# Before the

# Federal Communications Commission

# Washington, D.C. 20554

In the Matter of: )

)

Implementation of the Satellite Home )

Viewer Improvement Act of 1999: )

)

Broadcast Signal Carriage Issues ) CS Docket No. 00-96

)

Retransmission Consent Issues ) CS Docket No. 99-363

# REPORT AND ORDER

**Adopted: November 29, 2000 Released: November 30, 2000**

By the Commission:

**TABLE OF CONTENTS**

**[Paragraph]{.underline}**

I. INTRODUCTION 1

II. BACKGROUND 3

III. EXECUTIVE SUMMARY 9

IV. SATELLITE BROADCAST SIGNAL CARRIAGE 10

> A. Constitutional Matters 10

B. Commencing Satellite Broadcast Signal Carriage 14

1\. Election Cycle 16

2\. Initiating Carriage 25

C. Market Definitions 34

D. Receive Facilities 43

1\. Local Receive Facilities 45

2\. Alternative Receive Facilities 49

3\. Notification 55

4\. Process 59

5\. Good Quality Signal Issues 62

E. Duplicating Signals 73

F. Noncommercial Educational Television Station Carriage Issues 84

G. Channel Positioning 91

H. Content to be Carried 102

I. Material Degradation 110

J. Digital Television 120

K. Compensation for Carriage 124

L. Remedies 126

M.Definitional Issues and Other Concerns 134

V. PROCEDURAL MATTERS 140

VI\. ORDERING CLAUSES 142

Appendix A: Comments and Reply Comments

Appendix B: Rules

Appendix C: Final Regulatory Flexibility Act Analysis

Appendix D: Television Markets with Local-Into-Local Service from
DirecTV

Appendix E: Television Markets with Local-Into-Local Service from
Echostar

Appendix F: Section 338 of the Communications Act of 1934, as amended

Appendix G: Section 614 of the Communications Act of 1934, as amended

Appendix H: Section 615 of the Communications Act of 1934, as amended

Appendix I: Section 122 of the Copyright Act of 1976, as amended

Appendix J: Nielsen Media Research Designated Market Area Ranking
2000-2001

###### INTRODUCTION

1.  Section 338 of the Communications Act of 1934 ("Act"), adopted as
    part of the Satellite Home Viewer Improvement Act of 1999
    ("SHVIA")[^1] requires satellite carriers, by January 1, 2002, "to
    carry upon request all local television broadcast stations' signals
    in local markets in which the satellite carriers carry at least one
    television broadcast station signal," subject to the other carriage
    provisions contained in the Act. Until January 1, 2002, satellite
    carriers are granted a royalty-free copyright license to retransmit
    television broadcast signals on a station-by-station basis, subject
    to obtaining a broadcaster's retransmission consent. This transition
    period is intended to provide the satellite industry with time to
    begin providing local television signals into local markets,
    otherwise known as "local-into-local" satellite service. In this
    *Report and Order*, we adopt rules to implement the provisions
    contained in Section 338.

2.  In a separate proceeding, the Commission has implemented new
    amendments to Section 325 of the Act per the instructions set forth
    in the SHVIA.[^2] Good faith negotiation regulations and the
    prohibition on retransmission consent exclusivity are among the
    requirements the Commission has already adopted.[^3] However, the
    Commission deferred adopting rules concerning the satellite
    retransmission consent/mandatory carriage election cycle until we
    considered all of the rules necessary for a local broadcast station
    to gain carriage on a satellite carrier under both Sections 325 and
    338 of the Act. Thus, we adopt herein, election cycle rules and
    related policies for satellite broadcast signal carriage.

##### II. BACKGROUND

3.  In the SHVIA, Congress amended the Communications Act and Copyright
    Act to permit satellite carriers to provide the signals of local
    broadcast stations to subscribers residing in the broadcaster's
    market. Commencing on January 1, 2002, satellite carriers that
    provide local-into-local retransmission of broadcast stations
    pursuant to the statutory copyright license[^4] must "carry upon
    request the signals of all television broadcast stations within that
    local market . . ."[^5] The SHVIA requires the Commission to issue
    rules implementing this carriage requirement within one year of the
    SHVIA's enactment on November 29, 1999. In establishing such a
    deadline, Congress implicitly recognized that sufficient time was
    needed for satellite carriers to comply with the carriage
    requirements prior to January 1, 2002. Congress has indicated that
    the satellite carriage requirements should be comparable to the
    cable carriage requirements, noting in particular, paragraphs (3)
    and (4) of Section 614(b) and paragraphs (1) and (2) of Section
    615(g), presently found in Title VI of the Act.[^6]

4.  In *Implementation of the Cable Television Consumer Protection and
    Competition Act of 1992, Broadcast Signal Carriage Issues*
    ("*Broadcast Signal Carriage Order*"),[^7] the Commission
    implemented the cable broadcast signal carriage provisions of the
    Cable Television Consumer Protection and Competition Act of 1992
    ("1992 Cable Act").[^8] This statute amended the Act to provide
    television stations with certain carriage rights on local market
    cable television systems. Sections 614 and 615 of the Act contain
    the cable television "must carry" requirements for commercial and
    noncommercial television stations, respectively.[^9] Section 325
    contains retransmission consent requirements pursuant to which cable
    operators may be obligated to obtain the consent of commercial
    broadcasters before retransmitting their signals. Within local
    market areas, defined by Nielsen Media Research's Designated Market
    Areas ("DMAs"), commercial television stations may elect cable
    carriage under either the retransmission consent or mandatory
    carriage requirements. Noncommercial television stations have a
    right to mandatory carriage under the Act, but do not have statutory
    retransmission consent rights.

5.  It is important to note that the satellite carriage requirement is
    different from the cable carriage requirement. Under Sections 614
    and 615 of the Act, television stations can insist on carriage on a
    cable system even if the cable operator does not carry any local
    signals. Under Section 338 of the Act, the Commission cannot require
    satellite carriers to carry television stations in markets where
    they do not offer local-into-local service. There are other
    distinctions between cable operators and satellite carriers that
    must be noted as well. For example, a satellite carrier has a
    general obligation to carry all television stations in a market, if
    it carries one station in that market through reliance on the
    statutory copyright license, without a specific statutory reference
    to a channel capacity cap, while a cable system with more than 12
    usable activated channels is required to devote no more than
    one‑third of the aggregate number of usable activated channels to
    local commercial television stations that may elect mandatory
    carriage rights.[^10] Satellite carriers also provide video
    programming on a national basis through a space-based delivery
    facility while cable operators provide video service on a local
    basis through a terrestrial delivery facility.

6.  To understand the circumstances surrounding the implementation of
    Section 338, it is also necessary to discuss current satellite
    delivery of television broadcast stations and how subscribers access
    broadcast programming. We focus on DBS operators because they are
    currently providing local-into-local service. First, to obtain local
    television signals for local distribution, DBS operators receive the
    signals over-the-air, or have arrangements with local stations to
    deliver their signals by other means, to a receive facility in or
    near the stations' television market. Presently, a local exchange
    carrier's facility is used as a collection point for local
    television station signals.[^11] Once received, the satellite
    carrier converts the analog television broadcast signals into
    digital data bitstreams. The digitized television signals are then
    sent, using a fiber optic line or other means, to the satellite
    carriers' programming facility, or group of facilities, where they
    are then uplinked to the appropriate satellite. These satellites,
    orbiting around the equator at 22,300 feet at various locations
    above the United States, contain transponders[^12] that are used to
    retransmit local television station signals and other programming to
    subscribers' homes in a certain television market.[^13]

7.  Satellite television subscribers must buy or rent a small parabolic
    \"dish\" antenna, which is mounted on or near the home, to receive
    the satellite delivered signals. Satellite subscribers must also
    purchase or rent a set top box that converts the incoming digital
    signal to an analog format so that programming is viewable on the
    television receiver. Subscribers pay a subscription fee to receive
    both local television station signals and other programming
    services. While each television station carried by a satellite
    carrier occupies transponder capacity, a subscriber cannot purchase
    and view packages of non-local television station signals. Satellite
    carriers package video programming, including bundles of local
    television station signals, into different tiers of service.
    Services are also available on an a la carte basis where a single
    channel or program is sold separately.

8.  Satellite carriers organize programming according to channel
    neighborhoods where certain genres of programming, such as sports or
    music, are grouped together. Presently, local-into-local television
    stations carried under retransmission consent are found together in
    such neighborhoods.[^14] As of November 27, 2000, DirecTV offers
    local-into-local service in 38 television markets whereas Echostar
    offers such service in 34 television markets.[^15]

**III. EXECUTIVE SUMMARY**

9.  This *Order* implements carriage rules for satellite carriers
    pursuant to Section 338. The decisions are summarized as follows:

## Commencing Carriage. We find that commercial television stations must make an election between retransmission consent and mandatory carriage every three years for both satellite carriers and cable operators. The first satellite election cycle, however, will be for four years, to align it with the cable election cycle beginning in 2006. Under the SHVIA, a television station, in a market with local-into-local service, must request carriage. We find that for the first cycle, commercial television stations must request carriage by making an election by July 1, 2001, for carriage to commence on January 1, 2002. We further find that commercial television stations must request carriage by making an election, for all cycles thereafter, by October 1^st^ of the year preceding the new election cycle. Noncommercial educational television stations must request carriage on the same dates as commercial television stations, even though they are not subject to an election cycle. We establish separate timeframes for commencing carriage when a new television station begins service or when a satellite carrier commences new local-into-local service.

## Market Determinations. Under the SHVIA, Nielsen's 1999-2000 publications determine market areas at the commencement of the first election cycle. We find, however, that a satellite carrier may use future Nielsen publications to add counties to markets where it provides local-into-local service. A television station's local market for satellite carriage purposes is generally determined by the location of its city of license. In the cases where the station's city of license is located in a county outside the local market, but Nielsen has assigned the station to that market, it may assert carriage rights in the market to which it was assigned. We also find that the Commission cannot modify a television market under Section 338 as it is authorized to do so under Section 614(h) in the cable carriage context.

## Receive Facilities. The SHVIA establishes the "local receive facility" as the point in a market where a carrier collects the signals of local television stations before retransmitting them via satellite. The local receive facility, in essence, functions like a cable operator's principal headend. Under the SHVIA, a satellite carrier determines the location of the local receive facility in each market it provides local-into-local service. We interpret the SHVIA to permit satellite carriers to construct another facility, one that may be outside the local market, if 50% of the broadcasters in the relevant market agree to the location of such a facility. It should also be noted that the SHVIA requires television stations to pay for the costs of providing a good quality signal to any receive facility. We adopt rules for defining a good quality television station signal comparable to the rules established in the cable context. Notably, a satellite carrier does not have an obligation to carry a television signal that does not meet the Commission's good quality signal standard, until the time when the television station pays to cure the signal strength deficiency.

## Duplicating Signals. Under the SHVIA, a satellite carrier is not required to carry duplicative signals of television stations in the same market unless the stations at issue are network affiliates licensed to communities in different states. We adopt a duplication definition for commercial television stations that mimic the definition established in the cable carriage context. We also interpret the SHVIA's duplication provisions to mean that a satellite carrier is not obligated to carry two of the same network affiliates, even if their signals do not duplicate. 

## 

## Noncommercial Television Stations. We find that a satellite carrier must carry all non-duplicative noncommercial educational television stations in a market where local-into-local service is provided. We also find that a satellite carrier cannot satisfy its public interest set aside obligations through the carriage of noncommercial television stations.

## 

## Channel Positioning. We implement the SHVIA's requirement that a satellite carrier must carry all local television stations in a contiguous manner on its channel line-up. The SHVIA also requires the Commission to establish rules prohibiting non-discriminatory treatment of television stations carried under the copyright compulsory license. We find that a satellite carrier must treat television stations that elect mandatory carriage in the same manner on its electronic program guide as it does stations that elect retransmission consent. We also find that a satellite carrier must offer television stations that elect mandatory carriage to subscribers on comparable price terms as it offers television stations that elect retransmission consent. 

## Content to be Carried. The SHVIA requires the Commission to apply the cable carriage content requirements to satellite carriers. Given this directive, we implement rules requiring a satellite carrier to carry the primary video and accompanying audio of local television stations. We also implement rules requiring satellite carriers to carry all program-related material contained in a television station's vertical blanking interval, unless carriage of such data is technically infeasible. 

-   **Material Degradation.** The SHVIA requires the Commission to apply
    the material degradation principles established in the cable
    carriage context to satellite carriers. Given this directive, we
    find that a satellite carrier must provide the same degree of
    picture quality to television stations that elect mandatory carriage
    as it provides to television stations that elect retransmission
    consent.

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-   **Compensation.** We implement the SHVIA's directive prohibiting
    satellite carriers from requesting compensation in return for
    carriage.

## 

## Digital Television. The Notice of Proposed Rulemaking in this proceeding raised several questions regarding the carriage of digital television signals by satellite carriers. The broadcasting industry generally supported satellite digital carriage requirements while the satellite industry opposed any digital carriage requirements. We refrain from addressing the merits of such requirements and state that the satellite digital carriage issues will be addressed at the same time the Commission considers cable digital carriage issues.

## Remedies. The SHVIA provides the United States District Courts with exclusive jurisdiction to remedy a satellite carrier's failure to carry a local television station. However, the SHVIA also provides that the Commission shall order the satellite carrier to take appropriate remedial action if it fails to meet its obligations under Section 338. We interpret the SHVIA to require a television station to seek remedies for non-carriage by a satellite carrier under the statute in the court system. However, a television station that seeks remedial action and a carriage order under our rules may file a complaint with the Commission. We also interpret the SHVIA to allow the Commission to adjudicate satellite carriage complaints for each substantive topic enumerated in Section 338, including the content-to-be-carried and material degradation provisions. 

##### IV. SATELLITE BROADCAST SIGNAL CARRIAGE

######## Constitutional Matters 

10. Questions have been raised relating to the constitutionality of
    Section 338. The satellite industry argues that Section 338's
    carriage requirements are unconstitutional for several reasons. The
    Satellite Broadcasting and Communications Association ("SBCA")
    submits that mandatory carriage violates the First Amendment, by
    infringing on a carrier's editorial control in selecting
    programming, as well as the Takings Clause of the Fifth Amendment,
    by depriving the carrier of valuable spectrum without just
    compensation.[^16] SBCA additionally argues that, by linking a
    statutory copyright license to a requirement to engage in certain
    speech, Congress has exceeded its authority under the Copyright
    Clause of the Constitution.[^17] Echostar agrees and also asserts
    that Section 338 does not provide the Commission with any ability to
    salvage it from unconstitutionality, nor does the Act give the
    Commission any opportunity to alleviate the statutory burdens.[^18]

11. The National Association of Broadcasters ("NAB") argues that the Act
    does not limit a satellite carriers\' speech in any way, and
    carriers remain free to offer any programming for which they acquire
    the necessary rights in the marketplace.[^19] It argues that the
    compulsory license is a transfer of rights from copyright owners to
    carriers, not a restriction of any kind. According to NAB, the SHVIA
    gives satellite carriers a royalty-free statutory license to
    override the normal rights of copyright owners by retransmitting
    copyrighted programming, under specified circumstances.[^20] Paxson
    states that the Supreme Court has concluded that the cable carriage
    requirements satisfy the intermediate scrutiny test under *O'Brien*
    because they advance the important government interests of
    preserving the benefits of free over-the-air broadcasting and
    promoting the widespread dissemination of information from a
    multiplicity of sources.[^21] According to Paxson, the same
    government interests are protected and promoted through comparable
    carriage requirements on the satellite industry.[^22]

12. In the legislative history accompanying this section, Congress noted
    its belief that the carriage requirements are constitutional under
    the First Amendment:

> The conferees believe that the must carry provisions of this Act
> neither implicate nor violate the First Amendment. Rather than
> requiring carriage of stations in the manner of cable's mandated duty,
> this Act allows a satellite carrier to choose whether to incur the
> must carry obligation in a particular market in exchange for the
> benefits of the local statutory license. It does not deprive any
> programmers of potential access to carriage by satellite carriers.
> Satellite carriers remain free to carry any programming for which they
> are able to acquire the property rights. The provisions of this Act
> allow carriers an easier and more inexpensive way to obtain the right
> to use the property of copyright holders when they retransmit signals
> from all of a market's broadcast stations to subscribers in that
> market. The choice whether to retransmit those signals is made by
> carriers, not by the Congress. The proposed licenses are a matter of
> legislative grace, in the nature of subsidies to satellite carriers,
> and reviewable under the rational basis standard.[^23]

The Conferees also noted that they were "confident that the proposed
license provisions would pass constitutional muster even if subjected to
the *O'Brien* standard \[intermediate First Amendment scrutiny\] applied
to the cable mandatory carriage requirement."[^24]

13. We observe that Congress enacted Section 338 to preserve free
    over-the-air broadcasting, promote a multiplicity of voices, and
    promote fair competition between video providers. The SHVIA furthers
    these important government interests by establishing provisions
    ensuring that satellite carriers treat all local television stations
    seeking carriage in a fair manner. The goals, and the means to
    further them, are similar to those Congress enacted in 1992 when it
    promulgated the cable carriage provisions in the 1992 Cable
    Act.[^25] With regard to the arguments raised by SBCA, we find that
    the claims it raises, excepting the Copyright Clause claim, are
    similar to those the cable industry raised against the
    constitutionality of Sections 614 and 615 of the Act in 1992. In the
    *Turner* cases, the Supreme Court found that the Act's cable
    carriage provisions were constitutional.[^26] In this matter, we
    defer to Congress's determination that Section 338 is lawful.[^27]
    Thus, notwithstanding the satellite industry's court challenge, our
    task in this proceeding is to implement the statutory directives set
    forth in the SHVIA.

**B. Commencing Satellite Broadcast Signal Carriage**

14. Satellite carriers have had the right to retransmit local television
    stations without first obtaining retransmission consent, and without
    a mandatory carriage obligation, for a six month period from
    November 29, 1999 to May 28, 2000. Beginning on May 29, 2000 and
    continuing until December 31, 2001, satellite carriers may carry
    local television stations on a station-by-station basis if a
    retransmission consent agreement has been reached. As of January 1,
    2002, satellite carriers will have an obligation to carry all local
    television stations seeking carriage in any market in which they
    provide local-into-local service.[^28] This requirement is not
    absolute as satellite carriers generally need not carry duplicative
    television stations in the same market.[^29] In addition, a
    television station in a market where local-into-local service is
    provided must submit a request to the satellite carrier to gain
    carriage.[^30] Commercial television stations must make an election
    between retransmission consent and mandatory carriage when
    requesting carriage.[^31] Noncommercial television stations do not
    have to make an election because they do not have retransmission
    consent rights. However, a noncommercial television station and a
    satellite carrier may enter into a voluntary carriage agreement
    apart from the requirements contained in the Act.

15. We find that Section 338 provides a satellite carrier with two
    options for carrying local television broadcast signals. If a
    satellite carrier provides its subscribers with the signals of local
    television stations through reliance on the statutory copyright
    license, they will have the obligation to carry all of the
    commercial television signals in that particular market that request
    carriage.[^32] If a satellite carrier provides local television
    signals pursuant to private copyright arrangements, the Section 338
    carriage obligations do not apply. In this context, we note that a
    retransmission consent agreement, in most instances, is not
    analogous to a private copyright arrangement. Retransmission consent
    permits an MVPD to retransmit a station's signal, but it does not
    generally grant copyright clearance for the program content carried
    by that station. To obtain private clearances for material carried
    by a particular station, the copyright holders of each of the
    programs, advertisements, and music aired by that station must
    consent to the retransmission. In some cases, however, a television
    station may have permission from the copyright holders to provide
    clearances on their behalf. We therefore conclude that unless the
    retransmission contract clearly provides for all copyright
    clearances, a carrier retransmitting television stations electing
    retransmission consent would be subject to the compulsory license
    and be required to carry all other local market television stations
    under the provisions set forth in Section 338.

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1.  **Election Cycle**

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16. In *Implementation of the Satellite Home Viewer Improvement Act of
    1999---Retransmission Consent Issues*, Report and Order, the
    Commission promulgated good faith and anti-exclusivity requirements
    per the provisions amending Section 325 of the Act.[^33]
    Retransmission consent and mandatory carriage election cycle
    requirements for satellite carriers were discussed in the *Notice*
    in that docket. The *Retransmission Consent Notice* requested
    comment on whether the Commission should employ the same rules and
    procedures the Commission adopted in response to the 1992 Cable Act
    or adopt a different election cycle with different procedures to
    implement Section 325(b)(3)(C)(i).[^34] The *Notice* in this
    proceeding sought comment on how the carriage provisions of Section
    338 would work with the revised Section 325 provisions regarding
    retransmission consent.[^35] Because the issues of retransmission
    consent and mandatory carriage are intertwined, we believe that a
    coherent election regime is best effectuated by consolidating the
    election cycle record from that proceeding with the instant
    proceeding and determining the unresolved issues here.

17. The SHVIA amended Section 325 to provide that no cable system or
    other multichannel video program distributor shall transmit the
    signal of a broadcasting station, or any part thereof, except: (A)
    with the express authority of the originating station; (B) pursuant
    to Section 614, in the case of a station electing to assert the
    right to carriage by a cable operator;[^36] or (C) pursuant to
    Section 338, in the case of a station electing to assert the right
    to carriage by a satellite carrier.[^37] The SHVIA also amended
    Section 325(b) by adding new paragraph (3)(C)(i), which directs the
    Commission to adopt regulations which shall "establish election time
    periods that correspond with those regulations adopted under
    subparagraph (B) of this paragraph...."[^38]

18. Section 325(b)(3)(C)(i) instructs the Commission to establish
    regulations and procedures governing the election process for
    retransmission consent and mandatory carriage that correspond, as
    much as possible, with existing Section 325(b)(3)(B) of the Act. We
    find that the length of the first election cycle shall be for a
    four-year period commencing on January 1, 2002 and ending December
    31, 2005. We believe that a four-year timeframe is necessary to
    align the election cycles among satellite carriers and cable
    operators so that local television stations would be making
    retransmission consent/mandatory carriage elections for cable and
    for satellite on the same cycle.[^39] This conclusion is also
    consistent with many commenters that advocated a synchronized cycle.

19. ALTV, for example, proposed an alternative that would ultimately
    synchronize the cable and satellite cycles, but by beginning with a
    one-year cycle, followed by a three year cycle.[^40] We find that a
    four-year cycle is less burdensome for both broadcasters and
    satellite carriers. We note that certain broadcast interests argue
    against parallel election cycles because it would be overly
    burdensome to simultaneously negotiate carriage among cable
    operators and satellite carriers. [^41] We do not believe that the
    need to negotiate with the limited number of satellite carriers will
    place an undue burden on broadcasters. We also believe that
    simultaneous election cycles most effectively equalizes the
    obligation for satellite carriers and cable operators negotiating
    retransmission consent.

20. Echostar and DirecTV also favor synchronizing the cable and
    satellite cycles but note that regulations developed for the cable
    industry would not sufficiently take into account the distinctive
    aspects of retransmission consent/mandatory carriage elections for
    the satellite industry.[^42] EchoStar urges the Commission to give
    satellite carriers at least six months between new retransmission
    consent/carriage election dates and their respective effective
    dates.[^43] We agree that a satellite carrier needs ample time to
    commence carriage prior to the first election cycle because of the
    logistics of adding hundreds of local television stations to its
    channel line-up. We therefore provide satellite carriers with six
    months, from July 1, 2001 to December 31, 2001, to complete the
    carriage process.[^44] The election cycle and notification
    timeframes established for the first cycle, as described more fully
    below, are designed to accommodate the initial implementation of
    Section 338. After satellite carriers commence carriage on January
    1, 2002, the rationales for extended timeframes no longer apply.
    Thus, the second election cycle, and all cycles thereafter, shall be
    for a period of three years (e.g. January 1, 2006 through December
    31, 2008).

21. In terms of procedure and timing for the second election cycle and
    all subsequent cycles, commercial television broadcast stations
    should make their election by October 1^st^ for the election cycle
    beginning the following January 1st. Satellite carriers shall have
    90 days prior to the new election cycle, beginning October 1^st^ and
    ending December 31^st^, to negotiate retransmission consent
    agreements. These are the same timeframes as those established under
    the cable election rules.[^45] If a satellite carrier begins
    providing local-into-local service in a new market during an
    election cycle, the carrier and the commercial television stations
    in that market have 90 days to complete their retransmission consent
    discussions. In this situation, the election cycle starts at the
    date a satellite carrier begins local-into-local service and ends on
    the date the cycle ends under our rules.

22. Under the SHVIA, satellite carriers taking advantage of the
    compulsory copyright license for local signals are required to carry
    television broadcast stations "upon request."[^46] We note that
    cable carriage under the Act is an immediate right that vests
    without request. That is why we initially adopted a default rule in
    the cable context.[^47] We find, however, that there can be no
    default mandatory carriage requirement under Section 338 because a
    commercial television station must expressly request carriage.
    Rather, if a commercial television station does not make an
    election, it defaults to retransmission consent. In this context, we
    also recognize that carriers need some measure of control in
    configuring their satellite systems to meet their statutory
    obligations. Therefore, if an existing television station fails to
    request carriage by the established deadlines, it is not entitled to
    mandatory carriage under 338 for the duration of the election cycle.
    This policy does not apply to new television stations to which
    different substantive and procedural rules apply.

23. **Consistent Retransmission Consent/Carriage Elections.** Section
    76.64(g) requires that broadcasters make consistent retransmission
    consent/must carry elections between cable operators where franchise
    areas of cable systems overlap.[^48] While the SHVIA does not
    expressly require such action in the satellite context, in the
    *Retransmission Consent* *Notice* we requested comments on whether
    broadcasters should be subject to a consistent election requirement
    between satellite carrier and cable operators.[^49] Broadcast
    industry commenters argue that the SHVIA does not require Commission
    expansion of the consistent election requirements to satellite
    carriers as well as cable systems.[^50] DirecTV, on the other hand,
    argues that a consistent election rule should be adopted to prevent
    broadcasters from unfairly disadvantaging one MVPD competitor over
    another.[^51] We find that Section 325, amended by the SHVIA, makes
    no reference to expanding the consistent election requirement to the
    satellite context, notwithstanding the fact that the obligation was
    imposed in the cable context. Absent express statutory language to
    the contrary, we believe that a consistent election requirement
    between a cable operator and a satellite carrier should not be
    imposed.

24. While the absence of statutory language guides our determination, we
    also note that the service area differences between satellite
    carriers and cable operators also counsels against implementing such
    a rule. Television broadcast stations elect retransmission consent
    or mandatory carriage on a system-by-system basis under the cable
    carriage requirements. There are many cable systems in a television
    market. Sometimes, a television broadcast station may choose
    retransmission consent on one cable system, but select mandatory
    carriage for a system in an adjacent area. A satellite carrier's
    service area for local-into-local purposes, on the other hand,
    encompasses television market areas that are substantially broader
    in scope. When a television station is carried by a satellite
    carrier, it is either a retransmission consent station or a
    mandatory carriage station in the local market area. Given these
    facts, it is difficult to require consistency between the two MVPDs
    without also requiring a station to make a uniform election for all
    local market cable systems in order to match the election choice the
    station made with regard to the satellite carrier.

> **2. Initiating Carriage**

25. In the *Notice*, we discussed the framework and procedural rules
    that should be established for implementing Section 338.[^52] We
    sought comment regarding the meaning of the phrase "carry upon
    request" and noted that in the cable context, the Commission
    initially required the cable operator to contact all local broadcast
    television stations, in writing, on matters relating to their
    carriage rights.[^53] We asked commenters whether we should adopt a
    similar rule requiring satellite carriers to notify all local
    broadcasters, in writing, of their carriage rights once any local
    station in a particular market is being carried.[^54] The *Notice*
    also pointed out that broadcast television stations requesting
    mandatory carriage as part of the election process must make such
    carriage requests in writing.[^55] The Commission sought comment on
    whether similar provisions should be adopted in the satellite
    carriage context.[^56]

26. ALTV and others assert that a local television station that elects
    mandatory carriage under Section 338 should be considered to have
    requested carriage as well. ALTV argues that the additional
    requirement of a formal carriage request is unnecessary where a
    local television station already has notified a satellite carrier of
    its choice between retransmission consent and mandatory
    carriage.[^57] We agree with ALTV. An election made by the
    television broadcast station shall be treated as the request for
    carriage. The procedural policy we adopt here is necessary to reduce
    the paperwork lag time that would impede satellite carriers from
    complying with its Section 338 obligations by January 1, 2002.

27. Commenters propose different approaches to the carriage obligations
    of satellite carriers and the responsibilities of television
    broadcast stations when local-into-local service is provided in a
    television market. Broadcasters generally argue that because a
    satellite carrier's carriage obligations are triggered only when the
    carrier decides to avail itself of the local-into-local statutory
    copyright license, it is appropriate for the carrier to notify local
    stations, in writing, if it decides to rely on such a license.[^58]
    NAB asserts that imposing an affirmative notification requirement on
    satellite carriers will help prevent disputes about whether parties
    understood the other's intentions.[^59] Conversely, DirecTV asserts
    that Section 338 places an affirmative burden on television
    broadcast stations to "request" carriage on the satellite carrier's
    system. EchoStar similarly contends that broadcasters should be
    required to contact satellite carriers in the first instance, in
    writing, to request mandatory carriage because broadcasters have
    actual notice of the satellite carriers providing local-into-local
    service in their market.[^60]

28. We find that television stations have the burden of initiating
    satellite carriage. DirecTV and Echostar are the only satellite
    carriers currently operating and providing local-into-local service.
    It is reasonable to conclude that a television station has actual
    notice of the local presence of these carriers since satellite
    subscribers already have access to certain local television stations
    and a satellite carrier's programming activities are well
    publicized.[^61]

29. We also find that a television broadcast station must notify a
    satellite carrier, by July 1, 2001, of its carriage intentions if it
    is located in a market where local-into-local service is provided.
    Commercial television stations are required to choose between
    retransmission consent and mandatory carriage on this date. NCE
    stations must simply request carriage. We believe that a six month
    timeframe provides satellite carriers with sufficient time to plan
    for receive facility accommodations and channel line-up changes
    before January 1, 2002. To facilitate the carriage process, we also
    find that a satellite carrier must respond to a television station's
    carriage request by August 1, 2001, and state whether it accepts or
    denies the carriage request. If the satellite carrier denies the
    request, it must state the reasons why. In this context, some valid
    reasons for not commencing carriage of a television station are: (1)
    poor quality television signal; (2) substantial duplication; (3)
    non-local station requesting carriage; and (4) the satellite carrier
    is offering local-into-local service via private copyright
    agreements. If the television station's request for carriage is
    rejected, it may file a complaint pursuant to the rules established
    in the Remedies section, below.

30. With regard to the notification procedure, the request made by the
    television station must be in writing and sent to the satellite
    carrier's principal place of business, as listed on the carriers'
    website or official correspondence. The notification must be sent by
    certified mail, return receipt requested. A station's written
    notification should include the name of the appropriate station
    contact person as well as the station's: (i) call sign; (ii) address
    for purposes of receiving official correspondence; (iii) community
    of license; (iv) DMA assignment and (v) affirmative carriage
    election. These notification elements are necessary to ensure that a
    satellite carrier has the base information it needs to commence the
    carriage of local television stations.

31. **New Local-Into-Local Service.** In the *Notice*, we requested
    comment on whether separate procedures should be established for new
    satellite carriers and whether such rules should be similar to those
    established for cable carriage.[^62] Broadcast commenters favor
    notification requirements for new market entrants.[^63] While
    generally objecting to a notification burden being placed on
    satellite carriers, DirecTV submits that if one is adopted, the
    requirement should only apply to markets in which a satellite
    carrier commences service after January 1, 2002.[^64] We find that a
    new satellite carrier must notify all local television stations in a
    given market when it plans to provide local service. Similarly, an
    existing satellite carrier must provide notice when it provides
    local-into-local service in a new market. We note that requiring
    carriers to provide notice in these circumstances is less burdensome
    because there are far fewer television stations to contend with, at
    the same time, than in markets with existing local-into-local
    service. We also believe that advance notice in these situations
    ensures a level competitive playing field in two respects: (1) all
    local television stations will know, at the same time, when
    local-into-local service will be provided in a market and (2) all
    local television stations will be able to exercise their carriage
    rights at the same time.[^65]

32. We therefore adopt procedural provisions that substantially
    replicate the existing requirements for new cable systems under
    Section 76.64. However, we craft the rules in a slightly different
    manner recognizing that satellite carriers provide a national
    service. The carriage procedures also provide carriers with adequate
    preparation time while not unduly delaying the provision of full
    local-into-local service in a market. We adopt the following
    guidelines for both new satellite carriers and carriers that offer
    new local-into-local service for the first time on or after July
    1, 2001. First, satellite carriers shall notify local television
    stations, in writing, at least 60 days before the date it intends to
    provide new satellite service or intends to enter into a new market.
    At the same time, the satellite carrier should provide the location
    of the local receive facility in that particular market.[^66] A
    local television station then must provide its election, in writing,
    no more than 30 days after receipt of the satellite carrier's
    notice.[^67] If a satellite carrier finds that the television
    station meets the criteria for carriage under Section 338 and our
    rules, it shall then have 90 days after the election letter was
    received to negotiate carriage, resolve local receive facility
    issues, reconfigure its system and channel line-up, notify
    subscribers of the change in service, and commence carriage of the
    local television station.[^68] If the satellite carrier finds that
    the station is not qualified for carriage for any of the reasons
    stated above, it shall notify the local station in writing of the
    reason for such refusal within 30 days of the receipt of the
    station's election. The television station may either accept the
    satellite carrier's conclusion or file a carriage complaint.

33. **New Television Stations.** Section 338 requires carriage of all
    local stations in local markets regardless of when such stations
    begin broadcasting. Given this statutory directive, we find that new
    television broadcast stations licensed and providing over-the-air
    service have carriage rights under the SHVIA.[^69] Those stations
    licensed to provide over-the-air service for the first time on or
    after July 1, 2001 will be considered new television broadcast
    stations for satellite carriage purposes. We believe it appropriate
    to require a new television station to make its initial election
    between 60 days before commencing broadcast and 30 days after
    commencing broadcast. This requirement is similar to the cable rules
    regarding new television stations.[^70] If the station meets all of
    the requirements under Section 338 and our rules, the satellite
    carriers shall commence carriage within 90 days of receiving a
    carriage request from the television broadcast station or whenever
    the new television station provides over-the-air service.[^71] If
    the satellite carrier believes that the station is not qualified, it
    must notify the station of such a determination with 30 days of
    receiving the election notice. An aggrieved television station may
    then file a complaint for non-carriage in the appropriate forum
    under the guidelines established in Section 338.

######### C. Market Definitions {#c.-market-definitions .unnumbered}

34. Section 338(h)(3) defines the term, "local market," as having the
    meaning it has under Section 122(j) of title 17, United States
    Code.[^72] Section 122(j)(2)(A) defines the term, "local market," in
    the case of both commercial and noncommercial television broadcast
    stations, to mean the designated market area in which a station is
    located, and-(i) in the case of a commercial television broadcast
    station, all commercial television broadcast stations licensed to a
    community within the same designated market area are within the same
    local market; and (ii) in the case of a noncommercial educational
    television broadcast station, the market includes any station that
    is licensed to a community within the same designated market area as
    the noncommercial educational television broadcast station."[^73] In
    addition to the area described in subparagraph (A), a station's
    local market includes the county in which the station's community of
    license is located.[^74] Section 122(j)(2)(C) defines the term,
    designated market area to mean the market area, as determined by
    Nielsen Media Research and published in the 1999-2000 Nielsen
    Station Index Directory and Nielsen Station Index United States
    Television Household Estimates or any successor publication."[^75]

35. We did not receive comments interpreting these provisions. DirecTV,
    however, did suggest that the Commission adopt a rule expressly
    allowing satellite carriers, at their discretion, to limit a
    television station's carriage coverage area to its predicted Grade B
    service contour within its DMA.[^76] ALTV and NAB respond that
    DirecTV's proposal is antithetical to the language and purpose of
    the SHVIA.[^77] NAB asserts that the geographic scope of the
    mandatory carriage obligation is precisely the same as the scope of
    the compulsory license granted by Congress \-- namely, the "local
    market," which generally means the DMA.[^78]

36. We find that the term "local market," as it is used for satellite
    carriage purposes, includes all counties within a market, as well as
    the home county of the television station if that county is not
    physically located in the DMA. We believe that the satellite
    compulsory license includes not only television stations licensed to
    a local market, but also extends to stations licensed in one market
    but assigned[^79] by Nielsen to another market. For example, a
    television station licensed to a community in Jefferson County,
    Missouri, which is in the Paducah DMA, but assigned by Nielsen to
    the St. Louis DMA, would be considered within the St. Louis market
    under Section 338. In this case, Jefferson County is the home
    county, and such a county should be treated as part of the St. Louis
    DMA for satellite carriage purposes. Moreover, since this station is
    licensed to a community in the Paducah market, it may assert its
    carriage rights in that market as well, if satellite carriers decide
    to provide local-into-local service there. If there happens to be
    another television station licensed to a community in Jefferson
    County, that station will also be considered in the St. Louis DMA
    and eligible to assert its right to carriage against a satellite
    carrier. In addition, if a station is licensed to a community that
    is inside one DMA, but is assigned to another DMA by Nielsen, the
    station could assert its right to carriage in the market where its
    community of license is located. For example, KNTV is licensed to
    San Jose, CA, which is in the San Francisco DMA, but is assigned by
    Nielsen to the Salinas-Monterey DMA. In this case, KNTV can assert
    its carriage rights in the San Francisco DMA because that is where
    its community of license is located. These interpretations are
    consistent with the SHVIA's goals of preserving over-the-air
    broadcasting and providing satellite subscribers with a full
    complement of local station signals.

37. **Timing of Revisions to Market Definitions.** We sought comment on
    when to change the reference to the 1999-2000 Nielsen publications
    to reflect changes in market structure and market conditions. We
    noted, in the cable context, that the rules account for a market
    update every three years.[^80] We asked whether the rules we
    implement under this section should be updated on a triennial basis
    or at another interval. We also noted that cable operators are
    required to use the 1997-98 Nielsen publications to determine local
    markets for broadcast signal carriage purposes up until January 1,
    2003,[^81] yet satellite carriers are obliged to use the 1999-2000
    Nielsen publications for carriage purposes. We asked whether
    satellite carriers and cable operators should be required to use the
    same annual Nielsen market publications so that both may rely on the
    same market definition.

38. Our goals here are threefold. We intend to: (1) implement the
    language of Section 338; (2) establish comparable timelines and
    requirements for satellite carriers and cable operators; and (3)
    reduce procedural and administrative burdens. BellSouth argues for
    an extended period between updates to allow for satellite carriers'
    difficulties in accessing and tuning the satellite equipment used to
    transport television signals.[^82] ALTV and NCTA argue that the
    Commission should adopt rules allowing for the use of the same
    Nielsen data by cable systems and satellite carriers as quickly as
    practicable.[^83] NAB asserts that the 1999-2000 lists are the
    correct ones for the Commission to use to determine markets for the
    first election cycle commencing in January 1, 2002.[^84]

39. We will require satellite carriers to use Nielsen's 1999-2000 DMA
    market assignments to initially determine their carriage
    obligations. Satellite carriers and television broadcast stations
    have been on notice since November 29, 1999, that the 1999-2000
    Nielsen publications will be used for Section 338 purposes. To avoid
    overburdening satellite carriers, we will not require market
    boundaries to be updated on an annual basis. However, we do believe
    that television markets should be updated triennially, for each
    election cycle, to better reflect new market conditions and
    viewership patterns.[^85] Satellite carriers may, nevertheless,
    voluntarily adjust markets based upon county additions found in
    annual editions of Nielsen DMA market assignment publications. On
    this point, we agree with DirecTV when it states that Section
    122(j)(2) allows a local market originally defined in the 1999-2000
    Nielsen market assignment to be expanded in accordance with later
    issues of the relevant Nielsen publications.[^86] Satellite carriers
    may add counties to the markets in which they now provide
    local-into-local service by referring to the Nielsen 2000-2001 DMA
    market assignments and future assignments. By adopting this
    approach, a satellite carrier is able to serve new communities on
    the basis of each yearly Nielsen DMA market change, if that is what
    is desirable[^87] Counties that are removed from a market in
    subsequent Nielsen publications should remain in the market for
    satellite carriage purposes so that satellite subscribers will not
    lose local-into-local service.[^88] This policy fulfills the SHVIA's
    goal of furthering the availability of local-into-local service and
    providing effective competition to incumbent cable systems.

40. **Market Modifications.** In the *Notice*, we pointed out that a
    statutory device exists to expand or contract the size of a local
    television market for cable carriage purposes and sought opinion on
    whether the Commission has the authority to implement a market
    modification mechanism for satellite carriage purposes.[^89] Certain
    broadcast commenters assert that implementing a market modification
    mechanism is necessary to promote Congress' goal of protecting free
    television service, placing satellite and cable on equal terms, and
    preserve localism by ensuring that satellite carriage markets
    actually reflect what is truly local.[^90] However, BellSouth and
    DirecTV state that the Commission has no authority to add
    communities to a broadcaster's television market. They believe that
    Section 122(j) limits a station's satellite carriage rights to the
    DMA that includes its community of license.[^91] DirecTV argues,
    however, that the Commission can and should adopt market
    modification procedures that allow a satellite carrier to remove a
    station from the market if it can demonstrate that the station does
    not serve the relevant market.[^92] Paxson, in contrast, argues that
    had Congress intended to grant the Commission market modification
    authority, it would have explicitly done so in the statute just as
    it did in the cable context.[^93]

41. We find that the Act does not permit the Commission to change the
    shape of a television market. While we recognize the concerns raised
    above, we note that the satellite compulsory license is coterminous
    with the market in which the satellite carrier provides
    local-into-local service. Without express language in the Copyright
    Act or the Communications Act, any attempt to establish a market
    addition policy under our public interest authority would be moot
    because a satellite carrier cannot retransmit a local television
    station under Section 338 into another market without subjecting
    itself to copyright liability under Section 122 of the Copyright
    Act. In addition, there is no explicit provision providing the
    Commission with the authority to modify markets in the manner
    permitted under Section 614(h). Therefore, we cannot establish a
    market modification policy on our own motion. We note that the
    Senate version of the SHVIA had, at one point in time, a market
    modification provision.[^94] This subsection was not adopted by
    Congress. Thus, any attempt by the Commission to implement a market
    modification regime would run counter to the express intent of
    Congress.

42. **Coverage.** Satellite carriers are currently developing spot beam
    technology where programming can be delivered to a discrete
    geographical location using a specialized satellite.[^95] Spot beam
    satellites have the potential to increase satellite system channel
    capacity through the re-use of transponders.[^96] DirecTV argues
    that satellite carriers should be permitted to use spot beams, when
    they are in operation, for local-into-local service even if the beam
    does not cover the entire market.[^97] We will permit carriers to
    use spot beam satellites in such a manner. We first observe that
    Section 338 does not require a satellite carrier to serve each and
    every county in a television market. Rather, it requires that in the
    areas it does provide local-into-local service, it must carry all
    local television stations subject to carriage under the statute. In
    this context, we recognize that there are some markets, such as the
    Denver DMA encompassing counties in four states, that are
    geographically expansive. A spot beam may not be able to cover the
    entire DMA in these instances, and to make the satellite carrier
    reconfigure its spot beam may deprive it of capacity to serve
    additional markets with local-into-local coverage.

######### D. Receive Facilities  {#d.-receive-facilities .unnumbered}

43. Section 338(b)(1) states that, "A television broadcast station
    asserting its right to carriage under subsection (a) shall be
    required to bear the costs associated with delivering a good quality
    signal to the designated local receive facility of the satellite
    carrier or to another facility that is acceptable to at least
    one-half the stations asserting the right to carriage in the local
    market."[^98] Section 338(h)(2), in turn, defines the term "local
    receive facility" as "the reception point in each local market which
    a satellite carrier designates for delivery of the signal of the
    station for purposes of retransmission."[^99] The *Notice* sought
    comment on the term "local receive facility" and on the parameters
    under which a satellite carrier may construct and designate a local
    receive facility.[^100] We noted that the statutory language could
    be read to permit the satellite carrier to establish a regional
    receive facility that would receive broadcast signals from other
    markets provided 50% of the relevant broadcasters agreed to the
    location.[^101] We also asked questions concerning the procedures by
    which a satellite carrier must inform local market television
    stations of the location of the receive facility, and whether there
    should be Commission procedures to resolve a broadcaster's complaint
    if it disputes the receive location selected by the majority of
    broadcasters.

44. DirecTV agreed with the preliminary statement in the *Notice* that
    "the most economically feasible means \[of delivery of multiple
    local broadcast signals\] is to aggregate signals in each local
    market at one point and deliver them over the facilities of an
    interstate telecommunications carrier to the uplink site(s)" and
    co-locate at such a carrier's switching center.[^102] DirecTV
    provided comments detailing the process needed to establish a local
    receive facility, a process they have used to create 27 local
    receive sites to provide service to 27 local-into-local markets
    served since the SHVIA was enacted at the end of November,
    1999.[^103] According to DirecTV, the parameters for construction
    and designation of a local receive facility include: 1) access to
    multiple long distance common carriers for DS-3 or other high-speed
    digital fiber circuits; 2) access to at least one local common
    carrier that can provide TV1 quality digital fiber circuits to most,
    if not all, television broadcast stations \[in the DMA\], and/or
    local DS-3 circuits, microwave, and broadband analog service as
    local conditions may require; 3) access to multiple long distance
    carriers that can provide a wide area data network up to 256kb/s as
    well as dial up voice service must also be available; 4) access to
    building rooftop with connecting conduits to support, where needed,
    good quality over-the-air television reception, microwave links, and
    satellite reception; 5) access to a suitable area with connecting
    conduits to support a satellite downlink antenna; and 6) access to a
    suitable area to install equipment to support all local collection,
    compression, monitoring, and transmission equipment. This area must
    be securable against unauthorized access and have stable power
    source and HVAC. DirecTV also states that local receive facilities
    must be planned twelve months in advance.[^104]

# 

#  1. Local Receive Facilities

45. In the definition of "local receive facility" in Section 338(h)(2),
    the satellite carrier is the entity authorized to designate the
    placement of a local receive facility.[^105] If the satellite
    carrier designates a local receive facility, the television
    broadcast stations are required by the statute to bear the costs of
    delivering a good quality signal to "the designated local receive
    facility of the satellite carrier."[^106] We find that the statute
    expressly provides that the satellite carrier has the right to
    determine the location of the local receive facility. We disagree
    with the proposals offered by AAPTS and Network Affiliates to
    require a satellite carrier to locate a receive facility either
    within the Grade B contour or not more than 50 miles from the
    community of license of each of the local stations in a
    market.[^107] We recognize that in some of the larger DMAs in the
    western United States, some broadcast stations may be required to
    provide their signals over hundreds of miles if the receive facility
    is located beyond a local commercial or non-commercial television
    station's Grade B signal.[^108] We believe this is the reason
    Congress provided for an alternative receive facility, as discussed
    below. But, we do not believe it would be consistent with statutory
    language, which requires the broadcast station to bear the cost of
    delivering a good quality signal, to require satellite carriers to
    bear the cost of erecting additional facilities to receive signals
    from stations that are more than 50 miles away from a designated
    receive point.[^109]

46. With respect to the costs of erecting and maintaining the receive
    facility itself, we note that in the cable context, the cable
    operator pays the costs for signal processing at its principal
    headend.[^110] Given that the satellite carrier's local receive
    facility functions like a headend, and is under the carrier's
    control, we believe that the satellite carrier has the sole
    responsibility to pay for the costs of building and maintaining such
    a facility. We also find that the satellite carrier should pay for
    the costs of constructing and maintaining an alternative receive
    facility, as discussed below. This is appropriate particularly if
    the alternative facility is regional, and the satellite carrier
    benefits from having fewer facilities to build and maintain.

47. We note that DirecTV and Echostar have already built facilities in a
    number of television markets where they now provide local-into-local
    service.[^111] While DirecTV states that twelve months is the
    minimum amount of time necessary to establish a receive facility, we
    believe that the satellite carriers that are currently providing
    local-into-local service should not experience any difficulties in
    carrying local television stations by January 1, 2002 due to
    buildout issues.[^112] In the future, satellite carriers that enter
    new markets with local-into-local service should be able to fulfill
    their carriage obligations because Section 338 does not impose
    carriage obligations until the satellite carrier retransmits at
    least one local television station, which would necessitate that the
    carrier have a receive facility in place or under development before
    the carriage requirement is triggered.

48. We also find, as AAPTS and others suggest, that a satellite carrier
    should designate the same receive facility for both retransmission
    consent and mandatory carriage television stations so as to avoid
    any opportunity to assign less convenient facilities to those
    stations seeking mandatory carriage.[^113]

## 2. Alternative Receive Facility

49. The definition of local receive facility in Section 338(h)(2)
    strongly suggests that Congress intended to permit carriers to
    designate a single point for all local-into-local stations to be
    received, processed and retransmitted. However, the second clause of
    Section 338(b)(1) provides that, with respect to the costs of
    delivering a good quality signal, there may be "another facility
    that is acceptable to at least one-half the stations" to which the
    television broadcast station delivers a good quality signal. The
    *Notice* considered this other facility as a facility outside the
    local DMA, perhaps a facility serving a regional area. Some
    commenters agreed that this is the likely meaning of this
    clause.[^114] We note, however, that this is not the only possible
    meaning of "another facility." As DirecTV suggests, the other
    facility could be an alternative facility, not necessarily a
    non-local or regional facility.[^115] Most of the comments on this
    subject assumed that the other facility would be a non-local,
    regional facility established by a satellite carrier and that is
    acceptable to at least one-half of the stations asserting the right
    to carriage.[^116] We focus here on this interpretation and the
    necessary rules to implement it, but we do not foreclose the
    possibility that the creation of an alternative site, whether local
    or non-local, can also be consistent with the statutory language. An
    alternative local receive facility would be one selected after the
    satellite carrier has chosen its first designated local receive
    facility.

50. AAPTS states that the consent of at least one local NCE station
    eligible for carriage in the market should be required before an
    alternate facility is chosen.[^117] Broadcast groups generally
    assert that non-local receive sites should not be selected unless
    the majority of stations in each affected market agree to the
    location of the facility.[^118] Echostar argues that it is
    significantly more burdensome for satellite carriers to seek the
    agreement of a majority of stations in each locality than the
    majority of stations in a particular region.[^119] ALTV states that
    a non-local receive facility may be established if half the local
    stations electing mandatory carriage, rather than retransmission
    consent, agree to the alternate site.[^120]

51. Under our reading of the phrase "that is acceptable to at least
    one-half the stations asserting the right to carriage in the local
    market," we find that an alternative receive facility may be
    established if 50% or more of those stations in a particular market
    consent to such a site. As the statute uses the term "local," we
    find that the calculation should be based on the majority of
    stations entitled to carriage in each affected market, not the
    aggregate number of stations in all affected markets.[^121] Since
    the "right to carriage" under Section 338 extends, at least
    initially, to all local television broadcasters, the calculation
    includes all stations, whether they elect mandatory carriage or
    retransmission consent. We disagree, in part, with ALTV, which
    asserts that a non-local receive facility may be established if half
    the local stations electing mandatory carriage, rather than
    retransmission consent, agree to the alternate site.[^122] Just as
    we decide that a satellite carrier should include both
    retransmission consent and mandatory carriage local stations on the
    same designated local receive facility, we do not distinguish
    between retransmission consent and mandatory carriage in the
    determination of an acceptable alternative receive facility. We
    note, however, that if a satellite carrier has both a designated
    local receive facility and a non-local or regional receive facility
    and can accommodate local stations for retransmission into their
    local markets at either one, the television station may choose
    whether to deliver its good quality signal to one or the other, and
    must notify the satellite carrier to which one of the facilities it
    will deliver its signal. Each local television broadcast station
    requesting carriage must bear the cost of delivering its good
    quality signal to the receive facility.

52. All stations "asserting a right to carriage," either through
    retransmission consent or mandatory carriage, may participate in the
    consideration of whether an alternative receive facility is
    acceptable. We note that television stations that substantially
    duplicate other local television stations may not ultimately be
    carried, but should, nevertheless, be counted in the 50% of stations
    that must find the alternative facility acceptable. For example, if
    there are 20 stations in a local market that may request carriage,
    but only 16 that must ultimately be carried, the satellite carrier
    must notify all 20 stations of a proposed alternative receive site,
    and at least 10 must find the alternative site acceptable.[^123]

53. As several commenters observed, a satellite carrier's local receive
    facility is the equivalent of a cable system's headend.[^124] We do
    not believe that the statute requires, nor that any party
    contemplates, that television stations can unilaterally select a
    site and force a satellite carrier to construct a facility or move
    its receive facility there.[^125] NAB asserts that the Act
    contemplates negotiations in which a carrier attempts to persuade
    more than half of the stations eligible for carriage to agree to
    deliver a good quality signal to a particular location outside the
    local market.[^126] We agree with NAB on this point. If the
    satellite carrier designates one local receive facility, 50% or more
    of the local stations may not demand or require that the satellite
    carrier provide an alternative receive facility.[^127] We find that
    Congress intended that the satellite carrier be part of the
    negotiation process concerning the establishment of an alternative
    receive facility. Given the costs and steps involved in creating a
    receive facility, the satellite carrier is to play a central role in
    such discussions. Indeed, we expect that in most cases, the
    satellite carrier will be the initiating party seeking to use a
    non-local or regional receive facility other than its designated
    local receive facility and to obtain the consent of at least 50% of
    the stations asserting the right to carriage.

54. As noted above, the statute assigns costs to the broadcaster when
    providing the satellite carrier with a good quality signal to either
    a local or alternative facility. We agree, therefore, with BellSouth
    that a satellite carrier is not obligated to carry a television
    broadcast station that refuses to pay for the costs of providing a
    good quality signal. [^128] For similar reasons, we disagree with
    Network Affiliates' proposal that if the carrier uses an alternative
    facility, which at least half of the local stations find acceptable,
    then the satellite carrier should pay the incremental costs of
    delivering each broadcaster's signal if the alternative facility is
    more than 50 miles from the reference point of the station's
    community of license.[^129]

> **3. Notification**

# 

55. We conclude that a satellite carrier should provide local television
    stations with information on the location of an existing local
    receive facility, or where it plans to build a local or alternative
    receive facility, before the station makes its election. Advance
    notice of the receive point location is necessary because television
    stations must make arrangements for delivering good quality signals
    to the receive site. Advance notice is also desirable to enable the
    satellite carrier to negotiate with all the local television
    stations concerning alternative receive facilities. In the event a
    satellite carrier must select which duplicating station or NCE
    station to carry from among several that request carriage, nothing
    in the statute or our rules prevents the satellite carrier from
    taking into consideration which stations that find the satellite
    carrier's proposed alternative receive facility acceptable. As
    described above, we consider this to be a fair subject for
    negotiation amongst the affected parties.

56. We disagree with DirecTV's argument that satellite carriers not be
    required to inform local broadcast television stations of the
    location of the receive facility until after such stations have
    notified the carrier, in writing, that they wish to be carried
    pursuant to Section 338, and it has been established that they are
    otherwise eligible for such carriage.[^130] We see no reason to keep
    the location of existing designated local receive facilities or
    planned sites a secret. We agree with the suggestion of other
    commenters that the satellite carrier should designate the local
    receive facility in its carriage agreements with local television
    stations or, in the mandatory carriage situation, provide notice to
    the affected stations as to the location of the local receive
    facility.[^131]

57. Satellite carriers must be afforded a reasonable period of time to
    finalize arrangements for the location of the local receive facility
    in order to meet the January 1, 2002 deadline. Any delays by local
    television stations will work against a satellite carrier meeting
    its carriage obligations in a timely manner, which ultimately works
    against the television stations and viewers, as well. Therefore,
    when a satellite carrier has a designated local receive facility to
    which local stations seeking carriage must deliver a good quality
    signal, the carrier must make the location of this facility known by
    June 1, 2001 for the first election cycle, and at least 120 days
    prior to the commencement of all election cycles thereafter.[^132]
    The means by which television stations are notified is left to the
    discretion of the satellite carrier.

58. BellSouth suggests that a carrier should give local television
    stations 90 days notice before it moves a local receive facility in
    order to protect the legitimate interests of television stations and
    to avoid service disruption to subscribers.[^133] We agree, in
    principal, with BellSouth's proposal. Generally, a satellite carrier
    may relocate the designated local receive facility every three years
    coinciding with the election cycle. We believe that satellite
    carriers should have the flexibility to change their designated
    local receive facility or alternative facility, and will require 60
    days advance notice to all local stations. We are concerned,
    however, that the relocation of a local receive facility may make it
    more difficult for some television stations to pay the costs of
    delivering a good quality signal. Therefore, if a satellite carrier
    decides to relocate the designated local receive facility during an
    election cycle, it should pay the television stations' costs to
    deliver a good quality signal to the new location. With respect to
    moving the alternative facility, the new location must be acceptable
    to at least half of the local stations entitled to carriage in the
    local market. Obtaining such agreement may require more than 60 days
    notice, and the satellite carrier may find it necessary to plan for
    a new alternative facility with additional advance notice. A
    satellite carrier may not require local stations to deliver their
    signals to a new alternative facility unless and until at least 50%
    of the stations agree to the new facility.

> **4. Process**

59. The *Notice* requested comment on the process by which broadcast
    television stations agree to the establishment and location of an
    alternative receive facility.[^134] NAB urges the Commission to
    establish a complaint process whereby stations in the minority of a
    determination of an acceptable alternative receive facility can
    protest if they believe the designation of a non-local receive
    facility site would undermine or evade the mandatory carriage
    requirements.[^135] BellSouth disagrees with this suggestion because
    under Section 338(b)(1), the stations' vote decides the issue, and
    there is no statutory basis for Commission action to review or
    reverse this process.[^136] AAPTS responds by stating the Commission
    has the authority to create remedial processes that are not
    expressly mandated by statute.[^137]

60. We decline to establish a special complaint standard or process for
    disputes concerning alternative receive facility disputes. To the
    extent a television broadcast station believes its right to carriage
    has been denied because fewer than 50% of the relevant stations
    agreed to an alternative site, such claims may be raised in a
    mandatory carriage complaint. If there is no dispute that 50% or
    more of the local stations that could assert mandatory carriage have
    agreed to an alternative site, then we see no issue that would
    require our intervention.

61. We find that the negotiations and arrangements among local
    television broadcast stations and satellite carriers with respect to
    agreeing upon an alternative local receive facility are generally
    intended to be a voluntary process. We also decline to adopt a good
    faith test to be used in the context of receive point
    negotiations.[^138]

> **5.** **Good Quality Signal**

62. **Standard.** In the *Notice*, we inquired about the "good quality
    signal" mandate in Section 338. Under the current cable carriage
    regime, television broadcast stations must deliver either a signal
    level of -45dBm for UHF signals or -49dBm for VHF signals at the
    input terminals of the signal processing equipment, to be considered
    eligible for carriage.[^139] We sought comment on whether the signal
    quality parameters under Section 614 and the Commission's cable
    regulations are appropriate in the satellite carriage context.[^140]

63. DirecTV states that the Commission should define "good quality
    signal" as one that will facilitate efficient MPEG compression of
    all channels. DirecTV proposes that the signal must meet the
    requirements of GR-338 CORE, TV1 for \<20 route miles.[^141] It
    states that the "\<20 route miles" specification contains essential
    elements that are necessary for the digital video compression
    equipment used in DBS systems.[^142] DirecTV also argues that the
    Commission should require a television broadcast station to contract
    with a local telecommunications common carrier to lease a dedicated
    TV1-quality fiber circuit from the broadcast station to the
    satellite carrier's local receive facility.[^143] We decline to
    adopt DirecTV's good quality signal proposals for several reasons.
    First, we believe that the TV1 standard is too rigid a construct.
    Specifically, a signal-to-noise ratio of +67 dB cannot be easily
    implemented by most television broadcast stations.[^144]
    Broadcasters do not have to meet such exacting ratios and levels
    when delivering signals to a cable operator's headend to qualify for
    carriage. Moreover, as NAB points out, satellite carriers, such as
    Echostar, have been retransmitting local television signals that
    they have received over-the-air without much concern about signal
    quality.[^145] We also note that it would be prohibitively expensive
    for a small television station to lease a dedicated TV1 circuit from
    a telecommunications carrier. It is not our intention to impose
    inordinate costs on small television stations that would prevent
    them from being carried by a satellite carrier.

64. We decide to apply the current good quality signal standards
    applicable in the cable context to satellite carriers, as suggested
    by ALTV.[^146] The standards that have been applied to cable
    operators have functioned well since the inception of the statutory
    cable carriage requirements seven years ago. No evidence has been
    presented suggesting the cable signal quality standard will not
    prove equally satisfactory in the satellite context. We believe that
    the application of the current good quality signal standards will
    provide parties with a workable, tested standard.

65. Christian Television Network ("CTN") argues that the good quality
    signal standard should not be premised on off-air signal strength,
    but should turn on the quality of the picture delivered by any
    means.[^147] AAPTS also states local stations that cannot provide a
    good quality signal to the local receive facility over-the-air
    should be permitted to deliver the signal in another way.[^148] We
    agree with these commenters that television stations may use any
    delivery method to improve the quality of their signals to the
    satellite carrier. A television station may use microwave
    transmissions, fiber optic cable, or telephone lines as long as they
    pay for the costs of such delivery mechanisms. Such alternative
    delivery methods are sanctioned under the cable carriage rules and
    should be applicable in the satellite carriage context.

66. **Carriage of Television Stations With Disputed Signal Quality.** In
    the *Notice*, we recognized that a broadcaster not providing a good
    quality signal to a cable system headend is not qualified for
    carriage.[^149] In this situation, a cable system is under no
    obligation to carry such a signal, but the broadcaster has an
    opportunity to provide equipment necessary to improve its signal to
    the requisite level and gain carriage rights.[^150] We sought
    comment on whether Congress intended the same result for
    broadcasters that do not provide a good quality signal to the local
    satellite receive facility.

67. ALTV, AAPTS, and Network Affiliates agree that a satellite carrier
    may insist that a station cover the costs of delivering a good
    quality signal; they argue, however, that a satellite carrier cannot
    refuse to carry a television station just because its signal is less
    than adequate.[^151] NAB comments that satellite carriers operating
    under Section 338, unlike cable systems operating under Sections 614
    and 615, do not have the option of holding a station's carriage
    "hostage" during a dispute about a good quality signal.[^152] It
    posits that even if the Commission had the power to allow carriers
    to do so, it should decline that invitation, since a litigious
    satellite carrier could, as a practical matter, unilaterally
    postpone the effective date of the Section 338 requirements for long
    periods by dragging out Commission and court enforcement
    proceedings.[^153] Conversely, DirecTV and LTVS assert that a
    satellite carrier may refuse to carry a station that fails to
    provide a good quality signal to the local receive facility.[^154]
    LTVS adds that the satellite carrier should first notify the
    broadcast station of the deficient signal, including measurements
    and relevant data, and then discontinue carriage if the broadcaster
    fails to improve the signal quality.[^155]

68. We disagree with the broadcast groups on this issue. We first
    observe that the statute does not affirmatively instruct satellite
    carriers to carry television stations that do not provide a good
    quality signal. Rather, Section 338 only provides that a television
    station is responsible for the costs of delivering a good quality
    signal. Given the absence of a statutory directive, we must
    interpret Section 338 in a manner that is both reasonable and
    consistent with current law. We also find that it would be contrary
    to the public interest to require satellite carriers to carry
    television stations that provide a poor quality signal. The
    principle reason underlying this decision is that satellite
    subscribers would not benefit from receiving a television signal
    that is of poor quality. In this instance, we believe that satellite
    subscribers would rather subscribe to cable or receive the signals
    over-the-air rather than pay for inadequate television signals
    retransmitted by a satellite carrier. Moreover, cable operators are
    not required to carry poor quality signals under Sections 614 and
    615 of the Act. Noting the SHVIA's directive in establishing
    comparable carriage requirements between satellite carriers and
    cable operators, we should not require the carriage of poor quality
    signals under Section 338. We note that our findings here do not
    relieve the satellite carrier of its obligations to carry television
    signals where it provides local-into-local service. Rather, the
    satellite carrier does not have an obligation to carry television
    stations until they voluntarily pay and provide a good quality
    signal.

69. **Good Signal Quality Measurement and Testing.** With respect to the
    manner of testing for a good quality signal, we note that the
    Commission has adopted a method for measuring signal strength in the
    cable carriage context. 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, 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.[^156] The Commission stated that cable operators are
    further expected to employ sound engineering measurement practices
    when testing signal strength.[^157] We sought comment on whether we
    should require the same signal testing practices for measuring a
    broadcaster's signal strength in the satellite context.

70. LTVS states that the signal testing practices used in the cable
    context should apply in the satellite context.[^158] NAB proposes
    adding "additional safeguards" to the signal testing process, such
    as permitting local stations to observe measurement procedures and
    requiring use of independent engineers to conduct tests.[^159] NAB
    also advocates that the good quality signal requirements for
    satellite carriers should incorporate the various findings in
    Commission rulings in the cable context, such as the requirement
    that an operator use actual field measurements, rather than computer
    predictions, to measure a television station's signal.[^160]
    BellSouth argues that NAB provides no support for imposing more
    stringent requirements on satellite carriers than on cable
    systems.[^161] BellSouth also argues that like cable systems,
    satellite carriers should cooperate in testing the signal quality
    delivered by television stations to the satellite carrier's local
    receive facility.[^162]

71. We believe that the signal testing practices in the cable carriage
    context should be generally applied in the satellite carriage
    context. The Commission developed its engineering standards through
    experience in adjudicating signal quality disputes between cable
    operators and television broadcast stations. In this instance,
    commenters have not provided any arguments or data suggesting that
    the cable practices and engineering standards would be unsuited for
    satellite carriers. As for NAB's call for additional safeguards, we
    find that such engineering and procedural processes should not be
    implemented as regulatory requirements. Instead, the parties should
    look to precedent as useful guidance. With regard to testing fees,
    we believe that the television broadcast station should pay for
    signal tests.[^163]

72. At the same time, however, we note that the satellite carrier's
    local receive facility may not have a tower with broadcast station
    reception equipment mounted onto it like that is found at a cable
    system's principal headend. It has been standard practice among
    cable operators and broadcasters to test a television station's
    signal strength at the tower site. To remedy this situation, we
    strongly recommend that satellite carriers and broadcasters follow
    the testing procedures for field strength measurements found in
    Section 73.686(b)(2) of the Commission's rules, in addition to
    following the good engineering practices established in the cable
    context.[^164] These rules, we believe, will serve as an adequate
    proxy for conducting signal measurements in lieu of an actual tower.

######### E. Duplicating Signals {#e.-duplicating-signals .unnumbered}

73. **Definition.** Section 338(c)(1) states that:

> Notwithstanding subsection (a), a satellite carrier shall not be
> required to carry upon request the signal of any local commercial
> television broadcast station that substantially duplicates the signal
> of another local commercial television broadcast station which is
> secondarily transmitted by the satellite carrier within the same local
> market. . . .[^165]

In the *Notice*, we asked several definitional questions concerning this
phrase.

74. 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.[^166] The Commission
    decided that, based on the legislative history of this section, two
    stations \"substantially duplicate\" each other \"if they
    simultaneously broadcast identical programming for more than 50
    percent of the broadcast week.\"[^167] For purposes of this
    definition, identical programming means the identical episode of the
    same program series.[^168] Section 615(e) provides that cable
    operator with cable system capacity of more than 36 usable activated
    channels, and carrying the signals of three qualified NCE stations,
    is not required to carry the signals of additional stations the
    programming of which substantially duplicates the programming
    broadcast by another qualified NCE station requesting
    carriage.[^169] The 1992 Cable Act states that substantial
    duplication was to be defined by the Commission in a manner that
    promotes access to distinctive noncommercial educational television
    services.[^170] The Commission concluded that an NCE station does
    not substantially duplicate the programming of another NCE station
    if at least 50 percent of its typical weekly programming is distinct
    from programming on the other station either during prime time or
    during hours other than prime time.[^171] We sought comment on
    whether the Commission should apply the cable carriage duplication
    definitions to satellite carriers under Section 338.

75. DirecTV proposes that the definition of "substantial duplication,"
    as employed in Section 338(c), should include identical programming,
    whether broadcast simultaneously or not, of either 50 percent or
    more of a television broadcast station's total weekly programming,
    or 50 percent or more of its prime-time programming.[^172] Network
    Affiliates argue that substantial duplication should be found only
    where there is an overlap in the Grade B contours of the stations in
    question. According to Network Affiliates, where there is no Grade B
    overlap between the stations, the stations' signals should not be
    deemed to substantially duplicate each other and should be entitled
    to carriage.[^173] We do not find that these commenters have
    presented persuasive evidence as to why the cable standard is not
    suited for satellite carriers. Their proposals are also contrary to
    the purpose of the Act. DirecTV's proposal would winnow away a
    television station's right to carriage and would unduly expand the
    substantial duplication exception beyond what was intended by
    Congress. If the Network Affiliates' suggestion were adopted, we
    believe that the statutory duplication provision would be
    eviscerated, as there would be no station in a particular market
    that would duplicate another.

76. Accordingly, we will apply the duplication standards for commercial
    television stations,[^174] set forth in the cable operator context,
    to satellite broadcast signal carriage as suggested by ALTV, NCTA,
    and LTVS.[^175] That is, two commercial television stations
    substantially duplicate each other if they simultaneously broadcast
    identical programming for more than 50 percent of the broadcast
    week. The cable duplication provisions for commercial television
    stations have been in effect for the last seven years, without much
    controversy, and there is no reason to believe that they will be
    difficult to implement in the satellite carriage context.

77. We note, however, that due to the fundamental operational
    differences between cable systems and satellite service, a satellite
    carrier may choose which duplicating signal it is not required to
    carry. This policy differs from the cable duplication rules where an
    operator must carry the station that is closest to its principal
    headend. Since there are no "headends" in the satellite carriage
    context, that are relevant to the question of which stations in a
    particular market to carry, comparable rules in this specific
    instance should not be implemented. Absent an analogous headend
    standard or statutory guidance, we believe the public interest is
    best served by permitting satellite carriers to determine which
    stations to offer their subscribers.

78. DirecTV argues that, in addition to its ability to deny carriage of
    duplicative stations in the first instance, a satellite carrier
    should be permitted to remove a television broadcast station from
    its line-up if it begins to substantially duplicate its programming
    after carriage of the station has commenced.[^176] We agree with
    DirecTV on this point. If the substantial duplication criteria are
    satisfied, a satellite carrier is permitted to drop that television
    station from its channel line-up. If this situation arises, however,
    we require the satellite carrier to notify the station, and its
    subscribers, in a timely manner prior to its removal from the
    relevant local-into-local channel line-up. By the same token, we
    also find that a satellite carrier must begin carrying a television
    station that stops duplicating another local television station.
    When this circumstance presents itself, the station shall use the
    same procedures to establish carriage as permitted for new
    television stations under Section 76.66.

79. We sought comment on the phrase, "affiliated with a particular
    television network." In this situation, we asked what definition of
    "television network" applies because that term is not specifically
    defined in Section 338.[^177] We asked whether we should implement
    the definition of television network found in Section 339 of the
    Act, the SHVIA's distant signal carriage provision, for the purposes
    of administering the Section 338 duplication provision.[^178]
    BellSouth, NCTA, and LTVS all agree that the definition in Section
    339(d) is acceptable.[^179] Given the parties assent to the
    inclusion of the Section 339 definition, and the lack of opposition,
    we adopt this definition for the purpose of the substantial
    duplication analysis.

80. We now turn to the second part of Section 338(c)(1):
    "Notwithstanding subsection (a), a satellite carrier shall not be
    required to carry upon request the signal of any local commercial
    television broadcast station that substantially duplicates the
    signal of another local commercial television broadcast station
    which is secondarily transmitted by the satellite carrier within the
    same local market *or to carry upon request the signals of more than
    one local commercial television broadcast station in a single local
    market that is affiliated with a particular television network
    unless such stations are licensed to communities in different
    states.*" (emphasis added). We find that this part of the provision
    dictates three results. First, satellite carriers are not obligated
    to carry more than one network affiliate in a television market when
    both affiliates are licensed to communities in the same state, even
    if the affiliates do not substantially duplicate their programming.
    This is analogous to the cable rule stating that a cable system need
    only carry the network affiliate closest to the principal
    headend.[^180] In this context, a satellite carrier may select which
    network affiliate it wants to carry. Second, a satellite carrier
    must carry network affiliated television stations licensed to
    different states, but located in the same market, even if they meet
    the definition of substantial duplication under the Commission's
    rules. An example of this situation is WMUR and WCVB. Both are ABC
    network affiliates, but the former is licensed to Manchester, New
    Hampshire, while the latter is licensed to Boston,
    Massachusetts.[^181] Under Section 338(c)(1), the satellite carrier
    would be obligated to carry both. Third, if two television stations
    located in different states (but within the same "local market")
    duplicate each other, but are not network affiliates, the satellite
    carrier only has to carry one. For example, if there are two Home
    Shopping Network station affiliates in the same market, but located
    in different states, the satellite carrier need not carry both
    because the Home Shopping Network is not a television network under
    our definitional rule.[^182]

81. **Different States Examples.** In the *Notice*, we inquired about
    the application of the statutory phrase, "communities in different
    states."[^183] Congress stated that this phrase addresses unique and
    limited cases, including such station pairs as WMUR (Manchester, New
    Hampshire) and WCVB (Boston, Massachusetts) in the Boston DMA (both
    ABC affiliates), cited above, as well as WPTZ[^184] (Plattsburg, New
    York) and WNNE (White River Junction, Vermont)[^185] in the
    Burlington-Plattsburgh DMA (both NBC affiliates), in which mandatory
    carriage of both duplicating local stations upon request assures
    that satellite subscribers will not be precluded from receiving the
    network affiliate that is licensed to a community in the state in
    which they reside.[^186] We asked whether there were other similar
    situations that must be addressed and accounted for.[^187]

82. According to DirecTV, Congress sought to create only a very narrow
    exception to the general rule that satellite carriers shall not be
    required to carry duplicative signals -- one that applies in "unique
    and limited cases."[^188] DirecTV argues that the Commission must
    implement this provision in the limited manner that Congress
    intended\--in no case should the Commission infer additional
    authority to address "similar situations."[^189] We infer no such
    additional authority. NAB asserts that there is no conflict between
    the Act and the Conference Report on this issue: the Act reaches any
    instance in which two affiliates of the same network are licensed to
    different states but within the same local market.[^190] According
    to NAB, while these instances are no doubt "unique and limited," as
    the Conference Report indicates, the Act is not restricted to the
    particular examples mentioned in the Conference Report.[^191] We
    agree with NAB. The reference in the legislative history, cited
    above, merely states known examples. It cannot be read to limit the
    phrase's application to only the noted examples.

83. **National Programming.** DirecTV argues that it would make no sense
    for the Commission to mandate carriage of local affiliates if they
    substantially duplicate the programming provided by the same channel
    that is carried nationally.[^192] NAB argues that the term "another
    local commercial television broadcast station" in Section 338's
    duplication provision cannot be read to mean a non-local TV station
    or non-broadcast satellite channel.[^193] We disagree with DirecTV's
    position here. The relevant statutory provision is specifically an
    intra-market exemption, directly referring to situations where
    "local" television stations duplicate each other. Congress did not
    intend for national programming to be considered in the duplication
    analysis, otherwise it would have so stated. If we were to adopt
    DirecTV's position, local television stations that carry Univision
    or Telemundo Spanish language programming, for example, would not
    have to be carried by satellite carriers because their national
    feeds are already carried. In so doing, we would obviate the
    statute's focus on localism.

**F. Noncommercial Educational Television Station Carriage Issues.**

84. Section 338(c)(2) states that: "The Commission shall prescribe
    regulations limiting the carriage requirements under subsection (a)
    of satellite carriers with respect to the carriage of multiple local
    noncommercial television broadcast stations. To the extent possible,
    such regulation shall provide the same degree of carriage by
    satellite carriers of such multiple stations as is provided by cable
    systems under Section 615."[^194] Section 615(l)(1), in turn,
    provides that a local noncommercial educational television (\"NCE\")
    station qualifies for cable carriage 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.[^195] For purposes of cable
    carriage, an NCE station is considered local if its community of
    license is within 50 miles of, or the station places a Grade B
    contour over, the principal headend of the cable system.[^196] Cable
    systems are required to carry local noncommercial educational
    television stations under a statutory provision based on a cable
    system\'s number of usable activated channels.[^197] As part of our
    inquiry regarding Section 338's duplication provision, we sought
    comment on the scope of a satellite carrier's obligations with
    regard to noncommercial educational television stations.[^198] We
    also asked whether we should adopt procedural rules for the carriage
    of NCE television stations to mirror the cable carriage
    requirements.[^199]

85. AAPTS argues that the duplication provision is the only limitation
    on local NCE station carriage contemplated by SHVIA. AAPTS argues
    that Congress intended for eligible local NCE stations to be carried
    whenever a satellite carrier system is providing local-into-local
    service in a particular market.[^200] On the opposite side, DirecTV
    and Echostar assert that the Commission should limit satellite
    carriage of NCE stations in a manner consistent with a carrier's
    technical limitations and other factors that differentiate the
    satellite industry from the cable industry.[^201] For example,
    EchoStar argues that no more than 2% of a satellite carrier's total
    channel capacity (*i.e*., 6 channels nationwide for a system of 300
    channels) should be devoted to local noncommercial station
    carriage.[^202] DirecTV submits that satellite carriers should only
    be required to carry a number of NCE stations that would bring the
    total number of NCE channels (defined to include national
    educational channels) available in a local market to a maximum of
    four percent of the local required channels offered by the satellite
    carrier in the market.[^203] According to DirecTV, none of these
    channels should substantially duplicate programming that is offered
    on another channel already carried in the market.[^204]

86. We find that the NCE carriage formulations proposed by DirecTV and
    Echostar would deprive satellite subscribers of access to local
    noncommercial television stations in those markets where
    local-into-local service is offered. While we recognize that
    satellite carriers provide a national service, their proposals would
    vitiate the intent of Congress in promoting carriage of local NCE
    stations. Instead, we agree with AAPTS that the duplication
    provision is the only limitation on NCE carriage contemplated by
    Congress when it promulgated Section 338. Therefore, a satellite
    carrier must carry all non-duplicative NCE stations in markets where
    they provide local-into-service. Section 338 instructs the
    Commission to implement NCE station carriage requirements providing
    the same degree of carriage by satellite carriers as is required by
    cable systems under Section 615 of the Act.[^205] Cable systems with
    more than 36 channels are required to carry all non-duplicative NCE
    stations.[^206] Given that satellite carriers have more than 36
    channels, we hold that satellite carriers' NCE station carriage
    obligations should be comparable to the requirements imposed on
    cable operators. [^207]

87. At the same time, we recognize that Section 338 requires the
    Commission to limit the carriage of multiple NCE stations in markets
    where local-into-local service is provided. It is important to note
    that this instruction was embedded in the NCE duplication provision
    of Section 338.[^208] Against this backdrop, we adopt a limitation
    principle based upon duplicative programming.[^209] Using the NCE
    station duplication definition found in the cable context as a
    general model, we have developed a two step approach in defining
    substantial duplication in this context. First, a noncommercial
    television station substantially duplicates the programming of
    another noncommercial station if it simultaneously broadcasts the
    same programming as another noncommercial station for more than for
    more than 50 percent of prime time, as defined by §76.5(n), and more
    than 50 percent outside of prime time over a three month period.
    After three noncommercial television stations are carried,[^210] the
    test of duplication shall be whether more than 50 percent of prime
    time programming and more than 50 percent outside of prime time
    programming is duplicative on a non-simultaneous basis.[^211] As for
    the timeframe of when to measure duplication, we find that the
    amount of duplicative prime-time weekly programming broadcast should
    be examined over the course of three month period. The end of the
    three month period must fall within 30 days prior to the date the
    satellite carrier notifies the NCE station that it is denying or
    discontinuing carriage based on substantial duplication. The amount
    of duplicative weekly programming broadcast outside of prime time
    will be measured over the same period. Only if the station
    duplicates more than 50 percent of the other station's weekly
    programming in both of these respects can it be denied carriage. We
    believe this approach is a reasonable means of achieving the
    statutory goal of implementing an NCE carriage obligation for
    satellite carriers that parallels the existing cable carriage
    requirement, and takes into account, "to the extent possible," the
    other relevant technical and legal constraints. In reaching this
    balance, we note in particular that, unlike satellite carriers,
    cable operators are generally required to carry up to three local
    noncommercial educational stations regardless of the duplication
    involved.[^212] However, unlike satellite carriers, cable operators
    need not carry all NCE stations licensed to communities in an
    expansive DMA, but need only carry those NCE stations within 50
    miles of the cable system principal headend or which place a Grade B
    service contour over the principal headend.[^213] The rule adopted
    attempts to balance these differences in a practical way using the
    avoidance of duplication mechanism identified in Section 338(c) of
    the SHVIA.[^214]

88. **Public Interest Set-Aside***.* DirecTV and BellSouth have
    suggested that local NCE station carriage should be capped by the 4%
    set-aside requirement pursuant to Section 335 of the 1992 Cable Act
    and the Commission's rules.[^215] AAPTS urges the Commission to
    reject the DBS industry's attempt to use the national public
    interest set-aside requirement to limit NCE carriage obligations.
    According to AAPTS, the satellite carriers' attempt to cap their
    carriage requirements through their public interest obligations
    confuses two separate statutory schemes: (1) the DBS set-aside for
    national, noncommercial educational programming, designed primarily
    to satisfy DBS public interest obligations; and (2) the satellite
    carriage obligations, triggered only when a satellite carrier offers
    local channels to its subscriber's pursuant to the compulsory
    license.[^216]

89. We will not permit satellite carriers to include NCE stations,
    carried under Section 338, in the calculation of the 4% set-aside.
    We agree with AAPTS that the carriage requirements of the SHVIA have
    different purposes from the set-aside requirements contained in the
    satellite public interest provisions. The Section 338 provisions
    further the goals of localism and nondiscriminatory treatment of
    local television stations while Section 335 furthers the goal of
    program diversity. In this regard, we are concerned that if a
    satellite carrier were permitted to satisfy the public interest
    set-aside with NCE stations, programming diversity would be
    diminished because all programming currently carried to satisfy the
    set-aside will likely be dropped in lieu of NCE station
    carriage.[^217] Section 335 would also be rendered a nullity if NCE
    stations, carried under a different statutory section, were allowed
    to satisfy the set-aside obligations. Moreover, public interest
    set-aside programming must be made available to all subscribers of a
    satellite carrier without additional charge.[^218] This is a
    condition that cannot be met through the carriage of NCE stations
    under the SHVIA because the compulsory license prohibits satellite
    carriers from offering a local NCE station signal to subscribers in
    a non-local market. In this context, it is also important to note
    that cable operators have carriage obligations under Title VI that
    are mutually exclusive. For example, cable operators have an
    obligation to establish public, educational, and government access
    ("PEG") channels under Section 611 of the Act and pursuant to a
    local franchising agreement. We note that in this context, a cable
    operator cannot unilaterally satisfy its PEG requirements by
    carrying NCE stations under Section 615.

90. **PBS Feed.** KQED requests the Commission to clarify that satellite
    carriers may not avoid their local NCE station carriage obligations
    simply by carrying the national PBS satellite feed.[^219] According
    to KQED, the national PBS feed was intended as an interim measure to
    facilitate the satellite industry's ability to offer public
    television service to their subscribers while the industry organized
    to comply with Section 338. On this point, we note that the
    statutory copyright license for the PBS feed expires on January 1,
    2002.[^220] This expiration date coincides with the onset of the
    Section 338 obligations for satellite carriers. The SHVIA
    purposefully instituted a phase-out and phase-in with regard to the
    two compulsory license provisions so that satellite subscribers, in
    markets with local-into-local service, would have continuous access
    to public broadcasting programming.

######### G. Channel Positioning {#g.-channel-positioning .unnumbered}

91. **Placement.** Section 338(d) of the Communications Act states that:

> No satellite carrier shall be required to provide the signal of a
> local television broadcast station to subscribers in that station's
> local market on any particular channel number or to provide the
> signals in any particular order, except that the satellite carrier
> shall retransmit the signal of the local television broadcast stations
> to subscribers in the stations' local market on contiguous channels
> and provide access to such station's signals at a nondiscriminatory
> price and in a nondiscriminatory manner on any navigational device,
> on-screen program guide, or menu.[^221]

The Conference Report notes that the obligation to carry local stations
on contiguous channels is to ensure that satellite carriers position
local stations in a way that is convenient and practically accessible
for consumers.[^222] We stated in the *Notice* that the statutory
directive for channel positioning confirms that satellite carriers are
required to present local broadcast channels to satellite subscribers in
an uninterrupted series.[^223] We sought comment, however, on whether
broadcast signals carried under retransmission consent must be
contiguous with the television stations carried under Section 338 or
whether they may be presented to satellite subscribers in a
non-contiguous manner.[^224]

92. ALTV submits that the signals of all local television stations,
    including retransmission consent stations, must be provided on
    contiguous channels.[^225] AAPTS argues that local broadcast signals
    are to be grouped together regardless of their regulatory status
    because such grouping makes all local signals more easily accessible
    to viewers.[^226] NAB suggests that all stations should appear on
    channel numbers that are in the order in which the stations appear
    to the over-the-air receiver.[^227] BellSouth argues against
    requiring contiguous channel location for retransmission consent
    stations.[^228] It also asserts that Section 338(d) is explicit that
    a satellite carrier cannot be required to provide carry mandatory
    carriage stations in any particular order.[^229]

93. DirecTV urges the Commission to interpret the term "contiguous" as
    allowing satellite carriers to form channel "neighborhoods" of local
    television broadcast stations which consist of contiguous channels,
    but some of which remain vacant.[^230] ALTV believes that this
    proposal is consistent with the contiguous channel requirement
    provided that all local stations' signals are carried in an
    uninterrupted series with no intervening channels of
    programming.[^231] NAB does not object to DirecTV's "neighborhood"
    proposal, provided that: (1) the neighborhood includes all the local
    television stations, including retransmission consent television
    stations; (2) the television stations are listed in the same order
    as their over-the-air channel numbers, and (3) the neighborhood
    includes only local TV stations.[^232]

94. Based on the language of the statute, we find that the channel
    placement provision encompasses all local television stations.
    Therefore, a satellite carrier is obligated to carry both
    retransmission consent stations and mandatory carriage stations in a
    block on the satellite carrier's channel line-up. We find that
    DirecTV's neighborhood proposal is consistent with the statutory
    language as long as the local channel block is not interrupted by
    non-local programming.[^233] We do not believe, however, that the
    statute requires a satellite carrier to place local television
    stations in any particular order. Such restrictive language is not
    found in Section 338(d).

95. **Nondiscriminatory Program Guide Treatment.** In the *Notice*, we
    sought comment on the phrase, "provide access to such station's
    signals. . . . in a nondiscriminatory manner on any navigational
    device, on-screen program guide, or menu."[^234] We specifically
    sought comment on what rules the Commission should develop to ensure
    that television stations are accessible to satellite subscribers on
    nondiscriminatory terms. We asked whether there were any existing
    Commission rules that we may use as a model to develop regulations
    for this particular situation. We also sought comment on whether
    Congress meant that electronic program guide information concerning
    required television station signals should be presented to
    subscribers in the same fashion as other programming services
    provided by the satellite carrier.[^235]

96. AAPTS urges the Commission to adopt nondiscrimination rules that
    parallel the open video system ("OVS") requirements. It argues that
    such rules should ensure that all television broadcast stations,
    including NCE stations, are represented in a nondiscriminatory
    fashion on the electronic program guide, menu, and/or navigation
    device provided by the satellite carrier.[^236] NAB provides a list
    of suggestions regarding how satellite carriers should treat
    television stations to achieve the statute's objectives.[^237] One
    of those examples is to "bar satellite carriers from requiring
    viewers to take extra steps (e.g., mouse or remote control clicks)
    to obtain access to particular local stations, or from placing
    'carry one, carry all' stations on different screens."[^238] We find
    that the broadcasters' suggestions are too restrictive to be
    implemented. The open video system model, as BellSouth points out,
    is a statutory creation with unique requirements and characteristics
    not meant to be transferred to other contexts.[^239] The open video
    system requirements address access to a video delivery platform
    where two-thirds of system capacity must be made available at a
    nondiscriminatory price to outside programmers.[^240] The OVS
    provisions do not directly address concerns involved here, such as
    nondiscriminatory treatment on an electronic program guide. We also
    find that NAB's proposals involve too much detail to be implemented
    as rules. We do not believe that Congress meant to bar satellite
    carriers from requiring viewers to take extra steps to reach a local
    television station on an electronic program guide, when it
    promulgated the SHVIA.

97. In this context, we hold that a satellite carrier should treat all
    local television stations on EPGs in the same manner. Program guide
    presentation and information about a local independent television
    station, or an NCE station, should be similar to that given to a
    local network affiliate carried under retransmission consent. This
    requirement is similar to the statute's treatment of television
    station picture quality under the material degradation provisions,
    discussed below.

98. **Nondiscriminatory Price.** In the *Notice*, we inquired about the
    statutory phrase, "provide access to such station's signals at a
    nondiscriminatory price," and asked whether Congress meant that
    television station signals carried pursuant to mandatory carriage
    requests may cost no more per channel to subscribers than packages
    of retransmission consent television station signals or other
    satellite service packages.[^241] In response to this inquiry, ALTV
    and NAB assert that all local signals should be included in a single
    package.[^242] AAPTS asserts that NCE mandatory carriage television
    stations should be offered as part of the existing local broadcast
    signal package without any additional cost to the subscriber.[^243]
    BellSouth argues that a satellite carrier has the right to place
    local television signals on a pay tier, an enhanced service tier, or
    any other tier of service, as long as all local television stations
    are on this tier and the viewing of no one station costs the viewer
    more than the viewing of any other station in the DMA.[^244]
    Echostar comments that one of the crucial differences between cable
    and satellite carriers is that the latter do not have obligations as
    to the tier in which local signals are to be offered. It states that
    channel placement requirements of Section 338 cannot be used as a
    lever to impose such obligations on satellite carriers.[^245]

99. We do not believe that the statute requires satellite carriers to
    sell all local television stations as one package to subscribers. As
    Echostar points out, Congress did not intend to establish a basic
    service tier-type requirement for satellite carriers when it
    implemented Section 338. Nor did Congress explicitly prohibit the
    sale of local television station signals on an a la carte basis.
    Rather, Section 338's anti-discrimination language prohibits
    satellite carriers from implementing pricing schemes that
    effectively deter subscribers from purchasing some, but not all,
    local television station signals. Thus, we find that a satellite
    carrier must offer local television signals, as a package or a la
    carte, at comparable rates.

100. ALTV and NAB asks the Commission to rule that no new equipment
     should be required to access some, but not all of the local signals
     in a market. According to ALTV, such a pronouncement is necessary
     to prevent discriminatory treatment of mandatory carriage
     television stations.[^246] NAB also suggests that satellite
     carriers should be barred from placing mandatory carriage
     television stations on any satellite that would require a
     subscriber to purchase another dish to receive such signals.
     BellSouth agrees in principle noting that the channel placement
     provisions of Section 338 were designed to ensure that dominant
     stations in a DMA receive no better carriage treatment than other
     stations.[^247] On the other hand, Echostar comments that one of
     the obligations advocated by the NAB -- that the local stations be
     available from the same orbital location -- is tantamount to a
     provision that had been included in draft legislation prior to the
     passage of SHVIA.[^248] Echostar states that such provision, which
     was dropped from the final version of Section 338, would have
     barred satellite carriers from transmitting local stations in a
     manner that would require additional reception equipment. Echostar
     argues that the Commission cannot implement a rule similar to this
     provision when Congress decided not to include such a requirement
     in the SHVIA.[^249]

101. We find that the language of Section 338(d) covers the additional
     equipment concerns raised by the parties and bars satellite
     carriers from requiring subscribers to purchase additional
     equipment when television stations from one market are segregated
     and carried on separate satellites. However, we are not prohibiting
     a satellite carrier from requiring a subscriber to pay for an
     additional dish in order to receive all television stations from a
     single market. For example, DirecTV may require an additional dish
     to receive all television stations from the Baltimore market, but
     it may not require subscribers to purchase the same to receive some
     Baltimore stations where the others are available using existing
     equipment.

######### H. Content To Be Carried {#h.-content-to-be-carried .unnumbered}

102. **Programming in the Vertical Blanking Interval.** Section 338(g)
     states that, "The regulations prescribed \[under Section 338\]
     shall include requirements on satellite carriers that are
     comparable to the requirements on cable operators under Sections
     614(b)(3). . . .and 615(g)(1)."[^250] Section 614(b)(3) states
     that:

> A cable operator shall carry in its entirety, on the cable system of
> that operator, the primary video, accompanying audio, and line 21
> closed caption transmission of each of the local commercial television
> stations carried on the cable system and, to the extent technically
> feasible, program-related material carried in the vertical blanking
> interval \["VBI"\] or on subcarriers. Retransmission of other
> nonprogram-related material (including teletext and other subscription
> and advertiser supported information services) shall be at the
> discretion of the cable operator. Where appropriate and feasible,
> operators may delete signal enhancements, such as ghost canceling,
> from the broadcast signal and employ such enhancements at the system
> headend or headends.[^251]

Section 615(g)(1), which is the noncommercial equivalent of the
commercial television station provision in Section 614(b)(3), states
that:

> A cable operator shall retransmit in its entirety the primary video,
> accompanying audio, and line 21 closed caption transmission of each
> qualified local noncommercial educational television station whose
> signal is carried on the cable system, and, to the extent technically
> feasible, program-related material carried in the vertical blanking
> interval, or on subcarriers, that may be necessary for receipt of
> programming by handicapped persons or educational or language
> purposes. Retransmission of other material in the vertical blanking
> interval or on subcarriers shall be within the discretion of the cable
> operator.[^252]

We sought comment on the applicability of these two similar cable
requirements in the satellite carriage context, especially in light of
the term "comparable" contained in Section 338(g), above.[^253] We note
that the VBI contained in a television broadcast's signal is composed of
many lines of information. Our concern here is with those lines of the
VBI where certain types of data, such as closed captioning information,
are found.[^254] We also note that a satellite carrier does not
retransmit VBI information as it is received. Rather, it converts the
data from an analog to a digital form and carries such data as a digital
stream to the subscriber's home.[^255] The set-top box then converts the
digital stream and makes the data available for subscriber use.

103. Several commenters argue that the Commission should apply the
     applicable cable provisions to satellite carriers.[^256] NAB
     comments that satellite carriers should carry whatever information
     the broadcaster may have embedded in its analog VBI.[^257]
     BellSouth, however, seeks to limit the content-to-be-carried
     requirements for satellite carriers to only closed captioning
     information until the technical feasibility of other applications
     can be tested and agreed to on a case-by-case basis.[^258] We will
     apply the current cable content-to-be-carried requirements to
     satellite carriers. We are not persuaded that satellite carriers
     are unable to carry the relevant data currently contained in the
     VBI. Nor has any satellite carrier proffered a credible argument as
     to why we should treat them differently from cable operators in
     this context. We therefore require satellite carriers to carry the
     same program-related vertical blanking information as cable
     operators, including but not limited to, closed captioning,[^259]
     Nielsen rating codes, V-chip information and for NCE stations,
     material necessary for the receipt of programs by people with
     disabilities as well as education and language-related material. We
     believe our decisions here will further the goals of the SHVIA and
     are consistent with the cable television requirements.

104. **Program-Related.** In the *Broadcast Signal Carriage Order*, the
     Commission decided that the factors enumerated in *WGN Continental
     Broadcasting, Co. v. United Video Inc.* (\"*WGN*\")[^260] provide
     useful guidance for what constitutes program‑related
     material.[^261] The *WGN* case addressed the extent to which the
     copyright on a television program also included program material in
     the VBI of the signal. Under the cable carriage rules, all
     program-related broadcast material must be carried. We sought
     comment on whether the *WGN* program-related analysis applies in
     the context of satellite broadcast signal carriage. Very few
     parties provided comments on this issue. Of those who did, there
     were no negative arguments made. BellSouth, for example, has no
     objection to use of the WGN criteria to determine what content is
     program related and must be carried. Given the dearth of opposition
     to the WGN factors and our cable program-related decisions, we
     hereby incorporate all Commission policies and references regarding
     the term "program-related" into the satellite carriage context.
     This measure, again, serves to align the carriage requirements
     imposed both on cable operators and satellite carriers. Moreover,
     since the *WGN* case centered on copyright law, and the SHVIA and
     Section 338 are also copyright-based, we believe that adopting such
     a policy for satellite carriers is reasonable and appropriate.

105. In the *Notice*, we recognized that the Commission has not
     specifically defined "primary video" in the rules and has instead
     relied on the language of Section 614(b)(3)(B) to clarify the scope
     of the term for purposes of cable broadcast signal carriage.[^262]
     In view of this history, we sought comment on whether a specific
     definition of primary video is required for satellite carriers to
     fulfill the requirements contained in Section 338. Network
     Affiliates state that a specific definition of primary video need
     not be adopted for the satellite carriage rules.[^263] Network
     Affiliates assert that the term has proved self-explanatory and
     non-controversial as applied to cable carriage of analog signals
     and should be equally so in the satellite context.[^264] AAPTS
     asserts that the Commission has not further defined primary video
     for the cable carriage rules, and in the seven years that the rules
     have been in effect, this lack of definition has not been a
     problem.[^265] We agree that the primary video concept has worked
     in the cable carriage context. We therefore incorporate the cable
     version of primary video into the satellite broadcast signal
     carriage rules. Given these indicia, and the fact that implementing
     the cable definition will further the Congressional goal of
     comparability, we believe our finding serves the public interest.
     We note that the Act also mandates that, in addition to primary
     video, accompanying audio must be carried.[^266] Therefore,
     satellite carriers are required to carry the secondary audio
     programming ("SAP") material that accompanies many broadcast
     television programs.

106. **Technical Feasibility.** With regard to the \"technical
     feasibility\" of the carriage of program‑related material in the
     VBI or on subcarriers, the Commission stated in the *Broadcast
     Signal Carriage Order* that such carriage should be considered
     \"technically feasible\" if it does not require the cable operator
     to incur additional expenses and to change or add equipment in
     order to carry such material.[^267] The Commission noted that it
     would consider signal carriage to be \"technically feasible\" if
     only nominal costs, additions or changes of equipment are
     necessary.[^268] We sought comment on whether the consideration of
     technical feasibility should be different in the context of
     satellite broadcast signal carriage.[^269]

107. AAPTS states that there is no technical impediment to the carriage
     of VBI material over satellite; it is simply a question of
     capacity.[^270] LTVS asserts that it is technically possible for a
     satellite carrier to carry closed captioning information, audience
     measurement and/or ratings data, and SAP audio.[^271] While
     BellSouth does not dispute that satellite carriers can and do
     carry, without significant expense, the program-related material
     which television stations currently deliver through the VBI, it
     argues that requiring carriage of different, additional or future
     VBI-carried information may be expensive and may impose significant
     spectrum capacity burdens.[^272] DirecTV asserts that "billions of
     dollars" of additional investment would be required to retrofit its
     satellite system so that it could carry additional material on the
     VBI and allow consumers to view the additional material.[^273]
     AAPTS asserts that, given the widely divergent viewpoints on this
     issue within the satellite industry, the Commission cannot accept
     DirecTV's contention that it is not technically feasible for
     carriers to retransmit program-related material in the VBI.[^274]
     AAPTS further asserts that DirecTV's satellite systems are already
     being designed to deliver data and that even the first DBS
     receivers had both a wide-band and a low-speed data port.[^275]

108. Based on the arguments presented, we find that it is technically
     feasible for satellite carriers to carry the current
     program-related material contained in a television station's VBI.
     DirecTV has not provided detailed evidence to support its claim
     that it will incur financial hardship if it were required to carry
     such program content. We also find it significant that LTVS, a
     future satellite carrier, admits that it would have no difficulty
     in carrying VBI information. With regard to BellSouth's argument,
     there could be new kinds of program-related data in the VBI that
     would cause the satellite carrier to incur inordinate expenses and
     to change or add a substantial amount of equipment. We will address
     such issues on a case-by-case basis in the future.

109. In this context, DirecTV and LTVS also urge the Commission to
     recognize that satellite systems must be designed and constructed
     far in advance of the date for commencement of service.[^276] They
     state that once the systems are deployed in orbit, few changes can
     be made without necessitating the complete replacement of the
     satellite systems at issue.[^277] While we understand the
     challenges involved in constructing, designing, and launching new
     satellites, the arguments expressed by the satellite carriers' are
     unrelated to our discussion here. The underlying concern of the
     carriers is that the carriage of VBI information requires channel
     capacity. On this point, Congress was cognizant of channel capacity
     concerns when the SHVIA was being drafted, yet it still instructed
     the Commission to apply the cable content-to-be carried
     requirements to satellite carriers. We cannot relieve satellite
     carriers of the carriage obligations Congress imposed in the SHVIA
     in this instance.

######### I. Material Degradation {#i.-material-degradation .unnumbered}

110. **Picture Quality.** Section 338(g) states that, "The regulations
     prescribed \[by the Commission under Section 338\] shall include
     requirements on satellite carriers that are comparable to the
     requirements on cable operators under sections 614(b)(4). . . .and
     615(g)(2)."[^278] Section 614(b)(4)(A) states that,

> The signals of local commercial television stations that a cable
> operator carries shall be carried without material degradation. The
> Commission shall adopt carriage standards to ensure that, to the
> extent technically feasible, the quality of signal processing and
> carriage provided by a cable system for the carriage of local
> commercial television stations will be no less than that provided by
> the system for carriage of any other type of signal.[^279]

Section 615(g)(2), which is the noncommercial equivalent of the
commercial television station provision in Section 614(b)(4), states
that,

> A cable operator shall provide each qualified local noncommercial
> educational television station whose signal is carried in accordance
> with this section with bandwidth and technical capacity equivalent to
> that provided to commercial television broadcast stations carried on
> the cable system and shall carry the signal of each qualified local
> noncommercial educational television station without material
> degradation.[^280]

111. When implementing the material degradation provision for cable
     carriage, the Commission relied on the technical standards as
     updated in the *Cable Television Technical and Operational
     Requirements Report and Order*, in defining the scope of the
     requirement.[^281] The *Cable Technical Report and Order*
     specifically addressed the issue of preventing material degradation
     of local television signals carried on cable systems by adopting a
     number of technical standards and providing that cable operators
     must make reasonable efforts and use good engineering practices and
     proper equipment to guard against unnecessary degradation in the
     signal received and delivered to the cable subscriber.[^282] The
     Commission stated that the standards adopted in the *Cable
     Technical Report and Order* were sufficient to satisfy the material
     degradation requirements contained in the 1992 Cable Act.[^283] In
     declining to adopt regulations in addition to those found in the
     *Cable Technical Report and Order*, the Commission stated that
     further rules may have the unwarranted effect of impeding
     technological advances and experimentation in the cable
     industry.[^284] Standards specific to digital transmission were not
     adopted. We sought comment on whether reliance on Commission
     precedent in the cable carriage context regarding material
     degradation was appropriate and whether technical standards
     mirroring those in the cable television field would be
     warranted.[^285] We also asked whether there were certain
     compression ratios or encoding techniques that should be prohibited
     because their use would result in material degradation.[^286]

112. Commenters have proposed a variety of ways to determine picture
     quality standards. LTVS argues that the definition of material
     degradation should include any instance where a television
     broadcast station freezes, tiles, or looks "dirty" due to a
     satellite carrier's choice of encoding and compression
     techniques.[^287] AAPTS advocates a rule requiring satellite
     carriers to maintain local television stations at a TASO Grade 2
     level to avoid material degradation of these signals.[^288] DirecTV
     urges the Commission to refrain from setting standards for material
     degradation until two industry committees devoted to video picture
     quality, IEEE G-2.1.6 and ITU VQEG, complete their work.[^289] HBO
     argues that because of the rapid changes in digital technology,
     there is significant danger that any standards adopted today would
     quickly be obsolete, or worse, would prevent beneficial changes in
     transmission parameters

as technology improves.[^290] We decline to adopt specific picture
quality standards at this time. As we stated in the *Notice*, analog
degradation standards for the cable industry were developed over the
course of several years and evolved as technology changed and
improved.[^291] The Commission has not had a significant opportunity to
evaluate satellite delivery of broadcast signals. We agree with DirecTV
that it would be premature for the Commission to adopt specific picture
quality standards at this time.

113. The Conference Report noted that because of constraints on the use
     of satellite spectrum, satellite carriers may initially be limited
     in their ability to deliver must carry signals into multiple
     markets.[^292] According to the Conference Report: "New compression
     technologies, such as video streaming, may help overcome these
     barriers, and if deployed, could enable satellite carriers to
     deliver must carry signals into many more markets than they could
     otherwise."[^293] The Commission was urged, pursuant to its
     obligations under Section 338, or in any other related proceedings,
     "to not prohibit satellite carriers from using reasonable
     compression, reformatting, or similar technologies to meet their
     carriage obligations, consistent with existing authority."[^294]

114. ALTV argues that those technical means of enhancing capacity, but
     degrading picture quality, should be prohibited. ALTV argues that
     the Conference Report language on signal processing techniques
     should not be read to eviscerate the material degradation
     prohibition.[^295] AAPTS argues that the compression techniques a
     satellite carrier employs should not degrade a local broadcast
     signal such that, to the average viewer, the signal appears
     materially inferior to what the viewer might receive over the air.
     BellSouth argues that the Commission should decline to adopt signal
     quality standards that would contravene Congress's mandate to not
     prohibit satellite carriers from using reasonable compression,
     reformatting, or similar technologies to meet their carriage
     obligations.[^296] DirecTV argues against prohibiting any encoding
     techniques, compression ratios or the use of similar technologies
     that would impede technical innovation that Congress specifically
     sought to foster.[^297]

115. At the outset, we note that our concerns here revolve around the
     satellite carrier's treatment of the broadcast signal on the
     equipment it controls or authorizes. Thus, our focus does not
     involve picture quality issues that may arise because of the type
     of television receiver used since the satellite carrier has little
     control over the use of these devices. We also note that the
     satellite carrier should not be responsible for a poor quality
     picture delivered to the local receive facility. Rather, the
     broadcast station is responsible for ensuring that its signal is
     delivered in good quality.[^298] Moreover, our analysis of material
     degradation recognizes that dish placement on or near the
     subscriber's premises can affect the quality of the picture
     received, but that the satellite carrier cannot control how and
     where dishes are installed.[^299]

116. It is important to note the technical steps in the digital
     conversion process affecting the material degradation
     analysis.[^300] In satellite digital television systems, such as
     those implemented by DirecTV and Echostar, there are four layers of
     the system where video quality may be affected.[^301] The first
     layer, known as the picture layer, is where decisions are made
     regarding the use of progressive or interlace scanning techniques
     as well as whether the picture will be produced in a standard
     definition or high definition format. The choices made in this
     layer will not likely affect the quality of retransmitted analog
     broadcasts.[^302] In the second layer, the compression layer,
     decisions are made regarding the types of compression techniques
     used. The relevant digital standard, MPEG-2, supports a wide range
     of compression ratios and data rates. At this layer, the satellite
     carrier attempts to maximize the number of channels carried on each
     transponder and there is an effort to place a limit on the maximum
     data rate of each channel. Limiting the data rate may cause the
     picture quality to degrade, especially when certain video scenes
     involve rapid motion images or there is a greater degree of camera
     panning and zooming. The third layer is known as the transport
     layer and this is where the data are structured and organized into
     data packets. Since most digital video systems use the MPEG packet
     structure, there is little likelihood that any type of degradation
     would occur at this level. The final layer is the transmission
     layer and this is where data are modulated on to a carrier for
     transmission. Satellite carriers use quadrature phase-shift keying
     or "QPSK" \-- as the principal format when transmitting video
     programming.[^303] The use of high efficiency modulation
     techniques, such as the cable industry's QAM[^304] standard, permit
     greater data rate throughput. QPSK, however, is a lower order
     modulation and requires satellite carriers to limit the data rate
     or increase channel bandwidth. The chances for degradation to occur
     at this level are tied to the limiting data rate technique in the
     compression layer.

117. We specifically note that degradation may result when the satellite
     carrier encodes an analog broadcast signal and readies it for
     digital retransmission. During the encoding process, certain
     artifacts may be introduced into the original material that would
     have an effect on picture quality. The most dominant artifact is
     quantization[^305] noise in the picture. This effect is often
     visible on edges of subjects and textured areas of the image. It is
     caused when there is a high amount of picture detail along with a
     high degree of picture activity and levels of quantization are
     restricted due to data rate reduction. Random noise can also be
     introduced into the source video. This can result in activity or
     "busyness" in detail areas of the picture and tiling or flicker in
     other areas of the picture. Such effects are caused by the encoder
     attempting to encode random noise. During the encoding process of
     rapidly moving images, certain data reduction techniques can result
     in another artifact known as "dirty window," where noise appears
     stationary while images behind it are moving.

118. To satisfy the material degradation principles in the Act, we will
     adopt a simple comparability rule. That is, a satellite carrier
     should treat all local television stations in the same manner with
     regard to picture quality. The signal processing, compression and
     encoding techniques a satellite carrier uses to carry
     retransmission consent stations should also be used for mandatory
     carriage stations. This rule comports with the non-discriminatory
     thrust of Section 338 and the SHVIA. As long as all local
     television stations are treated equally, and the degradation
     resulting from processing these stations does not exceed the level
     for the lowest quality non-broadcast video service provided by the
     carrier, we will refrain from prohibiting compression methods. We
     recognize that compression technology is rapidly evolving and we do
     not want to impede innovation by proscribing certain techniques. We
     also believe that new compression methods may benefit subscribers
     as satellite carriers could offer more services, particularly those
     involving broadband applications.

119. **Measurement.** In the *Notice*, we sought suggestions for
     measurement standards that may be used to address broadcast signal
     degradation by satellite carriers.[^306] We found it necessary to
     request such information because the Commission has had relatively
     little experience in evaluating quality in the context of the
     analog to digital to analog conversion of the type involved in
     satellite broadcast signal carriage.[^307] LTVS states that
     subjective criteria should be used to measure broadcast signal
     degradation and suggests that the Commission consider the
     International Telecommunications Union's recommendations for
     broadcast video evaluation.[^308] NAB, however, proposes the use of
     three objective criteria \-- (a) carrier-to-noise (C/N) ratio, (b)
     bit error rates (BER), and (c) bit rate allocation for each channel
     \-- that collectively provide a method for checking whether a
     satellite carrier is "materially degrading" a local station's
     signal in comparison to other channels.[^309] We decline to adopt,
     as a rule, any one specific technique for measuring degradation.
     Both LTVS and NAB present worthy proposals, but they are untested
     in the field of satellite broadcast signal carriage. The more
     reasonable approach here is to develop a uniform measurement
     technique over time. After some experience with satellite broadcast
     signal carriage, broadcasters and satellite carriers will be able
     to apply such a technique for analog-to-digital degradation
     measurements.[^310] At some future point, the Commission will be in
     a better position to scrutinize the techniques used and establish
     standards, if necessary.

######### J. Digital Television {#j.-digital-television .unnumbered}

120. Section 338(g) states: "The regulations prescribed \[by the
     Commission under Section 338\] shall include requirements on
     satellite carriers that are comparable to the requirements on cable
     operators under sections 614(b)(4) . . . ."[^311] Section
     614(b)(4)(B) of the Act provides: "At such time as the Commission
     prescribes modifications of the standards for television broadcast
     signals, the Commission shall initiate a proceeding to establish
     any changes in the signal carriage requirements of cable television
     systems necessary to ensure cable carriage of such broadcast
     signals of local commercial television stations which have been
     changed to conform with such modified standards."[^312] The
     Conference Report stated: "by directing the FCC to promulgate these
     must carry rules \[found in Section 338\], the conferees do not
     take any position regarding the application of must-carry rules to
     carriage of digital television signals by either cable or satellite
     systems."[^313]

121. The Commission has adopted rules establishing a transitional
     process for the conversion from an analog to a digital form of
     broadcast transmission.[^314] The rules allow each existing analog
     television licensee or each eligible permittee to construct and
     operate digital facilities using 6 MHz of spectrum, in addition to
     the 6 MHz of spectrum used to continue analog broadcasting until
     the end of the transition. The broadcast station will transmit a
     signal consistent with the standards adopted in *Advanced
     Television Systems and Their Impact Upon the Existing Television
     Broadcast Service*, Fourth Report and Order, giving it the
     flexibility to broadcast in a high definition mode, in a multiple
     program standard definition mode, in a datacasting mode, or a
     mixture of all three, provided that the licensee provides at least
     one over-the-air video program stream to consumers.[^315] During
     the transition period, both the analog and digital television
     signals will be broadcast. At the end of the transition which is
     scheduled for 2006, with certain statutory exceptions, the station
     is to cease broadcasting an analog signal and will return to the
     government 6 MHz of spectrum.[^316]

122. The Commission commenced a proceeding to determine the carriage
     obligations cable operators should have with regard to a broadcast
     station's digital television signal during the transition period to
     digital television. [^317] We sought comment in that proceeding on
     how to accomplish the Congressional goals reflected in Section 614,
     Section 615, and Section 325 of the Act in light of the significant
     changes to the relevant industries resulting from the conversion to
     digital operations. The thrust of the proceeding was to examine the
     timing and scope of digital broadcast signal carriage obligations
     for cable operators. When this proceeding was initiated, there was
     no satellite broadcast signal carriage requirement, and satellite
     carriers did not comment on the issues addressed in that
     proceeding. We therefore sought comment on whether satellite
     carriers should be required to carry digital broadcast television
     signals in addition to analog broadcast signals up until the time
     that television stations return their analog spectrum to the
     government.[^318]

123. We believe that our goal of initiating a discussion on a satellite
     carrier's digital broadcast signal carriage obligations has been
     achieved. As expected, broadcast commenters support the imposition
     of a digital broadcast signal carriage rule under Section 338[^319]
     and satellite carriers oppose a digital broadcast signal carriage
     requirement.[^320] We note that these comments generally reflect
     the positions taken by the broadcast and cable industries in
     response to the questions raised in the Digital Must Carry
     Notice.[^321] We will consider the digital carriage obligations of
     both cable operators and satellite carriers in tandem within the
     context of the rulemaking for cable operators, and will consider
     the comments filed on this issue in that proceeding.[^322] In any
     instance, we note that Echostar argues that the Commission cannot
     impose digital carriage obligations on satellite because there are
     no current rules in effect for the cable industry.[^323] We find
     that the Commission must be able to issue rules for satellite
     digital broadcast signal carriage that are comparable to those for
     cable operators. The Congressional goal of comparable requirements
     was not frozen in time on November 29, 1999. Rather, we are
     authorized to implement changes or additions in the satellite
     carriage rules whenever we adopt changes in the cable carriage
     rules, including digital carriage requirements.

######### K. Compensation for Carriage {#k.-compensation-for-carriage .unnumbered}

124. Section 338(e) states:

> A satellite carrier shall not accept or request monetary payment or
> other valuable consideration in exchange either for carriage of local
> television broadcast stations in fulfillment of the requirements of
> this section or for channel positioning rights provided to such
> stations under this section, except that any such station may be
> required to bear the costs associated with delivering a good quality
> signal to the local receive facility of the satellite carrier.[^324]

We noted that this provision largely parallels provisions applicable to
cable operators that are found in Sections 614(b)(10) and 615(i) of the
Act that are implemented in Section 76.60 of the Commission's rules. In
the cable context, commercial broadcasters elect either must carry or
retransmission consent to obtain carriage of their signals. If mandatory
carriage is selected, there are no specific terms for carriage that must
be requested, other than choosing the relevant channel positioning
options available to broadcasters under the Act. If retransmission
consent is selected, the operator may receive compensation from the
broadcaster in exchange for carriage. We assumed the same general policy
was intended for satellite carriers and that a broadcaster seeking
carriage rather than requesting carriage "in fulfillment of the
requirements of \[Section 338\]" would simply negotiate carriage
provisions, including payment terms, in the context of a retransmission
consent negotiation. We sought comment on this interpretation.[^325] We
also sought comment on the policy underlying this provision and its
purpose in the statutory scheme.

125. Network Affiliates agree that the compensation rules applicable to
     satellite carriers pursuant to Section 338(e) of the Act should
     parallel the provisions applicable to cable operators.[^326] LTVS
     comments that there is no reason why the parties cannot themselves
     reach agreement on reasonable compensation for carriage in a
     retransmission consent agreement.[^327] In the context of mandatory
     carriage, LTVS asserts that satellite carriers cannot charge local
     television stations for carriage of their signals. We find that the
     current compensation rules applicable to cable operators should
     likewise apply to satellite carriers. That is, a station must bear
     the costs associated with delivering a good quality signal and a
     satellite carrier may accept payments from stations pursuant to a
     retransmission consent agreement. No one commented that there
     should be different rules between the industries nor can we find
     any valid reason to impose different rules. We therefore implement
     the language of Section 338 as presented in the statute.

######### L. Remedies {#l.-remedies .unnumbered}

126. Section 338(a)(2) states that the remedies for any failure to meet
     the obligations under subsection (a) (carriage obligations) shall
     be available exclusively under Section 501(f) of title 17, United
     States Code.[^328] New section 501(f)(1) states,

> With respect to any secondary transmission that is made by a satellite
> carrier of a performance or display of a work embodied in a primary
> transmission and is actionable as an act of infringement under section
> 122, a television broadcast station holding a copyright or other
> license to transmit or perform the same version of that work shall,
> for purposes of subsection (b) of this section, be treated as a legal
> or beneficial owner if such secondary transmission occurs within the
> local market of that station.[^329]

New section 501(f)(2) further provides that: "A television broadcast
station may file a civil action against any satellite carrier that has
refused to carry television broadcast signals, as required under section
122(a)(2), to enforce that television broadcast station's rights under
section 338(a) of the Communications Act of 1934."[^330]

127. Section 338(f)(1) states,

> Whenever a local television broadcast station believes that a
> satellite carrier has failed to meet its obligations under subsections
> (b) through (e) of this section \[(b) good signal required, (c)
> duplication not required, (d) channel positioning, and (e)
> compensation for carriage\], such station shall notify the carrier, in
> writing, of the alleged failure and identify its reasons for believing
> that the satellite carrier failed to comply with such obligations. The
> satellite carrier shall, within 30 days after such written
> notification, respond in writing to such notification and comply with
> such obligations or state its reasons for believing that it is in
> compliance with such obligations. A local television broadcast station
> that disputes a response by a satellite carrier that it is in
> compliance with such obligations may obtain review of such denial or
> response by filing a complaint with the Commission. Such complaint
> shall allege the manner in which such satellite carrier has failed to
> meet its obligations and the basis for such allegations.[^331]

In addition, Section 338(f)(2) states: "The Commission shall afford the
satellite carrier against which a complaint is filed under paragraph (1)
an opportunity to present data and arguments to establish that there has
been no failure to meet its obligations under this section.[^332]
Section 338(f)(3) then states that: "Within 120 days after the date a
complaint is filed under paragraph (1), the Commission shall determine
whether the satellite carrier has met its obligations under subsections
(b) through (e). If the Commission determines that the satellite carrier
has failed to meet such obligations, the Commission shall order the
satellite carrier to take appropriate remedial action. If the Commission
determines that the satellite carrier has fully met the requirements of
such subsections, the Commission shall dismiss the complaint." At the
outset, we find that the procedural provisions contained in Section
338(f)(1-3), concerning the steps required to file a carriage complaint,
are plain on their face. We adopt the statutory procedures without
change. With regard to the substantive issues raised in the *Notice*, we
address each one in turn below.

128. In the *Notice*, the Commission discussed the parameters of its
     enforcement authority regarding the carriage obligation rules under
     SHVIA.[^333] We sought to reconcile forum disputes that may arise
     if a satellite carrier fails to carry a local television station
     that has requested carriage in a market in which it provides
     local-into-local service. In addition, we sought to determine
     whether disputes concerning the non-carriage of broadcast station
     signals by satellite carriers because of signal quality problems
     should be within the domain of the courts, the Commission, or
     shared by the different jurisdictions.[^334] ALTV states that the
     outright failure to carry a station entitled to carriage under
     Section 338 should be grounds for an infringement of copyright suit
     in federal court.[^335] DirecTV asserts that the remedy available
     to a broadcaster in the event of a compulsory carriage dispute is
     to file a civil action against the satellite carrier that has
     refused carriage and that the Commission does not have jurisdiction
     to remedy non-carriage of broadcast station signals by satellite
     carriers.[^336] On the one hand, the statute provides that the
     remedies for any failure to meet the carriage obligations of
     Section 338(a) shall be available exclusively under Section 501(f)
     of the Copyright Act, which directs complainants to an appropriate
     United States District Court. On the other hand, Sections 338(b)
     -- (e) clearly contemplate the Commission making determinations
     that, in appropriate circumstances, require carriage. We find that
     if a television station is not being carried and seeks damages and
     other specific forms of monetary or injunctive relief under either
     Section 338(a) of the Act or Section 501(f) of the Copyright Act,
     then the United States District Court is the exclusive forum for
     adjudicating the complaint. If the television station seeks a
     finding on the facts and a resulting determination of whether it is
     entitled to carriage pursuant to Section 76.66 of our rules, then
     it may file a complaint with the Commission. In arriving at this
     determination, we do not believe that Congress intended to deprive
     the Commission of the right to enforce the regulations the statute
     specifically directs us to adopt under Section 338.

129. We find that the Commission should have primary jurisdiction over
     issues concerning: (1) good quality signal; (2) substantial
     duplication; (3) channel positioning; and (4) compensation matters.
     We adopt this position to ensure the rapid and timely
     implementation of Section 338. The Commission has the technical
     expertise to review and address such matters. The institutional
     knowledge the Commission has developed in adjudicating
     cable-broadcast disputes will be helpful in processing satellite
     carriage cases in an efficient manner.

130. In response to questions we raised in the *Notice*, several
     commenters addressed the issue of whether broadcasters should be
     permitted to file complaints with the Commission against a
     satellite carrier for non-compliance with the content-to-be-carried
     and material degradation provisions of the SHVIA, specifically
     referenced in Section 338(g). A number of broadcast commenting
     parties assert that the Commission's jurisdiction should be
     extended to allow consideration and resolution of complaints
     relating to content-to-be-carried and material degradation
     issues.[^337] Network Affiliates and LTVS, for example, state that
     such disputes rest squarely within the Commission's expertise and
     excluding such disputes from the complaint procedures would be
     inconsistent with Section 338(g), which requires the Commission to
     implement regulations regarding material degradation and
     content-to-be-carried in the satellite context that mirror those in
     the cable context.[^338] DirecTV however, argues that Section
     338(f) does not provide for broadcaster complaints against a
     satellite carrier for non-compliance with provisions concerning
     content-to-be-carried or material degradation.[^339] Consistent
     with the general authority invested in the Commission to implement
     Section 338,[^340] we will adjudicate complaints concerning the
     material degradation and content-to-be-carried provisions under the
     same procedural framework established for the other satellite
     carriage provisions of the Act. For the reasons outlined in the
     above paragraph, we will also assert primary jurisdiction over
     these matters.

131. We adopt a date certain for when a complaint must be filed with the
     Commission. Consistent with the procedural rule for cable carriage
     complaints, [^341] we will not consider a complaint brought by a
     television station if it is filed later than 60 days after a
     satellite carrier denies the station's carriage request. In this
     context, the denial can be in the affirmative, as in a rejection
     letter, or by silence, where a carrier does not respond to a
     carriage request within 30 days of its receipt. We implement this
     requirement, pursuant to Section 338(f) of the Act, to facilitate
     the carriage process and ensure that television broadcast stations
     do not delay in enforcing their rights to the detriment of the
     satellite carrier.[^342]

132. **Other Actions.** In the *Notice*, we requested comment on
     additional enforcement actions the Commission may impose.[^343]
     Some broadcasters have stated that the Commission should take into
     account any failure to comply with the local carriage requirements
     when considering license renewals for satellite carriers.[^344] We
     find that this issue is a matter better suited for discussion in
     the context of a satellite licensing proceeding, not within the
     confines of a rulemaking implementing the SHVIA's carriage
     requirements. We therefore decline to rule on the merits of the
     broadcasters' suggestion at this time.

133. ALTV proposes that the Commission require satellite carriers to
     file semi-annual reports detailing their efforts to achieve
     compliance with Section 338 by January 1, 2002.[^345] We find that
     the statute does not mandate such a requirement. Nevertheless,
     carriage compliance information will be useful in updating Congress
     on the implementation of the SHVIA. We therefore plan to ask
     questions concerning the implementation of Section 338 in the
     Commission's Notice of Inquiry, preceding the Annual Competition
     Report to be issued in 2002.[^346]

**M. Definitional Issues and Other Concerns.**

134. Section 338 contains several definitions that provide the framework
     for satellite broadcast signal carriage. While these definitions
     are generally self-effectuating, such as the meaning of "satellite
     carrier," "secondary transmission," and "subscriber," we asked
     commenters to further clarify the meaning of other terms found in
     Section 338.[^347] We received a number of viewpoints on the
     carriage status of certain types of stations. We also received
     comments from other parties on the general application of
     Section 338. We address each concern separately, below.

135. **Distributor.** Section 338(h)(1) of the Communications Act
     defines the term "distributor" as an "entity which contracts to
     distribute secondary transmissions from a satellite carrier and,
     either as a single channel or in a package with other programming,
     provides the secondary transmission either directly to individual
     subscribers or indirectly through other program distribution
     entities.\"[^348] In the *Notice*, we stated that the term
     "distributor" is not found in any other provision of Section 338,
     other than the definitional subsection.[^349] Given this omission,
     we sought comment on the definition of distributor and its
     relevance in this context. Local TV on Satellite, Inc. ("LTVS")
     argues that the use of term distributor has no relevance to Section
     338 and has no bearing on the implementation of the mandatory
     carriage provisions.[^350] We agree. This particular provision
     appears to have no connection with the carriage requirements in
     Section 338. Therefore, it requires no implementation.

136. **Class A Television Stations.** Section 338(h)(7) defines the term
     "television broadcast station" as having the meaning given such
     term in Section 325(b)(7).[^351] Section 325(b)(7) defines
     "television broadcast station," as "an over-the-air commercial or
     noncommercial television broadcast station licensed by the
     Commission under subpart E of part 73 of title 47, Code of Federal
     Regulations, except that such term does not include a low-power or
     translator station."[^352] Paging Associates, nevertheless raises
     the question of whether low power stations that receive Class A
     status from the Commission, pursuant to the Community Broadcasters
     Protection Act of 1999 ("CBPA"), may assert carriage rights under
     Section 338.[^353] Paging Associates states that Class A licensees
     are on equal footing with full-service television licensees as
     prescribed by the CBPA.[^354] We disagree. Low power television
     stations that receive Class A status pursuant to the CBPA are still
     low power stations for mandatory carriage purposes.[^355] Class A
     stations do not gain the same rights to carriage as their full
     power counterparts simply by receiving such status. The principal
     intent of the CBPA was to protect low power television stations
     from digital television ("DTV") interference. The CBPA did not
     create a new class of television stations eligible for full-fledged
     carriage rights on cable systems or satellite carriers. Given the
     burdens a Class A carriage requirement would impose, we believe
     that Congress would have specifically noted in Section 338 that
     satellite carriers were required to carry these stations if they
     provide local-into-local service in a market.

137. **Satellite Television Stations.** In the *Notice*, we asked
     whether satellite carriers must carry terrestrial broadcast
     "satellite television stations", as cable operators are required to
     do.[^356] Satellite stations, by definition, replicate
     substantially all of the programming of another full power
     television station in a market and also broadcast a minimum amount
     of original programming.[^357] LTVS and NAB assert that regulations
     should be developed to require satellite carriers to carry such
     stations if they carry other local market television stations,
     unless they substantially duplicate another station in the local
     market.[^358] DirecTV, however, argues that the compulsory carriage
     of satellite television stations will unduly burden satellite
     carriers' systems and limit the amount of capacity available.[^359]
     The Commission has long held that cable operators must carry
     satellite television stations because they are full power
     television stations with an assignment in the Table of Allotments
     under Part 73 of the rules. Congress was cognizant of this carriage
     policy at the time the SHVIA was enacted, but did not expressly
     exclude such stations from the definition of television broadcast
     station in the SHVIA. Therefore, a satellite television station,
     being a full power television station, may request carriage like
     other local full power television stations, but is subject to the
     duplications provisions, stated above.

138. **MMDS Operators.** Fifth Avenue Channel Corporation raises the
     concern that the carriage obligations under Section 338 may be
     construed to apply to multichannel multipoint distribution service
     providers ("MMDS" or "wireless cable").[^360] We find that the
     provision does not apply to such entities. MMDS operators generally
     receive television broadcast signals either off-the-air or by a
     direct feed from the broadcast station. They do not use the
     facilities of a satellite or satellite service to distribute those
     television station signals. Thus, an MMDS operator who contracts to
     distribute the signal of a local television station directly from
     the station is not a satellite carrier as that term is defined in
     the Act.

139. **Rural Service.** The National Rural Telecommunications
     Cooperative ("NRTC") argues that satellite carriers will not
     provide local-into-local service in lower population, lower-profit
     markets if they are required to carry all television stations in
     larger markets.[^361] It states that there is not enough satellite
     capacity available, nor is there a large enough subscriber base in
     less populated markets, to introduce local-into-local
     service.[^362] We recognize that one of the SHVIA's principal
     mandates is to permit satellite carriers to provide
     local-into-local service wherever and whenever possible. We also
     understand that satellite carriers, like cable operators, have
     limited capacity to add additional channels of programming.
     Congress, however, was aware of these concerns when it promulgated
     Section 338. Thus, while we find that the provision of dependable
     television service to rural areas is an important policy goal, the
     Section 338 requirements must be followed and implemented.

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V.  **PROCEDURAL MATTERS**

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140. *Final Regulatory Flexibility Analysis.* As required by the
     Regulatory Flexibility Act ("RFA"), *see* 5 U.S.C. §603, an Initial
     Regulatory Flexibility Analysis ("IRFA") was incorporated into both
     the *Notice* and the *Retransmission Consent* *Notice*. The
     Commission sought written public comments on the possible
     significant economic impact of the proposed policies and rules on
     small entities in the *Notice* and the *Retransmission Consent*
     *Notice*, including comments on the IRFAs. Pursuant to the RFA,
     *see* 5 U.S.C. §604, a Final Regulatory Flexibility Analysis is
     contained in Appendix C.

141. *Paperwork Reduction Act of 1995 Analysis.* This *Report & Order*
     contains new or modified information collection(s) subject to the
     Paperwork Reduction Act of 1995 ("PRA"), Public Law 104-13. It will
     be submitted to the Office of Management and Budget ("OMB") for
     review under Section 3507(d) of the PRA. OMB, the general public,
     and other Federal agencies are invited to comment on the new or
     modified information collection(s) contained in this proceeding.

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VI. **ORDERING CLAUSES**

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142. Accordingly, **IT IS ORDERED** that, pursuant authority found in
     Sections 4(i) 4(j), 303(r), 325, 338, 614, and 615 of the
     Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i),
     154(j), 303(r), 325, 338, 534, and 535, the Commission's rules
     **ARE HEREBY AMENDED** as set forth in Appendix B.

143. **IT IS FURTHER ORDERED** that the Consumer Information Bureau,
     Reference Information Center, **SHALL SEND** a copy of this *Report
     and Order*, including the Final Regulatory Flexibility Analysis, to
     the Chief Counsel for Advocacy of the Small Business
     Administration.

144. **IT IS FURTHER ORDERED** that the rules adopted in this *Report
     and Order* **SHALL TAKE EFFECT** upon publication in the Federal
     Register.

Federal Communications Commission

Magalie Roman Salas

> Secretary

# Appendix A

**COMMENTS FILED IN CS 00-96**

Association of Local Television Stations (\"ALTV\")

Association of America\'s Public Television Stations, the Public
Broadcasting System, and the

Corporation for Public Broadcasting (\"AAPTS\")

BellSouth Corp. and BellSouth Entertainment (\"BellSouth\")

Christian Television Network ("CTN")

Community Television of Southern California, KQED, Inc. & North Texas
Public Broadcasting, Inc. ("KQED")

Detroit Educational Television Foundation ("DETF")

DirecTV

Echostar Satellite Corporation ("Echostar")

Gray Communications, *et. al.*

Home Box Office ("HBO")

J.E. Schmidt

Joint Comments of the ABC, CBS, Fox, and NBC Television Network
Affiliate Associations ("Network Affiliates")

KNTV License, Inc. ("KNTV")

Local TV on Satellite, LLC ("LTVS")

Mid-State Television, Inc. ("WMFD")

National Association of Broadcasters ("NAB")

National Cable Television Association ("NCTA")

National Rural Telecommunications Cooperative ("NRTC")

Paxson Communications Corporation ("Paxson")

Quorum of Maryland License ("WHAG")

Satellite Broadcasting and Communications Association ("SBCA")

SJL of California, L.P. ("KSBY")

WDBJ Television, Inc. ("WDBJ")

Wisdom Media Group

5^th^ Avenue Channel Corporation

# REPLY COMMENTS FILED IN CS 00-96

American Cable Association ("ACA")

Association of America\'s Public Television Stations, the Public
Broadcasting System, and the

Corporation for Public Broadcasting

Association of Local Television Stations

BellSouth Corp. and BellSouth Entertainment

Detroit Educational Television Foundation

DirecTV

Echostar Satellite Corporation

Joint Comments of the ABC, CBS, Fox, and NBC Television Network
Affiliate Associations

Local TV on Satellite, LLC

Mid-State Television, Inc.

National Association of Broadcasters

National Cable Television Association

Paging Associates

Paxson Communications Corporation

**COMMENTS FILED IN CS 99-363**

ABC, CBS, Fox, and NBC Television Network Affiliate Associations
("Network Affiliates").

American Cable Association

Association of Local Television Stations, Inc.

BellSouth Corporation, BellSouth Interactive Media Services, Inc. and
BellSouth Wireless Cable, Inc.

CBS Corporation ("CBS")

DirecTV, Inc.

EchoStar Satellite Corporation

Fox Television Stations, Inc. ("Fox")

LEXCOM Cable

Local TV on Satellite, LLC

National Association of Broadcasters

National Broadcasting Company, Inc. ("NBC").

National Cable Television Association

Satellite Broadcasting and Communications Association

U S West, Inc. ("U S West")

Walt Disney Company ("Disney")

Wireless Communications Association International, Inc. ("WCA")

#######  {#section-5 .unnumbered}

## REPLY COMMENTS FILED IN CS 99-363

American Cable Association

ABC, CBS, Fox, and NBC Television Network Affiliate Associations

Association of Local Television Stations, Inc.

BellSouth Corporation, BellSouth Interactive Media Services, Inc. and
BellSouth Wireless Cable, Inc.

DIRECTV, Inc.

EchoStar Satellite Corporation

Fisher Broadcasting Inc. ("Fisher")

Hearst-Argyle Television, Inc. ("Hearst")

Lin Television Corporation ("Lin")

Local TV on Satellite, LLC

National Association of Broadcasters

National Broadcasting Company, Inc.

National Cable Television Association

RCN Telecom Services, Inc. ("RCN").

Satellite Broadcasting and Communications Association

Seren Innovations, Inc. ("Seren")

The Post Company ("Post")

Time Warner Cable ("Time Warner")

U S West, Inc.

Walt Disney Company

Young Broadcasting, Inc. ("Young").

# Appendix B

Part 76 of Title 47 of the Code of Federal Regulations is amended as
follows:

Part 76 -- Multichannel Video and Cable Television Service

1.  The authority citation for Part 76 reads as follows:

AUTHORITY: 47 U.S.C. §§151, 152, 153, 154, 301, 302, 303, 303a, 307,
308, 309, 312, 315, 317, 325, 338, 339, 503, 521, 522, 531, 532, 533,
534, 535, 536, 537, 543, 544, 544a, 545, 548, 549, 552, 554, 556, 558,
560, 561, 571, 572, 573.

2.  Section 76.66 is added to Subpart D to read as follows:

**§ 76.66 Satellite Broadcast Signal Carriage**

\(a\) *Definitions.*

\(1\) Satellite carrier. A satellite carrier is an entity that uses the
facilities of a satellite or satellite service licensed by the Federal
Communications Commission, and operates in the Fixed-Satellite Service
under part 25 of title 47 of the Code of Federal Regulations or the
Direct Broadcast Satellite Service under part 100 of title 47 of the
Code of Federal Regulations, to establish and operate a channel of
communications for point-to-multipoint distribution of television
station signals, and that owns or leases a capacity or a service on a
satellite in order to provide such point-to-multipoint distribution,
except to the extent that such entity provides such distribution
pursuant to tariff under the Communications Act of 1934, other than for
private home viewing.

\(2\) Secondary transmission. A secondary transmission is the further
transmitting of a primary transmission simultaneously with the primary
transmission.

\(3\) Subscriber. A subscriber is a person who receives a secondary
transmission service from a satellite carrier and pays a fee for the
service, directly or indirectly, to the satellite carrier or to a
distributor.

\(4\) Television broadcast station. A television broadcast station is an
over-the-air commercial or noncommercial television broadcast station
licensed by the Commission under subpart E of part 73 of title 47, Code
of Federal Regulations, except that such term does not include a
low-power or translator television station.

1.  

\(5\) Television network. For purposes of this section, a television
network is an entity which offers an interconnected program service on a
regular basis for 15 or more hours per week to at least 25 affiliated
broadcast stations in 10 or more States.

\(6\) Local-into-local television service. A satellite carrier is
providing local-into-local service when it retransmits a local
television station signal back into the local market of that television
station for reception by subscribers.

\(b\) *Signal carriage obligations.*

\(1\) Each satellite carrier providing, under section 122 of title 17,
United States Code, secondary transmissions to subscribers located
within the local market of a television broadcast station of a primary
transmission made by that station, shall carry upon request the signals
of all television broadcast stations located within that local market,
subject to section 325(b) of title 47, United States Code, and other
paragraphs in this section.

\(2\) No satellite carrier shall be required to carry local television
broadcast stations, pursuant to this section, until January 1, 2002.

\(c\) *Election cycle.* In television markets where a satellite carrier
is providing local-into-local service, a commercial television broadcast
station may elect either retransmission consent, pursuant to section 325
of title 47 United States Code, or mandatory carriage, pursuant to
section 338, title 47 United States Code.

\(1\) The first retransmission consent-mandatory carriage election cycle
shall be for a four-year period commencing on January 1, 2002 and ending
December 31, 2005.

\(2\) The second retransmission consent-mandatory carriage election
cycle, and all cycles thereafter, shall be for a period of three years
(*e.g.* the second election cycle commences on January 1, 2006 and ends
at midnight on December 31, 2008).

\(3\) A commercial television station must notify a satellite carrier,
by July 1, 2001, of its retransmission consent-mandatory carriage
election for the first election cycle commencing January 1, 2002.

\(4\) Except as provided in paragraphs 76.66(d)(2) and (3), local
commercial television broadcast stations shall make their retransmission
consent-mandatory carriage election by October 1^st^ of the year
preceding the new cycle for all election cycles after the first election
cycle.

\(5\) A noncommercial television station must request carriage by July
1, 2001 for the first election cycle and must renew its carriage request
at the same time a commercial television station must make its
retransmission consent-mandatory carriage election for all subsequent
cycles.

\(d\) *Carriage procedures.*

\(1\) *Carriage requests.*

\(i\) A retransmission consent-mandatory carriage election made by a
television broadcast station shall be treated as a request for carriage
for purposes of this section.

\(ii\) A carriage request made by a television station must be in
writing and sent to the satellite carrier's principal place of business,
by certified mail, return receipt requested.

\(iii\) A television station's written notification shall include the:
(1) station's call sign; (2) name of the appropriate station contact
person; (3) station's address for purposes of receiving official
correspondence; (4) station's community of license; (5) station's DMA
assignment; and (6) for commercial television stations, its election of
mandatory carriage or retransmission consent.

\(iv\) Within 30 days of receiving a television station's carriage
request, a satellite carrier shall notify in writing: 1) those local
television stations it will not carry, along with the reasons for such a
decision; and 2) those local television stations it intends to carry.

\(v\) A satellite carrier is not required to carry a television station,
for the duration of the election cycle, if the station fails to assert
its carriage rights by the deadlines established in this section.

(2) *New local-into-local service.*

\(i\) A new satellite carrier or a satellite carrier providing local
service in a market for the first time on or after July 1, 2001, must
notify local television stations of its intent to provide
local-into-local service at least 60 days before it intends to provide
service or decides to enter into a new television market. This
notification shall include information on the location of the satellite
carrier's designated local receive facility in that particular market.

\(ii\) A local television station shall make its request for carriage,
in writing, no more than 30 days after receipt of the satellite
carrier's notice.

\(iii\) A satellite carrier shall have 90 days, from the receipt of a
request for carriage, to commence carriage of a local television
station.

\(iv\) A satellite carrier shall notify a local television station in
writing of its reasons for refusing carriage within 30 days of the
station's carriage request.

\(3\) *New television stations.*

\(i\) A television station providing over-the-air service in a market
for the first time on or after July 1, 2001, shall be considered a new
television station for satellite carriage purposes.

\(ii\) A new television station shall make its request for carriage
between 60 days prior to commencing broadcasting and 30 days after
commencing broadcasting.

\(iii\) A satellite carrier shall commence carriage within 90 days of
receiving the request for carriage from the television broadcast station
or whenever the new television station provides over-the-air service.

\(iv\) A satellite carrier shall notify a new television station in
writing of its reasons for refusing carriage within 30 days of the
station's carriage request.

\(e\) *Market definitions.*

(1) A local market, in the case of both commercial and noncommercial
    television broadcast stations, is the designated market area in
    which a station is located, and (i) in the case of a commercial
    television broadcast station, all commercial television broadcast
    stations licensed to a community within the same designated market
    area within the same local market; and (ii) in the case of a
    noncommercial educational television broadcast station, the market
    includes any station that is licensed to a community within the same
    designated market area as the noncommercial educational television
    broadcast station.

(2) A designated market area is the market area, as determined by
    Nielsen Media Research and published in the 1999-2000 Nielsen
    Station Index Directory and Nielsen Station Index United States
    Television Household Estimates or any successor publication.

\(3\) A satellite carrier shall use the 1999-2000 Nielsen Station Index
Directory and Nielsen Station Index United States Television Household
Estimates to define television markets for the first retransmission
consent-mandatory carriage election cycle commencing on January 1, 2002
and ending on December 31, 2005. The 2003-2004 Nielsen Station Index
Directory and Nielsen Station Index United States Television Household
Estimates shall be used for the second retransmission consent-mandatory
carriage election cycle commencing January 1, 2006 and ending December
31, 2008, and so forth for each triennial election pursuant to this
section. Provided, however, that a county deleted from a market by
Nielsen need not be subtracted from a market in which a satellite
carrier provides local-into-local service, if that county is assigned to
that market in the 1999-2000 Nielsen Station Index Directory or any
subsequent issue of that publication.

\(4\) A local market includes all counties to which stations assigned to
that market are licensed.

\(f\) *Receive facilities.*

\(1\) A local receive facility is the reception point in each local
market which a satellite carrier designates for delivery of the signal
of the station for purposes of retransmission.

(2) A satellite carrier may establish another receive facility to serve
    a market if the location of such a facility is acceptable to at
    least one-half the stations with carriage rights in that market.

(3) Except as provided in 76.66(d)(2), a satellite carrier providing
    local-into-local service must notify local television stations of
    the location of the receive facility by June 1, 2001 for the first
    election cycle and at least 120 days prior to the commencement of
    all election cycles thereafter.

(4) A satellite carrier may relocate its local receive facility at the
    commencement of each election cycle. A satellite carrier is also
    permitted to relocate its local receive facility during the course
    of an election cycle, if it bears the signal delivery costs of the
    television stations affected by such a move. A satellite carrier
    relocating its local receive facility must provide 60 days notice to
    all local television stations carried in the affected television
    market.

\(g\) *Good quality signal.*

\(1\) A television station asserting its right to carriage shall be
required to bear the costs associated with delivering a good quality
signal to the designated local receive facility of the satellite carrier
or to another facility that is acceptable to at least one-half the
stations asserting the right to carriage in the local market.

(2) To be considered a good quality signal for satellite carriage
    purposes, a television station shall deliver to the local receive
    facility of a satellite carrier either a signal level of ‑45dBm for
    UHF signals or ‑49dBm for VHF signals at the input terminals of the
    signal processing equipment.

(3) A satellite carrier is not required to carry a television station
    that does not agree to be responsible for the costs of delivering a
    good quality signal to the receive facility.

\(h\) *Duplicating signals.*

\(1\) A satellite carrier shall not be required to carry upon request
the signal of any local television broadcast station that substantially
duplicates the signal of another local television broadcast station
which is secondarily transmitted by the satellite carrier within the
same local market, or the signals of more than one local commercial
television broadcast station in a single local market that is affiliated
with a particular television network unless such stations are licensed
to communities in different States.

\(2\) A satellite carrier may select which duplicating signal in a
market it shall carry.

\(3\) A satellite carrier may select which network affiliate in a market
it shall carry.

(4) A satellite carrier is permitted to drop a local television station
    whenever that station meets the substantial duplication criteria set
    forth in this paragraph. A satellite carrier must add a television
    station to its channel line-up if such station no longer duplicates
    the programming of another local television station.

(5) A satellite carrier shall provide notice to its subscribers, and to
    the affected television station, whenever it adds or deletes a
    station's signal in a particular local market pursuant to this
    paragraph.

\(6\) A commercial television station substantially duplicates the
programming of another commercial television station if it
simultaneously broadcasts the identical programming of another station
for more than 50 percent of the broadcast week.

\(7\) A noncommercial television station substantially duplicates the
programming of another noncommercial station if it simultaneously
broadcasts the same programming as another noncommercial station for
more than for more than 50 percent of prime time, as defined by
§76.5(n), and more than 50 percent outside of prime time over a three
month period, Provided, however, that after three noncommercial
television stations are carried, the test of duplication shall be
whether more than 50 percent of prime time programming and more than 50
percent outside of prime time programming is duplicative on a
non-simultaneous basis.

\(i\) *Channel positioning.*

\(1\) No satellite carrier shall be required to provide the signal of a
local television broadcast station to subscribers in that station\'s
local market on any particular channel number or to provide the signals
in any particular order, except that the satellite carrier shall
retransmit the signal of the local television broadcast stations to
subscribers in the stations\' local market on contiguous channels.

\(2\) The television stations subject to this paragraph include those
carried under retransmission consent.

\(3\) All local television stations carried under mandatory carriage in
a particular television market must be offered to subscribers at rates
comparable to local television stations carried under retransmission
consent in that same market.

\(4\) Within a market, no satellite carrier shall provide
local-into-local service in a manner that requires subscribers to obtain
additional equipment at their own expense or for an additional carrier
charge in order to obtain one or more local television broadcast signals
if such equipment is not required for the receipt of other local
television broadcast signals.

\(5\) All television stations carried under mandatory carriage, in a
particular market, shall be presented to subscribers in the same manner
as television stations that elected retransmission consent, in that same
market, on any navigational device, on-screen program guide, or menu
provided by the satellite carrier.

\(j\) *Manner of carriage.*

\(1\) Each television station carried by a satellite carrier, pursuant
to this section, shall include in its entirety the primary video,
accompanying audio, and closed captioning data contained in line 21 of
the vertical blanking interval and, to the extent technically feasible,
program‑related material carried in the vertical blanking interval or on
subcarriers. For noncommercial educational television stations, a
satellite carrier must also carry any program-related material that may
be necessary for receipt of programming by persons with disabilities or
for educational or language purposes. Secondary audio programming must
also be carried. Where appropriate and feasible, satellite carriers may
delete signal enhancements, such as ghost‑canceling, from the broadcast
signal and employ such enhancements at the local receive facility.

\(2\) A satellite carrier, at its discretion, may carry any ancillary
service transmission on the vertical blanking interval or the aural
baseband of any television broadcast signal, including, but not limited
to, multichannel television sound and teletext.

\(k\) *Material degradation.* Each local television station whose signal
is carried under mandatory carriage shall, to the extent technically
feasible and consistent with good engineering practice, be provided with
the same quality of signal processing provided to television stations
electing retransmission consent. A satellite carrier is permitted to use
reasonable digital compression techniques in the carriage of local
television stations.

\(l\) *Compensation for carriage.*

\(1\) A satellite carrier shall not accept or request monetary payment
or other valuable consideration in exchange either for carriage of local
television broadcast stations in fulfillment of the mandatory carriage
requirements of this section or for channel positioning rights provided
to such stations under this section, except that any such station may be
required to bear the costs associated with delivering a good quality
signal to the receive facility of the satellite carrier.

\(2\) A satellite carrier may accept payments from a station pursuant to
a retransmission consent agreement.

\(m\) *Remedies.*

(1) Whenever a local television broadcast station believes that a
    satellite carrier has failed to meet its obligations under this
    section, such station shall notify the carrier, in writing, of the
    alleged failure and identify its reasons for believing that the
    satellite carrier failed to comply with such obligations.

(2) The satellite carrier shall, within 30 days after such written
    notification, respond in writing to such notification and comply
    with such obligations or state its reasons for believing that it is
    in compliance with such obligations.

(3) A local television broadcast station that disputes a response by a
    satellite carrier that it is in compliance with such obligations may
    obtain review of such denial or response by filing a complaint with
    the Commission, in accordance with §76.7 of title 47, Code of
    Federal Regulations. Such complaint shall allege the manner in which
    such satellite carrier has failed to meet its obligations and the
    basis for such allegations.

\(4\) The satellite carrier against which a complaint is filed is
permitted to present data and arguments to establish that there has been
no failure to meet its obligations under this section.

\(5\) The Commission shall determine whether the satellite carrier has
met its obligations under this section. If the Commission determines
that the satellite carrier has failed to meet such obligations, the
Commission shall order the satellite carrier to take appropriate
remedial action. If the Commission determines that the satellite carrier
has fully met the requirements of this section, it shall dismiss the
complaint.

\(6\) The Commission will not accept any complaint filed later than 60
days after a satellite carrier, either implicitly or explicitly, denies
a television station's carriage request.

# Appendix C

# Final Regulatory Flexibility Act Analysis

1\. As required by the Regulatory Flexibility Act (\"RFA\"),[^363] an
Initial Regulatory Flexibility Analysis (\"IRFA\") was incorporated in
the Notice of Proposed Rulemaking in CS Docket No. 00-96, FCC 00-195
("*Notice*") and in the Notice of Proposed Rulemaking in CS Docket No.
99-363, FCC 99-406 ("Retransmission Consent *Notice*"). The Commission
sought written public comments on the proposals in both *Notices*,
including comment on the IRFAs.[^364] No specific comments were received
on the IRFAs. This Final Regulatory Flexibility Analysis ("FRFA")
conforms to the RFA.[^365]

2*.* **Need for, and Objectives of, this Report and Order***.* Section
338(g) of the Communications Act of 1934, as amended ("Act"), 47 U.S.C.
§338(g), directed the Commission, within one year of enactment of the
Satellite Home Viewer Improvement Act of 1999,[^366] to "issue
regulations implementing this section following a rulemaking
proceeding." The relevant provisions concern the carriage of all local
television broadcast station signals by satellite carriers commencing on
January 1, 2002. Section 325(b)(3)(C) of the Act, 47 U.S.C. §
325(b)(3)(C), also directs the Commission to complete all actions
necessary to prescribe election cycle regulations within one year of
enactment of the Satellite Home Viewer Improvement Act of 1999.[^367]

3.  **Summary of Significant Issues Raised by Public Comments in
    Response to the IRFAs**. We did not receive any comments in direct
    response to the IRFA in CS Docket 00-96. The American Cable
    Association commented on the IRFA in CS Docket No. 99-363, but those
    comments were directed at the SHVIA's good faith and exclusivity
    provisions, and did not concern the election cycle addressed herein.

4.  **Description and Estimate of the Number of Small Entities to Which
    the Rules Will Apply***.* The RFA directs agencies to provide a
    description of, and where feasible, an estimate of the number of
    small entities that may be affected by the proposed rules.[^368] The
    RFA defines the term \"small entity\" as having the same meaning as
    the terms \"small business,\" \"small organization,\" and "small
    governmental jurisdiction."[^369] In addition, the term \"small
    business\" has the same meaning as the term "small business concern"
    under Section 3 of the Small Business Act.[^370] Under the Small
    Business Act, a small business concern is one which: (1) is
    independently owned and operated; (2) is not dominant in its field
    of operation; and (3) satisfies any additional criteria established
    by the Small Business Administration (\"SBA\").[^371] The rules we
    adopt affect television station licensees and satellite carriers.

5.  *Television Stations*: The rules and policies will apply to
    television broadcasting licensees, and potential licensees of
    television service. The SBA defines a television broadcasting
    station that has no more than \$10.5 million in annual receipts as a
    small business.[^372] Television broadcasting stations consist of
    establishments primarily engaged in broadcasting visual programs by
    television to the public, except cable and other pay television
    services.[^373] Included in this industry are commercial, religious,
    educational, and other television stations.[^374] Also included are
    establishments primarily engaged in television broadcasting and
    which produce taped television program materials.[^375] Separate
    establishments primarily engaged in producing taped television
    program materials are classified under another SIC number.[^376]

6.  Pursuant to 5 U.S.C. § 601(3), the statutory definition of a small
    business applies \"unless an agency after consultation with the
    Office of Advocacy of the SBA and after opportunity for public
    comment, establishes one or more definitions of such term which are
    appropriate to the activities of the agency and publishes such
    definition(s) in the Federal Register.\"

7.  An element of the definition of \"small business\" is that the
    entity not be dominant in its field of operation. We are unable at
    this time to define or quantify the criteria that would establish
    whether a specific television station is dominant in its field of
    operation. Accordingly, the estimates that follow of small
    businesses to which rules may apply do not exclude any television
    station from the definition of a small business on this basis and
    are therefore over-inclusive to that extent. An additional element
    of the definition of \"small business\" is that the entity must be
    independently owned and operated. As discussed further below, we
    could not fully apply this criterion, and our estimates of small
    businesses to which rules may apply may be over-inclusive to this
    extent. The SBA\'s general size standards are developed taking into
    account these two statutory criteria. This does not preclude us from
    taking these factors into account in making our estimates of the
    numbers of small entities.

8.  There were 1,509 television stations operating in the nation in
    1992.[^377] That number has remained fairly constant as indicated by
    the approximately 1,616 operating television broadcasting stations
    in the nation as of September 1999.[^378] For 1992, the number of
    television stations that produced less than \$10.0 million in
    revenue was 1,155 establishments.[^379] Thus, the new rules will
    affect approximately 1,616 television stations; approximately 77%,
    or 1,230 of those stations are considered small businesses.[^380]
    These estimates may overstate the number of small entities since the
    revenue figures on which they are based do not include or aggregate
    revenues from non-television affiliated companies.

9.  *Small Multichannel Video Program Distributors* (*MVPDs*): SBA has
    developed a definition of small entities for cable and other pay
    television services, which includes all such companies generating
    \$11 million or less in annual receipts.[^381] This definition
    includes cable system operators, direct broadcast satellite
    services, multipoint distribution systems, satellite master antenna
    systems and subscription television services. According to the
    Census Bureau data from 1992, there were 1,758 total cable and other
    pay television services and 1,423 had less than \$11 million in
    revenue.[^382] We address below services individually to provide a
    more precise estimate of small entities.

10. *DBS*: There are four licensees of DBS services under Part 100 of
    the Commission\'s Rules. Three of those licensees are currently
    operational. Two of the licensees which are operational have annual
    revenues which may be in excess of the threshold for a small
    business. The Commission, however, does not collect annual revenue
    data for DBS and, therefore, is unable to ascertain the number of
    small DBS licensees that could be impacted by these proposed rules.
    DBS service requires a great investment of capital for operation,
    and we acknowledge that there are entrants in this field that may
    not yet have generated \$11 million in annual receipts, and
    therefore may be categorized as a small business, if independently
    owned and operated.

11. *Home Satellite Delivery ("HSD")*: The market for HSD service is
    difficult to quantify. Indeed, the service itself bears little
    resemblance to other MVPDs. HSD owners have access to more than 265
    channels of programming placed on C‑band satellites by programmers
    for receipt and distribution by MVPDs, of which 115 channels are
    scrambled and approximately 150 are unscrambled.[^383] HSD owners
    can watch unscrambled channels without paying a subscription fee. To
    receive scrambled channels, however, an HSD owner must purchase an
    integrated receiver‑decoder from an equipment dealer and pay a
    subscription fee to an HSD programming package. Thus, HSD users
    include: (1) viewers who subscribe to a packaged programming
    service, which affords them access to most of the same programming
    provided to subscribers of other MVPDs; (2) viewers who receive only
    non‑subscription programming; and (3) viewers who receive satellite
    programming services illegally without subscribing. Because
    scrambled packages of programming are most specifically intended for
    retail consumers, these are the services most relevant to this
    discussion.[^384]

12. According to the most recently available information, there are
    approximately 30 program packagers nationwide offering packages of
    scrambled programming to retail consumers.[^385] These program
    packagers provide subscriptions to approximately 2,314,900
    subscribers nationwide.[^386] This is an average of about 77,163
    subscribers per program package. This is substantially smaller than
    the 400,000 subscribers used in the commission\'s definition of a
    small MSO. Furthermore, because this is an average, it is possible
    that some program packagers may be smaller.

13. **Description of Projected Reporting, Recordkeeping and other
    Compliance Requirements***.* In order to implement the Satellite
    Home Viewer Improvement Act of 1999, the Commission will add new
    rules. We have adopted a regulatory framework for substantive rules
    and procedures concerning satellite broadcast signal carriage
    similar to, but separate from, the broadcast signal carriage rules
    for cable operators. There are certain compliance requirements
    involving the satellite broadcast signal carriage process. Foremost
    is that satellite carriers will have to carry all local television
    stations in a given market, subject to certain limited exceptions,
    if it decides to carry at least one signal in a market. There will
    be costs relating to the time and effort involved in carrying these
    local broadcast signals.

14. In terms of recordkeeping, entities will likely have to keep a
    record of their election status and entities may be required to
    maintain such information within their business environment and may
    also have to file such information with the Commission. These
    records are uncomplicated and are inexpensive to produce and
    maintain.

15. **Steps Taken to Minimize Significant Impact on Small Entities, and
    Significant Alternatives Considered***.* The RFA requires an agency
    to describe any significant alternatives that it has considered in
    reaching its proposed approach, which may include the following four
    alternatives, among others: (1) the establishment of differing
    compliance or reporting requirements or timetables that take into
    account the resources available to small entities; (2) the
    clarification, consolidation, or simplification of compliance or
    reporting requirements under the rule for small entities; (3) the
    use of performance, rather than design, standards; and (4) an
    exemption from coverage of the rule, or any part thereof, for small
    entities.[^387]

16. As indicated above, the *Report and Order* implements certain
    aspects of the Satellite Home Viewer Improvement Act of 1999. Among
    other things, the new legislation requires satellite carriers to
    carry all local television broadcast stations in a market, if it
    carries any local market television stations, by January 1, 2002.
    This document also discusses implementing regulations relating to
    the scope and substance of local broadcast signal carriage by
    satellite carriers, including the establishment of an election cycle
    process for broadcasters vis-à-vis satellite carriers. The rules
    adopted were required by Congress. Where there was discretion to
    consider alternatives, as in the case of notification requirements
    to commence carriage, the Commission chose to place the notice
    burden on broadcast stations rather than satellite carriers. In
    making this decision, the Commission recognized that there are only
    two affected satellite carriers while there are almost 500
    television stations at issue. This legislation applies to small
    entities and large entities equally.

17. **Report to Congress**: The Commission will send a copy of the
    *Report and Order*, including this FRFA, in a report to be sent to
    Congress pursuant to the Congressional Review Act.[^388] In
    addition, the Commission will send a copy of the *Report and Order*,
    including the FRFA, to the Chief Counsel for Advocacy of the SBA. A
    copy of the *Report and Order* and FRFA (or summaries thereof) will
    as be published in the Federal Register.[^389]

# Appendix D

# 

# Television Markets with Local-Into-Local Service from DirecTV 

**(38 total markets)**

Atlanta, GA

Baltimore, MD\*

Birmingham, AL\*

Boston, MA

Charlotte, NC

Chicago, IL

Cincinnati, OH

Cleveland, OH

Dallas/Ft. Worth, TX

Denver, CO

Detroit, MI

Greensboro, NC\*

Greenville, SC\*

Houston, TX

Indianapolis, IN

Kansas City, MO\*

Los Angeles, CA

Memphis, TN\*

Miami/Ft. Lauderdale, FL

Milwaukee, WI

Minneapolis/St. Paul, MN

Nashville, TN

New York, NY

Orlando/Daytona, FL

Philadelphia, PA

Phoenix, AZ

Pittsburgh, PA\*

Portland, OR

Raleigh-Durham, NC\*

Sacramento/Stockton, CA

St. Louis, MO

Salt Lake City, UT

San Antonio, TX\*

San Diego, CA\*

San Francisco/Oakland/San Jose, CA

Seattle/Tacoma, WA

Tampa/St. Petersburg, FL

Washington, D.C.

**\* indicates that special equipment is required to receive local
television stations on satellite**

**Appendix E**

# 

# Television Markets with Local-Into-Local Service from Echostar 

**(34 total markets)**

# 

Albuquerque-Santa Fe

Atlanta, GA

Boston, MA

Charlotte, NC

Chicago, IL

Cincinnati, OH

Cleveland, OH

Dallas/Ft. Worth, TX

Denver, CO

Detroit, MI

Greenville, NC

Houston, TX

Indianapolis, IN

Kansas City, MO

Los Angeles, CA

Miami/Ft. Lauderdale, FL

Minneapolis/St. Paul, MN

Nashville, TN

New York, NY

Orlando, FL

Philadelphia, PA

Phoenix, AZ

Pittsburgh, PA

Portland, OR

Raleigh/Durham, NC

Sacramento/Stockton, CA

Salt Lake City, UT

San Antonio, TX

San Diego, CA

San Francisco/Oakland/San Jose, CA

Seattle/Tacoma, WA

St. Louis, MO

Tampa/St. Petersburg (Sarasota), FL

Washington, D.C.

Appendix F

Section 338 of the Communications Act of 1934, as amended

**Carriage of Local Television Signals by Satellite Carriers.**

\(a\) Carriage obligations.\--

\(1\) In general.\--Subject to the limitations of paragraph (2), each
satellite carrier providing, under section 122 of title 17, United
States Code, secondary transmissions to subscribers located within the
local market of a television broadcast station of a primary transmission
made by that station shall carry upon request the signals of all
television broadcast stations located within that local market, subject
to section 325(b).

\(2\) Remedies for failure to carry.\--The remedies for any failure to
meet the

obligations under this subsection shall be available exclusively under
section 501(f) of title 17, United States Code.

\(3\) Effective date.\--No satellite carrier shall be required to carry
local television broadcast stations under paragraph (1) until January 1,
2002.

\(b\) Good signal required.\--

\(1\) Costs.\--A television broadcast station asserting its right to
carriage under subsection (a) shall be required to bear the costs
associated with delivering a good quality signal to the designated local
receive facility of the satellite carrier or to another facility that is
acceptable to at least one-half the stations asserting the right to
carriage in the local market.

\(2\) Regulations.\--The regulations issued under subsection (g) shall
set forth the obligations necessary to carry out this subsection.

\(c\) Duplication not required.\--

\(1\) Commercial stations.\--Notwithstanding subsection (a), a satellite
carrier shall not be required to carry upon request the signal of any
local commercial television broadcast station that substantially
duplicates the signal of another local commercial television broadcast
station which is secondarily transmitted by the satellite carrier within
the same local market, or to carry upon request the signals of more than
one local commercial television broadcast station in a single local
market that is affiliated with

a particular television network unless such stations are licensed to
communities in different States.

\(2\) Noncommercial stations.\--The Commission shall prescribe
regulations limiting the carriage requirements under subsection (a) of
satellite carriers with respect to the carriage of multiple local
noncommercial television broadcast stations. To the extent possible,
such regulations shall provide the same degree of carriage by satellite
carriers of such multiple stations as is provided by cable systems under
section 615.

\(d\) Channel positioning.\--No satellite carrier shall be required to
provide the signal of a local television broadcast station to
subscribers in that station\'s local market on any particular channel
number or to provide the signals in any particular order, except that
the satellite carrier shall retransmit the signal of the local
television broadcast stations to subscribers in the stations\' local
market on contiguous channels and provide access to such station\'s
signals at a nondiscriminatory price and in a nondiscriminatory manner
on any navigational device, on-screen program guide, or menu.

\(e\) Compensation for carriage.\--A satellite carrier shall not accept
or request monetary payment or other valuable consideration in exchange
either for carriage of local television broadcast stations in
fulfillment of the requirements of this section or for channel
positioning rights provided to such stations under this section, except
that any such station may be required to bear the costs associated with
delivering a good quality signal to the local receive facility of the
satellite carrier.

\(f\) Remedies.\--

\(1\) Complaints by broadcast stations.\--Whenever a local television
broadcast station believes that a satellite carrier has failed to meet
its obligations under subsections (b) through (e) of this section, such
station shall notify the carrier, in writing, of the alleged failure and
identify its reasons for believing that the satellite carrier failed to
comply with such obligations. The satellite carrier shall, within 30
days after such written notification, respond in writing to such
notification and comply with such obligations or state its reasons for
believing that it is in compliance with such obligations. A local
television broadcast station that disputes a response by a satellite
carrier that it is in compliance with such obligations may obtain review
of such denial or response by filing a complaint with the Commission.
Such complaint shall allege the manner in which such satellite carrier
has failed to meet its obligations and the basis for such allegations.

\(2\) Opportunity to respond.\--The Commission shall afford the
satellite carrier against which a complaint is filed under paragraph (1)
an opportunity to present data and arguments to establish that there has
been no failure to meet its obligations under this section.

\(3\) Remedial actions; dismissal.\--Within 120 days after the date a
complaint is filed under paragraph (1), the Commission shall determine
whether the satellite carrier has met its obligations under subsections
(b) through (e). If the Commission determines that the satellite carrier
has failed to meet such obligations, the Commission shall order the
satellite carrier to take appropriate remedial action. If the Commission
determines that the satellite carrier has fully met the requirements of
such subsections, the Commission shall dismiss the complaint.

\(g\) Regulations by commission.\--Within 1 year after the date of the
enactment of this section, the Commission shall issue regulations
implementing this section following a rulemaking proceeding. The
regulations prescribed under this section shall include requirements on
satellite carriers that are comparable to the requirements on cable
operators under sections 614(b)(3) and (4) and 615(g)(1) and (2).

\(h\) Definitions.\--As used in this section:

\(1\) Distributor.\--The term \'distributor\' means an entity which
contracts to distribute secondary transmissions from a satellite carrier
and, either as a single channel or in a package with other programming,
provides the secondary transmission either directly to individual
subscribers or indirectly through other program distribution entities.

\(2\) Local receive facility.\--The term \'local receive facility\'
means the reception point in each local market which a satellite carrier
designates for delivery of the signal of the station for purposes of
retransmission.

\(3\) Local market.\--The term \'local market\' has the meaning given
that term under section 122(j) of title 17, United States Code.

\(4\) Satellite carrier.\--The term \'satellite carrier\' has the
meaning given such term under section 119(d) of title 17, United States
Code.

\(5\) Secondary transmission.\--The term \'secondary transmission\' has
the meaning given such term in section 119(d) of title 17, United States
Code.

\(6\) Subscriber.\--The term \'subscriber\' has the meaning given that
term under section 122(j) of title 17, United States Code.

\(7\) Television broadcast station.\--The term \'television broadcast
station\' has the meaning given such term in section 325(b)(7).

Appendix G

**Section 614 of the Communications Act**

**Carriage of Local Commercial Television Signals by Cable Operators**

\(a\) Carriage obligations

Each cable operator shall carry, on the cable system of that operator,
the signals of local commercial television stations and qualified low
power stations as provided by this section. Carriage of additional
broadcast television signals on such system shall be at the discretion
of such operator, subject to section 325(b) of this title.

\(b\) Signals required

\(1\) In general

\(A\) A cable operator of a cable system with 12 or fewer usable
activated channels shall carry the signals of at least three local
commercial television stations, except that if such a system has 300 or
fewer subscribers, it shall not be subject to any requirements under
this section so long as such system does not delete from carriage by
that system any signal of a broadcast television station.

\(B\) A cable operator of a cable system with more than 12 usable
activated channels shall carry the signals of local commercial
television stations, up to one‑third of the aggregate number of usable
activated channels of such system.

\(2\) Selection of signals

Whenever the number of local commercial television stations exceeds the
maximum number of signals a cable system is required to carry under
paragraph (1), the cable operator shall have discretion in selecting
which such stations shall be carried on its cable system, except that‑‑

\(A\) under no circumstances shall a cable operator carry a qualified
low power station in lieu of a local commercial television station; and

\(B\) if the cable operator elects to carry an affiliate of a broadcast
network (as such term is defined by the Commission by regulation), such
cable operator shall carry the affiliate of such broadcast network whose
city of license reference point, as defined in section 76.53 of title
47, Code of Federal Regulations (in effect on January 1, 1991), or any
successor regulation thereto, is closest to the principal headend of the
cable system.

\(3\) Content to be carried

\(A\) A cable operator shall carry in its entirety, on the cable system
of that operator, the primary video, accompanying audio, and line 21
closed caption transmission of each of the local commercial television
stations carried on the cable system and, to the extent technically
feasible, program‑ related material carried in the vertical blanking
interval or on subcarriers. Retransmission of other material in the
vertical blanking internal or other nonprogram‑related material
(including teletext and other subscription and advertiser‑supported
information services) shall be at the discretion of the cable operator.
Where appropriate and feasible, operators may delete signal
enhancements, such as ghost‑canceling, from the broadcast signal and
employ such enhancements at the system headend or headends.

\(B\) The cable operator shall carry the entirety of the program
schedule of any television station carried on the cable system unless
carriage of specific programming is prohibited, and other programming
authorized to be substituted, under section 76.67 or subpart F of part
76 of title 47, Code of Federal Regulations (as in effect on January 1,
1991), or any successor regulations thereto.

\(4\) Signal quality

\(A\) Nondegradation; technical specifications

The signals of local commercial television stations that a cable
operator carries shall be carried without material degradation. The
Commission shall adopt carriage standards to ensure that, to the extent
technically feasible, the quality of signal processing and carriage
provided by a cable system for the carriage of local commercial
television stations will be no less than that provided by the system for
carriage of any other type of signal.

\(B\) Advanced television

At such time as the Commission prescribes modifications of the standards
for television broadcast signals, the Commission shall initiate a
proceeding to establish any changes in the signal carriage requirements
of cable television systems necessary to ensure cable carriage of such
broadcast signals of local commercial television stations which have
been changed to conform with such modified standards.

\(5\) Duplication not required

Notwithstanding paragraph (1), a cable operator shall not be 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 (as such term is defined by
regulation). If a cable operator elects to carry on its cable system a
signal which substantially duplicates the signal of another local
commercial television station carried on the cable system, or to carry
on its system the signals of more than one local commercial television
station affiliated with a particular broadcast network, all such signals
shall be counted toward the number of signals the operator is required
to carry under paragraph (1).

\(6\) Channel positioning

Each signal carried in fulfillment of the carriage obligations of a
cable operator under this section shall be carried 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, at the election of the station, or on such other channel number as
is mutually agreed upon by the station and the cable operator. Any
dispute regarding the positioning of a local commercial television
station shall be resolved by the Commission.

\(7\) Signal availability

Signals carried in fulfillment of the requirements of this section shall
be provided to every subscriber of a cable system. Such signals 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 a cable
operator provides a connection. If a 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 shall notify such
subscribers of all broadcast stations carried on the cable system which
cannot be viewed via cable without a converter box and shall offer to
sell or lease such a converter box to such subscribers at rates in
accordance with section 543(b)(3) of this title.

\(8\) Identification of signals carried

A cable operator shall identify, upon request by any person, the signals
carried on its system in fulfillment of the requirements of this
section.

\(9\) Notification

A cable operator shall provide written notice to a local commercial
television station at least 30 days prior to either deleting from
carriage or repositioning that station. No deletion or repositioning of
a local commercial television station shall occur during a period in
which major television ratings services measure the size of audiences of
local television stations. The notification provisions of this paragraph
shall not be used to undermine or evade the channel positioning or
carriage requirements imposed upon cable operators under this section.

\(10\) Compensation for carriage

A cable operator shall not accept or request monetary payment or other
valuable consideration in exchange either for carriage of local
commercial television stations in fulfillment of the requirements of
this section or for the channel positioning rights provided to such
stations under this section, except that‑‑

\(A\) any such station may be required to bear the costs associated with
delivering a good quality signal or a baseband video signal to the
principal headend of the cable system;

\(B\) a cable operator may accept payments from stations which would be
considered distant signals under section 111 of Title 17 as
indemnification for any increased copyright liability resulting from
carriage of such signal; and

\(C\) a cable operator may continue to accept monetary payment or other
valuable consideration in exchange for carriage or channel positioning
of the signal of any local commercial television station carried in
fulfillment of the requirements of this section, through, but not
beyond, the date of expiration of an agreement thereon between a cable
operator and a local commercial television station entered into prior to
June 26, 1990.

\(c\) Low power station carriage obligation

\(1\) Requirement

If there are not sufficient signals of full power local commercial
television stations to fill the channels set aside under subsection (b)
of this section‑‑

\(A\) a cable operator of a cable system with a capacity of 35 or fewer
usable activated channels shall be required to carry one qualified low
power station; and

\(B\) a cable operator of a cable system with a capacity of more than 35
usable activated channels shall be required to carry two qualified low
power stations.

\(2\) Use of public, educational, or governmental channels

A cable operator required to carry more than one signal of a qualified
low power station under this subsection may do so, subject to approval
by the franchising authority pursuant to section 531 of this title, by
placing such additional station on public, educational, or governmental
channels not in use for their designated purposes.

\(d\) Remedies

\(1\) Complaints by broadcast stations

Whenever a local commercial television station believes that a cable
operator has failed to meet its obligations under this section, such
station shall notify the operator, in writing, of the alleged failure
and identify its reasons for believing that the cable operator is
obligated to carry the signal of such station or has otherwise failed to
comply with the channel positioning or repositioning or other
requirements of this section. The cable operator shall, within 30 days
of such written notification, respond in writing to such notification
and either commence to carry the signal of such station in accordance
with the terms requested or state its reasons for believing that it is
not obligated to carry such signal or is in compliance with the channel
positioning and repositioning and other requirements of this section. A
local commercial television station that is denied carriage or channel
positioning or repositioning in accordance with this section by a cable
operator may obtain review of such denial by filing a complaint with the
Commission. Such complaint shall allege the manner in which such cable
operator has failed to meet its obligations and the basis for such
allegations.

\(2\) Opportunity to respond

The Commission shall afford such cable operator an opportunity to
present data and arguments to establish that there has been no failure
to meet its obligations under this section.

\(3\) Remedial actions; dismissal

Within 120 days after the date a complaint is filed, the Commission
shall determine whether the cable operator has met its obligations under
this section. If the Commission determines that the cable operator has
failed to meet such obligations, the Commission shall order the cable
operator to reposition the complaining station or, in the case of an
obligation to carry a station, to commence carriage of the station and
to continue such carriage for at least 12 months. If the Commission
determines that the cable operator has fully met the requirements of
this section, it shall dismiss the complaint.

\(e\) Input selector switch rules abolished

No cable operator shall be required‑‑

\(1\) to provide or make available any input selector switch as defined
in section 76.5(mm) of title 47, Code of Federal Regulations, or any
comparable device; or

\(2\) to provide information to subscribers about input selector
switches or comparable devices.

\(f\) Regulations by Commission

Within 180 days after October 5, 1992, the Commission shall, following a
rulemaking proceeding, issue regulations implementing the requirements
imposed by this section. Such implementing regulations shall include
necessary revisions to update section 76.51 of title 47 of the Code of
Federal Regulations.

\(g\) Sales presentations and program length commercials

\(1\) Carriage pending proceeding

Pending the outcome of the proceeding under paragraph (2), nothing in
this chapter shall require a cable operator to carry on any tier, or
prohibit a cable operator from carrying on any tier, the signal of any
commercial television station or video programming service that is
predominantly utilized for the transmission of sales presentations or
program length commercials.

\(2\) Proceeding concerning certain stations

Within 270 days after October 5, 1992, the Commission, notwithstanding
prior proceedings to determine whether broadcast television stations
that are predominantly utilized for the transmission of sales
presentations or program length commercials are serving the public
interest, convenience, and necessity, shall complete a proceeding in
accordance with this paragraph to determine whether broadcast television
stations that are predominantly utilized for the transmission of sales
presentations or program length commercials are serving the public
interest, convenience, and necessity. In conducting such proceeding, the
Commission shall provide appropriate notice and opportunity for public
comment. The Commission shall consider the viewing of such stations, the
level of competing demands for the spectrum allocated to such stations,
and the role of such stations in providing competition to nonbroadcast
services offering similar programming. In the event that the Commission
concludes that one or more of such stations are serving the public
interest, convenience, and necessity, the Commission shall qualify such
stations as local commercial television stations for purposes of
subsection (a) of this section. In the event that the Commission
concludes that one or more of such stations are not serving the public
interest, convenience, and necessity, the Commission shall allow the
licensees of such stations a reasonable period within which to provide
different programming, and shall not deny such stations a renewal
expectancy solely because their programming consisted predominantly of
sales presentations or program length commercials.

\(h\) Definitions

\(1\) Local commercial television station

\(A\) In general

For purposes of this section, the term \"local commercial television
station\" means any full power television broadcast station, other than
a qualified noncommercial educational television station within the
meaning of section 535(l)(1) of this title, 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.

\(B\) Exclusions

The term \"local commercial television station\" shall not include‑‑

\(i\) low power television stations, television translator stations, and
passive repeaters which operate pursuant to part 74 of title 47, Code of
Federal Regulations, or any successor regulations thereto;

\(ii\) a television broadcast station that would be considered a distant
signal under section 111 of Title 17 if such station does not agree to
indemnify the cable operator for any increased copyright liability
resulting from carriage on the cable system; or

\(iii\) a television broadcast station that does not deliver to the
principal headend of a cable system either a signal level of ‑45dBm for
UHF signals or ‑49dBm for VHF signals at the input terminals of the
signal processing equipment, if such station does not agree to be
responsible for the costs of delivering to the cable system a signal of
good quality or a baseband video signal.

\(C\) Market determinations

\(i\) For purposes of this section, a broadcasting station\'s market
shall be determined by the Commission by regulation or order using,
where available, commercial publications which delineate television
markets based on viewing patterns, except that, following a written
request, the Commission may, with respect to a particular television
broadcast station, include additional communities within its television
market or exclude communities from such station\'s television market to
better effectuate the purposes of this section. In considering such
requests, the Commission may determine that particular communities are
part of more than one television market.

\(ii\) In considering requests filed pursuant to clause (i), the
Commission shall afford particular attention to the value of localism by
taking into account such factors as‑‑

\(I\) whether the station, or other stations located in the same area,
have been historically carried on the cable system or systems within
such community;

\(II\) whether the television station provides coverage or other local
service to such community;

\(III\) whether any other television station that is eligible to be
carried by a cable system in such community in fulfillment of the
requirements of this section provides news coverage of issues of concern
to such community or provides carriage or coverage of sporting and other
events of interest to the community; and

\(IV\) evidence of viewing patterns in cable and noncable households
within the areas served by the cable system or systems in such
community.

\(iii\) A cable operator shall not delete from carriage the signal of a
commercial television station during the pendency of any proceeding
pursuant to this subparagraph.

\(iv\) Within 120 days after the date on which a request is filed under
this subparagraph (or 120 days after February 8, 1996, if later), the
Commission shall grant or deny the request.

\(2\) Qualified low power station

The term \"qualified low power station\" means any television broadcast
station conforming to the rules established for Low Power Television
Stations contained in part 74 of title 47, Code of Federal Regulations,
only if‑‑

\(A\) such station broadcasts for at least the minimum number of hours
of operation required by the Commission for television broadcast
stations under part 73 of title 47, Code of Federal Regulations;

\(B\) such station meets all obligations and requirements applicable to
television broadcast stations under part 73 of title 47, Code of Federal
Regulations, with respect to the broadcast of nonentertainment
programming; programming and rates involving political candidates,
election issues, controversial issues of public importance, editorials,
and personal attacks; programming for children; and equal employment
opportunity; and the Commission determines that the provision of such
programming by such station would address local news and informational
needs which are not being adequately served by full power television
broadcast stations because of the geographic distance of such full power
stations from the low power station\'s community of license;

\(C\) such station complies with interference regulations consistent
with its secondary status pursuant to part 74 of title 47, Code of
Federal Regulations;

\(D\) such station is located no more than 35 miles from the cable
system\'s headend, and delivers to the principal headend of the cable
system an over‑ the‑air signal of good quality, as determined by the
Commission;

\(E\) the community of license of such station and the franchise area of
the cable system are both located outside of the largest 160
Metropolitan Statistical Areas, ranked by population, as determined by
the Office of Management and Budget on June 30, 1990, and the population
of such community of license on such date did not exceed 35,000; and

\(F\) there is no full power television broadcast station licensed to
any community within the county or other political subdivision (of a
State) served by the cable system.

Nothing in this paragraph shall be construed to change the secondary
status of any low power station as provided in part 74 of title 47, Code
of Federal Regulations, as in effect on October 5, 1992.

Appendix H

**Section 615 of the Communications Act**

**Carriage of Noncommercial Educational Television Signals by Cable
Operators**

\(a\) Carriage obligations

In addition to the carriage requirements set forth in section 534 of
this title, each cable operator of a cable system shall carry the
signals of qualified noncommercial educational television stations in
accordance with the provisions of this section.

\(b\) Requirements to carry qualified stations

\(1\) General requirement to carry each qualified station

Subject to paragraphs (2) and (3) and subsection (e) of this section,
each cable operator shall carry, on the cable system of that cable
operator, any qualified local noncommercial educational television
station requesting carriage.

\(2\) Systems with 12 or fewer channels

\(A\) Notwithstanding paragraph (1), a cable operator of a cable system
with 12 or fewer usable activated channels shall be required to carry
the signal of one qualified local noncommercial educational television
station; except that a cable operator of such a system shall comply with
subsection (c) of this section and may, in its discretion, carry the
signals of other qualified noncommercial educational television
stations.

\(B\) In the case of a cable system described in subparagraph (A) which
operates beyond the presence of any qualified local noncommercial
educational television station‑‑

\(i\) the cable operator shall import and carry on that system the
signal of one qualified noncommercial educational television station;

\(ii\) the selection for carriage of such a signal shall be at the
election of the cable operator; and

\(iii\) in order to satisfy the requirements for carriage specified in
this subsection, the cable operator of the system shall not be required
to remove any other programming service actually provided to subscribers
on March 29, 1990; except that such cable operator shall use the first
channel available to satisfy the requirements of this subparagraph.

\(3\) Systems with 13 to 36 channels

\(A\) Subject to subsection (c) of this section, a cable operator of a
cable system with 13 to 36 usable activated channels‑‑

\(i\) shall carry the signal of at least one qualified local
noncommercial educational television station but shall not be required
to carry the signals of more than three such stations, and

\(ii\) may, in its discretion, carry additional such stations.

\(B\) In the case of a cable system described in this paragraph which
operates beyond the presence of any qualified local noncommercial
educational television station, the cable operator shall import and
carry on that system the signal of at least one qualified noncommercial
educational television station to comply with subparagraph (A)(i).

\(C\) The cable operator of a cable system described in this paragraph
which carries the signal of a qualified local noncommercial educational
station affiliated with a State public television network shall not be
required to carry the signal of any additional qualified local
noncommercial educational television stations affiliated with the same
network if the programming of such additional stations is substantially
duplicated by the programming of the qualified local noncommercial
educational television station receiving carriage.

\(D\) A cable operator of a system described in this paragraph which
increases the usable activated channel capacity of the system to more
than 36 channels on or after March 29, 1990, shall, in accordance with
the other provisions of this section, carry the signal of each qualified
local noncommercial educational television station requesting carriage,
subject to subsection (e) of this section.

\(c\) Continued carriage of existing stations

Notwithstanding any other provision of this section, all cable operators
shall continue to provide carriage to all qualified local noncommercial
educational television stations whose signals were carried on their
systems as of March 29, 1990. The requirements of this subsection may be
waived with respect to a particular cable operator and a particular such
station, upon the written consent of the cable operator and the station.

\(d\) Placement of additional signals

A cable operator required to add the signals of qualified local
noncommercial educational television stations to a cable system under
this section may do so, subject to approval by the franchising authority
pursuant to section 531 of this title, by placing such additional
stations on public, educational, or governmental channels not in use for
their designated purposes.

\(e\) Systems with more than 36 channels

A cable operator of a cable system with a capacity of more than 36
usable activated channels which is required to carry the signals of
three qualified local noncommercial educational television stations
shall not be required to carry the signals of additional such stations
the programming of which substantially duplicates the programming
broadcast by another qualified local noncommercial educational
television station requesting carriage. Substantial duplication shall be
defined by the Commission in a manner that promotes access to
distinctive noncommercial educational television services.

\(f\) Waiver of nonduplication rights

A qualified local noncommercial educational television station whose
signal is carried by a cable operator shall not assert any network
nonduplication rights it may have pursuant to section 76.92 of title 47,
Code of Federal Regulations, to require the deletion of programs aired
on other qualified local noncommercial educational television stations
whose signals are carried by that cable operator.

\(g\) Conditions of carriage

\(1\) Content to be carried

A cable operator shall retransmit in its entirety the primary video,
accompanying audio, and line 21 closed caption transmission of each
qualified local noncommercial educational television station whose
signal is carried on the cable system, and, to the extent technically
feasible, program‑related material carried in the vertical blanking
interval, 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 vertical blanking
interval or on subcarriers shall be within the discretion of the cable
operator.

\(2\) Bandwidth and technical quality

A cable operator shall provide each qualified local noncommercial
educational television station whose signal is carried in accordance
with this section with bandwidth and technical capacity equivalent to
that provided to commercial television broadcast stations carried on the
cable system and shall carry the signal of each qualified local
noncommercial educational television station without material
degradation.

\(3\) Changes in carriage

The signal of a qualified local noncommercial educational television
station shall not be repositioned by a cable operator unless the cable
operator, at least 30 days in advance of such repositioning, has
provided written notice to the station and all subscribers of the cable
system. For purposes of this paragraph, repositioning includes (A)
assignment of a qualified local noncommercial educational television
station to a cable system channel number different from the cable system
channel number to which the station was assigned as of March 29, 1990,
and (B) deletion of the station from the cable system. The notification
provisions of this paragraph shall not be used to undermine or evade the
channel positioning or carriage requirements imposed upon cable
operators under this section.

\(4\) Good quality signal required

Notwithstanding the other provisions of this section, a cable operator
shall not be required to carry the signal of any qualified local
noncommercial educational television station which does not deliver to
the cable system\'s principal headend a signal of good quality or a
baseband video signal, as may be defined by the Commission.

\(5\) Channel positioning

Each signal carried in fulfillment of the carriage obligations of a
cable operator under this section shall be carried on the cable system
channel number on which the qualified local noncommercial educational
television 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, or on
such other channel number as is mutually agreed upon by the station and
the cable operator. Any dispute regarding the positioning of a qualified
local noncommercial educational television station shall be resolved by
the Commission.

\(h\) Availability of signals

Signals carried in fulfillment of the carriage obligations of a cable
operator under this section shall be available to every subscriber as
part of the cable system\'s lowest priced service tier that includes the
retransmission of local commercial television broadcast signals.

\(i\) Payment for carriage prohibited

\(1\) In general

A cable operator shall not accept monetary payment or other valuable
consideration in exchange for carriage of the signal of any qualified
local noncommercial educational television station carried in
fulfillment of the requirements of this section, except that such a
station may be required to bear the cost associated with delivering a
good quality signal or a baseband video signal to the principal headend
of the cable system.

\(2\) Distant signal exception

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 subsection (c) of this section, where such signal would be considered
a distant signal for copyright purposes unless such station indemnifies
the cable operator for any increased copyright costs resulting from
carriage of such signal.

\(j\) Remedies

\(1\) Complaint

Whenever a qualified local noncommercial educational television station
believes that a cable operator of a cable system has failed to comply
with the signal carriage requirements of this section, the station may
file a complaint with the Commission. Such complaint shall allege the
manner in which such cable operator has failed to comply with such
requirements and state the basis for such allegations.

\(2\) Opportunity to respond

The Commission shall afford such cable operator an opportunity to
present data, views, and arguments to establish that the cable operator
has complied with the signal carriage requirements of this section.

\(3\) Remedial actions; dismissal

Within 120 days after the date a complaint is filed under this
subsection, the Commission shall determine whether the cable operator
has complied with the requirements of this section. If the Commission
determines that the cable operator has failed to comply with such
requirements, the Commission shall state with particularity the basis
for such findings and order the cable operator to take such remedial
action as is necessary to meet such requirements. If the Commission
determines that the cable operator has fully complied with such
requirements, the Commission shall dismiss the complaint.

\(k\) Identification of signals

A cable operator shall identify, upon request by any person, those
signals carried in fulfillment of the requirements of this section.

\(l\) Definitions

For purposes of this section‑‑

\(1\) Qualified noncommercial educational television station

The term \"qualified noncommercial educational television station\"
means any television broadcast station which‑‑

(A)(i) under the rules and regulations of the Commission in effect on
March 29, 1990, is licensed by the Commission as a noncommercial
educational television broadcast station and which is owned and operated
by a public agency, nonprofit foundation, corporation, or association;
and

\(ii\) has as its licensee an entity which is eligible to receive a
community service grant, or any successor grant thereto, from the
Corporation for Public Broadcasting, or any successor organization
thereto, on the basis of the formula set forth in section 396(k)(6)(B)
of this title; or

\(B\) is owned and operated by a municipality and transmits
predominantly noncommercial programs for educational purposes.

Such term includes (I) the translator of any noncommercial educational
television station with five watts or higher power serving the franchise
area, (II) a full‑service station or translator if such station or
translator is licensed to a channel reserved for noncommercial
educational use pursuant to section 73.606 of title 47, Code of Federal
Regulations, or any successor regulations thereto, and (III) such
stations and translators operating on channels not so reserved as the
Commission determines are qualified as noncommercial educational
stations.

\(2\) Qualified local noncommercial educational television station

The term \"qualified local noncommercial educational television
station\" means a qualified noncommercial educational television
station‑‑

\(A\) which is licensed to a principal community whose reference point,
as defined in section 76.53 of title 47, Code of Federal Regulations (as
in effect on March 29, 1990), or any successor regulations thereto, is
within 50 miles of the principal headend of the cable system; or

\(B\) whose Grade B service contour, as defined in section 73.683(a) of
such title (as in effect on March 29, 1990), or any successor
regulations thereto, encompasses the principal headend of the cable
system.

Appendix I

**Section 122 of the Copyright Act, as Amended**

**Limitations on exclusive rights; secondary transmissions by satellite
carriers within local markets**

\(a\) Secondary transmissions of television broadcast stations by
satellite carriers.‑‑A secondary transmission of a performance or
display of a work embodied in a primary transmission of a television
broadcast station into the station\'s local market shall be subject to
statutory licensing under this section if‑‑

\(1\) the secondary transmission is made by a satellite carrier to the
public;

\(2\) with regard to secondary transmissions, the satellite carrier is
in compliance with the rules, regulations, or authorizations of the
Federal Communications Commission governing the carriage of television
broadcast station signals; and

\(3\) the satellite carrier makes a direct or indirect charge for the
secondary transmission to‑‑

\(A\) each subscriber receiving the secondary transmission; or

\(B\) a distributor that has contracted with the satellite carrier for
direct or indirect delivery of the secondary transmission to the public.

\(b\) Reporting requirements.‑‑

\(1\) Initial lists.‑‑A satellite carrier that makes secondary
transmissions of a primary transmission made by a network station under
subsection (a) shall, within 90 days after commencing such secondary
transmissions, submit to the network that owns or is affiliated with the
network station a list identifying (by name in alphabetical order and
street address, including county and zip code) all subscribers to which
the satellite carrier makes secondary transmissions of that primary
transmission under subsection (a).

\(2\) Subsequent lists.‑‑After the list is submitted under paragraph
(1), the satellite carrier shall, on the 15th of each month, submit to
the network a list identifying (by name in alphabetical order and street
address, including county and zip code) any subscribers who have been
added or dropped as subscribers since the last submission under this
subsection.

\(3\) Use of subscriber information.‑‑Subscriber information submitted
by a satellite carrier under this subsection may be used only for the
purposes of monitoring compliance by the satellite carrier with this
section.

\(4\) Requirements of networks.‑‑The submission requirements of this
subsection shall apply to a satellite carrier only if the network to
which the submissions are to be made places on file with the Register of
Copyrights a document identifying the name and address of the person to
whom such submissions are to be made. The Register of Copyrights shall
maintain for public inspection a file of all such documents.

\(c\) No royalty fee required.‑‑A satellite carrier whose secondary
transmissions are subject to statutory licensing under subsection (a)
shall have no royalty obligation for such secondary transmissions.

\(d\) Noncompliance with reporting and regulatory
requirements.‑‑Notwithstanding subsection (a), the willful or repeated
secondary transmission to the public by a satellite carrier into the
local market of a television broadcast station of a primary transmission
embodying a performance or display of a work made by that television
broadcast station is actionable as an act of infringement under section
501, and is fully subject to the remedies provided under sections 502
through 506 and 509, if the satellite carrier has not complied with the
reporting requirements of subsection (b) or with the rules, regulations,
and authorizations of the Federal Communications Commission concerning
the carriage of television broadcast signals.

\(e\) Willful alterations.‑‑Notwithstanding subsection (a), the
secondary transmission to the public by a satellite carrier into the
local market of a television broadcast station of a performance or
display of a work embodied in a primary transmission made by that
television broadcast station is actionable as an act of infringement
under section 501, and is fully subject to the remedies provided by
sections 502 through 506 and sections 509 and 510, if the content of the
particular program in which the performance or display is embodied, or
any commercial advertising or station announcement transmitted by the
primary transmitter during, or immediately before or after, the
transmission of such program, is in any way willfully altered by the
satellite carrier through changes, deletions, or additions, or is
combined with programming from any other broadcast signal.

\(f\) Violation of territorial restrictions on statutory license for
television broadcast stations.**‑‑**

\(1\) Individual violations.‑‑The willful or repeated secondary
transmission to the public by a satellite carrier of a primary
transmission embodying a performance or display of a work made by a
television broadcast station to a subscriber who does not reside in that
station\'s local market, and is not subject to statutory licensing under
section 119 or a private licensing agreement, is actionable as an act of
infringement under section 501 and is fully subject to the remedies
provided by sections 502 through 506 and 509, except that‑‑

\(A\) no damages shall be awarded for such act of infringement if the
satellite carrier took corrective action by promptly withdrawing service
from the ineligible subscriber; and

\(B\) any statutory damages shall not exceed \$5 for such subscriber for
each month during which the violation occurred.

\(2\) Pattern of violations.‑‑If a satellite carrier engages in a
willful or repeated pattern or practice of secondarily transmitting to
the public a primary transmission embodying a performance or display of
a work made by a television broadcast station to subscribers who do not
reside in that station\'s local market, and are not subject to statutory
licensing under section 119 or a private licensing agreement, then in
addition to the remedies under paragraph (1)‑‑

\(A\) if the pattern or practice has been carried out on a substantially
nationwide basis, the court‑‑

\(i\) shall order a permanent injunction barring the secondary
transmission by the satellite carrier of the primary transmissions of
that television broadcast station (and if such television broadcast
station is a network station, all other television broadcast stations
affiliated with such network); and

\(ii\) may order statutory damages not exceeding \$250,000 for each
6‑month period during which the pattern or practice was carried out; and

\(B\) if the pattern or practice has been carried out on a local or
regional basis with respect to more than one television broadcast
station, the court‑‑

\(i\) shall order a permanent injunction barring the secondary
transmission in that locality or region by the satellite carrier of the
primary transmissions of any television broadcast station; and

\(ii\) may order statutory damages not exceeding \$250,000 for each
6‑month period during which the pattern or practice was carried out.

\(g\) Burden of proof.‑‑In any action brought under subsection (f), the
satellite carrier shall have the burden of proving that its secondary
transmission of a primary transmission by a television broadcast station
is made only to subscribers located within that station\'s local market
or subscribers being served in compliance with section 119 or a private
licensing agreement.

\(h\) Geographic limitations on secondary transmissions.‑‑The statutory
license created by this section shall apply to secondary transmissions
to locations in the United States.

\(i\) Exclusivity with respect to secondary transmissions of broadcast
stations by satellite to members of the public.**‑‑**No provision of
section 111 or any other law (other than this section and section 119)
shall be construed to contain any authorization, exemption, or license
through which secondary transmissions by satellite carriers of
programming contained in a primary transmission made by a television
broadcast station may be made without obtaining the consent of the
copyright owner.

\(j\) Definitions.‑‑In this section‑‑

\(1\) Distributor.‑‑The term \"distributor\" means an entity which
contracts to distribute secondary transmissions from a satellite carrier
and, either as a single channel or in a package with other programming,
provides the secondary transmission either directly to individual
subscribers or indirectly through other program distribution entities.

\(2\) Local market.‑‑

\(A\) In general.‑‑The term \"local market\", in the case of both
commercial and noncommercial television broadcast stations, means the
designated market area in which a station is located, and‑‑

\(i\) in the case of a commercial television broadcast station, all
commercial television broadcast stations licensed to a community within
the same designated market area are within the same local market; and

\(ii\) in the case of a noncommercial educational television broadcast
station, the market includes any station that is licensed to a community
within the same designated market area as the noncommercial educational
television broadcast station.

\(B\) County of license.‑‑In addition to the area described in
subparagraph (A), a station\'s local market includes the county in which
the station\'s community of license is located.

\(C\) Designated market area.‑‑For purposes of subparagraph (A), the
term \"designated market area\" means a designated market area, as
determined by Nielsen Media Research and published in the 1999‑2000
Nielsen Station Index Directory and Nielsen Station Index United States
Television Household Estimates or any successor publication.

\(3\) Network station; satellite carrier; secondary transmission.‑‑The
terms \"network station\", \"satellite carrier\", and \"secondary
transmission\" have the meanings given such terms under section 119(d).

\(4\) Subscriber.‑‑The term \"subscriber\" means a person who receives a
secondary transmission service from a satellite carrier and pays a fee
for the service, directly or indirectly, to the satellite carrier or to
a distributor.

\(5\) Television broadcast station.‑‑The term \"television broadcast
station\"‑‑

\(A\) means an over‑the‑air, commercial or noncommercial television
broadcast station licensed by the Federal Communications Commission
under subpart E of part 73 of title 47, Code of Federal Regulations,
except that such term does not include a low‑power or translator
television station; and

\(B\) includes a television broadcast station licensed by an appropriate
governmental authority of Canada or Mexico if the station broadcasts
primarily in the English language and is a network station as defined in
section 119(d)(2)(A).

**Appendix J**

**Nielsen Media Research**

**Designated Market Area Ranking for 2000-2001**

  ---------------- ------------------------------------------------------
  1                New York

  2                Los Angeles

  3                Chicago

  4                Philadelphia

  5                San Francisco-Oakland-San Jose

  6                Boston (Manchester)

  7                Dallas-Ft. Worth

  8                Washington, DC (Hagerstown)

  9                Detroit

  10               Atlanta

  11               Houston

  12               Seattle-Tacoma

  13               Minneapolis-St. Paul

  14               Tampa-St. Petersburg (Sarasota)

  15               Cleveland

  16               Miami-Ft. Lauderdale

  17               Phoenix

  18               Denver

  19               Sacramento-Stockton-Modesto

  20               Pittsburgh

  21               Orlando-Daytona Beach-Melbourne

  22               St. Louis

  23               Portland, OR

  24               Baltimore

  25               San Diego

  26               Indianapolis

  27               Hartford-New Haven

  28               Charlotte

  29               Raleigh-Durham (Fayettevlle)

  30               Kansas City

  31               Nashville

  32               Cincinnati

  33               Milwaukee

  34               Columbus, OH

  35               Greenville-Spartanburg

  36               Salt Lake City

  37               San Antonio

  38               Grand Rapids-Kalamazoo

  39               Birmingham (Anniston,Tuscaloosa)

  40               Memphis

  41               Norfolk-Portsmouth-Newport News

  42               New Orleans

  43               West Palm Beach-Ft. Pierce

  44               Buffalo

  45               Oklahoma City

  46               Harrisburg-Lancaster

  47               Greensboro-High Point

  48               Louisville

  49               Providence-New Bedford

  50               Albuquerque-Santa Fe

  51               Las Vegas

  52               Wilkes Barre-Scranton

  53               Jacksonville, Brunswick

  54               Fresno-Visalia

  55               Dayton

  56               Albany-Schenectady-Troy

  57               Little Rock-Pine Bluff

  58               Austin

  59               Tulsa

  60               Richmond-Petersburg

  61               Charleston-Huntington

  62               Mobile-Pensacola

  63               Knoxville

  64               Flint-Saginaw-Bay City

  65               Wichita-Hutchinson Plus

  66               Lexington

  67               Toledo

  68               Roanoke-Lynchburg

  69               Green Bay-Appleton

  70               Des Moines-Ames

  71               Tucson (Sierra Vista)

  72               Honolulu

  73               Paducah

  74               Rochester, NY

  75               Omaha

  76               Shreveport

  77               Spokane

  78               Springfield, MO

  79               Portland-Auburn

  80               Syracuse

  81               Ft. Myers-Naples

  82               Huntsville-Decatur (Florence)

  83               Champaign & Springfield-Decatur

  84               Madison

  85               Columbia, SC

  86               Chattanooga

  87               South Bend-Elkhart

  88               Jackson, MS

  89               Cedar Rapids

  90               Davenport

  91               Burlington-Plattsburgh

  92               Colorado Springs-Pueblo

  93               Tri-Cities, TN-VA

  94               Waco-Temple-Bryan

  95               Johnstown-Altoona

  96               Baton Rouge

  97               Evansville

  98               El Paso

  99               Youngstown

  100              Savannah

  101              Lincoln & Hastings-Kearny Plus

  102              Harlingen

  103              Charleston, SC

  104              Ft. Wayne

  105              Springfield-Holyoke

  106              Greenville-New Bern

  107              Lansing

  108              Tyler-Longview

  109              Reno

  110              Tallahassee-Thomasville

  111              Sioux Falls (Mitchell)

  112              Peoria-Bloomington

  113              Augusta

  114              Florence-Myrtle Beach

  115              Ft. Smith

  116              Montgomery (Selma)

  117              Santa Barbara

  118              Monterey-Salinas

  119              Traverse City-Cadillac

  120              Fargo-Valley City

  121              Macon

  122              Eugene

  123              Boise

  124              Lafayette, LA

  125              Yakima-Pasco

  126              La Crosse-Eau Claire

  127              Amarillo

  128              Columbus, GA

  129              Corpus Christi

  130              Bakersfield

  131              Columbus-Tupelo-West Point

  132              Duluth-Superior

  133              Chico-Redding

  134              Monroe-El Dorado

  135              Rockford

  136              Wausau-Rhinelander

  137              Beaumont-Port Arthur

  138              Topeka

  139              Terre Haute

  140              Wheeling-Steubenville

  141              Medford-Klamath Falls

  142              Erie

  143              Columbia-Jefferson City

  144              Sioux City

  145              Joplin-Pittsburg

  146              Wichita Falls & Lawton

  147              Lubbock

  148              Wilmington

  149              Bluefield-Beckley-Oak Hill

  150              Albany, GA

  151              Odessa-Midland

  152              Minot-Bismarck-Dickinson

  153              Rochester-Mason City-Austin

  154              Anchorage

  155              Bangor

  156              Binghamton

  157              Biloxi-Gulfport

  158              Panama City

  159              Palm Springs

  160              Abilene-Sweetwater

  161              Sherman, TX-Ada, OK

  162              Salisbury

  163              Quincy-Hannibal-Keokuk

  164              Idaho Falls-Pocatello

  165              Clarksburg-Weston

  166              Gainesville

  167              Hattiesburg-Laurel

  168              Utica

  169              Billings

  170              Missoula

  171              Elmira

  172              Dothan

  173              Lake Charles

  174              Yuma-El Centro

  175              Rapid City

  176              Watertown

  177              Marquette

  178              Alexandria, LA

  179              Harrisonburg

  180              Jonesboro

  181              Bowling Green

  182              Greenwood-Greenville

  183              Meridian

  184              Jackson, TN

  185              Parkersburg

  186              Grand Junction-Montrose

  187              Great Falls

  188              Twin Falls

  189              Laredo

  190              Butte-Bozeman, MT

  191              Eureka

  192              St. Joseph

  193              Charlottesville

  194              Lafayette, IN

  195              Mankato

  196              San Angelo

  197              Casper-Riverton

  198              Cheyenne, WY-Scottsbluff,

  199              Ottumwa-Kirksville

  200              Bend, OR

  201              Lima

  202              Zanesville

  203              Fairbanks

  204              Victoria

  205              Presque Isle

  206              Juneau, AK

  207              Helena

  208              Alpena

  209              North Platte

  210              Glendive
  ---------------- ------------------------------------------------------

[^1]: Pub. Law 106-113, 113 Stat. 1501, 1501A-526 to 1501A-545 (Nov. 29,
    1999). *See* Appendix F. The Commission adopted the *Notice* *of
    Proposed Rulemaking* to implement Section 338 on May 31, 2000. *See
    Implementation of the Satellite Home Viewer Improvement Act of
    1999---Broadcast Signal Carriage Issues*, Notice of Proposed
    Rulemaking, 15 FCC Rcd 12147 (2000)(hereinafter, "*Notice*").

[^2]: *See Implementation of the Satellite Home Viewer Improvement Act
    of 1999---Retransmission Consent Issues*, Notice of Proposed
    Rulemaking, 14 FCC Rcd 21736 (1999); *Retransmission Consent Issues:
    Good Faith Negotiation and Exclusivity*, First Report and Order, 15
    FCC Rcd 5445 (2000).

[^3]: *See* 47 C.F.R. §76.65.

[^4]: *See* 17 U.S.C. §122(a) (*as amended by* §1002 of the SHVIA).
    Section 122 of the Copyright Act is attached as Appendix I of the
    *Report and Order.*

[^5]: 47 U.S.C. §338(a)(1) (*as amended by* §1008 of the SHVIA).

[^6]: 47 U.S.C. §338(g). The legislative history states that the
    procedural provisions applicable to Section 338 (concerning costs,
    avoidance of duplication, channel positioning, compensation for
    carriage, and complaints by broadcast stations) generally parallel
    to those applicable to cable systems. *See* Joint Explanatory
    Statement of the Committee of Conference on H.R. 1554, 106^th^ Cong.
    ("Conference Report"), 145 Cong. Rec. H11795 (daily ed. Nov. 9,
    1999).

[^7]: *Implementation of the Cable Television Consumer Protection and
    Competition Act of 1992, Broadcast Signal Carriage Issues,* Report
    and Order, 8 FCC Rcd 2965 (1993)("Must Carry Order"). The Commission
    later clarified the broadcast signal carriage requirements. *See
    Implementation of the Cable Television Consumer Protection and
    Competition Act of 1992, Broadcast Signal Carriage Issues,* Order, 8
    FCC Rcd 4142 (1993) ("*Clarification Order*").

[^8]: Cable Television Consumer Protection and Competition Act of 1992,
    Pub. L. No. 102-385, 106 Stat. 1460 (1992).

[^9]: 47 U.S.C. §§534 and 535; 47 C.F.R. §76.56. The Act's cable
    carriage provisions are found at Appendices G and H, attached to
    this *Report and Order.*

[^10]: 47 U.S.C. §534(b)(1)(B).

[^11]: This location is known as the point of presence ("POP").

[^12]: A transponder is that portion of a satellite used for reception
    and retransmission of a signal or signals in a certain bandwidth.
    Each satellite located at one of the three prime continental United
    States ("CONUS") orbital slots is capable of broadcasting on 32
    frequencies. Through the use of digital compression technology, each
    frequency is currently capable of delivering approximately ten
    distinct channels of video programming to a subscriber's dish. Thus,
    each prime CONUS orbital slot is presently capable of delivering
    approximately 320 channels of traditional video programming. *See
    Satellite Broadcasting and Communications Association, et. al., v.
    FCC*, Complaint for Declaratory and Injunctive Relief, at 14 (filed
    in the context of SBCA's court challenge to the constitutionality of
    Section 338, noted in more detail below).

[^13]: DBS operators use the 12 GHz frequency band (12.2-12.7 GHz).

[^14]: Both Echostar and DirecTV are carrying the local ABC, NBC, CBS,
    and Fox network affiliates. These satellite carriers are also
    carrying other stations in certain markets, such as WPIX in New York
    and KTLA in Los Angeles.

[^15]: Television markets with local-into-local satellite service
    currently provided by DirecTV and Echostar are noted in Appendices D
    and E. *See*
    [http://www.dishnetwork.com](http://www.dishnetwork.com/) (Echostar)
    and [http://www.directv.com](http://www.directv.com/) (DirecTV) (as
    of November 27, 2000).

[^16]: SBCA Comments at 10. We note that subsequent to the issuance of
    the *Notice* in this proceeding, SBCA, DirecTV and Echostar filed a
    civil complaint on September 20, 2000, in the United States District
    Court for the Eastern District of Virginia, Alexandria Division,
    claiming that Section 338 is unconstitutional. The Commission, the
    United States Copyright Office, and the United States of America
    were named as defendants. Similar to their comments filed in this
    proceeding, the satellite industry argues that Section 338 violates
    the Free Speech and Free Press clauses of the First Amendment, the
    Takings and Due Process clauses of the Fifth Amendment, as well as
    the Copyright clause of the Constitution. We note that the U.S.
    District Court for the Southern District of Florida has found that
    the SHVIA is constitutional under the First Amendment. *See CBS v.
    Echostar*, Case No. 98-2651-CIV-NESBITT, Order Granting Motion for
    Preliminary Injunction (S.D. Fla., Sept. 29, 2000)("In effect,
    Echostar seeks to 'make commercial use of the copyrighted works of
    others. There is no first amendment right to do so.'") *citing
    United Video, Inc. v. FCC*, 890 F.2d 1173, 1191 (D.C. Cir. 1989).

[^17]: SBCA Comments at 3.

[^18]: Echostar Comments at ii.

[^19]: NAB Reply Comments at vii.

[^20]: *Id.* at 3.

[^21]: Paxson Reply Comments at 1-2.

[^22]: *Id.*

[^23]: *See* Conference Report at H11795.

[^24]: *Id.*

[^25]: Congress established cable carriage requirements in Sections 614
    and 615 of the Act to: (1) preserve the benefits of free,
    over-the-air local broadcast television; (2) promote the widespread
    dissemination of information from a multiplicity of sources; and (3)
    promote fair competition in the market for television programming.
    *Turner Broadcasting System, Inc. v. FCC*, 114 S.Ct. 2445, 2469
    (1994)("Turner I").

[^26]: *Id.*; *Turner Broadcasting System, Inc. v. FCC*, 117 S.Ct. 1174
    (1997)("Turner II"). We note that the Court found that the cable
    carriage provisions were constitutional under the First Amendment.
    However, the Court did not consider whether these same provisions
    were constitutional under the Fifth Amendment's Takings and Due
    Process clauses.

[^27]: *See Johnson v. Robinson*, 415 U.S. 361, 368
    (1974)(administrative agencies should presume that implementing
    statutes are constitutional and refrain from questioning their
    legality).

[^28]: 47 U.S.C. §338(a)(1). It is important to note that any television
    broadcast station provided by a satellite carrier within that
    station's local market under the statutory copyright license in
    Section 122(a) is treated as a local station for purposes of Section
    325 (retransmission consent) and 338 (mandatory carriage). The
    satellite carriage of a "superstation" in its local market would
    likely trigger the Section 338 obligations. The term "superstation"
    means a television broadcast station, other than a network station,
    licensed by the Federal Communications Commission that is
    secondarily transmitted by a satellite carrier. 17 U.S.C.
    §119(d)(9)(A).

[^29]: *Id.* at §338(c)(1) and (2).

[^30]: *Id.* at §338(a)(1).

[^31]: 47 U.S.C. §325(b)(3)(C)(1).

[^32]: This requirement is subject to the other limiting provisions in
    Section 338, such as the one concerning duplicative programming.

[^33]: *See* *Implementation of the Satellite Home Viewer Improvement
    Act of 1999---Retransmission Consent Issues* Notice of Proposed
    Rulemaking, 14 FCC Rcd 21736 (1999); First Report and Order, 15 FCC
    Rcd 5445 (2000).

[^34]: *Retransmission Consent* *Notice*, 14 FCC Rcd at 21741-42.

[^35]: *Notice*, 15 FCC Rcd at 12152-53.

[^36]: 47 U.S.C. §325(b)(1)(B).

[^37]: 47 U.S.C. §325(b)(1)(C).

[^38]: 47 U.S.C. §325(b)(3)(C). Subparagraph (B) of existing Section
    325(b)(3) provides that: "the regulations required by subparagraph
    (A) shall require that television stations, within one year after
    the date of enactment of the Cable Television Consumer Protection
    and Competition Act of 1992 and every three years thereafter, make
    an election between the right to grant retransmission consent under
    this subsection and the right to signal carriage under section 614.
    If there is more than one cable system that serves the same
    geographic area, a station's election shall apply to all such cable
    systems." 47 U.S.C. § 325(b)(3)(B). The regulations are codified in
    Section 76.64 of the Commission's rules. *See* 47 C.F.R. §
    76.64(f)(l).

[^39]: For example, the next cable election must be made by October 1,
    2002 and will take effect on January 1, 2003. The subsequent cable
    election must be made by October 1, 2005, to take effect on January
    1, 2006, which will allow for synchronization between cable
    operators and satellite carriers on this particular date.

[^40]: ALTV Retransmission Consent Comments at 3. NAB agrees that an
    election procedure similar to that applicable in the cable context
    should be adopted. NAB Comments at 3. Other broadcasters agree that
    the first election cycle should commence on January 1, 2002 but
    offer differing views on the length of the initial election period.
    *See* Network Affiliates Retransmission Consent Reply Comments at
    5-6; Network Affiliates Comments at 4; ALTV Comments at 38.

[^41]: Network Affiliates Retransmission Consent Reply Comments at 3-5.
    *See also* LTVS Retransmission Consent Comments at 2.

[^42]: EchoStar Retransmission Consent Reply Comments at 2-4; DirecTV
    Retransmission Consent Comments at 2.

[^43]: EchoStar Retransmission Consent Reply Comments at 2; DirecTV
    Retransmission Consent Comments at 2.

[^44]: *See* the Initiating Carriage sub-section, *infra.*

[^45]: *See* 47 C.F.R. §76.64.

[^46]: 47 U.S.C. §338(a)(1).

[^47]: *Must Carry Order*, 8 FCC Rcd at 3002.

[^48]: 47 C.F.R. § 76.64(g); 47 U.S.C. § 325(b)(3)(requiring that if
    there is more than one cable system that serves the same geographic
    area, a station's election shall apply to all such cable systems).

[^49]: *Retransmission Consent Notice*, 14 FCC Rcd at 21741-42.

[^50]: NAB Retransmission Consent Reply Comments at 2-3; ALTV
    Retransmission Consent Comments at 5-6; Network Affiliates
    Retransmission Consent Comments at 2; NAB Reply Comments at 12.

[^51]: DirecTV Retransmission Consent Reply Comments at 3; BellSouth
    Reply Comments at 3.

[^52]: *Notice*, 15 FCC Rcd at 12152-53.

[^53]: *Id.*; 47 C.F.R. § 76.58.

[^54]: *Notice*, 15 FCC Rcd at 12153.

[^55]: *Id.*

[^56]: *Id.*

[^57]: ALTV Comments at 37.

[^58]: Network Affiliates Comments at 5-6; NAB Comments at 2; ALTV
    Comments at 40; CTN Comments at 3; LTVS Comments at 6-7; and AAPTS
    Comments at 11.

[^59]: NAB Comments at 2.

[^60]: Echostar Comments at 12.

[^61]: *See*
    <http://www.dishnetwork.com/software/third_level_content/locals/index.asp>
    (for Echostar) and
    <http://www.directv.com/howtoget/howtogetpages/0,1076,224,00.html>
    (for DirecTV). We note that there are 485 full power television
    stations (379 commercial and 106 noncommercial) in the top 35
    television markets as ranked by Nielse Media Research. *See*
    Appendix J. These are substantially the same markets where DirecTV
    and Echostar currently provide local-into-local service. We note,
    however, that Echostar is not providing local-into-local service in:
    Market #24---Baltimore, Market #27---Hartford-New Haven, Market
    #33---Milwaukee, and Market #34---Columbus, Ohio. It is providing
    local-into-local service in Market #36---Salt Lake City, Market
    #37---San Antonio and Market #50---Albuquerque-Santa Fe. DirecTV is
    not providing local-into-local service in: Market #27---Hartford-New
    Haven. It is providing local-into-local service in Market #36---Salt
    Lake City, Market #37---San Antonio, Market #39---Birmingham
    (Anniston, Tuscaloosa), Market #40---Memphis, TN, and Market
    #47\--Greensboro-High Point-W. Salem. It plans to provide
    local-into-local service in Market #34---Columbus, Ohio, Market
    #43---West Palm Beach-Ft. Pierce, and Market #58---Austin.

[^62]: *Notice*, 15 FCC Rcd at 12153.

[^63]: NAB Comments at 2; ALTV Comments at 41.

[^64]: DirecTV Comments at 11.

[^65]: We note that this result would have an adverse economic impact on
    smaller television stations in the market that are competing against
    larger stations for satellite subscriber viewership and advertising
    revenue.

[^66]: We note that a satellite carrier's notice of intent should be
    viewed as conditional in nature as it may decide not to enter into a
    market based on costs or other considerations. However, once it
    begins providing local-into-local service by offering any local
    television station to its subscribers, not carried under a private
    copyright arrangement, it must fulfill its carriage obligations
    under Section 338.

[^67]: A television station's notification letter should contain the
    same elements enumerated in paragraph 30, above.

[^68]: *See* Appendix B.

[^69]: Our finding here applies to new analog television station
    licensees. The rights of digital television stations will be decided
    at a later time in a separate proceeding.

[^70]: *See* 47 C.F.R. §76.64(f).

[^71]: We note that the same rationales for giving a satellite carrier
    90 days to commence carriage in paragraph 32 above, apply in this
    circumstance.

[^72]: 47 U.S.C. §338(h)(3).

[^73]: 17 U.S.C. §122(j)(2)(A).

[^74]: 17 U.S.C. §122(j)(2)(B).

[^75]: 17 U.S.C. §122(j)(2)(C).

[^76]: DirecTV Comments at 23 (Section 122(j)(2) does not specify that a
    broadcaster's carriage rights extend throughout the DMA in which the
    broadcaster is located.)

[^77]: ALTV Reply Comments at 19; NAB Reply Comments at 14.

[^78]: *Id.*

[^79]: Nielsen has established a system to determine which stations are
    considered "local" for ratings reporting purposes. This is the
    "market-of-origin" assignment process and involves several
    statistical calculations based upon viewership and other factors. A
    television station is generally designated as local in the DMA in
    which its community of license is located. *See 1997-1998 NSI
    Reference Supplement* at 47. However, a station may petition Nielsen
    to change its market-of-origin assignment if both its transmitter
    and the majority of its Grade B service contour are located in a
    different DMA than the DMA in which the station's community of
    license is located. Such a petition must include relevant
    information on which the petitioning station bases its request for a
    change in market-of-origin including, but not limited to: (1)
    community of license; (2) present transmitter location; (3) signal
    coverage (including FCC coverage maps), audience data from previous
    measurements, and/or competitive considerations. Nielsen reserves
    the right to use its best judgement based upon the information
    available to it in considering whether the change sought by the
    petition reflects the reality of the market affected. The station's
    assignment is then made available in Nielsen's *Directory of
    Stations* publication. *See Definitions of Markets for Purposes of
    the Cable Television Broadcast Signal Carriage Rules*, 14 FCC Rcd
    8366 (1999).

[^80]: *Notice*, 15 FCC Rcd at 12155; 47 C.F.R. §76.55(e)(2).

[^81]: *Notice*, 15 FCC Rcd at 12155. 47 C.F.R. §76.55(e)(2)(i).

[^82]: BellSouth Comments at 13 (Commission has the discretion to choose
    the Nielsen 1999-2000 DMA definition or any subsequently published
    definition).

[^83]: ALTV Comments at 44; NCTA Comments at 5.

[^84]: NAB Comments at 4-5.

[^85]: For the second retransmission consent/mandatory carriage election
    commencing on January 1, 2006, for which elections must be made by
    October 1, 2005, the Nielsen publications from 2003-2004 should be
    used. This requirement is consistent with the market update rule
    developed for cable carriage purposes. *See* 47 C.F.R.
    76.55(e)(2)(ii).

[^86]: DirecTV Comments at 15.

[^87]: *Id.* at 18.

[^88]: We note that this approach is intended to ensure that if Nielsen
    moved a county out of a DMA in which there is satellite
    local-into-local service into a DMA in which there is no satellite
    local-into-local service, the satellite subscribers in that county
    will not lose access to local stations via satellite. If Nielsen
    moves a county from one DMA that has local-into-local satellite
    service, a satellite carrier may consider the county to be in both
    DMAs and provide local-into-local service from both DMAs to
    subscribers in that county.

[^89]: *Notice*, 15 FCC Rcd at 12155. Pursuant to Section 614(h)(1)(C),
    at the request of either a broadcaster or a cable operator, the
    Commission may, with respect to a particular commercial television
    broadcast station, include additional communities within its
    television market or exclude communities from such station\'s
    television market. The Commission\'s inclusion of additional
    communities within a station\'s market imposes new carriage
    requirements on cable operators subject to the modification request,
    while the grant to exclude communities from a station\'s market
    relieves a cable operator from its obligation to carry a certain
    station\'s television signal.

[^90]: WFMD Comments at 5; KNTV Comments at 7; and WDBJ Comments at 1.

[^91]: BellSouth Comments at 12; DirecTV Comments at 15.

[^92]: DirecTV Comments at 21.

[^93]: Paxson Comments at 7.

[^94]: *See* Senate amendments to H.R. 1554 (May 20, 1999)("Section 338.
    Carriage of Local Television Stations by Satellite Carrier. . . .The
    mandatory carriage provisions of section 614 and 615 of this Act
    will apply in a local market no later than January 1, 2002, to
    satellite carriers retransmitting any television broadcast station
    in that local market pursuant to the compulsory license provided by
    section 122 of title 17, United States Code."

[^95]: *Id.* The coverage area or "footprint" of satellite systems can
    vary: (1) "global beam" where 1/3 of the earth is covered by a
    satellite; (2) "regional beam" where a couple of continents are
    covered by a satellite; (3) "CONUS coverage" which is the satellite
    footprint over the continental United States; and (4) "spot beam" as
    described above.

[^96]: In the *Notice*, we also had questions concerning the phrase
    "similar technologies to meet their carriage obligations" as it is
    found in the legislative history surrounding material degradation.
    We asked what was meant by the term "similar technologies." We
    specifically sought comment on whether the phrase encompasses
    satellite spot beams. *Notice*, 15 FCC Rcd at 12167.

[^97]: DirecTV Comments at 23.

[^98]: 47 U.S.C. §338(b)(1).

[^99]: 47 U.S.C. §338(h)(2).

[^100]: *Notice*, 15 FCC Rcd at 12157.

[^101]: *Id.* For example, a regional receive facility could serve
    stations throughout New England, which is comprised of several DMAs.

[^102]: *See* DirecTV Comments at 25 and *Notice*, 15 FCC Rcd at 12157.
    *See also* Echostar Comments at 13-14.

[^103]: DirecTV Comments at 25-26.

[^104]: To establish a receive facility, a satellite carrier must: (1)
    select a location for the receive facility and negotiate a lease;
    (2) order and install encoding and other equipment; (3) hire
    support, maintenance and monitoring staff; (4) make arrangements
    with local television stations to obtain a signal of sufficient
    quality; (5) allow television stations to negotiate fiber agreements
    with telephone carriers and install local fiber links; (6) install,
    as needed, over-the-air antennas and noise reduction equipment; (7)
    negotiate a long-haul fiber agreement and install a long haul fiber
    link; (8) order and install equipment for broadcast/uplink centers;
    and (9) test each link in the system. DirecTV Comments at 26-27.

[^105]: 47 U.S.C. §338(h)(2). *See, e.g.,* DirecTV Comments at 25;
    BellSouth Comments at 16.

[^106]: 47 U.S.C. §338(b)(1).

[^107]: Network Affiliates Comments at 10; AAPTS Comments at 13.

[^108]: AAPTS Comments at 13 (a television station might have to relay
    the signal over microwave or fiber at a cost of \$30 to \$60 per
    mile per month in order for a local station to deliver a good
    quality signal to the receive facility).

[^109]: *See, e.g.,* BellSouth Reply Comments at 14 (Requirement to
    place a local receive facility within a certain radius of all
    stations or within their Grade B contours is inconsistent with
    definition of "local receive facility" as the "reception point in
    each local market which the satellite carrier designates").

[^110]: *See Must Carry Order,* 8 FCC Rcd at 2988.

[^111]: At the time it filed comments, DirecTV stated it has 27
    facilities for 27 markets. DirecTV Comments at 26.

[^112]: Neither DirecTV nor Echostar stated in the record that the
    receive facilities they are using for local-into-local now cannot be
    used to retransmit all of the local television stations in those
    markets.

[^113]: NAB also asserts that both retransmission consent and mandatory
    carriage television stations should use the same local receive
    facility. NAB Comments at 10.

[^114]: *Notice*, 15 FCC Rcd at 12157. *See, e.g.* Network Affiliates
    Comments at 8-10; Echostar Comments at 13-14; and BellSouth Reply at
    14.

[^115]: DirecTV Comments at 28-30; LTVS Comments at 15.

[^116]: LTVS Comments at 15; ALTV Comments at 32.

[^117]: AAPTS Comments at 14.

[^118]: ALTV Comments at 33; Network Affiliates Comments at 10; NAB
    Comments at 11.

[^119]: Echostar Comments at 6.

[^120]: ALTV Comments at 32.

[^121]: For example, if DirecTV were to establish an alternative receive
    facility in Howard County, MD, (which is in the Baltimore DMA) that
    would serve the Washington, D.C., Philadelphia, and Baltimore
    television markets, 50% or more of the stations in Washington, D.C.
    and 50% or more of stations in Philadelphia would have to agree to
    the site location. A satellite carrier cannot combine the number of
    Washington, D.C. and Philadelphia stations to reach the 50%
    threshold.

[^122]: ALTV Comments at 32.

[^123]: New television stations that sign on-the-air during the middle
    of an election cycle, must deliver their signal to an existing local
    or non-local receive facility and need not be counted in the 50%
    coalition until the next election cycle commences.

[^124]: *See, e.g.*, Network Affiliates Comments at 8; ALTV Comments at
    24; and AAPTS Comments at 12.

[^125]: *See, e.g.*, NAB Comments at 21-22; DirecTV Comments at 29; and
    note 25, *supra.*

[^126]: NAB Comments at 21-22.

[^127]: We believe such a result would be comparable to a television
    broadcast station requiring a cable operator to move its headend or
    create a new headend to accommodate its signal.

[^128]: BellSouth Comments at 19 (Television stations in the losing
    minority of a vote to allow a non-local receive facility may be
    denied carriage by the satellite provider unless such stations bear
    the costs to deliver a good quality signal to the out-of-market
    reception point).

[^129]: Network Affiliates Comments at 10 (Arguing that satellite
    carriers are the primary beneficiaries of regional receive
    facilities and should bear the costs).

[^130]: DirecTV Comments at 28.

[^131]: *See, e.g.,* LTVS Comments at 15.

[^132]: We reject, as unnecessary, DirecTV's argument that any agreement
    among television broadcast stations may only be made twelve months
    prior to the election cycle to allow satellite carriers to plan
    ahead and to prevent broadcasters from garnering votes for an
    alternate facility throughout the entire period. DirecTV Comments at
    29.

[^133]: BellSouth Comments at 18.

[^134]: *Notice*, 15 FCC Rcd at 12157.

[^135]: NAB Comments at 12.

[^136]: BellSouth Reply Comments at 16 (Congress considered and rejected
    language that would have prohibited a satellite carrier from
    designating a receive site to "undermine or evade the carriage
    requirements ...." citing H.R. 1027, the last sentence to what was
    enacted as Section 338(h)(2), defining "local receive facility."
    H.R. Rep. No. 86, 106^th^ Cong., 1^st^ Sess., at 7 (April 12, 1999).
    Resurrecting that standard in rules, after Congress consciously
    rejected that standard, would violate Congressional intent). *See
    also* DirecTV Comments at 30 (Commission should not adopt remedies
    and procedures that have no basis in the statute).

[^137]: AAPTS Comments at 19 (satellite carriers object to such a
    process because they fear it will result in the creation of
    additional and expensive receive facilities).

[^138]: We note that Section 338 does not contain a "good faith" clause
    similar to the one contained in the amendments to Section 325. *See*
    47 U.S.C. §325(b)(3)(C)(ii). We also reject as unnecessary
    BellSouth's request for rules prohibiting local television stations
    from unreasonably withholding consent to a regional receive facility
    location. BellSouth Comments at 17. *See* ALTV Comments at 8; NAB
    Reply Comments at 2-3 (arguing that BellSouth's good faith request
    exceeds the scope of Section 338 and that Congress gave television
    stations the absolute right to refuse to agree to a non-local
    receive facility).

[^139]: 47 U.S.C. §534(h)(1)(B)(iii); 47 C.F.R. §76.55(c)(3).

[^140]: *Notice*, 15 FCC Rcd at 12157.

[^141]: DirecTV remarks that an equally acceptable standard is
    ANSI/EIA/TIA-250-C, known as the "Short Haul." DirecTV Comments at
    32.

[^142]: We note that the short haul standard specifies a signal-to-noise
    ratio of +67dB, not --67dB as stated by DirecTV.

[^143]: *Id.*

[^144]: AAPTS comments that this is a standard that a broadcaster could
    achieve only by using fiber-optic capacity all the way from the
    station to the receive facility. AAPTS Reply Comments at 16.

[^145]: NAB Reply Comments at 20.

[^146]: ALTV Comments at iii.

[^147]: CTN Comments at 7.

[^148]: AAPTS Comments at 16.

[^149]: *Notice*, 15 FCC Rcd at 12157.

[^150]: *Broadcast Signal Carriage Order*, 8 FCC Rcd at 2991. A
    broadcast station may use microwave facilities, fiber-optics, or
    even a translator station to improve the quality of its signal, and
    therefore be qualified for carriage. *Id.*

[^151]: ALTV Comments at iii; AAPTS Comments at 15; and Network
    Affiliates Comments at 12.

[^152]: NAB Comments at 7.

[^153]: *Id.*

[^154]: DirecTV Comments at 28; LTVS Comments at 16.

[^155]: LTVS Comments at 17.

[^156]: *See Implementation of the Cable Television Consumer Protection
    and Competition Act of 1992: Broadcast Signal Carriage Issues*,
    Memorandum Opinion and Order, 9 FCC Rcd 6723-24 (1994) ("Must Carry
    Reconsideration")

[^157]: *Id.* For example, we have required the: (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. *Id.*

[^158]: LTVS Comments at 17.

[^159]: NAB Comments at 14-15. DirecTV agrees that an independent
    engineer may be consulted to determine signal quality. DirecTV Reply
    Comments at 19.

[^160]: *Id.*

[^161]: BellSouth Reply Comments at 17.

[^162]: BellSouth Comments at 18.

[^163]: Under Section 338, the station bears the responsibility to
    provide a good quality signal. Attendant to this burden is its
    obligation to prove to the satellite carrier that the signal is of
    good quality.

[^164]: 47 C.F.R. §73.686(b)(2). The rule, in part, requires that at
    each measuring location, the following procedures shall be employed:
    (1) The instrument calibration is checked; (2) The antenna is
    elevated to a height of 30 feet; (3) The receiving antenna is
    rotated to determine if the strongest signal is arriving from the
    direction of the transmitter; and (4) The antenna is oriented so
    that the sector of its response pattern over which maximum gain is
    realized is in the direction of the transmitter.

[^165]: 47 U.S.C. §338(c)(1).

[^166]: 47 U.S.C. §534(b)(5).

[^167]: *Must Carry Order,* 8 FCC Rcd at 2980-81. The Commission has
    stated, in the cable carriage context, that programs in foreign
    languages (e.g., MacNeil/Lehrer in Spanish) are not duplicative of
    the same programs broadcast in English, because they target
    different audiences. *Id.* at 2971.

[^168]: *Id.*

[^169]: 47 U.S.C. §535(e).

[^170]: *Id.*

[^171]: *Must Carry Order*, 8 FCC Rcd at 2970.

[^172]: DirecTV Comments at 35.

[^173]: Network Affiliates Comments at 13-14.

[^174]: In the cable carriage context, the Commission treated the
    duplication provisions of Sections 615(b)(2) and Section 614(b)(5)
    separately. The Commission noted that the two provisions were
    intended to accommodate different situations and were addressed
    separately in the statute and its legislative history. 8 FCC Rcd at
    2980. We believe that our separate duplication postulates for
    commercial and NCE stations in the cable context should also be
    applied in the satellite context.

[^175]: ALTV Comments at 44; NCTA Comments at 6; and LTVS Comments at
    20.

[^176]: DirecTV Comments at 37.

[^177]: *Notice*, 15 FCC Rcd at 12159.

[^178]: *Id*. "The term 'television network' means a television network
    in the United States which offers an interconnected program service
    on a regular basis for 15 or more hours per week to at least 25
    affiliated broadcast stations in 10 or more States." This is known
    as the 15-25-10 rule. 47 U.S.C. §339(d)(5).

[^179]: BellSouth Comments at 21; NCTA Comments at 6; and LTVS Comments
    at 20.

[^180]: *See* 47 C.F.R. §76.56(b)(5).

[^181]: We note that Hearst-Argyle is the licensee for both WMUR and
    WCVB.

[^182]: If a network no longer meets the 15-25-10 rule, or a new network
    meets that rule, it is incumbent upon the station to make this fact
    known to the satellite carrier. The satellite carrier can either
    accept or reject the station's determination. A station may file a
    complaint with the Commission if it is in a disagreement with the
    satellite carrier.

[^183]: *Notice*, 15 FCC Rcd at 12159.

[^184]: We note that WNNE is a satellite of WPTZ.

[^185]: We note that Hartford, VT is the station's city of license.
    White River Junction is where the station's studio is located.

[^186]: Conference Report at H11795.

[^187]: Quorum of Maryland License provided the only other example of a
    situation meeting the duplication exception in Section 338. It
    states that WHAG-TV (NBC, Hagerstown, MD) and WRC-TV (NBC,
    Washington, D.C.) are located in different states, and thus the
    exception should apply. However, WHAG-TV only wants carriage in the
    upper northwest part of the Washington, D.C.-Hagerstown, MD DMA.
    Quorum of Maryland License Comments at 2-3.

[^188]: DirecTV Comments at 38.

[^189]: *Id.*

[^190]: NAB Reply Comments at 26, *citing* 47 U.S.C. § 338(c)(1).

[^191]: *Id.*

[^192]: DirecTV Comments at 36.

[^193]: NAB Reply Comments at 25.

[^194]: 47 U.S.C. §338(c)(2).

[^195]: 47 U.S.C. §535(l)(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. 47 C.F.R. §76.55(a).

[^196]: 47 U.S.C. §535(l)(2).

[^197]: Cable systems with: (1) 12 or fewer usable activated channels
    are required to carry the signal of one qualified local
    noncommercial educational station; (2) 13-36 usable activated
    channels are required to carry no more than three qualified local
    noncommercial educational stations; and (3) more than 36 usable
    activated channels shall carry at least three qualified local
    noncommercial educational stations. *See* 47 U.S.C. §535(b) and (e);
    47 C.F.R. §76.56(a).

[^198]: *Notice*, 15 FCC Rcd at 12160-61.

[^199]: *Notice*, 15 FCC Rcd at 12153. *See* 47 C.F.R. §76.56 (signal
    carriage obligations) and 47 C.F.R. §76.61(b) (regarding the
    carriage of noncommercial televisions).

[^200]: AAPTS Comments at 9.

[^201]: DirecTV Comments at 34; EchoStar Comments at 5.

[^202]: Echostar Comments at iv, 5.

[^203]: DirecTV Comments at 39.

[^204]: NCTA and AAPTS argue that the formulations proposed by EchoStar
    and DirecTV would lead to satellite NCE carriage requirements that
    do not remotely resemble those imposed on the cable industry in
    terms of the nature of the signal (national versus local) and in the
    number of stations carried. NCTA Comments at 10; AAPTS Reply
    Comments at 3.

[^205]: 47 U.S.C. §338(c)(2).

[^206]: 47 U.S.C. §535(e).

[^207]: The Commission has held that Section 615 requires cable
    operators with more than 36 channels to carry additional qualified
    NCE stations where there are more than three such stations
    available. *See* *Must Carry Reconsideration*, 9 FCC Rcd at 6723-24.
    For example, Cox Communications in Fairfax County, VA, has to carry
    NCE stations WMPT, WETA, WHUT and WNVC because it has more than 36
    channels and each of these stations are either within 50 miles of
    the operator's principal headend or the stations place Grade B
    Contours over the headend.

[^208]: *See* 47 U.S.C. §338(c)(2).

[^209]: Given the differences between commercial and noncommercial
    television stations in the statutory language, we are able to
    develop different definitions of substantial duplication.

[^210]: We note that 11 of the top 35 markets contain more than 3 NCE
    stations. They are: (1) New York (7 NCEs); (2) Los Angeles (4 NCEs);
    (3) Philadelphia (5 NCEs); (4) San Francisco-Oakland-San Jose (5
    NCEs); (5) Boston (4 NCEs); (6) Washington, D.C. (6 NCEs); (7)
    Minneapolis-St. Paul (5 NCEs); (8) Indianapolis (4 NCEs); (9)
    Charlotte (4 NCEs); (10) Cincinnati (4 NCEs) ; and (11)
    Greenville-Spartanburg (4 NCEs).

[^211]: Like our conclusion in the cable context, we consider the
    programming broadcast in prime time distinct from the programming
    broadcast at other times because prime time often is intended for
    different purposes and attracts different viewers. *See Must Carry
    Order*, 8 FCC Rcd at 2971

[^212]: 47 U.S.C. §615(e).

[^213]: *Compare* 47 U.S.C. §615(l)(2) with 47 U.S.C. §338(h)(3).

[^214]: The Act's NCE cable carriage provision instructs that
    duplication shall be defined by the Commission "in a manner that
    promotes access to distinctive noncommercial educational television
    service." 47 U.S.C. §535(e).

[^215]: DirecTV Comments at 39-40; BellSouth Comments at 24. 47 U.S.C.
    §335; 47 C.F.R. §100.5(c); *see also Implementation of Section 25 of
    the Cable Television Consumer Protection and Competition Act of
    1992; Direct Broadcast Satellite Public Interest Obligations, Report
    and Order*, 13 FCC Rcd 23254 (1998)("*Direct Broadcast Satellite
    Public Interest Obligations Order"*).

[^216]: AAPTS Comments at 10.

[^217]: 47 U.S.C. §335; *Direct Broadcast Satellite Public Interest
    Obligations Order,* 13 FCC Rcd at 23385.

[^218]: *Id.* at 23285.

[^219]: KQED Comments at 3; Detroit Television Reply Comments at 1.

[^220]: 17 U.S.C. §119(a).

[^221]: 47 U.S.C. §338(f)(1). The satellite carriage channel positioning
    obligation is different from the requirement imposed on cable
    operators. Under Section 614(b)(6) commercial television stations
    may choose among four channel positioning options vis-à-vis cable
    operators: (1) the channel number on which the station broadcasts
    over-the-air; (2) the channel on which the station was carried on
    July 19, 1985; (3) the channel on which it was carried on January 1,
    1992; and (4) any other channel number as is mutually agreed upon by
    the station and the cable operator. 47 U.S.C. §534(b)(6); 47 C.F.R.
    §76.57(a). Noncommercial television stations have three channel
    positioning options under Section 615(g)(5): (1) the channel number
    on which the station is broadcast over-the-air; (2) the channel on
    which the station was carried on July 19, 1985; and (3) any other
    channel number as is mutually agreed upon by the station and the
    cable operator. 47 U.S.C. §535(g)(5); 47 C.F.R. §76.57(b).

[^222]: Conference Report at H11795.

[^223]: *Notice*, 15 FCC Rcd at 12161.

[^224]: *Id.*

[^225]: ALTV Comments at iii.

[^226]: AAPTS Comments at 26-27.

[^227]: NAB Comments at 15, n.13.

[^228]: BellSouth Comments at 24.

[^229]: *Id.*

[^230]: DirecTV Comments at 40. For example, channels 970-985 on
    DirecTV's channel line-up would be the channel neighborhood for the
    Washington, D.C. (Hagerstown) market stations. However, channels 979
    and 981 may not be programmed and remain dark.

[^231]: ALTV Reply Comments at i.

[^232]: NAB Reply Comments at 27.

[^233]: The term "contiguous" in this context refers to the tuning of
    channels and easy accessibility on the satellite carrier's channel
    line-up. The term does not refer to frequency continuity.

[^234]: *Notice*, 15 FCC Rcd at 12162 *citing* 47 U.S.C. §338(d).

[^235]: *Id.*

[^236]: AAPTS Comments at 29-30. AAPTS states that representation in a
    nondiscriminatory fashion means that the NCE station logo, for
    example, should be given the same prominence and placement as that
    of the most favored channel. AAPTS also asserts that the method, by
    which the NCE station is selected, whether by channel number or
    interaction with a program guide, should be comparable to the method
    used to select the most-favored channel. *Id.*

[^237]: NAB Comments at 16, *quoting* 47 U.S.C. § 338(d).

[^238]: *Id.* at 17.

[^239]: BellSouth states that those rules implement an explicitly
    different statutory/ regulatory model for the delivery of video
    services, and are uniquely designed to implement that model and the
    combination of open video platform and cable regulatory elements
    contained within it. BellSouth Reply Comments at 31.

[^240]: 47 U.S.C. §1503(c).

[^241]: *Notice*, 15 FCC Rcd at 12162.

[^242]: ALTV Comments at 16; NAB Comments at 17.

[^243]: AAPTS Comments at 29.

[^244]: BellSouth notes that it is not endorsing the concept that
    station signals cannot be sold on an a la carte basis. BellSouth
    Reply Comments at 28.

[^245]: Echostar Comments at iii.

[^246]: NAB Comments at 17-18. ALTV Comments at 20-21.

[^247]: BellSouth Reply Comments at 27, *citing* Conf. Rep. at S14711.

[^248]: Echostar Reply Comments at iv.

[^249]: *Id.*

[^250]: 47 U.S.C. §338(g).

[^251]: 47 U.S.C. §534(b)(3).

[^252]: 47 U.S.C. §535(g)(1).

[^253]: *Notice*, 15 FCC Rcd at 12162-63.

[^254]: Line 21, for example, has several fields that can be used for a
    variety of data purposes.

[^255]: *See*, *e.g.*, BellSouth Comments at 24. (All direct-to-home
    satellite providers use digital modulation, and for that reason,
    there is no VBI in the digital bitstream. VBI information must be
    stripped from the analog signal and re-created as a bitstream.)

[^256]: *See* ALTV Comments at iv; NCTA Comments at 6; LTVS Comments at
    24; Paxson Comments at 6.

[^257]: NAB Comments at 18-19.

[^258]: BellSouth Comments at 25.

[^259]: We did not receive any comments stating that a satellite carrier
    cannot carry closed captioning information.

[^260]: *WGN*, 693 F.2d 622 (7th Cir. 1982). 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 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. *WGN*, 693 F.2d at
    626.

[^261]: *Must Carry Order*, 8 FCC Rcd at 2986. The Commission declined
    to further define \"program‑related,\" apart from the WGN analysis,
    noting that carriage of information in the VBI was rapidly evolving.
    Close captioning information, and television ratings data are some
    examples of the material carried in the vertical blanking interval.
    *Id.*

[^262]: *Notice* at ¶ 31. *See Implementation of the Cable Television
    Consumer Protection and Competition Act of 1992---Broadcast Signal
    Carriage Issues*, Notice of Proposed Rulemaking, 7 FCC Rcd 8055,
    8062 (1992) (Section 614(b)(3)(B) provides that the cable operator
    shall carry the entirety of the program schedule of any television
    station included on its system unless carriage of specific
    programming is prohibited, and other programming is authorized to be
    substituted, pursuant to Section 76.67 (regarding sports broadcasts)
    or Subpart F of Part 76 of the Commission's rules (regarding
    nonduplication protection and syndicated exclusivity)).

[^263]: Network Affiliates Comments at 19.

[^264]: *Id.*

[^265]: AAPTS Comments at 23.

[^266]: *See* 47 U.S.C. §534(b)(3); 47 U.S.C. §535(g)(1).

[^267]: *Must Carry Order*, 8 FCC Rcd at 2986.

[^268]: *Id.*

[^269]: *Notice*, 15 FCC Rcd at 12163.

[^270]: AAPTS Comments at 24.

[^271]: LTVS Comments at 26.

[^272]: *Id.*

[^273]: DirecTV Comments at 41. DirecTV states that the encoding and
    processing equipment used to transmit programming from the uplink
    facility to the appropriate transponder would have to be modified,
    and the receivers used by customers who subscribe to its service
    programming would have to be replaced in order to support the
    additional functions.

[^274]: AAPTS Reply Comments at 21.

[^275]: *Id.*

[^276]: DirecTV Comments at 5; LTVS Comments at 4.

[^277]: DirecTV Comments at 5; LTVS Comments at 4.

[^278]: 47 U.S.C. §338(g).

[^279]: 47 U.S.C. §534(b)(4).

[^280]: 47 U.S.C. §535(g)(2).

[^281]: *See* 7 FCC Rcd at 8063 *citing* *Cable Television Technical and
    Operational Requirements* *Report and Order*, 7 FCC Rcd 2021 (1992)
    ("Cable Technical *Report and Order*") and *Cable Television
    Technical and Operational Requirements Memorandum Opinion and
    Order*, 7 FCC Rcd 8676 (1992) ("Cable Technical Reconsideration").

[^282]: *Must Carry Order*, 8 FCC Rcd at 2990*.*

[^283]: *See* *id.*

[^284]: *Id.*

[^285]: *Notice*, 15 FCC Rcd at 12165.

[^286]: *Id.*

[^287]: LTVS Comments at 27.

[^288]: AAPTS Comments at 25-26. In response, BellSouth argues that the
    snow and interference effects that would be measured, subjectively,
    to determine the TASO quality of a signal simply do not exist in a
    digital environment; instead, the digital picture malformations (at
    least in presently employed technology) are in the nature of total
    picture loss, block errors, tiling and other artifacts that do not
    occur in an analog picture and thus cannot be used to assign a TASO
    grade to a digital picture. BellSouth Reply Comments at 34.

[^289]: DirecTV Comments at 45.

[^290]: HBO Comments at 3.

[^291]: *Notice*, 15 FCC Rcd at 12167.

[^292]: Conference Report at H11795.

[^293]: *Id.*

[^294]: *Id.*

[^295]: ALTV Comments at 35.

[^296]: BellSouth Comments at 26.

[^297]: DirecTV Comments at 44.

[^298]: *See* the Good Quality Signal Issues sub-section, *supra*.

[^299]: For example, if the dish is not properly situated or is
    obfuscated by foliage, the satellite carrier cannot be held
    responsible for the resulting degradation of picture quality. We
    also note that satellite signal degradation varies from location to
    location due to atmospheric differences. For example, satellite
    signal outages due to rain fade are more common in Miami, Florida,
    than in Cheyenne, Wyoming.

[^300]: This discussion was previously mentioned in the *Notice* in this
    proceeding. *See Notice*, 15 FCC Rcd at 12165-67.

[^301]: We note that all digital video systems, including DBS, are based
    on MPEG standards for the compression of moving video images.

[^302]: Picture quality questions in this layer may arise in the future
    when satellite carriers decide to retransmit digital broadcast
    signals.

[^303]: This is also a different digital format from the vestigial
    sideband modulation ("VSB") system that broadcasters are currently
    using to deliver over-the-air digital signals to viewers.

[^304]: QAM is the acronym for quadrature amplitude modulation.

[^305]: Quantization is part of the process by which analog signals are
    encoded into digital form. Specifically, it is the classification
    step that determines the number of bits to be used in the conversion
    process.

[^306]: *Notice*, 15 FCC Rcd at 12167.

[^307]: In this context, we note that the broadcast signal is converted
    back to analog at the satellite set-top box so that the picture can
    be displayed on the analog television receiver.

[^308]: LTVS specifically notes two proposed international standards:
    (1) ITU-R 500-10 ("methodology for the subjective assessment of the
    quality of television pictures") and (2) ITU-R 1129-2 ("subjective
    assessment of standard definition digital television") LTVS Comments
    at 28.

[^309]: NAB Comments at 19. BellSouth asserts that the adoption of NAB's
    criteria would restrain technological innovation beneficial to
    local-into-local station carriage and improvements in signal
    quality. BellSouth Reply Comments at 35.

[^310]: We also note that as broadcasters' transition to digital
    television, the question of measuring degradation changes. This
    issue was raised in the Commission's pending Digital Must Carry
    rulemaking in the cable context. *See Digital Broadcast Signal
    Carriage Issues*, 13 FCC Rcd 15092, 15122 (1998) ("DTV Must Carry
    Notice")

[^311]: 47 U.S.C. §338(g).

[^312]: 47 U.S.C. §534(b)(4)(B).

[^313]: Conference Report at H11795.

[^314]: 47 C.F.R. §§73.622-624. The rules governing the transition from
    analog to digital broadcasting are found in *Advanced Television
    Systems and Their Impact Upon the Existing Television Broadcast
    Service*, Fifth Report and Order, 12 FCC Rcd 12809 (1997). ("*DTV
    Fifth Report and Order*"). The *DTV Fifth Report and Order* set
    forth a phased-in implementation schedule for the introduction of
    digital broadcast television. Construction requirements vary
    depending on the size of the television market and other factors.
    *DTV Fifth Report and Order*, 12 FCC Rcd at 12840-41; *Memorandum
    Opinion and Order on Reconsideration of the Fifth Report and Order*,
    13 FCC Rcd 6860 (1998); *Second* *Memorandum Opinion and Order on
    Reconsideration of the Fifth and Sixth Report and Orders*, 14 FCC
    Rcd 1348 (1998).

[^315]: *See* 11 FCC Rcd 17771 (1996).

[^316]: The 2006 date is subject to certain exceptions related to
    consumer acceptance of digital technology and other market-based
    conditions as provided for in the 1997 Balanced Budget Act. 47
    U.S.C. §309(j)(14)(B) (Balanced Budget Act language concerning the
    reversion of the analog television spectrum to the government). *See
    also DTV Fourth Report and Order*, 11 FCC Rcd 17771 (1996); *DTV
    Fifth Report and Order*, 12 FCC Rcd 12809 (1997); *DTV* *Sixth
    Report and Order*, 12 FCC Rcd 14588 (1997).

[^317]: *See Digital Must Carry Notice*, 13 FCC Rcd 15092 *et. seq*.

[^318]: *Notice*, 15 FCC Rcd at 12169.

[^319]: *See, e.g.*, ALTV Comments at v and 50.

[^320]: *See, e.g.*, DirecTV Comments at 46.

[^321]: We note that the satellite carriers also raise the novel
    argument that a dual carriage policy will significantly impede the
    Congressional goal of offering local-into-local service into as many
    television markets as possible. See SBCA Comments at 11; DirecTV
    Comments at 46-47.

[^322]: We note that the Commission has held, in the cable carriage
    context, that digital television signals ultimately will have
    carriage rights. *See Service Rules for the 746-764 and 776-794 MHz
    Bands, and Revisions to Part 27 of the Commission's Rules*,
    Memorandum Opinion and Order and Further Notice of Proposed
    Rulemaking, FCC 00-224 (released June 30, 2000) at ¶ 65.

[^323]: *Id.*

[^324]: 47 U.S.C. §338(e). Sections 614(b)(10) and 615(i) impose
    substantially similar requirements on cable operators.

[^325]: *Notice*, 15 FCC Rcd at 12169.

[^326]: Network Affiliates Comments at 22.

[^327]: LTVS Comments at 30.

[^328]: 47 U.S.C. §338(a)(2).

[^329]: 17 U.S.C. §501(f)(1)(as amended by Section 1002 of the SHVIA).

[^330]: 17 U.S.C. §501(f)(2).

[^331]: 47 U.S.C. §338(f)(1). The remedial provisions of the SHVIA are
    substantially similar to provisions applicable to cable operators
    set forth in Section 614(d)(1)-(3) of the 1992 Cable Act.

[^332]: 47 U.S.C. §338(f)(2).

[^333]: *Notice*, 15 FCC Rcd at 12170.

[^334]: *Id.* at 12171.

[^335]: ALTV Comments at 46.

[^336]: DirecTV Comments at 49.

[^337]: LTVS Comments at 32; NAB Comments at 22; ALTV Comments at 47;
    AAPTS Comments at 38; Network Affiliates Comments at 27.

[^338]: Network Affiliates Comments at 27; LTVS Comments at 32. The
    complaint and special relief procedures in the cable rules allow
    broadcasters with material degradation or content carriage disputes
    to bring their disputes before the Commission. *See* 47 C.F.R. §§
    76.7 and 76.61.

[^339]: DirecTV Comments at 50.

[^340]: *See* 47 U.S.C. §338(g).

[^341]: *See* 47 C.F.R. §76.61(a)(5).

[^342]: 47 U.S.C. §338(f)(1)-(3). These statutory provisions discuss the
    satellite carriage complaint process and the remedial actions the
    Commission may take.

[^343]: *Notice*, 15 FCC Rcd at 12171.

[^344]: Network Affiliates Comments at 28.

[^345]: ALTV Comments at 50.

[^346]: *See* 47 U.S.C. §548(g) ("The Commission shall, beginning not
    later than 18 months after promulgation of the regulations required
    by subsection (c) \[concerning program access\], annually report to
    Congress on the status of competition in the market for the delivery
    of video programming.)

[^347]: *Notice*, 15 FCC Rcd at 12154.

[^348]: 47 U.S.C. §338(h)(1).

[^349]: *Notice*, 15 FCC Rcd at 12154.

[^350]: LTVS Comments at 12.

[^351]: 47 U.S.C. §338(h)(7).

[^352]: 47 U.S.C. §325(b)(7)(B).

[^353]: Paging Associates Reply Comments at 1-2.

[^354]: Community Broadcasters Protection Act of 1999, P.L. No. 106-113,
    113 Stat. Appendix 1 at p.1501A-594-1501A-598 (1999) (codified at 47
    U.S.C. §336(f)).

[^355]: The Commission has already determined that cable operators are
    under no obligation to treat Class A television stations like full
    power television stations for the purpose of mandatory carriage.
    *See Establishment of a Class A Television Service*, Report and
    Order, MM Docket No. 00-10, 15 FCC Rcd 6355, n.61 (2000) ("Nothing
    in this *Report and Order* is intended to affect a Class A LPTV
    station's eligibility to qualify for mandatory carriage under 47
    U.S.C. §534.")

[^356]: *Notice*, 15 FCC Rcd at 12154. *Broadcast Signal Carriage
    Order*, 8 FCC Rcd at 2973.

[^357]: *See* *generally*, 47 C.F.R. §73.3555 at note 5.

[^358]: LTVS Comments at 11; NAB Comments at 4.

[^359]: DirecTV Comments at 12.

[^360]: Fifth Avenue Channel Corporation Comments at 3.

[^361]: NRTC Comments at 5.

[^362]: *Id.*

[^363]: *See* 5 U.S.C. §603. The RFA, *see* 5 U.S.C. §601 *et. seq*.,
    has been amended by the Contract With America Advancement Act of
    1996, Pub. L. No. 104-121, 110 Stat. 847 (1996) (CWAAA). Title II of
    the CWAAA is the Small Business Regulatory Enforcement Fairness Act
    of 1996 ("SBREFA").

[^364]: *See Implementation of the Satellite Home Viewer Improvement Act
    of 1999---Broadcast Signal Carriage Issues*, Notice of Proposed
    Rulemaking, 15 FCC Rcd 12147 (2000). *Implementation of the
    Satellite Home Viewer Improvement Act of 1999---Retransmission
    Consent Issues*, Notice of Proposed Rulemaking, 14 FCC Rcd 21736
    (1999). The IRFAs are found at Appendix A in the respective
    *Notices*.

[^365]: *See* 5 U.S.C. § 604.

[^366]: Act of Nov. 29, 1999, Pub. Law 106-113, §1000(9), 113 Stat.
    1501, Appendix A.

[^367]: *Id.*

[^368]: 5 U.S.C. §603(b)(3).

[^369]: 5 U.S.C. §601(6).

[^370]: 5 U.S.C. §601(3)(incorporating by reference the definition of
    "small business concern" in 15 U.S.C. §632.)

[^371]: 15 U.S.C. §632.

[^372]: 13 C.F.R. §121.201, Standard Industrial Code (SIC) 4833 (1996).

[^373]: Economics and Statistics Administration, Bureau of Census, U.S.
    Department of Commerce, 1992 Census of Transportation,
    Communications and Utilities, Establishment and Firm Size, Series
    UC92-S-1, Appendix A-9 (1995).

[^374]: *Id*. *See* Executive Office of the President, Office of
    Management and Budget, Standard Industrial Classification Manual
    (1987), at 283, which describes \"Television Broadcasting Stations
    (SIC Code 4833)\" as:

    Establishments primarily engaged in broadcasting visual programs by
    television to the public, except cable and other pay television
    services. Included in this industry are commercial, religious,
    educational and other television stations. Also included here are
    establishments primarily engaged in television broadcasting and
    which produce taped television program materials.

[^375]: Economics and Statistics Administration, Bureau of Census, U.S.
    Department of Commerce, 1992 Census of Transportation,
    Communications and Utilities, Establishment and Firm Size, Series
    UC92-S-1, Appendix A-9 (1995).

[^376]: *Id*.; SIC 7812 (Motion Picture and Video Tape Production); SIC
    7922 (Theatrical Producers and Miscellaneous Theatrical Services)
    (producers of live radio and television programs).

[^377]: FCC News Release No. 31327, Jan. 13, 1993; Economics and
    Statistics Administration, Bureau of Census, U.S. Department of
    Commerce, Appendix A-9.

[^378]: FCC News Release, Broadcast Station Totals as of September, 1999
    (released November, 1999).

[^379]: The amount of \$10 million was used to estimate the number of
    small business establishments because the relevant Census categories
    stopped at \$9,999,999 and began at \$10,000,000. No category for
    \$10.5 million existed. Thus, the number is as accurate as it is
    possible to calculate with the available information.

[^380]: We use the 77 percent figure of TV stations operating at less
    than \$10 million for 1992 and apply it to the 1999 total of 1,616
    TV stations to arrive at 1,230 stations categorized as small
    businesses.

[^381]: 13 C.F.R. §121.201 (SIC 4841).

[^382]: 1992 Economic Census Industry and Enterprise Receipts Size
    Report, Table 2D, SIC Code 4841 (Bureau of the Census data under
    contract to the Office of Advocacy of the SBA).

[^383]: Annual Assessment of the Status of Competition in Markets for
    the Delivery of Video Programming, Third Annual Report, CS Docket
    No. 96-133, 12 FCC Rcd 4358, 4385 (1996)("*Third Annual Report").*

[^384]: *Third Annual Report,* 12 FCC Rcd at 4385.

[^385]: *Id.*

[^386]: *Id.*

[^387]: 5 U.S.C. §603(c)

[^388]: *See* 5 U.S.C. §801(a)(1)(A).

[^389]: *See* 5 U.S.C. §604(b).