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[House Report 108-634]
[From the U.S. Government Publishing Office]

108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     108-634

======================================================================

 
    SATELLITE HOME VIEWER EXTENSION AND REAUTHORIZATION ACT OF 2004

                                _______
                                

 July 22, 2004.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Barton of Texas, from the Committee on Energy and Commerce, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 4501]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 4501) to extend the statutory license for 
secondary transmissions under section 119 of title 17, United 
States Code, and to amend the Communications Act of 1934 with 
respect to such transmissions, and for other purposes, having 
considered the same, report favorably thereon without amendment 
and recommend that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................     4
Committee Consideration..........................................     4
Committee Votes..................................................     4
Committee Oversight Findings.....................................     5
Statement of General Performance Goals and Objectives............     5
New Budget Authority, Entitlement Authority, and Tax Expenditures     5
Committee Cost Estimate..........................................     5
Congressional Budget Office Estimate.............................     5
Federal Mandates Statement.......................................    10
Advisory Committee Statement.....................................    10
Constitutional Authority Statement...............................    10
Applicability to Legislative Branch..............................    10
Section-by-Section Analysis of the Legislation...................    10
Changes in Existing Law Made by the Bill, as Reported............    21

                          Purpose and Summary

    The purpose of H.R. 4501, the ``Satellite Home Viewer 
Extension and Reauthorization Act of 2004'' (SHVERA), is to 
modernize satellite television policy and enhance competition 
between satellite and cable operators. The bill does so by 
reauthorizing certain provisions of the Communications Act that 
govern satellite retransmission of distant broadcast signals; 
increasing regulatory parity by extending to satellite 
operators the same type of authority cable operators already 
have to carry ``significantly viewed'' signals into a market; 
amending other provisions to reflect the increased carriage by 
satellite operators of local broadcast signals; and beginning 
to address how satellite operators may retransmit digital 
broadcast signals.

                  Background and Need for Legislation

    Direct Broadcast Satellite (DBS) operators have become 
significant facilities-based competitors to cable operators in 
the multichannel video programming distribution (MVPD) market 
since the introduction of DBS about a decade ago. Approximately 
20.4 million U.S. television households subscribed to DBS 
service as of June 30, 2003, representing 19.1 percent of 
television households and 21.6 percent of MVPD subscribers, 
according to the Federal Communications Commission. See In re 
Annual Assessment of the Status of Competition in the Market 
for the Delivery of Video Programming, MB Docket No. 03-172, 
Tenth Annual Report, 19 FCC Rcd 1606, at para.para. 61, 65 & 
Tbl. B-1 (2004). This figure represents more than twice the 
households that were receiving DBS service in June 1999, just 
prior to the enactment of the Satellite Home Viewer Improvement 
Act (SHVIA), when DBS had 10.1 percent TV household penetration 
and 12.5 percent of the MVPD market. See Ninth Annual Report, 
17 FCC Rcd 26901, at Tbl. B-1 (2002).
    DBS retransmission of broadcast programming, and 
particularly local programming, is responsible for much of the 
growth. Approximately 58 percent of DBS subscribers receive 
local or distantbroadcast signals from a DBS provider. Tenth 
Annual Report, 19 FCC Rcd 1606, at para. 69. Some consumers have 
trouble receiving television signals over the air for reasons such as 
intervening terrain or their distance from a broadcast station. 
Consequently, the Satellite Home Viewer Act of 1988 (SHVA) amended the 
Communications Act to authorize a satellite operator to deliver the 
signal of an out-of-market broadcast affiliate to a consumer who is 
``unserved'' by the over-the-air signal of a local affiliate of that 
network. See 47 U.S.C. Sec. 339. To facilitate that regime, SHVA also 
created provisions exempting satellite operators from having to 
negotiate with distant broadcast stations to retransmit the distant 
stations' signals to consumers who are unserved over the air. See 47 
U.S.C. Sec. 325(b). The retransmission-consent exemption created by 
SHVA expires Dec. 31, 2004. See 47 U.S.C. Sec. 325(b)(2)(C).
    In SHVIA, Congress expanded on SHVA by further amending the 
Communications Act to authorize satellite operators to provide 
consumers with local broadcast signals. As a general rule, a 
satellite operator must carry all the local broadcast stations 
in a market if it chooses to carry any local broadcast stations 
in that market. See 47 U.S.C. Sec. 338. As of December 2003, 
such local-into-local service was offered by at least one DBS 
operator in 106 of the 210 Designated Market Areas (DMAs), 
covering 86 percent of U.S. television households. Tenth Annual 
Report, 19 FCC Rcd 1606, at para. 69. This represents an 
increase from 64 DMAs, according to the prior year's report. 
Id. As of July 2004, DirecTV alone listed local service in 106 
markets on its web site, and indicated plans to add 18 more 
markets by the end of 2004. EchoStar listed 137 local markets 
on its web site as of June 2004, and has stated that it intends 
to reach 147 by the end of 2004.
    Satellite-delivered television service started as a way to 
serve consumers, particularly in rural areas, who could not get 
adequate over-the-air reception and did not have access to 
cable. But DBS does more than serve otherwise unserved areas. 
Its nationwide coverage allows it to compete against cable 
operators, and in so doing it improves consumer options. The 
General Accounting Office (GAO) reports that the carriage by 
satellite operators of local stations in a market leads cable 
operators to offer approximately 5 percent more cable channels. 
See U.S. General Accounting Office, Issues Related to 
Competition and Subscriber Rates in the Cable Television 
Industry, GAO-04-8 (Oct. 2003). The availability of DBS has 
also forced cable operators to upgrade their infrastructure to 
allow consumers to receive high-quality video and more 
channels, as well as interactive, broadband, and video-on-
demand services. See Tenth Annual Report, at para. 12. The FCC 
also reports that ``as DBS offerings have become more 
comparable to cable service (including the provision of 
advanced video and non-video services), and pursuant to 
Congress' authorization of the retransmission of local 
broadcast signals, DBS subscribership has grown rapidly.'' 
Tenth Annual Report, at para. 5. Although some DBS customers 
never before subscribed to MVPD service, many switch from 
cable. Indeed, DirecTV has told the FCC that 70 percent of its 
customers switched from cable the first time they subscribed to 
DirecTV. Tenth Annual Report, at para. 65.
    H.R. 4501 is necessary to maintain and increase these 
competitive pressures. It does so by reauthorizing 
Communications Act provisions regarding satellite 
retransmission of distant broadcast signals, amending and 
adding other provisions to reflect the increasing 
retransmission by satellite of local signals, improving 
regulatory parity between cable and satellite, and beginning to 
consider how to treat satellite retransmission of digital 
broadcast signals.
    During the hearings and legislative markups on satellite 
television reauthorization legislation, the Committee discussed 
whether satellite and cable operators should be required to 
offer programming on an a la carte or themed-tier basis, or 
allowed to do so voluntarily, and whether there were any 
regulatory barriers to the provision of such services on a 
voluntary basis. A la carte service generally involves allowing 
consumers to design their own programming packages by selecting 
content on a channel-by-channel basis, or by choosing from 
among a variety of themed tiers of channels. Currently, 
satellite and cable operators generally organize channels based 
on their own business judgments, negotiations with programmers, 
and certain regulations.
    The Committee concluded that adding a la carte or themed-
tier provisions to this satellite television reauthorization 
legislation would be inappropriate at this time. A la carte and 
themed-tier issues apply to cable as well as satellite, while 
this legislation is focused on reauthorizing provisions 
governing satellite retransmission of broadcast television 
signals. Moreover, the Committee needs a fuller understanding 
of the implications of a la carte legislation, including 
whether there are any market or regulatory barriers to 
providing such service today, and whether a la carte regulation 
would help or harm consumer rates and programming choices. 
Consequently, the Committee held an MVPD competition hearing 
July 21, 2004, that addressed a la carte. The Committee has 
also directed the FCC to initiate an inquiry on the subject.

                                Hearings

    The Subcommittee on Telecommunications and the Internet 
held two hearings on satellite-delivered broadcast television 
during the second session of the 108th Congress. The 
Subcommittee received testimony in an oversight hearing on 
March 10, 2004, from: David Moskowitz, Senior Vice President & 
General Counsel, EchoStar Communications Corp.; Robert Lee, 
President & General Manager, WDBJ-TV, on behalf of the National 
Association of Broadcasters; Matthew Polka, President, American 
Cable Association; Gene Kimmelman, Senior Director of Public 
Policy and Advocacy, Consumers Union; Martin Franks, Executive 
Vice President, CBS Television; and, Eddy Hartenstein, Vice 
Chairman, Hughes Electronics Corp. The Subcommittee received 
testimony in a legislative hearing on April 1, 2004, from: 
Eloise Gore, Assistant Division Chief, Media Bureau's Policy 
Division, Federal Communications Commission; David Moskowitz, 
Senior Vice President & General Counsel, EchoStar 
Communications Corp.; Eddy Hartenstein, Vice Chairman, The 
DirecTV Group; Robert Lee, President & General Manager, WDBJ-
TV, on behalf of the National Association of Broadcasters; and 
Frank Wright, President, National Religious Broadcasters.

                        Committee Consideration

    On Wednesday, April 28, 2004, the Subcommittee on 
Telecommunications and the Internet met in open markup session 
and approved a Committee Print for Full Committee 
consideration, as amended, a quorum being present. On Thursday, 
June 3, 2004, the Full Committee met in open markup session and 
ordered a Committee Print reported to the House, amended, by 
voice vote, a quorum being present. A request by Mr. Barton to 
file a report on a bill to be introduced, and that the actions 
of the Committee be deemed as action on that bill, was agreed 
to by unanimous consent.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. 
There were no record votes taken in connection with ordering 
the Committee Print reported. A motion by Mr. Barton to order 
the Committee Print reported to the House, as amended, was 
agreed to by a voice vote.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee held legislative and 
oversight hearings and made findings that are reflected in this 
report.

         Statement of General Performance Goals and Objectives

    The goal of H.R. 4501 is to promote facilities-based 
competition in the provision of video programming. It does so 
by reauthorizing certain expiring statutory provisions 
regarding satellite retransmission of distant broadcast 
signals, amending and adding other provisions to reflect the 
increasing satellite retransmission of local signals, and 
increasing regulatory parity between cable and satellite 
operators.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
4501, the Satellite Home Viewer Extension and Reauthorization 
Act of 2004, would result in no new or increased budget 
authority, entitlement authority, or tax expenditures or 
revenues.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, July 8, 2004.
Hon. Joe Barton,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4501, the 
Satellite Home Viewer Extension and Reauthorization Act of 
2004.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Melissa E. 
Zimmerman (for federal costs), and Jean Talarico and Philip 
Webre (for the private sector-impact).
            Sincerely,
                                         Elizabeth Robinson
                               (For Douglas Holtz-Eakin, Director).
    Enclosure.

H.R. 4501--Satellite Home Viewer Extension and Reauthorization Act of 
        2004

    Summary: H.R. 4501 would amend current law relating to 
satellite retransmission of television broadcasting. CBO 
estimates that enacting only the provisions of H.R. 4501 would 
not affect direct spending or revenues. However, if the 
authority to collect and distribute copyright royalties for 
satellite retransmissions were extended by subsequent 
legislation, CBO estimates that enacting the bill (together 
with that extension) would decrease revenues by about $1 
million over the five-year period beginning in calendar year 
2005 and also would decrease direct spending by about $1 
million over the 10-year period beginning in calendar year 
2005. The bill would not have a significant effect on spending 
subject to appropriation.
    H.R. 4501 contains an intergovernmental mandate as defined 
in the Unfunded Mandates Reform Act (UMRA), but CBO estimates 
that the resulting costs would be minimal and would not exceed 
the threshold established in UMRA ($60 million in 2004, 
adjusted annually for inflation).
    H.R. 4501 would impose private-sector mandates as defined 
in UMRA on satellite companies. CBO estimates that the 
aggregate cost of those mandates would not exceed the annual 
threshold for private-sector mandates established by UMRA ($120 
million in 2004, adjusted annually for inflation).
    Estimated cost to the Federal Government: Under current 
law, the use of certain copyrighted material by the public 
operates under a compulsory license. Users of copyrighted 
material do not need specific permission from owners to use 
material with a compulsory license, but must pay royalties and 
abide by certain conditions when using the material. The 
federal Copyright Office collects royalties from users of 
compulsory licenses and then later distributes the royalties to 
owners of copyrighted works using guidelines agreed upon in 
private negotiations between users and owners of copyrighted 
work. The receipt of royalties from users of copyrighted 
material are recorded in the budget as federal revenues, and 
the distributions to copyright owners are recorded as federal 
spending.
    H.R. 4501 would extend current law to allow satellite 
companies to use copyrighted material without specific 
permission from copyright owners, but would not extend the 
requirement for satellite companies to pay royalties in 
exchange for the use of copyrighted material. Under current 
law, the requirement to pay royalties will expire on December 
31, 2004. Several provisions in H.R. 4501 would make changes 
affecting royalties collected and distributed for satellite 
transmissions; however, without extending the requirement for 
satellite companies to pay royalties for use of copyrighted 
material, these changes would have no effect after December 31, 
2004.

Basis of estimate

            Revenues and direct spending

    CBO estimates that enacting H.R. 4501 by itself would have 
no effect on revenues or direct spending from enactment through 
the end of calendar year 2009. However, if the Congress extends 
royalty requirements for satellite retransmission of broadcast 
signals at the rate effective under current law, CBO estimates 
that enacting the bill (together with that extension) would 
decrease revenues by about $1 million over the five-year period 
beginning in calendar year 2005. With lower royalty 
collections, the payments to copyright owners would also 
decrease.
    Satellite retransmission of distant and local signals. 
According to the FCC, about 20 million households subscribe to 
a satellite television service in the United States. Under 
current law, satellite companies are permitted to retransmit 
signals originally broadcast by television stations back into 
the same area where they originated (``local-into-local'') for 
most subscribers and may retransmit signals that originate in a 
distant market into a local area (``distant-into-local'') under 
certain circumstances. As a result, some subscribers are 
eligible to receive both distant-into-local and local-into-
local signals. Section 204 would require certain satellite 
subscribers to choose between receiving distant-into-local and 
local-into-local signals.
    While satellite companies pay royalties for retransmitting 
distant-into-local signals, they do not pay royalties for 
retransmitting local-into-local signals. Under section 204, 
satellite companies would pay fewer royalties because they 
would be retransmitting distant-into-local signals to a smaller 
number of subscribers than they would if the current copyright 
laws were extended.
    CBO estimates that enacting section 204 (and an extension 
of the current-law requirements for royalties from satellite 
retransmission) would decrease revenue collections by about $1 
million over the five-year period beginning in calendar year 
2005. In addition, payments to copyright owners would decrease, 
causing a decrease in direct spending of about $1 million over 
the 10-year period beginning in calendar year 2005.

            Spending subject to appropriation

    Section 208 of the bill would require the FCC to conduct a 
study identifying consumers who will be unserved by over-the-
air signals starting in 2007, when those signals will no longer 
be broadcast. Based on information provided by the FCC, CBO 
estimates that completing this study would not have a 
significant effect on spending subject to appropriation.
    Estimated impact on state, local, and tribal governments: 
H.R. 4501 contains an intergovernmental mandate as defined in 
UMRA because it would establish procedures for appeal of FCC 
orders, by satellite carriers, that would supersede any other 
appeal rights under state law. CBO estimates that the resulting 
costs to states of this preemption would be minimal and would 
not exceed the threshold established in UMRA ($60 million in 
2004, adjusted annually for inflation).
    Estimated impact on the private sector: H.R. 4501 would 
impose private-sector mandates as defined in UMRA on satellite 
companies. Specifically, the bill would impose mandates on 
satellite companies by requiring them to:
           Reallocate their retransmission of local 
        television channels to a single dish;
           Replace ``distant-into-local'' signals with 
        ``local-into-local'' signals for certain subscribers;
           Notify subscribers of their privacy rights; 
        and
           Notify television broadcast stations of 
        plans to begin ``local-into-local'' satellite service 
        in their markets and provide them with the right to 
        elect carriage of their stations.
    CBO estimates that the aggregate cost of those mandates 
would not exceed the annual threshold for private-sector 
mandates established by UMRA ($120 million in 2004, adjusted 
annually for inflation).

            Carriage of local stations in a single dish

    Section 203 would require satellite companies to reallocate 
their retransmission of local television channels in such a way 
that satellite subscribers can receive all of the local 
channels with only one satellite antenna (or satellite dish) 
and associated equipment. Local channels are those channels 
that can be received over the air with a conventional antenna 
and television set. The bill would provide an exception to this 
requirement in the case of digital local channels. Satellite 
carriers may retransmit local digital channels to subscribers 
by means of a separate dish, but must transmit all local 
digital channels to the same dish. Section 203 also would 
require satellite companies to notify their licensees 
(broadcast television stations) and subscribers of the 
reallocation of the channels and inform them of the need for 
new reception antenna or equipment.
    In many television markets, some subscribers to satellite 
service require two dishes to receive all the local channels. 
(Many subscribers in those markets do not have a second dish 
and so do not receive some local channels.) Satellite companies 
estimate that currently only 15 percent to 20 percent of 
subscribers have two dishes nationally, but that proportion of 
subscribers varies by market.
    The bill would require carriers to meet the retransmission 
requirements of section 203 within a year of enactment. Given 
the one-year time frame, affected companies could comply with 
the mandate in one of two ways. First, satellite carriers could 
exit the market for retransmission of local channels. CBO 
assumes that satellite companies would not abandon local 
service entirely because the affected companies would risk 
losing valuable customers to rival satellite companies and 
cable providers. Second, carriers could reallocate their 
satellite transmissions so that, in each market, subscribers 
received all their local channels from a single satellite. In 
some markets, receiving those local channels would require that 
the companies provide a second dish to subscribers. The largest 
cost facing affected companies would be the cost of installing 
those additional dishes. CBO estimates thatproviding additional 
dishes could cost the companies about $150 to $160 per customer, 
including installation, notification, and equipment.
    Service to as many as two million subscribers could be 
subject to the reallocation requirements under the current 
configuration of local television channels on the satellites. 
Engineering studies, however, suggest that reallocation of 
local channels on the satellites could reduce the number of 
subscribers needing a second dish to 350,000 to 400,000. Such 
relocation of local channels to a second dish would most likely 
occur in the relatively smaller markets served by satellite 
carriers. The affected number of subscribers might be reduced 
further by technical changes available to satellite companies.
    Based on those figures, CBO estimates that satellite 
companies could spend $50 million to $65 million to comply with 
this mandate.

            Replacement of distant signals with local signals

    Until recently, satellite carriers did not have the 
technological capability to redistribute multiple local 
broadcast signals back to the communities serviced by the local 
broadcast stations (``local-into-local'') service. So satellite 
providers retransmitted ``distant network signals'' from 
locations such as New York, Atlanta, or Denver (``distant-into-
local'' service). Currently, some satellite providers have the 
capability of retransmitting local signals into many local 
markets.
    Section 204 would prohibit satellite companies from 
providing a distant-into-local signal to certain subscribers 
that are currently receiving that signal. The companies would 
be required to send notices to subscribers offering to 
substitute the local-into-local signal for the distant-into-
local signal. The companies would then adjust the subscriber's 
package so that the subscriber would receive the appropriate 
signal. The bill also would require companies to send a list to 
television networks with each subscriber that receives a 
distant-into-local signal. Based on information from the 
industry, the cost to not transmit a signal would be minor. CBO 
estimates that the cost to send those notices would not be 
great.

            Privacy rights of satellite subscribers

    Section 206 would require satellite companies to notify 
their subscribers in a separate written statement of their 
privacy rights. The bill also would prohibit the satellite 
companies from collecting and disclosing program selection or 
personally identifiable information concerning any subscriber 
without prior consent from the subscriber. In addition, 
satellite companies would be required to provide a subscriber 
access to all personally identifiable information that is 
collected and maintained by the satellite company regarding the 
subscriber. When that information is no longer necessary and a 
request by the subscriber for access is not pending, the 
company must destroy that information. The main cost of these 
provisions would be the one-time cost of notifying subscribers. 
Accordingly to the FCC, there are about 20 million subscribers 
of satellite services. CBO estimates that the cost to comply 
with those mandates could be between $10 million and $20 
million.

            Additional notices

    Section 205 would require satellite companies to inform 
each television broadcast station licensee within a local 
market of the company's intention to begin local-into-local 
service and to provide them with the right to elect carriage of 
their station. This section also would require satellite 
companies to send a notice to any television broadcast station 
in a local market that it will begin transmitting significantly 
viewed stations. CBO estimates that the cost to send those 
notices would be small.
    Estimate prepared by: Federal Costs: Melissa E. Zimmerman; 
Impact on State, Local, and Tribal Governments: Sarah Puro; and 
Impact on the Private Sector: Jean Talarico and Philip Webre.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional authority for this legislation is provided in 
Article I, section 8, clause 3, which grants Congress the power 
to regulate commerce with foreign nations, among the several 
States, and with the Indian tribes.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation

Section 1. Short title

    Section 1 of the bill establishes the short title, the 
``Satellite Home Viewer Extension and Reauthorization Act of 
2004'' (SHVERA).

Section 201. Extension of retransmission consent exemption

    Section 201 of the bill extends to Dec. 31, 2009, from Dec. 
31, 2004, the retransmission consent exemption in Section 
325(b) of the Communications Act (47 U.S.C. Sec. 325(b)). 
Ordinarily, a satellite operator must obtain consent from a 
broadcaster to retransmit that broadcaster's television signal 
to a distant market. Section 325(b) of the Communications Act, 
however, exempts a satellite operator from having to obtain 
consent from a network broadcast affiliate to provide that 
affiliate's television signal to a consumer in a distant market 
who cannot receive an over-the-air signal from an affiliate of 
that network. The Committee chose to extend the exemption to 
help satellite-delivered television continue to grow as a 
multichannel video competitor.

Section 202. Cable/satellite comparability

    Section 202 of the bill creates Section 340 of the 
Communications Act to allow a satellite operator to retransmit 
to a subscriber a signal of an out-of-market broadcast station 
if the signal is ``significantly viewed'' over the air in the 
subscriber's local community. Nielsen Media Research organizes 
the country into designated market areas (DMAs) that determine 
which television broadcasters are deemed ``local'' for 
consumers in a particular community. These determinations 
affect whether and how satellite and cable operators may 
retransmit broadcast stations into a community. The reach of a 
broadcast station's over-the-air signal does not necessarily 
coincide with the Nielsen-defined local market, however. 
Consequently, Section 340 allows a satellite operator to treat 
as local in a community any signal that is significantly viewed 
by consumers over the air in that community. A signal is 
``significantly viewed'' based on the amount of viewership it 
garners in non-cable households, i.e. over the air. Cable 
operators already have authority to treat such significantly 
viewed signals as local. See 47 C.F.R. Sec. Sec. 76.5(i), 
76.54. Section 340 is designed to promote competition by 
increasing regulatory parity.
    Section 340 is also intended to help consumers receive 
satellite retransmissions of in-state broadcasts when they are 
assigned to DMAs that contain local broadcasters from another 
state. State boundaries, just like the reach of over-the-air 
signals, do no necessarily coincide with the Nielsen-defined 
local markets. Nielsen defines television markets in a way that 
some consumers near state lines fall in ``local'' markets 
``outside'' their states. For these consumers, network-
affiliated broadcast stations within their states are 
technically distant signals, and satellite operators generally 
may not provide these consumers the signals of distant network-
affiliated stations unless the consumers cannot receive over 
the air the out-of-state ``local'' signals of the corresponding 
network-affiliated stations in their DMAs. See 47 U.S.C. 
Sec. 339. Consequently, consumers who can receive network 
signals over the air in these ``out of state'' local markets 
may find that current law prevents them from receiving by 
satellite the news, sports, or community programming from 
within their states that they consider truly local. Section 340 
can help remedy this problem by allowing satellite operators to 
provide some consumers in out-of-state DMAs with in-state, 
significantly viewed, network-affiliated distant signals in 
addition to the out-of-state, but technically local, signals.
    Thus, new section 340(a) authorizes a satellite operator to 
retransmit an out-of-market signal to a subscriber in a 
community if the FCC has determined that the signal is 
significantly viewed in the community for purposes of cable 
carriage. The Committee intends section 340 to authorize the 
retransmission of a significantly viewed signal by a satellite 
operator on a signal-specific basis, rather than a station-
specific basis. Thus, a station's analog signal must be 
significantly viewed under the FCC's quantitative criteria to 
qualify for satellite carriage, and a station's digital signal 
must be independently significantly viewed under the FCC's 
quantitative criteria to qualify for satellite carriage.
    Section 340(a) also makes clear that a satellite operator 
may carry an unlimited number of significantly viewed signals-
just as a cable operator may--by stating that satellite 
operators may retransmit such signals ``[i]n addition to the 
broadcast signals that subscribers may receive under section 
338 [governing carriage of local signals] and 339[governing 
carriage of distant signals].'' The exemption for significantly viewed 
signals is necessary because section 339 of the Communications Act (47 
U.S.C. Sec. 339) prohibits a satellite carrier from providing a 
household with the signals of more than two distant affiliates of a 
particular network per day.
    Section 340(b)(1) provides that a satellite operator may 
retransmit a significantly viewed distant analog signal to a 
subscriber in a local market only if the subscriber also 
receives local-into-local service. The provision adds this 
condition to protect and promote localism. Cable operators are 
subject to must-carry obligations that generally require them 
to carry all local broadcast television stations. See 47 U.S.C. 
Sec. 534. Consequently, any time a cable operator is 
retransmitting into a market a distant broadcast affiliate of a 
network, it is generally also retransmitting into that market 
any local affiliate of that network. In recognition of capacity 
constraints, Congress subjects satellite operators, by 
contrast, to a ``carry-one, carry all'' obligation. That 
obligation generally requires satellite operators to retransmit 
all local stations in a market if they retransmit any local 
stations in the market, but allows satellite operators to forgo 
carrying local stations in the market altogether. See 47 U.S.C. 
Sec. 338. As a result, absent section 340(b)(1), a satellite 
operator could retransmit into a market a distant significantly 
viewed signal of a network affiliate without also 
retransmitting a signal of any local affiliate of the network.
    Section 340(b)(2)(A) conditions retransmission to a 
subscriber of a network broadcast station's distant 
significantly viewed digital signal on retransmission to that 
subscriber of a digital signal broadcast by a local affiliate 
of the same network. Like section 340(b)(1), section 
340(b)(2)(A) protects localism by helping ensure that the 
satellite operator cannot retransmit into a market a 
significantly viewed digital signal of a network broadcast 
station from a distant market without also retransmitting into 
the market a digital signal of any local affiliate from the 
same network.
    Section 340(b)(2)(B) prevents the satellite operator from 
retransmitting a local affiliate's digital signal in a less 
robust format than a significantly viewed digital signal of a 
distant affiliate of the same network, such as by down-
converting the local affiliate's signal but not the distant 
affiliate's signal from high-definition digital format to 
analog or standard definition digital format. Section 
340(b)(2)(B)(i) speaks of ``equivalent bandwidth'' to 
recognize, for example, that a local affiliate may be 
multicasting while a distant affiliate of the same network may 
be broadcasting in high-definition, and to ensure that the 
local affiliate's choice to multicast does not prevent the 
satellite operator from retransmitting a significantly viewed 
signal of a distant affiliate of the network that chooses to 
broadcast in high-definition. Section 340(b)(2)(B)(ii) speaks 
of ``entire bandwidth'' to ensure that a satellite operator may 
still retransmit a distant significantly viewed digital signal 
of a network affiliate in a more robust format than a digital 
signal of a local broadcaster of the same network so long as 
the satellite operator is carrying the digital signal of the 
local affiliate in its original format. For example, if a local 
broadcaster chooses to transmit only a single, standard 
definition digital broadcast stream, the satellite operator may 
still retransmit multicast or high-definition streams from the 
distant affiliate of the same network if the satellite operator 
carries the local broadcaster's standard definition stream and 
meets the other conditions for the provision of significantly 
viewed signals. Section 340(i)(3), discussed below, directs the 
FCC to define ``equivalent bandwidth'' and ``entire 
bandwidth.''
    The Committee does not intend section 340(b)(2)(B) to 
prevent a satellite operator from using compression technology; 
to require a satellite operator to use the exact bandwidth or 
bit rate as the local or distant broadcaster whose signal it is 
retransmitting; or to require a satellite operator to use the 
exact bandwidth or bit rate for a local broadcaster as it does 
for a distant broadcaster. Nor does the Committee intend 
section 340(b)(2)(B) to affect a satellite operator's carry-
one, carry-all obligations, or the definitions of ``program 
related'' and ``primary video.'' The Committee also does not 
intend the limitations of section 340(b)(2) to apply to 
satellite provision of a significantly viewed distant digital 
signal of a non-network broadcast station.
    Section 340(b)(3) provides that the absence of an affiliate 
of a particular network in a local market does not prevent a 
satellite operator from retransmitting a significantly viewed 
signal of a distant broadcast station from that network. More 
than 70 markets do not have a full complement of network 
affiliates. This provision allows a satellite provider to 
retransmit into such a market a distant significantly viewed 
analog signal of a network broadcast station even though the 
market does not have a local affiliate from the same network. 
Similarly, it allows a satellite operator to retransmit into a 
market a distant significantly viewed digital signal of a 
network broadcast station if the market does not have a local 
affiliate from the same network.
    Section 340(b)(3) does not allow provision of a distant 
significantly viewed digital signal of a network broadcast 
station if a local affiliate from the same network is present 
in the market but not yet broadcasting a digital signal. 
Section 340(b)(3) operates in this fashion to ensure that a 
satellite operator may not retransmit the distant significantly 
viewed digital signal of a network broadcast station if an 
affiliate of that network is present in the local market but 
has never begun to offer a digital signal for a reason excused 
by the FCC.
    Section 340(b)(4) allows a local network affiliate to waive 
the limitations in sections 340(b)(1) or 340(b)(2) as they 
apply to the retransmission, into the local affiliate's local 
market, of a distant significantly viewed signal of a station 
affiliated with the same network. The waiver can be as broad or 
as narrow as the affiliate wants. For example, a local 
affiliate can waive the application of sections 340(b)(1) or 
340(b)(2) to one or more consumers in the local market, and 
with respect to one or more specific distant affiliates of the 
same network. It may do so as part of a negotiated agreement 
and for any reason, including common ownership among the 
stations. The Committee does not intend the FCC to grant these 
waivers or preside over the waiver process. Whether to grant a 
waiver is a decision to be made solely based on the 
broadcaster's own business judgment, although the Committee 
anticipates that a local broadcaster may grant a waiver as part 
of an agreement made with a satellite operator or other 
parties. The Committeealso does not intend to require a local 
broadcaster to execute any particular document as part of the waiver 
process, although the Committee expects that parties who intend to rely 
on such a waiver or any attendant agreement will want to reduce the 
waiver and the agreement to writing, so that they have something to 
refer to should any dispute arise in the future. Nor does the Committee 
intend such waivers or agreements to be subject to the section 325 
good-faith negotiation requirement. The Committee intends that section 
340(b)(4) will help provide consumers with more viewing choices without 
causing undue harm to local broadcasters in a market.
    Section 340(c)(1) allows a satellite operator to initiate 
an FCC determination that a signal of a distant broadcast 
station is significantly viewed. The Committee intends for the 
FCC to maintain a unified list of significantly viewed stations 
and communities that applies to both cable and satellite.
    Section 340(c)(2) provides for significantly viewed 
determinations in areas without cable service. Because current 
regulations provide only for cable carriage of significantly 
viewed signals, significantly viewed determinations currently 
focus on cable communities. In areas of the country that do not 
have cable service, there is no cable community. Section 
340(c)(2) is intended to allow satellite operators to carry 
significantly viewed signals in a community where no cable 
franchise exists so long as a signal is significantly viewed in 
the community based on the same quantitative criteria as 
currently apply to cable operators. See 47 C.F.R. 
Sec. Sec. 76.5(i), 76.54. The Committee intends that any signal 
determined to be significantly viewed for purposes of satellite 
carriage in an area where cable is not present would also be 
significantly viewed for cable carriage should a cable operator 
enter the community in the future.
    Section 340(d)(1) makes clear that carriage in a local 
market of a distant significantly viewed signal is not 
mandatory. Cable operators are under no obligation to carry in 
a local market a distant significantly viewed signal, and the 
Committee intends satellite carriage of such a distant signal 
in a local market to be similarly voluntary. Section 340(d)(1) 
also makes clear that any right of a station to have its signal 
carried in a local market under the carry-one, carry-all 
provisions of section 338 is not affected by the significantly 
viewed status of the signal in another market.
    Section 340(d)(2) provides that the status of a distant 
signal as significantly viewed does not affect whether a 
satellite operator must get retransmission consent to carry 
that signal into a local market. Cable operators must obtain 
retransmission consent to carry distant significantly viewed 
signals into a local market and the Committee intends the same 
obligation to apply to satellite. If the satellite operator is 
exempt from having to obtain retransmission consent for other 
reasons, however, then retransmission consent would not be 
necessary. For example, a satellite operator is exempt under 
section 325(b) (47 U.S.C. Sec. 325(b)) from having to obtain 
retransmission consent when providing a distant signal of a 
network to an unserved subscriber who cannot receive an over-
the-air signal from an affiliate of the same network. The 
satellite operator would still be exempt from having to 
negotiate retransmission consent when providing a significantly 
viewed signal if it was providing it as a distant signal to an 
unserved consumer.
    Section 340(e) allows the FCC to apply its network non-
duplication and syndicated exclusivity rules to ``remove'' 
stations from the significantly viewed list as applied to 
satellite operators in a similar manner as it currently does 
with cable operators. Many, if not all, broadcast stations 
enter into contracts to be the sole providers of particular 
network or syndicated programming within a certain geographic 
radius. See 47 C.F.R. Sec. Sec. 76.93, 76.103. When broadcast 
stations do so, the FCC's network non-duplication and 
syndicated exclusivity rules generally require cable operators 
to black out the duplicative programming when they retransmit 
signals from distant stations into the protected areas. See 47 
C.F.R. Sec. Sec. 76.92, 76.101. If the FCC determines that a 
distant signal is significantly viewed in a community, the FCC 
exempts the signal from the network non-duplication and 
syndicated exclusivity rules so that the cable operator can 
carry the distant signal, including the duplicative 
programming, into the local market. See 47 C.F.R. 
Sec. Sec. 76.92(f), 76.106(a). If the signal ever loses 
viewership such that it no longer qualifies as significantly 
viewed, the FCC does not literally remove the signal from the 
significantly viewed list, but parties can petition the FCC to 
re-impose the blackout obligations.
    In the satellite context, however, the network non-
duplication and syndicated exclusivity rules ordinarily apply 
only to retransmission of nationally distributed superstations. 
See 47 C.F.R. Sec. Sec. 76.120(b), 76.122, 76.123. They do not 
currently apply to retransmission of distant signals of network 
stations or non-network stations that are not superstations. 
Section 340(e)(1) is intended to give the FCC authority to 
apply the network non-duplication and syndicated exclusivity 
rules to distant signals of network or non-network stations in 
a way that replicates, where and when appropriate, the way the 
FCC ``removes'' signals from the significantly viewed list for 
cable. Section 340(e)(2) makes clear that section 340(e)(1) 
does not authorize the FCC to apply the network non-duplication 
and syndicated exclusivity rules to other lawful 
retransmissions of distant signals of network or non-network 
stations, such as when a consumer is unserved over the air.
    Section 340(f) creates a mechanism to enforce the new 
provisions regarding satellite delivery of significantly viewed 
signals. Section 340(f) is modeled after existing satellite-
retransmission-related enforcement mechanisms in 47 U.S.C. 
Sec. 325(e).
    Section 340(g)(1) gives the FCC 180 days from enactment to 
commence a proceeding to implement the provisions of section 
340. The notice of proposed rulemaking commencing the 
proceeding is to include a list of the signals already deemed 
significantly viewed for purposes of cable carriage and thus 
that are eligible for satellite carriage. The Committee intends 
for the FCC to continue to use this list, and add and 
``remove'' stations in accordance with the other provisions of 
section 340. The FCC will have one year from enactment to adopt 
rules implementing section 340. Section 340(g)(2) makes clear 
that satellite may start carrying the signals on the list 
pending adoption of the rules.
    Section 340(h)(1) gives the FCC until April 30, 2005, to 
revise its rules so that a television broadcast station may 
elect ``carry-one, carry-all status'' from a satellite operator 
on a community-by-community basis within a local market. Under 
current law, when a satellite operator offers local-into-local 
service in a market, the local broadcasters may choose between 
carry-one, carry-all status and retransmission consent. If the 
local broadcaster elects carry-one, carry-all status, the 
satellite operator must carry the station, but the station is 
not entitled to compensation. If the station chooses 
retransmission consent, the broadcaster can try to negotiate 
for compensation, but runs the risk of not getting carried at 
all.
    Because cable systems are subject to local franchising, 
each community within a local market generally has a separate 
cable system. If a cable system is carrying a significantly 
viewed signal in a community, a local broadcaster of the same 
network can elect must-carry for that system, but still 
negotiate retransmission consent for cable systems elsewhere in 
the local market where no significantly viewed signal for the 
same network is being carried.
    Because satellite operators have a nationwide--rather than 
local- franchise-based--service area, however, local 
broadcasters ordinarily must choose between carry-one, carry-
all status and retransmission consent as an all-or-nothing 
proposition throughout the entire local market. To accommodate 
the new significantly viewed authority for satellite operators 
and to recreate, as best as possible, a similar bargaining 
framework for local broadcasters as exists with cable systems, 
section 340(h)(1) allows a local broadcaster to elect carry-
one, carry-all status in communities with a significantly 
viewed signal from the same network, while continuing to 
negotiate retransmission consent in other communities in the 
market.
    To ease the administrative burden on the satellite 
operator, section 340(h)(2) specifies that the community-by-
community elections within a local market shall take place in a 
unified negotiation between each satellite operator and 
broadcaster. The Committee does not intend to set any 
particular time limit on the negotiation, or to suggest that it 
must take place in one sitting, but does mean to require the 
broadcaster to ``lay all its elections on the table at once'' 
so that the satellite operator can see the entire picture in 
anticipation of any retransmission consent negotiations that 
may be necessary in the communities where the broadcaster does 
not elect ``carry-one, carry all.'' To facilitate the 
community-by-community election process, section 340(h)(3) 
gives the FCC until April 30, 2005, to revise its rules to 
require satellite operators to notify broadcasters in advance 
of any communities in which they intend to carry significantly 
viewed signals. The satellite operators are permitted to carry 
significantly viewed signals only in communities for which the 
satellite operators provide such notice.

Section 203. Carriage of local stations on a single dish

    Section 203 of the bill amends section 338 of the 
Communications Act (47 U.S.C. Sec. 338) to require a satellite 
operator that offers local-into-local service in a market to 
provide to a subscriber any analog signals of the local 
broadcasters in that market on a single reception antenna 
device--often referred to as a ``dish''--as well as to provide 
any digital signals of the local broadcasters on a single dish. 
The satellite operator may, however, carry any analog signals 
of the local broadcasters on a separate dish from any digital 
signals of the local broadcasters.
    Satellite operators will have one year from enactment to 
comply. Within 270 days of enactment, a satellite operator 
offering local-into-local service will be obligated to notify 
local broadcasters and subscribers in the local market: (1) 
what broadcast or non-broadcast signals, if any, it intends to 
move among dishes to comply with these requirements; (2) 
whether subscribers will need to obtain additional equipment to 
receive such signals; and, (3) whether it plans to stop 
carrying any broadcast or non-broadcast signals to comply.
    DirecTV does not currently split local broadcasters between 
dishes. As of May 2004, EchoStar split local broadcasters in 38 
markets. The Committee does not expect EchoStar to withdraw 
from local markets, or significantly delay roll-out into 
additional local markets, to comply with the one-year deadline. 
DirecTV has stated it will be in 124 markets by the end of 
2004, and in all 210 sometime between 2006 and 2008. EchoStar 
has said it does not intend to let DirecTV serve more local 
markets than it does. Therefore, it will likely keep up a 
fairly aggressive pace. In any event, even if EchoStar did drop 
local markets or slowed down its roll-out, consumers would 
likely still be able to get local broadcast signals from 
DirecTV or other MVPD providers.

Section 204. Replacement of distant signals with local signals

    Section 204 of the bill amends section 339 of the 
Communications Act (47 U.S.C. Sec. 339) to require a satellite 
operator to stop providing distant-signal service to certain 
subscribers in a market once the operator begins providing 
local-into-local service in that market.
    New section 339(a)(2)(A) requires certain grandfathered 
subscribers to choose between receiving a distant signal of a 
network and a local signal. With SHVIA, Congress allowed some 
subscribers who were receiving a distant signal to continue to 
do so even though the subscribers were deemed as a matter of 
law to be ``served'' over the air from an affiliate of the same 
network. The grandfathered status of these subscribers is set 
to expire at the end of this year. Section 339(a)(2)(A) allows 
a satellite operator to continue retransmitting a distant 
signal to such a grandfathered subscriber who affirmatively 
elects to receive such a signal. The satellite operator may do 
so, however, only until the subscriber elects to receive a 
local signal of the network as part of the satellite operator's 
local-into-local service.
    New section 339(a)(2)(B) allows certain subscribers who are 
deemed unserved by an over-the-air signal of a network 
affiliate to receive from their satellite operator both a 
distant signal and a local signal of that network. Under 
section 339(a)(2)(B), a subscriber who is deemed unserved by an 
over-the-air signal of a network affiliate, and who at the date 
of enactment is already receiving from a satellite operator 
both a local and a distant signal of that network, can continue 
to receive both signals. If, however, an unserved subscriber is 
receiving from a satellite operator a signal from only a 
distant affiliate of the network,even though the subscriber had 
the option on the date of enactment to receive from the satellite 
operator a signal from a local affiliate of that network, the 
subscriber may continue to receive the distant signal, but only until 
the subscriber elects to receive the local signal. If a satellite 
operator was not offering at the date of enactment a signal from a 
local affiliate of a network, the satellite operator may provide a 
signal of a distant affiliate of that network to an unserved consumer 
who was a subscriber of the satellite operator at the date of 
enactment, or who became a subscriber of that operator before the 
operator began offering the local signal, but only until the subscriber 
elects to receive the local signal.
    New section 339(a)(2)(C) provides that a satellite operator 
may not provide a signal of a distant affiliate of a network to 
a consumer in a local market who becomes a subscriber to the 
satellite operator after the operator has begun to make 
available a signal of a local affiliate of that network in that 
local market.
    New section 339(a)(2)(D) allows a local affiliate to waive 
any of the limitations in section 339(a)(2) as they apply to 
the retransmission, into the local affiliate's local market, of 
the distant signals of a station affiliated with the same 
network. The local affiliate may waive application of the 
limitations as to one or more consumers in the local market, 
and with respect to one or more distant affiliates of the same 
network. It may do so as part of a negotiated agreement and for 
any reason, including common ownership among the stations. The 
Committee does not intend the FCC to grant these waivers or 
preside over the waiver process. Whether to grant a waiver is a 
decision to be made solely based on the broadcaster's own 
business judgment, although the Committee anticipates that a 
local broadcaster may grant a waiver as part of an agreement 
made with a satellite operator or other parties. The Committee 
also does not intend to require a local broadcaster to execute 
any particular document as part of the waiver process, although 
the Committee expects that parties who intend to rely on such a 
waiver or any attendant agreement will want to reduce the 
waiver and the agreement to writing, so that they have 
something to refer to should any dispute arise in the future. 
Nor does the Committee intend such waivers or agreements to be 
subject to the section 325 good-faith negotiation requirement. 
The Committee intends that section 339(a)(2)(D) will help 
provide consumers with more viewing choices without causing 
undue harm to local broadcasters in that market.
    New section 339(a)(2)(E) makes clear that the distant-
signal limitations of section 339(a)(2) do not apply to the 
provision of significantly viewed signals under new section 
340, or to the provision of distant signals to trucks and 
recreational vehicles.

Section 205. Additional notices to subscribers, networks, and stations 
        concerning signal carriage

    Section 205 of the bill creates new section 338(h) of the 
Communications Act (47 U.S.C. Sec. 338(h)) obligating satellite 
operators to provide subscribers, networks and stations certain 
additional notices regarding the satellite operators' carriage 
of signals. Section 338(h)(1) gives a satellite operator a 
certain amount of time to notify a subscriber who receives a 
distant signal of a network about the availability, if any, of 
a signal of a local affiliate of that network, and to offer to 
replace the distant signal with the local signal. If the 
subscriber does not respond within 60 days, the satellite 
operator is to stop providing the distant signal to the 
subscriber within another 10 days.
    Section 338(h)(2) gives a satellite operator 60 days from 
enactment to provide each network with information regarding 
the distant signals of that network that the operator 
retransmits, and to certify that it does so lawfully to the 
best of its knowledge. This provision is designed to help 
networks and stations monitor satellite compliance with the new 
Communications Act limitations the SHVERA creates on the 
provision of distant signals.
    Section 338(h)(3) gives the FCC 180 days from enactment to 
revise its rules governing the form of the notice satellite 
operators must provide local broadcasters when the operators 
begin offering local-into-local service in a market. The 
purpose of this section is to make sure such notices more 
clearly indicate to local broadcasters the rights and 
responsibilities they have under the carry-one, carry-all 
provisions of the Communications Act and FCC regulations, as 
well as the consequences of failing to respond to such notices. 
This provision is also intended to require satellite operators 
to send such notices by certified mail. Broadcasters are 
already required to send their carry-one, carry-all elections 
to satellite operators by certified mail to ensure that the 
satellite operators take notice. Section 338(h)(3) is intended 
to create a similar obligation for satellite operators to 
ensure the broadcasters take notice of the satellite operators' 
announcements that they are commencing local-into-local 
service.
    Section 338(h)(4) requires satellite operators to notify 
local broadcasters of any intent to begin retransmitting into a 
market the signal of distant stations that are significantly 
viewed over the air in the local market. The Committee intends 
this provision to help local broadcasters monitor satellite 
compliance with the conditions SHVERA creates on the provision 
of significantly viewed signals, and to exercise their option 
of negotiating retransmission consent on a community-by-
community basis under new section 340. This provision also 
requires satellite operators to list on their web sites the 
significantly viewed signals they offer so that consumers are 
aware of the signals available to them.

Section 206. Privacy rights of satellite subscribers

    Section 206 of the bill creates new section 338(i) of the 
Communications Act (47 U.S.C. Sec. 338(i)). Section 338(i) 
obligates satellite operators to abide by the same privacy 
obligations that section 631 of the Communications Act (57 
U.S.C Sec. 551) applies to cable operators. The Committee 
wishes to make clear that satellite operators may disclose to 
broadcasters the information required by sections 338(h) and 
340(h) without violating new section 338(i). Such disclosures 
are ``necessary to render, or conduct a legitimate business 
activity related to, a satellite service provided by the 
satellite carrier to the subscriber,'' and so fall within new 
section 338(i)(4)(B)(i).

Section 207. Reciprocal bargaining obligations

    Section 207 of the bill extends until Jan. 1, 2010, the 
obligations broadcasters have under section 325(b)(3)(C)(ii) 
(47 U.S.C. Sec. 325(b)(3)(C)(ii)) to negotiate retransmission 
consent in good faith and not to enter into exclusive 
retransmission consent agreements. The good-faith and non-
exclusivity requirements currently expire Jan. 1, 2006. In 
light of evidence that retransmission negotiations continue to 
be contentious, the Committee chose to extend these 
obligations, and also to begin applying the good-faith 
obligations to MVPDs. The Committee intends the MVPD good-faith 
obligations to be analogous to those that apply to 
broadcasters, and not to affect the ultimate ability of an MVPD 
to decide not to enter into a retransmission consent agreement 
with a broadcaster.

Section 208. Unserved digital customers

    Section 208 of the bill requires the FCC to recommend to 
Congress by Dec. 31, 2005, a methodology for determining 
whether a particular consumer would be unserved over the air by 
the digital signal of a specific network as transmitted by a 
broadcast station after the broadcasters in that consumer's 
market have ceased to broadcast in analog because of the 
implementation of section 309(j)(14) of the Communications Act. 
A consumer is unserved if the consumer cannot receive a network 
affiliate signal of adequate signal strength as set out by FCC 
regulations. If possible, the FCC is also to report whether it 
might be possible to determine prior to the end of the digital 
television transition if there will be particular parts of the 
country that will be unserved over the air by the digital 
signals of the affiliates of particular networks after the 
transition, and what those parts of the country might be. The 
Committee intends the FCC to base its methodology on the FCC's 
existing technical specifications for digital television 
service and the individual location Longley-Rice algorithm.
    Just as there are consumers today who cannot receive analog 
signals over the air, there will be consumers who cannot 
receive digital signals over the air once the digital 
television transition is complete. The Committee intends this 
report to help provide Congress the information it needs to 
consider whether to enact additional legislation governing the 
way satellite operators may provide consumers with distant 
digital signals.

Section 209. Reduction of required tests

    Section 209 of the bill amends the provisions of section 
339(c)(4) of the Communications Act (47 U.S.C Sec. 339(c)(4)) 
governing signal-strength testing. Under current law, if the 
FCC's predictive model indicates that a consumer can receive an 
adequate analog signal over the air--making the consumer 
ineligible for analog distant-signal service--the consumer may 
challenge that prediction by requesting an on-location signal-
strength test. If the test determines that the consumer is, in 
fact, served, the satellite operator must pay for the test. If 
the test indicates that the consumer is not served, the 
broadcaster must pay for the test. New section 339(c)(4)(D)(i) 
makes a consumer in a local-into-local market ineligible for a 
test at the expense of a broadcaster or satellite operator 
because under this bill such consumers are no longer eligible 
for distant-signal service if they do not have it already, 
making the test irrelevant. New section 339(c)(4)(D)(ii) makes 
a consumer ineligible for a test at satellite provider or 
broadcaster expense if the FCC's predictive model reports a 
signal-strength within a certain margin of error to be 
determined by the FCC by rule within one year of enactment. In 
such circumstances, on-location tests are unlikely to return 
results different than the predictive model. New section 
339(c)(4)(E), however, allows consumers to pay for their own 
tests if the FCC's model predicts the consumer to be ``served'' 
over the air. The Committee intends the satellite operator to 
provide a consumer who requests a signal-strength test under 
section 339(c)(4)(E) with a good-faith estimate of the costs 
usually incurred by the satellite operator or broadcaster when 
the satellite operator and the broadcaster follow the ordinary 
procedures under section 339(c)(4)(A) and (B) for arranging 
such a test. If the consumer agrees to pay those costs, the 
Committee intends the satellite operator and the broadcaster to 
engage in those procedures, intends the satellite operator to 
report the results to the consumer, and intends the satellite 
operator and broadcaster to respect the results of those tests 
as if the satellite operator or broadcaster had requested it.

Section 210. Carriage of certain additional stations

    Section 210 of the bill adds new section 340(c)(3) of the 
Communications Act to help consumers in certain small 
communities receive by satellite certain television broadcasts 
from within their states. New section 340, as created by 
Section 202 of the bill and discussed above, helps consumers 
who Nielsen Media Research assigns to ``local'' markets outside 
their states receive by satellite certain distant broadcast 
signals from within their states if those signals are 
significantly viewed over the air in the consumers' Nielsen-
defined local markets. Some small communities assigned by 
Nielsen to out-of-state markets, however, have no significantly 
viewed over-the-air signals from within their own states. 
Section 340(c)(3) allows satellite providers to offer consumers 
in certain small communities in out-of-state markets receive by 
satellite certain broadcast signals from stations within their 
states, in addition to signals from their Nielsen-defined local 
markets.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

COMMUNICATIONS ACT OF 1934

           *       *       *       *       *       *       *

                TITLE III--PROVISIONS RELATING TO RADIO

PART I--GENERAL PROVISIONS

           *       *       *       *       *       *       *

SEC. 325. FALSE DISTRESS SIGNALS; REBROADCASTING; STUDIOS OF FOREIGN 
                    STATIONS.

  (a) * * *
  (b)(1) * * *
  (2) This subsection shall not apply--
          (A) * * *

           *       *       *       *       *       *       *

          (C) until December 31, [2004] 2009, to retransmission 
        of the signals of network stations directly to a home 
        satellite antenna, if the subscriber receiving the 
        signal--
                  (i) * * *

           *       *       *       *       *       *       *

  (3)(A) * * *

           *       *       *       *       *       *       *

  (C) [Within 45 days after the date of the enactment of the 
Satellite Home Viewer Improvement Act of 1999, the] The 
Commission shall commence a rulemaking proceeding to revise the 
regulations governing the exercise by television broadcast 
stations of the right to grant retransmission consent under 
this subsection, and such other regulations as are necessary to 
administer the limitations contained in paragraph (2). [The 
Commission shall complete all actions necessary to prescribe 
such regulations within 1 year after such date of enactment.] 
Such regulations shall--
          (i) establish election time periods that correspond 
        with those regulations adopted under subparagraph (B) 
        of this paragraph; [and]
          (ii) until January 1, [2006] 2010, prohibit a 
        television broadcast station that provides 
        retransmission consent from engaging in exclusive 
        contracts for carriage or 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 con-siderations[.]; 
        and
          (iii) until January 1, 2010, prohibit a multichannel 
        video programming distributor from failing to negotiate 
        in good faith for retransmission consent under this 
        section, and it shall not be a failure to negotiate in 
        good faith if the distributor enters into 
        retransmission consent agreements containing different 
        terms and conditions, including price terms, with 
        different broadcast stations if such different terms 
        and conditions are based on competitive marketplace 
        considerations.

           *       *       *       *       *       *       *

SEC. 338. CARRIAGE OF LOCAL TELEVISION SIGNALS BY SATELLITE CARRIERS.

  (a) * * *

           *       *       *       *       *       *       *

  (g) Carriage of Local Stations on a Single Dish.--
          (1) Single dish.--Each satellite carrier that 
        retransmits the signals of local television broadcast 
        stations in a local market shall retransmit the signals 
        of all local television broadcast stations 
        retransmitted by that carrier to subscribers in such 
        market by means of a single reception antenna and 
        associated equipment.
          (2) Exception.--Notwithstanding paragraph (1), if the 
        carrier retransmits signals in the digital television 
        service, the carrier shall retransmit the digital 
        television service signals of all the local television 
        broadcast stations retransmitted by that carrier to 
        subscribers in such market by means of a single 
        reception antenna and associated equipment, but such 
        antenna and associated equipment may be separate from 
        the single reception antenna and associated equipment 
        used for signals that are not in the digital television 
        service.
          (3) Effective date.--The requirements of paragraphs 
        (1) and (2) of this subsection shall apply on and after 
        one year after the date of enactment of the Satellite 
        Home Viewer Extension and Reauthorization Act of 2004.
          (4) Notice of disruptions.--A carrier that is 
        providing signals of a local television broadcast 
        station in a local market under this section on the 
        date of enactment of the Satellite Home Viewer 
        Extension and Reauthorization Act of 2004 shall, not 
        later than 270 days after such date of enactment, 
        provide to the licensees for such stations and the 
        carrier's subscribers in such local market a notice 
        that displays prominently and conspicuously a clear 
        statement of--
                  (A) any reallocation of signals between 
                different reception antennas and associated 
                equipment that the carrier intends to make in 
                order to comply with the requirements of this 
                subsection;
                  (B) the need, if any, for subscribers to 
                obtain an additional reception antenna and 
                associated equipment to receive such signals; 
                and
                  (C) any cessation of carriage or other 
                material change in the carriage of signals as a 
                consequence of the requirements of this 
                paragraph.
          (5) Enforcement.--Notwithstanding any other provision 
        of this section, the Commission may enforce this 
        section and any regulation thereunder in accordance 
        with titles IV and V of this Act.
  (h) Additional Notices to Subscribers, Networks, and Stations 
Concerning Signal Carriage.--
          (1) Notices to and elections by subscribers 
        concerning grandfathered signals.--Any carrier that 
        provides a distant signal of a network station to a 
        subscriber pursuant to a statutory license under 
        section 119(a)(4)(A) of title 17, United States Code, 
        shall--
                  (A) within 60 days after the local signal of 
                a network station of the same television 
                network is available pursuant to a statutory 
                license under section 122, or within 60 days 
                after the date of enactment of the Satellite 
                Home Viewer Extension and Reauthorization Act 
                of 2004, whichever is later, send a notice to 
                the subscriber--
                          (i) offering to substitute the local 
                        network signal for the duplicating 
                        distant network signal; and
                          (ii) informing the subscriber that, 
                        if the subscriber fails to respond in 
                        60 days, the subscriber will lose the 
                        distant network signal but will be 
                        permitted to subscribe to the local 
                        network signal; and
                  (B) if the subscriber--
                          (i) elects to substitute such local 
                        network signal within such 60 days, 
                        switch such subscriber to such local 
                        network signal within 10 days after the 
                        end of such 60-day period; or
                          (ii) fails to respond within such 60 
                        days, terminate the distant network 
                        signal within 10 days after the end of 
                        such 60-day period.
          (2) Notices to networks of distant signal 
        subscribers.--Within 60 days after the date of 
        enactment of the Satellite Home Viewer Extension and 
        Reauthorization Act of 2004, each satellite carrier 
        that provides a distant signal of a network station to 
        a subscriber pursuant to a statutory license under 
        section 119(a)(4)(A) or 119(a)(4)(B)(i) of title 17, 
        United States Code, shall submit to each network--
                  (A) a list, aggregated by designated market 
                area, identifying each subscriber provided such 
                a signal by--
                          (i) name;
                          (ii) address (street or RFD number, 
                        city, state, and zip code); and
                          (iii) the distant network signal or 
                        signals received; and
                  (B) a statement that, to the best of the 
                carrier's knowledge and belief after having 
                made diligent and good faith inquiries, the 
                subscriber is qualified under the existing law 
                to receive the distant network signal or 
                signals pursuant to a statutory license under 
                section 119(a)(4)(A) or 119(a)(4)(B)(i) of 
                title 17, United States Code.
          (3) Notice to station licensees of commencement of 
        local-into-local service.--
                  (A) Notice required.--Within 180 days after 
                the date of enactment of the Satellite Home 
                Viewer Extension and Reauthorization Act of 
                2004, the Commission shall revise the 
                regulations under this section relating to 
                notice to broadcast station licensees to comply 
                with the requirements of this paragraph.
                  (B) Contents of commencement notice.--The 
                notice required by such regulations shall 
                inform each television broadcast station 
                licensee within any local market in which a 
                satellite carrier proposes to commence carriage 
                of signals of stations from that market, not 
                later than 60 days prior to the commencement of 
                such carriage--
                          (i) of the carrier's intention to 
                        launch local-into-local service under 
                        this section in a local market, the 
                        identity of that local market, and the 
                        location of the carrier's proposed 
                        local receive facility for that local 
                        market;
                          (ii) of the right of such licensee to 
                        elect carriage under this section or 
                        grant retransmission consent under 
                        section 325(b);
                          (iii) that such licensee has 30 days 
                        from the date of the receipt of such 
                        notice to make such election; and
                          (iv) that failure to make such 
                        election will result in the loss of the 
                        right to demand carriage under this 
                        section for the remainder of the 3-year 
                        cycle of carriage under section 325.
                  (C) Transmission of notices.--Such 
                regulations shall require that each satellite 
                carrier shall transmit the notices required by 
                such regulation via certified mail to the 
                address for such television station licensee 
                listed in the consolidated database system 
                maintained by the Commission.
          (4) Notices concerning significantly viewed 
        stations.--Each satellite carrier that proposes to 
        commence the retransmission of a station pursuant to 
        section 340 in any local market shall--
                  (A) not less than 60 days before commencing 
                such retransmission, provide a written notice 
                to any television broadcast station in such 
                local market of a such proposal; and
                  (B) designate on such carrier's website all 
                significantly viewed signals carried pursuant 
                to section 340 and the communities in which the 
                signals are carried.
  (i) Privacy Rights of Satellite Subscribers.--
          (1) Notice.--At the time of entering into an 
        agreement to provide any satellite service or other 
        service to a subscriber and at least once a year 
        thereafter, a satellite carrier shall provide notice in 
        the form of a separate, written statement to such 
        subscriber which clearly and conspicuously informs the 
        subscriber of--
                  (A) the nature of personally identifiable 
                information collected or to be collected with 
                respect to the subscriber and the nature of the 
                use of such information;
                  (B) the nature, frequency, and purpose of any 
                disclosure which may be made of such 
                information, including an identification of the 
                types of persons to whom the disclosure may be 
                made;
                  (C) the period during which such information 
                will be maintained by the satellite carrier;
                  (D) the times and place at which the 
                subscriber may have access to such information 
                in accordance with paragraph (5); and
                  (E) the limitations provided by this section 
                with respect to the collection and disclosure 
                of information by a satellite carrier and the 
                right of the subscriber under paragraphs (7) 
                and (9) to enforce such limitations.
        In the case of subscribers who have entered into such 
        an agreement before the effective date of this 
        subsection, such notice shall be provided within 180 
        days of such date and at least once a year thereafter.
          (2) Definitions.--For purposes of this subsection, 
        other than paragraph (9)--
                  (A) the term ``personally identifiable 
                information'' does not include any record of 
                aggregate data which does not identify 
                particular persons;
                  (B) the term ``other service'' includes any 
                wire or radio communications service provided 
                using any of the facilities of a satellite 
                carrier that are used in the provision of 
                satellite service; and
                  (C) the term ``satellite carrier'' includes, 
                in addition to persons within the definition of 
                satellite carrier, any person who--
                          (i) is owned or controlled by, or 
                        under common ownership or control with, 
                        a satellite carrier; and
                          (ii) provides any wire or radio 
                        communications service.
          (3) Prohibitions.--
                  (A) Consent to collection.--Except as 
                provided in subparagraph (B), a satellite 
                carrier shall not use any facilities used by 
                the satellite carrier to collect programming 
                selection or subscription information from such 
                a subscriber to collect personally identifiable 
                information concerning any subscriber without 
                the prior written or electronic consent of the 
                subscriber concerned.
                  (B) Exceptions.--A satellite carrier may use 
                such facilities to collect such information in 
                order to--
                          (i) obtain information necessary to 
                        render a satellite service or other 
                        service provided by the satellite 
                        carrier to the subscriber; or
                          (ii) detect unauthorized reception of 
                        satellite communications.
          (4) Disclosure.--
                  (A) Consent to disclosure.--Except as 
                provided in subparagraph (B), a satellite 
                carrier shall not disclose personally 
                identifiable information concerning any 
                subscriber without the prior written or 
                electronic consent of the subscriber concerned 
                and shall take such actions as are necessary to 
                prevent unauthorized access to such information 
                by a person other than the subscriber or 
                satellite carrier.
                  (B) Exceptions.--A satellite carrier may 
                disclose such information if the disclosure 
                is--
                          (i) necessary to render, or conduct a 
                        legitimate business activity related 
                        to, a satellite service or other 
                        service provided by the satellite 
                        carrier to the subscriber;
                          (ii) subject to paragraph (9), made 
                        pursuant to a court order authorizing 
                        such disclosure, if the subscriber is 
                        notified of such order by the person to 
                        whom the order is directed;
                          (iii) a disclosure of the names and 
                        addresses of subscribers to any 
                        satellite service or other service, 
                        if--
                                  (I) the satellite carrier has 
                                provided the subscriber the 
                                opportunity to prohibit or 
                                limit such disclosure; and
                                  (II) the disclosure does not 
                                reveal, directly or indirectly, 
                                the--
                                          (aa) extent of any 
                                        viewing or other use by 
                                        the subscriber of a 
                                        satellite service or 
                                        other service provided 
                                        by the satellite 
                                        carrier; or
                                          (bb) the nature of 
                                        any transaction made by 
                                        the subscriber over any 
                                        facilities used by the 
                                        satellite carrier to 
                                        collect programming 
                                        selection or 
                                        subscription 
                                        information from such a 
                                        subscriber; or
                          (iv) to a government entity as 
                        authorized under chapters 119, 121, or 
                        206 of title 18, United States Code, 
                        except that such disclosure shall not 
                        include records revealing satellite 
                        subscriber selection of video 
                        programming from a satellite carrier.
          (5) Access by subscriber.--A satellite subscriber 
        shall be provided access to all personally identifiable 
        information regarding that subscriber which is 
        collected and maintained by a satellite carrier. Such 
        information shall be made available to the subscriber 
        at reasonable times and at a convenient place 
        designated by such satellite carrier. A satellite 
        subscriber shall be provided reasonable opportunity to 
        correct any error in such information.
          (6) Destruction of information.--A satellite carrier 
        shall destroy personally identifiable information if 
        the information is no longer necessary for the purpose 
        for which it was collected and there are no pending 
        requests or orders for access to such information under 
        paragraph (5) or pursuant to a court order.
          (7) Penalties.--Any person aggrieved by any act of a 
        satellite carrier in violation of this section may 
        bring a civil action in a United States district court. 
        The court may award--
                  (A) actual damages but not less than 
                liquidated damages computed at the rate of $100 
                a day for each day of violation or $1,000, 
                whichever is higher;
                  (B) punitive damages; and
                  (C) reasonable attorneys' fees and other 
                litigation costs reasonably incurred.
        The remedy provided by this subsection shall be in 
        addition to any other lawful remedy available to a 
        satellite subscriber.
          (8) Rule of construction.--Nothing in this title 
        shall be construed to prohibit any State from enacting 
        or enforcing laws consistent with this section for the 
        protection of subscriber privacy.
          (9) Court orders.--Except as provided in paragraph 
        (4)(B)(iv), a governmental entity may obtain personally 
        identifiable information concerning a satellite 
        subscriber pursuant to a court order only if, in the 
        court proceeding relevant to such court order--
                  (A) such entity offers clear and convincing 
                evidence that the subject of the information is 
                reasonably suspected of engaging in criminal 
                activity and that the information sought would 
                be material evidence in the case; and
                  (B) the subject of the information is 
                afforded the opportunity to appear and contest 
                such entity's claim.
  [(g)] (j) Regulations by Commission.--Within 1 year after the 
date of the enactment of this section, the Commission shall 
issue regulations implementing this section following a 
rulemaking proceeding. The regulations prescribed under this 
section shall include requirements on satellite carriers that 
are comparable to the requirements on cable operators under 
sections 614(b)(3) and (4) and 615(g)(1) and (2).
  [(h)] (k) Definitions.--As used in this section:
          (1) Distributor.--The term ``distributor'' means an 
        entity which contracts to distribute secondary 
        transmissions from a satellite carrier and, either as a 
        single channel or in a package with other programming, 
        provides the secondary transmission either directly to 
        individual subscribers or indirectly through other 
        program distribution entities.

           *       *       *       *       *       *       *

SEC. 339. CARRIAGE OF DISTANT TELEVISION STATIONS BY SATELLITE 
                    CARRIERS.

  (a) Provisions Relating to Carriage of Distant Signals.--
          (1) * * *
          (2) Replacement of distant signals with local 
        signals.--Notwithstanding any other provision of 
        paragraph (1), the following rules shall apply after 
        the date of enactment of the Satellite Home Viewer 
        Extension and Reauthorization Act of 2004:
                  (A) Rules for grandfathered subscribers.--In 
                the case of a subscriber of a satellite carrier 
                who is eligible to receive the signal of a 
                network station solely by reason of section 
                119(e) of title 17, United States Code (in this 
                subparagraph referred to as a ``distant 
                signal''), the following shall apply:
                          (i) In a case in which the signal of 
                        a local network station affiliated with 
                        the same television network is made 
                        available pursuant to the statutory 
                        license under section 122 by that 
                        satellite carrier to the subscriber, 
                        the carrier may only provide the 
                        secondary transmissions of the distant 
                        signal of such network station to that 
                        subscriber--
                                  (I) if, within 60 days after 
                                receiving the notice of the 
                                satellite carrier under section 
                                338(h)(1) of the Communications 
                                Act of 1934, the subscriber 
                                elects to retain the distant 
                                signal; but
                                  (II) only until such time as 
                                the subscriber elects to 
                                receive such local signal.
                          (ii) Notwithstanding clause (i), the 
                        carrier may not retransmit the distant 
                        signal to any subscriber who is 
                        eligible to receive the signal of a 
                        network station solely by reason of 
                        section 119(e) of title 17, United 
                        States Code, unless such carrier, 
                        within 60 days after the date of the 
                        enactment of the Satellite Home Viewer 
                        Extension and Reauthorization Act of 
                        2004, submits to that television 
                        network the list and statement required 
                        by section 338(h)(2).
                  (B) Rules for other subscribers.--In the case 
                of a subscriber of a satellite carrier who is 
                eligible to receive the signal of a network 
                station under the statutory license under 
                section 119(a)(2) of title 17, United States 
                Code (in this subparagraph referred to as a 
                ``distant signal''), other than subscribers to 
                whom subparagraph (A) applies, the following 
                shall apply:
                          (i) In a case in which the signal of 
                        a local network station affiliated with 
                        the same television network is made 
                        available pursuant to the statutory 
                        license under section 122 by that 
                        satellite carrier to the subscriber on 
                        the date of the enactment of the 
                        Satellite Home Viewer Extension and 
                        Reauthorization Act of 2004, the 
                        carrier may only provide the secondary 
                        transmissions of the distant signal of 
                        such network station to that 
                        subscriber--
                                  (I)(aa) if, on such date of 
                                enactment, the subscriber is 
                                receiving such distant signal 
                                and is also receiving such 
                                local signal, and
                                  (bb) the subscriber's 
                                satellite carrier, within 60 
                                days after the date of the 
                                enactment of the Satellite Home 
                                Viewer Extension and 
                                Reauthorization Act of 2004, 
                                submits to that television 
                                network the list and statement 
                                required by section 338(h)(2); 
                                or
                                  (II)(aa) if, on such date of 
                                enactment, the subscriber is 
                                receiving such distant signal 
                                and is not receiving such local 
                                signal; but
                                  (bb) only until such time as 
                                the subscriber elects to 
                                receive such local signal.
                          (ii) In a case in which the signal of 
                        a local network station affiliated with 
                        the same television network is not made 
                        available pursuant to the statutory 
                        license under section 122 by that 
                        satellite carrier to a subscriber on 
                        the date of the enactment of the 
                        Satellite Home Viewer Extension and 
                        Reauthorization Act of 2004, the 
                        carrier may only provide the secondary 
                        transmissions of the distant signal of 
                        such network station to that 
                        subscriber--
                                  (I) who is a subscriber of 
                                that satellite carrier on such 
                                date of enactment, or
                                  (II) who becomes a subscriber 
                                of that satellite carrier after 
                                such date but before the local 
                                signal is made available by the 
                                carrier,
                        but only until such time as the 
                        subscriber elects to receive the local 
                        signal from that satellite carrier.
                  (C) Future applicability.--A satellite 
                carrier may not provide a distant signal 
                (within the meaning of subparagraph (A) or (B)) 
                to any person in a location to which the signal 
                of a local network station affiliated with the 
                same television network was made available by 
                that carrier pursuant to the statutory license 
                under section 122 of title 17, United States 
                Code, before the person becomes a subscriber to 
                that carrier.
                  (D) Authority to grant station-specific 
                waivers.--Notwithstanding the provisions of 
                this paragraph, a satellite carrier may provide 
                the distant signal (within the meaning of 
                subparagraph (A) or (B)) of any distant network 
                station to any person to whom the signal of a 
                local network station is available pursuant to 
                the statutory license under section 122 of 
                title 17, United States Code, if and to the 
                extent that such local network station has 
                granted a waiver from the requirements of this 
                paragraph to such satellite carrier with 
                respect to such distant network station.
                  (E) Other provisions not affected.--This 
                paragraph shall not affect the eligibility of a 
                subscriber to receive secondary transmissions 
                under section 119(a)(3) of title 17, United 
                States Code, or as an unserved household 
                included under section 119(a)(12) of such 
                title.
          [(2)] (3) Penalty for violation.--Any satellite 
        carrier that knowingly and willfully provides the 
        signals of television stations to subscribers in 
        violation of this subsection shall be liable for a 
        forfeiture penalty under section 503 in the amount of 
        $50,000 for each violation or each day of a continuing 
        violation.

           *       *       *       *       *       *       *

  (c) Eligibility for Retransmission.--
          (1) * * *

           *       *       *       *       *       *       *

          (4) Objective verification.--
                  (A) * * *

           *       *       *       *       *       *       *

                  (D) Reduction of verification burdens.--
                Within one year after the date of enactment of 
                the Satellite Home Viewer Extension and 
                Reauthorization Act of 2004, the Commission 
                shall by rule exempt from the verification 
                requirements of subparagraph (A) any request 
                for a test made by a subscriber to a satellite 
                carrier--
                          (i) to whom the retransmission of the 
                        signals of local broadcast stations is 
                        available under section 122 of title 
                        17, United States Code, from such 
                        carrier; or
                          (ii) for whom the predictive model 
                        required by paragraph (3) predicts a 
                        signal intensity that exceeds the 
                        signal intensity standard in effect 
                        under section 119(d)(11)(A) of such 
                        title by such number of decibels as the 
                        Commission specifies in such rule.
                  (E) Exception.--Notwithstanding any provision 
                of this Act, this section does not prohibit a 
                subscriber who is predicted to receive a signal 
                that meets or exceeds such signal intensity 
                standard from conducting a signal strength test 
                at the subscriber's own expense for the purpose 
                of determining their eligibility for distant 
                signals under this section.

           *       *       *       *       *       *       *

SEC. 340. SIGNIFICANTLY VIEWED SIGNALS PERMITTED TO BE CARRIED.

  (a) Significantly Viewed Stations.--In addition to the 
broadcast signals that subscribers may receive under section 
338 and 339, a satellite carrier is also authorized to 
retransmit to subscribers located in a community the signal of 
any station that a cable system in the same community is 
authorized to retransmit pursuant to section 111 of title 17, 
United States Code, if such station is treated as significantly 
viewed in the county within which such community is located in 
accordance with the rules, regulations, and authorizations of 
the Commission.
  (b) Limitations.--
          (1) Analog service limited to subscribers taking 
        local-into-local service.--With respect to a signal 
        that originates as an analog signal of a television 
        broadcast station, this section shall apply only to 
        retransmissions to subscribers who receive 
        retransmissions from a satellite carrier pursuant to 
        the statutory license under section 122 of title 17, 
        United States Code.
          (2) Digital service limitations.--With respect to a 
        signal that originates as a digital signal of a network 
        station, this section shall apply only if--
                  (A) the subscriber receives from the 
                satellite carrier pursuant to the statutory 
                license under section 122 of title 17, United 
                States Code, the retransmission of the digital 
                signal of a network station in the subscriber's 
                local market that is affiliated with the same 
                television network; and
                  (B) either--
                          (i) the retransmission of the local 
                        network station occupies at least the 
                        equivalent bandwidth as the digital 
                        signal retransmitted pursuant to this 
                        section; or
                          (ii) the retransmission of the local 
                        network station carries the entire 
                        bandwidth of the digital signal 
                        broadcast by such local network 
                        station.
          (3) Limitation not applicable where no network 
        affiliates.--The limitations in paragraphs (1) and (2) 
        shall not prohibit a retransmission under this section 
        to a subscriber located in a local market in which 
        there are no network stations affiliated with the same 
        television network as the station whose signal is being 
        retransmitted pursuant to this section.
          (4) Authority to grant station-specific waivers.--
        Notwithstanding paragraphs (1) and (2), a satellite 
        carrier may provide to subscribers the retransmission 
        of a network station that is determined to be 
        significantly viewed under this section, if and to the 
        extent that the network station in the local market in 
        which the subscriber is located, and that is affiliated 
        with the same television network, has granted a waiver 
        from the requirements of paragraph (1) and (2) to such 
        satellite carrier with respect to such significantly 
        viewed station.
  (c) Modifications of List.--
          (1) Petitions from satellite carriers.--In addition 
        to cable operators and television broadcast station 
        licensees, the Commission shall permit a satellite 
        carrier to petition for decisions and orders--
                  (A) by which stations and communities may be 
                added to those that are eligible for 
                retransmission under subsection (a); and
                  (B) by which stations and communities may be 
                determined to be eligible for retransmission 
                under paragraph (2) of this subsection.
          (2) Application of criteria to communities without 
        cable service.--In addition to the stations and 
        communities that are eligible for retransmission under 
        subsection (a), in a community that is not served by a 
        cable system, a satellite carrier is also authorized to 
        retransmit to subscribers located in such community the 
        signal of any station that a cable system in that 
        community would be authorized to retransmit pursuant to 
        section 111 of title 17, United States Code, if such 
        signal would be treated as significantly viewed in the 
        county within which such community is located in 
        accordance with the rules, regulations, and 
        authorizations of the Commission.
          (3) Carriage of certain additional stations.--
                  (A) Additional stations authorized.--In 
                addition to the signals that are eligible to be 
                carried under subsection (a) and paragraph (2) 
                of this subsection, a satellite carrier is also 
                authorized to retransmit to subscribers in no 
                more than two counties in a State that are in a 
                local market principally comprised of counties 
                in another State, the signals of any television 
                station located in the capital city of the 
                State in which such counties are located, if 
                the total number of television households in 
                the two counties combined did not exceed 10,000 
                for the year 2003 according to Nielson Media 
                Research.
                  (B) Treatment as significantly viewed; 
                limitations.--Such signals shall be deemed, 
                solely for purposes of this section, to be 
                significantly viewed in such two counties. In 
                total, a satellite carrier that carries one or 
                more additional signals under this paragraph 
                may retransmit no more than four television 
                broadcast stations in such counties pursuant to 
                this paragraph. All rules applicable to 
                carriage of stations pursuant to subsection (a) 
                or paragraph (2) of this subsection shall apply 
                to carriage of stations pursuant to this 
                paragraph.
  (d) Effect on Other Obligations and Rights.--
          (1) No effect on carriage obligations.--Carriage of a 
        signal under this section is not mandatory, and any 
        right of a station licensee to have the signal of such 
        station carried under section 338 is not affected by 
        the eligibility of such station to be carried under 
        this section.
          (2) Retransmission consent rights not affected.--The 
        eligibility of the signal of a station to be carried 
        under this section does not affect the right of the 
        licensee of such station to grant (or withhold) 
        retransmission consent under section 325(b)(1).
  (e) Network Nonduplication and Syndicated Exclusivity.--
          (1) Not applicable except as provided by commission 
        regulations.--Signals eligible to be carried under this 
        section are not subject to the Commission's regulations 
        concerning network nonduplication or syndicated 
        exclusivity unless, pursuant to regulations adopted by 
        the Commission, the Commission determines to permit 
        network nonduplication or syndicated exclusivity to 
        apply within the appropriate zone of protection.
          (2) Limitation.--Nothing in this subsection or 
        Commission regulations shall permit the application of 
        network nonduplication or syndicated exclusivity 
        regulations to the retransmission of distant signals of 
        network stations that are carried by a satellite 
        carrier pursuant to a statutory license under section 
        119(a)(2)(A) or (B), with respect to persons who reside 
        in unserved households, under 119(a)(4)(A), or under 
        section 119(a)(12).
  (f) Enforcement Proceedings.--
          (1) Notice by television broadcast stations.--If a 
        television broadcast station believes that a satellite 
        carrier has retransmitted to any subscriber in the 
        local market of such station the signal of another 
        television broadcast station affiliated with the same 
        television network in violation of this section, the 
        station may provide the satellite carrier with written 
        notice of such violation. Such notice shall be provided 
        via overnight delivery, addressed to the chief 
        executive officer of the satellite carrier at its 
        principal place of business and marked ``URGENT 
        LITIGATION MATTER'' on the outer packaging. Such 
        notification shall set forth--
                  (A) the name, address, and call letters of 
                the station that is claimed to have been 
                unlawfully retransmitted (for purposes of this 
                subsection, the ``imported station'');
                  (B) the name and address of the satellite 
                carrier;
                  (C) the dates on which the alleged 
                retransmission occurred;
                  (D) the street address of at least one person 
                to whom the alleged retransmission was made;
                  (E) a statement that the retransmission was 
                not permitted because--
                          (i) the Commission had not determined 
                        that the imported station is 
                        significantly viewed in the relevant 
                        community;
                          (ii) the subscriber is not eligible 
                        for the retransmission of the signal 
                        because of the limitation in subsection 
                        (b) (1) or (2);
                          (iii) the satellite carrier had not 
                        provided the notification required by 
                        subsection (h)(3); or
                          (iv) two or more of the above; and
                  (F) the name and address of counsel for the 
                station.
          (2) Complaints by television broadcast stations.--If, 
        within 30 days of providing to the satellite carrier a 
        notice pursuant to paragraph (1), the satellite carrier 
        has not cured the alleged retransmission in violation 
        of this section, or if the satellite carrier cures the 
        alleged violation after notice and then renews such 
        violation within the next two years, the station may 
        file a complaint with the Commission. Such complaint 
        shall set forth the information provided in a notice 
        under paragraph (1).
          (3) Service of complaints on satellite carriers.--For 
        purposes of any proceeding under this subsection, any 
        satellite carrier that retransmits the signal of any 
        broadcast station shall be deemed to designate the 
        Secretary of the Commission as its agent for service of 
        process. A television broadcast station may serve a 
        satellite carrier with a complaint concerning an 
        alleged violation of this section through 
        retransmission of a station within the local market of 
        such station by filing the original and two copies of 
        the complaint with the Secretary of the Commission and 
        serving a copy of the complaint on the satellite 
        carrier by means of two commonly used overnight 
        delivery services, each addressed to the chief 
        executive officer of the satellite carrier at its 
        principal place of business, and each marked ``URGENT 
        LITIGATION MATTER'' on the outer packaging. Service 
        shall be deemed complete one business day after a copy 
        of the complaint is provided to the delivery services 
        for overnight delivery. On receipt of a complaint filed 
        by a television broadcast station under this 
        subsection, the Secretary of the Commission shall send 
        the original complaint by United States mail, postage 
        prepaid, receipt requested, addressed to the chief 
        executive officer of the satellite carrier at its 
        principal place of business.
          (4) Answers by satellite carriers.--Within 20 
        business days after the date of service, the satellite 
        carrier shall file an answer with the Commission and 
        shall serve the answer by a commonly used overnight 
        delivery service and by United States mail, on the 
        counsel designated in the complaint at the address 
        listed for such counsel in the complaint. The answer 
        shall include, as a schedule, a complete and accurate 
        list of all subscribers to which the satellite carrier 
        retransmitted the imported station into the community 
        in question pursuant to this section for each month 
        during the relevant time period. Such subscriber 
        information submitted by a satellite carrier may be 
        used only for purposes of determining compliance by the 
        satellite carrier with this section.
          (5) Defenses.--
                  (A) Exclusive defenses.--The defenses under 
                this paragraph are the exclusive defenses 
                available to a satellite carrier against which 
                a complaint under this subsection is filed.
                  (B) Defenses.--The defenses referred to under 
                subparagraph (A) are the defenses--
                          (i) that the satellite carrier did 
                        not retransmit the imported station to 
                        any person in the complaining station's 
                        local market pursuant to this section 
                        during the time period specified in the 
                        complaint;
                          (ii) if the complaining station has 
                        alleged that the retransmission was 
                        unlawful because the Commission had not 
                        determined that the station is 
                        significantly viewed in the relevant 
                        community, that the Commission had in 
                        fact made that determination;
                          (iii) with respect to particular 
                        subscribers referenced in the 
                        complaint, that those subscribers 
                        reside in communities in which the 
                        Commission has determined the station 
                        to be significantly viewed;
                          (iv) if the complaining station has 
                        alleged that the retransmission is 
                        unlawful because the subscriber is 
                        ineligible for the retransmission 
                        because of the limitation in subsection 
                        (b) (1) or (2), that such limitation is 
                        inapplicable; and
                          (v) if the complaining station has 
                        alleged that the retransmission was 
                        unlawful because the satellite carrier 
                        had not provided the notification 
                        required by subsection (h)(3), that the 
                        satellite carrier had in fact provided 
                        that notification.
          (6) Counting of violations.--The unlawful 
        retransmission of a particular television broadcast 
        station on a particular day subsequent to the notice 
        and opportunity to cure described in paragraphs (1) and 
        (2) of this subsection to a single subscriber pursuant 
        to this section shall be considered a separate 
        violation of this section.
          (7) Procedures.--
                  (A) Regulations.--Within 60 days after the 
                date of enactment, the Commission shall issue 
                procedural regulations implementing this 
                subsection which shall supersede procedures 
                under section 312.
                  (B) Determinations.--
                          (i) In general.--Within 45 days after 
                        the filing of a complaint, the 
                        Commission shall issue a final 
                        determination in any proceeding brought 
                        under this subsection, unless the 
                        Commission issues an interim 
                        determination in writing that there has 
                        been a genuine, reasonable, good faith 
                        dispute about the applicability of one 
                        of the defenses set forth in paragraph 
                        (5), in which case the Commission shall 
                        have 135 additional days to issue a 
                        final determination. The Commission 
                        shall hear witnesses only if it clearly 
                        appears, based on written filings by 
                        the parties, that there is a genuine 
                        dispute about material facts. Except as 
                        provided in the preceding sentence, the 
                        Commission may issue a final ruling 
                        based on written filings by the 
                        parties.
                          (ii) Discovery.--The Commission may 
                        direct the parties to exchange 
                        pertinent documents, and if necessary 
                        to take prehearing depositions, on such 
                        schedule as the Commission may approve, 
                        but only if the Commission first 
                        determines that such discovery is 
                        necessary to resolve a genuine dispute 
                        about material facts, consistent with 
                        the obligation to make a final 
                        determination within 45 days (or 180 
                        days, as appropriate).
          (8) Relief.--If the Commission determines that a 
        satellite carrier has retransmitted the imported 
        stations to at least one person in the complaining 
        station's local market based on this section and has 
        failed to meet its burden of proving one of the 
        defenses under paragraph (5) with respect to such 
        retransmission, the Commission shall be required to--
                  (A) make a finding that the satellite carrier 
                violated this section with respect to that 
                station; and
                  (B) issue an order containing--
                          (i) a cease-and-desist order 
                        directing the satellite carrier 
                        immediately to stop making any further 
                        retransmissions in violation of this 
                        section;
                          (ii) a monetary penalty of $50 per 
                        violation, which may be waived by the 
                        Commission only if the Commission 
                        determines that there was a genuine, 
                        reasonable, good faith dispute about 
                        the applicability of one of the 
                        defenses set forth in paragraph (5); 
                        and
                  (C) an award to the complainant of the 
                complainant's costs and reasonable attorney's 
                fees.
          (9) Court proceedings on enforcement of commission 
        order.--
                  (A) In general.--On entry by the Commission 
                of a final order granting relief under this 
                subsection--
                          (i) a television broadcast station 
                        may apply within 30 days after such 
                        entry to the United States District 
                        Court for the District of Columbia for 
                        a final judgment enforcing all relief 
                        granted by the Commission; and
                          (ii) the satellite carrier may apply 
                        within 30 days after such entry to the 
                        United States District Court for the 
                        District of Columbia for a judgment 
                        reversing the Commission's order.
                  (B) Appeal.--
                          (i) For cases in which the Commission 
                        has not determined that there has been 
                        a genuine, reasonable, good faith 
                        dispute about the applicability of one 
                        of the defenses set forth in paragraph 
                        (5),the procedure for an appeal under 
                        this subparagraph by the satellite 
                        carrier shall supersede any other 
                        appeal rights under Federal or State 
                        law. The United States District Court 
                        for the District of Columbia may find 
                        personal jurisdiction based on the 
                        satellite carrier's ownership of 
                        licenses issued by the Commission. An 
                        application by a television broadcast 
                        station for an order enforcing any 
                        cease-and-desist relief granted by the 
                        Commission shall be resolved on a 
                        highly expedited schedule. No discovery 
                        may be conducted by the parties in any 
                        such proceeding. The district court 
                        shall enforce the Commission order 
                        unless the Commission record reflects 
                        manifest error and an abuse of 
                        discretion by the Commission.
                          (ii) For cases in which the 
                        Commission has determined that there 
                        has been genuine, reasonable, good 
                        faith dispute about the applicability 
                        of one of the defenses set forth in 
                        paragraph (5), the appeals process set 
                        forth in section 402 shall apply, with 
                        the following caveats:
                                  (I) If the Commission has 
                                found the retransmissions in 
                                question to be in violation of 
                                this section, the satellite 
                                carrier must cease such 
                                retransmissions during the 
                                pendency of any appeal. Any 
                                such retransmissions after the 
                                date of the Commission's order 
                                but prior to any order 
                                overturning the Commission on 
                                appeal shall be considered 
                                violations under paragraph (6).
                                  (II) If the Commission has 
                                found the retransmissions in 
                                question to be not in violation 
                                of this section, the satellite 
                                carrier may continue such 
                                retransmissions during the 
                                pendency of the appeal. Any 
                                such retransmissions after the 
                                date of the Commission's order 
                                but prior to any order 
                                overturning the Commission on 
                                appeal shall not be considered 
                                violations under paragraph (6).
  (g) Rulemaking.--
          (1) Requirements.--The Commission shall--
                  (A) commence a rulemaking proceeding to 
                implement this section by publication of a 
                notice of proposed rulemaking within 180 days 
                after the date of enactment of the Satellite 
                Home Viewer Extension and Reauthorization Act 
                of 2004;
                  (B) include in such notice a list of the 
                stations or communities eligible for carriage 
                under subsection (a); and
                  (C) adopt rules pursuant to such rulemaking 
                within one year after such date of enactment.
          (2) Interim eligibility.--Stations and communities 
        listed as eligible for carriage in the notice of 
        proposed rulemaking issued by the Commission under 
        paragraph (1) may be treated as eligible for carriage 
        under this section on an interim basis pending adoption 
        of such rules and publication of the list of eligible 
        stations and communities under such rules.
  (h) Additional Corresponding Changes in Regulations.--
          (1) Community-by-community elections.--The Commission 
        shall, no later than April 30, 2005, revise section 
        76.66 of its regulations (47 CFR 76.66), concerning 
        satellite broadcast signal carriage, to permit (at the 
        next cycle of elections under section 325) a television 
        broadcast station that is located in a local market 
        into which a satellite carrier retransmits a television 
        broadcast station on the basis of a statutory license 
        under section 122 of title 17, United States Code, to 
        elect, with respect to such satellite carrier, between 
        retransmission consent pursuant to such section 325 and 
        mandatory carriage pursuant to section 338 separately 
        for each county within such station's local market, 
        if--
                  (A) the satellite carrier has notified the 
                station, pursuant to paragraph (3), that it 
                intends to carry another affiliate of the same 
                network pursuant to this section during the 
                relevant election period in the station's local 
                market; or
                  (B) on the date notification under paragraph 
                (3) was due, the satellite carrier was 
                retransmitting into the station's local market 
                pursuant to this section an affiliate of the 
                same television network.
          (2) Single negotiations.--In revising its regulations 
        as required by paragraph (1), the Commission shall 
        provide that any such station shall conduct a single 
        negotiation for the entire portion of its local market 
        for which retransmission consent is elected.
          (3) Additional provisions.--The Commission shall, no 
        later than April 30, 2005, revise its regulations to 
        provide the following:
                  (A) Notifications by satellite carrier.--A 
                satellite carrier's retransmission of 
                television broadcast stations pursuant to this 
                section shall be subject to the following 
                limitations:
                          (i) In any local market in which the 
                        satellite carrier provides service on 
                        the basis of a statutory license under 
                        section 122 of title 17, United States 
                        Code, on the date of enactment of the 
                        Satellite Home Viewer Extension and 
                        Reauthorization Act of 2004, the 
                        carrier may notify a television 
                        broadcast station in that market, at 
                        least 60 days prior to any date on 
                        which the station must thereafter make 
                        an election under section 76.66 of the 
                        Commission's regulations (47 CFR 
                        76.66), of--
                                  (I) each affiliate of the 
                                same television network that 
                                the carrier reserves the right 
                                to retransmit into that 
                                station's local market pursuant 
                                to this section during the next 
                                election cycle under such 
                                section of such regulations; 
                                and
                                  (II) for each such affiliate, 
                                the communities into which the 
                                satellite carrier reserves the 
                                right to make such 
                                retransmissions.
                          (ii) In any local market in which the 
                        satellite carrier commences service on 
                        the basis of a statutory license under 
                        section 122 of title 17, United States 
                        Code, after the date of enactment of 
                        the Satellite Home Viewer Extension and 
                        Reauthorization Act of 2004, the 
                        carrier may notify a station in that 
                        market, at least 60 days prior to the 
                        introduction of such service in that 
                        market, and thereafter at least 60 days 
                        prior to any date on which the station 
                        must thereafter make an election under 
                        under section 76.66 of the Commission's 
                        regulations (47 CFR 76.66), of each 
                        affiliate of the same television 
                        network that the carrier reserves the 
                        right to retransmit into that station's 
                        local market during the next election 
                        cycle under such section of such 
                        regulations.
                          (iii) Beginning with the 2005 
                        election cycle, a satellite carrier may 
                        only retransmit pursuant to this 
                        section during the pertinent election 
                        period a signal--
                                  (I) as to which it has 
                                provided the notifications set 
                                forth in clauses (i) and (ii); 
                                or
                                  (II) that it was 
                                retransmitting into the local 
                                market under this section as of 
                                the date such notifications 
                                were due.
                  (B) Harmonization of elections and 
                retransmission consent agreements.--If a 
                satellite carrier notifies a television 
                broadcast station that it reserves the right to 
                retransmit an affiliate of the same television 
                network during the next election cycle pursuant 
                to this section, the station may choose between 
                retransmission consent and mandatory carriage 
                for any portion of the 3-year election cycle 
                that is not covered by an existing 
                retransmission consent agreement.
  (i) Definitions.--As used in this section:
          (1) Local market; satellite carrier; subscriber; 
        television broadcast station.--The terms ``local 
        market'', ``satellite carrier'', ``subscriber'', and 
        ``television broadcast station'' have the meanings 
        given such terms in section 338(k).
          (2) Network station; television network.--The terms 
        ``network station'' and ``television network'' have the 
        meanings given such term in section 339(d).
          (3) Bandwidth.--The terms ``equivalent bandwidth'' 
        and ``entire bandwidth'' shall be defined by the 
        Commission by regulation.

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