Before the

**Federal Communications Commission**

**Washington, D.C. 20554**

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**ORDER ON RECONSIDERATION**

**Adopted: September 4, 2001 Released: September 5, 2001**

By the Commission:

**TABLE OF CONTENTS**

[Paragraph]{.underline}

I.  INTRODUCTION AND EXECUTIVE SUMMARY 1

II. ORDER ON RECONSIDERATION 5

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A.  DIRECTV's Petition 6

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1.  Carriage of Local NCE Stations 7

2.  Public Interest Set-Aside 13

3.  Programming in the Vertical Blanking Interval 16

4.  Good Quality Signal Standard 24

5.  Relocation of Local Receive Facilities Mid-Cycle 33

6.  Extra Equipment for Some Local Signals 37

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B.  ALTV's Petition 42

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1.  A La Carte Sales of Local Signals 43

2.  Station Eligibility to Vote on Alternative Receive Facility 49

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C.  Issues for Clarification 54

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1.  Refusals to Carry 55

2.  Consistent Carriage Elections 62

3.  Retransmission Consent Agreements 63

4.  Amendment of Carriage Request Provisions 64

5.  Allocation of Costs for Reception Equipment at Receive Facility 71

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III. PAPERWORK REDUCTION ACT OF 1995 ANALYSIS 76

IV. ORDERING CLAUSES 77

Appendix A: Rule Changes

# introduction AND EXECUTIVE SUMMARY

1.  In this *Order on Reconsideration*, we consider two petitions for
    reconsideration of the Commission's *Report and Order* in
    *Implementation of the Satellite Home Viewer Improvement Act of
    1999: Broadcast Signal Carriage Issues; Retransmission Consent
    Issues*,[^1] which implements Section 338 of the Communications Act
    of 1934 ("Act"), as amended by the Satellite Home Viewer Improvement
    Act of 1999 ("SHVIA").[^2] The *Report and Order* adopted broadcast
    signal carriage requirements for satellite carriers in order to
    implement Section 338 of the Act.[^3] Section 338 requires satellite
    carriers, by January 1, 2002, to carry upon request all local
    television broadcast stations' signals in local markets in which the
    satellite carriers carry at least one television broadcast station
    signal pursuant to the statutory copyright license, subject to the
    other carriage provisions contained in the Act.[^4] As noted in the
    *Report and Order*, this transition period is intended to provide
    the satellite industry with time to begin providing local television
    signals into local markets, otherwise known as "local-into-local"
    satellite service.[^5] The Commission's carriage rules in many
    respects mirror the broadcast signal carriage rules applicable to
    cable operators, but with key distinctions made in recognition of
    the statutory and practical constraints that result from differences
    in satellite and cable technologies.

2.  DIRECTV, Inc. ("DIRECTV") and the Association of Local Television
    Stations, Inc. ("ALTV") separately filed petitions for
    reconsideration of the *Report and Order*, raising different
    issues.[^6] Several parties separately filed oppositions or comments
    in response to DIRECTV's petition: ALTV; National Association of
    Broadcasters ("NAB"); Network Affiliated Stations Alliance ("NASA");
    Paxson Communications Corporation ("Paxson"); and a joint opposition
    by the Association of America's Public Television Stations, the
    Public Broadcasting Service, and the Corporation for Public
    Broadcasting (collectively "Public Television Stations").[^7]
    DIRECTV, in turn, filed a reply.[^8] In response to ALTV's petition,
    DIRECTV filed an opposition and NAB submitted comments in
    support.[^9] Both ALTV and NAB filed separate replies to DIRECTV's
    opposition.[^10]

3.  Our response to the petitions are governed by the Communications Act
    and our own rules.[^11] Reconsideration of a Commission decision is
    warranted only if the petitioner cites a material error of fact or
    law, or presents additional facts and circumstances which raise
    substantial or material questions of fact that were not considered
    and that otherwise warrant Commission review of its prior
    action.[^12] The Commission will not reconsider arguments that have
    already been considered.[^13] For the reasons stated herein, we
    affirm our decisions in the *Report and Order* and deny both
    DIRECTV's and ALTV's petition. We also take this opportunity to
    clarify and, where necessary, amend some of the requirements set
    forth in the *Report and Order* and the rule.[^14]

4.  In this *Order on Reconsideration*, we

-   decline to adopt DIRECTV's proposal that we modify our noncommercial
    educational ("NCE") carriage rule by limiting a satellite carrier's
    carriage obligation to only one qualified NCE station per designated
    market area ("DMA"), with additional NCE stations carried on a
    voluntary basis only;

-   deny DIRECTV's request that we permit satellite carriers to include
    local NCE stations, carried pursuant to Section 338, in the
    calculation of the four percent (4%) set-aside requirement under
    Section 335 of the Act and Section 100.5(c) of the rules;

-   affirm the rule requiring satellite carriers to carry in its
    entirety the primary video, accompanying audio, and closed-caption
    data contained in line 21 of the vertical blanking interval ("VBI")
    and, to the extent technically feasible, program-related material
    carried in the VBI or on subcarriers;

-   decline DIRECTV's proposal that we revise the good quality signal
    standard and require broadcast stations to deliver a "TV-1quality"
    signal;

-   deny DIRECTV's request that we require television stations to pay
    new or additional costs to deliver a good quality signal in cases
    where a satellite carrier changes its facility in the middle of an
    election cycle;

-   deny DIRECTV's request that we permit satellite carriers to offer
    local-into-local service through the use of different orbital
    positions that necessitate subscriber use of multiple dishes, and
    affirm the rule prohibiting satellite carriers from requiring
    subscribers to purchase additional equipment (*e.g*., an additional
    satellite dish) to gain access only to some, but not all of the
    local signals in a market;

-   decline to accept ALTV's request that we require satellite carriers
    to offer all local signals to their subscribers only as a unitary
    package;

-   affirm the rule that all stations, whether they elect mandatory
    carriage or retransmission consent, may participate in voting on
    whether an alternative receive facility is acceptable;

-   and on our own motion, we make the following
    clarifications/amendments to our rules:

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-   clarify that satellite carriers may not refuse carriage requests
    without a reasonable basis by shifting onto local broadcast stations
    the burden to prove they are entitled to carriage;

-   where there is more than one satellite carrier providing
    local-into-local service subject to these carriage rules, a
    broadcaster may make inconsistent carriage elections (*i.e*., elect
    must carry for one carrier and retransmission consent for the
    other);

-   absent an agreement by the parties to the contrary, if a broadcast
    station has a retransmission agreement that extends into and
    terminates during an election cycle, the station \-- at the end of
    its contract term with the carrier \-- will not be entitled to
    demand must carry if it has not elected must carry by the required
    date (*i.e*., by July 1, 2001 for the first election cycle, by
    October 1, 2005 for the next election cycle, etc.);

-   amend the carriage request procedures to make the requirements
    consistent for all elections; and

-   clarify that satellite carriers may not require local broadcast
    stations carried pursuant to mandatory carriage to pay for basic
    reception equipment at local receive facilities but are, as in the
    cable rules, responsible for costs of additional or special
    equipment.

    We address, in more detail, the foregoing issues below.

# order ON RECONSIDERATION

5.  As explained below, after careful consideration of all the arguments
    and facts presented, we decline to revise the satellite broadcast
    signal carriage requirements adopted in the *Report and Order*,
    except to provide additional clarification to some of those rules.
    Consistent with the requirements of the SHVIA, the Commission's
    satellite broadcast signal carriage rules generally attempt to place
    satellite carriers on an equal footing with cable operators
    regarding the provision of local broadcast programming, in order to
    give consumers more competitive options in selecting a multichannel
    video program distributor ("MVPD"). In the legislative history to
    Section 338, Congress made clear that "\[t\]he procedural provisions
    applicable to Section 338 (concerning costs, avoidance of
    duplication, channel positioning, compensation for carriage, and
    complaints by broadcast stations) are generally parallel to those
    applicable to cable systems."[^15] As the legislative history of the
    SHVIA indicates, Congress was concerned that, "without must carry
    obligations, satellite carriers would simply choose to carry only
    certain stations which would effectively prevent many other local
    broadcasters from reaching potential viewers in their service
    areas."[^16] Our satellite carriage rules also reflect Congress's
    desire to provide satellite subscribers with local television
    service in as many markets as possible, but also take into account,
    to the extent possible, the inherent nature of satellite technology
    and constraints on the use of satellite spectrum in the delivery of
    must carry signals. Against this backdrop, we address the six issues
    raised by DIRECTV in its petition, then the two issues raised by
    ALTV in its petition, and, on our own motion, provide clarification
    and amendment to several of the rules governing procedures
    consistent with the legislative intent of Section 338(g).

## DIRECTV's Petition

6.  In its petition, DIRECTV seeks reconsideration of six issues
    concerning: (1) the NCE station carriage requirement applicable to
    satellite carriers; (2) the calculation of satellite carriers' four
    percent (4%) public interest set-aside obligation; (3) satellite
    carriers' obligation to transmit program-related material in the
    VBI; (4) the Commission's "good quality signal" standard applicable
    in the satellite context; (5) satellite carriers' obligation to pay
    the costs associated with a satellite carrier's mid-cycle relocation
    of its receive facilities; and (6) satellite carriers' ability to
    require subscribers to purchase additional equipment. We discuss
    below each of these issues in turn.

### Carriage of Local NCE Stations 

7.  ***Background***. In the *Report and Order*, the Commission held
    that, pursuant to Section 338(c)(2), a satellite carrier "must carry
    all non-duplicative NCE stations in markets where they provide
    local-into-local service."[^17] Section 338(c)(2) of the Act states:
    "The Commission shall prescribe regulations limiting the carriage
    requirements under subsection (a) of satellite carriers with respect
    to the carriage of multiple local noncommercial television broadcast
    stations. To the extent possible, such regulations shall provide the
    same degree of carriage by satellite carriers of such multiple
    stations as is provided by cable systems under Section 615 \[of the
    Act\]."[^18] Pursuant to this latter requirement, the Commission
    examined the NCE carriage obligations for cable systems and the
    appropriateness of its application to satellite carriers. As the
    Commission noted, cable systems are required to carry local NCE
    stations under a statutory provision based on a cable system's
    number of usable activated channels.[^19] Thus, cable systems
    with: (1) 12 or fewer usable activated channels are required to
    carry the signal of one qualified local noncommercial educational
    station; (2) 13-36 usable activated channels are required to carry
    no more than three qualified local noncommercial educational
    stations; and (3) more than 36 usable activated channels are
    required to carry at least three qualified local noncommercial
    educational stations.[^20] In attempting to develop a similar
    formulation for satellite carriers, the Commission determined that
    because DBS operators offer more than 36 channels per market, they
    should carry all nonduplicating NCEs in each DMA in which they offer
    local-into-local service pursuant to the SHVIA compulsory license.

8.  Recognizing that Section 338(c)(2) also requires the Commission to
    limit the carriage of multiple NCE stations in markets where
    local-into-local service is provided, the Commission adopted a
    limitation principle based upon duplicative programming.[^21] Based
    on this principle, until a satellite carrier reaches a threshold of
    three NCE stations in each market, it need not carry any NCE station
    that duplicates the programming of another NCE station in the market
    on a simultaneous basis. Once the satellite provider carries three
    NCE stations in the market, it need not carry any additional NCE
    stations that duplicate programming on a simultaneous or
    non-simultaneous basis.

9.  DIRECTV, in its petition, contends that the Commission's NCE
    carriage requirement does not comport with the language in Section
    338(c)(2) directing the Commission to "prescribe regulations
    limiting" satellite carriers' obligations to carry multiple local
    noncommercial stations.[^22] Further, DIRECTV asserts that the
    Commission's rule causes NCE station carriage to occupy a much
    larger percentage of DBS providers' channel capacity relative to any
    cable system operator in the United States, and that this
    "disproportionate" burden is not consistent with Section 338.[^23]
    DIRECTV asks the Commission to "adopt a specific NCE carriage limit
    for satellite carriers that takes into account the (i) nationwide
    character of satellite-based services, (ii) the finite channel
    capacity of satellite systems, and (iii) the larger local service
    areas of satellite carriers relative to cable operators."[^24]
    DIRECTV recommends that the Commission impose a rule that requires
    the carriage of only one qualified NCE station per DMA, with
    additional NCE stations carried on a voluntary basis.[^25]

10. Public Television Stations and Paxson oppose DIRECTV's proposal.
    Public Television Stations argue that Congress did not intend for
    the Commission to apply more limits on noncommercial station
    carriage by a satellite provider than a cable operator, given
    Section 338(c)(2)'s admonition to the Commission to "provide the
    same degree of carriage by satellite carriers . . . as is provided
    by cable systems."[^26] Further, Public Television Stations state
    that, in light of expected increases in DBS capacity and the
    flexibility the SHVIA affords satellite carriers to determine the
    pace at which they introduce local-into-local service and incur the
    accompanying carriage obligations, it was reasonable for the
    Commission to determine that requiring satellite carriers to carry
    all nonduplicating NCEs in each local market they serve would impose
    a burden on satellite carriers comparable to that borne by cable
    operators under Section 615.[^27] Paxson adds that allowing
    satellite operators to carry just one of the local NCE stations in a
    market would deprive the remaining stations of the ability to reach
    local audiences.[^28]

11. ***Discussion***. We decline to revise our NCE carriage rule, as
    DIRECTV requests. Contrary to DIRECTV's contention, our rule is
    consistent with the plain language of Section 338(c)(2) as it
    requires, "\[t\]o the extent possible, . . . the same degree of
    carriage by satellite carriers . . . as is provided by cable
    systems."[^29] It also promotes parity between DBS and cable by
    assuring that consumers receive via satellite essentially the same
    local channels they would receive if they subscribed to cable.

12. Contrary to DIRECTV's assertion, the standard we developed for the
    NCE carriage obligation also took into consideration the technical
    limitations, as well as the national character, of satellite
    systems, in addition to other factors that differentiate the
    satellite industry from the cable industry. Under our rules, a cable
    system with more than 36 channels must carry all of the first three
    local NCEs in its market, even when the stations transmit
    substantially the same programming at the same time.[^30] The
    limitation on mandatory carriage of NCEs that duplicate only applies
    to additional NCEs when there are more than three local NCEs in the
    cable system's market.[^31] Satellite carriers, on the other hand,
    need not carry any simultaneously duplicative signals. Satellite
    carriers are required to carry up to three local NCEs that do not
    duplicate programming -- with duplication defined as more than 50
    percent of prime time programming and more than 50 percent of
    programming outside of prime time broadcast on a simultaneous basis.
    Once the carrier provides three local noncommercial stations, the
    duplication test becomes the same as for cable -- whether more than
    50 percent of prime time programming and more than 50 percent of
    programming outside of prime time is duplicative on a simultaneous
    or non-simultaneous basis.[^32] Given this standard, our rule does
    address the capacity concerns that DIRECTV raises because the
    foregoing standard prevents satellite capacity from being wasted on
    repetitive programming while ensuring carriage of nonduplicating,
    diverse public stations that respond to the different audiences and
    distinct needs of each community.[^33] In this regard, we agree with
    Public Television Stations and Paxson that the NCE carriage
    formulation proposed by DIRECTV (*i.e*., that we require satellite
    carriers to carry only one qualified NCE station per DMA, with
    additional NCE stations carried on a voluntary basis) would deprive
    satellite subscribers of access to local noncommercial television
    stations in those markets where local-into-local is offered.[^34]

### Public Interest Set-Aside 

13. ***Background***. In 1998, the Commission, in *Implementation of
    Section 25 of the Cable Television Consumer Protection and
    Competition Act of 1992, Direct Broadcast Satellite Public Interest
    Obligations* ("*DBS Public Interest Report and Order*"), adopted
    rules implementing Section 335 of the Act, as amended by the Cable
    Television Consumer Protection Act of 1992 ("1992 Cable Act").[^35]
    The rules require DBS providers to reserve four percent (4%) of
    their channel capacity exclusively for use by qualified programmers
    for noncommercial programming of an educational or informational
    nature.[^36] Channel capacity is determined annually by calculating
    the average number of channels available for video programming on
    all satellites licensed to the provider during the previous year. In
    the *Report and Order*, the Commission addressed DIRECTV's and
    BellSouth's request that satellite carriers be permitted to include
    local NCE stations, carried pursuant to Section 338, in the
    calculation of the set-aside required under Section 335 of the
    Act.[^37] The Commission rejected their request, finding that the
    local NCE carriage requirements of the SHVIA have different purposes
    from the set-aside requirements contained in the DBS public interest
    obligations.[^38] The Commission explained that the Section 338
    provision furthers the goals of localism and nondiscriminatory
    treatment of local television stations, while Section 335 furthers
    the goal of program diversity.[^39] The Commission expressed concern
    that if a satellite carrier were permitted to satisfy the public
    interest set-aside with NCE stations, programming diversity would be
    diminished because all programming currently carried to satisfy the
    set-aside will likely be dropped in lieu of NCE station
    carriage.[^40] Further, the Commission stated that Section 335 would
    also be rendered a nullity if NCE stations, carried under a
    different statutory section, were allowed to satisfy the set-aside
    obligations.[^41]

14. DIRECTV, in its petition, asks the Commission to permit satellite
    carriers to include NCE stations in the calculation of public
    interest programming required to be set aside by satellite carriers
    under Section 335 of the Act.[^42] DIRECTV argues that Congress knew
    of the existence of Section 335 in crafting the satellite must carry
    regime of Section 338, and that "nothing in the text of this latter
    provision suggests that NCE stations should not be counted towards
    the 4% set-aside."[^43] Public Television Stations, the only party
    to respond on this point, disagrees with DIRECTV and urges the
    Commission to affirm its rule on this issue.[^44] Public Television
    Stations agree with the Commission that Congress enacted the public
    interest set-aside requirements under Section 335 and the SHVIA
    local noncommercial station carriage requirements under Section 338
    for different reasons, pursuant to different statutory regimes, to
    carry out different Congressional goals.

15. ***Discussion***. We deny DIRECTV's request for reconsideration of
    this issue. We find that DIRECTV's request that we permit satellite
    carriers to include local NCE stations, carried pursuant to Section
    338, in the calculation of public interest programming required to
    be set aside under Section 335 would not result in compliance with
    Section 335 because carriage of certain stations in a limited number
    of markets does not provide the national scope intended by
    Section 335. Section 338 is not a national but rather a
    market-by-market requirement.[^45] Significantly, the public
    interest set-aside requirement under the 1992 Cable Act focuses on
    educational or informational public interest programming available
    to all subscribers nationally. SHVIA, in contrast, is intended to
    provide satellite subscribers with their local noncommercial
    educational stations. Allowing satellite carriers to count towards
    the national set aside individual local NCE stations provided only
    in their respective local markets would violate Section 335's
    requirement that a direct broadcast satellite service meet the set
    aside requirement "by making channel capacity available to
    *national* educational programming suppliers."[^46] In applying this
    requirement, we have made it clear that eligible public interest
    programming must therefore be available to all subscribers.[^47] We
    also note that DIRECTV is seeking reconsideration of an issue that
    has already been addressed in the *Report and Order*, and that
    DIRECTV has not presented any new arguments that would warrant
    reconsideration of this issue. [^48]

### Programming in the Vertical Blanking Interval 

16. ***Background***. In the *Report and Order*, the Commission,
    pursuant to Section 338(g) of the Act,[^49] applied the current
    cable content-to-be-carried requirements to satellite carriers.[^50]
    The Commission found that satellite carriers had not presented any
    credible argument that would justify treating them differently from
    cable operators in this context. After review of the record, the
    Commission found that "it is technically feasible for satellite
    carriers to carry the current program-related material contained in
    the television station's VBI."[^51] Accordingly, the Commission
    required satellite carriers "to carry the same program-related
    vertical blanking information as cable operators, including but not
    limited to closed captioning, Nielsen rating codes, V-chip
    information and for NCE stations, material necessary for the receipt
    of programs by people with disabilities, as well as education and
    language-related material."[^52] The Commission also required
    satellite carriers to carry the secondary audio programming ("SAP")
    material that accompanies many broadcast television programs.[^53]
    The Commission stated that it would address case by case any
    instances in which new kinds of program-related data in the VBI
    might cause satellite carriers to incur inordinate expenses or to
    change or add a substantial amount of equipment.[^54]

17. In its petition, DIRECTV contends that carriage of "additional" VBI
    material is not "technically feasible" for existing, deployed
    satellite systems.[^55] It states that, "\[a\]part from primary
    video and audio signals and Line 21 closed caption transmissions, it
    is not technically feasible for DIRECTV's DBS system to reliably
    pass through additional material in a usable form from other
    portions of the VBI."[^56] It asserts that the Commission's
    requirement on this issue "could require the replacement of DIRECTV
    equipment for as many as ten million households, resulting in a cost
    of more than 2.8 billion dollars."[^57] DIRECTV asks the Commission
    to reconsider its findings with respect to the ability of existing
    satellite carriers to carry additional VBI material, "at least
    insofar as it applies to satellite systems that are already in
    operation."[^58]

18. In support of its request for reconsideration of this issue, DIRECTV
    submitted a declaration, stating that DIRECTV's system is able to
    carry "Line 21 closed captioning, closed text, XDS, V-chip and any
    other data carried in Line 21."[^59] The declaration further states
    that, currently, "all DIRECTV set top boxes are designed to pass
    through any data stemming from Line 21, fields 1 and 2 of the VBI,"
    but that "\[a\]ny additional data in the VBI will be entirely
    eliminated during the conversion to compressed digital form."[^60]
    DIRECTV does not dispute that it could modify its system in order to
    carry additional VBI data, but asserts that doing so could result in
    "substantial costs and disruption" in retrofitting an existing
    system with millions of customers.[^61] According to the
    declaration, in order to accommodate additional data in the VBI,
    "DIRECTV would have no option but to replace each set top box in
    circulation today for an installed subscriber base of almost ten
    million DBS customers."[^62] The declaration represents that
    "DIRECTV would also need to replace 'mirrored' set top boxes
    (additional boxes serving a particular customer account), set top
    boxes currently in the distribution 'pipeline,' and those set top
    boxes located at the manufacturers' premises."[^63]

19. The broadcast interests generally agree that DIRECTV should not have
    to replace all the set-top boxes currently being used by subscribers
    if it is technically infeasible or prohibitively expensive for
    DIRECTV to do so, but they maintain that DIRECTV should be required
    to comply with the VBI carriage requirement on a going-forward
    basis.[^64] NAB recommends that this requirement become effective in
    six months. Further, it states that the requirement as to new boxes
    should apply both to boxes provided to new subscribers and to
    replacement boxes provided to existing subscribers.[^65] Similarly,
    Public Television Stations recommend that DIRECTV "make available to
    existing subscribers at a reasonable price an upgraded set-top
    capable of receiving additional program-related material, so that
    existing subscribers who would like to receive this material can do
    so."[^66]

20. In response, DIRECTV asks the Commission to reject the broadcasters'
    suggestion that DIRECTV redesign its system and set-top boxes on a
    going-forward basis to deliver additional program-related VBI
    material to subscribers.[^67] It states that the Commission's rule
    with respect to VBI carriage need not be revised, but the Commission
    "simply needs to rescind its finding regarding the technical
    feasibility of satellite carriers carrying additional
    program-related material in the VBI."[^68] DIRECTV suggests that
    "the requirement to carry additional VBI material should only apply,
    as in the cable context, if 'nominal costs, additions or changes of
    equipment are necessary.'"[^69] According to DIRECTV, under this
    standard, "retrofitting the existing DIRECTV system and bearing the
    replacement cost of subscribers' set-top boxes to accommodate
    additional VBI material is not technically feasible."[^70]

21. ***Discussion***. Section 338(g) of the Act states that, "\[t\]he
    regulations prescribed \[under Section 338\] shall include
    requirements on satellite carriers that are comparable to the
    requirements on cable operators under Sections 614(b)(3) . . . . and
    615(g)(1)."[^71] Section 614(b)(3) states that, "\[a\] cable
    operator shall carry in its entirety . . . the primary video,
    accompanying audio, and line 21 closed caption transmission of each
    of the local commercial television stations carried on the cable
    system and, to the extent technically feasible, program-related
    material carried in the vertical blanking interval or on
    subcarriers."[^72] Section 615(g)(1) applies a similar requirement
    to the contents of noncommercial educational stations.[^73] In the
    cable context, with regard to the \"technical feasibility\" of the
    carriage of program‑related material in the VBI or on subcarriers,
    the Commission stated in *Implementation of the Cable Television
    Consumer Protection and Competition Act of 1992: Broadcast Signal
    Carriage Issues* ("*Cable Must Carry Report and Order*") that such
    carriage should be considered \"technically feasible\" if only
    nominal costs, additions or changes of equipment are necessary in
    order to carry such material.[^74] In the *Report and Order* the
    Commission expressed its view that, based on the record presented,
    it was technically feasible for satellite carriers to carry the
    program-related material currently carried in a television station's
    VBI.[^75] The *Report and Order* declined to rule on new kinds of
    program-related data in the VBI or on subcarriers indicating that
    these issues would be addressed in the future on a case-by- case
    basis.[^76] DIRECTV's petition addresses the carriage of such
    additional VBI material and does not dispute the feasibility of
    carrying the data in line 21. We conclude, for the reasons set forth
    below, that it is unnecessary to revise the rule requiring satellite
    carriers to carry in its entirety the primary video, accompanying
    audio, and closed-caption data contained in line 21 of the VBI and,
    to the extent technically feasible, program-related material carried
    in the VBI or on subcarriers.[^77]

22. We find no reason to reconsider these decisions since it was not the
    Commission's intention to require satellite carriers to carry
    program-related material in the VBI if it is not "technically
    feasible" for satellite carriers to do so. DIRECTV indicates that
    its system is able to carry line 21 closed captioning, closed text,
    XDS, V-chip information, "TSID" data and extended service packets on
    line 21. Neither DIRECTV nor the broadcast parties commenting on
    this issue have been specific as to what additional information
    that, if made the subject of a carriage request, would be
    jeopardized by the current system limitations described by
    DIRECTV.[^78] In these circumstances, we believe it is generally
    appropriate to apply the "technically feasible" standard as
    previously articulated in the cable context, but that it is not
    appropriate to attempt to rule on any additional or future VBI
    service without more specific information.[^79] We note, however,
    that most of the costs that DIRECTV claims it would have to bear as
    the consequence of any additional carriage obligation, totaling some
    \$2.8 billion, relate to replacing the integrated receiver/decoders
    that are currently used to receive DIRECTV service. In the future,
    any claim of technical infeasibility should address separately the
    technical issues involved with the transmission of the material in
    question as opposed to its reception and management in the
    receiver/decoder and the extent to which each set of issues is under
    the control of the satellite provider.

23. On a different, but related point, DIRECTV argues that satellite
    carriers should not be required to carry programming material of a
    "must carry" station if inclusion of such type of material is not
    covered by the retransmission consent agreements reached by that
    carrier with other stations in the local market in question.[^80] We
    find no authority in Section 338, and DIRECTV has not presented any,
    to support DIRECTV's request. The terms negotiated by retransmission
    consent stations for the carriage of program-related material cannot
    be used to undermine Congress's directive that the Commission adopt
    satellite carriage requirements that are comparable to the cable
    carriage requirements, which explicitly mandate the carriage of
    program-related material. We therefore reject DIRECTV's request that
    we establish separate VBI requirements for must carry and
    retransmission consent stations.

### Good Quality Signal Standard

24. ***Background***. Section 338(b)(1) of the Act requires a television
    broadcast station asserting its right to carriage to bear the costs
    associated with delivering a "good quality signal" to the satellite
    carrier's receive facility.[^81] In the cable context, Congress
    defined a signal strength standard that would equate to a good
    quality signal.[^82] In the satellite context, however, Congress did
    not define specific signal levels that local stations must deliver
    to satellite carriers, and apparently left that determination to the
    Commission. In determining what constitutes a "good quality signal,"
    as that term is used in Section 338, the Commission, in the *Report
    and Order*, found that the signal quality parameters under Section
    614 of the Act and Section 76.55 of the Commission's cable
    regulations were appropriate in the satellite carriage context.[^83]
    The Commission noted that, under the current cable carriage regime,
    television broadcast stations must deliver either a signal level of
    --45dBm for UHF signals or --49dBm for VHF signals at the input
    terminals of the signal processing equipment, to be considered
    eligible for carriage.[^84] The Commission determined that
    application of the same standard to the satellite carriage context
    was appropriate, given that the standards that have been applied to
    cable operators "have functioned well since the inception of the
    statutory carriage requirements seven years ago."[^85] Additionally,
    the Commission did not find evidence in the record to suggest that
    the cable signal quality standard will not prove equally
    satisfactory in the satellite context.[^86] In providing a good
    quality signal, the Commission concluded that television stations
    may use any delivery method (*e.g*., microwave transmission, fiber
    optic cable, or telephone lines) to improve the quality of their
    signals to the satellite carrier as long as they pay for the costs
    of such delivery mechanisms.[^87]

25. In its petition for reconsideration, DIRECTV asks the Commission to
    change its signal quality standard and "compel any station seeking
    carriage to provide a signal that meets the requirements of GR-388
    CORE, TV1 for \<20 route miles."[^88] DIRECTV asserts that the cable
    standard the Commission adopted will not allow satellite carriers to
    make efficient use of their allocated bandwidth and that it will
    increase the likelihood of signal degradation.[^89] It argues that
    the adoption of the cable signal quality standard in the satellite
    context is based on "unsupported speculation that a higher standard
    may prove 'prohibitively expensive' for small television stations to
    meet."[^90] DIRECTV also argues that there are no statutory limits
    on broadcasters' costs for providing a good quality signal.
    Furthermore, DIRECTV insists that the record contained "ample
    evidence" that satellite carriers must receive a TV-1 quality
    signal.[^91] According to DIRECTV, requiring a TV-1 quality signal
    is "critical" to differentiating DBS from cable television.[^92]
    DIRECTV maintains that it markets its services on the basis of
    providing a higher quality signal than cable, and that, without
    having a higher standard for what constitutes a good quality signal
    in the satellite context, its marketing advantage will be severely
    undercut. DIRECTV asserts that the use of compression systems based
    on the Moving Pictures Experts Group ("MPEG-2") standard requires
    signals that meet the requirements of GR-338 CORE, TV1 for \<20
    route miles.[^93] It further asserts that all of the local stations
    that are currently carried by DIRECTV meet the TV-1 quality standard
    and are delivered to DIRECTV's local receive facilities using a
    dedicated fiber circuit.[^94] DIRECTV insists that any station
    seeking carriage should be required to meet the same standard, thus
    ensuring a "good quality" satellite signal.

26. ALTV, NAB, NASA, Paxson, and Public Television Stations are
    unanimous in urging the Commission to reject DIRECTV's request for
    reconsideration of the "good quality signal" standard adopted in the
    *Report and Order*. ALTV points out that DIRECTV has not presented
    any new evidence to justify reconsideration of the issue.[^95] ALTV
    asserts that Section 338's legislative history requires the
    Commission to enact regulations that are similar to those applied to
    the cable industry, and that the "good quality signal" standard
    applicable to the cable industry "is more than a sufficient signal
    strength to provide a top quality signal to either a cable headend
    or a satellite receive facility."[^96] NAB asserts that DIRECTV's
    claims are inconsistent with those of another major DBS company
    (*i.e*., EchoStar), which has stated that a fiber-optic TV-1 signal
    is not the only method of delivering a usable local station signal
    to a satellite carrier.[^97] Further, NAB points out that DIRECTV's
    claims are also inconsistent with the views of two other satellite
    carriers (*i.e*., BellSouth and LTVS) that filed comments in the
    rulemaking proceeding.[^98] NAB asserts that imposing a fiber optic
    cable requirement \-- in order to deliver a TV-1 signal \-- on local
    stations seeking carriage would also result in a large disparity
    between the regulatory regimes applicable to cable systems and to
    satellite carriers.[^99] NASA asserts that the costs associated with
    complying with a TV-1 standard for local television stations would
    be "excessive."[^100] Paxson states that broadcasters should not be
    required to "subsidize" DIRECTV's competitive efforts.[^101] Paxson
    contends that DIRECTV's proposals were not intended by Congress.
    Public Television Stations state that DIRECTV is "free to insist on
    TV-1 delivery for its own technical reasons, but it should bear the
    costs associated with such transmission."[^102]

27. In reply, DIRECTV maintains that a "good quality signal" for
    satellite carriage purposes is not and should not mean the same
    thing as "good quality signal" in the cable carriage context.[^103]
    It states that "it makes little sense for the Commission to adopt a
    signal quality standard used by cable operators, which are the very
    incumbents for whom Congress and the Commission are seeking to
    promote competition against in terms of price and service, including
    signal quality."[^104] DIRECTV also states that broadcasters do not
    dispute DIRECTV's observation that "substandard local broadcast
    signals supplied to a satellite carrier's MPEG encoder will demand
    more channel capacity than TV-1 quality signals and will degrade the
    picture quality on all other channels utilizing the same
    transponder."[^105] DIRECTV responds that broadcasters' concerns
    over the cost of implementing TV-1 as a standard are "vastly
    overstated."[^106] It asserts that the statute does not place any
    limits on the expenses that broadcasters are required to bear in
    order to deliver a good quality signal to the local receive
    facility.[^107] Furthermore, DIRECTV states that this expense is not
    being forced on broadcasters, and that broadcasters are free to
    forego satellite carriage altogether.[^108] DIRECTV states that,
    contrary to NAB's statements, it is not its position that fiber
    optic cable is the only method of delivering a usable local station
    to a satellite carrier; rather, while the use of fiber optic cable
    is the easiest and most conventional method of ensuring that the
    TV-1 signal quality standard is met, DIRECTV is not contending that
    other modes of distribution, such as microwave links, should be
    precluded.[^109] In an ex parte submission, DIRECTV further states
    that many broadcast stations "can come close to achieving a TV-1
    quality signal via off-air transmission."[^110] DIRECTV proposes
    that a station transmitting over-the-air would need to improve its
    "as-received" signal-to-noise ("S/N") ratio to meet the proposed
    TV-1 quality fiber standard, and suggests "a signal-to-noise ratio
    of approximately 60 dB."[^111] DIRECTV surmises that broadcasters
    could achieve this S/N "with the addition of commercial noise
    reduction equipment that is relatively inexpensive."[^112]

28. ***Discussion***. We decline to revise the "good quality signal"
    standard adopted in the *Report in the Order*, as urged by
    DIRECTV*.* As noted by ALTV and Paxson, DIRECTV made the same
    request in its initial comments in the proceeding which the
    Commission reviewed and rejected.[^113] As reflected in the *Report
    and Order*, the Commission has already considered DIRECTV's request
    that the Commission define "good quality signal" as one that will
    facilitate efficient MPEG compression of all channels, and that the
    signal must meet the requirements of GR-388 CORE, TV1 for \<20 route
    miles.[^114] The Commission, however, declined to adopt DIRECTV's
    good quality signal proposals for the following reasons:

    First, we believe that the TV1 standard is too rigid a construct.
    Specifically, a signal-to-noise ratio of +67 dB cannot be easily
    implemented by most television broadcast stations. Broadcasters do
    not have to meet such exacting ratios and levels when delivering
    signals to a cable operator's headend to qualify for carriage.
    Moreover, as NAB points out, satellite carriers, such as EchoStar,
    have been retransmitting local television signals that they have
    received over-the-air . . . . We also note that it would be
    prohibitively expensive for a small television station to lease a
    dedicated TV1 circuit from a telecommunications carrier. It is not
    our intention to impose inordinate costs on small television
    stations that would prevent them from being carried by a satellite
    carrier.[^115]

29. In reviewing DIRECTV's petition, we find that DIRECTV has not
    presented new evidence that warrants changing the good quality
    signal standard already adopted to a TV-1 quality signal,[^116]
    which NAB and ALTV refer to as an "essentially perfect
    signal."[^117] DIRECTV, in an ex parte letter, suggests that "a
    number of" TV stations "can come close" to achieving a 67 dB S/N
    ratio.[^118] By "coming close," DIRECTV means a S/N ratio of
    "approximately 60 dB," and says that even achieving that S/N ratio
    with an over-the-air signal will, in many cases, require the
    purchase of additional noise reduction equipment.[^119] While lower
    than the 67 dB S/N ratio that DIRECTV initially requested, we agree
    with NAB and ALTV that "a 60 dB signal-to-noise \[ratio\] would
    still force stations to deliver to DBS firms a virtually perfect
    signal, rather than the good quality signal that the SHVIA requires
    stations to provide to satellite carriers and that the Cable Act
    requires stations to provide to cable systems (including cable
    systems that provide digital service)."[^120] Moreover, we note that
    DIRECTV proposes requiring a S/N ratio of 60 dB but does not clarify
    what signal strength level would satisfy the "strong, high quality
    broadcast signal" or whether the intention is to combine the -49dBm
    for VHF signals and -45dBm for UHF signals with a 60 dB S/N ratio.
    Additionally, DIRECTV does not define the "as-received" S/N ratio
    that a broadcast station must deliver, but rather proposes that
    stations must achieve the desired 60 dB S/N through use of noise
    reduction equipment. Furthermore, DIRECTV acknowledges that stations
    with "weaker off-air signals at the local receive facility may not
    be able to meet the TV-1 (or 60 dB ) standard via off-air
    transmission" and recommends that broadcasters can pay \$14,000 per
    year to lease a TV-1 line to accommodate the standard
    proposed.[^121] As the Commission previously stated, however,
    "\[i\]t is not our intention to impose inordinate costs on small
    television stations that would prevent them from being carried by a
    satellite carrier."[^122]

30. With respect to DIRECTV's claims about the potential for diminished
    capacity under the current good quality signal standard, we are
    unable to make a meaningful evaluation of this claim based on the
    record. DIRECTV, in its June 25, 2001 Ex Parte Letter, explains that
    if each video frame is similar to the next, then only "a small
    amount of 'difference' information is required for the second frame"
    and states that "noise is the enemy of compression."[^123] DIRECTV
    further explains that, in a compression system, it is difficult to
    differentiate between intended activity and undesirable background
    noise. It states that such excessive background noise will "consume
    valuable transmission capacity thus causing the desired picture to
    be degraded."[^124] On this point, we note that DIRECTV, however,
    did not establish the amount of picture degradation that could
    result. DIRECTV asserts that tests conducted in its lab "show that
    one channel with a 50 dB weighted signal-to-noise ratio will consume
    25% more bandwidth than the same program with a 67 dB
    signal-to-noise ratio."[^125] DIRECTV, however, did not submit
    information as to how these tests were conducted and how capacity
    would be affected if we retain the signal strength standard
    established in the *Report and Order* versus adopting its proposed
    60 dB S/N standard. Further, we see merit in NAB's and ALTV's
    response on this issue that a "DBS firm can set a cap on the number
    of bits that will be allocated to any one channel, thus ensuring
    that there will be no effect on any other channel through the
    statistical multiplexing process."[^126]

31. Although DIRECTV clarifies, in its reply, that microwave
    transmissions may be used in lieu of fiber optic cable to achieve a
    TV-1 quality signal, it appears to expect that microwave spectrum is
    available everywhere. Moreover, DIRECTV provided no standard or cost
    analysis for such an alternative.

32. DIRECTV has not provided sufficient evidence to demonstrate that the
    good quality signal standard used in the cable context is inadequate
    or inappropriate in the satellite context. As NAB and ALTV point
    out, "many cable systems (like DBS firms) now provide digital
    service, but that has *not* resulted in any change in the quality of
    the signal that stations are required to provide to cable headends.
    As before, stations are still required to provide cable systems with
    a 'good quality,' but not a flawless, signal to cable
    systems."[^127] The good quality signal standard \-- in either the
    cable or satellite context \-- ensures that a signal available to
    over-the-air viewers will receive carriage. We continue to believe
    that the standard used for cable is appropriate in the satellite
    context as well. The signal standard must be one that can be
    measured and can be satisfied by over-the-air delivery.[^128] We
    believe that the goal of preserving over-the-air local television,
    which underlies the carriage requirements in the Communications Act,
    would be disserved by a signal quality standard that cannot be
    satisfied by over-the-air delivery.[^129] Furthermore, as indicated
    in the *Report and Order*, the Commission was compelled to reject
    the TV-1 standard because, among other reasons, many television
    broadcast stations would have difficulty implementing the
    standard.[^130] We believe that imposing an exacting standard that
    exceeds the level necessary would inhibit many local stations'
    ability to qualify for carriage with a satellite carrier, when the
    same stations can qualify for carriage with a cable operator. If we
    adopted DIRECTV's proposal to require broadcasters to meet a 60 dB
    signal-to-noise ratio, we would be creating disparate schemes for
    satellite and cable. Moreover, to the extent that cable operators
    have upgraded their systems and equipment since the 1992 Cable Act,
    they have been bearing the costs of improving some broadcasters'
    signal quality to meet the cable system's higher standards and
    subscribers' higher expectations.[^131] Because the good quality
    signal standard is statutory for cable systems, we cannot revise it.
    Creating such a disparity for cable versus satellite subscribers, as
    well as for broadcast stations, is not what Congress contemplated in
    Section 338.

### Relocation of Local Receive Facilities Mid-Cycle

33. ***Background***. In the *Report and Order*, the Commission
    concluded that, as a general matter, a satellite carrier may
    relocate the designated local receive facility[^132] at the
    beginning of an election cycle (*i.e*., at the time broadcast
    stations must elect either must carry or retransmission
    consent).[^133] The Commission stated that satellite carriers should
    have the flexibility to change their designated local receive
    facility or alternative facility, and required satellite carriers to
    provide 60 days advance notice to all local stations of such a
    change. In affording satellite carriers this flexibility, however,
    the Commission was concerned that the relocation of a local receive
    facility, if done mid-cycle, may make it more difficult for some
    television stations to pay the unanticipated costs of delivering a
    good quality signal. Accordingly, the Commission determined that if
    a satellite carrier decides to relocate its local receive facility
    in the middle of an election cycle (*i.e*., after the time for
    electing must carry or retransmission consent during an election
    cycle has expired), it should pay the television stations' costs to
    deliver a good quality signal to the new location.[^134]

34. DIRECTV contends that the costs of delivering a good quality signal
    in the context of the relocation of local receive facilities
    mid-cycle by satellite carriers should be borne by broadcasters, not
    satellite carriers.[^135] DIRECTV argues that "nowhere in the text
    of the statute or in its legislative history did Congress express
    the intent that satellite carriers should be required to pay the
    costs of delivering a station's signal under any
    circumstances."[^136] Further, DIRECTV asserts that, because of the
    expense involved in establishing a local receive facility, it is
    unlikely that a satellite carrier will move its facility voluntarily
    "unless unforeseen circumstances make relocation absolutely
    necessary."[^137]

35. ALTV, NAB, NASA, Paxson, and Public Television Stations, on the
    other hand, are unanimous in asking the Commission to reject
    reconsideration of this issue. These parties agree that the
    Commission correctly interpreted the requirements of the SHVIA in
    requiring satellite carriers to pay for the costs of delivering a
    good quality signal if the carrier changes its facility
    mid-cycle.[^138] They also argue that if television stations are
    required to incur costs associated with a satellite carrier's
    decision to move its local receive facility mid-cycle, then local
    stations will be forced to incur additional, significant, and
    unforeseen costs, and that these additional costs could prevent a
    station from getting its signal to the new receive facility.[^139]
    Paxson, for one, asserts that, "\[u\]nder DIRECTV's proposal, a
    satellite operator could specify alternative receive sites multiple
    times during an election period (with the concurrence of just
    one-half of the local broadcast stations), thus imposing
    unpredictable and insurmountable expenses on must-carry
    stations."[^140]

36. ***Discussion***. The Commission's prior interpretation of the
    statute is reasonable and consistent with the purpose of the SHVIA.
    It is within the Commission's discretion to interpret "designated"
    facility, as that term appears in Section 338(b), as the facility
    for which the carrier gives a station notice before the station
    makes its carriage election.[^141] The carrier thus cannot change
    the "designated" facility to which the broadcaster can be held
    responsible for delivering its good quality signal until it comes
    time to make a carriage election for the next election cycle. If the
    satellite carrier, however, does make such a change mid-cycle, even
    as a result of unforeseen events, it is only reasonable to require
    it to bear any new capital costs and incremental ongoing expenses
    required for the delivery of a good quality broadcast signal,
    because the new receive facility was not the one initially
    "designated" and anticipated by local stations. We agree with Public
    Television Stations that this limited burden on carriers protects a
    broadcast station's reasonable expectations of the signal delivery
    costs it will incur if it elects satellite carriage.[^142]

### Extra Equipment for Some Local Signals

37. ***Background***. In the *Report and Order*, the Commission
    interpreted the nondiscrimination provision of Section 338(d) of the
    Act to prohibit satellite carriers from requiring subscribers to
    purchase additional equipment (*e*.*g*., a satellite dish) to gain
    access only to some, but not all of the local signals in a
    market.[^143] This determination was made in response to concerns
    over the possible discriminatory treatment that television stations
    electing mandatory carriage might receive; that is, a concern that a
    satellite carrier may place mandatory carriage stations on a
    satellite that would require a subscriber to purchase another dish
    and/or other equipment to receive such signals, which would
    effectively inhibit the ability of local stations to reach potential
    viewers. In addressing this issue, the Commission found that "the
    language of Section 338(d) covers the additional equipment concerns
    raised by the parties and bars satellite carriers from requiring
    subscribers to purchase additional equipment when television
    stations from one market are segregated and carried on separate
    satellites."[^144] As the Commission explained, this interpretation
    does not prohibit a satellite carrier from requiring a subscriber to
    pay for additional equipment in order to receive all television
    stations from a single market.[^145] To illustrate the application
    of the rule, the Commission noted: "For example, DIRECTV may require
    an additional dish to receive all television stations from the
    Baltimore market, but it may not require subscribers to purchase the
    same to receive some Baltimore stations where the others are
    available using existing equipment."[^146]

38. In its petition, DIRECTV contends that Section 338(d) does not
    unduly restrict satellite carriers from offering local-into-local
    service through the use of different orbital positions, with
    multiple dishes if necessary.[^147] It argues that the Commission's
    interpretation of Section 338(d) on this issue conflicts with
    Congressional intent.[^148] It asserts that Congress considered this
    precise question and decided to delete draft statutory language that
    would have imposed the very restriction that the Commission found in
    the statute.[^149] DIRECTV surmises that Congress contemplated
    restricting the satellite carriers' ability to segregate local
    stations on two satellites and require two receive antennas, but
    must have rejected the idea because it later deleted the proposed
    language.[^150] DIRECTV states that it has been "innovative" in
    using multiple orbital locations to offer competitive multichannel
    services to consumers. It contends that the SHVIA was not intended
    to constrain this innovation, and that it "does not prohibit
    satellite carriers from offering local-into-local services from
    multiple locations, with multiple dishes if necessary, where it
    makes business and technical sense to do so."[^151]

39. None of the other parties in the instant proceeding support
    DIRECTV's position on this issue.[^152] ALTV, for example, contends
    that the Commission's construction of Section 338(d) "is fully
    consistent with the letter and spirit of the legislation." ALTV
    explains:

    Congress was primarily concerned with the discriminatory effect of
    carrying only the major network stations. If enacted, DIRECTV's plan
    would permit a satellite carrier to package some local signals with
    hundreds of other channels, while placing other local signals on a
    different satellite and forcing consumers to purchase extra
    equipment to access these signals. Such a result is contrary to the
    express non-discrimination language in section 338 as well as the
    legislation's intent.[^153]

    NAB argues that "even if the omitted language had (despite its
    language) been aimed only at preventing purchase of extra equipment
    for stations carried under Section 338, the Commission correctly
    concluded that the nondiscrimination language of Section 338
    adequately covered this point with or without the omitted
    language."[^154]

40. ***Discussion***. We decline to reconsider this issue. DIRECTV's
    arguments were squarely before us when we made our determination
    that Section 338(d)'s nondiscrimination provision bars satellite
    carriers from discriminating against some broadcast stations by
    requiring subscribers to purchase additional receiving equipment in
    order to access some, but not all, local signals.[^155] DIRECTV has
    not presented any new facts or arguments to convince us to change
    our interpretation of Section 338(d) as it concerns this issue.
    Indeed, as reflected in the *Report and Order*, the Commission
    considered the very same line of legislative argument that DIRECTV
    now makes, which EchoStar previously made:

    EchoStar comments that one of the obligations advocated by the NAB
    -- that local stations be available from the same orbital location
    -- is tantamount to a provision that had been included in draft
    legislation prior to the passage of SHVIA. EchoStar states that such
    provision, which was dropped from the final version of Section 338,
    would have barred satellite carriers from transmitting local
    stations in a manner that would require additional reception
    equipment. EchoStar argues that the Commission cannot implement a
    rule similar to this provision when Congress decided not to include
    such a requirement in the SHVIA.[^156]

    In response, the Commission held "that the language of Section
    338(d) covers the additional equipment concerns raised by the
    parties and bars satellite carriers from requiring subscribers to
    purchase additional equipment when television stations from one
    market are segregated and carried on separate satellites."[^157] The
    Commission's rule on this issue is intended to prohibit satellite
    carriers from placing mandatory carriage television stations on a
    satellite if that would require a subscriber to purchase equipment
    additional to what is needed to receive other local stations in the
    same market, and, at the same time, placing retransmission consent
    stations on another satellite that does not require subscribers to
    purchase any additional equipment.[^158]

41. We agree with Public Television Stations that DIRECTV, in any event,
    misinterprets the legislative history of SHVIA in arguing that it
    should be permitted to require subscribers to use two separate
    dishes to receive the full package of local channels.[^159] When
    Congress adopted the SHVIA, it rejected language that said
    subscribers could not be required to install an additional dish to
    receive any local signals. The legislative drafting change cited by
    DIRECTV involved a deletion of a much broader limitation on
    satellite carriers than what the Commission adopted under the
    general anti-discrimination language that survived. The legislative
    drafting change, at most, indicated that Congress did not want to
    prohibit satellite carriers from requiring additional dishes
    generally, but the change does not imply that Congress wanted to
    allow satellite carriers to require additional dishes if such a
    requirement created discriminatory effects. We believe that a
    limited prohibition on requiring subscribers to obtain a separate
    dish to receive some local signals when other local signals are
    available without the separate dish is necessary to give full effect
    to local station carriage requirements. Otherwise, as Public
    Television Stations argue, satellite carriers could structure local
    station packages and separate dish requirements to discourage
    consumers from subscribing to certain local stations, including
    local noncommercial stations. For the foregoing reasons, we affirm
    our rule prohibiting satellite carriers from requiring subscribers
    to purchase additional equipment to gain access only to some, but
    not all of the local signals in a market.

## ALTV's Petition

42. In its petition, ALTV seeks reconsideration of issues
    concerning: (1) the a la carte sales of local signals; and (2) the
    determination of which stations are eligible to vote on an
    acceptable receive facility. In their separate pleadings, NAB, NASA,
    Paxson, and Public Television Stations submitted arguments in
    support of ALTV's position on these issues. Below, we discuss these
    two issues.

### A La Carte Sales of Local Signals

43. ***Background***. In the *Report and Order*, the Commission held
    that Section 338 does not require satellite carriers to sell all
    local television stations as one package to subscribers, as
    broadcast interests had urged in their comments.[^160] The
    Commission found that Congress did not intend to establish a basic
    service tier-type requirement for satellite carriers when it
    implemented Section 338, and that Congress did not explicitly
    prohibit the sale of local television station signals on an a la
    carte basis. The Commission determined that, instead, Section 338's
    anti-discrimination language prohibits satellite carriers from
    implementing pricing schemes that effectively deter subscribers from
    purchasing some, but not all, local television station signals.
    Thus, the Commission stated, "a satellite carrier must offer local
    television signals, as a package or a la carte, at comparable
    rates."[^161]

44. ALTV seeks reconsideration of this issue. NAB, NASA, Paxson, and
    Public Television Stations submitted arguments, similar to those
    that ALTV makes, in support of reconsideration. ALTV and other
    parties contend that the Commission's decision to allow a la carte
    pricing of local stations could result in discrimination against
    local stations and run counter to the SHVIA's anti-discrimination
    requirements.[^162] They ask the Commission to require all local
    signals to be included in a single package in order to ensure that
    consumers have access to all local stations. ALTV insists that this
    change to the Commission's rule is needed because of its concern
    that a satellite carrier, through its packaging and pricing
    decision, could influence the availability of, and access to, local
    channels. NAB states that "allowing satellite carriers to adopt
    differential pricing policies for 'favored' and 'disfavored' local
    channels directly contravenes the statutory prohibition on
    discriminatory pricing."[^163] Further, NAB asserts that authorizing
    a la carte pricing for local stations "would allow satellite
    carriers to demote some local stations to second-class status in a
    manner that cable systems could never dream of -- namely, selling a
    handful of stations in a market as a package, while offering the
    smaller stations in the market only on an a la carte basis, which
    predictably will be purchased by far fewer subscribers."[^164]

45. DIRECTV opposes reconsideration of this issue, contending that the
    Commission correctly concluded that the SHVIA does not require
    satellite carriers to sell all local television signals in a single
    package to subscribers.[^165] It argues that ALTV fails to trace its
    proposed "unitary package" rule to any express textual requirement
    of the SHVIA.[^166] It states that, in declining to mandate a
    "unitary package" of local channels, the Commission is promoting an
    increase in the range of choice in local programming, not decreasing
    the range of choices as ALTV suggests.[^167] It asserts that it may
    be that a unitary package is the best way to provide satellite
    carrier subscribers with local signals, as ALTV suggests, or it may
    be that offering local signals a la carte is preferable, but "the
    public will be well served by allowing the multichannel marketplace
    and satellite carrier business decisions to govern how local signals
    are packaged."[^168]

46. ***Discussion***. We deny ALTV's request for reconsideration of this
    issue. As reflected in the *Report and Order*, the Commission
    considered and rejected the precise argument that ALTV is asking us
    to reconsider. Neither ALTV nor the parties that support ALTV on
    this issue has submitted new arguments or facts to warrant
    reconsideration of our decision that satellite carriers should not
    be required to offer local stations only as a single package. We
    find nothing in the statute that prohibits satellite carriers from
    offering local stations on an individual a la carte basis to the
    extent the carrier is not using this method of packaging to
    discriminate against local stations. As DIRECTV points out, and we
    agree, Congress could have created a requirement that satellite
    carriers must sell local stations to its subscribers as a single
    package, but it did not do so. The relevant part of Section 338
    requires only that a satellite carrier provide access to a local
    television station's signal "at a nondiscriminatory price" and
    access "in a nondiscriminatory manner on any navigational device,
    on-screen program guide, or menu."[^169] Neither of these
    requirements prohibits satellite carriers from offering local
    television signals to consumers on an a la carte basis, and we
    believe that allowing a satellite carrier the flexibility to offer
    local television station signals to its subscribers on an a la carte
    basis promotes consumer choice.

47. ALTV faults our decision to implement the statutory prohibition on
    discriminatory pricing by requiring that satellite carriers offer
    broadcast stations at "comparable rates." ALTV argues that the
    discriminatory pricing prohibition must translate to a prohibition
    of a la carte offerings and a requirement for a single package of
    local signals. We used the term "comparable" in the *Report and
    Order* to explain that "non-discriminatory" need not mean identical.
    That is, although the charges need not be the same, they should be
    within a nondiscriminatory range. The pricing should be based on
    relevant economic factors applied in a nondiscriminatory fashion
    that does not result in discriminatory treatment of any station or
    stations, such as pricing so as to effectively deter subscribers
    from purchasing some, but not all, local television station signals.
    We recognize that comparable pricing may require further
    clarification on a case-by-case basis, and that in most cases local
    stations should be offered to subscribers at the same or nearly
    identical prices. We are, however, unwilling at this time to require
    identical pricing for each local station carried and will evaluate
    on a case-by-case basis any complaints alleging discrimination
    prohibited by Section 338.

48. We clarify here that although the statute does not prohibit
    satellite carriers from offering stations on an a la carte basis at
    comparable rates, we believe that a prohibited discriminatory effect
    would result if carriers created a mix of one or more packages for
    some stations while offering other stations only individually
    (*e.g*., creating a package of six local stations and offering other
    local stations only on an individual a la carte basis, or creating
    two separate packages of different local stations). Allowing
    satellite carriers to offer some stations as a package and others on
    an a la carte basis could operate as a deterrent to the purchase of
    certain local stations without furthering consumer choice. We
    believe that this is one of the very discriminatory results that
    Section 338 sought to prohibit. In contrast, we do not believe it
    would be discriminatory for a satellite carrier to offer either each
    local station individually *or* a package containing all local
    stations for a price less than or equal to the sum of subscribing to
    each station individually (*e.g*., each of twelve local stations for
    \$1 *or* all twelve stations for \$10).[^170] Thus, if subscribers
    choose to forego a package of local stations that a satellite
    carrier is offering and instead subscribe, for example, to only
    three of the twelve stations that may be offered on an a la carte
    basis, that is an exercise of consumer choice. At the same time,
    other subscribers may choose to select a package that may be cheaper
    than the sum of individual stations.

### Station Eligibility to Vote on Alternative Receive Facility

49. ***Background***. Section 338(b)(1) of the Act requires a television
    station asserting its "right to carriage" under Section 338(a) to
    bear the costs associated with the delivery of a good quality signal
    to the satellite carrier's designated local receive facility or to
    "another facility that is acceptable to at least one-half the
    stations asserting the right to carriage in the local market."[^171]
    In the *Report and Order*, the Commission interpreted the phrase
    "that is acceptable to at least one-half the stations asserting the
    right to carriage in the local market" to mean that a satellite
    carrier may establish an alternative receive facility if "50% or
    more" of those stations in a particular market consent to such a
    site.[^172] The Commission determined that calculation of the "50%
    or more" stations should be based on the majority of stations
    entitled to carriage in each affected market.[^173] The Commission
    reasoned: "Since the 'right to carriage' under Section 338 extends,
    at least initially, to all local television broadcasters, the
    calculation includes *all stations*, whether they elect mandatory
    carriage or retransmission consent."[^174]

50. ALTV asks the Commission to revise its rule concerning this issue.
    ALTV contends that the calculation of the 50% threshold should be
    based on the number of local stations actually electing mandatory
    carriage, and that it should not include those stations that elect
    to proceed via retransmission consent.[^175] ALTV asserts that, if
    stations that elect retransmission consent are allowed to approve an
    alternative receive facility, "stations 'asserting their right' to
    be carried under the signal carriage rules will be harmed," because
    of the costs associated with having to transport their signals to a
    distant location.[^176] NAB and Public Television Stations submitted
    similar arguments in support of ALTV's position on this issue.[^177]
    DIRECTV, on the other hand, which opposes reconsideration of this
    issue, asserts that ALTV simply "rehashes" its position on an issue
    that the Commission has already addressed, and contends that the
    Commission's rule is based on a reasonable construction of the
    statute.

51. ***Discussion***. We decline to revise our rule on this issue. As an
    initial observation, we note that the Commission already has
    considered and rejected similar arguments voiced in the initial
    rulemaking. In the *Report and Order*, the Commission stated:

    We disagree . . . with ALTV, which asserts that a non-local receive
    facility may be established if half the local stations electing
    mandatory carriage, rather than retransmission consent, agree to the
    alternate site. Just as we decide that a satellite carrier should
    include both retransmission consent and mandatory carriage local
    stations on the same designated local receive facility, we do not
    distinguish between retransmission consent and mandatory carriage in
    the determination of an acceptable alternative receive facility. . .
    . All stations "asserting a right to carriage," either through
    retransmission consent or mandatory carriage, may participate in the
    consideration of whether an alternative receive facility is
    acceptable.[^178]

52. We recognize that ALTV wishes to ensure that stations electing
    retransmission consent are not permitted to vote in an election
    process that ALTV views as a protection only for must carry
    stations. We disagree, however, that this is the only or the best
    reading of the statute. The relevant language in Section 338(b)(1)
    ("asserting the right to carriage") is not the same as the language
    in Section 338(a)(1), which requires carriage of those local
    stations that "request" carriage.[^179] Nothing in this language
    suggests that a station seeking to participate in the selection of
    an alternative reception site in order to determine its rights under
    the law could not assert that it has a right to carriage in a market
    but thereafter opt to be carried pursuant to retransmission consent.
    In this, as in many other areas, asserting the existence of a right
    need not be the same as proceeding to exercise that right. As the
    process contemplated by the statue commences (and as it plays out in
    subsequent years) there is a set of stations that can assert a right
    to carriage consisting basically of all stations in the market. As
    the process proceeds, this group of stations is divided through the
    carriage election process into stations that request carriage and
    those that proceed under the retransmission consent provisions of
    the law. The assertion of the right and the request for carriage
    pursuant to that right are separate acts. Moreover, since the
    location of the receive facility may inform the station's decision
    to elect must carry or retransmission consent (*e.g*., if the
    receive site is in a location to which the station is confident of
    delivering a good quality signal, it may encourage a mandatory
    carriage election), a logical reading of the phrase in Section
    338(b)(1) of "asserting the right to carriage" would permit a vote
    by all must carry eligibles (including those ultimately choosing
    retransmission consent at the election for the upcoming cycle) prior
    to the election. In addition, since a station's status as a "must
    carry" or "retransmission consent" station may change from election
    cycle to election cycle, and since there may be only one opportunity
    to vote on the alternative receive facility, the best reading of the
    phrase "asserting the right to carriage" would cover those stations
    asserting that they have such a right at the vote, which they may
    then exercise at the upcoming election cycle, or in future election
    cycles. [^180]

53. We note also that there are practical problems associated with the
    ALTV suggested rule. It is not known at the inception of the
    satellite broadcast carriage requirements, when or even if satellite
    carriers will attempt to use alternative receive facilities. If a
    satellite carrier proposes an alternative receive facility after the
    local stations in the affected market have submitted their carriage
    elections but before the carriage cycle commences (*e.g.*, between
    July 1 and December 31, 2001), it could be possible to identify
    stations that have elected mandatory carriage and that satellite
    carriers have agreed to carry. However, if the alternative receive
    facility is proposed at any other time, it is not possible to
    identify which stations have requested mandatory carriage for the
    relevant cycle. We believe the statute neither contemplates nor
    dictates station eligibility requirements that vary according to the
    timing of the satellite carrier's proposal of an alternative receive
    facility. We believe the statute provides us with the flexibility to
    adopt rules that will best address the factual circumstances we
    anticipate and, if warranted, to amend these rules if actions and
    events in practice prove otherwise.

## Issues for Clarification

54. Below, we clarify and modify several requirements adopted in the
    *Report and Order*. We take these actions partly *sua sponte* and
    partly in response to informal telephonic requests for clarification
    of our rules from the public.[^181]

### Refusals to Carry

55. The *Report and Order* implemented the terms of Section 338 with
    respect to bases for refusing a local broadcast station's request
    for mandatory carriage.[^182] To the extent the statutory language
    in Section 338 is similar to the language of Section 614, we
    patterned the rules for satellite carriers on the cable must carry
    rules.[^183] Where possible, we endeavored to leave the details of
    compliance to the affected parties and the marketplace. We expected
    that the parties would act reasonably and not refuse carriage
    without a good-faith basis for doing so. As the parties have
    commenced acting on the carriage procedures set forth in the rules,
    however, we have seen indications that more specific instruction and
    parameters may be necessary. We take the opportunity afforded by
    this *Order on Reconsideration* to clarify our intent and
    expectations more fully. We continue to hope that specific rule
    amendments will not be necessary.

56. The rules we adopted to implement Section 338 govern carriage
    elections and describe the information a station must include in its
    carriage request "to ensure that a satellite carrier has the base
    information it needs to commence the carriage of local television
    stations."[^184] The rules also require satellite carriers to
    respond to must carry elections by accepting or denying carriage and
    providing reasons for denial.[^185] We noted, by way of example,
    that a valid reason for not commencing carriage is "poor quality
    television signal."[^186] In addition, with respect to substantial
    duplication, we noted that a satellite carrier is not required to
    carry stations that broadcast programming that duplicates another
    station carried in the market.[^187] However, a broadcast station
    requesting mandatory carriage is not required to provide evidence
    with its request to prove that it does not duplicate. Indeed, it
    would be difficult or impossible for a station to do so because it
    does not know which other stations in the market have requested
    carriage.[^188] Rather, if the satellite carrier has a reasonable
    basis for asserting that the station substantially duplicates
    another station carried in the market, the carrier should describe
    its basis in sufficient detail to afford the station an opportunity
    to respond.[^189]

57. In the context of carriage elections, we did not require broadcast
    stations to provide information about signal quality nor did we
    require each station electing must carry to first prove to the
    satellite carrier that its signal is of good quality.[^190] Rather,
    we left it to the satellite carrier, in its response to a request
    for mandatory carriage, to notify the station if the request is
    rejected and the reason for refusal is a poor quality signal. If a
    satellite carrier has a reasonable, good-faith basis for believing
    that a station is not delivering a good quality signal to the
    designated receive facility, then it may describe its basis for this
    belief in its response to the station's request for mandatory
    carriage. We do not require in the satellite context, as we did in
    the cable context, that satellite carriers must conduct tests or
    present specific measurements to broadcasters in response to
    requests for mandatory carriage. However, the absence of this
    express requirement should not be taken to imply that the satellite
    carrier is not required to have a reasonable basis for a denial of
    carriage and to convey that information to the broadcast station
    affected.[^191] With respect to the issue of signal quality, a
    station should not be rejected for carriage unless, based on a
    knowledge of the facts and circumstances involved, there are
    engineering reasons for doubting that a good quality signal is
    likely to be available.[^192] Our expectation was that carriers
    would generally be able to readily determine whether the signal of a
    station requesting carriage is being received by the facility's
    reception equipment.[^193] It is implicit in the notification
    requirement, and indeed it is explicit in the statute itself, that
    stations are entitled to carriage if they qualify based on the
    applicable statutory and regulatory provisions. Carriage is not to
    be avoided by denials where there is no legitimate controversy as to
    the station's qualifications.

58. In discussing "disputed" signal quality, the *Report and Order*
    concluded that a satellite carrier is not required to carry a
    station "until" the station provides or pays the costs for a good
    quality signal.[^194] We required that "the signal testing practices
    in the cable carriage context should be generally applied in the
    satellite carriage context."[^195] In the event of a dispute over
    signal quality, we advised parties to look to cable precedent for
    guidance, and we concluded that the broadcast station should pay the
    cost of signal tests if necessary to prove that the signal is of
    good quality.[^196] If, however, the satellite carrier has no
    reasonable basis for contending that the broadcast station does not
    provide a good quality signal, then no test is required.[^197] When
    a carrier has a reasonable basis for asserting that the station is
    not providing a good quality signal, the station has the opportunity
    to improve its over-the-air signal or arrange alternative means of
    delivery. In that case, or if the station responds with a promise to
    provide or pay to provide a good quality signal in the future, we
    encourage the parties to arrange a reasonable time frame within
    which the good quality signal will be provided to avoid long-term
    uncertainty that ties up the carrier's capacity.[^198]

59. We further clarify that rejection of a request for carriage based on
    a broadcast station's "failure" to prove in its initial request for
    carriage that it delivers a good quality signal to the receive
    facility is not a valid ground for refusing carriage. Specifically,
    it has been reported to us that at least one satellite carrier has
    utilized a form letter that rejected carriage requests solely on the
    basis of "failure to prove signal meets legal standard of quality
    necessary for mandatory carriage."[^199] This is not a valid reason
    for rejecting a request for mandatory carriage. Additionally, we are
    informed that the same carrier's form letter also attempts to shift
    the burden to the station requesting carriage to prove that it does
    not substantially duplicate another station that has requested
    carriage.[^200] Such attempts to shift the burden to the station
    requesting carriage do not comply with the rule or the *Report and
    Order.* We believe that stations that have received such form
    letters may appropriately respond by notifying the satellite carrier
    pursuant to Section 76.66(m)(1) that it has failed to meet its
    obligations under the rules.[^201] Such notification by the
    broadcast station should specify how the satellite carrier's
    response failed to comply. For example, in response to a carrier's
    assertion that the station has failed to prove its signal quality, a
    station could provide information that the receive facility is
    within the station's Grade A service contours or that the Individual
    Location Longley-Rice computer model predicts that the station
    delivers a good quality signal to the receive facility. The
    satellite carrier would have 30 days to respond, pursuant to Section
    76.66(m)(2). The carrier could use the response to rescind its
    initial rejection and agree to carry the station or to provide
    specific information as to its basis for asserting that the station
    is not entitled to carriage. This response must state either that
    the station will be carried (*e.g*., as of January 1, 2002 for the
    first election cycle), or provide reasons, including the reasonable
    basis therefor, for not carrying the station as requested.[^202]

60. We also clarify that the 60 days within which a complaint must be
    filed with the Commission pursuant to Section 76.66(m)(6) will
    commence after the satellite carrier submits a final rejection of a
    broadcast station's carriage request, as clarified in this *Order on
    Reconsideration*. If a satellite carrier provides no response to a
    must carry election, the 60 days commences after the time for
    responding as required by the rule has elapsed.[^203] Or, in the
    case of a carrier's failure to provide the second response, as
    described above, the 60 days commences after the 30 days for
    response pursuant to Section 76.66(m)(2) has elapsed. As in the
    cable context, if the parties are negotiating to resolve carriage
    disputes (*e.g*., a station and carrier are planning to conduct a
    signal quality test or to determine alternative means for signal
    delivery), the 60 days does not begin to run until resolution
    efforts have failed, and the satellite carrier has notified the
    station in writing that it will not be carried.[^204] We continue to
    hope that parties will work together to resolve disputes or to
    determine that disputes cannot be resolved by negotiation and that
    Commission action is required.[^205] We note, however, that a
    station that has received an initial rejection letter may file a
    complaint with the Commission within 60 days of receipt if it
    believes that the carrier's apparent resolution efforts are not in
    good faith and are intended primarily to delay or derail legitimate
    carriage.

61. To summarize, as a general and guiding principle, we take this
    opportunity to note that the Act requires satellite carriers to
    carry stations upon request in those markets in which the carrier
    uses the statutory copyright license to retransmit one or more local
    stations. If the satellite carrier has a good faith, reasonable
    basis for refusing carriage, the carrier has the initial
    responsibility to specify that basis and to provide the station with
    adequate information and justification for its refusal. This
    principle applies to any refusal to carry, not only to refusals
    based upon signal quality. It is not consistent with the SHVIA or
    our rules to attempt to place the burden on the broadcast station to
    prove why it is entitled to carriage in the absence of a legitimate
    reason for questioning its eligibility. It is also inconsistent with
    the Act and rules to refuse to provide broadcast stations with
    reasonable and readily available access to the local receive
    facility to conduct signal strength tests as necessary. As in the
    cable context, a satellite carrier that fails to comply with the Act
    and rules, for example by using the notification procedures to
    frustrate the process or delay carriage without justification is not
    acting in the public interest and may be subject to further
    actions.[^206] In addition, in the satellite context, a local
    broadcast station may file a civil action under Section 501(f) of
    the copyright provisions in title 17 to the extent the satellite
    carrier's actions result in a failure to carry a station entitled to
    carriage.[^207]

### Consistent Carriage Elections

62. As indicated in the *Report and Order*, television broadcast
    stations are not required to have the same election requirement \--
    *i.e*., of either retransmission consent or must carry -- between a
    satellite carrier and a cable operator.[^208] This decision was
    based in part on the lack of statutory language requiring television
    stations to make consistent retransmission consent/must carry
    elections for the two types of MVPDs, but also on the service area
    differences between satellite carriers and cable operators.[^209] In
    this *Order on Reconsideration*, we further clarify that where there
    is more than one satellite carrier in a local market area, a
    television station can elect retransmission consent for one
    satellite carrier and elect must carry for another satellite
    carrier. We believe that allowing broadcast stations to elect
    independently is consistent with our goal of promoting competition
    in the MVPD market.

### Retransmission Consent Agreements 

63. Under our rules, a television station must, during the first
    election cycle, notify a satellite carrier by July 1, 2001 of its
    carriage intention if it is located in a market where
    local-into-local service is provided.[^210] Beyond the first
    election cycle, our rules require television stations to make their
    retransmission consent-mandatory carriage election by October 1^st^
    of the year preceding the new cycle for all election cycles after
    the first election cycle.[^211] Commercial television stations are
    required to choose between retransmission consent and mandatory
    carriage by the prescribed date; NCE stations, on the other hand,
    must simply request carriage. A satellite carrier, in turn, must
    respond to a television station's carriage request within 30 days of
    receiving notice (*e.g*., for the first election cycle, by August 1,
    2001), and state whether it accepts or denies the carriage
    request.[^212] If the satellite carrier denies the request, it must
    state the reasons why. We clarify that, absent an agreement by the
    parties to the contrary, if a broadcast station has a retransmission
    agreement that extends into and terminates during an election cycle,
    the station \-- at the end of its contract term with the carrier \--
    will not be entitled to demand must carry if it has not elected must
    carry by the required date (*i.e*., by July 1, 2001 for the first
    election cycle, by October 1, 2005 for the next election cycle,
    etc.). We believe that this clarification is consistent with the
    requirements of the statute that, in the absence of a specific
    request for carriage by the relevant election deadline, a
    broadcaster is deemed to have elected retransmission consent and
    cannot assert a demand for carriage until the next election cycle.

### Amendment of Carriage Request Provisions

64. On our own motion, we take this opportunity to clarify and amend the
    rule provisions concerning carriage election provisions that apply
    to satellite carriers. As described in the *Report and Order*, under
    Section 338, satellite carriers are required to carry broadcast
    stations only "upon request."[^213] The *Report and Order* further
    explains that if an existing station fails to request carriage by
    the election deadline, it is not entitled to demand carriage for the
    duration of that cycle.[^214] The request for carriage is manifested
    by the station's election of must carry by the specified
    deadline.[^215] Section 76.66(d)(1)(i) provides that "a
    retransmission consent-mandatory carriage election made by a
    television broadcast station shall be treated as a request for
    carriage for purposes of this section."[^216] We are concerned that,
    as written, this provision could be misconstrued to mean that an
    election for retransmission consent constitutes a request for
    carriage that necessitates mandatory carriage under the statute. To
    avoid confusion or misinterpretation of this language, we revise
    Section 76.66(d)(1)(i), as follows:

    An election for mandatory carriage made by a television broadcast
    station shall be treated as a request for carriage. For purposes of
    this subsection concerning carriage procedures, the term "election
    request" includes an election of retransmission consent or mandatory
    carriage.

    We will also change the reference from "carriage request" to
    "election request" in Section 76.66(d)(1)(ii) to conform to the
    revision in Section 76.66(d)(1)(i).[^217]

65. In addition, on our own motion, we clarify and amend Section
    76.66(d)(2)(ii), which provides for carriage elections by television
    broadcast stations in new local-into-local markets. This provision
    requires local stations to make elections and requests for carriage
    "in writing, no more than 30 days after receipt of the satellite
    carrier's notice." We note that this provision does not contain the
    same requirements that apply to carriage elections for existing
    local-into-local markets. We believe that certified mail, return
    receipt requested is the preferred method to ensure that broadcast
    stations are able to demonstrate that they submitted their elections
    by the required deadline, and that they were received by the
    satellite carrier.[^218] Therefore, we will amend Section
    76.66(d)(2)(ii) as follows:

    A local television station shall make its election request, in
    writing, sent to the satellite carrier's principal place of business
    by certified mail, return receipt requested, no more than 30 days
    after the station's receipt of the satellite carrier's notice of
    intent to provide local-into-local service in a new television
    market. This written notification shall include the information
    required by Section 76.66(d)(1)(iii).

66. We will also amend Section 76.66(d)(3)(ii), which provides for
    elections and carriage requests for new television stations to be
    consistent with Sections 76.66(d)(1) and (2), as amended.[^219] The
    amended language is as follows:

    A new television station shall make its election request, in
    writing, sent to the satellite carrier's principal place of business
    by certified mail, return receipt requested, between 60 days prior
    to commencing broadcasting and 30 days after commencing
    broadcasting. This written notification shall include the
    information required by Section 76.66(d)(1)(iii).

67. For similar reasons of consistency, we amend Sections 76.66(2)(iv)
    and (3)(iv), that set forth the procedures for new local-into-local
    service and new television stations, respectively. These amendments
    clarify the requirement that satellite carriers respond to elections
    for mandatory carriage within 30 days with notification of either
    agreement to carry or not to carry, along with reasons for the
    latter decision.[^220] These amendments track the requirement in
    Section 76.66(d)(1)(iv).[^221] Section 76.66(d) is amended as
    follows:

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

    \* \* \* \* \*

    (3)(iv) Within 30 days of receiving a new television station's
    election of mandatory carriage, a satellite carrier shall notify the
    station in writing that it will not carry the station, along with
    the reasons for such decision, or that it intends to carry the
    station.

68. In this respect we also note that if a satellite carrier provides
    notification of intent to provide local-into-local service in a new
    market, pursuant to Section 76.66(d)(2)(i), the satellite carrier
    must respond to an election of mandatory carriage, requested
    pursuant to Section 76.66(d)(2)(ii), as required by Section
    76.66(d)(2)(iv), notwithstanding that it has not yet commenced
    local-into-local service in that market. We clarify that the
    satellite carrier is not required to carry a local television
    station that elects mandatory carriage in the new local-into-local
    market until the satellite carrier has commenced such service. We
    amend Section 76.66(d)(2)(iii) accordingly, as follows:

    A satellite carrier shall commence carriage of a local station by
    the later of 90 days from receipt of an election of mandatory
    carriage or upon commencing local-into-local service in the new
    television market.

69. We further clarify that, with respect to determining the satellite
    carrier's principal place of business for purposes of submitting an
    election or carriage request, we believe it would be appropriate for
    a local television station to use a satellite carrier's letterhead
    address or other readily available principal address.[^222] If the
    satellite carrier wishes to designate a particular name or address
    for purposes of receipt of election notices, the carrier bears the
    obligation of providing that information to the local television
    stations no later than 30 days prior to the deadline for election
    and carriage requests. In addition, as in the cable context, the
    local television station's election or request for carriage may be
    signed by any person authorized to make and submit such election on
    behalf of the station.

70. In response to numerous telephone inquiries, we clarify that
    election requests must be sent by the relevant election deadline. In
    the cable context, Section 76.64(h) provides that "on or before each
    must carry/retransmission consent deadline, each television
    broadcast station shall . . . send via certified mail to each cable
    system in the station's defined market a copy of the station's
    election statement with respect to that operator."[^223] The rules
    implementing satellite carriage requirements do not contain the same
    language, and we received no comments on this specific question
    during the rulemaking proceeding. In light of our general goal of
    making the satellite carriage rules comparable and parallel to the
    cable carriage rules, and in the absence of arguments demonstrating
    why the procedures for election notifications should differ, we
    clarify our intent that the election request should be sent by
    certified mail, return receipt by the election date to be effective.
    We hereby amend Section 76.66(d) of our rules to clarify this
    intent, as follows:

    \(4\) Television broadcast stations must send election requests as
    provided in Sections 76.66(d)(1), (2), and (3) on or before the
    relevant deadline.

### Allocation of Costs for Reception Equipment at Receive Facility

71. DIRECTV in an *ex* *parte* meeting and submission requested a
    clarification that it would be permissible for a satellite carrier
    to "pass through to broadcasters the costs incurred on the
    broadcaster side of the demarcation point at the local receive
    facility."[^224] DIRECTV asserts that Section 76.66(g)(2) requires
    the broadcaster to provide a good quality signal "at the input
    terminals of the signal processing equipment."[^225] DIRECTV
    contends that, in the satellite context, "this would mean the input
    to any signal preamplifiers in the antenna downlead. Thus, the
    demarcation point for a station to hand off a 'good quality signal'
    must be at the preamplifier input, which in \[DIRECTV's\] case is a
    junction box at the point where the downleads enter the
    building."[^226] DIRECTV wants to pass through to broadcasters on a
    pro rata basis the costs of providing the rooftop equipment and
    other costs related to signal reception up to the junction box,
    which DIRECTV refers to as the "demarcation point."[^227] DIRECTV
    further explains that the "non-recurring costs" for negotiating roof
    rights, obtaining local permits, mounting antenna masts and
    installing conduit range from \$1,000 to \$45,000 and average
    \$15,000.[^228] DIRECTV estimates average monthly costs for
    maintaining roof rights would be \$2,500.[^229] DIRECTV proposes to
    pass these costs on to the broadcasters in the market, both those
    carried pursuant to retransmission consent and mandatory
    carriage.[^230] In the average case, and assuming ten stations in
    the market, DIRECTV estimates charging each station "a one-time,
    non-recurring charge of \$1,500, and a recurring charge of \$250 per
    month."[^231]

72. In response to DIRECTV's views on this issue, NAB and ALTV, in a
    joint ex parte letter, contend that a station's obligation under the
    Act is only to deliver a good quality signal, "and not to build (or
    rent) a local receive facility for a DBS operator."[^232] NAB and
    ALTV assert that "the roof space on which DIRECTV has erected (or
    plans to erect) antennas is the relevant part of its local receive
    facility; and all that a station is required to do is deliver a good
    quality signal to that location."[^233] Thus, they argue, DIRECTV's
    demand that stations pay for DIRECTV's own real estate costs for
    creation of a local receive facility is "inconsistent with the
    division of responsibility established by Congress in the
    SHVIA."[^234]

73. DIRECTV's proposal and request for clarification raise an issue not
    mentioned in the original proceeding nor in the Petitions for
    Reconsideration. We do not have in the record information that would
    warrant a decision that could potentially impose unexpected expense
    on broadcast stations. We note that, in the cable context, upon
    which the satellite carriage rules generally are based, the cable
    system headends typically include antennas and other receiving and
    processing equipment necessary to receive a broadcaster's good
    quality signal.[^235] We have required cable operators to employ
    good engineering practices with respect to receiving and processing
    the broadcast station's signal.[^236] In the *Cable Must Carry
    Report and Order*, we noted that the television station has the
    obligation to bear the costs associated with delivering a good
    quality signal to the system's principal headend. In this context we
    offered by way of example, "improved antennas, increased tower
    height, microwave relay equipment, amplification equipment and tests
    that may be needed to determine whether the station's signal
    complies with the signal strength requirements, especially if the
    cable system's over-the-air reception equipment is already in place
    and operating properly."[^237] Cable operators are not, however,
    required to bear the burden of improving a broadcast station's
    signal.[^238]

74. In the Order clarifying the *Cable Must Carry Report and Order,* the
    Commission was asked to address whether the broadcaster or the cable
    system should pay for the purchase, installation, and maintenance of
    a special antenna if necessary to receive adequate signal
    strength.[^239] The Commission concluded that the statute specifies
    that a broadcast station must deliver a good quality signal to the
    principal headend of the cable system in order to be entitled to
    mandatory carriage, and, for broadcast stations received at the
    principal headend and carried on the system, the signal quality
    measurements should be made using the existing equipment at the
    headend. For stations that were not carried by the cable system
    prior to the implementation of the carriage rules, the Commission
    concluded that cable operators should measure the signal quality
    using "generally accepted equipment that is currently used to
    receive signals of similar frequency range, type or distance from
    the principal headend" but need not "employ extraordinary measures
    or specialized equipment" for stations not currently carried.[^240]
    The Commission also reiterated what was said in the *Cable Must
    Carry Report and Order* that broadcasters may provide "improved
    antennas" to deliver a good quality signal, that the cable operator
    may not refuse to allow the broadcaster to provide such types of
    equipment, either for measurements or delivery of signals, and that
    broadcasters "shall be responsible for the cost of such specialized
    antennas or equipment. However, cable operators may not shift the
    costs of *routine reception of broadcast signals to those stations
    seeking must-carry status*."[^241] The Commission concluded:
    "Accordingly, we believe that it is appropriate to require a
    broadcast station to pay only for antennas, equipment and other
    needed improvements that are directly related to the delivery of its
    signal and not to contribute to the general maintenance of the cable
    system's facilities."[^242]

75. We believe that for satellite carriers, like cable operators, it is
    reasonable to require that the local receive facility include, for
    example, the roof rights, antennas, towers, and processing equipment
    necessary to receive and process over-the-air good quality signals
    from local broadcasters. We do not believe, therefore, that it is
    consistent with our rules or with the statute to require
    broadcasters to pay for the basic equipment and property
    negotiations necessary to operate a receive facility. However, as in
    the cable context, if a broadcaster would require special or
    additional equipment so that its signal can be received at the
    established level of good quality at the receive facility, then the
    broadcaster is responsible for these additional costs.

# paperwork reduction act of 1995 analysis

76. This *Order on Reconsideration* has been analyzed with respect to
    the Paperwork Reduction Act of 1995 and has been found to contain no
    new or modified information collection requirements on the public.
    The rule revisions we adopt on our own motion are included in the
    approval we obtained from the Office of Management and Budget
    ("OMB").[^243] No further OMB approval is required.

# ORDERING CLAUSES

77. **IT IS ORDERED**, pursuant to Section 405(a) of the Communications
    Act of 1934, 47 U.S.C. § 405(a), and Section 1.429 of the
    Commission's rules, 47 C.F.R. § 1.429, that DIRECTV's Petition for
    Reconsideration and the Association of Local Television Stations'
    Petition for Reconsideration **ARE DENIED**.

78. **IT IS FURTHER ORDERED,** pursuant to Sections 4(i), 4(j), and 303
    of the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i),
    154(j), and 303, that the amendments to rule 47 C.F.R. § 76.66
    discussed in this *Order on Reconsideration* and set forth in
    Appendix A, and the clarifications of that rule discussed in this
    *Order on Reconsideration*, **ARE ADOPTED**, and shall become
    effective 30 days after publication in the Federal Register.

    FEDERAL COMMUNICATIONS COMMISSION

    Magalie Roman Salas Secretary

# APPENDIX A - Rule Changes {#appendix-a---rule-changes .unnumbered}

**For the reasons discussed in this Order on Reconsideration preamble,
the Federal Communications Commission amends Part 76 of Title 47 of the
Code of Federal Regulations as follows:** PART 76 \-- Multichannel Video
and Cable Television Service.

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

AUTHORITY: 47 U.S.C. 151, 152, 153, 154, 301, 302, 303, 303a, 307, 308,
309, 312, 315, 317, 325, 336, 338, 339, 503, 521, 522, 531, 532, 533,
534, 535, 536, 537, 543, 544, 544a, 545, 548, 549, 552, 554, 556, 558,
560, 561, 571, 572, 573.

**2. Section 76.66 is revised to read as follows:**

**[§76.66 Satellite Broadcast Signal Carriage]{.underline}**

\* \* \* \* \*

\(d\) *Carriage procedures*.

\(1\) *Carriage requests.*

> \(i\) An election for mandatory carriage made by a television
> broadcast station shall be treated as a request for carriage. For
> purposes of this subsection concerning carriage procedures, the term
> election request includes an election of retransmission consent or
> mandatory carriage.
>
> \(ii\) An election request made by a television station must be in
> writing and sent to the satellite carrier's principal place of
> business, by certified mail, return receipt requested.

\* \* \* \* \*

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

\* \* \* \* \*

> \(ii\) A local television station shall make its election request, in
> writing, sent to the satellite carrier's principal place of business
> by certified mail, return receipt requested, no more than 30 days
> after the station's receipt of the satellite carrier's notice of
> intent to provide local-into-local service in a new television market.
> This written notification shall include the information required by
> Section 76.66(d)(1)(iii).
>
> \(iii\) A satellite carrier shall commence carriage of a local station
> by the later of 90 days from receipt of an election of mandatory
> carriage or upon commencing local-into-local service in the new
> television market.

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

\* \* \* \* \*

\(3\) *New television stations.*

\* \* \* \* \*

> \(ii\) A new television station shall make its election request, in
> writing, sent to the satellite carrier's principal place of business
> by certified mail, return receipt requested, between 60 days prior to
> commencing broadcasting and 30 days after commencing broadcasting.
> This written notification shall include the information required by
> Section 76.66(d)(1)(iii).

\* \* \* \* \*

> \(iv\) Within 30 days of receiving a new television station's election
> of mandatory carriage, a satellite carrier shall notify the station in
> writing that it will not carry the station, along with the reasons for
> such decision, or that it intends to carry the station.

\(4\) Television broadcast stations must send election requests as
provided in Sections 76.66(d)(1), (2), and (3) on or before the relevant
deadline.

[^1]: *See* 16 FCC Rcd 1918 (2000) (hereinafter "*Report and Order*").
    We note that judicial review of the constitutionality of the
    statutory satellite carrier must carry requirement and the
    Commission's implementing regulations has been sought by the
    Satellite Broadcasting and Communications Association ("SBCA"),
    EchoStar Communications Corporation, and DIRECTV, Inc. On June 24,
    2001, the United States District Court, in *Satellite Broadcasting
    and Communications Ass'n, et al* *v. FCC*, No. 00-1571-A (E.D. Va.),
    issued an unpublished Order dismissing the plaintiffs' case, and
    holding that the SHVIA is constitutional and does not in any way
    violate the First and Fifth Amendment rights of satellite carriers.
    The district court further held that the Act is a proper exercise of
    Congress's plenary powers over copyright and Congress's power to
    promote the free and full exchange of information over the broadcast
    spectrum. Still pending, however, is an appeal before the United
    States Court of Appeals for the Fourth Circuit, where plaintiffs are
    challenging the constitutionality of the SHVIA and the Commission's
    *Report and Order*, in the case *Satellite Broadcasting and
    Communications Ass'n, et al v. FCC*, No. 01-1151 (consolidated cases
    pending).

[^2]: Pub. L. No. 106-113, 113 Stat. 1501, 1501A-526 to 1501A-545 (Nov.
    29, 1999).

[^3]: *See* 47 C.F.R. § 76.66.

[^4]: *See* 47 U.S.C. § 338. Until January 1, 2002, satellite carriers
    are granted a royalty-free copyright license to retransmit
    television broadcast signals on a station-by-station basis, subject
    to obtaining a broadcaster's retransmission consent. *See* *Report
    and Order*, 16 FCC Rcd at 1919. *See also* Joint Explanatory
    Statement of the Committee of Conference on H.R. 1554, 106th Cong.
    ("*Conference Report*"), 145 Cong. Rec. H11769-01, H11795 (daily ed.
    Nov. 9, 1999).

[^5]: *See* 16 FCC Rcd at 1919.

[^6]: DIRECTV Petition for Reconsideration (filed Feb. 22, 2001); ALTV
    Petition for Reconsideration (filed Feb. 22, 2001).

[^7]: Opposition to DIRECTV, Inc.'s Petition for Reconsideration filed
    by the Association of Local Television Stations, Inc. (filed Apr.
    12, 2001) ("ALTV Opposition"); Response of National Association of
    Broadcasters to DIRECTV Petition for Reconsideration (filed Apr. 12,
    2001) ("NAB Response"); Opposition of the Network Affiliated
    Stations Alliance to the Petition for Reconsideration filed by
    DIRECTV, Inc. (filed Apr. 12, 2001) ("NASA Opposition"); Comments of
    Paxson Communications Corporation on Petitions for Reconsideration
    (filed Apr. 12, 2001) ("Paxson Comments"); Joint Opposition of the
    Association of America's Public Television Stations, the Public
    Broadcasting Service, and the Corporation for Public Broadcasting to
    the Petition for Reconsideration of DIRECTV, Inc. (filed Apr. 12,
    2001) ("Public Television Stations Opposition").

[^8]: Reply of DIRECTV, Inc. (filed Apr. 25, 2001) ("DIRECTV Reply").
    DIRECTV later filed an ex parte supplement to its reply. *See* Ex
    Parte Supplement to Reply of DIRECTV, Inc. (filed Apr. 30, 2001)
    ("April 30, 2001 DIRECTV Ex Parte Supplement").

[^9]: Opposition of DIRECTV, Inc. (filed Apr. 12, 2001) ("DIRECTV
    Opposition"); National Association of Broadcasters' Statement in
    Support of ALTV Petition for Reconsideration (filed Apr. 12, 2001)
    ("NAB Statement in Support of ALTV Petition").

[^10]: Reply of the Association of Local Television Stations, Inc. to
    Opposition filed by DIRECTV, Inc. (filed Apr. 23, 2001) ("ALTV
    Reply"); National Association of Broadcasters' Response to DIRECTV's
    Opposition to ALTV's Petition for Reconsideration (filed Apr. 23,
    2001) ("NAB Reply to DIRECTV Opposition").

[^11]: Petitions for reconsideration of Commission decisions are
    provided for by Section 405(a) of the Communications Act of 1934, 47
    U.S.C. § 405(a). Petitions for reconsideration in a rulemaking
    proceeding are governed by Section 1.429 of the Commission's rules.
    *See* 47 C.F.R. § 1.429.

[^12]: *See* 47 C.F.R. § 1.429. *See*, *e.g*., *800 Data Base Access
    Tariffs and the 800 Service Management System Tariff and Provision
    of 800 Services*, 12 FCC Rcd 5188, 5202 n.84 (1997); *Amendment of
    Section 73.202(B), Table of Allotments, FM Broadcast Stations*, 10
    FCC Rcd 7727 (1995) (citing *Eagle Broadcasting Co. v. FCC*, 514
    F.2d 852 (D.C. Cir. 1975)); *see also Amendment of Part 97 of the
    Commission's Rules Concerning the Establishment of a Codeless Class
    of Amateur Operator License*, 7 FCC Rcd 1753 (1992) ("petitions for
    reconsideration must show changed facts or circumstances, or facts
    that were unknown to the petitioner until after the petitioner's
    last opportunity to present them to \[the Commission\]"). In
    *Southwestern Bell Telephone Co. v. FCC*, 180 F.3d 307 (D.C. Cir.
    1999) ("*Southwestern Bell*") and *Beehive Telephone Co. v. FCC*,
    180 F.3d 314 (D.C. Cir. 1999), the D.C. Circuit recently upheld two
    Commission orders denying petitions for reconsideration. The court
    found unreviewable "the agency's refusal to go back over ploughed
    ground." *Southwestern Bell*, 180 F.3d at 311 (quoting *ICC v.
    Brotherhood of Locomotive Engineers*, 482 U.S. 270, 282-84 (1987)).

[^13]: *See* *Satellite Delivery of Network Signals to Unserved
    Households for Purposes of the Satellite Home Viewer Act: Part 73
    Definition and Measurement of Signals of Grade B Intensity*, Order
    on Reconsideration, 14 FCC Rcd 17373 (1999); *Elimination of
    Telephone Company-Cable Cross Ownership Rules, Sections 63.54-63.56,
    for Rural Areas*, 91 FCC 2d 622 (1982) ("The major arguments raised
    by the petitioners here were raised and considered by the Commission
    in response to the NPRM in this proceeding. The petitioners have
    raised no new arguments now which warrant reversal of our
    decision."); *Amendment of Section 73.636(a) of the Commission's
    Rules (Multiple Ownership of Television Stations)*, 82 FCC 2d 329
    (1980).

[^14]: *See* 47 U.S.C. § 405; 47 C.F.R. § 1.108. *See also Central
    Florida Enterprises v. FCC*, 598 F.2d 37, 48 n.51 (D.C. Cir.),
    *cert. dismissed*, 441 U.S. 957 (1979).

[^15]: 145 Cong. Rec. H11769-01, at H11795.

[^16]: *Id*.

[^17]: *See* 16 FCC Rcd at 1954.

[^18]: *See* 47 U.S.C. § 338(c)(2).

[^19]: *See* *Report and Order*, 16 FCC Rcd at 1954.

[^20]: *See* 47 U.S.C. § 535(b) and (e); 47 C.F.R. § 76.56(a). *See also
    Report and Order*, 16 FCC Rcd at 1953 n.197. In the cable context, a
    NCE station is considered "local" if "its community of license is
    within 50 miles of, or the station places a Grade B contour over,
    the principal headend of the cable system." *Id*. at 1953. Cable
    systems with more than 36 channels must carry all qualified NCE
    stations but are not required to carry more than three if there is
    substantial duplication. *See* 47 C.F.R. § 76.56(a)(1)(iii) and
    note.

[^21]: *See Report and Order,* 16 FCC Rcd at 1955. Using the NCE station
    duplication definition found in the cable context as a general
    model, the Commission developed a two-step approach in defining
    substantial duplication in the satellite context:

    > First, a noncommercial television station substantially duplicates
    > the programming of another noncommercial station if it
    > simultaneously broadcasts the same programming of another
    > noncommercial station for more than 50 percent of prime time, as
    > defined by § 76.5(n), and more than 50 percent outside of prime
    > time over a three-month period. After three noncommercial
    > television stations are carried, the test of duplication shall be
    > whether more than 50 percent of prime time programming and more
    > than 50 percent outside of prime time programming is duplicative
    > on a non-simultaneous basis. As for the timeframe of when to
    > measure duplication, we find that the amount of duplicative
    > prime-time weekly programming broadcast should be examined over
    > the course of \[a\] three month period. The end of the three-month
    > period must fall within 30 days prior to the date the satellite
    > carrier notifies the NCE station that it is denying or
    > discontinuing carriage based on substantial duplication. The
    > amount of duplicative weekly programming broadcast outside of
    > prime time will be measured over the same period. Only if the
    > station duplicates more than 50 percent of the other station's
    > weekly programming in both of these respects can it be denied
    > carriage.

    *Id*.

[^22]: *See* DIRECTV Petition at 7-12.

[^23]: *Id.* at 10.

[^24]: *Id.* at 3.

[^25]: *See* *id*. at 12.

[^26]: Public Television Stations Opposition at 5, quoting Section
    338(c)(2).

[^27]: *See id*. at 6.

[^28]: *See* Paxson Comments at 15.

[^29]: 47 U.S.C. § 338(c)(2).

[^30]: *See* 47 C.F.R. § 76.56(a).

[^31]: *See* 47 C.F.R. § 76.56(a)(1)(iii). *See also Implementation of
    the Cable Television Consumer Protection and Competition Act of
    1992: Broadcast Signal Carriage Issues,* Memorandum Opinion and
    Order, 9 FCC Rcd 6723 (1994).

[^32]: *See Report and Order*, 16 FCC Rcd at 1955.

[^33]: *See* Public Television Stations Opposition at 5-6.

[^34]: 145 Cong. Rec. H11769-01, at H11795 ("Providing the proposed
    license on a market-by-market basis furthers both goals by
    preventing satellite carriers from choosing to carry only certain
    stations and effectively preventing many other local broadcasters
    from reaching potential viewers in their service area.").

[^35]: *See* 13 FCC Rcd 23254 (1998). *See also* Cable Television
    Consumer Protection and Competition Act of 1992, Pub. L. No.
    102-385, 106 Stat. 1460 (1992).

[^36]: *See* 47 C.F.R. § 100.5.

[^37]: *See* 16 FCC Rcd at 1956.

[^38]: *See id*.

[^39]: *See id*.

[^40]: *See id*.

[^41]: *See id*.

[^42]: *See* DIRECTV Petition at 12-13.

[^43]: *Id*. at 4.

[^44]: *See* Public Television Stations Opposition at 8-9.

[^45]: The requirement under Section 335 is a statutory provision that
    was enacted by Congress as part of the 1992 Cable Act, and it has
    nothing to do with Section 338, which was enacted in 1999. *Compare*
    47 U.S.C. § 335(b) (requiring a public interest set-aside to make
    "channel capacity available to national educational programming
    suppliers," which include "any qualified noncommercial educational
    television station, other public telecommunications entities, and
    public or private educational institutions"), *and* H. Conf. Rep.
    No. 102-862, at 100 (1992) (explaining that Congress structured the
    public interest set-aside in part "to enable *national* educational
    programming suppliers to utilize this reserved channel capacity")
    (emphasis added), *with* H. Conf. Rep. No. 106-464, at 92 (1999)
    (emphasizing "the importance of protecting and fostering the system
    of television networks as they relate to the concept of localism"
    and explaining that one reason for the local-into-local carriage
    regime is "to encourage and promote retransmissions by satellite of
    *local* television broadcast stations to subscribers who reside in
    the local markets of those stations") (emphasis added).

[^46]: 47 U.S.C. § 335(b)(3) (emphasis added).

[^47]: *See* *DBS Public Interest Report and Order,* 13 FCC Rcd at
    23285, 23293 (subscribers must provide programming designed for a
    national audience); *see also American Distance Education
    Consortium,* 14 FCC Rcd 19976 (1999) (emphasizes that public
    interest programming under the statute and the Commission's rules
    should be nationally available).

[^48]: Alternatively, DIRECTV, in its petition, states that, "\[a\]t a
    minimum, the Commission should clarify that NCE stations that are
    distributed on a national basis should be included in the 4% DBS
    public interest set-aside calculation." DIRECTV Petition at 13. We
    note that the Commission has generally addressed DIRECTV's
    alternative request for clarification (on the issue of whether, in
    the abstract, a local NCE station can be counted as a programmer for
    Section 335 purposes) in another proceeding (*see* *DBS Public
    Interest Report and Order*, 13 FCC Rcd at 23292-93 (concluding "that
    we should interpret the term 'national' broadly so as to include
    local, regional, or national domestic nonprofit entities that
    qualify under the definitions listed above and produce noncommercial
    programming designed for a national audience")), but we decline at
    this point to go beyond what we said in the *DBS Public Interest
    Report and Order* about this matter without having a concrete set of
    facts before us.

[^49]: Section 338(g) states that, "the regulations prescribed \[under
    Section 338\] shall include requirements on satellite carriers that
    are comparable to the requirements on cable operators under Section
    614(b)(3) . . . and 615(g)(1)." 47 U.S.C. § 338(g).

[^50]: *See* 16 FCC Rcd at 1961-65.

[^51]: *Id*. at 1964-65.

[^52]: *Id*. at 1962.

[^53]: *See id*. at 1963.

[^54]: *See id*. at 1965.

[^55]: *See* DIRECTV Petition at 13-17.

[^56]: April 30, 2001 DIRECTV Ex Parte Supplement at 2.

[^57]: *Id*.

[^58]: DIRECTV Petition at 16-17.

[^59]: DIRECTV Petition, Technical Declaration of David A. Baylor, at ¶
    4.

[^60]: *Id*.

[^61]: *Id*., ¶ 6.

[^62]: *Id*.

[^63]: *Id.*

[^64]: *See* NAB Response at 3 (recommends that if certain VBI
    program-related material cannot be received by existing set-top
    boxes, then "any new boxes marketed by the carrier (whether
    manufactured by the carrier or not) should be designed to enable
    receipt of the additional VBI material"); ALTV Opposition at 3
    (states that while it understands DIRECTV's legacy problem, it
    recommends "that any new set top box should be capable of decoding
    all of the program-related information contained in a station's
    VBI"); Public Television Stations Opposition at 12 (agrees that
    DIRECTV need not be required to replace all of its installed set-top
    boxes with boxes capable of delivering additional program-related
    information, and notes that DIRECTV does not assert that it would be
    technically infeasible to provide future subscribers with a set-top
    box capable of receiving additional program-related material).

[^65]: *See* NAB Response at 4.

[^66]: Public Television Stations Opposition at 12.

[^67]: *See* April 30, 2001 DIRECTV Ex Parte Supplement at 1-5.

[^68]: *Id*. at 4.

[^69]: *Id.*

[^70]: *Id*.

[^71]: 47 U.S.C. § 338(g).

[^72]: 47 U.S.C. § 534(b)(3).

[^73]: *See* 47 U.S.C. § 535(g)(1).

[^74]: *See* 8 FCC Rcd 2965, 2986 (1993) ("*Cable Must Carry Report and
    Order*").

[^75]: *See* 16 FCC Rcd at 1964-65.

[^76]: *See id.* In determining the "technical feasibility" of the
    carriage of program-related material in the VBI or on subcarriers,
    we apply the same standard that is applied in the cable context;
    that is, we would consider signal carriage to be "technically
    feasible" if only nominal costs in the context of satellite service,
    additions or changes of equipment are necessary.

[^77]: *See* 47 C.F.R. § 76.66(j)(1).

[^78]: We also note that none of the parties have described how this
    information or programming would be displayed, if at all, on
    subscribers' television equipment.

[^79]: Here, an assessment of the nominal costs, additions or changes of
    equipment that are necessary is evaluated in the satellite context.
    Thus, what might be considered "nominal costs" in the cable context
    may be different in the satellite context.

[^80]: *See* DIRECTV Petition at 17.

[^81]: *See* 47 U.S.C. § 338(b)(1).

[^82]: *See* 47 U.S.C. § 534(h)(1)(B)(iii).

[^83]: *See* 16 FCC Rcd at 1945-46.

[^84]: *See id*. at 1945.

[^85]: *Id*. at 1946.

[^86]: *See id*.

[^87]: *See id*.

[^88]: DIRECTV Petition at 20.

[^89]: *See id*. at 5.

[^90]: *Id.*

[^91]: *Id*. at 18.

[^92]: *Id*.

[^93]: *See id*.

[^94]: *See id*.

[^95]: *See* ALTV Opposition at 7.

[^96]: *Id*. at 7-8. Similarly, NAB and ALTV argue that "DIRECTV's
    insistence that TV stations provide a signal of vastly higher
    quality than they are required to provide to cable systems is
    inconsistent both with the language of the SHVIA and with its goal
    of creating a regulatory regime parallel to that applicable to
    cable." *See* Letter from Thomas Olson, on behalf of NAB and ALTV,
    to Magalie Roman Salas, Secretary, filed in CS Docket No. 00-96
    (July 6, 2001), at 2 ("July 6, 2001 Joint NAB and ALTV Ex Parte
    Letter").

[^97]: *See* NAB Response at 5.

[^98]: *See id*., citing BellSouth Comments at 19 ("Since those signal
    quality standards have been effective in the cable environment,
    there is no reason they will not work for satellite."), and LTVS
    Comments at 16-17 n.21 ("The only difference between cable and
    satellite technology is that TV stations deliver the signal to a
    cable system headend, whereas in \[the\] satellite context the
    signal is delivered to the local receive facility.").

[^99]: *See* NAB Response at 6.

[^100]: *See* NASA Opposition at 2-3 (the costs for a TV circuit from a
    telecommunications carrier would be around \$800-\$1500 per month;
    and that because TV-1 lines are leased in terms of distance, the
    cost has the potential to be even greater if a satellite carrier
    uses a regional, rather than a local, receive facility).

[^101]: Paxson Comments at 10.

[^102]: Public Television Stations Opposition at 10.

[^103]: *See* DIRECTV Reply at 8.

[^104]: *Id.*

[^105]: *Id*. at 9.

[^106]: *Id.*

[^107]: *See id*. at 9-10.

[^108]: *See id*. at 11.

[^109]: *See id*. at 10 n.31.

[^110]: *See* Letter from James Barker, Counsel for DIRECTV, filed in CS
    Docket Nos. 00-96 and 99-363 (dated June 25, 2001), at 1
    (hereinafter "June 25, 2001 DIRECTV Ex Parte Letter").

[^111]: *Id.*

[^112]: *Id.*

[^113]: *See* ALTV Opposition at 7; Paxson Comments at 10-11

[^114]: *See* 16 FCC Rcd at 1945, citing DIRECTV Comments in CS Docket
    00-96 (filed July 14, 2000). DIRECTV, in its July 14, 2000 Comments
    (at 32), had proposed "a weighted signal to noise ratio of -67 dB"
    as necessary for the digital video compression equipment used in DBS
    systems. In the *Report and Order,* we noted that DIRECTV probably
    intended to request +67 dB S/N. *See* 16 FCC Rcd at 1945 n.142.
    Apparently, that was DIRECTV's intention, and they are now modifying
    their proposal by explaining that, in order for the local receive
    facility to have a 67 dB S/N ratio, the broadcaster should provide
    an "as received" S/N ratio of 60 dB. *See* June 25, 2001 DIRECTV Ex
    Parte Letter at 1.

[^115]: *Report and Order*, 16 FCC Rcd at 1945.

[^116]: Indeed, we note that DIRECTV acknowledges that four or five of
    the broadcast stations DIRECTV carries pursuant to retransmission
    consent agreements "have no fiber infrastructure," thus requiring
    DIRECTV to "bring in the primary feed off-air." June 25, 2001
    DIRECTV Ex Parte Letter at 5.

[^117]: July 6, 2001 Joint NAB and ALTV Ex Parte Letter at 1 ("DIRECTV
    continues to press its campaign to force local stations to provide
    not a '*good* quality signal,' as the Satellite Home Viewer
    Improvement Act expressly specifies, but instead an essentially
    *perfect* signal.") (emphasis in original).

[^118]: June 25, 2001 DIRECTV Ex Parte Letter at 1.

[^119]: *Id*. As NAB and ALTV observes, "DIRECTV itself effectively
    admits that the only way to achieve a 67 dB signal-to-noise ratio is
    by arranging for a fiber-optic TV-1 line from the station's studio
    to DIRECTV's local receive facility." July 6, 2001 Joint NAB and
    ALTV Ex Parte Letter at 2.

[^120]: July 6, 2001 Joint NAB and ALTV Ex Parte Letter at 2.

[^121]: June 25, 2001 DIRECTV Ex Parte Letter at 2.

[^122]: *Report and Order*, 16 FCC Rcd at 1945.

[^123]: June 25, 2001 DIRECTV Ex Parte Letter at 3.

[^124]: *Id.*

[^125]: *Id.* We note, too, that DIRECTV's test did not compare the 60
    dB S/N standard it now proposes, but rather a 67 dB S/N ratio. The
    difference in effect could be significantly less than 25%.

[^126]: July 6, 2001 Joint NAB and ALTV Ex Parte Letter at 3.

[^127]: *Id*. at 2 (emphasis in original).

[^128]: As noted in the *Report and Order*, "the current good quality
    signal standards will provide parties with a workable, tested
    standard." 16 FCC Rcd at 1946.

[^129]: We note that broadcasters in the cable context may meet the good
    quality signal standard by delivering their station\'s signals via
    microwave or fiber at their expense. We anticipate that the same
    will hold true in the satellite context.

[^130]: NAB, NASA, and Public Television Stations contend that adopting
    DIRECTV's TV-1 quality standard would impose an excessive burden on
    many local television stations. *See* NASA Opposition at 2 (while
    the cost for leasing a TV1 line can range from \$800-\$1500 per
    month, this cost can potentially be greater if a satellite carrier
    uses a regional, rather than a local, receive facility, because the
    cost of leasing a TV1 line is based on distance); Public Television
    Stations Opposition at 11 ("\[T\]he TV1 standard advanced by DirecTV
    is a 'short-haul' standard designed for transmission of a broadcast
    signal up to 20 miles, and many stations will be sending their
    signals \[at\] a much greater distance to reach the carrier's
    receive facility."); NAB Response at 4 (noting that this distance
    may be hundreds of miles).

[^131]: The signal level of -45dBm for UHF and -49 dBm for VHF are the
    threshold signal levels required by the Commission for broadcast
    carriage. Under the current increasingly competitive environment,
    many cable operators have borne the costs of improving some
    broadcasters' signals to enable the system to be more competitive
    with DBS providers, as well as to meet cable subscribers' higher
    expectations.

[^132]: Section 338(h)(2) defines the term "local receive facility" as
    "the reception point in each local market which a satellite carrier
    designates for delivery of the signal of the station for purposes of
    retransmission." 47 U.S.C. § 338(h)(2). In the definition of "local
    receive facility" in Section 338(h)(2), the satellite carrier is the
    entity authorized to designate the placement of a local receive
    facility. If the satellite carrier designates a local receive
    facility, the television broadcast stations are required by the
    statute to bear the costs of delivering a good quality signal to
    "the designated local receive facility of the satellite carrier." 47
    U.S.C. § 338(b)(1).

[^133]: *See* 16 FCC Rcd at 1943-44.

[^134]: *See id*. at 1944.

[^135]: *See* DIRECTV Petition at 20.

[^136]: *Id*. (emphasis in original omitted).

[^137]: *Id*.

[^138]: *See, e.g*., NAB Response at 7-8.

[^139]: *See, e.g*., ALTV Opposition at 13-14.

[^140]: Paxson Comments at 13.

[^141]: *See* NAB Response at 7 (the Commission "was well within its
    authority in concluding that while a carrier could require a station
    to pay those costs to deliver a signal to one location during an
    election cycle, it may not impose the costs repetitively on stations
    during a single cycle"); NASA Opposition at 7 (the Commission
    appropriately interpreted "designated" local receive facility to
    mean the facility designated by the carrier for that three-year
    election cycle); Public Television Stations Opposition at 13
    (arguing same).

[^142]: Public Television Stations Opposition at 13 ("If the location of
    the carrier's receive facility changes mid-cycle, a broadcast
    station may no longer be able to afford the cost of getting a good
    quality signal to the relocated receive facility.").

[^143]: *See* 16 FCC Rcd at 1959-61. The anti-discrimination language is
    contained in Section 338(d) of the SHVIA, which states:

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

    47 U.S.C. § 338(d) (emphasis added).

[^144]: *Report and Order*, 16 FCC Rcd at 1961.

[^145]: *See id*.

[^146]: *Id.*

[^147]: *See* DIRECTV Petition at 21-23.

[^148]: *See id*. at 21.

[^149]: *See id*. DIRECTV states that early drafts of the SHVIA on this
    subject read as follows:

    > No satellite carrier shall be required to provide the signal of a
    > local television broadcast station to subscribers in that
    > station's local market on any particular channel number or to
    > provide signals in any particular order, except that the satellite
    > carrier shall retransmit the signal of the local television
    > broadcast stations to subscribers in the station's local market on
    > contiguous channels which a *subscriber may receive without the
    > need to install an additional reception antenna or any other
    > additional equipment* and provide access to such station's signals
    > at a nondiscriminatory price and in a nondiscriminatory manner on
    > any navigational device, on-screen program guide, or menu.

    *Id*. at 22, quoting House Conferees' Counteroffer of the Copyright
    Satellite Statutory License Improvement Act, Discussion Draft, at 27
    (Oct. 15, 1999) (emphasis added by DIRECTV).

[^150]: *See* DIRECTV Petition at 23.

[^151]: *Id.*

[^152]: *E.g*., Paxson Comments at 9-10 (DIRECTV's arguments regarding
    the statute's legislative history is "without merit," and asserts
    that Congress enacted satellite must carry provisions to ensure that
    satellite subscribers have access to all local signals, not just
    those of the major affiliates and few other stations.).

[^153]: ALTV Opposition at 10.

[^154]: NAB Response at 9.

[^155]: *See Report and Order*, 16 FCC Rcd at 1959-61.

[^156]: *Id*. at 1960-61.

[^157]: *Id*. at 1961.

[^158]: *See* NAB Response at 8 (The Commission correctly concluded that
    satellite carriers cannot force consumers to purchase additional
    equipment to receive stations carried under Section 338, as opposed
    to stations carried through retransmission consent.).

[^159]: *See* Public Television Stations Opposition at 15.

[^160]: *See* 16 FCC Rcd at 1960.

[^161]: *Id.*

[^162]: *See* ALTV Petition at 3-14; NAB Statement at 3-5; NASA
    Opposition at 9; Paxson Comments at 4-8; Public Television Stations
    Opposition at 15-16.

[^163]: NAB Response at 5.

[^164]: NAB Statement at 1-2.

[^165]: *See* DIRECTV Opposition at 1-5.

[^166]: *See id*. at 2.

[^167]: *See id*. at 4.

[^168]: *Id.*

[^169]: 47 U.S.C. § 338(d).

[^170]: Nor, of course, would it be discriminatory to offer a package of
    all stations at a price equal to the sum of subscribing to each
    station individually.

[^171]: 47 U.S.C. § 338(b)(1).

[^172]: *See* 16 FCC Rcd at 1941.

[^173]: *Id*.

[^174]: *Id*. (emphasis added). The Commission further clarified that
    the "50% or more" stations does not refer to the aggregate number of
    stations in all affected markets. That is, a satellite carrier
    cannot calculate the 50% threshold by combining the votes of two
    DMAs in neighboring markets. On this point, the Commission
    explained: "For example, if DIRECTV were to establish an alternative
    receive facility in Howard County, MD (which is the Baltimore DMA)
    that would serve the Washington, D.C., Philadelphia, and Baltimore
    television markets, 50% or more of the stations in Washington, D.C.
    and 50% or more of stations in Philadelphia would have to agree to
    the site location. A satellite carrier cannot combine the number of
    Washington, D.C. and Philadelphia stations to reach the 50%
    threshold." *Id*. at 1941 n.121.

[^175]: *See* ALTV Petition at 15-16.

[^176]: *Id.* at 17.

[^177]: *See* NAB Statement in Support of ALTV Petition at 6-7; Public
    Television Stations Opposition at 14-15.

[^178]: 16 FCC Rcd at 1941-42.

[^179]: Section 338(a) requires satellite carriers to "carry upon
    request the signals of all television broadcast stations located
    within \[a local market in which the carrier retransmits local
    broadcast stations under Section 122 of title 17\], subject to
    section 325(b)." Section 325(b) limits retransmissions of broadcast
    signals to stations that grant "express authority" for
    retransmission or "elect\[ \] to assert the right to carriage" under
    Section 338. *See* 47 U.S.C. §§ 325(b)(1)(A) and (C) and 338(a)(1).

[^180]: For example, if we confined voting rights to stations that
    elected must carry on July 1, 2001 for the carriage cycle from
    January 1, 2002 through December 31, 2005, we would deprive stations
    that elected retransmission consent in that cycle from voting on an
    alternative receive facility that would apply for the next cycle. If
    the station chooses to elect mandatory carriage in this subsequent
    cycle (*i.e*., January 1, 2006 through December 31, 2008), it has
    had no voice in the election of the alternative receive facility.
    Similarly, we could inadvertently give a station that elected must
    carry in the present cycle the right to vote on an alternative
    receive facility for the subsequent cycle in which the station may
    elect retransmission consent. Moreover, if, after the carriage cycle
    begins, the satellite carrier proposes an alternative receive
    facility to be used during that cycle, this is essentially a
    mid-cycle change, and the satellite carrier would be responsible to
    paying the costs of delivering a good quality signal to that site.
    *See* Discussion section at ¶¶ 33-36, *supra.* We expect, in light
    of this requirement, that most proposals for an alternative receive
    facility will take place in advance of the election and carriage
    cycle.

[^181]: *See* 47 U.S.C. § 405; 47 C.F.R. §1.108; *Central Florida
    Enterprises v. FCC*, 598 F.2d 37, 48 n.51 (D.C. Cir.), *cert.
    dismissed*, 441 U.S. 957 (1979).

[^182]: *See* 16 FCC Rcd at 1931-32, 1946-47, 1949-51, 1954-55.

[^183]: *See* *id*. at 1920.

[^184]: *Id*. at 1932.

[^185]: *See* 47 C.F.R. § 76.66(d).

[^186]: *Report and Order*, 16 FCC Rcd at 1932.

[^187]: *See* *id*. at 1955. *See also* discussion on carrier's NCE
    obligation in ¶¶ 7-12, *supra*. We note that substantial duplication
    for commercial stations differs from substantial duplication with
    respect to NCEs. *Id*.

[^188]: A station electing mandatory carriage is not in a position to
    know to which other stations it is being compared at the time it is
    making its carriage election. In addition, the carrier has the
    ultimate choice of deciding which of two or more stations that
    substantially duplicate it will carry. *See Report and Order*, 16
    FCC Rcd at 1950.

[^189]: For example, a satellite carrier may consult program listings to
    compare stations in the same market where more than one station has
    requested carriage either by retransmission consent or mandatory
    carriage.

[^190]: *See* 47 C.F.R. § 76.66(d)(1)(iii).

[^191]: While we are not suggesting that a carrier is required to
    undertake extensive testing before it judges that a station fails to
    provide a good quality over-the-air signal to the receive facility,
    the rules require that a satellite carrier provide its reason for
    rejecting a carriage request.

[^192]: The relevant facts and circumstances can include the location of
    the station and its transmitter in relation to the receive facility
    and relevant terrain and obstacles in between. For example, if a
    station is in close geographic proximity to the receive facility or
    the receive facility is within the station's City Grade or Grade A
    service area, and there is no obvious and well-recognized physical
    barrier to signal reception, then the carrier would most likely not
    have a reasonable basis for refusing carriage on the basis of an
    inadequate signal unless the carrier actually measured the signal at
    the receive facility.

[^193]: A carrier could use the Individual Location Longley-Rice
    computer model as one way of learning if a station is predicted to
    deliver a good quality signal, as defined in the rules, to the
    receive facility.

[^194]: 16 FCC Rcd at 1946-47. Once a station delivers a good quality
    signal, it is entitled to carriage. Carriers are entitled to a
    reasonable time to arrange carriage after a station delivers or pays
    the costs to deliver a good quality signal.

[^195]: *Id*. at 1948. *See, e.g., Channel 5 Public Broadcasting, Inc.,*
    Memorandum Opinion and Order, 8 FCC Rcd 4953, 4953 & n.1 (MMB 1993)
    (describing good engineering practices for determining good quality
    signal for VHF and UHF stations).

[^196]: *See Report and Order*, 16 FCC Rcd at 1948. The obligation of a
    station to prove to a satellite carrier that the signal is of good
    quality, as set forth in the *Report and Order,* arises when there
    is a genuine dispute as to the quality of the station's signal. *See
    id.* at note 163.

[^197]: Notwithstanding that a broadcast station has the burden to prove
    its signal quality in the event of a dispute, if in its response to
    a station's request for mandatory carriage pursuant to Section
    76.66(d)(1)(iv), (d)(2)(iv), or (d)(3)(iv), a satellite carrier does
    not have a reasonable basis for asserting that the station does not
    deliver a good quality signal to the local receive facility (or
    alternative receive facility), the carrier shall have the burden of
    proving that the signal quality does not meet the standard in
    response to a signal quality complaint filed with the Commission.
    With respect to stations that are alleged to substantially
    duplicate, the burden is on the satellite carrier to articulate its
    basis for so alleging in a carriage response to a station, as well
    as having the burden to prove duplication to the Commission.

[^198]: As an example of a reasonable time frame in this context, *see*
    Ex Parte Filing from Thomas Olson, on behalf of NAB, to Magalie
    Roman Salas, Secretary, filed in CS Docket No. 00-96 (Aug. 14,
    20001) (providing a sample DIRECTV letter to a station indicating
    that the station's request for carriage is denied for failure to
    provide a good quality signal, and informing the station that to
    ensure carriage by January 1, 2002, the good quality signal must be
    in place by October 15, 2001).

[^199]: *See* Notice of Ex Parte Communication from Amy Levine, on
    behalf of various commercial and noncommercial broadcast clients, to
    Magalie Roman Salas, Secretary, filed in CS Docket No. 00-96 (Aug.
    9, 2001), at 1-2 and Appendix A("August 9, 2001 Levine Ex Parte
    Letter") (alleging that this form letter denying carriage was sent
    to all or virtually all stations requesting mandatory carriage); Ex
    Parte Filing from Thomas P. Olson, on behalf of NAB and ALTV, to
    Magalie Roman Salas, Secretary, filed in CS Docket No. 00-96 (Aug.
    10, 2001), at 1 ("August 10, 2001 NAB Ex Parte Letter") (asserting
    same).

[^200]: *See* August 9, 2001 Levine Ex Parte Letter at 1 and Appendix A;
    August 10, 2001 NAB Ex Parte Letter at 5.

[^201]: Broadcasters that choose to respond to such form letters by
    providing a signal strength test or basis for non-duplication are
    free to do so, but are not required to do so to perfect their
    carriage rights. Satellite carriers are reminded that they must
    afford broadcast stations access to the receive facility so that
    they can conduct tests to demonstrate signal quality.

[^202]: Likewise, in response to future elections pursuant to Section
    76.66(d)(1)(iv), (2)(iv) or (3)(iv), satellite carriers must provide
    reasons for carriage refusals along with the reasonable bases
    therefor.

[^203]: *See* 47 C.F.R. §§ 76.66(d)(1)(iv), (2)(iv), and (3)(iv).

[^204]: *See, e.g., Mountain Broadcasting Corp.,* Memorandum Opinion and
    Order*,* 11 FCC Rcd 4772, 4775-76 (CSB 1996).

[^205]: This is the policy we have followed in the cable context as
    well. *See, e.g.*, *Amendment of Part 76 of the Commission's Rules
    Concerning Carriage of Television Broadcast Signals by Cable
    Television Systems,* Memorandum Opinion and Order, 2 FCC Rcd 3593
    (1987) (encouraging cable systems and broadcasters to resolve
    carriage disputes among themselves and bring them to the Commission
    only when the parties are unable to resolve after good faith
    attempts). *See also Willmar Video, Inc.,* 15 FCC 2d 113, 116 (1968)
    ("what is required is the good faith, reasonable cooperation of the
    broadcaster and the CATV operator, for the common good of the
    parties and of the viewing public in their communities").

[^206]: *See* *Implementation of the Cable Television Consumer
    Protection and Competition Act of 1992: Broadcast Signal Carriage
    Issues,* Clarification Order, 8 FCC Rcd 4142, 4143 (1993) ("*Cable
    Must Carry Clarification Order*"). *See also* 47 U.S.C. § 503(b); 47
    C.F.R. § 1.80(a). *E.g*., *Cable Systems Corporation*, Forfeiture
    Order, 15 FCC Rcd 24298 (2000) (\$127,500 forfeiture against cable
    operator for violation of Section 614 of the Communications Act).
    Further, in *Amendment of Part 76 of the Commission's Rules
    Concerning Carriage of Television Broadcast Signals by Cable
    Television Systems,* Report and Order, 1 FCC Rcd 864, 889 (1986),
    the Commission stated that a cable system is required to give "a
    brief statement of its reasons" for its decision to decline carriage
    and will not be subject to forfeiture or other penalty if it
    complies in good faith even if the station is later determined to be
    entitled to carriage. In an analogous situation, the Commission
    found that parties seeking to exercise rights under the network
    non-duplication program deletion rules "demonstrated patterns of
    abuse in terms of the notification process" when they sent deletion
    notices "to all conceivably covered cable television systems,
    leaving it to the cable systems to determine what specifically is
    triggered." *Amendments to Part 76 of the Commission's Rules to
    Require Substantiation of Requests for Carriage or Nonduplication to
    Cable Television Systems, Request for a Declaratory Ruling by
    Service Electric Cable TV, Inc. and Service Electric Cable TV of New
    Jersey, Inc.,* Memorandum Opinion and Order, 92 FCC 2d 1058, ¶¶
    15-16 (1982) (deciding to rely on "good faith cooperation of the
    parties" rather than imposing additional paperwork burdens; but
    requiring that stations sending deletion notices "should stand ready
    to provide" additional information when questions arise as to the
    reasons notices are sent; and reminding stations that patterns of
    abuse could result in suspension of the right holder's rights).

[^207]: *See* 17 U.S.C. § 501(f); 47 U.S.C. § 338(a)(2). *See also*
    *Report and Order,* 16 FCC Rcd at 1973-74.

[^208]: *See* 16 FCC Rcd at 1929-30.

[^209]: *See id*.

[^210]: *See id*. at 1931. *See also* 47 C.F.R. § 76.66(c)(3).

[^211]: *See* 47 C.F.R. § 76.66(c).

[^212]: *See Report and Order*, 16 FCC Rcd at 1933.

[^213]: *Id*. at 1929.

[^214]: *See id*.

[^215]: Unlike the cable rules, the rules for satellite carriers
    essentially combine the election of must carry with the demand for
    carriage due to the differences in the statute. *See id.*

[^216]: 47 C.F.R. § 76.66(d)(1)(i)

[^217]: *See* Appendix A.

[^218]: We note that, in light of the rule provision as written and in
    effect, any elections or carriage requests sent pursuant to and in
    compliance with Section 76.66(d)(2)(ii) need not be sent by
    certified mail, return receipt requested until the amendment to this
    rule provision takes effect.

[^219]: *See* amended rules in Appendix A.

[^220]: As explained in paragraph 131 of the *Report and Order*, a
    satellite carrier's failure to respond to a request for mandatory
    carriage within 30 days as required by Section 76.66 can be
    considered a denial about which the television station denied may
    file a complaint. *See* 16 FCC Rcd at 1975.

[^221]: We note, too, that the references to "carriage request" in
    Sections 76.66(d)(1)(iv), (2)(iv), and (3)(iv) mean elections of
    mandatory carriage, as explained above. The rules do not require
    satellite carriers to respond to elections of retransmission
    consent.

[^222]: For example, the letterhead address and signatory on a satellite
    carrier's notification of location of designated local receive
    facilities or notification of intent to provide local-into-local
    service in a new market can be considered to be the principal place
    of business and appropriate address for purposes of carriage
    elections.

[^223]: 47 C.F.R. § 76.64(h). *See Gannon University Broadcasting*, 10
    FCC Rcd 8619 (CSB 1995).

[^224]: June 25, 2001 DIRECTV Ex Parte Letter at 4.

[^225]: *Id.,* citing 47 C.F. R. § 76.66(g)(2).

[^226]: June 25, 2001 DIRECTV Ex Parte Letter at 4.

[^227]: *See id*.

[^228]: *See id*. at 5.

[^229]: *See id.*

[^230]: *See id.*

[^231]: *Id.*

[^232]: July 6, 2001 Joint NAB and ALTV Ex Parte Letter at 3 (emphasis
    omitted).

[^233]: *Id*.

[^234]: *Id.*

[^235]: We also note, as discussed above, that cable systems often
    improve broadcaster signal quality at their own expense to provide a
    better quality picture to their subscribers.

[^236]: *See Cable Must Carry Report and Order,* 8 FCC Rcd at 2988-91.

[^237]: *Id.* at 2991. The Commission further stated: "For cable systems
    that are being built and/or are in the design stage, we expect the
    cable operator to consult with local television stations concerning
    the necessary equipment needed to receive a good quality signal and
    to negotiate the additional costs of upgrading of equipment with the
    broadcaster if necessary." *Id.* at 2991 n.301.

[^238]: *See id*. at 2990.

[^239]: *See* *Cable Must Carry Clarification Order*, 8 FCC Rcd at
    4144-45.

[^240]: *Id.* at 4144-45 & n.11.

[^241]: *Id.* at 4144 (emphasis added).

[^242]: *Id. See also Mountain Broadcasting Corp. v. Continental
    Cablevision of Western New England,* 11 FCC Rcd 6488, 6510-13 (CSB
    1996)*, aff'd,* 12 FCC Rcd 12262 (1997), *aff'd on other grounds,
    WLNY v. FCC ,* 163 F.3d 187 (2d Cir. 1998) (In a must carry
    complaint concerning, *inter alia*, the safety of adding an
    additional antenna to an existing headend tower, we concluded that
    the station had the responsibility to pay for an engineering study
    on wind load, necessary equipment, antenna installation, and new
    tower, if required. These costs were for equipment in addition to
    the headend's existing reception equipment.)

[^243]: *See* OMB Notice of Action (OMB No. 3060-0980) (June 7, 2001).