[Federal Register Volume 76, Number 59 (Monday, March 28, 2011)]
[Proposed Rules]
[Pages 17071-17088]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-7250]



[[Page 17071]]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[MB Docket No. 10-71; FCC 11-31]


Amendment of the Commission's Rules Related to Retransmission 
Consent

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Federal Communications Commission (FCC) 
seeks comment on a series of proposals to streamline and clarify the 
Commission's rules concerning or affecting retransmission consent 
negotiations. The Commission believes that these rule changes could 
allow the market-based negotiations contemplated by the statute to 
proceed more smoothly, provide greater certainty to the negotiating 
parties, and help protect consumers.

DATES: Submit comments on or before May 27, 2011, and submit reply 
comments on or before June 27, 2011. See SUPPLEMENTARY INFORMATION 
section for additional comment dates.

ADDRESSES: You may submit comments, identified by MB Docket No. 10-71, 
by any of the following methods:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> Federal Communications Commission's Web site: http://www.fcc.gov/cgb/ecfs/. Follow the instructions for submitting comments.
    <bullet> Mail: Filings can be sent by hand or messenger delivery, 
by commercial overnight courier, or by first-class or overnight U.S. 
Postal Service mail (although the Commission continues to experience 
delays in receiving U.S. Postal Service mail). All filings must be 
addressed to the Commission's Secretary, Office of the Secretary, 
Federal Communications Commission.
    <bullet> People With Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by e-mail: <a href="/cdn-cgi/l/email-protection#50161313656064103633337e373f26"><span class="__cf_email__" data-cfemail="a5e3e6e6909591e5c3c6c68bc2cad3">[email protected]</span></a> or phone: 202-418-
0530 or TTY: 202-418-0432.
    In addition to filing comments with the Secretary, a copy of any 
comments on the Paperwork Reduction Act proposed information collection 
requirements contained herein should be submitted to the Federal 
Communications Commission via e-mail to <a href="/cdn-cgi/l/email-protection#18484a59587e7b7b367f776e"><span class="__cf_email__" data-cfemail="19494b58597f7a7a377e766f">[email protected]</span></a> and to Nicholas A. 
Fraser, Office of Management and Budget, via e-mail to 
<a href="/cdn-cgi/l/email-protection#422c243023312730022d2f206c272d326c252d34"><span class="__cf_email__" data-cfemail="452b233724362037052a28276b202a356b222a33">[email protected]</span></a> or via fax at 202-395-5167. For detailed 
instructions for submitting comments and additional information on the 
rulemaking process, see the SUPPLEMENTARY INFORMATION section of this 
document.

FOR FURTHER INFORMATION CONTACT: For additional information on this 
proceeding, contact Diana Sokolow, <a href="/cdn-cgi/l/email-protection#e6a28f878887c8b5898d898a8991a6808585c8818990"><span class="__cf_email__" data-cfemail="387c51595659166b57535754574f785e5b5b165f574e">[email protected]</span></a>, of the Media 
Bureau, Policy Division, 202-418-2120. For additional information 
concerning the Paperwork Reduction Act information collection 
requirements contained in this document, send an e-mail to <a href="/cdn-cgi/l/email-protection#83d3d1c2c3e5e0e0ade4ecf5"><span class="__cf_email__" data-cfemail="87d7d5c6c7e1e4e4a9e0e8f1">[email protected]</span></a> 
or contact Cathy Williams at 202-418-2918. To view or obtain a copy of 
this information collection request (ICR) submitted to OMB: (1) Go to 
this OMB/GSA Web page: http://www.reginfo.gov/public/do/PRAMain, (2) 
look for the section of the Web page called ``Currently Under Review,'' 
(3) click on the downward-pointing arrow in the ``Select Agency'' box 
below the ``Currently Under Review'' heading, (4) select ``Federal 
Communications Commission'' from the list of agencies presented in the 
``Select Agency'' box, (5) click the ``Submit'' button to the right of 
the ``Select Agency'' box, and (6) when the list of FCC ICRs currently 
under review appears, look for the OMB control number of the ICR as 
show in the Supplementary Information section below (3060-0649) and 
then click on the ICR Reference Number. A copy of the FCC submission to 
OMB will be displayed.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking (NPRM), MB Docket No. 10-71, FCC No. 11-31, 
adopted and released March 3, 2011. The full text of the NPRM is 
available for public inspection and copying during regular business 
hours in the FCC Reference Information Center, Portals II, 445 12th 
Street, SW., Room CY-A257, Washington, DC 20554. It also may be 
purchased from the Commission's duplicating contractor at Portals II, 
445 12th Street, SW., Room CY-B402, Washington, DC 20554; the 
contractor's Web site, http://www.bcpiweb.com; or by calling 800-378-
3160, facsimile 202-488-5563, or e-mail <a href="/cdn-cgi/l/email-protection#e0a6a3a3a0a2a3b0a9b7a5a2ce838f8d"><span class="__cf_email__" data-cfemail="abede8e8ebe9e8fbe2fceee985c8c4c6">[email protected]</span></a>. Copies of the 
NPRM also may be obtained via the Commission's Electronic Comment 
Filing System (ECFS) by entering the docket number, MB Docket No. 10-
71. Additionally, the complete item is available on the Federal 
Communications Commission's Web site at http://www.fcc.gov.
    This document contains proposed information collection 
requirements. The Commission, as part of its continuing effort to 
reduce paperwork burdens, invites the general public and the Office of 
Management and Budget (OMB) to comment on the information collection 
requirements contained in this document, as required by the Paperwork 
Reduction Act of 1995, Public Law 104-13. Written comments on the 
Paperwork Reduction Act proposed information collection requirements 
must be submitted by the public, Office of Management and Budget (OMB), 
and other interested parties on or before May 27, 2011.
    Comments should address: (a) Whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the Commission, including whether the information shall have practical 
utility; (b) the accuracy of the Commission's burden estimates; (c) 
ways to enhance the quality, utility, and clarity of the information 
collected; (d) ways to minimize the burden of the collection of 
information on the respondents, including the use of automated 
collection techniques or other forms of information technology; and (e) 
ways to further reduce the information collection burden on small 
business concerns with fewer than 25 employees. In addition, pursuant 
to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, 
see 44 U.S.C. 3506(c)(4), we seek specific comment on how we might 
further reduce the information collection burden for small business 
concerns with fewer than 25 employees.
    OMB Control Number: 3060-0649.
    Title: Sections 76.1601, Deletion or Repositioning of Broadcast 
Signals, 76.1617 Initial Must-Carry Notice, 76.1607 and 76.1708 
Principal Headend.
    Form Number: Not applicable.
    Type of Review: Revision of a currently approved collection.
    Respondents: Businesses or other for-profit entities; Not-for-
profit institutions.
    Number of Respondents and Responses: 3,380 respondents and 4,200 
responses.
    Estimated Time per Response: 0.5 to 2 hours.
    Frequency of Response: On occasion reporting requirement; Third 
party disclosure requirement; Recordkeeping requirement.
    Total Annual Burden: 2,400 hours.
    Total Annual Costs: None.
    Obligation to Respond: Required to obtain or retain benefits. The 
statutory authority for this information collection is contained in 
Section 4(i) of the

[[Page 17072]]

Communications Act of 1934, as amended.
    Nature and Extent of Confidentiality: No need for confidentiality 
required with this collection of information.
    Privacy Impact Assessment: No impact(s).
    Needs and Uses: 47 CFR 76.1601 requires that effective April 2, 
1993, a cable operator shall provide written notice to any broadcast 
television station at least 30 days prior to either deleting from 
carriage or repositioning that station. Such notification shall also be 
provided to subscribers of the cable system.
    47 CFR 76.1607 states that a cable operator shall provide written 
notice by certified mail to all stations carried on its system pursuant 
to the must-carry rules at least 60 days prior to any change in the 
designation of its principal headend.
    47 CFR 76.1617(a) states within 60 days of activation of a cable 
system, a cable operator must notify all qualified NCE stations of its 
designated principal headend by certified mail.
    47 CFR 76.1617(b) states within 60 days of activation of a cable 
system, a cable operator must notify all local commercial and NCE 
stations that may not be entitled to carriage because they either:
    (1) Fail to meet the standards for delivery of a good quality 
signal to the cable system's principal headend, or
    (2) May cause an increased copyright liability to the cable system.
    47 CFR 76.1617(c) states within 60 days of activation of a cable 
system, a cable operator must send by certified mail a copy of a list 
of all broadcast television stations carried by its system and their 
channel positions to all local commercial and noncommercial television 
stations, including those not designated as must-carry stations and 
those not carried on the system.
    47 CFR 76.1708(a) states that the operator of every cable 
television system shall maintain for public inspection the designation 
and location of its principal headend. If an operator changes the 
designation of its principal headend, that new designation must be 
included in its public file.
    The NPRM proposes to redesignate 47 CFR 76.1601 as 47 CFR 
76.1601(a), and to add a new 47 CFR 76.1601(b). If adopted, new 47 CFR 
76.1601(b) would require broadcast television stations and multichannel 
video programming distributors (MVPDs) to notify affected subscribers 
of the potential deletion of a broadcaster's signal a minimum of 30 
days in advance of a retransmission consent agreement's expiration, 
unless a renewal or extension agreement has been executed, and 
regardless of whether the signal is ultimately deleted. All other 
remaining existing information collection requirements would stay as 
they are, and the various burden estimates would be revised to reflect 
new 47 CFR 76.1601(b).

Synopsis of the Notice of Proposed Rulemaking

I. Introduction

    1. In this Notice of Proposed Rulemaking (NPRM), we seek comment on 
a series of proposals to streamline and clarify our rules concerning or 
affecting retransmission consent negotiations. Our primary objective is 
to assess whether and how the Commission rules in this arena are 
ensuring that the market-based mechanisms Congress designed to govern 
retransmission consent negotiations are working effectively and, to the 
extent possible, minimize video programming service disruptions to 
consumers.
    2. The Communications Act of 1934, as amended (the Act), prohibits 
cable systems and other multichannel video programming distributors 
(MVPDs) from retransmitting a broadcast station's signal without the 
station's consent. 47 U.S.C. 325(b)(1)(A). This consent is what is 
known as ``retransmission consent.'' The law requires broadcasters and 
MVPDs to negotiate for retransmission consent in good faith. See 47 
U.S.C. 325(b)(3)(C)(ii) and (iii); 47 CFR 76.65. Since Congress enacted 
the retransmission consent regime in 1992, there have been significant 
changes in the video programming marketplace. One such change is the 
form of compensation sought by broadcasters. Historically, cable 
operators typically compensated broadcasters for consent to retransmit 
the broadcasters' signals through in-kind compensation, which might 
include, for example, carriage of additional channels of the 
broadcaster's programming on the cable system or advertising time. See, 
e.g., General Motors Corp. and Hughes Electronics Corp., Transferors, 
and The News Corp. Ltd., Transferee, Memorandum Opinion and Order, 19 
FCC Rcd 473, 503, para. 56 (2004). Today, however, broadcasters are 
increasingly seeking and receiving monetary compensation from MVPDs in 
exchange for consent to the retransmission of their signals. Another 
important change concerns the rise of competitive video programming 
providers. In 1992, the only option for many local broadcast television 
stations seeking to reach MVPD customers in a particular Designated 
Market Area (DMA) was a single local cable provider. Today, in 
contrast, many consumers have additional options for receiving 
programming, including two national direct broadcast satellite (DBS) 
providers, telephone providers that offer video programming in some 
areas, and, to a degree, the Internet. One result of such changes in 
the marketplace is that disputes over retransmission consent have 
become more contentious and more public, and we recently have seen a 
rise in negotiation impasses that have affected millions of consumers.
    3. Accordingly, we have concluded that it is appropriate for us to 
reexamine our rules relating to retransmission consent. We consider 
below revisions to the retransmission consent and related rules that we 
believe could allow the market-based negotiations contemplated by the 
statute to proceed more smoothly, provide greater certainty to the 
negotiating parties, and help protect consumers. Accordingly, as 
discussed below, we seek comment on rule changes that would:
    <bullet> Provide more guidance under the good faith negotiation 
requirements to the negotiating parties by:
    [cir] Specifying additional examples of per se violations in Sec.  
76.65(b)(1) of the Commission's rules; and
    [cir] Further clarifying the totality of the circumstances standard 
of Sec.  76.65(b)(2) of the Commission's rules;
    <bullet> Improve notice to consumers in advance of possible service 
disruptions by extending the coverage of our notice rules to non-cable 
MVPDs and broadcasters as well as cable operators, and specifying that, 
if a renewal or extension agreement has not been executed 30 days in 
advance of a retransmission consent agreement's expiration, notice of 
potential deletion of a broadcaster's signal must be given to consumers 
regardless of whether the signal is ultimately deleted;
    <bullet> Extend to non-cable MVPDs the prohibition now applicable 
to cable operators on deleting or repositioning a local commercial 
television station during ratings ``sweeps'' periods; and
    <bullet> Allow MVPDs to negotiate for alternative access to network 
programming by eliminating the Commission's network non-duplication and 
syndicated exclusivity rules.

We also seek comment on any other revisions or additions to our rules 
within the scope of our authority that would improve the retransmission 
consent negotiation process and help protect consumers from programming 
disruptions. The Commission does not have the power to force 
broadcasters to consent to MVPD carriage of their

[[Page 17073]]

signals nor can the Commission order binding arbitration. See infra 
para. 18. See also Letter from Chairman Julius Genachowski, FCC, to The 
Honorable John F. Kerry, Chairman, Subcommittee on Communications, 
Technology, and the Internet, Committee on Commerce, Science, and 
Transportation, U.S. Senate, at 1 (Oct. 29, 2010) (``[C]urrent law does 
not give the agency the tools necessary to prevent service 
disruptions.'').

II. Background

A. Retransmission Consent

    4. The current regulatory scheme for carriage of broadcast 
television stations was established by the Cable Television Consumer 
Protection and Competition Act of 1992 (1992 Cable Act), Public Law 
102-385, 106 Stat. 1460 (1992). In 1992, unlike today, local broadcast 
television stations seeking to reach viewers in a particular DMA 
through an MVPD service often had only one option--namely, a single 
local cable provider. While broadcasters benefited from cable carriage, 
Congress recognized that broadcast programming ``remains the most 
popular programming on cable systems, and a substantial portion of the 
benefits for which consumers pay cable systems is derived from carriage 
of the signals of network affiliates, independent television stations, 
and public television stations.'' See 1992 Cable Act sec. 2(a)(19). In 
adopting the retransmission consent provisions of the 1992 Cable Act, 
Congress found that cable operators obtained great benefit from the 
local broadcast signals that they were able to carry without 
broadcaster consent or copyright liability, and that this benefit 
resulted in an effective subsidy to cable operators. See id. 
Accordingly, Congress adopted its retransmission consent provisions to 
allow broadcasters to negotiate to receive compensation for the value 
of their signals. Through the 1992 Cable Act, Congress modified the 
Communications Act, inter alia, to provide television stations with 
certain carriage rights on cable television systems in their local 
market. See 47 U.S.C. 325, 534.
    5. Pursuant to the statutory provisions enacted in 1992, television 
broadcasters elect every three years whether to proceed under the 
retransmission consent requirements of section 325 of the Act, or the 
mandatory carriage (must carry) requirements of sections 338 and 614 of 
the Act. See 47 U.S.C. 325(b), 338, 534. Section 338 governs mandatory 
carriage on satellite, and Section 614 (codified at 47 U.S.C. 534) 
governs mandatory carriage of commercial television stations on cable. 
There are important differences between the retransmission consent and 
must carry regimes. Specifically, a broadcaster electing must carry 
status is guaranteed carriage on cable systems in its market, and the 
cable operator is generally prohibited from accepting or requesting 
compensation for carriage, whereas a broadcaster who elects carriage 
under the retransmission consent rules may insist on compensation. In 
order to reach MVPD customers, most broadcasters elected carriage under 
the must carry rules in the early years following enactment of the new 
regime. By 2009, only 37 percent of stations relied on must carry. See 
Omnibus Broadband Initiative, Spectrum Analysis: Options for Broadcast 
Spectrum, OBI Technical Paper No. 3, at 8 (June 2010); see also id. at 
Exhibit C (showing decrease in must carry elections and increase in 
retransmission consent elections since 2003); id. at n. 23.
    6. Since 2001, broadcasters have also had mandatory carriage rights 
on DBS systems. The Satellite Home Viewer Improvement Act of 1999 
(SHVIA) gives satellite carriers a statutory copyright license to 
retransmit local broadcast stations to subscribers in the station's 
market, also known as ``local-into-local'' service. SHVIA was enacted 
as Title I of the Intellectual Property and Communications Omnibus 
Reform Act of 1999 (IPACORA) (relating to copyright licensing and 
carriage of broadcast signals by satellite carriers, codified in 
scattered sections of 17 and 47 U.S.C.), Public Law 106-113, 113 Stat. 
1501, Appendix I (1999). Generally, when a satellite carrier provides 
local-into-local service pursuant to the statutory copyright license, 
the satellite carrier is obligated to carry any qualified local 
television station in the particular DMA that has made a timely 
election for mandatory carriage, unless the station's programming is 
duplicative of the programming of another station carried by the 
carrier in the DMA or the station does not provide a good quality 
signal to the carrier's local receive facility. See 47 U.S.C. 338.
    7. As an alternative to seeking mandatory carriage, a broadcaster 
may elect carriage under the retransmission consent rules, which allow 
for negotiations with cable operators and other MVPDs for carriage. A 
broadcaster electing retransmission consent may accept or request 
compensation for carriage in retransmission consent negotiations. The 
legislative history of section 325 indicates that Congress intended 
``to establish a marketplace for the disposition of the rights to 
retransmit broadcast signals; it is not the Committee's intention in 
this bill to dictate the outcome of the ensuing marketplace 
negotiations.'' S. Rep. No. 92, 102nd Cong., 1st Sess. 1991, reprinted 
in 1992 U.S.C.C.A.N. 1133, 1169. Under section 325(b)(1)(A) of the Act, 
if a broadcaster electing retransmission consent and an MVPD are unable 
to reach an agreement, or do not agree to the extension of an existing 
agreement prior to its expiration, then the MVPD may not retransmit the 
broadcasting station's signal because the signal cannot be carried 
without the broadcast station's consent. Section 325(b)(1)(A) of the 
Act states, ``No cable system or other multichannel video programming 
distributor shall retransmit the signal of a broadcasting station, or 
any part thereof, except--(A) with the express authority of the 
originating station. * * *'' 47 U.S.C. 325(b)(1). Pursuant to section 
325(b)(2), there are five circumstances in which the retransmission 
restrictions do not apply.

 B. Good Faith Negotiations

    8. Initially, section 325 of the Act did not include any standards 
governing retransmission consent negotiations between broadcasters and 
MVPDs. That changed in 1999 when Congress adopted SHVIA, which 
contained provisions concerning the satellite industry, as well as 
television broadcast stations and terrestrial MVPDs. Specifically, 
Congress required broadcast television stations engaging in 
retransmission consent negotiations with any MVPD to negotiate in good 
faith. See 47 U.S.C. 325(b)(3)(C). SHVIA also prohibited broadcasters 
from entering into exclusive retransmission consent agreements. See 47 
U.S.C. 325(b)(3)(C). Congress required the Commission to revise its 
regulations so that they:

    * * * prohibit a television broadcast station that provides 
retransmission consent from * * * failing to negotiate in good 
faith, and it shall not be a failure to negotiate in good faith if 
the television broadcast station enters into retransmission consent 
agreements containing different terms and conditions, including 
price terms, with different multichannel video programming 
distributors if such different terms and conditions are based on 
competitive marketplace considerations.

47 U.S.C. 325(b)(3)(C)(ii). The Joint Explanatory Statement of the 
Committee of Conference (Conference Report) did not explain or clarify 
the statutory language, instead merely stating that the regulations 
would:


[[Page 17074]]


    * * * prohibit a television broadcast station from * * * 
refusing to negotiate in good faith regarding retransmission consent 
agreements. A television station may generally offer different 
retransmission consent terms or conditions, including price terms, 
to different distributors. The [Commission] may determine that such 
different terms represent a failure to negotiate in good faith only 
if they are not based on competitive marketplace considerations.

Conference Report at 13. This good faith negotiation obligation was 
later made reciprocal to MVPDs as well as broadcasters by the Satellite 
Home Viewer Extension and Reauthorization Act of 2004 (SHVERA), Public 
Law 108-447, 118 Stat. 2809 (2004).

    9. In implementing the good faith negotiation requirement, the 
Commission concluded ``that the statute does not intend to subject 
retransmission consent negotiation to detailed substantive oversight by 
the Commission. Instead, the order concludes that Congress intended 
that the Commission follow established precedent, particularly in the 
field of labor law, in implementing the good faith retransmission 
consent negotiation requirement.'' Implementation of the Satellite Home 
Viewer Improvement Act of 1999; Retransmission Consent Issues: Good 
Faith Negotiation and Exclusivity, 65 FR 15559, March 23, 2000 (Good 
Faith Order). Given the dearth of guidance in section 325 and its 
legislative history, the Commission drew guidance from analogous 
statutory standards, such as the good faith bargaining requirement of 
section 8(d) of the Taft-Hartley Act. Id. The Commission also looked to 
its own rules implementing the good faith negotiation requirement of 
section 251 of the Act, which largely relies on labor law precedent. 
Id.
    10. The Commission adopted a two-part framework to determine 
whether broadcasters and MVPDs negotiate retransmission consent in good 
faith. First, the Commission established a list of seven objective good 
faith negotiation standards, the violation of which is considered a per 
se breach of the good faith negotiation obligation. See 47 CFR 
76.65(b)(1). Second, even if the seven specific standards are met, the 
Commission may consider whether, based on the totality of the 
circumstances, a party failed to negotiate retransmission consent in 
good faith. See 47 CFR 76.65(b)(2). The Commission has stated that, 
where ``a broadcaster is determined to have failed to negotiate in good 
faith, the Commission will instruct the parties to renegotiate the 
agreement in accordance with the Commission's rules and section 
325(b)(3)(C).'' Good Faith Order. While the Commission did not find any 
statutory authority to impose damages, it noted ``that, as with all 
violations of the Communications Act or the Commission's rules, the 
Commission has the authority to impose forfeitures for violations of 
section 325(b)(3)(C).'' Id. In discussing remedies for a violation of 
the good faith negotiation requirement, the Commission did not 
reference continued carriage as a potential remedy, and stated that it 
could not adopt regulations permitting retransmission during good faith 
negotiation or while a good faith complaint is pending before the 
Commission, absent broadcaster consent to such retransmission. Id.
    11. The Commission concluded that Congress did not intend for it to 
sit in judgment of the terms of every executed retransmission consent 
agreement. Id. Rather, the Commission said, ``[w]e believe that, by 
imposing the good faith obligation, Congress intended that the 
Commission develop and enforce a process that ensures that broadcasters 
and MVPDs meet to negotiate retransmission consent and that such 
negotiations are conducted in an atmosphere of honesty, purpose and 
clarity of process.'' Id. In adopting the good faith negotiation rules, 
the Commission pointed to commenters' arguments that intrusive 
Commission action was unnecessary because of the thousands of 
retransmission consent agreements that had been concluded successfully 
since the adoption of the 1992 Cable Act. Id.
    12. There have been very few complaints filed alleging violations 
of the Commission's good faith rules. For example, in 2001, the former 
Cable Services Bureau issued an order denying EchoStar Satellite 
Corporation's retransmission consent complaint alleging that Young 
Broadcasting, Inc. et al. failed to negotiate in good faith. See 
EchoStar Satellite Corp. v. Young Broadcasting, Inc. et al., Memorandum 
Opinion and Order, 16 FCC Rcd 15070 (CSB 2001). More recently, in 2007, 
the Media Bureau issued an order denying Mediacom Communications 
Corporation's (Mediacom) retransmission consent complaint alleging that 
Sinclair Broadcast Group, Inc. (Sinclair) failed to negotiate in good 
faith. See Mediacom Communications Corp. v. Sinclair Broadcast Group, 
Inc., Memorandum Opinion and Order, 22 FCC Rcd 47 (MB 2007). Although 
Mediacom filed an application for review of the Media Bureau's order, 
Mediacom and Sinclair subsequently announced the completion of a 
retransmission consent agreement, and the Media Bureau thus granted 
Mediacom's motion to dismiss the case with prejudice. See Mediacom 
Communications Corp. v. Sinclair Broadcast Group, Inc., Order, 22 FCC 
Rcd 11093 (MB 2007). Also in 2007, the Media Bureau ruled that a cable 
operator failed to negotiate in good faith under the totality of the 
circumstances, and ordered resumption of negotiations within 10 days 
and status updates every 30 days. See Letter to Jorge L. Bauermeister, 
22 FCC Rcd 4933 (MB 2007); see also infra para. 33. Further, in 2009, 
the Media Bureau issued an order denying ATC Broadband LLC and Dixie 
Cable TV, Inc.'s retransmission consent complaint alleging that Gray 
Television Licensee, Inc. failed to negotiate in good faith. See ATC 
Broadband LLC and Dixie Cable TV, Inc. v. Gray Television Licensee, 
Inc., Memorandum Opinion and Order, 24 FCC Rcd 1645 (MB 2009). Also in 
2009, Mediacom filed another retransmission consent complaint alleging 
that Sinclair failed to negotiate in good faith, but, following an 
agreed-upon extension, the parties announced the completion of a 
retransmission consent agreement and the Media Bureau granted 
Mediacom's motion to dismiss the case with prejudice. See Mediacom 
Communications Corp. v. Sinclair Broadcast Group, Inc., Order, 25 FCC 
Rcd 257 (MB 2010). Accordingly, there is little Commission precedent 
regarding the good faith rules, and there has only been one finding 
that a party to a retransmission consent agreement negotiated in bad 
faith.

C. Petition for Rulemaking

    13. In March 2010, 14 MVPDs and public interest groups filed a 
rulemaking petition arguing that the Commission's retransmission 
consent regulations are outdated and are harming consumers. Time Warner 
Cable Inc. et al. Petition for Rulemaking to Amend the Commission's 
Rules Governing Retransmission Consent, MB Docket No. 10-71, at 1 
(filed Mar. 9, 2010) (the Petition). The petitioners argued that 
changes in the marketplace, and the increasingly contentious nature of 
retransmission consent negotiations, justify revisions to the 
Commission's rules governing retransmission consent. Specifically, the 
Petition stated that, in 1992, Congress acted out of ``concern that 
cable operators were functioning as monopolies and in turn threatened 
to undercut the public interest benefits associated with over-the-air 
broadcasting.'' Petition at 2-3 (footnote omitted). The petitioners 
argued that broadcasters today ``enjoy distribution options beyond the 
cable incumbent in

[[Page 17075]]

nearly every [DMA].'' Id. at 4. The Petition also contended that 
Congress expected broadcaster demands for compensation, if any, to be 
modest, because of the benefits that broadcasters derive from carriage. 
Id. The Petition argued that the recent shift of bargaining power to 
broadcasters has resulted in retransmission consent negotiations in 
which MVPDs must either agree to the significantly higher fees 
requested by broadcasters or lose access to programming. Id. at 5.
    14. On March 19, 2010, the Media Bureau released a Public Notice 
inviting public comment on the Petition. See Public Notice, Media 
Bureau Seeks Comment on a Petition for Rulemaking to Amend the 
Commission's Rules Governing Retransmission Consent, DA 10-474 (MB 
2010) (the Public Notice). Following the grant of an extension, 
comments were due May 18, 2010, and reply comments were due June 3, 
2010. See Petition for Rulemaking to Amend the Commission's Rules 
Governing Retransmission Consent, Order, 25 FCC Rcd 3334 (MB 2010). 
While some commenters agree with the petitioners that the 
retransmission consent regime is in need of reform, others argue that 
the retransmission consent process is working as intended and that the 
shift in retransmission consent pricing represents a market correction 
reflecting the increased competition faced by incumbent cable 
operators.

D. Consumer Impact

    15. In the past year, we have seen high profile retransmission 
consent disputes result in carriage impasses. When Cablevision Systems 
Corp. (Cablevision) and News Corp.'s agreement for two Fox-affiliated 
television stations and one MyNetwork TV-affiliated television station 
expired on October 15, 2010 and the parties did not reach an extension 
or renewal agreement, Cablevision was forced to discontinue carriage of 
the three stations until agreement was reached on October 30, 2010. The 
carriage impasse resulted in affected Cablevision subscribers being 
unable to view on cable the baseball National League Championship 
Series, the first two games of the World Series, a number of NFL 
regular season games, and other regularly scheduled programs. 
Previously, on March 7, 2010, Walt Disney Co. (Disney) and Cablevision 
were unable to reach agreement on carriage of Disney's ABC signal for 
nearly 21 hours after a previous agreement expired. As a result, the 
approximately 3.1 million households served by Cablevision were unable 
to view the first 14 minutes of the Academy Awards through their cable 
provider. Most recently, we are aware of losses of programming 
resulting from retransmission consent carriage impasses involving DISH 
Network and Chambers Communications Corp., Time Warner Cable and Smith 
Media LLC, DISH Network and Frontier Radio Management, DirecTV and 
Northwest Broadcasting, Mediacom and KOMU-TV, and Full Channel TV and 
Entravision.
    16. In addition, consumers have been concerned about other high 
profile retransmission consent negotiations that seemed close to an 
impasse. For example, a retransmission consent agreement with Time 
Warner Cable for News Corp.'s Fox television stations expired at 
midnight on December 31, 2009. A statement from FCC Chairman Julius 
Genachowski at the time acknowledged that a failure to conclude a new 
agreement could harm consumers, noting that ``[c]ompanies shouldn't 
force cable-watching football fans to scramble for other means of TV 
delivery on New Year's weekend.'' See News Release, FCC Chairman Julius 
Genachowski Statement on Retransmission Disputes, (rel. Dec. 31, 2009). 
Ultimately, Fox and Time Warner reached agreement without any carriage 
interruption, but consumers who were aware of the dispute were unsure 
if they would have continued access to Fox programming through their 
Time Warner subscription. We are concerned about the uncertainty that 
consumers have faced regarding their ability to continue receiving 
certain broadcast television stations during recent contentious 
retransmission consent negotiations. The early termination fees imposed 
by some MVPDs may cause consumers faced with a potential retransmission 
consent negotiating impasse to be unwilling or unable to consider 
switching to another MVPD to maintain access to a particular broadcast 
station. See infra para. 30. Accordingly, recognizing the consumer harm 
caused by retransmission consent negotiation impasses and near 
impasses, the Commission seeks comment on certain proposals to modify 
the rules governing retransmission consent.

III. Discussion

    17. Our goal in this proceeding is to take appropriate action, 
within our existing authority, to protect consumers from the disruptive 
impact of the loss of broadcast programming carried on MVPD video 
services. Subscribers are the innocent bystanders adversely affected 
when broadcasters and MVPDs fail to reach an agreement to extend or 
renew their retransmission consent contracts. In light of the changing 
marketplace, our proposals in this NPRM are intended to update the good 
faith rules and remedies in order to better utilize the good faith 
requirement as a consumer protection tool. While one way to protect 
consumers' interests might be for the Commission to order that a 
station continue to be carried notwithstanding the parties' failure to 
reach an agreement, the statute does not authorize carriage without the 
station's consent, as discussed below. Therefore, we have identified 
other measures that we could take to improve the process and decrease 
the occurrence of these disruptions. As detailed in this NPRM, we seek 
comment on these measures and on others that could be beneficial and 
constructive. Is there an impact on the basic service rate that 
consumers pay as a result of the retransmission consent fees or 
disputes?
    18. As a threshold matter, we note that the Petition proposed, 
among other suggestions, that the Commission adopt a mandatory 
arbitration mechanism for retransmission consent disputes, and provide 
for mandatory interim carriage while an MVPD negotiates in good faith 
or while dispute resolution proceedings are pending. Petition at 31-40. 
In response to the Public Notice seeking comment on the Petition, some 
commenters have agreed that the Commission should adopt mandatory 
dispute resolution procedures and/or interim carriage mechanisms. In 
contrast, other commenters have argued that the Commission should not, 
as a matter of policy, adopt mandatory dispute resolution procedures or 
interim carriage mechanisms, and/or that in any event the Commission 
lacks authority to adopt such procedures and mechanisms. We do not 
believe that the Commission has authority to adopt either interim 
carriage mechanisms or mandatory binding dispute resolution procedures 
applicable to retransmission consent negotiations. First, regarding 
interim carriage, examination of the Act and its legislative history 
has convinced us that the Commission lacks authority to order carriage 
in the absence of a broadcaster's consent due to a retransmission 
consent dispute. Rather, section 325(b) of the Act expressly prohibits 
the retransmission of a broadcast signal without the broadcaster's 
consent. 47 U.S.C. 325(b)(1)(A) (``No cable system or other 
multichannel video programming distributor shall retransmit the signal 
of a broadcasting station, or any part thereof, except--(A) with the 
express authority of the originating station''). Furthermore, 
consistent with the

[[Page 17076]]

statutory language, the legislative history of section 325(b) states 
that the retransmission consent provisions were not intended ``to 
dictate the outcome of the ensuing marketplace negotiations'' and that 
broadcasters would retain the ``right to control retransmission and to 
be compensated for others' use of their signals.'' S.Rep.No. 92, 102nd 
Cong., 1st Sess. 1991, reprinted in 1992 U.S.C.C.A.N. 1133, 1169. We 
thus interpret section 325(b) to prevent the Commission from ordering 
carriage over the objection of the broadcaster, even upon a finding of 
a violation of the good faith negotiation requirement. Consistent with 
this interpretation, the Commission previously found that it has ``no 
latitude * * * to adopt regulations permitting retransmission during 
good faith negotiation or while a good faith or exclusivity complaint 
is pending before the Commission where the broadcaster has not 
consented to such retransmission.'' Good Faith Order. Contrary to the 
suggestion of some commenters, section 4(i) of the Act does not 
authorize the Commission to act in a manner that is inconsistent with 
other provisions of the Act, and thus does not support Commission-
ordered carriage in this context. Second, we believe that mandatory 
binding dispute resolution procedures would be inconsistent with both 
section 325 of the Act, in which Congress opted for retransmission 
consent negotiations to be handled by private parties subject to 
certain requirements, and with the Administrative Dispute Resolution 
Act (ADRA), which authorizes an agency to use arbitration ``whenever 
all parties consent.'' 5 U.S.C. 575(a)(1).
    19. In light of the statutory mandate in section 325 and the 
restrictions imposed by the ADRA, we do not believe that we have 
authority to require either interim carriage requirements or mandatory 
binding dispute resolution procedures. Parties may comment on that 
conclusion. We seek comment below on other ways the Commission can 
protect the public from, and decrease the frequency of, retransmission 
consent negotiation impasses within our existing statutory authority.

A. Strengthening the Good Faith Negotiation Standards of Sec.  
76.65(b)(1) of the Commission's Rules

    20. When the Commission originally adopted the good faith standards 
in 2000, the circumstances were different from the conditions industry 
and consumers face today. At that time programming disruptions due to 
retransmission consent disputes were rare. The Commission's approach 
then was to provide broad standards of what constitutes good faith 
negotiation but generally leave the negotiations to the parties. See, 
e.g., Good Faith Order (``[T]he Commission concluded in the Broadcast 
Signal Carriage Order that Congress did not intend that the Commission 
should intrude in the negotiation of retransmission consent. We do not 
interpret the good faith requirement of SHVIA to alter this settled 
course and require that the Commission assume a substantive role in the 
negotiation of the terms and conditions of retransmission consent.''). 
As the Commission stated, ``The statute does not appear to contemplate 
an intrusive role for the Commission with regard to retransmission 
consent.'' See id. Instead, the Commission stated that ``[w]e believe 
that, by imposing the good faith obligation, Congress intended that the 
Commission develop and enforce a process that ensures that broadcasters 
and MVPDs meet to negotiate retransmission consent and that such 
negotiations are conducted in an atmosphere of honesty, purpose and 
clarity of process.'' See id. The good faith provision of SHVIA was 
specifically targeted at constraining unacceptable negotiating conduct 
on the part of broadcasters, but Congress subsequently recognized that 
it is necessary to constrain unacceptable retransmission consent 
negotiating conduct of MVPDs as well as broadcasters, and thus imposed 
a reciprocal bargaining obligation in SHVERA. See, e.g., Implementation 
of Section 207 of the Satellite Home Viewer Extension and 
Reauthorization Act of 2004; Reciprocal Bargaining Obligation, 70 FR 
40216, July 13, 2005 (SHVERA Reciprocal Bargaining Order) (``Section 
207 [of SHVERA] * * * amends [section 325(b)(3)(C) of the Act] to 
impose a reciprocal good faith retransmission consent bargaining 
obligation on [MVPDs]. This section alters the bargaining obligations 
created by [SHVIA] which imposed a good faith bargaining obligation 
only on broadcasters.'') (footnote omitted). In recent times, the 
actual and threatened service disruptions resulting from increasingly 
contentious retransmission consent disputes present a growing 
inconvenience and source of confusion for consumers. We believe that 
these changes in circumstances support reevaluation of the good faith 
rules, particularly to ameliorate the impact of retransmission consent 
negotiations on innocent consumers. We note that recent letters from 
members of Congress have emphasized the effect of retransmission 
consent negotiations on consumers.
    21. As discussed above, in implementing the reciprocal good faith 
negotiation requirement of section 325 of the Act, the Commission 
established a list of seven objective good faith negotiation standards. 
Violation of any of these standards by a broadcast station or MVPD is 
considered a per se breach of its obligation to negotiate in good 
faith. The record indicates that there is some uncertainty in the 
marketplace about whether certain conduct constitutes a failure to 
negotiate in good faith. Accordingly, we seek comment on augmenting our 
rules to include additional objective good faith negotiation standards, 
the violation of which would be considered a per se breach of Sec.  
76.65 of the Commission's rules. We believe that additional per se good 
faith negotiation standards could increase certainty in the 
marketplace, thereby promoting the successful completion of 
retransmission consent negotiations and protecting consumers from 
impasses or near impasses. In addition, we seek comment on clarifying 
various aspects of our existing good faith rules.
    22. First, we seek comment on whether it should be a per se 
violation for a station to agree to give a network with which it is 
affiliated the right to approve a retransmission consent agreement with 
an MVPD or to comply with such an approval provision. In response to 
the Public Notice seeking comment on the Petition, certain commenters 
discussed network involvement in the retransmission consent process. 
Some commenters have argued that the Commission should consider 
preventing networks from dictating whether and by what terms an 
affiliated station may grant retransmission consent. Others have argued 
that provisions in network-affiliate agreements do not interfere with 
the requirement that broadcasters negotiate retransmission consent in 
good faith. Interested parties have argued that, in recent 
retransmission consent negotiations, a network's exercise of its 
contractual approval right has hindered the progress of the 
negotiations. The good faith rules currently require the Negotiating 
Entity to designate a representative with authority to make binding 
representations on retransmission consent and not unreasonably delay 
negotiations. 47 CFR 76.65(b)(1)(ii) and (iii). If a station has 
granted a network a veto power over any retransmission consent 
agreement with an MVPD, then it has arguably impaired its own ability 
to designate a representative who can

[[Page 17077]]

bind the station in negotiations, contrary to our rules. Do provisions 
in network affiliation agreements giving the network approval rights 
over the grant of retransmission consent by its affiliate represent a 
reasonable exercise by a network of its distribution rights in network 
programming? If so, in considering revisions to the good faith rules, 
how should the Commission balance the networks' rights against the 
stations' obligation to negotiate in good faith and the regulatory goal 
of protecting consumers from service disruptions? We seek comment on 
the appropriate parameters of network involvement in retransmission 
consent negotiations. We would also welcome comment and data regarding 
how frequently a network's assertion of the right to review or approve 
an agreement affects negotiations. In our consideration of the role of 
the network in its affiliates' retransmission consent negotiations, we 
do not intend to interfere with the flow of revenue between networks 
and their affiliates. We recognize the special value of broadcast 
network programming to local broadcast television stations and to 
MVPDs. Accordingly, we do not propose to prevent a network from 
contracting to receive a portion of its affiliates' retransmission 
consent fees. Rather, we seek comment on the permissible scope of a 
network's involvement in the negotiations or right to approve an 
agreement. If the Commission decides to prohibit stations from granting 
networks the right to approve their affiliates' retransmission consent 
agreements, should we, on a going-forward basis, abrogate any 
provisions restricting an affiliate's power to grant retransmission 
consent without network approval that appear in existing agreements?
    23. Second, we seek comment on whether it should be a per se 
violation for a station to grant another station or station group the 
right to negotiate or the power to approve its retransmission consent 
agreement when the stations are not commonly owned. Such consent might 
be reflected in local marketing agreements (LMAs), Joint Sales 
Agreements (JSAs), shared services agreements, or other similar 
agreements. Some commenters have noted problems that occur when one 
station or station group negotiates retransmission consent on behalf of 
a station or station group that is not commonly owned. The Commission 
believes that, when a station relinquishes its responsibility to 
negotiate retransmission consent, there may be delays to the 
negotiation process, and negotiations may become unnecessarily 
complicated if an MVPD is forced to negotiate with multiple parties 
with divergent interests, potentially including interests that extend 
beyond a single local market. The proposal on which we seek comment 
would effectively prohibit joint retransmission consent negotiations by 
stations that are not commonly owned. Should the Commission, on a 
going-forward basis, abrogate any such terms that appear in existing 
agreements? One commenter has argued that the negotiating arrangements 
about which others complain are rare, and that they are largely in 
small markets ``where such sharing agreements may well be necessary for 
the stations to survive economically.'' Accordingly, we seek comment on 
the prevalence of agreements that grant one station or station group 
the right to negotiate or approve the retransmission consent agreement 
of a station or station group that is not commonly owned; the impact of 
such arrangements on the negotiation process; and the potential harms 
and benefits of prohibiting such agreements. How should the Commission 
balance any asserted benefits of such sharing agreements against the 
goal of protecting consumers from service disruptions?
    24. Third, we seek comment on whether it should be a per se 
violation for a Negotiating Entity to refuse to put forth bona fide 
proposals on important issues. One commenter has stated that a refusal 
to make proposals as to key issues is a bad faith tactic in 
retransmission consent negotiations. How should we identify the 
category of issues about which a Negotiating Entity is required to put 
forth a bona fide proposal? How should we determine what constitutes a 
bona fide proposal, or whether a proposal is sufficiently unreasonable 
as to constitute bad faith? We note that the Commission has defined a 
bona fide request in the context of a programmer's request for leased 
access on a system of a small cable operator. See 47 CFR 76.970(i)(3).
    25. Fourth, we seek comment on whether it should be a per se 
violation for a Negotiating Entity to refuse to agree to non-binding 
mediation when the parties reach an impasse within 30 days of the 
expiration of their retransmission consent agreement. We seek comment 
on whether 30 days from the expiration of the retransmission consent 
agreement is the appropriate time frame within which to require non-
binding mediation. In previous retransmission consent disputes, the 
Commission has encouraged parties to engage in voluntary dispute 
resolution mechanisms as a means to reach agreement because a neutral 
third party may be able to facilitate agreement where the parties have 
otherwise failed. The Commission previously stated its belief ``that 
voluntary mediation can play an important part in the facilitation of 
retransmission consent and [we] encourage parties involved in 
protracted retransmission consent negotiations to pursue mediation on a 
voluntary basis.'' See Good Faith Order (also stating that the 
Commission would revisit the issue of mandatory retransmission consent 
mediation if its experience in enforcing the good faith provision 
indicates that it is necessary). If parties are unable to reach 
agreement on their own and the expiration of their existing agreement 
is imminent, should we consider it bad faith for them to refuse to 
participate in non-binding mediation? Would mediation advance the 
successful completion of retransmission consent negotiations, even if 
it is not binding on the parties? Although as noted above we do not 
believe we have authority to mandate binding arbitration, we believe 
that we have authority to require non-binding mediation. Because the 
mediation would be non-binding, we believe that it would be consistent 
with the statutory prohibition on retransmission without the 
originating station's express authority. Non-binding mediation would 
also be consistent with the ADRA, which prohibits compelled binding 
arbitration. See 5 U.S.C. 571 through 584. We seek comment on our 
proposal to require non-binding mediation. If we require mediation, how 
should a mediator be selected, and how should the parties determine who 
is responsible for the costs of mediation? How would the ground rules 
of the mediation be determined?
    26. Fifth, we seek comment on what it means to ``unreasonably'' 
delay retransmission consent negotiations. Section 76.65(b)(1)(iii) of 
the Commission's rules currently provides that ``[r]efusal by a 
Negotiating Entity to meet and negotiate retransmission consent at 
reasonable times and locations, or acting in a manner that unreasonably 
delays retransmission consent negotiations,'' constitutes a violation 
of the Negotiating Entity's duty to negotiate retransmission consent in 
good faith. 47 CFR 76.65(b)(1)(iii). Commenters report that 
negotiations have been adversely affected by a party--either a 
broadcaster or an MVPD--delaying the commencement or progress of a 
negotiation as a tactic to gain advantage rather than out of necessity. 
We believe that delaying retransmission consent negotiations could 
predictably and intentionally lead

[[Page 17078]]

to the type of impasse and threat of disruption that inconveniences 
consumers. Accordingly, we seek comment on what standards we should 
consider in determining whether a Negotiating Entity has acted in a 
manner that ``unreasonably'' delays retransmission consent negotiations 
and thus violates the duty to negotiate in good faith.
    27. Sixth, we seek comment on whether a broadcaster's request or 
requirement, as a condition of retransmission consent, that an MVPD not 
carry an out-of-market ``significantly viewed'' (SV) station violates 
Sec.  76.65(b)(1)(vi) of the Commission's rules. Section 
76.65(b)(1)(vi) of the Commission's rules provides that ``[e]xecution 
by a Negotiating Entity of an agreement with any party, a term or 
condition of which, requires that such Negotiating Entity not enter 
into a retransmission consent agreement with any other television 
broadcast station or multichannel video programming distributor'' is a 
violation of the Negotiating Entity's duty to negotiate in good faith. 
See 47 CFR 76.65(b)(1)(vi). Despite the existence of this rule, in the 
Commission's proceeding implementing section 203 of the Satellite 
Television Extension and Localism Act of 2010 (STELA), DISH Network 
L.L.C. requested that the Commission adopt a rule to ``clarify that 
tying retransmission consent to restrictions on SV station carriage'' 
violates the requirement that parties negotiate retransmission consent 
in good faith. See Comments and Petition for Further Rulemaking of DISH 
Network L.L.C., MB Docket No. 10-148, at 9 (filed Aug. 17, 2010). DISH 
Network stated that some ``local stations have tied the grant of their 
retransmission consent for local-into-local service to concessions from 
satellite carriers that the carriers will not introduce any SV stations 
of the same network.'' Id. (footnote omitted). We note that the 
Commission previously interpreted Sec.  76.65(b)(1)(vi) of the 
Commission's rules narrowly, as involving collusion between a 
broadcaster and an MVPD. See, e.g., Good Faith Order (``For example, 
Broadcaster A is prohibited from agreeing with MVPD B that it will not 
reach retransmission consent with MVPD C.''); SHVERA Reciprocal 
Bargaining Order (``As is evidenced by the discussion in the Good Faith 
Order, that provision is intended to cover collusion between a 
broadcaster and an MVPD requiring non-carriage by another MVPD * * 
*.''); see also ATC Broadband LLC and Dixie Cable TV, Inc. v. Gray 
Television Licensee, Inc., 24 FCC Rcd at 1649, para. 7. We seek comment 
on whether to interpret this rule more expansively to preclude a 
broadcast station from executing an agreement prohibiting an MVPD from 
carrying an out-of-market SV station that might otherwise be available 
to consumers as a partial substitute for the in-market station's 
programming, in the event of a retransmission consent negotiation 
impasse. Should we expand our prior interpretation of this rule to 
cover any additional scenarios? Have there been instances in which an 
MVPD would have carried an out-of-market SV station, but for a local 
broadcaster's request or requirement to the contrary? Do the holders of 
the rights to certain programming, including but not limited to 
broadcast networks, impose geographic restrictions on the stations to 
which they license programming, such that an out-of-market SV station 
may be prohibited from consenting to carriage, in any event? We also 
invite comment on whether stations have threatened to delay or refuse 
to reach a retransmission agreement unless the MVPD commits to forego 
carriage of out-of-market SV stations without including such commitment 
in the executed agreement. Do such threats circumvent the rule as 
written by keeping the commitment out of the executed document? Should 
we revise the rule to prevent such circumvention?
    28. Finally, we seek comment on whether there are any additional 
actions or practices that should be deemed to constitute per se 
violations of a Negotiating Entity's duty to negotiate retransmission 
consent agreements in good faith under Sec.  76.65 of the Commission's 
rules, or that we should otherwise prohibit in order to protect 
consumers. For example, if a broadcaster or MVPD repeatedly insists on 
month-to-month retransmission consent agreements or a new agreement 
term of less than one year, should that constitute a per se violation 
of the Negotiating Entity's duty to negotiate retransmission consent in 
good faith? Month-to-month retransmission consent agreements are 
different from short-term extensions to existing retransmission consent 
agreements for the purpose of negotiating a mutually satisfactory long-
term retransmission consent agreement, which the Commission encourages 
as a means of avoiding a loss of programming. In addition, how should 
the Commission view the required inclusion of a ``most favored nation'' 
(MFN) clause in a retransmission consent agreement? An MFN clause 
refers to an agreement that if Party A awards terms or conditions to a 
third party that are more favorable than those currently in place with 
Party B, then Party A must offer the more favorable terms or conditions 
to Party B. How often are MFN clauses included in retransmission 
consent agreements, what is their intended purpose, and what is their 
effect on retransmission consent negotiations?
    29. With respect to other practices the Commission should consider, 
one commenter stated, ``Small and mid-size MVPDs could greatly enhance 
their ability to negotiate with broadcasters if they were permitted to 
pool their resources, appoint an agent, and negotiate as a group.'' We 
seek comment on this proposal, including how to reconcile it with the 
proposal described above that would prevent a broadcast station from 
granting to another station or station group the right to negotiate or 
the power to approve its retransmission consent agreement when the 
stations are not commonly owned. In addition, we ask parties to comment 
on whether small and new entrant MVPDs are typically forced to accept 
retransmission consent terms that are less favorable than larger or 
more established MVPDs, and if so, whether this is fair. And, several 
commenters have suggested that the Commission should address the 
ability of broadcasters to condition retransmission consent on the 
purchase of other programming services, such as the programming of 
affiliated non-broadcast networks. We note that a number of commenters 
see problems with such broadcaster requirements. Is this something that 
the Commission should consider in evaluating whether broadcasters have 
negotiated in good faith?
    30. Are there additional actions that should be listed as 
presumptive breaches of good faith but subject to arguments rebutting 
the presumption in special circumstances? Would the approach of 
rebuttable presumptions rather than per se violations offer beneficial 
flexibility or diminish the benefits of greater specificity in the good 
faith rule? We also invite comment on ways the Commission can 
strengthen the remedies available upon finding a violation of the good 
faith standards to encourage compliance with the rules. Are there 
additional penalties that the Commission can impose for failure to 
negotiate in good faith that would provide a meaningful incentive for 
compliance with the good faith standard, such as considering such 
failure in the context of license renewals, including, e.g., satellite 
and CARS licenses? See, e.g., 47 CFR 25.102, 25.156, 25.160, 78.11 et 
seq.; 47 U.S.C. 301, 308(b), 309. Finally, to what extent do MVPDs 
impose early termination

[[Page 17079]]

fees (ETFs) on their subscribers, and what effect, if any, do ETFs have 
on retransmission consent negotiations and on consumers' ability to 
switch MVPDs in the event of a negotiation impasse? What actions, if 
any, could the Commission take to address any problems involving ETFs?

B. Specification of the Totality of the Circumstances Standard of Sec.  
76.65(b)(2) of the Commission's Rules

    31. We seek comment on revising the ``totality of the 
circumstances'' standard for determining whether actions in the 
negotiating process are taken in good faith, in an effort to improve 
the standard's utility and to better serve innocent consumers. As 
described in greater detail below, we invite comment on how the 
Commission can more effectively evaluate complaints that do not allege 
per se violations but involve behavior calculated to threaten 
disruption of consumer access as a negotiating tactic. We seek comment 
on particular behavior that the Commission should evaluate in the 
context of the ``totality of the circumstances'' standard.
    32. Pursuant to Sec.  76.65(b)(2) of the Commission's rules, ``a 
Negotiating Entity may demonstrate, based on the totality of the 
circumstances of a particular retransmission consent negotiation, that 
a television broadcast station or multichannel video programming 
distributor breached its duty to negotiate in good faith * * *.'' 47 
CFR 76.65(b)(2). The Commission has stated, ``[w]e do not intend the 
totality of the circumstances test to serve as a `back door' inquiry 
into the substantive terms negotiated between the parties.'' Good Faith 
Order. Rather, the totality of the circumstances test enables the 
Commission to consider a complaint alleging that, while a Negotiating 
Entity did not violate the per se objective standards, its proposals or 
actions were ``sufficiently outrageous,'' or included terms or 
conditions not based on competitive marketplace considerations, so as 
to violate the good faith negotiation requirement. See id.
    33. Some commenters have argued that the Commission should clarify 
or expand on the totality of the circumstances standard, including the 
related concept of competitive marketplace considerations, while others 
do not support changes to our rules governing retransmission consent. 
We seek comment on whether to provide more specificity for the meaning 
and scope of the ``totality of the circumstances'' standard of Sec.  
76.65(b)(2) of the Commission's rules, in order to define more clearly 
the instances in which a Negotiating Entity may violate this standard. 
For example, the Media Bureau previously found a violation of the 
totality of the circumstances standard, in response to a petition filed 
by WLII/WSUR Licensee Partnership, G.P. against Choice Cable T.V. 
(Choice), regarding the parties' negotiations for carriage of WLII-TV 
and its booster stations WSUR-TV and WORA-TV. See Letter to Jorge L. 
Bauermeister, 22 FCC Rcd 4933. While Choice stated that it halted 
negotiations because it began carrying WLII's programming through 
arrangements with WORA, Choice failed to provide evidence of a valid 
retransmission consent agreement with WORA, and thus the Media Bureau 
found that Choice breached its duty to negotiate in good faith. See id. 
at 4933-34. Are there additional circumstances that the Commission 
should consider in evaluating the totality of the circumstances, or is 
the ``totality of the circumstances'' best left as a general provision 
to capture those actions and behaviors that we do not now foresee but 
that may impede productive and fair negotiations? We note that the 
Commission previously provided examples of bargaining proposals that 
are presumptively consistent and presumptively inconsistent with 
competitive marketplace considerations and the good faith negotiation 
requirement. See Good Faith Order. Should any of the potential 
additional per se violations proposed in Section III.A., above, instead 
be considered as part of the totality of the circumstances of a 
particular negotiation? Is it sufficient to retain the existing 
flexible standard, and look to precedent to provide specificity as 
warranted? We seek comment on particular ways in which we could provide 
more specificity in defining when conduct would breach the duty of good 
faith negotiation under the ``totality of the circumstances.''

C. Revision of the Notice Requirements

    34. Adequate advance notice of retransmission consent disputes for 
consumers can enable them to prepare for disruptions in their video 
service. However, such notice can be unnecessarily costly and 
disruptive when it creates a false alarm, i.e., concern about 
disruption that does not come to pass, and induces subscribers to 
switch MVPD providers in anticipation of a service disruption that 
never takes place. We seek comment on how best to balance useful 
advance notice against the potential for causing unnecessary anxiety to 
consumers. We invite comment on how best to revise our notice rules in 
light of these considerations, as well as the economic impact of notice 
requirements on both broadcasters and MVPDs.
    35. Our current notice requirements apply to cable operators only 
and are not violated by a failure to provide notice unless service is 
actually disrupted. Specifically, section 614(b)(9) of the Act requires 
a cable operator to notify a local commercial television station in 
writing at least 30 days before either deleting or repositioning that 
station. 47 U.S.C. 534(b)(9). Section 76.1601 of the Commission's rules 
further specifies that a cable operator must ``provide written notice 
to any broadcast television station at least 30 days prior to either 
deleting from carriage or repositioning that station. Such notification 
shall also be provided to subscribers of the cable system.'' 47 CFR 
76.1601. (Sec. Sec.  76.1602 and 76.1603 of the Commission's rules 
contain additional requirements for notifying subscribers and cable 
franchise authorities. 47 CFR 76.1602, 76.1603.) Accordingly, under the 
current rule, if a cable operator fails to give notice 30 days before 
the retransmission consent agreement's expiration, and the agreement is 
ultimately renewed without the station being deleted, then the cable 
operator has not violated the rule. If, however, the station is 
ultimately deleted, and the cable operator has not given the required 
30 day notice, then the cable operator is in violation of Sec.  76.1601 
of the Commission's rules. Of course, the cable operator does not know 
whether the negotiations will ultimately fail and it will be required 
to delete the broadcast signal until the agreement actually expires. We 
note that, notwithstanding the fact that the Commission may not have 
enforced the current notice requirements in all instances in which a 
station is deleted without notice, it reserves the right to do so in 
its discretion. See Heckler v. Chaney, 470 U.S. 821, 831 (1985) (``an 
agency's decision not to prosecute or enforce, whether through civil or 
criminal process, is a decision generally committed to an agency's 
absolute discretion'').
    36. Some commenters have proposed that we not only clarify but also 
expand our existing notice requirements so that consumers will have 
sufficient time to determine their options and take appropriate action 
in the event that a broadcast signal is deleted from an MVPD's service. 
Asserted benefits of enhanced notice include providing consumers with 
sufficient time to obtain access to particular broadcast signals by 
alternative means, and encouraging the successful completion of renewal

[[Page 17080]]

retransmission consent agreements more than 30 days before an existing 
agreement expires. In contrast, other commenters have argued that 
enhanced notice would have negative results such as unnecessarily 
alarming consumers and public officials, making negotiations 
increasingly contentious, providing broadcasters and rival MVPDs with 
more time to encourage customers to switch MVPDs, and causing customers 
who do switch to bear the associated costs unnecessarily if the 
negotiations are resolved without service disruption. We note that some 
cable operators have expressed their view that the existing notice 
requirements are not triggered by failed retransmission consent 
negotiations because the loss of the signal is not within the cable 
operators' ``control.'' See 47 CFR 76.1603(b) (``Notice must be given 
to subscribers a minimum of thirty (30) days in advance of such changes 
if the change is within the control of the cable operator.''). We 
clarify that the notice requirements of Sec.  76.1601 of the 
Commission's rules do not vary based on whether a change is within the 
cable operator's control. Our focus in this NPRM is on Sec.  76.1601 of 
the Commission's rules, which requires notice when a cable operator 
deletes or repositions broadcast signals, rather than Sec.  76.1603 of 
the Commission's rules, which addresses customer service rules 
applicable to cable operators. Additionally, even if we were concerned 
with Sec.  76.1603 of the Commission's rules, we would consider 
retransmission consent negotiations to be within the control of both 
parties to the negotiations, and thus, failure to reach retransmission 
consent agreement would not be an excuse for failing to provide notice.
    37. We seek comment on whether we should revise our notice rules to 
require that notice of potential deletion of a broadcaster's signal be 
given to consumers once a retransmission consent agreement is within 30 
days of expiration, unless a renewal or extension has been executed, 
and regardless of whether the station's signal is ultimately deleted. 
Under this approach, if parties have not reached a new agreement prior 
to 30 days from the agreement's expiration, notice must be given to 
consumers. Would the requirement to provide such notice encourage the 
parties to conclude their negotiations more than 30 days before the 
expiration of the existing agreement, and thus help avoid the station 
deletions that deprive MVPD customers of local broadcast stations? 
Should we require notice to be given by any particular means? How 
should the Commission avoid imposing notice requirements that become so 
frequent that MVPD customers discount the notices? We have observed 
that the notices of impending impasses that generally have been 
provided by broadcasters and MVPDs alike are often little more than ad 
hominem attacks on the other party. We seek comment on what steps the 
Commission could take to ensure, to the extent possible, that required 
notifications provide useful information to consumers instead of merely 
serving as a further front in the retransmission consent war. For 
example, LIN objects to notices in which MVPDs ``discount the 
possibility of a carriage interruption.'' If the parties to a 
retransmission consent agreement begin giving notice, and subsequently 
agree to an extension pending further negotiations, should new notice 
be required of the extension agreement, and when should that notice be 
given? Where the parties enter into multiple extensions of their 
existing agreement, should notice be given of each extension? Would 
multiple notices be confusing to consumers? We also seek comment on 
extending the notice requirements with respect to deletions associated 
with retransmission consent disputes to non-cable MVPDs and 
broadcasters. What sources of authority does the Commission possess to 
support imposing notice requirements on non-cable MVPDs and 
broadcasters? See, e.g., 47 U.S.C. 154(i), 301, 303(r), 303(v), 307, 
309, 335(a). Would the benefits of advance notice to subscribers, 
particularly in allowing customers to switch providers in order to 
avoid service disruptions and possibly reducing their likelihood, 
exceed the costs to subscribers, particularly in encouraging 
unnecessary switching of MVPDs when service disruptions do not occur?

D. Application of the ``Sweeps'' Prohibition to Retransmission Consent 
Disputes

    38. We seek comment on whether we should extend the Commission's 
``sweeps'' prohibition to non-cable MVPDs. Section 614(b)(9) of the Act 
states:

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

47 U.S.C. 534(b)(9). Note 1 to Sec.  76.1601 of the Commission's rules 
states:

    No deletion or repositioning of a local commercial television 
station shall occur during a period in which major television 
ratings services measure the size of audiences of local television 
stations. For this purpose, such periods are the four national four-
week ratings periods--generally including February, May, July and 
November--commonly known as audience sweeps.

47 CFR 76.1601, Note 1. Commenters have expressed differing views about 
the scope of this provision.

    39. We note that the record evidences some confusion about whether, 
despite the prohibition on deletion during the sweeps period, a 
broadcaster may require a cable operator to delete the broadcaster's 
signal when the retransmission consent agreement expires during sweeps 
and the parties do not reach an extension or renewal agreement. The 
sweeps prohibition, found in section 614(b)(9) of the Act, states that 
``No deletion or repositioning of a local commercial television station 
shall occur during a period in which major television ratings services 
measure the size of audiences of local television stations.'' 47 U.S.C. 
534(b)(9). The provision is contained within Section 614 which imposes 
carriage obligations on cable operators. 47 U.S.C. 534(a). Although the 
language of the statute is broadly worded, there is nothing in section 
614(b)(9) to suggest that Congress intended to impose a reciprocal 
obligation on broadcasters during sweeps. To the contrary, the 
legislative history explains that ``A cable operator may not drop or 
reposition any such station during a `sweeps' period when ratings 
services measure local television audiences.'' See S. Rep. No. 92, 
102nd Cong., 1st Sess. 1991, at 86, reprinted in 1992 U.S.C.C.A.N. 
1133, 1219. Moreover, this reading of the statute would eliminate any 
tension with the retransmission consent provisions, which provide that 
``No cable system or other multichannel video programming distributor 
shall retransmit the signal of a broadcasting station, or any part 
thereof, except with the express authority of the originating 
station.'' 47 U.S.C. 325(b)(1)(A). Interpreting section 614(b)(9) to 
prohibit broadcasters from withholding retransmission consent during 
sweeps would run counter to section 325(b)(1)(A)'s express limitation 
on broadcast carriage without a broadcaster's consent. 47 U.S.C. 
534(b)(9), 325(b)(1)(A). While DirecTV

[[Page 17081]]

and DISH have stated that permitting broadcasters to withhold 
programming during sweeps would be contrary to precedent (citing 
Northland Cable TV, Inc., 23 FCC Rcd 7865 (MB 2008), which cites Time 
Warner Cable, 15 FCC Rcd 7882 (CSB 2006)), we note that neither of 
those bureau-level decisions involved a retransmission consent 
agreement expiring during sweeps and the broadcaster requesting 
deletion of its own signal. In any event, to the extent that language 
in any prior cases could be read as precluding a broadcaster from 
requiring a cable operator to delete its signal during sweeps, staff-
level decisions are not binding on the Commission. See Comcast Corp. v. 
FCC, 526 F.3d 763, 769 (D.C. Cir. 2008). We seek comment on the above 
analysis.
    40. Likewise, it does not appear that section 335(a) grants the 
Commission authority to impose a sweeps limitation on broadcasters. 
Section 335(a) directs the Commission to ``initiate a rulemaking 
proceeding to impose, on providers of direct broadcast satellite 
service, public interest or other requirements for providing video 
programming.'' 47 U.S.C. 335(a). Thus, while section 335 would arguably 
grant the Commission authority to extend the sweeps rule to DBS 
providers, it does not appear to confer authority to extend the sweeps 
rule to broadcasters. We invite comment on this view.
    41. The sweeps prohibition generally prevents a cable operator from 
deleting a station during the sweeps period if the retransmission 
consent agreement expires during sweeps. We do not believe that the 
existing prohibition on deleting or repositioning a local commercial 
television station during sweeps periods applies to non-cable MVPDs, 
such as DBS, given that the provision appears within section 614, a 
section that focuses on the carriage obligations of cable operators. 
See 47 U.S.C. 534(b)(9). We further note that the prohibition on 
deleting a local station during sweeps periods appears inextricably 
intertwined with the prior sentence expressly requiring a ``cable 
operator'' to provide at least 30 days notice to a local station prior 
to deletion of that station. Id. We see nothing in the legislative 
history of the statute to suggest that Congress intended section 
614(b)(9) to apply to non-cable MVPDs. Consistent with the statute, 
Sec.  76.1601 of the Commission's rules expressly applies to cable 
operators only. See 47 CFR 76.1601. A different provision of the Act, 
section 338, governs satellite carriage of local broadcast stations, 
and it does not include a prohibition on deletion or repositioning 
during sweeps. See 47 U.S.C. 338. Accordingly, to achieve regulatory 
parity between cable systems and other MVPDs, we seek comment on 
whether we should extend the Commission's ``sweeps rule'' to non-cable 
MVPDs. Does the Commission have authority to extend the prohibition to 
DBS and other non-cable MVPDs, such as through sections 154(i), 303(r), 
303(v), and 335(a) of the Act? 47 U.S.C. 154(i), 303(r), 303(v), 
335(a).

E. Elimination of the Network Non-Duplication and Syndicated 
Exclusivity Rules

    42. We seek comment on the potential benefits and harms of 
eliminating the Commission's rules concerning network non-duplication 
and syndicated programming exclusivity. See 47 CFR 76.92 et seq., 
76.101 et seq., 76.122, 76.123. The network non-duplication rules 
permit a station with exclusive rights to network programming, as 
granted by the network, to assert those rights by using notification 
procedures in the Commission's rules. See 47 CFR 76.92 through 76.94. 
The rules, in turn, prohibit the cable system from carrying the network 
programming as broadcast by any other station within the ``geographic 
zone'' to which the contractual rights and rules apply. See 47 CFR 
76.92. (The size of the geographic zone depends upon the size of the 
market in which the station is located. See 47 CFR 76.92(b).) Thus, a 
cable system negotiating retransmission consent with a local network 
affiliate may face greater pressure to reach agreement by virtue of the 
cable system's inability to carry another affiliate of the same network 
if the retransmission consent negotiations fail. Similarly, under the 
syndicated exclusivity rules, a station may assert its contractual 
rights to exclusivity within a specified geographic zone to prevent a 
cable system from carrying the same syndicated programming aired by 
another station. See 47 CFR 76.101 et seq. These rules are collectively 
referred to as the ``exclusivity rules.'' They are grounded in the 
private contractual arrangements that exist between a station and the 
provider of network or syndicated programming. The Commission's rules 
do not create these rights but rather provide a means for the parties 
to the exclusive contracts to enforce them through the Commission 
rather than through the courts. In fact, the Commission's rules limit 
the circumstances in which the private contracts can be enforced by, 
for example, limiting the geographic area in which the exclusivity 
applies or exempting small cable systems and significantly viewed 
stations. See, e.g., 47 CFR 76.92(b) and (f), 76.95(a); see also 47 CFR 
76.93 (``Television broadcast station licensees shall be entitled to 
exercise non-duplication rights * * * in accordance with the 
contractual provisions of the network-affiliate agreement.'').
    43. The Petition argued that the Commission's rules provide 
broadcasters with a ``one-sided level of protection'' that is no longer 
justified, including through the network non-duplication and syndicated 
exclusivity rules. Petition at 12-15. Commenters also argued that the 
exclusivity rules provide broadcasters with artificially inflated 
bargaining leverage in retransmission consent negotiations. In 
addition, ACA filed a Petition for Rulemaking to Amend 47 CFR 76.64, 
76.93 and 76.103 on March 2, 2005 (ACA's 2005 Petition), asserting that 
competition and consumers are harmed when broadcasters use exclusivity 
and network affiliation agreements to extract ``supracompetitive 
prices'' for retransmission consent from small cable companies. See 
Public Notice, Report No. 2696, RM-11203 (Mar. 17, 2005). We hereby 
incorporate in this proceeding by reference ACA's 2005 Petition, as 
well as the comments filed in response thereto. In contrast, other 
commenters have asserted that network non-duplication and syndicated 
exclusivity provisions are important to foster localism. Some 
commenters have also suggested that eliminating the Commission's 
exclusivity rules may have little effect on retransmission consent 
negotiations, because private exclusive contracts between broadcasters 
and programming suppliers would remain in place.
    44. We seek comment on whether eliminating the Commission's network 
non-duplication and syndicated exclusivity rules, without abrogating 
any private contractual provisions, would have a beneficial impact on 
retransmission consent negotiations. Would eliminating these rules help 
to minimize regulatory intrusion in the market, thus better enabling 
free market negotiations to set the terms for retransmission consent? 
The Commission previously stated in discussing its exclusivity rules, 
``By requiring MVPDs to black out duplicative programming carried on 
any distant signals they may import into a local market, the 
Commission's network non-duplication and syndicated exclusivity rules 
provide a regulatory means for broadcasters to prevent MVPDs from 
undermining their contractually negotiated exclusivity rights.'' See 
Retransmission Consent and Exclusivity Rules: Report to Congress 
Pursuant to Section 208 of the Satellite

[[Page 17082]]

Home Viewer Extension and Reauthorization Act of 2004, para. 17 (Sept. 
8, 2005), available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-260936A1.pdf. Are these rules still necessary, or is 
any benefit of these rules outweighed by a negative impact on 
retransmission consent negotiations? Do these rules serve a useful 
purpose in today's marketplace? Should exclusivity in this area be left 
entirely to the private marketplace, without providing any means of 
enforcement through the Commission? Would there be a beneficial impact 
to removing these rules if the contractual provisions that the rules 
enforce stay in place? Would the elimination of the network non-
duplication and syndicated exclusivity rules have a negative impact on 
localism? We seek comment on the impact of our network non-duplication 
and syndicated exclusivity rules on the distribution of programming by 
television stations. Do these rules provide stations and networks with 
any rights that cannot be secured through a combination of network-
affiliate contracts and retransmission consent? Under the existing 
exclusivity rules, the in-market television station has the right to 
assert network non-duplication and syndicated exclusivity protection 
based on its contractual relationship with the network, regardless of 
whether it is actually carried by the cable system. See Amendment of 
Parts 73 and 76 of the Commission's Rules relating to program 
exclusivity in the cable and broadcast industries, Report and Order, 3 
FCC Rcd 5299, 5313-14, 5320, para. 92, 95, 122 (1988). As an 
alternative to eliminating the network non-duplication rule completely 
as discussed above, we seek comment on revising the network non-
duplication rule so that it does not apply to a television station that 
has not granted retransmission consent. Thus, a television station 
would only be permitted to assert network non-duplication protection if 
it is actually carried on the cable system. We seek comment on this 
proposal.
    45. We note that in SHVIA Congress extended the network non-
duplication and syndicated exclusivity rules to DBS but only in 
extremely limited situations that are not equivalent to their 
application to cable systems. See 47 U.S.C. 339(b)(1) (applying network 
non-duplication protection and syndicated exclusivity protection only 
to ``nationally distributed superstations,'' which are defined so that 
they are limited to six stations); 47 U.S.C. 339(d)(2). See also 
Implementation of the Satellite Home Viewer Improvement Act of 1999: 
Application of Network Nonduplication, Syndicated Exclusivity, and 
Sports Blackout Rules to Satellite Retransmissions of Broadcast 
Signals, 65 FR 68082, November 14, 2000 (SHVIA Exclusivity Rules 
Order). In contrast, the cable network non-duplication rules may apply 
to any station broadcasting network programming. See 47 CFR 76.92(a) 
and 76.93 (subject to geographic limitations and exemptions based on 
the cable system's size or a station's ``significantly viewed'' status, 
Sec. Sec.  76.92(f) and 76.95(a) of the Commission's rules). See also 
47 CFR 76.101 and 76.106 (governing syndicated exclusivity). As 
specified in SHVIA, the Commission's rules apply the exclusivity 
requirements only to ``nationally distributed superstations.'' See 
SHVIA Exclusivity Rules Order. We do not propose to eliminate or revise 
these statutorily mandated rules. In SHVERA, Congress permitted DBS to 
carry out-of-market significantly viewed stations (currently, 17 U.S.C. 
122(a)(2) and 47 U.S.C. 340) and applied the exclusivity rules insofar 
as local stations could challenge the significantly viewed status of 
the out-of-market station and thus prevent its carriage, just as in the 
cable context. See Implementation of the Satellite Home Viewer 
Extension and Reauthorization Act of 2004, Implementation of Section 
340 of the Communications Act, 70 FR 76504, December 27, 2005 (SHVERA 
Significantly Viewed Report and Order). (SV status is an exception to 
the network non-duplication rules. 47 CFR 76.92(f). SHVERA provided 
that if a station was to be carried out-of-market as a SV station, it 
would be subject to the rules allowing an in-market station to assert 
network non-duplication to prevent carriage of the SV station if it 
demonstrated that the SV status was no longer valid. See SHVERA 
Significantly Viewed Report and Order. Thus, for DBS, if a station is 
demonstrated to no longer be significantly viewed, it is not eligible 
for carriage as an out-of-market SV station. We do not propose to 
change this result.) We seek comment on whether and, if so, how, this 
limited application of the exclusivity rules would apply to DBS if we 
eliminate the rules as they apply to cable and whether eliminating 
rules as to cable systems would create undue disparities or unintended 
consequences for DBS. We also seek comment on whether new rules would 
be needed to permit local stations to challenge the significantly 
viewed status of an out-of-market station if the network non-
duplication rules are revised or eliminated.

F. Other Proposals

    46. We seek comment on whether there are other actions the 
Commission should take either to revise its existing rules or adopt new 
rules in order to protect consumers from harm as a result of impasses 
or threatened impasses in retransmission consent negotiations. 
Commenters advocating rule revisions or additions should address the 
Commission's authority to adopt their proposals.

IV. Conclusion

    47. In conclusion, in this NPRM, we seek comment on proposed 
changes to our rules to provide greater certainty to parties engaged in 
retransmission consent negotiations and to better protect consumers 
from the uncertainty and disruption that they may experience when such 
negotiations fail to yield an agreement.

V. Procedural Matters

A. Initial Regulatory Flexibility Act Analysis

    48. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA) the Commission has prepared this present Initial 
Regulatory Flexibility Analysis (IRFA) concerning the possible 
significant economic impact on small entities by the policies and rules 
proposed in this Notice of Proposed Rulemaking (NPRM). See 5 U.S.C. 
603. The RFA, see 5 U.S.C. 601-612, has been amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), Public 
Law 104-121, Title II, 110 Stat. 857 (1996). Written public comments 
are requested on this IRFA. Comments must be identified as responses to 
the IRFA and must be filed in accordance with the same filing deadlines 
for comments on the NPRM. The Commission will send a copy of the NPRM, 
including this IRFA, to the Chief Counsel for Advocacy of the Small 
Business Administration (SBA). See 5 U.S.C. 603(a). In addition, the 
NPRM and IRFA (or summaries thereof) will be published in the Federal 
Register. See id.
Need for, and Objectives of, the Proposed Rule Changes
    49. The NPRM seeks comment on a series of proposals to streamline 
and clarify the Commission's rules concerning or affecting 
retransmission consent negotiations. The Commission's primary objective 
is to assess whether and how the Commission rules in this arena are 
ensuring that the market-based mechanisms Congress designed to govern 
retransmission consent negotiations are working effectively and,

[[Page 17083]]

to the extent possible, minimize video programming service disruptions 
to consumers.
    50. Since Congress enacted the retransmission consent regime in 
1992, there have been significant changes in the video programming 
marketplace. One such change is the form of compensation sought by 
broadcasters. Historically, cable operators typically compensated 
broadcasters for consent to retransmit the broadcasters' signals 
through in-kind compensation, which might include, for example, 
carriage of additional channels of the broadcaster's programming on the 
cable system or advertising time. See, e.g., General Motors Corp. and 
Hughes Electronics Corp., Transferors, and The News Corp. Ltd., 
Transferee, Memorandum Opinion and Order, 19 FCC Rcd 473, 503, para. 56 
(2004). Today, however, broadcasters are increasingly seeking and 
receiving monetary compensation from multichannel video programming 
distributors (MVPDs) in exchange for consent to the retransmission of 
their signals. Another important change concerns the rise of 
competitive video programming providers. In 1992, the only option for 
many local broadcast television stations seeking to reach MVPD 
customers in a particular Designated Market Area (DMA) was a single 
local cable provider. Today, in contrast, many consumers have 
additional options for receiving programming, including two national 
direct broadcast satellite (DBS) providers, telephone providers that 
offer video programming in some areas, and, to a degree, the Internet. 
One result of such changes in the marketplace is that disputes over 
retransmission consent have become more contentious and more public, 
and we recently have seen a rise in negotiation impasses that have 
affected millions of consumers.
    51. Accordingly, we have concluded that it is appropriate for us to 
reexamine our rules relating to retransmission consent. In the NPRM, we 
consider revisions to the retransmission consent and related rules that 
we believe could allow the market-based negotiations contemplated by 
the statute to proceed more smoothly, provide greater certainty to the 
negotiating parties, and help protect consumers. Accordingly, the NPRM 
seeks comment on rule changes that would:
    <bullet> Provide more guidance under the good faith negotiation 
requirements to the negotiating parties by:
    [cir] Specifying additional examples of per se violations in Sec.  
76.65(b)(1) of the Commission's rules; and
    [cir] Further clarifying the totality of the circumstances standard 
of Sec.  76.65(b)(2) of the Commission's rules;
    <bullet> Improve notice to consumers in advance of possible service 
disruptions by extending the coverage of our notice rules to non-cable 
MVPDs and broadcasters as well as cable operators, and specifying that, 
if a renewal or extension agreement has not been executed 30 days in 
advance of a retransmission consent agreement's expiration, notice of 
potential deletion of a broadcaster's signal must be given to consumers 
regardless of whether the signal is ultimately deleted;
    <bullet> Extend to non-cable MVPDs the prohibition now applicable 
to cable operators on deleting or repositioning a local commercial 
television station during ratings ``sweeps'' periods; and
    <bullet> Allow MVPDs to negotiate for alternative access to network 
programming by eliminating the Commission's network non-duplication and 
syndicated exclusivity rules.

We also seek comment on any other revisions or additions to our rules 
within the scope of our authority that would improve the retransmission 
consent negotiation process and help protect consumers from programming 
disruptions.
Legal Basis
    52. The proposed action is authorized pursuant to sections 4(i), 
4(j), 301, 303(r), 303(v), 307, 309, 325, 335, and 614 of the 
Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 301, 
303(r), 303(v), 307, 309, 325, 335, and 534.
Description and Estimate of the Number of Small Entities to Which the 
Proposed Rules Will Apply
    53. The RFA directs agencies to provide a description of and, where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules, if adopted. 5 U.S.C. 603(b)(3). The RFA 
generally defines the term ``small entity'' as having the same meaning 
as the terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' 5 U.S.C. 601(6). In addition, the term 
``small business'' has the same meaning as the term ``small business 
concern'' under the Small Business Act. 5 U.S.C. 601(3) (incorporating 
by reference the definition of ``small business concern'' in 15 U.S.C. 
632). Pursuant to 5 U.S.C. 601(3), the statutory definition of a small 
business applies ``unless an agency, after consultation with the Office 
of Advocacy of the Small Business Administration and after opportunity 
for public comment, establishes one or more definitions of such term 
which are appropriate to the activities of the agency and publishes 
such definition(s) in the Federal Register.'' 5 U.S.C. 601(3). A small 
business concern is one which: (1) Is independently owned and operated; 
(2) is not dominant in its field of operation; and (3) satisfies any 
additional criteria established by the SBA. 15 U.S.C. 632. Application 
of the statutory criteria of dominance in its field of operation and 
independence are sometimes difficult to apply in the context of 
broadcast television. Accordingly, the Commission's statistical account 
of television stations may be over-inclusive. Below, we provide a 
description of such small entities, as well as an estimate of the 
number of such small entities, where feasible.
    54. Wired Telecommunications Carriers. The 2007 North American 
Industry Classification System (NAICS) defines ``Wired 
Telecommunications Carriers'' as follows: ``This industry comprises 
establishments primarily engaged in operating and/or providing access 
to transmission facilities and infrastructure that they own and/or 
lease for the transmission of voice, data, text, sound, and video using 
wired telecommunications networks. Transmission facilities may be based 
on a single technology or a combination of technologies. Establishments 
in this industry use the wired telecommunications network facilities 
that they operate to provide a variety of services, such as wired 
telephony services, including VoIP services; wired (cable) audio and 
video programming distribution; and wired broadband Internet services. 
By exception, establishments providing satellite television 
distribution services using facilities and infrastructure that they 
operate are included in this industry.'' U.S. Census Bureau, 2007 NAICS 
Definitions, ``517110 Wired Telecommunications Carriers''; http://www.census.gov/naics/2007/def/ND517110.HTM#N517110. The SBA has 
developed a small business size standard for wireline firms within the 
broad economic census category, ``Wired Telecommunications Carriers.'' 
13 CFR 121.201 (NAICS code 517110). Under this category, the SBA deems 
a wireline business to be small if it has 1,500 or fewer employees. 
Census Bureau data for 2007, which now supersede data from the 2002 
Census, show that there were 3,188 firms in this category that operated 
for the entire year. Of this total, 3,144 had employment of 999 or 
fewer, and 44 firms had had employment of 1,000 employees or

[[Page 17084]]

more. Thus under this category and the associated small business size 
standard, the majority of these firms can be considered small. See 
http://factfinder.census.gov/servlet/IBQTable?_bm=y&-fds_name=EC0700A1&-geo_id=&-_skip=600&-ds_name=EC0751SSSZ5&-_lang=en.
    55. Cable Television Distribution Services. Since 2007, these 
services have been defined within the broad economic census category of 
Wired Telecommunications Carriers; that category is defined above. The 
SBA has developed a small business size standard for this category, 
which is: All such firms having 1,500 or fewer employees. Census Bureau 
data for 2007, which now supersede data from the 2002 Census, show that 
there were 3,188 firms in this category that operated for the entire 
year. Of this total, 3,144 had employment of 999 or fewer, and 44 firms 
had had employment of 1,000 employees or more. Thus under this category 
and the associated small business size standard, the majority of these 
firms can be considered small. See http://factfinder.census.gov/servlet/IBQTable?_bm=y&-fds_name=EC0700A1&-geo_id=&-_skip=600&-ds_name=EC0751SSSZ5&-_lang=en.
    56. Cable Companies and Systems. The Commission has also developed 
its own small business size standards, for the purpose of cable rate 
regulation. Under the Commission's rules, a ``small cable company'' is 
one serving 400,000 or fewer subscribers, nationwide. 47 CFR 76.901(e). 
Industry data indicate that, of 1,076 cable operators nationwide, all 
but eleven are small under this size standard. In addition, under the 
Commission's rules, a ``small system'' is a cable system serving 15,000 
or fewer subscribers. 47 CFR 76.901(c). Industry data indicate that, of 
7,208 systems nationwide, 6,139 systems have under 10,000 subscribers, 
and an additional 379 systems have 10,000-19,999 subscribers. Thus, 
under this standard, most cable systems are small.
    57. Cable System Operators. The Communications Act of 1934, as 
amended, also contains a size standard for small cable system 
operators, which is ``a cable operator that, directly or through an 
affiliate, serves in the aggregate fewer than 1 percent of all 
subscribers in the United States and is not affiliated with any entity 
or entities whose gross annual revenues in the aggregate exceed 
$250,000,000.'' 47 U.S.C. 543(m)(2); see 47 CFR 76.901(f) & nn. 1-3. 
The Commission has determined that an operator serving fewer than 
677,000 subscribers shall be deemed a small operator, if its annual 
revenues, when combined with the total annual revenues of all its 
affiliates, do not exceed $250 million in the aggregate. 47 CFR 
76.901(f); see FCC Announces New Subscriber Count for the Definition of 
Small Cable Operator, Public Notice, 16 FCC Rcd 2225 (Cable Services 
Bureau 2001). Industry data indicate that, of 1,076 cable operators 
nationwide, all but ten are small under this size standard. We note 
that the Commission neither requests nor collects information on 
whether cable system operators are affiliated with entities whose gross 
annual revenues exceed $250 million, and therefore we are unable to 
estimate more accurately the number of cable system operators that 
would qualify as small under this size standard.
    58. Direct Broadcast Satellite (DBS) Service. DBS service is a 
nationally distributed subscription service that delivers video and 
audio programming via satellite to a small parabolic ``dish'' antenna 
at the subscriber's location. DBS, by exception, is now included in the 
SBA's broad economic census category, ``Wired Telecommunications 
Carriers'' (see 13 CFR 121.201, NAICS code 517110 (2007)), which was 
developed for small wireline firms. Under this category, the SBA deems 
a wireline business to be small if it has 1,500 or fewer employees. 13 
CFR 121.201, NAICS code 517110 (2007). Census Bureau data for 2007, 
which now supersede data from the 2002 Census, show that there were 
3,188 firms in this category that operated for the entire year. Of this 
total, 3,144 had employment of 999 or fewer, and 44 firms had had 
employment of 1,000 employees or more. Thus under this category and the 
associated small business size standard, the majority of these firms 
can be considered small. See http://factfinder.census.gov/servlet/IBQTable?_bm=y&-fds_name=EC0700A1&-geo_id=&-_skip=600&-ds_name=EC0751SSSZ5&-_lang=en. Currently, only two entities provide DBS 
service, which requires a great investment of capital for operation: 
DIRECTV and EchoStar Communications Corporation (EchoStar) (marketed as 
the DISH Network). Each currently offers subscription services. DIRECTV 
and EchoStar each report annual revenues that are in excess of the 
threshold for a small business. Because DBS service requires 
significant capital, we believe it is unlikely that a small entity as 
defined by the SBA would have the financial wherewithal to become a DBS 
service provider.
    59. Satellite Master Antenna Television (SMATV) Systems, also known 
as Private Cable Operators (PCOs). SMATV systems or PCOs are video 
distribution facilities that use closed transmission paths without 
using any public right-of-way. They acquire video programming and 
distribute it via terrestrial wiring in urban and suburban multiple 
dwelling units such as apartments and condominiums, and commercial 
multiple tenant units such as hotels and office buildings. SMATV 
systems or PCOs are now included in the SBA's broad economic census 
category, ``Wired Telecommunications Carriers,'' (see 13 CFR 121.201, 
NAICS code 517110 (2007)) which was developed for small wireline firms. 
Under this category, the SBA deems a wireline business to be small if 
it has 1,500 or fewer employees. 13 CFR 121.201, NAICS code 517110 
(2007). Census Bureau data for 2007, which now supersede data from the 
2002 Census, show that there were 3,188 firms in this category that 
operated for the entire year. Of this total, 3,144 had employment of 
999 or fewer, and 44 firms had had employment of 1,000 employees or 
more. Thus under this category and the associated small business size 
standard, the majority of these firms can be considered small. See 
http://factfinder.census.gov/servlet/IBQTable?_bm=y&-fds_name=EC0700A1&-geo_id=&-_skip=600&-ds_name=EC0751SSSZ5&-_lang=en.
    60. Home Satellite Dish (HSD) Service. HSD or the large dish 
segment of the satellite industry is the original satellite-to-home 
service offered to consumers, and involves the home reception of 
signals transmitted by satellites operating generally in the C-band 
frequency. Unlike DBS, which uses small dishes, HSD antennas are 
between four and eight feet in diameter and can receive a wide range of 
unscrambled (free) programming and scrambled programming purchased from 
program packagers that are licensed to facilitate subscribers' receipt 
of video programming. Because HSD provides subscription services, HSD 
falls within the SBA-recognized definition of Wired Telecommunications 
Carriers. 13 CFR 121.201, NAICS code 517110 (2007). The SBA has 
developed a small business size standard for this category, which is: 
all such firms having 1,500 or fewer employees. Census Bureau data for 
2007, which now supersede data from the 2002 Census, show that there 
were 3,188 firms in this category that operated for the entire year. Of 
this total, 3,144 had employment of 999 or

[[Page 17085]]

fewer, and 44 firms had had employment of 1,000 employees or more. Thus 
under this category and the associated small business size standard, 
the majority of these firms can be considered small. See http://factfinder.census.gov/servlet/IBQTable?_bm=y&-fds_name=EC0700A1&-geo_id=&-_skip=600&-ds_name=EC0751SSSZ5&-_lang=en.
    61. Broadband Radio Service and Educational Broadband Service. 
Broadband Radio Service systems, previously referred to as Multipoint 
Distribution Service (MDS) and Multichannel Multipoint Distribution 
Service (MMDS) systems, and ``wireless cable,'' transmit video 
programming to subscribers and provide two-way high speed data 
operations using the microwave frequencies of the Broadband Radio 
Service (BRS) and Educational Broadband Service (EBS) (previously 
referred to as the Instructional Television Fixed Service (ITFS)). In 
connection with the 1996 BRS auction, the Commission established a 
small business size standard as an entity that had annual average gross 
revenues of no more than $40 million in the previous three calendar 
years. 47 CFR 21.961(b)(1). The BRS auctions resulted in 67 successful 
bidders obtaining licensing opportunities for 493 Basic Trading Areas 
(BTAs). Of the 67 auction winners, 61 met the definition of a small 
business. BRS also includes licensees of stations authorized prior to 
the auction. At this time, we estimate that of the 61 small business 
BRS auction winners, 48 remain small business licensees. In addition to 
the 48 small businesses that hold BTA authorizations, there are 
approximately 392 incumbent BRS licensees that are considered small 
entities. 47 U.S.C. 309(j). Hundreds of stations were licensed to 
incumbent MDS licensees prior to implementation of section 309(j) of 
the Communications Act of 1934, 47 U.S.C. 309(j). For these pre-auction 
licenses, the applicable standard is SBA's small business size standard 
of 1500 or fewer employees. After adding the number of small business 
auction licensees to the number of incumbent licensees not already 
counted, we find that there are currently approximately 440 BRS 
licensees that are defined as small businesses under either the SBA or 
the Commission's rules. In 2009, the Commission conducted Auction 86, 
the sale of 78 licenses in the BRS areas. The Commission offered three 
levels of bidding credits: (i) A bidder with attributed average annual 
gross revenues that exceed $15 million and do not exceed $40 million 
for the preceding three years (small business) will receive a 15 
percent discount on its winning bid; (ii) a bidder with attributed 
average annual gross revenues that exceed $3 million and do not exceed 
$15 million for the preceding three years (very small business) will 
receive a 25 percent discount on its winning bid; and (iii) a bidder 
with attributed average annual gross revenues that do not exceed $3 
million for the preceding three years (entrepreneur) will receive a 35 
percent discount on its winning bid. Auction 86 concluded in 2009 with 
the sale of 61 licenses. Of the ten winning bidders, two bidders that 
claimed small business status won 4 licenses; one bidder that claimed 
very small business status won three licenses; and two bidders that 
claimed entrepreneur status won six licenses.
    62. In addition, the SBA's Cable Television Distribution Services 
small business size standard is applicable to EBS. There are presently 
2,032 EBS licensees. All but 100 of these licenses are held by 
educational institutions. Educational institutions are included in this 
analysis as small entities. The term ``small entity'' within SBREFA 
applies to small organizations (nonprofits) and to small governmental 
jurisdictions (cities, counties, towns, townships, villages, school 
districts, and special districts with populations of less than 50,000). 
5 U.S.C. 601(4) through (6). We do not collect annual revenue data on 
EBS licensees. Thus, we estimate that at least 1,932 licensees are 
small businesses. Since 2007, Cable Television Distribution Services 
have been defined within the broad economic census category of Wired 
Telecommunications Carriers; that category is defined as follows: 
``This industry comprises establishments primarily engaged in operating 
and/or providing access to transmission facilities and infrastructure 
that they own and/or lease for the transmission of voice, data, text, 
sound, and video using wired telecommunications networks. Transmission 
facilities may be based on a single technology or a combination of 
technologies.'' U.S. Census Bureau, 2007 NAICS Definitions, ``517110 
Wired Telecommunications Carriers,'' (partial definition), http://www.census.gov/naics/2007/def/ND517110.HTM#N517110. The SBA has 
developed a small business size standard for this category, which is: 
All such firms having 1,500 or fewer employees. Census Bureau data for 
2007, which now supersede data from the 2002 Census, show that there 
were 3,188 firms in this category that operated for the entire year. Of 
this total, 3,144 had employment of 999 or fewer, and 44 firms had had 
employment of 1,000 employees or more. Thus under this category and the 
associated small business size standard, the majority of these firms 
can be considered small. See http://factfinder.census.gov/servlet/IBQTable?_bm=y&-fds_name=EC0700A1&-geo_id=&-_skip=600&-ds_name=EC0751SSSZ5&-_lang=en.
    63. Fixed Microwave Services. Microwave services include common 
carrier, private-operational fixed, and broadcast auxiliary radio 
services. They also include the Local Multipoint Distribution Service 
(LMDS), the Digital Electronic Message Service (DEMS), and the 24 GHz 
Service, where licensees can choose between common carrier and non-
common carrier status. See 47 CFR 101.533 and 101.1017. At present, 
there are approximately 31,428 common carrier fixed licensees and 
79,732 private operational-fixed licensees and broadcast auxiliary 
radio licensees in the microwave services. There are approximately 120 
LMDS licensees, three DEMS licensees, and three 24 GHz licensees. The 
Commission has not yet defined a small business with respect to 
microwave services. For purposes of the IRFA, we will use the SBA's 
definition applicable to Wireless Telecommunications Carriers (except 
satellite)--i.e., an entity with no more than 1,500 persons. 13 CFR 
121.201, NAICS code 517210. Under the present and prior categories, the 
SBA has deemed a wireless business to be small if it has 1,500 or fewer 
employees. 13 CFR 121.201, NAICS code 517210 (2007 NAICS). The now-
superseded, pre-2007 CFR citations were 13 CFR 121.201, NAICS codes 
517211 and 517212 (referring to the 2002 NAICS). For the category of 
Wireless Telecommunications Carriers (except Satellite), Census data 
for 2007, which supersede data contained in the 2002 Census, show that 
there were 1,383 firms that operated that year. U.S. Census Bureau, 
2007 Economic Census, Sector 51, 2007 NAICS code 517210 (rel. Oct. 20, 
2009), http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-fds_name=EC0700A1&-_skip=700&-ds_name=EC0751SSSZ5&-_lang=en. Of 
those 1,383, 1,368 had fewer than 100 employees, and 15 firms had more 
than 100 employees. Thus under this category and the associated small 
business size standard, the majority of firms can be considered small. 
We note

[[Page 17086]]

that the number of firms does not necessarily track the number of 
licensees. We estimate that virtually all of the Fixed Microwave 
licensees (excluding broadcast auxiliary licensees) would qualify as 
small entities under the SBA definition.
    64. Open Video Systems. The open video system (OVS) framework was 
established in 1996, and is one of four statutorily recognized options 
for the provision of video programming services by local exchange 
carriers. 47 U.S.C. 571(a)(3) through (4). The OVS framework provides 
opportunities for the distribution of video programming other than 
through cable systems. Because OVS operators provide subscription 
services, OVS falls within the SBA small business size standard 
covering cable services, which is ``Wired Telecommunications 
Carriers.'' U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired 
Telecommunications Carriers''; http://www.census.gov/naics/2007/def/ND517110.HTM#N517110. The SBA has developed a small business size 
standard for this category, which is: All such firms having 1,500 or 
fewer employees. Census Bureau data for 2007, which now supersede data 
from the 2002 Census, show that there were 3,188 firms in this category 
that operated for the entire year. Of this total, 3,144 had employment 
of 999 or fewer, and 44 firms had had employment of 1,000 employees or 
more. Thus under this category and the associated small business size 
standard, the majority of these firms can be considered small. See 
http://factfinder.census.gov/servlet/IBQTable?_bm=y&-fds_name=EC0700A1&-geo_id=&-_skip=600&-ds_name=EC0751SSSZ5&-_lang=en. 
In addition, we note that the Commission has certified some OVS 
operators, with some now providing service. A list of OVS 
certifications may be found at http://www.fcc.gov/mb/ovs/csovscer.html. 
Broadband service providers (BSPs) are currently the only significant 
holders of OVS certifications or local OVS franchises. The Commission 
does not have financial or employment information regarding the 
entities authorized to provide OVS, some of which may not yet be 
operational. Thus, at least some of the OVS operators may qualify as 
small entities.
    65. Cable and Other Subscription Programming. The Census Bureau 
defines this category as follows: ``This industry comprises 
establishments primarily engaged in operating studios and facilities 
for the broadcasting of programs on a subscription or fee basis. * * * 
These establishments produce programming in their own facilities or 
acquire programming from external sources. The programming material is 
usually delivered to a third party, such as cable systems or direct-to-
home satellite systems, for transmission to viewers.'' U.S. Census 
Bureau, 2007 NAICS Definitions, ``515210 Cable and Other Subscription 
Programming''; http://www.census.gov/naics/2007/def/ND515210.HTM#N515210. To gauge small business prevalence in the Cable 
and Other Subscription Programming industries, the Commission relies on 
data currently available from the U.S. Census for the year 2007. 
According to that source, which supersedes data from the 2002 Census, 
there were 396 firms that in 2007 were engaged in production of Cable 
and Other Subscription Programming. Of these, 386 operated with less 
than 1,000 employees, and 10 operated with more than 1,000 employees. 
However, as to the latter 10 there is no data available that shows how 
many operated with more than 1,500 employees. Thus, under this category 
and associated small business size standard, the majority of firms can 
be considered small. See http://factfinder.census.gov/servlet/IBQTable?_bm=y&-fds_name=EC0700A1&-geo_id=&-_skip=600&-ds_name=EC0751SSSZ5&-_lang=en.
    66. Small Incumbent Local Exchange Carriers. We have included small 
incumbent local exchange carriers in this present RFA analysis. A 
``small business'' under the RFA is one that, inter alia, meets the 
pertinent small business size standard (e.g., a telephone 
communications business having 1,500 or fewer employees), and ``is not 
dominant in its field of operation.'' 15 U.S.C. 632. The SBA's Office 
of Advocacy contends that, for RFA purposes, small incumbent local 
exchange carriers are not dominant in their field of operation because 
any such dominance is not ``national'' in scope. We have therefore 
included small incumbent local exchange carriers in this RFA analysis, 
although we emphasize that this RFA action has no effect on Commission 
analyses and determinations in other, non-RFA contexts.
    67. Incumbent Local Exchange Carriers (LECs). Neither the 
Commission nor the SBA has developed a small business size standard 
specifically for incumbent local exchange services. The appropriate 
size standard under SBA rules is for the category Wired 
Telecommunications Carriers. Under that size standard, such a business 
is small if it has 1,500 or fewer employees. 13 CFR 121.201 (2007 NAICS 
code 517110). Census Bureau data for 2007, which now supersede data 
from the 2002 Census, show that there were 3,188 firms in this category 
that operated for the entire year. Of this total, 3,144 had employment 
of 999 or fewer, and 44 firms had had employment of 1,000 employees or 
more. Thus under this category and the associated small business size 
standard, the majority of these firms can be considered small. See 
http://factfinder.census.gov/servlet/IBQTable?_bm=y&-fds_name=EC0700A1&-geo_id=&-_skip=600&-ds_name=EC0751SSSZ5&-_lang=en.
    68. Competitive Local Exchange Carriers, Competitive Access 
Providers (CAPs), ``Shared-Tenant Service Providers,'' and ``Other 
Local Service Providers.'' Neither the Commission nor the SBA has 
developed a small business size standard specifically for these service 
providers. The appropriate size standard under SBA rules is for the 
category Wired Telecommunications Carriers. Under that size standard, 
such a business is small if it has 1,500 or fewer employees. 13 CFR 
121.201 (2007 NAICS code 517110). Census Bureau data for 2007, which 
now supersede data from the 2002 Census, show that there were 3,188 
firms in this category that operated for the entire year. Of this 
total, 3,144 had employment of 999 or fewer, and 44 firms had had 
employment of 1,000 employees or more. Thus under this category and the 
associated small business size standard, the majority of these firms 
can be considered small. See http://factfinder.census.gov/servlet/IBQTable?_bm=y&-fds_name=EC0700A1&-geo_id=&-_skip=600&-ds_name=EC0751SSSZ5&-_lang=en. Consequently, the Commission estimates 
that most providers of competitive local exchange service, competitive 
access providers, ``Shared-Tenant Service Providers,'' and ``Other 
Local Service Providers'' are small entities.
    69. Television Broadcasting. The SBA defines a television 
broadcasting station as a small business if such station has no more 
than $14.0 million in annual receipts. See 13 CFR 121.201, NAICS Code 
515120 (2007). Business concerns included in this industry are those 
``primarily engaged in broadcasting images together with sound.'' Id. 
The Commission has estimated the number of licensed commercial 
television stations to be 1,392. See News Release, ``Broadcast Station 
Totals as of December 31, 2009,'' 2010 WL 676084 (F.C.C.) (dated Feb. 
26, 2010) (Broadcast

[[Page 17087]]

Station Totals); also available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-296538A1.pdf. According to Commission staff 
review of the BIA/Kelsey, MAPro Television Database (BIA) as of April 
7, 2010, about 1,015 of an estimated 1,380 commercial television 
stations (or about 74 percent) have revenues of $14 million or less 
and, thus, qualify as small entities under the SBA definition. The 
Commission has estimated the number of licensed noncommercial 
educational (NCE) television stations to be 390. See Broadcast Station 
Totals, supra. We note, however, that, in assessing whether a business 
concern qualifies as small under the above definition, business 
(control) affiliations must be included. Our estimate, therefore, 
likely overstates the number of small entities that might be affected 
by our action, because the revenue figure on which it is based does not 
include or aggregate revenues from affiliated companies. The Commission 
does not compile and otherwise does not have access to information on 
the revenue of NCE stations that would permit it to determine how many 
such stations would qualify as small entities.
    70. In addition, an element of the definition of ``small business'' 
is that the entity not be dominant in its field of operation. We are 
unable at this time to define or quantify the criteria that would 
establish whether a specific television station is dominant in its 
field of operation. Accordingly, the estimate of small businesses to 
which rules may apply do not exclude any television station from the 
definition of a small business on this basis and are therefore over-
inclusive to that extent. Also, as noted, an additional element of the 
definition of ``small business'' is that the entity must be 
independently owned and operated. We note that it is difficult at times 
to assess these criteria in the context of media entities and our 
estimates of small businesses to which they apply may be over-inclusive 
to this extent.
Description of Projected Reporting, Recordkeeping, and Other Compliance 
Requirements
    71. Certain proposed rule changes discussed in the NPRM would 
affect reporting, recordkeeping or other compliance requirements. 
Specifically, a potential rule change would (1) revise the Commission's 
notice rules to specify that, if a renewal or extension agreement has 
not been executed 30 days in advance of a retransmission consent 
agreement's expiration, notice of potential deletion of a broadcaster's 
signal must be given to consumers regardless of whether the signal is 
ultimately deleted; and (2) extend the coverage of this notice rule to 
non-cable MVPDs and broadcasters.
Steps Taken To Minimize Significant Economic Impact on Small Entities, 
and Significant Alternatives Considered
    72. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include the following four alternatives (among others): (1) 
The establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities. 5 U.S.C. 603(c)(1) through (c)(4).
    73. As discussed in the NPRM, our goal in this proceeding is to 
take appropriate action, within our existing authority, to protect 
consumers from the disruptive impact of the loss of broadcast 
programming carried on MVPD video services. The specific changes on 
which we seek comment are intended to allow the market-based 
negotiations contemplated by the statute to proceed more smoothly, 
provide greater certainty to the negotiating parties, and help protect 
consumers. The improved successful completion of retransmission consent 
negotiations would benefit both broadcasters and MVPDs, including those 
that are smaller entities, as well as MVPD subscribers. Thus, the 
proposed rules would benefit smaller entities as well as larger 
entities. For this reason, an analysis of alternatives to the proposed 
rules is unnecessary. Further, we note that in its discussion of 
whether there are any additional actions or practices that should be 
deemed to constitute per se violations of a negotiating entity's duty 
to negotiate retransmission consent agreements in good faith, the 
Commission specifically references a proposal to permit small and mid-
size MVPDs to ``pool their resources, appoint an agent, and negotiate 
as a group.'' Such a proposal would provide particular benefit to small 
entities. The NPRM further considers the impact of retransmission 
consent on small entities by asking whether small and new entrant MVPDs 
are typically forced to accept retransmission consent terms that are 
less favorable than larger or more established MVPDs, and if so, 
whether this is fair.
    74. We invite comment on whether there are any alternatives we 
should consider to our proposed modifications to rules that apply to or 
affect retransmission consent negotiations that would minimize any 
adverse impact on small businesses, but which maintain the benefits of 
our proposals.
Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rule
    75. None.

B. Ex Parte Rules

    76. Permit-But-Disclose. This proceeding will be treated as a 
``permit-but-disclose'' proceeding subject to the ``permit-but-
disclose'' requirements under Sec.  1.1206(b) of the Commission's 
rules. See 47 CFR 1.1206(b); see also id. Sec. Sec.  1.1202 and 1.1203 
of the Commission's rules. Ex parte presentations are permissible if 
disclosed in accordance with Commission rules, except during the 
Sunshine Agenda period when presentations, ex parte or otherwise, are 
generally prohibited. Persons making oral ex parte presentations are 
reminded that a memorandum summarizing a presentation must contain a 
summary of the substance of the presentation and not merely a listing 
of the subjects discussed. More than a one- or two-sentence description 
of the views and arguments presented is generally required. See id. 
Sec.  1.1206(b)(2) of the Commission's rules. Additional rules 
pertaining to oral and written presentations are set forth in Sec.  
1.1206(b) of the Commission's rules.

C. Filing Requirements

    77. Comments and Replies. Pursuant to Sec. Sec.  1.415 and 1.419 of 
the Commission's rules, 47 CFR 1.415 and 1.419, interested parties may 
file comments and reply comments on or before the dates indicated in 
the DATES section of this document. To the extent any filings in 
response to this NPRM relate to issues pending in MB Docket No. 07-198, 
where the Commission sought comment on the issue of tying of an MVPD's 
rights to carry broadcast stations with carriage of other owned or 
affiliated broadcast stations in the same or a distant market or one or 
more affiliated non-broadcast networks, they must also be filed in MB 
Docket No. 07-198. Comments may be filed using: (1) The Commission's 
Electronic Comment Filing System (ECFS), (2) the Federal Government's 
eRulemaking Portal, or (3) by filing paper copies. See Electronic 
Filing of Documents in Rulemaking Proceedings, 63 FR 24121, May 1, 
1998.

[[Page 17088]]

    <bullet> Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: http://www.fcc.gov/cgb/ecfs/ 
or the Federal eRulemaking Portal: http://www.regulations.gov.
    <bullet> Paper Filers: Parties who choose to file by paper must 
file an original and four copies of each filing. If more than one 
docket or rulemaking number appears in the caption of this proceeding, 
filers must submit two additional copies for each additional docket or 
rulemaking number.
    Filings can be sent by hand or messenger delivery, by commercial 
overnight courier, or by first-class or overnight U.S. Postal Service 
mail. All filings must be addressed to the Commission's Secretary, 
Office of the Secretary, Federal Communications Commission.
    [cir] All hand-delivered or messenger-delivered paper filings for 
the Commission's Secretary must be delivered to FCC Headquarters at 445 
12th St., SW., Room TW-A325, Washington, DC 20554. All hand deliveries 
must be held together with rubber bands or fasteners. Any envelopes 
must be disposed of before entering the building. The filing hours are 
8 a.m. to 7 p.m.
    [cir] Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743.
    [cir] U.S. Postal Service first-class, Express, and Priority mail 
must be addressed to 445 12th Street, SW., Washington, DC 20554.
    78. Availability of Documents. Comments, reply comments, and ex 
parte submissions will be available for public inspection during 
regular business hours in the FCC Reference Center, Federal 
Communications Commission, 445 12th Street, SW., CY-A257, Washington, 
DC 20554. These documents will also be available via ECFS. Documents 
will be available electronically in ASCII, Microsoft Word, and/or Adobe 
Acrobat.
    79. Accessibility Information. To request information in accessible 
formats (computer diskettes, large print, audio recording, and 
Braille), send an e-mail to <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="81e7e2e2b4b1b5c1e7e2e2afe6eef7">[email protected]</a> or call the FCC's Consumer 
and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-
0432 (TTY). This document can also be downloaded in Word and Portable 
Document Format (PDF) at: http://www.fcc.gov.
    80. Additional Information. For additional information on this 
proceeding, contact Diana Sokolow, <a href="/cdn-cgi/l/email-protection#bafed3dbd4db94e9d5d1d5d6d5cdfadcd9d994ddd5cc"><span class="__cf_email__" data-cfemail="16527f7778773845797d797a79615670757538717960">[email protected]</span></a>, of the Media 
Bureau, Policy Division, (202) 418-2120.

VI. Ordering Clauses

    81. Accordingly, it is ordered that pursuant to the authority 
contained in sections 4(i), 4(j), 301, 303(r), 303(v), 307, 309, 325, 
335, and 614 of the Communications Act of 1934, as amended, 47 U.S.C. 
154(i), 154(j), 301, 303(r), 303(v), 307, 309, 325, 335, and 534, this 
Notice of Proposed Rulemaking is adopted.
    82. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Notice of Proposed Rulemaking, including the Initial 
Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of 
the Small Business Administration.

List of Subjects in 47 CFR Part 76

    Administrative practice and procedure, Cable television, Equal 
employment opportunity, Political candidates, and Reporting and 
recordkeeping requirements.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Proposed Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission proposes to amend 47 CFR part 76 as follows:

PART 76--MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE

    1. The authority citation for part 76 continues to read as follows:

    Authority:  47 U.S.C. 151, 152, 153, 154, 301, 302, 302a, 303, 
303a, 307, 308, 309, 312, 315, 317, 325, 339, 340, 341, 503, 521, 
522, 531, 532, 534, 535, 536, 537, 543, 544, 544a, 545, 548, 549, 
552, 554, 556, 558, 560, 561, 571, 572, 573.

    2. Amend Sec.  76.65 by revising paragraph (b)(1)(iv) and by adding 
paragraphs (b)(1)(viii) through (x) to read as follows:


Sec.  76.65  Good faith and exclusive retransmission consent 
complaints.

* * * * *
    (b) * * *
    (1) * * *
    (iv) Refusal by a Negotiating Entity to put forth more than a 
single, unilateral proposal, or to provide a bona fide proposal on an 
important issue;
* * * * *
    (viii) Agreement by a broadcast television station Negotiating 
Entity to provide a network with which it is affiliated the right to 
approve the station's retransmission consent agreement with an MVPD;
    (ix) Agreement by a broadcast television station Negotiating Entity 
to grant another station or station group the right to negotiate or the 
power to approve its retransmission consent agreement when the stations 
are not commonly owned; and
    (x) Refusal by a Negotiating Entity to agree to non-binding 
mediation when the parties reach an impasse within 30 days of the 
expiration of their retransmission consent agreement.
* * * * *
    3. Revise Sec.  76.1601 to read as follows:


Sec.  76.1601  Deletion or repositioning of broadcast signals.

    (a) Effective April 2, 1993, a cable operator shall provide written 
notice to any broadcast television station at least 30 days prior to 
either deleting from carriage or repositioning that station. Such 
notification shall also be provided to subscribers of the cable system.

    Note 1 to Sec.  76.1601(a):  No deletion or repositioning of a 
local commercial television station shall occur during a period in 
which major television ratings services measure the size of 
audiences of local television stations. For this purpose, such 
periods are the four national four-week ratings periods--generally 
including February, May, July and November--commonly known as 
audience sweeps.

    (b) Broadcast television stations and multichannel video 
programming distributors shall notify affected subscribers of the 
potential deletion of a broadcaster's signal a minimum of 30 days in 
advance of a retransmission consent agreement's expiration, unless a 
renewal or extension agreement has been executed.

[FR Doc. 2011-7250 Filed 3-25-11; 8:45 am]
BILLING CODE 6712-01-P


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