SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Multichannel Video Competition Act 
of 1998''.

SEC. 2. FINDINGS.

    The Congress makes the following findings:
            (1) In the Cable Television Consumer Protection and 
        Competition Act of 1992, Congress stated its policy of 
        promoting competition in cable services and making available to 
        the public a diversity of views and information through cable 
        television and other video media.
            (2) In the Telecommunications Act of 1996, Congress stated 
        its policy of securing lower prices and higher quality service 
        for American telecommunications consumers and encouraging the 
        rapid deployment of new telecommunications technologies.
            (3) Notwithstanding the intent of Congress as expressed in 
        the 1992 Cable Act and the 1996 Telecommunications Act, in most 
        places throughout America, cable television system operators 
        still do not face effective competition from other providers of 
        multichannel video service.
            (4) Absent effective competition, the market power 
        exercised by cable television operators enables them to raise 
        the price of cable service to consumers, and to control the 
        price and availability of cable programming services to other 
        multichannel video service providers.
            (5) Direct Broadcast Satellite service has over 8 million 
        subscribers and constitutes the most significant competitive 
        alternative to cable television service. However, Direct 
        Broadcast Satellite Service currently suffers from a number of 
        statutory, regulatory, and technical barriers that keep it from 
        being an effective competitor to cable television in the 
        provision of multichannel video services. The most prominent of 
        these barriers is its inability to provide subscribers with 
        local television broadcast signals. Other barriers include the 
        higher cost consumers must pay for equipment, installation, and 
        additional equipment to receive service on additional 
        television sets.
            (6) Permitting providers of direct broadcast satellite 
        service to retransmit local television signals to their 
        subscribers would greatly enhance the ability of direct 
        broadcast satellite service to compete effectively in the 
        provision of multichannel video services.
            (7) Unlike cable television systems, providers of direct 
        broadcast satellite service cannot carry all local television 
broadcast signals in all the local television markets they serve.
            (8) It would be in the public interest for providers of 
        direct broadcast satellite service to fully comply with the 
        mandatory signal carriage rules at such time as terrestrial or 
        satellite-based technology enables them to do so. In the 
        interim, requiring full compliance with the mandatory signal 
        carriage rules would substantially harm the ability of direct 
        broadcast satellite service providers to compete in the 
        provision of multichannel video services and would not serve 
        the public interest.
            (9) Local television broadcast licensees whose stations are 
        not carried by providers of direct broadcast satellite services 
        are entitled to be compensated for any demonstrable loss of 
        revenue that will result.
            (10) Millions of subscribers to direct broadcast satellite 
        service currently receive the signals of network-affiliated 
        stations not located in these subscribers' local television 
        markets. In many cases, distant network signals may be these 
        subscribers' only source of network television service.
            (11) Notwithstanding the prevalence of distant network 
        signals and their importance as a component of direct broadcast 
        satellite service to millions of subscribers, a recent ruling 
        by a federal district court will result in many subscribers 
        losing these signals, regardless of whether local network 
        signals are actually viewable off-air or not.
            (12) Widespread carriage of distant network stations in 
        local network affiliates' markets can cause local affiliates to 
        lose audience share and revenues, which would in turn harm 
        their ability to serve their local community. Therefore, it 
        would best serve the public interest to ensure that distant 
        network stations are carried only where local network stations 
        cannot be received off-air.
            (13) Abrupt termination of satellite carriers provision of 
        distant network signals would deprive direct broadcast 
        satellite subscribers of an important component of their 
        existing satellite television service, and have a severely 
        negative impact on the ability of direct broadcast satellite 
        service to compete effectively in the provision of multichannel 
        video services.
            (14) It is in the public interest for direct broadcast 
        satellite subscribers who cannot receive acceptable over-the-
        air service from their local network-affiliated stations to 
        continue to receive distant network signals for an interim 
        period sufficient to permit the Federal Communications 
        Commission to redefine those situations in which the permanent 
        carriage of distant network signals would be appropriate.
            (15) Improving the ability of providers of direct broadcast 
        service to compete effectively in the provision of multichannel 
        video services by eliminating remaining statutory and 
        administrative barriers to competition would be consistent with 
        the intent of Congress as expressed in the terms of the 1992 
        Cable Act and the 1996 Telecommunications Act.

SEC. 3. PURPOSE.

    The purpose of this Act is to promote the growth of competition in 
the provision of multichannel video services by expeditiously removing 
certain statutory and regulatory barriers that prevent providers of 
Direct Broadcast Satellite Services from competing effectively with 
cable television systems.

SEC. 4. MUST-CARRY FOR SATELLITE CARRIERS RETRANSMITTING TELEVISION 
              BROADCAST SIGNALS.

    Part I of title III of the Communications Act of 1934 (47 U.S.C. 
301 et seq.) is amended by adding at the end thereof the following:

``SEC. 337. CARRIAGE OF LOCAL TELEVISION SIGNALS BY SATELLITE CARRIERS.

    ``(a) Purpose.--The purpose of this section is to promote 
competition in the provision of multichannel video services by--
            ``(1) enabling providers of direct broadcast service to 
        offer their subscribers the signals of local television 
        stations; and
            ``(2) accommodating, for an interim period, technical 
        limitations that preclude providers of direct broadcast service 
        from carrying all local signals in all local television 
        markets.
    ``(b) Application of Mandatory Carriage to Satellite Carriers.--
Except as otherwise provided in this section, the mandatory carriage 
provisions of section 614 of the Communications Act will apply no later 
than January 1, 2002, to satellite carriers retransmitting television 
broadcast signals.
    ``(c) Rulemaking Required.--Within 180 days after the date of 
enactment of the Multichannel Video Competition Act of 1998, the 
Commission shall adopt regulations to facilitate the provision of all 
qualified local commercial and noncommercial television stations, 
either through satellite or terrestrial means, by providers of direct 
broadcast satellite service providing video programming.
    ``(d) Interim Requirements.--
            ``(1) Interim requirement.--Before January 1, 2002, or the 
        effective date of the final regulations adopted pursuant to 
        subsection (c) (if that date is earlier), a provider of direct 
        broadcast satellite service providing video programming shall--
                    ``(A) carry all local television stations eligible 
                for carriage; or
                    ``(B) compensate any such station not carried.
            ``(2) Compensation formula.--Within 180 days of the date of 
        enactment of the Multichannel Video Competition Act of 1998, 
        the Commission shall prescribe a formula to be used to 
        determine the audience and revenue loss incurred by a local 
        television station as a result of its noncarriage by a provider 
        of direct broadcast satellite service under paragraph (1)(B), 
        and procedural rules for the expeditious resolution of 
        petitions requesting compensation.
            ``(3) Burden of proof.--A local television station, 
        otherwise eligible for carriage, whose signal is not carried by 
        a direct broadcast satellite service provider under paragraph 
        (1)(B), may petition the Commission for an order directing that 
        provider to pay compensation under this paragraph. In any 
        proceeding on such a petition, the burden of proof shall lie 
        with the petitioner.
            ``(4) Compensation limited to formula amount absent unusual 
        or compelling circumstances.--The Commission may not grant 
        compensation under this subsection for any projected revenue 
        loss except in accordance with the formula prescribed by the 
        Commission under paragraph (2) unless the Commission determines 
        that unusual or compelling circumstances warrant additional 
        compensation.
            ``(5) Additional compensation.--If the petitioner shows 
        that the compensation determined under the formula would be 
        insufficient to enable the petitioner to operate in the public 
        interest, the Commission shall award additional compensation 
        under this section.
            ``(6) Time limit for commission action.--The Commission 
        shall issue a decision on any petition filed under paragraph 
        (3) no later than 150 days after the petition is filed.
    ``(e) Good Signal Required.--A local television broadcast station 
eligible for carriage under subsection (b) shall be required to bear 
the costs associated with delivering a good quality signal for 
retransmission by the satellite carrier.''.

SEC. 5. CARRIAGE OF DISTANT NETWORK SIGNALS BY SATELLITE CARRIERS.

    (a) Purpose.--The purpose of this section is to promote competition 
in the provision of multichannel video services by enabling direct 
broadcast satellite providers to offer distant network signals to 
consumers in areas receiving inadequate over-the-air reception of local 
television signals.
    (b) Continued Retransmission of Distant Network Signals.--
Notwithstanding any other provision of law, satellite carriers 
retransmitting the signal of a distant network station to households 
located within an area served by a local affiliate of the same network 
and receiving service as of July 10, 1998, shall not be required to 
discontinue carriage of the distant network station to such households 
prior to February 28, 1999. Nothing in this subsection is intended to 
modify the duration of the license granted in section 119 of title 17, 
United States Code.
    (c) Rulemaking Required.--The Federal Communications Commission 
shall complete a single rulemaking proceeding in which it shall rule on 
any petitions or similar matters regarding the definition of unserved 
areas or households. Any definition adopted by the Commission must 
consist of an objective measure of a satisfactory signal obtainable by 
use of generally-available off-air reception devices of the type used 
by the average viewer. The Commission shall complete this rulemaking 
proceeding within such time as to enable any rule change to become 
effective no later than February 28, 1999.
    (d) No Remission of Penalty.--No action taken by the Commission 
pursuant to subsection (c) shall indemnify any provider of direct 
broadcast satellite service from any liability for any prior violation 
of section 119(a)(5)(D) of title 17, United States Code, or from the 
imposition of any penalty therefor.

SEC. 6. RETRANSMISSION CONSENT.

    (a) Amendments.--Section 325(b) of the Communications Act of 1934 
(47 U.S.C. 325(b)) is amended--
            (1) by striking the subsection designation and paragraphs 
        (1) and (2) and inserting the following:
    ``(b)(1) No cable system or other multichannel video programming 
distributor shall retransmit the signal of a broadcasting station, or 
any part thereof, except--
            ``(A) with the express authority of the station;
            ``(B) pursuant to section 614, in the case of a station 
        electing, in accordance with this subsection, to assert the 
        right to carriage under such section; or
            ``(C) pursuant to section 337, in the case of a station 
        eligible, in accordance with this subsection, to assert the 
        right to carriage under such section.
    ``(2) The provisions of this subsection shall not apply to--
            ``(A) retransmission of the signal of a non-commercial 
        broadcasting station;
            ``(B) retransmission of the signal of a television 
        broadcast station outside the station's local market by a 
        satellite carrier directly to subscribers if--
                    ``(i) such station was a superstation on May 1, 
                1991; and
                    ``(ii) on December 31, 1997, such station was a 
                network station and its signal was retransmitted by 
                satellite carriers directly to at least 500,000 
                subscribers;
            ``(C) retransmission of the distant signal of a 
        broadcasting station that is owned or operated by, or 
        affiliated with, a broadcasting network directly to a home 
        satellite antenna, if the household receiving the signal is 
        located in an unserved area;
            ``(D) retransmission by a cable operator or other 
        multichannel video programming distributor (other than by a 
        satellite carrier direct to its subscribers) of the signal of a 
        television broadcast station outside the station's local 
        market, if such signal was obtained from a satellite carrier 
        and--
                    ``(i) the originating station was a superstation on 
                May 1, 1991; and
                    ``(ii) the originating station was a network 
                station on December 31, 1997, and its signal was 
                retransmitted by a satellite carrier directly to 
                subscribers.''; and
            (2) by adding at the end the following new paragraph:
    ``(7) For purposes of this subsection:
            ``(1) Television broadcast station.--The term `television 
        broadcast station' means a full power television broadcast 
        station, but does not include a low-power or translator 
        television broadcast station.
            ``(2) Broadcasting network.--The term `broadcasting 
        network' means a television network in the United States which 
        offers an interconnected program service on a regular basis for 
        15 or more hours per week to at least 25 affiliated broadcast 
        stations in 10 or more States.
            ``(3) Network station.--The term `network station' means a 
        television broadcast station that is owned or operated by, or 
        affiliated with, a broadcasting network.
            ``(4) Local market.--The term `local market' means the 
        designated market area in which a station is located, and--
                    ``(A) for a commercial television broadcast station 
                located in any of the 150 largest designated market 
                areas, all commercial television broadcast stations 
                licensed to a community within the same designated 
                market are within the same local market;
                    ``(B) for a commercial television broadcast station 
                that is located in a designated market that is not one 
                of the 150 largest, the local market includes, in 
                addition to all commercial television broadcast 
                stations licensed to a community within the same 
                designated market area, any station that is 
                significantly viewed, as such term is defined in 
                section 76.54 of the Commission's regulations (47 
                C.F.R. 76.45); and
                    ``(C) for a noncommercial educational television 
                broadcast station, the local market includes any 
                station that is licensed to a community within the same 
                designated market area as the noncommercial educational 
                television broadcast station.
            ``(5) Designated market area.--The term `designated market 
        area' means a designated market area, as determined by Nielsen 
        Media Research and published in the DMA Market and Demographic 
        Report.
            ``(6) Unserved area.--The term `unserved area' means a 
        place that does not receive an off-air signal from a local 
        network station that meets or exceeds the standards established 
        by the Commission.''.
    (b) Effective Date.--The amendments made by subsection (a) are 
effective January 1, 1999.
Output: Multichannel Video Competition Act of 1998 - Amends the Communications Act of 1934 to state that the mandatory local television signal carriage provisions of such Act shall apply no later than January 1, 2002, to satellite carriers retransmitting television (TV) broadcast signals.  Directs the Federal Communications Commission (FCC) to adopt regulations to facilitate the provision of all qualified local commercial and noncommercial TV stations, either through satellite or terrestrial means, by providers of direct broadcast satellite services (DBS) providing video programming. Requires DBS providers, prior to January 1, 2001, to either carry all eligible local TV stations or compensate any station not carried. Directs the FCC to prescribe a compensation formula.  Provides procedures for such stations to petition for such compensation. Requires the payment of additional compensation when the petitioner demonstrates that the formula compensation is insufficient to allow such station to operate in the public interest.  Requires petitions to be decided within 150 days. 
Requires eligible local TV stations to bear the costs of delivering a good quality signal for retransmission by the satellite carrier. 
States that satellite carriers retransmitting the signal of a distant network station to households within an area served by a local affiliate of such network and receiving service as of July 10, 1998, shall not be required to discontinue carriage of the distant station prior to February 28, 1999.  Directs the FCC to complete a single rulemaking proceeding defining unserved areas or households. 
Authorizes a cable system or other multichannel video programming distributor to retransmit the signal of a broadcasting station in the case of public service stations.  Authorizes the retransmission of a signal of a TV station outside the station's local market by a satellite carrier directly to subscribers if:  (1) such station was a superstation on May 1, 1991; and (2) on December 31, 1997, such station was a network station and its signal was retransmitted by satellite carriers directly to at least 500,000 subscribers. Authorizes such a retransmission if:  (1) such signal was obtained from a satellite carrier; (2) the originating station was a superstation on May 1, 1991; and (3) the originating station was a network station on December 31, 1997, and its signal was retransmitted by a satellite carrier directly to subscribers.