[Federal Register Volume 85, Number 243 (Thursday, December 17, 2020)]
[Rules and Regulations]
[Pages 81805-81813]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-26259]


=======================================================================
-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[MB Docket Nos. 20-70, 17-105, 11-131; FCC 20-162; FRS 17261]


Review Procedures; Modernization of Media Regulation Initiative; 
Program Carriage Rules

AGENCY: Federal Communications Commission.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: In this document, the Commission revises the rules governing 
the resolution of program carriage disputes between video programming 
vendors and multichannel video programming distributors (MVPDs) and 
parallel procedural rules, which govern program access, open video 
system (OVS), and good-faith retransmission consent complaints. 
Specifically, the document amends the third prong of the statute of 
limitations for filing program carriage complaints so that it no longer 
undermines the fundamental purpose of a statute of limitations. To 
harmonize the rules, the document similarly amends the statutes of 
limitations for filing program access, OVS, and good-faith 
retransmission consent complaints. The document also revises the 
effective date and review procedures for initial decisions issued by an 
administrative law judge (ALJ) in program carriage, program access, and 
OVS proceedings to make them consistent with the Commission's generally 
applicable procedures and adopts an aspirational shot clock to 
encourage quick resolution of appeals of such decisions. The Commission 
concludes that these changes will help to ensure a clear and 
expeditious program access, program carriage, retransmission consent, 
and OVS complaint process for potential complainants and defendants.

DATES: Effective January 19, 2021.

FOR FURTHER INFORMATION CONTACT: For additional information on this 
proceeding, contact John Cobb, <a href="/cdn-cgi/l/email-protection#02486d6a6c2c416d6060426461612c656d74"><span class="__cf_email__" data-cfemail="e8a2878086c6ab878a8aa88e8b8bc68f879e">[email protected]</span></a>, of the Policy 
Division, Media Bureau, (202) 418-2120.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order, MB Docket Nos. 20-70, 17-105, 11-131; FCC 20-162, adopted 
and released on November 18, 2020. The full text of this document is 
available via ECFS (http://www.fcc.gov/cgb/ecfs/). (Documents will be 
available electronically in ASCII, Word, and/or Adobe Acrobat.) To 
request these documents in accessible formats (computer diskettes, 
large print, audio recording, and Braille), send an email to 
<a href="/cdn-cgi/l/email-protection#aaccc9c99f9a9eeaccc9c984cdc5dc"><span class="__cf_email__" data-cfemail="32545151070206725451511c555d44">[email protected]</span></a> or call the Commission's Consumer and Governmental 
Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

Synopsis

    In this Report and Order (Order), we adopt proposed changes to the 
rules governing the resolution of program carriage disputes between 
video programming vendors and multichannel video programming 
distributors (MVPDs) and parallel procedural rules in part 76 of our 
rules, which govern program access, open video system (OVS), and good-
faith retransmission consent complaints. Specifically, we amend the 
third prong of the statute of limitations for filing program carriage 
complaints so that it no longer undermines the fundamental purpose of a 
statute of limitations. To harmonize our rules, we similarly amend the 
statutes of limitations for filing program

[[Page 81806]]

access, OVS, and good-faith retransmission consent complaints. We also 
revise the effective date and review procedures for initial decisions 
issued by an administrative law judge (ALJ) in program carriage, 
program access, and OVS proceedings to make them consistent with the 
Commission's generally applicable procedures and adopt an aspirational 
shot clock to encourage quick resolution of appeals of such decisions. 
We find that these changes will help to ensure a clear and expeditious 
program access, program carriage, retransmission consent, and OVS 
complaint process for potential complainants and defendants. With this 
proceeding, we continue our efforts to modernize our media regulations.
    Background. Section 616 of the Communications Act of 1934, as 
amended (the Act), directs the Commission to adopt regulations 
governing program carriage agreements between MVPDs and video 
programming vendors that prohibit certain anti-competitive practices 
and provide for expedited review of program carriage complaints. 
Congress passed section 616 as part of the Cable Television Consumer 
Protection and Competition Act of 1992 (1992 Cable Act), which was 
designed to preserve diversity and competition in the video programming 
market. Two sets of rules adopted pursuant to the 1992 Cable Act 
principally are addressed in this Report and Order: The statute of 
limitations for filing a program carriage complaint and the rules 
governing the effective date and review procedures for initial 
decisions issued by an ALJ in program carriage cases. We discuss these 
rules, in turn, below.
    First, for a program carriage complaint to be timely filed under 
our rules, it must be brought within one year of the date on which any 
of the following events occurs: (1) The defendant MVPD enters into a 
contract with a video programming vendor that a party alleges to 
violate the program carriage rules, (2) the defendant MVPD makes a 
carriage offer that allegedly violates the program carriage rules, and 
such offer is unrelated to any existing contract between the 
complainant and the MVPD; or (3) ``[a] party has notified [an MVPD] 
that it intends to file a complaint with the Commission'' based on a 
violation of the program carriage rules. As noted in the further notice 
of proposed rulemaking (FNPRM) in this proceeding (85 FR 21131, April 
16, 2020), the third prong of the statute of limitations, as originally 
adopted in the 1993 Program Carriage Order (58 FR 60390, November 16, 
1993), contained additional limiting language that made it functionally 
identical to the current statutes of limitations governing program 
access, OVS, and good-faith negotiation of retransmission consent 
complaints. In particular, the original language provided that a 
program carriage complaint was timely if filed within one year of the 
date on which ``the complainant has notified [an MVPD] that it intends 
to file a complaint with the Commission based on a request for carriage 
or to negotiate for carriage of its programming on a defendant's 
distribution system that has been denied or unacknowledged,'' allegedly 
in violation of the program carriage rules. In a subsequent 1994 
amendment (59 FR 43776, August 25, 1994), the Commission modified Sec.  
76.1302(h)(3) to eliminate this limiting language without setting forth 
an explicit rationale for doing so. After several program carriage 
decisions in which the third prong of the statute of limitations had 
been interpreted in a manner consistent with the plain meaning of the 
1994 rule language, the Commission expressed concern in the 2011 
Program Carriage NPRM (76 FR 60675, September 29, 2011) that the third 
prong could be read to mean that a complaint would be deemed timely 
filed under our rules if brought within one year of the date on which a 
complainant notified the defendant MVPD of its intention to file a 
complaint, regardless of when the alleged violation of the rules had 
occurred, thereby ``undermining the fundamental purpose of a statute of 
limitations.'' In the FNPRM, we proposed to reinsert in the program 
carriage rules statute of limitations language similar to that adopted 
in the 1993 Program Carriage Order, which would make the triggering 
event for the statute of limitations the denial or failure to 
acknowledge a request for carriage or to negotiate for carriage, and to 
clarify that the third prong applies only in instances where there is 
no existing contract or offer of carriage. For consistency, we also 
proposed to modify the similar third prongs of the statutes of 
limitations governing program access, OVS, and good-faith 
retransmission consent complaints to make the triggering event for each 
the denial or failure to acknowledge a request.
    Second, program carriage disputes may be referred by the Chief of 
the Media Bureau to an ALJ for a hearing on the merits if a complainant 
establishes that a prima facie violation of Sec.  76.1301 has occurred. 
A program carriage decision issued by an ALJ becomes effective upon 
release except in certain circumstances. If a party seeks review, the 
decision remains in effect pending Commission review, unlike the 
generally applicable procedures of Sec.  1.276(d) that automatically 
stay an ALJ's initial decision pending Commission review. In the FNPRM, 
we noted that although Congress instructed the Commission to adopt 
procedures for the expedited review of program carriage complaints, 
there is no specific statutory requirement for ALJ decisions to take 
immediate effect, nor that they remain in effect pending Commission 
review. We observed that, in the past, the incongruous provisions in 
parts 76 and 1 of our rules have caused confusion for both parties and 
adjudicators, and can create inconsistent outcomes pending appeal. 
Therefore, we proposed to harmonize our parts 76 and 1 rules so that 
review of an ALJ's initial decision in program carriage, program 
access, and OVS proceedings is subject to the same procedural rules as 
other complaints adjudicated by the Commission.
    Additionally, the FNPRM proposed to make several technical edits to 
the part 76 rules. The FNPRM also sought comment on whether, given the 
amount of time that has passed, the Commission should consider any of 
the substantive proposals from the 2011 Program Carriage NPRM, which 
considered a range of substantive and procedural revisions to the 
program carriage rules.
    As further discussed below, MVPDs responding to the FNPRM generally 
support our proposals and advocate for simplifying the regulatory 
framework for program carriage disputes. MVPDs assert that the 
rationale for protecting consumers from vertically-integrated 
distributors is outdated, given the increased competition in the video 
marketplace. On the other hand, independent video programming vendors 
oppose the rule revisions proposed in the FNPRM. In general, such 
programmers advocate for program carriage rules more favorable for 
programmers, citing the practical and financial hardships they face 
when bringing a complaint under our rules and alleging that the 
negotiation practices of vertically-integrated MVPDs continue to 
restrain their ability to compete.
    Discussion. For the reasons discussed below, we adopt our proposals 
to amend the third prong of the statute of limitations for program 
carriage, program access, OVS, and good-faith retransmission consent 
complaints, as well as the rules governing the effective date and 
review procedures for initial decisions issued by an ALJ in program 
access, program carriage, and OVS proceedings. Additionally, in order 
to

[[Page 81807]]

ensure prompt resolution of appeals in program access, program 
carriage, and OVS proceedings, we adopt an aspirational 180-day shot 
clock for circulating a final Commission decision of ALJ initial 
decision appeals in such proceedings. We also make other revisions to 
our part 76 rules to ensure consistency among parallel provisions, 
clarify existing language, and eliminate inoperative language. Finally, 
we decline at this time to adopt other proposals from the 2011 Program 
Carriage NPRM. We find that the rule revisions adopted herein will 
serve the public interest by clarifying and harmonizing the 
Commission's rules and encouraging the timely resolution of program 
carriage disputes.
    Program Carriage Statute of Limitations. We adopt our proposal to 
revise the third prong of the program carriage statute of limitations 
to clarify that it applies only in circumstances where there is not an 
existing program carriage contract or carriage offer and the defendant 
MVPD has denied or failed to acknowledge either a request for program 
carriage or a request to negotiate for program carriage. We find that 
this rule revision will provide certainty to both MVPDs and prospective 
complainants and foreclose the possibility that the third prong could 
be read to allow the filing of a program carriage complaint at 
essentially any time, regardless of when the alleged violation of the 
rules occurred.
    As explained above, the third prong of the program carriage statute 
of limitations currently provides that a complaint must be filed within 
one year of the date on which ``[a] party has notified [an MVPD] that 
it intends to file a complaint with the Commission based on violations 
of one or more of the rules contained in this section.'' We agree with 
those commenters who assert that we should adopt our proposal because 
the current rule could be read to ``undermine[ ] the fundamental 
purpose of a statute of limitations `to protect a potential defendant 
against stale and vexatious claims by ending the possibility of 
litigation after a reasonable period of time has elapsed.' '' NCTA 
asserts, for example, that under the existing statute of limitations a 
complainant could file a program carriage complaint years after a 
contract is entered into with the goal of ``belatedly modify[ing] the 
agreed-upon terms of a contract.'' As explained previously, the third 
prong originally contained language limiting its application to 
circumstances in which there is an unreasonable refusal to negotiate, 
and this language was stricken by the Commission in 1994 without 
explanation. We agree with Comcast that this limiting language made 
clear that the statute of limitations contained ``three distinct and 
mutually exclusive paths for a program carriage complaint'' and that 
the ``ambiguity in the language of the revised rule has led to . . . 
interpretations of the third prong as an exception that swallows the 
other two prongs of the rule.'' We therefore clarify that the third 
prong applies only in circumstances where there is no existing contract 
or carriage offer, and the MVPD has denied or failed to acknowledge a 
request for carriage or a request to negotiate for program carriage 
allegedly in violation of the program carriage rules, consistent with 
the program carriage rules as originally adopted and with Congress's 
directive in section 616.
    We are not persuaded that the public interest would be better 
served by abandoning our proposed changes in favor of alternative 
revisions advocated for by commenters. As an initial matter, we affirm 
our tentative conclusion from the FNPRM that reincorporating the 
limiting language originally contained in the third prong is preferable 
to adopting a single provision that would run for one year from the 
date on which a violation of the program carriage rules allegedly 
occurred. No commenter supported this latter option. Rather, we 
conclude that revising the third prong of the rule strikes an 
appropriate balance between the interest of MVPDs in ensuring that 
program carriage complaints are brought in a timely manner, 
unaffiliated programmers' interest in securing relief for alleged 
violations of the program carriage rules, and the interest of all 
parties in having greater procedural certainty.
    We also decline to adopt alternative proposals raised by commenters 
in the record because we find that none would provide greater certainty 
to parties and adjudicators. First, Independent Programmers oppose our 
proposal, asserting that instead we should revise the statute of 
limitations to permit claims submitted within one year of the date that 
a programmer becomes aware, or should have become aware through the 
exercise of reasonable diligence, of an alleged program carriage 
violation. They assert that MVPDs often ``do not clearly decline or 
refuse carriage proposals'' during negotiations, making it difficult to 
determine when a denial of carriage occurs. However, given the inherent 
uncertainty in determining whether and when a potential complainant 
knew or should have known of an alleged violation of the program 
carriage rules, we agree with NCTA and AT&T that this option would not 
provide greater certainty and finality to the parties. Independent 
Programmers also assert that limiting the third prong to instances 
where a contract does not exist opens the door for MVPD misconduct in 
pre- or post-offer renewal negotiations. However, as noted in the 
FNPRM, our intent is that this revised third prong will ``encompass 
instances where an MVPD refuses to renew or to negotiate for renewal of 
a contract.'' Accordingly, we revise the rule to make clear that the 
third prong also applies in such instances. Other commenters do not 
directly oppose revising the third prong as proposed, but assert that 
if we were to do so, we should adopt a new fourth prong that would run 
from the date that a potential complainant learns that a contractual 
right has been exercised in a discriminatory manner by an MVPD. 
Commenters supporting this proposal contend that such a fourth prong is 
necessary because a contract provision may be consistent with the rules 
at the time it is entered into, but subsequently may be exercised by an 
MVPD in a manner that is unlawfully discriminatory. We decline to adopt 
this proposal. We agree with Comcast that such a proposal, if adopted, 
would create ``ongoing uncertainty and litigation risk for material 
decisions [MVPDs] make pursuant to existing agreements,'' and would 
fail to provide finality to the parties as virtually any conduct by an 
MVPD during the course of a carriage agreement could become the basis 
for a claim of allegedly impermissible discrimination. We also find 
merit in Comcast's assertion that allowing claims based on an MVPD's 
exercise (or non-exercise) of rights that a programmer has agreed to 
contractually would deprive the MVPD of the ``benefit of its bargain.''
    We also reject beIN's proposal that we amend the rules so that the 
one-year period is separately triggered by each materially different 
offer made by an unaffiliated programmer to a vertically integrated 
MVPD. beIN contends that this would reflect the reality that program 
carriage negotiations often run longer than a single calendar year, and 
thus a programmer absent such an amendment may feel that it needs to 
resort to filing a program carriage complaint before necessary. 
However, we are persuaded that such a rule appears to give programmers 
the unilateral power to restart the limitations period at any point by 
making a new offer to an MVPD on whose platform they are seeking 
carriage. Thus, we find that such a rule

[[Page 81808]]

would be administratively unworkable and be susceptible to gaming by 
programmers seeking carriage.
    We also conclude that determining when an MVPD has denied or failed 
to acknowledge a request for carriage or a request to negotiate for 
carriage is an inherently fact-specific exercise and, therefore, such a 
determination should be made on a case-by-case basis. beIN asks that we 
amend the rule so that ``the third prong of the statute of limitations 
does not begin to run until the vertically integrated MVPD provides a 
written and substantiated rejection of the unaffiliated programmer's 
carriage offer or request to negotiate.'' beIN suggests that such a 
rule is necessary to encourage MVPDs to ``be responsive to the offers 
and requests of unaffiliated programmers'' and to provide clarity about 
where such programmers stand in carriage negotiations. To the extent 
that it may be unclear whether an MVPD has denied or failed to respond 
to a request for carriage or to negotiate for carriage, we agree with 
commenters who assert that it would be appropriate for a programmer to 
request an answer by a reasonable date, after which it may consider an 
MVPD's failure to respond to constitute a denial of its request for 
purposes of triggering the third prong of the statute of limitations. 
We are not persuaded, however, that MVPDs should be required to 
substantiate in writing their denial of a request for carriage or to 
negotiate for carriage in order to trigger the third prong, as beIN 
requests. Because, as noted, an MVPD's failure to respond to a carriage 
request within a reasonable date specified by the programmer would be 
deemed a denial of such request, we find that requiring MVPDs to 
provide denials in writing is unnecessary and that the burdens imposed 
by such a requirement would outweigh any purported benefits.
    Finally, we adopt our proposal to amend the parallel prongs in the 
statutes of limitations for program access, OVS, and good-faith 
retransmission consent complaints so that they run from the date that a 
potential defendant has denied or failed to acknowledge an offer or a 
request to negotiate, rather than from the date a potential complainant 
provides notice of its intent to file on that basis. Every commenter 
who addressed this proposal voiced support for maintaining consistency 
between the statutes of limitations for program carriage, program 
access, OVS, and good-faith retransmission consent complaints, and also 
ensures a finite limitations period.
    Part 76 ALJ Initial Decision Effective Date and Review Procedures. 
We also adopt our proposal to harmonize the procedures governing the 
effective date and review of initial ALJ decisions in program carriage, 
program access, and OVS proceedings with the generally applicable 
procedures in part 1 of the Commission's rules. In practice, this means 
that rather than taking immediate effect and remaining in effect 
pending Commission review, ALJ initial decisions in these contexts will 
not take effect for at least 50 days following release and will be 
stayed automatically upon the filing of exceptions. We find that this 
action will simplify and streamline the Commission's procedures, which 
in turn will reduce uncertainty and confusion for both parties and 
adjudicators. Further, we agree with Comcast and AT&T that this action 
will benefit consumers by avoiding ``carriage whipsaw'' in the event 
that an ALJ initial decision mandating carriage is reversed by the 
Commission.
    Although programmers express concern that any additional delays in 
implementing ALJ initial decisions would harm unaffiliated programmers, 
we disagree that this concern is best remedied by abandoning our 
proposal. Specifically, Independent Programmers contend that further 
delaying an order for mandatory carriage amplifies the harms to 
programmers by extending the length of time during which their 
programming is not carried. Independent Programmers further suggest 
that delaying the effectiveness of an ALJ initial decision pending 
appeal would incentivize MVPDs to pursue frivolous appeals for the 
purpose of delay. We are not persuaded that the potential harms to 
programmers from delaying the effectiveness of ALJ initial decisions 
justify retaining the existing effective date and review procedures. As 
noted by AT&T and Comcast, the rules provide that if the Commission 
upholds a mandatory carriage decision that is stayed pending review in 
certain instances, the MVPD will be required to carry the relevant 
programming for an additional period of time equal to the length of the 
delay caused by the review. Further, the Commission generally has the 
discretion to ``order appropriate remedies'' upon completion of program 
carriage proceedings. We find that these remedies adequately address 
the potential harm to unaffiliated programmers from delaying the 
effectiveness of ALJ initial decisions pending appeal.
    Recognizing ``the logic'' in harmonizing the part 76 review 
procedures, but expressing concern about the effect of prolonged 
program carriage disputes on unaffiliated programmers, AMC Networks 
(AMCN) proposes that the Commission adopt a six-month ``shot clock'' 
for the Commission to review and issue an order upholding or 
overturning an ALJ initial decision when a party seeks review. We note 
that no other commenters addressed AMCN's proposal. Although the 
Commission is under no statutory obligation to review ALJ initial 
decisions within a specified timeframe, we agree with AMCN that such a 
timeframe would serve the public interest by limiting the harms to 
those programmers with finite litigation resources and expediting the 
resolution of complaints. We, therefore, establish a 180-day 
aspirational shot-clock for circulating to the Commission a proposed 
ruling on review of an initial ALJ decision in program access, program 
carriage, and OVS proceedings that commences from the date that an 
aggrieved party appeals such initial decision. We believe that creating 
this aspirational shot-clock will establish clearer expectations for 
all parties involved and facilitate prompt review of ALJ initial 
decisions. As in other contexts where the Commission has established 
such shot clocks, ``we intend to apply it in the ordinary course and 
only anticipate suspending it under special circumstances.''
    Other Proposals. Standstill Rule. We decline to reimpose the 
standstill provision in the program carriage rules, as requested by 
beIN. In 2013, the Second Circuit vacated this provision without 
prejudice, which provides that ``[a] program carriage complainant 
seeking renewal of an existing programming contract may file a petition 
along with its complaint requesting a temporary standstill of the 
price, terms, and other conditions of the existing programming contract 
pending resolution of the complaint.'' The Second Circuit found that 
the public did not have adequate notice under the APA when the 
Commission adopted the provision. beIN asks that we initiate a notice-
and-comment rulemaking to readopt this provision consistent with the 
APA. Comcast opposes this request, asserting that such a rule would be 
inconsistent with the goal of expeditious resolution of program 
carriage complaints. Because the absence of explicit standstill 
procedures in the program carriage rules does not preclude parties from 
filing a request for temporary injunctive relief with the Commission, 
we find it unnecessary to pursue readopting the standstill rule at this 
time. As the rule was vacated by the Second Circuit, we will take this 
opportunity to delete the standstill

[[Page 81809]]

provision, Sec.  76.1302(k), from the text of the CFR.
    2011 Proposals. We decline to address any of the remaining program 
carriage proposals put forth in the 2011 Program Carriage NPRM at this 
time, but may consider them in a future order. As content and speaker 
neutral regulations on protected speech, the program carriage rules 
must advance an important government interest--here, fair competition 
and a diversity of voices in the video market--and be narrowly tailored 
to advance that interest. The Commission has recently found that the 
video programming market has vastly changed in the past decade. 
Congress enacted section 616 to promote competition in the marketplace 
at a time when most Americans had access to only a single MVPD and 
their local broadcast stations for video programming. Today, most 
Americans have access to at least three MVPDs, in addition to broadcast 
and online video distributor (OVD) offerings. Consumers now have a 
competitive choice of multiple delivery systems offering more 
programming options of more diverse types from more diverse sources 
than was envisioned when the 1992 Cable Act was enacted nearly 30 years 
ago. Significantly, in 2013, the last time the program carriage statute 
was considered in federal court, the Second Circuit observed that 
``there is no denying that the video programming industry is dynamic 
and that the level of competition has rapidly increased in the last two 
decades.'' The court elaborated that in light of these changes ``some 
of the Cable Act's broad prophylactic rules may no longer be 
justified'' and that it considered the ``possibility more real than 
speculative'' that developments in the market would erode the 
justification for the program carriage regime.
    Commenters disagree starkly on the degree of competition and 
vertical integration in today's video programming market and the need 
for these proposals. On one hand, MVPDs assert that competition is at 
an all-time high in the video programming market as a result of the 
advent of alternative video programming options since the passage of 
the 1992 Cable Act, and therefore generally oppose the adoption of any 
additional program carriage rules. On the other hand, programmers 
contend that MVPDs retain outsized market power in the video 
marketplace and thus have the ability to engage in behavior detrimental 
to programmers. Accordingly, programmers voice support for several of 
the 2011 proposals that they claim would create a more competitive 
video programming market, including: Adopting an anti-retaliation rule; 
allowing for the award of damages in successful program carriage 
complaints; implementing limited automatic discovery at the prima facie 
stage; shifting the burden of proof after the prima facie stage; and 
applying a good-faith negotiation rule to vertically integrated MVPDs 
in program carriage negotiations. Given the lack of consensus in the 
record, we are not persuaded that this procedure-focused proceeding is 
the appropriate vehicle through which to fully consider these proposals 
that, if adopted, would substantially alter the existing program 
carriage framework. Therefore, we decline to address these proposals at 
this time and instead may consider them in a future order.
    Other Proposals. Commenters urge that we consider broader 
amendments to the program carriage rules to address, among other 
things, the imposition of most favored nation clauses by MVPDs, the 
challenges faced by smaller stations seeking to obtain carriage on 
virtual MVPDs (vMVPDs), and the effect of the retransmission consent 
rules on the program carriage market. We concur with those commenters 
who suggest that these other proposals fall outside the scope of this 
narrow procedure-focused proceeding, and therefore we decline to 
consider those proposals here.
    Procedural Matters. Final Regulatory Flexibility Analysis. As 
required by the Regulatory Flexibility Act of 1980, as amended (RFA), 
the Commission has prepared a Final Regulatory Flexibility Analysis 
(FRFA) relating to this Order. The FRFA is set forth in Appendix B of 
the Report and Order.
    Paperwork Reduction Act Analysis. This document does not contain 
new or modified information collection requirements subject to the 
Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In addition, 
therefore, it does not contain any new or modified information 
collection burden for small business concerns with fewer than 25 
employees, pursuant to the Small Business Paperwork Relief Act of 2002, 
Public Law 107-198, see 44 U.S.C. 3506(c)(4).
    Congressional Review Act. The Commission has determined, and the 
Administrator of the Office of Information and Regulatory Affairs, 
Office of Management and Budget concurs, that this rule is ``non-
major'' under the Congressional Review Act, 5 U.S.C. 804(2). The 
Commission will send a copy of this Report & Order to Congress and the 
Government Accountability Office pursuant to 5 U.S.C. 801(a)(1)(A).
    Final Regulatory Flexibility Act Analysis. As required by the 
Regulatory Flexibility Act of 1980, as amended (RFA), an Initial 
Regulatory Flexibility Analysis (IRFA) was incorporated in the FNPRM in 
this proceeding. The Commission sought written public comment on the 
proposals in the FNPRM, including comment on the IRFA. We received no 
comments specifically directed toward the IRFA. This present Final 
Regulatory Flexibility Analysis (FRFA) conforms to the RFA.
    Need for, and Objective of, the Report and Order. In this Report 
and Order, we adopt changes to the rules governing the resolution of 
program carriage disputes between video programming vendors and 
multichannel video programming distributors (MVPDs). Specifically, we 
amend the statute of limitations for program carriage complaints to 
make clear that the third triggering event applies only when a party 
seeks renewal of an existing contract or when there is not an existing 
program carriage contract or contract offer, and a defendant MVPD has 
denied or failed to acknowledge either a request for carriage or a 
request to negotiate for program carriage. This third prong of the 
program carriage statute of limitations originally contained similar 
limiting language concerning an unreasonable refusal to deal that 
appears to have been inadvertently stricken by the Commission in 1994. 
The Commission has previously expressed concern that without that 
language this provision could be read to mean that a complaint would be 
timely within one year of the date on which a complainant notified the 
defendant MVPD of its intention to file a complaint, regardless of when 
the actual violation of the rules had occurred, undermining the 
fundamental purpose of a statute of limitations. For consistency, we 
similarly amend parallel provisions in the statutes of limitations for 
filing program access, open video system (OVS), and good-faith 
retransmission consent complaints so that they run from the date that a 
potential defendant denied an offer or a request to negotiate, rather 
than from the date a potential complainant provides notice of its 
intent to file on that basis. We find that these changes will help 
ensure an expeditious program access, program carriage, retransmission 
consent, and OVS complaint process and provide additional clarity to 
both potential complainants and defendants, as well as adjudicators.
    We also revise the effective date and review procedures for initial 
decisions issued by an administrative law judge (ALJ) in program 
carriage, program access, and OVS proceedings to make them consistent 
with the Commission's

[[Page 81810]]

generally applicable procedures. In practice, this means that rather 
than taking immediate effect and remaining in effect pending review, 
ALJ initial decisions in these contexts will not take effect for at 
least 50 days following release and will be stayed automatically upon 
the filing of exceptions. As discussed fully in the FNPRM, the 
incongruous provisions concerning the effective date and review 
procedures for ALJ initial decisions in parts 76 and 1 of our rules 
have caused confusion for both parties and adjudicators and can create 
inconsistent outcomes pending appeal. We find that this action will 
simplify and streamline the Commission's procedures, which will reduce 
uncertainty and confusion for both parties and adjudicators. The rest 
of the existing rules governing the resolution of program carriage, 
program access, OVS, and good-faith retransmission consent complaints 
remain unchanged by this Report and Order.
    Summary of Significant Issues Raised by Public Comments in Response 
to the IRFA. There were no comments filed in response to the IRFA.
    Response to comments by the Chief Counsel for Advocacy of the Small 
Business Administration. Pursuant to the Small Business Jobs Act of 
2010, which amended the RFA, the Commission is required to respond to 
any comments filed by the Chief Counsel for Advocacy of the Small 
Business Administration (SBA), and to provide a detailed statement of 
any change made to the proposed rules as a result of those comments.
    The Chief Counsel did not file any comments in response to the 
proposed rules in this proceeding.
    Description and Estimate of the Number of Small Entities to Which 
Rules Will Apply. The RFA directs agencies to provide a description of, 
and where feasible, an estimate of the number of small entities that 
may be affected by the proposed rules, if adopted. The RFA generally 
defines the term ``small entity'' as having the same meaning as the 
terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' In addition, the term ``small business'' 
has the same meaning as the term ``small business concern'' under the 
Small Business Act. A small business concern is one which: (1) Is 
independently owned and operated; (2) is not dominant in its field of 
operation; and (3) satisfies any additional criteria established by the 
SBA. Below, we provide a description of such small entities, as well as 
an estimate of the number of such small entities, where feasible.
    Cable Companies and Systems (Rate Regulation Standard). 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. Industry data indicates that, of the 777 cable companies 
currently operating in the United States, 766 serve 400,000 or fewer 
subscribers. Additionally, under the Commission's rules, a ``small 
system'' is a cable system serving 15,000 or fewer subscribers. 
According to industry data, there are currently 4,336 active cable 
systems in the United States. Of this total, 3,650 cable systems have 
fewer than 15,000 subscribers. Thus, the Commission believes that the 
vast majority of cable companies and cable systems are small entities.
    Cable System Operators (Telecom Act Standard). 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 one 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.'' As of 2019, there were approximately 48,646,056 basic 
cable video subscribers in the United States. Accordingly, an operator 
serving fewer than 486,460 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. Based 
on available data, we find that all but five cable operators are small 
entities 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. Therefore, we are unable at this time to estimate with greater 
precision the number of cable system operators that would qualify as 
small cable operators under the definition in the Communications Act.
    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. For the purposes of economic classification, 
establishments providing satellite television distribution services 
using facilities and infrastructure that they operate are included in 
the Wired Telecommunications Carriers industry. The Wired 
Telecommunications Carriers 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 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. The SBA determines 
that a wireline business is small if it has fewer than 1,500 employees. 
Economic census data for 2012 indicate that 3,117 wireline companies 
were operational during that year. Of that number, 3,083 operated with 
fewer than 1,000 employees. Based on that data, we conclude that the 
majority of wireline firms are small under the applicable standard. 
However, currently only two entities provide DBS service, which 
requires a great deal of capital for operation: DIRECTV (owned by AT&T) 
and DISH Network. According to industry data, DIRECTV and DISH serve 
14,831,379 and 8,957,469 subscribers respectively, and count the third 
and fourth most subscribers of any multichannel video distribution 
system in the U.S. Given the capital required to operate a DBS service, 
its national scope, and the approximately one-third share of the video 
market controlled by these two companies, we presume that neither would 
qualify as a small business.
    Motion Picture and Video Production. This industry comprises 
establishments primarily engaged in producing, or producing and 
distributing motion pictures, videos, television programs, or 
television commercials. The SBA has established a small size standard 
for businesses operating this industry, which consists of all such 
firms with gross annual receipts of $35 million dollars or less. U.S. 
Census Bureau data for 2012 show that there were 8203 firms operated 
for the entire year. Of that number, 8,075 had annual receipts of less 
than $25 million per year. Based on this data, we conclude that the 
majority of firms operating in this industry are small.
    Motion Picture and Video Distribution. This industry ``comprises 
establishments primarily engaged in acquiring distribution rights and 
distributing film and video productions to motion picture theaters, 
television

[[Page 81811]]

networks and stations, and exhibitors.'' The Small Business 
Administration has developed a size standard for firms operating in 
this industry, which is that companies whose annual receipts are $34.5 
million or less are considered small. U.S. Census Bureau data for 2012 
indicate there were 307 firms that were operational throughout the 
entire year. Of those, 294 firms had annual receipts of less than $25 
million. Based on this data, we conclude that a majority of firms 
operating in the motion picture and video distribution industry are 
small.
    Television Broadcasting. This Economic Census category ``comprises 
establishments primarily engaged in broadcasting images together with 
sound.'' These establishments operate television broadcast studios and 
facilities for the programming and transmission of programs to the 
public. These establishments also produce or transmit visual 
programming to affiliated broadcast television stations, which in turn 
broadcast the programs to the public on a predetermined schedule. 
Programming may originate in their own studio, from an affiliated 
network, or from external sources. The SBA has created the following 
small business size standard for such businesses: those having $41.5 
million or less in annual receipts. The 2012 Economic Census reports 
that 751 firms in this category operated in that year. Of this number, 
656 had annual receipts of less than $25 million, 25 had annual 
receipts ranging from $25 million to $49,999,999, and 70 had annual 
receipts of $50 million or more. Based on this data, we estimate that 
the majority of commercial television broadcasters are small entities 
under the applicable SBA size standard.
    Additionally, the Commission has estimated the number of licensed 
commercial television stations to be 1374. Of this total, 1,282 
stations (or 94.2%) had revenues of $38.5 million or less in 2018, 
according to Commission staff review of the BIA Kelsey Inc. Media 
Access Pro Television Database (BIA) on April 15, 2019, and therefore 
these licensees qualify as small entities under the SBA definition. In 
addition, the Commission estimates the number of licensed noncommercial 
educational (NCE) television stations to be 388. The Commission does 
not compile and 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.
    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. In addition, 
another element of the definition of ``small business'' requires that 
an 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 broadcast station is dominant in its 
field of operation. Accordingly, the estimate of small businesses to 
which rules may apply does not exclude any television station from the 
definition of a small business on this basis and is therefore possibly 
over-inclusive.
    There are also 387 Class A stations. Given the nature of these 
services, the Commission presumes that all of these stations qualify as 
small entities under the applicable SBA size standard. In addition, 
there are 1,892 LPTV stations and 3,621 TV translator stations. Given 
the nature of these services as secondary and in some cases purely a 
``fill-in'' service, we will presume that all of these entities qualify 
as small entities under the above SBA small business size standard.
    Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities. As discussed fully above, 
this Report and Order adopts revisions to the part 76 procedural rules. 
These amendments do not create any new reporting or recordkeeping 
requirements.
    Steps Taken to Minimize the Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered. The RFA requires an 
agency to describe any significant alternatives that it has considered 
in developing its 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 an 
reporting requirements under the rule for such 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 such small 
entities.''
    The Report and Order, as stated in Section A of this FRFA, 
minimizes the burdens associated with the resolution of program 
carriage, program access, OVS, and good-faith retransmission consent 
complaints by amending the rules governing two procedural aspects of 
the complaint process. First, we clarify that the third prong of the 
statute of limitations for all four types of complaints is triggered by 
an MVPD's denial or failure to acknowledge either a request for program 
carriage or a request to negotiate for program carriage, rather than 
delivery of a notice of intent to file a complaint on that basis. 
Second, we amend the rules to provide that initial decisions by an ALJ 
in program carriage, program access, and OVS proceedings will be 
automatically stayed upon the filing of exceptions, consistent with the 
Commission's generally applicable procedures. The rest of the 
procedures governing the resolution of these complaints--e.g., 
deadlines for filing answers and replies, adjudication procedures, 
etc.--remain unchanged. We find that these revisions will aid in the 
expeditious resolution of program access, program carriage, OVS, good-
faith retransmission consent complaints consistent with the Act. These 
changes will reduce the costs associated with litigating program 
access, program carriage, OVS, good-faith retransmission consent 
complaints before the Commission by eliminating any confusion 
surrounding the statute of limitations in all four contexts and by 
eliminating the need to seek a stay of an initial decision issued by an 
ALJ pending review for program carriage, program access, and OVS 
complaints. This change will benefit both small and large entities.
    Report to Congress. The Commission will send a copy of the Report 
and Order, including this FRFA, in a report to be sent to Congress 
pursuant to the Congressional Review Act. In addition, the Commission 
will send a copy of the Report and Order, including this FRFA, to the 
Chief Counsel for Advocacy of the SBA. A copy of the Report and Order 
and FRFA (or summaries thereof) will also be published in the Federal 
Register.
    Accordingly, it is ordered that, pursuant to the authority 
contained in sections 1, 4(i), 4(j), 303(r), 325, 616, 628, and 653 of 
the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 
154(j), 303(r), 325, 536, 548, and 573, this Report and Order is 
adopted. It is further ordered that the Commission's rules are hereby 
amended as set forth in Appendix A of the Report and Order and such 
amendments shall be effective 30 days after publication in the Federal 
Register. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Report and Order, including the Final Regulatory 
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small

[[Page 81812]]

Business Administration. It is further ordered that the Commission will 
send a copy of this Report and Order in a report to Congress and the 
Government Accountability Office pursuant to the Congressional Review 
Act (CRA). It is further ordered that, should no petitions for 
reconsideration or petitions for judicial review be timely filed, MB 
Docket No. 20-70 shall be terminated and its docket closed.

List of Subjects in 47 CFR Part 76

    Administrative practice and procedure, Cable Television, 
Communications, Telecommunications.

Federal Communications Commission.
Marlene Dortch,
Secretary.
    For the reasons set forth in the preamble, the Federal 
Communications Commission amends part 76 of title 47 of the Code of 
Federal Regulations as follows:

PART 76--MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE

0
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, 338, 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.

0
2. Amend Sec.  76.10 by revising paragraph (c)(2) to read as follows:


Sec.  76.10  Review.

* * * * *
    (c) * * *
    (2) Any party to a proceeding under this part aggrieved by any 
decision on the merits by an administrative law judge may file an 
appeal of the decision directly with the Commission, in accordance with 
Sec. Sec.  1.276(a) and 1.277(a) through (c) of this chapter.

0
3. Amend Sec.  76.65 by revising paragraph (e)(3) to read as follows:


Sec.  76.65   Good faith and exclusive retransmission consent 
complaints.

* * * * *
    (e) * * *
    (3) The television broadcast station or multichannel video 
programming distributor has denied, unreasonably delayed, or failed to 
acknowledge a request to negotiate retransmission consent in violation 
of one or more of the rules contained in this subpart.
* * * * *

0
4. Amend Sec.  76.1003 by revising paragraphs (g)(3) and (h)(1) to read 
as follows:


Sec.  76.1003   Program access proceedings.

* * * * *
    (g) * * *
    (3) A cable operator, or a satellite cable programming vendor or a 
satellite broadcast programming vendor has denied or failed to 
acknowledge a request to purchase or negotiate to purchase satellite 
cable programming, satellite broadcast programming, or terrestrial 
cable programming, or a request to amend an existing contract 
pertaining to such programming pursuant to Sec.  76.1002(f), allegedly 
in violation of one or more of the rules contained in this subpart.
    (h) * * *
    (1) Remedies authorized. Upon completion of such adjudicatory 
proceeding, the Commission, Commission staff, or Administrative Law 
Judge shall order appropriate remedies, including, if necessary, the 
imposition of damages, and/or the establishment of prices, terms, and 
conditions for the sale of programming to the aggrieved multichannel 
video programming distributor. Such order shall set forth a timetable 
for compliance. Such order issued by the Commission or Commission staff 
shall be effective upon release. See Sec. Sec.  1.102(b) and 1.103 of 
this chapter. The effective date of such order issued by the 
Administrative Law Judge is set forth in Sec.  1.276(d) of this 
chapter.
* * * * *

0
5. Amend Sec.  76.1302 by:
0
a. Revising paragraphs (h)(1) and (3) and (j)(1);
0
b. Removing paragraph (k).
    The revisions read as follows:


Sec.  76.1302  Carriage agreement proceedings.

* * * * *
    (h) * * *
    (1) The multichannel video programming distributor enters into a 
contract with a video programming vendor that a party alleges to 
violate one or more of the rules contained in this section; or
* * * * *
    (3) In instances where there is no existing contract or an offer 
for carriage, or in instances where a party seeks renewal of an 
existing contract, the multichannel video programming distributor has 
denied or failed to acknowledge a request by a video programming vendor 
for carriage or to negotiate for carriage of that video programming 
vendor's programming on defendant's distribution system, allegedly in 
violation of one or more of the rules contained in this section.
* * * * *
    (j) * * *
    (1) Remedies authorized. Upon completion of such adjudicatory 
proceeding, the Commission, Commission staff, or Administrative Law 
Judge shall order appropriate remedies, including, if necessary, 
mandatory carriage of a video programming vendor's programming on 
defendant's video distribution system, or the establishment of prices, 
terms, and conditions for the carriage of a video programming vendor's 
programming. Such order shall set forth a timetable for compliance. The 
effective date of such order issued by the Administrative Law Judge is 
set forth in Sec.  1.276(d) of this chapter. Such order issued by the 
Commission or Commission staff shall become effective upon release, see 
Sec. Sec.  1.102(b) and 1.103 of this chapter, unless any order of 
mandatory carriage issued by the staff would require the defendant 
multichannel video programming distributor to delete existing 
programming from its system to accommodate carriage of a video 
programming vendor's programming. In such instances, if the defendant 
seeks review of the staff decision, the order for carriage of a video 
programming vendor's programming will not become effective unless and 
until the decision of the staff is upheld by the Commission. If the 
Commission upholds the remedy ordered by the staff or Administrative 
Law Judge in its entirety, the defendant MVPD will be required to carry 
the video programming vendor's programming for an additional period 
equal to the time elapsed between the staff or Administrative Law Judge 
decision and the Commission's ruling, on the terms and conditions 
approved by the Commission.
* * * * *

0
6. Amend Sec.  76.1513 by revising paragraphs (g)(3) and (h)(1) to read 
as follows:


Sec.  76.1513   Open video dispute resolution.

* * * * *
    (g) * * *
    (3) An open video system operator has denied or failed to 
acknowledge a request for such operator to carry the complainant's 
programming on its open video system, allegedly in violation of one or 
more of the rules contained in this part.
    (h) * * *
    (1) Remedies authorized. Upon completion of such adjudicatory 
proceeding, the Commission, Commission staff, or Administrative Law 
Judge shall order appropriate remedies, including, if necessary, the

[[Page 81813]]

requiring carriage, awarding damages to any person denied carriage, or 
any combination of such sanctions. Such order shall set forth a 
timetable for compliance. Such order issued by the Commission or 
Commission staff shall be effective upon release. See Sec. Sec.  
1.102(b) and 1.103 of this chapter. The effective date of such order 
issued by the Administrative Law Judge is set forth in Sec.  1.276(d) 
of this chapter.
* * * * *

[FR Doc. 2020-26259 Filed 12-16-20; 8:45 am]
BILLING CODE 6712-01-P


</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>