**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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**SECOND ORDER**

**ON RECONSIDERATION OF**

**FIRST REPORT AND ORDER**

**Adopted: March 3, 2004 Released:** **March 25, 2004**

By the Commission: Commissioners Copps and Adelstein issuing separate
statements.

**[TABLE OF CONTENTS]{.underline}**

**[Topic]{.underline} [Paragraph No.]{.underline}**

**I. INTRODUCTION 1**

**II. BACKGROUND 4**

**III. DISCUSSION 7**

**A. Definition of Providers of DBS Service 8**

**B. Political Broadcasting Requirements 19**

**C. Opportunities for Localism 36**

**D. Additional Obligations 40**

**E. Guidelines Concerning Commercialization of Children's Programming
44**

**F. Programming on Reserved Capacity 50**

**G. Noncommercial Channel Limitation 53**

**IV. CONCLUSION 61**

V.  **PAPERWORK REDUCTION ACT OF 1995 ANALYSIS 62**

VI. **REGULATORY FLEXIBILITY ACT CERTIFICATION 64**

**VII. ORDERING CLAUSES 65**

**APPENDIX A Amendment to 47 C.F.R. part 25 of the Commission's Rules**

**APPENDIX B Regulatory Flexibility Certification**

**I. INTRODUCTION**

1.  For the reasons discussed below, we vacate the Order on
    Reconsideration[^1] adopted in this proceeding and adopt in its
    place the following Sua Sponte Order on Reconsideration and
    accompanying rules.[^2] This Order reaches results that differ from
    the Order on Reconsideration with respect to two sections: the
    Political Broadcasting Requirements and Guidelines Concerning
    Commercialization of Children\'s Programming.[^3]

2.  In this *Memorandum Opinion and Order,* we consider petitions for
    reconsideration and other pleadings filed in response to our *First
    Report and Order*[^4] implementing Section 25 of the Cable
    Television Consumer Protection and Competition Act of 1992 ("1992
    Cable Act").[^5] For the reasons discussed below, we conclude that
    the Commission's interpretation and implementation of Section 25 of
    the 1992 Cable Act was generally correct, but that clarification and
    codification of political broadcasting rules for Direct Broadcast
    Satellite service providers is in order. In addition, we find that
    revision of our conclusion regarding advertising limits for
    children's programming is warranted. Therefore we grant in part and
    deny in part the petitions for reconsideration.

3.  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.[^6]

**II. BACKGROUND**

4.  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.[^7] In 1998, the Commission adopted the *First Report and
    Order,* which implements these statutory obligations.

5.  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[^8]; entities licensed pursuant to
    Part 25 of the Commission's rules to provide fixed-satellite service
    ("FSS"), via the Ku-band,[^9] 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.[^10]

6.  Nine petitions for reconsideration and related pleadings were filed
    in response to the *First Report and Order.*[^11] 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**

7.  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.[^12] We find that some of the
    petitioners' requests warrant reconsideration and therefore we grant
    in part some of the petitions and deny the remaining petitions. We
    also clarify some aspects of the DBS public interest obligations.

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

8.  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.[^13]

9.  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.[^14] 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.[^15] 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.[^16]

10. 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\...."[^17] 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.[^18] 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.[^19] 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.[^20] The rules allow FSS licensees to rely on compliance
    certifications from lessee customers and distributors certifying
    compliance with the public interest obligation rules.[^21]

11. 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.[^22]

12. 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.[^23]

13. 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. [^24] 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.

14. 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.[^25] 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. [^26] The petitioners proffer many of the same
    arguments that were considered in the *First Report and Order.*[^27]
    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.

15. 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.[^28]
    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.[^29] 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.

16. 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.[^30] 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.[^31]

17. PanAmSat questions the legitimacy of including non-U.S. satellite
    licensees in the definition of "providers of DBS service." [^32]
    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.

18. 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.[^33] 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.[^34]

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B.  **Political Broadcasting Requirements**

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19. In our First Order on Reconsideration in this proceeding, we
    concluded that it was premature to adopt specific rules implementing
    political broadcasting obligations for DBS providers. We instead
    chose to follow a case by case approach that we believed would offer
    more flexibility in responding to specific circumstances presented
    by complaints which would highlight the issues involved in applying
    rules for terrestrial broadcasters to a national subscription
    service such as DBS.[^35] Having reconsidered this issue sua sponte,
    however, we conclude that specific rules in this area may serve a
    useful function in providing some guidance to providers and
    political candidates regarding their respective obligations and
    rights, particularly during the upcoming national elections. We
    conclude that we can adapt the cable and broadcast political
    broadcasting rules to accommodate the differences between those
    services and DBS. We also conclude that the broad guidance afforded
    by these rules will not hamper the evolution of the political
    broadcasting requirements as applied to DBS in specific cases. To
    ensure that the rules we adopt are appropriate, we direct the Media
    Bureau to compile a staff report after the next election cycle that
    evaluates the operation of the new DBS rules. The report should
    include an examination of any complaints or concerns received
    regarding the new rules. The rules we adopt will apply to DBS as
    described in the following paragraphs and are the same as those
    applied to cable and broadcast with slight modifications to account
    for unique characteristics of DBS service.

20. 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.[^36] 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 ("equal opportunity"),
    including rates that do not exceed the lowest unit charge ("LUC")
    paid by the station's most favored commercial advertisers.[^37]

21. 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.[^38] 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 meet their obligations in a practical and
    meaningful way, consistent with the intent of the law.[^39] The
    *First Report and Order* also required that DBS providers maintain a
    public file of requests for broadcast time and political advertising
    and the disposition of these requests in order to assist in
    evaluations of compliance with the political broadcasting rules and
    to enable competing candidates to review other candidates'
    advertising access and rates.[^40]

22. In general, in its Petition for Reconsideration, DAETC objected to
    the manner in which the political broadcasting requirements were
    implemented in the *First Report and Order*[^41] and urged the
    Commission to adopt specific rules and policies to facilitate the
    enforcement of Sections 312(a)(7) and 315, as well as to clarify
    that DBS providers have the same political broadcast advertisement
    obligations as do terrestrial broadcasters.[^42] We reconsider
    aspects of that decision here, as discussed in detail below, and
    conclude that it is now appropriate to adopt political broadcast
    rules that will expressly apply to DBS providers. We will derive the
    new rules for DBS providers from the existing rules that apply to
    terrestrial broadcasters or to cable operators, whichever is most
    appropriate.

23. [Reasonable Access.]{.underline} Because DBS systems generally
    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 were the federal
    candidates most likely to undertake the expense for national
    exposure on DBS systems and, thus, deferred a decision on whether
    and under what circumstances a candidate for a congressional office
    would be entitled to access.[^43] The *First Report and Order* noted
    also that the number of congressional candidates nationally is
    large, and the potential technical and financial burden on a
    national DBS provider to provide access to all federal candidates
    could be substantial and thus access could be inherently
    unworkable.[^44] Thus, 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.[^45]

24. DAETC argued that the Commission did not affirm the policy that a
    candidate's needs are the primary factor in assessing requests for
    time under Section 312(a)(7) and that the DBS provider must make
    every effort to accommodate the candidate's stated purpose for
    requesting airtime.[^46] Most importantly, DAETC contended that the
    Commission improperly concluded that it should defer consideration
    of whether congressional candidates may obtain access to DBS
    systems. DAETC argued that Section 312(a)(7) specifies, without
    limitation, that all federal candidates are entitled to access DBS
    systems for advertisements.

25. The *First Report and Order* left it to the DBS service providers to
    determine what constitutes reasonable access in the context of a
    varied multi-channel environment on a national platform.[^47]
    Although we are prescribing specific rule provisions, we reiterate
    here that relevant factors to be considered include the amount of
    time requested, the number of candidates involved, potential
    programming disruption, and technical difficulties that might arise
    from providing access to candidates.[^48] Reasonable alternatives
    for providing access are also required to be taken into
    consideration. Complaints filed against DBS providers with respect
    to obligations under Section 312(a)(7) will be evaluated to
    determine whether the provider's actions are within the spirit of
    the statute and in compliance with the Commission's rules and
    policies on political broadcasting.

26. We disagree with DAETC's arguments relating to the balancing
    involved in assessing reasonable access requests. No change in
    established policy is being introduced here. In the Carter/Mondale
    case, the Court of Appeals said "...the interests of broadcasters
    and candidates must be balanced in determining what constitutes
    reasonable access ... ."[^49] In affirming the Court of Appeals in
    the Carter/Mondale case, the Supreme Court stated that:

> broadcasters are required to tailor their responses to accommodate, as
> much as reasonably possible, a candidate's stated purpose in seeking
> air time. In responding to access requests, however, broadcasters may
> also give weight to such factors as the amount of time previously sold
> to the candidate, the disruptive impact on regular programming, and
> the likelihood of requests for time by rival candidates under the
> equal opportunities provision of § 315 (a).[^50] Just as we consider
> the multiplicity of federal candidates in a broadcaster's service
> community in our enforcement of Section 312(a)(7) for terrestrial
> broadcasting, the number of congressional candidates seeking access
> would be one of the factors for a DBS provider to consider in
> responding to a reasonable access request. 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.

27. DAETC also objected to a perceived implication that Section
    312(a)(7)'s reasonableness standard would permit DBS providers to
    segregate political advertisements from regular programming channels
    and to adopt blanket policies relegating candidates' advertisements
    to certain portions of the broadcast day.[^51] We disagree that the
    *First Report and Order* implied this reading of the statute, and we
    reiterate that a DBS provider, like a terrestrial broadcaster, may
    not summarily refuse access to a particular daypart or channel but
    must provide reasonable access to the facilities it controls.[^52]

28. Although we have received no reasonable access complaints from any
    federal candidates, including congressional candidates, in
    connection with DBS providers, we believe that the DBS industry has
    matured and expanded in the ways described below that warrant
    imposing more detailed political broadcasting rules. In particular
    it appears that DBS providers are now capable and willing to sell
    advertising time on their DBS facilities.[^53] In addition, the
    introduction of spot beam technologies is making DBS a more flexible
    service with greater potential to serve individual markets or
    regions. Although this flexibility to date has been used almost
    entirely for the carriage of local television broadcast signals
    (each individually subject to the political broadcasting
    requirements), there is now a greater potential for the introduction
    of other local services. These changes will have to be factored into
    providers' responses to federal candidate access requests and into
    our determination of whether these responses are reasonable.

29. We therefore adopt rules now to clarify our implementation of
    Section 312(a) (7) for all qualified federal candidates.[^54] These
    rules are modeled on the rules that apply to broadcast
    licensees.[^55] In applying these rules, 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
    precedent in terrestrial broadcasting will be instructive in
    resolving controversies that may arise in the context of DBS
    compliance.[^56] In addition, the Staff Report we are requiring
    following the completion of the 2004 presidential election cycle
    should analyze if, how, and to what extent federal candidates are
    using reasonable access to DBS facilities. Such a Staff Report on
    reasonable access, and, as discussed below, the equal opportunity
    provisions, can assist us in tailoring the rules more specifically
    to the DBS providers' operations, as well as the candidates'
    experiences. A Staff Report can also examine how the use of DBS
    facilities differs from the terrestrial broadcasting model.

30. [Equal Opportunity.]{.underline} The *First Report and Order*
    incorporated Section 315 equal opportunity provisions into the
    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. 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.[^57] 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. DAETC and MAP object
    that the Commission has not promulgated detailed rules governing
    equal opportunity for DBS providers that are comparable to the rules
    for terrestrial broadcasters and cable operators.[^58] We have scant
    information in the record on whether and how DBS providers offer
    access or insert commercial time on the programming they carry.[^59]
    Nor is there evidence on the type or extent of other programming
    originated by DBS providers.[^60] 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.
    Nevertheless, we believe it is appropriate to adopt specific
    requirements delineating DBS providers' existing obligations under
    the statute. Because the DBS service is a MVPD, we will adapt the
    cable rules that implement the equal opportunity requirements for
    DBS, including the equally applicable limitation to programming
    originated by DBS providers. DBS providers primarily carry
    programming, including advertising, provided by programmers that are
    not controlled by the DBS provider. In the cable context, the equal
    opportunity requirements are limited to programming originated by
    the cable operator, "origination cablecasting."[^61] As in the cable
    context, DBS origination programming (which likewise includes
    advertising and other insertions) will be defined as: "Programming
    (exclusive of broadcast signals) carried on a DBS facility over one
    or more channels and subject to the exclusive control of the DBS
    provider."[^62]

31. DAETC also criticized the Commission's formulation that 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. It is
    long-established Commission policy that "equal opportunity" requires
    "approximately equal audience potential" but not exactly the same
    time of day, same day of the week, nor "exactly the same programs or
    series of programs."[^63] Consistent with this policy, we reiterate
    that for DBS providers, as for terrestrial broadcasters or cable
    operators, the equal opportunity provision prohibits discrimination
    among competing candidates but does not necessarily entitle
    candidates to time on the same channel or program as the broadcast
    that gives rise to the right to equal time.[^64] To the extent
    practicable, we intend to apply the existing rules and precedents to
    DBS providers, but adjust this application in the future as
    necessary to reflect differences in technology and sales practices.
    DAETC also raises arguments relating to the general operation of the
    political broadcast rules but unrelated to the specific application
    of these rules to the DBS service.[^65] Such arguments may be better
    addressed elsewhere or in particular cases in which they may arise.

32. [Lowest Unit Charge.]{.underline} In the *First Report and Order*
    the Commission stated that DBS providers are required to afford
    legally qualified candidates the benefits of the LUC.[^66] It did
    not exempt DBS providers from this obligation. DAETC contended that
    the Commission's application of the use of broadcast facilities at
    lowest unit rates was confusing, and that the Commission had found
    that DBS providers were not required to abide by the LUC rules if
    they do not sell commercial advertising time.[^67] In fact, the
    *First Report and Order* took into consideration the unique nature
    of the DBS service in applying Section 315's lowest unit charge
    provisions while recognizing that LUC provisions apply to political
    advertising sold on DBS systems.[^68] At the time the *First Report
    and Order* was adopted, DBS providers did not have commercial
    advertising rates for political or comparable advertising.
    Therefore, 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. The
    Commission also decided that DBS providers, like broadcasters and
    cable operators, are required to disclose information to candidates
    about rates and discount privileges.[^69]

33. Although the Commission's decision was appropriate based on the
    information available in 1998, we conclude now that the DBS industry
    has matured, as described above. Therefore, we find that it is
    proper now to offer more specific guidance by adapting the LUC rules
    from the cable context and applying them to DBS providers.[^70] A
    DBS provider that sells advertising time on its system is expected
    to comply with the Commission's established procedures for
    determining LUC. As described above, we expect the 2004 presidential
    election cycle to provide an opportunity for candidates and DBS
    providers to develop experience in the practical operation and
    effect of these new rules. A Staff Report following the completion
    of the election cycle can help us to determine whether and how to
    revise the rules to better suit the DBS operation.

34. [Political File.]{.underline} 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 requested that the Commission adopt rules based on
    the rules for terrestrial broadcasters' public files.[^71]

35. 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.[^72] Specifically, we adopt
    rules to require DBS providers to abide by political file
    obligations similar to those requirements placed on terrestrial
    broadcasters and cable systems.[^73] Because DBS is a national
    service and each provider's headquarters is not necessarily readily
    accessible to most of its viewers and to candidates, we require DBS
    providers to make their political files available upon telephone or
    electronic request. They may provide access to the file by fax,
    e-mail, via Internet website access, or, if so requested, by mailing
    photocopies of the documents in their political files. We expect
    that DBS providers will assist callers by promptly answering
    questions about how to access the contents of the DBS providers'
    political files. DBS providers may require individuals requesting
    documents to pay for photocopying if the requester prefers delivery
    by mail, but the DBS provider must pay for postage. DBS providers
    are encouraged to put their political files on their respective web
    sites but must provide alternatives for individuals who do not have
    Internet access. . In view of these requirements and expectations,
    we do not find it necessary to require that a provider maintain a
    public file in every community that receives its signal. We do,
    however, require, that DBS providers prominently disclose the
    toll-free telephone number and e-mail address of the department
    responsible for responding to requests for access to the political
    file.[^74] In addition, because DBS experience with the political
    broadcasting rules is relatively new, and to facilitate a future
    Staff Report, we will require that DBS providers maintain all
    requests for time from candidates or individuals on behalf of
    candidates, including general requests for availabilities and rate
    information.[^75] In addition, and for the same reasons, DBS
    providers will be required to retain information in their political
    files for four years, until 2006, and thereafter for two years, as
    is required of cable operators and terrestrial broadcast
    stations.[^76]

**C. Opportunities for Localism**

36. 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." [^77]
    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").[^78]

37. 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.[^79] 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. [^80] 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.[^81]

38. 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,[^82] permitting "satellite carriers"[^83] to offer subscribers
    local-into-local service in markets across the country.[^84] 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 64 markets with 59 more announced for
    2004 and EchoStar offers similar packages in 104 markets.[^85] It
    also appears that the expansion in local-into-local service may have
    contributed to the over 8 million, 57%, increase in DBS
    subscribership between June 2000 and June 2003, making DBS the
    country's fastest growing competitor in the multichannel video
    programming distribution ("MVPD") marketplace.[^86]

39. The 1999 SHVIA has significantly enhanced the programming offered by
    DBS providers. In addition to traditional satellite and cable
    programs, many DBS subscribers are now receiving retransmissions of
    local terrestrial broadcast stations. These local stations are
    proving popular and DBS systems are devoting a portion of their
    system channel capacity to locally originated programming. 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.[^87] Because it is not clear to
    what degree the satellite channel capacity may be limited by
    technical constraints, or whether market demand will result in
    local-into-local service in all parts of the country, we do not
    believe it will serve the public interest to impose additional
    requirements to "further the principle of localism" at this time. 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**

40. 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.[^88] 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.[^89] Time Warner argues that
    the Commission erred in making this determination.[^90]

41. 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.[^91] Thus, many of the obligations advocated by Time
    Warner are now required by law.

42. 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"),[^92] which are also relatively new
    entrants to the MVPD marketplace, are subject to PEG access
    requirements,[^93] Time Warner asserts that there is no reason for
    exempting DBS providers from these requirements.[^94] 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. [^95]

43. We agree with DirecTV and SBCA that Time Warner has not established
    good cause for imposing a PEG-type obligation on DBS providers.[^96]
    Time Warner has not demonstrated that Congress intended, as it did
    with OVS,[^97] 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.[^98] 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.[^99] 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.[^100]
    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**

44. In our April Order on Reconsideration in this proceeding, we
    determined not to adopt rules on children's advertising because we
    concluded that there was insufficient evidence of a problem. [^101]
    Having reconsidered this issue sua sponte, however, we conclude that
    a different approach is warranted. We have decided that it is better
    to take action to protect children from excessive commercialization
    before we are presented with evidence of abuses. Although Section
    335(a) does not require commercialization guidelines for children's
    programming on DBS, such guidelines are consistent with our public
    interest programming authority in this section. Accordingly, we
    conclude that prophylactic rules should be adopted that will protect
    children while imposing minimal burdens on DBS providers. The rules
    we adopt in this regard are described in the following paragraphs.

45. 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 take any action,
    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. [^102]

46. CME, which advocated the adoption of requirements regarding
    children's programming when the *First Report and Order* was
    adopted,[^103] 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.[^104] 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.[^105] 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 create greater similarities between DBS,
    cable and, broadcasting.[^106]

47. CME further contends that the Commission overstates the
    oppressiveness of CME's commercial limitation proposal. 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.[^107]

48. Based on the growth, penetration level, and technological advances
    of DBS, as described below, we find CME's arguments persuasive and
    that reconsideration is warranted. We agree with CME that the
    benefits of imposing commercial limits on children's programming
    outweigh the potential burdens. Therefore upon reconsideration, we
    will require DBS providers to comply with the rules regarding
    commercial limits on children's programming that apply to cable
    operators.[^108] As of June 2002, DBS subscribership stood at over
    20 million households, representing 20.% of all subscribers to
    multichannel video programming.[^109] Given this penetration level,
    we believe it is now timely and appropriate to exercise our
    authority under Section 335(a) to ensure that children in DBS
    households are protected from excessive commercialism on television.
    A blanket exemption for DBS would expose a significant number of
    children to the risk of over-commercialization, contrary to
    Congress' intent in enacting the Children's Television Act of
    1990.[^110] While the Children's Television Act specifically applies
    to broadcasters and cable operators, we do not believe that this was
    intended as a specific and permanent exemption for DBS, which was
    not yet a commercial service in 1990. Consequently, we shall amend
    Part 25 of the Commission's rules to include the commercial limits
    on children's programming that apply to cable operators.[^111]

49. We do not believe that compliance with the children's television
    rules on commercial limits will be burdensome. Many of the
    programming services carried by DBS providers are the same as are
    carried by cable systems around the country and thus this
    programming already complies with the commercial restrictions. In
    addition, as we did in the cable context, we will relieve DBS
    providers from compliance with our rules where a specific statutory
    scheme prevents a DBS provider from controlling the programming
    involved.[^112] Thus, for example, where a DBS provider passively
    retransmits a broadcast signal pursuant to statute, it will not be
    held responsible for compliance with the commercial limits on the
    channel.

**F. Programming on Reserved Capacity**

50. 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."[^113] In response to this mandate, the Commission selected
    four percent as the capacity reservation percentage.[^114]

51. 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.[^115] 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.[^116]

52. 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.[^117] Moreover, as we noted above, DBS providers are now
    providing a wide range of public interest programming on their
    reserved channels, some of which appears to be designed to serve the
    particular needs of viewers that may have been overlooked in the
    past.[^118] Accordingly, we will not make this change.

**G. Noncommercial Channel Limitation**

53. 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.[^119]
    The Commission imposed this limit in order to ensure that a few
    national educational program suppliers would not dominate access to
    the noncommercial channels.[^120] 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.[^121] The Commission also determined that the limitation
    comports with Congress's intent to foster robust and editorially
    diverse programming on the reserved channels.[^122]

54. 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)[^123] 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.[^124]

55. 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.[^125]

56. 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.[^126]

57. 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.[^127]

58. 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.[^128] 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.[^129] 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.[^130]

59. 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." [^131] The fact that
    Section 335 does not specifically provide for the limitation in no
    way invalidates the legitimacy of the Commission's action.[^132]
    Congress identified the promotion of diversity of views and
    information as one of the purposes of the 1992 Cable Act.[^133] The
    Courts have also determined that promoting diversity of media
    sources is a proper Commission goal[^134] and, specifically, that
    the Commission has the authority to apply rules promoting source
    diversity.[^135] Finally, Section 335 expressly allows the
    Commission to impose "public interest or other requirements for
    providing video programming,"[^136] 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.

60. 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.[^137] The Commission adopted the
    one-channel-per-programmer limit to promote diversity of
    voices.[^138] In other words, the purpose of the limitation is to
    foster "the widest possible dissemination of information from
    diverse and antagonistic sources."[^139] 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. [^140] 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**

61. For the reasons discussed above, we reaffirm the Commission's
    interpretation of Section 335 as reflected in the implementing rules
    with the exception of political broadcasting rules and rules
    limiting advertising on children's programming. Consequently, we
    grant in part and deny in part the petitions for reconsideration.

**V. PAPERWORK REDUCTION ACT ANALYSIS**

62. This Report and Order contains modified information collections
    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 collections contained in the proceeding.

63. Written comments by the public on the modified information
    collections are due \[60 days from date of publication in the
    Federal Register\] Written comments must be submitted by the public,
    Office of Management and Budget (OMB), and other interested parties
    on the modified information collections on or before \[60 days from
    date of publication in the Federal Register\] In addition to filing
    comments with the Secretary, a copy of any Paperwork Reduction Act
    comments on the information collections contained herein should be
    submitted to Judith B. Herman, Federal Communications Commission,
    Room 1-C804, 445 12^th^ Street, SW, Washington, D.C. 20554, or via
    the Internet to Judith-B.Herman \@fcc.gov and to Kim A. Johnson, OMB
    Desk Officer, Room 10236 NEOB, 725 17^th^ Street, N.W., Washington,
    D.C. 20503 or via the Internet to <KimA.Johnson@omb.eop.gov> or by
    fax to 202-395-5167.

**VI. REGULATORY FLEXIBILITY ACT CERTIFICATION**

64. A Final Regulatory Flexibility Act Certification is attached hereto
    as Appendix B.

**VII. ORDERING CLAUSES**

65. 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, GE American Communications, Inc., Loral Space and
    Communications Ltd., PanAmSat Corporation,*,* and Time Warner Cable
    ARE DENIED and the petitions for reconsideration filed by the Denver
    Area Educational Telecommunications Consortium, *et al* and the
    Center for Media Education, *et al*, ARE GRANTED to the extent
    discussed herein, and ARE OTHERWISE DENIED.

66. IT IS FURTHER ORDERED, pursuant to the authority contained in
    sections 4, 301, 302, 303, 307, 309, 312, 315, 332, and 335 of the
    Communications Act, as amended, 47 U.S.C. Sections 154, 301, 303,
    307, 309, 312, 315, 332, and 335, that revised 47 C.F.R. §25.701
    SHALL BECOME EFFECTIVE thirty (30) days after publication of the
    text or summary thereof in the Federal Register, except sections
    25.701(d)(1)(i)&(ii),(2),&(3); 25.701(e)(3); and 25.701
    (f)(6)(i)&(ii) which involve Paperwork Reduction Act burdens, which
    SHALL BECOME EFFECTIVE immediately upon announcement in the Federal
    Register of OMB approval.

67. IT IS FURTHER ORDERED that the Commission's Consumer and
    Governmental Affairs Bureau, Reference Information Center, SHALL
    SEND a copy of this Order on Reconsideration, including the Final
    Regulatory Flexibility Certification, to the Chief Counsel for
    Advocacy of the Small Business Administration.

FEDERAL COMMUNICATIONS COMMISSION

Marlene H. Dortch

Secretary

**Appendix A \-- Rule Changes**

Part 25 of Title 47 of the Code of Federal Regulations is amended as
follows:

Part 25 -- SATELLITE COMMUNICATIONS

SUBPART J PUBLIC INTEREST OBLIGATIONS

1\. The authority citation for Part 25 reads as follows:

AUTHORITY: 47 U.S.C. 701-744. Interprets or applies Sections 4, 301,
302, 303, 307, 309, 312, 315, 332, and 335 of the Communications Act, as
amended, 47 U.S.C. Sections 154, 301, 303, 307, 309, 312, 315, 332 and
335 unless otherwise noted.

2\. Section 25.701 is revised to read as follows:

§ 25.701 Public interest obligations.

\(a\) DBS providers are subject to the public interest obligations set
forth in paragraphs (b), (c), (d), (e) and (f) of this section. As used
in this section, DBS providers are any of the following:

\(1\) Entities licensed to operate satellites in the 12.2 to 12.7 GHz
DBS frequency bands; or

\(2\) Entities licensed to operate satellites in the Ku band fixed
satellite service and that sell or lease capacity to a video programming
distributor that offers service directly to consumers providing a
sufficient number of channels so that four percent of the total
applicable programming channels yields a set aside of at least one
channel of non commercial programming pursuant to paragraph (e) of this
section, or

\(3\) Non U.S. licensed satellite operators in the Ku band that offer
video programming directly to consumers in the United States pursuant to
an earth station license issued under part 25 of this title and that
offer a sufficient number of channels to consumers so that four percent
of the total applicable programming channels yields a set aside of one
channel of non commercial programming pursuant to paragraph (e) of this
section.

\(b\) Political broadcasting requirements \--

\(1\) Legally qualified candidates for public office for purposes of
this section are as defined in 47 CFR § 73.1940.

\(2\) DBS origination programming is defined as programming (exclusive
of broadcast signals) carried on a DBS facility over one or more
channels and subject to the exclusive control of the DBS provider.

\(3\) Reasonable access.

\(i\) DBS providers must comply with Section 312(a)(7) of the
Communications Act of 1934, as amended, by allowing reasonable access
to, or permitting purchase of reasonable amounts of time for, the use of
their facilities by a legally qualified candidate for federal elective
office on behalf of his or her candidacy.

\(ii\) Weekend Access. For purposes of providing reasonable access, DBS
providers shall make facilities available for use by federal candidates
on the weekend before the election if the DBS provider has provided
similar access to commercial advertisers during the year preceding the
relevant election period. DBS providers shall not discriminate between
candidates with regard to weekend access.

\(4\) Use of facilities; equal opportunities. DBS providers must comply
with Section 315 of the Communications Act of 1934, as amended, by
providing equal opportunities to legally qualified candidates for DBS
origination programming.

\(i\) General requirements. Except as otherwise indicated in section
25.701(b)(3), no DBS provider is required to permit the use of its
facilities by any legally qualified candidate for public office, but if
a DBS provider shall permit any such candidate to use its facilities, it
shall afford equal opportunities to all other candidates for that office
to use such facilities. Such DBS provider shall have no power of
censorship over the material broadcast by any such candidate. Appearance
by a legally qualified candidate on any:

\(A\) Bona fide newscast;

\(B\) Bona fide news interview;

\(C\) Bona fide news documentary (if the appearance of the candidate is
incidental to the presentation of the subject or subjects covered by the
news documentary); or

\(D\) On the spot coverage of bona fide news events (including, but not
limited to political conventions and activities incidental thereto)

shall not be deemed to be use of a DBS provider's facility. (section
315(a) of the Communications Act.)

\(ii\) Uses. As used in this section and § 25.701(c), the term \"use\"
means a candidate appearance (including by voice or picture) that is not
exempt under paragraphs 25.701(b)(3)(i)(A) through (i)(D) of this
section.

\(iii\) Timing of Request. A request for equal opportunities must be
submitted to the DBS provider within 1 week of the day on which the
first prior use giving rise to the right of equal opportunities
occurred: Provided, however, That where the person was not a candidate
at the time of such first prior use, he or she shall submit his or her
request within 1 week of the first subsequent use after he or she has
become a legally qualified candidate for the office in question.

\(iv\) Burden of proof. A candidate requesting equal opportunities of
the DBS provider or complaining of noncompliance to the Commission shall
have the burden of proving that he or she and his or her opponent are
legally qualified candidates for the same public office.

\(v\) Discrimination between candidates. In making time available to
candidates for public office, no DBS provider shall make any
discrimination between candidates in practices, regulations, facilities,
or services for or in connection with the service rendered pursuant to
this part, or make or give any preference to any candidate for public
office or subject any such candidate to any prejudice or disadvantage;
nor shall any DBS provider make any contract or other agreement that
shall have the effect of permitting any legally qualified candidate for
any public office to use DBS origination programming to the exclusion of
other legally qualified candidates for the same public office.

\(c\) Candidate rates.

\(1\) Charges for use of DBS facilities. The charges, if any, made for
the use of any DBS facility by any person who is a legally qualified
candidate for any public office in connection with his or her campaign
for nomination for election, or election, to such office shall not
exceed:

\(i\) During the 45 days preceding the date of a primary or primary
runoff election and during the 60 days preceding the date of a general
or special election in which such person is a candidate, the lowest unit
charge of the DBS provider for the same class and amount of time for the
same period.

\(A\) A candidate shall be charged no more per unit than the DBS
provider charges its most favored commercial advertisers for the same
classes and amounts of time for the same periods. Any facility practices
offered to commercial advertisers that enhance the value of advertising
spots must be disclosed and made available to candidates upon equal
terms. Such practices include but are not limited to any discount
privileges that affect the value of advertising, such as bonus spots,
time sensitive make goods, preemption priorities, or any other factors
that enhance the value of the announcement.

\(B\) The Commission recognizes non preemptible, preemptible with
notice, immediately preemptible and run of schedule as distinct classes
of time.

\(C\) DBS providers may establish and define their own reasonable
classes of immediately preemptible time so long as the differences
between such classes are based on one or more demonstrable benefits
associated with each class and are not based solely upon price or
identity of the advertiser. Such demonstrable benefits include, but are
not limited to, varying levels of preemption protection, scheduling
flexibility, or associated privileges, such as guaranteed time sensitive
make goods. DBS providers may not use class distinctions to defeat the
purpose of the lowest unit charge requirement. All classes must be fully
disclosed and made available to candidates.

\(D\) DBS providers may establish reasonable classes of preemptible with
notice time so long as they clearly define all such classes, fully
disclose them and make them available to candidates.

\(E\) DBS providers may treat non preemptible and fixed position as
distinct classes of time provided that they articulate clearly the
differences between such classes, fully disclose them, and make them
available to candidates.

\(F\) DBS providers shall not establish a separate, premium priced class
of time sold only to candidates. DBS providers may sell higher priced
non preemptible or fixed time to candidates if such a class of time is
made available on a bona fide basis to both candidates and commercial
advertisers, and provided such class is not functionally equivalent to
any lower priced class of time sold to commercial advertisers.

\(G\) \[Reserved\]

\(H\) Lowest unit charge may be calculated on a weekly basis with
respect to time that is sold on a weekly basis, such as rotations
through particular programs or dayparts. DBS providers electing to
calculate the lowest unit charge by such a method must include in that
calculation all rates for all announcements scheduled in the rotation,
including announcements aired under long term advertising contracts. DBS
providers may implement rate increases during election periods only to
the extent that such increases constitute \"ordinary business
practices,\" such as seasonal program changes or changes in audience
ratings.

\(I\) DBS providers shall review their advertising records periodically
throughout the election period to determine whether compliance with this
section requires that candidates receive rebates or credits. Where
necessary, DBS providers shall issue such rebates or credits promptly.

\(J\) Unit rates charged as part of any package, whether individually
negotiated or generally available to all advertisers, must be included
in the lowest unit charge calculation for the same class and length of
time in the same time period. A candidate cannot be required to purchase
advertising in every program or daypart in a package as a condition for
obtaining package unit rates.

\(K\) DBS providers are not required to include non cash promotional
merchandising incentives in lowest unit charge calculations; provided,
however, that all such incentives must be offered to candidates as part
of any purchases permitted by the system. Bonus spots, however, must be
included in the calculation of the lowest unit charge calculation.

\(L\) Make goods, defined as the rescheduling of preempted advertising,
shall be provided to candidates prior to election day if a DBS provider
has provided a time sensitive make good during the year preceding the
pre election periods, respectively set forth in paragraph (c)(1)(i) of
this section, to any commercial advertiser who purchased time in the
same class.

\(M\) DBS providers must disclose and make available to candidates any
make good policies provided to commercial advertisers. If a DBS provider
places a make good for any commercial advertiser or other candidate in a
more valuable program or daypart, the value of such make good must be
included in the calculation of the lowest unit charge for that program
or daypart.

\(ii\) At any time other than the respective periods set forth in
paragraph (c)(1)(i) of this section, DBS providers may charge legally
qualified candidates for public office no more than the charges made for
comparable use of the facility by commercial advertisers. The rates, if
any, charged all such candidates for the same office shall be uniform
and shall not be rebated by any means, direct or indirect. A candidate
shall be charged no more than the rate the DBS provider would charge for
comparable commercial advertising. All discount privileges otherwise
offered by a DBS provider to commercial advertisers must be disclosed
and made available upon equal terms to all candidates for public office.

\(2\) If a DBS provider permits a candidate to use its facilities, it
shall make all discount privileges offered to commercial advertisers,
including the lowest unit charges for each class and length of time in
the same time period and all corresponding discount privileges,
available on equal terms to all candidates. This duty includes an
affirmative duty to disclose to candidates information about rates,
terms, conditions and all value enhancing discount privileges offered to
commercial advertisers, as provided herein**.** DBS providers may use
reasonable discretion in making the disclosure; provided, however, that
the disclosure includes, at a minimum, the following information:

\(i\) A description and definition of each class of time available to
commercial advertisers sufficiently complete enough to allow candidates
to identify and understand what specific attributes differentiate each
class;

\(ii\) A description of the lowest unit charge and related privileges
(such as priorities against preemption and make goods prior to specific
deadlines) for each class of time offered to commercial advertisers;

\(iii\) A description of the DBS provider's method of selling
preemptible time based upon advertiser demand, commonly known as the
\"current selling level,\" with the stipulation that candidates will be
able to purchase at these demand generated rates in the same manner as
commercial advertisers;

\(iv\) An approximation of the likelihood of preemption for each kind of
preemptible time; and

\(v\) An explanation of the DBS provider\'s sales practices, if any,
that are based on audience delivery, with the stipulation that
candidates will be able to purchase this kind of time, if available to
commercial advertisers.

\(3\) Once disclosure is made, DBS providers shall negotiate in good
faith to actually sell time to candidates in accordance with the
disclosure.

\(d\) Political file. Each DBS provider shall keep and permit public
inspection of a complete and orderly political file and shall
prominently disclose the physical location of the file, and the
telephonic and electronic means to access the file.

\(1\) The political file shall contain, at a minimum:

\(i\) A record of all requests for DBS origination time, the disposition
of those requests, and the charges made, if any, if the request is
granted. The \"disposition\" includes the schedule of time purchased,
when spots actually aired, the rates charged, and the classes of time
purchased; and

\(ii\) A record of the free time provided if free time is provided for
use by or on behalf of candidates.

\(2\) DBS providers shall place all records required by this section in
a file available to the public as soon as possible and shall be retained
for a period of four years until December 31, 2006, and thereafter for a
period of two years.

\(3\) DBS providers shall make available, by fax, e-mail, or by mail
upon telephone request, photocopies of documents in their political
files and shall assist callers by answering questions about the contents
of their political files. Provided, however, that if a requester prefers
access by mail, the DBS provider shall pay for postage but may require
individuals requesting documents to pay for photocopying. To the extent
that a DBS provider places its political file on its website, it may
refer the public to the website in lieu of mailing photocopies. Any
material required by this section to be maintained in the political file
must be made available to the public by either mailing or website access
or both.

\(e\) Commercial limits in children's programs.

\(1\) No DBS provider shall air more than 10.5 minutes of commercial
matter per hour during children's programming on weekends, or more that
12 minutes of commercial matter per hour on week days.

\(2\) This rule shall not apply to programs aired on a broadcast
television channel which the DBS provider passively carries, or to
channels over which the DBS provider may not exercise editorial control,
pursuant to 47 U.S.C. 335(b)(3).

\(3\) DBS providers airing children's programming must maintain records
sufficient to verify compliance with this rule and make such records
available to the public. Such records must be maintained for a period
sufficient to cover the limitations period specified in 47 U.S.C.
503(b)(6)(B).

Note 1 to § 25.701(e): *Commercial matter* means airtime sold for
purposes of selling a product or service.

Note 2 to § 25.701(e): For purposes of this section, children's
programming refers to programs originally produced and broadcast
primarily for an audience of children 12 years old and younger.

\(f\) Carriage obligation for noncommercial programming‑‑

\(1\) Reservation requirement. DBS providers shall reserve four percent
of their channel capacity exclusively for use by qualified programmers
for noncommercial programming of an educational or informational nature.
Channel capacity shall be determined annually by calculating, based on
measurements taken on a quarterly basis, the average number of channels
available for video programming on all satellites licensed to the
provider during the previous year. DBS providers may use this reserved
capacity for any purpose until such time as it is used for noncommercial
educational or informational programming.

\(2\) Qualified programmer. For purposes of these rules, a qualified
programmer is:

\(i\) A noncommercial educational broadcast station as defined in
section 397(6) of the Communications Act of 1934, as amended,

\(ii\) A public telecommunications entity as defined in section 397(12)
of the Communications Act of 1934, as amended,

\(iii\) An accredited nonprofit educational institution or a
governmental organization engaged in the formal education of enrolled
students (A publicly supported educational institution must be
accredited by the appropriate state department of education; a privately
controlled educational institution must be accredited by the appropriate
state department of education or the recognized regional and national
accrediting organizations), or

\(iv\) A nonprofit organization whose purposes are educational and
include providing educational and instructional television material to
such accredited institutions and governmental organizations.

\(v\) Other noncommercial entities with an educational mission.

\(3\) Editorial control.

\(i\) A DBS operator will be required to make capacity available only to
qualified programmers and may select among such programmers when demand
exceeds the capacity of their reserved channels.

\(ii\) A DBS operator may not require the programmers it selects to
include particular programming on its channels.

\(iii\) A DBS operator may not alter or censor the content of the
programming provided by the qualified programmer using the channels
reserved pursuant to this section.

\(4\) Non‑commercial channel limitation. A DBS operator cannot initially
select a qualified programmer to fill more than one of its reserved
channels except that, after all qualified entities that have sought
access have been offered access on at least one channel, a provider may
allocate additional channels to qualified programmers without having to
make additional efforts to secure other qualified programmers.

\(5\) Rates, terms and conditions.

\(i\) In making the required reserved capacity available, DBS providers
cannot charge rates that exceed costs that are directly related to
making the capacity available to qualified programmers. Direct costs
include only the cost of transmitting the signal to the uplink facility
and uplinking the signal to the satellite.

\(ii\) Rates for capacity reserved under paragraph (a) of this section
shall not exceed 50 percent of the direct costs as defined in this
section.

\(iii\) Nothing in this section shall be construed to prohibit DBS
providers from negotiating rates with qualified programmers that are
less than 50 percent of direct costs or from paying qualified
programmers for the use of their programming.

\(iv\) DBS providers shall reserve discrete channels and offer these to
qualifying programmers at consistent times to fulfill the reservation
requirement described in these rules.

\(6\) Public file.

\(i\) In addition to the political file requirements in section
25.701(d), each DBS provider shall keep and permit public inspection of
a complete and orderly record of:

\(A\) Quarterly measurements of channel capacity and yearly average
calculations on which it bases its four percent reservation, as well as
its response to any capacity changes;

\(B\) A record of entities to whom noncommercial capacity is being
provided, the amount of capacity being provided to each entity, the
conditions under which it is being provided and the rates, if any, being
paid by the entity;

\(C\) A record of entities that have requested capacity, disposition of
those requests and reasons for the disposition.

\(ii\) All records required by this paragraph shall be placed in a file
available to the public as soon as possible and shall be retained for a
period of two years.

\(7\) Effective date. DBS providers are required to make channel
capacity available pursuant to this section upon the effective date.
Programming provided pursuant to this rule must be available to the
public no later than six months after the effective date.

**APPENDIX B**

FINAL REGULATORY FLEXIBILITY CERTIFICATION

The Regulatory Flexibility Act of 1980, as amended (RFA),[^141] requires
that a regulatory flexibility analysis be prepared for
notice-and-comment rule making proceedings, unless the agency certifies
that "the rule will not, if promulgated, have a significant economic
impact on a substantial number of small entities."[^142] The RFA
generally defines the term "small entity" as having the same meaning as
the terms "small business," "small organization," and "small
governmental jurisdiction."[^143] In addition, the term "small business"
has the same meaning as the term "small business concern" under the
Small Business Act.[^144] 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).[^145]

The Order on Reconsideration mandates that DBS providers maintain
political files that contain, at a minimum, (i) a record of all requests
for DBS origination time, the disposition of those requests, and the
charges made, if any, if the request is granted. The "disposition"
includes the schedule of time purchased, when spots actually aired, the
rates charged, and the classes of time purchased; and (ii) a record of
the free time provided if free time is provided for use by or on behalf
of candidates. DBS providers must also maintain records sufficient to
verify compliance with the rules establishing commercial limits for
children's programming. Because DBS provides subscription services, DBS
falls within the SBA-recognized definitions of "Cable Networks" and
Cable and Other Program Distribution."[^146] These definitions provide
that small entities are ones with \$12.5 million or less in annual
receipts.[^147] Small businesses, i.e. ones with less than \$12.5
million in annual receipts, do not have the financial ability to become
DBS licensees because of the high implementation costs associated with
satellite services. Because this is an established service, with limited
spectrum and orbital resources for assignment, we estimate that no more
than 15 entities will be Commission licensees providing these services.
In addition, because of high implementation costs and limited spectrum
resources, we believe that none of the 15 licensees will be small
entities. We expect that no small entities will be impacted by this
rulemaking. Therefore, we certify that the requirements of the Order on
Reconsideration will not have a significant economic impact on a
substantial number of small entities.

We note that the American Cable Association ("ACA") (formerly the Small
Cable Business Association) filed a 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.[^148] The Order on Reconsideration finds 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.

Therefore, we certify that the rules in this Order will not have a
significant economic impact on a substantial number of small entities.

SEPARATE STATEMENT OF

COMMISSIONER MICHAEL J. COPPS

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

Although not ideal, I support today's Second Order on Reconsideration
because it corrects two glaring deficiencies of our First Order on
Reconsideration. Today's action adopts rules implementing the political
broadcasting obligations of DBS and takes steps to ensure that the
political files of DBS operators are readily accessible. In addition,
the Order moves forward to limit the over-commercialization of
children's programming on DBS. I dissented to the First Order on
Reconsideration, highlighting these areas of concern. I appreciate my
colleagues' willingness to remedy these problems. I look forward to
working through a number of other issues with respect to DBS operators
in the near future, including clarifying that DBS providers may not
discriminate against some local broadcasters in a market by requiring
consumers to obtain a second dish to receive those signals.

**SEPARATE STATEMENT OF**

**COMMISSIONER JONATHAN S. ADELSTEIN**

> *Re: Implementation of Section 25 of the Cable Television Consumer
> Protection and Competition Act of 1992, Digital Broadcast Satellite
> Public Interest Obligations; Sua Sponte Reconsideration of Memorandum
> Opinion and Order on Reconsideration of First Report and Order*

While not perfect, I support this Order. Today's action presses forward
the expectations of Congress concerning the public interest
responsibilities of direct broadcast satellite service providers. Given
the evolution of DBS, the Commission's adoption of specific rules
implementing political broadcasting requirements and protecting children
from excessive commercialization is a positive and practical step.
Specific rules provide certainty to DBS providers, political candidates,
and the viewing public.

[^1]: FCC 03-78 (adopted Apr. 9, 2003).

[^2]: S*ee* Appendix A.

[^3]: We also update some information about the DBS industry in
    paragraph 38. The textual changes appear in the following
    paragraphs: 1, 2, 7, 19-35, 38, 39, 44-49, 61-67 and Appendices A
    and B. Otherwise, this Sua Sponte Reconsideration is identical to
    the Order on Reconsideration adopted on April 9, 2003. We also note
    that since the adoption of the first *Order on Reconsideration*, in
    April 2003, a new DBS service operated by Cablevisions Systems
    Corporation and marketed under the name of VOOM began providing
    service to customers on October 15, 2003. *See*
    [*www.voom.com/util/press/press093003.isp*](http://www.voom.com/util/press/press093003.isp)
    (viewed on Jan.. 16, 2004).

[^4]: *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"*)*.*

[^5]: Pub. L. No. 102-385, 106 Stat. 1460 (1992).

[^6]: *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.

[^7]: 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.

[^8]: 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).

[^9]: The Ku-band frequencies referenced in the statute are 11.7 GHz --
    12.2 GHz and 14.0 GHz -- 14.5 GHz.

[^10]: *See* 47 C.F.R. § 25.701.

[^11]: 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 Mar. 10, 1999 filing deadline would be accepted as
    timely filed. Public Notice, Report No. 2326 (Apr. 15, 1999)
    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.

[^12]: 47 C.F.R. § 1.429(c).

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

[^14]: *Id.* at 23262.

[^15]: *See* 47 U.S.C. § 335(b)(5)(A)(ii).

[^16]: *See First Report and Order,* 13 FCC Rcd at 23262-63.

[^17]: *See* 47 U.S.C. § 335(b)(1).

[^18]: *See First Report and Order,* 13 FCC Rcd at 23263.

[^19]: *Id.* at 23264.

[^20]: *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).

[^21]: *See First Report and Order,* 13 FCC Rcd at 23264-65.

[^22]: *See, e.g.,* Loral Petition for Reconsideration ("Loral
    Petition"), filed Mar. 10, 1999, at 4-5; PanAmSat Petition for
    Reconsideration ("PanAmSat Petition"), filed Mar. 10, 1999, at 3-4;
    Time Warner Petition for Reconsideration ("Time Warner Petition),
    filed Mar. 10, 1999, at 15-18; GE Americom Petition for
    Reconsideration ("GE Americom Petition"), filed Mar. 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.

[^23]: *See* PanAmSat Petition at 4.

[^24]: *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.

[^25]: *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"*)*.*

[^26]: *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.

[^27]: *See First Report and Order,* 13 FCC Rcd at 23262-65.

[^28]: *Id.* at 23264-65.

[^29]: *See* Loral Petition at 10-12.

[^30]: *See First Report and Order,* 13 FCC Rcd at 23266-68.

[^31]: *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*).

[^32]: *See* PanAmSat Petition at 7-8.

[^33]: 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).

[^34]: *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 (Nov. 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.

[^35]: First Order on Reconsideration at paras 27-33.

[^36]: 47 U.S.C. §§ 312(a)(7), 315.

[^37]: 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).

[^38]: *See First Report and Order,* 13 FCC Rcd at 23273.

[^39]: *Id.* at 23271.

[^40]: *See First Report and Order,* 13 FCC Rcd at 23270-73. *See also*
    47 C.F.R. § 25.701(c)(6).

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

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

[^43]: *See First Report and Order,* 13 FCC Rcd at 23270.

[^44]: *Id.*

[^45]: *Id*. at 23269-70.

[^46]: *Id.*

[^47]: *Id.* at 23271**.**

[^48]: *See CBS Inc. v. FCC,* 453 U.S. 367, 387 (1981)
    (*Carter/Mondale)* where the Court discussed the obligations of
    broadcasters in responding to access requests.

[^49]: 629 F. 2d 1, 22-23 (D.C. Cir. 1980)

[^50]: *Carter/Mondale*, 453 U.S. at 387.

[^51]: *See* DAETC petition at 12.

[^52]: *In the Matter of Commission Policy in Enforcing Section
    312(a)(7) of the Communications Act*, 68 FCC 2d 1079, 1090 (1978).

[^53]: *See, e.g.,*
    [[http://www.hughes.com/ir/pr/03_07_28_dtv.asp]{.underline}](http://www.hughes.com/ir/pr/03_07_28_dtv.asp)
    (DirecTV announcement of arrangement with Nielsen Media Research and
    Sony Pictures Television concerning data for advertising sales by
    DirecTV); and *Multichannel News*, p.55 (July 28, 2003) (DirecTV
    will sell advertising time by clustering the 100 networks it carries
    into eight demographic clusters. "DirecTV's commercial inventory
    averages two national minutes per hour -- sometimes three minutes --
    with the avails positioned during the same local ad breaks the
    networks' cable affiliates get."). *See also* Media Access Project
    *ex parte* submissions dated July 17, and July 30, 2003; and
    <http://www.dishnetwork.com/content/aboutus/index.shtml> (EchoStar
    site for link to <advertiseondish@echostar.com>).

[^54]: *See* amended rule section 25.701(b)(3) in Appendix A.

[^55]: Section 312(a)(7) does not apply to cable operators; therefore,
    there are no cable rules concerning reasonable access. *See In the
    Matter of Codification of the Commission\'s Political Programming
    Policies,* 7 FCC Rcd 678, 680-81 n.11 (1991).

[^56]: *See Commission Policy Enforcing Section 312(a)(7) of the
    Communications Act,* Report and Order, 68 FCC 2d 1079 (1978), *see
    also Carter/Mondale,* 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).

[^57]: *See First Report and Order,* 13 FCC Rcd at 23273.

[^58]: *See* DAETC Petition at 21-23. *See also* Media Access Project
    *ex parte* at 2, 6 (July 30, 2003).

[^59]: Both DirecTV and EchoStar appear to offer advertising
    opportunities, but how such opportunities are implemented and where
    commercials appear are not in the record. *See, supra,* note \[12\].

[^60]: The DirecTV and EchoStar websites indicate that they offer
    subscribers "barker" or "information" channels containing
    information about the respective satellite system and its offerings.
    *See, e.g.,*
    <http://www.directv.com/DTVAPP/SearchDetailAction.do?current=ProgramSearchbyTitle&program_id=9980110465&program_title=DIRECTV+Pricing+and+Packaging+Info.&event_code=&time_zone=est&start_date_time=200308061600&end_date_time=200308071600>
    (DirecTV offers Information on channels 998 and 999); and
    <http://204.95.170.116/dishsite/listings/progdetails.asp?prog_id=1698136>
    (EchoStar Information Channel, Info 101) In addition, EchoStar
    offers "Charlie Chat" on which EchoStar Chairman Charlie Ergen
    discusses topics of interest to subscribers. *See*
    http://www.dishnetwork.com/content/customerCare/charlie_chat/index.shtml.

[^61]: *See In the Matter of Amendment of Part 74, Subpart K, of the
    commission's Rules and Regulations Relative to Community Antenna
    Television Systems; and Inquiry into the Development of
    Communications Technology and Services to Formulate Regulatory
    Policy and Rulemaking and/or Legislative Proposals,* First Report
    and Order, 20 FCC 2d 201, paras. 40-47 (1969); *Use of Broadcast and
    Cable Facilities by Candidates for Public Office,* 34 FCC 2d 510
    (1972); *see also, In Re Request of A.H. Belo Corp. for Declaratory
    Ruling*, 11 FCC Rcd 12306, 12307 at n. 3 (MMB 1996); and *In Re
    Request of A&E Television Networks for Declaratory Ruling*, 15 FCC
    Rcd 10796 at n. 2 (MMB 2000).

[^62]: *Compare* 47 C.F.R. § 76.5(p). *See also* amended rule section
    25.701(b)(2) in Appendix A.

[^63]: *See [The Law of Political Broadcasting and Cablecasting: A
    Political Primer 1984 Edition]{.underline},* 100 FCC 2d 1476,
    1504-1506 (1984). *See also* 47 C.F.R. §§ 73.1941(e) and 76.205(e)
    (prohibiting discrimination against or preference to any candidate
    in making time available under the equal opportunity provisions);
    and amended rule section 47 C.F.R. § 25.701(b)(4)(v) in Appendix A.

[^64]: *See Becker v FCC,* 95 F. 3d 75,84 (1996) quoting 1984 Political
    Primer, 100 FCC 2d at 1505. *See also*, *Carter/Mondale, Inc.*, 74
    FCC 2d 631, recon. denied, 74 FCC 2d 657, aff'd sub nom. *CBS Inc. v
    FCC*, 629 F. 2d 1, 22-23 (D.C. Cir. 1980), aff'd 453 U.S. 367
    (1981); In *the Matter of Implementation of Section 25 of the Cable
    Television Consumer Protection and Competition Act of 1992, Direct
    Broadcast Satellite Public Service Obligations*, 8 FCC Rcd 1589,
    1594 (1993).

[^65]: *See* DAETC Petition at 14-17.

[^66]: *See First Report and Order,* 13 FCC Rcd at 23274.

[^67]: S*ee* DAETC Petition at 18-19.

[^68]: *See First Report and Order,* 13 FCC Rcd at 23274.

[^69]: *See First Report and Order,* 13 FCC Rcd at 23273-74.

[^70]: *See* amended rule section 25.701(c) in Appendix A.

[^71]: *See* DAETC Petition at 23 and CME Petition for Reconsideration
    ("CME Petition"), filed Mar. 11, 1999, at 10, citing *Main Studio
    and Public Inspection Files of Broadcast Television and Radio
    Stations* ("*Main Studio Order*"), 13 FCC Rcd 15691 (1998). The
    conclusion relied upon by DAETC in its Petition was significantly
    revised upon reconsideration of the *Main Studio* *Order*, which
    excluded a station's political file from the accommodations imposed
    on other parts of a station's public file. *See In the Matter of
    Review of the Commission\'s Rules Regarding the Main Studio and
    Local Public Inspection Files of Broadcast Television and Radio
    Stations*, 14 FCC Rcd 11113, 11122 (1999)

[^72]: *See First Report and Order,* 13 FCC Rcd at 23271.

[^73]: *See* amended rule section 25.701(d) in Appendix A.

[^74]: Unlike cable systems or terrestrial broadcast stations in a
    candidate's community, the home office location and corporate
    telephone number to reach DBS providers are not necessarily well
    known or easy to find. For that reason, providing contact
    information on the website or as part of the "phone tree" reached by
    published toll-free number is necessary to constitute a prominent
    disclosure by DBS providers.

[^75]: *Compare, In the Matter of Codification of the Commission's
    Political Programming Policies*, Memorandum Opinion and Order, 7 FCC
    Rcd 4611, 4626 n. 150 (1992) ("...we leave to the discretion of
    broadcasters to determine what exactly constitutes a 'request for
    time.'")

[^76]: *See* amended rule section 25.701(d) in Appendix A; *compare* 47
    C.F.R. §§ 73.1943 and 76.1701.

[^77]: 47 U.S.C. § 335(a).

[^78]: *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).*

[^79]: *See* ACA Petition for Reconsideration ("ACA Petition"), filed
    Mar. 10, 1999, at 5-14.

[^80]: *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).

[^81]: Petition for Reconsideration filed Mar. 9, 1999; S*ee First
    Report and Order,* 13 FCC Rcd at 23325.

[^82]: 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).

[^83]: 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.

[^84]: "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).

[^85]: *See http://www.directv.com* and *http://www.dishnetwork.com*
    (viewed on Feb. 6, 2004).

[^86]: *See In the Matter of Annual Assessment of the Status of
    Competition in Markets for the Delivery of Video Programming, Tenth
    Annual Report*, FCC 04-5, \_\_FCC Rcd\_\_\_(Jan. 28, 2004)*. See
    also Policies and Rules for the Direct Broadcast Satellite Service,
    supra note 5 at para.10.*

[^87]: See 47 C.F.R. §76.66.

[^88]: 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.

[^89]: *See First Report an Order,* 13 FCC Rcd at 23276-78.

[^90]: *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.

[^91]: *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).

[^92]: 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).

[^93]: 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")).

[^94]: *See* Time Warner Petition at 3-10.

[^95]: *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.

[^96]: *See, e.g.,* DirecTV Opposition at 5-8; SBCA Opposition, filed
    May 20, 1999, at 4-6.

[^97]: *See* 47 U.S.C. § 573(c).

[^98]: *See First Report and Order,* 13 FCC Rcd at 23279

[^99]: *Id.* at 23278.

[^100]: *Id.* at 23297-99.

[^101]: FCC 03-78 at para 45.

[^102]: *See First Report and Order,* 13 FCC Rcd at 23279-80.

[^103]: 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 applies 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 ensue
    compliance with these obligations. *See* CME Comments, filed Apr.
    28, 1997, at 4-17.

[^104]: *See* CME Petition at 4-5.

[^105]: *Id.* at 5-6.

[^106]: *Id.* at 6-8,

[^107]: *Id.* at 8-10.

[^108]: *See* 47 C.F.R. §76.225. As we determined in the context of
    applying some of the political broadcasting rules to DBS, in this
    case the rules applicable to cable operators are better suited to
    other MVPDs such as DBS.

[^109]: *In the Matter of Annual Assessment of the Status of Competition
    in Markets for the Delivery of Video Programming, Tenth Annual
    Report*, *supra* note 87.

[^110]: Children's Television Act of 1990, Pub. L. No. 101-437, 104
    Stat. 996-1000, [codified at]{.underline} 47 U.S.C. Sections 303a,
    303b, 394.

[^111]: *See* amendments to rules *infra* Appendix A.

[^112]: *See Policies and Rules Concerning Children's Television
    Programming, Report and Order*, 6 FCC Rcd 2111, 2113 (1991); *Order
    on Reconsideration,* 6 FCC Rcd 5093, 5094 (1991).

[^113]: *See* 47 U.S.C § 335(b)(1).

[^114]: *See First Report and Order,* 13 FCC Rcd at 23285.

[^115]: *See* Time Warner Petition at 12-14.

[^116]: *See* DAETC and CME Joint Opposition, filed May 6, 1999, at
    28-30.

[^117]: *See* DirecTV Opposition at 14-15 and SBCA Opposition at 7.

[^118]: *See supra* at *¶ 2.*

[^119]: *See First Report and Order* at 23302.

[^120]: *Id.*

[^121]: *Id.*

[^122]: *Id.* at 23302-04.

[^123]: 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.

[^124]: *See, e.g.,* APTS/PBS Petition for Reconsideration ("APTS/PBS
    Petition"), filed Mar. 10, 1999, at 4-5.

[^125]: *Id.* at 6.

[^126]: *Id.* at 7-8.

[^127]: *Id.* at 8-11.

[^128]: *See* DAETC and CME Joint Opposition at 17.

[^129]: *Id.* at 16.

[^130]: *Id.* at 18.

[^131]: *First Report and Order,* 13 FCC Rcd at 23303.

[^132]: *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).

[^133]: *See* 1992 Cable Act, § 2(b)(1), Pub. L. No. 102-385, 106 Stat.
    1460, 1463 (1992).

[^134]: *See, e.g., FCC v. NCCB*, 436 U.S. 775, 794 (1978) (confirming
    that diversification is a relevant factor in broadcast renewal
    proceedings).

[^135]: *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).

[^136]: 47 U.S.C. § 335(a).

[^137]: *See* DAETC and CME Joint Opposition at 14.

[^138]: *See First Report and Order,* 13 FCC Rcd at 23302-03.

[^139]: *Associated Press v. United States,* 326 U.S. 1, 20 (1945), *see
    also Id.*.

[^140]: *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.

[^141]: The RFA, *see* 5 U.S.C. § 601 -- 612, has been amended by the
    Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA),
    Pub. L. No. 104-121, Title II, 110 Stat. 857 (1996).

[^142]: 5 U.S.C. § 605(b).

[^143]: 5 U.S.C. § 601(6).

[^144]: 5 U.S.C. § 601(3) (incorporating by reference the definition of
    "small-business concern" in the Small Business Act, 15 U.S.C. §
    632). 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 Small Business Administration 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."

[^145]: 15 U.S.C. § 632.

[^146]: 13 C.F.R. § 121.201, North American Industry Classification
    Systems (NAICA) codes 513210 and 513220.

[^147]: 13 C.F.R. § 121.201, NAICS codes 513210 and 513220.

[^148]: Petition for Reconsideration filed Mar. 9, 1999.