Video Competition and Consumer Choice Act of 1998

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Video Competition and Consumer 
Choice Act of 1998''.

SEC. 2. CABLE PROGRAMMING SERVICES REGULATION.

      Section 623(c)(4) of the Communications Act of 1934 (47 U.S.C. 
543(c)(4)) is amended to read as follows:
            ``(4) Sunset of upper tier rate regulation.--
                    ``(A) Programming choice required.--The authority 
                to regulate rates under this subsection shall not apply 
                to cable programming services provided after March 31, 
                1999, by a cable system unless the franchising 
                authority for such cable system, after notice and 
                opportunity for a public hearing at which the operator, 
                subscribers, and other interested persons may appear 
                and present evidence, certifies to the Commission that 
                the cable operator of such system is not providing to 
                subscribers an acceptable range of programming choices 
                to the extent technically feasible and economically 
                reasonable.
                    ``(B) Basis for certification.--Any franchising 
                authority making such a certification shall include 
                with the statement the factors upon which the 
                franchising authority bases its determination. Such 
                factors may include (but are not limited to) the 
                factors described in paragraph (2) and any one or more 
                of the following:
                            ``(i) delivery of the packages is 
                        technically feasible based on the current and 
                        expected capability of the system;
                            ``(ii) delivery of the packages is 
                        economically reasonable based on the technical 
                        requirements for delivery of the packages;
                            ``(iii) delivery of the packages can be 
                        performed without jeopardizing security of 
                        multichannel video programming and other 
                        services offered over the system, or impeding 
                        the legal rights of the system operator to 
                        prevent theft of service;
                            ``(iv) any revenues received by the cable 
                        operator and cable programming providers from 
                        advertising, including the economic effect of 
                        offering additional programming choices on 
                        advertising revenues and subscriber rates;
                            ``(v) the packages permit subscribers to 
                        subscribe to significantly less than the 
                        majority of upper tier programing services 
                        available; and
                            ``(vi) the packages are related to the 
                        program category interests of groups as 
                        demonstrated by polling, surveys, referenda, 
                        statistics, or other comparable means based on 
                        statistics from the franchising area.
                    ``(C) Commission review.--Upon receipt of a request 
                for review from a cable operator, the Commission may 
                review any certification submitted under subparagraph 
                (A) and may rescind such certification if the 
                Commission determines that the determination of the 
                franchising authority is arbitrary and capricious.
                    ``(D) Duration.--A certification under subparagraph 
                (A) is effective for one year, unless earlier withdrawn 
                by the franchising authority or rescinded by the 
                Commission.
                    ``(E) No effect on effective competition test.--
                Notwithstanding any certification under this paragraph, 
                a cable system that is subject to effective 
                competition, as determined under subsection (a)(2), 
                shall not be subject to regulation under this 
                subsection.''.

SEC. 3. PROGRAM ACCESS.

    (a) Amendments To Extend and Revise Program Access Requirements.--
Section 628 of the Communications Act of 1934 (47 U.S.C. 548) is 
amended--
            (1) in subsection (a), by striking ``satellite cable 
        programming and satellite broadcast programming'' and inserting 
        ``multichannel video programming'';
            (2) in subsection (b)--
                    (A) by striking ``cable operator, a satellite cable 
                programming vendor in which a cable operator has an 
                attributable interest, or a satellite broadcast 
                programming vendor'' and inserting ``multichannel video 
                programming distributor''; and
                    (B) by striking ``satellite cable programming or 
                satellite broadcast programming'' and inserting 
                multichannel video programming'';
            (3) in subsection (c)--
                    (A) by striking ``Within 180 days after the date of 
                enactment of this section, the Commission'' in 
                paragraph (1) and inserting ``The Commission'';
                    (B) by striking paragraph (2) and inserting the 
                following:
            ``(2) Minimum contents of regulations.--The regulations to 
        be promulgated under this section shall--
                    ``(A) establish effective safeguards to prevent any 
                multichannel video programming distributor from unduly 
                or improperly influencing the decision of any 
                multichannel video programming vendor to sell, or the 
                prices, terms, and conditions of sale of, multichannel 
                video programming to any other multichannel video 
                programming distributor;
                    ``(B) prohibit discrimination by a multichannel 
                video programming vendor in the prices, terms, and 
                conditions of sale or delivery of such programming 
                among or between cable systems, cable operators, or 
                other multichannel video programming distributors, or 
                their agents or buying groups; except that a 
                multichannel video programming vendor shall not be 
                prohibited from--
                            ``(i) imposing reasonable requirements for 
                        creditworthiness, offering of service, and 
                        financial stability and standards regarding 
                        character and technical quality;
                            ``(ii) establishing different prices, 
                        terms, and conditions to take into account 
                        actual and reasonable differences in the cost 
                        of creation, sale, delivery, or transmission of 
                        multichannel video programming;
                            ``(iii) establishing different prices, 
                        terms, and conditions which take into account 
                        economies of scale, cost savings, or other 
                        direct and legitimate economic benefits 
                        reasonably attributable to the number of 
                        subscribers served by the distributor; or
                            ``(iv) entering into an exclusive contract 
                        that is permitted under subparagraph (D);
                    ``(C) prohibit practices, understandings, 
                arrangements, and activities, including exclusive 
                contracts for multichannel video programming between a 
                multichannel video programming distributor and a 
                multichannel video programming vendor, that prevent any 
                multichannel video programming distributor from 
                obtaining such programming for distribution to persons 
                in areas not served by a cable operator;
                    ``(D) with respect to distribution to persons in 
                areas served by a cable operator--
                            ``(i) prohibit exclusive contracts for 
                        multichannel video programming between a cable 
                        operator and a multichannel video programming 
                        vendor in which a cable operator has an 
                        attributable interest, unless the Commission 
                        determines (in accordance with paragraph (4)) 
                        that such contract is in the public interest;
                            ``(ii) not prohibit exclusive contracts for 
                        multichannel video programming between a 
                        multichannel video programming distributor, 
                        other than a cable operator, and a multichannel 
                        video programming vendor, other than a 
                        multichannel video programming vendor in which 
                        a cable operator has an attributable interest, 
                        unless the Commission determines (in accordance 
                        with paragraph (4)) that such contract is 
                        contrary to the public interest.''; and
                    (C) in paragraph (5), by striking ``enactment of 
                this section'' and inserting ``enactment of the Video 
                Competition and Consumer Choice Act of 1998'';
            (4) in subsection (h), by adding at the end the following 
        new paragraph:
            ``(3) Other contracts.--No contract to grant exclusive 
        distribution rights to any person with respect to multichannel 
        video programming may be entered into on or after the date of 
        enactment of the Video Competition and Consumer Choice Act of 
        1998, except as permitted under subsection (c)(2)(D). No 
        contract entered into after June 1, 1990, and before such date 
        of enactment that grants such rights may continue in effect 
        after 120 days after the date of enactment of the Video 
        Competition and Consumer Choice Act of 1998.'';
            (5) in subsection (i), by adding at the end the following 
        new paragraphs:
            ``(5) The term `multichannel video programming' means video 
        programming which is transmitted by any means and which is 
        primarily intended for the direct receipt by multichannel video 
        programming distributors for retransmission to their 
        subscribers.
            ``(6) The term `multichannel video programming vendor' 
        means a person engaged in the production, creation, or 
        wholesale distribution for sale of multichannel video 
        programming.''.
            (6) by striking subsection (j) and inserting the following:
    ``(j) Common Carriers.--Any provision that applies to a 
multichannel video programming distributor or multichannel video 
programming vendor under this section shall apply to a common carrier 
or its affiliate that provides multichannel video programming.''.
    (b) Deadlines for Revised Regulations.--The Federal Communications 
Commission shall prescribe such revisions to its regulations as may be 
necessary to implement the amendments made by subsection (a) within 120 
days after the date of enactment of this Act.

SEC. 4. LIFELINE CABLE SERVICE TIER.

    Section 623(b) of the Communications Act of 1934 (47 U.S.C. 543(b)) 
is amended--
            (1) in the subsection heading by inserting ``and Lifeline'' 
        after ``Basic''; and
            (2) by adding at the end the following new paragraph:
            ``(9) Lifeline service tier.--
                    ``(A) Contents.--Each cable operator of a cable 
                system shall make available for sale to its subscribers 
                a separately packaged lifeline service tier. Such 
                lifeline service tier shall consist exclusively of the 
                following:
                            ``(i) All signals carried in fulfillment of 
                        the requirements of sections 614 and 615.
                            ``(ii) Any public, educational, and 
                        governmental access programming required by the 
                        franchise of the cable system to be provided to 
                        subscribers.
                            ``(iii) Any signal of a local television 
                        broadcast station that is provided by the cable 
                        operator to any subscriber, except that a 
                        digital television service signal shall not be 
                        required to be carried as part of the lifeline 
                        service tier pursuant to this clause (iii) 
                        unless such carriage is required by regulations 
                        prescribed by the Commission.
                    ``(B) Prohibition on additions.--A cable operator 
                may not add additional video programming signals or 
                services to the lifeline service tier.
                    ``(C) Rate regulation.--The Commission shall 
                prescribe regulations concerning the rates for the 
                lifeline service tier. Such regulations shall be 
                designed to achieve the goals of--
                            ``(i) ensuring that rates for the lifeline 
                        service tier are reasonable; and
                            ``(ii) promoting multichannel video 
                        programming distribution competition.''.

Summary: Video Competition and Consumer Choice Act of 1998 - Amends the Communications Act of 1934 to make the authority of the Federal Communications Commission (FCC) to regulate cable television service rates inapplicable to services provided after March 31, 1999, by a cable system unless the franchising authority for such system, after notice and opportunity for a public hearing, certifies to the FCC that the cable operator of such system is not providing subscribers an acceptable range of programming choices to the extent technically feasible and economically reasonable.  Outlines factors to be considered for such certification.  Authorizes FCC review of such certifications.  Makes such certifications effective for one year, unless earlier withdrawn or rescinded. 
Replaces references to "satellite cable programming" and "satellite broadcast programming" with "multichannel video programming (MVP)."  Repeals a deadline for FCC regulations concerning the development of competition and diversity in MVP distribution. Outlines minimum requirements for such regulations, including prohibited actions by an MVP vendor with respect to the sale or delivery of such programming among cable systems, cable operators, and other MVP distributors. 
Prohibits entering into contracts to grant exclusive distribution rights to any person with respect to MVP after the date of enactment of this Act, except for certain exclusivity contracts granted by the FCC in the public interest.  Prohibits any such contract (other than the public interest contract) already entered into before such date of enactment to continue after 120 days after such date. 
Defines MVP as video programming which is transmitted by any means and which is primarily intended for the direct receipt by MVP distributors for retransmission to their subscribers. 
Requires the revision of MVP regulations as necessitated by this Act within 120 days after enactment. 
Requires each cable operator of a cable system to make available for sale to its subscribers a separately packaged lifeline service tier consisting exclusively of:  (1) FCC-required local commercial television and noncommercial educational television programming; (2) any public, educational, and governmental access programming required by the cable system franchise; and (3) any signal of a local television broadcast station provided by the cable operator to any subscriber (with an exception).  Prohibits a cable operator from adding additional video programming signals or services to the lifeline tier. Directs the FCC to prescribe regulations for lifeline tier rates.