68082 Federal Register / Vol. 65, No. 220 / Tuesday, November 14, 2000 / Rules and Regulations

TABLE 52.1525.—EPA—APPROVED RULES AND REGULATIONS 1—NEW HAMPSHIRE

Title/subject State citation

chapter 2

Date submitted by

State

Date approved

by EPA

Federal Register

citation 52.1520 Explanation

*******

NOX Budget Trading

Program.

Part Env-A 3200 ....... 7/27/98 11/14/00 65 FR 68082 ............. (c)(57) Approval of OTC

NOX budget and allowance trading

program.

*******

Source specific order Order ARD 98–001 ... 7/17/98 11/14/00 65 FR 68082 ............. (c)(64) Source-specific NOX

RACT order and

discrete emission

reduction protocols

for Public Service

of New Hampshire.

*******

NOX Budget Trading

Program.

Part Env-A 3200 ....... 7/27/98 11/14/00 65 FR 68082 ............. (c)(57) Approval of OTC

NOX budget and allowance trading

program.

*******

1These regulations are applicable statewide unless otherwise noted in the Explanation section.

2When the New Hampshire Department of Environmental Services was established in 1987, the citation chapter title for the air regulations

changed from CH Air to Env-A.

[FR Doc. 00–28707 Filed 11–13–00; 8:45 am]

BILLING CODE 6560–50–P

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Parts 73 and 76

[CS Docket No. 00–2; FCC 00–388]

Implementation of the Satellite Home

Viewer Improvement Act of 1999:

Application of Network

Nonduplication, Syndicated

Exclusivity, and Sports Blackout Rules

to Satellite Retransmissions of

Broadcast Signals

AGENCY: Federal Communications

Commission.

ACTION: Final rule.

SUMMARY: This document adopts

regulations to implement certain aspects

of the Satellite Home Viewer

Improvement Act of 1999, which was

enacted on November 29, 1999. Among

other things, the act authorizes satellite

carriers to add more local and national

broadcast programming to their

offerings and seeks to place satellite

carriers on an equal footing with cable

operators with respect to availability of

broadcast programming. This document

adopts regulations that apply current

cable rules for network non-duplication,

syndicated program exclusivity and

sports blackout to satellite carriers.

DATES: Effective November 29, 2000.

ADDRESSES: Federal Communications

Commission, 445 12th Street, SW,

Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT:

Eloise Gore at (202) 418–7200 or via

internet at egore@fcc.gov.

SUPPLEMENTARY INFORMATION: This is a

summary of the Commission’s Report

and Order (‘‘Order’’), FCC 00–388,

adopted October 27, 2000; released

November 2, 2000. The full text of the

Commission’s Order is available for

inspection and copying during normal

business hours in the FCC Reference

Center (Room CY–A257) at its

headquarters, 445 12th Street, SW,

Washington, DC 20554, or may be

purchased from the Commission’s copy

contractor, International Transcription

Service, Inc., (202) 857–3800, 1231 20th

Street, NW, Washington, DC 20036, or

may be reviewed via internet at http://

www.fcc.gov/csb/ For copies in

alternative formats, such as braille,

audio cassette or large print, please

contact Sheila Ray at ITS.

Paperwork Reduction Act

This Report and Order contains new

or modified information collection(s)

subject to the Paperwork Reduction Act

of 1995 (PRA), Public Law 104–13. The

Commission is requesting Office of

Management and Budget (‘‘OMB’’)

approval, under the emergency

processing provisions of the 1995 Act (5

CFR 1320.13), of the information

collection requirements contained in

this Report and Order.

Synopsis of the Order

Introduction

1. In this Report and Order (‘‘Order’’),

we adopt network non-duplication,

syndicated exclusivity, and sports

blackout rules for satellite carriers.

These rules implement provisions of the

Satellite Home Viewer Improvement Act

of 1999 (‘‘SHVIA,’’ Public Law 106–113,

113 Stat. 1501, 1501A–526 to 1501A–

545 (Nov. 29, 1999)), which provides

statutory copyright licenses for satellite

carriers to provide additional local and

national broadcast programming to

subscribers. In enacting the SHVIA,

Congress sought to create parity

between satellite carriers and cable

operators with regard to the

retransmission of broadcast

programming and to expand the

availability of such programming to

consumers. Prior to enactment of the

SHVIA, the copyright laws made it

virtually impossible for satellite

subscribers to receive television

broadcast programming by satellite. In

adopting these rules, the Commission

implements the statutory requirements

and seeks to facilitate competition in the

multichannel video programming

distribution marketplace.

2. Section 1008 of the SHVIA creates

a new section 339 of the

Communications Act of 1934, as

amended (‘‘Communications Act’’)

entitled ‘‘Carriage of Distant Television

Stations by Satellite Carriers.’’ Section

339(b) directs the Commission to apply

Federal Register / Vol. 65, No. 220 / Tuesday, November 14, 2000 / Rules and Regulations 68083

the network non-duplication,

syndicated exclusivity, and sports

blackout rules, previously applicable

only to cable television systems, to

satellite carriers’ retransmission of

nationally distributed superstations to

satellite subscribers. Congress also

requires the Commission to apply the

cable sports blackout rule to satellite

carriers’ retransmission of network

stations, but only ‘‘to the extent

technically feasible and not

economically prohibitive.’’ The

Commission released a Notice of

Proposed Rulemaking (‘‘NPRM’’) on

January 7, 2000, seeking comment on

how best to apply these rules to satellite

carriers (65 FR 4927, February 2, 2000).

The Commission received 22 comments

and 14 reply comments to the NPRM.

Background

3. The network non-duplication,

syndicated exclusivity, and sports

blackout rules (collectively referred to

herein as ‘‘the exclusivity rules’’), as

applied in the cable context, generally

protect exclusive contractual rights that

have been negotiated between program

providers and broadcasters or other

rights holders. These exclusive

contractual rights are potentially

threatened by cable systems that are

capable of importing duplicative

programming from distant sources

beyond the control of the contracting

parties. The cable exclusivity rules

provide that specific programs must be

deleted from distant television

broadcast signals delivered to cable

subscribers if the programs are subject

to exclusive rights pursuant to contracts

with local stations. Additionally,

pursuant to the sports blackout rule,

sporting events carried on distant

stations must be deleted when carriage

would violate sporting teams’ or

leagues’ arrangements to protect gate

receipts in the local market.

4. Section 339(b)(1)(A) of the

Communications Act, as amended by

the SHVIA, requires the Commission ‘‘to

apply network non-duplication

protection (47 CFR 76.92), syndicated

exclusivity protection (47 CFR 76.151),

and sports blackout protection (47 CFR

76.67) to the retransmission of the

signals of nationally distributed

superstations by satellite carriers to

subscribers.’’ Section 339(b)(1)(B)

requires the Commission to ‘‘apply

sports blackout protection (47 CFR

76.67) to the retransmission of the

signals of network stations by satellite

carriers to subscribers’’ ‘‘to the extent

technically feasible and not

economically prohibitive.’’ The SHVIA

requires that the Commission

implement these new rules so that they

will be ‘‘as similar as possible’’ to the

rules applicable to cable operators.

Summary of Decision

5. In implementing these sections of

the SHVIA, the Commission attempts to

be faithful to the clear Congressional

intent to place satellite carriers on an

equal footing with cable operators,

while taking into consideration that the

operational structures of these two

Multichannel Video Programming

Distributors (‘‘MVPD’’s) are very

different. In the context of the SHVIA,

which is fundamentally part of the

copyright laws, we are cognizant also of

the important protection that the

exclusivity rules provide to broadcasters

and copyright holders. The SHVIA

facilitates satellite carriage of additional

broadcast stations through the use of a

statutory copyright license. By applying

the cable exclusivity rules to satellite

carriers, Congress sought to keep the

competitive marketplace in balance by

protecting the broadcasters’ private

contractual arrangements and ensuring

that satellite carriers have regulatory

obligations that are as similar as

possible to cable operators. The

statutory language unambiguously

directs us to apply all three of the cable

exclusivity rules to satellite carriers

with respect to retransmission of

nationally distributed superstations.

The SHVIA further requires that only

the sports blackout rule be applied to

satellite carriers’ retransmission of

network stations and limits application

of the cable rule in this context ‘‘to the

extent technically feasible and not

economically prohibitive.’’

Congressional intent, as expressed in

the Joint Explanatory Statement, places

a heavy burden on showing that rules

similar to the cable rules would be

‘‘economically prohibitive’’ for satellite

carriers.

6. In general, under the new statutory

provisions, the network non-duplication

and syndicated exclusivity rules apply

when a satellite carrier retransmits a

nationally distributed superstation to a

household within a local broadcaster’s

zone of protection, and the nationally

distributed superstation carries a

program to which the local station has

exclusive rights. The program may fall

under either the definition of network

program (delivered simultaneously to

more than one broadcast station, (47

CFR 76.5(m)) or the definition of

syndicated program (sold, licensed,

distributed or sold to licensees in more

than one market (47 CFR 76.5(ii)). In

addition, the sports blackout rules will

apply when a subject sporting event will

not be aired live by any local television

station, and a satellite carrier

retransmits a nationally distributed

superstation or a distant network station

carrying that sporting event to a

household within the zone of protection

of the holder of exclusive distribution

rights to the event. In all of these cases,

the television broadcast station or other

rights holder may require the satellite

carrier to blackout these particular

programs for the satellite subscriber

households within the protected zone.

7. In the NPRM we sought comments

on how we could follow the

Congressional mandate to apply the

cable exclusivity rules as closely as

possible to satellite carriers while taking

account of the differences between the

two industries. In general, the

comments did not provide specific data

on cost or technical difficulties in

applying the exclusivity rules to

satellite carriers and leave us with the

conclusion that, in most cases, these

rules can be applied directly to satellite

carriers. There is a general consensus,

however, that the ‘‘community units’’

used for identification of cable systems

are inapplicable in the satellite context.

We decide here to use zip codes in lieu

of community units to define the

various zones of protection afforded

under the satellite exclusivity rules

adopted today. In large part, the

notification provisions of the cable

exclusivity rules can be applied in the

satellite context, except with respect to

the sports blackout requirements, for

which we have the statutory flexibility

and record to support slightly different

requirements. In a further effort to

provide comparable treatment for the

cable and satellite rules, we adapt the

exceptions to the cable exclusivity rules

for small systems to the satellite context.

We also require that the contractual

language granting exclusive rights in a

market clearly apply to satellite carriage,

and we provide a period of time for

satellite carriers to phase-in

implementation of the new rules.

Finally, we decline to take the steps

advocated by the National Football

League to go beyond the statutory

requirements to delete non-duplicating

sports programming that is part of a

sports program ‘‘unitary’’ package

because it would unnecessarily and

unjustifiably further limit the ability of

consumers to view the programming of

their choice.

Statutory Interpretation and

Definitional Issues

8. Section 339(b)(1), as created by the

SHVIA, applies to ‘‘satellite carriers.’’

Section 339(d)(4) defines ‘‘satellite

carrier’’ by reference to the Copyright

Act definition as

68084 Federal Register / Vol. 65, No. 220 / Tuesday, November 14, 2000 / Rules and Regulations

an entity that uses the facilities of a satellite

or satellite service licensed by the Federal

Communications Commission and operates

in the Fixed-Satellite Service under part 25

of title 47 of the Code of Federal Regulations

or the Direct Broadcast Satellite Service

under part 100 of title 47 of the Code of

Federal Regulations, to establish and operate

a channel of communications for point-tomultipoint distribution of television station

signals, and that owns or leases a capacity or

service on a satellite in order to provide such

point-to-multipoint distribution, except to

the extent that such entity provides such

distribution pursuant to tariff under the

Communications Act of 1934, other than for

private home viewing. (17 U.S.C. 119(d)(6))

Contrary to the arguments of several

commenters, there is nothing in the

SHVIA or the legislative history that

suggests that satellite carriers operating

in the C-Band were intended to be

exempted from the requirements of

section 339(b)(1). C-Band satellite

carriers are licensed under part 25 of the

Commission’s rules. We do not agree

that an isolated and ambiguous colloquy

between two Senators overrides

unambiguous statutory language. We

recognize, however, that C-Band carriers

operate differently from DBS carriers

and that the number of C-Band

subscribers is steadily decreasing, and

to the extent C-Band satellite carriers

can be subject to exceptions from any of

the exclusivity rules we adopt today,

they are specifically described below. In

the absence of specific language

distinguishing C-Band satellite carriers,

references to ‘‘satellite carriers’’ in this

Order refer to all satellite carriers that

meet the definition in the SHVIA.

9. Section 339(b)(1)(A) of the

Communications Act requires the

Commission to apply network nonduplication protection, syndicated

exclusivity protection, and sports

blackout protection to the

retransmission of the signals of

nationally distributed superstations by

satellite carriers to subscribers. For

these purposes, a ‘‘nationally

distributed superstation’’ is a term that

is defined as a television broadcast

station, licensed by the Commission,

that meets the following three criteria:

(A) is not owned or operated by or

affiliated with a television network that,

as of January 1, 1995, offered

interconnected program service on a

regular basis for 15 or more hours per

week to at least 25 affiliated television

licensees in 10 or more States;

(B) on May 1, 1991, was retransmitted

by a satellite carrier and was not a

network station at that time; and

(C) was, as of July 1, 1998,

retransmitted by a satellite carrier under

the statutory license of section 119 of

title 17, United States Code.

Television network means ‘‘a

television network in the United States

which offers an interconnected program

service on a regular basis for 15 or more

hours per week to at least 25 affiliated

broadcast stations in 10 or more States’’

(47 U.S.C. 339(d)(5)). A ‘‘network

station’’ is ‘‘(A) a television broadcast

station, including any translator station

or terrestrial satellite station that

rebroadcasts all or substantially all of

the programming broadcast by a

network station, that is owned or

operated by, or affiliated with, one or

more of the television networks in the

United States which offer an

interconnected program service on a

regular basis for 15 or more hours per

week to at least 25 of its affiliated

television licensees in 10 or more

States’’ or ‘‘(B) a noncommercial

educational broadcast station (as

defined in section 397 of the

Communications Act of 1934)’’ except

that the term does not include ‘‘the

signal of the Alaska Rural

Communications Service, or any

successor entity to that service.’’ (17

U.S.C. 119(d)(2).)

10. In the NPRM, we stated that the

television broadcast stations that meet

the foregoing criteria are limited to

KTLA–TV (Los Angeles), WPIX–TV

(New York), KWGN–TV (Denver),

WSBK–TV (Boston), WWOR–TV (New

York) and WGN–TV (Chicago). KTLA,

WPIX and KWGN are all now affiliates

of the Warner Brothers Network (‘‘WB’’).

In addition, WSBK and WWOR

currently are affiliated with the UPN

Network. WGN is affiliated with WB but

provides a different ‘‘syndex/nondupe

proof’’ signal for uplink and carriage as

a superstation. We note that WB and

UPN did not qualify as ‘‘television

networks’’ as of January 1, 1995, the

operative date referenced in section

339(d)(2)(A) because they did not satisfy

each of the statutory criteria as of that

date. We also stated that since no other

station could meet these criteria in the

future due to the date-specific

conditions set forth in the definition,

the foregoing constitutes a finite list of

the nationally distributed superstations

covered by the statute. Commenters

directly addressing this issue generally

agree with our conclusion that this list

of nationally distributed superstations is

complete and finite.

11. By creating this special category

known as nationally distributed

superstations, Congress permits satellite

carriers to retransmit these superstations

to subscribers regardless of whether

they are ‘‘served’’ or ‘‘unserved’’

pursuant to the Copyright Act. The

amended copyright provision provides

that the retransmission of nationally

distributed superstations to subscribers

who do not reside in ‘‘unserved

households’’ shall not violate the

compulsory copyright license. (An

unserved household is defined in part

as one that cannot receive over-the-air a

signal of Grade B intensity for a primary

television network station (17 U.S.C.

119(d)(10)).) Thus, we conclude that as

a result of section 1005(b), there is no

geographic restriction on the

retransmission of ‘‘nationally

distributed superstations’’ pursuant to

the compulsory copyright license.

12. In addition, the SHVIA amended

the retransmission consent section of

the Communications Act, which

generally prohibits MVPDs from

retransmitting the signals of a

broadcaster absent the broadcaster’s

written authorization. The SHVIA

allows a satellite carrier to retransmit

the signal of a superstation outside the

station’s local market without the

station’s consent if: (i) The station was

a superstation on May 1, 1991, and (ii)

the station was retransmitted by the

satellite carrier as of July 1, 1998,

provided the satellite carrier complies

with the Commission’s non-duplication,

syndicated exclusivity, and sports black

out rules. This provision differs slightly

from the definition of a nationally

distributed superstation in that it does

not specify that the superstation must

not be affiliated with a network that

existed as such as of January 1, 1995. At

this time, this distinction is without

practical significance because the six

television stations cited above meet the

relevant criteria of either definition, and

there are no additional stations that are

included or excluded by operation of

this third criterion. As discussed in the

NPRM, we conclude that, pursuant to

these new statutory mandates in the

SHVIA, satellite carriers are permitted

to retransmit the signals of the

nationally distributed superstations

covered by section 339(b)(1)(A) outside

the station’s local market to both served

and unserved households without the

station’s consent and without

geographic restriction. In a similar but

not identical provision, the SHVIA

permits a cable operator or other MVPD

(other than a satellite carrier) to

retransmit a television broadcast station

outside of its local market without its

consent, provided the MVPD obtains the

signal from a satellite, and the station

was a superstation on May 1, 1991 and

was retransmitted by a satellite carrier

under the Section 119 statutory license

as of July 1, 1998.

13. In addition to applying the

existing cable exclusivity rules to

nationally distributed superstations,

Section 339(b)(1)(B) requires the

Federal Register / Vol. 65, No. 220 / Tuesday, November 14, 2000 / Rules and Regulations 68085

Commission to apply sports blackout

protection to the retransmission of the

signals of network stations by satellite

carriers to subscribers ‘‘to the extent

technically feasible and not

economically prohibitive.’’ By its terms,

Section 339(b)(1)(B) applies only to

‘‘network stations,’’ which are television

broadcast stations owned or operated

by, or affiliated with, the television

networks. Affiliates of these networks

are the only entities that meet the

definition of a television network

station contained in the Copyright Act

and are the only stations covered by

Section 339(b)(1)(B). In the cable

context, the Commission’s sports

blackout rule applies to any television

broadcast station and is not limited to

network stations. Consistent with the

provisions of the statute, we confine the

application of the satellite sports

blackout rule to retransmission of

network stations. The SHVIA statutory

license for satellite carriers applies only

to retransmission of distant network

stations. Thus it is consistent for the

sports blackout provisions to be

similarly limited pursuant to Section

339(b)(1)(B).

14. In the NPRM we observed that the

title of new Section 339, ‘‘Carriage of

Distant Television Stations by Satellite

Carriers,’’ indicates that this section is

intended to apply to satellite

retransmission of distant network

stations, notwithstanding that the text of

Section 339(b)(1) does not specifically

so state. The cable exclusivity rules

were originally created and apply today

to address cable importation of distant

stations. We conclude, and most

commenters agree, that it was Congress’

intent to apply the sports blackout rules

to retransmission of distant network

stations and not to local network

stations. We note, too, that the statutory

copyright license for satellite carriage of

distant network stations relies upon the

definition of ‘‘network station’’ in the

copyright provisions.

15. We also sought comment in the

NPRM on whether stations based in

foreign countries are affected by the

SHVIA provisions requiring application

of the cable exclusivity and sports

blackout rules to satellite

retransmissions. Certain commenters

addressing this issue argue that while

the blackout protection afforded by the

rules should apply to a foreign station’s

programming carried by a U.S. satellite

carrier, a foreign station cannot invoke

these protections against satellite

importation of programming into its

home market. Grupo Televisa, on the

other hand, argues that the rules should

apply in favor of non-U.S. licensed

border stations serving U.S. markets and

affiliated with U.S. networks, citing the

inclusion of such stations in the

compulsory license of Section 1002 of

the SHVIA. We agree with MPAA and

NHL that foreign stations are beyond

our jurisdiction and therefore unable to

invoke the protection of the exclusivity

and sports blackout rules. With respect

to retransmission of a foreign station’s

programming into U.S. markets by a

U.S. licensed satellite carrier, we

conclude that the satellite rules will

apply as they do with respect to the

exclusivity rules governing cable

systems. The definition of ‘‘television

broadcast station’’ in 47 CFR 76.5(b)

includes stations licensed by a foreign

government but provides that such

foreign station not entitled to assert

program exclusivity. Also, in the DISCO

II Order the Commission explained that

it will license the earth stations that use

a non-U.S. licensed satellite to provide

service to subscribers in the United

States, rather than re-license foreign

satellite operators. The earth station

operators providing service in the

United States through these non-U.S.

licensed satellites are ‘‘satellite carriers’’

as defined in the SHVIA because they

are licensed under either part 25 or part

100 of the Commission’s rules.

Section 339(B)(1)(A): Application of

Network Non-Duplication, Syndicated

Exclusivity, and Sports Blackout to

Retransmission of Nationally

Distributed Superstations

16. Section 339(b)(1)(A) requires the

Commission to apply network nonduplication protection, syndicated

exclusivity protection, and sports

blackout protection to the

retransmission of signals of nationally

distributed superstations by satellite

carriers. In this section, we address the

application of the network nonduplication and syndicated exclusivity

rules to nationally distributed

superstations together because these two

rules are similar in significant respects.

17. The Commission’s cable television

network non-duplication rule allows a

television broadcast station that has

purchased exclusive rights to network

programming within a specified area to

protect its exclusivity against carriage of

duplicating programming on local cable

systems. The ‘‘specified’’ or ‘‘protected’’

zone is the smaller of either the area

protected by the terms of the contract or

the 35 or 55 mile area designated by the

rules. In the satellite rules, this area is

generally termed the ‘‘zone of

protection’’ or protected zone. (47 CFR

76.92). The rule allows a local television

broadcast station to demand that a local

cable system’s duplicate carriage of the

same program from an otherwise distant

station be blacked out. ‘‘Network

program’’ is something of a misnomer in

terms of common usage as it appears to

suggest a program provided by a

recognized network. In fact, it is defined

as ‘‘any program delivered

simultaneously to more than one

broadcast station regional or national,

commercial or noncommercial’’ (47 CFR

76.5(m)). It is not necessary that the

program be delivered by a ‘‘television

network.’’ (In addition to full power

television stations, 100 watt translator

stations are allowed to demand network

non-duplication protection under

certain circumstances. Translator

stations are not entitled to syndicated

exclusivity protection (47 CFR 76.92(d)).

Due to differential carriage rights, we

are not replicating this provision in the

satellite non-duplication rules.) A

station may assert its exclusivity rights

regardless of whether its signal is

carried by the cable system in question.

Under the cable network nonduplication rule, a television station is

entitled to assert its exclusivity rights

against a cable system serving any

‘‘cable community unit’’ within the

station’s ‘‘specified zone’’ that is

carrying duplicative programming for

which the local station has obtained

exclusive distribution rights. (Cable

systems are comprised of one or more

‘‘community units’’ that correspond to

separate and discrete communities or

municipal entities. The rule applies on

a community unit basis by requiring the

cable system for a particular community

unit to black out a specific program

based on the priorities established in the

rule. The ‘‘specified zone’’ of a

television broadcast station is the 35

mile area surrounding its community of

license. The 35 mile specified zone, as

well as all other mileage zones used in

applying the exclusivity rules, is

measured from the relevant station’s

‘‘reference point’’ in its community of

license. The rules provide a list of the

reference points to identify television

market boundaries used for this

purpose. See 47 CFR 76.5(e), (dd); 76.53;

and 76.92(a).) A television station’s

rights within these areas are limited by

the terms of the contractual agreement

between the station and the holder of

the rights to the program (‘‘rights

holder’’). In addition, for local

programming to be protected, the local

programming must be the same as the

distant programming that is being

imported into a local station’s market.

Even the use of different camera crews

and announcers during the production

of an imported program may result in

the distant program not being

68086 Federal Register / Vol. 65, No. 220 / Tuesday, November 14, 2000 / Rules and Regulations

considered the same, per Major League

Baseball, 6 FCC Rcd. 5573 (1991).

18. The Commission’s syndicated

program exclusivity rule allows local

stations to protect their exclusive

distribution rights for syndicated

programming on local cable systems in

a local market. (A syndicated program is

defined as ‘‘any program sold, licensed,

distributed or offered to television

station licensees in more than one

market within the United States other

than as network programming. * * *’’)

This rule is similar in operation to the

network non-duplication rule, but it

applies to exclusive contracts for

syndicated programming, rather than for

network programming. In this rule, too,

a local television station is entitled to

assert its exclusivity rights within a

specified zone of 35 miles surrounding

the television station’s city of license.

Unlike the network non-duplication

rule, however, the maximum zone of

protection allowed under the rules is 35

miles surrounding a television station’s

city of license in a non-hyphenated

television market and 35 miles

surrounding each named city in any size

hyphenated market; the zone of

protection is not greater in smaller

markets.

19. As with network non-duplication,

the syndicated exclusivity rule applies

on a community unit basis by requiring

the cable system for a particular

community unit to black out a specific

program based on the priorities

established in the rule. In addition, the

geographic limits for exclusivity under

the Commission’s rules are limited by

the terms of the contractual agreement

between the station and the holder of

the rights to the program. As with

network non-duplication, the protected

zone is the smaller of either the area of

exclusivity provided in the contract or

the 35 mile area surrounding the

relevant reference point(s). Thus, if the

rights holder grants the television

station a zone of protection of ten miles,

then that station would be precluded

from exercising its exclusivity rights

against any cable system located more

than ten miles from that station’s city of

license. In addition, as with the network

non-duplication rules, for syndicated

programming to be protected, the

programming covered by the contract

must be the same as the distant

programming. We note that under both

of these cable rules, it is not necessary

that the broadcast station or rights

holder asserting protection actually be

carried on the cable system in question,

nor is it required that the rights holder

asserting its rights actually display the

programming for which it asserts

protection. These cable rules protect

contractual rights and apply even if the

programming is not shown at all or if

the subscribers subject to the deletion

do not have another source to receive

the programming.

Separate Satellite Rules

20. Initially, we sought comment on

whether we should incorporate the rules

we adopt to implement § 339(b)(1)(A)

into the existing Commission rules, or

whether we should adopt separate rules

for satellite carriers. Commenters

generally recommend that the

Commission adopt separate rules for

satellite carriers patterned after the

cable exclusivity rules. We concur that,

even though Congress specifically cited

the existing rule sections in the statute,

it will be less confusing and simpler to

implement a separate set of rules in the

satellite context. We agree with DirecTV

that new rules will be easier to

understand and comply with if they are

contained in a parallel, but distinct,

section, which will allow the

differences between the rules applicable

to the satellite and cable industries to be

highlighted. This will enable the

Commission to maintain consistency in

its rules, while adopting the minor

adjustments that are necessary to

properly apply the rules to satellite

carriers (e.g., application only to

nationally distributed superstations). In

this regard, we do not agree with WB

that the direct references to the

corresponding cable rules indicate that

Congress intended the rules to be

identical. The statutory language directs

us to develop rules that apply the

exclusivity protections in the satellite

context, not merely to add the words

‘‘satellite carriers’’ in the existing cable

rules. While we are establishing a

separate rule section for the exclusivity

rules that apply to satellite carriers,

these rules will not be substantially

different from the equivalent cable

rules.

21. Some satellite industry

commenters argue that we must take

into account the distinctive

characteristics of satellite services and

the associated issues of technical

feasibility and the cost of compliance.

EchoStar contends that the rules for

satellite carriers should be significantly

different from the cable rules due to the

characteristics of satellite services and

the onerous burdens of compliance.

Echostar raises a variety of technical

and administrative issues, such as the

need to develop a database to determine

affected subscribers and the addition of

‘‘untold layers of complexity to its

authorization/unscrambling

procedures’’ to delete different programs

in different areas of the country if we

merely apply the cable exclusivity rules

to satellite without change. EchoStar

asserts that unless appropriately

mitigated, the rules could lead to the

cessation of satellite carriage of

superstations, which would contravene

the legislative goal of parity between

cable and satellite operators. EchoStar

also argues that if Congress intended for

the Commission to automatically

employ the cable rules in the satellite

context it would not have directed the

Commission to conduct a rulemaking.

Alternatively, in support of a separate

rule section, DirecTV asserts that, given

the technological differences between

cable and satellites, in certain situations

it does not make sense, or is simply not

technologically feasible, to merely ‘‘lift’’

the cable rules.

22. We reject the arguments that the

satellite exclusivity rules should be

substantially different from the cable

rules due to technical considerations

and the burdens of compliance.

Congress directed the Commission to

make the rules ‘‘as similar as possible’’

to the cable rules and to protect the

contractual exclusivity rights purchased

by broadcasters and sold by program

rights holders. The statute specifically

cites the existing network nonduplication and syndicated exclusivity

rules as guidance. In particular, the

statute does not provide for any

exemption from these rules based on

technical feasibility or economic

hardship as it does for the application

of the sports blackout rules to network

stations. We believe, however, that in

considering the application of these

rules to satellite carriers we must

consider several modifications that

reflect the practical differences between

the two industries and the different

delivery systems they employ, as

detailed herein.

23. Some broadcasters argue that for

there to be parity between cable and

satellite providers, the Commission

should extend the protections of

network non-duplication to all distant

network carriage to protect emerging

networks and notes that the existing

cable rules are not statutorily mandated.

Because Congress provided for the

application of the sports blackout rule to

network stations, but not for the

network non-duplication or syndicated

exclusivity rules, we believe that

extending the rules in this manner is

beyond what Congress intended. We

reject this proposal on the same basis

that we reject the satellite industry’s

request to adopt significantly different

rules for satellite carriers due to

technical considerations.

Federal Register / Vol. 65, No. 220 / Tuesday, November 14, 2000 / Rules and Regulations 68087

Zone of Protection

24. Under the network nonduplication rules, a commercial or

noncommercial television station

licensed to a major television market

may assert exclusivity rights within its

specified zone. That zone is generally

the 35-mile area surrounding a

broadcast television station’s

community of license. The zone of

protection for stations licensed to

smaller television markets extends an

additional 20 miles (‘‘secondary zone’’),

for a total of 55 miles surrounding its

community of license. Pursuant to the

syndicated exclusivity rules, a local

commercial television station is entitled

to assert its exclusivity rights only

within a 35-mile geographic zone. There

is no extended zone of protection for

smaller market stations. For both rules,

a station licensed to a hyphenated

television market, as defined in the

rules, is entitled to assert exclusivity

within 35 miles surrounding each

named city. However, the zone of

protection may not exceed the area

agreed upon between the program

supplier or network and the television

station nor the area within which the

station has acquired broadcast territorial

exclusivity rights. For purposes of all of

the rules discussed in this Order, we

refer generally to a ‘‘zone of protection’’

or ‘‘protected zone’’ to apply to the

entire area protected by the rules’

provisions.

25. A majority of commenters support

the adoption of the same zones of

protection for broadcast stations in this

context because they provide a

definitive area within which exclusivity

rights may be asserted. We agree. We

also concur that, as with the cable rules,

the zone of protection should be limited

by the terms of the contractual

agreement between the station and the

program rights holder, with the

applicable geographic zone set forth in

the rules providing an outside limit on

the permitted zone of protection.

Several commenters mention, but reject,

the use of other zones of protection,

such as a station’s grade B contour or a

zone of protection coextensive with the

boundaries of ‘‘local market’’ for

retransmission consent purposes. As

Tribune observes, since Congress did

not mention a zone different from that

of the cable rules, it appears appropriate

to use the existing specified zone. We

also believe that this conclusion is

consistent with the congressional

directive to make these rules as similar

as possible to the cable rules. We further

believe that implementation in the

satellite context is feasible because

existing methods (e.g., the geocoding

techniques used to determine served

and unserved households) can be used

to determine whether a household is

located in a specified zone.

Accordingly, local broadcast television

stations will be entitled to assert

exclusivity protection throughout the

same zones of protection as those

specified in the cable rules.

26. We reject EchoStar’s proposal that

a satellite carrier should not be required

to comply with requests for exclusivity

(either network or syndicated) unless

the program deletion is requested by

qualified broadcast stations whose

geographic zones (not counting

overlaps) cover a substantial majority of

the nation. The ‘‘geographic zone’’ is

limited to the 35/55 mile area around

the reference point in the community of

license. EchoStar argues that this

requirement is needed in order to deal

with the mosaic of diverse deletion

requests for the same feed. EchoStar’s

proposal ignores the exclusivity rights

of individual broadcasters and

undermines regulatory objectives,

contrary to congressional intent and, in

our view, defeats the purpose of the

statutory mandate to protect the

exclusivity rights of local broadcast

stations. Moreover, while EchoStar

claims that it would have to develop a

huge database to determine whether a

subscriber is within the specified zone,

we observe that satellite carriers already

maintain such databases of subscribers

for determining eligibility for local-intolocal and network signals, for

information on the particular services to

which a household subscribes, and for

billing purposes. In addition, even

though satellite carriers use a

nationwide or multi-state footprint to

deliver programming, they provide

signals on a household-by-household

basis that enables them to deliver

different programming to different

households based upon which

programming package the subscriber

selects. Satellite carriers currently delete

programming when it is required by

contracts negotiated in the marketplace.

Furthermore, as a practical matter, the

programming deletions affect only five

of the six nationally distributed

superstations because WGN is ‘‘largely,

if not completely syndex and nondupeproof.’’ With respect to network

program deletions, we expect significant

uniformity across markets where

affiliates of WB or UPN assert their

rights since each superstation is

affiliated with one of these networks.

With respect to syndicated

programming, the superstations are

large market stations, which typically

acquire the most popular syndicated

programming that is sold in the vast

majority of markets, making EchoStar’s

fear of a crazy quilt pattern of deletions

largely unfounded. Moreover, the

statute unambiguously requires that we

apply the exclusivity rules in these

situations. Adopting EchoStar’s

proposal to limit application of the rules

to the non-existent circumstance in

which the broadcaster’s geographic zone

would cover most of the nation

effectively eliminates the application of

the exclusivity rules. The statutory

language does not give us this choice.

We also reject EchoStar’s proposal to

establish a procedure to exempt satellite

carriers on a case-by-case basis upon a

showing of extraordinary hardship. We

believe that such a policy is contrary to

the intent of the statute to protect the

rights of local broadcast licensees. We

also note that, in adopting exclusivity

rules in 1988, we eliminated a similar

waiver process.

Use of Zip Codes To Determine the

Location of Affected Households

27. The cable rules apply the

exclusivity rules on a community unit

basis within a station’s zone of

protection. Community units are

political jurisdictions (i.e., a city, town,

or county) or portions of political

jurisdictions for which a local

government body has granted a

franchise to operate a cable system.

These separate areas may or may not

encompass an entire city or county.

Several commenters support the

application of these rules on a

community unit basis in order that they

be as similar as possible to the cable

rules and to eliminate the possible

confusion to customers in the same

neighborhood that would be caused by

a program being blacked out if a

household subscribed to cable, but not

if it subscribed to a satellite service. In

order to promote parity between cable

operators and satellite carriers, they

argue that it is important that the

blackout areas for satellite carriers be as

congruent as possible with the blackout

areas for competing cable systems. They

further state that requiring satellite

carriers to black out programming on

the same community unit basis as is

applied to cable is the most easily

applied, understood, and enforced

approach for providers and residents.

Other commenters claim that it is

impossible or inappropriate to import

the community unit concept from cable

to satellite as cable systems have

specific, municipally-granted franchises

to serve discrete communities, the

boundaries of which are difficult to

determine and unnecessarily complex to

apply. They propose that subscribers

68088 Federal Register / Vol. 65, No. 220 / Tuesday, November 14, 2000 / Rules and Regulations

subject to the blackout rules be

ascertained by means of their zip code,

a method currently used by satellite

carriers for other purposes. These

commenters argue that since satellite

providers do not have identifiers

assigned to the communities they serve,

as is the case for cable, a comparable

method for determining the areas to

which the zone of protection applies

involves reliance on zip codes. This

method, like the use of cable

community units, is not a perfect means

to achieve congruence between the zip

code boundary and that of the specified

zone, but it is a workable compromise

using a fairly stable identifier.

Moreover, in their reply comments,

several proponents of the use of

community units state that they would

be willing to support a zip code

approach as a reasonable alternative as

long the rules would apply throughout

the entire zip code.

28. We conclude that it is appropriate

to use zip codes rather than community

units in the satellite context. There are

approximately 38,000 five-digit zip

codes in the United States, compared

with nearly 33,000 community units.

There is no readily applicable measure

that will precisely match specified

zones in either the cable or satellite

context. However, zip codes are already

used by satellite providers to determine

the location of subscribers for other

purposes and it would be more difficult

to determine which satellite subscribers

are located within a cable community

unit, which is tied to the cable franchise

process. As with the cable community

unit concept, reliance on zip codes can

often be overinclusive of the zone

covered by the exclusivity rights to be

protected. To closely align the rules for

satellite carriers with the cable rules, we

have been urged to require a satellite

provider to provide protection in all

relevant zip codes that fall, in whole or

in part, within the zone of protection.

We conclude, as described below, that

if technology permits satellite carriers to

more closely align their deletions to the

precise areas of the protected zone, they

may do so.

29. Satellite interests generally

propose that the broadcaster or rights

holder asserting its exclusivity rights

provide the satellite carrier with an

electronic file of the affected zip codes

that corresponds to the specified zone.

Alternatively, broadcasters contend that

the satellite carriers already have zip

code information that they use for other

purposes and they should be

responsible for determining which

subscribers are located in the areas

where the programming must be

blacked out. Since exclusivity contracts

vary in their coverage areas and it is the

broadcast station or rights holder that

has negotiated such contracts, we

conclude that the party seeking

exclusivity protection will be

responsible for identifying the affected

zip code areas along with the other

information that must be provided to

the satellite carrier. This approach is

consistent with our existing cable rules

that place the notification burdens on

the party seeking to assert its exclusivity

rights. We do not believe that this

requirement places an undue burden on

a broadcaster seeking exclusivity. In

many cases, the contracts will provide

for exclusivity up to the limits of the

specified zone and the broadcaster will

only have to determine the appropriate

zip codes once to cover such contracts.

Accordingly, we will require broadcast

stations or rights holders to provide

satellite carriers with the list of affected

zip codes, although we will not mandate

that it be in any specific format (e.g., we

will not require an electronic file). We

encourage satellite carriers and

broadcasters to work together to

effectuate the provisions of the statute,

even though we place the onus of

determining the affected zip codes on

the party seeking exclusivity protection.

We see no reason to make special or

separate provisions for satellite carriers

to verify that the list of zip codes is

accurate. If it comes to light that the list

is inaccurate, the satellite carrier may

object to the broadcaster or rights

holder.

30. We believe that for purposes of

complying with these and other

provisions of the SHVIA, satellite

operators must generally be aware of the

actual physical location of a subscriber.

Several commenters express concerns

regarding the accurate location of a

subscriber whose address is a post office

box (e.g., a U.S. Post Office Box or a

private post office box) or rural route

number, stating that a non-street address

makes it impossible to apply any rule

that relies on a geographic location.

Since accurate addresses are the

linchpin of a system that relies on

geographic location, they propose that

satellite carriers be required to certify

that they have no basis for believing that

subscribers have provided inaccurate

addresses for purposes of evading the

rules. In opposition, DirecTV argues that

there is no parallel provision in the

cable rules to serve as a basis for

imposing this additional obligation on

satellite carriers. In addition, proposals

to impose a number of restrictions on

satellite carriers to ‘‘reduce if not

obviate both the domestic and external

grey marketing’’ of satellite

programming are rejected as they are

beyond the scope of this proceeding.

31. On the basis of the record, there

is general agreement that rural route

numbers reasonably approximate the

actual location of the subscriber and are

acceptable because they are generally

located close to the residential address

where the subscriber receives the

satellite programming. Accordingly, we

will allow satellite carriers to use the

zip codes associated with rural route

numbers to determine the location of

such subscribers. However, where a

subscriber chooses to provide a post

office box for a billing address, we will

require that satellite carriers obtain a

residential street address—or simply a

zip code—where the service is actually

being received. Upon request, satellite

carriers may verify the data provided by

broadcasters and vice versa. We decline

to adopt the reporting and auditing

procedures proposed in the comments,

as they would place an undue burden

on broadcasters, satellite carriers and

the Commission.

32. In addition, MPAA proposes that

in instances in which the satellite

carriers serve individual households

that are within a zip code but outside

the specified zone, such subscribers

should be permitted to petition for a

waiver so that their programming is not

blacked out. It contends that, since the

satellite rules apply on a household

basis, this waiver process would serve

the purposes of the statute (i.e., parity

with cable and protection of rights

holders) without unduly depriving

satellite subscribers beyond the

specified zone of programming. We

acknowledge the cable rules require

cable operators to provide exclusivity

protection throughout community units,

even if some of their subscribers in that

unit are located outside the specified

zone. This requirement is based on our

understanding that it is not technically

feasible for cable operators to black out

programming to individual households.

On the grounds of maintaining

regulatory parity, NCTA advocates

requiring satellite carriers to delete

programming throughout zip code areas

that in whole or part overlap the

broadcaster’s zone of protection.

Notwithstanding our general interest in

regulatory parity, we are reluctant to

require satellite carriers to delete

programming beyond the boundaries of

the broadcaster’s or rights holder’s zone

of protection if they have the technical

capacity to accommodate such finetuning. Due to the unavoidable

difference in coverage between the zip

code areas and the community units,

there are likely to be some differences

between cable and satellite subscribers

Federal Register / Vol. 65, No. 220 / Tuesday, November 14, 2000 / Rules and Regulations 68089

in terms of programming required to be

deleted. Therefore, there is no reason to

require deletions outside the protected

zone on the grounds of parity. The

satellite rules provide that satellite

carriers must delete protected

programming from subscribers within

the zone of protection, but need not

delete programming from subscribers

who live in the part of a zip code area

that extends beyond the zone of

protection.

Terms of Contractual Agreements

33. Pursuant to § 76.93, television

stations are entitled to exercise network

non-duplication protection in

accordance with their network

agreements. The syndicated exclusivity

rules allow television stations to

exercise exclusivity rights in accordance

with their syndicated program license

agreement, consistent with the

requirements to invoke protection

specified in § 76.159. Under § 76.159, to

be eligible for syndicated exclusivity

protection, a station must have a

contract or other written indicia that it

holds syndication rights for the

programming. Section 76.159 requires

that contracts contain special language

for the licensee to invoke such

protection.

34. We find that the current situation

is analogous to that of 1988 when the

Commission reinstated syndicated

exclusivity rights, and the rule we adopt

treats these new rights in the same

manner as we did syndicated

exclusivity contracts at that time. That

is, we will give effect to new or existing

contracts that unambiguously grant such

rights against satellite carriage and

permit existing contracts to be clarified

or amended if they are ambiguous or did

not anticipate a change in the law.

35. The cable rules do not prescribe

specific language needed to invoke

network non-duplication protection.

Such exclusivity is provided in the

contractual provisions of networkaffiliate agreements that give individual

stations the right to be the exclusive

distributor of a network’s programming

in an area, generally within 35 miles of

its city of license. Where a networkaffiliation agreement does not provide

for network non-duplication protection

against satellite carriage of superstations

because this right was unanticipated or

the contract is ambiguous regarding

such rights, parties will be given an

opportunity to amend their agreements

to include clear, specific language, as

described below.

36. Some commenters contend that if

the special language required by the

cable syndicated exclusivity rules

appears in a contract, it is applicable to

satellite carriers. They contend that this

language invokes the two essential

elements for protection—retransmission

pursuant to the compulsory license and

reference to the Commission’s rules.

They state that any station with

exclusivity rights vis-a-vis cable should

be considered to hold the same rights

with respect to satellite carriers and that

parties should not be required to

renegotiate existing exclusivity

contracts. We disagree. We cannot

assume that the parties to these existing

contracts negotiated for protection

against satellite carriage when

duplicating carriage by satellite was not

covered by the Commission’s

exclusivity rules. We agree with other

commenters who counter that the rules

should only give effect to contracts that

unambiguously grant exclusive rights

vis-aa`-vis satellite carriers. They assert

that existing contracts should not be

enforceable against satellite carriers

unless it is clear that the licensee or

rights holder has negotiated for and

received such rights. Until the SHVIA

was enacted on November 29, 1999,

there was no certainty of satellite

exclusivity requirements. Arguably,

parties could not have a reasonable

expectation of exclusivity protection

until the rules adopted by this Order

take effect. Accordingly, we conclude

that only those exclusive contracts that

specifically cover satellite-delivered

programming or are broad enough to

encompass the delivery of duplicating

programming by any delivery means

(e.g., cable, satellite, wireless cable)

entitle a station to assert exclusivity

rights under these rules. Without such

specificity, it is not clear whether the

party granting the exhibition rights for

the programming intended to convey

network non-duplication or syndicated

exclusivity rights to the broadcaster in

the satellite context.

37. In reinstituting the syndicated

exclusivity rules in 1988, the

Commission allowed an opportunity for

parties to amend their contracts to

reflect the newly granted rights. Because

government protection of both network

non-duplication and syndicated

exclusivity rights vis a vis satellite

retransmission did not exist before

November 29, 1999, consistent with this

precedent we will provide a transition

period of six months to allow parties to

amend or clarify their network

affiliation or syndicated exclusivity

agreements to cover the exclusivity

rights provided in § 339(b)(1)(A) and the

rules we adopt today. We will require

also that contracts entered into after

release of this Order must include

special words to invoke protection

against duplication of programming

imported under the satellite statutory

copyright license. The special words in

the satellite context are similar to those

required to assert enforceable cable

syndicated exclusivity. Parties may use

this statement to reference either or both

the cable and satellite network nonduplication and syndicated exclusivity

rules, depending upon whether their

negotiated exclusivity covers protection

against cable, satellite or both. Existing

affiliate agreements and other contracts

that apply to network program nonduplication only in the cable context

need not be revised to be effective to

provide non-duplication protection

pursuant to § 76.92. These special words

shall apply to both the network nonduplication and syndicated exclusivity

rules to ensure that, in either instance,

the contracting parties contemplated

protection from satellite carriage. Where

existing contracts expressly provide for

exclusivity against satellite carriage,

albeit without using these special

words, there is no need for

renegotiation, nor for a six month period

for parties to renegotiate. In these

situations of remarkable prescience in

the contract terms, the normal

notification requirements will apply.

38. We will not require, as Echostar

proposes, that the contracts be nondiscriminatory or be exercised in a nondiscriminatory fashion. We believe that

such requirements are inconsistent with

the rights of parties to negotiate the

extent of exclusivity that they determine

to be in their best interests and were not

contemplated by the statute. Such

requirements would also be inconsistent

with the cable exclusivity rules.

Notification Requirements

39. In order to exercise network nonduplication rights, a television station

must notify each cable system operator

of the protection sought. The syndicated

exclusivity rules contain similar

notification procedures with respect to

broadcasters or distributors notifying

cable systems of the exclusivity sought.

In both cases, the notices must identify

the party seeking non-duplication

protection and the affected

programming. Notices must be provided

within 60 calendar days of the signing

of the contract. Exclusivity protection

begins on the date specified in the

notice or the first day of the calendar

week that begins 60 days after the cable

operator receives notice from the

broadcaster. In addition, cable operators

may rely on published information

sources (e.g., newspapers) to determine

which programs must be deleted or

obtain the information from the station

seeking protection or the station whose

68090 Federal Register / Vol. 65, No. 220 / Tuesday, November 14, 2000 / Rules and Regulations

programming is to be deleted.

Furthermore, the rules require that the

party exercising its exclusivity rights

must provide a copy of the relevant

portions of its contract to the cable

system, upon request.

40. A number of commenters observe

that the current notification procedures

have proven workable for the parties in

the cable context and generally support

the same notification requirements and

time periods for satellite carriers. For

example, DirecTV states that stations

should be required to notify satellite

carriers of any exclusivity rights in the

same manner required under the cable

rules. We agree and will model the

satellite notification rules on the cable

requirements. We apply the same 60-

day notice requirement following the

signing of a contract providing

exclusivity and impose the same

contract disclosure requirements for

satellite carriers. As in the cable context,

the satellite carrier will have sufficient

lead time to act on the exclusivity

request. Accordingly, exclusivity

protection will beginning on the later of:

(a) the date specified in the notice; or (b)

the first day of the calendar week

(Sunday-Saturday) that begins 60 days

following the satellite carrier’s receipt of

the notice from the broadcaster or other

rights holder. Using the same

notification periods reduces the

administrative burden on rights holders

and stations and allows them to send a

single set of notices to cable systems

and satellite carriers, rather than forcing

them to send one notice to cable

systems at one time and a virtually

identical notice to satellite carriers at

another time. In this manner, we also

minimize the possibility that protection

would be lost inadvertently because of

differing requirements. It is also

consistent with the general goal of

making the cable and satellite rules

parallel as much as possible.

41. We will require that the notice

asserting exclusivity rights contain the

same identifying information about the

programming to be deleted and the

extent of the exclusivity (e.g., the dates

on which exclusivity is to begin and

end). As indicated above, the notice

must identify the zip codes included in

the zone of protection (i.e., the specified

zone or other permitted area covered by

the exclusivity contract). Satellite

carriers may request a copy of the

relevant contractual provisions, as cable

operators may do, but it is not required

in the notice. We adopt the suggestion

that the notice should be served on

satellite carriers with the carrier having

the obligation to disseminate the

information to their distributors

(distributors include parties with

exclusive territories for the sale and

service of satellite systems, including

those distributors that are authorized by

the satellite carrier to authorize or deauthorize programming for subscribers),

if necessary, since they are in the best

position to know which distributors

serve which areas. Several commenters

suggest that satellite carriers be required

to designate (e.g., on their Web sites) the

name, title, and address to whom the

notices should be sent, with this

information updated as necessary to

avoid delay and miscommunications.

While we recognize that such

information might be useful, it should

not be necessary to ensure the

compliance with exclusivity requests.

We have not required cable systems or

operators to provide this information

and see no reason to do so in the

satellite context. Satellite carriers must

promptly direct their mail to the

appropriate staff. Notice received by the

corporation is considered receipt of the

notice for purposes of triggering the

deletion requirements, so it will be in

the best interests of satellite carriers to

assure that broadcasters and rights

holders have the necessary current

information to reach the right person.

We urge stations and rights holders to

follow DirecTV’s suggestion that

exclusivity notices be addressed to the

‘‘Director of Programming Operations’’

or marked ‘‘Attention: Program

Exclusivity Request’’ to assist satellite

carriers in ensuring that the information

is directed to the proper department.

42. The cable rules provide that to

determine the scheduling of programs

that must be deleted, cable operators

may rely on newspapers and other

published sources, the broadcaster

seeking exclusivity protection, or the

broadcast station subject to the

requested deletion. Similarly, the

provision we adopt allows satellite

carriers to rely on such published

sources, the broadcaster seeking

protection, or the nationally distributed

superstation. We received no comments

on this provision and believe the cable

model will work as well for satellite

carriers.

43. Under the cable syndicated

exclusivity rules, ‘‘distributors’’ of

syndicated programming, who own the

rights to the programming for purposes

of syndication, are entitled to exercise

exclusive rights for a period of one year

from the initial broadcast syndication

licensing of such programming,

although not in areas in which the

programming has already been licensed.

This cable provision is intended to give

holders of syndication rights a one year

period in which to negotiate their

agreements in each market. It originated

with private consensus agreements

among rights holders, broadcasters and

cable operators in 1971. If the

programming in question were shown in

the market before the syndicator had an

opportunity to negotiate for exclusivity,

it would diminish the value of the

program. In the NPRM, we requested

comment on whether to apply this

provision in the satellite context, and

whether the rights holder should notify

the satellite carrier directly. MPAA

contends that allowing rights holders to

notify carriers directly, as holders of

syndication rights can do with cable

systems, gives holders a means to

protect the value of their programs as

well as providing parity in the operation

of the rules in the cable and satellite

contexts. DirecTV, however, argues that

it is unnecessary to import this rule to

the satellite context since the rules will

apply to a discrete universe of

superstations. We believe that it is

appropriate to allow distributors to

notify satellite carriers directly. We

agree they are often the rights holders

with the greatest need and incentive to

protect their rights. In the satellite

context, syndicated exclusivity

protection is limited to the six

nationally distributed superstations.

Allowing the distributor that has the

exclusive syndication rights a one year

period to negotiate exclusive

arrangements for each market has

worked well in the cable context and

should be applied here in the absence

of a specific reason to treat satellite

carriers differently in this regard.

44. We also acknowledge that, as with

the cable rules, a broadcast station,

syndicator, or other rights holder is

entitled to assert exclusivity protection

based upon contractual rights, as

discussed above. It is not necessary that

either the entity requesting protection or

the program to be protected actually be

carried by the satellite carrier. Thus we

recognize that in some cases subscribers

will not be able to receive the deleted

programming from any television

broadcast station carried by the satellite

carrier. The Commission’s network nonduplication and syndicated exclusivity

rules protect contractual rights. The

rights may apply even in situations in

which the rights holder chooses not to

display the protected programming or in

which the cable system is not carrying

the broadcast station asserting

protection. We specifically recognize

that in markets in which the satellite

carrier chooses not to provide local-intolocal carriage, a local station may assert

network non-duplication or syndicated

exclusivity protection for programming

that subscribers in that market cannot

Federal Register / Vol. 65, No. 220 / Tuesday, November 14, 2000 / Rules and Regulations 68091

receive via satellite because the station

demanding protection is not carried on

satellite. Viewers may be able to receive

this programming, however, through use

of over-the-air antennas or on cable.

Substitute Programming

45. The cable syndicated exclusivity

rules expressly allow a cable operator to

substitute programming from another

television station when programming is

required to be deleted, provided carriage

is consistent with all the exclusivity

rules, such as sports blackout. No

comparable provision is included in the

network non-duplication rules, but

cable operators are free to substitute any

programming—broadcast or cable—to

which they have the legal rights.

Commenters addressing this issue

generally support a provision to allow

satellite carriers to offer substitute

programming for the programming

covered by exclusivity agreements. We

agree that it is reasonable to permit

substitute programming so that viewers

need not be faced with a blank screen

or a slide stating that contractual

limitations require programming to be

deleted.

46. Carriage of programming by

satellite carriers is governed by a

number of laws and regulations,

including the Copyright Act, the

Communications Act, and Commission

rules, which differ from those

applicable to cable programming. In

reinstating the syndicated exclusivity

rules in 1988, the Commission

encouraged the substitution of

programming in response to consumer

demands that a distant program be

available in place of the original

programming that is deleted. At that

time, we also noted that such

substitution of programming was

consistent with the compulsory license

provisions of the Copyright Act and the

syndicated exclusivity rules repealed in

1981. Unlike the cable compulsory

license, however, the satellite statutory

license does not include provisions for

the substitution of programming. In

considering permissible substitute

programming under these rules, we

observe that there are statutory

provisions that impose a number of

limits on the retransmission of signals

by satellite carriers. Under these

provisions, distant network station

signals are limited to two per network

per day and restricted to unserved

households, local signals may be

provided only in their own markets, and

the satellite carrier must have

retransmission consent for carriage of

any local broadcast signal. To the extent

that carriage of a program is permissible

under these laws and regulations, and

the satellite carrier has the authority to

offer the programming, we believe that

satellite carriers should be permitted to

use substitute programming. In

addition, commenters ask that we not

limit substitute programming to

broadcast programming. We see no

reason to place such a limit on what is

permissible and will allow nonbroadcast programming to be used as a

substitute, as long as its carriage is

consistent with the applicable statutory

and regulatory provisions, and it is clear

to viewers that the substitute

programming is not provided by the

same broadcast station as the

programming for which it is substituted.

47. We further note that the cable

rules do not expressly provide for the

substitution of programming when a

program is deleted pursuant to network

non-duplication protection. The absence

of an express provision does not

necessarily prevent the cable operator

from substituting programming to which

it has the rights. However, we recognize

that if a cable operator were required to

delete network programming from a

station, and the network programming

subject to deletion constitutes a high

percentage of the station’s programming,

the cable operator would likely drop the

entire station from carriage. When the

Commission originally adopted the

network non-duplication rules, there

were only three commercial broadcast

networks, and network programming

constituted the majority of the

programming distributed to viewers by

each network affiliate. The superstations

affected by these new rules are affiliated

with emerging networks (i.e., WB, UPN).

These networks distribute significantly

fewer hours of programming to their

affiliates each day and week than the

older commercial networks. Thus, we

believe that when, for satellite carriers,

the non-duplication rules are applied

only to nationally distributed

superstations, it is likely that a smaller

percentage of the programming will be

subject to deletion. It is hoped that

satellite carriers will continue to

provide the nationally distributed

superstations to their subscribers, and,

thus, the question of substitution

programming is relevant. To prevent the

possibility of a blank screen and

undesirable disruptions for consumers,

we will specifically provide for

substitution for non-duplication

deletions with any programming that

the satellite carrier is authorized to

carry. Accordingly, we will adopt rules

permitting the use of authorized

substitute programming for any

programs deleted to comply with

network non-duplication or syndicated

exclusivity protection, or sports

blackout. We note that the copyright

laws do not provide a statutory

copyright license for substitute

programming for satellite carriers as

they do for cable operators. Therefore,

unless the statutory provisions are

changed, satellite carriers may only

substitute programming for which they

have copyright and retransmission

consent, or otherwise have legal rights

to carry.

Transition Period

48. When the Commission reinstated

the syndicated exclusivity rules, it

recognized that cable systems would

need several months to implement the

new regulatory requirements. Satellite

industry commenters in this proceeding

requested a similar transition period to

implement these new rules. Echostar

suggests that broadcasters and other

rights holders should submit their

deletion requests during the transition

period, but satellite carriers’ compliance

would be tolled for one year. We agree

that satellite carriers today, like cable

operators in 1988, need time to phasein compliance with these new

exclusivity rules. We reject, however,

proposals for a transition period one

year in duration. The transition period

for cable operators was necessary, in

part, to allow time to develop and

implement new equipment needed to

perform the deletions required by the

rule. In this proceeding, apart from the

concerns raised by the C-Band carriers

and discussed below, the satellite

carriers have not asserted that they need

time to develop new equipment. In

addition, we do not believe that

EchoStar’s one-year proposal would

serve its stated purpose of enabling

satellite carriers to review deletion

notices and plan a year in advance

before the implementing the deletions.

We believe rights holders would not

bother to submit deletion requests

knowing that they will not be acted

upon for a year.

49. We will allow satellite carriers a

reasonable period of time after the new

satellite network non-duplication and

syndicated exclusivity rules take effect

to adjust to the new requirements, to

review the contract language, to ensure

that they have adequate equipment and

personnel to implement the deletions,

and to arrange for programming that can

be used to substitute for deleted

programming. Normally, as set forth

above, exclusivity protection begins, at

the earliest, within 60 days of

notification. However, as described

above, broadcasters will have up to six

months from the effective date of this

Order to renegotiate contracts, and they

68092 Federal Register / Vol. 65, No. 220 / Tuesday, November 14, 2000 / Rules and Regulations

must notify satellite carriers of deletion

requests within 60 days of signing the

renegotiated contract. When no

renegotiation is necessary because the

existing contract clearly pertains to

satellite as well as cable carriage,

broadcasters must notify satellite

carriers of their exclusivity protection

and deletion requests within 60 days of

the effective date of this Order. In these

instances, satellite carriers will have 120

days in which to implement deletion

requests (e.g., this Order is effective on

November 29, 2000, therefore a

broadcaster could provide deletion

notice on January 8, 2001, and the

deletion would take effect on or after

May 10, 2001). To provide time for

satellite carriers to adjust to the new

requirements, for notices provided

before June 1, 2001, satellite carriers

will have 120 days before they are

required to implement the necessary

deletions. For notices provided to

satellite carriers after June 1, 2001, the

normal time requirements will apply.

50. Echostar also proposes, as an

alternative or complement to the

transition period, a ‘‘grandfathering’’

provision that would exempt from

application of the network nonduplication and syndicated exclusivity

rules all of EchoStar’s 700,000 current

superstation subscribers. We reject this

proposal because there is nothing in the

statute to support it, and it is contrary

to the letter and the intent of the SHVIA

provision requiring the Commission to

apply the exclusivity rules to satellite

carriers. This proposal is also

inconsistent with the goal of placing

comparable requirements on cable

operators and satellite carriers. Cable

subscribers’ viewing options are

currently subject to the cable exclusivity

rules, which allow for the same

deletions that affect satellite subscribers.

In fact, cable subscribers are generally

subject to a greater impact from

deletions because the cable rules apply

to deletions of programming carried on

network stations and other broadcast

stations, not only that programming

carried on the specially defined six

superstations. Adopting EchoStar’s

proposal would perpetuate the disparity

between cable and satellite that

Congress clearly sought to eliminate.

Moreover, when the Commission

implemented the network nonduplication rules and reinstituted the

syndicated exclusivity rules with

respect to cable operators, it did not

provide for grandfathering of existing

cable customers. As the Commission

explained in those proceedings, the

potential impact of the rules is

ultimately determined by the

negotiations among the parties for

exclusivity rights and the decision

whether or not to assert them in a given

market. Protecting parties’ rights to

engage in contract negotiations with the

knowledge that exclusive agreements

would not be abrogated by importation

of distant signals was fundamental to

the Commission’s purpose in creating

the exclusivity rules in the cable

context, and is relevant today to

application of these rules to satellite

carriers.

Small System Exception and C-Band

Carriers

51. Sections 76.95(a) and 76.156(b)

(amended rule § 76.106(b)) provide that

small cable systems serving fewer than

1,000 subscribers are exempt from the

network non-duplication and

syndicated exclusivity requirements,

respectively. The Commission originally

adopted these exceptions in the mid1970s to balance the costs of compliance

for small cable systems against the

impact on broadcast stations. The

Commission was concerned that the

costs of equipment and manpower

needed to comply with the cable

exclusivity rules would have a

substantial impact on such systems

when viewed in relation to their gross

revenues. In addition, the Commission

concluded that the cumulative number

of homes served by small systems

nationwide constituted a very small

percentage of the total number of

television households and there would

be no significant adverse economic

impact on broadcasters. When the

Commission reinstituted the syndicated

exclusivity rules and modified the

network non-duplication rules in 1988,

it again exempted cable systems with

fewer than 1,000 subscribers out of the

same concern.

52. Some commenters representing

the satellite industry seek similar

exceptions that take into account the

technical feasibility and cost of

compliance for satellite carriers. While

offering no specific proposal, EchoStar

argues that the only way to ensure

equivalent protections for satellite

operators is to go back to the rationale

for the exception. However, since the

original rationale for the small system

exception was based on the relative cost

of compliance compared to such

systems’ gross revenues, and none of the

commenters has provided cost data to

justify such an exception, we are unable

to conclude that a comparable situation

exists in the satellite context. Satellite

carriers are among the largest providers

of television programming and are not

comparable to the ‘‘Mom and Pop’’

cable operators for which the small

system exception was designed. Each of

the satellite carriers serves millions of

subscribers nationally, is wellcapitalized and capable of purchasing

necessary equipment, is managed

through centralized control centers, and

already blacks out programming

consistent with existing contracts and

the programming packages selected by

individual subscribers. We conclude

that, with no specific evidence to the

contrary, the costs of compliance with

these rules, on a per subscriber basis

and relative to total revenues, will be

small given the large subscriber base of

each DBS satellite carrier.

53. In contrast to DBS carriers,

however, we note that C-Band satellite

carriers, while still serving 1.3 million

subscribers nationwide, are

experiencing a steady decline in

subscribers from a high in 1995 of

nearly 2.4 million. C-Band commenters

contend that Congress intended to

exempt them from application of the

exclusivity rules. However, they offer

only an isolated and ambiguous

colloquy between two Senators in

support of this assertion. C-Band

commenters describe their subscribers

as primarily rural and note that many

live in areas that are not served by cable

systems or are beyond the reach of overthe-air broadcasters. They contend that

their centralized system of program

delivery and authorization would make

deletion and substitution of

programming economically prohibitive.

As these commenters note, in 1991 the

Commission considered applying the

syndicated exclusivity rules to C-Band

retransmission of television broadcast

programming. At that time, Congress

had directed the Commission to apply

the cable syndicated exclusivity rules to

C-Band carriers if the Commission

found it would be feasible for the CBand carriers to comply. The

Commission sought comment and

concluded that the equipment needed

for satellite carriers to implement

exclusivity protection was not available

and could not be developed and

implemented before the expiration in

1994 of the interim compulsory

copyright license under which C-Band

carriers retransmitted broadcast

programming. C-Band commenters

contend that nothing has changed in

their capability of deleting duplicating

programming. They argue that network

non-duplication requirements may

apply to at least 93 markets, 30 weekly

programs, with different times for each

program. They ask that we either

exempt them from application of the

cable exclusivity rules or defer

application until after 2004.

Federal Register / Vol. 65, No. 220 / Tuesday, November 14, 2000 / Rules and Regulations 68093

54. The circumstances today differ

significantly from 1991 in that the

provision in the SHVIA does not allow

for consideration of feasibility. Congress

could have provided an exemption for

C-Band carriers from application of the

exclusivity rules, but did not. Congress

did provide a more generous copyright

license to C-Band carriers, than to DBS

carriers, to retransmit distant network

stations to virtually all C-Band

subscribers. As noted, the network nonduplication and syndicated exclusivity

rules do not apply to satellite

retransmission of network stations.

Currently, C-Band carriers provide only

four of the six nationally distributed

superstations (C-Band carries KTLA,

WPIX, KWGN, and WGN. WOR–TV

(New York) and WSBK–TV (Boston) are

no longer available.) One of these, WGN,

provides a satellite feed from which all

duplicating programming has been

deleted. Thus, the burden on C-Band

carriers under the new network nonduplication and syndicated exclusivity

rules is to delete programming from

only three nationally distributed

superstations. The information provided

by the satellite commenters in this

record describes serious technical and

economic difficulties in accomplishing

deletions and substituting replacement

programming. C-Band carriers contend

that Geolocs cannot accomplish the

numerous simultaneous deletions that

the network non-duplication and

syndicated exclusivity rules may

require. However, it appears that these

comments contemplate more

widespread deletions and substitutions

than the statute calls for and more than

we impose here on either C-Band or

DBS carriers.

55. Notwithstanding that we may not

provide a blanket exemption for C-Band

carriers, we have considered their

proposal that we defer application of the

rules until after 2004 or pending a

further rulemaking proceeding. We

determine to do neither. We note that

the Commission deferred application of

the syndicated exclusivity rules in 1991

due to the expectation of full copyright

liability in 1994. Now we are urged

again, for the same reasons, to defer

because the statutory copyright license

is set to expire in 2004. We are not

willing to defer application until 2004,

and then find that the copyright license

is again extended and we are faced

again with the same issues and

arguments. We believe that C-Band

carriers will be able to implement these

new regulations, in the limited

circumstances in which they will apply

to C-Band subscribers, using existing

technology modified as necessary. We

also believe that this proceeding has

given all sides on this issue ample

opportunity to present evidence and see

no need for a further rulemaking. We do

note, however, that we can apply to CBand carriers an exception comparable

to the cable exceptions for small

systems. C-Band has persuasively

argued that the demands of network

non-duplication, syndicated exclusivity,

and sports blackout, cumulatively, may

exceed the capacity of their existing

system. In this case, the C-Band carriers

would have to develop a new system or

substantially modify their existing

system. We believe that this can be a

costly burden, and that it is appropriate

to provide an exception that recognizes

the relatively small size of the C-Band

carriers, as compared with the DBS

carriers. Therefore, insofar as any CBand carrier has fewer than 1,000

subscribers within the zone of

protection, as expressed by zip code

areas within the zone, it is not required

to delete programming subject to

network non-duplication or syndicated

exclusivity protection. (See §§ 76.122(l),

76.123(m), and 76.127(e).) The language

of these exceptions is not limited to CBand carriers and may apply, as well, to

any satellite carrier with a similarly

small subscriber base, such as a new

carrier in the future. We will consider,

if presented to us, additional

information on how best to tailor a

small system exemption that would be

meaningful for C-Band carriers without

being significantly broader than the

exemption for small cable systems.

Finally, if Congress amends the SHVIA

to expressly exempt C-Band carriers

from application of any or all of the

exclusivity rules (including sports

blackout, discussed below), we can

conduct a rulemaking proceeding to

exempt C-Band from our rules

accordingly.

Exceptions Preventing One Local

Station From Blacking Out Another

56. The cable rules contain a number

of exceptions that prevent one local

station from asserting exclusivity

protection against another station that

has been deemed ‘‘local.’’ Often these

situations arise because the rules

contain several definitions of ‘‘local’’

station. These exceptions—for

significantly viewed stations, stations

whose Grade B includes the community

unit to be blacked out, and overlapping

specified zones—were adopted to

ensure that cable subscribers receive the

same programming that would be

available to over-the-air viewers in their

communities. Consideration of these

exceptions in the context of satellite

carriage is made more complicated

because superstations could have dual

identities. In the NPRM, we sought

comment on the treatment of

superstations within their own markets.

We noted that for must carry purposes,

superstations are treated as local signals

in their local markets (DMAs) and

distant signals elsewhere. In its own

market, a nationally-distributed

superstation acts as any other local

station and is treated as a local station

within its local market. In the context of

satellite retransmission of nationally

distributed superstations, however,

there is an important difference between

a station carried as a superstation or

carried as a local station. As described

above, satellite carriers are not required

to obtain retransmission consent to

carry the superstations, but are required

to obtain retransmission consent to

carry a local station within its local

market. The SHVIA, as it amended the

retransmission consent provisions in the

Communications Act, permits satellite

carriers to retransmit the six stations

that meet the definition of nationally

distributed superstation without their

consent provided they are transmitted

outside their local markets. We believe

that the presence or absence of a

requirement for retransmission consent

for nationally distributed superstations

is key to Congress’ determination to

apply the cable exclusivity and sports

blackout rules in this satellite context.

Therefore, within their local markets,

the nationally distributed superstations

are not subject to deletions because they

are carried as local stations. However,

when a satellite carrier is retransmitting

the station as a nationally distributed

superstation, without its retransmission

consent, it must be treated as a

superstation, and the exclusivity and

sports blackout rules will apply. Even in

those instances in which the

superstation’s terrestrial over-the-air

signal is significantly viewed, or the

protected zone is within its Grade B

contour, if the satellite retransmission is

outside the station’s local market, we

will look to the manner of carriage to

determine whether the station is treated

as a superstation subject to deletions

and blackouts, or as a local station that

cannot be blacked out by another,

overlapping local station. To the extent

the exceptions for overlapping areas in

the cable exclusivity rules are relevant

in the satellite context, we will adopt

them, as described below.

57. With respect to the ‘‘significantly

viewed signal exception,’’ a broadcast

television station can be declared

‘‘significantly viewed’’ outside what is

usually considered its local market on

the basis of its over-the-air viewing in a

68094 Federal Register / Vol. 65, No. 220 / Tuesday, November 14, 2000 / Rules and Regulations

community. Significantly viewed status

confers local treatment on a station

under a number of rules and is intended

to ensure that cable subscribers have the

same local broadcast service that is

available to noncable subscribers in

their communities. Section 76.92(f)

provides that a community unit is not

required to delete the duplicating

network programming of a significantly

viewed signal. Similarly, under Section

76.156 (amended rule § 76.106),

syndicated programming covered by an

exclusivity agreement need not be

deleted from a significantly viewed

signal. A few comments note that a

superstation could be significantly

viewed in areas surrounding its city of

license based on over-the-air viewing.

DirecTV argues that this exception

could only apply in a few cases in

which the superstation is functioning as

a local station and since local stations

are not covered by this section of

SHVIA, the significantly viewed

exception should not be present in the

satellite context. We believe that

pursuant to the SHVIA, the local-intolocal copyright license can only apply

within the station’s DMA. Thus, once

carried outside the DMA, the station

cannot be considered a ‘‘local’’ station.

Therefore, we believe the significantly

viewed and Grade B contour exceptions

will rarely, if ever, be applicable in the

satellite context.

Overlapping Specified Zones

58. In a related matter, under the

network non-duplication rules, if a

cable community is located in one or

more overlapping specified zones,

neither station can blackout the other

station’s duplicating programming

because both stations have equal

priorities. The NPRM stated that we did

not believe that a similar situation could

occur in the satellite context and sought

comment on this issue. The one

commenter addressing this issue

contends this exception will not be

triggered in the satellite context since

superstations do not have specified

zones outside their local markets and

SHVIA only applies network nonduplication to nationally distributed

superstations. As mentioned above, a

nationally distributed superstation is a

‘‘local station’’ when carried by a

satellite carrier within its local market.

When carried as a local station, the

network non-duplication and

syndicated exclusivity rules do not

apply to delete its programming. To the

extent the overlapping zones situation

could occur, it will be covered by the

exception for significantly viewed or

Grade B contour discussed above.

NCE Must-Carry Exception

59. Under Section 76.92(g) of the

rules, a cable community unit is not

required to delete the duplicating

network programming of any qualified

noncommercial educational (‘‘NCE’’)

broadcast television station that is

carried pursuant to the must carry rules.

Congress mandated that this provision

be added to the cable network nonduplication rules as part of the must

carry requirements. Congress recognized

that in some situations an NCE station

could be considered ‘‘local’’ under the

must-carry rules, which are based on a

50-mile zone around the station’s

community of license, and ‘‘distant’’ for

purposes of the network nonduplication rules, which are based on a

35-mile specified zone. No commenters

addressed this issue and we believe that

this exception is not relevant in this

context. The SHVIA provision applies

only to a local station asserting

exclusivity rights against one of six

nationally distributed superstations,

none of which is an NCE licensee.

Section 339(B)(1)(A) and (B):

Application of Sports Blackout to

Retransmission of Nationally

Distributed Superstations and Network

Stations

60. In addition to requiring

application of the network nonduplication and syndicated exclusivity

rules, section 339(b)(1)(A) also requires

that we apply the sports blackout rule

to retransmission of nationally

distributed superstations, and section

339(b)(1)(B) requires that we apply the

sports blackout rule to satellite

retransmission of network stations.

Unlike the other cable rules we are

required to apply to satellite carriers,

only the sports blackout rule applies to

retransmission of both nationally

distributed superstations and network

stations. In the case of retransmission of

network stations, we are instructed to

apply the cable sports blackout rule

only ‘‘to the extent technically feasible

and not economically prohibitive.

61. The Commission’s sports

broadcasts rule (‘‘sports blackout rule’’)

is designed to allow the holder of the

exclusive distribution rights to local

programming, in this case sporting

events, to control, through contractual

agreements, the display of that event on

local cable systems. The purpose of the

sports blackout rule is to ensure the

continued general availability of sports

programming to the public. The

Commission adopted this rule based on

a concern that sports teams would

refuse to sell the rights to their local

games to television stations serving

distant markets due to their fear of

losing gate receipts if the local cable

system imported the local sporting

event carried on a distant station. The

cable sports blackout rule is triggered

when a subject sporting event will not

be aired live by any local television

station carried on a community unit

cable system. Under the cable sports

blackout rule, the holder of the rights to

the event (e.g., a sports team or league,

rather than a broadcaster) has the power

to demand that the local cable system

blackout the distant importation of the

subject sporting event. The zone of

protection afforded by the sports

blackout rule is generally 35 miles

surrounding the reference point of the

broadcast station’s community of

license in which the live sporting event

is taking place. The 35 mile zone of

protection is measured from a television

station’s reference point based upon the

list of reference points in 47 CFR 76.53.

The same reference point applies to all

stations licensed to the same

community regardless of where their

transmitter or studios are located. When

sports facilities are located in suburban

areas, the downtown reference points

may be inappropriate for purposes of

calculating the protected zone (e.g., the

New England Patriots play mid way

between Boston and Providence).

Therefore, the Commission has

expressed its willingness to consider

waivers ‘‘to substitute a zone of

protection extending out 35 miles from

the site of a sports event for the

television station specified zone

designated by the rule.’’ As with the

Commission’s exclusivity rules, the

sports blackout rule specifies

notification procedures regarding the

sports programming to be deleted.

However, the time frame allowed for

notification is significantly shorter in

the case of the sports blackout rule than

for network non-duplication and

syndicated exclusivity. Notification for

sports blackout can be given as little as

24 hours in advance. Notifications for

regularly scheduled events subject to

the sports blackout rule must be

received no later than the Monday

preceding the calendar week during

which the deletion is to be made.

Notifications for events not regularly

scheduled, or when the schedule is

revised, must be received within 24

hours after the time of the deleted

telecast is known, but in no event less

than 24 hours before the event will take

place. The sports blackout rule does not

apply to any community unit with fewer

than 1,000 subscribers. This exemption

is based on the cost of the equipment

needed to delete programming.

Federal Register / Vol. 65, No. 220 / Tuesday, November 14, 2000 / Rules and Regulations 68095

Technical and Economic Effects of

Sports Blackout on Satellite Carriers

62. With respect to retransmission of

nationally distributed superstations, the

SHVIA requires us to apply the sports

blackout rule from the cable context to

satellite carriers. With respect to

retransmission of network stations,

however, the SHVIA provides that the

sports blackout rules should be applied

only to the extent technically feasible

and not economically prohibitive. The

language limits the application of the

sports blackout rules in this narrow

circumstance but only if the technical

and economic difficulties are serious

and harmful to the satellite carriers. In

the NPRM we asked for specific

information on the technical and

economic problems that would be

encountered by satellite carriers. We

requested per subscriber cost data and

asked whether the existing conditional

access mechanisms would work for this

purpose. We did not receive specific

data or descriptions of how the

requirement to black out sporting events

on network stations would be unfeasible

or economically prohibitive to the

degree of posing a serious economic

threat to the health of satellite carriers.

63. DirecTV argues that the

Commission should invoke the

technical/economic hardship exception

of section 339(b)(1)(B) and not apply

any sports blackout requirements on

satellite retransmission of network

stations but does not explain why the

methods it uses to perform the blackouts

required by its contracts with sports

leagues cannot be used to black out

network stations. DirecTV does explain

that the actual blackouts are ‘‘manually

triggered’’ by a person who can watch

and monitor only four events at a time.

DirecTV states that additional personnel

would be needed to monitor and trigger

the additional events that will be

covered by the sports blackout rule. It

asserts there will be ‘‘vast numbers of

subscribers’’ and ‘‘thousands of blackout

requests’’ creating a ‘‘monumental,

expensive, and time-consuming task.’’

There are no specific costs provided.

The Echostar comments offer even less

specific information. Echostar provides

no information about particular burdens

that would be imposed by the

requirement to black out sport events

from network stations.

64. As the Network Affiliates point

out, no commenting party explains why

it would be infeasible to develop the

technology to black out sports

programming, if such technology is not

already in use, nor does any commenter

offer cost figures to demonstrate that the

technology would be cost prohibitive.

We agree with those commenters that

observe that the statutory language and

expressions of legislative intent place a

high burden to justify not imposing the

sports blackout requirements for

satellite retransmission of network

stations. Such burden cannot be

satisfied by the vague assertions and

undocumented conclusions offered in

this record. In contrast, the record

provides unrefuted information that the

technology to implement the network

station sports blackout exists. Indeed,

the satellite carriers currently black out

sports programming pursuant to

geographic restrictions in their contracts

with regional sports networks and

sports leagues. Consequently, we find

that the heavy burden is not met to

justify not applying the sports blackout

obligations to satellite carriers with

respect to network stations.

Notification

65. In one aspect of the sports

blackout rules, however, the timing of

notification, we find that the record

supports some modification from the

notification periods in the cable sports

blackout rules. DirecTV and Echostar

urge that we lengthen the notification

periods with respect to sports blackouts.

In this respect, DirecTV describes a

blackout system that is notably more

complex than that of a cable operator.

The cable operator controls the

programming at a headend, which

facilitates blacking out a particular area

of limited geographic size. The satellite

carrier, in contrast, is controlling

programming on a national basis:

First the programmer must notify DirecTV

and provide information about the program

to be blacked out, as well as the areas (by zip

code) affected. The information provided by

the programmer must then be reformatted for

DirecTV compatibility. Traffic department

employees must then build the blackout by

entering the data into the system and notify

the scheduling department. The blackout is

then scheduled and the data regarding the

blackout is processed. The blackout is

checked again for accuracy before it hits the

air. Finally the actual blackout itself must be

manually triggered, both in and out, by an

employee who determines when the actual

event begins and ends by watching an actual

signal of the event.

DirecTV also notes the difficulty of reprogramming the time period that has

been blacked out, especially with very

short advance notice.

66. While the process generally

described by DirecTV does not appear to

present such a serious technical or

economic burden as to excuse

compliance with the sports blackout

rules altogether, it does suggest that the

challenge of implementing multiple,

simultaneous blackouts and identifying

and arranging substitute programming is

greater for satellite carriers than for

cable operators. DirecTV correctly notes

that the time frame allowed for

notification for sports blackouts is

significantly shorter than it is for either

network non-duplication or syndicated

exclusivity, and recognizes that rights

holders may not always have the ability

to provide more than 24 hours notice.

The cable sports blackout rules require

notice for regularly scheduled events to

be received on the Monday preceding

the calendar week during which the

deletion is to be made, and, for events

not regularly scheduled or revisions to

previously submitted notices, within 24

hours after the time of the telecast is

known and no later than 24 hours before

the telecast is to occur. This timing was

instituted in 1975 to address sports

interests’ concerns that playoffs and

weather cancellations often afford little

advance notice of scheduling changes.

DirecTV explains that while it may be

capable of deleting a sporting event on

short notice, it cannot accomplish the

reprogramming necessary in such a

short period of time. DirecTV proposes

a notification period of 60 days prior to

the start of a season for sports with a

specific season, 60 days prior to the

event for nonseasonal but regularly

scheduled events, 30 days for events not

regularly scheduled, and 10 working

days for revisions to previously

submitted notices.

67. Commenters respond to DirecTV’s

proposal that, while they sometimes can

provide notice as soon as a season’s

games are scheduled, the televising

schedule may not be set until a later

date. We agree that a 60 day advance

notice may allow time for the games to

be scheduled but not for the telecasts to

be arranged. Often the televising

schedule is not finally decided until a

week before the beginning of the season.

We find that the satellite carriers,

although not providing sufficient data to

warrant an exemption from the sports

blackout requirements, have offered

reasonable arguments in support of

revising the notification periods in the

satellite sports blackout rules to the

extent possible without depriving the

teams and leagues of their contractual

rights by establishing time frames that

afford no practical protection.

68. In light of the differences in the

structure and operation of the satellite

and cable industries, we are persuaded

that some adjustment in the application

of the sports blackout rules is justified

and consistent with Congressional

recognition of these differences. We

find, however, that the lack of specific

information in the record limits our

ability to finely tailor the requirements

68096 Federal Register / Vol. 65, No. 220 / Tuesday, November 14, 2000 / Rules and Regulations

while providing the protection the

statute requires. Moreover, we take note

that satellite carriers currently comply

with contractually mandated blackouts,

which require that they delete sporting

events and provide subscribers with

replacement programming. We believe it

is appropriate to adjust the notification

requirements for satellite carriers to

ensure that the holders of rights to

sporting events will provide the

required notice as promptly as possible.

The sports blackout rules for satellite

carriers will, therefore, retain the same

advance notice requirements for

regularly scheduled events, including

those events that have a specific season

(notice must be received the Monday

before the calendar week in which the

deletion is to be made) but will also

require that rights holders notify

satellite carriers within forty-eight hours

of the time the telecast is scheduled. We

will not make the same requirement for

events not regularly scheduled due to

the last minute nature of such events.

For these unscheduled events, as well as

for last minute revisions to previously

scheduled events, we must take into

account the realities for the sports

interests of last minute revisions,

particularly due to weather. Therefore,

we retain the 24 hour advance notice

minimum to revise previously

scheduled deletions. We hope that

where satellite carriers have had

adequate time to line up substitute

programming, they will be able to shift

the substitute programming into the

revised time slot even with only 24

hours notice. Because this adjustment to

the notification requirements reflects

legitimate differences between satellite

carriers and cable operators, we see no

reason to limit this distinction to

retransmission of network stations. For

purposes of uniformity and clarity, the

same notification requirements will

apply to all sports blackout

requirements imposed on satellite

carriers, whether with respect to

network stations or nationally

distributed superstations.

Use of Zip Codes To Determine the

Location of Households Subject to

Sports Blackout

69. As with the network nonduplication and syndicated exclusivity

rules, most commenters agree that the

sports blackout rule can best be applied

to satellite carriers by reference to zip

codes rather than community units. For

the same reasons discussed in

connection with network nonduplication and syndicated exclusivity,

we agree that the zip codes that

comprise the specified zones are

appropriate for this purpose. As in the

cable sports blackout rule, the holder of

the broadcast rights, or its agent, shall

be responsible for including the

appropriate information identifying

areas subject to deletion with its

blackout notification to the satellite

carrier. The notification must include a

list of the appropriate zip codes.

Exception for Small Community Units,

as Applied to Satellite Carriers

70. DirecTV advocates excepting

satellite carriers from the sports

blackout requirement if the blackout

would affect fewer than 5% of the

television households in the relevant

DMA, on a provider-by-provider basis.

DirecTV asserts that this would have a

de minimis impact on rights holders.

The holders of rights to sporting events

strongly disagree. The Commissioner of

Baseball states that satellite subscribers

generally constitute less than 5% of

households in most DMAs and contends

such an exception would eliminate

sports blackouts in most cases. We agree

that there should be exceptions to the

blackout requirements imposed on

satellite carriers that are analogous to

the exceptions for cable systems. We do

not agree that 5% of television

households in a DMA (which would

include cable subscribers as well as

satellite subscribers) is analogous to the

small community unit exception for

cable systems.

71. The cable sports blackout rule

does not apply ‘‘to any community unit

having fewer than 1,000 subscribers.’’

Much has been made by some

commenters of the difference between

the language of this small system

exception and the small system

exceptions for non-duplication and

syndicated exclusivity, which

specifically exempt cable systems with

fewer than 1,000 subscribers. However,

there appears to be no basis in past

Commission Orders for emphasizing

this difference in the rule language. The

Commission’s rationale for exempting

either small systems or small

community units is the cost of the

equipment for the cable system, and the

relatively de minimis effect on the

protected rights holder of exempting

such a small system. Because there is no

specific cost information in the record

in this proceeding, it is difficult for us

to draw a direct connection from the

Commission’s concerns for small cable

systems due to the cost of their blackout

equipment to the satellite carriers who,

by all reports, already possess the

necessary equipment to perform the

sports blackouts required by statute.

72. We believe that the same type of

exception we apply to the satellite

network non-duplication and

syndicated exclusivity rules is

warranted here. Our primary concern

here is for the affected subscribers, as

well as the expense imposed upon

satellite carriers relative to the number

of subscribers who will be blacked out.

The Commission has found in previous

considerations of the cable sports

blackout rule that the effect of excepting

up to 1,000 subscribers from a blackout

requirement will have a de minimis

effect on the gate receipts. Insofar as we

are using zip codes in lieu of

community units, we believe an

exception based upon the number of

satellite subscribers, per carrier, in the

zip codes affected by a sports blackout

request is analogous to the exception in

the cable sports blackout rule for

community units with fewer than 1,000

subscribers. In this satellite context we

find again that an exception for fewer

than 1,000 subscribers per carrier, per

zip code area comprising a protected

zone, will not be so detrimental to the

sports interests as to warrant the

expense to satellite carriers and the loss

of sports programming for viewers. We

will reexamine this issue if, in the

future, we receive information that the

loss of 1,000 satellite subscribers is

more costly to the sports interests than

the comparable loss of 1,000 cable

subscribers where the small system

exception applies in the cable sports

blackout rule.

Other Provisions of Sports Blackout

Rule for Satellite Carriers

73. Apart from the changes in the use

of zip codes and in the notification

requirements described above, we do

not change the other provisions of the

cable sports blackout rules in their

application to satellite carriers. Based

upon the general consensus in the

comments, the same 35 mile zone of

protection that applies to cable systems

will apply to satellite carriers, and the

same willingness to consider waivers for

suburban stadiums applies to the

satellite sports blackout rules as well as

to the cable sports blackout rules. The

rights holder will have the obligation of

providing a list of the relevant zip codes

to the satellite carrier with its deletion

notice. If satellite carriers want to

evaluate each subscriber’s address and

black out only those households within

the 35 mile zone, the rules will not

prevent them from doing so. For the

same reasons cited in the network nonduplication and syndicated exclusivity

rules, we will not require an electronic

list of zip codes, nor will we require that

satellite carriers designate a particular

name or address for receipt of the

notification. We do not have such a

requirement for cable systems, which

Federal Register / Vol. 65, No. 220 / Tuesday, November 14, 2000 / Rules and Regulations 68097

are far more numerous and varied, and

we see no reason to require it from

satellite carriers. As in the cable sports

blackout rule, satellite carriers may

substitute other programming during the

time scheduled for a sporting event that

must be blacked out. Satellite carriers

may only use substitute programming

for which they have copyrights, and,

when required, retransmission consent.

They may substitute a different distant

network station provided they do not

retransmit more than two network

stations affiliated with the same

network in a single day. Of course the

substitute programming must also

comply with the network nonduplication and syndicated exclusivity

rules.

74. In addition, to afford satellite

carriers an opportunity to adjust their

schedules to these new regulatory

requirements, we will require that

sports rights holders provide 60 days

advance notice for any sports blackout

to occur on or before March 31, 2001.

As of April 1, 2001, the regular notice

requirements, including 24 hour notice

for changes in previously scheduled

blackouts, will apply. Because satellite

carriers are currently complying with

contractually required sports blackouts,

we do not believe it is necessary to

provide the same length of time to

phase-in the implementation of the

sports blackout rules as we find

warranted for the network nonduplication and syndicated exclusivity.

We believe that this 60 day period will

be adequate for satellite carriers to

adjust to the additional sports blackout

requests.

Other Issues

Digital Signals

75. In the NPRM, we stated that

section 339(b)(1) and the relevant part of

the Joint Explanatory Statement are

silent regarding application of the

exclusivity and sports blackout rules to

the retransmission of digital broadcast

signals. We noted that in the pending

proceeding considering cable mandatory

carriage of digital signals, we requested

comment on how these cable rules

would function for cable carriage of

digital signals. In the Notice, we

repeated our question of whether

Congress intended to apply these rules

to satellite retransmission of digital

broadcast signals. We noted that the

SHVIA may be read to apply to both

analog and digital broadcast signals. An

alternative interpretation we posited

was that Congress was only concerned

about the carriage of analog signals

given that elsewhere in the statute

Congress expressly mentioned digital

signals and, presumably, could have

done so in this context as well. We

sought comment on whether and how

the exclusivity rules could apply to

satellite carriage of digital broadcast

signals, and whether there is a

meaningful distinction between analog

and digital carriage issues for satellite

carriers in this context.

76. The responses we received

concerning this matter are aligned by

industry. Echostar argues that there is

no legislative authority for the extension

of the exclusivity rules to digital signals.

NAB argues that the SHVIA requires

exclusivity and sports blackout

protection to apply to both analog and

digital signals. Other broadcast groups,

such as Tribune, argue that Congress did

not indicate an intent that digital signals

should be excluded from the new

exclusivity rules and therefore that there

should be no distinction between analog

and digital signals under the new rules.

MPAA asserts that syndicated

exclusivity should apply to both digital

and analog signals, pointing out that

Congress made exceptions for digital

signals in certain instances but did not

do so for syndicated exclusivity.

77. Because digital exclusivity issues

are closely related to digital carriage

issues, we believe that it would be

premature to resolve the matters related

to this issue at this time. Exclusivity

requirements cannot be fully fashioned

until both cable operators and satellite

carriers know what their carriage

responsibilities will be for digital

broadcast television. The digital

exclusivity issues should be decided

either when the Commission issues a

Report and Order in the Digital Must

Carry proceeding or in another

proceeding that discusses a satellite

carrier’s digital broadcast signal carriage

responsibilities.

78. We do address one aspect of this

issue here. We are disinclined, in the

early stage of the DTV transition, to

allow a broadcaster to use an exclusive

contract that applies only to digital

programming to prevent a cable system

or satellite carrier from providing that

programming in analog form to its

subscribers. However, to the extent

contractual rights protect a broadcaster’s

exclusivity for both the analog and

digital versions of the same program, we

see no reason to limit the effectiveness

of the contract to protect only analog

exclusivity. Therefore, contractual

language that expressly applies to

analog and digital format of the same

program content will be effective to

require deletion of both. That is, the rule

will provide that neither satellite

carriers nor cable operators will be

permitted to carry the digital version of

a program when the analog version is

required to be deleted and the contract

expressly provides exclusivity for both,

any, or all formats.

NFL Proposal to Expand Exclusivity

Rules To Apply to Unitary Program

Packages

79. The NPRM sought comment on an

additional issue concerning the

distribution of sports programming that

is related to, but not directly covered by,

the SHVIA. The National Football

League sells packages of programming

to networks on a national basis, but

different games are broadcast locally on

a regional basis, often in two-game

packages. To the extent that broadcasts

of games are carried into local markets

on distant broadcast signals via satellite,

the network non-duplication and other

rules involved in this proceeding appear

to offer neither the stations nor the

leagues involved any protection beyond

the rights to the particular games that

local stations are authorized to

broadcast. We sought comment on the

question of how the patterns of sports

carriage involved are addressed by the

new law, and whether they can and

should be addressed in the regulations

the Commission is required to adopt

pursuant to it.

80. The NFL asks the Commission to

‘‘complete the work that Congress

began’’ by applying the network nonduplication and syndicated exclusivity

rules to network stations as well as to

nationally distributed superstations.

The NFL admits that damage to stations’

contractual rights is limited because

only unserved and grandfathered

households can receive such stations

but argues that the numbers of viewers

involved are significant nonetheless.

The NFL further contends that the

Commission should also recognize the

unitary nature of the NFL or any other

regional television plan and allow local

affiliates to exercise network nonduplication protections to black out

other games played at the same time but

broadcast in other regions of the country

(e.g., Redskins versus Cowboys could

blackout Giants versus Packers).

Similarly, the National Hockey League

expresses concern that a satellite carrier

that offers local-into-local service could

have access to the four games that the

NHL plans to regionalize on ABC this

year and could thereby create a multigame hockey package to compete

unfairly with the ‘‘Center Ice’’ package

on ABC. We note that in the case of

local-into-local carriage, retransmission

consent is required, and, presumably,

the stations in question could

contractually prevent this from

occurring.

68098 Federal Register / Vol. 65, No. 220 / Tuesday, November 14, 2000 / Rules and Regulations

81. The advocates of this expanded

application of network non-duplication

have not described why such action

would be in the public interest,

although we are persuaded it could be

in the Leagues’ interest. The NFL and

other sports interests advocating this

change ask us to revise the existing

cable rules to require deletion of

programming that does not duplicate

protected programming. As noted in the

discussion of the network nonduplication rules, supra, the

Commission has determined in the

cable context that the use of different

camera crews and announcers for a

sporting event results in the distant

program not being considered the same

as the local program. Here, the NFL asks

us to reach a contrary result and decide

that a different event between different

teams ‘‘duplicates’’ the protected event.

The NFL and others ask us to expand

the scope of the new satellite exclusivity

rules beyond what Congress mandated.

In light of the SHVIA’s restrictions on

households that are eligible to receive

distant network signals, it is not clear to

what extent carriage of distant signals

providing different games merits

remedial action. The NFL asserts that

allowing satellite carriers (and,

presumably, cable systems as well) to

import distant signals carrying different

games would undermine the NFL’s

regional television plan. The NFL

cautions that it might ‘‘be forced’’ to

alter its distribution plan in unspecified

ways that would be ‘‘less proconsumer.’’ However, we believe it

would not be pro-consumer to take the

action the sports interests request. There

can be no doubt of the negative impact

on viewers of losing access to more and

more sports programming. The sports

interests have not provided a

compelling need for this additional

protection, and other commenters have

argued that it would deprive viewers

unnecessarily. For the reasons given, we

decline to expand the exclusivity rules

to apply to regional or so-called unitary

packages. If the program for which

protection is sought is not, in fact,

duplicated by the distant programming

imported by the cable system or satellite

carrier, then neither the network nonduplication nor syndicated exclusivity

rules apply.

Two Network Affiliates in One DMA

82. In the NPRM we asked for

comment on the possibility and

ramifications of a ‘‘two-affiliates-in-one

market scenario’’ with respect to the

sports blackout rule. We described the

possibility that, in areas in which there

are two affiliates of the same network

within the same DMA, a subscriber

would be eligible to receive both

network stations based on the satellite

carrier’s ‘‘local-into-local’’ license

because the subscriber resides in the

DMA of both stations. Thus, in this

circumstance, the sports blackout

requirement of the SHVIA could,

conceivably, apply to retransmission of

local, rather than distant, network

stations where the geographic area for

purposes of the sports blackout zone

surrounding one of the affiliates is

smaller than the DMA. If one of the

affiliates is not carrying the event, the

sports blackout rule might be triggered.

If the second affiliate is carrying the

event, then the satellite carrier might be

required to black out the event being

transmitted by the second affiliate to

subscribers within the 35 mile zone. We

received scant response to this scenario.

We believe these comments confirm that

this situation is unlikely ever to occur

because the contractual arrangements

allow the rights holder to prohibit both

affiliates from broadcasting the event in

question. Therefore, we see no reason at

this time to provide for this situation in

the rules.

Technical Revisions to the Rules:

§ 76.5(gg)

83. The NPRM identified several of

the cable exclusivity rules that contain

out-dated cross-references to other

sections. We sought comment on how

these editorial corrections should be

made. In particular, we noted that the

cable sports blackout rule (§ 76.67,

amended rule § 76.111) contains a crossreference to § 76.5(gg) to determine

when the sports blackout rule is

triggered. Section 76.5(gg) was

eliminated for reasons unrelated to the

operation of the sports blackout rule,

and no replacement reference is

provided. The NPRM asked whether we

should simply reinstate a standard

based on the original criteria

incorporated into former § 76.5(gg) or

adopt a new standard.

84. Former § 76.5(gg) of the

Commission’s rules referred to the 1972

must carry rules to determine whether

a station was considered ‘‘local.’’ The

cable sports blackout rule is intended to

be triggered only when no ‘‘local’’

television station carried by a cable

system is broadcasting the subject

sporting event for which protection is

sought. In general, the 1972 must carry

rules considered a television station

‘‘local’’ if the subject cable community

served was located within the station’s

specified zone. In contrast, the current

must carry rules consider a television

station ‘‘local’’ if it is located in the

same DMA as a cable community. The

National Hockey League (NHL)

maintains that any replacement for

§ 76.5(gg) should incorporate the 1972

must carry rules definition of a ‘‘local’’

television station’s market area. We

agree. The use of DMA’s would

unnecessarily undermine the

application of the sports blackout rule

because DMAs may encompass

hundreds of miles. In such a DMA,

stations carrying the event located

hundreds of miles distant from the

relevant protected zone would be

considered ‘‘local.’’ If considered

‘‘local,’’ the holder of the rights to the

event could not assert the sports

blackout rule without blacking out such

distant over-the-air carriage if the

station had must carry rights.

85. For the limited purpose of the

application of the sports blackout rule,

the provisions of the former § 76.5(gg)

can be substantially shortened and

consolidated. Because the purpose of

the sports blackout rule is simply to

ensure that the rights holders to local

events can exercise their contractual

exclusivity rights, it is unnecessary to

re-instate the complex definition of

‘‘local’’ that was used for the 1972 must

carry regime or the 1987 rate

regulations. It is not our intention to

change the operation of the cable sports

blackout rule. This revision merely

incorporates within the cable and

satellite sports blackout rules the

relevant concept from the former

§ 76.5(gg).

Other Technical Corrections

86. The NPRM also included, in

Appendix C, two other provisions that

require minor, technical corrections. No

comments were received regarding these

provisions. In the absence of any

objection, we make these modifications,

as proposed, including an editorial

change to the top 100 market list

contained in the rules (correcting the

markets listed at § 76.51(a)(2) and

(a)(28)), and a correction to § 76.5 to

reflect that the reference to § 76.5(o) in

§ 76.5(ii) should be § 76.5(m).

87. In addition, we note that

§ 73.658(m) contains a reference to the

Arbitron list of smaller markets. As

discussed in the Commission’s recent

Market Modification Order, Arbitron is

no longer tracking television

viewership. The Nielsen Research

Company produces a similar list of

markets, which is current. We will,

therefore, revise this section of the rules

to accomplish this updated crossreference.

88. We are also taking this

opportunity to delete several provisions

from the cable exclusivity rules

(§§ 76.94, 76.105 (formerly § 76.155),

76.97 and 76.163) that have no further

Federal Register / Vol. 65, No. 220 / Tuesday, November 14, 2000 / Rules and Regulations 68099

applicability. We find that notice and

comment are unnecessary under section

553(b) of the Administrative Procedure

Act because the rules are outdated and

have no further applicability.

Procedural Matters

89. The SHVIA requires that these

rules become effective within one year

of enactment. The SHVIA was enacted

on November 29, 1999. We find good

cause exists under the Administrative

Procedure Act (‘‘APA’’) to have the rules

adopted in this Report and Order take

effect with fewer than 30 days advance

publication in the Federal Register

pursuant to section 553(d)(3) of the APA

due to the statutory deadline. The APA

generally requires publication in the

Federal Register of substantive rules 30

days prior to their effective date but

permits substantive rules to become

effective with less than 30 days advance

publication for good cause. The

Commission has acted expeditiously to

adopt these complex rules, and they

will be adopted and published in the

Federal Register before the statutory

deadline. We note that the rules

contemplate a phase-in period to allow

parties to implement the new

requirements, and thus parties will have

time to consider the effect of the rules

before they commence implementation.

Final Regulatory Flexibility Analysis

90. As required by the Regulatory

Flexibility Act (‘‘RFA’’), see 5 U.S.C.

603, an Initial Regulatory Flexibility

Analysis (‘‘IRFA’’) was incorporated in

the NPRM. The Commission sought

written public comments on the

possible significant economic impact of

the proposed policies and rules on small

entities in the Notice, including

comments on the IRFA. No comments

were received on the IRFA. Pursuant to

the RFA, see 5 U.S.C. 604, a Final

Regulatory Flexibility Analysis is

contained in the Report and Order. This

Final Regulatory Flexibility Analysis

(‘‘FRFA’’) conforms to the RFA.

91. Need for, and Objectives of, this

Report and Order. Section 339(b) of the

Communications Act of 1934, as

amended (‘‘Act’’), 47 U.S.C. 339(b)(1),

directed the Commission to ‘‘complete

all actions necessary to prescribe

regulations required by this section so

that the regulations shall become

effective within 1 year after’’ enactment

of the Satellite Home Viewer

Improvement Act of 1999. The relevant

provisions concern the application of

the cable network non-duplication,

syndicated program exclusivity, and

sports blackout rules to satellite carriers’

retransmission of nationally distributed

superstations, and, with respect only to

the cable sports blackout rules, to

satellite retransmission of network

stations.

92. Summary of Significant Issues

Raised by Public Comments in Response

to the IRFA. We did not receive any

comments in direct response to the

IRFA. However, we received some

comments requesting an exception to

the rules analogous to the cable small

system exception. As discussed in

Sections V.H. and VI.D., we create an

exception to the rules that will assist

any small entities subject to these rules

now or in the future.

93. Description and Estimate of the

Number of Small Entities to Which the

Rules Will Apply. The RFA directs the

Commission to provide a description of

and, where feasible, an estimate of the

number of small entities that will be

affected by the proposed rules. The RFA

defines the term ‘‘small entity’’ as

having the same meaning as the terms

‘‘small business,’’ ‘‘small organization,’’

and ‘‘small government jurisdiction.’’ (5

U.S.C. 601(6)) In addition, the term

‘‘small business concern’’ has the same

meaning as the term ‘‘small business

concern’’ under Section 3 of the Small

Business Act. 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

Small Business Administration

(‘‘SBA’’). The rules we adopt affect

television station licensees and satellite

carriers.

94. Television Stations: The rules and

policies will apply to television

broadcasting licensees, and potential

licensees of television service. The SBA

defines a television broadcasting station

that has no more than $10.5 million in

annual receipts as a small business.

Television broadcasting stations consist

of establishments primarily engaged in

broadcasting visual programs by

television to the public, except cable

and other pay television services.

Included in this industry are

commercial, religious, educational, and

other television stations. Also included

are establishments primarily engaged in

television broadcasting and which

produce taped television program

materials. Separate establishments

primarily engaged in producing taped

television program materials are

classified under another SIC number.

95. Pursuant to 5 U.S.C. 601(3), the

statutory definition of a small business

applies ‘‘unless an agency after

consultation with the Office of

Advocacy of the SBA and after

opportunity for public comment,

establishes one or more definitions of

such term which are appropriate to the

activities of the agency and publishes

such definition(s) in the Federal

Register.’’

96. An element of the definition of

‘‘small business’’ is that the entity not

be dominant in its field of operation. We

are unable at this time to define or

quantify the criteria that would

establish whether a specific television

station is dominant in its field of

operation. Accordingly, the estimates

that follow of small businesses to which

rules may apply do not exclude any

television station from the definition of

a small business on this basis and are

therefore over-inclusive to that extent.

An additional element of the definition

of ‘‘small business’’ is that the entity

must be independently owned and

operated. As discussed further below,

we could not fully apply this criterion,

and our estimates of small businesses to

which rules may apply may be overinclusive to this extent. The SBA’s

general size standards are developed

taking into account these two statutory

criteria. This does not preclude us from

taking these factors into account in

making our estimates of the numbers of

small entities.

97. There were 1,509 television

stations operating in the nation in 1992.

That number has remained fairly

constant as indicated by the

approximately 1,616 operating

television broadcasting stations in the

nation as of September 1999. For 1992,

the number of television stations that

produced less than $10.0 million in

revenue was 1,155 establishments.

Thus, the new rules will affect

approximately 1,616 television stations;

approximately 77%, or 1,230 of those

stations are considered small

businesses. These estimates may

overstate the number of small entities

since the revenue figures on which they

are based do not include or aggregate

revenues from non-television affiliated

companies.

98. Small Multiple Video Program

Distributors (‘‘MVPDs’’): SBA has

developed a definition of small entities

for cable and other pay television

services, which includes all such

companies generating $11 million or

less in annual receipts. This definition

includes cable system operators, direct

broadcast satellite services, multipoint

distribution systems, satellite master

antenna systems and subscription

television services. According to the

Census Bureau data from 1992, there

were 1,758 total cable and other pay

television services and 1,423 had less

than $11 million in revenue. We address

below services individually to provide a

more precise estimate of small entities.

68100 Federal Register / Vol. 65, No. 220 / Tuesday, November 14, 2000 / Rules and Regulations

99. Direct Broadcast Satellite (‘‘DBS’’):

There are four licensees of DBS services

under Part 100 of the Commission’s

Rules. Three of those licensees are

currently operational. Two of the

licensees which are operational have

annual revenues which may be in

excess of the threshold for a small

business. The Commission, however,

does not collect annual revenue data for

DBS and, therefore, is unable to

ascertain the number of small DBS

licensees that could be impacted by

these proposed rules. DBS service

requires a great investment of capital for

operation, and we acknowledge that

there are entrants in this field that may

not yet have generated $11 million in

annual receipts, and therefore may be

categorized as a small business, if

independently owned and operated.

100. Home Satellite Delivery (‘‘HSD’’):

The market for HSD service is difficult

to quantify. Indeed, the service itself

bears little resemblance to other MVPDs.

HSD owners have access to more than

265 channels of programming placed on

C-band satellites by programmers for

receipt and distribution by MVPDs, of

which 115 channels are scrambled and

approximately 150 are unscrambled.

HSD owners can watch unscrambled

channels without paying a subscription

fee. To receive scrambled channels,

however, an HSD owner must purchase

an integrated receiver-decoder from an

equipment dealer and pay a

subscription fee to an HSD

programming package. Thus, HSD users

include: (1) Viewers who subscribe to a

packaged programming service, which

affords them access to most of the same

programming provided to subscribers of

other MVPDs; (2) viewers who receive

only non-subscription programming;

and (3) viewers who receive satellite

programming services illegally without

subscribing. Because scrambled

packages of programming are most

specifically intended for retail

consumers, these are the services most

relevant to this discussion.

101. According to the most recently

available information, there are

approximately 30 program packagers

nationwide offering packages of

scrambled programming to retail

consumers. These program packagers

provide subscriptions to approximately

2,314,900 subscribers nationwide. This

is an average of about 77,163 subscribers

per program package. This is

substantially smaller than the 400,000

subscribers used in the commission’s

definition of a small MSO. Furthermore,

because this is an average, it is possible

that some program packagers may be

smaller.

102. Description of Projected

Reporting, Recordkeeping and other

Compliance Requirements. This Report

and Order establishes a series of rules

implementing the Satellite Home

Viewer Improvement Act of 1999. We

have adopted a regulatory framework for

substantive rules and procedures

concerning network non-duplication,

syndicated program exclusivity, and

sports blackout that is substantially

similar to, but separate from, these rules

in the cable context. There are certain

compliance requirements involving the

satellite broadcast signal delivery

process. Foremost is satellite carriers

will have to delete certain programming

from the retransmission of nationally

distributed superstations to satellite

subscribers within the protected zone of

the television broadcast station or other

rights holder asserting network nonduplication, syndicated program

exclusivity or sports blackout rights.

With respect to satellite retransmission

of network stations, satellite carriers

will be required to delete certain sports

events from retransmission to satellite

subscribers located within the rights

holder’s zone of protection. There will

be costs relating to the time and effort

involved in deleting these superstation

signals and replacing the deleted

programming. These costs will largely

be borne by satellite carriers. We do not

believe any satellite carrier currently

subject to these rules is classified as a

small entity.

103. In terms of recordkeeping,

entities will likely have to keep a record

of the deletion and blackout requests

and entities may be required to maintain

such information within their business

environment. This information is for

business purposes and not required to

be provided to the Commission as a

matter of course.

104. Steps Taken to Minimize

Significant Impact on Small Entities,

and Significant Alternatives Considered.

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: (1) the

establishment of differing compliance or

reporting requirements or timetables

that take into account the resources

available to small entities; (2) the

clarification, consolidation, or

simplification of compliance or

reporting requirements under the rule

for small entities; (3) the use of

performance, rather than design,

standards; and (4) an exemption from

coverage of the rule, or any part thereof,

for small entities. (5 U.S.C. 603(c).)

105. As indicated above, the Report

and Order implements certain aspects of

the Satellite Home Viewer Improvement

Act of 1999. Among other things, as

described in Sections II and IV, the new

legislation requires the Commission to

apply the cable network nonduplication rules, syndicated program

exclusivity rules, and sports blackout

rules to satellite carriers within one year

of the November 29, 1999 enactment

date. This legislation applies to both

small and large entities. Because the

Commission was instructed to pattern

the satellite rules after the cable rules,

the best alternative available to assist

small entities was to create an exception

for satellite carriers that have 1,000 or

fewer subscribers within the zip codes

areas that comprise the geographic zone

protected by these rules. To the extent

small entities come within this

exception, they are exempt from these

rules.

Ordering Clauses

106. Accordingly, It is ordered that,

pursuant authority found in sections 4(i)

4(j), 303(r), and 339 of the

Communications Act of 1934, as

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

303(r), and 339, the terms of this Report

and Order and rules as set forth in the

rule changes are adopted. The

amendments shall become effective

November 29, 2000, provided that this

Report and Order (or a summary

thereof) and the rules have been

published in the Federal Register and

OMB emergency approval of the

information collections has been

obtained on or before that date.

107. It is further ordered that the

Consumer Information Bureau,

Reference Information Center, Shall

send a copy of this Report and Order,

including the Final Regulatory

Flexibility Analysis, to the Chief

Counsel for Advocacy of the Small

Business Administration.

List of Subjects in 47 CFR Parts 73 and

76

Cable television, Satellite carriers,

Television broadcast stations.

Federal Communications Commission.

William F. Caton,

Deputy Secretary.

Rule Changes

For the reasons discussed in the

preamble, the Federal Communications

Commission amends Parts 73 and 76 of

Title 47 of the Code of Federal

Regulations as follows:

PART 73—RADIO BROADCAST

SERVICES

The authority citation for Part 73

continues to read as follows:

Federal Register / Vol. 65, No. 220 / Tuesday, November 14, 2000 / Rules and Regulations 68101

Authority: 47 U.S.C. 154, 303, 334 and

336.

1. Section 73.658(m)(1) is revised to

read as follows:

§ 73.658 Affiliation agreements and

network program practices; territorial

exclusivity in non-network program

arrangements.

* * * * *

(m) Territorial exclusivity in nonnetwork arrangements. (1) No television

station shall enter into any contract,

arrangement, or understanding,

expressed or implied; with a nonnetwork program producer, distributor,

or supplier, or other person; which

prevents or hinders another television

station located in a community over

56.3 kilometers (35 miles) away, as

determined by the reference points

contained in § 76.53 of this chapter, (if

reference points for a community are

not listed in § 76.53, the location of the

main post office will be used) from

broadcasting any program purchased by

the former station from such nonnetwork program producer, distributor,

supplier, or other person, except that a

television station may secure exclusivity

against a television station licensed to

another designated community in a

hyphenated market specified in the

market listing as contained in § 76.51 of

this chapter for those 100 markets listed,

and for markets not listed in § 76.51 of

this chapter, the listing as contained in

the Nielsen Media Research DMA

Rankings for the most recent year at the

time that the exclusivity contract,

arrangement or understanding is

complete under practices of the

industry. As used in this paragraph, the

term ‘‘community’’ is defined as the

community specified in the instrument

of authorization as the location of the

station.

* * * * *

PART 76—MULTICHANNEL VIDEO

AND CABLE TELEVISION SERVICE

2. The authority citation for Part 76 is

revised to read as follows:

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

301, 302, 303, 303a, 307, 308, 309, 312, 315,

325, 339, 503, 521, 522, 531, 532, 534, 535,

536, 537, 543, 544, 544a, 545, 548, 549, 552,

554, 556, 558, 560, 561, 571, 572, 573.

3. Section 76.5(ii) is revised to read as

follows:

§ 76.5 Definitions

* * * * *

(ii) A syndicated program is any

program sold, licensed, distributed or

offered to television station licensees in

more than one market within the United

States other than as network

programming as defined in § 76.5(m).

4. Section 76.51 is amended by

revising the entries for paragraphs (a)(2)

and (a)(28) to read as follows:

§ 76.51 Major television markets.

* * * * *

(a) * * *

(2) Los Angeles-San BernardinoCorona-Riverside-Anaheim, Calif.

* * * * *

(28) Tampa-St. Petersburg-Clearwater,

Florida.

* * * * *

§ 76.67 [Removed]

5. Remove § 76.67.

6. Revise Part 76, subpart F to read as

follows:

Subpart F—Network Non-duplication

Protection, Syndicated Exclusivity and

Sports Blackout

Sec.

76.92 Cable network non-duplication;

extent of protection.

76.93 Parties entitled to network nonduplication protection.

76.94 Notification.

76.95 Exceptions.

76.101 Cable syndicated program

exclusivity: extent of protection.

76.103 Parties entitled to syndicated

exclusivity.

76.105 Notification.

76.106 Exceptions.

76.107 Exclusivity contracts.

76.108 Indemnification contracts.

76.109 Requirements for invocation of

protection.

76.110 Substitutions.

76.111 Cable sports blackout.

76.120 Network non-duplication,

syndicated exclusivity and sports

blackout for satellite carriers:

Definitions.

76.122 Satellite network non-duplication.

76.123 Satellite syndicated program

exclusivity.

76.124 Requirements for invocation of

protection.

76.125 Indemnification contracts.

76.127 Satellite sports blackout.

76.128 Application of sports blackout rules.

76.130 Substitutions.

§ 76.92 Cable network non-duplication;

extent of protection.

(a) Upon receiving notification

pursuant to § 76.94, a cable community

unit located in whole or in part within

the geographic zone for a network

program, the network non-duplication

rights to which are held by a

commercial television station licensed

by the Commission, shall not carry that

program as broadcast by any other

television signal, except as otherwise

provided below.

(b) For purposes of this section, the

order of nonduplication priority of

television signals carried by a

community unit is as follows:

(1) First, all television broadcast

stations within whose specified zone

the community of the community unit

is located, in whole or in part;

(2) Second, all smaller market

television broadcast stations within

whose secondary zone the community

of the community unit is located, in

whole or in part.

(c) For purposes of this section, all

noncommercial educational television

broadcast stations licensed to a

community located in whole or in part

within a major television market as

specified in § 76.51 shall be treated in

the same manner as a major market

commercial television broadcast station,

and all noncommercial educational

television broadcast stations not

licensed to a community located in

whole or in part within a major

television market shall be treated in the

same manner as a smaller market

television broadcast station.

(d) Any community unit operating in

a community to which a 100-watt or

higher power translator is located

within the predicted Grade B signal

contour of the television broadcast

station that the translator station

retransmits, and which translator is

carried by the community unit shall,

upon request of such translator station

licensee or permittee, delete the

duplicating network programming of

any television broadcast station whose

reference point (See § 76.53) is more

than 88.5 km (55 miles) from the

community of the community unit.

(e) Any community unit which

operates in a community located in

whole or in part within the secondary

zone of a smaller market television

broadcast station is not required to

delete the duplicating network

programming of any major market

television broadcast station whose

reference point (See § 76.53) is also

within 88.5 km (55 miles) of the

community of the community unit.

(f) A community unit is not required

to delete the duplicating network

programming of any television

broadcast station which is significantly

viewed in the cable television

community pursuant to § 76.54.

(g) A community unit is not required

to delete the duplicating network

programming of any qualified NCE

television broadcast station that is

carried in fulfillment of the cable

television system’s mandatory signal

carriage obligations, pursuant to § 76.56.

Note: With respect to network

programming, the geographic zone within

which the television station is entitled to

enforce network non-duplication protection

and priority of shall be that geographic area

agreed upon between the network and the

68102 Federal Register / Vol. 65, No. 220 / Tuesday, November 14, 2000 / Rules and Regulations

television station. In no event shall such

rights exceed the area within which the

television station may acquire broadcast

territorial exclusivity rights as defined in

§ 73.658(m) of this Chapter, except that small

market television stations shall be entitled to

a secondary protection zone of 32.2

additional kilometers (20 additional miles).

To the extent rights are obtained for any

hyphenated market named in § 76.51, such

rights shall not exceed those permitted under

§ 73.658(m) of this Chapter for each named

community in that market.

§ 76.93 Parties entitled to network nonduplication protection.

Television broadcast station licensees

shall be entitled to exercise nonduplication rights pursuant to § 76.92 in

accordance with the contractual

provisions of the network-affiliate

agreement.

§ 76.94 Notification.

(a) In order to exercise nonduplication rights pursuant to § 76.92,

television stations shall notify each

cable television system operator of the

non-duplication sought in accordance

with the requirements of this section.

Except as otherwise provided in

paragraph (b) of this section, nonduplication protection notices shall

include the following information:

(1) The name and address of the party

requesting non-duplication protection

and the television broadcast station

holding the non-duplication right;

(2) The name of the program or series

(including specific episodes where

necessary) for which protection is

sought; and

(3) The dates on which protection is

to begin and end.

(b) Broadcasters entering into

contracts providing for network nonduplication protection shall notify

affected cable systems within 60

calendar days of the signing of such a

contract. In the event the broadcaster is

unable based on the information

contained in the contract, to furnish all

the information required by paragraph

(a) of this section at that time, the

broadcaster must provide modified

notices that contain the following

information:

(1) The name of the network (or

networks) which has (or have) extended

non-duplication protection to the

broadcaster;

(2) The time periods by time of day

(local time) and by network (if more

than one) for each day of the week that

the broadcaster will be broadcasting

programs from that network (or

networks) and for which nonduplication protection is requested; and

(3) The duration and extent (e.g.,

simultaneous, same-day, seven-day,

etc.) of the non-duplication protection

which has been agreed upon by the

network (or networks) and the

broadcaster.

(c) Except as otherwise provided in

paragraph (d) of this section, a

broadcaster shall be entitled to nonduplication protection beginning on the

later of:

(1) The date specified in its notice (as

described in paragraphs (a) or (b) of this

section, whichever is applicable) to the

cable television system; or

(2) The first day of the calendar week

(Sunday through Saturday) that begins

60 days after the cable television system

receives notice from the broadcaster.

(d) A broadcaster shall provide the

following information to the cable

television system under the following

circumstances:

(1) In the event the protection

specified in the notices described in

paragraphs (a) or (b) of this section has

been limited or ended prior to the time

specified in the notice, or in the event

a time period, as identified to the cable

system in a notice pursuant to

paragraph (b) of this section, for which

a broadcaster has obtained protection is

shifted to another time of day or another

day (but not expanded), the broadcaster

shall, as soon as possible, inform each

cable television system operator that has

previously received the notice of all

changes from the original notice. Notice

to be furnished ‘‘as soon as possible’’

under this paragraph shall be furnished

by telephone, telegraph, facsimile,

overnight mail or other similar

expedient means.

(2) In the event the protection

specified in the modified notices

described in paragraph (b) of this

section has been expanded, the

broadcaster shall, at least 60 calendar

days prior to broadcast of a protected

program entitled to such expanded

protection, notify each cable system

operator that has previously received

notice of all changes from the original

notice.

(e) In determining which programs

must be deleted from a television signal,

a cable television system operator may

rely on information from any of the

following sources published or

otherwise made available:

(1) Newspapers or magazines of

general circulation.

(2) A television station whose

programs may be subject to deletion. If

a cable television system asks a

television station for information about

its program schedule, the television

station shall answer the request:

(i) Within ten business days following

the television station’s receipt of the

request; or

(ii) Sixty days before the program or

programs mentioned in the request for

information will be broadcast;

whichever comes later.

(3) The broadcaster requesting

exclusivity.

(f) A broadcaster exercising

exclusivity pursuant to § 76.92 shall

provide to the cable system, upon

request, an exact copy of those portions

of the contracts, such portions to be

signed by both the network and the

broadcaster, setting forth in full the

provisions pertinent to the duration,

nature, and extent of the nonduplication terms concerning broadcast

signal exhibition to which the parties

have agreed.

§ 76.95 Exceptions.

(a) The provisions of §§ 76.92 through

76.94 shall not apply to a cable system

serving fewer than 1,000 subscribers.

Within 60 days following the provision

of service to 1,000 subscribers, the

operator of each such system shall file

a notice to that effect with the

Commission, and serve a copy of that

notice on every television station that

would be entitled to exercise network

non-duplication protection against it.

(b) Network non-duplication

protection need not be extended to a

higher priority station for one hour

following the scheduled time of

completion of the broadcast of a live

sports event by that station or by a lower

priority station against which a cable

community unit would otherwise be

required to provide non-duplication

protection following the scheduled time

of completion.

§ 76.101 Cable syndicated program

exclusivity: extent of protection.

Upon receiving notification pursuant

to § 76.105, a cable community unit

located in whole or in part within the

geographic zone for a syndicated

program, the syndicated exclusivity

rights to which are held by a

commercial television station licensed

by the Commission, shall not carry that

program as broadcast by any other

television signal, except as otherwise

provided below.

Note: With respect to each syndicated

program, the geographic zone within which

the television station is entitled to enforce

syndicated exclusivity rights shall be that

geographic area agreed upon between the

non-network program supplier, producer or

distributor and the television station. In no

event shall such zone exceed the area within

which the television station has acquired

broadcast territorial exclusivity rights as

defined in § 73.658(m) of this Chapter. To the

extent rights are obtained for any hyphenated

market named in § 76.51, such rights shall

not exceed those permitted under

Federal Register / Vol. 65, No. 220 / Tuesday, November 14, 2000 / Rules and Regulations 68103

§ 73.658(m) of this Chapter for each named

community in that market.

§ 76.103 Parties entitled to syndicated

exclusivity.

(a) Television broadcast station

licensees shall be entitled to exercise

exclusivity rights pursuant to § 76.101

in accordance with the contractual

provisions of their syndicated program

license agreements, consistent with

§ 76.109.

(b) Distributors of syndicated

programming shall be entitled to

exercise exclusive rights pursuant to

§ 76.101 for a period of one year from

the initial broadcast syndication

licensing of such programming

anywhere in the United States;

provided, however, that distributors

shall not be entitled to exercise such

rights in areas in which the

programming has already been licensed.

§ 76.105 Notification.

(a) In order to exercise exclusivity

rights pursuant to § 76.101, distributors

or television stations shall notify each

cable television system operator of the

exclusivity sought in accordance with

the requirements of this section.

Syndicated program exclusivity notices

shall include the following information:

(1) The name and address of the party

requesting exclusivity and the television

broadcast station or other party holding

the exclusive right;

(2) The name of the program or series

(including specific episodes where

necessary) for which exclusivity is

sought;

(3) The dates on which exclusivity is

to begin and end.

(b) Broadcasters entering into

contracts on or after August 18, 1988,

which contain syndicated exclusivity

protection shall notify affected cable

systems within sixty calendar days of

the signing of such a contract.

Broadcasters who have entered into

contracts prior to August 18, 1988, and

who comply with the requirements

specified in § 76.109 shall notify

affected cable systems on or before June

19, 1989. A broadcaster shall be entitled

to exclusivity protection beginning on

the later of:

(1) The date specified in its notice to

the cable television system; or

(2) The first day of the calendar week

(Sunday through Saturday) that begins

60 days after the cable television system

receives notice from the broadcaster;

(c) In determining which programs

must be deleted from a television

broadcast signal, a cable television

system operator may rely on

information from any of the following

sources published or otherwise made

available.

(1) Newspapers or magazines of

general circulation;

(2) A television station whose

programs may be subject to deletion. If

a cable television system asks a

television station for information about

its program schedule, the television

station shall answer the request:

(i) Within ten business days following

the television station’s receipt of the

request; or

(ii) Sixty days before the program or

programs mentioned in the request for

information will be broadcast;

whichever comes later.

(3) The distributor or television

station requesting exclusivity.

(d) In the event the exclusivity

specified in paragraph (a) of this section

has been limited or has ended prior to

the time specified in the notice, the

distributor or broadcaster who has

supplied the original notice shall, as

soon as possible, inform each cable

television system operator that has

previously received the notice of all

changes from the original notice. In the

event the original notice specified

contingent dates on which exclusivity is

to begin and/or end, the distributor or

broadcaster shall, as soon as possible,

notify the cable television system

operator of the occurrence of the

relevant contingency. Notice to be

furnished ‘‘as soon as possible’’ under

this paragraph shall be furnished by

telephone, telegraph, facsimile,

overnight mail or other similar

expedient means.

§ 76.106 Exceptions.

(a) Notwithstanding the requirements

of §§ 76.101 through 76.105, a broadcast

signal is not required to be deleted from

a cable community unit when that cable

community unit falls, in whole or in

part, within that signal’s grade B

contour, or when the signal is

significantly viewed pursuant to § 76.54

in the cable community.

(b) The provisions of §§ 76.101

through 76.105 shall not apply to a

cable system serving fewer than 1,000

subscribers. Within 60 days following

the provision of service to 1,000

subscribers, the operator of each such

system shall file a notice to that effect

with the Commission, and serve a copy

of that notice on every television station

that would be entitled to exercise

syndicated exclusivity protection

against it.

§ 76.107 Exclusivity contracts.

A distributor or television station

exercising exclusivity pursuant to

§ 76.101 shall provide to the cable

system, upon request, an exact copy of

those portions of the exclusivity

contracts, such portions to be signed by

both the distributor and the television

station, setting forth in full the

provisions pertinent to the duration,

nature, and extent of the exclusivity

terms concerning broadcast signal

exhibition to which the parties have

agreed.

§ 76.108 Indemnification contracts.

No licensee shall enter into any

contract to indemnify a cable system for

liability resulting from failure to delete

programming in accordance with the

provisions of this subpart unless the

licensee has a reasonable basis for

concluding that such program deletion

is not required by this subpart.

§ 76.109 Requirements for invocation of

protection.

For a station licensee to be eligible to

invoke the provisions of § 76.101, it

must have a contract or other written

indicia that it holds syndicated

exclusivity rights for the exhibition of

the program in question. Contracts

entered on or after August 18, 1988,

must contain the following words: ‘‘the

licensee [or substitute name] shall, by

the terms of this contract, be entitled to

invoke the protection against

duplication of programming imported

under the Compulsory Copyright

License, as provided in § 76.101 of the

FCC rules [or ‘as provided in the FCC’s

syndicated exclusivity rules’].’’

Contracts entered into prior to August

18, 1988, must contain either the

foregoing language or a clear and

specific reference to the licensee’s

authority to exercise exclusivity rights

as to the specific programming against

cable television broadcast signal

carriage by the cable system in question

upon the contingency that the

government reimposed syndicated

exclusivity protection. In the absence of

such a specific reference in contracts

entered into prior to August 18, 1988,

the provisions of these rules may be

invoked only if the contract is amended

to include the specific language

referenced in this section or a specific

written acknowledgment is obtained

from the party from whom the broadcast

exhibition rights were obtained that the

existing contract was intended, or

should now be construed by agreement

of the parties, to include such rights. A

general acknowledgment by a supplier

of exhibition rights that specific contract

language was intended to convey rights

under these rules will be accepted with

respect to all contracts containing that

specific language. Nothing in this

section shall be construed as a grant of

68104 Federal Register / Vol. 65, No. 220 / Tuesday, November 14, 2000 / Rules and Regulations

exclusive rights to a broadcaster where

such rights are not agreed to by the

parties.

§ 76.110 Substitutions.

Whenever, pursuant to the

requirements of the syndicated

exclusivity rules, a community unit is

required to delete a television program

on a broadcast signal that is permitted

to be carried under the Commission’s

rules, such community unit may,

consistent with these rules and the

sports blackout rules at § 76.111,

substitute a program from any other

television broadcast station. Programs

substituted pursuant to this section may

be carried to their completion.

§ 76.111 Cable sports blackout.

(a) No community unit located in

whole or in part within the specified

zone of a television broadcast station

licensed to a community in which a

sports event is taking place, shall, on

request of the holder of the broadcast

rights to that event, or its agent, carry

the live television broadcast of that

event if the event is not available live on

a television broadcast station meeting

the criteria specified in § 76.128. For

purposes of this section, if there is no

television station licensed to the

community in which the sports event is

taking place, the applicable specified

zone shall be that of the television

station licensed to the community with

which the sports event or team is

identified, or, if the event or local team

is not identified with any particular

community, the nearest community to

which a television station is licensed.

(b) Notification of the programming to

be deleted pursuant to this section shall

include the following information:

(1) As to programming to be deleted

from television broadcast signals

regularly carried by the community

unit:

(i) The name and address of the party

requesting the program deletion;

(ii) The date, time and expected

duration of the sports event the

television broadcast of which is to be

deleted;

(iii) The call letters of the television

broadcast station(s) from which the

deletion is to be made.

(2) As to programming to be deleted

from television broadcast signals not

regularly carried by the community

unit:

(i) The name and address of the party

requesting the program deletion;

(ii) The date, time and expected

duration of the sports event the

television broadcast of which is to be

deleted.

(c) Notifications given pursuant to

this section must be received, as to

regularly scheduled events, no later

than the Monday preceding the calendar

week (Sunday through Saturday) during

which the program deletion is to be

made. Notifications as to events not

regularly scheduled and revisions of

notices previously submitted, must be

received within twenty-four (24) hours

after the time of the telecast to be

deleted is known, but in any event no

later than twenty-four (24) hours from

the time the subject telecast is to take

place.

(d) Whenever, pursuant to this

section, a community unit is required to

delete a television program on a signal

regularly carried by the community

unit, such community unit may,

consistent with the rules contained in

subpart F of this part, substitute a

program from any other television

broadcast station. A program substituted

may be carried to its completion, and

the community unit need not return to

its regularly carried signal until it can

do so without interrupting a program

already in progress.

(e) The provisions of this section shall

not be deemed to require the deletion of

any portion of a television signal which

a community unit was lawfully carrying

prior to March 31, 1972.

(f) The provisions of this section shall

not apply to any community unit having

fewer than 1,000 subscribers.

§ 76.120 Network non-duplication

protection, syndicated exclusivity and

sports blackout rules for satellite carriers:

Definitions.

For purposes of §§ 76.122–76.130, the

following definitions apply:

(a) Satellite carrier. The term

‘‘satellite carrier’’ means an entity that

uses the facilities of a satellite or

satellite service licensed by the Federal

Communications Commission and

operates in the Fixed-Satellite Service

under part 25 of title 47 of the Code of

Federal Regulations or the Direct

Broadcast Satellite Service under part

100 of title 47 of the Code of Federal

Regulations, to establish and operate a

channel of communications for point-tomultipoint distribution of television

station signals, and that owns or leases

a capacity or service on a satellite in

order to provide such point-tomultipoint distribution, except to the

extent that such entity provides such

distribution pursuant to tariff under the

Communications Act of 1934, other than

for private home viewing.

(b) Nationally distributed

superstation. The term ‘‘nationally

distributed superstation’’ means a

television broadcast station, licensed by

the Commission, that—

(1) Is not owned or operated by or

affiliated with a television network that,

as of January 1, 1995, offered

interconnected program service on a

regular basis for 15 or more hours per

week to at least 25 affiliated television

licensees in 10 or more States;

(2) On May 1, 1991, was retransmitted

by a satellite carrier and was not a

network station at that time; and

(3) Was, as of July 1, 1998,

retransmitted by a satellite carrier under

the statutory license of Section 119 of

title 17, United States Code.

(c) Television network. The term

‘‘television network’’ means a television

network in the United States which

offers an interconnected program

service on a regular basis for 15 or more

hours per week to at least 25 affiliated

broadcast stations in 10 or more States.

(d) Network station. The term

‘‘network station’’ means—

(1) A television broadcast station,

including any translator station or

terrestrial satellite station that

rebroadcasts all or substantially all of

the programming broadcast by a

network station, that is owned or

operated by, or affiliated with, one or

more of the television networks in the

United States which offer an

interconnected program service on a

regular basis for 15 or more hours per

week to at least 25 of its affiliated

television licensees in 10 or more States;

or

(2) A noncommercial educational

broadcast station (as defined in Section

397 of the Communications Act of

1934); except that the term does not

include the signal of the Alaska Rural

Communications Service, or any

successor entity to that service.

(e) Zone of protection. The term ‘‘zone

of protection’’ means—

(1) With respect to network nonduplication, the zone of protection

within which the television station is

entitled to enforce network nonduplication protection shall be that

geographic area agreed upon between

the network and the television station.

In no event shall such rights exceed the

area within which the television station

may acquire broadcast territorial

exclusivity rights as defined in

§ 73.658(m) of this Chapter, except that

small market television stations shall be

entitled to a secondary protection zone

of 32.2 additional kilometers (20

additional miles). To the extent rights

are obtained for any hyphenated market

named in § 76.51, such rights shall not

exceed those permitted under

§ 73.658(m) of this Chapter for each

named community in that market.

(2) With respect to each syndicated

program, the zone of protection within

Federal Register / Vol. 65, No. 220 / Tuesday, November 14, 2000 / Rules and Regulations 68105

which the television station is entitled

to enforce syndicated exclusivity rights

shall be that geographic area agreed

upon between the non-network program

supplier, producer or distributor and the

television station. In no event shall such

zone exceed the area within which the

television station has acquired broadcast

territorial exclusivity rights as defined

in § 73.658(m) of this Chapter. To the

extent rights are obtained for any

hyphenated market named in § 76.51,

such rights shall not exceed those

permitted under § 73.658(m) of this

chapter for each named community in

that market.

(3) With respect to sports blackout,

the zone of protection is the ‘‘specified

zone’’ of a television broadcast station,

as defined in § 76.5(e). If there is no

television station licensed to the

community in which the sports event is

taking place, the applicable specified

zone shall be that of the television

station licensed to the community with

which the sports event or team is

identified, or, if the event or local team

is not identified with any particular

community, the nearest community to

which a television station is licensed.

§ 76.122 Satellite network non-duplication.

(a) Upon receiving notification

pursuant to paragraph (c) of this section,

a satellite carrier shall not deliver, to

subscribers within zip code areas

located in whole or in part within the

zone of protection of a commercial

television station licensed by the

Commission, a program carried on a

nationally distributed superstation

when the network non-duplication

rights to such program are held by the

commercial television station providing

notice, except as provided in paragraphs

(j), (k) or (l) of this section.

(b) Television broadcast station

licensees shall be entitled to exercise

non-duplication rights pursuant to

§ 76.122 in accordance with the

contractual provisions of the networkaffiliate agreement, and as provided in

§ 76.124.

(c) In order to exercise nonduplication rights pursuant to § 76.122,

television stations shall notify each

satellite carrier of the non-duplication

sought in accordance with the

requirements of this section. Nonduplication protection notices shall

include the following information:

(1) The name and address of the party

requesting non-duplication protection

and the television broadcast station

holding the non-duplication right;

(2) The name of the program or series

(including specific episodes where

necessary) for which protection is

sought;

(3) The dates on which protection is

to begin and end;

(4) The name of the network (or

networks) which has (or have) extended

non-duplication protection to the

broadcaster;

(5) The time periods by time of day

(local time) and by network (if more

than one) for each day of the week that

the broadcaster will be broadcasting

programs from that network (or

networks) and for which nonduplication protection is requested;

(6) The duration and extent (e.g.,

simultaneous, same-day, seven-day,

etc.) of the non-duplication protection

which has been agreed upon by the

network (or networks) and the

broadcaster; and

(7) A list of the U.S. postal zip code(s)

that encompass the zone of protection

under these rules.

(d) Broadcasters entering into

contracts providing for network nonduplication protection shall notify

affected satellite carriers within 60

calendar days of the signing of such a

contract; provided, however, that for

such contracts signed before November

29, 2000, the broadcaster may provide

notice on or before January 31, 2001, or

with respect to pre-November 29, 2000

contracts that require amendment in

order to invoke the provisions of these

rules, notification may be given within

sixty calendar days of the signing of

such amendment.

(e) Except as otherwise provided in

this section, a broadcaster shall be

entitled to non-duplication protection

beginning on the later of:

(1) The date specified in its notice to

the satellite carrier; or

(2) The first day of the calendar week

(Sunday through Saturday) that begins

60 days after the satellite carrier

receives notice from the broadcaster;

Provided, however, that with respect to

notifications given pursuant to this

section prior to June 1, 2001, a satellite

carrier is not required to provide nonduplication protection until 120 days

after the satellite carrier receives such

notification.

(f) A broadcaster shall provide the

following information to the satellite

carrier under the following

circumstances:

(1) In the event the protection

specified in the notices described in

paragraph (c) of this section has been

limited or ended prior to the time

specified in the notice, or in the event

a time period, as identified to the

satellite carrier in a notice pursuant to

paragraph (c) of this section, for which

a broadcaster has obtained protection is

shifted to another time of day or another

day (but not expanded), the broadcaster

shall, as soon as possible, inform each

satellite carrier that has previously

received the notice of all changes from

the original notice. Notice to be

furnished ‘‘as soon as possible’’ under

this paragraph shall be furnished by

telephone, telegraph, facsimile, e-mail,

overnight mail or other similar

expedient means.

(2) In the event the protection

specified in the notices described in

paragraph (c) of this section has been

expanded, the broadcaster shall, at least

60 calendar days prior to broadcast of a

protected program entitled to such

expanded protection, notify each

satellite carrier that has previously

received notice of all changes from the

original notice.

(g) In determining which programs

must be deleted from a television signal,

a satellite carrier may rely on

information from newspapers or

magazines of general circulation, the

broadcaster requesting exclusivity

protection, or the nationally distributed

superstation.

(h) If a satellite carrier asks a

nationally distributed superstation for

information about its program schedule,

the nationally distributed superstation

shall answer the request:

(i) Within ten business days following

its receipt of the request; or

(ii) Sixty days before the program or

programs mentioned in the request for

information will be broadcast,

whichever comes later.

(i) A broadcaster exercising

exclusivity pursuant to this section shall

provide to the satellite carrier, upon

request, an exact copy of those portions

of the contracts, such portions to be

signed by both the network and the

broadcaster, setting forth in full the

provisions pertinent to the duration,

nature, and extent of the nonduplication terms concerning broadcast

signal exhibition to which the parties

have agreed.

(j) A satellite carrier is not required to

delete the duplicating programming of

any nationally distributed superstation

that is carried by the satellite carrier as

a local station with the station’s

retransmission consent pursuant to

§ 76.64

(i) Within the station’s local market;

(ii) If the station is ‘‘significantly

viewed,’’ pursuant to § 76.54, in zip

code areas included within the zone of

protection; or

(iii) If the zone of protection falls, in

whole or in part, within that signal’s

grade B contour.

(k) A satellite carrier is not required

to delete the duplicating programming

of any nationally distributed

superstation from an individual

68106 Federal Register / Vol. 65, No. 220 / Tuesday, November 14, 2000 / Rules and Regulations

subscriber who is located outside the

zone of protection, notwithstanding that

the subscriber lives within a zip code

provided by the broadcaster pursuant to

paragraph (c) of this section.

(l) A satellite carrier is not required to

delete programming if it has fewer than

1,000 subscribers within the relevant

protected zone who subscribe to the

nationally distributed superstation

carrying the programming for which

deletion is requested pursuant to

paragraph (c) of this section.

§ 76.123 Satellite syndicated program

exclusivity.

(a) Upon receiving notification

pursuant to paragraph (d) of this

section, a satellite carrier shall not

deliver, to subscribers located within

zip code areas in whole or in part

within the zone of protection of a

commercial television station licensed

by the Commission, a program carried

on a nationally distributed superstation

when the syndicated program

exclusivity rights to such program are

held by the commercial television

station providing notice, except as

provided in paragraphs (k), (l) and (m)

of this section.

(b) Television broadcast station

licensees shall be entitled to exercise

exclusivity rights pursuant to this

Section in accordance with the

contractual provisions of their

syndicated program license agreements,

consistent with § 76.124.

(c) Distributors of syndicated

programming shall be entitled to

exercise exclusive rights pursuant to

this Section for a period of one year

from the initial broadcast syndication

licensing of such programming

anywhere in the United States;

provided, however, that distributors

shall not be entitled to exercise such

rights in areas in which the

programming has already been licensed.

(d) In order to exercise exclusivity

rights pursuant to this Section,

distributors of syndicated programming

or television broadcast stations shall

notify each satellite carrier of the

exclusivity sought in accordance with

the requirements of this paragraph.

Syndicated program exclusivity notices

shall include the following information:

(1) The name and address of the party

requesting exclusivity and the television

broadcast station or other party holding

the exclusive right;

(2)The name of the program or series

(including specific episodes where

necessary) for which exclusivity is

sought;

(3)The dates on which exclusivity is

to begin and end; and

(4) A list of the U.S. postal zip code(s)

that encompass the zone of protection

under these rules.

(e) A distributor or television station

exercising exclusivity pursuant to this

Section shall provide to the satellite

carrier, upon request, an exact copy of

those portions of the exclusivity

contracts, such portions to be signed by

both the distributor and the television

station, setting forth in full the

provisions pertinent to the duration,

nature, and extent of the exclusivity

terms concerning broadcast signal

exhibition to which the parties have

agreed.

(f) Television broadcast stations or

distributors entering into contracts on or

after November 29, 2000, which contain

syndicated exclusivity protection with

respect to satellite retransmission of

programming, shall notify affected

satellite carriers within sixty calendar

days of the signing of such a contract.

Television broadcast stations or

distributors who have entered into

contracts prior to November 29, 2000,

and who comply with the requirements

specified in § 76.124 shall notify

affected satellite carriers on or before

January 31, 2001; provided, however,

that with respect to pre-November 29,

2000 contracts that require amendment

in order to invoke the provisions of

these rules, notification may be given

within sixty calendar days of the signing

of such amendment.

(g) Except as otherwise provided in

this section, a television broadcast

station shall be entitled to exclusivity

protection beginning on the later of:

(1) The date specified in its notice to

the satellite carrier; or

(2) The first day of the calendar week

(Sunday through Saturday) that begins

60 days after the satellite carrier

receives notice from the broadcaster.

Provided, however, that with respect

to notifications given pursuant to this

section prior to June 1, 2001, a satellite

carrier is not required to provide

syndicated exclusivity protection until

120 days after the satellite carrier

receives such notification.

(h) In determining which programs

must be deleted from a television

broadcast signal, a satellite carrier may

rely on information from the distributor

or television broadcast station

requesting exclusivity; newspapers or

magazines of general circulation; or the

nationally distributed superstation

whose programs may be subject to

deletion.

(i) If a satellite carrier asks a

nationally distributed superstation for

information about its program schedule,

the nationally distributed superstation

shall answer the request:

(1) Within ten business days

following the its receipt of the request;

or

(2) Sixty days before the program or

programs mentioned in the request for

information will be broadcast;

whichever comes later.

(j) In the event the exclusivity

specified in paragraph (a) of this section

has been limited or has ended prior to

the time specified in the notice, the

distributor or broadcaster who has

supplied the original notice shall, as

soon as possible, inform each satellite

carrier that has previously received the

notice of all changes from the original

notice. In the event the original notice

specified contingent dates on which

exclusivity is to begin and/or end, the

distributor or broadcaster shall, as soon

as possible, notify the satellite carrier of

the occurrence of the relevant

contingency. Notice to be furnished ‘‘as

soon as possible’’ under this Subsection

shall be furnished by telephone,

telegraph, facsimile, e-mail, overnight

mail or other similar expedient means.

(k) A satellite carrier is not required

to delete the programming of any

nationally distributed superstation that

is carried by the satellite carrier as a

local station with the station’s

retransmission consent pursuant to

§ 76.64:

(1) Within the station’s local market;

(2) If the station is ‘‘significantly

viewed,’’ pursuant to § 76.54, in zip

code areas included within the zone of

protection; or

(3) If the zone of protection falls, in

whole or in part, within that signal’s

grade B contour.

(l) A satellite carrier is not required to

delete the duplicating programming of

any nationally distributed superstation

from an individual subscriber who is

located outside the zone of protection,

notwithstanding that the subscriber

lives within a zip code provided by the

broadcaster pursuant to paragraph (d) of

this section.

(m) A satellite carrier is not required

to delete programming if it has fewer

than 1,000 subscribers within the

relevant protected zone who subscribe

to the nationally distributed

superstation carrying the programming

for which deletion is requested pursuant

to paragraph (d) of this section.

§ 76.124 Requirements for invocation of

protection.

For a television broadcast station

licensee or distributor of syndicated

programming to be eligible to invoke the

provisions of § 76.122 or § 76.123 of this

subpart, it must have a contract or other

written indicia that it holds network

program non-duplication or syndicated

Federal Register / Vol. 65, No. 220 / Tuesday, November 14, 2000 / Rules and Regulations 68107

exclusivity rights for the exhibition of

the program in question. Contracts

entered on or after November 29, 2000,

must contain the following words: ‘‘the

licensee [or substitute name] shall, by

the terms of this contract, be entitled to

invoke the protection against

duplication of programming imported

under the Statutory Copyright License,

as provided in § 76.122 or § 76.123 of

the FCC rules [or ’as provided in the

FCC’s satellite network non-duplication

or syndicated exclusivity rules’].’’

Contracts entered into prior to

November 29, 2000, must contain the

foregoing language plus a clear and

specific reference to the licensee’s

authority to exercise exclusivity rights

as to the specific programming against

signal carriage by the satellite carrier in

question, or by satellite carriage in

general in a protected, geographic or

specified zone. In the absence of such a

specific reference in contracts entered

into prior to November 29, 2000, the

provisions of these rules may be

invoked only if the contract is amended

to include the specific language

referenced in this section or a specific

written acknowledgment is obtained

from the party from whom the broadcast

exhibition rights were obtained that the

existing contract was intended, or

should now be construed by agreement

of the parties, to include such rights. A

general acknowledgment by a supplier

of exhibition rights that specific contract

language was intended to convey rights

under these rules will be accepted with

respect to all contracts containing that

specific language. Nothing in this

section shall be construed as a grant of

exclusive rights to a broadcaster where

such rights are not agreed to by the

parties.

§ 76.125 Indemnification contracts.

No television broadcast station

licensee shall enter into any contract to

indemnify a satellite carrier for liability

resulting from failure to delete

programming in accordance with the

provisions of this Subpart unless the

licensee has a reasonable basis for

concluding that such program deletion

is not required by this Subpart.

§ 76.127 Satellite sports blackout.

(a) Upon the request of the holder of

the broadcast rights to a sports event, or

its agent, no satellite carrier shall

retransmit to subscribers within the area

comprising the specified zone a

‘‘nationally distributed superstation’’ or

‘‘network station’’ carrying the live

television broadcast of a sports event if

the event is not available live on a

television broadcast station meeting the

criteria specified in § 76.128. For

purposes of this section, if there is no

television station licensed to the

community in which the sports event is

taking place, the applicable specified

zone shall be that of the television

station licensed to the community with

which the sports event or team is

identified, or, if the event or local team

is not identified with any particular

community, the nearest community to

which a television station is licensed.

(b) Notification of the programming to

be deleted pursuant to this Section shall

include the following information:

(1) The name and address of the party

requesting the program deletion;

(2) The date, time and expected

duration of the sports event the

television broadcast of which is to be

deleted;

(3) The call letters of the nationally

distributed superstation or network

station(s) from which the deletion is to

be made;

(4) The U.S. postal zip codes that

encompass the specified zone.

(c) Notifications given pursuant to

this section must be received by the

satellite carrier, as to regularly

scheduled events, within forty-eight (48)

hours after the time of the telecast to be

deleted is known, and no later than the

Monday preceding the calendar week

(Sunday through Saturday) during

which the program deletion is to be

made. Notifications as to events not

regularly scheduled and revisions of

notices previously submitted, must be

received within twenty-four (24) hours

after the time of the telecast to be

deleted is known, but in any event no

later than twenty-four (24) hours from

the time the subject telecast is to take

place.

(d) A satellite carrier is not required

to delete a sports event from an

individual subscriber who is located

outside the specified zone,

notwithstanding that the subscriber

lives within a zip code provided by the

holder of the broadcast rights pursuant

to paragraph (b) of this section.

(e) A satellite carrier is not required

to delete a sports event if it has fewer

than 1,000 subscribers within the

relevant specified zone who subscribe to

the nationally distributed superstation

or network station carrying the sports

event for which deletion is requested

pursuant to paragraph (b) of this section.

(f) Notwithstanding paragraph (c) of

this section, for sports events to be

deleted on or before March 31, 2001,

notification must be received by satellite

carriers at least 60 full days prior to the

day the telecast is to be deleted.

§ 76.128 Application of sports blackout

rules.

The cable and satellite sports blackout

rules (§§ 76.111 and 76.127) may apply

when the sports event is not available

live on any of the following television

broadcast stations carried by a cable

system or other MVPD:

(a) Television broadcast stations

within whose specified zone the

community of the community unit or

the community within which the

sporting event is taking place is located,

in whole or in part;

(b) Television broadcast stations

within whose Grade B contours the

community of the community unit or

the community within which the

sporting event is taking place is located,

in whole or in part;

(c) Television broadcast stations

licensed to other designated

communities which are generally

considered to be part of the same

television market (Example: Burlington,

Vt.-Plattsburgh, N.Y. or Cincinnati,

Ohio-Newport, Ky., television markets);

(d) Television broadcast stations that

are significantly viewed, pursuant to

§ 76.54, in the community unit or

community within the specified zone.

§ 76.130 Substitutions.

Whenever, pursuant to the

requirements of the network program

non-duplication, syndicated program

exclusivity, or sports blackout rules, a

satellite carrier is required to delete a

television program from retransmission

to satellite subscribers within a zip code

area, such satellite carrier may,

consistent with this Subpart, substitute

a program from any other television

broadcast station for which the satellite

carrier has obtained the necessary legal

rights and permissions, including but

not limited to copyright and

retransmission consent. Programs

substituted pursuant to this section may

be carried to their completion.

[FR Doc. 00–29028 Filed 11–13–00; 8:45 am]

BILLING CODE 6712–01–U

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety

Administration

49 CFR Part 571

[Docket No. NHTSA–2000–8258]

RIN No. 2127–AI10

Federal Motor Vehicle Safety

Standards; Occupant Crash Protection

AGENCY: National Highway Traffic

Safety Administration (NHTSA), DOT.