Federal Register / Vol. 72, No. 192 / Thursday, October 4, 2007 / Rules and Regulations 56645 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 76 

[MB Docket No. 07–29; FCC 07–169] 

Implementation of the Cable Television 

Consumer Protection and Competition 

Act of 1992 and Development of 

Competition and Diversity in Video 

Programming Distribution: Section 

628(c)(5) of the Communications Act—

Sunset of Exclusive Contract 

Prohibition 

AGENCY: Federal Communications 

Commission. 

ACTION: Final rule. 

SUMMARY: In this document, the 

Commission retains for five years the 

prohibition on exclusive contracts for 

satellite cable programming and satellite 

broadcast programming between 

vertically integrated programming 

vendors and cable operators and 

modifies the procedures for resolving 

program access disputes. 

DATES: Effective October 4, 2007, except 

for the amendments to § 76.1003(e)(1) 

and (j) which contain information 

collection requirements that are not 

effective until approved by the Office of 

Management and Budget. The 

Commission will publish a document in 

the Federal Register announcing the 

effective date for those sections. 

FOR FURTHER INFORMATION CONTACT: For 

additional information on this 

proceeding, contact Steven Broeckaert, 

Steven.Broeckaert@fcc.gov; David 

Konczal, David.Konczal@fcc.gov; or 

Katie Costello, Katie.Costello@fcc.gov; of 

the Media Bureau, Policy Division, (202) 

418–2120. 

SUPPLEMENTARY INFORMATION: This is a 

summary of the Commission’s Report 

and Order (‘‘Order’’), FCC 07–169, 

adopted on September 11, 2007, and 

released on October 1, 2007. The full 

text of this document is available for 

public inspection and copying during 

regular business hours in the FCC 

Reference Center, Federal 

Communications Commission, 445 12th 

Street, SW., CY–A257, Washington, DC 

20554. This document will also be 

available via ECFS (http://www.fcc.gov/ 

cgb/ecfs/). (Documents will be available 

electronically in ASCII, Word 97, and/ 

or Adobe Acrobat.) The complete text 

may be purchased from the 

Commission’s copy contractor, 445 12th 

Street, SW., Room CY–B402, 

Washington, DC 20554. To request this 

document in accessible formats 

(computer diskettes, large print, audio 

recording, and Braille), send an e-mail 

to fcc504@fcc.gov or call the 

Commission’s Consumer and 

Governmental Affairs Bureau at (202) 

418–0530 (voice), (202) 418–0432 

(TTY). 

In addition to filing comments with 

the Office of the Secretary, a copy of any 

comments on the proposed information 

collection requirements contained 

herein should be submitted to Cathy 

Williams, Federal Communications 

Commission, 445 12th St., SW., Room 

1–C823, Washington, DC 20554, or via 

the Internet at PRA@fcc.gov. 

Paperwork Reduction Act of 1995 

Analysis 

This document contains modified 

information collection requirements. 

The Commission will send the 

requirements for OMB review at a later 

date. The Commission, as part of its 

continuing effort to reduce paperwork 

burdens, will invite the general public 

to comment on the information 

collection requirements as required by 

the Paperwork Reduction Act of 1995, 

Public Law 104–13. In addition, 

pursuant to the Small Business 

Paperwork Relief Act of 2002, Public 

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

we sought specific comment on how we 

might ‘‘further reduce the information 

collection burden for small business 

concerns with fewer than 25 

employees.’’ We have assessed the 

effects of the information collection 

requirements resulting from the 

modifications to the Commission’s 

procedures for resolving program access 

disputes adopted herein, and find that 

those requirements will benefit 

companies with fewer than 25 

employees by facilitating the resolution 

of program access complaints and that 

these requirements will not burden 

those companies. 

Summary of the Report and Order 

I. Introduction and Executive Summary 

1. In areas served by a cable operator, 

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

Communications Act of 1934, as 

amended (‘‘Communications Act’’) 

generally prohibits exclusive contracts 

for satellite cable programming or 

satellite broadcast programming 

between vertically integrated 

programming vendors and cable 

operators (the ‘‘exclusive contract 

prohibition’’). See 47 U.S.C. 

548(c)(2)(D). In this Order, we find that 

the exclusive contract prohibition 

continues to be necessary to preserve 

and protect competition and diversity in 

the distribution of video programming, 

and accordingly, retain it again for five 

years, until October 5, 2012. In the 

Order, we decline to narrow the scope 

of the exclusive contract prohibition 

based on the popularity of the 

programming network, based on the 

competitive circumstances in individual 

geographic areas served by a cable 

operator, or by precluding certain 

competitive multichannel video 

programming distributors (‘‘MVPDs’’) 

from benefiting from the prohibition. 

We also decline to expand the exclusive 

contract prohibition to apply to noncable-affiliated programming, and we 

again conclude that terrestrially 

delivered programming is beyond the 

scope of the exclusive contract 

prohibition in Section 628(c)(2)(D). 

2. Further, we modify our procedures 

for resolving program access disputes by 

(i) codifying the requirements that a 

respondent in a program access 

complaint proceeding that expressly 

relies upon a document in asserting a 

defense include the document as part of 

its answer; (ii) finding that in the 

context of a complaint proceeding, it 

would be unreasonable for a respondent 

not to produce all the documents either 

requested by the complainant or ordered 

by the Commission, provided that such 

documents are in its control and 

relevant to the dispute; (iii) codifying 

the Commission’s authority to issue 

default orders granting a complaint if 

the respondent fails to comply with 

discovery requests; and (iv) allowing 

parties to a program access complaint 

proceeding to voluntarily engage in 

alternative dispute resolution, including 

commercial arbitration, during which 

time Commission action on the 

complaint will be suspended. We also 

retain our goals of resolving program 

access complaints within five months 

from the submission of a complaint for 

denial of programming cases, and 

within nine months for all other 

program access complaints, such as 

price discrimination cases. We decline 

to (i) mandate electronic filings of 

pleadings at this time (but we note that 

parties currently may voluntarily submit 

electronic copies of their pleadings to 

staff via e-mail); (ii) adopt a more 

expedited pleading cycle for program 

access complaints; (iii) mandate weekly 

status conferences; (iv) shift resolution 

of program access complaints to the 

Enforcement Bureau; or (v) adopt 

mandatory arbitration. 

II. Background 

A. Exclusive Contract Prohibition 

3. In enacting the program access 

provisions, adopted as part of the Cable 

Television Consumer Protection and 

Competition Act of 1992 (‘‘1992 Cable 

Act’’), Congress intended to encourage 


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entry into the MVPD market by existing 

or potential competitors to traditional 

cable systems by making available to 

those entities the programming 

necessary to enable them to become 

viable competitors. The 1992 Cable Act 

and its legislative history reflect 

Congressional findings that increased 

horizontal concentration of cable 

operators, combined with extensive 

vertical integration (which means the 

combined ownership of cable systems 

and suppliers of cable programming), 

created an imbalance of power, both 

between cable operators and program 

vendors and between incumbent cable 

operators and their multichannel 

competitors. Congress concluded at that 

time that vertically integrated program 

suppliers had the incentive and ability 

to favor their affiliated cable operators 

over other MVPDs, such as other cable 

systems, home satellite dish (‘‘HSD’’) 

distributors, direct broadcast satellite 

(‘‘DBS’’) providers, satellite master 

antenna television (‘‘SMATV’’) systems, 

and wireless cable operators. 

4. When the Commission promulgated 

regulations implementing the program 

access provisions of Section 628, it 

recognized that Congress placed a 

higher value on new competitive entry 

into the MVPD marketplace than on the 

continuation of exclusive distribution 

practices when such practices impede 

this entry. Congress absolutely 

prohibited exclusive contracts for 

satellite cable programming or satellite 

broadcast programming between 

vertically integrated programming 

vendors and cable operators in areas 

unserved by cable, and generally 

prohibited exclusive contracts within 

areas served by cable: 

With respect to distribution to persons in 

areas served by a cable operator, [the 

Commission shall] prohibit exclusive 

contracts for satellite cable programming or 

satellite broadcast programming between a 

cable operator and a satellite cable 

programming vendor in which a cable 

operator has an attributable interest or a 

satellite broadcast programming vendor in 

which a cable operator has an attributable 

interest, unless the Commission determines 

* * * that such contract is in the public 

interest. 47 U.S.C. 548(c)(2)(D); see also 47 

CFR 76.1002(c)(2). 

Congress recognized that, in areas 

served by cable, some exclusive 

contracts may serve the public interest 

by providing offsetting benefits to the 

video programming market or assisting 

in the development of competition 

among MVPDs. See 47 U.S.C. 

548(c)(2)(4). Any cable operator, 

satellite cable programming vendor in 

which a cable operator has an 

attributable interest, or satellite 

broadcast programming vendor in 

which a cable operator has an 

attributable interest seeking to enforce 

or enter into an exclusive contract in an 

area served by a cable operator must 

submit a ‘‘petition for exclusivity’’ to 

the Commission for approval. See 47 

CFR 76.1002(c)(5). 

5. Congress directed that the exclusive 

contract prohibition would cease to be 

effective on October 5, 2002, unless the 

Commission found in a proceeding 

conducted between October 2001 and 

October 2002 that the prohibition 

‘‘continues to be necessary to preserve 

and protect competition and diversity in 

the distribution of video programming.’’

See 47 U.S.C. 548(c)(5). In October 2001, 

the Commission sought comment on 

this issue (2001 Sunset NPRM, 66 FR 

54972, October 31, 2001) and ultimately 

concluded that the exclusive contract 

prohibition did continue to be 

‘‘necessary.’’ See 2002 Extension Order, 

67 FR 49247, July 30, 2002. The 

Commission therefore extended the 

prohibition for five years (i.e., through 

October 5, 2007). 

6. The Commission further provided 

that, during the year before the 

expiration of the five-year extension of 

the exclusive contract prohibition, it 

would conduct another review to 

determine whether the exclusive 

contract prohibition continues to be 

necessary to preserve and protect 

competition and diversity in the 

distribution of video programming. We 

issued a Notice of Proposed Rulemaking 

(‘‘NPRM’’) in February 2007 to initiate 

this review (72 FR 9289, March 1, 2007). 

B. Program Access Complaint 

Procedures 

7. Section 628 of the Communications 

Act prohibits unfair methods of 

competition or unfair or deceptive 

practices that hinder or prevent any 

MVPD from providing satellitedelivered programming to consumers. 

Section 628(b) provides: 

It shall be unlawful for a cable operator, a 

satellite cable programming vendor in which 

a cable operator has an attributable interest, 

or a satellite broadcast programming vendor 

to engage in unfair methods of competition 

or unfair or deceptive acts or practices, the 

purpose or effect of which is to hinder 

significantly or to prevent any multichannel 

video programming distributor from 

providing satellite cable programming or 

satellite broadcast programming to 

subscribers or consumers. 

As part of the Telecommunications 

Act of 1996, Congress expanded 

program access protection to include 

common carriers and their affiliates that 

provide video programming by any 

means directly to subscribers, and to 

satellite cable programming vendors in 

which a common carrier has an 

attributable interest. See 47 U.S.C. 

548(j). Section 628, among other things, 

protects access to vertically integrated 

cable programming services by 

competing MVPDs in order to increase 

competition and diversity in the MVPD 

market and foster the development of 

competition to traditional cable systems. 

8. Parties aggrieved by conduct 

alleged to violate the program access 

provisions have the right to commence 

an adjudicatory proceeding before the 

Commission. As instructed by Section 

628(c), the Commission promulgated 

regulations implementing a program 

access complaint process. The 

Commission determined that a 

streamlined program access complaint 

process, with limited discovery 

procedures and adjudication based on a 

complaint, answer, and reply, would 

provide the most flexible and 

expeditious means of enforcing the antidiscrimination program access 

provisions. The Commission further 

addressed program access complaint 

process issues in response to a petition 

for rulemaking filed by Ameritech New 

Media, Inc. The Commission resolved 

these and other issues in the 1998 

Program Access Order (13 FCC Rcd 

15822). 

9. In the 1998 Program Access Order, 

the Commission affirmed its authority to 

impose damages on a case-by-case basis 

for program access violations and 

adopted guidelines for resolving 

program access disputes so that denial 

of programming cases, such as 

unreasonable refusal to sell, petitions 

for exclusivity, and exclusivity 

complaints, are resolved within five 

months of the submission of the 

complaint to the Commission and all 

other program access complaints, 

including price discrimination cases, 

are resolved within nine months of the 

submission of the complaint to the 

Commission. The Commission 

subsequently amended the program 

access rules as part of an overhaul of the 

Commission’s pleading and complaint 

rules. 

10. In the NPRM, in addition to 

seeking comment on extension of the 

exclusive contract prohibition, we 

sought comment on whether and how 

our procedures for resolving program 

access disputes under Section 628 

should be modified. We sought 

comment on the costs associated with 

the complaint process and whether the 

pre-filing notice, pleading requirements, 

evidentiary standards, timing, and 

potential remedies are appropriate and 

effective. We also sought comment on 

whether specific time limits on the 


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Commission, the parties, or others 

would promote a speedy and just 

resolution of program access 

complaints. We asked whether the 

program access complaint rules and 

procedures, including those governing 

discovery and protection of confidential 

information, are adequate. We also 

asked whether we should adopt 

alternative procedures or remedies such 

as mandatory standstill agreements or 

arbitration, as the Commission has done 

in recent mergers. 

III. Discussion 

A. Exclusive Contract Prohibition 

11. Our analysis of whether the 

exclusive contract prohibition 

‘‘continues to be necessary to preserve 

and protect competition and diversity in 

the distribution of video programming’’

proceeds in five parts. Based on this 

five-part analysis, we conclude as 

explained below that the exclusive 

contract prohibition continues to be 

necessary to preserve and protect 

competition and diversity in the 

distribution of video programming and, 

accordingly, retain it again for five 

years. 

1. Standard of Review 

12. Various cable MSOs repeat 

arguments made in response to the 2001 

Sunset NPRM that the Commission 

should construe the term ‘‘necessary’’ as 

used in Section 628(c)(5) as requiring 

the exclusive contract prohibition to be 

‘‘indispensable’’ or ‘‘essential’’ to 

prevent harm to competition. In the 

2002 Extension Order, the Commission 

explained that the term ‘‘necessary’’ has 

been interpreted differently depending 

on the statutory context. In some cases, 

courts have interpreted the term to 

mean ‘‘useful,’’ ‘‘convenient,’’ or 

‘‘appropriate’’ while in other contexts 

courts have interpreted the term in a 

more restrictive sense to mean 

‘‘indispensable’’ or ‘‘essential.’’

Consistent with judicial precedent, the 

Commission construed the term 

‘‘necessary’’ in its statutory context and 

determined that the exclusive contract 

prohibition continues to be ‘‘necessary’’

if, in the absence of the prohibition, 

competition and diversity in the 

distribution of video programming 

would not be preserved and protected. 

We find no basis to revisit the 

conclusions reached in the 2002 

Extension Order, which, we note, were 

never challenged. We continue to 

believe that Section 628(c)(5), when 

construed in its statutory context, 

requires the exclusive contract 

prohibition to be extended if we find 

that, in the absence of the prohibition, 

competition and diversity in the 

distribution of video programming 

would not be preserved and protected. 

2. Status of the MVPD Market: 2002–

2007 

13. We examine below the changes 

that have occurred in the programming 

and distribution markets since 2002 

when the Commission last reviewed 

whether the exclusive contract 

prohibition continued to be necessary to 

preserve and protect competition. 

14. Satellite-Delivered National 

Programming Networks. The number of 

satellite-delivered national 

programming networks available to 

MVPDs has increased by 237 since 

2002, from 294 networks to 531 

networks. This amounts to an eighty 

percent increase in satellite-delivered 

national programming networks 

available to MVPDs. 

15. Vertically Integrated SatelliteDelivered National Programming 

Networks. The number of satellitedelivered national programming 

networks that are vertically integrated 

with cable operators has increased by 

twelve since 2002, from 104 networks to 

116 networks. The percentage of all 

satellite-delivered national 

programming networks that are 

vertically integrated with cable 

operators has declined since 2002, from 

35 percent to 22 percent. 

16. The amount of the most popular 

programming that is vertically 

integrated with cable operators has 

declined slightly since 2002. While nine 

of the Top 20 (45 percent) satellitedelivered national programming 

networks (as ranked by subscribership) 

were vertically integrated in 2002 when 

the Commission last reviewed the 

exclusive contract prohibition, 

commenters state that this number has 

decreased to seven (35 percent). As 

discussed below, we find that this 

number has decreased to six. These 

networks are The Discovery Channel, 

CNN, TNT, TBS, TLC, and Headline 

News. 

17. Only the largest cable MSOs tend 

to own vertically integrated 

programming. In the 2002 Extension 

Order, the Commission noted that all 

vertically integrated programming was 

attributable to five cable operators, four 

of which were among the seven largest 

cable MSOs. Today, all vertically 

integrated programming is attributable 

to five cable operators, all of which are 

among the six largest cable MSOs: 

Comcast, Time Warner, Cox, 

Cablevision, and Advance/Newhouse. 

18. Regional Programming Networks. 

The number of regional programming 

networks available to MVPDs has 

increased by sixteen since 2002, from 80 

networks to 96 networks. This amounts 

to a 20 percent increase since 2002 in 

regional programming networks 

available to MVPDs. The number of 

regional sports networks (‘‘RSNs’’) has 

increased by approximately 36 percent 

since 2002, from 28 networks to 39 

networks, by some estimates. We note 

that, according to the Commission’s 

most recent annual competition report, 

there were 37 RSNs as of June 2005. See 

12th Annual Report, 21 FCC Rcd at 2510 

and 2586. More recent data indicates 

that there are now 39 RSNs. 

19. Vertically Integrated Regional 

Programming Networks. The number of 

regional programming networks that are 

vertically integrated with cable 

operators has increased by five since 

2002, from 39 networks to 44 networks. 

The percentage of all regional 

programming networks that are 

vertically integrated with cable 

operators, however, has declined 

slightly since 2002, from 49 percent to 

46 percent. The number of RSNs that are 

vertically integrated with cable 

operators has decreased by six since 

2002, from 24 networks to 18 networks, 

by some estimates. We note that, 

according to the Commission’s most 

recent annual competition report, there 

were 17 vertically integrated RSNs as of 

June 2005. See 12th Annual Report, 21 

FCC Rcd at 2510 and 2586. More recent 

data indicates that there are now 18 

vertically integrated RSNs. The 

percentage of all RSNs that are vertically 

integrated has declined since 2002, from 

86 percent to approximately 46 percent. 

We note that, according to the 

Commission’s most recent annual 

competition report, 45.9 percent of 

RSNs were vertically integrated as of 

June 2005. If the unaffiliated MASN and 

the cable-affiliated SportsNet New York 

are included, then 18 out of 39 RSNs, 

or 46.1 percent, are vertically integrated. 

20. MVPD Market. Since the 

Commission last examined the 

exclusive contract prohibition in 2002, 

the percentage of MVPD subscribers 

receiving their video programming from 

a cable operator has declined from 78 

percent to 67 percent, by some 

estimates. We note that, according to the 

Commission’s annual competition 

reports, the percentage of MVPD 

subscribers receiving their video 

programming from a cable operator was 

78.11 percent as of June 2001 and 69.41 

percent as of June 2005. More recent 

data indicates that the portion of MVPD 

subscribers served by cable operators is 

now approximately 67 percent. The 

number of cable subscribers has 

declined by 3.4 million since 2002, from 

69 million to 65.4 million. During this 


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same period, the percentage of MVPD 

subscribers receiving their video 

programming from a DBS operator has 

increased from 18 percent to over 30 

percent, by some estimates. We note 

that, according to the Commission’s 

annual competition reports, the 

percentage of MVPD subscribers 

receiving their video programming from 

a DBS operator was 18.2 percent as of 

June 2001 and 27.72 percent as of June 

2005. Compare 8th Annual Report, 17 

FCC Rcd at 1388, Table C–1 (18.2 

percent) with 12th Annual Report, 21 

FCC Rcd at 2617, Table B–1 (27.72 

percent). More recent data indicates that 

the portion of MVPD subscribers served 

by DBS operators is now over 30 

percent. The number of DBS subscribers 

has increased by 11.6 million since 

2002, from 18 million to 29.6 million, 

by some estimates. We note that, 

according to the Commission’s annual 

competition reports, the number of 

MVPD subscribers receiving their video 

programming from a DBS operator was 

16.07 million as of June 2001 and 26.12 

million as of June 2005. More recent 

data indicate that the number of DBS 

subscribers is now 29.6 million. 

21. A significant development since 

2002 is the emergence of video services 

offered by telephone companies, 

including AT&T, Qwest, and Verizon. 

As of the end of the second quarter of 

2007, AT&T’s U-Verse fiber-based video 

and Internet service passed over 4 

million households. AT&T also recently 

announced that its U-Verse video 

service has more than 100,000 

customers. Qwest has twenty-one cable 

franchises and provides nearly 60,000 

subscribers with multichannel video 

service in Arizona, Colorado, Nebraska, 

and Utah. Verizon, which introduced its 

fiber-based FiOS TV service in 

September 2005, had 515,000 video 

subscribers at the end of the second 

quarter of 2007. Verizon’s FiOS TV was 

available for sale to nearly 3.9 million 

premises in nearly 500 communities in 

12 states as of the end of the second 

quarter of 2007. Other wireline 

Broadband Service Providers (‘‘BSPs’’) 

also offer video services in competition 

with cable operators, including RCN, 

WideOpenWest, Knology, and Grande. 

Some wireline entrants cite a 2004 

Government Accountability Office 

(‘‘GAO’’) Report which concludes that 

wireline video entry provides more 

price discipline to cable than DBS and 

is more likely to cause cable operators 

to enhance their own services and to 

improve customer service. In response, 

cable MSOs argue that wireline entry 

does not have a greater impact on cable 

prices than DBS entry. Despite the 

significant investments made in 

competitive wireline networks, AT&T 

notes NCTA’s estimate that wireline 

entrants have no more than 1.9 percent 

of all MVPD subscribers. 

22. The cable industry also cites other 

potential sources of video competition, 

such as SMATV systems, providers of 

video on the Internet (such as YouTube, 

Google, and Akimbo), over-the-air 

broadcast television, DVDs and 

videotape purchases and rentals, 

municipal and non-municipal utilities, 

and providers of mobile video services. 

Comcast also argues that in every 

community, consumers can choose from 

a minimum of three MVPDs, and states 

that in many communities a fourth or 

fifth MVPD is available or will be soon. 

Cablevision states that DIRECTV and 

EchoStar have at least double the 

number of subscribers of every cable 

MSO, with the exception of Time 

Warner and Comcast. 

23. Commenters in favor of extending 

the prohibition state that the figures 

cited by the cable industry are 

misleading. EchoStar claims that 

national DBS penetration figures 

obscure the extent of competition on a 

local or regional basis where DBS 

penetration is much lower than the 

national average. While the number of 

DBS subscribers has increased by 11.6 

million since the 2002 Extension Order, 

CA2C notes that cable subscribership 

during the same period decreased by 

less than one million, demonstrating 

that cable operators have maintained 

their position in the market. Some 

competitive MVPDs argue that the 

continued ability of cable operators to 

raise prices in excess of inflation 

demonstrates the lack of competition in 

the video marketplace. Competitive 

MVPDs also assert that barriers in the 

MVPD market still persist, as 

demonstrated by the Commission’s 

efforts to promote greater competition. 

CA2C notes that the Commission in its 

decision on cable franchising reform 

found that in the vast majority of 

communities around the country, ‘‘cable 

competition simply does not exist.’’

Some competitive MVPDs disagree with 

the assertion by the cable industry that 

mobile video, Internet video, and DVDs 

are substitutes for cable television. 

Moreover, competitive MVPDs state that 

only 2.9 percent of MVPD subscribers 

receive service from an alternative 

provider to cable or DBS. 

24. Consolidation of the Cable 

Industry. The cable industry has 

continued to consolidate since 2002. 

During this period, the percentage of 

MVPD subscribers receiving their video 

programming from one of the four 

largest cable MSOs (Comcast, Time 

Warner, Cox, and Charter) has increased 

from 48 percent to between 53 and 60 

percent, by some estimates, after taking 

into account the recent acquisition by 

Comcast and Time Warner of cable 

systems formerly owned by Adelphia. 

We note that, according to the 

Commission’s annual competition 

reports, the percentage of MVPD 

subscribers receiving their video 

programming from one of the four 

largest cable MSOs was 47.67 percent as 

of June 2001 and 47.78 percent as of 

June 2005. More recent data indicates 

that the percentage of MVPD subscribers 

receiving their video programming from 

one of the four largest cable MSOs 

(Comcast, Time Warner, Cox, and 

Charter) has increased to between 53 

and 60 percent. Moreover, the 

percentage of MVPD subscribers 

receiving their video programming from 

one of the four largest vertically 

integrated cable MSOs (Comcast, Time 

Warner, Cox, and Cablevision) has 

increased significantly since 2002, from 

34 percent to between 54 and 56.75 

percent, by some estimates. We note 

that, according to the Commission’s 

annual competition reports, the 

percentage of MVPD subscribers 

receiving their video programming from 

one of the four largest vertically 

integrated cable MSOs was 34.26 

percent as of June 2001 and 44.63 

percent as of June 2005. Compare 8th 

Annual Report, 17 FCC Rcd at 1341, 

Table C–3 (34.26 percent) with 12th 

Annual Report, 21 FCC Rcd at 2620, 

Table B–3 (44.63 percent). More recent 

data indicates that the percentage of 

MVPD subscribers receiving their video 

programming from one of the four 

largest vertically integrated cable MSOs 

(Comcast, Time Warner, Cox, and 

Cablevision) has increased to between 

54 and 56.75 percent. 

25. Clustering of Cable Systems. The 

amount of regional clustering of cable 

systems has remained significant. 

Clustering refers to a strategy whereby 

cable MSOs concentrate their operations 

in regional geographic areas by 

acquiring cable systems in regions 

where the MSO already has a significant 

presence, while giving up other 

holdings scattered across the country. 

This strategy is accomplished through 

purchases and sales of cable systems, or 

by system ‘‘swapping’’ among MSOs. 

The percentage of cable subscribers that 

are served by systems that are part of 

regional clusters has increased since 

2002, from 80 percent to as much as 85 

to 90 percent, by some estimates, taking 

into account the acquisition by Comcast 

and Time Warner of cable systems 

formerly owned by Adelphia. We note 


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that, according to the Commission’s 

annual competition reports, the 

percentage of cable subscribers served 

by systems that are part of regional 

clusters was 80.4 percent as of 2000 and 

77.9 percent as of 2004. Compare 8th 

Annual Report, 17 FCC Rcd at 1340, 

Table C–2 (stating that, as of 2000, 108 

cable system clusters were serving 54.4 

million subscribers, or 80.4 percent of 

cable subscribers) with 12th Annual 

Report, 21 FCC Rcd at 2619, Table B–

2 (stating that, as of 2004, 118 cable 

system clusters were serving 51.5 

million subscribers, or 78.7 percent of 

cable subscribers). More recent data 

indicates that the percentage of cable 

subscribers that are served by systems 

that are part of regional clusters has 

increased to between 85 and 90 percent. 

3. Ability and Incentive 

26. Our analysis of whether the 

exclusive contract prohibition continues 

to be necessary requires us to assess 

whether, in the absence of the exclusive 

contract prohibition, vertically 

integrated programmers would have the 

ability and incentive to favor their 

affiliated cable operators over 

nonaffiliated competitive MVPDs and, if 

so, whether such behavior would result 

in a failure to protect and preserve 

competition and diversity in the 

distribution of video programming. 

a. Ability 

27. As discussed in this section, we 

conclude that satellite-delivered 

vertically integrated programming 

remains programming for which there 

are often no good substitutes and that 

such programming is necessary for 

viable competition in the video 

distribution market. In assessing the 

ability of satellite-delivered vertically 

integrated programmers to favor their 

affiliated cable operators to the 

detriment of competing MVPDs, we 

consider whether developments in the 

last five years have diminished the 

importance of satellite-delivered 

vertically integrated programming or 

have affected the ability of satellitedelivered vertically integrated 

programmers to favor their affiliated 

cable operators over other MVPDs. 

28. Discussion. Despite some procompetitive developments over the past 

five years, we find that access to 

vertically integrated programming 

continues to be necessary in order for 

competitive MVPDs to remain viable 

substitutes to the incumbent cable 

operator in the eyes of consumers. What 

is most significant to our analysis is not 

the percentage of total available 

programming that is vertically 

integrated with cable operators, but 

rather the popularity of the 

programming that is vertically 

integrated and how the inability of 

competitive MVPDs to access this 

programming will affect the 

preservation and protection of 

competition in the video distribution 

marketplace. While there has been a 

decrease since 2002 in the percentage of 

the most popular programming 

networks that are vertically integrated, 

we find that the four largest cable MSOs 

(Comcast, Time Warner, Cox, and 

Cablevision) still have (i) an interest in 

six of the Top 20 satellite-delivered 

networks as ranked by subscribership 

(The Discovery Channel, CNN, TNT, 

TBS, TLC, and Headline News); (ii) 

seven of the Top 20 satellite-delivered 

networks as ranked by prime time 

ratings (TNT, Adult Swim, HBO, TBS, 

American Movie Classics, Cartoon 

Network, and The Discovery Channel); 

(iii) almost half of all RSNs; (iv) popular 

subscription premium networks, such as 

HBO and Cinemax (competitive MVPDs 

argue that first-run programming 

produced by HBO and other premium 

networks are essential for a competitive 

MVPD to offer to potential subscribers 

in order to compete with the incumbent 

cable operator); and (v) video-ondemand (‘‘VOD’’) networks, such as iN 

DEMAND (competitive MVPDs argue 

that movie libraries owned by VOD 

networks are essential for a competitive 

MVPD to offer to potential subscribers 

in order to compete with the incumbent 

cable operator). The record thus reflects 

that popular national programming 

networks, such as CNN, TNT, TBS, and 

The Discovery Channel, among many 

others, in addition to premium 

programming networks, RSNs, and VOD 

networks, are affiliated with the four 

largest vertically integrated cable MSOs 

and that such programming networks 

are demanded by MVPD subscribers. We 

thus find that cable-affiliated 

programming continues to represent 

some of the most popular and 

significant programming available 

today. 

29. We find that access to vertically 

integrated programming is essential for 

new entrants in the video marketplace 

to compete effectively. If the 

programming offered by a competitive 

MVPD lacks ‘‘must have’’ programming 

that is offered by the incumbent cable 

operator, subscribers will be less likely 

to switch to the competitive MVPD. We 

give little weight to the claims by cable 

operators that recent entrants, such as 

telephone companies, have not 

experienced ‘‘any trouble’’ to date in 

acquiring access to satellite-delivered 

vertically integrated programming. As 

an initial matter, we note that 

competitive MVPDs state that they pay 

significant amounts for access to 

satellite-delivered vertically integrated 

programming. Moreover, because the 

exclusive contract prohibition is 

currently in effect and has been since 

1992, vertically integrated programmers 

delivering programming to MVPDs via 

satellite were not able to deny 

competitors access to their 

programming. We also reject the cable 

MSOs’ suggestion that the resources of 

some competitors in the video 

distribution market (i.e., telephone 

companies) should change our analysis 

of whether to extend the prohibition at 

this time. The competitors to which the 

cable operators refer are new entrants to 

the video distribution market, and have 

no established customer base. If cable 

operators have exclusive access to 

content that is essential for viable 

competition and for which there are no 

close substitutes, and they have the 

incentive to withhold such content, they 

can significantly impede the ability of 

new entrants to compete effectively in 

the marketplace, regardless of their level 

of resources. As competitive MVPDs 

note, DBS providers have been able to 

attract and retain millions of subscribers 

because of their ability to offer ‘‘must 

have’’ programming that is affiliated 

with cable operators. 

30. For the reasons discussed above, 

we conclude that there are no close 

substitutes for some satellite-delivered 

vertically integrated programming and 

that such programming is necessary for 

viable competition in the video 

distribution market. Having made this 

determination, we further conclude that 

vertically integrated programmers 

continue to have the ability to favor 

their affiliated cable operators over 

competitive MVPDs such that 

competition and diversity in the 

distribution of video programming 

would not be preserved and protected. 

Accordingly, assuming vertically 

integrated programmers continue to 

have the incentive to favor their 

affiliated cable operators, allowing 

vertically integrated programmers to 

enter into exclusive arrangements with 

their affiliated cable operators will fail 

to protect and preserve competition and 

diversity in the distribution of video 

programming. 

b. Incentive 

31. We next assess whether vertically 

integrated programmers continue to 

have the incentive to favor their 

affiliated cable operators over 

competitive MVPDs. This requires us to 

analyze (i) whether cable operators, 

through the number of subscribers they 


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serve, the number of homes they pass, 

and their affiliations with programmers, 

continue to have market dominance of 

sufficient magnitude that, in the absence 

of the prohibition, they would be able 

to act in an anticompetitive manner; and 

(ii) whether there continues to be an 

economic rationale for vertically 

integrated programmers to engage in 

exclusive agreements with cable 

operators that will cause such 

anticompetitive harms. 

32. While cable MSOs argue that they 

have no incentive to withhold 

programming, competitive MVPDs 

provide the following examples which 

they claim demonstrate that cable MSOs 

will withhold programming if 

advantageous and permitted. 

Competitive MVPDs argue that many of 

the examples listed below, involving 

terrestrially delivered programming 

(sports as well as non-sports)—for 

which the exclusive contract 

prohibition does not apply—

demonstrate the incentive and ability of 

vertically integrated cable operators to 

deny access to programming where 

permitted by the statute. 

Sports Programming 

• Comcast SportsNet Philadelphia. 

Some competitive MVPDs state that 

Comcast refuses to make the terrestrially 

delivered Comcast SportsNet 

Philadelphia channel available to 

EchoStar and DIRECTV. Competitive 

MVPDs cite the Commission’s 

conclusion in the Adelphia Order that 

the percentage of households that 

subscribe to DBS service in Philadelphia 

is 40 percent below what would 

otherwise be expected. In response, 

Comcast notes that Comcast SportsNet 

Philadelphia is available to RCN. 

• Channel 4 San Diego. Some 

competitive MVPDs claim that Cox 

makes available its Channel 4 San Diego 

network, which has exclusive rights to 

San Diego Padres baseball games, only 

to cable operators that do not directly 

compete with Cox and not to DIRECTV, 

EchoStar, and AT&T. While competitive 

MVPDs state that DIRECTV’s market 

penetration in San Diego is half of its 

national average, Cablevision notes that 

DIRECTV in the Adelphia proceeding 

reported that it did not find a 

statistically significant effect on its 

market penetration in San Diego 

resulting from its inability to access this 

RSN. 

• Overflow sports programming in 

New York, NY. RCN notes that it was 

deprived of access to overflow sports 

programming from Cablevision after 

Cablevision revised its distribution 

system from satellite to terrestrial 

delivery. 

• RSNs Affiliated with Cablevision in 

New York and New England. Verizon 

notes that it was forced to file a program 

access complaint against Cablevision 

and its vertically integrated 

programming subsidiary, Rainbow 

Media Holdings, LLC, in order to obtain 

access to RSNs in the New York City 

metropolitan area and New England. 

• High Definition (‘‘HD’’) Feeds of 

RSNs Affiliated with Cablevision. While 

Rainbow has made available standard 

definition feeds of its RSNs, Verizon 

states that Rainbow is delivering HD 

feeds of this programming terrestrially 

to avoid the program access rules. 

Non-Sports Programming 

• New England Cable News (‘‘NECN’’) 

in Boston, MA. One commenter claims 

that RCN was provided with access to 

NECN, a terrestrially delivered network 

that is 50 percent owned by Comcast, 

only after the Senate Judiciary 

Committee indicated that they were 

considering legislative action to apply 

an exclusive contract prohibition to 

terrestrially delivered programming. 

• PBS Kids Sprout. AT&T and RCN 

claim that after PBS Kids Sprout became 

vertically integrated with Comcast, RCN 

lost access to the network, resulting in 

an 83 percent drop in the usage of its 

children’s VOD service. 

• iN DEMAND. CA2C notes that iN 

DEMAND is jointly owned by Time 

Warner, Comcast, and Cox. CA2C argues 

that iN DEMAND has taken the position 

that its programming is beyond the 

scope of the exclusive contract 

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

because iN DEMAND programming is 

delivered to MVPDs terrestrially. CA2C 

claims that iN DEMAND initially 

refused to provide its service to BSPs 

that competed with incumbent cable 

operators and that it reversed this 

position only after meetings were held 

with the Antitrust Subcommittee of the 

Senate Judiciary Committee. 

• CN8—The Comcast Network. Qwest 

claims that CN8—The Comcast Network 

is a local news and information channel 

that serves 12 states and 20 television 

markets but is only available to Comcast 

and Cablevision subscribers because it 

is terrestrially delivered and therefore 

beyond the scope of Section 

628(c)(2)(D). 

• NRTC. NRTC, which acts as a 

‘‘buying group’’ on behalf of its 

members, claims that it has been denied 

access to two vertically integrated 

programming networks, the identities of 

which it claims it cannot disclose due 

to non-disclosure agreements. 

33. Discussion. We conclude that 

vertically integrated cable programmers 

retain the incentive to withhold 

programming from their competitors. 

We recognize the pro-competitive 

developments in the MVPD market 

since the 2002 Extension Order, such as 

the reduction in the cable industry’s 

share of MVPD subscribers from 78 

percent to an estimated 67 percent and 

the increase in the DBS industry’s 

market share from 18 percent to 

approximately 30 percent. Despite these 

positive trends, however, almost seven 

out of ten subscribers still choose cable 

over competitive MVPDs, the percentage 

of all MVPD subscribers nationwide 

served by one of the four largest 

vertically integrated cable operators has 

increased substantially since 2002, and 

cable operators have continued to raise 

prices in excess of inflation. While cable 

MSOs claim that the emergence of 

telephone companies as new video 

competitors demonstrates that 

competition is flourishing, the fact is 

that, based on estimates provided by the 

cable industry, competitive MVPDs, 

excluding DBS operators, serve 

approximately three percent of all 

MVPD subscribers nationwide, which 

accounts for less than three million total 

MVPD subscribers. Although we are 

encouraged by developments since 

2002, we do not believe these 

developments have been significant 

enough for us to reverse the 

Commission’s previous conclusion that 

cable operators have market dominance 

of sufficient magnitude that, in the 

absence of the prohibition, they would 

be able to act in an anticompetitive 

manner. 

34. We also conclude that cableaffiliated programmers continue to have 

an economic incentive to favor their 

affiliated cable operators over 

competitive MVPDs by entering into 

exclusive agreements. We agree that in 

many instances a cable-affiliated 

programmer may choose to provide its 

programming to as many platforms as 

possible in order to maximize 

advertising and subscription revenues. 

In other cases, however, cable-affiliated 

programmers will have an incentive to 

withhold programming from 

competitive MVPDs in order to favor 

their affiliated cable operator. Our 

conclusion that vertically integrated 

cable programmers retain the incentive 

to withhold programming from their 

competitors is reinforced by specific 

factual evidence that vertically 

integrated programmers have withheld 

and continue to withhold programming, 

including both sports and non-sports 

programming, from competitive MVPDs. 

If vertically integrated programmers had 

no economic incentive other than to 

distribute their programming to as many 


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platforms as possible, then we would 

not expect to see such examples of 

withholding. 

35. As the Commission did in the 

2002 Extension Order, we find that the 

costs (i.e., foregone revenues) incurred 

by a cable-affiliated programmer by 

refusing to sell to competitive MVPDs 

would be offset by (i) revenues from 

increased subscriptions to the services 

of its affiliated cable operator resulting 

from subscribers that switch to cable to 

obtain access to the cable-exclusive 

programming; (ii) revenues from 

increased rates charged by the affiliated 

cable operator in response to increased 

demand for its services resulting from 

its ability to offer exclusive 

programming; and (iii) revenues 

resulting from the ability of the cableaffiliated programmer to raise the price 

it charges for programming to other 

cable operators in return for exclusivity. 

Thus, particularly where competitive 

MVPDs are limited in their market 

share, a cable-affiliated programmer will 

be able to recoup a substantial amount, 

if not all, of the revenues foregone by 

pursuing a withholding strategy. In the 

long term, a withholding strategy may 

result in a reduction in competition in 

the video distribution market, thereby 

allowing the affiliated cable operator to 

raise rates. We thus conclude that the 

one-third share of the MVPD market 

held by competitive MVPDs remains 

limited enough to allow cable-affiliated 

programmers to successfully and 

profitably implement a withholding 

strategy. 

36. We also find that three additional 

developments since 2002 provide cableaffiliated programmers with an even 

greater economic incentive to withhold 

programming from competitive MVPDs: 

(i) the increase in horizontal 

consolidation in the cable industry; (ii) 

the increase in clustering of cable 

systems; and (iii) the recent emergence 

of new entrants in the video market 

place, such as telephone companies. 

37. Horizontal Consolidation. The 

cable industry has continued to 

consolidate since 2002. Since this time, 

the percentage of MVPD subscribers 

receiving their video programming from 

one of the four largest vertically 

integrated cable MSOs (Comcast, Time 

Warner, Cox, and Cablevision) has 

increased from 34 percent to between 54 

and 56.75 percent. Moreover, the 

percentage of MVPD subscribers 

receiving their video programming from 

one of the four largest cable MSOs 

(Comcast, Time Warner, Cox, and 

Charter) has increased from 48 percent 

to between 53 and 60 percent after 

taking into account the recent 

acquisition by Comcast and Time 

Warner of cable systems formerly 

owned by Adelphia. Thus, while the 

evidence demonstrates that the market 

share of small-to-medium sized, nonvertically integrated cable operators has 

declined, the market share of large cable 

operators, and in particular those that 

own cable programming, has increased 

substantially since 2002. In the 2002 

Extension Order, the Commission 

observed that because four of the five 

largest vertically integrated cable 

operators served 34 percent of all MVPD 

subscribers, they could reap a 

substantial portion of the gains from 

withholding programming from their 

rivals. Now that the market share of the 

four largest vertically integrated cable 

MSOs has increased to between 54 and 

56.75 percent, the largest vertically 

integrated cable operators stand to gain 

even more from a withholding strategy. 

Thus, the increase in horizontal 

consolidation in the cable industry 

since 2002 increases the incentive to 

pursue anticompetitive withholding 

strategies. 

38. Clustering. The cable industry has 

continued to form regional clusters 

since the 2002 Extension Order, when 

approximately 80 percent of cable 

subscribers were served by systems that 

were part of regional clusters. Today, 

taking into account the sale of 

Adelphia’s systems to Comcast and 

Time Warner, some estimate that the 

percentage of cable subscribers served 

by systems that are part of regional 

clusters has increased to between 85 

and 90 percent. The Commission 

concluded in the 2002 Extension Order 

that horizontal consolidation and 

clustering combined with affiliation 

with regional programming contributed 

to the cable industry’s overall market 

dominance. Given the increase in 

horizontal consolidation and regional 

clustering since 2002, this statement is 

no less true today. With a regional 

programming denial strategy, a cableaffiliated programmer foregoes only 

those revenues associated with the 

subscribers of competitive MVPDs 

within the cluster, not the revenues 

associated with subscribers of 

competitive MVPDs nationwide. As the 

Commission concluded previously, in 

many cities where cable MSOs have 

clusters, the market penetration of 

competitive MVPDs is much lower and 

cable market penetration is much higher 

than their nationwide penetration rates. 

For example, according to data from 

Nielsen Media Research, the collective 

market penetration of competitive 

MVPDs in many DMAs where cable 

MSOs have clusters is far less than their 

collective nationwide market 

penetration rate (approximately 33 

percent): San Diego (13.7 percent), New 

York (18.2 percent), Philadelphia (19.8 

percent), and San Francisco (26.9 

percent). As the Commission 

acknowledged in the 2002 Extension 

Order, this market penetration data may 

not correspond exactly to cable MSO 

cluster boundaries, and there are likely 

other factors, such as line-of-sight, in 

addition to cable competition that affect 

city market penetration. Nevertheless, 

we believe that this market penetration 

data provide support for the position 

that market penetration of competitive 

MVPDs is lower in certain cable cluster 

areas than nationwide. Moreover, due to 

the national distribution of DBS services 

and the insufficient mass of DBS 

subscribers on a regional basis, DBS 

operators do not have an economic base 

for substantial regional programming 

investments on a market-by-market 

basis. As a result, the cost to a cableaffiliated programmer of withholding 

regional programming is lower in many 

cases than the cost of withholding 

national programming. Moreover, the 

affiliated cable operator will obtain a 

substantial share of the benefits of a 

withholding strategy because its share of 

subscribers within the cluster is likely 

to be inordinately high. 

39. As we concluded in the 2002 

Extension Order, Sections 628(b), 

628(c)(2)(A), and 628(c)(2)(B) of the 

Communications Act are not adequate 

substitutes for the particularized 

protection afforded under Section 

628(c)(2)(D). We stated that (i) Section 

628(c)(2)(D) places the burden on the 

party seeking exclusivity to show that 

an exclusive contract meets the 

statutory public interest standard and 

that no other program access provision 

provides this protection; (ii) these other 

provisions were all enacted as part of 

the 1992 Cable Act, indicating that, 

despite the existence of these other 

program access provisions, Congress 

found the exclusive contract prohibition 

to be necessary to preserve and protect 

competition and diversity; (iii) as 

compared to Section 628(c)(2)(D), 

Section 628(b) carries with it an added 

burden ‘‘to demonstrate that the 

purpose or effect of the conduct 

complained of was to ‘‘hinder 

significantly or to prevent’’ an MVPD 

from providing programming to 

subscribers or customers’’; (iv) conduct 

of undue influence necessary to 

establish a violation of Section 

628(c)(2)(A) ‘‘may be difficult for the 

Commission or complainants to 

establish’’; and (v) the prohibition of 

‘‘non-price discrimination’’ in Section 

628(c)(2)(B) requires the complainant to 


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demonstrate the conduct was 

‘‘unreasonable’’ which may be difficult 

to establish. No commenter provides 

any basis for us to revisit these 

conclusions. Moreover, we note that 

some competitive MVPDs argue that 

allowing the exclusive contract 

prohibition to sunset would provide 

cable-affiliated programmers with an 

incentive to enter into exclusive 

contracts with their affiliated cable 

operators to avoid allegations of unfair 

acts or practices or discrimination with 

respect to their dealings with 

unaffiliated distributors. 

40. We recognize the benefits of 

exclusive contracts and vertical 

integration cited by some cable MSOs, 

such as encouraging innovation and 

investment in programming and 

allowing for ‘‘product differentiation’’

among distributors. We do not believe, 

however, that these purported benefits 

outweigh the harm to competition and 

diversity in the video distribution 

marketplace that would result if we 

were to lift the exclusive contract 

prohibition. In addition, the 

Commission’s rules permit cableaffiliated programmers to seek approval 

to enter into an exclusive contract based 

on a demonstration that the exclusive 

arrangement serves the public interest 

consistent with factors established by 

Congress. 

c. Impact on Programming 

41. We find above that the exclusive 

contract prohibition continues to be 

necessary to preserve and protect 

diversity in the distribution of 

programming. As we stated in the 2002 

Extension Order, while we recognize 

that the exclusive contract prohibition’s 

impact on programming diversity is one 

component of our analysis, Congress 

directed that ‘‘our primary focus should 

be on preserving and protecting 

diversity in the distribution of video 

programming—i.e., ensuring that as 

many MVPDs as possible remain viable 

distributors of video programming.’’

While cable MSOs contend that the 

exclusive contract prohibition reduces 

incentives for cable operators and 

competitive MVPDs to create and invest 

in new programming, we find no 

evidence to support this theory. To the 

contrary, the number of vertically 

integrated satellite-delivered national 

programming networks has more than 

doubled since 1994 when the rule 

implementing the exclusive contract 

prohibition took effect and has 

continued to increase since 2002 when 

the Commission last examined the 

exclusive contract prohibition. There is 

also evidence that some competitive 

MVPDs have begun to invest in their 

own programming despite their ability 

to access cable-affiliated programming 

based on the exclusive contract 

prohibition and the program access 

rules. Accordingly, we find no basis to 

conclude that extending the exclusive 

contract prohibition will create a 

disincentive for the creation of new 

programming. 

42. We are mindful that our decision 

to extend the exclusive contract 

prohibition must withstand an 

intermediate scrutiny test pursuant to 

First Amendment jurisprudence. As the 

D.C. Circuit explained in rejecting a 

facial challenge to the constitutionality 

of the exclusive contract prohibition in 

Section 628(c)(2)(D), the prohibition 

will survive intermediate scrutiny if it 

‘‘furthers an important or substantial 

governmental interest; if the 

governmental interest is unrelated to the 

suppression of free expression; and if 

the incidental restriction on alleged 

First Amendment freedoms is no greater 

than is essential to the furtherance of 

that interest.’’ For the reasons discussed 

herein, our decision to extend the 

exclusive contract prohibition satisfies 

this intermediate scrutiny test. First, in 

Time Warner, the court found that the 

governmental interest Congress 

intended to achieve in enacting the 

exclusive contract prohibition was ‘‘the 

promotion of fair competition in the 

video marketplace,’’ and that this 

interest was substantial. Moreover, one 

of Congress’ express findings in 

enacting the 1992 Cable Act was that 

‘‘[t]here is a substantial governmental 

and First Amendment interest in 

promoting a diversity of views provided 

through multiple technology media.’’

Moreover, the court noted Congress’

conclusion that ‘‘the benefits of these 

provisions—the increased speech that 

would result from fairer competition in 

the video programming marketplace—

outweighed the disadvantages [resulting 

in] the possibility of reduced economic 

incentives to develop new 

programming.’’ We disagree with cable 

MSOs to the extent they argue that the 

substantial government interest in 

achieving competition in the video 

distribution market has been met. As 

discussed above, cable operators still 

have a dominant share of MVPD 

subscribers (approximately 67 percent), 

have raised prices in excess of inflation 

despite the emergence of new 

competitors, and still own significant 

programming networks. Accordingly, 

we conclude that competition and 

diversity in the video distribution 

market has not reached the level at 

which Congress intended the exclusive 

contract prohibition would sunset. 

Second, in Time Warner, the court held 

that the governmental objective in 

adopting the exclusive contract 

prohibition in Section 628(c)(2)(D) was 

unrelated to the suppression of free 

speech. In this Order, we extend the 

exclusive contract prohibition for an 

additional five years but do not 

otherwise modify the prohibition. Thus, 

the prohibition remains unrelated to the 

suppression of free speech, as the D.C. 

Circuit Court of Appeals previously 

held. Third, in Time Warner, the court 

rejected claims that the exclusive 

contract prohibition was not narrowly 

tailored to achieve the stated 

government interest. In this Order, we 

extend the exclusive contract 

prohibition for a term of five years but 

do not otherwise modify the 

prohibition. Thus, the prohibition 

remains narrowly tailored to meet the 

statute’s objective, and any incidental 

restriction on alleged First Amendment 

freedoms is no greater than is essential 

to the furtherance of that objective. 

43. We note that cable MSOs argue 

that the exclusive contract prohibition is 

not narrowly tailored because it is 

allegedly both overinclusive (in that it 

applies to ‘‘new,’’ ‘‘unpopular,’’ and 

other types of programming that are 

arguably not essential to the viability of 

competition in the video distribution 

market) and underinclusive (in that it 

does not apply to certain non-cableaffiliated programming that may be 

necessary for viable competition in the 

MVPD market). Moreover, we note that 

the exclusive contract prohibition in 

Section 628(c)(2)(D) is not absolute. 

Rather, cable-affiliated programmers 

may seek approval to enter into 

exclusive programming contracts that 

satisfy the criteria set forth by Congress 

in Section 628(c)(2) and (4). Despite 

claims that the exclusive contract 

prohibition deprives cable operators and 

others of the incentive to invest in new 

programming, thereby restricting the 

creation of new programming, the 

record reflects the opposite. Thus, 

contrary to these contentions, the 

prohibition has fostered, not restricted, 

speech. 

4. Scope of Exclusive Contract 

Prohibition 

44. Various commenters argue that the 

exclusive contract prohibition is both 

overinclusive and underinclusive with 

respect to the type of programming and 

MVPDs it covers. As discussed below, 

we decline to either narrow or expand 

the exclusive contract prohibition. 


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Federal Register / Vol. 72, No. 192 / Thursday, October 4, 2007 / Rules and Regulations 56653 

a. Narrowing the Prohibition 

(i) Narrowing Based on Status of 

Programming Network 

45. For the reasons discussed below, 

we decline to narrow the scope of the 

exclusive contract prohibition based on 

the status of the programming network. 

The exclusive contract prohibition in 

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

implementing rules pertain to all 

satellite-delivered programming 

networks that are vertically integrated 

with a cable operator, regardless of their 

popularity. 

46. As an initial matter, we note that 

in adopting the exclusive contract 

prohibition in Section 628(c)(2)(D), 

Congress applied the prohibition to all 

cable-affiliated programming. Congress 

did not distinguish between different 

types of cable-affiliated programming. 

Accordingly, as the Commission 

concluded in the 2002 Extension Order, 

we believe that treating all satellite 

cable programming and satellite 

broadcast programming uniformly for 

purposes of the exclusive contract 

prohibition is consistent with Section 

628(c)(2)(D) and the definitions set forth 

in Sections 628(i)(1) and (3). Moreover, 

no commenter has provided a rational 

and workable definition of ‘‘must have’’

programming that would allow us to 

apply the exclusive contract prohibition 

to only this type of programming. 

(ii) Narrowing Based on Status of Cable 

Operator 

47. For the reasons discussed below, 

we decline to narrow the scope of the 

exclusive contract prohibition based on 

the status of the cable operator. Cable 

MSOs argue that we should narrow the 

exclusive contract prohibition by 

allowing certain types of exclusive 

arrangements based on the status of the 

cable operator, such as (i) those 

involving an affiliated cable operator 

whose network passes only a small 

number of households throughout the 

nation; (ii) those between a cable 

operator and an affiliated programming 

network outside the footprint of the 

affiliated cable operator; and (iii) those 

involving affiliated cable operators that 

face competition from both DBS and 

telephone companies. 

48. In adopting the exclusive contract 

prohibition in Section 628(c)(2)(D), 

Congress applied the prohibition to all 

cable operators. Congress did not 

distinguish between different types of 

cable operators for purposes of Section 

628(c)(2)(D). Moreover, in adopting the 

exclusive contract prohibition, Congress 

has already delineated a geographic 

demarcation applicable to the 

prohibition—‘‘areas served by a cable 

operator.’’ Congress did not provide that 

the exclusive contract prohibition 

should vary based on the competitive 

circumstances in individual geographic 

areas served by a cable operator. 

49. We also find that these attempts 

to narrow the exclusive contract 

prohibition would harm competition in 

the video distribution marketplace. One 

of the key anticompetitive practices that 

the exclusive contract prohibition 

addresses is the practice of leveraging 

cable’s market power collectively by 

withholding affiliated programming 

from rival MVPDs while selling the 

affiliated programming to other cable 

operators which do not compete with 

one another. A cable operator may gain 

by weakening a current or potential 

rival (such as a DBS operator) even in 

markets that the cable operator itself 

does not serve. Thus, proposals to 

narrow the exclusive contract 

prohibition by allowing exclusive 

arrangements outside of the footprint of 

the affiliated cable operator or with 

cable operators whose networks pass 

only a small number of households 

throughout the nation will impede 

competition in the video distribution 

marketplace. We similarly find that 

allowing exclusive arrangements for 

affiliated cable operators that face 

competition from both DBS and 

telephone companies would harm 

competition in the video distribution 

marketplace. We conclude herein that a 

cable operator will not lose the 

incentive and ability to enter into an 

exclusive arrangement in a given 

geographic area simply because it faces 

competition from both DBS operators 

and telephone companies in that area. 

(iii) Narrowing Based on Status of 

Competitive MVPD 

50. For the reasons discussed below, 

we decline to narrow the exclusive 

contract prohibition by precluding 

certain competitive MVPDs from 

benefiting from the prohibition. 

Comcast and Cablevision ask us to 

narrow the exclusive contract 

prohibition by precluding certain 

competitive MVPDs from benefiting 

from the prohibition, such as 

competitive MVPDs that (i) have been in 

the MVPD market for more than five 

years; (ii) have extensive resources; or 

(iii) enter into exclusive contracts for 

programming. 

51. Section 628 makes no distinction 

among MVPDs of the kind suggested by 

these commenters. Moreover, we find 

that adopting such restrictions on the 

entities that can benefit from the 

prohibition will limit competition in the 

video distribution market and will 

result in no discernible public interest 

benefits. The resources of competitors or 

the number of years they have spent in 

the market has no bearing on the goal 

of Section 628(c)(2)(D) to preclude 

exclusive contracts in order to facilitate 

competition in the video distribution 

market. Rather, if cable operators have 

exclusive access to non-substitutable 

content that is essential for viable 

competition and they have the incentive 

to withhold such content, the amount of 

resources of competitive MVPDs or their 

longevity in the market will not be able 

to overcome that competitive advantage. 

Comcast asks us to prevent competitive 

MVPDs that themselves enter into 

exclusive programming contracts from 

being the beneficiaries of the exclusive 

contract prohibition applied to cableaffiliated programmers. Section 628, 

however, does not exempt cable 

operators from its restrictions based on 

the contracting practices of non-cable 

MVPDs. 

b. Expanding the Prohibition 

(i) Expanding the Prohibition to NonCable-Affiliated Programming 

52. For the reasons discussed below, 

we decline to apply an exclusive 

contract prohibition to non-cableaffiliated programming. The exclusive 

contract prohibition in Section 

628(c)(2)(D) and the implementing rules 

pertain only to programming networks 

that are vertically integrated with a 

‘‘cable operator,’’ as that term is defined 

in the Communications Act. 

Competitive MVPDs, as well as some 

cable MSOs, argue that the prohibition 

is thus underinclusive because it does 

not pertain to certain non-cableaffiliated programming that is necessary 

for MVPDs to compete. 

53. As an initial matter, to the extent 

that an MVPD meets the definition of a 

‘‘cable operator’’ under the 

Communications Act, the exclusive 

contract prohibition in Section 

628(c)(2)(D) already applies to its 

affiliated programming and, thus, no 

further action is required on our part. 

Moreover, as AT&T notes, Section 628(j) 

of the Communications Act provides 

that any provision of Section 628 that 

applies to a cable operator also applies 

to any common carrier or its affiliate 

that provides video programming. See 

47 U.S.C. 548(j). We have previously 

explained that the exclusive contract 

prohibition in Section 628(c)(2)(D) does 

not extend to unaffiliated programming 

networks and programming networks 

affiliated with non-cable MVPDs, such 

as DBS operators. Moreover, the record 

before us in this proceeding does not 

provide sufficient evidence upon which 

to conclude that non-cable-affiliated 


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programming is being withheld from 

MVPDs to a significant extent or that 

such withholding is adversely 

impacting competition in the video 

distribution market. 

(ii) Expanding the Prohibition to 

Terrestrially Delivered Programming 

54. We decline to apply an exclusive 

contract prohibition to terrestrially 

delivered programming at this time. 

Some competitive MVPDs argue that the 

Commission should apply the exclusive 

contract prohibition to terrestrially 

delivered programming networks, citing 

various provisions of the 

Communications Act in addition to 

Section 628(c) for statutory support. The 

Commission previously declined to 

address arguments regarding the 

Commission’s statutory authority to 

address terrestrially delivered 

programming under Sections 4(i) and 

303(r) of the Communications Act. 

Commenters have failed to provide any 

new evidence or arguments that would 

lead us to reconsider our previous 

conclusion that terrestrially delivered 

programming is ‘‘outside of the direct 

coverage’’ of Section 628(c)(2)(D). We 

continue to believe that the plain 

language of the definitions of ‘‘satellite 

cable programming’’ and ‘‘satellite 

broadcast programming’’ as well as the 

legislative history of the 1992 Cable Act 

place terrestrially delivered 

programming beyond the scope of 

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

5. Length of New Term 

55. We conclude that the exclusive 

contract prohibition will be extended 

for five years subject to review during 

the last year of this extension period 

(i.e., between October 2011 and October 

2012). We believe that five years could 

be a sufficient amount of time for 

competition to develop in the video 

distribution and programming markets. 

Accordingly, we believe that five years 

is an appropriate period of time to 

revisit the exclusivity prohibition. We 

also emphasize that, if adequate 

competition emerges before five years, 

the Commission could initiate its review 

earlier either on its own motion or in 

response to a petition. Moreover, we 

will continue to evaluate petitions for 

exclusivity under the public interest 

factors established by Congress. 

6. Other Programming Issues 

56. Small and rural telephone MVPDs 

raise additional concerns in their 

comments regarding the difficulties they 

face in trying to obtain access to 

programming, such as tying of desired 

with undesired programming and 

unwarranted security requirements. We 

find that these concerns are beyond the 

scope of the programming issues raised 

in the NPRM, which pertained only to 

the prohibition on exclusive contracts 

for satellite-delivered vertically 

integrated programming under Section 

628(c)(2)(D) and the extension of that 

prohibition pursuant to Section 

628(c)(5). We did not seek comment on 

these issues in the NPRM and, 

accordingly, do not have a sufficient 

record upon which to address these 

concerns in this Order. We seek further 

comment on these issues in the Notice 

of Proposed Rulemaking in MB Docket 

No. 07–198. 

B. Modification of Program Access 

Complaint Procedures 

57. As discussed below, we revise our 

program access complaint procedures. 

Specifically, we codify the existing 

requirement that respondents to 

program access complaints must attach 

to their answers copies of any 

documents that they rely on in their 

defense; find that in the context of a 

complaint proceeding, it would be 

unreasonable for a respondent not to 

produce all the documents requested by 

the complainant or ordered by the 

Commission, provided that such 

documents are in its control and 

relevant to the dispute; codify the 

Commission’s authority to issue default 

orders granting a complaint if a 

respondent fails to comply with 

discovery requests; and allow parties to 

choose, within 20 days of the close of 

the pleading cycle, to engage in 

voluntary commercial arbitration of 

their program access complaints. 

58. In the NPRM, the Commission 

sought comment on whether and how 

the procedures for resolving program 

access disputes under Section 628 

should be modified. 

1. Pleading Cycle 

59. In this Order, we retain our 

existing pleading cycle. The 

Commission’s existing rules provide 

that an MVPD aggrieved by conduct that 

it believes constitutes a violation of 

Section 628 and the Commission’s 

program access rules may file a 

complaint with the Commission. See 47 

CFR 76.7 and 76.1003. A complainant 

must first notify the programming 

vendor that it intends to file the 

complaint and allow the vendor 10 days 

to respond. Once a complaint is filed, 

the cable operator or satellite 

programming vendor must answer 

within 20 days of service of the 

complaint. Replies to the answer are 

due within 15 days of service of the 

answer. 

60. Discussion. A shorter pleading 

cycle would not necessarily improve the 

overall time for complaint resolution 

because incomplete or rushed responses 

could lead to the need for further 

pleadings and discovery. We therefore 

decline to adopt a more expedited 

pleading cycle. However, we believe 

that electronic filing may help improve 

the speed of resolution and, therefore, 

we will continue to study this issue 

internally to determine if it is 

technologically feasible to require 

electronic filing for program access 

complaints, which necessarily involve a 

number of confidential documents. 

Currently, parties may voluntarily 

submit electronic copies of their 

pleadings to staff via e-mail in order to 

expedite review. 

2. Discovery 

61. In this Order, after reviewing our 

discovery rules pertaining to program 

access disputes, we codify the existing 

requirement that respondents to 

program access complaints must attach 

to their answers copies of any 

documents that they rely on in their 

defense; find that in the context of a 

complaint proceeding, it would be 

unreasonable for a respondent not to 

produce all the documents either 

requested by the complainant or ordered 

by the Commission, provided that such 

documents are in its control and 

relevant to the dispute; and emphasize 

that the Commission will use its 

authority to issue default orders 

granting a complaint if a respondent 

fails to comply with its discovery 

requests. The respondent shall have the 

opportunity to object to any request for 

documents. Such request shall be heard, 

and determination made, by the 

Commission. The respondent need not 

produce the disputed discovery material 

until the Commission has ruled on the 

discovery request. 

62. Discussion. We take measures to 

ensure that the Commission has the 

information necessary to expeditiously 

resolve program access complaints. 

63. Respondent’s Answer. In the 1998 

Program Access Order, the Commission 

clarified that, to the extent that a 

respondent expressly references and 

relies upon a document or documents in 

defending a program access claim, the 

respondent must attach that document 

or documents to its answer. In this 

Order, we expressly codify that 

requirement in the Commission’s rules. 

To the extent that there has been any 

confusion about this requirement in the 

past, we clarify that a respondent must 

attach the necessary documentation to 

its answer to a program access 

complaint, subject to our rules on 


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confidential filings. Subsequent to the 

1998 Program Access Order, the 

Commission, in the 1998 Biennial 

Review (64 FR 6565, February 10, 1999), 

further clarified the response 

requirements for specific types of 

program access complaints. To the 

extent that a respondent fails to include 

the permissive attachments identified in 

our rules that are necessary to a 

resolution of the complaint, the 

Commission may require the production 

of further documents. See 47 CFR 

76.1003(e); 47 CFR 76.7(e)(2). Moreover, 

a program access complainant is 

entitled, either as part of its complaint 

or through a motion filed after the 

respondent’s answer is submitted, to 

request that Commission staff order 

discovery of any evidence necessary to 

prove its case. See 47 CFR 76.7(e), (f). 

Respondents are also free to request 

discovery. 

64. Submission of Necessary 

Information. We believe that expanded 

discovery will improve the quality and 

efficiency of the Commission’s 

resolution of program access 

complaints. Accordingly, we find that it 

would be unreasonable for a respondent 

not to produce all the documents either 

requested by the complainant or ordered 

by the Commission (indeed, in such 

circumstances, failure to produce the 

subject documents would also be a 

violation of a Commission order), 

provided that such documents are in its 

control and relevant to the dispute. 

While we retain the existing process for 

the Commission to order the production 

of documents and other discovery, we 

will also allow parties to a program 

access complaint to serve requests for 

discovery directly on opposing parties. 

65. Parties to a program access 

complaint may serve requests for 

discovery directly on opposing parties, 

and file a copy of the request with the 

Commission. The respondent shall have 

the opportunity to object to any request 

for documents that are not in its control 

or relevant to the dispute. If the 

respondent refuses to produce the 

requested documents, the requesting 

party may file a petition with the 

Commission seeking to compel 

production of the documents. Such 

discovery dispute shall be heard, and 

determination made, by the 

Commission. Until the objection is ruled 

upon, the respondent need not produce 

the disputed material. Any party who 

fails to timely provide discovery 

requested by the opposing party to 

which it has not raised an objection as 

described above may be deemed in 

default and an order may be entered in 

accordance with the allegations 

contained in the complaint, or the 

complaint may be dismissed with 

prejudice. 

66. We reiterate that respondents to 

program access complaints must 

produce in a timely manner, the 

contracts and other documentation that 

are necessary to resolve the complaint, 

subject to confidential treatment. See 47 

CFR 76.9. In order to prevent abuse, the 

Commission will strictly enforce its 

default rules against respondents who 

do not answer complaints thoroughly or 

do not respond in a timely manner to 

permissible discovery requests with the 

necessary documentation attached. 

Respondents that do not respond in a 

timely manner to all discovery ordered 

by the Commission will risk penalties, 

including having the complaint against 

them granted by default. Likewise, a 

complainant that fails to respond 

promptly to a Commission order 

regarding discovery will risk having its 

complaint dismissed with prejudice. 

Finally, a party that fails to respond 

promptly to a request for discovery to 

which it has not raised a proper 

objection will be subject to these 

sanctions as well. 

67. Confidential Material. We 

understand that this approach requires 

the submission of confidential and 

extremely competitively-sensitive 

information. See, e.g., 47 CFR 

0.457(d)(iv). Accordingly, in order to 

appropriately safeguard this 

confidential information we believe it is 

necessary to revise the standard 

protective order and declaration 

(‘‘Protective Order’’) for use in program 

access proceedings. 

68. To ensure that confidential 

information is not improperly used for 

competitive business purposes, we 

intend to make an important revision to 

the Protective Order. Specifically, we 

revise it to reflect that any personnel, 

including in-house counsel, involved in 

competitive decision-making are 

prohibited from accessing the 

confidential information. 

69. In order to appropriately safeguard 

confidential information, we revise the 

Protective Order for use in program 

access proceedings to find that any 

personnel, including in-house counsel, 

(i) that are involved in competitive 

decision-making, (ii) are in a position to 

use the confidential information for 

competitive commercial or business 

purposes, or (iii) whose activities, 

association, or relationship with the 

complainant, client, or any authorized 

representative involve rendering advice 

or participation in any or all of said 

person’s business decisions that are or 

will be made in light of similar or 

corresponding information about a 

competitor, are prohibited from 

accessing the confidential information. 

See Appendix. 

70. A protective order constitutes both 

an order of the Commission and an 

agreement between the party executing 

the declaration and the submitting 

party. The Commission has full 

authority to fashion appropriate 

sanctions for violations of its protective 

orders, including but not limited to 

suspension or disbarment of attorneys 

from practice before the Commission, 

forfeitures, cease and desist orders, and 

denial of further access to confidential 

information in Commission 

proceedings. We intend to vigorously 

enforce any transgressions of the 

provisions of our protective orders. 

3. Time Frame for Resolving Program 

Access Complaints 

71. In this Order, we retain our 

current goals for resolving program 

access complaints with the intent to 

expedite complaints filed by small 

companies without existing carriage 

contracts. Under the current process, the 

Commission has set forth goals for the 

resolution of program access complaints 

as five months from the submission of 

a complaint for denial of programming 

cases, and nine months for all other 

program access complaints, such as 

price discrimination cases. 

72. Discussion. We agree that program 

access complaints should be resolved in 

a timely manner, but the time frames for 

resolving complaints must be realistic. 

We will retain our goals of resolving 

program access complaints within five 

months from the submission of a 

complaint for denial of programming 

cases, and nine months for all other 

program access complaints, such as 

price discrimination cases. 

73. However, we are concerned with 

delays in the resolution of complaints 

filed by new entrants, especially small 

businesses, and therefore, the 

Commission will expedite the 

resolution of such complaints and, as 

discussed above in Section III.B.2, will 

strictly enforce its default rules against 

respondents who do not answer 

complaints thoroughly with the 

necessary documentation attached. See 

47 CFR 76.7(b)(2)(iii). 

4. Arbitration 

74. In this Order, we expand the use 

of voluntary arbitration for resolution of 

program access disputes, by increasing 

opportunities for parties to choose 

arbitration in lieu of Commission 

resolution of a pending complaint, and 

refrain from imposing a mandatory 

arbitration requirement at this time. 

75. Discussion. We decline to impose 

mandatory arbitration as a rule in all 


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program access cases at this time. We 

would like to see how arbitration of 

program access disputes, either through 

a merger condition or through voluntary 

arbitration, is working over time, to 

determine if modifications to the 

arbitration process are necessary prior to 

imposing a mandatory requirement on 

all parties to all program access 

complaints. Once there is a track record 

for arbitration of program access 

disputes, we will be able to determine 

which types of disputes lend themselves 

more readily to resolution by arbitration 

and which may be more judiciously 

resolved by the Commission in the first 

instance. 

76. The current rules allow parties to 

voluntarily engage in ADR, including 

arbitration, in lieu of an administrative 

hearing. See 47 CFR 76.7(g)(2). 

However, we believe that parties to 

program access complaints should be 

able to voluntarily choose arbitration 

prior to the Commission making a 

determination to forward the complaint 

to an administrative law judge and that 

the Adelphia Order provides adequate 

guidance for the arbitration process. 

Therefore, the Commission will suspend 

action on a complaint where both 

parties agree to use ADR, including 

commercial arbitration, within 20 days 

following the close of the pleading 

cycle. Parties may agree that voluntary 

arbitration is a quick and productive 

way to resolve their commercial 

disputes. Moreover, we will continue to 

monitor developments in the 

marketplace and will, if necessary, 

revisit in the future whether to adopt a 

mandatory arbitration requirement. 

IV. Procedural Matters 

A. Paperwork Reduction Act Analysis 

77. This document contains 

information collection requirements 

subject to the Paperwork Reduction Act 

of 1995 (PRA), Public Law 104–13. It 

will be submitted to the OMB for review 

under section 3507(d) of the PRA. OMB, 

the general public, and other Federal 

agencies are invited to comment on the 

information collection requirements 

contained in this proceeding. In 

addition, we note that pursuant to the 

Small Business Paperwork Relief Act of 

2002, Public Law 107–198, see 44 U.S.C. 

3506(c)(4), we will seek specific 

comment on how the Commission might 

‘‘further reduce the information 

collection burden for small business 

concerns with fewer than 25 

employees.’’

78. We have assessed the effects of the 

information collection requirements, 

and find that those requirements will 

benefit companies with fewer than 25 

employees by facilitating the resolution 

of program access complaints and that 

these requirements will not burden 

those companies. 

B. Congressional Review Act 

79. The Commission will send a copy 

of this Order in a report to be sent to 

Congress and the Government 

Accountability Office pursuant to the 

Congressional Review Act, see 5 U.S.C. 

801(a)(1)(A). 

C. Final Regulatory Flexibility Analysis 

80. As required by the Regulatory 

Flexibility Act (‘‘RFA’’), 5 U.S.C. 604, 

the Commission has prepared the 

following Final Regulatory Flexibility 

Analysis (‘‘FRFA’’) relating to the Order. 

An Initial Regulatory Flexibility 

Analysis (‘‘IRFA’’) was incorporated in 

the NPRM in MB Docket No. 07–29 (72 

FR 9289, March 1, 2007). The 

Commission sought written public 

comment on the proposals in the NPRM, 

including comment on the IRFA. The 

comments received are discussed below. 

This present FRFA conforms to the 

RFA. We note that, because our action 

with respect to the exclusive contract 

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

retains the status quo in this context, we 

could have certified our action under 

the RFA. See generally 5 U.S.C. 605. 

Need for, and Objectives of, the Rules 

Adopted 

81. Background. Congress enacted the 

program access provisions contained in 

Section 628 of the Communications Act 

of 1934, as amended (the 

‘‘Communications Act’’), as part of the 

Cable Television Consumer Protection 

and Competition Act of 1992 (‘‘1992 

Act’’). Section 628 is intended to 

encourage entry into the multichannel 

video programming distribution 

(‘‘MVPD’’) market by existing or 

potential competitors to traditional 

cable operators by requiring cable 

operators to make available to MVPDs 

the programming necessary for them to 

become viable competitors. Specifically, 

this proceeding involves (i) Section 

628(c)(2)(D), which prohibits, in areas 

served by a cable operator, exclusive 

contracts for satellite cable 

programming or satellite broadcast 

programming between vertically 

integrated programming vendors and 

cable operators unless the Commission 

determines that such exclusivity is in 

the public interest; and (ii) the 

Commission’s procedures for resolving 

program access disputes under Section 

628. 

82. Extension of Exclusive Contract 

Prohibition. Section 628(c)(5) of the 

Communications Act directed that the 

exclusive contract prohibition in 

Section 628(c)(2)(D) would cease to be 

effective on October 5, 2002, unless the 

Commission found in a proceeding 

conducted between October 2001 and 

October 2002 that the prohibition 

‘‘continues to be necessary to preserve 

and protect competition and diversity in 

the distribution of video programming.’’

47 U.S.C. 548(c)(5). In October 2001, the 

Commission issued a Notice of 

Proposed Rulemaking in CS Docket No. 

01–290 seeking comment on whether 

the exclusive contract prohibition 

continued to be ‘‘necessary’’ pursuant to 

the criteria set forth in Section 628(c)(5). 

See 66 FR 54972, October 31, 2001. In 

June 2002, the Commission issued a 

decision concluding that the exclusive 

contract prohibition continued to be 

‘‘necessary’’ pursuant to these criteria 

and therefore extended the prohibition 

for five years (i.e., through October 5, 

2007). See 67 FR 49247, July 30, 2002. 

The Commission also provided that, 

during the year before the expiration of 

the five-year extension of the exclusive 

contract prohibition, it would conduct 

another review to determine whether 

the exclusive contract prohibition 

continues to be necessary to preserve 

and protect competition and diversity in 

the distribution of video programming. 

We issued the NPRM in February 2007 

to initiate this review. See 72 FR 9289, 

March 1, 2007. 

83. The Order herein adopted retains 

for five years (until October 5, 2012) the 

prohibition on exclusive contracts for 

satellite cable programming and satellite 

broadcast programming between 

vertically integrated programming 

vendors and cable operators as set forth 

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

Communications Act and Section 

76.1002(c)(2) of the Commission’s rules. 

84. In the Order, we analyze the 

changes that have occurred in the video 

programming and distribution markets 

since 2002 when we last decided that 

the exclusive contract prohibition 

continued to be necessary to preserve 

and protect competition. While the 

markets for both programming and 

distribution reflect some procompetitive trends since 2002, we 

conclude that these developments are 

not sufficient to allow us to decide that 

the exclusive contract prohibition is no 

longer necessary to preserve and protect 

competition and diversity in the 

distribution of video programming. We 

then assess whether vertically integrated 

programmers today retain both the 

ability and incentive to favor their 

affiliated cable operators over 

nonaffiliated MVPDs such that 

competition and diversity in the 

distribution of video programming 


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would not be preserved and protected. 

We conclude that vertically integrated 

programmers retain this ability and 

incentive. Thus, we find that the 

exclusive contract prohibition is 

necessary to preserve and protect 

competition and diversity in the 

distribution of video programming. We 

therefore extend the exclusive contract 

prohibition for five years subject to 

review during the last year of this 

extension period. 

85. In the Order, we also reject 

proposals presented by some 

commenters to narrow the exclusive 

contract prohibition based on the status 

of the programming, the cable operator, 

or the competitive MVPD. We find that 

narrowing the prohibition in this 

manner is not supported by the 

Communications Act and would not 

promote competition. We also reject 

proposals presented by some 

commenters to expand the exclusive 

contract prohibition to non-cableaffiliated programming and unaffiliated 

programming. We find that expanding 

the prohibition is not supported by the 

Communications Act and that there is 

no record evidence to support such an 

expansion of the prohibition. We also 

considered the possibility of allowing 

the exclusive contract prohibition to 

sunset. Because we conclude that the 

exclusive contract prohibition is 

necessary to preserve and protect 

competition and diversity in the video 

distribution market, we decide not to 

allow the exclusive contract prohibition 

to sunset. The decision to retain the 

exclusive contract prohibition will 

facilitate competition in the video 

distribution market, thereby benefiting 

various competitive MVPDs including 

those that are smaller entities. 

Therefore, we conclude that our 

decision to retain the exclusive contract 

prohibition set forth in Section 

628(c)(2)(D) benefits smaller entities as 

well as larger entities. 

86. Modification of Program Access 

Complaint Procedures. The 

Commission’s rules provide that any 

MVPD aggrieved by conduct that it 

believes constitutes a violation of 

Section 628 and the Commission’s 

program access rules may file a 

complaint at the Commission. 47 CFR 

76.7 and 76.1003. In the NPRM, we 

considered whether and how our 

procedures for resolving program access 

disputes under Section 628 should be 

modified. Among other things, we 

considered (i) whether specific time 

limits on the Commission, the parties, 

or others would promote a speedy and 

just resolution of these disputes; (ii) 

whether our rules governing discovery 

and protection of confidential 

information are adequate; and (iii) 

whether the Commission should adopt 

alternative procedures or remedies such 

as mandatory standstill agreements and 

arbitration. 

87. In the Order, to facilitate the 

resolution of program access 

complaints, we modify our procedures 

for resolving such complaints by (i) 

codifying the requirements that a 

respondent in a program access 

complaint proceeding who expressly 

relies upon a document in asserting a 

defense must include the document as 

part of its answer; (ii) finding that in the 

context of a complaint proceeding, it 

would be unreasonable for a respondent 

not to produce all the documents either 

requested by the complainant or ordered 

by the Commission, provided that such 

documents are in its control and 

relevant to the dispute; (iii) codifying 

the Commission’s authority to issue 

default orders granting a complaint if 

the respondent fails to comply with 

discovery requests; and (iv) allowing 

parties to a program access complaint 

proceeding to voluntarily engage in 

alternative dispute resolution, including 

commercial arbitration, during which 

time Commission action on the 

complaint will be suspended. We also 

retain our goals of resolving program 

access complaints within five months 

from the submission of a complaint for 

denial of programming cases, and 

within nine months for all other 

program access complaints, such as 

price discrimination cases. 

Summary of Significant Issues Raised by 

Public Comments in Response to the 

IRFA 

88. In its Comments on the IRFA, the 

Office of Advocacy of the United States 

Small Business Administration (‘‘SBA 

Office of Advocacy’’) claims that the 

Commission’s IRFA in this proceeding 

was inadequate because it allegedly (i) 

did not contain a complete economic 

analysis of the impact of a decision to 

allow the exclusive contract prohibition 

to sunset on the small entities listed in 

the IRFA; (ii) failed to consider 

alternatives to allowing the prohibition 

to sunset that will achieve the 

Commission’s goals while minimizing 

burdens on small entities; and (iii) 

failed to collect data on the impact of a 

sunset of the prohibition on small 

businesses that offer video programming 

to customers, such as sports bars, smalls 

entities in the hospitality industry, and 

certain housing developments. The SBA 

Office of Advocacy Office argues that 

without access to video content 

demanded by subscribers, small 

providers of video services will not be 

able to compete in the MVPD market. 

Accordingly, the SBA Office of 

Advocacy urges a three-year extension 

of the exclusive contract prohibition. 

Although not filed specifically in 

response to the IRFA, comments were 

filed in response to the NPRM by small 

competitive MVPDs and small cable 

operators that urged the Commission to 

retain the exclusive contract prohibition 

and to revise the procedures for 

resolving program access complaints. 

These commenters argued that they will 

be unable to viably compete in the video 

distribution market if denied access to 

vertically integrated programming. 

Moreover, they argued that the current 

program access complaint process is 

costly and time-consuming such that it 

makes it impracticable for small carriers 

to pursue filing a program access 

complaint. Our response to all such 

comments is contained below. 

Description and Estimate of the Number 

of Small Entities to Which the Proposed 

Rules Will Apply 

89. The RFA directs agencies to 

provide a description of, and where 

feasible, an estimate of the number of 

small entities that may be affected by 

the proposed rules, if adopted. The RFA 

generally defines the term ‘‘small 

entity’’ as having the same meaning as 

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

organization,’’ and ‘‘small governmental 

jurisdiction.’’ In addition, the term 

‘‘small business’’ has the same meaning 

as the term ‘‘small business concern’’

under the Small Business Act. A ‘‘small 

business concern’’ is one which: (1) Is 

independently owned and operated; (2) 

is not dominant in its field of operation; 

and (3) satisfies any additional criteria 

established by the Small Business 

Administration (‘‘SBA’’). 

90. Wired Telecommunications 

Carriers. The 2007 North American 

Industry Classification System 

(‘‘NAICS’’) defines ‘‘Wired 

Telecommunications Carriers’’ (2007 

NAISC Code 517110) to include the 

following three classifications which 

were listed separately in the 2002 

NAICS: Wired Telecommunications 

Carriers (2002 NAICS Code 517110), 

Cable and Other Program Distribution 

(2002 NAISC Code 517510), and 

Internet Service Providers (2002 NAISC 

Code 518111). The 2007 NAISC defines 

this category as follows: ‘‘This industry 

comprises establishments primarily 

engaged in operating and/or providing 

access to transmission facilities and 

infrastructure that they own and/or 

lease for the transmission of voice, data, 

text, sound, and video using wired 

telecommunications networks. 

Transmission facilities may be based on 

a single technology or a combination of 


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technologies. Establishments in this 

industry use the wired 

telecommunications network facilities 

that they operate to provide a variety of 

services, such as wired telephony 

services, including VoIP services; wired 

(cable) audio and video programming 

distribution; and wired broadband 

Internet services. By exception, 

establishments providing satellite 

television distribution services using 

facilities and infrastructure that they 

operate are included in this industry.’’

The SBA has developed a small 

business size standard for Wired 

Telecommunications Carriers, which is 

all firms having 1,500 employees or less. 

According to Census Bureau data for 

2002, there were a total of 27,148 firms 

in the Wired Telecommunications 

Carriers category (2002 NAISC Code 

517110) that operated for the entire 

year; 6,021 firms in the Cable and Other 

Program Distribution category (2002 

NAISC Code 517510) that operated for 

the entire year; and 3,408 firms in the 

Internet Service Providers category 

(2002 NAISC Code 518111) that 

operated for the entire year. Of these 

totals, 25,374 of 27,148 firms in the 

Wired Telecommunications Carriers 

category (2002 NAISC Code 517110) had 

less than 100 employees; 5,496 of 6,021 

firms in the Cable and Other Program 

Distribution category (2002 NAISC Code 

517510) had less than 100 employees; 

and 3,303 of the 3,408 firms in the 

Internet Service Providers category 

(2002 NAISC Code 518111) had less 

than 100 employees. Thus, under this 

size standard, the majority of firms can 

be considered small. 

91. Cable and Other Program 

Distribution. The 2002 NAICS defines 

this category as follows: ‘‘This industry 

comprises establishments primarily 

engaged as third-party distribution 

systems for broadcast programming. The 

establishments of this industry deliver 

visual, aural, or textual programming 

received from cable networks, local 

television stations, or radio networks to 

consumers via cable or direct-to-home 

satellite systems on a subscription or fee 

basis. These establishments do not 

generally originate programming 

material.’’ This category includes, 

among others, cable operators, direct 

broadcast satellite (‘‘DBS’’) services, 

home satellite dish (‘‘HSD’’) services, 

satellite master antenna television 

(‘‘SMATV’’) systems, and open video 

systems (‘‘OVS’’). The SBA has 

developed a small business size 

standard for Cable and Other Program 

Distribution, which is all such firms 

having $13.5 million or less in annual 

receipts. According to Census Bureau 

data for 2002, there were a total of 1,191 

firms in this category that operated for 

the entire year. Of this total, 1,087 firms 

had annual receipts of under $10 

million, and 43 firms had receipts of 

$10 million or more but less than $25 

million. Thus, under this size standard, 

the majority of firms can be considered 

small. 

92. Cable System Operators (Rate 

Regulation Standard). The Commission 

has also developed its own small 

business size standards for the purpose 

of cable rate regulation. Under the 

Commission’s rules, a ‘‘small cable 

company’’ is one serving 400,000 or 

fewer subscribers nationwide. As of 

2006, 7,916 cable operators qualify as 

small cable companies under this 

standard. In addition, under the 

Commission’s rules, a ‘‘small system’’ is 

a cable system serving 15,000 or fewer 

subscribers. Industry data indicate that 

6,139 systems have under 10,000 

subscribers, and an additional 379 

systems have 10,000–19,999 

subscribers. Thus, under this standard, 

most cable systems are small. 

93. Cable System Operators (Telecom 

Act Standard). The Communications 

Act of 1934, as amended, also contains 

a size standard for small cable system 

operators, which is ‘‘a cable operator 

that, directly or through an affiliate, 

serves in the aggregate fewer than 1 

percent of all subscribers in the United 

States and is not affiliated with any 

entity or entities whose gross annual 

revenues in the aggregate exceed 

$250,000,000.’’ There are approximately 

65.4 million cable subscribers in the 

United States today. Accordingly, an 

operator serving fewer than 654,000 

subscribers shall be deemed a small 

operator, if its annual revenues, when 

combined with the total annual 

revenues of all its affiliates, do not 

exceed $250 million in the aggregate. 

Based on available data, we find that the 

number of cable operators serving 

654,000 subscribers or less totals 

approximately 7,916. We note that the 

Commission neither requests nor 

collects information on whether cable 

system operators are affiliated with 

entities whose gross annual revenues 

exceed $250 million. Although it seems 

certain that some of these cable system 

operators are affiliated with entities 

whose gross annual revenues exceed 

$250,000,000, we are unable at this time 

to estimate with greater precision the 

number of cable system operators that 

would qualify as small cable operators 

under the definition in the 

Communications Act. 

94. Direct Broadcast Satellite (‘‘DBS’’) 

Service. DBS service is a nationally 

distributed subscription service that 

delivers video and audio programming 

via satellite to a small parabolic ‘‘dish’’

antenna at the subscriber’s location. 

Because DBS provides subscription 

services, DBS falls within the SBArecognized definition of Cable and 

Other Program Distribution. This 

definition provides that a small entity is 

one with $13.5 million or less in annual 

receipts. Currently, three operators 

provide DBS service, which requires a 

great investment of capital for operation: 

DIRECTV, EchoStar (marketed as the 

DISH Network), and Dominion Video 

Satellite, Inc. (‘‘Dominion’’) (marketed 

as Sky Angel). All three currently offer 

subscription services. Two of these 

three DBS operators, DIRECTV and 

EchoStar Communications Corporation 

(‘‘EchoStar’’), report annual revenues 

that are in excess of the threshold for a 

small business. The third DBS operator, 

Dominion’s Sky Angel service, serves 

fewer than one million subscribers and 

provides 20 family and religion-oriented 

channels. Dominion does not report its 

annual revenues. The Commission does 

not know of any source which provides 

this information and, thus, we have no 

way of confirming whether Dominion 

qualifies as a small business. Because 

DBS service requires significant capital, 

we believe it is unlikely that a small 

entity as defined by the SBA would 

have the financial wherewithal to 

become a DBS licensee. Nevertheless, 

given the absence of specific data on 

this point, we recognize the possibility 

that there are entrants in this field that 

may not yet have generated $13.5 

million in annual receipts, and therefore 

may be categorized as a small business, 

if independently owned and operated. 

95. Private Cable Operators (PCOs) 

also known as Satellite Master Antenna 

Television (SMATV) Systems. PCOs, 

also known as SMATV systems or 

private communication operators, are 

video distribution facilities that use 

closed transmission paths without using 

any public right-of-way. PCOs acquire 

video programming and distribute it via 

terrestrial wiring in urban and suburban 

multiple dwelling units such as 

apartments and condominiums, and 

commercial multiple tenant units such 

as hotels and office buildings. The SBA 

definition of small entities for Cable and 

Other Program Distribution Services 

includes PCOs and, thus, small entities 

are defined as all such companies 

generating $13.5 million or less in 

annual receipts. Currently, there are 

approximately 150 members in the 

Independent Multi-Family 

Communications Council (IMCC), the 

trade association that represents PCOs. 

Individual PCOs often serve 


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approximately 3,000–4,000 subscribers, 

but the larger operations serve as many 

as 15,000–55,000 subscribers. In total, 

PCOs currently serve approximately one 

million subscribers. Because these 

operators are not rate regulated, they are 

not required to file financial data with 

the Commission. Furthermore, we are 

not aware of any privately published 

financial information regarding these 

operators. Based on the estimated 

number of operators and the estimated 

number of units served by the largest 

ten PCOs, we believe that a substantial 

number of PCO may qualify as small 

entities. 

96. Home Satellite Dish (‘‘HSD’’) 

Service. Because HSD provides 

subscription services, HSD falls within 

the SBA-recognized definition of Cable 

and Other Program Distribution, which 

includes all such companies generating 

$13.5 million or less in revenue 

annually. HSD or the large dish segment 

of the satellite industry is the original 

satellite-to-home service offered to 

consumers, and involves the home 

reception of signals transmitted by 

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

uses small dishes, HSD antennas are 

between four and eight feet in diameter 

and can receive a wide range of 

unscrambled (free) programming and 

scrambled programming purchased from 

program packagers that are licensed to 

facilitate subscribers’ receipt of video 

programming. There are approximately 

30 satellites operating in the C-band, 

which carry over 500 channels of 

programming combined; approximately 

350 channels are available free of charge 

and 150 are scrambled and require a 

subscription. HSD is difficult to 

quantify in terms of annual revenue. 

HSD owners have access to program 

channels placed on C-band satellites by 

programmers for receipt and 

distribution by MVPDs. Commission 

data shows that, between June 2004 and 

June 2005, HSD subscribership fell from 

335,766 subscribers to 206,358 

subscribers, a decline of more than 38 

percent. The Commission has no 

information regarding the annual 

revenue of the four C-Band distributors. 

97. Broadband Radio Service and 

Educational Broadband Service. 

Broadband Radio Service comprises 

Multichannel Multipoint Distribution 

Service (MMDS) systems and 

Multipoint Distribution Service (MDS). 

MMDS systems, often referred to as 

‘‘wireless cable,’’ transmit video 

programming to subscribers using the 

microwave frequencies of MDS and 

Educational Broadband Service (EBS) 

(formerly known as Instructional 

Television Fixed Service (ITFS)). We 

estimate that the number of wireless 

cable subscribers is approximately 

100,000, as of March 2005. The SBA 

definition of small entities for Cable and 

Other Program Distribution, which 

includes such companies generating 

$13.5 million in annual receipts, 

appears applicable to MDS and ITFS. 

98. The Commission has also defined 

small MDS (now BRS) entities in the 

context of Commission license auctions. 

For purposes of the 1996 MDS auction, 

the Commission defined a small 

business as an entity that had annual 

average gross revenues of less than $40 

million in the previous three calendar 

years. This definition of a small entity 

in the context of MDS auctions has been 

approved by the SBA. In the MDS 

auction, 67 bidders won 493 licenses. Of 

the 67 auction winners, 61 claimed 

status as a small business. At this time, 

the Commission estimates that of the 61 

small business MDS auction winners, 48 

remain small business licensees. In 

addition to the 48 small businesses that 

hold BTA authorizations, there are 

approximately 392 incumbent MDS 

licensees that have gross revenues that 

are not more than $40 million and are 

thus considered small entities. MDS 

licensees and wireless cable operators 

that did not receive their licenses as a 

result of the MDS auction fall under the 

SBA small business size standard for 

Cable and Other Program Distribution, 

which includes all such entities that do 

not generate revenue in excess of $13.5 

million annually. Information available 

to us indicates that there are 

approximately 850 of these licensees 

and operators that do not generate 

revenue in excess of $13.5 million 

annually. Therefore, we estimate that 

there are approximately 850 small entity 

MDS (or BRS) providers, as defined by 

the SBA and the Commission’s auction 

rules. 

99. Educational institutions are 

included in this analysis as small 

entities; however, the Commission has 

not created a specific small business 

size standard for ITFS (now EBS). We 

estimate that there are currently 2,032 

ITFS (or EBS) licensees, and all but 100 

of the licenses are held by educational 

institutions. Thus, we estimate that at 

least 1,932 ITFS licensees are small 

entities. 

100. Local Multipoint Distribution 

Service. Local Multipoint Distribution 

Service (LMDS) is a fixed broadband 

point-to-multipoint microwave service 

that provides for two-way video 

telecommunications. The SBA 

definition of small entities for Cable and 

Other Program Distribution, which 

includes such companies generating 

$13.5 million in annual receipts, 

appears applicable to LMDS. The 

Commission has also defined small 

LMDS entities in the context of 

Commission license auctions. In the 

1998 and 1999 LMDS auctions, the 

Commission defined a small business as 

an entity that had annual average gross 

revenues of less than $40 million in the 

previous three calendar years. 

Moreover, the Commission added an 

additional classification for a ‘‘very 

small business,’’ which was defined as 

an entity that had annual average gross 

revenues of less than $15 million in the 

previous three calendar years. These 

definitions of ‘‘small business’’ and 

‘‘very small business’’ in the context of 

the LMDS auctions have been approved 

by the SBA. In the first LMDS auction, 

104 bidders won 864 licenses. Of the 

104 auction winners, 93 claimed status 

as small or very small businesses. In the 

LMDS re-auction, 40 bidders won 161 

licenses. Based on this information, we 

believe that the number of small LMDS 

licenses will include the 93 winning 

bidders in the first auction and the 40 

winning bidders in the re-auction, for a 

total of 133 small entity LMDS 

providers as defined by the SBA and the 

Commission’s auction rules. 

101. Open Video Systems (‘‘OVS’’). 

The OVS framework provides 

opportunities for the distribution of 

video programming other than through 

cable systems. Because OVS operators 

provide subscription services, OVS falls 

within the SBA-recognized definition of 

Cable and Other Program Distribution 

Services, which provides that a small 

entity is one with $13.5 million or less 

in annual receipts. The Commission has 

approved approximately 120 OVS 

certifications with some OVS operators 

now providing service. Broadband 

service providers (BSPs) are currently 

the only significant holders of OVS 

certifications or local OVS franchises, 

even though OVS is one of four 

statutorily-recognized options for local 

exchange carriers (LECs) to offer video 

programming services. As of June 2005, 

BSPs served approximately 1.4 million 

subscribers, representing 1.49 percent of 

all MVPD households. Among BSPs, 

however, those operating under the OVS 

framework are in the minority. As of 

June 2005, RCN Corporation is the 

largest BSP and 14th largest MVPD, 

serving approximately 371,000 

subscribers. RCN received approval to 

operate OVS systems in New York City, 

Boston, Washington, DC and other 

areas. The Commission does not have 

financial information regarding the 

entities authorized to provide OVS, 

some of which may not yet be 

operational. We thus believe that at least 


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some of the OVS operators may qualify 

as small entities. 

102. Cable and Other Subscription 

Programming. The Census Bureau 

defines this category as follows: ‘‘This 

industry comprises establishments 

primarily engaged in operating studios 

and facilities for the broadcasting of 

programs on a subscription or fee basis 

* * *. These establishments produce 

programming in their own facilities or 

acquire programming from external 

sources. The programming material is 

usually delivered to a third party, such 

as cable systems or direct-to-home 

satellite systems, for transmission to 

viewers.’’ The SBA has developed a 

small business size standard for firms 

within this category, which is all firms 

with $13.5 million or less in annual 

receipts. According to Census Bureau 

data for 2002, there were 270 firms in 

this category that operated for the entire 

year. Of this total, 217 firms had annual 

receipts of under $10 million and 13 

firms had annual receipts of $10 million 

to $24,999,999. Thus, under this 

category and associated small business 

size standard, the majority of firms can 

be considered small. 

103. Small Incumbent Local Exchange 

Carriers. We have included small 

incumbent local exchange carriers in 

this present RFA analysis. A ‘‘small 

business’’ under the RFA is one that, 

inter alia, meets the pertinent small 

business size standard (e.g., a telephone 

communications business having 1,500 

or fewer employees), and ‘‘is not 

dominant in its field of operation.’’ The 

SBA’s Office of Advocacy contends that, 

for RFA purposes, small incumbent 

local exchange carriers are not dominant 

in their field of operation because any 

such dominance is not ‘‘national’’ in 

scope. We have therefore included small 

incumbent local exchange carriers in 

this RFA, although we emphasize that 

this RFA action has no effect on 

Commission analyses and 

determinations in other, non-RFA 

contexts. 

104. Incumbent Local Exchange 

Carriers (‘‘LECs’’). Neither the 

Commission nor the SBA has developed 

a small business size standard 

specifically for incumbent local 

exchange services. The appropriate size 

standard under SBA rules is for the 

category Wired Telecommunications 

Carriers. Under that size standard, such 

a business is small if it has 1,500 or 

fewer employees. According to 

Commission data, 1,307 carriers have 

reported that they are engaged in the 

provision of incumbent local exchange 

services. Of these 1,307 carriers, an 

estimated 1,019 have 1,500 or fewer 

employees and 288 have more than 

1,500 employees. Consequently, the 

Commission estimates that most 

providers of incumbent local exchange 

service are small businesses. 

105. Competitive Local Exchange 

Carriers, Competitive Access Providers 

(CAPs), Shared-Tenant Service 

Providers,’’ and ‘‘Other Local Service 

Providers.’’ Neither the Commission nor 

the SBA has developed a small business 

size standard specifically for these 

service providers. The appropriate size 

standard under SBA rules is for the 

category Wired Telecommunications 

Carriers. Under that size standard, such 

a business is small if it has 1,500 or 

fewer employees. According to 

Commission data, 859 carriers have 

reported that they are engaged in the 

provision of either competitive access 

provider services or competitive local 

exchange carrier services. Of these 859 

carriers, an estimated 741 have 1,500 or 

fewer employees and 118 have more 

than 1,500 employees. In addition, 16 

carriers have reported that they are 

‘‘Shared-Tenant Service Providers,’’ and 

all 16 are estimated to have 1,500 or 

fewer employees. In addition, 44 

carriers have reported that they are 

‘‘Other Local Service Providers.’’ Of the 

44, an estimated 43 have 1,500 or fewer 

employees and one has more than 1,500 

employees. Consequently, the 

Commission estimates that most 

providers of competitive local exchange 

service, competitive access providers, 

‘‘Shared-Tenant Service Providers,’’ and 

‘‘Other Local Service Providers’’ are 

small entities. 

106. Electric Power Generation, 

Transmission and Distribution. The 

Census Bureau defines this category as 

follows: ‘‘This industry group comprises 

establishments primarily engaged in 

generating, transmitting, and/or 

distributing electric power. 

Establishments in this industry group 

may perform one or more of the 

following activities: (1) Operate 

generation facilities that produce 

electric energy; (2) operate transmission 

systems that convey the electricity from 

the generation facility to the distribution 

system; and (3) operate distribution 

systems that convey electric power 

received from the generation facility or 

the transmission system to the final 

consumer.’’ The SBA has developed a 

small business size standard for firms in 

this category: ‘‘A firm is small if, 

including its affiliates, it is primarily 

engaged in the generation, transmission, 

and/or distribution of electric energy for 

sale and its total electric output for the 

preceding fiscal year did not exceed 4 

million megawatt hours.’’ According to 

Census Bureau data for 2002, there were 

1,644 firms in this category that 

operated for the entire year. Census data 

do not track electric output and we have 

not determined how many of these firms 

fit the SBA size standard for small, with 

no more than 4 million megawatt hours 

of electric output. Consequently, we 

estimate that 1,644 or fewer firms may 

be considered small under the SBA 

small business size standard. 

Description of Reporting, Recordkeeping 

and Other Compliance Requirements 

107. The rules adopted in the Report 

and Order will impose additional 

reporting, recordkeeping, and 

compliance requirements on 

complainants and respondents in 

program access disputes by (i) codifying 

the requirements that a respondent in a 

program access complaint proceeding 

who expressly relies upon a document 

in asserting a defense must include the 

document as part of its answer; and (ii) 

finding that in the context of a 

complaint proceeding, it would be 

unreasonable for a respondent not to 

produce all the documents either 

requested by the complainant or ordered 

by the Commission, provided that such 

documents are in its control and 

relevant to the dispute. 

Steps Taken To Minimize Significant 

Impact on Small Entities and Significant 

Alternatives Considered 

108. The RFA requires an agency to 

describe any significant alternatives that 

it has considered in proposing 

regulatory approaches, which may 

include the following four alternatives 

(among others): (1) The establishment of 

differing compliance or reporting 

requirements or timetables that take into 

account the resources available to small 

entities; (2) the clarification, 

consolidation, or simplification of 

compliance or reporting requirements 

under the rule for small entities; (3) the 

use of performance, rather than design, 

standards; and (4) an exemption from 

coverage of the rule, or any part thereof, 

for small entities. 

109. The NPRM invited comment on 

issues that had the potential to have 

significant economic impact on some 

small entities, including (i) whether the 

exclusive contract prohibition remains 

necessary to preserve and protect 

competition in the video distribution 

market; and (ii) whether and how our 

procedures for resolving program access 

disputes under Section 628 should be 

modified. 

110. Extension of Exclusive Contract 

Prohibition. As discussed above, the 

decision to extend the exclusive 

contract prohibition for five years will 

facilitate competition in the video 

distribution market by ensuring that 


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competitive MVPDs continue to have 

access to the programming they need to 

compete. The decision therefore confers 

benefits upon various competitive 

MVPDs, including those that are smaller 

entities. Moreover, the decision avoids 

the adverse impact to smaller entities 

that the SBA Office of Advocacy Office 

and others stated would occur if the 

prohibition were to sunset. Therefore, 

we conclude that our decision to retain 

the exclusive contract prohibition set 

forth in Section 628(c)(2)(D) benefits 

smaller entities as well as larger entities. 

The alternative of allowing the 

exclusive contract prohibition to expire 

would hinder competition in the video 

distribution market, thereby harming 

smaller entities. 

111. Modification of Program Access 

Complaint Procedures. As discussed 

above, the decision to modify the 

procedures for resolving program access 

disputes will facilitate the processing 

and resolution of program access 

complaints, thereby conferring benefits 

upon smaller entities as well as larger 

entities that seek to compete in the 

video distribution marketplace. The 

alternative of retaining the current 

program access complaint procedures 

would not facilitate the resolution of 

program access complaints and would 

thereby harm smaller entities that file 

such complaints. 

Report to Congress 

112. The Commission will send a 

copy of the Report and Order, including 

this FRFA, in a report to be sent to 

Congress pursuant to the Congressional 

Review Act. In addition, the 

Commission will send a copy of the 

Report and Order, including this FRFA, 

to the Chief Counsel for Advocacy of the 

SBA. A copy of the Report and Order 

and FRFA (or summaries thereof) will 

also be published in the Federal 

Register. 

V. Ordering Clauses 

113. It is ordered that, pursuant to the 

authority found in Sections 4(i), 303(r), 

and 628 of the Communications Act of 

1934, as amended, 47 U.S.C. 154(i), 

303(r), and 548, this Report and Order 

is adopted. 

114. It is ordered that, pursuant to the 

authority found in Sections 4(i), 303(r), 

and 628 of the Communications Act of 

1934, as amended, 47 U.S.C. 154(i), 

303(r), and 548, the Commission’s rules 

are hereby amended as set forth in the 

Rules Changes below. 

115. It is ordered that the rules 

adopted herein are effective October 4, 

2007, except for § 76.1003(e)(1) and (j) 

which contains information collection 

requirements that are not effective until 

approved by the Office of Management 

and Budget. The Commission will 

publish a document in the Federal 

Register announcing the effective date 

for those sections. 

116. It is ordered that, pursuant to 5 

U.S.C. 553(d)(3) and 47 CFR 1.427(b), 

the Commission finds good cause to 

make § 76.1002(c)(6) and § 76.1003(i) 

and (k) effective upon publication in the 

Federal Register. Section 76.1002(c)(6) 

provides that the exclusive contract 

prohibition set forth in § 76.1002(c)(2) 

will expire on October 5, 2007. See 47 

CFR 76.1002(c)(6). Accordingly, it is 

necessary for the five-year extension of 

this prohibition reflected in the 

amendment to § 76.1002(c)(6) adopted 

herein to take effect by October 5, 2007. 

We thus find good cause to make the 

amendment to § 76.1002(c)(6) effective 

upon publication in the Federal 

Register. We note further that this 

amendment extends an existing 

requirement and does not impose any 

new requirements on any entity. 

Accordingly, no entity will be harmed 

as a result of our decision to make this 

amendment effective upon publication 

in the Federal Register. We also find 

good cause to make the amendments to 

our procedural rules adopted herein, 

other than those that require OMB 

approval, effective upon publication in 

the Federal Register. These rules are (i) 

new § 76.1003(i), which allows parties 

to a program access dispute to 

voluntarily engage in ADR; and (ii) new 

§ 76.1003(k), which pertains to the 

Commission’s authority to issue 

protective orders regarding confidential 

material submitted in program access 

complaint proceedings and to issue 

appropriate sanctions for violations of 

its protective orders. These new rules 

are essential to our goal of expeditiously 

resolving program access complaints. 

We find good cause to make these 

amendments effective upon publication 

in the Federal Register so that parties to 

all program access complaint 

proceedings, including those currently 

pending before the Commission, can 

benefit from these new rules. With 

respect to new § 76.1003(i) regarding 

ADR, we note this procedure is 

voluntary and requires both parties to 

agree to engage in alternative dispute 

resolution; thus, no entity will be 

harmed as a result of our decision to 

make this amendment effective upon 

publication in the Federal Register. 

With respect to new § 76.1003(k) 

regarding protective orders, we note that 

this rule enhances existing safeguards 

provided under our form protective 

order, and will facilitate and expedite 

the review of privileged and/or 

confidential documents; thus, no entity 

will be harmed as a result of our 

decision to make this amendment 

effective upon publication in the 

Federal Register. 

117. It is further ordered that the 

Commission’s Consumer and 

Governmental Affairs Bureau, Reference 

Information Center, shall send a copy of 

this Report and Order including the 

Final Regulatory Flexibility Analysis, to 

the Chief Counsel for Advocacy of the 

Small Business Administration. 

118. It is further ordered that the 

Commission shall send a copy of this 

Report and Order in a report to be sent 

to Congress and the Government 

Accountability Office pursuant to the 

Congressional Review Act, see 5 U.S.C. 

801(a)(1)(A). 

List of Subjects in 47 CFR Part 76 

Administrative practice and 

procedure and Cable television. 

Federal Communications Commission. 

Marlene H. Dortch, 

Secretary. 

Rule Changes 

■ For the reasons stated in the preamble, 

the Federal Communications 

Commission amends 47 CFR part 76 as 

follows: 

PART 76—MULTICHANNEL VIDEO 

AND CABLE TELEVISION SERVICE 

■ 1. The authority citation for part 76 

continues to read as follows: 

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

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

315, 317, 325, 338, 339, 340, 503, 521, 522, 

531, 532, 533, 534, 535, 536, 537, 543, 544, 

544a, 545, 548, 549, 552, 554, 556, 558, 560, 

561, 571, 572 and 573. 

■ 2. Section 76.1002 is amended by 

revising paragraph (c)(6) to read as 

follows: 

§ 76.1002 Specific unfair practices 

prohibited. 

* * * * * 

(c) * * * 

(6) Sunset provision. The prohibition 

of exclusive contracts set forth in 

paragraph (c)(2) of this section shall 

cease to be effective on October 5, 2012, 

unless the Commission finds, during a 

proceeding to be conducted during the 

year preceding such date, that said 

prohibition continues to be necessary to 

preserve and protect competition and 

diversity in the distribution of video 

programming. 

* * * * * 

■ 3. Section 76.1003 is amended by 

adding a sentence to the end of 

paragraph (e)(1) and by adding 


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paragraphs (i), (j) and (k) to read as 

follows: 

§ 76.1003 Program access proceedings. 

* * * * * 

(e) Answer. (1) * * * To the extent 

that a cable operator, satellite cable 

programming vendor or satellite 

broadcast programming vendor 

expressly references and relies upon a 

document or documents in asserting a 

defense or responding to a material 

allegation, such document or documents 

shall be included as part of the answer. 

* * * * * 

(i) Alternative dispute resolution. 

Within 20 days of the close of the 

pleading cycle, the parties to the 

program access dispute may voluntarily 

engage in alternative dispute resolution, 

including commercial arbitration. The 

Commission will suspend action on the 

complaint if both parties agree to use 

alternative dispute resolution. 

(j) Discovery. In addition to the 

general pleading and discovery rules 

contained in § 76.7 of this part, parties 

to a program access complaint may 

serve requests for discovery directly on 

opposing parties, and file a copy of the 

request with the Commission. The 

respondent shall have the opportunity 

to object to any request for documents 

that are not in its control or relevant to 

the dispute. Such request shall be heard, 

and determination made, by the 

Commission. Until the objection is ruled 

upon, the obligation to produce the 

disputed material is suspended. Any 

party who fails to timely provide 

discovery requested by the opposing 

party to which it has not raised an 

objection as described above, or who 

fails to respond to a Commission order 

for discovery material, may be deemed 

in default and an order may be entered 

in accordance with the allegations 

contained in the complaint, or the 

complaint may be dismissed with 

prejudice. 

(k) Protective Orders. In addition to 

the procedures contained in § 76.9 of 

this part related to the protection of 

confidential material, the Commission 

may issue orders to protect the 

confidentiality of proprietary 

information required to be produced for 

resolution of program access 

complaints. A protective order 

constitutes both an order of the 

Commission and an agreement between 

the party executing the protective order 

declaration and the party submitting the 

protected material. The Commission has 

full authority to fashion appropriate 

sanctions for violations of its protective 

orders, including but not limited to 

suspension or disbarment of attorneys 

from practice before the Commission, 

forfeitures, cease and desist orders, and 

denial of further access to confidential 

information in Commission 

proceedings. 

Note: The attached Appendix will not be 

included in the Code of Federal Regulations 

(CFR). 

Appendix—Standard Protective Order 

and Declaration for Use in Section 628 

Program Access Proceedings Before the 

Federal Communications Commission, 

Washington, DC 20554 

In the Matter of lllllllllllll

[Name of Proceeding] llllllllll

Docket No. lllllllllllllll

PROTECTIVE ORDER 

1. This Protective Order is intended to 

facilitate and expedite the review of 

documents obtained from a person in the 

course of discovery that contain trade secrets 

and privileged or confidential commercial or 

financial information. It establishes the 

manner in which ‘‘Confidential Information,’’

as that term is defined herein, is to be treated. 

The Order is not intended to constitute a 

resolution of the merits concerning whether 

any Confidential Information would be 

released publicly by the Commission upon a 

proper request under the Freedom of 

Information Act or other applicable law or 

regulation, including 47 CFR § 0.442. 

2. Definitions. 

a. Authorized Representative. ‘‘Authorized 

Representative’’ shall have the meaning set 

forth in Paragraph 7. 

b. Commission. ‘‘Commission’’ means the 

Federal Communications Commission or any 

arm of the Commission acting pursuant to 

delegated authority. 

c. Confidential Information. ‘‘Confidential 

Information’’ means (i) information 

submitted to the Commission by the 

Submitting Party that has been so designated 

by the Submitting Party and which the 

Submitting Party has determined in good 

faith constitutes trade secrets and 

commercial or financial information which is 

privileged or confidential within the meaning 

of Exemption 4 of the Freedom of 

Information Act, 5 U.S.C. 552(b)(4) and (ii) 

information submitted to the Commission by 

the Submitting Party that has been so 

designated by the Submitting Party and 

which the Submitting Party has determined 

in good faith falls within the terms of 

Commission orders designating the items for 

treatment as Confidential Information. 

Confidential Information includes additional 

copies of, notes, and information derived 

from Confidential Information. 

d. Declaration. ‘‘Declaration’’ means 

Attachment A to this Protective Order. 

e. Reviewing Party. ‘‘Reviewing Party’’

means a person or entity participating in this 

proceeding or considering in good faith filing 

a document in this proceeding. 

f. Submitting Party. ‘‘Submitting Party’’

means a person or entity that seeks 

confidential treatment of Confidential 

Information pursuant to this Protective 

Order. 

2A. Claim of Confidentiality. The 

Submitting Party may designate information 

as ‘‘Confidential Information’’ consistent 

with the definition of that term in Paragraph 

2.c of this Protective Order. The Commission 

may, sua sponte or upon petition, pursuant 

to 47 CFR 0.459 and 0.461, determine that all 

or part of the information claimed as 

‘‘Confidential Information’’ is not entitled to 

such treatment. 

3. Procedures for Claiming Information is 

Confidential. Confidential Information 

submitted to the Commission shall be filed 

under seal and shall bear on the front page 

in bold print, ‘‘CONTAINS PRIVILEGED 

AND CONFIDENTIAL INFORMATION—DO 

NOT RELEASE.’’ Confidential Information 

shall be segregated by the Submitting Party 

from all non-confidential information 

submitted to the Commission. To the extent 

a document contains both Confidential 

Information and non-confidential 

information, the Submitting Party shall 

designate the specific portions of the 

document claimed to contain Confidential 

Information and shall, where feasible, also 

submit a redacted version not containing 

Confidential Information. 

4. Storage of Confidential Information at 

the Commission. The Secretary of the 

Commission or other Commission staff to 

whom Confidential Information is submitted 

shall place the Confidential Information in a 

non-public file. Confidential Information 

shall be segregated in the files of the 

Commission, and shall be withheld from 

inspection by any person not bound by the 

terms of this Protective Order, unless such 

Confidential Information is released from the 

restrictions of this Order either through 

agreement of the parties, or pursuant to the 

order of the Commission or a court having 

jurisdiction. 

5. Access to Confidential Information. 

Confidential Information shall only be made 

available to Commission staff, Commission 

consultants and to counsel to the Reviewing 

Parties, or if a Reviewing Party has no 

counsel, to a person designated by the 

Reviewing Party. Before counsel to a 

Reviewing Party or such other designated 

person designated by the Reviewing Party 

may obtain access to Confidential 

Information, counsel or such other 

designated person must execute the attached 

Declaration. Consultants under contract to 

the Commission may obtain access to 

Confidential Information only if they have 

signed, as part of their employment contract, 

a non-disclosure agreement the scope of 

which includes the Confidential Information, 

or if they execute the attached Declaration. 

6. Disclosure. Counsel to a Reviewing Party 

or such other person designated pursuant to 

Paragraph 5 may disclose Confidential 

Information to other Authorized 

Representatives to whom disclosure is 

permitted under the terms of paragraph 7 of 

this Protective Order only after advising such 

Authorized Representatives of the terms and 

obligations of the Order. In addition, before 

Authorized Representatives may obtain 

access to Confidential Information, each 

Authorized Representative must execute the 

attached Declaration. 

7. Authorized Representatives shall be 

limited to: 

a. Subject to Paragraph 7.d, counsel for the 

Reviewing Parties to this proceeding, 


pwalker on PROD1PC71 with RULES
Federal Register / Vol. 72, No. 192 / Thursday, October 4, 2007 / Rules and Regulations 56663 

including in-house counsel, actively engaged 

in the conduct of this proceeding and their 

associated attorneys, paralegals, clerical staff 

and other employees, to the extent 

reasonably necessary to render professional 

services in this proceeding; 

b. Subject to Paragraph 7.d, specified 

persons, including employees of the 

Reviewing Parties, requested by counsel to 

furnish technical or other expert advice or 

service, or otherwise engaged to prepare 

material for the express purpose of 

formulating filings in this proceeding; and 

c. Subject to Paragraph 7.d, any person 

designated by the Commission in the public 

interest, upon such terms as the Commission 

may deem proper; except that, 

d. Disclosure shall be prohibited to any 

persons in a position to use the Confidential 

Information for competitive commercial or 

business purposes, including persons 

involved in competitive decision-making, 

which includes, but is not limited to, persons 

whose activities, association or relationship 

with the Reviewing Parties or other 

Authorized Representatives involve 

rendering advice or participating in any or all 

of the Reviewing Parties’, Associated 

Representatives’ or any other person’s 

business decisions that are or will be made 

in light of similar or corresponding 

information about a competitor. 

8. Inspection of Confidential Information. 

Confidential Information shall be maintained 

by a Submitting Party for inspection at two 

or more locations, at least one of which shall 

be in Washington, D.C. Inspection shall be 

carried out by Authorized Representatives 

upon reasonable notice not to exceed one 

business day during normal business hours. 

9. Copies of Confidential Information. The 

Submitting Party shall provide a copy of the 

Confidential Material to Authorized 

Representatives upon request and may charge 

a reasonable copying fee not to exceed 

twenty five cents per page. Authorized 

Representatives may make additional copies 

of Confidential Information but only to the 

extent required and solely for the preparation 

and use in this proceeding. Authorized 

Representatives must maintain a written 

record of any additional copies made and 

provide this record to the Submitting Party 

upon reasonable request. The original copy 

and all other copies of the Confidential 

Information shall remain in the care and 

control of Authorized Representatives at all 

times. Authorized Representatives having 

custody of any Confidential Information shall 

keep the documents properly and fully 

secured from access by unauthorized persons 

at all times. 

10. Filing of Declaration. Counsel for 

Reviewing Parties shall provide to the 

Submitting Party and the Commission a copy 

of the attached Declaration for each 

Authorized Representative within five (5) 

business days after the attached Declaration 

is executed, or by any other deadline that 

may be prescribed by the Commission. 

11. Use of Confidential Information. 

Confidential Information shall not be used by 

any person granted access under this 

Protective Order for any purpose other than 

for use in this proceeding (including any 

subsequent administrative or judicial 

review), shall not be used for competitive 

business purposes, and shall not be used or 

disclosed except in accordance with this 

Order. This shall not preclude the use of any 

material or information that is in the public 

domain or has been developed 

independently by any other person who has 

not had access to the Confidential 

Information nor otherwise learned of its 

contents. 

12. Pleadings Using Confidential 

Information. Submitting Parties and 

Reviewing Parties may, in any pleadings that 

they file in this proceeding, reference the 

Confidential Information, but only if they 

comply with the following procedures: 

a. Any portions of the pleadings that 

contain or disclose Confidential Information 

must be physically segregated from the 

remainder of the pleadings and filed under 

seal; 

b. The portions containing or disclosing 

Confidential Information must be covered by 

a separate letter referencing this Protective 

Order; 

c. Each page of any Party’s filing that 

contains or discloses Confidential 

Information subject to this Order must be 

clearly marked: ‘‘Confidential Information 

included pursuant to Protective Order, [cite 

proceeding];’’ and 

d. The confidential portion(s) of the 

pleading, to the extent they are required to 

be served, shall be served upon the Secretary 

of the Commission, the Submitting Party, and 

those Reviewing Parties that have signed the 

attached Declaration. Such confidential 

portions shall be served under seal, and shall 

not be placed in the Commission’s Public 

File unless the Commission directs otherwise 

(with notice to the Submitting Party and an 

opportunity to comment on such proposed 

disclosure). A Submitting Party or a 

Reviewing Party filing a pleading containing 

Confidential Information shall also file a 

redacted copy of the pleading containing no 

Confidential Information, which copy shall 

be placed in the Commission’s public files. 

A Submitting Party or a Reviewing Party may 

provide courtesy copies of pleadings 

containing Confidential Information to 

Commission staff so long as the notations 

required by this Paragraph 12 are not 

removed. 

13. Violations of Protective Order. Should 

a Reviewing Party that has properly obtained 

access to Confidential Information under this 

Protective Order violate any of its terms, it 

shall immediately convey that fact to the 

Commission and to the Submitting Party. 

Further, should such violation consist of 

improper disclosure or use of Confidential 

Information, the violating party shall take all 

necessary steps to remedy the improper 

disclosure or use. The Violating Party shall 

also immediately notify the Commission and 

the Submitting Party, in writing, of the 

identity of each party known or reasonably 

suspected to have obtained the Confidential 

Information through any such disclosure. 

The Commission retains its full authority to 

fashion appropriate sanctions for violations 

of this Protective Order, including but not 

limited to suspension or disbarment of 

attorneys from practice before the 

Commission, forfeitures, cease and desist 

orders, and denial of further access to 

Confidential Information in this or any other 

Commission proceeding. Nothing in this 

Protective Order shall limit any other rights 

and remedies available to the Submitting 

Party at law or equity against any party using 

Confidential Information in a manner not 

authorized by this Protective Order. 

14. Termination of Proceeding. Within two 

weeks after final resolution of this 

proceeding (which includes any 

administrative or judicial appeals), 

Authorized Representatives of Reviewing 

Parties shall, at the direction of the 

Submitting Party, destroy or return to the 

Submitting Party all Confidential Information 

as well as all copies and derivative materials 

made, and shall certify in a writing served on 

the Commission and the Submitting Party 

that no material whatsoever derived from 

such Confidential Information has been 

retained by any person having access thereto, 

except that counsel to a Reviewing Party may 

retain two copies of pleadings submitted on 

behalf of the Reviewing Party. Any 

confidential information contained in any 

copies of pleadings retained by counsel to a 

Reviewing Party or in materials that have 

been destroyed pursuant to this paragraph 

shall be protected from disclosure or use 

indefinitely in accordance with paragraphs 9 

and 11 of this Protective Order unless such 

Confidential Information is released from the 

restrictions of this Order either through 

agreement of the parties, or pursuant to the 

order of the Commission or a court having 

jurisdiction. 

15. No Waiver of Confidentiality. 

Disclosure of Confidential Information as 

provided herein shall not be deemed a 

waiver by the Submitting Party of any 

privilege or entitlement to confidential 

treatment of such Confidential Information. 

Reviewing Parties, by viewing these 

materials: (a) agree not to assert any such 

waiver; (b) agree not to use information 

derived from any confidential materials to 

seek disclosure in any other proceeding; and 

(c) agree that accidental disclosure of 

Confidential Information shall not be deemed 

a waiver of the privilege. 

16. Additional Rights Preserved. The entry 

of this Protective Order is without prejudice 

to the rights of the Submitting Party to apply 

for additional or different protection where it 

is deemed necessary or to the rights of 

Reviewing Parties to request further or 

renewed disclosure of Confidential 

Information. 

17. Effect of Protective Order. This 

Protective Order constitutes an Order of the 

Commission and an agreement between the 

Reviewing Party, executing the attached 

Declaration, and the Submitting Party. 

18. Authority. This Protective Order is 

issued pursuant to Sections 4(i) and 4(j) of 

the Communications Act as amended, 47 

U.S.C. 154(i), (j) and 47 CFR 0.457(d). 

Attachment A to Standard Protective Order 

DECLARATION 

In the Matter of lllllllllllll

[Name of Proceeding] llllllllll

Docket No. lllllllllllllll

I, llllll, hereby declare under 

penalty of perjury that I have read the 


pwalker on PROD1PC71 with RULES
56664 Federal Register / Vol. 72, No. 192 / Thursday, October 4, 2007 / Rules and Regulations 

Protective Order that has been entered by the 

Commission in this proceeding, and that I 

agree to be bound by its terms pertaining to 

the treatment of Confidential Information 

submitted by parties to this proceeding. I 

understand that the Confidential Information 

shall not be disclosed to anyone except in 

accordance with the terms of the Protective 

Order and shall be used only for purposes of 

the proceedings in this matter. I acknowledge 

that a violation of the Protective Order is a 

violation of an order of the Federal 

Communications Commission. I acknowledge 

that this Protective Order is also a binding 

agreement with the Submitting Party. I am 

not in a position to use the Confidential 

Information for competitive commercial or 

business purposes, including competitive 

decision-making, and my activities, 

association or relationship with the 

Reviewing Parties, Authorized 

Representatives, or other persons does not 

involve rendering advice or participating in 

any or all of the Reviewing Parties,’

Associated Representatives’ or other persons’

business decisions that are or will be made 

in light of similar or corresponding 

information about a competitor. 

(signed) lllllllllllllllll

(printed name) lllllllllllll

(representing) llllllllllllll

(title) llllllllllllllllll

(employer) lllllllllllllll

(address) llllllllllllllll

(phone) lllllllllllllllll

(date) llllllllllllllllll

[FR Doc. 07–4935 Filed 10–3–07; 8:45 am] 

BILLING CODE 6712–01–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

50 CFR Part 660 

[Docket No. 060824226–6322–02] 

RIN 0648–AW07 

Magnuson-Stevens Act Provisions; 

Fisheries Off West Coast States; 

Pacific Coast Groundfish Fishery; 

Biennial Specifications and 

Management Measures; Inseason 

Adjustments 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Final rule; inseason adjustments 

to groundfish management measures; 

request for comments. 

SUMMARY: This final rule announces 

inseason changes to management 

measures in the commercial and 

recreational Pacific Coast groundfish 

fisheries and the reopening of the 2007 

Pacific whiting primary season. These 

actions, which are authorized by the 

Pacific Coast Groundfish Fishery 

Management Plan (FMP), are intended 

to allow fisheries to access more 

abundant groundfish stocks while 

protecting overfished and depleted 

stocks. 

DATES: Effective 0001 hours (local time) 

October 1, 2007. Comments on this final 

rule must be received no later than 5 

p.m., local time on November 5, 2007. 

ADDRESSES: You may submit comments, 

identified by RIN 0648–AW07 by any 

one of the following methods: 

• Electronic Submissions: Submit all 

electronic public comments via the 

Federal eRulemaking Portal http:// 

www.regulations.gov. 

• Fax: 206–526–6736, Attn: Gretchen 

Arentzen 

• Mail: D. Robert Lohn, 

Administrator, Northwest Region, 

NMFS, 7600 Sand Point Way NE, 

Seattle, WA 98115–0070, Attn: Gretchen 

Arentzen. 

Instructions: All comments received 

are a part of the public record and will 

generally be posted to http:// 

www.regulations.gov without change. 

All Personal Identifying Information (for 

example, name, address, etc.) 

voluntarily submitted by the commenter 

may be publicly accessible. Do not 

submit Confidential Business 

Information or otherwise sensitive or 

protected information. 

NMFS will accept anonymous 

comments. Attachments to electronic 

comments will be accepted in Microsoft 

Word, Excel, WordPerfect, or Adobe 

PDF file formats only. 

FOR FURTHER INFORMATION CONTACT: 

Gretchen Arentzen (Northwest Region, 

NMFS), phone: 206–526–6147, fax: 206–

526–6736 and e-mail 

gretchen.arentzen@noaa.gov. 

SUPPLEMENTARY INFORMATION: 

Electronic Access 

This final rule is accessible via the 

Internet at the Office of the Federal 

Register′s Website at http:// 

www.gpoaccess.gov/fr/index.html. 

Background information and documents 

are available at the Pacific Fishery 

Management Council′s (Council′s) 

website at http://www.pcouncil.org/. 

Background 

The Pacific Coast Groundfish FMP 

and its implementing regulations at title 

50 in the Code of Federal Regulations 

(CFR), part 660, subpart G, regulate 

fishing for over 90 species of groundfish 

off the coasts of Washington, Oregon, 

and California. Groundfish 

specifications and management 

measures are developed by the Pacific 

Fishery Management Council (Council), 

and are implemented by NMFS. A 

proposed rule to implement the 2007–

2008 specifications and management 

measures for the Pacific Coast 

groundfish fishery and Amendment 16–

4 of the FMP was published on 

September 29, 2006 (71 FR 57764). The 

final rule to implement the 2007–2008 

specifications and management 

measures for the Pacific Coast 

Groundfish Fishery was published on 

December 29, 2006 (71 FR 78638). These 

specifications and management 

measures were codified in the CFR (50 

CFR part 660, subpart G). The final rule 

was subsequently amended on: March 

20, 2007 (71 FR 13043); April 18, 2007 

(72 FR 19390); July 5, 2007 (72 FR 

36617); August 3, 2007 (72 FR 43193); 

and September 18, 2007 (72 FR 53165). 

Changes to current groundfish 

management measures implemented by 

this action were recommended by the 

Council, in consultation with Pacific 

Coast Treaty Indian Tribes and the 

States of Washington, Oregon, and 

California, at its September 10–14, 2007, 

meeting in Portland, Oregon. At that 

meeting, the Pacific Council 

recommended adjusting current 

groundfish management measures to 

respond to updated fishery information 

and other inseason management needs. 

The Pacific Council recommended: (1) 

increasing the 2–month cumulative 

limit in the limited entry fixed gear 

fishery for shortspine thornyheads south 

of 34°27′ N. lat.; (2) prohibiting 

retention of cabezon by recreational 

ocean boat anglers in Federal waters off 

Oregon; (3) closing the Federal 

recreational fishing season for rockfish, 

cabezon, greenlings, and lingcod from 

42° N. lat. to 37°11′ N. lat.; (4) adjust the 

shoreward boundary of the limited entry 

non-whiting trawl RCA to a line 

approximating the 75–fm (137–m) depth 

contour North of Cape Alava (48°10′ N. 

lat.) and between Humbug Mountain 

(43°20.83′ N. lat.) and Cape Arago 

(42°40.50′ N. lat.); (5) increasing 

coastwide sablefish limits for large and 

small footrope trawl gear; (6) increasing 

longspine thornyhead limits south of 

40°10′ N. lat. for large and small 

footrope trawl gear; (7) increasing 

shortspine thornyhead limits coastwide 

for large and small footrope trawl gear; 

(8) increasing coastwide Dover sole 

limits for large and small footrope trawl 

gear; (9) increasing coastwide other 

flatfish limits for large and small 

footrope trawl gear; (10) increasing 

petrale sole limits north of 40°10′ N. lat. 

for large and small footrope trawl gear; 

(11) increasing slope rockfish limits for 

limited entry trawl gear south of 38° N. 

lat.; (12) increasing the 2007 non-tribal 

whiting widow rockfish bycatch limit 


pwalker on PROD1PC71 with RULES