24302 Federal Register / Vol. 77, No. 78 / Monday, April 23, 2012 / Proposed Rules 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 76 

[MB Docket Nos. 12–68, 07–18, and 05–192; 

FCC 12–30] 

Revision of the Commission’s Program 

Access Rules 

AGENCY: Federal Communications 

Commission. 

ACTION: Proposed rule. 

SUMMARY: In this document, the 

Commission seeks comment on whether 

to retain, sunset, or relax one of the 

several protections afforded to 

multichannel video programming 

distributors by the program access 

rules—the prohibition on exclusive 

contracts involving satellite-delivered, 

cable-affiliated programming. The 

current exclusive contract prohibition is 

scheduled to expire on October 5, 2012. 

The Commission also seeks comment on 

potential revisions to its program access 

rules to better address alleged 

violations, including potentially 

discriminatory volume discounts and 

uniform price increases. 

DATES: Comments are due on or before 

June 22, 2012; reply comments are due 

on or before July 23, 2012. Written PRA 

comments on the proposed information 

collection requirements contained 

herein must be submitted by the public, 

Office of Management and Budget 

(OMB), and other interested parties on 

or before June 22, 2012. 

ADDRESSES: You may submit comments, 

identified by MB Docket Nos. 12–68, 

07–18, and 05–192 by any of the 

following methods: 

• Federal Communications 

Commission’s Web site: http:// 

www.fcc.gov/cgb/ecfs/. Follow the 

instructions for submitting comments. 

• Mail: Filings can be sent by hand or 

messenger delivery, by commercial 

overnight courier, or by first-class or 

overnight U.S. Postal Service mail 

(although the Commission continues to 

experience delays in receiving U.S. 

Postal Service mail). All filings must be 

addressed to the Commission’s 

Secretary, Office of the Secretary, 

Federal Communications Commission. 

• People with Disabilities: Contact the 

FCC to request reasonable 

accommodations (accessible format 

documents, sign language interpreters, 

CART, etc.) by email: FCC504@fcc.gov 

or phone: (202) 418–0530 or TTY: (202) 

418–0432. 

In addition to filing comments with 

the Secretary, a copy of any PRA 

comments on the proposed information 

collection requirements contained 

herein should be submitted to the 

Federal Communications Commission 

via email to PRA@fcc.gov and to 

Nicholas A. Fraser, Office of 

Management and Budget, via email to 

Nicholas_A._Fraser@omb.eop.gov or via 

fax at (202) 395–5167. For detailed 

instructions for submitting comments 

and additional information on the 

rulemaking process, see the 

SUPPLEMENTARY INFORMATION section of 

this document. 

FOR FURTHER INFORMATION CONTACT: For 

additional information, contact David 

Konczal, David.Konczal@fcc.gov, or 

Diana Sokolow, Diana.Sokolow@fcc.gov, 

of the Media Bureau, Policy Division, 

(202) 418–2120. For additional 

information concerning the information 

collection requirements contained in 

this document, send an email to 

PRA@fcc.gov or contact Cathy Williams 

at (202) 418–2918. To view or obtain a 

copy of this information collection 

request (ICR) submitted to OMB: (1) Go 

to this OMB/GSA Web page: http:// 

www.reginfo.gov/public/do/PRAMain, 

(2) look for the section of the Web page 

called ‘‘Currently Under Review,’’ (3) 

click on the downward-pointing arrow 

in the ‘‘Select Agency’’ box below the 

‘‘Currently Under Review’’ heading, (4) 

select ‘‘Federal Communications 

Commission’’ from the list of agencies 

presented in the ‘‘Select Agency’’ box, 

(5) click the ‘‘Submit’’ button to the 

right of the ‘‘Select Agency’’ box, and (6) 

when the list of FCC ICRs currently 

under review appears, look for the OMB 

control number of this ICR as shown in 

the Supplementary Information section 

below (or its title if there is no OMB 

control number) and then click on the 

ICR Reference Number. A copy of the 

FCC submission to OMB will be 

displayed. 

SUPPLEMENTARY INFORMATION: This is a 

summary of document FCC 12–30, 

adopted and released on March 20, 

2012. The full text is available for public 

inspection and copying during regular 

business hours in the FCC Reference 

Center, Federal Communications 

Commission, 445 12th Street SW., CY– 

A257, Washington, DC 20554. This 

document will also be available via 

ECFS (http://www.fcc.gov/cgb/ecfs/). 

Documents will be available 

electronically in ASCII, Word 97, and/ 

or Adobe Acrobat. The complete text 

may be purchased from the 

Commission’s copy contractor, 445 12th 

Street SW., Room CY–B402, 

Washington, DC 20554. To request this 

document in accessible formats 

(computer diskettes, large print, audio 

recording, and Braille), send an email to 

fcc504@fcc.gov or call the Commission’s 

Consumer and Governmental Affairs 

Bureau at (202) 418–0530 (voice), (202) 

418–0432 (TTY). 

This document contains proposed 

information collection requirements. As 

part of its continuing effort to reduce 

paperwork burden and as required by 

the Paperwork Reduction Act (PRA) of 

1995 (44 U.S.C. 3501–3520), the Federal 

Communications Commission invites 

the general public and other Federal 

agencies to comment on the following 

information collection(s). Public and 

agency comments are due June 22, 2012. 

Comments should address: (a) 

Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

Commission, including whether the 

information shall have practical utility; 

(b) the accuracy of the Commission’s 

burden estimates; (c) ways to enhance 

the quality, utility, and clarity of the 

information collected; and (d) ways to 

minimize the burden of the collection of 

information on the respondents, 

including the use of automated 

collection techniques or other forms of 

information technology; In addition, 

pursuant to the Small Business 

Paperwork Relief Act of 2002, Public 

Law 107–198, see 44 U.S.C. 3506(c)(4), 

we seek specific comment on how we 

might ‘‘further reduce the information 

collection burden for small business 

concerns with fewer than 25 

employees.’’ 

OMB Control Number: 3060–0888. 

Title: Section 1.221, Notice of hearing; 

appearances; Section 1.229, Motions to 

enlarge, change, or delete issues; 

Section 1.248, Prehearing conferences; 

hearing conferences; Section 76.7, 

Petition Procedures; Section 76.9, 

Confidentiality of Proprietary 

Information; Section 76.61, Dispute 

Concerning Carriage; Section 76.914, 

Revocation of Certification; Section 

76.1001, Unfair Practices; Section 

76.1002, Specific Unfair Practices 

Prohibited; Section 76.1003, Program 

Access Proceedings; Section 76.1302, 

Carriage Agreement Proceedings; 

Section 76.1513, Open Video Dispute 

Resolution. 

Form Number: Not applicable. 

Type of Review: Revision of a 

currently approved collection. 

Respondents: Businesses or other forprofit; not-for-profit institutions. 

Number of Respondents and 

Responses: 828 respondents; 828 

responses. 

Estimated Time per Response: 6.8 to 

98 hours. 

Frequency of Response: On occasion 

reporting requirement; third party 

disclosure requirement. 


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Federal Register / Vol. 77, No. 78 / Monday, April 23, 2012 / Proposed Rules 24303 

1See 47 U.S.C. 548(c)(2)(D). An exclusive 

contract for satellite cable programming or satellite 

broadcast programming between a cable operator 

and a cable-affiliated programming vendor that 

provides satellite-delivered programming would 

violate Section 628(c)(2)(D) even if the cable 

operator that is a party to the contract is not 

affiliated with the cable-affiliated programming 

vendor that is a party to the contract. See 

Implementation of the Cable Television Consumer 

Protection and Competition Act of 1992— 

Development of Competition and Diversity in Video 

Programming Distribution: Section 628(c)(5) of the 

Communications Act: Sunset of Exclusive Contract 

Prohibition, Report and Order, 22 FCC Rcd 17791, 

17840–41, paras. 70–72 (2007) (‘‘2007 Extension 

Order’’), aff’d sub nom. Cablevision Sys. Corp. et al. 

v. FCC, 597 F.3d 1306, 1314–15 (D.C. Cir. 2010) 

(‘‘Cablevision I’’); see also Cable Horizontal and 

Vertical Ownership Limits, Further Notice of 

Proposed Rulemaking, 23 FCC Rcd 2134, 2195–96, 

para. 145 (2008). 

Obligation to Respond: Required to 

obtain or retain benefits. The statutory 

authority for this collection of 

information is contained in sections 4(i), 

303(r), 616, and 628 of the 

Communications Act of 1934, as 

amended. 

Total Annual Burden: 43,387 hours. 

Total Annual Costs: $4,719,600. 

Privacy Act Impact Assessment: No 

impact. 

Nature and Extent of Confidentiality: 

A party that wishes to have 

confidentiality for proprietary 

information with respect to a 

submission it is making to the 

Commission must file a petition 

pursuant to the pleading requirements 

in § 76.7 and use the method described 

in §§ 0.459 and 76.9 to demonstrate that 

confidentiality is warranted. 

Needs and Uses: On March 20, 2012, 

the Commission adopted a Notice of 

Proposed Rulemaking (‘‘NPRM’’), 

Revision of the Commission’s Program 

Access Rules, MB Docket No. 12–68, 

FCC 12–30. In the NPRM, the 

Commission seeks comment on (i) 

whether to retain, sunset, or relax the 

prohibition on exclusive contracts 

between cable operators and satellitedelivered, cable-affiliated programming 

vendors; and (ii) potential revisions to 

the program access rules to better 

address alleged violations, including 

potentially discriminatory volume 

discounts and uniform price increases. 

The NPRM proposes to add or revise 

the following rule sections, which 

contain proposed information collection 

requirements: 47 CFR 76.1002(c)(5), 47 

CFR 76.1002(c)(7), 76.1003(e)(1). 

If adopted, 47 CFR 76.1002(c)(5) 

would provide that, to the extent the 

exclusive contract prohibition sunsets 

or is relaxed, a cable operator, satellite 

cable programming vendor in which a 

cable operator has an attributable 

interest, or satellite broadcast 

programming vendor in which a cable 

operator has an attributable interest 

must submit a ‘‘Petition for Exclusivity’’ 

to the Commission and receive approval 

from the Commission to preclude the 

filing of complaints alleging that an 

exclusive contract, or practice, activity 

or arrangement tantamount to an 

exclusive contract, with respect to areas 

served by a cable operator violates 

Section 628(b) of the Communications 

Act of 1934, as amended, and Section 

76.1001(a) of the Commission’s Rules, 

or Section 628(c)(2)(B) of the 

Communications Act of 1934, as 

amended, and Section 76.1002(b) of the 

Commission’s Rules. The proposed rule 

specifies the requirements for the 

petition for exclusivity, provides that a 

competing multichannel video 

programming distributor affected by the 

proposed exclusivity may file an 

opposition to the petition for exclusivity 

within thirty (30) days of the date on 

which the petition is placed on public 

notice, and provides that the petitioner 

may file a response within ten (10) days 

of receipt of any formal opposition. 

If adopted, 47 CFR 76.1002(c)(7) 

would provide that, to the extent the 

exclusive contract prohibition is 

relaxed, a cable operator, satellite cable 

programming vendor in which a cable 

operator has an attributable interest, or 

satellite broadcast programming vendor 

in which a cable operator has an 

attributable interest seeking to remove 

the prohibition on exclusive contracts 

and practices, activities or arrangements 

tantamount to an exclusive contract set 

forth in Section 76.1002(c)(2) of the 

Commission’s Rules may submit a 

‘‘Petition for Sunset’’ to the 

Commission. If the Commission finds 

that the prohibition is not necessary to 

preserve and protect competition and 

diversity in the distribution of video 

programming, then the prohibition set 

forth in Section 76.1002(c)(2) of the 

Commission’s Rules shall no longer 

apply in the geographic area specified in 

the decision of the Commission. The 

proposed rule specifies the 

requirements for the petition for sunset, 

provides that a competing multichannel 

video programming distributor or other 

interested party affected by the petition 

for sunset may file an opposition to the 

petition within forty-five (45) days of 

the date on which the petition is placed 

on public notice, and provides that the 

petitioner may file a response within 

fifteen (15) days of receipt of any formal 

opposition. 

If adopted, 47 CFR 76.1003(e)(1) 

would provide that a cable operator, 

satellite cable programming vendor, or 

satellite broadcast programming vendor 

upon which a program access complaint 

is served shall answer within forty-five 

(45) days of service of the complaint if 

the complaint alleges a violation of 

Section 628(b) of the Communications 

Act of 1934, as amended, or Section 

76.1001(a) of the Commission’s rules. In 

addition, to the extent the exclusive 

contract prohibition sunsets or is 

relaxed, an increase in the number of 

complaints alleging a violation of 

Section 628(b) of the Communications 

Act of 1934, as amended, or Section 

76.1001(a) of the Commission’s rules is 

expected. 

The Commission is seeking OMB 

approval for the proposed information 

collection requirements. All other 

remaining existing information 

collection requirements would stay as 

they are, and the various burden 

estimates would be revised to reflect the 

new and revised rules noted above. 

Summary of the Notice of Proposed 

Rulemaking 

I. Introduction 

We issue this Notice of Proposed 

Rulemaking (‘‘NPRM’’) to seek comment 

on (i) whether to retain, sunset, or relax 

one of the several protections afforded 

to multichannel video programming 

distributors (‘‘MVPDs’’) by the program 

access rules—the prohibition on 

exclusive contracts involving satellitedelivered, cable-affiliated programming; 

and (ii) potential revisions to our 

program access rules to better address 

alleged violations, including potentially 

discriminatory volume discounts and 

uniform price increases. This NPRM 

promotes the goals of Executive Order 

13579 and the Commission’s plan 

adopted thereto, whereby the 

Commission analyzes rules that may be 

outmoded, ineffective, insufficient, or 

excessively burdensome and determines 

whether any such regulations should be 

modified, streamlined, expanded, or 

repealed. 

2. In areas served by a cable operator, 

Section 628(c)(2)(D) of the 

Communications Act of 1934, as 

amended (the ‘‘Act’’), generally 

prohibits exclusive contracts for satellite 

cable programming or satellite broadcast 

programming between any cable 

operator and any cable-affiliated 

programming vendor (the ‘‘exclusive 

contract prohibition’’).1 The exclusive 

contract prohibition applies to all 

satellite-delivered, cable-affiliated 

programming and presumes that an 

exclusive contract will cause 

competitive harm in every case, 

regardless of the type of programming at 

issue. The exclusive contract 

prohibition applies only to 

programming which is delivered via 

satellite; it does not apply to 

programming which is delivered via 


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24304 Federal Register / Vol. 77, No. 78 / Monday, April 23, 2012 / Proposed Rules 

2 In this NPRM, we refer to ‘‘satellite cable 

programming’’ and ‘‘satellite broadcast 

programming’’ collectively as ‘‘satellite-delivered 

programming.’’ 

3 Vertical integration means the combined 

ownership of cable systems and suppliers of cable 

programming. 

4Throughout this NPRM, we use the term ‘‘unfair 

act’’ as shorthand for the phrase ‘‘unfair methods 

of competition or unfair or deceptive acts or 

practices.’’ 47 U.S.C. 548(b); see 47 CFR 76.1001. 

terrestrial facilities.2 In January 2010, 

the Commission adopted rules 

providing for the processing of 

complaints alleging that an ‘‘unfair act’’ 

involving terrestrially delivered, cableaffiliated programming violates Section 

628(b) of the Act. Thus, while an 

exclusive contract involving satellitedelivered, cable-affiliated programming 

is generally prohibited, an exclusive 

contract involving terrestrially 

delivered, cable-affiliated programming 

is permitted unless the Commission 

finds in response to a complaint that it 

violates Section 628(b) of the Act. 

3. In Section 628(c)(5) of the Act, 

Congress provided that the exclusive 

contract prohibition would cease to be 

effective on October 5, 2002, unless the 

Commission found that it ‘‘continues to 

be necessary to preserve and protect 

competition and diversity in the 

distribution of video programming.’’ In 

June 2002, the Commission found that 

the exclusive contract prohibition 

continued to be necessary to preserve 

and protect competition and diversity 

and retained the exclusive contract 

prohibition for five years, until October 

5, 2007. The Commission provided that, 

during the year before the expiration of 

the five-year extension, it would 

conduct a second review to determine 

whether the exclusive contract 

prohibition continued to be necessary to 

preserve and protect competition and 

diversity in the distribution of video 

programming. After conducting such a 

review, the Commission in September 

2007 concluded that the exclusive 

contract prohibition was still necessary, 

and it retained the prohibition for five 

more years, until October 5, 2012. The 

Commission again provided that, during 

the year before the expiration of the 

five-year extension, it would conduct a 

third review to determine whether the 

exclusive contract prohibition continues 

to be necessary to preserve and protect 

competition and diversity in the 

distribution of video programming. 

4. Accordingly, in this NPRM, we 

initiate the third review of the necessity 

of the exclusive contract prohibition. 

Below, we present certain data on the 

current state of competition in the video 

distribution market and the video 

programming market, and we invite 

commenters to submit more recent data 

or empirical analyses. We seek comment 

on whether current conditions in the 

video marketplace support retaining, 

sunsetting, or relaxing the exclusive 

contract prohibition. To the extent that 

the data do not support retaining the 

exclusive contract prohibition as it 

exists today, we seek comment on 

whether we can preserve and protect 

competition in the video distribution 

market by either: 

• Sunsetting the exclusive contract 

prohibition in its entirety and instead 

relying solely on existing protections 

provided by the program access rules 

that will not sunset: (i) The case-by-case 

consideration of exclusive contracts 

pursuant to Section 628(b) of the Act; 

(ii) the prohibition on discrimination in 

Section 628(c)(2)(B) of the Act; and (iii) 

the prohibition on undue or improper 

influence in Section 628(c)(2)(A) of the 

Act; or 

• Relaxing the exclusive contract 

prohibition by (i) establishing a process 

whereby a cable operator or satellitedelivered, cable-affiliated programmer 

can seek to remove the prohibition on 

a market-by-market basis based on the 

extent of competition in the market; (ii) 

retaining the prohibition only for 

satellite-delivered, cable-affiliated 

Regional Sports Networks (‘‘RSNs’’) and 

any other satellite-delivered, cableaffiliated programming that the record 

here establishes as being important for 

competition and non-replicable and 

having no good substitutes; and/or (iii) 

other ways commenters propose. 

We seek comment also on (i) how to 

implement a sunset (complete or partial) 

to minimize any potential disruption to 

consumers; (ii) the First Amendment 

implications of the alternatives 

discussed herein; (iii) the costs and 

benefits of the alternatives discussed 

herein; and (iv) the impact of a sunset 

on existing merger conditions. 

5. In addition, we seek comment 

below on potential improvements to the 

program access rules to better address 

potential violations. With the exception 

of certain procedural revisions and the 

previous extensions of the exclusive 

contract prohibition, the program access 

rules have remained largely unchanged 

in the almost two decades since the 

Commission originally adopted them in 

1993. We seek comment on, among 

other things, whether our rules 

adequately address potentially 

discriminatory volume discounts and 

uniform price increases and, if not, how 

these rules should be revised to address 

these concerns. 

II. Background 

A. Program Access Protections 

6. Congress adopted the program 

access provisions as part of the Cable 

Television Consumer Protection and 

Competition Act of 1992 (‘‘1992 Cable 

Act’’). Congress was concerned that, in 

order to compete effectively, new 

market entrants would need access to 

satellite-delivered, cable-affiliated 

programming. At that time, Congress 

found that increased horizontal 

concentration of cable operators and 

extensive vertical integration 3 created 

an imbalance of power, both between 

cable operators and program vendors 

and between incumbent cable operators 

and their multichannel competitors. As 

a result of this imbalance of power, 

Congress determined that the 

development of competition among 

MVPDs was limited and consumer 

choice was restricted. Congress 

concluded that cable-affiliated 

programmers had the incentive and 

ability to favor their affiliated cable 

operators over other, unaffiliated, 

MVPDs with the effect that competition 

and diversity in the distribution of 

video programming would not be 

preserved and protected. 

7. The program access provisions 

afford several protections to MVPDs in 

their efforts to compete in the video 

distribution market. Sections 628(b), 

628(c)(1), and 628(d) of the Act grant the 

Commission broad authority to prohibit 

‘‘unfair acts’’ of cable operators, satellite 

cable programming vendors in which a 

cable operator has an attributable 

interest, and satellite broadcast 

programming vendors that have the 

‘‘purpose or effect’’ of ‘‘hinder[ing] 

significantly or prevent[ing]’’ any MVPD 

from providing ‘‘satellite cable 

programming or satellite broadcast 

programming to subscribers or 

consumers.’’ 4 In addition to this broad 

grant of authority, Congress in Section 

628(c)(2) of the Act required the 

Commission to adopt specific 

regulations to specify particular conduct 

that is prohibited by Section 628(b), i.e., 

certain unfair acts involving satellitedelivered, cable-affiliated programming. 

In contrast to Section 628(b), the unfair 

acts listed in Section 628(c)(2) 

pertaining to satellite-delivered 

programming are presumed to harm 

competition in every case, and MVPDs 

alleging such unfair acts are not 

required to demonstrate harm. First, 

Section 628(c)(2)(A) requires the 

Commission to prohibit efforts by cable 

operators to unduly influence the 

decision of cable-affiliated programming 

vendors that provide satellite-delivered 

programming to sell their programming 

to competitors (‘‘undue influence’’). 


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Federal Register / Vol. 77, No. 78 / Monday, April 23, 2012 / Proposed Rules 24305 

5See 47 CFR 76.1002(c)(5). Ten Petitions for 

Exclusivity have been filed since enactment of the 

1992 Cable Act. Of these petitions, two were 

granted, three were denied, and five were dismissed 

at the request of the parties. See New England Cable 

News Channel, Memorandum Opinion and Order, 

9 FCC Rcd 3231 (1994) (granting exclusivity 

petition); Time Warner Cable, Memorandum 

Opinion and Order, 9 FCC Rcd 3221 (1994) 

(denying exclusivity petition for Courtroom 

Television (‘‘Court TV’’)); Outdoor Life Network and 

Speedvision Network, Memorandum Opinion and 

Order, 13 FCC Rcd 12226 (CSB 1998) (denying 

exclusivity petition for the Outdoor Life Network 

(‘‘OLN’’) and Speedvision Network 

(‘‘Speedvision’’)); Cablevision Industries Corp. and 

Sci-Fi Channel, Memorandum Opinion and Order, 

10 FCC Rcd 9786 (CSB 1995) (denying exclusivity 

petition for the Sci-Fi Channel); NewsChannel, 

Memorandum Opinion and Order, 10 FCC Rcd 691 

(CSB 1994) (granting exclusivity petition). 

6For purposes of this NPRM, the term 

‘‘competitive MVPD’’ refers to MVPDs that compete 

with incumbent cable operators in the video 

distribution market, such as DBS operators and 

wireline video providers. 

Second, Section 628(c)(2)(B) requires 

the Commission to prohibit 

discrimination among MVPDs by cableaffiliated programming vendors that 

provide satellite-delivered programming 

in the prices, terms, and conditions for 

sale of programming (‘‘discrimination’’). 

Third, Sections 628(c)(2)(C)–(D) require 

the Commission to prohibit exclusive 

contracts between cable operators and 

cable-affiliated programming vendors 

that provide satellite-delivered 

programming, subject to certain 

exceptions. In this proceeding, our focus 

is on the protection provided under 

Section 628(c)(2)(D), although we 

discuss the other statutory protections 

to the extent they bear on our 

consideration of whether to allow the 

exclusive contract provision to sunset. 

B. Enactment of the Exclusive Contract 

Prohibition With a Sunset Provision 

8. In the 1992 Cable Act, Congress 

drew a distinction between exclusive 

contracts for satellite-delivered, cableaffiliated programming in areas not 

served by a cable operator as of October 

5, 1992 (‘‘unserved areas’’) and areas 

served by a cable operator as of that date 

(‘‘served areas’’). In unserved areas, 

Congress adopted a per se prohibition 

on exclusive contracts between cable 

operators and satellite-delivered, cableaffiliated programmers. In served areas, 

however, the prohibition on exclusive 

contracts is not absolute; rather, an 

exclusive contract is permissible if the 

Commission determines that it ‘‘is in the 

public interest.’’ Congress thus 

recognized that, in served areas, some 

exclusive contracts may serve the public 

interest by providing offsetting benefits 

to the video programming market or 

assisting in the development of 

competition among MVPDs. To enforce 

or enter into an exclusive contract in a 

served area, a cable operator or a 

satellite-delivered, cable-affiliated 

programmer must submit a ‘‘Petition for 

Exclusivity’’ to the Commission for 

approval.5

9. In addition to this prior approval 

process, Congress also recognized that 

exclusivity can be a legitimate business 

practice where there is sufficient 

competition. Accordingly, in Section 

628(c)(5), Congress provided that the 

exclusive contract prohibition in served 

areas: 

Shall cease to be effective 10 years after the 

date of enactment of this section, unless the 

Commission finds, in a proceeding 

conducted during the last year of such 10- 

year period, that such prohibition continues 

to be necessary to preserve and protect 

competition and diversity in the distribution 

of video programming. 

The 1992 Cable Act was enacted on 

October 5, 1992. Accordingly, the 

‘‘sunset provision’’ of Section 628(c)(5) 

would have triggered the expiration of 

the exclusive contract prohibition on 

October 5, 2002, absent a Commission 

finding that the prohibition remained 

necessary to preserve and protect 

competition and diversity in the 

distribution of video programming. 

C. 2002 Extension of the Exclusive 

Contract Prohibition 

10. In October 2001, approximately a 

year before the initial expiration of the 

exclusive contract prohibition, the 

Commission sought comment on 

whether the exclusive contract 

prohibition remained necessary to 

preserve and protect competition and 

diversity in the distribution of video 

programming. Ultimately, the 

Commission concluded that the 

prohibition remained ‘‘necessary.’’ The 

Commission explained that, based on 

marketplace conditions at the time, 

cable-affiliated programmers retained 

the incentive and ability to withhold 

programming from unaffiliated MVPDs 

with the effect that competition and 

diversity in the distribution of video 

programming would be impaired 

without the prohibition. The 

Commission found as follows: 

The competitive landscape of the market 

for the distribution of multichannel video 

programming has changed for the better since 

1992. The number of MVPDs that compete 

with cable and the number of subscribers 

served by those MVPDs have increased 

significantly. We find, however, that the 

concern on which Congress based the 

program access provisions—that in the 

absence of regulation, vertically integrated 

programmers have the ability and incentive 

to favor affiliated cable operators over 

nonaffiliated cable operators and 

programming distributors using other 

technologies such that competition and 

diversity in the distribution of video 

programming would not be preserved and 

protected—persists in the current 

marketplace. 

11. Accordingly, the Commission 

extended the exclusive contract 

prohibition for five years (i.e., through 

October 5, 2007). The Commission 

provided that, during the year before the 

expiration of the five-year extension of 

the exclusive contract prohibition, it 

would conduct another review to 

determine whether the exclusive 

contract prohibition continued to be 

necessary to preserve and protect 

competition and diversity in 

distribution of video programming. 

D. 2007 Extension of the Exclusive 

Contract Prohibition and D.C. Circuit 

Decision 

12. In February 2007, the Commission 

again sought comment on whether the 

prohibition remained necessary to 

preserve and protect competition and 

diversity in the distribution of video 

programming. For a second time, the 

Commission concluded that the 

prohibition remained ‘‘necessary.’’ 

13. The Commission conducted its 

analysis of the exclusive contract 

prohibition in five parts. First, in 

considering the applicable standard of 

review, the Commission determined 

that it may use its predictive judgment, 

economic theory, and specific factual 

evidence in determining whether, ‘‘in 

the absence of the prohibition, 

competition and diversity in the 

distribution of video programming 

would not be preserved and protected.’’ 

If such an inquiry is answered in the 

affirmative, then the Commission 

concluded that it must extend the 

exclusive contract prohibition. Second, 

the Commission examined the changes 

that had occurred in the video 

programming and distribution markets 

since 2002, and it found that, while 

there had been some procompetitive 

trends, the concerns on which Congress 

based the program access provisions 

persisted in the marketplace. Third, the 

Commission examined the incentive 

and ability of cable-affiliated 

programmers to favor their affiliated 

cable operators over competitive MVPDs 

with the effect that competition and 

diversity in the distribution of video 

programming would not be preserved 

and protected.6 The Commission 

determined that this incentive and 

ability existed with the effect that the 

exclusive contract prohibition remained 

necessary to preserve and protect 


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24306 Federal Register / Vol. 77, No. 78 / Monday, April 23, 2012 / Proposed Rules 

7See Applications for Consent to the Assignment 

and/or Transfer of Control of Licenses, Time 

Warner Inc., Assignor/Transferor, and Time Warner 

Cable Inc., Assignee/Transferree, Memorandum 

Opinion and Order, 24 FCC Rcd 879 (MB, WCB, 

WTB, IB, 2009) (‘‘Time Warner Order’’). 

8See Applications of Comcast Corporation, 

General Electric Company and NBC Universal, Inc. 

For Consent to Assign Licenses and Transfer 

Control of Licensees, Memorandum Opinion and 

Order, 26 FCC Rcd 4238 (2011) (‘‘Comcast/NBCU 

Order’’). 

competition and diversity in the 

distribution of video programming. The 

Commission recognized, however, ‘‘that 

Congress intended for the exclusive 

contract prohibition to sunset at a point 

when market conditions warrant’’ and 

specifically ‘‘caution[ed] competitive 

MVPDs to take any steps they deem 

appropriate to prepare for the eventual 

sunset of the prohibition, including 

further investments in their own 

programming.’’ Fourth, the Commission 

considered commenters’ arguments that 

the exclusive contract prohibition is 

both overinclusive and underinclusive 

with respect to the types of 

programming and MVPDs it covers, and 

the Commission declined either to 

narrow or broaden the prohibition. 

Fifth, the Commission considered the 

appropriate length of time for an 

extension of the exclusive contract 

prohibition, and it again concluded that 

the prohibition should be extended for 

five years. 

14. Accordingly, the Commission 

extended the exclusive contract 

prohibition for five years (i.e., until 

October 5, 2012). As in 2002, the 

Commission provided that, during the 

year before the expiration of the fiveyear extension of the exclusive contract 

prohibition (i.e., between October 2011 

and October 2012), it would conduct a 

third review to determine whether the 

exclusive contract prohibition continues 

to be necessary to preserve and protect 

competition and diversity in the 

distribution of video programming. 

15. Cablevision Systems Corporation 

(‘‘Cablevision’’) and Comcast 

Corporation (‘‘Comcast’’) (Cablevision 

and Comcast, collectively, the 

‘‘Petitioners’’) filed petitions for review 

of the 2007 Extension Order with the 

D.C. Circuit. The D.C. Circuit addressed 

Petitioners’ objections to three 

conclusions that the Commission 

reached in the 2007 Extension Order. 

First, Petitioners objected to the 

Commission’s interpretation of the term 

‘‘necessary’’ as used in the sunset 

provision as requiring the exclusive 

contract prohibition to continue ‘‘if, in 

the absence of the prohibition, 

competition and diversity in the 

distribution of video programming 

would not be preserved and protected.’’ 

The D.C. Circuit found that the term 

‘‘necessary’’ is ‘‘not language of plain 

meaning’’ and that the Commission’s 

interpretation was ‘‘well within the 

Commission’s discretion’’ under 

Chevron. Second, Petitioners contended 

that ‘‘the Commission did not rely on 

substantial evidence when it concluded 

that vertically integrated cable 

companies would enter into 

competition-harming exclusive 

contracts if the exclusivity prohibition 

were allowed to lapse.’’ The D.C. Circuit 

disagreed, finding that the Commission 

relied on substantial evidence and 

stating that ‘‘conclusions based on [the 

Commission’s] predictive judgment and 

technical analysis are just the type of 

conclusions that warrant deference from 

this Court.’’ While there had been 

substantial changes in the MVPD market 

since 1992, the court described the 

transformation as a ‘‘mixed picture’’ and 

deferred to the Commission’s analysis, 

which concluded that vertically 

integrated cable companies retained a 

substantial ability and incentive to 

withhold ‘‘must have’’ programming. 

Finally, Petitioners objected to the 

Commission’s failure to narrow the 

exclusive contract prohibition to apply 

only to certain types of cable companies 

or certain types of programming. The 

D.C. Circuit found that the 

Commission’s decision to refrain from 

narrowing the exclusive contract 

prohibition was not arbitrary and 

capricious, but rather was a reasonable 

decision ‘‘to adhere to Congress’s 

statutory design.’’ 

16. While the D.C. Circuit affirmed 

the 2007 Extension Order, it also 

provided some comment on the 

Commission’s subsequent review of the 

exclusive contract prohibition. 

Specifically, the D.C. Circuit stated as 

follows: 

We anticipate that cable’s dominance in 

the MVPD market will have diminished still 

more by the time the Commission next 

reviews the prohibition, and expect that at 

that time the Commission will weigh heavily 

Congress’s intention that the exclusive 

contract prohibition will eventually sunset. 

Petitioners are correct in pointing out that the 

MVPD market has changed drastically since 

1992. We expect that if the market continues 

to evolve at such a rapid pace, the 

Commission will soon be able to conclude 

that the [exclusive contract] prohibition is no 

longer necessary to preserve and protect 

competition and diversity in the distribution 

of video programming. 

E. TWC/Time Warner and Comcast/ 

NBCU Transactions 

17. Since the 2007 Extension Order, 

two transactions have had a particular 

impact on the video distribution market 

and the video programming market: (i) 

The separation of Time Warner Cable 

Inc. (‘‘TWC’’; a cable operator) from 

Time Warner Inc. (‘‘Time Warner’’; an 

owner of satellite-delivered, national 

programming networks); 7 and (ii) the 

joint venture between Comcast (a 

vertically integrated cable operator) and 

NBC Universal, Inc. (‘‘NBCU’’; an owner 

of broadcast stations and satellitedelivered, national programming 

networks).8

18. In the Time Warner Order, the 

Media, Wireline Competition, Wireless 

Telecommunications, and International 

Bureaus (the ‘‘Bureaus’’) granted the 

applications for the assignment and 

transfer of control of certain 

Commission licenses and authorizations 

from Time Warner to TWC. Before the 

transaction, Time Warner controlled 

TWC, but after their separation, Time 

Warner no longer has an ownership 

interest in TWC or its subsidiary 

licensees. As a result of the transaction, 

Time Warner’s programming networks 

are no longer affiliated with TWC, thus 

reducing the number of satellitedelivered, national programming 

networks that are cable-affiliated. The 

Bureaus found that the transaction 

would benefit the public interest by 

lessening the extent to which TWC is 

vertically integrated and by eliminating 

Time Warner’s vertical integration. In 

declining to adopt a condition applying 

the program access rules to Time 

Warner post-transaction, the 

Commission explained that the 

underlying premise of the program 

access rules would no longer apply 

because Time Warner and TWC would 

no longer have the incentive and ability 

to discriminate in favor of each other. If 

an MVPD believed that Time Warner or 

TWC violated the program access rules 

while they were vertically integrated, 

however, the Commission stated that 

the program access complaint process 

would provide an avenue for relief. 

19. In contrast, another recent 

transaction has led to an increased 

number of satellite-delivered, national 

programming networks that are cableaffiliated. In the Comcast/NBCU Order, 

the Commission granted the application 

of Comcast, General Electric Company 

(‘‘GE’’), and NBCU to assign and transfer 

control of broadcast, satellite, and other 

radio licenses from GE to Comcast. The 

transaction created a joint venture 

(‘‘Comcast-NBCU’’) combining NBCU’s 

broadcast, cable programming, online 

content, movie studio, and other 

businesses with some of Comcast’s cable 

programming and online content 

businesses. Before the transaction, both 

Comcast and NBCU either wholly or 

partly owned a number of satelliteVerDate Mar<15>2010 15:14 Apr 20, 2012 Jkt 226001 PO 00000 Frm 00006 Fmt 4701 Sfmt 4702 E:\FR\FM\23APP3.SGM 23APP3

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9Because the Commission seeks comment on 

alternative approaches to the exclusive contract 

prohibition—retaining, sunsetting, or relaxing 

(either through market-based petitions or retaining 

a prohibition for regional sports networks)—the 

Proposed Rules attached hereto include potential 

rule amendments based on each of these 

alternatives. 

10 ‘‘Clustering’’ refers to ‘‘an increase over time in 

the number of cable subscribers and homes passed 

by a single MSO in particular markets 

(accomplished via internal growth as well as by 

acquisitions).’’ 2007 Extension Order, 22 FCC Rcd 

at 17831, para. 56. 11 Implementation of Section 19 of the Cable 

Television Consumer Protection and Competition 

Act of 1992: Annual Assessment of the Status of 

Competition in the Market for the Delivery of Video 

Programming, First Report, 9 FCC Rcd 7442 (1994) 

(‘‘1st Annual Report’’) (containing data as of 1994). 

12 Implementation of the Cable Television 

Consumer Protection and Competition Act of 

1992—Development of Competition and Diversity in 

Video Programming Distribution: Section 628(c)(5) 

of the Communications Act: Sunset of Exclusive 

Contract Prohibition, Report and Order, 17 FCC Rcd 

12124 (2002) (‘‘2002 Extension Order’’) (citing data 

from the Annual Assessment of the Status of 

Competition in the Market for the Delivery of Video 

Programming, Eighth Annual Report, 17 FCC Rcd 

1244 (2002) (containing data as of June 2001) (‘‘8th 

Annual Report’’)). 

13See 2007 Extension Order, 22 FCC Rcd 17791 

(citing data from the Annual Assessment of the 

Continued 

delivered, national programming 

networks. As a result of the transaction, 

programming networks that were 

previously affiliated with NBCU became 

affiliated with the joint venture, thus 

increasing the number of satellitedelivered, national programming 

networks that are cable-affiliated. 

20. In evaluating post-transaction 

MVPD access to Comcast-NBCU 

programming, the Commission 

concluded that the transaction ‘‘creates 

the possibility that Comcast-NBCU, 

either temporarily or permanently, will 

block Comcast’s video distribution 

rivals from access to the video 

programming content the [joint venture] 

would come to control or raise 

programming costs to its video 

distribution rivals.’’ The Commission 

found the joint venture would ‘‘have the 

power to implement an exclusionary 

strategy,’’ and that ‘‘successful 

exclusion * * * of video distribution 

rivals would likely harm competition by 

allowing Comcast to obtain or (to the 

extent it may already possess it) 

maintain market power.’’ Additionally, 

the Commission concluded that an 

‘‘anticompetitive exclusionary program 

access strategy would often be profitable 

for Comcast.’’ Accordingly, the 

Commission imposed conditions 

designed to ameliorate the potential 

harms, including a baseball-style 

arbitration condition that allows an 

aggrieved MVPD to submit a dispute 

with Comcast-NBCU over the terms and 

conditions of carriage of programming 

to commercial arbitration. 

III. Discussion 

A. Exclusive Contract Prohibition 

21. We seek comment on whether to 

retain, sunset, or relax the exclusive 

contract prohibition.9 Our discussion of 

this issue below proceeds in ten main 

parts. First, we present relevant data for 

assessing whether to retain, sunset, or 

relax the exclusive contract prohibition, 

and we invite commenters to submit 

more recent data or empirical analyses. 

Second, we ask commenters to assess 

whether these data, as updated and 

supplemented by commenters, support 

either retaining, sunsetting, or relaxing 

the exclusive contract prohibition. 

Third, we seek comment on how each 

of these three options (i.e., retaining, 

sunsetting, or relaxing the exclusive 

contract prohibition) will impact the 

creation of new national, regional, and 

local programming. Fourth, to the extent 

that the data do not support retaining 

the exclusive contract prohibition as it 

exists today, we seek comment on 

whether we can nonetheless preserve 

and protect competition in the video 

distribution market by either (i) 

sunsetting the prohibition in its entirety 

and relying solely on existing 

protections provided by the program 

access rules that will not sunset; or (ii) 

relaxing the exclusive contract 

prohibition, such as through removal of 

the prohibition on a market-by-market 

basis based on the extent of competition 

in the market or by retaining the 

prohibition only for satellite-delivered, 

cable-affiliated RSNs and other satellitedelivered, cable-affiliated ‘‘must have’’ 

programming. Fifth, we seek input on 

how a sunset (complete or partial) of the 

exclusive contract prohibition will 

impact consumers, and how to 

implement a sunset to minimize any 

potential disruption to consumers. 

Sixth, we ask commenters to assess 

whether and how each of the three 

options comports with the First 

Amendment. Seventh, we ask 

commenters to consider the costs and 

benefits associated with each of the 

three options. Eighth, to the extent the 

exclusive contract prohibition sunsets 

(wholly or partially), we propose to 

eliminate existing restrictions on 

exclusive subdistribution agreements 

between cable operators and satellitedelivered, cable-affiliated programmers. 

Ninth, we propose that any amendments 

we adopt herein to our rules pertaining 

to exclusive contracts between cable 

operators and satellite-delivered, cableaffiliated programmers in served areas 

will apply equally to existing rules 

pertaining to exclusive contracts 

involving common carriers and Open 

Video Systems (‘‘OVS’’) in served areas. 

Finally, we seek comment on how 

conditions adopted in previous merger 

orders may be impacted if the exclusive 

contract prohibition were to sunset 

(wholly or partially). 

1. Relevant Data in Considering a Sunset 

of the Exclusive Contract Prohibition 

22. In evaluating whether the 

exclusive contract prohibition 

‘‘continues to be necessary to preserve 

and protect competition and diversity in 

the distribution of video programming,’’ 

the Commission has previously 

examined data on the status of 

competition in the video programming 

market and the video distribution 

market. Specifically, in the 2007 

Extension Order, the Commission 

examined ‘‘the changes that [had] 

occurred in the programming and 

distribution markets since 2002 when 

the Commission last reviewed whether 

the exclusive contract prohibition 

continued to be necessary to preserve 

and protect competition.’’ The 

Commission examined data relating to 

(i) the number of MVPD subscribers 

nationwide and in regional markets 

attributable to each category of MVPD, 

including cable operators, as well as the 

extent of regional clustering by cable 

operators; 10 (ii) the number of satellitedelivered, national programming 

networks and the percentage of such 

networks that are cable-affiliated; and 

(iii) the number of regional 

programming networks and the 

percentage of such networks that are 

cable-affiliated. We believe it is 

appropriate to consider similar data in 

determining whether the exclusive 

contract prohibition remains necessary 

today. We also seek comment on 

whether our assessment of the 

exclusivity prohibition should consider 

data concerning other types of ‘‘satellite 

cable programming.’’ 

23. In an effort to aid such an 

evaluation, we have prepared the tables 

in Appendices A through C of the 

NPRM, which contain data from 

previously released Commission 

documents as well as other sources. 

Appendices A through C are available at 

http://transition.fcc.gov/Daily_Releases/ 

Daily_Business/2012/db0320/FCC-12- 

30A1.pdf. The first column of data, 

entitled ‘‘1st Annual Report,’’ focuses 

on data from the 1st Annual Report on 

video competition.11 The second 

column of data, entitled ‘‘2002 

Extension,’’ focuses on data from the 

2002 Extension Order.12 The third 

column of data, entitled ‘‘2007 

Extension,’’ focuses on data from the 

2007 Extension Order.13 The fourth and 


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Status of Competition in the Market for the Delivery 

of Video Programming, Twelfth Annual Report, 21 

FCC Rcd 2503 (2006) (containing data as of June 

2005) (‘‘12th Annual Report’’)). 

14See Annual Assessment of the Status of 

Competition in the Market for the Delivery of Video 

Programming, Further Notice of Inquiry, 26 FCC 

Rcd 14091, 14112–13, paras. 52–55 (2011) (‘‘Further 

Notice for the 14th Report’’). 

15 In the 2007 Extension Order, the Commission 

found that 22 percent of satellite-delivered, national 

programming networks were affiliated with cable 

operators. See 2007 Extension Order, 22 FCC Rcd 

at 17802–03, para. 18. This percentage was based 

on a total of 531 satellite-delivered, national 

programming networks, as stated in the 12th 

Annual Report. See 12th Annual Report, 21 FCC 

Rcd at 2509–10, para. 21 and 2575, para. 157 

(containing data as of June 2005). For purposes of 

the analysis in this NPRM, we increase this figure 

to 800 based on two factors. First, since 2005, we 

estimate that approximately 150 high-definition 

versions of networks previously provided only in 

standard definition have been launched. See SNL 

Kagan, High-Definition Cable Networks Getting 

More Carriage, Feb. 17, 2009; NCTA, Cable 

Networks, available at http://www.ncta.com/ 

Organizations.aspx? type=orgtyp2&contentId=2907. 

Second, we estimate a net addition of 

approximately 100 networks, reflecting the increase 

over time in the number of national programming 

networks. See 2007 Extension Order, 22 FCC Rcd 

at 17836–37, para. 64 (noting the increase in 

national programming networks over time); Annual 

Assessment of the Status of Competition in the 

Market for the Delivery of Video Programming, 

Thirteenth Annual Report, 24 FCC Rcd 542, 550, 

para. 20 (2009) (‘‘13th Annual Report’’) (noting an 

increase of 34 programming networks between June 

2005 and June 2006); id. at 731–36, Table C–4 

(listing planned networks); SNL Kagan, Economics 

of Basic Cable Networks (2011 Edition), at 27 

(listing cable networks launched after 2005). 

16See Comcast/NBCU Order, 26 FCC Rcd at 4358, 

Appendix A, Condition II. The program access 

conditions reflected in Condition II apply to ‘‘C– 

NBCU Programmers,’’ which are defined as 

‘‘Comcast, C–NBCU, their Affiliates and any entity 

for which Comcast or C–NBCU manages or controls 

the licensing of Video Programming and/or any 

local broadcast television station on whose behalf 

Comcast or NBCU negotiates retransmission 

consent.’’ Id. at 4356, Appendix A, Definitions. An 

‘‘Affiliate’’ of any person means ‘‘any person 

directly or indirectly controlling, controlled by, or 

under common control with, such person at the 

time at which the determination of affiliation is 

being made.’’ Id. at 4355, Appendix A, Definitions. 

The issue of whether a particular cable network 

qualifies as a ‘‘C–NBCU Programmer’’ subject to 

these conditions is a fact-specific determination. 

For purposes of the estimates in this NPRM, and 

with the exception of the iN DEMAND networks 

discussed below, we assume that any network in 

which Comcast or NBCU holds a 50 percent or 

greater interest is a ‘‘C–NBCU Programmer’’ subject 

to these conditions. See Appendix B, Table 2 and 

Appendix C, Table 2 (available at http:// 

transition.fcc.gov/Daily_Releases/Daily_Business/ 

2012/db0320/FCC-12-30A1.pdf). We refer to these 

networks as ‘‘Comcast-controlled networks.’’ We 

refer to other networks in which Comcast or NBCU 

holds a less than 50 percent interest as ‘‘Comcastaffiliated networks,’’ which we assume for purposes 

of the estimates in this NPRM are not ‘‘C–NBCU 

Programmers’’ subject to the program access 

conditions adopted in the Comcast/NBCU Order, 

but are subject to the program access rules, 

including the exclusive contract prohibition. See id. 

Although Comcast has stated that it has a 53.7 

percent interest in iN DEMAND, it has also stated 

that it ‘‘cannot control decisionmaking at iN 

DEMAND.’’ See Application of General Electric and 

Comcast, MB Docket No. 10–56 (Jan. 28, 2010), at 

20 (stating that Comcast has a 53.7 percent interest 

final column of data, entitled ‘‘Most 

Recent,’’ focuses on the most recent data 

available. We believe that considering 

data from these four time periods will 

enable us to view the evolution of the 

video distribution and video 

programming markets over time. We 

invite commenters to submit more 

recent data in each of the categories 

identified, as well as data regarding the 

extent of regional clustering of cable 

operators, and any additional data the 

Commission should consider in its 

review. 

a. Nationwide and Regional MVPD 

Subscribership 

24. In past reviews of the exclusive 

contract prohibition, the Commission 

has assessed the percentage of MVPD 

subscribers nationwide that are 

attributable to each category of MVPD, 

including cable operators. The data in 

Appendix A indicate that the percentage 

of MVPD subscribers nationwide 

attributable to cable operators has 

declined over time, with the current 

percentage at approximately 58.5 

percent, a decrease of 8.5 percentage 

points since the 2007 Extension Order. 

On a regional basis, the market share 

held by cable operators in Designated 

Market Areas (‘‘DMAs’’) varies 

considerably, from a high in the 80 

percent range to a low in the 20 percent 

range. 

25. We seek comment on the extent to 

which we should consider online 

distributors of video programming in 

our analysis. The Commission recently 

stated that online distributors of video 

programming ‘‘offer a tangible 

opportunity to bring customers 

substantial benefits’’ and that they ‘‘can 

provide and promote more 

programming choices, viewing 

flexibility, technological innovation and 

lower prices.’’ While the Commission 

concluded that consumers today do not 

perceive online distributors as a 

substitute for traditional MVPD service, 

it stated that online distributors are a 

‘‘potential competitive threat’’ and that 

they ‘‘must have a similar array of 

programming’’ if they are to ‘‘fully 

compete against a traditional MVPD.’’ In 

addition, in connection with the 

Commission’s forthcoming 14th Annual 

Report on video competition, the 

Commission sought comment on the 

emergence of online video 

distributors.14 In light of possible cordcutting and cord-shaving trends, we ask 

commenters to provide information 

regarding the effect that online 

distributors have had, or may have, on 

nationwide and regional MVPD 

subscription rates. Our task under 

Section 628(c)(5) is to determine 

whether the exclusive contract 

prohibition is necessary to preserve and 

protect ‘‘competition,’’ not competitors. 

Thus, to the extent that we conclude 

that competition in the video 

distribution market and the video 

programming market is currently 

sufficient to warrant sunsetting or 

relaxing the exclusive contract 

prohibition, how, if at all, should the 

emergence of a new category of 

potential competitor that could benefit 

from the exclusive contract prohibition 

impact our analysis? 

b. Satellite-Delivered, Cable-Affiliated, 

National Programming Networks 

26. In past reviews of the exclusive 

contract prohibition, the Commission 

has assessed the percentage of satellitedelivered, national programming 

networks that are cable-affiliated and 

the number of cable-affiliated networks 

that are among the Top 20 satellitedelivered, national programming 

networks as ranked by either 

subscribership or prime time ratings. 

The data in Appendix B indicate that, 

since the 2007 Extension Order, (i) the 

percentage of satellite-delivered, 

national programming networks that are 

cable-affiliated has declined from 22 

percent to approximately 14.4 percent; 

(ii) the number of cable-affiliated 

networks among the Top 20 satellitedelivered, national programming 

networks as ranked by subscribership 

has increased from six to seven; and (iii) 

the number of cable-affiliated networks 

among the Top 20 satellite-delivered, 

national programming networks as 

ranked by average prime time ratings 

has remained at seven. We note that the 

calculation of the percentage of satellitedelivered, national programming 

networks that are cable-affiliated is 

based on our estimate of a total of 800 

satellite-delivered, national 

programming networks available to 

MVPDs today.15 We seek comment on 

the reasonableness of this estimate and 

how, if at all, it should be revised. We 

also note that these data include 

satellite-delivered, national 

programming networks affiliated with 

Comcast, many of which (i.e., the 

‘‘Comcast-controlled networks’’) are 

subject to program access conditions 

adopted in the Comcast/NBCU Order 

and will continue to be subject to these 

conditions for six more years (until 

January 2018, assuming they are not 

modified earlier in response to a 

petition) even if the exclusive contract 

prohibition were to sunset.16 If the 


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in iN DEMAND) (‘‘GE/Comcast/NBCU 

Application’’); Letter from Michael H. Hammer, 

Counsel for Comcast, to Marlene H. Dortch, FCC, 

MB Docket No. 10–56 (Oct. 22, 2010), at 2 n.5. 

Accordingly, for purposes of the estimates in this 

NPRM, we consider the iN DEMAND networks to 

be ‘‘Comcast-affiliated’’ networks, and not 

‘‘Comcast-controlled’’ networks subject to the 

program access conditions adopted in the Comcast/ 

NBCU Order. Nothing in this NPRM should be read 

to state or imply any position as to whether any 

particular network qualifies or does not qualify as 

a ‘‘C–NBCU Programmer.’’ 

Comcast-controlled networks are 

excluded, the data in Appendix B 

indicate that, since the 2007 Extension 

Order, (i) the percentage of satellitedelivered, national programming 

networks that are cable-affiliated has 

declined from 22 percent to 

approximately 11 percent; (ii) the 

number of cable-affiliated networks 

among the Top 20 satellite-delivered, 

national programming networks as 

ranked by subscribership has remained 

at six; and (iii) the number of cableaffiliated networks among the Top 20 

satellite-delivered, national 

programming networks as ranked by 

average prime time ratings has fallen 

from seven to five. We seek comment on 

whether and how to account for 

different versions of the same network 

in our analysis. For example, to the 

extent a particular network is available 

in standard definition (‘‘SD’’), high 

definition (‘‘HD’’), 3D, and video-ondemand (‘‘VOD’’), should this be 

counted as four different networks for 

purposes of our analysis? If so, and if 

both cable-affiliated and unaffiliated 

networks are treated similarly, how will 

this impact the percentage of networks 

that are cable-affiliated? 

c. Satellite-Delivered, Cable-Affiliated, 

Regional Programming Networks 

27. In addition to national 

programming networks, the Commission 

in past reviews of the exclusive contract 

prohibition has assessed the extent to 

which regional programming networks 

are cable-affiliated. As an initial matter, 

we note that some regional networks 

may be terrestrially delivered and 

therefore not subject to the exclusive 

contract prohibition applicable to 

satellite-delivered, cable-affiliated 

programming. The data in Appendix C 

pertaining to regional networks do not 

distinguish between terrestrially 

delivered and satellite-delivered 

networks. We ask commenters to 

provide data regarding which cableaffiliated, regional programming 

networks, including RSNs, are satellitedelivered and which are terrestrially 

delivered. 

28. For purposes of our analysis, we 

distinguish between RSNs and other 

regional networks. The Commission has 

previously held that RSNs have no good 

substitutes, are important for 

competition, and are non-replicable. As 

set forth in Appendix C, recent data 

indicate that the number of RSNs that 

are cable-affiliated has increased from 

18 to 31 (not including HD versions) 

since the 2007 Extension Order, and the 

percentage of all RSNs that are cableaffiliated has increased from 46 percent 

to approximately 52.3 percent. Are there 

networks that satisfy the Commission’s 

definition of an RSN that are not 

included in the list of RSNs in 

Appendix C, such as certain local and 

regional networks that show NCAA 

Division I college football and basketball 

games? Should we include these and 

other similar networks, including 

unaffiliated networks, in our list of 

RSNs in Appendix C? In addition, are 

there networks included in the list of 

RSNs in Appendix C that do not satisfy 

the Commission’s definition of an RSN? 

For example, do networks such as the 

Big Ten Network, PAC–12 Network, and 

The Mtn.—Mountain West Sports 

Network, which show NCAA Division I 

college football and basketball games of 

a particular college conference but not 

necessarily those of a particular team, 

satisfy the Commission’s definition of 

an RSN? As required by this definition, 

do these and similar networks (i) 

distribute programming in ‘‘a limited 

geographic region’’ and (ii) carry the 

minimum amount of covered 

programming for an individual sports 

team. 

29. We note that the figures in 

Appendix C include RSNs that are 

affiliated with Comcast, many of which 

are subject to program access conditions 

adopted in the Comcast/NBCU Order 

and which will continue to be subject to 

these conditions for six more years 

(until January 2018, assuming they are 

not modified earlier in response to a 

petition) even if the exclusive contract 

prohibition were to sunset. If the 

Comcast-controlled RSNs are excluded, 

the data in Appendix C indicate that the 

number of RSNs that are cable-affiliated 

has increased from 18 to 22 (not 

including HD versions) since the 2007 

Extension Order, and the percentage of 

RSNs that are cable-affiliated has 

decreased slightly from 46 percent to 

approximately 44.1 percent. With 

respect to non-RSN regional 

programming, we ask commenters to 

provide recent data on the number of 

these networks and the percentage of 

them that are cable-affiliated. 

d. Other Types of Cable-Affiliated 

‘‘Satellite Cable Programming’’ 

30. While the Commission in past 

reviews of the exclusive contract 

prohibition has considered linear and 

VOD programming networks, we also 

seek comment on whether there are 

other types of ‘‘satellite cable 

programming’’ or ‘‘satellite broadcast 

programming’’ that we should consider 

in assessing the exclusive contract 

prohibition. The Act defines ‘‘satellite 

cable programming’’ as (i) ‘‘video 

programming’’ (ii) which is ‘‘transmitted 

via satellite’’ and (iii) which is 

‘‘primarily intended for the direct 

receipt by cable operators for their 

retransmission to cable subscribers.’’ 

The Act defines ‘‘video programming’’ 

as ‘‘programming provided by, or 

generally considered comparable to 

programming provided by, a television 

broadcast station.’’ Are cable operators 

affiliated with forms of ‘‘video 

programming’’ that meet the other two 

requirements of the definition of 

‘‘satellite cable programming,’’ but that 

are not necessarily considered 

programming ‘‘networks’’? For example, 

to the extent that cable operators own or 

are affiliated with film libraries and 

other content, to what extent does this 

content qualify as ‘‘satellite cable 

programming’’? If so, how should this 

factor into our consideration of the 

exclusive contract prohibition? 

2. Assessing Whether the Data Support 

Retaining, Sunsetting, or Relaxing the 

Exclusive Contract Prohibition 

31. We seek comment on whether the 

data set forth herein, as updated and 

supplemented by commenters, support 

retaining, sunsetting, or relaxing the 

exclusive contract prohibition. In 

addition to the specific questions stated 

herein, we seek comment on any new 

trends in the industry or any other 

issues that are relevant to our 

determination of whether the status of 

the MVPD marketplace today supports 

the sunset of the exclusive contract 

prohibition. We specifically seek 

comment on the effect of the 

development of online video on the 

marketplace. We also request 

information on the impact of the 

Comcast/NBCU and TWC/Time Warner 

transactions on the MVPD marketplace. 

To what extent, if any, should these 

transactions inform our analysis of 

whether to retain, sunset, or relax the 

exclusive contract prohibition? What 

other recent developments in the MVPD 

market since our 2007 review should we 

consider in deciding whether to retain, 

sunset, or relax the exclusive contract 

prohibition? 


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32. In analyzing whether the 

exclusive contract prohibition remains 

necessary, the Commission has stated 

that it will ‘‘assess whether, in the 

absence of the exclusive contract 

prohibition, vertically integrated 

programmers would have the ability and 

incentive to favor their affiliated cable 

operators over nonaffiliated competitive 

MVPDs and, if so, whether such 

behavior would result in a failure to 

protect and preserve competition and 

diversity in the distribution of video 

programming.’’ Accordingly, in light of 

the data noted above and as updated 

and supplemented by commenters, we 

seek comment on whether cableaffiliated programmers would have the 

ability and incentive to favor their 

affiliated cable operators absent the 

exclusive contract prohibition in today’s 

marketplace with the effect that 

competition and diversity in the 

distribution of video programming 

would not be preserved and protected. 

How has the exclusive contract 

prohibition impacted the general state of 

competition among MVPDs in the video 

distribution market? How would a 

sunset or relaxation of the exclusive 

contract prohibition affect consumers 

and competition in the video 

distribution market, and how would a 

sunset or relaxation affect the potential 

entry of new competitors in the market? 

Is there any basis for treating satellitedelivered, cable-affiliated programming 

and terrestrially delivered, cableaffiliated programming differently with 

respect to the exclusive contract 

prohibition? Are there differences 

between satellite-delivered 

programming and terrestrially delivered 

programming that would result in cable 

operators having a greater ability and 

incentive to favor affiliates providing 

satellite-delivered programming that 

warrants extension of the exclusive 

contract prohibition? To the extent the 

data support retaining the exclusive 

contract prohibition as it exists today, 

we seek comment on the appropriate 

length of an extension. Should the 

sunset date be five years from the 

current sunset date (i.e., until October 5, 

2017), consistent with the two prior 

five-year extensions? 

a. Ability 

33. In assessing whether cableaffiliated programmers have the 

‘‘ability’’ to favor their affiliated cable 

operators with the effect that 

competition and diversity in the 

distribution of video programming 

would not be preserved and protected, 

the Commission has explained that it 

considers whether satellite-delivered, 

cable-affiliated programming remains 

programming that is necessary for 

competition and for which there are no 

good substitutes. In the 2007 Extension 

Order, the Commission found that there 

were no good substitutes for certain 

satellite-delivered, cable-affiliated 

programming, and that such 

programming remained necessary for 

viable competition in the video 

distribution market. Accordingly, the 

Commission concluded that cableaffiliated programmers retained ‘‘the 

ability to favor their affiliated cable 

operators over competitive MVPDs such 

that competition and diversity in the 

distribution of video programming 

would not be preserved and protected 

absent the rule.’’ In reaching this 

conclusion, the Commission explained 

that ‘‘[w]hat is most significant to our 

analysis is not the percentage of total 

available programming that is vertically 

integrated with cable operators, but 

rather the popularity of the 

programming that is vertically 

integrated and how the inability of 

competitive MVPDs to access this 

programming will affect the 

preservation and protection of 

competition in the video distribution 

marketplace.’’ Moreover, the 

Commission acknowledged that ‘‘there 

exists a continuum of vertically 

integrated programming, ‘ranging from 

services for which there may be 

substitutes (the absence of which from 

a rival MVPD’s program lineup would 

have little impact), to those for which 

there are imperfect substitutes, to those 

for which there are no close substitutes 

at all (the absence of which from a rival 

MVPD’s program lineup would have a 

substantial negative impact).’ ’’ 

34. We seek comment on whether 

competitive MVPDs’ access to satellitedelivered, cable-affiliated programming 

remains necessary today to preserve and 

protect competition in the video 

distribution marketplace. Is there any 

basis to depart from the Commission’s 

conclusion in the 2007 Extension Order 

that satellite-delivered, cable-affiliated 

programming remains necessary for 

viable competition in the video 

distribution market? We seek comment 

on whether and how the continued 

decline in the number and percentage of 

national programming networks that are 

cable-affiliated should impact our 

analysis, if at all. Despite a similar 

decline between the 2002 Extension 

Order and the 2007 Extension Order, the 

Commission in the 2007 Extension 

Order nonetheless found that ‘‘cableaffiliated programming continues to 

represent some of the most popular and 

significant programming available 

today’’ and that ‘‘vertically integrated 

programming, if denied to cable’s 

competitors, would adversely affect 

competition in the video distribution 

market.’’ Is this also true today, 

considering that the data in Appendices 

B and C indicate that, since the 2007 

Extension Order, (i) the percentage of 

satellite-delivered, national 

programming networks that are cableaffiliated has declined from 22 percent 

to approximately 14.4 percent; (ii) the 

number of cable-affiliated networks 

among the Top 20 satellite-delivered, 

national programming networks as 

ranked by subscribership has increased 

from six to seven; (iii) the number of 

cable-affiliated networks among the Top 

20 satellite-delivered, national 

programming networks as ranked by 

average prime time ratings has remained 

at seven; and (iv) the number of cableaffiliated RSNs has increased from 18 to 

31 (not including HD versions)? 

35. To what extent should we 

consider Comcast-controlled networks 

in our review of the exclusive contract 

prohibition? Because these networks 

will continue to be subject to program 

access conditions adopted in the 

Comcast/NBCU Order for six more years 

(until January 2018, assuming they are 

not modified earlier in response to a 

petition) even if the exclusive contract 

prohibition were to sunset, is there any 

basis to consider them in assessing 

whether to retain, sunset, or relax the 

exclusive contract prohibition? With the 

Comcast-controlled networks excluded, 

the data in Appendices B and C indicate 

that, since the 2007 Extension Order, (i) 

the number of cable-affiliated networks 

among the Top 20 satellite-delivered, 

national programming networks as 

ranked by subscribership has remained 

at six; (ii) the number of cable-affiliated 

networks among the Top 20 satellitedelivered, national programming 

networks as ranked by average prime 

time ratings has fallen from seven to 

five; and (iii) the number of cableaffiliated RSNs has increased from 18 to 

21 (not including HD versions). With 

the Comcast-controlled networks 

excluded from the analysis, is it still 

accurate to characterize cable-affiliated 

programming as ‘‘some of the most 

popular and significant programming 

available today,’’ the absence of which 

from an MVPD’s offering would 

‘‘adversely affect competition in the 

video distribution market.’’ Rather than 

focusing on the number and percentage 

of networks that are cable-affiliated, is it 

more critical to assess the extent to 

which cable-affiliated programming 

remains popular and without 

substitutes? We note that, in the 

Comcast-NBCU Order, the Commission 


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found that the ‘‘the loss of ComcastNBCU programming * * * would harm 

rival video distributors, reducing their 

ability or incentive to compete with 

Comcast for subscribers’’ and that 

‘‘[t]his is particularly true for marquee 

programming, which includes a broad 

portfolio of national cable programming 

in addition to RSN and local broadcast 

programming; such programming is 

important to Comcast’s competitors and 

without good substitutes from other 

sources.’’ Is there any basis to reach a 

different conclusion with respect to 

satellite-delivered programming 

affiliated with other cable operators? 

36. We ask commenters contending 

that access to certain satellite-delivered, 

cable-affiliated programming remains 

necessary to preserve and protect 

competition in the video distribution 

market to present reliable, empirical 

data supporting their positions, rather 

than merely labeling such programming 

as ‘‘must have.’’ While the Commission 

has recognized that some satellitedelivered, cable-affiliated programming 

has substitutes and that exclusive 

contracts involving such programming 

are unlikely to impact competition, are 

there certain categories of programming, 

such as RSNs, that we can presume have 

no close substitutes and that are 

necessary for competition? Does the 

wide variation in the importance and 

substitutability of satellite-delivered, 

cable-affiliated programming call for a 

case-by-case or categorical assessment of 

programming, rather than a broad rule 

that applies to all programming equally? 

37. We also seek comment on whether 

a sunset of the exclusive contract 

prohibition would result in increased 

vertical integration in the video 

marketplace. If cable operators are 

permitted to enter into exclusive 

contracts with satellite-delivered, cableaffiliated programmers, will this result 

in the acquisition of existing 

programming networks by cable 

operators, thereby increasing vertical 

integration? How can we accurately 

predict any such expected increase as 

we assess whether to retain, sunset, or 

relax the exclusive contract prohibition? 

Are cable operators more likely to 

acquire established networks that 

provide popular and non-substitutable 

programming, rather than creating new 

networks or investing in fledgling 

networks? Are there certain categories of 

programming networks that are more 

likely to be acquired or launched by 

cable operators? For example, we note 

that TWC recently announced that it 

will launch two RSNs in 2012 featuring 

the games of the Los Angeles Lakers, 

including the first Spanish-language 

RSN. Are cable operators expected to 

make further investments in RSNs in the 

future, especially if the exclusive 

contract prohibition were to sunset? 

b. Incentive 

38. In evaluating whether vertically 

integrated programmers retain the 

incentive to favor their affiliated cable 

operators over competitive MVPDs, the 

Commission analyzes ‘‘whether there 

continues to be an economic rationale 

for vertically integrated programmers to 

engage in exclusive agreements with 

cable operators that will cause [] 

anticompetitive harms.’’ The 

Commission has explained that, if a 

vertically integrated cable operator 

withholds programming from 

competitors, it can recoup profits lost at 

the upstream level (i.e., lost licensing 

fees and advertising revenues) by 

increasing the number of subscribers of 

its downstream MVPD division. The 

Commission explained that, particularly 

‘‘where competitive MVPDs are limited 

in their market share, a cable-affiliated 

programmer will be able to recoup a 

substantial amount, if not all, of the 

revenues foregone by pursuing a 

withholding strategy.’’ Moreover, in the 

2007 Extension Order, the Commission 

provided an empirical analysis 

demonstrating that the profitability of 

withholding increases as the number of 

television households passed by a 

vertically integrated cable operator 

increases in a given market area, such as 

through clustering. 

39. The Commission concluded in the 

2007 Extension Order that market 

developments since 2002 did not yet 

support the lifting of the exclusive 

contract prohibition, but ‘‘there 

nevertheless may come a point when 

these developments will be sufficient to 

allow the prohibition to sunset.’’ 

Similarly, in upholding the 2007 

Extension Order, the D.C. Circuit stated 

its expectation that, if the market 

continued evolving rapidly, the 

Commission could soon allow the 

exclusive contract prohibition to sunset, 

which Congress intended to occur at 

some point. We seek comment on 

whether now, almost five years since 

the most recent extension of the 

exclusive contract prohibition, we have 

reached such a point. 

40. As set forth in Appendix A, the 

percentage of MVPD subscribers 

nationwide attributable to cable 

operators has fallen since 2007, from an 

estimated 67 percent to approximately 

58.5 percent today. Is there a certain 

market share threshold that, if reached, 

will render it unlikely for satellitedelivered, cable-affiliated programmers 

to withhold national networks from 

competitive MVPDs? We ask 

commenters to provide empirical 

analyses to support their positions. Has 

the decline in cable market share 

benefited consumers, such as through 

lower prices, or in some other way? If 

not, does that suggest that the level of 

competition in the video distribution 

market has not reached a point where 

the exclusive contract prohibition 

should sunset, or is the price of cable 

offerings determined by other factors? 

41. We also seek comment on how the 

current state of cable system clusters 

and cable market share in regional 

markets should affect our decision on 

whether to retain, sunset, or relax the 

exclusive contract prohibition. On a 

regional basis, the market share held by 

cable operators in DMAs varies 

considerably, from a high in the 80 

percent range to a low in the 20 percent 

range. In some major markets, such as 

New York, Philadelphia, and Boston, 

the share of MVPD subscribers 

attributable to cable operators far 

exceeds the national cable market share 

of 67 percent deemed significant in the 

2007 Extension Order. In other DMAs, 

such as Dallas, Denver, and Phoenix, 

data indicate that the share of MVPD 

subscribers attributable to cable 

operators is below 50 percent. How 

should this variation in regional market 

shares impact our analysis? Does this 

wide variation in cable market share on 

a regional and local basis call for a more 

granular assessment of the continued 

need for an exclusive contract 

prohibition in individual markets, 

rather than a broad rule that applies to 

all markets equally? 

42. The Commission stated in the 

2002 Extension Order that ‘‘clustering, 

accompanied by an increase in 

vertically integrated regional 

programming networks affiliated with 

cable MSOs that control system clusters, 

will increase the incentive of cable 

operators to practice anticompetitive 

foreclosure of access to vertically 

integrated programming.’’ We seek 

comment on whether this conclusion 

remains valid today. In the 2007 

Extension Order, the Commission found 

that the cable industry had continued to 

form regional clusters since the 2002 

Extension Order. We note that a 

decrease in the amount of regional 

clustering could decrease the market 

share of individual cable operators 

within the footprints of regional 

programming, which would create fewer 

opportunities to implement exclusive 

arrangements. Has the amount of 

regional clustering increased or 

decreased since the 2007 Extension 

Order? We seek comment on whether 

events since the 2007 Extension Order 

mitigate or exacerbate the impact of 


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24312 Federal Register / Vol. 77, No. 78 / Monday, April 23, 2012 / Proposed Rules 

17See Review of the Commission’s Program 

Access Rules and Examination of Programming 

Tying Arrangements, First Report and Order, 25 

FCC Rcd 746, 750–51, para. 9 (2010) (‘‘2010 

Program Access Order’’), affirmed in part and 

vacated in part sub nom. Cablevision Sys. Corp. et 

al. v. FCC, 649 F.3d 695 (D.C. Cir. 2011) 

(‘‘Cablevision II’’). 

clustering. In the 2007 Extension Order, 

the Commission provided an empirical 

analysis demonstrating that the 

profitability of withholding increases as 

the number of television households 

passed by a vertically integrated cable 

operator increases in a given market 

area, such as through clustering. The 

analysis examined two vertically 

integrated cable operators on a DMA-byDMA basis. Taking account of various 

factors, including the characteristics of 

the affiliated RSN and the profitability 

figures of the vertically integrated cable 

operator examined, the analysis 

identified multiple DMAs in which 

withholding would be profitable. In 

those DMAs, the homes passed by the 

vertically integrated cable operator as a 

percentage of television households 

ranged from 60–80 percent. We seek 

comment on this analysis and whether, 

based on current data, it continues to 

support retaining an exclusive contract 

prohibition, particularly in those 

markets where a vertically integrated 

cable operator passes a significant 

number of television households. We 

also note that the Commission in the 

2007 Extension Order performed an 

analysis that concluded that 

withholding of some nationally 

distributed programming networks 

could be profitable if as little as 1.9 

percent of non-cable subscribers were to 

switch to cable as a result of the 

withholding. We seek comment on this 

analysis and whether, based on current 

data, it continues to support retaining 

an exclusive contract prohibition for 

national programming networks. 

43. Has the current state of horizontal 

consolidation in the cable industry 

increased or decreased incentives for 

anticompetitive foreclosure of access to 

vertically integrated programming? We 

note that the data in Appendix A 

indicate that the percentage of MVPD 

subscribers receiving their video 

programming from one of the four 

largest vertically integrated cable MSOs 

has decreased from between 54 and 

56.75 percent as stated in the 2007 

Extension Order to approximately 42.8 

percent today. What impact, if any, does 

this have on our review of the exclusive 

contract prohibition? 

3. Impact on the Video Programming 

Market 

44. We seek comment on how 

retaining, sunsetting, or relaxing the 

exclusive contract prohibition would 

impact the creation of new national, 

regional, and local programming and 

which of these options is most likely to 

increase programming diversity. What 

effect has the exclusive contract 

prohibition had on the incentives of 

incumbent cable operators to develop 

and produce video programming? Are 

incumbent cable operators less willing 

to invest in programming because they 

cannot enter into exclusive contracts 

and therefore must share their 

programming investment with their 

competitors? In the 2007 Extension 

Order, the Commission concluded that 

the extension of the exclusive contract 

prohibition would not create a 

disincentive for the creation of new 

programming. In support of this finding, 

the Commission noted that, despite the 

exclusive contract prohibition, the 

number of programming networks, 

including cable-affiliated networks, had 

increased since 1994. Is there any basis 

to conclude that the number of video 

programming networks, including cableaffiliated networks, would be even 

greater today if the exclusive contract 

prohibition had sunset earlier? Since the 

2007 extension of the exclusive contract 

prohibition, has there been an increase 

or decrease in the development, 

promotion, and launch of new video 

programming services by incumbent 

cable operators? Would a sunset of the 

exclusive contract prohibition entice 

incumbent cable operators to invest in 

and launch new programming networks 

to compete with established networks, 

leading to greater diversity in the video 

programming market, or are incumbent 

cable operators more likely to acquire 

these established networks? 

45. What effect has the exclusive 

contract prohibition had on the 

incentives of competitive MVPDs and 

non-MVPD-affiliated programmers to 

develop and produce video 

programming? In the 2007 Extension 

Order, the Commission noted evidence 

that some competitive MVPDs had 

begun to invest in their own video 

programming, despite their ability to 

access satellite-delivered, cableaffiliated programming as a result of the 

exclusive contract prohibition. To what 

extent have competitive MVPDs 

invested in their own video 

programming? In the 2007 Extension 

Order, the Commission ‘‘caution[ed] 

competitive MVPDs to take any steps 

they deem appropriate to prepare for the 

eventual sunset of the prohibition, 

including further investments in their 

own programming.’’ Have competitive 

MVPDs made further investments in 

their own programming since that time? 

If the exclusive contract prohibition 

were to sunset (wholly or partially), 

would competitive MVPDs be likely to 

increase their investment in video 

programming in order to ensure that 

they have a robust offering of 

programming to counteract any 

exclusive deals that incumbent cable 

operators might enter into with their 

affiliated programmers? We note that 

certain competitive MVPDs are 

currently subject to the exclusive 

contract prohibition, such as those that 

are cable operators or common carriers 

that provide video programming 

directly to subscribers. Has the 

exclusive contract prohibition caused 

these competitive MVPDs to be less 

willing to invest in programming 

because they must share their 

programming investment with their 

competitors? Would a sunset of the 

exclusive contract prohibition entice 

these competitive MVPDs to invest in 

and launch new programming 

networks? Do competitive MVPDs have 

the resources to invest in creating their 

own video programming? If not, to the 

extent that certain satellite-delivered, 

cable-affiliated programming is 

withheld from competitive MVPDs, is it 

likely that non-MVPD-affiliated 

programming vendors will fill the void 

by creating competing programming to 

license to competitive MVPDs, thereby 

leading to even greater diversity in the 

video programming market? Are there 

certain categories of programming that 

cannot be replicated by either 

competitive MVPDs or non-MVPDaffiliated programming vendors? In the 

2010 Program Access Order, the 

Commission stated: 

If particular programming is replicable, our 

policies should encourage MVPDs or others 

to create competing programming, rather 

than relying on the efforts of others, thereby 

encouraging investment and innovation in 

programming and adding to the diversity of 

programming in the marketplace. Conversely, 

when programming is non-replicable and 

valuable to consumers, such as regional 

sports programming, no amount of 

investment can duplicate the unique 

attributes of such programming, and denial of 

access to such programming can significantly 

hinder an MVPD from competing in the 

marketplace.17

While the Commission found that RSNs 

are non-replicable, it concluded that 

local news and local community or 

educational programming is ‘‘readily 

replicable programming.’’ We seek 

comment on how the distinction 

between replicable and non-replicable 

content should impact our review of the 

exclusive contract prohibition. 


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4. Alternatives to Retaining the 

Exclusive Contract Prohibition as It 

Exists Today 

46. As discussed in further detail 

below, to the extent the data do not 

support retaining the exclusive contract 

prohibition as it exists today, we seek 

comment on whether we can 

nonetheless preserve and protect 

competition in the video distribution 

market either by (i) sunsetting the 

prohibition in its entirety and relying 

solely on existing protections provided 

by the program access rules that will not 

sunset; or (ii) relaxing the exclusive 

contract prohibition, such as through 

removal of the prohibition on a marketby-market basis based on the extent of 

competition in the market or by 

retaining the prohibition only for 

satellite-delivered, cable-affiliated RSNs 

and other satellite-delivered, cableaffiliated ‘‘must have’’ programming. 

a. Sunsetting the Exclusive Contract 

Prohibition in Its Entirety and Relying 

Solely on Existing Protections 

47. As discussed above, the exclusive 

contract prohibition is just one of 

several protections that the program 

access rules afford to competitive 

MVPDs in their efforts to compete in the 

video distribution market. Even if the 

exclusive contract prohibition were to 

sunset (wholly or partially), these other 

existing protections will remain in 

effect. We seek comment on whether 

these existing protections are sufficient 

to preserve and protect competition in 

the video distribution market if the 

exclusive contract prohibition were to 

sunset and whether any additional 

safeguards should be adopted. 

(i) Section 628(b) Complaints 

48. The Act and the Commission’s 

existing rules allow for the filing of 

complaints alleging a violation of 

Section 628(b) of the Act and Section 

76.1001(a) of the Commission’s rules. 

These provisions require a complainant 

to establish three elements in order to 

demonstrate a violation: (i) The 

defendant is one of the three entities 

covered by these provisions (i.e., a cable 

operator, a satellite cable programming 

vendor in which a cable operator has an 

attributable interest, or a satellite 

broadcast programming vendor); (ii) the 

defendant has engaged in an ‘‘unfair 

act’’; and (iii) the ‘‘purpose or effect’’ of 

the unfair act is to ‘‘significantly hinder 

or prevent’’ an MVPD from providing 

satellite cable programming or satellite 

broadcast programming to subscribers or 

consumers. Even if the exclusive 

contract prohibition were to sunset 

(wholly or partially), an MVPD would 

still have the option to file a complaint 

with the Commission alleging that an 

exclusive contract between a cable 

operator and a satellite-delivered, cableaffiliated programmer involving 

satellite-delivered, cable-affiliated 

programming violates these provisions. 

We note that the Commission currently 

considers allegedly ‘‘unfair acts’’ 

involving terrestrially delivered, cableaffiliated programming on a case-bycase basis pursuant to Section 628(b) of 

the Act and Section 76.1001(a) of the 

Commission’s rules. Applying these 

provisions, the Commission recently 

found that the withholding of 

terrestrially delivered, cable-affiliated 

RSNs from certain MVPDs in the New 

York, Buffalo, and Hartford/New Haven 

DMAs violated these provisions. We 

seek comment regarding whether there 

are any justifications for applying 

different rules and procedures to 

satellite-delivered, cable-affiliated 

programming than those that apply to 

terrestrially delivered, cable-affiliated 

programming. 

49. The Commission previously 

concluded that Section 628(b) was not 

an adequate substitute for the 

prohibition on exclusive contracts 

under Section 628(c)(2)(D). Among 

other things, the Commission noted that 

Section 628(b) ‘‘carries with it an added 

burden’’ to demonstrate that the 

‘‘purpose or effect’’ of the ‘‘unfair act’’ 

is to ‘‘significantly hinder or prevent’’ 

an MVPD from providing programming. 

We seek comment on the costs and 

benefits of moving from a broad, 

prophylactic prohibition on exclusive 

contracts involving satellite-delivered, 

cable-affiliated programming to reliance 

instead on a case-by-case process, 

including Section 628(b) complaints. To 

what extent would a case-by-case 

process be more costly for competitive 

MVPDs than the current prohibition on 

exclusive contracts? What would be the 

benefits of eliminating the prohibition 

on exclusive contracts involving 

satellite-delivered, cable-affiliated 

programming? Would these benefits 

outweigh the costs of a case-by-case 

process? 

(a) Case-by-Case Complaint Process 

50. We note that a case-by-case 

complaint process alleging a violation of 

Section 628(b) would differ from the 

current prohibition on exclusive 

contracts in Section 628(c)(2)(D) in 

several important respects. First, under 

the current exclusive contract 

prohibition, all exclusive contracts 

between a cable operator and a satellitedelivered, cable-affiliated programmer 

pertaining to satellite-delivered, cableaffiliated programming are considered 

categorically ‘‘unfair.’’ If the exclusive 

contract prohibition were to sunset 

(wholly or partially), however, exclusive 

contracts would no longer always be 

presumed ‘‘unfair.’’ Rather, a 

complainant would have the burden to 

establish that the exclusive contract at 

issue is ‘‘unfair’’ based on the facts and 

circumstances presented. Second, under 

the current exclusive contract 

prohibition, all exclusive contracts 

between a cable operator and a satellitedelivered, cable-affiliated programmer 

pertaining to satellite-delivered, cableaffiliated programming are presumed to 

harm competition, and competitive 

MVPDs alleging a prohibited exclusive 

contract are not required to demonstrate 

harm. In alleging that an exclusive 

contract violates Section 628(b), 

however, a complainant would have the 

burden of proving that the exclusive 

contract has the ‘‘purpose or effect’’ of 

‘‘significantly hindering or preventing’’ 

the MVPD from providing satellite cable 

programming or satellite broadcast 

programming. Third, the current 

exclusive contract prohibition forbids 

all exclusive contracts between a cable 

operator and a satellite-delivered, cableaffiliated programmer pertaining to 

satellite-delivered, cable-affiliated 

programming, unless a cable operator or 

programmer can satisfy its burden of 

demonstrating that an exclusive contract 

serves the public interest based on the 

factors set forth in Section 628(c)(4) of 

the Act and Section 76.1002(c)(4) of the 

Commission’s rules. If the exclusive 

contract prohibition were to sunset 

(wholly or partially), however, the 

situation would be reversed. That is, 

such exclusive contracts would be 

permitted, unless an MVPD could carry 

its burden of demonstrating that the 

exclusive contract violates Section 

628(b) (or, potentially, Section 

628(c)(2)(B)). We seek comment on the 

above interpretations of Section 628(b) 

as it pertains to exclusive contracts 

involving satellite-delivered, cableaffiliated programming, particularly the 

practical implications for competitive 

MVPDs, cable operators, and satellitedelivered, cable-affiliated programmers. 

(b) Extending Rules and Policies 

Adopted for Section 628(b) Complaints 

Involving Terrestrially Delivered, CableAffiliated Programming to Section 

628(b) Complaints Challenging 

Exclusive Contracts Involving SatelliteDelivered, Cable-Affiliated 

Programming 

51. The Commission in the 2010 

Program Access Order adopted a caseby-case complaint process to address 

unfair acts involving terrestrially 

delivered, cable-affiliated programming 


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that allegedly violate Section 628(b). In 

doing so, the Commission adopted rules 

and policies that would appear to be 

equally appropriate for complaints 

alleging that an exclusive contract 

involving satellite-delivered, cableaffiliated programming violates Section 

628(b). Accordingly, if the exclusive 

contract prohibition were to sunset 

(wholly or partially), we propose to 

apply these same rules and policies to 

such complaints. 

52. First, the Commission declined to 

adopt specific evidentiary requirements 

with respect to proof that the 

defendant’s alleged activities violated 

Section 628(b). Among other things, the 

Commission explained that the 

evidence required to satisfy this burden 

will vary based on the facts and 

circumstances of each case and may 

depend on, among other things, whether 

the complainant is a new entrant or an 

established competitor and whether the 

programming the complainant seeks to 

access is new or existing programming. 

In addition, the Commission provided 

the following illustrative examples of 

evidence that litigants might consider 

providing: (i) An appropriately crafted 

regression analysis that estimates what 

the complainant’s market share in the 

MVPD market would be if it had access 

to the programming and how that 

compares to its actual market share; or 

(ii) statistically reliable survey data 

indicating the likelihood that customers 

would choose not to subscribe to or not 

to switch to an MVPD that did not carry 

the withheld programming. The 

Commission also explained that the 

discovery process will enable parties to 

obtain additional evidence. If the 

exclusive contract prohibition were to 

sunset (wholly or partially), we propose 

to apply the same requirements to 

complaints alleging that an exclusive 

contract involving satellite-delivered, 

cable-affiliated programming violates 

Section 628(b). 

53. Second, the Commission found 

that one category of programming, 

RSNs, was shown by both Commission 

precedent and record evidence to be 

very likely to be both non-replicable and 

highly valued by consumers. Rather 

than requiring litigants and the 

Commission staff to undertake repetitive 

examinations of this RSN precedent and 

the relevant historical evidence, the 

Commission instead allowed 

complainants to invoke a rebuttable 

presumption that an ‘‘unfair act’’ 

involving a terrestrially delivered, cableaffiliated RSN has the purpose or effect 

set forth in Section 628(b). The D.C. 

Circuit upheld the Commission’s 

decision to establish a rebuttable 

presumption of ‘‘significant hindrance’’ 

for ‘‘unfair acts’’ involving terrestrially 

delivered, cable-affiliated RSNs under 

both First Amendment and 

Administrative Procedure Act (‘‘APA’’) 

review. Accordingly, to the extent the 

exclusive contract prohibition were to 

sunset (wholly or partially) and we do 

not retain an exclusive contract 

prohibition for satellite-delivered, cableaffiliated RSNs, should we similarly 

adopt a rebuttable presumption of 

‘‘significant hindrance’’ under Section 

628(b) for exclusive contracts involving 

satellite-delivered, cable-affiliated 

RSNs? If so, we propose to define the 

term ‘‘RSN’’ in the same way the 

Commission defined that term in the 

2010 Program Access Order. Is there any 

basis to have a rebuttable presumption 

of ‘‘significant hindrance’’ for 

terrestrially delivered, cable-affiliated 

RSNs, but not when these networks are 

satellite-delivered? Are there any other 

categories of satellite-delivered, cableaffiliated programming that can be 

deemed ‘‘must have’’ and for which we 

should establish a rebuttable 

presumption of ‘‘significant hindrance’’? 

We note that the Commission in the 

Comcast-NBCU Order concluded that 

‘‘certain national cable programming 

networks produce programming that is 

more widely viewed and commands 

higher advertising revenue than certain 

broadcast or RSN programming.’’ Are 

there other types of satellite-delivered, 

cable-affiliated programming besides 

RSNs that have no good substitutes, are 

important for competition, and are nonreplicable, as the Commission has found 

with respect to RSNs? To the extent that 

commenters contend that there are, we 

ask that they provide reliable, empirical 

data supporting their positions, rather 

than merely labeling such programming 

as ‘‘must have.’’ In addition, we request 

commenters to provide a rational and 

workable definition of such 

programming that can be applied 

objectively. 

54. Third, the Commission concluded 

that HD programming is growing in 

significance to consumers and that 

consumers do not consider the SD 

version of a particular channel to be an 

adequate substitute for the HD version 

due to the different technical 

characteristics and sometimes different 

content. Accordingly, the Commission 

determined that it would analyze the 

HD version of a network separately from 

the SD version of similar content for 

purposes of determining whether an 

‘‘unfair act’’ has the purpose or effect set 

forth in Section 628(b). Thus, the fact 

that a respondent provides the SD 

version of a network to the complainant 

will not alone be sufficient to refute the 

complainant’s showing that lack of 

access to the HD version has the 

purpose or effect set forth in Section 

628(b). Similarly, in cases involving an 

RSN, withholding the HD feed is 

rebuttably presumed to cause 

‘‘significant hindrance’’ even if an SD 

version of the network is made available 

to competitors. The D.C. Circuit upheld 

the Commission’s decision on this issue 

under both First Amendment and APA 

review. To the extent the exclusive 

contract prohibition were to sunset 

(wholly or partially), we believe the 

same requirements should apply to 

complaints alleging that an exclusive 

contract involving satellite-delivered, 

cable-affiliated programming violates 

Section 628(b). We seek comment on 

this proposal. 

(c) Additional Rules for Complaints 

Challenging Exclusive Contracts 

Involving Satellite-Delivered, CableAffiliated Programming 

55. To the extent the exclusive 

contract prohibition were to sunset 

(wholly or partially), we seek comment 

on ways to reduce burdens on both 

complainants and defendants in 

connection with complaints alleging 

that an exclusive contract involving 

satellite-delivered, cable-affiliated 

programming violates Section 628(b) 

(or, potentially, Section 628(c)(2)(B)). 

We acknowledge that a case-by-case 

complaint process for addressing 

exclusive contracts involving satellitedelivered, cable-affiliated, national 

programming networks may impose 

some burdens for litigants and the 

Commission, especially in comparison 

to the current broad, prophylactic 

prohibition. For example, although 

several MVPDs could join as 

complainants, the showing in the 

complaint and any subsequent ruling on 

the complaint (either grant or denial) 

will be limited to the complainants. 

Other competitive MVPDs that are not 

parties to the complaint would have to 

file their own complaint and 

demonstrate how the exclusive contract 

at issue is ‘‘unfair’’ and has 

‘‘significantly hindered’’ them from 

providing programming. Given the 

number of competitive MVPDs 

nationwide that might seek access to a 

satellite-delivered, cable-affiliated, 

national programming network that is 

subject to an exclusive contract with 

cable operators, the number of such 

complaints involving just one national 

network could be significant. 

56. We seek comment on how to 

reduce these potential burdens for both 

complainants and defendants. For 

example, rather than requiring litigants 

and the Commission staff to undertake 


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18To the extent that we determine that an MVPD 

can challenge an exclusive contract as an 

unreasonable refusal to license in violation of 

Section 628(c)(2)(B) post-sunset, we seek comment 

above on ways to reduce the potential burdens for 

both complainants and defendants resulting from a 

case-by-case complaint process. See supra paras. 

56–57. 

repetitive examinations of the same 

network, we seek comment on whether 

the Commission could establish a 

rebuttable presumption that, once a 

complainant succeeds in demonstrating 

that an exclusive contract involving a 

satellite-delivered, cable-affiliated 

programming network violates Section 

628(b) (or, potentially, Section 

628(c)(2)(B)), any other exclusive 

contract involving the same network 

violates Section 628(b) (or Section 

628(c)(2)(B)). We seek comment on 

whether adoption of such a rebuttable 

presumption is rational. For example, in 

the event the Commission finds that an 

exclusive contract violates Section 

628(b) (or Section 628(c)(2)(B)) in 

response to a complaint brought by a 

small, fledgling MVPD, is it rational to 

assume that the Commission is likely to 

reach the same conclusion when the 

complaint is brought by a large, 

established MVPD? 

57. We also seek comment on whether 

there would be any benefit to retaining 

post-sunset our existing process 

whereby a cable operator or a satellitedelivered, cable-affiliated programmer 

may file a Petition for Exclusivity 

seeking Commission approval for an 

exclusive contract involving satellitedelivered, cable-affiliated programming 

by demonstrating that the arrangement 

serves the public interest based on the 

factors set forth in Section 628(c)(4) of 

the Act and Section 76.1002(c)(4) of the 

Commission’s rules. While a cable 

operator post-sunset would be permitted 

generally to enter into an exclusive 

contract with a satellite-delivered, 

cable-affiliated programming network 

without receiving prior Commission 

approval, we propose that the grant of 

a Petition for Exclusivity would 

immunize such an exclusive contract 

from potential complaints alleging a 

violation of Section 628(b), as well as 

Section 628(c)(2)(B). We further propose 

that, to the extent we were to deny a 

Petition for Exclusivity post-sunset, the 

petitioner would not be precluded from 

entering into or enforcing the exclusive 

contract subject to the petition. Rather, 

denial of a Petition for Exclusivity postsunset would mean that the exclusive 

contract at issue may not be permissible 

in all cases if challenged pursuant to 

Section 628(b) or, potentially, Section 

628(c)(2)(B). We seek comment on the 

costs and benefits of retaining this 

petition process after a sunset, 

especially whether the burdens for the 

Commission staff and impacted parties 

would outweigh any benefits. We also 

seek comment on any other ways to 

reduce the potential burdens for both 

complainants and defendants resulting 

from a case-by-case complaint process. 

(ii) Section 628(c)(2)(B) Discrimination 

Complaints 

58. We believe that discrimination 

complaints under Section 628(c)(2)(B) 

also will provide some protection for 

competitive MVPDs should the 

exclusive contract prohibition sunset 

(wholly or partially). Discrimination can 

take two forms: price discrimination 

and non-price discrimination. Non-price 

discrimination includes an 

unreasonable refusal to license 

programming to an MVPD. A refusal to 

license is permissible only if there is a 

‘‘legitimate business justification’’ for 

the conduct. As discussed below, a 

refusal to license can take two forms. 

First, a satellite-delivered, cableaffiliated programmer may refuse to 

license its programming to all MVPDs in 

a market except for one (such as its 

affiliated cable operator), thereby 

providing the affiliated cable operator 

with exclusive access to the 

programming. Second, a satellitedelivered, cable-affiliated programmer 

may selectively refuse to license its 

programming to certain MVPDs in a 

market (such as a recent entrant) while 

licensing the programming to other 

MVPDs (such as its affiliated cable 

operator and DBS operators). We seek 

comment on each of these scenarios 

below. 

(a) Challenging an Exclusive 

Arrangement as an Unreasonable 

Refusal to License 

59. We seek comment on the interplay 

between the potential sunset of the 

exclusive contact prohibition in Section 

628(c)(2)(D) and the continued 

prohibition on unreasonable refusals to 

license pursuant to Section 628(c)(2)(B). 

As an initial matter, we note that 

Section 628(c)(2)(D) prohibits 

‘‘exclusive contracts * * * between a 

cable operator and a satellite cable 

programming vendor in which a cable 

operator has an attributable interest.’’ 

This language presumes that an 

agreement will exist between the cable 

operator and the satellite-delivered, 

cable-affiliated programmer that would 

provide the cable operator with 

exclusivity. In the event that a satellitedelivered, cable-affiliated programmer 

unilaterally refuses to license its 

programming to all MVPDs in a market 

except for one cable operator and 

without any exclusive contract with the 

cable operator, we believe an MVPD can 

challenge this conduct as an 

unreasonable refusal to license in 

violation of Section 628(c)(2)(B). While 

a cable operator would be permitted 

generally to enter into an exclusive 

contract with the satellite-delivered, 

cable-affiliated programmer in the event 

of a sunset, the scenario presented here 

does not involve an exclusive contract; 

rather, it involves unilateral action by 

the satellite-delivered, cable-affiliated 

programmer. We seek comment on this 

interpretation. In defending against a 

complaint, the satellite-delivered, cableaffiliated programmer would be 

required to provide a ‘‘legitimate 

business justification’’ for its conduct. 

60. In the event that a satellitedelivered, cable-affiliated programmer 

and a cable operator enter into an 

exclusive contract post-sunset (complete 

or partial), we seek comment on 

whether an MVPD can challenge this 

exclusive contract as an unreasonable 

refusal to license in violation of Section 

628(c)(2)(B).18 We believe that there are 

legitimate arguments for and against this 

interpretation. We seek comment on 

which of the interpretations set forth 

below is more reasonable and consistent 

with the goals of Section 628. 

61. In favor of interpreting Section 

628(c)(2)(B) to allow a challenge postsunset to an exclusive contract as an 

unreasonable refusal to license, we note 

that Section 628(c)(2)(B)(iv) provides 

that it is not a violation of Section 

628(c)(2)(B) for a satellite-delivered, 

cable-affiliated programmer to ‘‘enter[] 

into an exclusive contract that is 

permitted under [Section 628(c)(2)(D)].’’ 

The Commission has previously 

interpreted this language to pertain to 

only those exclusive contracts that have 

been deemed by the Commission to be 

in the public interest pursuant to the 

factors set forth in Section 628(c)(4). 

This provision is silent regarding 

exclusive contracts that are generally 

permissible after a sunset pursuant to 

Section 628(c)(5). Does the omission of 

post-sunset exclusive contracts from 

both Section 628(c)(2)(D) and Section 

628(c)(2)(B)(iv) mean that Congress 

intended that such contracts might still 

be challenged as impermissibly 

discriminatory in violation of Section 

628(c)(2)(B)? In addition, we note that 

the exclusive contract prohibition in 

Section 628(c)(2)(D) applies to exclusive 

contracts between a satellite-delivered, 

cable-affiliated programmer and a cable 

operator; it does not apply to exclusive 

contracts between a satellite-delivered, 

cable-affiliated programmer and a DBS 


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operator. Both before and after a sunset, 

however, the decision of a satellitedelivered, cable-affiliated programmer 

to license its programming to a DBS 

operator but not to other MVPDs might 

be challenged as an unreasonable 

refusal to license pursuant to Section 

628(c)(2)(B). If, post-sunset, an MVPD 

cannot challenge an exclusive 

arrangement between a satellitedelivered, cable-affiliated programmer 

and a cable operator as an unreasonable 

refusal to license in violation of Section 

628(c)(2)(B), would this produce an 

anomalous result? Specifically, in 

challenging an exclusive contract 

between a satellite-delivered, cableaffiliated programmer and a cable 

operator, an MVPD would have to rely 

on Section 628(b), which places the 

burden on the MVPD to demonstrate 

that the defendant has engaged in an 

‘‘unfair act’’ that has the ‘‘purpose or 

effect’’ of ‘‘significantly hindering or 

preventing’’ the MVPD from providing 

satellite cable programming or satellite 

broadcast programming to subscribers or 

consumers. By contrast, in challenging 

an exclusive contract between a 

satellite-delivered, cable-affiliated 

programmer and a DBS operator, an 

MVPD could rely on Section 

628(c)(2)(B), which presumes harm in 

every case and places the burden on the 

satellite-delivered, cable-affiliated 

programmer to provide a ‘‘legitimate 

business justification’’ for its conduct. Is 

there any basis for placing a greater 

burden on an MVPD in challenging an 

exclusive contract between a satellitedelivered, cable-affiliated programmer 

and a cable operator than between a 

satellite-delivered, cable-affiliated 

programmer and a DBS operator? 

62. On the other hand, we note that 

there are legitimate arguments against 

interpreting Section 628(c)(2)(B) to 

allow an MVPD to challenge an 

exclusive contract between a satellitedelivered, cable-affiliated programmer 

and a cable operator post-sunset as an 

unreasonable refusal to license. 

Currently, with the exclusive contract 

prohibition in effect, an exclusive 

contract between a satellite-delivered, 

cable-affiliated programmer and a cable 

operator is prohibited, unless the 

programmer or cable operator can 

demonstrate that the exclusive contract 

serves the public interest based on the 

factors set forth in Section 628(c)(4). If, 

post-sunset, an MVPD can challenge an 

exclusive contract between a satellitedelivered, cable-affiliated programmer 

and a cable operator as an unreasonable 

refusal to license in violation of Section 

628(c)(2)(B), the satellite-delivered, 

cable-affiliated programmer would be 

required to demonstrate a ‘‘legitimate 

business reason’’ for its conduct. Is it 

reasonable to interpret Section 628 to 

provide that, post-sunset, the public 

interest factors in Section 628(c)(4) 

would be replaced with a showing of a 

‘‘legitimate business reason’’ in 

response to a complaint alleging a 

violation of Section 628(c)(2)(B)? We 

note that two of the public interest 

factors in Section 628(c)(4) focus on 

competition in the video distribution 

market, allowing a proponent of 

exclusivity to demonstrate how the 

exclusive contract will not adversely 

impact competition. In a complaint 

alleging discrimination under Section 

628(c)(2)(B), however, the alleged 

discriminatory act is presumed to harm 

competition in every case. Is it 

reasonable to interpret Section 628 to 

provide that, pre-sunset, a satellitedelivered, cable-affiliated programmer 

or a cable operator could make a 

showing that an exclusive contract 

would not adversely impact competition 

pursuant to the public interest factors in 

Section 628(c)(4), but, post-sunset, 

exclusivity is presumed to harm 

competition in every case when 

challenged pursuant to Section 

628(c)(2)(B)? 

63. In addition to the foregoing, we 

seek comment on whether the 

legislative history of the 1992 Cable Act 

supports either of the above 

interpretations. The Senate Report 

accompanying the 1992 Cable Act states 

that the ‘‘bill does not equate exclusivity 

with an unreasonable refusal to deal.’’ 

This statement might be read to imply 

that Congress considered exclusive 

contracts and unreasonable refusals to 

deal to be mutually exclusive, with the 

effect that once a satellite-delivered, 

cable-affiliated programmer enters into 

an exclusive contract with a cable 

operator post-sunset, the contract 

cannot be challenged as an 

unreasonable refusal to license pursuant 

to Section 628(c)(2)(B). Another part of 

the Senate Report, however, states that 

‘‘the dominance in the market of the 

distributor obtaining exclusivity should 

be considered in determining whether 

an exclusive arrangement amounts to an 

unreasonable refusal to deal.’’ This 

statement might be read to imply that 

Congress did not consider exclusive 

contracts and unreasonable refusals to 

license to be mutually exclusive, with 

the effect that an exclusive contract 

could be challenged as an unreasonable 

refusal to license pursuant to Section 

628(c)(2)(B). 

(b) Selective Refusals To License 

Programming 

64. Notwithstanding the question 

raised in the previous section of 

whether an MVPD can challenge postsunset an exclusive arrangement 

between a satellite-delivered, cableaffiliated programmer and a cable 

operator as an unreasonable refusal to 

license in violation of Section 

628(c)(2)(B), our rules and precedent 

establish that the discrimination 

provision in Section 628(c)(2)(B) would 

prevent a satellite-delivered, cableaffiliated programmer from licensing its 

content to MVPD A (such as a DBS 

operator) in a given market area, but to 

selectively refuse to license the content 

to MVPD B (such as a telco video 

provider) in the same area, absent a 

legitimate business reason. When a 

satellite-delivered, cable-affiliated 

programmer discriminates among 

MVPDs in this manner, it faces the 

prospect of a complaint alleging nonprice discrimination in violation of 

Section 628(c)(2)(B). As noted above, 

complaints alleging a violation of 

Section 628(c)(2)(B) do not require a 

showing of harm to the complainant. 

65. We seek comment on whether the 

right of an MVPD to challenge a 

selective refusal to license as a form of 

prohibited non-price discrimination 

under Section 628(c)(2)(B) will help to 

preserve and protect competition in the 

video distribution market if the 

exclusive contract prohibition were to 

sunset (wholly or partially). As reflected 

in Appendix A, the two DBS operators 

together have approximately 34 percent 

of MVPD subscribers nationwide today. 

Because a national programming 

network that refuses to license its 

content to these MVPDs will forgo 

significant licensing fees and 

advertising revenues, is it reasonable to 

assume that most satellite-delivered, 

cable-affiliated, national programming 

networks will license their content to 

DBS operators? If they do, we interpret 

Section 628(c)(2)(B) as permitting other 

competitive MVPDs, such as a telco 

video provider, to bring non-price 

discrimination complaints should these 

programmers refuse to deal with them. 

How does this analysis change with 

respect to local and regional markets, 

where cable operators may have an 

overwhelming share of the market or a 

vertically integrated cable operator may 

pass a large percentage of television 

households? 

66. The Commission previously 

concluded that the discrimination 

provision in Section 628(c)(2)(B) is not 

an adequate substitute for the 

prohibition on exclusive contracts 


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19We note that the Commission sought comment 

on a similar proposal in the 2007 Program Access 

NPRM. See Review of the Commission’s Program 

Access Rules and Examination of Programming 

Tying Arrangements, MB Docket No. 07–198, 

Notice of Proposed Rulemaking, 22 FCC Rcd 17791, 

17859, para. 114 (2007) (seeking comment on 

whether the Commission can establish a procedure 

that would shorten the term of the exclusive 

contract prohibition if, after two years (i.e., October 

5, 2009), a cable operator can show competition 

from new entrant MVPDs has reached a certain 

penetration level in the DMA) (‘‘2007 Program 

Access NPRM’’). We hereby incorporate by 

reference the comments filed in response to this 

proposal. 

under Section 628(c)(2)(D). Among 

other things, the Commission noted that 

a non-price discrimination complaint 

requires an MVPD to demonstrate that 

the conduct was ‘‘unreasonable,’’ which 

the Commission noted may be difficult 

to establish. We seek comment on the 

costs and benefits of moving from a 

broad, prophylactic prohibition on 

exclusive contracts involving satellitedelivered, cable-affiliated programming 

to reliance instead on a case-by-case 

process, including non-price 

discrimination complaints. 

(iii) Section 628(c)(2)(A) Undue 

Influence Complaints 

67. We seek comment on the extent to 

which undue influence complaints 

under Section 628(c)(2)(A) may also 

provide some protection for competitive 

MVPDs should the exclusive contract 

prohibition sunset (wholly or partially). 

Section 628(c)(2)(A) precludes a cable 

operator that has an attributable interest 

in a satellite cable programming vendor 

or a satellite broadcast programming 

vendor from ‘‘unduly or improperly 

influencing the decision of such vendor 

to sell, or the prices, terms, and 

conditions of sale of, satellite cable 

programming or satellite broadcast 

programming to any unaffiliated 

[MVPD].’’ The Commission has 

explained that the ‘‘concept of undue 

influence between affiliated firms is 

closely linked with discriminatory 

practices and exclusive contracting’’ 

and that the prohibition on undue 

influence ‘‘can play a supporting role 

where information is available (such as 

might come from an internal 

‘whistleblower’) that evidences ‘undue 

influence’ between affiliated firms to 

initiate or maintain anticompetitive 

discriminatory pricing, contracting, or 

product withholding.’’ The Commission 

acknowledged that ‘‘such conduct may 

be difficult for the Commission or 

complainants to establish’’ but ‘‘its 

regulation provides a useful support for 

direct discrimination and contracting 

regulation.’’ To what extent, if any, will 

the prohibition on undue influence 

provide some protection for competitive 

MVPDs should the exclusive contract 

prohibition sunset? If the exclusive 

contract prohibition were to sunset, 

then a cable operator would be 

permitted generally to enter into an 

exclusive contract with a satellitedelivered, cable-affiliated programming 

network, although the contract may be 

deemed to violate Section 628(b) (or, 

potentially, Section 628(c)(2)(B)) after 

the conclusion of a complaint 

proceeding. In the event the exclusive 

contract prohibition sunsets, if a cable 

operator ‘‘unduly influences’’ a satellitedelivered, cable-affiliated programmer 

to enter into an exclusive contract, 

would that conduct violate Section 

628(c)(2)(A) even though the underlying 

contract would be permissible (absent a 

finding of a violation of Section 628(b) 

(or, potentially, Section 628(c)(2)(B)))? 

Stated differently, in the event of a 

sunset, can a cable operator ‘‘unduly 

influence’’ a satellite-delivered, cableaffiliated programmer to enter into an 

exclusive contract only if the underlying 

contract violates Section 628(b) (or, 

potentially, Section 628(c)(2)(B))? 

b. Relaxing the Exclusive Contract 

Prohibition 

68. Rather than sunsetting the 

exclusive contract prohibition in its 

entirety and relying solely on existing 

protections provided by the program 

access rules that will not sunset, we 

seek comment on whether we should 

instead relax, rather than sunset, the 

exclusivity prohibition in the ways 

discussed below, or in some other way. 

We ask parties to comment on whether 

retaining the exclusivity ban in certain 

circumstances would be more effective 

in preserving and protecting 

competition in the video distribution 

market than permitting the exclusive 

contract prohibition to sunset entirely. 

In addition to the proposals below, we 

invite comment on other ways to relax 

the exclusive contract prohibition. 

(i) Sunsetting the Exclusive Contract 

Prohibition on a Market-by-Market Basis 

69. We seek comment on whether to 

establish a process whereby a cable 

operator or satellite-delivered, cableaffiliated programmer can file a Petition 

for Sunset seeking to remove the 

exclusive contract prohibition on a 

market-by-market basis based on the 

extent of competition in the market.19 In 

the 2002 Extension Order, the 

Commission explained that ‘‘clustering, 

accompanied by an increase in 

vertically integrated regional 

programming networks affiliated with 

cable MSOs that control system clusters, 

will increase the incentive of cable 

operators to practice anticompetitive 

foreclosure of access to vertically 

integrated programming.’’ Moreover, as 

noted above, the market share held by 

cable operators in DMAs varies 

considerably, from a high in the 80 

percent range to a low in the 20 percent 

range. As the Commission has explained 

previously, particularly ‘‘where 

competitive MVPDs are limited in their 

market share, a cable-affiliated 

programmer will be able to recoup a 

substantial amount, if not all, of the 

revenues foregone by pursuing a 

withholding strategy.’’ Moreover, in the 

2007 Extension Order, the Commission 

provided an empirical analysis 

demonstrating that the profitability of 

withholding increases as the number of 

television households passed by a 

vertically integrated cable operator 

increases in a given market area, such as 

through clustering. Accordingly, a 

cable-affiliated programmer will have an 

increased incentive to enter into 

exclusive contracts with cable operators 

in those areas where the market share of 

competitive MVPDs is comparatively 

low or where its affiliated cable operator 

passes a large percentage of television 

households or where both 

circumstances are present. If there was 

not a blanket prohibition on exclusive 

contracts involving satellite-delivered, 

cable-affiliated programming, would 

incumbent cable operators and cableaffiliated programmers enter into 

exclusive contracts in these markets? If 

so, does the wide variation in cable 

market share and television households 

passed by a vertically integrated cable 

operator on a regional and local basis 

call for a more granular assessment of 

the continued need for an exclusive 

contract prohibition in individual 

markets, rather than a broad rule that 

applies to all markets equally? Would 

such a market-by-market assessment 

necessarily be based on a Commission 

finding that satellite-delivered, cableaffiliated programming remains 

necessary for competition in the video 

distribution market? That is, absent 

such a finding, would a market-bymarket assessment approach mean that 

the exclusive contract prohibition 

would sunset only in areas where 

satellite-delivered, cable-affiliated 

programmers lack an incentive to enter 

into exclusive contracts, regardless of 

the importance of the programming at 

issue for competition? Is there any basis 

for interpreting the sunset provision in 

Section 628(c)(5) in this manner, which 

might permit exclusive contracts only 

when there is little possibility such 

contracts will exist? 

70. To the extent we establish a 

process whereby a cable operator or 


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satellite-delivered, cable-affiliated 

programmer can petition to remove the 

exclusive contract prohibition on a 

market-by-market basis, we seek 

comment on the details of this process. 

First, in assessing whether to sunset the 

exclusive contract prohibition in an 

individual market, we propose to apply 

the same test set forth in Section 

628(c)(5)—i.e., whether the prohibition 

‘‘continues to be necessary to preserve 

and protect competition and diversity in 

the distribution of video programming.’’ 

Who should bear the burdens of 

production and persuasion in 

demonstrating that the exclusive 

contract prohibition either does or does 

not meet this test in an individual 

market? While a petitioner (in this case, 

the cable operator or satellite-delivered, 

cable-affiliated programmer) might 

normally bear these burdens, Congress 

established that the exclusive contract 

prohibition would sunset unless it 

continues to be necessary pursuant to 

this test. The Commission has explained 

that Section 628(c)(5) thus ‘‘creates a 

presumption that the rule will sunset’’ 

unless it continues to be necessary. Does 

this call for a regime where, in response 

to a petition seeking to remove the 

prohibition in an individual market, the 

burden of production shifts to 

competitive MVPDs and other interested 

parties to put forth evidence 

demonstrating that the prohibition 

continues to be necessary? To provide 

guidance to impacted parties, should we 

establish a specific benchmark which, if 

met, would establish a rebuttable 

presumption that the market is not 

sufficiently competitive to allow the 

exclusive contract prohibition to sunset? 

For example, should the market be 

rebuttably presumed to not be 

sufficiently competitive to allow the 

exclusive contract prohibition to sunset 

if the market share held by competitive 

MVPDs is below a certain threshold or 

television households passed by a 

vertically integrated cable operator is 

above a certain threshold? We ask 

commenters to provide support for any 

proposed threshold. Should we instead 

apply the test set forth in Section 

628(c)(5) on an entirely case-by-case 

basis, considering all of the facts and 

circumstances presented, without 

establishing a specific benchmark? 

Second, how should we define the 

‘‘market’’ for purposes of these 

petitions? Should we establish a specific 

market size for purpose of the petitions 

(such as DMA, county, or franchise area) 

or should we allow petitioners to seek 

a sunset of the exclusive contract 

prohibition for any size market they 

choose? Third, we seek comment on 

procedural deadlines. Given the likely 

fact-intensive nature of these petitions, 

we propose to establish a pleading cycle 

that is identical to the one established 

for complaints involving terrestrially 

delivered, cable-affiliated programming. 

Specifically, we propose to establish a 

45-day opposition period and a 15-day 

reply period. Fourth, to the extent that 

the exclusive contract prohibition has 

not been removed in an individual 

market, we propose to retain our 

existing rules and procedures whereby a 

cable operator or a satellite-delivered, 

cable-affiliated programmer can seek 

prior Commission approval to enter into 

an exclusive contract by demonstrating 

that the arrangement satisfies the factors 

set forth in Section 628(c)(4) of the Act 

and Section 76.1002(c)(4) of the 

Commission’s rules. Fifth, we seek 

comment on whether to adopt a sunset 

date for the exclusive contract 

prohibition, thereby eliminating the 

need for further market-based petitions, 

subject to a review by the Commission 

in the year prior to the sunset date. 

Should the sunset date be five years 

from the current sunset date (i.e., until 

October 5, 2017), consistent with the 

two prior five-year extensions? 

71. We also seek comment on the 

practical effect of sunsetting the 

exclusive contract prohibition on a 

market-by-market basis. For example, to 

the extent that certain competitive 

MVPDs, such as DBS providers, market 

their service on a nationwide basis, how 

will the sunset of the exclusive contract 

prohibition in individual markets 

impact their marketing efforts? For 

example, if a certain satellite-delivered, 

cable-affiliated programming network is 

available to DBS customers in some 

markets, but not in others due to 

exclusive contracts with cable operators, 

how burdensome will it be for DBS 

providers to inform subscribers and 

potential customers of the limited 

availability of this programming and to 

implement the selective availability of 

the programming? In addition to this 

potential concern, we seek comment on 

the other costs and benefits of moving 

from a broad, prophylactic prohibition 

on exclusive contracts involving 

satellite-delivered, cable-affiliated 

programming throughout the nation to 

reliance instead on a market-by-market 

assessment. 

(ii) Retaining an Exclusive Contract 

Prohibition for Satellite-Delivered, 

Cable-Affiliated RSNs and Other 

Satellite-Delivered, Cable-Affiliated 

‘‘Must Have’’ Programming 

72. We seek comment on whether we 

should retain an exclusive contract 

prohibition for satellite-delivered, cableaffiliated RSNs and other satellitedelivered, cable-affiliated ‘‘must have’’ 

programming. The Commission has 

previously explained that RSNs have no 

good substitutes, are important for 

competition, and are non-replicable. 

Moreover, in his dissenting opinion to 

the D.C. Circuit decision affirming the 

2007 Extension Order, Judge Kavanaugh 

articulated the following explanation for 

why a ban on exclusive contracts for 

RSNs may be appropriate: 

I would leave open the possibility that the 

Government might still impose a prospective 

ban on some exclusive agreements between 

video programming distributors and affiliated 

regional video programming networks, 

particularly regional sports networks. That is 

because the upstream market in which video 

programming distributors contract with 

regional networks is less competitive than 

the national market * * *. [M]arket share 

and other relevant factors in certain areas 

may dictate tolerance of a narrow exclusivity 

ban. Situations where a highly desirable 

‘‘must have’’ regional sports network is 

controlled by one video programming 

distributor might justify a targeted restraint 

on such regional exclusivity arrangements. I 

need not definitively address such a 

possibility in this case. 

73. We note, however, that the 

Commission in the 2010 Program 

Access Order declined to adopt a flat 

ban on exclusive contracts involving 

terrestrially delivered, cable-affiliated 

RSNs pursuant to Section 628(b) of the 

Act. Noting empirical evidence that 

withholding of an RSN in one case did 

not have an impact on competition, the 

Commission declined to adopt a general 

conclusion regarding RSNs, adopting 

instead a case-by-case approach, albeit 

with a rebuttable presumption that an 

‘‘unfair act’’ involving a terrestrially 

delivered, cable-affiliated RSN has the 

purpose or effect set forth in Section 

628(b). The Commission explained that 

‘‘case-by-case consideration of the 

impact on competition in the video 

distribution market is necessary to 

address whether unfair practices 

significantly hinder competition in 

particular cases.’’ 

74. Are there legal and/or policy 

reasons why the Commission may want 

to establish a case-by-case approach for 

assessing exclusive contracts involving 

terrestrially delivered, cable-affiliated 

RSNs, but to retain an across-the-board 

prohibition on exclusive contracts 

involving satellite-delivered, cableaffiliated RSNs? We note that, in 

adopting a case-by-case approach for 

terrestrially delivered, cable-affiliated 

RSNs, the Commission was applying 

and interpreting Section 628(b) of the 

Act, which prohibits ‘‘unfair acts’’ that 

have the ‘‘purpose or effect’’ to 

‘‘significantly hinder or prevent’’ an 


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20These reasons were as follows: (i) Congress did 

not distinguish between different types of satellitedelivered, cable-affiliated programming in adopting 

the exclusive contract prohibition in Section 

628(c)(2)(D) (see 2007 Extension Order, 22 FCC Rcd 

at 17839–40, para. 69; see also 2002 Extension 

Order, 17 FCC Rcd at 12156, para. 69); (ii) requests 

to relieve satellite-delivered, cable-affiliated 

programming networks from the exclusive contract 

prohibition can be addressed through individual 

exclusivity petitions satisfying the factors set forth 

in Section 628(c)(4) (see 2007 Extension Order, 22 

FCC Rcd at 17839–40, para. 69); (iii) no commenter 

provided a rational and workable definition of 

‘‘must have’’ programming that would allow the 

Commission to apply the exclusive contract 

prohibition to only this type of programming (see 

id.); (iv) the difficulty of developing an objective 

process of general applicability to determine what 

programming may or may not be essential to 

preserve and protect competition (see id.; see also 

2002 Extension Order, 17 FCC Rcd at 12156, para. 

69); and (v) distinguishing between different types 

of satellite-delivered, cable-affiliated programming 

might raise First Amendment concerns (see 2007 

Extension Order, 22 FCC Rcd at 17839–40, para. 69; 

see also 2002 Extension Order, 17 FCC Rcd at 

12156, para. 69). 

MVPD from providing satellite cable 

programming or satellite broadcast 

programming to subscribers or 

consumers. In considering a sunset of 

the exclusive contract prohibition, 

however, we are applying and 

interpreting Section 628(c)(5) of the Act, 

which requires the Commission to 

determine whether the exclusive 

contract prohibition ‘‘continues to be 

necessary to preserve and protect 

competition and diversity in the 

distribution of video programming.’’ 

Unlike Section 628(b), the language in 

Section 628(c)(5) does not require the 

Commission to assess whether 

particular exclusive contracts are 

‘‘unfair’’ or whether they have the 

‘‘purpose or effect’’ to ‘‘significantly 

hinder or prevent’’ an MVPD from 

providing satellite cable programming 

or satellite broadcast programming to 

subscribers or consumers. We note that 

two vertically integrated cable 

operators, Comcast and Cablevision, 

previously stated before the D.C. Circuit 

that a partial sunset of the exclusive 

contract prohibition is a legally 

permissible approach, explaining that 

‘‘Section 628(c)(5) grants the FCC 

additional sunsetting authority, and 

nothing in the statute suggests that the 

FCC must do so on an all-or-nothing 

basis.’’ Does this difference in statutory 

language provide a basis for treating 

satellite-delivered, cable-affiliated RSNs 

differently from terrestrially delivered, 

cable-affiliated RSNs? In addition, are 

there policy reasons why the 

Commission may want to retain the 

exclusivity ban as it applies to satellitedelivered, cable-affiliated RSNs? If so, 

we propose to define the term ‘‘RSN’’ in 

the same way the Commission defined 

that term in the 2010 Program Access 

Order. 

75. To the extent we retain an 

exclusive contract prohibition for 

satellite-delivered, cable-affiliated 

RSNs, we propose to retain our existing 

rules and procedures whereby a cable 

operator or a satellite-delivered, cableaffiliated programmer can file a Petition 

for Exclusivity seeking prior 

Commission approval to enter into an 

exclusive contract by demonstrating that 

the arrangement satisfies the factors set 

forth in Section 628(c)(4) of the Act and 

Section 76.1002(c)(4) of the 

Commission’s rules. We seek comment 

on whether this process is sufficient for 

addressing those instances where an 

exclusive contract pertaining to a 

satellite-delivered, cable-affiliated RSN 

might serve the public interest. We note 

that, if we were to retain an exclusive 

contract prohibition for only satellitedelivered, cable-affiliated RSNs, our 

rules would apply burdens to different 

parties depending on whether or not the 

programming subject to an exclusive 

contract is an RSN: (i) In the case of 

satellite-delivered, cable-affiliated 

RSNs, exclusive contracts with cable 

operators would be generally 

prohibited, unless a cable operator or 

RSN can satisfy its burden of 

demonstrating that an exclusive contract 

serves the public interest based on the 

factors set forth in Section 628(c)(4) of 

the Act and Section 76.1002(c)(4) of the 

Commission’s rules; and (ii) in the case 

of all other satellite-delivered, cableaffiliated programming, exclusive 

contracts with cable operators would be 

generally permitted, unless an MVPD 

can satisfy its burden of demonstrating 

that the exclusive contract violates 

Section 628(b) of the Act and Section 

76.1001(a) of the Commission’s rules 

(or, potentially, Section 628(c)(2)(B) of 

the Act and Section 76.1002(b) of the 

Commission’s rules). Given the 

Commission precedent and relevant 

historical evidence pertaining to the 

importance of RSNs for competition, as 

well as their non-substitutability and 

non-replicability, we believe there is a 

sufficient basis for drawing this 

distinction between RSN and non-RSN 

programming. We seek comment on this 

view. 

76. Are there any other categories of 

satellite-delivered, cable-affiliated 

programming besides RSNs that can be 

deemed ‘‘must have’’ and for which we 

should retain the exclusivity 

prohibition? We note that the 

Commission in the Comcast-NBCU 

Order concluded that ‘‘certain national 

cable programming networks produce 

programming that is more widely 

viewed and commands higher 

advertising revenue than certain 

broadcast or RSN programming.’’ Are 

there other types of satellite-delivered, 

cable-affiliated programming besides 

RSNs that have no good substitutes, are 

important for competition, and are nonreplicable, as the Commission has found 

with respect to RSNs? To the extent that 

commenters contend that there are, we 

ask that they provide reliable, empirical 

data supporting their positions, rather 

than merely labeling such programming 

as ‘‘must have.’’ In addition, we request 

commenters to provide a rational and 

workable definition of such 

programming that can be applied 

objectively. We note that in the 2007 

Extension Order the Commission 

declined to differentiate between 

categories of programming for purposes 

of the exclusive contract prohibition for 

a number of legal and policy reasons.20

We seek comment on whether any of the 

concerns the Commission expressed in 

the 2007 Extension Order should 

prevent us from retaining an exclusive 

contract prohibition for satellitedelivered, cable-affiliated RSNs, or 

potentially other satellite-delivered, 

cable-affiliated ‘‘must have’’ 

programming, given the state of the 

market today. 

77. With respect to First Amendment 

concerns, we note that the Commission 

in the 2010 Program Access Order 

applied a rebuttable presumption of 

significant hindrance to one category of 

programming—terrestrially delivered, 

cable-affiliated RSNs. The D.C. Circuit 

rejected claims that this was a contentbased restriction on speech subject to 

strict scrutiny, explaining that: 

[T]here is absolutely no evidence, nor even 

any serious suggestion, that the Commission 

issued its regulations to disfavor certain 

messages or ideas. The clear and undisputed 

evidence shows that the Commission 

established presumptions for RSN 

programming due to that programming’s 

economic characteristics, not to its 

communicative impact. Thus contentneutral, the presumptions are subject only to 

intermediate scrutiny. 

In applying intermediate scrutiny, the 

D.C. Circuit ruled that, ‘‘[g]iven record 

evidence demonstrating the significant 

impact of RSN programming 

withholding, the Commission’s 

presumptions represent a narrowly 

tailored effort to further the important 

governmental interest of increasing 

competition in video programming.’’ 

Based on the D.C. Circuit’s decision, we 

do not believe that retaining an 

exclusive contract prohibition for 

satellite-delivered, cable-affiliated RSNs 


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and other satellite-delivered, cableaffiliated ‘‘must have’’ programming 

would run afoul of the First 

Amendment. We seek comment on this 

view. 

78. To the extent we retain an 

exclusive contract prohibition for 

satellite-delivered, cable-affiliated RSNs 

and other satellite-delivered, cableaffiliated ‘‘must have’’ programming, we 

propose to apply the prohibition 

independently to the SD and HD 

versions of the same network. As 

discussed above, the Commission has 

concluded that HD programming is 

growing in significance to consumers 

and that consumers do not consider the 

SD version of a particular channel to be 

an adequate substitute for the HD 

version due to the different technical 

characteristics and sometimes different 

content. Accordingly, the Commission 

has determined that it will analyze the 

HD version of a network separately from 

the SD version with similar content for 

purposes of determining whether an 

‘‘unfair act’’ has the purpose or effect set 

forth in Section 628(b). Because this 

same finding would appear to apply to 

an exclusive contract prohibition, we 

propose that, if a satellite-delivered, 

cable-affiliated programmer makes the 

SD version of an RSN or other ‘‘must 

have’’ programming available to 

MVPDs, this would not exempt the 

satellite-delivered, HD version of the 

RSN or other ‘‘must have’’ programming 

from the exclusive contract prohibition. 

We seek comment on this view. 

79. To the extent we retain an 

exclusive contract prohibition pursuant 

to Section 628(c)(5) only for satellitedelivered, cable-affiliated RSNs and 

other satellite-delivered, cable-affiliated 

‘‘must have’’ programming, should we 

adopt a date when this prohibition will 

sunset, subject to a review by the 

Commission in the year prior to the 

sunset date? Should the sunset date be 

five years from the current sunset date 

(i.e., until October 5, 2017), consistent 

with the two prior five-year extensions? 

80. Should we combine the two 

approaches to partial sunsetting of the 

exclusive contract prohibition, by 

adopting a market-by-market approach 

and also retaining the prohibition for 

satellite-delivered, cable-affiliated RSNs 

and other satellite-delivered, cableaffiliated ‘‘must have’’ programming? If 

so, how should the two approaches 

interrelate? If the exclusive contract 

prohibition sunsets in a specific market, 

should this sunset also apply to 

satellite-delivered, cable-affiliated RSNs 

and other satellite-delivered, cableaffiliated ‘‘must have’’ programming? 

Or, given the critical nature of RSNs and 

other ‘‘must have’’ programming for 

competition, should the exclusive 

contract prohibition for satellitedelivered, cable-affiliated RSNs and 

other satellite-delivered, cable-affiliated 

‘‘must have’’ programming continue to 

apply even if the exclusive contract 

prohibition sunsets for other satellitedelivered, cable-affiliated programming 

in the market? Should the Commission 

instead assess whether the exclusive 

contract prohibition should continue to 

apply to satellite-delivered, cableaffiliated RSNs and other satellitedelivered, cable-affiliated ‘‘must have’’ 

programming on a market-by-market 

basis, considering all of the facts and 

circumstances presented in the petition? 

5. Implementation of a Sunset in a 

Manner That Minimizes Any Potential 

Disruption for Consumers 

81. Whether we retain, sunset, or 

relax the exclusive contract prohibition, 

our goal is protect consumers and 

minimize any potential disruption. As 

an initial matter, as noted above, many 

Comcast-affiliated networks are subject 

to program access conditions adopted in 

the Comcast/NBCU Order and will 

continue to be subject to these 

conditions for six more years (until 

January 2018, assuming they are not 

modified earlier in response to a 

petition). These networks will not be 

impacted by a sunset (complete or 

partial). With respect to other satellitedelivered, cable-affiliated networks, we 

seek comment below on how sunsetting 

the exclusive contract prohibition 

(wholly or partially) will impact 

consumers, and whether a phased 

implementation of a sunset is necessary 

to minimize any potential disruption to 

consumers. As discussed above, to the 

extent the data do not support retaining 

the exclusive contract prohibition as it 

exists today, we seek comment above on 

sunsetting or relaxing the prohibition. 

To the extent the prohibition sunsets 

(wholly or partially), we envision that 

there are at least two possible scenarios 

with respect to existing affiliation 

agreements. We seek comment on which 

scenario is more likely and if there are 

any other likely scenarios. First, if the 

exclusive contract prohibition were to 

sunset, an existing affiliation agreement 

between a cable-affiliated programmer 

and an MVPD pertaining to a satellitedelivered, cable-affiliated programming 

network might allow the programmer to 

terminate or modify the existing 

agreement immediately on the effective 

date of the sunset and to instead enter 

into an exclusive contract with a cable 

operator. Second, even if the exclusive 

contract prohibition were to sunset, an 

existing affiliation agreement might 

require the satellite-delivered, cableaffiliated programmer to continue to 

provide the programming to the MVPD 

for the duration of the term of the 

affiliation agreement despite the sunset. 

We seek comment on these alternative 

scenarios below. 

a. Termination or Modification of 

Affiliation Agreements on the Effective 

Date of the Sunset 

82. To the extent that existing 

affiliation agreements permit satellitedelivered, cable-affiliated programmers 

to terminate or modify the agreements 

immediately on the effective date of the 

sunset and to instead enter into an 

exclusive contract with a cable operator, 

is there any basis to expect that many 

satellite-delivered, cable-affiliated 

programmers would terminate or 

modify existing agreements 

simultaneously and thereby cause 

significant disruption to consumers by 

depriving them of programming they 

have come to expect? Are our existing 

rules sufficient to prevent any customer 

disruption? For example, to the extent 

that a cable-affiliated programmer 

terminates or modifies an existing 

affiliation agreement with an MVPD 

pertaining to a satellite-delivered, cableaffiliated programming network and 

instead enters into an exclusive 

arrangement with a cable operator, the 

MVPD could file a complaint alleging a 

violation of Section 628(b) of the Act 

(and, potentially, Section 628(c)(2)(B) of 

the Act). While our program access rules 

contain specific procedures for the filing 

of a petition for a standstill along with 

a program access complaint when 

seeking to renew an existing affiliation 

agreement, should our standstill 

procedures also apply when an MVPD 

files a program access complaint based 

on a satellite-delivered, cable-affiliated 

programmer’s mid-term termination or 

modification of an affiliation agreement 

resulting from the sunset? If the 

standstill petition is granted, the price, 

terms, and other conditions of the 

existing affiliation agreement will 

remain in place pending resolution of 

the program access complaint, thereby 

reducing consumer disruption. 

83. Rather than relying on the 

complaint and standstill process, should 

we instead abrogate provisions of 

affiliation agreements that would allow 

satellite-delivered, cable-affiliated 

programmers to terminate or modify 

their existing agreements with MVPDs 

immediately on the effective date of the 

sunset? We seek comment regarding the 

benefits and burdens of abrogating 

contractual provisions that otherwise 

would permit a programmer to 

terminate or modify its existing 

agreement with an unaffiliated MVPD 


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immediately upon sunset of the 

exclusive contract prohibition. We seek 

comment regarding how the abrogation 

of such contractual provisions would be 

congruous with a possible finding to 

sunset the exclusive contract 

prohibition. In NCTA v. FCC, the D.C. 

Circuit upheld the Commission’s 

abrogation of existing contracts in the 

program access context. Alternatively, 

to minimize any potential disruption to 

consumers, should we adopt a phased 

implementation of the sunset? For 

example, should we provide that, for a 

period of three years from the sunset 

date, a cable-affiliated programmer 

cannot enter into an exclusive contract 

with a cable operator for a satellitedelivered, cable-affiliated programming 

network that is an RSN (assuming the 

prohibition is not retained for RSNs) or 

is ranked within the Top 20 cable 

networks as measured by either prime 

time ratings, average all-day ratings, or 

total number of subscribers? Should we 

adopt a similar restriction, for a period 

of two years from the sunset date, for a 

satellite-delivered, cable-affiliated 

programming network that is ranked 

within the Top 21–50 cable networks? 

We seek comment on these proposals 

and any other appropriate ways to 

minimize any disruption to consumers 

resulting from the sunset in the event 

that existing affiliation agreements 

permit satellite-delivered, cableaffiliated programmers to terminate or 

modify them on the effective date of the 

sunset. 

b. Continued Enforcement of Existing 

Affiliation Agreements Despite the 

Sunset 

84. To the extent that existing 

affiliation agreements require cableaffiliated programmers to continue to 

provide satellite-delivered, cableaffiliated programming networks to 

MVPDs for the duration of the term of 

the existing agreement despite the 

sunset of the exclusive contract 

prohibition, we seek comment on the 

interplay between the sunset and the 

discrimination provision of the program 

access rules. For example, assume that 

a cable-affiliated programmer has 

existing affiliation agreements for a 

satellite-delivered, cable-affiliated 

programming network with three 

MVPDs (including one cable operator) 

subject to the following termination 

dates: December 31, 2012 (cable 

operator); December 31, 2013 (MVPD 

A); December 31, 2014 (MVPD B). If the 

satellite-delivered, cable-affiliated 

programmer enters into an exclusive 

contract with the cable operator after its 

current agreement expires on December 

31, 2012, would the satellite-delivered, 

cable-affiliated programmer be required 

to make the programming available to 

all MVPDs until after the expiration of 

the latest-expiring affiliation agreement 

with an MVPD other than the cable 

operator that is a party to the exclusive 

contract? We seek comment on whether 

it would be impermissibly 

discriminatory in violation of Section 

628(c)(2)(B) if the satellite-delivered, 

cable-affiliated programmer were to 

refuse to license the network to MVPD 

A after December 31, 2013, while 

continuing to provide the programming 

to MVPD B until its agreement expires 

on December 31, 2014, based on the 

future enforcement of an exclusive 

contract with the cable operator as of 

January 1, 2015, after the expiration of 

the agreement with MVPD B. While the 

satellite-delivered, cable-affiliated 

programmer’s discriminatory treatment 

of MVPD A relative to MVPD B and the 

cable operator during the period of 

December 31, 2013 to December 31, 

2014 might be justified based on a 

legitimate business reason, is the future 

enforcement of an exclusive contract a 

legitimate business reason for such 

discriminatory conduct? If not, then the 

satellite-delivered, cable-affiliated 

programmer would not be permitted to 

have the exclusivity period with the 

cable operator begin, or to refuse to 

license the programming to other 

MVPDs, until all affiliation agreements 

with other MVPDs expire. Thus, in this 

scenario, absent a legitimate business 

reason, the satellite-delivered, cableaffiliated programmer would be 

required to enter into an affiliation 

agreement with MVPD A that terminates 

no earlier than December 31, 2014 (i.e., 

the expiration of the latest-expiring 

affiliation agreement with an MVPD 

other than the cable operator that is a 

party to the exclusive contract). We seek 

comment on this view. 

85. To the extent that affiliation 

agreements require cable-affiliated 

programmers to continue to provide 

satellite-delivered, cable-affiliated 

programming networks to MVPDs for 

the duration of the term of the existing 

agreement despite the sunset, does the 

anti-discrimination provision of Section 

628(c)(2)(B) as described here prevent 

the enforcement of any exclusive 

contract until the expiration of the 

latest-expiring affiliation agreement 

with an MVPD other than the cable 

operator that is a party to the exclusive 

contract? Will this limit the immediate 

impact of the sunset (complete or 

partial) and help to minimize any 

potential disruption to consumers? 

What impact, if any, does Section 

628(c)(2)(B)(iv) have on this discussion? 

Even if this section could be read to 

immunize post-sunset exclusive 

contracts from being challenged as 

impermissibly discriminatory in 

violation of Section 628(c)(2)(B), would 

this provision allow a satellitedelivered, cable-affiliated programmer 

to selectively refuse to license 

programming to certain MVPDs based 

on future enforcement of an exclusive 

contract, as described here? 

6. First Amendment 

86. We ask commenters to consider 

carefully how the First Amendment 

impacts our review of the exclusive 

contract prohibition, including the 

proposals to relax the prohibition. As 

the D.C. Circuit explained in rejecting a 

facial challenge to the constitutionality 

of the program access provisions, these 

provisions will survive intermediate 

scrutiny if they ‘‘further[] an important 

or substantial governmental interest; if 

the governmental interest is unrelated to 

the suppression of free expression; and 

if the incidental restriction on alleged 

First Amendment freedoms is no greater 

than is essential to the furtherance of 

that interest.’’ Given the current state of 

competition in the video programming 

market and the video distribution 

market, does the First Amendment 

require the exclusive contract 

prohibition as it exists today to sunset 

or to be relaxed? Is a prohibition on all 

exclusive contracts in all markets 

between cable operators and cableaffiliated programmers pertaining to 

satellite-delivered, cable-affiliated 

programming ‘‘no greater than is 

essential’’ to the furtherance of the 

substantial government interest in 

promoting competition in the MVPD 

market? Would retaining the prohibition 

only for satellite-delivered, cableaffiliated RSNs and other satellitedelivered, cable-affiliated ‘‘must have’’ 

programming, and/or allowing the 

prohibition to sunset on a market-bymarket basis, be a sufficiently tailored 

approach? 

87. We note that, in rejecting a facial 

First Amendment challenge to the 2010 

Program Access Order in which the 

Commission adopted a case-by-case 

approach for considering unfair acts 

involving terrestrially delivered, cableaffiliated programming, the D.C. Circuit 

explained that, ‘‘[b]y imposing liability 

only when complainants demonstrate 

that a company’s unfair act has ‘the 

purpose or effect’ of ‘hinder[ing] 

significantly or * * * prevent[ing]’ the 

provision of satellite programming, 

* * * the Commission’s terrestrial 

programming rules specifically target 

activities where the governmental 

interest is greatest.’’ Moreover, the D.C. 


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21See Applications for Consent to the Assignment 

and/or Transfer of Control of Licenses, Adelphia 

Communications Corporation, Assignors to Time 

Warner Cable, Inc., Assignees, et al., Memorandum 

Opinion and Order, 21 FCC Rcd 8203, 8274, paras. 

156–157 (2006) (‘‘Adelphia Order’’) (requiring 

terrestrially delivered RSNs in which Time Warner 

has or acquires an attributable interest to comply 

with the program access rules applicable to 

satellite-delivered, cable-affiliated programming, 

citing 47 CFR 76.1002), 8276, para. 162, and 8336, 

Appendix B, sec. B.1 (citing 47 CFR 76.1002); see 

also Time Warner Order, 24 FCC Rcd at 893, para. 

26 (approving transaction separating Time Warner 

from TWC and explaining that the Adelphia Order 

program access conditions will continue to apply to 

TWC post-restructuring but will no longer apply to 

Time Warner). An RSN as defined in the Adelphia 

Order is ‘‘any non-broadcast video programming 

service that (1) provides live or same-day 

distribution within a limited geographic region of 

sporting events of a sports team that is a member 

of Major League Baseball, the National Basketball 

Association, the National Football League, the 

National Hockey League, NASCAR, NCAA Division 

I Football, NCAA Division I Basketball and (2) in 

any year, carries a minimum of either 100 hours of 

programming that meets the criteria of subheading 

1, or 10% of the regular season games of at least 

one sports team that meets the criteria of 

subheading 1.’’ Adelphia Order, 21 FCC Rcd at 

Circuit stated that the Commission, in 

adopting this case-by-case approach, 

‘‘has no obligation to establish that 

vertically integrated cable companies 

retain a stranglehold on competition 

nationally or that all withholding of 

terrestrially delivered programming 

negatively affects competition.’’ Is a 

case-by-case approach pursuant to 

Section 628(b) (and, potentially, Section 

628(c)(2)(B)) or a narrowed application 

of the exclusive contract prohibition as 

discussed above, rather than the current 

broad, prophylactic prohibition, 

preferable under the First Amendment 

given the competitive environment 

today? We also seek comment on the 

First Amendment implications of a 

phased implementation of a sunset as 

discussed above to minimize any 

potential disruption to consumers. 

7. Costs and Benefits 

88. In addition to the specific 

questions noted above, we ask 

commenters to consider generally the 

costs and benefits associated with either 

retaining, sunsetting, or relaxing the 

exclusive contract prohibition as 

described herein. We believe that 

retaining the exclusive contract 

prohibition in its entirety as it exists 

today will result in certain costs, such 

as unnecessarily restricting 

procompetitive arrangements that in 

certain instances may foster competition 

in the video distribution market and 

promote competition and diversity in 

the video programming market. While a 

case-by-case approach, either pursuant 

to a Section 628(b) complaint (and, 

potentially, a Section 628(c)(2)(B) 

complaint) or a market-based petition, 

will better enable the Commission to 

consider the unique facts and 

circumstances presented in each case, 

this approach will also result in certain 

costs by requiring the affected parties 

and the Commission to expend 

resources litigating and resolving the 

complaints and petitions. Retaining an 

exclusive contract prohibition for 

programming that is demonstrated to be 

important for competition, nonreplicable, and without good substitutes 

(i.e., satellite-delivered, cable-affiliated 

RSNs and other satellite-delivered, 

cable-affiliated ‘‘must have’’ 

programming), may help to reduce these 

costs by eliminating the need to file 

complaints with respect to this class of 

programming. To the extent possible, 

we encourage commenters to quantify 

the costs and benefits of the different 

approaches to the exclusive contract 

prohibition as described herein. Which 

of the approaches would be most 

beneficial to the public? When would 

the public realize these benefits? Which 

of these approaches would be least 

burdensome? 

8. Subdistribution Agreements 

89. We seek comment on the impact 

of a sunset (complete or partial) of the 

exclusive contract prohibition on the 

Commission’s rules pertaining to 

exclusive subdistribution agreements. 

The Commission’s rules define a 

subdistribution agreement as ‘‘an 

arrangement by which a local cable 

operator is given the right by a satellite 

cable programming vendor or satellite 

broadcast programming vendor to 

distribute the vendor’s programming to 

competing multichannel video 

programming distributors.’’ Based on 

the exclusive contract prohibition, the 

Commission in the 1993 Program 

Access Order adopted certain 

restrictions on exclusive subdistribution 

agreements to ‘‘address any incentives 

for a subdistributor to refuse to sell to 

a competing MVPD that may be inherent 

in such rights’’ and to ensure 

‘‘appropriate safeguards to limit the 

potential for anticompetitive behavior.’’ 

Specifically, a cable operator engaged in 

subdistribution (i) may not require a 

competing MVPD to purchase 

additional or unrelated programming as 

a condition of such subdistribution; (ii) 

may not require a competing MVPD to 

provide access to private property in 

exchange for access to programming; 

(iii) may not charge a competing MVPD 

more for programming than the satellite 

cable programming vendor or satellite 

broadcast programming vendor itself 

would be permitted to charge; and (iv) 

must respond to a request for access to 

such programming by a competing 

MVPD within fifteen (15) days of the 

request and, if the request is denied, the 

competing MVPD must be permitted to 

negotiate directly with the satellite cable 

programming vendor or satellite 

broadcast programming vendor. We 

propose to eliminate these restrictions 

to the extent the exclusive contract 

prohibition sunsets and seek comment 

on this proposal. 

9. Common Carriers and Open Video 

Systems 

90. The Commission’s rules contain 

provisions pertaining to exclusive 

contracts involving common carriers 

and OVS in served areas that mirror the 

rules applicable to exclusive contracts 

between cable operators and satellitedelivered, cable-affiliated programmers 

in served areas. With respect to common 

carriers, these rules pertain to exclusive 

contracts between a satellite-delivered, 

common-carrier-affiliated programmer 

and a common carrier or its affiliate that 

provides video programming by any 

means directly to subscribers. With 

respect to OVS, these rules pertain to 

exclusive contracts (i) between a 

satellite-delivered, OVS-affiliated 

programmer and an OVS or its affiliate 

that provides video programming on its 

OVS; and (ii) between a satellitedelivered, cable-affiliated programmer 

and an OVS video programming 

provider in which a cable operator has 

an attributable interest. We propose that 

any amendments we adopt herein to our 

rules pertaining to exclusive contracts 

between cable operators and satellitedelivered, cable-affiliated programmers 

in served areas will apply equally to 

these rules pertaining to common 

carriers and OVS. We also propose to 

conform the rules pertaining to 

exclusive subdistribution agreements 

involving OVS to the rules applicable to 

cable operators and seek comment on 

this proposal. 

10. Impact of a Sunset on Existing 

Merger Conditions 

91. We believe that conditions 

adopted in two previous merger orders 

may be impacted if the exclusive 

contract prohibition were to sunset 

(wholly or partially). We seek comment 

on this impact below. 

a. Adelphia Order Merger Conditions 

92. Pursuant to merger conditions 

adopted in the Adelphia Order, certain 

terrestrially delivered RSNs (‘‘Covered 

RSNs’’) affiliated with TWC are 

currently required to comply with the 

program access rules applicable to 

satellite-delivered, cable-affiliated 

programming, including the exclusive 

contract prohibition.21 Among other 


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8336, Appendix B, sec. A. While these conditions 

originally applied to Comcast as well, they were 

superseded by the Comcast/NBCU Order. See 

Comcast/NBCU Order, 26 FCC Rcd at 4364, 

Appendix A, Condition VI. 

22Applications for Consent to the Assignment 

and/or Transfer of Control of Licenses, News 

Corporation. and The DIRECTV Group, Inc., 

Transferors, to Liberty Media Corporation., 

Transferee, Memorandum Opinion and Order, 23 

FCC Rcd 3265 (2008) (‘‘Liberty Media Order’’). The 

conditions state that the term ‘‘Liberty Media’’ 

includes ‘‘any entity or program rights holder in 

which Liberty Media or John Malone holds an 

attributable interest. Thus, the term ‘Liberty Media’ 

includes Discovery Communications.’’ Id. at 3340– 

41 n.3. Moreover, the conditions provide that 

‘‘Liberty Media and DIRECTV are prohibited from 

acquiring an attributable interest in any nonbroadcast national or regional programming service 

while these conditions are in effect if the 

programming service is not obligated to abide by 

such conditions.’’ Id. 

things, the conditions state as follows 

with respect to exclusivity (the 

‘‘exclusivity conditions’’): 

(i) ‘‘Time Warner [Cable], and [its] existing 

or future Covered RSNs, regardless of the 

means of delivery, shall not offer any such 

RSN on an exclusive basis to any MVPD, and 

* * * Time Warner [Cable], and [its] Covered 

RSNs, regardless of the means of delivery, are 

required to make such RSNs available to all 

MVPDs on a non-exclusive basis * * *’’; 

(ii) ‘‘Time Warner [Cable] will not enter 

into an exclusive distribution arrangement 

with any such Covered RSN, regardless of the 

means of delivery’’; and 

(iii) ‘‘Th[is] exclusive contracts and 

practices * * * requirement of the program 

access rules will apply to Time Warner 

[Cable] and [its] Covered RSNs for six years, 

provided that if the program access rules are 

modified this condition shall be modified to 

conform to any revised rules adopted by the 

Commission.’’ 

93. These conditions are scheduled to 

expire in July 2012. Depending on 

whether and how we revise the 

exclusive contract prohibition, and if we 

do so before these conditions expire, we 

may need to modify these exclusivity 

conditions to conform to our revised 

rules. We envision four alternative 

scenarios. First, to the extent that we 

retain the exclusive contract prohibition 

in its entirety as it exists today, 

including for RSNs, there will be no 

need to modify the exclusivity 

conditions because the program access 

rules will remain the same. Second, to 

the extent that we retain an exclusive 

contract prohibition for satellitedelivered, cable-affiliated RSNs and 

other satellite-delivered, cable-affiliated 

‘‘must have’’ programming only, there 

will be no need to modify the 

exclusivity conditions because the 

exclusive contract prohibition will 

remain the same with respect to RSNs. 

Third, to the extent we establish a 

process whereby a cable operator or 

satellite-delivered, cable-affiliated 

programmer can seek to remove the 

exclusive contract prohibition on a 

market-by-market basis, and grant of 

such a petition includes RSNs, then we 

would expect to modify the exclusivity 

conditions to provide that Covered 

RSNs in markets covered by such a 

petition (if granted) will no longer be 

subject to these exclusivity conditions. 

If the grant of such a petition does not 

include RSNs, however, there will be no 

need to modify the exclusivity 

conditions because the exclusive 

contract prohibition will remain the 

same with respect to RSNs. Fourth, to 

the extent we sunset the exclusive 

contract prohibition in its entirety, 

including for RSNs, then we would 

expect to modify the exclusivity 

conditions to provide that Covered 

RSNs will no longer be subject to these 

exclusivity conditions; rather, exclusive 

contracts for Covered RSNs may be 

assessed on a case-by-case basis in 

response to a program access complaint 

alleging a violation of Section 628(b) 

(and, potentially, Section 628(c)(2)(B)). 

We seek comment on this interpretation. 

b. Liberty Media Order Merger 

Conditions 

94. Pursuant to merger conditions 

adopted in the Liberty Media Order,22

certain programmers affiliated with 

Liberty Media and DIRECTV are subject 

to the following conditions (the 

‘‘exclusivity conditions’’), among others: 

(i) ‘‘Liberty Media shall not offer any of its 

existing or future national and regional 

programming services on an exclusive basis 

to any MVPD. Liberty Media shall continue 

to make such services available to all MVPDs 

on a non-exclusive basis * * *’’; 

(ii) ‘‘DIRECTV will not enter into an 

exclusive distribution arrangement with any 

Affiliated Program Rights Holder.’’; 

(iii) ‘‘As long as Liberty Media holds an 

attributable interest in DIRECTV, DIRECTV 

will deal with any Affiliated Program Rights 

Holder with respect to programming services 

the Affiliated Program Rights Holder controls 

as a vertically integrated programmer subject 

to the program access rules.’’; 

(iv) ‘‘These conditions will apply to Liberty 

Media, DIRECTV, and any Affiliated Program 

Rights Holder until the later of a 

determination by the Commission that 

Liberty Media no longer holds an attributable 

interest in DIRECTV or the Commission’s 

program access rules no longer remain in 

effect (provided that if the program access 

rules are modified these commitments shall 

be modified, as the Commission deems 

appropriate, to conform to any revised rules 

adopted by the Commission).’’ 

95. These particular Liberty Media 

Order conditions differ from similar 

conditions in the Adelphia Order in that 

(i) they apply not only to RSNs, but to 

both national and regional programming 

services; and (ii) they do not expire after 

the passage of a certain period of time. 

Depending on whether and how we 

revise the exclusive contract prohibition 

of the program access rules, we may 

need to modify these exclusivity 

conditions to conform to our revised 

rules. First, to the extent that we retain 

the exclusive contract prohibition in its 

entirety as it exists today, there will be 

no need to modify the exclusivity 

conditions because the program access 

rules will remain the same. Second, to 

the extent that we retain an exclusive 

contract prohibition for satellitedelivered, cable-affiliated RSNs and 

other satellite-delivered, cable-affiliated 

‘‘must have’’ programming only, there 

will be no need to modify the 

exclusivity conditions with respect to 

RSNs and other ‘‘must have’’ 

programming because the exclusive 

contract prohibition will remain the 

same with respect to such programming. 

With respect to non-RSN programming 

and other programming that is not 

deemed ‘‘must have,’’ however, we 

would expect to modify the exclusivity 

conditions to provide that exclusive 

contracts involving such programming 

will no longer be prohibited. To the 

extent any covered non-RSN/non-‘‘must 

have’’ programming is cable-affiliated, 

however, exclusive contracts may be 

assessed on a case-by-case basis in 

response to a program access complaint 

alleging a violation of Section 628(b) 

(and, potentially, Section 628(c)(2)(B)). 

Third, to the extent we establish a 

process whereby a cable operator or 

satellite-delivered, cable-affiliated 

programmer can seek to remove the 

exclusive contract prohibition on a 

market-by-market basis, and grant of 

such a petition includes satellitedelivered, cable-affiliated RSNs and 

other satellite-delivered, cable-affiliated 

‘‘must have’’ programming, then we 

would expect to modify the exclusivity 

conditions to provide that exclusive 

contracts in markets covered by such a 

petition (if granted) will not be 

prohibited under these conditions. If the 

grant of such a petition does not include 

satellite-delivered, cable-affiliated RSNs 

and other satellite-delivered, cableaffiliated ‘‘must have’’ programming, 

however, there will be no need to 

modify the exclusivity conditions with 

respect to RSNs and other ‘‘must have’’ 

programming because the exclusive 

contract prohibition will remain the 

same with respect to such programming. 

Fourth, to the extent we sunset the 

exclusive contract prohibition in its 

entirety, including for satellitedelivered, cable-affiliated RSNs and 

other satellite-delivered, cable-affiliated 


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23 In contrast to the Adelphia Order and the 

Liberty Media Order, there is no provision in the 

Comcast/NBCU Order requiring the conditions 

adopted therein to be modified to conform to 

changes the Commission makes to the program 

access rules. See Comcast/NBCU Order, 26 FCC Rcd 

at 4381, Appendix A, Condition XX (stating that the 

conditions will remain in effect for seven years, 

provided that the Commission will consider a 

petition from Comcast/NBCU for modification of a 

condition if they can demonstrate that there has 

been a material change in circumstances, or that the 

condition has proven unduly burdensome, such 

that the Condition is no longer necessary in the 

public interest). Accordingly, the conditions 

adopted in the Comcast/NBCU Order will not be 

affected by the rule changes adopted in this 

proceeding. 

‘‘must have’’ programming, then we 

would expect to modify the exclusivity 

conditions to provide that exclusive 

contracts will not be prohibited. Again, 

however, to the extent any of the 

covered programming is cable-affiliated, 

exclusive contracts will be assessed on 

a case-by-case basis in response to a 

program access complaint alleging a 

violation of Section 628(b) (and, 

potentially, Section 628(c)(2)(B)). We 

seek comment on this interpretation.23

B. Potential Revisions to the Program 

Access Rules To Better Address Alleged 

Violations 

96. The Commission initially adopted 

its program access rules in 1993. Other 

than the previous extensions of the 

exclusive contract prohibition and 

certain procedural changes, including 

the adoption of a process for the award 

of damages, establishing aspirational 

deadlines for the processing of 

complaints, and implementing party-toparty discovery, these rules have 

remained largely unchanged since this 

time. We seek comment on how our 

rules can be improved, especially in 

light of marketplace developments and 

commenters’ experience with these 

rules over the past two decades. 

1. Procedural Rules 

97. As an initial matter, while our 

program access procedural rules provide 

a defendant with 20 days after service 

of a complaint to file an answer, the 

Commission has provided defendants 

with 45 days from the date of service to 

file an answer to a Section 628(b) 

complaint alleging an ‘‘unfair act’’ 

involving terrestrially delivered, cableaffiliated programming to ensure that 

the defendant has adequate time to 

develop a response. The Commission 

explained that additional time was 

appropriate because, unlike complaints 

alleging a violation of the prohibitions 

in Section 628(c), a complaint alleging 

a violation of Section 628(b) entails 

additional factual inquiries, including 

whether the allegedly ‘‘unfair act’’ at 

issue has the purpose or effect set forth 

in Section 628(b). To the extent the 

exclusive contract prohibition were to 

sunset (wholly or partially), we propose 

to adopt the same 45-day answer period 

in complaint proceedings alleging that 

an exclusive contract involving satellitedelivered, cable-affiliated programming 

violates Section 628(b). We seek 

comment on this proposal. Because all 

complaints alleging a violation of 

Section 628(b) will involve the claim 

that the conduct at issue has the 

purpose or effect set forth in Section 

628(b), we propose to amend our rules 

to provide for a 45-day answer period 

for all complaints alleging a violation of 

Section 628(b). We seek comment on 

this proposal. Are there any other 

changes we should make to our program 

access procedural rules to accommodate 

the case-by-case consideration of 

exclusive contracts involving satellitedelivered, cable-affiliated programming 

under Section 628(b)? 

2. Volume Discounts 

98. We also seek comment on whether 

our program access rules adequately 

address potentially discriminatory 

volume discounts and, if not, how these 

rules should be revised to address these 

concerns. Some MVPDs have expressed 

concern that cable-affiliated 

programmers charge larger MVPDs less 

for programming on a per-subscriber 

basis than smaller MVPDs due to 

volume discounts, which are based on 

the number of subscribers the MVPD 

serves. As a result, smaller MVPDs 

claim that they are placed at a 

significant cost disadvantage relative to 

larger MVPDs. Some commenters have 

claimed that this price differential is not 

cost-based because program production 

and acquisition costs are sunk; delivery 

costs do not vary; and administrative 

costs are not different. According to 

some commenters, without a basis in 

cost, this wholesale practice amounts to 

price discrimination. 

99. The anti-discrimination provision 

in Section 628(c)(2)(B) of the Act 

provides that it is not impermissibly 

discriminatory for a satellite-delivered, 

cable-affiliated programmer to 

‘‘establish[] different prices, terms, and 

conditions which take into account 

economies of scale, cost savings, or 

other direct and legitimate economic 

benefits reasonably attributable to the 

number of subscribers served by the 

distributor.’’ The Commission’s rules 

provide that: 

Vendors may use volume-related 

justifications to establish price differentials 

to the extent that such justifications are made 

available to similarly situated distributors on 

a technology-neutral basis. When relying 

upon standardized volume-related factors 

that are made available to all multichannel 

video programming distributors using all 

technologies, the vendor may be required to 

demonstrate that such volume discounts are 

reasonably related to direct and legitimate 

economic benefits reasonably attributable to 

the number of subscribers served by the 

distributor if questions arise about the 

application of that discount. In such 

demonstrations, vendors will not be required 

to provide a strict cost justification for the 

structure of such standard volume-related 

factors, but may also identify non-cost 

economic benefits related to increased 

viewership. 

Thus, the Commission’s rules 

contemplate that an MVPD may file a 

program access complaint challenging 

volume-based pricing in certain 

circumstances. In the Comcast/NBCU 

Order, the Commission declined to 

adopt a condition that would prohibit 

Comcast-NBCU from offering volumebased discounts for its video 

programming, finding such a 

prohibition to be unnecessary because 

‘‘the specific matter of volume-based 

discounts is adequately addressed by 

the Commission’s program access 

rules.’’ 

100. Despite the concerns expressed 

by some MVPDs regarding allegedly 

discriminatory volume discounts and 

the availability of the existing complaint 

process, the Commission has not 

received program access complaints 

alleging that particular volume 

discounts violate Section 628(c)(2)(B) of 

the Act. We seek information about 

specific instances of perceived volume 

discount discrimination, along with 

explanations of why the alleged conduct 

amounts to a violation of the 

Commission’s rules. We seek comment 

on the reasons for the lack of program 

access complaints alleging 

discriminatory volume discounts, 

despite the apparent concern among 

some MVPDs regarding this issue. Do 

our current program access rules and 

procedures prevent or discourage the 

filing of legitimate complaints 

pertaining to this issue? Is the complaint 

process too costly and time-consuming 

with respect to complaints alleging 

price discrimination? If so, we seek 

comment on how we might improve our 

rules and procedures to avoid impeding 

the filing of legitimate complaints. Are 

there procedural tools we might use, 

such as establishing rebuttable 

presumptions, that will expedite the 

complaint process while ensuring 

fairness to all parties? While the 

Commission has stated that satellitedelivered, cable-affiliated programmers 

may justify volume discounts based on 

‘‘non-cost economic benefits’’ related to 


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increased viewership, it has not defined 

these benefits in the rules. Should we 

continue to consider ‘‘non-cost 

economic benefits’’ on a case-by-case 

basis due to the various factors, such as 

advertising and online and VOD 

offerings, that can be considered in 

setting prices? Should our rules 

specifically list those ‘‘non-cost 

economic benefits’’ related to increased 

viewership that might justify volume 

discounts? If so, what non-cost 

economic benefits should be identified? 

Should these benefits be limited to 

increased advertising revenues resulting 

from increased viewership? Should 

satellite-delivered, cable-affiliated 

programmers be required to demonstrate 

in response to a complaint the increase 

in advertising revenues resulting from 

licensing programming to a larger 

MVPD and how this increase justifies 

the volume discount provided to the 

larger MVPD relative to the 

complainant? 

3. Uniform Price Increases 

101. We also seek comment on 

whether and how we should revise our 

rules to address uniform price increases 

imposed by satellite-delivered, cableaffiliated programmers. In previous 

merger decisions, the Commission has 

discussed the possibility that a 

vertically integrated cable operator 

could disadvantage its competitors in 

the video distribution market by raising 

the price of a network to all distributors 

(including itself) to a level greater than 

that which would be charged by a nonvertically integrated supplier. The 

Commission explained that a vertically 

integrated cable operator might employ 

such a strategy to raise its rivals’ costs. 

Because rival MVPDs would have to pay 

more for the programming, they would 

likely respond either by raising their 

prices to subscribers, not purchasing the 

programming, or reducing marketing 

activities. The vertically integrated cable 

operator could then enjoy a competitive 

advantage, because the higher price for 

the programming that it would pay 

would be an internal transfer that it 

could disregard when it sets its own 

prices. By forcing its competitors either 

to pay more for the programming and 

increase their retail rates, or forgo 

purchasing the programming, the 

vertically integrated cable operator 

could raise its prices to some extent 

without losing subscribers. The 

Commission has also stated that this 

strategy of uniform price increases does 

not necessarily violate the antidiscrimination provision of the program 

access rules because the price increases 

would be applied to all distributors 

equally and thus does not involve 

discriminatory conduct. In previous 

merger orders, the Commission has 

sought to address this issue by adopting 

a baseball-style arbitration remedy to 

maintain the pre-integration balance of 

bargaining power between vertically 

integrated programming networks and 

rival MVPDs. 

102. We seek comment on whether 

and how we should revise our rules to 

address uniform price increases 

imposed by satellite-delivered, cableaffiliated programmers. We also seek 

comment on actual experiences of 

discriminatory uniform price increases. 

Is there any basis to interpret the antidiscrimination provision in Section 

628(c)(2)(B) as applying to uniform 

price increases? We note that, in 

employment law, a practice that appears 

facially neutral may nonetheless be 

discriminatory if it has a disparate 

impact on a certain class. While a 

uniform price increase appears facially 

neutral in that it applies to all MVPDs 

equally, it has a disparate impact on 

MVPDs that are not affiliated with the 

cable-affiliated programmer because the 

price increase is not merely an internal 

transfer for unaffiliated MVPDs. To the 

extent that a uniform price increase is 

not covered by the anti-discrimination 

provision in Section 628(c)(2)(B), can it 

be addressed on a case-by-case basis in 

a Section 628(b) complaint alleging that 

a uniform price increase is an ‘‘unfair 

act’’ that has the ‘‘purpose or effect’’ of 

‘‘significantly hindering or preventing’’ 

an MVPD from providing satellite cable 

programming or satellite broadcast 

programming to subscribers or 

consumers? To the extent that a uniform 

price increase is actionable under 

Section 628(c)(2)(B) or Section 628(b), 

how can we distinguish an 

anticompetitive uniform price increase 

intended to raise rivals’ costs from a 

price increase dictated by the market? 

IV. Procedural Matters 

A. Initial Regulatory Flexibility Act 

Analysis 

103. As required by the Regulatory 

Flexibility Act of 1980, as amended 

(‘‘RFA’’), the Commission has prepared 

this present Initial Regulatory 

Flexibility Analysis (‘‘IRFA’’) 

concerning the possible significant 

economic impact on small entities by 

the policies and rules proposed in the 

Notice of Proposed Rulemaking 

(‘‘NPRM’’). Written public comments are 

requested on this IRFA. Comments must 

be identified as responses to the IRFA 

and must be filed by the deadlines for 

comments on the NPRM specified 

supra. The Commission will send a 

copy of the NPRM, including this IRFA, 

to the Chief Counsel for Advocacy of the 

Small Business Administration 

(‘‘SBA’’). In addition, the NPRM and 

IRFA (or summaries thereof) will be 

published in the Federal Register. 

Need for, and Objectives of, the 

Proposed Rule Changes 

104. We issue the NPRM to seek 

comment on (i) whether to retain, 

sunset, or relax one of the several 

protections afforded to multichannel 

video programming distributors 

(‘‘MVPDs’’) by the program access 

rules—the prohibition on exclusive 

contracts involving satellite-delivered, 

cable-affiliated programming; and (ii) 

potential revisions to our program 

access rules to better address alleged 

violations, including potentially 

discriminatory volume discounts and 

uniform price increases. 

105. In areas served by a cable 

operator, Section 628(c)(2)(D) of the 

Communications Act of 1934, as 

amended (the ‘‘Act’’), generally 

prohibits exclusive contracts for satellite 

cable programming or satellite broadcast 

programming between any cable 

operator and any cable-affiliated 

programming vendor (the ‘‘exclusive 

contract prohibition’’). The exclusive 

contract prohibition applies to all 

satellite-delivered, cable-affiliated 

programming and presumes that an 

exclusive contract will cause 

competitive harm in every case, 

regardless of the type of programming at 

issue. The exclusive contract 

prohibition applies only to 

programming which is delivered via 

satellite; it does not apply to 

programming which is delivered via 

terrestrial facilities. In January 2010, the 

Commission adopted rules providing for 

the processing of complaints alleging 

that an ‘‘unfair act’’ involving 

terrestrially delivered, cable-affiliated 

programming violates Section 628(b) of 

the Act. Thus, while an exclusive 

contract involving satellite-delivered, 

cable-affiliated programming is 

generally prohibited, an exclusive 

contract involving terrestrially 

delivered, cable-affiliated programming 

is permitted unless the Commission 

finds in response to a complaint that it 

violates Section 628(b) of the Act. 

106. In Section 628(c)(5) of the Act, 

Congress provided that the exclusive 

contract prohibition would cease to be 

effective on October 5, 2002, unless the 

Commission found that it ‘‘continues to 

be necessary to preserve and protect 

competition and diversity in the 

distribution of video programming.’’ In 

June 2002, the Commission found that 

the exclusive contract prohibition 

continued to be necessary to preserve 


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and protect competition and diversity 

and retained the exclusive contract 

prohibition for five years, until October 

5, 2007. The Commission provided that, 

during the year before the expiration of 

the five-year extension, it would 

conduct a second review to determine 

whether the exclusive contract 

prohibition continued to be necessary to 

preserve and protect competition and 

diversity in the distribution of video 

programming. After conducting such a 

review, the Commission in September 

2007 concluded that the exclusive 

contract prohibition was still necessary, 

and it retained the prohibition for five 

more years, until October 5, 2012. The 

Commission again provided that, during 

the year before the expiration of the 

five-year extension, it would conduct a 

third review to determine whether the 

exclusive contract prohibition continues 

to be necessary to preserve and protect 

competition and diversity in the 

distribution of video programming. 

107. Accordingly, in this NPRM, we 

initiate the third review of the necessity 

of the exclusive contract prohibition. In 

the NPRM, we present certain data on 

the current state of competition in the 

video distribution market and the video 

programming market, and we invite 

commenters to submit more recent data 

or empirical analyses. We seek comment 

on whether current conditions in the 

video marketplace support retaining, 

sunsetting, or relaxing the exclusive 

contract prohibition. To the extent that 

the data do not support retaining the 

exclusive contract prohibition as it 

exists today, we seek comment on 

whether we can preserve and protect 

competition in the video distribution 

market by either: 

• Sunsetting the exclusive contract 

prohibition in its entirety and instead 

relying solely on existing protections 

provided by the program access rules 

that will not sunset: (i) The case-by-case 

consideration of exclusive contracts 

pursuant to Section 628(b) of the Act; 

(ii) the prohibition on discrimination in 

Section 628(c)(2)(B) of the Act; and (iii) 

the prohibition on undue or improper 

influence in Section 628(c)(2)(A) of the 

Act; or 

• Relaxing the exclusive contract 

prohibition by (i) establishing a process 

whereby a cable operator or satellitedelivered, cable-affiliated programmer 

can seek to remove the prohibition on 

a market-by-market basis based on the 

extent of competition in the market; (ii) 

retaining the prohibition only for 

satellite-delivered, cable-affiliated 

Regional Sports Networks (‘‘RSNs’’) and 

any other satellite delivered, cableaffiliated programming that the record 

here establishes as being important for 

competition and non-replicable and 

having no good substitutes; and/or (iii) 

other ways commenters propose. 

We seek comment also on (i) how to 

implement a sunset (complete or partial) 

to minimize any potential disruption to 

consumers; (ii) the First Amendment 

implications of the alternatives 

discussed herein; (iii) the costs and 

benefits of the alternatives discussed 

herein; and (iv) the impact of a sunset 

on existing merger conditions. 

108. In addition, we seek comment in 

the NPRM on potential improvements to 

the program access rules to better 

address potential violations. With the 

exception of certain procedural 

revisions and the previous extensions of 

the exclusive contract prohibition, the 

program access rules have remained 

largely unchanged in the almost two 

decades since the Commission 

originally adopted them in 1993. We 

seek comment on, among other things, 

whether our rules adequately address 

potentially discriminatory volume 

discounts and uniform price increases 

and, if not, how these rules should be 

revised to address these concerns. 

Legal Basis 

109. The proposed action is 

authorized pursuant to Sections 4(i), 

4(j), 303(r), and 628 of the 

Communications Act of 1934, as 

amended, 47 U.S.C. 154(i), 154(j), 

303(r), and 548. 

Description and Estimate of the Number 

of Small Entities to Which the Proposed 

Rules Will Apply 

110. The RFA directs agencies to 

provide a description of, and where 

feasible, an estimate of the number of 

small entities that may be affected by 

the proposed rules, if adopted. The RFA 

generally defines the term ‘‘small 

entity’’ as having the same meaning as 

the terms ‘‘small business,’’ ‘‘small 

organization,’’ and ‘‘small governmental 

jurisdiction.’’ In addition, the term 

‘‘small business’’ has the same meaning 

as the term ‘‘small business concern’’ 

under the Small Business Act. A small 

business concern is one which: (1) Is 

independently owned and operated; (2) 

is not dominant in its field of operation; 

and (3) satisfies any additional criteria 

established by the SBA. Below, we 

provide a description of such small 

entities, as well as an estimate of the 

number of such small entities, where 

feasible. 

111. Wired Telecommunications 

Carriers. The 2007 North American 

Industry Classification System 

(‘‘NAICS’’) defines ‘‘Wired 

Telecommunications Carriers’’ as 

follows: ‘‘This industry comprises 

establishments primarily engaged in 

operating and/or providing access to 

transmission facilities and infrastructure 

that they own and/or lease for the 

transmission of voice, data, text, sound, 

and video using wired 

telecommunications networks. 

Transmission facilities may be based on 

a single technology or a combination of 

technologies. Establishments in this 

industry use the wired 

telecommunications network facilities 

that they operate to provide a variety of 

services, such as wired telephony 

services, including VoIP services; wired 

(cable) audio and video programming 

distribution; and wired broadband 

Internet services. By exception, 

establishments providing satellite 

television distribution services using 

facilities and infrastructure that they 

operate are included in this industry.’’ 

The SBA has developed a small 

business size standard for wireline firms 

within the broad economic census 

category, ‘‘Wired Telecommunications 

Carriers.’’ Under this category, the SBA 

deems a wireline business to be small if 

it has 1,500 or fewer employees. Census 

Bureau data for 2007, which now 

supersede data from the 2002 Census, 

show that there were 3,188 firms in this 

category that operated for the entire 

year. Of this total, 3,144 had 

employment of 999 or fewer, and 44 

firms had employment of 1,000 

employees or more. Thus under this 

category and the associated small 

business size standard, the majority of 

these firms can be considered small. 

112. Cable Television Distribution 

Services. Since 2007, these services 

have been defined within the broad 

economic census category of Wired 

Telecommunications Carriers; that 

category is defined above. The SBA has 

developed a small business size 

standard for this category, which is: All 

such firms having 1,500 or fewer 

employees. Census Bureau data for 

2007, which now supersede data from 

the 2002 Census, show that there were 

3,188 firms in this category that 

operated for the entire year. Of this 

total, 3,144 had employment of 999 or 

fewer, and 44 firms had employment of 

1,000 employees or more. Thus under 

this category and the associated small 

business size standard, the majority of 

these firms can be considered small. 

113. Cable Companies and Systems. 

The Commission has also developed its 

own small business size standards, for 

the purpose of cable rate regulation. 

Under the Commission’s rules, a ‘‘small 

cable company’’ is one serving 400,000 

or fewer subscribers nationwide. 

Industry data indicate that all but ten 


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cable operators nationwide are small 

under this size standard. In addition, 

under the Commission’s rules, a ‘‘small 

system’’ is a cable system serving 15,000 

or fewer subscribers. Industry data 

indicate that, of 6,101 systems 

nationwide, 4,410 systems have under 

10,000 subscribers, and an additional 

258 systems have 10,000–19,999 

subscribers. Thus, under this standard, 

most cable systems are small. 

114. Cable System Operators. The 

Communications Act of 1934, as 

amended, also contains a size standard 

for small cable system operators, which 

is ‘‘a cable operator that, directly or 

through an affiliate, serves in the 

aggregate fewer than 1 percent of all 

subscribers in the United States and is 

not affiliated with any entity or entities 

whose gross annual revenues in the 

aggregate exceed $250,000,000.’’ The 

Commission has determined that an 

operator serving fewer than 677,000 

subscribers shall be deemed a small 

operator if its annual revenues, when 

combined with the total annual 

revenues of all its affiliates, do not 

exceed $250 million in the aggregate. 

Industry data indicate that all but nine 

cable operators nationwide are small 

under this subscriber size standard. We 

note that the Commission neither 

requests nor collects information on 

whether cable system operators are 

affiliated with entities whose gross 

annual revenues exceed $250 million, 

and therefore we are unable to estimate 

more accurately the number of cable 

system operators that would qualify as 

small under this size standard. 

115. Direct Broadcast Satellite 

(‘‘DBS’’) Service. DBS service is a 

nationally distributed subscription 

service that delivers video and audio 

programming via satellite to a small 

parabolic ‘‘dish’’ antenna at the 

subscriber’s location. DBS, by 

exception, is now included in the SBA’s 

broad economic census category, 

‘‘Wired Telecommunications Carriers,’’ 

which was developed for small wireline 

firms. Under this category, the SBA 

deems a wireline business to be small if 

it has 1,500 or fewer employees. Census 

Bureau data for 2007, which now 

supersede data from the 2002 Census, 

show that there were 3,188 firms in this 

category that operated for the entire 

year. Of this total, 3,144 had 

employment of 999 or fewer, and 44 

firms had employment of 1,000 

employees or more. Thus under this 

category and the associated small 

business size standard, the majority of 

these firms can be considered small. 

Currently, only two entities provide 

DBS service, which requires a great 

investment of capital for operation: 

DIRECTV and EchoStar 

Communications Corporation 

(‘‘EchoStar’’) (marketed as the DISH 

Network). Each currently offers 

subscription services. DIRECTV and 

EchoStar each report annual revenues 

that are in excess of the threshold for a 

small business. Because DBS service 

requires significant capital, we believe it 

is unlikely that a small entity as defined 

by the SBA would have the financial 

wherewithal to become a DBS service 

provider. 

116. Satellite Master Antenna 

Television (SMATV) Systems, also 

known as Private Cable Operators 

(PCOs). SMATV systems or PCOs are 

video distribution facilities that use 

closed transmission paths without using 

any public right-of-way. They acquire 

video programming and distribute it via 

terrestrial wiring in urban and suburban 

multiple dwelling units such as 

apartments and condominiums, and 

commercial multiple tenant units such 

as hotels and office buildings. SMATV 

systems or PCOs are now included in 

the SBA’s broad economic census 

category, ‘‘Wired Telecommunications 

Carriers,’’ which was developed for 

small wireline firms. Under this 

category, the SBA deems a wireline 

business to be small if it has 1,500 or 

fewer employees. Census Bureau data 

for 2007, which now supersede data 

from the 2002 Census, show that there 

were 3,188 firms in this category that 

operated for the entire year. Of this 

total, 3,144 had employment of 999 or 

fewer, and 44 firms had employment of 

1,000 employees or more. Thus, under 

this category and the associated small 

business size standard, the majority of 

these firms can be considered small. 

117. Home Satellite Dish (‘‘HSD’’) 

Service. HSD or the large dish segment 

of the satellite industry is the original 

satellite-to-home service offered to 

consumers, and involves the home 

reception of signals transmitted by 

satellites operating generally in the Cband frequency. Unlike DBS, which 

uses small dishes, HSD antennas are 

between four and eight feet in diameter 

and can receive a wide range of 

unscrambled (free) programming and 

scrambled programming purchased from 

program packagers that are licensed to 

facilitate subscribers’ receipt of video 

programming. Because HSD provides 

subscription services, HSD falls within 

the SBA-recognized definition of Wired 

Telecommunications Carriers. The SBA 

has developed a small business size 

standard for this category, which is: All 

such firms having 1,500 or fewer 

employees. Census Bureau data for 

2007, which now supersede data from 

the 2002 Census, show that there were 

3,188 firms in this category that 

operated for the entire year. Of this 

total, 3,144 had employment of 999 or 

fewer, and 44 firms had employment of 

1,000 employees or more. Thus, under 

this category and the associated small 

business size standard, the majority of 

these firms can be considered small. 

118. Broadband Radio Service and 

Educational Broadband Service. 

Broadband Radio Service systems, 

previously referred to as Multipoint 

Distribution Service (MDS) and 

Multichannel Multipoint Distribution 

Service (MMDS) systems, and ‘‘wireless 

cable,’’ transmit video programming to 

subscribers and provide two-way high 

speed data operations using the 

microwave frequencies of the 

Broadband Radio Service (BRS) and 

Educational Broadband Service (EBS) 

(previously referred to as the 

Instructional Television Fixed Service 

(ITFS)). In connection with the 1996 

BRS auction, the Commission 

established a small business size 

standard as an entity that had annual 

average gross revenues of no more than 

$40 million in the previous three 

calendar years. The BRS auctions 

resulted in 67 successful bidders 

obtaining licensing opportunities for 

493 Basic Trading Areas (BTAs). Of the 

67 auction winners, 61 met the 

definition of a small business. BRS also 

includes licensees of stations authorized 

prior to the auction. At this time, we 

estimate that of the 61 small business 

BRS auction winners, 48 remain small 

business licensees. In addition to the 48 

small businesses that hold BTA 

authorizations, there are approximately 

392 incumbent BRS licensees that are 

considered small entities. After adding 

the number of small business auction 

licensees to the number of incumbent 

licensees not already counted, we find 

that there are currently approximately 

440 BRS licensees that are defined as 

small businesses under either the SBA 

or the Commission’s rules. In 2009, the 

Commission conducted Auction 86, the 

sale of 78 licenses in the BRS areas. The 

Commission offered three levels of 

bidding credits: (i) A bidder with 

attributed average annual gross revenues 

that exceed $15 million and do not 

exceed $40 million for the preceding 

three years (small business) received a 

15 percent discount on its winning bid; 

(ii) a bidder with attributed average 

annual gross revenues that exceed $3 

million and do not exceed $15 million 

for the preceding three years (very small 

business) received a 25 percent discount 

on its winning bid; and (iii) a bidder 

with attributed average annual gross 

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for the preceding three years 

(entrepreneur) received a 35 percent 

discount on its winning bid. Auction 86 

concluded in 2009 with the sale of 61 

licenses. Of the ten winning bidders, 

two bidders that claimed small business 

status won 4 licenses; one bidder that 

claimed very small business status won 

three licenses; and two bidders that 

claimed entrepreneur status won six 

licenses. 

119. In addition, the SBA’s Cable 

Television Distribution Services small 

business size standard is applicable to 

EBS. There are presently 2,032 EBS 

licensees. All but 100 of these licenses 

are held by educational institutions. 

Educational institutions are included in 

this analysis as small entities. Thus, we 

estimate that at least 1,932 licensees are 

small businesses. Since 2007, Cable 

Television Distribution Services have 

been defined within the broad economic 

census category of Wired 

Telecommunications Carriers; that 

category is defined as follows: ‘‘This 

industry comprises establishments 

primarily engaged in operating and/or 

providing access to transmission 

facilities and infrastructure that they 

own and/or lease for the transmission of 

voice, data, text, sound, and video using 

wired telecommunications networks. 

Transmission facilities may be based on 

a single technology or a combination of 

technologies.’’ The SBA has developed 

a small business size standard for this 

category, which is: All such firms 

having 1,500 or fewer employees. 

Census Bureau data for 2007, which 

now supersede data from the 2002 

Census, show that there were 3,188 

firms in this category that operated for 

the entire year. Of this total, 3,144 had 

employment of 999 or fewer, and 44 

firms had employment of 1,000 

employees or more. Thus, under this 

category and the associated small 

business size standard, the majority of 

these firms can be considered small. 

120. Fixed Microwave Services. 

Microwave services include common 

carrier, private-operational fixed, and 

broadcast auxiliary radio services. They 

also include the Local Multipoint 

Distribution Service (LMDS), the Digital 

Electronic Message Service (DEMS), and 

the 24 GHz Service, where licensees can 

choose between common carrier and 

non-common carrier status. At present, 

there are approximately 31,428 common 

carrier fixed licensees and 79,732 

private operational-fixed licensees and 

broadcast auxiliary radio licensees in 

the microwave services. There are 

approximately 120 LMDS licensees, 

three DEMS licensees, and three 24 GHz 

licensees. The Commission has not yet 

defined a small business with respect to 

microwave services. For purposes of the 

IRFA, we will use the SBA’s definition 

applicable to Wireless 

Telecommunications Carriers (except 

satellite)—i.e., an entity with no more 

than 1,500 persons. Under the present 

and prior categories, the SBA has 

deemed a wireless business to be small 

if it has 1,500 or fewer employees. For 

the category of Wireless 

Telecommunications Carriers (except 

Satellite), Census data for 2007, which 

supersede data contained in the 2002 

Census, show that there were 1,383 

firms that operated that year. Of those 

1,383, 1,368 had fewer than 1000 

employees, and 15 firms had 1000 

employees or more. Thus under this 

category and the associated small 

business size standard, the majority of 

firms can be considered small. We note 

that the number of firms does not 

necessarily track the number of 

licensees. We estimate that virtually all 

of the Fixed Microwave licensees 

(excluding broadcast auxiliary 

licensees) would qualify as small 

entities under the SBA definition. 

121. Open Video Systems. The open 

video system (‘‘OVS’’) framework was 

established in 1996, and is one of four 

statutorily recognized options for the 

provision of video programming 

services by local exchange carriers. The 

OVS framework provides opportunities 

for the distribution of video 

programming other than through cable 

systems. Because OVS operators provide 

subscription services, OVS falls within 

the SBA small business size standard 

covering cable services, which is 

‘‘Wired Telecommunications Carriers.’’ 

The SBA has developed a small 

business size standard for this category, 

which is: All such firms having 1,500 or 

fewer employees. Census Bureau data 

for 2007, which now supersede data 

from the 2002 Census, show that there 

were 3,188 firms in this category that 

operated for the entire year. Of this 

total, 3,144 had employment of 999 or 

fewer, and 44 firms had employment of 

1,000 employees or more. Thus, under 

this category and the associated small 

business size standard, the majority of 

these firms can be considered small. In 

addition, we note that the Commission 

has certified some OVS operators, with 

some now providing service. Broadband 

service providers (‘‘BSPs’’) are currently 

the only significant holders of OVS 

certifications or local OVS franchises. 

The Commission does not have 

financial or employment information 

regarding the entities authorized to 

provide OVS, some of which may not 

yet be operational. Thus, at least some 

of the OVS operators may qualify as 

small entities. 

122. Cable and Other Subscription 

Programming. The Census Bureau 

defines this category as follows: ‘‘This 

industry comprises establishments 

primarily engaged in operating studios 

and facilities for the broadcasting of 

programs on a subscription or fee basis. 

* * * These establishments produce 

programming in their own facilities or 

acquire programming from external 

sources. The programming material is 

usually delivered to a third party, such 

as cable systems or direct-to-home 

satellite systems, for transmission to 

viewers.’’ The SBA has developed a 

small business size standard for this 

category, which is: All such firms 

having $15 million dollars or less in 

annual revenues. To gauge small 

business prevalence in the Cable and 

Other Subscription Programming 

industries, the Commission relies on 

data currently available from the U.S. 

Census for the year 2007. Census Bureau 

data for 2007, which now supersede 

data from the 2002 Census, show that 

there were 396 firms in this category 

that operated for the entire year. Of that 

number, 325 operated with annual 

revenues of $9,999,999 million dollars 

or less. Seventy-one (71) operated with 

annual revenues of between $10 million 

and $100 million or more. Thus, under 

this category and associated small 

business size standard, the majority of 

firms can be considered small. 

123. Small Incumbent Local Exchange 

Carriers. We have included small 

incumbent local exchange carriers in 

this present RFA analysis. A ‘‘small 

business’’ under the RFA is one that, 

inter alia, meets the pertinent small 

business size standard (e.g., a telephone 

communications business having 1,500 

or fewer employees), and ‘‘is not 

dominant in its field of operation.’’ The 

SBA’s Office of Advocacy contends that, 

for RFA purposes, small incumbent 

local exchange carriers are not dominant 

in their field of operation because any 

such dominance is not ‘‘national’’ in 

scope. We have therefore included small 

incumbent local exchange carriers in 

this RFA analysis, although we 

emphasize that this RFA action has no 

effect on Commission analyses and 

determinations in other, non-RFA 

contexts. 

124. Incumbent Local Exchange 

Carriers (‘‘LECs’’). Neither the 

Commission nor the SBA has developed 

a small business size standard 

specifically for incumbent local 

exchange services. The appropriate size 

standard under SBA rules is for the 

category Wired Telecommunications 

Carriers. Under that size standard, such 


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a business is small if it has 1,500 or 

fewer employees. Census Bureau data 

for 2007, which now supersede data 

from the 2002 Census, show that there 

were 3,188 firms in this category that 

operated for the entire year. Of this 

total, 3,144 had employment of 999 or 

fewer, and 44 firms had employment of 

1,000 employees or more. Thus, under 

this category and the associated small 

business size standard, the majority of 

these firms can be considered small. 

125. Competitive Local Exchange 

Carriers, Competitive Access Providers 

(CAPs), ‘‘Shared-Tenant Service 

Providers,’’ and ‘‘Other Local Service 

Providers.’’ Neither the Commission nor 

the SBA has developed a small business 

size standard specifically for these 

service providers. The appropriate size 

standard under SBA rules is for the 

category Wired Telecommunications 

Carriers. Under that size standard, such 

a business is small if it has 1,500 or 

fewer employees. Census Bureau data 

for 2007, which now supersede data 

from the 2002 Census, show that there 

were 3,188 firms in this category that 

operated for the entire year. Of this 

total, 3,144 had employment of 999 or 

fewer, and 44 firms had employment of 

1,000 employees or more. Thus, under 

this category and the associated small 

business size standard, the majority of 

these firms can be considered small. 

Consequently, the Commission 

estimates that most providers of 

competitive local exchange service, 

competitive access providers, ‘‘SharedTenant Service Providers,’’ and ‘‘Other 

Local Service Providers’’ are small 

entities. 

126. Motion Picture and Video 

Production. The Census Bureau defines 

this category as follows: ‘‘This industry 

comprises establishments primarily 

engaged in producing, or producing and 

distributing motion pictures, videos, 

television programs, or television 

commercials.’’ We note that firms in this 

category may be engaged in various 

industries, including cable 

programming. Specific figures are not 

available regarding how many of these 

firms produce and/or distribute 

programming for cable television. The 

SBA has developed a small business 

size standard for this category, which is: 

All such firms having $29.5 million 

dollars or less in annual revenues. To 

gauge small business prevalence in the 

Motion Picture and Video Production 

industries, the Commission relies on 

data currently available from the U.S. 

Census for the year 2007. Census Bureau 

data for 2007, which now supersede 

data from the 2002 Census, show that 

there were 9,095 firms in this category 

that operated for the entire year. Of 

these, 8995 had annual receipts of 

$24,999,999 or less, and 100 had annual 

receipts ranging from not less that 

$25,000,000 to $100,000,000 or more. 

Thus, under this category and 

associated small business size standard, 

the majority of firms can be considered 

small. 

127. Motion Picture and Video 

Distribution. The Census Bureau defines 

this category as follows: ‘‘This industry 

comprises establishments primarily 

engaged in acquiring distribution rights 

and distributing film and video 

productions to motion picture theaters, 

television networks and stations, and 

exhibitors.’’ We note that firms in this 

category may be engaged in various 

industries, including cable 

programming. Specific figures are not 

available regarding how many of these 

firms produce and/or distribute 

programming for cable television. The 

SBA has developed a small business 

size standard for this category, which is: 

All such firms having $29.5 million 

dollars or less in annual revenues. To 

gauge small business prevalence in the 

Motion Picture and Video Distribution 

industries, the Commission relies on 

data currently available from the U.S. 

Census for the year 2007. Census Bureau 

data for 2007, which now supersede 

data from the 2002 Census, show that 

there were 450 firms in this category 

that operated for the entire year. Of 

these, 434 had annual receipts of 

$24,999,999 or less, and 16 had annual 

receipts ranging from not less that 

$25,000,000 to $100,000,000 or more. 

Thus, under this category and 

associated small business size standard, 

the majority of firms can be considered 

small. 

Description of Projected Reporting, 

Recordkeeping, and Other Compliance 

Requirements 

128. Certain proposed rule changes 

discussed in the NPRM would affect 

reporting, recordkeeping, or other 

compliance requirements. First, even if 

the exclusive contract prohibition were 

to sunset (wholly or partially), the 

Commission recognizes that other 

existing protections will remain in 

effect. Namely, an MVPD would still 

have the option to file a complaint with 

the Commission alleging that an 

exclusive contract between a cable 

operator and a satellite-delivered, cableaffiliated programmer involving 

satellite-delivered, cable-affiliated 

programming is an unfair act in 

violation of Section 628(b) of the Act 

and Section 76.1001(a) of the 

Commission’s rules. An MVPD may also 

have the option of filing a 

discrimination complaint under Section 

628(c)(2)(B) of the Act, which would 

provide some protection for competitive 

MVPDs should the exclusive contract 

prohibition sunset (wholly or partially). 

Further, the NPRM seeks comment on 

the extent to which undue influence 

complaints under Section 628(c)(2)(A) 

may also provide some protection for 

competitive MVPDs should the 

exclusive contract prohibition sunset 

(wholly or partially). Second, rather 

than sunsetting the exclusive contract 

prohibition in its entirety, the 

Commission seeks comment on whether 

it should instead relax the exclusivity 

prohibition, such as by establishing a 

process whereby a cable operator or 

satellite-delivered, cable-affiliated 

programmer can seek to remove the 

exclusive contract prohibition on a 

market-by-market basis based on the 

extent of competition in the market. The 

Commission seeks comment on the 

details of any such process for removing 

the exclusive contract prohibition on a 

market-by-market basis. Third, the 

Commission proposes to adopt a 45-day 

answer period in complaint proceedings 

alleging a violation of Section 628(b). 

Fourth, the NPRM seeks comment on 

how the Commission might improve its 

rules and procedures to avoid impeding 

the filing of legitimate complaints 

alleging that particular volume 

discounts violate Section 628(c)(2)(B) of 

the Act. Specifically, the Commission 

asks whether satellite-delivered, cableaffiliated programmers should be 

required to demonstrate in response to 

a complaint the increase in advertising 

revenues resulting from licensing 

programming to a larger MVPD and how 

this increase justifies the volume 

discount provided to the larger MVPD 

relative to the complaint. 

Steps Taken to Minimize Significant 

Impact on Small Entities and Significant 

Alternatives Considered 

129. The RFA requires an agency to 

describe any significant alternatives that 

it has considered in reaching its 

proposed approach, which may include 

the following four alternatives (among 

others): (1) The establishment of 

differing compliance or reporting 

requirements or timetables that take into 

account the resources available to small 

entities; (2) the clarification, 

consolidation, or simplification of 

compliance or reporting requirements 

under the rule for small entities; (3) the 

use of performance, rather than design, 

standards; and (4) an exemption from 

coverage of the rule, or any part thereof, 

for small entities. 

130. First, regarding the potential 

sunset or relaxation of the exclusive 

contract prohibition, the NPRM seeks 


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comment on what impact the retention 

of the exclusive contract prohibition has 

had on the general state of competition 

among MVPDs in the video distribution 

market. More specifically, the NPRM 

asks how a sunset or relaxation of the 

exclusive contract prohibition would 

affect competition in the video 

distribution market, and how a sunset or 

relaxation would affect the potential 

entry of new competitors in the market. 

The NPRM also seeks comment on how 

the current state of cable system 

clustering and cable market share in 

regional markets should affect the 

Commission’s decision on whether to 

retain, sunset, or relax the exclusive 

contract prohibition. Further, it asks 

whether the current state of horizontal 

consolidation in the cable industry has 

increased or decreased incentives for 

anticompetitive foreclosure of access to 

vertically integrated programming. The 

NPRM asks whether competitive MVPDs 

have the resources to invest in creating 

their own video programming. Overall, 

the Commission’s analysis is focused on 

whether the exclusive contract 

prohibition ‘‘continues to be necessary 

to preserve and protect competition and 

diversity in the distribution of video 

programming.’’ 

131. Second, to the extent the 

exclusive contract prohibition were to 

sunset (wholly or partially), the NPRM 

seeks comment on ways to reduce 

burdens on both complainants and 

defendants in connection with 

complaints alleging that an exclusive 

contract involving satellite-delivered, 

cable-affiliated programming violates 

Section 628(b) (or Section 628(c)(2)(B)) 

of the Act. 

132. Third, regarding the potential 

changes to our procedural rules 

governing program access complaints, 

we find that the changes would benefit 

regulated entities, including those that 

are small entities. Specifically, small 

entities may benefit from the proposed 

lengthier 45-day period within which to 

file an answer. They may also benefit 

from rules addressing potentially 

discriminatory volume discounts and 

uniform price increases. 

Federal Rules That May Duplicate, 

Overlap, or Conflict With the Proposed 

Rule 

133. None. 

B. Paperwork Reduction Act 

134. This document contains 

proposed new information collection 

requirements. The Commission, as part 

of its continuing effort to reduce 

paperwork burdens, invites the general 

public and the Office of Management 

and Budget (OMB) to comment on the 

information collection requirements 

contained in this document, as required 

by the Paperwork Reduction Act of 

1995. In addition, pursuant to the Small 

Business Paperwork Relief Act of 2002, 

we seek specific comment on how we 

might ‘‘further reduce the information 

collection burden for small business 

concerns with fewer than 25 

employees.’’ 

C. Ex Parte Rules 

135. Permit-But-Disclose. The 

proceeding this Notice initiates shall be 

treated as a ‘‘permit-but-disclose’’ 

proceeding in accordance with the 

Commission’s ex parte rules. Persons 

making ex parte presentations must file 

a copy of any written presentation or a 

memorandum summarizing any oral 

presentation within two business days 

after the presentation (unless a different 

deadline applicable to the Sunshine 

period applies). Persons making oral ex 

parte presentations are reminded that 

memoranda summarizing the 

presentation must (1) list all persons 

attending or otherwise participating in 

the meeting at which the ex parte 

presentation was made, and (2) 

summarize all data presented and 

arguments made during the 

presentation. If the presentation 

consisted in whole or in part of the 

presentation of data or arguments 

already reflected in the presenter’s 

written comments, memoranda or other 

filings in the proceeding, the presenter 

may provide citations to such data or 

arguments in his or her prior comments, 

memoranda, or other filings (specifying 

the relevant page and/or paragraph 

numbers where such data or arguments 

can be found) in lieu of summarizing 

them in the memorandum. Documents 

shown or given to Commission staff 

during ex parte meetings are deemed to 

be written ex parte presentations and 

must be filed consistent with rule 

1.1206(b). In proceedings governed by 

rule 1.49(f) or for which the 

Commission has made available a 

method of electronic filing, written ex 

parte presentations and memoranda 

summarizing oral ex parte 

presentations, and all attachments 

thereto, must be filed through the 

electronic comment filing system 

available for that proceeding, and must 

be filed in their native format (e.g., .doc, 

.xml, .ppt, searchable .pdf). Participants 

in this proceeding should familiarize 

themselves with the Commission’s ex 

parte rules. 

D. Filing Requirements 

136. Comments and Replies. Pursuant 

to Sections 1.415 and 1.419 of the 

Commission’s rules, interested parties 

may file comments and reply comments 

on or before the dates indicated on the 

first page of this document. Comments 

may be filed using the Commission’s 

Electronic Comment Filing System 

(‘‘ECFS’’). 

• Electronic Filers: Comments may be 

filed electronically using the Internet by 

accessing the ECFS: http:// 

fjallfoss.fcc.gov/ecfs2/. 

• Paper Filers: Parties who choose to 

file by paper must file an original and 

one copy of each filing. If more than one 

docket or rulemaking number appears in 

the caption of this proceeding, filers 

must submit two additional copies for 

each additional docket or rulemaking 

number. 

Filings can be sent by hand or 

messenger delivery, by commercial 

overnight courier, or by first-class or 

overnight U.S. Postal Service mail. All 

filings must be addressed to the 

Commission’s Secretary, Office of the 

Secretary, Federal Communications 

Commission. 

Æ All hand-delivered or messengerdelivered paper filings for the 

Commission’s Secretary must be 

delivered to FCC Headquarters at 445 

12th St. SW., Room TW–A325, 

Washington, DC 20554. The filing hours 

are 8 a.m. to 7 p.m. All hand deliveries 

must be held together with rubber bands 

or fasteners. Any envelopes and boxes 

must be disposed of before entering the 

building. 

Æ Commercial overnight mail (other 

than U.S. Postal Service Express Mail 

and Priority Mail) must be sent to 9300 

East Hampton Drive, Capitol Heights, 

MD 20743. 

Æ U.S. Postal Service first-class, 

Express, and Priority mail must be 

addressed to 445 12th Street SW., 

Washington, DC 20554. 

137. Availability of Documents. 

Comments, reply comments, and ex 

parte submissions will be available for 

public inspection during regular 

business hours in the FCC Reference 

Center, Federal Communications 

Commission, 445 12th Street SW., CY– 

A257, Washington, DC 20554. These 

documents will also be available via 

ECFS. Documents will be available 

electronically in ASCII, Microsoft Word, 

and/or Adobe Acrobat. 

138. People with Disabilities. To 

request materials in accessible formats 

for people with disabilities (braille, 

large print, electronic files, audio 

format), send an email to fcc504@fcc.gov 

or call the FCC’s Consumer and 

Governmental Affairs Bureau at (202) 

418–0530 (voice), (202) 418–0432 

(TTY). 

139. Additional Information. For 

additional information on this 


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proceeding, contact David Konczal, 

David.Konczal@fcc.gov, or Diana 

Sokolow, Diana.Sokolow@fcc.gov, of the 

Media Bureau, Policy Division, (202) 

418–2120. 

V. Ordering Clauses 

140. Accordingly, It is ordered that 

pursuant to the authority found in 

Sections 4(i), 4(j), 303(r), and 628 of the 

Communications Act of 1934, as 

amended, 47 U.S.C. 154(i), 154(j), 

303(r), and 548, this Notice of Proposed 

Rulemaking is adopted. 

141. It is further ordered that the 

Commission’s Consumer and 

Governmental Affairs Bureau, Reference 

Information Center, shall send a copy of 

this Notice of Proposed Rulemaking, 

including the Initial Regulatory 

Flexibility Analysis, to the Chief 

Counsel for Advocacy of the Small 

Business Administration. 

List of Subjects in 47 CFR Part 76 

Cable television, Reporting and 

recordkeeping requirements. 

Federal Communications Commission. 

Sheryl D. Todd, 

Deputy Secretary. 

Proposed Rules 

For the reasons discussed in the 

preamble, the Federal Communications 

Commission proposes to amend 47 CFR 

part 76 as follows: 

PART 76—MULTICHANNEL VIDEO 

AND CABLE TELEVISION SERVICE 

1. The authority citation for Part 76 

continues to read as follows: 

Authority: 47 U.S.C. 151, 152, 153, 154, 

301, 302, 302a, 303, 303a, 307, 308, 309, 312, 

315, 317, 325, 339, 340, 341, 503, 521, 522, 

531, 532, 534, 535, 536, 537, 543, 544, 544a, 

545, 548, 549, 552, 554, 556, 558, 560, 561, 

571, 572 and 573. 

2. Section 76.1000 is amended by 

adding paragraph (n) to read as follows: 

§ 76.1000 Definitions. 

* * * * * 

(n) Regional Sports Network. The term 

‘‘Regional Sports Network’’ means video 

programming that: 

(1) Provides live or same-day 

distribution within a limited geographic 

region of sporting events of a sports 

team that is a member of Major League 

Baseball, the National Basketball 

Association, the National Football 

League, the National Hockey League, 

NASCAR, NCAA Division I Football, 

NCAA Division I Basketball, Liga de 

Be ́isbol Profesional de Puerto Rico, 

Baloncesto Superior Nacional de Puerto 

Rico, Liga Mayor de Fu ́tbol Nacional de 

Puerto Rico, and the Puerto Rico 

Islanders of the United Soccer League’s 

First Division; and 

(2) In any year, carries a minimum of 

either 100 hours of programming that 

meets the criteria of paragraph (n)(1) of 

this section, or 10 percent of the regular 

season games of at least one sports team 

that meets the criteria of paragraph 

(n)(1) of this section. 

Alternative 1: 

3. Section 76.1002 is amended by 

revising paragraph (c)(3) and (6) to read 

as follows: 

§ 76.1002 Specific unfair practices 

prohibited. 

* * * * * 

(c) * * * 

(3) Specific arrangements: 

Subdistribution agreements—(i) 

Unserved and served areas. No cable 

operator shall enter into any 

subdistribution agreement or 

arrangement for satellite cable 

programming or satellite broadcast 

programming with a satellite cable 

programming vendor in which a cable 

operator has an attributable interest or a 

satellite broadcast programming vendor 

in which a cable operator has an 

attributable interest, with respect to 

areas served or unserved by a cable 

operator, unless such agreement or 

arrangement complies with the 

limitations set forth in paragraph 

(c)(3)(ii) of this section. 

(ii) Limitations on subdistribution 

agreements. No cable operator engaged 

in subdistribution of satellite cable 

programming or satellite broadcast 

programming may require a competing 

multichannel video programming 

distributor to 

(A) Purchase additional or unrelated 

programming as a condition of such 

subdistribution; or 

(B) Provide access to private property 

in exchange for access to programming. 

In addition, a subdistributor may not 

charge a competing multichannel video 

programming distributor more for said 

programming than the satellite cable 

programming vendor or satellite 

broadcast programming vendor itself 

would be permitted to charge. Any cable 

operator acting as a subdistributor of 

satellite cable programming or satellite 

broadcast programming must respond to 

a request for access to such 

programming by a competing 

multichannel video programming 

distributor within fifteen (15) days of 

the request. If the request is denied, the 

competing multichannel video 

programming distributor must be 

permitted to negotiate directly with the 

satellite cable programming vendor or 

satellite broadcast programming vendor. 

* * * * * 

(6) Sunset provision. The prohibition 

of exclusive contracts set forth in 

paragraph (c)(2) of this section shall 

cease to be effective on October 5, 2017, 

unless the Commission finds, during a 

proceeding to be conducted during the 

year preceding such date, that said 

prohibition continues to be necessary to 

preserve and protect competition and 

diversity in the distribution of video 

programming. 

* * * * * 

Alternative 2: 

4. Section 76.1002 is amended by 

removing and reserving paragraph (c)(2), 

revising paragraph (c)(3) through (5), 

and removing paragraph (c)(6) to read as 

follows: 

§ 76.1002 Specific unfair practices 

prohibited. 

* * * * * 

(c) * * * 

(3) Specific arrangements: 

Subdistribution agreements—(i) 

Unserved areas. No cable operator shall 

enter into any subdistribution 

agreement or arrangement for satellite 

cable programming or satellite broadcast 

programming with a satellite cable 

programming vendor in which a cable 

operator has an attributable interest or a 

satellite broadcast programming vendor 

in which a cable operator has an 

attributable interest for distribution to 

persons in areas not served by a cable 

operator as of October 5, 1992 unless 

such agreement or arrangement 

complies with the limitations set forth 

in paragraph (c)(3)(ii) of this section. 

(ii) Limitations on subdistribution 

agreements in unserved areas. No cable 

operator engaged in subdistribution of 

satellite cable programming or satellite 

broadcast programming may require a 

competing multichannel video 

programming distributor to 

(A) Purchase additional or unrelated 

programming as a condition of such 

subdistribution; or 

(B) Provide access to private property 

in exchange for access to programming. 

In addition, a subdistributor may not 

charge a competing multichannel video 

programming distributor more for said 

programming than the satellite cable 

programming vendor or satellite 

broadcast programming vendor itself 

would be permitted to charge. Any cable 

operator acting as a subdistributor of 

satellite cable programming or satellite 

broadcast programming must respond to 

a request for access to such 

programming by a competing 

multichannel video programming 

distributor within fifteen (15) days of 

the request. If the request is denied, the 

competing multichannel video 

programming distributor must be 


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permitted to negotiate directly with the 

satellite cable programming vendor or 

satellite broadcast programming vendor. 

(4) Public interest determination. In 

determining whether an exclusive 

contract is in the public interest for 

purposes of paragraph (c)(5) of this 

section, the Commission will consider 

each of the following factors with 

respect to the effect of such contract on 

the distribution of video programming 

in areas that are served by a cable 

operator: 

(i) The effect of such exclusive 

contract on the development of 

competition in local and national 

multichannel video programming 

distribution markets; 

(ii) The effect of such exclusive 

contract on competition from 

multichannel video programming 

distribution technologies other than 

cable; 

(iii) The effect of such exclusive 

contract on the attraction of capital 

investment in the production and 

distribution of new satellite cable 

programming; 

(iv) The effect of such exclusive 

contract on diversity of programming in 

the multichannel video programming 

distribution market; and 

(v) The duration of the exclusive 

contract. 

(5) Commission approval required. 

Any cable operator, satellite cable 

programming vendor in which a cable 

operator has an attributable interest, or 

satellite broadcast programming vendor 

in which a cable operator has an 

attributable interest must submit a 

‘‘Petition for Exclusivity’’ to the 

Commission and receive approval from 

the Commission to preclude the filing of 

complaints alleging that an exclusive 

contract, or practice, activity or 

arrangement tantamount to an exclusive 

contract, with respect to areas served by 

a cable operator violates section 628(b) 

of the Communications Act of 1934, as 

amended, and § 76.1001(a), or section 

628(c)(2)(B) of the Communications Act 

of 1934, as amended, and paragraph (b) 

of this section. 

(i) The petition for exclusivity shall 

contain those portions of the contract 

relevant to exclusivity, including: 

(A) A description of the programming 

service; 

(B) The extent and duration of 

exclusivity proposed; and 

(C) Any other terms or provisions 

directly related to exclusivity or to any 

of the criteria set forth in paragraph 

(c)(4) of this section. The petition for 

exclusivity shall also include a 

statement setting forth the petitioner’s 

reasons to support a finding that the 

contract is in the public interest, 

addressing each of the five factors set 

forth in paragraph (c)(4) of this section. 

(ii) Any competing multichannel 

video programming distributor affected 

by the proposed exclusivity may file an 

opposition to the petition for exclusivity 

within thirty (30) days of the date on 

which the petition is placed on public 

notice, setting forth its reasons to 

support a finding that the contract is not 

in the public interest under the criteria 

set forth in paragraph (c)(4) of this 

section. Any such formal opposition 

must be served on petitioner on the 

same day on which it is filed with the 

Commission. 

(iii) The petitioner may file a response 

within ten (10) days of receipt of any 

formal opposition. The Commission will 

then approve or deny the petition for 

exclusivity. 

* * * * * 

Alternative 3: 

5. Section 76.1002 is amended by 

revising paragraph (c)(2) through (3) and 

(5), removing and reserving paragraph 

(c)(6), and adding paragraph (c)(7) to 

read as follows: 

§ 76.1002 Specific unfair practices 

prohibited. 

* * * * * 

(c) * * * 

(2) Served areas. No cable operator 

shall enter into any exclusive contracts, 

or engage in any practice, activity or 

arrangement tantamount to an exclusive 

contract, for satellite cable programming 

or satellite broadcast programming with 

a satellite cable programming vendor in 

which a cable operator has an 

attributable interest or a satellite 

broadcast programming vendor in 

which a cable operator has an 

attributable interest, with respect to 

areas served by a cable operator, unless: 

(i) The Commission determines in 

accordance with paragraph (c)(4) of this 

section that such contract, practice, 

activity or arrangement is in the public 

interest; or 

(ii) Such contract, practice, activity or 

arrangement pertains to a geographic 

area for which a petition for sunset has 

been granted pursuant to paragraph 

(c)(7) of this section. 

(3) Specific arrangements: 

Subdistribution agreements—(i) 

Unserved and served areas. No cable 

operator shall enter into any 

subdistribution agreement or 

arrangement for satellite cable 

programming or satellite broadcast 

programming with a satellite cable 

programming vendor in which a cable 

operator has an attributable interest or a 

satellite broadcast programming vendor 

in which a cable operator has an 

attributable interest, with respect to 

areas served or unserved by a cable 

operator, unless such agreement or 

arrangement complies with the 

limitations set forth in paragraph 

(c)(3)(ii) of this section. 

(ii) Limitations on subdistribution 

agreements. No cable operator engaged 

in subdistribution of satellite cable 

programming or satellite broadcast 

programming may require a competing 

multichannel video programming 

distributor to 

(A) Purchase additional or unrelated 

programming as a condition of such 

subdistribution; or 

(B) Provide access to private property 

in exchange for access to programming. 

In addition, a subdistributor may not 

charge a competing multichannel video 

programming distributor more for said 

programming than the satellite cable 

programming vendor or satellite 

broadcast programming vendor itself 

would be permitted to charge. Any cable 

operator acting as a subdistributor of 

satellite cable programming or satellite 

broadcast programming must respond to 

a request for access to such 

programming by a competing 

multichannel video programming 

distributor within fifteen (15) days of 

the request. If the request is denied, the 

competing multichannel video 

programming distributor must be 

permitted to negotiate directly with the 

satellite cable programming vendor or 

satellite broadcast programming vendor. 

(iii) Exceptions. Paragraph (c)(3) of 

this section shall not apply in a 

geographic area where a petition for 

sunset has been granted pursuant to 

paragraph (c)(7) of this section. 

* * * * * 

(5) Commission approval required. (i) 

Any cable operator, satellite cable 

programming vendor in which a cable 

operator has an attributable interest, or 

satellite broadcast programming vendor 

in which a cable operator has an 

attributable interest must submit a 

‘‘Petition for Exclusivity’’ to the 

Commission and receive approval from 

the Commission: 

(A) Prior to enforcing or entering into 

an exclusive contract, or practice, 

activity or arrangement tantamount to 

an exclusive contract, subject to 

paragraph (c)(2) of this section that 

pertains to a geographic area for which 

a petition for sunset has not been 

granted pursuant to paragraph (c)(7) of 

this section; and 

(B) To preclude the filing of 

complaints alleging that an exclusive 

contract, or practice, activity or 

arrangement tantamount to an exclusive 

contract, with respect to areas served by 

a cable operator violates section 628(b) 


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Federal Register / Vol. 77, No. 78 / Monday, April 23, 2012 / Proposed Rules 24333 

of the Communications Act of 1934, as 

amended, and § 76.1001(a) of this part, 

or section 628(c)(2)(B) of the 

Communications Act of 1934, as 

amended, and paragraph (b) of this 

section. 

(ii) The petition for exclusivity shall 

contain those portions of the contract 

relevant to exclusivity, including: 

(A) A description of the programming 

service; 

(B) The extent and duration of 

exclusivity proposed; and 

(C) Any other terms or provisions 

directly related to exclusivity or to any 

of the criteria set forth in paragraph 

(c)(4) of this section. The petition for 

exclusivity shall also include a 

statement setting forth the petitioner’s 

reasons to support a finding that the 

contract is in the public interest, 

addressing each of the five factors set 

forth in paragraph (c)(4) of this section. 

(iii) Any competing multichannel 

video programming distributor affected 

by the proposed exclusivity may file an 

opposition to the petition for exclusivity 

within thirty (30) days of the date on 

which the petition is placed on public 

notice, setting forth its reasons to 

support a finding that the contract is not 

in the public interest under the criteria 

set forth in paragraph (c)(4) of this 

section. Any such formal opposition 

must be served on petitioner on the 

same day on which it is filed with the 

Commission. 

(iv) The petitioner may file a response 

within ten (10) days of receipt of any 

formal opposition. The Commission will 

then approve or deny the petition for 

exclusivity. 

* * * * * 

(7) Petition for Sunset. Any cable 

operator, satellite cable programming 

vendor in which a cable operator has an 

attributable interest, or satellite 

broadcast programming vendor in 

which a cable operator has an 

attributable interest seeking to remove 

the prohibition on exclusive contracts 

and practices, activities or arrangements 

tantamount to an exclusive contract set 

forth in paragraph (c)(2) of this section 

may submit a ‘‘Petition for Sunset’’ to 

the Commission. 

(i) The petition for sunset shall 

specify the geographic area for which a 

sunset of the prohibition set forth in 

paragraph (c)(2) of this section is sought 

and shall include a statement setting 

forth the petitioner’s reasons to support 

a finding that such prohibition is not 

necessary to preserve and protect 

competition and diversity in the 

distribution of video programming in 

the geographic area specified. 

(ii) Any competing multichannel 

video programming distributor or other 

interested party affected by the petition 

for sunset may file an opposition to the 

petition within forty-five (45) days of 

the date on which the petition is placed 

on public notice, setting forth its 

reasons to support a finding that such 

prohibition continues to be necessary to 

preserve and protect competition and 

diversity in the distribution of video 

programming. Any such formal 

opposition must be served on the 

petitioner on the same day on which it 

is filed with the Commission. 

(iii) The petitioner may file a response 

within fifteen (15) days of receipt of any 

formal opposition. 

(iv) If the Commission finds that the 

prohibition is not necessary to preserve 

and protect competition and diversity in 

the distribution of video programming, 

then the prohibition set forth in 

paragraph (c)(2) of this section shall no 

longer apply in the geographic area 

specified in the decision of the 

Commission. 

* * * * * 

Alternative 4: 

6. Section 76.1002 is amended by 

revising paragraphs (c)(2) (3), (5) and (6) 

to read as follows: 

§ 76.1002 Specific unfair practices 

prohibited. 

* * * * * 

(c) * * * 

(2) Served areas. No cable operator 

shall enter into any exclusive contracts, 

or engage in any practice, activity or 

arrangement tantamount to an exclusive 

contract, for satellite cable programming 

or satellite broadcast programming that 

meets the definition of a Regional Sports 

Network as defined in § 76.1000(n) of 

this part with a satellite cable 

programming vendor in which a cable 

operator has an attributable interest or a 

satellite broadcast programming vendor 

in which a cable operator has an 

attributable interest, with respect to 

areas served by a cable operator, unless 

the Commission determines in 

accordance with paragraph (c)(4) of this 

section that such contract, practice, 

activity or arrangement is in the public 

interest. 

(3) Specific arrangements: 

Subdistribution agreements—(i) 

Unserved areas. No cable operator shall 

enter into any subdistribution 

agreement or arrangement for satellite 

cable programming or satellite broadcast 

programming with a satellite cable 

programming vendor in which a cable 

operator has an attributable interest or a 

satellite broadcast programming vendor 

in which a cable operator has an 

attributable interest, for distribution to 

persons in areas not served by a cable 

operator as of October 5, 1992, unless 

such agreement or arrangement 

complies with the limitations set forth 

in paragraph (c)(3)(iii) of this section. 

(ii) Served areas. No cable operator 

shall enter into any subdistribution 

agreement or arrangement for satellite 

cable programming or satellite broadcast 

programming that meets the definition 

of a Regional Sports Network as defined 

in § 76.1000(n) of this part with a 

satellite cable programming vendor in 

which a cable operator has an 

attributable interest or a satellite 

broadcast programming vendor in 

which a cable operator has an 

attributable interest, with respect to 

areas served by a cable operator, unless 

such agreement or arrangement 

complies with the limitations set forth 

in paragraph (c)(3)(iii) of this section. 

(iii) Limitations on subdistribution 

agreements. No cable operator engaged 

in subdistribution of satellite cable 

programming or satellite broadcast 

programming may require a competing 

multichannel video programming 

distributor to 

(A) Purchase additional or unrelated 

programming as a condition of such 

subdistribution; or 

(B) Provide access to private property 

in exchange for access to programming. 

In addition, a subdistributor may not 

charge a competing multichannel video 

programming distributor more for said 

programming than the satellite cable 

programming vendor or satellite 

broadcast programming vendor itself 

would be permitted to charge. Any cable 

operator acting as a subdistributor of 

satellite cable programming or satellite 

broadcast programming must respond to 

a request for access to such 

programming by a competing 

multichannel video programming 

distributor within fifteen (15) days of 

the request. If the request is denied, the 

competing multichannel video 

programming distributor must be 

permitted to negotiate directly with the 

satellite cable programming vendor or 

satellite broadcast programming vendor. 

* * * * * 

(5) Commission approval required. (i) 

Any cable operator, satellite cable 

programming vendor in which a cable 

operator has an attributable interest, or 

satellite broadcast programming vendor 

in which a cable operator has an 

attributable interest must submit a 

‘‘Petition for Exclusivity’’ to the 

Commission and receive approval from 

the Commission: 

(A) Prior to enforcing or entering into 

an exclusive contract, or practice, 

activity or arrangement tantamount to 

an exclusive contract, subject to 

paragraph (c)(2) of this section; and 


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24334 Federal Register / Vol. 77, No. 78 / Monday, April 23, 2012 / Proposed Rules 

(B) To preclude the filing of 

complaints alleging that an exclusive 

contract, or practice, activity or 

arrangement tantamount to an exclusive 

contract, with respect to areas served by 

a cable operator violates section 628(b) 

of the Communications Act of 1934, as 

amended, and § 76.1001(a) of this part, 

or section 628(c)(2)(B) of the 

Communications Act of 1934, as 

amended, and paragraph (b) of this 

section. 

(ii) The petition for exclusivity shall 

contain those portions of the contract 

relevant to exclusivity, including: 

(A) A description of the programming 

service; 

(B) The extent and duration of 

exclusivity proposed; and 

(C) Any other terms or provisions 

directly related to exclusivity or to any 

of the criteria set forth in paragraph 

(c)(4) of this section. The petition for 

exclusivity shall also include a 

statement setting forth the petitioner’s 

reasons to support a finding that the 

contract is in the public interest, 

addressing each of the five factors set 

forth in paragraph (c)(4) of this section. 

(iii) Any competing multichannel 

video programming distributor affected 

by the proposed exclusivity may file an 

opposition to the petition for exclusivity 

within thirty (30) days of the date on 

which the petition is placed on public 

notice, setting forth its reasons to 

support a finding that the contract is not 

in the public interest under the criteria 

set forth in paragraph (c)(4) of this 

section. Any such formal opposition 

must be served on petitioner on the 

same day on which it is filed with the 

Commission. 

(iv) The petitioner may file a response 

within ten (10) days of receipt of any 

formal opposition. The Commission will 

then approve or deny the petition for 

exclusivity. 

(6) Sunset provision. The prohibition 

of exclusive contracts set forth in 

paragraph (c)(2) of this section shall 

cease to be effective on October 5, 2017, 

unless the Commission finds, during a 

proceeding to be conducted during the 

year preceding such date, that said 

prohibition continues to be necessary to 

preserve and protect competition and 

diversity in the distribution of video 

programming. 

* * * * * 

7. Section 76.1003 is amended by 

revising paragraph (e)(1) to read as 

follows: 

§ 76.1003 Program access proceedings. 

* * * * * 

(e) Answer. (1) Except as otherwise 

provided or directed by the 

Commission, any cable operator, 

satellite cable programming vendor or 

satellite broadcast programming vendor 

upon which a program access complaint 

is served under this section shall answer 

within twenty (20) days of service of the 

complaint, provided that the answer 

shall be filed within forty-five (45) days 

of service of the complaint if the 

complaint alleges a violation of section 

628(b) of the Communications Act of 

1934, as amended, or § 76.1001(a). To 

the extent that a cable operator, satellite 

cable programming vendor or satellite 

broadcast programming vendor 

expressly references and relies upon a 

document or documents in asserting a 

defense or responding to a material 

allegation, such document or documents 

shall be included as part of the answer. 

* * * * * 

Alternative 1: 

8. Section 76.1004 is amended by 

revising paragraph (b) to read as follows: 

§ 76.1004 Applicability of program access 

rules to common carriers and affiliates. 

* * * * * 

(b) Sections 76.1002(c)(1) through (3) 

shall be applied to a common carrier or 

its affiliate that provides video 

programming by any means directly to 

subscribers as follows: No common 

carrier or its affiliate that provides video 

programming directly to subscribers 

shall engage in any practice or activity 

or enter into any understanding or 

arrangement, including exclusive 

contracts, with a satellite cable 

programming vendor or satellite 

broadcast programming vendor for 

satellite cable programming or satellite 

broadcast programming that prevents a 

multichannel video programming 

distributor from obtaining such 

programming from any satellite cable 

programming vendor in which a 

common carrier or its affiliate has an 

attributable interest, or any satellite 

broadcasting vendor in which a 

common carrier or its affiliate has an 

attributable interest for distribution to 

persons in areas not served by a cable 

operator as of October 5, 1992. 

Alternative 2: 

9. Section 76.1004 is amended by 

revising paragraph (b) to read as follows: 

§ 76.1004 Applicability of program access 

rules to common carriers and affiliates. 

* * * * * 

(b) Sections 76.1002(c)(1) through (3) 

shall be applied to a common carrier or 

its affiliate that provides video 

programming by any means directly to 

subscribers in such a way that such 

common carrier or its affiliate shall be 

generally restricted from entering into 

an exclusive arrangement for satellite 

cable programming or satellite broadcast 

programming with a satellite cable 

programming vendor in which a 

common carrier or its affiliate has an 

attributable interest or a satellite 

broadcast programming vendor in 

which a common carrier or its affiliate 

has an attributable interest, unless the 

arrangement pertains to an area served 

by a cable system as of October 5, 1992, 

and: 

(1) The Commission determines in 

accordance with § 76.1002(c)(4) that 

such arrangement is in the public 

interest; or 

(2) Such arrangement pertains to a 

geographic area for which a petition for 

sunset has been granted pursuant to 

§ 76.1002(c)(7) of this part. 

Alternative 3: 

10. Section 76.1004 is amended by 

revising paragraph (b) to read as follows: 

§ 76.1004 Applicability of program access 

rules to common carriers and affiliates. 

* * * * * 

(b) Sections 76.1002(c)(1) through (3) 

shall be applied to a common carrier or 

its affiliate that provides video 

programming by any means directly to 

subscribers in such a way that such 

common carrier or its affiliate shall be 

generally restricted from entering into 

an exclusive arrangement for satellite 

cable programming or satellite broadcast 

programming that meets the definition 

of a Regional Sports Network as defined 

in § 76.1000(n) with a satellite cable 

programming vendor in which a 

common carrier or its affiliate has an 

attributable interest or a satellite 

broadcast programming vendor in 

which a common carrier or its affiliate 

has an attributable interest, unless the 

arrangement pertains to an area served 

by a cable system as of October 5, 1992, 

and the Commission determines in 

accordance with § 76.1002(c)(4) that 

such arrangement is in the public 

interest. 

Alternative 1: 

11. Section 76.1507 is amended by 

removing and reserving paragraph (a)(2) 

and revising paragraphs (a)(3) and (b) to 

read as follows: 

§ 76.1507 Competitive access to satellite 

cable programming. 

(a) * * * 

(3) Section 76.1002(c)(3)(i) through 

(ii) shall only restrict the conduct of an 

open video system operator, its affiliate 

that provides video programming on its 

open video system and a satellite cable 

programming vendor in which an open 

video system operator has an 

attributable interest, as follows: No open 

video system operator shall enter into 

any subdistribution agreement or 

arrangement for satellite cable 


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Federal Register / Vol. 77, No. 78 / Monday, April 23, 2012 / Proposed Rules 24335 

programming or satellite broadcast 

programming with a satellite cable 

programming vendor in which an open 

video system operator has an 

attributable interest or a satellite 

broadcast programming vendor in 

which an open video system operator 

has an attributable interest for 

distribution to persons in areas not 

served by a cable operator as of October 

5, 1992 unless such agreement or 

arrangement complies with the 

limitations set forth in 

§ 76.1002(c)(3)(ii). 

(b) No open video system 

programming provider in which a cable 

operator has an attributable interest 

shall engage in any practice or activity 

or enter into any understanding or 

arrangement, including exclusive 

contracts, with a satellite cable 

programming vendor or satellite 

broadcast programming vendor for 

satellite cable programming or satellite 

broadcast programming that prevents a 

multichannel video programming 

distributor from obtaining such 

programming from any satellite cable 

programming vendor in which a cable 

operator has an attributable interest, or 

any satellite broadcasting vendor in 

which a cable operator has an 

attributable interest for distribution to 

person in areas not served by a cable 

operator as of October 5, 1992. 

Alternative 2: 

12. Section 76.1507 is amended by 

revising paragraphs (a)(2) and (3) and 

paragraph (b)(2) to read as follows: 

§ 76.1507 Competitive access to satellite 

cable programming. 

(a) * * * 

(2) Section 76.1002(c)(2) shall only 

restrict the conduct of an open video 

system operator, its affiliate that 

provides video programming on its open 

video system and a satellite cable 

programming vendor in which an open 

video system operator has an 

attributable interest, as follows: No open 

video system operator or its affiliate that 

provides video programming on its open 

video system shall enter into any 

exclusive contracts, or engage in any 

practice, activity or arrangement 

tantamount to an exclusive contract, for 

satellite cable programming or satellite 

broadcast programming with a satellite 

cable programming vendor in which an 

open video system operator has an 

attributable interest or a satellite 

broadcast programming vendor, unless: 

(i) The Commission determines in 

accordance with § 76.1002(c)(4) that 

such a contract, practice, activity or 

arrangement is in the public interest; or 

(ii) Such a contract, practice, activity 

or arrangement pertains to a geographic 

area for which a petition for sunset has 

been granted pursuant to 

§ 76.1002(c)(7). 

(3) Section 76.1002(c)(3)(i) through 

(ii) shall only restrict the conduct of an 

open video system operator, its affiliate 

that provides video programming on its 

open video system and a satellite cable 

programming vendor in which an open 

video system operator has an 

attributable interest, as follows: No open 

video system operator shall enter into 

any subdistribution agreement or 

arrangement for satellite cable 

programming or satellite broadcast 

programming with a satellite cable 

programming vendor in which an open 

video system operator has an 

attributable interest or a satellite 

broadcast programming vendor in 

which an open video system operator 

has an attributable interest, with respect 

to areas served or unserved by a cable 

operator, unless such agreement or 

arrangement complies with the 

limitations set forth in 

§ 76.1002(c)(3)(ii), except as provided in 

§ 76.1002(c)(3)(iii). 

(b) * * * 

(2) Enter into any exclusive contracts, 

or engage in any practice, activity or 

arrangement tantamount to an exclusive 

contract, for satellite cable programming 

or satellite broadcast programming with 

a satellite cable programming vendor in 

which a cable operator has an 

attributable interest or a satellite 

broadcast programming vendor, unless: 

(i) The Commission determines in 

accordance with § 76.1002(c)(4) that 

such a contract, practice, activity or 

arrangement is in the public interest; or 

(ii) Such a contract, practice, activity 

or arrangement pertains to a geographic 

area for which a petition for sunset has 

been granted pursuant to 

§ 76.1002(c)(7). 

Alternative 3: 

13. Section 76.1507 is amended by 

revising paragraph (a)(2) through (3) and 

paragraph (b)(2) to read as follows: 

§ 76.1507 Competitive access to satellite 

cable programming. 

(a) * * * 

(2) Section 76.1002(c)(2) shall only 

restrict the conduct of an open video 

system operator, its affiliate that 

provides video programming on its open 

video system and a satellite cable 

programming vendor in which an open 

video system operator has an 

attributable interest, as follows: No open 

video system operator or its affiliate that 

provides video programming on its open 

video system shall enter into any 

exclusive contracts, or engage in any 

practice, activity or arrangement 

tantamount to an exclusive contract, for 

satellite cable programming or satellite 

broadcast programming that meets the 

definition of a Regional Sports Network 

as defined in § 76.1000(n) of this part 

with a satellite cable programming 

vendor in which an open video system 

operator has an attributable interest or a 

satellite broadcast programming vendor, 

unless the Commission determines in 

accordance with § 76.1002(c)(4) that 

such a contract, practice, activity or 

arrangement is in the public interest. 

(3) Section 76.1002(c)(3)(i) through 

(ii) shall only restrict the conduct of an 

open video system operator, its affiliate 

that provides video programming on its 

open video system and a satellite cable 

programming vendor in which an open 

video system operator has an 

attributable interest, as follows: 

(i) Unserved areas. No open video 

system operator shall enter into any 

subdistribution agreement or 

arrangement for satellite cable 

programming or satellite broadcast 

programming with a satellite cable 

programming vendor in which an open 

video system operator has an 

attributable interest or a satellite 

broadcast programming vendor in 

which an open video system operator 

has an attributable interest for 

distribution to persons in areas not 

served by a cable operator as of October 

5, 1992 unless such agreement or 

arrangement complies with the 

limitations set forth in 

§ 76.1002(c)(3)(iii). 

(ii) Served areas. No open video 

system operator shall enter into any 

subdistribution agreement or 

arrangement for satellite cable 

programming or satellite broadcast 

programming that meets the definition 

of a Regional Sports Network as defined 

in § 76.1000(n) of this part with a 

satellite cable programming vendor in 

which an open video system operator 

has an attributable interest or a satellite 

broadcast programming vendor in 

which an open video system operator 

has an attributable interest, with respect 

to areas served by a cable operator, 

unless such agreement or arrangement 

complies with the limitations set forth 

in § 76.1002(c)(3)(iii). 

(b) * * * 

(2) Enter into any exclusive contracts, 

or engage in any practice, activity or 

arrangement tantamount to an exclusive 

contract, for satellite cable programming 

or satellite broadcast programming that 

meets the definition of a Regional Sports 

Network as defined in § 76.1000(n) of 

this part with a satellite cable 

programming vendor in which a cable 

operator has an attributable interest or a 

satellite broadcast programming vendor, 

unless the Commission determines in 


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24336 Federal Register / Vol. 77, No. 78 / Monday, April 23, 2012 / Proposed Rules 

accordance with § 76.1002(c)(4) that 

such a contract, practice, activity or 

arrangement is in the public interest. 

[FR Doc. 2012–8991 Filed 4–20–12; 8:45 am] 

BILLING CODE 6712–01–P 


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