**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | * | MM Docket No. 93-25          |
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**MEMORANDUM OPINION AND ORDER**

**ON RECONSIDERATION OF**

**THE FIRST REPORT AND ORDER**

**Adopted: April 9, 2003 Released:** **March 25, 2004**

By the Commission: Commissioner Copps approving in part, dissenting in
part and issuing a statement.

**TABLE OF CONTENTS**

**I. INTRODUCTION 1**

**II. BACKGROUND 3**

**III. DISCUSSION**

**A. Definition of Providers of DBS Service 7**

**B. Political Broadcasting Requirements 18**

**C. Opportunities for Localism 34**

**D. Cable-Related Obligations 38**

**E. Guidelines Concerning Commercialization of Children's Programming
42**

**F. Programming on Reserved Capacity 46**

**G. Noncommercial Channel Limitation 49**

**IV. CONCLUSION 57**

**V. ORDERING CLAUSES 58**

**I. INTRODUCTION**

1.  In this *Memorandum Opinion and Order,* we consider petitions for
    reconsideration and other pleadings filed in response to our *First
    Report and Order*[^1] implementing Section 25 of the Cable
    Television Consumer Protection and Competition Act of 1992 ("1992
    Cable Act").[^2] For the reasons discussed below, we conclude that
    the Commission's interpretation and implementation of Section 25 of
    the 1992 Cable Act was correct, but that some clarification is in
    order. Therefore we deny the petitions for reconsideration.

2.  At this time DBS providers are complying with the public interest
    obligations specified in the *First Report and Order.* In response
    to Commission inquiry, the three operating DBS providers, DirecTV,
    Inc., EchoStar Satellite Communications Corporation, and Dominion
    Video Satellite, Inc., state that each has set aside at least four
    percent of its channel capacity to satisfy the public interest
    obligation and is providing a broad range of informational and
    educational programming, including programming relating to
    international news, public affairs, family life, foreign language
    instruction, and academic instruction on various levels.[^3]

**II. BACKGROUND**

3.  In 1992, Congress directed the Commission to initiate a rulemaking
    to impose certain public interest obligations on direct broadcast
    satellite ("DBS") providers, including political broadcasting
    rules.[^4] In 1998, the Commission adopted the *First Report and
    Order,* which implements these statutory obligations.

4.  The Commission's rules apply to "providers of direct broadcast
    satellite service." These include entities licensed pursuant to Part
    100 of the Commission's rules[^5]; entities licensed pursuant to
    Part 25 of the Commission's rules to provide fixed-satellite service
    ("FSS"), via the Ku-band,[^6] that sell or lease transponder
    capacity to a video program distributor who offers direct-to-home
    FSS ("DTH-FSS") to consumers; and non-U.S. licensed satellites
    providing DBS or DTH-FSS services in the United States. As required
    by statute, the rules require DBS providers to comply with certain
    statutory political broadcasting requirements granting candidates
    for federal office reasonable access to a licensee's facilities on
    an equal basis with other federal candidates at the lowest rate
    available. DBS providers must also comply with statutory equal
    opportunities provisions. As part of the public interest
    obligations, Congress also mandated that DBS providers set aside
    channel capacity for noncommercial programming and offer access to
    educational programmers at reasonable prices, terms and conditions.
    To implement that requirement, the rules impose program carriage
    obligations on DBS providers, requiring them to set aside four
    percent of their channel capacity exclusively for noncommercial
    educational and informational programming and to make the capacity
    available at reasonable prices. Access to the noncommercial and
    informational capacity is limited to bona fide noncommercial
    national educational programming suppliers, and access is limited to
    one channel per supplier as long as demand for such capacity exceeds
    the available supply. The rules allow a DBS provider initially to
    select qualified, noncommercial programmers, but prohibit a DBS
    provider from altering or censoring the content of the programming
    aired on the noncommercial channels. Finally, the rules require that
    each DBS provider maintain a public file containing a complete and
    orderly record concerning its compliance with both the political
    broadcasting and the noncommercial educational and informational
    programming requirements.[^7]

5.  Nine petitions for reconsideration and related pleadings were filed
    in response to the *First Report and Order.*[^8] The petitioners
    raise concerns regarding whether the Commission has correctly
    determined what entities are defined as DBS providers, whether it
    has properly implemented the Commission's political broadcasting
    requirements for DBS providers, and whether it has adequately
    addressed the issue of localism. Petitioners also assert that the
    Commission should have applied certain additional obligations to DBS
    providers, should have taken steps to protect children from harm
    associated with over-commercialization, should have prohibited DBS
    providers from meeting their public service obligation with existing
    programming, and challenge the Commission's determination to limit
    access to capacity reserved for educational and informational
    programming to one channel per national educational programming
    supplier.

**III. DISCUSSION**

6.  Reconsideration is appropriate only where the petitioner either
    shows a material error or omission in the original order or raises
    additional facts not known or existing at the petitioner's last
    opportunity to present such matters. A petition for reconsideration
    of a final rulemaking proceeding must state with particularity the
    respects in which the petitioner believes the action taken by the
    Commission should be changed.[^9] We find that none of the
    petitioners' requests warrants reconsideration and therefore we deny
    all of the petitions. We also clarify some aspects of the DBS public
    interest obligations.

**A. Definition of Providers of DBS Service**

7.  Several petitioners assert that the Commission erred when it defined
    the term "providers of DBS service" to include satellite operators
    licensed pursuant to Part 25 of the Commission's rules. In the
    *First Report and Order,* the Commission found that the term
    included both Part 100 licensees and Part 25 licensees.[^10]

8.  The Commission found that entities licensed under Part 25 of its
    rules were providers of DBS service, for several reasons. Entities
    that could be included within the definition of DBS for purposes of
    Section 335 are DBS licensees and FSS licensees that lease capacity
    to DTH-FSS providers, video programmers, other program suppliers or
    distributors, or other third party lessees that resell capacity to
    individual programmers.[^11] The Commission pointed out that Section
    335 of the Act specifies that a "provider of DBS services" includes
    any distributor that both uses Ku-band frequencies to provide
    DTH-FSS service and is licensed under Part 25.[^12] In interpreting
    this language, the *First Report and Order* found that Congress's
    conjunctive use of the word "and" implies that the term distributor
    means an entity that controls a certain number of FSS channels
    [and]{.underline} is licensed under Part 25. In other words, the FSS
    satellite licensee is the DBS provider for purposes of Section 335,
    rather than the entity that leases DTH-FSS capacity. If Congress had
    intended otherwise, the Commission found, it would have instead
    written the statutory definition to cover a distributor that uses a
    "Ku-band satellite \... [that]{.underline} is licensed\..." under
    Part 25.[^13]

9.  In addition, Section 335 of the Act requires the Commission to
    impose the DBS public interest obligations "as a condition of any
    provision, initial authorization, or authorization renewal for a
    provider of direct broadcast satellite service\...."[^14] The
    Commission determined that the quoted language suggests that
    Congress intended the Commission to impose the public interest
    obligations on entities that it licenses and that the obligations do
    not directly extend to lessees of satellite capacity or programming
    distributors.[^15] The Commission also recognized that imposing the
    public interest obligations on the FSS Part 25 licensee facilitates
    enforcement of the requirements, as the Commission's enforcement
    authority over non-licensees is more limited.[^16] Finally, the
    Commission determined that holding the DBS and FSS satellite
    licensees responsible for public interest obligations facilitates
    fair and efficient administration of the rule, since it places the
    Commission in a position to apply the same public interest
    obligation regulatory scheme to both Part 100 and FSS Part 25
    licensees.[^17] The rules allow FSS licensees to rely on compliance
    certifications from lessee customers and distributors certifying
    compliance with the public interest obligation rules.[^18]

10. Four petitioners contend that the Commission erred by defining
    entities licensed under Part 25 as DBS providers and, therefore,
    subjecting them to the public interest obligations of Section 335 of
    the Act. The petitioners contend that the Commission's
    interpretation of the statute misconstrues Congress's intent, which
    they argue is to apply the public service obligations to the
    distributors of DTH service who compete directly with Part 100 DBS
    licensees and not to FSS satellite licensees who have nothing to do
    with DTH service. The petitioners submit that had Congress intended
    Section 335 to include FSS Part 25 satellite licensees it would have
    specifically stated so, as it did for Part 100 licensees. Instead,
    the petitioners contend that Section 335 reaches those entities that
    distribute and control video programming offered directly to
    subscribers whether the distributor is a satellite licensee or not.
    [^19]

11. Next the petitioners argue that the Commission's reliance on Section
    335's requirement that it enforce the DBS public interest
    requirements as a condition of licensing is unpersuasive. For
    example, PanAmSat argues that a more plausible interpretation of the
    statutory language concerning initial authorizations and renewals is
    that it was intended to apply to licensees in the DBS service.
    PanAmSat also posits that the reference to "any provisions" in the
    statute, in addition to initial authorizations, and renewals,
    indicates that Congress intended that the public interest
    requirements should extend to non-licensees that distribute DTH-FSS
    programming.[^20]

12. The same four petitioners also dispute the view that the Commission
    is limited in its ability to enforce the public interest obligations
    against non-licensees. [^21] The petitioners explain that, while a
    program distributor that is not a licensee does not have a license
    to revoke, the Commission has broad authority over interstate
    communications. The Commission's authority, these petitioners
    submit, provides it with the power to levy forfeitures and to issue
    cease-and-desist orders to ensure that non-licensees comply with its
    rules and regulations. Consequently, the petitioners argue, there is
    no need for FSS licensees to be burdened with public interest
    compliance.

13. At the notice phase of this proceeding, the Commission acknowledged
    that Section 335's definition of a DBS provider was broad enough to
    apply to a number of different entities, including the FSS satellite
    licensee and lessees of FSS capacity that distribute video
    programming directly to subscribers.[^22] We agree with petitioners
    that the definition of DBS provider could include lessees of FSS
    capacity that distribute video programming to subscribers. We are
    not, however, persuaded that Congress intended that the ultimate
    responsibility for complying with public service obligations rests
    with non-licensees. [^23] The petitioners proffer many of the same
    arguments that were considered in the *First Report and Order.*[^24]
    For the reasons set forth in the *First Report and Order,* we remain
    convinced that the statute's requirement to make capacity available,
    its definition of a provider of DBS service, and inclusion of
    entities licensed under Part 25 of the Commission's rules, clearly
    indicates that Congress intended that Part 25 Commission licensees
    be subject to the requirements of Section 335. This interpretation
    facilitates the Commission's orderly administration of the public
    interest obligations. It also enables the Commission to apply the
    same public interest regulatory requirements to both Part 100 and
    FSS Part 25 satellite operators. Moreover, because the Commission
    maintains ownership information for satellite licensees, and does
    not have similar records for lessees or program distributors,
    monitoring licensees is easier and enforcement is more effective.

14. We are also not persuaded that forfeitures and cease-and-desist
    orders or other enforcement remedies arising from the Commission's
    general authority to regulate interstate communications are as
    effective as the Commission's broad range of defined powers over its
    licensees. In addition, it is the satellite licensee, not the
    Commission, which has the closest connection to its lessee that is
    the distributor of programming to subscribers. Recognizing, however,
    that satellite licensees may not be ideally suited to monitor and
    enforce the public interest requirements, the Commission developed a
    procedure to permit FSS Part 25 licensees to delegate their
    responsibility for Section 335 compliance to the programming
    distributors. The Commission permitted licensees to demonstrate
    compliance with the public service obligations by relying on
    certifications from distributors that the obligations are being
    fulfilled, provided the licensee's reliance is reasonable.[^25]
    However, because the rules adopted in the *First Report and Order*
    do not specifically provide for certification, we agree with Loral
    that the rules should be clarified to permit FSS Part 25 licensees
    to rely reasonably on certifications by lessees or programmers for
    the DBS public interest obligations.[^26] Thus, we clarify that an
    FSS Part 25 licensee may demonstrate compliance with the provisions
    of Sections 100.5(b) and (c) of the Commission's rules (new Section
    25.701(b) and (c) by submitting a certification from a distributor
    that expressly states that the distributor has complied with the
    obligations of Section 335 of the Act. Moreover, we will not hold an
    FSS Part 25 licensee responsible for a distributor's false
    certification that it has complied with the public service
    requirements if the licensee could reasonably have concluded that
    the certification was not fraudulent. Because we believe that it is
    generally appropriate for a licensee to rely on the accuracy of
    certifications by program distributors offering a DTH-FSS service,
    licensees will not be required to verify compliance by distributors
    unless there is evidence that the distributor has not met its
    obligation. If a satellite licensee has reason to believe that its
    customer-distributor is not complying with these rules or has
    falsely certified compliance, the licensee should report the
    situation to the Commission for appropriate action. We believe that
    under this scheme, placing the ultimate compliance responsibility on
    the satellite licensees is not unduly burdensome, as certification
    requirements can be included in satellite carriage and leasing
    contracts.

15. The *First Report and Order* also defined "providers of DBS" to
    include non-U.S. licensed satellites that provide DBS service to
    subscribers in the United States so as to comply with the
    nondiscriminatory market access policies adopted by the Commission
    in the *DISCO II* proceeding.[^27] Essentially, *DISCO II* requires
    non-U.S. satellite operators providing access to the U.S. market to
    comply with all Commission rules applicable to U.S. satellite
    operators, including DBS public interest obligations.[^28]

16. PanAmSat questions the legitimacy of including non-U.S. satellite
    licensees in the definition of "providers of DBS service." [^29]
    PanAmSat contends that extending the Section 335 public interest
    obligations to foreign-licensed FSS systems is both inconsistent
    with notions of international comity and overly burdensome. PanAmSat
    states that under the current formulation of the rule, an FSS system
    providing service primarily outside the United States could be
    required to comply with the DBS public interest requirements even
    though it may only have a single U.S. subscriber. PanAmSat argues
    that this would have the consequence of regulating program content
    provided by a foreign-licensed satellite operator primarily to an
    audience residing in a foreign country. PanAmSat states this would
    call into question the U.S. commitment to free flow of information
    across international borders, and this country's traditional
    opposition to attempts by other countries to block U.S.
    transmissions based on content restrictions. Furthermore, PanAmSat
    adds, it makes little sense to impose purely domestic regulatory
    requirements, such as U.S. political broadcasting obligations, on
    satellite services that are delivered to subscribers who reside in
    foreign countries. PanAmSat argues that the public interest benefit,
    if any, that U.S. citizens might derive from enforcing these
    obligations is outweighed by the costs that would be incurred by the
    non-U.S. licensed satellite operator in order to comply with the
    obligations and by the Commission in enforcing them.

17. We are not persuaded by PanAmSat's arguments. Non-U.S. licensees
    will only be subject to the U.S. public interest obligations rules
    if they offer service to subscribers in the United States in a
    package consisting of 25 channels or more, and then only with
    respect to services provided in the United States.[^30] Furthermore,
    in two similar international satellite agreements entered into by
    the United States, one with Mexico and another with Argentina, the
    administrations have agreed to permit each country to require
    foreign-licensed satellite systems to comply with a "modicum" of
    each other's domestic content restrictions.[^31]

**B. Political Broadcasting Requirements**

18. Section 335 of the Act requires that the Commission establish rules
    applying the political broadcasting provisions of Sections 312(a)(7)
    and 315 of the Act to providers of DBS service.[^32] Section
    312(a)(7) requires that a candidate for federal elective office be
    provided reasonable access to broadcast facilities. Section 315
    requires that a candidate for any public office be allowed the same
    opportunities to use broadcast facilities that are afforded all
    other candidates for the same office, including rates that do not
    exceed the lowest unit charge ("LUC") paid by the station's most
    favored commercial advertisers.[^33]

19. In formulating rules to apply the requirements of Sections 312 and
    315 to DBS, the Commission recognized that there are fundamental
    differences between DBS systems and traditional terrestrial
    broadcast stations.[^34] Unlike broadcasters, DBS licensees, at the
    time the *First Report and Order* was adopted, did not originate
    programming, sell advertising, or generally transmit localized
    programming. Given these differences, the Commission decided that it
    was appropriate that the DBS political broadcasting rules afford DBS
    providers flexibility to ensure that DBS is not hampered by
    unnecessary regulation.[^35]

20. Because DBS systems provide service on a nationwide basis, as
    opposed to terrestrial broadcast stations that principally serve the
    area in or near the communities in which the stations are licensed,
    the Commission found that presidential and vice presidential
    candidates are the only federal candidates that would likely be
    willing to assume the expense that national exposure would entail
    and, thus, deferred a decision on whether and under what
    circumstances a candidate for a congressional office would be
    entitled to access. In addition, the Commission determined that any
    public benefit that might be realized from requiring coverage of
    congressional races might not justify the technical and financial
    burdens that the obligation would entail.[^36]

21. The Commission left it to the DBS service providers to determine
    what constitutes reasonable access in the context of a varied
    multi-channel environment. Relevant factors to consider include the
    amount of time requested, the number of candidates involved,
    potential programming disruption, and any technical difficulties
    that may arise from providing access to candidates. Reasonable
    alternatives for providing access should also be taken into
    consideration. The Commission also noted that any complaint filed
    against a DBS provider with respect to its obligations under Section
    312(a)(7) will be evaluated by the Commission to determine whether
    the provider's actions were within the spirit of the statute and in
    compliance with the Commission's rules and policies on political
    broadcasting. The Commission required that DBS providers maintain a
    public file of requests for political advertising and the
    disposition of these requests in order to assist in evaluations of
    compliance with the political broadcasting rules. [^37]

22. The Commission took a similar approach for implementing the
    requirements of Section 315 of the Act. The *First Report and Order*
    incorporated Section 315 equal opportunity provisions into
    Commission's rules, as well as the policies delineated in previous
    Commission orders on the subject, and stated that compliance with
    these provisions will be determined on a case-by-case basis. In
    addition, the Commission determined that DBS providers will be
    required to keep a record of all requests for broadcast time and the
    disposition of the requests in their public file, to enable
    competing candidates to review other candidates' advertising access
    and rates.[^38]

23. The *First Report and Order* also took into consideration the unique
    nature of the DBS service in applying Section 315's lowest unit
    charge provisions. The Commission noted that LUC provisions apply if
    political advertising is sold on DBS systems.[^39] When the *First
    Report and Order* was released, DBS providers did not have
    commercial advertising rates for political or comparable
    advertising. The Commission determined that DBS providers could set
    a rate that they believe is reasonable, taking into account
    marketplace factors such as the rate other electronic media charge
    political candidates to reach audiences of comparable size.
    Nevertheless, DBS providers, like broadcasters and cable operators,
    are required to disclose information to candidates about rates and
    discount privileges.[^40]

24. One petitioner, DAETC, takes issue with the manner in which the
    political broadcasting requirements were implemented in the *First
    Report and Order.* DAETC contends that the requirements are
    needlessly vague and place an unjustified reliance upon case-by-case
    decision making for resolving disputes concerning compliance with
    the requirements. According to DAETC, the Commission puts concerns
    about burdens placed on DBS providers ahead of the needs of
    political candidates. Consequently, DAETC argues that the Commission
    fails to affirm the policy that a candidate's needs are the primary
    factor in assessing time requests under Section 312(a)(7). DAETC
    also asserts that each request must be considered on an
    individualized basis and that the DBS provider must make every
    effort to accommodate the candidate's stated purpose for requesting
    airtime. DAETC submits that the Commission's action implies that
    under Section 312(a)(7)'s reasonableness standard, DBS providers can
    segregate political advertisements from regular programming channels
    and that it is permissible for DBS providers to adopt blanket
    policies relegating candidates' advertisements to certain portions
    of the broadcast day. In addition, DAETC alleges that the Commission
    improperly concluded that it can and should defer consideration of
    whether congressional candidates may obtain access to DBS systems.
    DAETC argues that Section 312(a)(7) specifies, without limitation,
    that all federal candidates are entitled to access DBS systems for
    advertisements.[^41] DAETC argues that the Commission should adopt
    specific rules and policies that will facilitate the enforcement of
    Sections 312(a)(7) and 315, and that will make it clear that DBS
    providers and terrestrial broadcasters have the same political
    broadcast advertisement obligations.[^42]

25. We are not persuaded by DAETC's arguments. DAETC fails to take into
    account the technical and geographic differences between DBS and
    terrestrial broadcast systems and that the Commission's political
    broadcasting requirements have to accommodate these differences. It
    also appears that DAETC has misinterpreted the Commission's
    application of the political broadcasting requirements for DBS
    providers. For the reasons explained below, we conclude that DAETC
    has failed to demonstrate that the political broadcasting
    requirements specified in the *First Report and Order* warrant
    revision.

26. To the extent that the *First Report and Order* may have been
    unclear with respect to federal candidates for congressional office,
    we clarify that under Section 312(a)(7) all federal candidates,
    presidential and congressional, are entitled to reasonable access.
    We do not mean to imply that congressional candidates did not
    possess reasonable access rights under Section 335. The *First
    Report and Order* recognized, however, that because DBS is
    essentially a nationally delivered service, it would appear to be
    unlikely that congressional candidates would use DBS service for
    political advertising, given that this would require them to incur
    the expense of paying for advertising to reach a national audience
    for a local election. The introduction of local-into-local service
    by DBS providers does not change this conclusion because DBS
    providers cannot alter or insert advertising into retransmitted
    broadcast signals. Indeed, since the *First Report and Order* was
    adopted in 1998, the Commission has received no reasonable access
    complaints from congressional candidates in connection with DBS
    service providers. We also noted in the *First Report and Order*
    that, of additional significance, the number of congressional
    candidates nationally is large and the potential burden on a
    national DBS provider to provide access to all federal candidates
    could be substantial and thus access could be inherently unworkable.
    We indicated that the number of such congressional candidates would
    be but one of the factors for a DBS provider to consider in
    responding to a reasonable access request, just as is the case with
    our enforcement of Section 312(a)(7) for terrestrial broadcasting
    where we look at the multiplicity of federal candidates in a
    broadcaster's service community.

27. We therefore clarify here that we will address the appropriate
    implementation of Section 312(a) (7) for congressional candidates
    if, and when, individual cases arise. In doing so, we will use the
    rationales and interpretations of terrestrial broadcasting precedent
    to determine what is reasonable under the particular circumstances
    of a specific federal candidate\'s request for DBS access. This
    extensive universe of precedent in terrestrial broadcasting will be
    instructive in resolving any controversies that may arise in the
    context of DBS.

28. For all of these reasons, we take issue with DAETC\'s assertion that
    the *First Report and Order* was too vague and that it placed an
    unjustified reliance on a case-by-case analysis. First, it is
    impossible for this Commission to anticipate the nature of
    reasonable access cases in the context of DBS, which is different
    from the terrestrial broadcasting model. We merely recognized this
    obvious distinction between the two unique forms of technology and
    indicated that we would attempt to apply our extensive precedent for
    terrestrial broadcasting to circumstances in DBS as they arise.
    Moreover, the case-by-case approach is consistent with the
    Commission\'s and the courts\' longstanding enforcement of Section
    312(a)(7). [^43] The case-by-case approach is also entirely
    consistent with the Commission\'s and the courts\' interpretation
    that federal candidates are entitled to deference in terms of their
    individualized needs, which typically are different from campaign to
    campaign and within any particular market. Thus, the scheme set out
    in the *First Report and Order* establishing a case-by-case analysis
    conforms with the longstanding policy and law in this area.

29. Next, DAETC contends that the Commission's application of Section
    315 of the Act governing equal access to broadcast facilities at
    lowest unit rates is confusing. DAETC contends that the language of
    the *First Report and Order,* is so imprecise that it is difficult
    to discern how the Commission intends to apply Section 315's
    obligations to DBS providers. According to DAETC, it appears that
    under the Commission's formulation, candidates seeking equal access
    to broadcast facilities are not necessarily entitled to time on the
    same channel as the broadcast necessitating a response, but only to
    audiences of equal size. DAETC also asserts that under the
    Commission's rules, DBS providers are not required to abide by the
    LUC rules that apply to broadcasters and cable operators if they do
    not sell commercial advertising time.[^44]

30. We decline to adopt DAETC\'s suggestion to specifically prescribe by
    rule exactly how the obligations imposed by Section 315 will apply
    to DBS providers, such as whether a candidate is entitled to time on
    the same channel as the broadcast that gives rise to the right to
    equal time. The Commission stated unequivocally that the equal
    opportunities provisions of the statute and the Commission\'s rules,
    as well as related policies delineated in prior Commission orders,
    will apply to DBS providers.[^45] Thus, if a legally qualified
    candidate is afforded access to a DBS system, all other candidates
    for the same office must be afforded equal opportunities. We believe
    that it is premature, however, to prescribe exactly what type of use
    of DBS facilities will be considered to afford equal opportunities.
    Since adoption of the *First Report and Order*, the Commission has
    received no complaints regarding DBS operators\' compliance with
    their obligation to provide equal opportunities to candidates for
    public office. Thus, we have no experience in assessing the
    technical, operational, other factors that may affect DBS
    operators\' provision of equal opportunities. As indicated above in
    discussing Section 312(a)(7), we believe that there may be
    significant differences between DBS and terrestrial broadcasters
    that may affect how the political broadcasting rules apply to DBS
    operators. Therefore, as we stated in the *First Report and Order*,
    we believe that it is most appropriate to assess whether equal
    opportunities have been provided in response to a candidate request
    on a case-by-case basis, taking into account the particular factual
    circumstances.

31. Nor do we find adequate grounds to reconsider or change our rules
    relating to the application of Section 315(b)'s LUC obligations. In
    the *First Report and Order* the Commission plainly stated that DBS
    providers are required to afford legally qualified candidates the
    benefits of the LUC.[^46] It did not exempt DBS providers from this
    obligation, as suggested by DAETC.[^47] Rather, it took into
    consideration the fact that, at the time the rules were adopted, DBS
    providers generally did not have commercial advertising rates
    available to make a LUC determination and, therefore, the Commission
    allowed DBS providers to rely on marketplace factors for setting
    reasonable rates. The situation may have changed since the *First
    Report and Order* and if a DBS provider is now selling advertising
    time on its system, that provider is expected to comply with the
    Commission's established procedures for determining LUC.[^48]

32. Finally, DAETC and CME contend that the public file requirements
    adopted in the *First Report and Order* requiring maintenance of
    records on sales of advertising to candidates are inadequate. Both
    petitioners maintain that because parties seeking to inspect a DBS
    provider's public files could be located anywhere throughout the
    country, it may be difficult for those who do not reside near the
    DBS provider's headquarters to obtain access to the files. In order
    to alleviate the geographic burden on parties seeking to inspect a
    DBS provider's public files, the petitioners request that the
    Commission adopt rules based on rules recently enacted by the
    Commission for terrestrial broadcasters.[^49]

33. The Commission has stated that DBS providers are required to comply
    with the public file obligation within the spirit of the Act's
    political broadcasting requirements.[^50] Specifically, we expect
    DBS providers to abide by the same public file obligations as
    terrestrial broadcasters. In addition, because DBS is a national
    service and each provider's headquarters is not necessarily readily
    accessible to many of its viewers, we expect DBS providers to make
    available, by mail upon telephone request, photocopies of documents
    in their public files. We also expect that DBS providers will assist
    callers by answering questions about the contents of the DBS
    providers' public files. DBS providers may require individuals
    requesting documents to pay for photocopying, but the provider
    should pay for postage. DBS providers are also encouraged to put as
    much of their public files as practical on their respective
    websites. In view of these requirements and expectations, we do not
    find that reasonable access by the public to a DBS provider's files
    requires that the provider maintain a public file in every community
    that receives its signal.

**C. Opportunities for Localism**

34. Section 335(a) requires the Commission "to examine the opportunities
    that the establishment of direct broadcast satellite service
    provides for the principle of localism under \[the\] Act, and the
    methods by which such principle may be served through technological
    and other developments in, or regulation of, such service." [^51]
    There is no legislative guidance for the Commission to rely upon in
    defining "localism" in the context of DBS service. For example,
    there is no indication of whether localism refers to special
    programming for individual localities or if it refers to local
    broadcast channel carriage. In the *First Report and Order* the
    Commission noted that DBS providers lack the channel capacity to
    serve all localities in the country. At the same time, the
    Commission acknowledged that the Satellite Home Viewer Act of 1988
    ("1988 SHVA") severely limited DBS providers' retransmission of
    local programming, but deferred an in-depth study of localism until
    the technical and legal issues were resolved through pending
    legislation that eventually became the Satellite Home Viewer
    Improvement Act of 1999 ("1999 SHVIA").[^52]

35. ACA (formerly the Small Cable Business Association) contends that
    the Commission has not given serious consideration to the manner in
    which DBS can serve the principle of localism. ACA states that the
    Commission has failed to meet its statutory obligation under Section
    335(a). According to ACA, the Commission's failure is due to the
    fact that its analysis is based on a stale record. ACA submits that
    the Commission has not taken into account advances in technology
    that will enable DBS providers to offer widespread local
    programming, or recent legislative activity foreshadowing changes to
    the 1988 SHVA.[^53] Moreover, ACA adds that, since the release of
    the *First Report and Order,* two significant events have taken
    place affecting the implementation of localism on DBS. In its
    comments ACA points out that several major DBS mergers have been
    approved, raising the prospect of a significantly restructured DBS
    industry. In addition, ACA explains that the two largest DBS
    providers have announced intentions to offer local-into-local
    broadcast stations to subscribers. [^54] ACA filed a second Petition
    for Reconsideration of the *First Report and Order*'s Final
    Regulatory Flexibility Analysis, claiming generally that the
    Commission failed to properly take into account the harm that would
    be caused to small cable operators by the lack of rules requiring
    DBS providers to carry all local broadcast programming.[^55]

36. ACA is correct in noting that since the *First Report and Order* the
    DBS industry has experienced a number of significant changes. Many
    of the legal and technical impediments to the transmission of local
    television broadcasts are now eroding. The 1999 SHVIA has become
    law,[^56] permitting "satellite carriers"[^57] to offer subscribers
    local-into-local service in markets across the country.[^58] On the
    technical side, advancements have been made in signal compression
    technology that give DBS providers additional capacity and the
    ability to carry local broadcast stations. DBS providers are taking
    advantage of these opportunities. According to the major DBS
    providers' websites, DirecTV offers local television service
    packages to subscribers in over 52 markets with 48 more coming soon
    and EchoStar offers similar packages in 62 markets.[^59] It also
    appears that the expansion in local-into-local service may have
    contributed to the over 3 million, 19%, increase in DBS
    subscribership between June 2000 and June 2001, making DBS the
    country's fastest growing competitor in the multichannel video
    programming distribution ("MVPD") marketplace.[^60]

37. The 1999 SHVIA has significantly enhanced the programming offered by
    DBS providers. Although DBS remains primarily a national service, in
    addition to traditional satellite and cable programs, many DBS
    subscribers are now receiving retransmissions of local terrestrial
    broadcast stations. Thus, without the necessity of Commission
    intervention, market demand has compelled DBS providers to devote a
    portion of their system channel capacity to locally originated
    programs. The statutory requirement to comply with carriage
    obligations in the 1999 SHVIA has been implemented through a
    separate Commission proceeding, and DBS providers are now required
    to carry all local broadcast stations that request carriage, within
    each local market that the carriers choose to serve through reliance
    on the Section 122 statutory copyright license.[^61] Because
    satellite channel capacity is limited by technical constraints, we
    do not believe it will serve the public interest to impose
    additional requirements to "further the principle of localism" at
    this time. DBS providers, at this time, only serve selected markets
    with local channels. We believe that imposing additional obligations
    on DBS providers could further cut into channel capacity and could
    have the unintended consequence of foreclosing local-into-local
    service in some markets. Therefore, we find that local concerns are
    being addressed by DBS providers through local program carriage of
    terrestrial broadcasters' signals for local-into-local service. We
    also find that although the Final Regulatory Flexibility Analysis
    issued in conjunction with the *First Report and Order* was
    adequate, in any event the intervening adoption of broadcast signal
    carriage rules for DBS, similar to those imposed on cable systems,
    has alleviated the concerns articulated by ACA.

**D. Additional Obligations**

38. In 1998, the Commission determined in the *First Report and Order*
    that it would not impose additional obligations, similar to those
    imposed on cable operators, on DBS providers.[^62] The Commission
    said that DBS, unlike cable, does not possess sufficient market
    power to raise anti-competitive concerns warranting additional
    obligations. The Commission therefore concluded that, given the
    disparity in market power between the two services, imposing
    additional obligations on DBS providers might hinder the development
    of DBS as a viable competitor to cable.[^63] Time Warner argues that
    the Commission erred in making this determination.[^64]

39. In November 1999, the 1999 SHVIA became law imposing many of the
    same obligations imposed on cable operators in exchange for a
    compulsory copyright license enabling DBS providers to offer local
    broadcast stations. Under the 1999 SHVIA and the Commission's
    implementation, DBS providers must comply with regulations such as
    syndicated exclusivity, network non-duplication, sports blackout,
    and broadcast channel carriage requirements similar to cable
    operators.[^65] Thus, many of the obligations advocated by Time
    Warner are now required by law.

40. Although the 1999 SHVIA imposed on DBS providers many obligations
    similar to those imposed on cable operators, it did not require that
    DBS providers be subject to public interest obligations equivalent
    to cable operators' public, education and governmental ("PEG")
    access obligations. Time Warner urges the Commission on
    reconsideration to impose such obligations. Because operators of
    open video systems ("OVS"),[^66] which are also relatively new
    entrants to the MVPD marketplace, are subject to PEG access
    requirements,[^67] Time Warner asserts that there is no reason for
    exempting DBS providers from these requirements.[^68] Time Warner
    further argues that DBS providers should be required to provide
    funding to support the creation of local programming to air on
    PEG-type channels. Absent a requirement to offer locally oriented
    programming, Time Warner suggests that DBS providers should be
    required to contribute five percent of their gross receipts to
    support the creation and development of programming aired on the
    Public Broadcast Service ("PBS"). According to Time Warner, this
    amount is equivalent to the local franchise fees paid by most cable
    operators. Time Warner states that it views PBS as the national
    equivalent of noncommercial PEG programming and that a PBS support
    obligation for DBS providers would be equivalent to a cable
    operator's local PEG access support obligations. [^69]

41. We agree with DirecTV and SBCA that Time Warner has not established
    good cause for imposing a PEG-type obligation on DBS providers.[^70]
    Time Warner has not demonstrated that Congress intended, as it did
    with OVS,[^71] that the Commission adopt the regulations Time Warner
    advocates. As the Commission noted in the *First Report and Order*,
    Congress has preempted the ability of local jurisdictions to impose
    any tax or fee on DBS services.[^72] More importantly, the
    Commission determined that the 1992 Cable Act was passed in order to
    remedy the competitive disadvantages faced by DBS providers
    struggling for a share of the MVPD market.[^73] Imposing the
    additional regulations proposed by Time Warner would divert DBS
    providers' channel capacity away from the provision of
    local-into-local service and effectively negate the Commission's
    efforts to create a competitive MVPD market by limiting the ability
    of DBS to compete with cable and offer more consumer choices. In
    addition, there is no indication in the language of Section 335 of
    the Act, that Congress wanted the Commission to impose PEG access
    obligations on DBS providers. In fact, in the *First Report and
    Order* the Commission pointed out that the PEG requirements that
    apply to cable operators are entirely different from the public
    interest requirements applicable to DBS providers. On the one hand,
    the PEG access rules are designed to create a "soap box" of sorts
    for the expression of different viewpoints without fear of
    censorship. On the other hand, the DBS public interest requirements
    are designed to create a haven for educational and informational
    programming that need not compete with commercial offerings.[^74] We
    also note that when Congress proposed the 1999 SHVIA, it had a
    further opportunity to impose the same PEG obligations on DBS
    providers as exist for cable operators. Although Congress did impose
    many regulations similar to those imposed on cable operators on DBS
    providers in the 1999 SHVIA, it did not require PEG access. We
    therefore find no grounds to impose PEG obligations on DBS
    providers.

**E. Guidelines Concerning Commercialization of Children's Programming**

42. In the *First Report and Order,* the Commission found that Section
    335(a) provides authority for the Commission to impose other public
    interest programming requirements on DBS providers, including
    guidelines concerning the commercialization of children's
    programming. The Commission declined, however, to impose programming
    obligations not required by the statute, principally because it felt
    that any additional obligations imposed on the DBS industry at that
    stage in its development would be burdensome and could prevent DBS
    from realizing its potential as a robust competitor to cable.
    Nevertheless, the Commission said that the issue of additional
    public interest programming requirements will be reexamined if it
    becomes evident that regulatory intervention is needed to ensure
    that the needs of children are not overlooked. [^75]

43. CME, which advocated the adoption of requirements regarding
    children's programming when the *First Report and Order* was
    adopted,[^76] contends that the Commission's reasons for not
    imposing commercial limits lack merit. According to CME, the
    Commission overstates both the newness of the DBS industry and the
    differences between DBS and cable services.[^77] In support of its
    assertions, CME points out that the DBS industry has experienced
    tremendous growth since this proceeding was initiated in 1993 and
    that two of its providers, DirecTV and EchoStar, have established a
    substantial presence in the MVPD marketplace. Consequently, CME
    submits that there is no justification for the Commission's reserved
    approach and that it is time to protect the millions of DBS
    subscribing homes from the harms associated with
    over-commercialization.[^78] CME argues that the Commission cannot
    justify its approach based on the differences between DBS and cable.
    CME claims that, from the consumer's perspective, DBS providers
    deliver the same service as cable operators and broadcasters. CME
    continues by saying that the DBS service's increased provision of
    local programming in fact creates greater similarities between DBS,
    cable and, broadcasting.[^79]

44. CME further contends that the Commission overstates the
    oppressiveness of CME's commercial limitation proposal. CME's
    position is that the benefits of imposing commercial limits on
    children's programming outweigh the potential burdens. Imposing
    commercial limits on children's programs, CME argues, has been
    established as the best way to protect children from the evils of
    over-commercialization. Furthermore, adds CME, the burden on DBS
    providers to comply with commercial limits is minimal since most of
    the programming aired on DBS is also provided to cable, which has
    children's commercial limits.[^80]

45. While we appreciate CME's concerns, we are not convinced that a need
    has been demonstrated that would justify the imposition of
    additional regulatory requirements at this time. There is no
    evidence that children's programming carried by DBS providers, as
    contrasted with other providers, is over-commercialized. As CME
    points out, most of the programming offered on DBS is the same
    programming delivered by cable, including local broadcast
    programming, all of which is subject to the statutory
    requirements.[^81] And there is no evidence in the record that any
    DBS offered children's programming contains commercial material in
    an amount injurious to the interests of children or that exceeds the
    amount in broadcast or cable programming. Because, when Congress
    enacted Section 335 just two years after it passed the Children's
    Television Act, it chose not to include children's advertising
    limits in the requirements for DBS, independent application of these
    limits by the Commission, would need to be justified based on the
    administrative record before us. Accordingly, absent a demonstration
    that children may be at risk because of excessive commercialization
    particularly associated with children's programming provided by DBS,
    we believe that further restrictions on DBS providers at this time
    have not been shown to be warranted. Consequently, although we will
    continue to monitor DBS children's programming for evidence of
    "over-commercialization," we decline to adopt CME's proposal at this
    time.

**F. Programming on Reserved Capacity**

46. Section 335(b)(1) specifies that the Commission must require that a
    DBS provider reserve a portion of its channel capacity, "equal to
    not less than 4 percent nor more than 7 percent, exclusively for
    noncommercial programming of an educational or informational
    nature."[^82] In response to this mandate, the Commission selected
    four percent as the capacity reservation percentage.[^83]

47. Time Warner asserts that DBS providers should not be allowed to
    fulfill the four percent reservation obligation by carrying
    noncommercial, educational and informational programming that was
    already being offered to subscribers before the *First Report and
    Order* was adopted. Time Warner argues that allowing DBS providers
    to do so would defeat the purpose of having a separate reservation
    obligation. Time Warner asserts that Congress intended that a DBS
    provider's reserved capacity should be available exclusively for
    programmers that represent interests that are not currently being
    served.[^84] Time Warner is supported by comments from DAETC and CME
    that contend that prohibiting DBS providers from satisfying the
    reservation requirement with existing programming will result in
    greater diversity of media sources on DBS systems.[^85]

48. We decline to amend the rule as requested by Time Warner. If the
    programming is of the type that fulfills the statutory requirement
    for noncommercial programming of an educational or informational
    nature, there is no reason to deny a DBS operator credit solely
    because it carried the programming voluntarily before the set-aside
    went into effect. We believe that the amendment that Time Warner
    advocates would unfairly penalize those DBS providers that complied
    with the requirement before they were obligated to do so. Time
    Warner has not cited anything in the statute or its legislative
    history indicating that Congress intended that the reservation
    requirement be implemented in this manner. As DirecTV and SBCA point
    out, a DBS provider should not be barred from fulfilling its public
    interest obligation with qualified programming simply because the
    programming happens to have a widespread appeal, rather than a
    narrow focus on the specific needs of a particular group of
    viewers.[^86] Moreover, as we noted above, DBS providers are now
    providing a wide range of public interest programming on their
    reserved channels, some of which appear to be designed to serve the
    particular needs of viewers that may have been overlooked in the
    past.[^87] Accordingly, we will not make this change..

**G. Noncommercial Channel Limitation**

49. The *First Report and Order* limited access to the reserved capacity
    on each DBS system to one channel per qualified program supplier as
    long as demand for such capacity exceeds the available supply.[^88]
    The Commission imposed this limit in order to ensure that a few
    national educational program suppliers would not dominate access to
    the noncommercial channels.[^89] The Commission reasoned that the
    limitation would promote the development of quality educational and
    informational programming, as well as provide increased access
    opportunities for smaller, less well-funded noncommercial program
    suppliers.[^90] The Commission also determined that the limitation
    comports with Congress's intent to foster robust and editorially
    diverse programming on the reserved channels.[^91]

50. APTS/PBS assert that the single programmer restriction is not
    supported by the statute and therefore, should be removed. According
    to APTS/PBS, Section 335(b),[^92] authorizes the reservation of DBS
    capacity for noncommercial educational programmers and does not
    suggest that there should be any limitation on the amount of
    reserved capacity that can be occupied by a single programmer. These
    petitioners state that the statute's only requirement is that DBS
    providers make capacity available to qualified programmers at
    reasonable prices and on reasonable terms and conditions. Thus,
    concludes APTS/PBS, given the absence of any indication that
    Congress intended such a limitation, the Commission lacks authority
    to impose any restrictions.[^93]

51. The petitioners further contend that the one-channel-per-programmer
    limit is inconsistent with the Commission's interpretation of the
    ban on editorial control contained in Section 335(b). The Commission
    found that the editorial control ban does not bar DBS providers from
    selecting programmers when demand for reserved capacity exceeds the
    available supply. APTS/PBS claim the one-channel-per-programmer
    restriction is inconsistent with this discretion given to DBS
    providers to select the qualified programmers offered access to
    these channels.[^94]

52. APTS/PBS also assert that the Commission is not justified in
    suggesting that the one-channel-per-programmer restriction will
    result in a greater diversity of programming because there is no
    indication that Congress intended to promote greater diversity when
    it enacted the 1992 Cable Act. APTS/PBS contend that Congress's
    intent was simply to provide a minimum level of educational
    programming and to rely on the marketplace to create diversity.[^95]

53. In addition to a lack of legal justification, APTS/PBS argue that
    there is no factual support in the record for the one-channel
    restriction and that there is no basis for the Commission's
    conclusion that the restriction will provide the viewer with a
    greater variety of programming. These petitioners argue that the
    Commission decision could be encouraging less diverse programming
    because few noncommercial programmers have comparable financial
    resources and production skills to commercial programmers. APTS/PBS
    contend that requiring that a DBS provider limit noncommercial
    programmers to a single channel may actually result in programming
    that is neither diverse nor high quality. APTS/PBS, therefore,
    submit that a DBS provider should not be barred from assigning
    several channels of the reserved capacity to a single programmer,
    such as PBS or an individual public television station, if the DBS
    provider believes the programmer offers the best available
    noncommercial programming.[^96]

54. DAETC and CME disagree with APTS/PBS and contend that the
    Commission's adoption of the one-channel-per-programmer limitation
    is sound as a matter of law and policy. DAETC and CME maintain that
    the Commission has ample authority to adopt rules promoting
    diversity of viewpoints and that the one-channel limit is not at
    odds with the ban on editorial control.[^97] They also argue that
    the limit will, in fact, produce the desired effect of serving
    audiences that are often overlooked. They contend that without the
    rule, DBS providers might choose one or only a few programmers, and
    that those programmers might not serve audiences that have been
    traditionally underserved or perhaps not served at all.[^98] DAETC
    and CME view the one-channel limitation essentially as a compromise
    whereby, in exchange for the small burden of being required to
    choose several different programmers, DBS providers are given the
    much greater benefit of editorial freedom.[^99]

55. We believe that the Commission's decision to adopt a
    one-channel-per-programmer limitation, when demand for reserved
    channels exceeds the four percent reservation requirement, was sound
    as a matter of law and policy. In carrying out Congress' mandate to
    impose an obligation on DBS providers to devote a portion of their
    channel capacity to noncommercial programming of an educational or
    informational nature, the Commission determined that "it would
    frustrate Congress' goal to permit the set-aside capacity to be
    dominated by a single programming voice where there are other
    noncommercial voices seeking to be heard." [^100] The fact that
    Section 335 does not specifically provide for the limitation in no
    way invalidates the legitimacy of the Commission's action.[^101]
    Congress identified the promotion of diversity of views and
    information as one of the purposes of the 1992 Cable Act.[^102] The
    Courts have also determined that promoting diversity of media
    sources is a proper Commission goal[^103] and, specifically, that
    the Commission has the authority to apply rules promoting source
    diversity.[^104] Finally, Section 335 expressly allows the
    Commission to impose "public interest or other requirements for
    providing video programming,"[^105] and we believe that imposition
    of the one-channel limitation in order to foster diversity of
    programming is an appropriate exercise of that authority.
    Consequently, we find that the Commission's decision to adopt the
    one-channel-per-programmer limitation was sound as a matter of law.

56. The one-channel limitation is also sound public policy. While we
    agree that a large, highly experienced, and well funded
    noncommercial programmer may be capable of consistently producing an
    array of high quality programs, the fact remains that multiple views
    from the same programmer does not provide the benefits of source
    diversity since that programmer decides what programs will be
    produced and offered.[^106] The Commission adopted the
    one-channel-per-programmer limit to promote diversity of
    voices.[^107] In other words, the purpose of the limitation is to
    foster "the widest possible dissemination of information from
    diverse and antagonistic sources."[^108] We believe that the goal of
    promoting diversity is best achieved by having multiple programmers
    competing for the capacity reserved for noncommercial programming.
    Furthermore, we do not find the one-channel limitation on
    programmers unduly burdensome on DBS providers. In view of the
    Commission's policy allowing DBS providers to select among qualified
    programmers, the one-channel-per-programmer requirement permits the
    Commission to minimize the burdens it places on DBS providers while
    retaining effective oversight to ensure that programming is not
    dominated by a single voice. DBS providers, therefore, are given
    wide latitude to select programmers, but their discretion is
    tempered to ensure that it does not result in domination by one or
    two major programmers when other noncommercial entities are seeking
    access. Indeed, the programmers currently carried in compliance with
    our rules include a wide variety of entities such as educators,
    NASA, ethnic programmers, and religious programmers. In addition,
    DBS providers are free to carry more than one program from a single
    programmer provided they count only one channel per qualified
    programmer to satisfy their reservation obligations. [^109] Thus,
    DBS providers retain significant discretion in putting together
    subscriber offerings without unduly limiting the diversity of their
    public interest programmers. Finally, it should be remembered that
    the one-channel limitation pertains only to those channels reserved
    in compliance with the four percent reservation.

**IV. CONCLUSION**

57. For the reasons discussed above, we reaffirm the Commission's
    interpretation of Section 335 as reflected in the implementing
    rules. The record shows that the Commission's public interest rules
    have facilitated provision of a wide range of noncommercial
    programming to DBS subscribers. We find no basis to revise those
    rules. Consequently, we deny the petitions for reconsideration.

**VII. ORDERING CLAUSES**

58. Accordingly, IT IS ORDERED that the petitions for reconsideration
    filed by the American Cable Association (including its petition for
    reconsideration of the Final Regulatory Flexibility Act analysis),
    America's Public Television Stations and the Public Broadcasting
    Service, the Denver Area Educational Telecommunications Consortium,
    Inc., *et al.*, GE American Communications, Inc., Loral Space and
    Communications Ltd., PanAmSat Corporation, the Center for Media
    Education, *et al,* and Time Warner Cable ARE DENIED.

FEDERAL COMMUNICATIONS COMMISSION

Marlene H. Dortch

Secretary

STATEMENT OF

COMMISSIONER MICHAEL J. COPPS

APPROVING IN PART AND DISSENTING IN PART

RE: Implementation of Section 25 of the Cable Television Consumer
Protection and Competition Act of 1992; Direct Broadcast Satellite
Public Interest Obligations; Memorandum Opinion and Order on
Reconsideration of the First Report and Order.

I dissent in part from this Order because the majority concludes that
important public interest rules with which cable and broadcast operators
must comply should not be extended to direct broadcast satellite
operators. I highlight below two of the issues that concern me the most
in this Order.

First, the Order says the rules on political programming should be
different for DBS. In Section 335, Congress expressly directed that the
political broadcasting requirements of sections 312(a)(7) and 315 apply
to DBS. Yet, the Commission determines that it is premature to adopt
specific rules to implement this requirement, notwithstanding that there
are such rules for cable and broadcast. In the *First Report and Order*
this decision was made, in part, because DBS operators were not selling
advertising. But today DBS providers sell advertising. If DBS companies
are now contracting with programmers to leave ad slots open, then are
filling those slots with advertising of their own choosing and at their
own rates, the time is now to roll up our sleeves and determine how to
implement the statutory requirements. Why wait until problems arise,
especially because they may occur in the heat of an election? Clarity
today will increase predictability and certainty for candidates for
public office, for DBS operators, and for the public. Additionally,
given the national scope of DBS's activities, I believe that we should
require DBS operators to make their public files readily accessible.
Disclosure is good for everyone.

The Commission also decides not to adopt any rules that protect against
over-commercialization of children's programming, even though cable and
broadcast television must comply with such rules. It states that no
protections are needed because "most of the programming offered by DBS
is the same programming delivered by cable, including local broadcast
programming." Given the harms of over-commercialization in children's
programming, I believe we ought to apply commercial limits to DBS just
as we apply rules to cable and broadcast.

I am pleased, however, that the Commission plans to address these issues
in a *sua sponte* reconsideration decision.

[^1]: *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) (*"First Report and Order"*)*.*

[^2]: Pub. L. No. 102-385, 106 Stat. 1460 (1992).

[^3]: *See* DirecTV, Inc., FCC File No. EB-00-IH-0060; EchoStar
    Communications Corporation, FCC File No. EB-00-IH-0014; and Dominion
    Video Satellite, Inc., FCC File No. EB-00-IH-00-68. Current
    programming carried pursuant to the rule includes, *e.g.,* NASA-TV,
    Inspirational Network, Free Speech TV, Hispanic Information and
    Telecommunications Network, and Educating Everyone.

[^4]: Section 25 of the 1992 Cable Act is codified at Section 335 of the
    Communications Act of 1934 ("the Act"), 47 U.S.C. § 335.

[^5]: On June 13, 2002 the Commission released a *Report and Order*
    eliminating Part 100 of the Commission's Rules. The Commission moved
    Section 100.5 to Section 25.701 and eliminated the reference to
    entities licensed pursuant to Part 100. Instead, the new rule in
    section 25.701 (a)(1)defines DBS Providers as entities licensed to
    operate satellites in the 12.2-12.7 DBS frequency bands. *Policies
    and Rules for the Direct Broadcast Satellite Service*, 17 FCC Rcd
    11331 (2002) at paras. 22-24. For purposes of this Report and Order,
    any reference to Part 100 licensees means entities defined in
    Section 25.701(a)(1).

[^6]: The Ku-band frequencies referenced in the statute are 11.7 GHz --
    12.2 GHz and 14.0 GHz -- 14.5 GHz.

[^7]: *See* 47 C.F.R. §25.701.

[^8]: Petitions for reconsideration were filed by the American Cable
    Association ("ACA") (formerly the Small Cable Business Association),
    which filed two separate petitions, America's Public Television
    Stations and Public Broadcasting Service ("APTS/PBS"), Center for
    Media Education, *et al.* ("CME"), Denver Area Educational
    Telecommunications Consortium, Inc., *et al.* ("DAETC"), GE American
    Communications, Inc. ("GE Americom"), Loral Space and Communications
    Ltd. ("Loral"), PanAmSat Corporation ("PanAmSat"), and Time Warner
    Cable ("Time Warner"). Pursuant to 47 C.F.R. § 0,231(i), the
    Secretary determined that, because of operational problems with the
    Commission's Electronic Filing System, petitions for reconsideration
    filed after the March 10, 1999 filing deadline would be accepted as
    timely filed. Oppositions to petitions for reconsideration were
    filed by the Alliance for Community Media ("Alliance"), APTS/PBS,
    DAETC and CME, DirecTV, Inc. ("DirecTV"), and Satellite Broadcasting
    and Communications Association ("SBCA"). Replies were filed by the
    ACA, APTS/PBS, DirecTV, GE Americom, Loral, and Time Warner.

[^9]: 47 C.F.R. § 1.429(c).

[^10]: *See First Report and Order,* 13 FCC Rcd at 23261-62.

[^11]: *Id.* at 23262.

[^12]: *See* 47 U.S.C. § 335(b)(5)(A)(ii).

[^13]: *See First Report and Order,* 13 FCC Rcd at 23262-63.

[^14]: *See* 47 U.S.C. § 335(b)(1).

[^15]: *See First Report and Order,* 13 FCC Rcd at 23263.

[^16]: *Id.* at 23264.

[^17]: *Id., see also Policies and Rules for the Direct Broadcast
    Satellite Service*, *supra* note 5, (consolidating DBS service rules
    with other satellit*e* services, including DTH-FSS in Part 25).

[^18]: *See First Report and Order,* 13 FCC Rcd at 23264-65.

[^19]: *See, e.g.,* Loral Petition for Reconsideration ("Loral
    Petition"), filed March 10, 1999, at 4-5; PanAmSat Petition for
    Reconsideration ("PanAmSat Petition"), filed March 10, 1999, at 3-4;
    Time Warner Petition for Reconsideration ("Time Warner Petition),
    filed March 10, 1999, at 15-18; GE Americom Petition for
    Reconsideration ("GE Americom Petition"), filed March 10, 1999, at
    6-9. DAETC and CME in their joint opposition comment suggest that
    the rules should apply to both the FSS licensee and the program
    distributor. *See* DATEC and CME Joint Opposition, filed May 6,
    1999, at 25.

[^20]: *See* PanAmSat Petition at 4.

[^21]: *See, e.g.,* Loral Petition at 8-9; PanAmSat Petition at 4-7;
    Time Warner Petition at 20-21; GE Americom Petition at 11- 15.

[^22]: *See, e.g., Implementation of Section 25 of the Cable Television
    Consumer Protection and Competition Act of 1992, Direct Broadcast
    Satellite Public Interest Obligations,* Notice of Proposed Rule
    Making, 8 FCC Rcd 1589, 1591 (1993) (*"NPRM"*)*.*

[^23]: *See, e.g.,* GTE Spacenet Corporation Comments, filed May 24,
    1993, at 2-10; DirecTV Comments, filed May 25, 1993, 8-11; GE
    Americom Reply Comments, filed July 14, 1993, at 2-13; Time Warner
    Comments, filed April 28, 1997.

[^24]: *See First Report and Order,* 13 FCC Rcd at 23262-65.

[^25]: *Id.* at 23264-65.

[^26]: *See* Loral Petition at 10-12.

[^27]: *See First Report and Order,* 13 FCC Rcd at 23266-68.

[^28]: *See Amendment of the Commission's Regulatory Policies to Allow
    Non-U.S. Licensed Space Stations to provide Domestic and
    International Satellite Service in the United States,* Report and
    Order, 12 FCC Rcd 24094, 24168 (1997) (*DISCO II*).

[^29]: *See* PanAmSat Petition at 7-8.

[^30]: The public interest obligations only apply to an FSS Ku-band
    satellite licensee that offers enough channels, four percent of
    which would require setting aside one channel of qualified
    programming. *See* 47 C.F.R. § 25.701(a)(3).

[^31]: *See* Protocol Concerning the Transmission and Reception of
    Signals form Satellites for the Provision of Direct-to-Home
    Satellite Services in the United States of America and the United
    Mexican States (November 8, 1996), Article VI; Agreement Between the
    Government of the United States of America and the Government of the
    Argentine Republic Concerning the Provision of Satellite Facilities
    and the Transmission and Reception of Signals to and from Satellites
    for the Provision of Satellite Services to Users in the United
    States of America and the Republic of Argentina (June 5, 1998),
    Article VI.

[^32]: 47 U.S.C. §§ 312(a)(7), 315.

[^33]: Section 315(b) limits the LUC requirement to a timeframe
    consisting of the forty-five days preceding the date of a primary or
    primary runoff election and during the sixty days preceding the date
    of a general or special election in which such person is a
    candidate. *See* 47 U.S.C. §§ 315(b)(1), (2).

[^34]: *See First Report and Order,* 13 FCC Rcd at 23273.

[^35]: *See* 47 C.F.R. § 25.701(b).

[^36]: *See First Report and Order* 13 FCC Rcd at 23269-70.

[^37]: *Id.* at 23270-71.

[^38]: *Id.* at 23272-73.

[^39]: *Id.* at 23274.

[^40]: *Id.* at 23273-74.

[^41]: *See* DAETC Petition for Reconsideration ("DAETC Petition"),
    filed March 11, 1999, at 2-14.

[^42]: *Id.* at 20-23.

[^43]: *See Commission Policy Enforcing Section 312(a)(7) of the
    Communications Act,* Report and Order, 68 FCC 2d 1079 (1978), *see
    also Carter/Mondale Presidential Committee, Inc.,* 74 FCC 2d 631,
    *recon. denied,* 74 FCC 2d 657, *aff'd sub nom. CBS Inc. v. FCC,*
    629 F.2d 1, (D.C. Cir. 1980), *aff'd* 453 U.S. 367 (1981).

[^44]: S*ee* DAETC Petition at 14-20.

[^45]: *See First Report and Order,* 13 FCC Rcd at 23273.

[^46]: *Id.* at 23274.

[^47]: *Id.*

[^48]: *Id.*

[^49]: *See* DAETC Petition at 23 and CME Petition for Reconsideration
    ("CME Petition"), filed March 11, 1999, at 10.

[^50]: *See First Report and Order,* 13 FCC Rcd at 23271.

[^51]: 47 U.S.C. § 335(a).

[^52]: *See First Report and Order,* 13 FCC Rcd at 23274-76, *see also
    Pub. Law 106-113, 113 Stat. 1501, 1501A-526 to 1501A-545 (November
    29, 1999).*

[^53]: *See* ACA Petition for Reconsideration ("ACA Petition"), filed
    March 10, 1999, at 5-14.

[^54]: *See* ACA Reply, filed June 1, 1999, at 4-6. ACA filed these
    comments prior to the Commission's November 1999 Order adopting
    rules implementing SHVIA. *See Implementation of the Satellite Home
    Viewer Act of 1999: Broadcast Signal Carriage Issues; Retransmission
    Consent Issues*, CS Docket Nos. 00-96 &99-363,Report and Order, 16
    FCC Rcd 1918 (2000).

[^55]: Petition for Reconsideration filed March 9, 1999; S*ee First
    Report and Order,* 13 FCC Rcd at 23325.

[^56]: The SHVIA was enacted as Title 1 of the Intellectual Property and
    Communications Omnibus Reform Act of 1999 ("IPACORA") (relating to
    copyright licensing and carriage of broadcast signals by satellite
    carriers, codified in scattered sections of 17 and 47 U.S.C.), Pub.
    L. No. 106-113 Stat. 1501, 1501A-526 to 1501A-545 (Nov. 29, 1999).

[^57]: The term "DBS provider" is encompassed by the term "satellite
    carrier." The 1999 SHVIA uses satellite carrier. *See, e.g.,*
    Section 338(h)(4) of the Act, 47 U.S.C. § 338(h)(4), and Section
    119(d) of title 17, United States Code, 17 U.S.C. § 119(d). These
    statutes define satellite carrier as "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 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." 17 U.S.C. §119(d). In this order we use the term DBS
    provider when discussing the 1999 SHVIA.

[^58]: "Local-into-local service" refers to the ability to provide local
    broadcast channels to subscribers who reside in the local TV
    station's market, which is defined as a Designated Market Area
    ("DMA"). *See* 17 U.S.C. § 122(j)(2)(A).

[^59]: *See http://www.directv.com* and *http://www.dishnetwork.com*
    (viewed on April 24, 2003).

[^60]: *See Annual Assessment of the Status of Competition in the Market
    for the Delivery of Video Programming* Eighth Annual Report, CS
    Docket No. 01-129, FCC Rcd (2002)(*"2001Competition Report"). See
    also Policies and Rules for the Direct Broadcast Satellite Service,
    supra note 5,at para.10.*

[^61]: See 47 C.F.R. §76.66.

[^62]: Such obligations included must carry obligations, program access
    rules, channel occupancy limits, syndicated exclusivity, network non
    duplication and sports blackout, leased and PEG channel access
    requirements, cross ownership prohibitions, and local taxes and
    other fees. *First Report and Order,* 13 FCC Rcd at 23277.

[^63]: *See First Report an Order,* 13 FCC Rcd at 23276-78.

[^64]: *See* Time Warner Petition at 3-4. ACA comments, filed before the
    1999 SHVIA was passed, that the operators of small cable systems
    will suffer disproportionately if they have to comply with must
    carry rules while DBS providers are allowed to select and choose
    which local stations to carry. *See* ACA Petition at 16-18.

[^65]: *See* 47 U.S.C. §§ 338(c)(1), 339(b)(1)(A), (B), *see also
    Implementation of the Satellite Home Viewer Improvement Act of 1999,
    Application of Network Nonduplication, Syndicated Exclusivity, and
    Sports Blackout to Satellite Retransmissions,* Report and Order 15
    FCC Rcd 21688 ( 2000); *Implementation of the Satellite Home Viewer
    Act of 1999; Broadcast Signal Carriage Issues; Retransmission
    Consent Issues,* CS Docket Nos. 00-96 & 99-363, Report and Order, 16
    FCC Rcd 1918 (2000).

[^66]: Open video systems were established by Congress as a means for
    local exchange carriers to enter the video market place. They are
    regulated under Part 76 of the Commission's rules. *See, e.g.,
    Implementation of Section 302 of the Telecommunications Act of 1996:
    Open Video Systems,* Report and Order and Notice of Proposed
    Rulemaking, 11 FCC Rcd 14639 (1996).

[^67]: Pursuant to Title VI of the Act, cable television operators can
    be required by a franchising authority to designate channel capacity
    on their systems for PEG access purposes. They are can also be
    required to provide adequate financial support for PEG access. *See*
    47 U.S.C. §§ 611(b), 621(a)(4)(B). PEG access requirements are
    imposed on cable operators as part of their public interest
    obligations as local video programming distributors. *See* H.R. Rep.
    No. 934, 98^th^ Cong., 2d Sess. 47-48 (1984) (adopting the Cable
    Communications Policy Act of 1984 ("1984 Cable Act")).

[^68]: *See* Time Warner Petition at 3-10.

[^69]: *Id.* at 10-12. DATEC and CME in their joint opposition comments
    strongly disagree that PBS is the national equivalent of PEG access.
    *See* DATEC and CME Joint Opposition at 29, fn. 24.

[^70]: *See, e.g.,* DirecTV Opposition at 5-8; SBCA Opposition, filed
    May 20, 1999, at 4-6.

[^71]: *See* 47 U.S.C. § 573(c).

[^72]: *See First Report and Order,* 13 FCC Rcd at 23279

[^73]: *Id.* at 23278.

[^74]: *Id.* at 23297-99.

[^75]: *See First Report and Order,* 13 FCC Rcd at 23279-80.

[^76]: CME urged the Commission to take the following actions: First, to
    establish a "safe harbor" that will enable a DBS provider to meet
    its public interest obligations with regard to the children in its
    audience in the same way as terrestrial broadcasters. Second, to
    apply to DBS providers the rules and policies concerning commercial
    advertising that currently apply to children's television
    programming on terrestrial television and cable. Third, to ensure
    that these obligations apply to all DBS providers. Finally, to
    develop reporting requirements as enforcement mechanisms to ensure
    compliance with these obligations. *See* CME Comments, filed April
    28, 1997, at 4-17.

[^77]: *See* CME Petition at 4-5.

[^78]: *Id.* at 5-6.

[^79]: *Id.* at 6-8,

[^80]: *Id.* at 8-10.

[^81]: *See* Children's Television Act of 1990, Pub. L. No. 101-437, 104
    Stat. 996-1000, *codified at* 47 U.S.C. §§ 303a, 303b, 394.

[^82]: *See* 47 U.S.C § 335(b)(1).

[^83]: *See First Report and Order,* 13 FCC Rcd at 23285.

[^84]: *See* Time Warner Petition at 12-14.

[^85]: *See* DAETC and CME Joint Opposition, filed May 6, 1999, at
    28-30.

[^86]: *See* DirecTV Opposition at 14-15 and SBCA Opposition at 7.

[^87]: *See supra* at *¶ 2.*

[^88]: *See First Report and Order* at 23302.

[^89]: *Id.*

[^90]: *Id.*

[^91]: *Id.* at 23302-04.

[^92]: The petitioners' citations are to Section 25 of the 1992 Cable
    Act. We refer in the text to parallel Section 335 citations in order
    to avoid confusion.

[^93]: *See, e.g.,* APTS/PBS Petition for Reconsideration ("APTS/PBS
    Petition"), filed March 10, 1999, at 4-5.

[^94]: *Id.* at 6.

[^95]: *Id.* at 7-8.

[^96]: *Id.* at 8-11.

[^97]: *See* DAETC and CME Joint Opposition at 17.

[^98]: *Id.* at 16.

[^99]: *Id.* at 18.

[^100]: *First Report and Order,* 13 FCC Rcd at 23303.

[^101]: *See, e.g., United States v. Southwest Cable,* 392 U.S. 157,
    177-178 (1968) (ruling that the Commission is empowered to perform
    any and all acts, make such rules and regulations, and issue such
    orders it deems necessary to for the execution of its functions,
    provided its actions are consistent with the Act). *See also* 47
    U.S.C. §§ 154(i), 303(r).

[^102]: *See* 1992 Cable Act, § 2(b)(1), Pub. L. No. 102-385, 106 Stat.
    1460, 1463 (1992).

[^103]: *See, e.g., FCC v. NCCB*, 436 U.S. 775, 794 (1978) (confirming
    that diversification is a relevant factor in broadcast renewal
    proceedings).

[^104]: *See NAB v. FCC,* 740 F.2d 1190, 1207-09 (D.C. Cir. 1984)
    (upholding the Commission's ownership restrictions as a means of
    promoting diversity).

[^105]: 47 U.S.C. § 335(a).

[^106]: *See* DAETC and CME Joint Opposition at 14.

[^107]: *See First Report and Order,* 13 FCC Rcd at 23302-03.

[^108]: *Associated Press v. United States,* 326 U.S. 1, 20 (1945), *see
    also Id.*.

[^109]: *See* Letter to Gregory Ferenbach, Senior Vice President and
    General Counsel, Public Broadcasting Service, from Roderick K.
    Porter, Acting Chief, International Bureau, FCC, dated June 18,
    1999, clarifying that the noncommercial channel limitation does not
    preclude DBS providers from carrying more than one programming
    service offered by the same qualified programmer provided that the
    DBS provider can only count one of these services for purposes of
    meeting its reservation obligation.