[Federal Register Volume 65, Number 220 (Tuesday, November 14, 2000)]
[Rules and Regulations]
[Pages 68082-68107]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-29028]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 73 and 76
[CS Docket No. 00-2; FCC 00-388]
Implementation of the Satellite Home Viewer Improvement Act of
1999: Application of Network Nonduplication, Syndicated Exclusivity,
and Sports Blackout Rules to Satellite Retransmissions of Broadcast
Signals
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: This document adopts regulations to implement certain aspects
of the Satellite Home Viewer Improvement Act of 1999, which was enacted
on November 29, 1999. Among other things, the act authorizes satellite
carriers to add more local and national broadcast programming to their
offerings and seeks to place satellite carriers on an equal footing
with cable operators with respect to availability of broadcast
programming. This document adopts regulations that apply current cable
rules for network non-duplication, syndicated program exclusivity and
sports blackout to satellite carriers.
DATES: Effective November 29, 2000.
ADDRESSES: Federal Communications Commission, 445 12th Street, SW,
Washington, DC 20554.
FOR FURTHER INFORMATION CONTACT: Eloise Gore at (202) 418-7200 or via
internet at [email protected].
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report
and Order (``Order''), FCC 00-388, adopted October 27, 2000; released
November 2, 2000. The full text of the Commission's Order is available
for inspection and copying during normal business hours in the FCC
Reference Center (Room CY-A257) at its headquarters, 445 12th Street,
SW, Washington, DC 20554, or may be purchased from the Commission's
copy contractor, International Transcription Service, Inc., (202) 857-
3800, 1231 20th Street, NW, Washington, DC 20036, or may be reviewed
via internet at http://www.fcc.gov/csb/ For copies in alternative
formats, such as braille, audio cassette or large print, please contact
Sheila Ray at ITS.
Paperwork Reduction Act
This Report and Order contains new or modified information
collection(s) subject to the Paperwork Reduction Act of 1995 (PRA),
Public Law 104-13. The Commission is requesting Office of Management
and Budget (``OMB'') approval, under the emergency processing
provisions of the 1995 Act (5 CFR 1320.13), of the information
collection requirements contained in this Report and Order.
Synopsis of the Order
Introduction
1. In this Report and Order (``Order''), we adopt network non-
duplication, syndicated exclusivity, and sports blackout rules for
satellite carriers. These rules implement provisions of the Satellite
Home Viewer Improvement Act of 1999 (``SHVIA,'' Public Law 106-113, 113
Stat. 1501, 1501A-526 to 1501A-545 (Nov. 29, 1999)), which provides
statutory copyright licenses for satellite carriers to provide
additional local and national broadcast programming to subscribers. In
enacting the SHVIA, Congress sought to create parity between satellite
carriers and cable operators with regard to the retransmission of
broadcast programming and to expand the availability of such
programming to consumers. Prior to enactment of the SHVIA, the
copyright laws made it virtually impossible for satellite subscribers
to receive television broadcast programming by satellite. In adopting
these rules, the Commission implements the statutory requirements and
seeks to facilitate competition in the multichannel video programming
distribution marketplace.
2. Section 1008 of the SHVIA creates a new section 339 of the
Communications Act of 1934, as amended (``Communications Act'')
entitled ``Carriage of Distant Television Stations by Satellite
Carriers.'' Section 339(b) directs the Commission to apply
[[Page 68083]]
the network non-duplication, syndicated exclusivity, and sports
blackout rules, previously applicable only to cable television systems,
to satellite carriers' retransmission of nationally distributed
superstations to satellite subscribers. Congress also requires the
Commission to apply the cable sports blackout rule to satellite
carriers' retransmission of network stations, but only ``to the extent
technically feasible and not economically prohibitive.'' The Commission
released a Notice of Proposed Rulemaking (``NPRM'') on January 7, 2000,
seeking comment on how best to apply these rules to satellite carriers
(65 FR 4927, February 2, 2000). The Commission received 22 comments and
14 reply comments to the NPRM.
Background
3. The network non-duplication, syndicated exclusivity, and sports
blackout rules (collectively referred to herein as ``the exclusivity
rules''), as applied in the cable context, generally protect exclusive
contractual rights that have been negotiated between program providers
and broadcasters or other rights holders. These exclusive contractual
rights are potentially threatened by cable systems that are capable of
importing duplicative programming from distant sources beyond the
control of the contracting parties. The cable exclusivity rules provide
that specific programs must be deleted from distant television
broadcast signals delivered to cable subscribers if the programs are
subject to exclusive rights pursuant to contracts with local stations.
Additionally, pursuant to the sports blackout rule, sporting events
carried on distant stations must be deleted when carriage would violate
sporting teams' or leagues' arrangements to protect gate receipts in
the local market.
4. Section 339(b)(1)(A) of the Communications Act, as amended by
the SHVIA, requires the Commission ``to apply network non-duplication
protection (47 CFR 76.92), syndicated exclusivity protection (47 CFR
76.151), and sports blackout protection (47 CFR 76.67) to the
retransmission of the signals of nationally distributed superstations
by satellite carriers to subscribers.'' Section 339(b)(1)(B) requires
the Commission to ``apply sports blackout protection (47 CFR 76.67) to
the retransmission of the signals of network stations by satellite
carriers to subscribers'' ``to the extent technically feasible and not
economically prohibitive.'' The SHVIA requires that the Commission
implement these new rules so that they will be ``as similar as
possible'' to the rules applicable to cable operators.
Summary of Decision
5. In implementing these sections of the SHVIA, the Commission
attempts to be faithful to the clear Congressional intent to place
satellite carriers on an equal footing with cable operators, while
taking into consideration that the operational structures of these two
Multichannel Video Programming Distributors (``MVPD''s) are very
different. In the context of the SHVIA, which is fundamentally part of
the copyright laws, we are cognizant also of the important protection
that the exclusivity rules provide to broadcasters and copyright
holders. The SHVIA facilitates satellite carriage of additional
broadcast stations through the use of a statutory copyright license. By
applying the cable exclusivity rules to satellite carriers, Congress
sought to keep the competitive marketplace in balance by protecting the
broadcasters' private contractual arrangements and ensuring that
satellite carriers have regulatory obligations that are as similar as
possible to cable operators. The statutory language unambiguously
directs us to apply all three of the cable exclusivity rules to
satellite carriers with respect to retransmission of nationally
distributed superstations. The SHVIA further requires that only the
sports blackout rule be applied to satellite carriers' retransmission
of network stations and limits application of the cable rule in this
context ``to the extent technically feasible and not economically
prohibitive.'' Congressional intent, as expressed in the Joint
Explanatory Statement, places a heavy burden on showing that rules
similar to the cable rules would be ``economically prohibitive'' for
satellite carriers.
6. In general, under the new statutory provisions, the network non-
duplication and syndicated exclusivity rules apply when a satellite
carrier retransmits a nationally distributed superstation to a
household within a local broadcaster's zone of protection, and the
nationally distributed superstation carries a program to which the
local station has exclusive rights. The program may fall under either
the definition of network program (delivered simultaneously to more
than one broadcast station, (47 CFR 76.5(m)) or the definition of
syndicated program (sold, licensed, distributed or sold to licensees in
more than one market (47 CFR 76.5(ii)). In addition, the sports
blackout rules will apply when a subject sporting event will not be
aired live by any local television station, and a satellite carrier
retransmits a nationally distributed superstation or a distant network
station carrying that sporting event to a household within the zone of
protection of the holder of exclusive distribution rights to the event.
In all of these cases, the television broadcast station or other rights
holder may require the satellite carrier to blackout these particular
programs for the satellite subscriber households within the protected
zone.
7. In the NPRM we sought comments on how we could follow the
Congressional mandate to apply the cable exclusivity rules as closely
as possible to satellite carriers while taking account of the
differences between the two industries. In general, the comments did
not provide specific data on cost or technical difficulties in applying
the exclusivity rules to satellite carriers and leave us with the
conclusion that, in most cases, these rules can be applied directly to
satellite carriers. There is a general consensus, however, that the
``community units'' used for identification of cable systems are
inapplicable in the satellite context. We decide here to use zip codes
in lieu of community units to define the various zones of protection
afforded under the satellite exclusivity rules adopted today. In large
part, the notification provisions of the cable exclusivity rules can be
applied in the satellite context, except with respect to the sports
blackout requirements, for which we have the statutory flexibility and
record to support slightly different requirements. In a further effort
to provide comparable treatment for the cable and satellite rules, we
adapt the exceptions to the cable exclusivity rules for small systems
to the satellite context. We also require that the contractual language
granting exclusive rights in a market clearly apply to satellite
carriage, and we provide a period of time for satellite carriers to
phase-in implementation of the new rules. Finally, we decline to take
the steps advocated by the National Football League to go beyond the
statutory requirements to delete non-duplicating sports programming
that is part of a sports program ``unitary'' package because it would
unnecessarily and unjustifiably further limit the ability of consumers
to view the programming of their choice.
Statutory Interpretation and Definitional Issues
8. Section 339(b)(1), as created by the SHVIA, applies to
``satellite carriers.'' Section 339(d)(4) defines ``satellite carrier''
by reference to the Copyright Act definition as
[[Page 68084]]
an entity that uses the facilities of a satellite or satellite
service licensed by the Federal Communications Commission and
operates in the Fixed-Satellite Service under part 25 of title 47 of
the Code of Federal Regulations or the Direct Broadcast Satellite
Service under part 100 of title 47 of the Code of Federal
Regulations, to establish and operate a channel of communications
for point-to-multipoint distribution of television station signals,
and that owns or leases a capacity or service on a satellite in
order to provide such point-to-multipoint distribution, except to
the extent that such entity provides such distribution pursuant to
tariff under the Communications Act of 1934, other than for private
home viewing. (17 U.S.C. 119(d)(6))
Contrary to the arguments of several commenters, there is nothing in
the SHVIA or the legislative history that suggests that satellite
carriers operating in the C-Band were intended to be exempted from the
requirements of section 339(b)(1). C-Band satellite carriers are
licensed under part 25 of the Commission's rules. We do not agree that
an isolated and ambiguous colloquy between two Senators overrides
unambiguous statutory language. We recognize, however, that C-Band
carriers operate differently from DBS carriers and that the number of
C-Band subscribers is steadily decreasing, and to the extent C-Band
satellite carriers can be subject to exceptions from any of the
exclusivity rules we adopt today, they are specifically described
below. In the absence of specific language distinguishing C-Band
satellite carriers, references to ``satellite carriers'' in this Order
refer to all satellite carriers that meet the definition in the SHVIA.
9. Section 339(b)(1)(A) of the Communications Act requires the
Commission to apply network non-duplication protection, syndicated
exclusivity protection, and sports blackout protection to the
retransmission of the signals of nationally distributed superstations
by satellite carriers to subscribers. For these purposes, a
``nationally distributed superstation'' is a term that is defined as a
television broadcast station, licensed by the Commission, that meets
the following three criteria:
(A) is not owned or operated by or affiliated with a television
network that, as of January 1, 1995, offered interconnected program
service on a regular basis for 15 or more hours per week to at least 25
affiliated television licensees in 10 or more States;
(B) on May 1, 1991, was retransmitted by a satellite carrier and
was not a network station at that time; and
(C) was, as of July 1, 1998, retransmitted by a satellite carrier
under the statutory license of section 119 of title 17, United States
Code.
Television network means ``a television network in the United
States which offers an interconnected program service on a regular
basis for 15 or more hours per week to at least 25 affiliated broadcast
stations in 10 or more States'' (47 U.S.C. 339(d)(5)). A ``network
station'' is ``(A) a television broadcast station, including any
translator station or terrestrial satellite station that rebroadcasts
all or substantially all of the programming broadcast by a network
station, that is owned or operated by, or affiliated with, one or more
of the television networks in the United States which offer an
interconnected program service on a regular basis for 15 or more hours
per week to at least 25 of its affiliated television licensees in 10 or
more States'' or ``(B) a noncommercial educational broadcast station
(as defined in section 397 of the Communications Act of 1934)'' except
that the term does not include ``the signal of the Alaska Rural
Communications Service, or any successor entity to that service.'' (17
U.S.C. 119(d)(2).)
10. In the NPRM, we stated that the television broadcast stations
that meet the foregoing criteria are limited to KTLA-TV (Los Angeles),
WPIX-TV (New York), KWGN-TV (Denver), WSBK-TV (Boston), WWOR-TV (New
York) and WGN-TV (Chicago). KTLA, WPIX and KWGN are all now affiliates
of the Warner Brothers Network (``WB''). In addition, WSBK and WWOR
currently are affiliated with the UPN Network. WGN is affiliated with
WB but provides a different ``syndex/nondupe proof'' signal for uplink
and carriage as a superstation. We note that WB and UPN did not qualify
as ``television networks'' as of January 1, 1995, the operative date
referenced in section 339(d)(2)(A) because they did not satisfy each of
the statutory criteria as of that date. We also stated that since no
other station could meet these criteria in the future due to the date-
specific conditions set forth in the definition, the foregoing
constitutes a finite list of the nationally distributed superstations
covered by the statute. Commenters directly addressing this issue
generally agree with our conclusion that this list of nationally
distributed superstations is complete and finite.
11. By creating this special category known as nationally
distributed superstations, Congress permits satellite carriers to
retransmit these superstations to subscribers regardless of whether
they are ``served'' or ``unserved'' pursuant to the Copyright Act. The
amended copyright provision provides that the retransmission of
nationally distributed superstations to subscribers who do not reside
in ``unserved households'' shall not violate the compulsory copyright
license. (An unserved household is defined in part as one that cannot
receive over-the-air a signal of Grade B intensity for a primary
television network station (17 U.S.C. 119(d)(10)).) Thus, we conclude
that as a result of section 1005(b), there is no geographic restriction
on the retransmission of ``nationally distributed superstations''
pursuant to the compulsory copyright license.
12. In addition, the SHVIA amended the retransmission consent
section of the Communications Act, which generally prohibits MVPDs from
retransmitting the signals of a broadcaster absent the broadcaster's
written authorization. The SHVIA allows a satellite carrier to
retransmit the signal of a superstation outside the station's local
market without the station's consent if: (i) The station was a
superstation on May 1, 1991, and (ii) the station was retransmitted by
the satellite carrier as of July 1, 1998, provided the satellite
carrier complies with the Commission's non-duplication, syndicated
exclusivity, and sports black out rules. This provision differs
slightly from the definition of a nationally distributed superstation
in that it does not specify that the superstation must not be
affiliated with a network that existed as such as of January 1, 1995.
At this time, this distinction is without practical significance
because the six television stations cited above meet the relevant
criteria of either definition, and there are no additional stations
that are included or excluded by operation of this third criterion. As
discussed in the NPRM, we conclude that, pursuant to these new
statutory mandates in the SHVIA, satellite carriers are permitted to
retransmit the signals of the nationally distributed superstations
covered by section 339(b)(1)(A) outside the station's local market to
both served and unserved households without the station's consent and
without geographic restriction. In a similar but not identical
provision, the SHVIA permits a cable operator or other MVPD (other than
a satellite carrier) to retransmit a television broadcast station
outside of its local market without its consent, provided the MVPD
obtains the signal from a satellite, and the station was a superstation
on May 1, 1991 and was retransmitted by a satellite carrier under the
Section 119 statutory license as of July 1, 1998.
13. In addition to applying the existing cable exclusivity rules to
nationally distributed superstations, Section 339(b)(1)(B) requires the
[[Page 68085]]
Commission to apply sports blackout protection to the retransmission of
the signals of network stations by satellite carriers to subscribers
``to the extent technically feasible and not economically
prohibitive.'' By its terms, Section 339(b)(1)(B) applies only to
``network stations,'' which are television broadcast stations owned or
operated by, or affiliated with, the television networks. Affiliates of
these networks are the only entities that meet the definition of a
television network station contained in the Copyright Act and are the
only stations covered by Section 339(b)(1)(B). In the cable context,
the Commission's sports blackout rule applies to any television
broadcast station and is not limited to network stations. Consistent
with the provisions of the statute, we confine the application of the
satellite sports blackout rule to retransmission of network stations.
The SHVIA statutory license for satellite carriers applies only to
retransmission of distant network stations. Thus it is consistent for
the sports blackout provisions to be similarly limited pursuant to
Section 339(b)(1)(B).
14. In the NPRM we observed that the title of new Section 339,
``Carriage of Distant Television Stations by Satellite Carriers,''
indicates that this section is intended to apply to satellite
retransmission of distant network stations, notwithstanding that the
text of Section 339(b)(1) does not specifically so state. The cable
exclusivity rules were originally created and apply today to address
cable importation of distant stations. We conclude, and most commenters
agree, that it was Congress' intent to apply the sports blackout rules
to retransmission of distant network stations and not to local network
stations. We note, too, that the statutory copyright license for
satellite carriage of distant network stations relies upon the
definition of ``network station'' in the copyright provisions.
15. We also sought comment in the NPRM on whether stations based in
foreign countries are affected by the SHVIA provisions requiring
application of the cable exclusivity and sports blackout rules to
satellite retransmissions. Certain commenters addressing this issue
argue that while the blackout protection afforded by the rules should
apply to a foreign station's programming carried by a U.S. satellite
carrier, a foreign station cannot invoke these protections against
satellite importation of programming into its home market. Grupo
Televisa, on the other hand, argues that the rules should apply in
favor of non-U.S. licensed border stations serving U.S. markets and
affiliated with U.S. networks, citing the inclusion of such stations in
the compulsory license of Section 1002 of the SHVIA. We agree with MPAA
and NHL that foreign stations are beyond our jurisdiction and therefore
unable to invoke the protection of the exclusivity and sports blackout
rules. With respect to retransmission of a foreign station's
programming into U.S. markets by a U.S. licensed satellite carrier, we
conclude that the satellite rules will apply as they do with respect to
the exclusivity rules governing cable systems. The definition of
``television broadcast station'' in 47 CFR 76.5(b) includes stations
licensed by a foreign government but provides that such foreign station
not entitled to assert program exclusivity. Also, in the DISCO II Order
the Commission explained that it will license the earth stations that
use a non-U.S. licensed satellite to provide service to subscribers in
the United States, rather than re-license foreign satellite operators.
The earth station operators providing service in the United States
through these non-U.S. licensed satellites are ``satellite carriers''
as defined in the SHVIA because they are licensed under either part 25
or part 100 of the Commission's rules.
Section 339(B)(1)(A): Application of Network Non-Duplication,
Syndicated Exclusivity, and Sports Blackout to Retransmission of
Nationally Distributed Superstations
16. Section 339(b)(1)(A) requires the Commission to apply network
non-duplication protection, syndicated exclusivity protection, and
sports blackout protection to the retransmission of signals of
nationally distributed superstations by satellite carriers. In this
section, we address the application of the network non-duplication and
syndicated exclusivity rules to nationally distributed superstations
together because these two rules are similar in significant respects.
17. The Commission's cable television network non-duplication rule
allows a television broadcast station that has purchased exclusive
rights to network programming within a specified area to protect its
exclusivity against carriage of duplicating programming on local cable
systems. The ``specified'' or ``protected'' zone is the smaller of
either the area protected by the terms of the contract or the 35 or 55
mile area designated by the rules. In the satellite rules, this area is
generally termed the ``zone of protection'' or protected zone. (47 CFR
76.92). The rule allows a local television broadcast station to demand
that a local cable system's duplicate carriage of the same program from
an otherwise distant station be blacked out. ``Network program'' is
something of a misnomer in terms of common usage as it appears to
suggest a program provided by a recognized network. In fact, it is
defined as ``any program delivered simultaneously to more than one
broadcast station regional or national, commercial or noncommercial''
(47 CFR 76.5(m)). It is not necessary that the program be delivered by
a ``television network.'' (In addition to full power television
stations, 100 watt translator stations are allowed to demand network
non-duplication protection under certain circumstances. Translator
stations are not entitled to syndicated exclusivity protection (47 CFR
76.92(d)). Due to differential carriage rights, we are not replicating
this provision in the satellite non-duplication rules.) A station may
assert its exclusivity rights regardless of whether its signal is
carried by the cable system in question. Under the cable network non-
duplication rule, a television station is entitled to assert its
exclusivity rights against a cable system serving any ``cable community
unit'' within the station's ``specified zone'' that is carrying
duplicative programming for which the local station has obtained
exclusive distribution rights. (Cable systems are comprised of one or
more ``community units'' that correspond to separate and discrete
communities or municipal entities. The rule applies on a community unit
basis by requiring the cable system for a particular community unit to
black out a specific program based on the priorities established in the
rule. The ``specified zone'' of a television broadcast station is the
35 mile area surrounding its community of license. The 35 mile
specified zone, as well as all other mileage zones used in applying the
exclusivity rules, is measured from the relevant station's ``reference
point'' in its community of license. The rules provide a list of the
reference points to identify television market boundaries used for this
purpose. See 47 CFR 76.5(e), (dd); 76.53; and 76.92(a).) A television
station's rights within these areas are limited by the terms of the
contractual agreement between the station and the holder of the rights
to the program (``rights holder''). In addition, for local programming
to be protected, the local programming must be the same as the distant
programming that is being imported into a local station's market. Even
the use of different camera crews and announcers during the production
of an imported program may result in the distant program not being
[[Page 68086]]
considered the same, per Major League Baseball, 6 FCC Rcd. 5573 (1991).
18. The Commission's syndicated program exclusivity rule allows
local stations to protect their exclusive distribution rights for
syndicated programming on local cable systems in a local market. (A
syndicated program is defined as ``any program sold, licensed,
distributed or offered to television station licensees in more than one
market within the United States other than as network programming. * *
*'') This rule is similar in operation to the network non-duplication
rule, but it applies to exclusive contracts for syndicated programming,
rather than for network programming. In this rule, too, a local
television station is entitled to assert its exclusivity rights within
a specified zone of 35 miles surrounding the television station's city
of license. Unlike the network non-duplication rule, however, the
maximum zone of protection allowed under the rules is 35 miles
surrounding a television station's city of license in a non-hyphenated
television market and 35 miles surrounding each named city in any size
hyphenated market; the zone of protection is not greater in smaller
markets.
19. As with network non-duplication, the syndicated exclusivity
rule applies on a community unit basis by requiring the cable system
for a particular community unit to black out a specific program based
on the priorities established in the rule. In addition, the geographic
limits for exclusivity under the Commission's rules are limited by the
terms of the contractual agreement between the station and the holder
of the rights to the program. As with network non-duplication, the
protected zone is the smaller of either the area of exclusivity
provided in the contract or the 35 mile area surrounding the relevant
reference point(s). Thus, if the rights holder grants the television
station a zone of protection of ten miles, then that station would be
precluded from exercising its exclusivity rights against any cable
system located more than ten miles from that station's city of license.
In addition, as with the network non-duplication rules, for syndicated
programming to be protected, the programming covered by the contract
must be the same as the distant programming. We note that under both of
these cable rules, it is not necessary that the broadcast station or
rights holder asserting protection actually be carried on the cable
system in question, nor is it required that the rights holder asserting
its rights actually display the programming for which it asserts
protection. These cable rules protect contractual rights and apply even
if the programming is not shown at all or if the subscribers subject to
the deletion do not have another source to receive the programming.
Separate Satellite Rules
20. Initially, we sought comment on whether we should incorporate
the rules we adopt to implement Sec. 339(b)(1)(A) into the existing
Commission rules, or whether we should adopt separate rules for
satellite carriers. Commenters generally recommend that the Commission
adopt separate rules for satellite carriers patterned after the cable
exclusivity rules. We concur that, even though Congress specifically
cited the existing rule sections in the statute, it will be less
confusing and simpler to implement a separate set of rules in the
satellite context. We agree with DirecTV that new rules will be easier
to understand and comply with if they are contained in a parallel, but
distinct, section, which will allow the differences between the rules
applicable to the satellite and cable industries to be highlighted.
This will enable the Commission to maintain consistency in its rules,
while adopting the minor adjustments that are necessary to properly
apply the rules to satellite carriers (e.g., application only to
nationally distributed superstations). In this regard, we do not agree
with WB that the direct references to the corresponding cable rules
indicate that Congress intended the rules to be identical. The
statutory language directs us to develop rules that apply the
exclusivity protections in the satellite context, not merely to add the
words ``satellite carriers'' in the existing cable rules. While we are
establishing a separate rule section for the exclusivity rules that
apply to satellite carriers, these rules will not be substantially
different from the equivalent cable rules.
21. Some satellite industry commenters argue that we must take into
account the distinctive characteristics of satellite services and the
associated issues of technical feasibility and the cost of compliance.
EchoStar contends that the rules for satellite carriers should be
significantly different from the cable rules due to the characteristics
of satellite services and the onerous burdens of compliance. Echostar
raises a variety of technical and administrative issues, such as the
need to develop a database to determine affected subscribers and the
addition of ``untold layers of complexity to its authorization/
unscrambling procedures'' to delete different programs in different
areas of the country if we merely apply the cable exclusivity rules to
satellite without change. EchoStar asserts that unless appropriately
mitigated, the rules could lead to the cessation of satellite carriage
of superstations, which would contravene the legislative goal of parity
between cable and satellite operators. EchoStar also argues that if
Congress intended for the Commission to automatically employ the cable
rules in the satellite context it would not have directed the
Commission to conduct a rulemaking. Alternatively, in support of a
separate rule section, DirecTV asserts that, given the technological
differences between cable and satellites, in certain situations it does
not make sense, or is simply not technologically feasible, to merely
``lift'' the cable rules.
22. We reject the arguments that the satellite exclusivity rules
should be substantially different from the cable rules due to technical
considerations and the burdens of compliance. Congress directed the
Commission to make the rules ``as similar as possible'' to the cable
rules and to protect the contractual exclusivity rights purchased by
broadcasters and sold by program rights holders. The statute
specifically cites the existing network non-duplication and syndicated
exclusivity rules as guidance. In particular, the statute does not
provide for any exemption from these rules based on technical
feasibility or economic hardship as it does for the application of the
sports blackout rules to network stations. We believe, however, that in
considering the application of these rules to satellite carriers we
must consider several modifications that reflect the practical
differences between the two industries and the different delivery
systems they employ, as detailed herein.
23. Some broadcasters argue that for there to be parity between
cable and satellite providers, the Commission should extend the
protections of network non-duplication to all distant network carriage
to protect emerging networks and notes that the existing cable rules
are not statutorily mandated. Because Congress provided for the
application of the sports blackout rule to network stations, but not
for the network non-duplication or syndicated exclusivity rules, we
believe that extending the rules in this manner is beyond what Congress
intended. We reject this proposal on the same basis that we reject the
satellite industry's request to adopt significantly different rules for
satellite carriers due to technical considerations.
[[Page 68087]]
Zone of Protection
24. Under the network non-duplication rules, a commercial or
noncommercial television station licensed to a major television market
may assert exclusivity rights within its specified zone. That zone is
generally the 35-mile area surrounding a broadcast television station's
community of license. The zone of protection for stations licensed to
smaller television markets extends an additional 20 miles (``secondary
zone''), for a total of 55 miles surrounding its community of license.
Pursuant to the syndicated exclusivity rules, a local commercial
television station is entitled to assert its exclusivity rights only
within a 35-mile geographic zone. There is no extended zone of
protection for smaller market stations. For both rules, a station
licensed to a hyphenated television market, as defined in the rules, is
entitled to assert exclusivity within 35 miles surrounding each named
city. However, the zone of protection may not exceed the area agreed
upon between the program supplier or network and the television station
nor the area within which the station has acquired broadcast
territorial exclusivity rights. For purposes of all of the rules
discussed in this Order, we refer generally to a ``zone of protection''
or ``protected zone'' to apply to the entire area protected by the
rules' provisions.
25. A majority of commenters support the adoption of the same zones
of protection for broadcast stations in this context because they
provide a definitive area within which exclusivity rights may be
asserted. We agree. We also concur that, as with the cable rules, the
zone of protection should be limited by the terms of the contractual
agreement between the station and the program rights holder, with the
applicable geographic zone set forth in the rules providing an outside
limit on the permitted zone of protection. Several commenters mention,
but reject, the use of other zones of protection, such as a station's
grade B contour or a zone of protection coextensive with the boundaries
of ``local market'' for retransmission consent purposes. As Tribune
observes, since Congress did not mention a zone different from that of
the cable rules, it appears appropriate to use the existing specified
zone. We also believe that this conclusion is consistent with the
congressional directive to make these rules as similar as possible to
the cable rules. We further believe that implementation in the
satellite context is feasible because existing methods (e.g., the
geocoding techniques used to determine served and unserved households)
can be used to determine whether a household is located in a specified
zone. Accordingly, local broadcast television stations will be entitled
to assert exclusivity protection throughout the same zones of
protection as those specified in the cable rules.
26. We reject EchoStar's proposal that a satellite carrier should
not be required to comply with requests for exclusivity (either network
or syndicated) unless the program deletion is requested by qualified
broadcast stations whose geographic zones (not counting overlaps) cover
a substantial majority of the nation. The ``geographic zone'' is
limited to the 35/55 mile area around the reference point in the
community of license. EchoStar argues that this requirement is needed
in order to deal with the mosaic of diverse deletion requests for the
same feed. EchoStar's proposal ignores the exclusivity rights of
individual broadcasters and undermines regulatory objectives, contrary
to congressional intent and, in our view, defeats the purpose of the
statutory mandate to protect the exclusivity rights of local broadcast
stations. Moreover, while EchoStar claims that it would have to develop
a huge database to determine whether a subscriber is within the
specified zone, we observe that satellite carriers already maintain
such databases of subscribers for determining eligibility for local-
into-local and network signals, for information on the particular
services to which a household subscribes, and for billing purposes. In
addition, even though satellite carriers use a nationwide or multi-
state footprint to deliver programming, they provide signals on a
household-by-household basis that enables them to deliver different
programming to different households based upon which programming
package the subscriber selects. Satellite carriers currently delete
programming when it is required by contracts negotiated in the
marketplace. Furthermore, as a practical matter, the programming
deletions affect only five of the six nationally distributed
superstations because WGN is ``largely, if not completely syndex and
nondupe-proof.'' With respect to network program deletions, we expect
significant uniformity across markets where affiliates of WB or UPN
assert their rights since each superstation is affiliated with one of
these networks. With respect to syndicated programming, the
superstations are large market stations, which typically acquire the
most popular syndicated programming that is sold in the vast majority
of markets, making EchoStar's fear of a crazy quilt pattern of
deletions largely unfounded. Moreover, the statute unambiguously
requires that we apply the exclusivity rules in these situations.
Adopting EchoStar's proposal to limit application of the rules to the
non-existent circumstance in which the broadcaster's geographic zone
would cover most of the nation effectively eliminates the application
of the exclusivity rules. The statutory language does not give us this
choice. We also reject EchoStar's proposal to establish a procedure to
exempt satellite carriers on a case-by-case basis upon a showing of
extraordinary hardship. We believe that such a policy is contrary to
the intent of the statute to protect the rights of local broadcast
licensees. We also note that, in adopting exclusivity rules in 1988, we
eliminated a similar waiver process.
Use of Zip Codes To Determine the Location of Affected Households
27. The cable rules apply the exclusivity rules on a community unit
basis within a station's zone of protection. Community units are
political jurisdictions (i.e., a city, town, or county) or portions of
political jurisdictions for which a local government body has granted a
franchise to operate a cable system. These separate areas may or may
not encompass an entire city or county. Several commenters support the
application of these rules on a community unit basis in order that they
be as similar as possible to the cable rules and to eliminate the
possible confusion to customers in the same neighborhood that would be
caused by a program being blacked out if a household subscribed to
cable, but not if it subscribed to a satellite service. In order to
promote parity between cable operators and satellite carriers, they
argue that it is important that the blackout areas for satellite
carriers be as congruent as possible with the blackout areas for
competing cable systems. They further state that requiring satellite
carriers to black out programming on the same community unit basis as
is applied to cable is the most easily applied, understood, and
enforced approach for providers and residents. Other commenters claim
that it is impossible or inappropriate to import the community unit
concept from cable to satellite as cable systems have specific,
municipally-granted franchises to serve discrete communities, the
boundaries of which are difficult to determine and unnecessarily
complex to apply. They propose that subscribers
[[Page 68088]]
subject to the blackout rules be ascertained by means of their zip
code, a method currently used by satellite carriers for other purposes.
These commenters argue that since satellite providers do not have
identifiers assigned to the communities they serve, as is the case for
cable, a comparable method for determining the areas to which the zone
of protection applies involves reliance on zip codes. This method, like
the use of cable community units, is not a perfect means to achieve
congruence between the zip code boundary and that of the specified
zone, but it is a workable compromise using a fairly stable identifier.
Moreover, in their reply comments, several proponents of the use of
community units state that they would be willing to support a zip code
approach as a reasonable alternative as long the rules would apply
throughout the entire zip code.
28. We conclude that it is appropriate to use zip codes rather than
community units in the satellite context. There are approximately
38,000 five-digit zip codes in the United States, compared with nearly
33,000 community units. There is no readily applicable measure that
will precisely match specified zones in either the cable or satellite
context. However, zip codes are already used by satellite providers to
determine the location of subscribers for other purposes and it would
be more difficult to determine which satellite subscribers are located
within a cable community unit, which is tied to the cable franchise
process. As with the cable community unit concept, reliance on zip
codes can often be overinclusive of the zone covered by the exclusivity
rights to be protected. To closely align the rules for satellite
carriers with the cable rules, we have been urged to require a
satellite provider to provide protection in all relevant zip codes that
fall, in whole or in part, within the zone of protection. We conclude,
as described below, that if technology permits satellite carriers to
more closely align their deletions to the precise areas of the
protected zone, they may do so.
29. Satellite interests generally propose that the broadcaster or
rights holder asserting its exclusivity rights provide the satellite
carrier with an electronic file of the affected zip codes that
corresponds to the specified zone. Alternatively, broadcasters contend
that the satellite carriers already have zip code information that they
use for other purposes and they should be responsible for determining
which subscribers are located in the areas where the programming must
be blacked out. Since exclusivity contracts vary in their coverage
areas and it is the broadcast station or rights holder that has
negotiated such contracts, we conclude that the party seeking
exclusivity protection will be responsible for identifying the affected
zip code areas along with the other information that must be provided
to the satellite carrier. This approach is consistent with our existing
cable rules that place the notification burdens on the party seeking to
assert its exclusivity rights. We do not believe that this requirement
places an undue burden on a broadcaster seeking exclusivity. In many
cases, the contracts will provide for exclusivity up to the limits of
the specified zone and the broadcaster will only have to determine the
appropriate zip codes once to cover such contracts. Accordingly, we
will require broadcast stations or rights holders to provide satellite
carriers with the list of affected zip codes, although we will not
mandate that it be in any specific format (e.g., we will not require an
electronic file). We encourage satellite carriers and broadcasters to
work together to effectuate the provisions of the statute, even though
we place the onus of determining the affected zip codes on the party
seeking exclusivity protection. We see no reason to make special or
separate provisions for satellite carriers to verify that the list of
zip codes is accurate. If it comes to light that the list is
inaccurate, the satellite carrier may object to the broadcaster or
rights holder.
30. We believe that for purposes of complying with these and other
provisions of the SHVIA, satellite operators must generally be aware of
the actual physical location of a subscriber. Several commenters
express concerns regarding the accurate location of a subscriber whose
address is a post office box (e.g., a U.S. Post Office Box or a private
post office box) or rural route number, stating that a non-street
address makes it impossible to apply any rule that relies on a
geographic location. Since accurate addresses are the linchpin of a
system that relies on geographic location, they propose that satellite
carriers be required to certify that they have no basis for believing
that subscribers have provided inaccurate addresses for purposes of
evading the rules. In opposition, DirecTV argues that there is no
parallel provision in the cable rules to serve as a basis for imposing
this additional obligation on satellite carriers. In addition,
proposals to impose a number of restrictions on satellite carriers to
``reduce if not obviate both the domestic and external grey marketing''
of satellite programming are rejected as they are beyond the scope of
this proceeding.
31. On the basis of the record, there is general agreement that
rural route numbers reasonably approximate the actual location of the
subscriber and are acceptable because they are generally located close
to the residential address where the subscriber receives the satellite
programming. Accordingly, we will allow satellite carriers to use the
zip codes associated with rural route numbers to determine the location
of such subscribers. However, where a subscriber chooses to provide a
post office box for a billing address, we will require that satellite
carriers obtain a residential street address--or simply a zip code--
where the service is actually being received. Upon request, satellite
carriers may verify the data provided by broadcasters and vice versa.
We decline to adopt the reporting and auditing procedures proposed in
the comments, as they would place an undue burden on broadcasters,
satellite carriers and the Commission.
32. In addition, MPAA proposes that in instances in which the
satellite carriers serve individual households that are within a zip
code but outside the specified zone, such subscribers should be
permitted to petition for a waiver so that their programming is not
blacked out. It contends that, since the satellite rules apply on a
household basis, this waiver process would serve the purposes of the
statute (i.e., parity with cable and protection of rights holders)
without unduly depriving satellite subscribers beyond the specified
zone of programming. We acknowledge the cable rules require cable
operators to provide exclusivity protection throughout community units,
even if some of their subscribers in that unit are located outside the
specified zone. This requirement is based on our understanding that it
is not technically feasible for cable operators to black out
programming to individual households. On the grounds of maintaining
regulatory parity, NCTA advocates requiring satellite carriers to
delete programming throughout zip code areas that in whole or part
overlap the broadcaster's zone of protection. Notwithstanding our
general interest in regulatory parity, we are reluctant to require
satellite carriers to delete programming beyond the boundaries of the
broadcaster's or rights holder's zone of protection if they have the
technical capacity to accommodate such fine-tuning. Due to the
unavoidable difference in coverage between the zip code areas and the
community units, there are likely to be some differences between cable
and satellite subscribers
[[Page 68089]]
in terms of programming required to be deleted. Therefore, there is no
reason to require deletions outside the protected zone on the grounds
of parity. The satellite rules provide that satellite carriers must
delete protected programming from subscribers within the zone of
protection, but need not delete programming from subscribers who live
in the part of a zip code area that extends beyond the zone of
protection.
Terms of Contractual Agreements
33. Pursuant to Sec. 76.93, television stations are entitled to
exercise network non-duplication protection in accordance with their
network agreements. The syndicated exclusivity rules allow television
stations to exercise exclusivity rights in accordance with their
syndicated program license agreement, consistent with the requirements
to invoke protection specified in Sec. 76.159. Under Sec. 76.159, to be
eligible for syndicated exclusivity protection, a station must have a
contract or other written indicia that it holds syndication rights for
the programming. Section 76.159 requires that contracts contain special
language for the licensee to invoke such protection.
34. We find that the current situation is analogous to that of 1988
when the Commission reinstated syndicated exclusivity rights, and the
rule we adopt treats these new rights in the same manner as we did
syndicated exclusivity contracts at that time. That is, we will give
effect to new or existing contracts that unambiguously grant such
rights against satellite carriage and permit existing contracts to be
clarified or amended if they are ambiguous or did not anticipate a
change in the law.
35. The cable rules do not prescribe specific language needed to
invoke network non-duplication protection. Such exclusivity is provided
in the contractual provisions of network-affiliate agreements that give
individual stations the right to be the exclusive distributor of a
network's programming in an area, generally within 35 miles of its city
of license. Where a network-affiliation agreement does not provide for
network non-duplication protection against satellite carriage of
superstations because this right was unanticipated or the contract is
ambiguous regarding such rights, parties will be given an opportunity
to amend their agreements to include clear, specific language, as
described below.
36. Some commenters contend that if the special language required
by the cable syndicated exclusivity rules appears in a contract, it is
applicable to satellite carriers. They contend that this language
invokes the two essential elements for protection--retransmission
pursuant to the compulsory license and reference to the Commission's
rules. They state that any station with exclusivity rights vis-a-vis
cable should be considered to hold the same rights with respect to
satellite carriers and that parties should not be required to
renegotiate existing exclusivity contracts. We disagree. We cannot
assume that the parties to these existing contracts negotiated for
protection against satellite carriage when duplicating carriage by
satellite was not covered by the Commission's exclusivity rules. We
agree with other commenters who counter that the rules should only give
effect to contracts that unambiguously grant exclusive rights vis-aa-
vis satellite carriers. They assert that existing contracts should not
be enforceable against satellite carriers unless it is clear that the
licensee or rights holder has negotiated for and received such rights.
Until the SHVIA was enacted on November 29, 1999, there was no
certainty of satellite exclusivity requirements. Arguably, parties
could not have a reasonable expectation of exclusivity protection until
the rules adopted by this Order take effect. Accordingly, we conclude
that only those exclusive contracts that specifically cover satellite-
delivered programming or are broad enough to encompass the delivery of
duplicating programming by any delivery means (e.g., cable, satellite,
wireless cable) entitle a station to assert exclusivity rights under
these rules. Without such specificity, it is not clear whether the
party granting the exhibition rights for the programming intended to
convey network non-duplication or syndicated exclusivity rights to the
broadcaster in the satellite context.
37. In reinstituting the syndicated exclusivity rules in 1988, the
Commission allowed an opportunity for parties to amend their contracts
to reflect the newly granted rights. Because government protection of
both network non-duplication and syndicated exclusivity rights vis a
vis satellite retransmission did not exist before November 29, 1999,
consistent with this precedent we will provide a transition period of
six months to allow parties to amend or clarify their network
affiliation or syndicated exclusivity agreements to cover the
exclusivity rights provided in Sec. 339(b)(1)(A) and the rules we adopt
today. We will require also that contracts entered into after release
of this Order must include special words to invoke protection against
duplication of programming imported under the satellite statutory
copyright license. The special words in the satellite context are
similar to those required to assert enforceable cable syndicated
exclusivity. Parties may use this statement to reference either or both
the cable and satellite network non-duplication and syndicated
exclusivity rules, depending upon whether their negotiated exclusivity
covers protection against cable, satellite or both. Existing affiliate
agreements and other contracts that apply to network program non-
duplication only in the cable context need not be revised to be
effective to provide non-duplication protection pursuant to Sec. 76.92.
These special words shall apply to both the network non-duplication and
syndicated exclusivity rules to ensure that, in either instance, the
contracting parties contemplated protection from satellite carriage.
Where existing contracts expressly provide for exclusivity against
satellite carriage, albeit without using these special words, there is
no need for renegotiation, nor for a six month period for parties to
renegotiate. In these situations of remarkable prescience in the
contract terms, the normal notification requirements will apply.
38. We will not require, as Echostar proposes, that the contracts
be non-discriminatory or be exercised in a non-discriminatory fashion.
We believe that such requirements are inconsistent with the rights of
parties to negotiate the extent of exclusivity that they determine to
be in their best interests and were not contemplated by the statute.
Such requirements would also be inconsistent with the cable exclusivity
rules.
Notification Requirements
39. In order to exercise network non-duplication rights, a
television station must notify each cable system operator of the
protection sought. The syndicated exclusivity rules contain similar
notification procedures with respect to broadcasters or distributors
notifying cable systems of the exclusivity sought. In both cases, the
notices must identify the party seeking non-duplication protection and
the affected programming. Notices must be provided within 60 calendar
days of the signing of the contract. Exclusivity protection begins on
the date specified in the notice or the first day of the calendar week
that begins 60 days after the cable operator receives notice from the
broadcaster. In addition, cable operators may rely on published
information sources (e.g., newspapers) to determine which programs must
be deleted or obtain the information from the station seeking
protection or the station whose
[[Page 68090]]
programming is to be deleted. Furthermore, the rules require that the
party exercising its exclusivity rights must provide a copy of the
relevant portions of its contract to the cable system, upon request.
40. A number of commenters observe that the current notification
procedures have proven workable for the parties in the cable context
and generally support the same notification requirements and time
periods for satellite carriers. For example, DirecTV states that
stations should be required to notify satellite carriers of any
exclusivity rights in the same manner required under the cable rules.
We agree and will model the satellite notification rules on the cable
requirements. We apply the same 60-day notice requirement following the
signing of a contract providing exclusivity and impose the same
contract disclosure requirements for satellite carriers. As in the
cable context, the satellite carrier will have sufficient lead time to
act on the exclusivity request. Accordingly, exclusivity protection
will beginning on the later of: (a) the date specified in the notice;
or (b) the first day of the calendar week (Sunday-Saturday) that begins
60 days following the satellite carrier's receipt of the notice from
the broadcaster or other rights holder. Using the same notification
periods reduces the administrative burden on rights holders and
stations and allows them to send a single set of notices to cable
systems and satellite carriers, rather than forcing them to send one
notice to cable systems at one time and a virtually identical notice to
satellite carriers at another time. In this manner, we also minimize
the possibility that protection would be lost inadvertently because of
differing requirements. It is also consistent with the general goal of
making the cable and satellite rules parallel as much as possible.
41. We will require that the notice asserting exclusivity rights
contain the same identifying information about the programming to be
deleted and the extent of the exclusivity (e.g., the dates on which
exclusivity is to begin and end). As indicated above, the notice must
identify the zip codes included in the zone of protection (i.e., the
specified zone or other permitted area covered by the exclusivity
contract). Satellite carriers may request a copy of the relevant
contractual provisions, as cable operators may do, but it is not
required in the notice. We adopt the suggestion that the notice should
be served on satellite carriers with the carrier having the obligation
to disseminate the information to their distributors (distributors
include parties with exclusive territories for the sale and service of
satellite systems, including those distributors that are authorized by
the satellite carrier to authorize or de-authorize programming for
subscribers), if necessary, since they are in the best position to know
which distributors serve which areas. Several commenters suggest that
satellite carriers be required to designate (e.g., on their Web sites)
the name, title, and address to whom the notices should be sent, with
this information updated as necessary to avoid delay and
miscommunications. While we recognize that such information might be
useful, it should not be necessary to ensure the compliance with
exclusivity requests. We have not required cable systems or operators
to provide this information and see no reason to do so in the satellite
context. Satellite carriers must promptly direct their mail to the
appropriate staff. Notice received by the corporation is considered
receipt of the notice for purposes of triggering the deletion
requirements, so it will be in the best interests of satellite carriers
to assure that broadcasters and rights holders have the necessary
current information to reach the right person. We urge stations and
rights holders to follow DirecTV's suggestion that exclusivity notices
be addressed to the ``Director of Programming Operations'' or marked
``Attention: Program Exclusivity Request'' to assist satellite carriers
in ensuring that the information is directed to the proper department.
42. The cable rules provide that to determine the scheduling of
programs that must be deleted, cable operators may rely on newspapers
and other published sources, the broadcaster seeking exclusivity
protection, or the broadcast station subject to the requested deletion.
Similarly, the provision we adopt allows satellite carriers to rely on
such published sources, the broadcaster seeking protection, or the
nationally distributed superstation. We received no comments on this
provision and believe the cable model will work as well for satellite
carriers.
43. Under the cable syndicated exclusivity rules, ``distributors''
of syndicated programming, who own the rights to the programming for
purposes of syndication, are entitled to exercise exclusive rights for
a period of one year from the initial broadcast syndication licensing
of such programming, although not in areas in which the programming has
already been licensed. This cable provision is intended to give holders
of syndication rights a one year period in which to negotiate their
agreements in each market. It originated with private consensus
agreements among rights holders, broadcasters and cable operators in
1971. If the programming in question were shown in the market before
the syndicator had an opportunity to negotiate for exclusivity, it
would diminish the value of the program. In the NPRM, we requested
comment on whether to apply this provision in the satellite context,
and whether the rights holder should notify the satellite carrier
directly. MPAA contends that allowing rights holders to notify carriers
directly, as holders of syndication rights can do with cable systems,
gives holders a means to protect the value of their programs as well as
providing parity in the operation of the rules in the cable and
satellite contexts. DirecTV, however, argues that it is unnecessary to
import this rule to the satellite context since the rules will apply to
a discrete universe of superstations. We believe that it is appropriate
to allow distributors to notify satellite carriers directly. We agree
they are often the rights holders with the greatest need and incentive
to protect their rights. In the satellite context, syndicated
exclusivity protection is limited to the six nationally distributed
superstations. Allowing the distributor that has the exclusive
syndication rights a one year period to negotiate exclusive
arrangements for each market has worked well in the cable context and
should be applied here in the absence of a specific reason to treat
satellite carriers differently in this regard.
44. We also acknowledge that, as with the cable rules, a broadcast
station, syndicator, or other rights holder is entitled to assert
exclusivity protection based upon contractual rights, as discussed
above. It is not necessary that either the entity requesting protection
or the program to be protected actually be carried by the satellite
carrier. Thus we recognize that in some cases subscribers will not be
able to receive the deleted programming from any television broadcast
station carried by the satellite carrier. The Commission's network non-
duplication and syndicated exclusivity rules protect contractual
rights. The rights may apply even in situations in which the rights
holder chooses not to display the protected programming or in which the
cable system is not carrying the broadcast station asserting
protection. We specifically recognize that in markets in which the
satellite carrier chooses not to provide local-into-local carriage, a
local station may assert network non-duplication or syndicated
exclusivity protection for programming that subscribers in that market
cannot
[[Page 68091]]
receive via satellite because the station demanding protection is not
carried on satellite. Viewers may be able to receive this programming,
however, through use of over-the-air antennas or on cable.
Substitute Programming
45. The cable syndicated exclusivity rules expressly allow a cable
operator to substitute programming from another television station when
programming is required to be deleted, provided carriage is consistent
with all the exclusivity rules, such as sports blackout. No comparable
provision is included in the network non-duplication rules, but cable
operators are free to substitute any programming--broadcast or cable--
to which they have the legal rights. Commenters addressing this issue
generally support a provision to allow satellite carriers to offer
substitute programming for the programming covered by exclusivity
agreements. We agree that it is reasonable to permit substitute
programming so that viewers need not be faced with a blank screen or a
slide stating that contractual limitations require programming to be
deleted.
46. Carriage of programming by satellite carriers is governed by a
number of laws and regulations, including the Copyright Act, the
Communications Act, and Commission rules, which differ from those
applicable to cable programming. In reinstating the syndicated
exclusivity rules in 1988, the Commission encouraged the substitution
of programming in response to consumer demands that a distant program
be available in place of the original programming that is deleted. At
that time, we also noted that such substitution of programming was
consistent with the compulsory license provisions of the Copyright Act
and the syndicated exclusivity rules repealed in 1981. Unlike the cable
compulsory license, however, the satellite statutory license does not
include provisions for the substitution of programming. In considering
permissible substitute programming under these rules, we observe that
there are statutory provisions that impose a number of limits on the
retransmission of signals by satellite carriers. Under these
provisions, distant network station signals are limited to two per
network per day and restricted to unserved households, local signals
may be provided only in their own markets, and the satellite carrier
must have retransmission consent for carriage of any local broadcast
signal. To the extent that carriage of a program is permissible under
these laws and regulations, and the satellite carrier has the authority
to offer the programming, we believe that satellite carriers should be
permitted to use substitute programming. In addition, commenters ask
that we not limit substitute programming to broadcast programming. We
see no reason to place such a limit on what is permissible and will
allow non-broadcast programming to be used as a substitute, as long as
its carriage is consistent with the applicable statutory and regulatory
provisions, and it is clear to viewers that the substitute programming
is not provided by the same broadcast station as the programming for
which it is substituted.
47. We further note that the cable rules do not expressly provide
for the substitution of programming when a program is deleted pursuant
to network non-duplication protection. The absence of an express
provision does not necessarily prevent the cable operator from
substituting programming to which it has the rights. However, we
recognize that if a cable operator were required to delete network
programming from a station, and the network programming subject to
deletion constitutes a high percentage of the station's programming,
the cable operator would likely drop the entire station from carriage.
When the Commission originally adopted the network non-duplication
rules, there were only three commercial broadcast networks, and network
programming constituted the majority of the programming distributed to
viewers by each network affiliate. The superstations affected by these
new rules are affiliated with emerging networks (i.e., WB, UPN). These
networks distribute significantly fewer hours of programming to their
affiliates each day and week than the older commercial networks. Thus,
we believe that when, for satellite carriers, the non-duplication rules
are applied only to nationally distributed superstations, it is likely
that a smaller percentage of the programming will be subject to
deletion. It is hoped that satellite carriers will continue to provide
the nationally distributed superstations to their subscribers, and,
thus, the question of substitution programming is relevant. To prevent
the possibility of a blank screen and undesirable disruptions for
consumers, we will specifically provide for substitution for non-
duplication deletions with any programming that the satellite carrier
is authorized to carry. Accordingly, we will adopt rules permitting the
use of authorized substitute programming for any programs deleted to
comply with network non-duplication or syndicated exclusivity
protection, or sports blackout. We note that the copyright laws do not
provide a statutory copyright license for substitute programming for
satellite carriers as they do for cable operators. Therefore, unless
the statutory provisions are changed, satellite carriers may only
substitute programming for which they have copyright and retransmission
consent, or otherwise have legal rights to carry.
Transition Period
48. When the Commission reinstated the syndicated exclusivity
rules, it recognized that cable systems would need several months to
implement the new regulatory requirements. Satellite industry
commenters in this proceeding requested a similar transition period to
implement these new rules. Echostar suggests that broadcasters and
other rights holders should submit their deletion requests during the
transition period, but satellite carriers' compliance would be tolled
for one year. We agree that satellite carriers today, like cable
operators in 1988, need time to phase-in compliance with these new
exclusivity rules. We reject, however, proposals for a transition
period one year in duration. The transition period for cable operators
was necessary, in part, to allow time to develop and implement new
equipment needed to perform the deletions required by the rule. In this
proceeding, apart from the concerns raised by the C-Band carriers and
discussed below, the satellite carriers have not asserted that they
need time to develop new equipment. In addition, we do not believe that
EchoStar's one-year proposal would serve its stated purpose of enabling
satellite carriers to review deletion notices and plan a year in
advance before the implementing the deletions. We believe rights
holders would not bother to submit deletion requests knowing that they
will not be acted upon for a year.
49. We will allow satellite carriers a reasonable period of time
after the new satellite network non-duplication and syndicated
exclusivity rules take effect to adjust to the new requirements, to
review the contract language, to ensure that they have adequate
equipment and personnel to implement the deletions, and to arrange for
programming that can be used to substitute for deleted programming.
Normally, as set forth above, exclusivity protection begins, at the
earliest, within 60 days of notification. However, as described above,
broadcasters will have up to six months from the effective date of this
Order to renegotiate contracts, and they
[[Page 68092]]
must notify satellite carriers of deletion requests within 60 days of
signing the renegotiated contract. When no renegotiation is necessary
because the existing contract clearly pertains to satellite as well as
cable carriage, broadcasters must notify satellite carriers of their
exclusivity protection and deletion requests within 60 days of the
effective date of this Order. In these instances, satellite carriers
will have 120 days in which to implement deletion requests (e.g., this
Order is effective on November 29, 2000, therefore a broadcaster could
provide deletion notice on January 8, 2001, and the deletion would take
effect on or after May 10, 2001). To provide time for satellite
carriers to adjust to the new requirements, for notices provided before
June 1, 2001, satellite carriers will have 120 days before they are
required to implement the necessary deletions. For notices provided to
satellite carriers after June 1, 2001, the normal time requirements
will apply.
50. Echostar also proposes, as an alternative or complement to the
transition period, a ``grandfathering'' provision that would exempt
from application of the network non-duplication and syndicated
exclusivity rules all of EchoStar's 700,000 current superstation
subscribers. We reject this proposal because there is nothing in the
statute to support it, and it is contrary to the letter and the intent
of the SHVIA provision requiring the Commission to apply the
exclusivity rules to satellite carriers. This proposal is also
inconsistent with the goal of placing comparable requirements on cable
operators and satellite carriers. Cable subscribers' viewing options
are currently subject to the cable exclusivity rules, which allow for
the same deletions that affect satellite subscribers. In fact, cable
subscribers are generally subject to a greater impact from deletions
because the cable rules apply to deletions of programming carried on
network stations and other broadcast stations, not only that
programming carried on the specially defined six superstations.
Adopting EchoStar's proposal would perpetuate the disparity between
cable and satellite that Congress clearly sought to eliminate.
Moreover, when the Commission implemented the network non-duplication
rules and reinstituted the syndicated exclusivity rules with respect to
cable operators, it did not provide for grandfathering of existing
cable customers. As the Commission explained in those proceedings, the
potential impact of the rules is ultimately determined by the
negotiations among the parties for exclusivity rights and the decision
whether or not to assert them in a given market. Protecting parties'
rights to engage in contract negotiations with the knowledge that
exclusive agreements would not be abrogated by importation of distant
signals was fundamental to the Commission's purpose in creating the
exclusivity rules in the cable context, and is relevant today to
application of these rules to satellite carriers.
Small System Exception and C-Band Carriers
51. Sections 76.95(a) and 76.156(b) (amended rule Sec. 76.106(b))
provide that small cable systems serving fewer than 1,000 subscribers
are exempt from the network non-duplication and syndicated exclusivity
requirements, respectively. The Commission originally adopted these
exceptions in the mid-1970s to balance the costs of compliance for
small cable systems against the impact on broadcast stations. The
Commission was concerned that the costs of equipment and manpower
needed to comply with the cable exclusivity rules would have a
substantial impact on such systems when viewed in relation to their
gross revenues. In addition, the Commission concluded that the
cumulative number of homes served by small systems nationwide
constituted a very small percentage of the total number of television
households and there would be no significant adverse economic impact on
broadcasters. When the Commission reinstituted the syndicated
exclusivity rules and modified the network non-duplication rules in
1988, it again exempted cable systems with fewer than 1,000 subscribers
out of the same concern.
52. Some commenters representing the satellite industry seek
similar exceptions that take into account the technical feasibility and
cost of compliance for satellite carriers. While offering no specific
proposal, EchoStar argues that the only way to ensure equivalent
protections for satellite operators is to go back to the rationale for
the exception. However, since the original rationale for the small
system exception was based on the relative cost of compliance compared
to such systems' gross revenues, and none of the commenters has
provided cost data to justify such an exception, we are unable to
conclude that a comparable situation exists in the satellite context.
Satellite carriers are among the largest providers of television
programming and are not comparable to the ``Mom and Pop'' cable
operators for which the small system exception was designed. Each of
the satellite carriers serves millions of subscribers nationally, is
well-capitalized and capable of purchasing necessary equipment, is
managed through centralized control centers, and already blacks out
programming consistent with existing contracts and the programming
packages selected by individual subscribers. We conclude that, with no
specific evidence to the contrary, the costs of compliance with these
rules, on a per subscriber basis and relative to total revenues, will
be small given the large subscriber base of each DBS satellite carrier.
53. In contrast to DBS carriers, however, we note that C-Band
satellite carriers, while still serving 1.3 million subscribers
nationwide, are experiencing a steady decline in subscribers from a
high in 1995 of nearly 2.4 million. C-Band commenters contend that
Congress intended to exempt them from application of the exclusivity
rules. However, they offer only an isolated and ambiguous colloquy
between two Senators in support of this assertion. C-Band commenters
describe their subscribers as primarily rural and note that many live
in areas that are not served by cable systems or are beyond the reach
of over-the-air broadcasters. They contend that their centralized
system of program delivery and authorization would make deletion and
substitution of programming economically prohibitive. As these
commenters note, in 1991 the Commission considered applying the
syndicated exclusivity rules to C-Band retransmission of television
broadcast programming. At that time, Congress had directed the
Commission to apply the cable syndicated exclusivity rules to C-Band
carriers if the Commission found it would be feasible for the C-Band
carriers to comply. The Commission sought comment and concluded that
the equipment needed for satellite carriers to implement exclusivity
protection was not available and could not be developed and implemented
before the expiration in 1994 of the interim compulsory copyright
license under which C-Band carriers retransmitted broadcast
programming. C-Band commenters contend that nothing has changed in
their capability of deleting duplicating programming. They argue that
network non-duplication requirements may apply to at least 93 markets,
30 weekly programs, with different times for each program. They ask
that we either exempt them from application of the cable exclusivity
rules or defer application until after 2004.
[[Page 68093]]
54. The circumstances today differ significantly from 1991 in that
the provision in the SHVIA does not allow for consideration of
feasibility. Congress could have provided an exemption for C-Band
carriers from application of the exclusivity rules, but did not.
Congress did provide a more generous copyright license to C-Band
carriers, than to DBS carriers, to retransmit distant network stations
to virtually all C-Band subscribers. As noted, the network non-
duplication and syndicated exclusivity rules do not apply to satellite
retransmission of network stations. Currently, C-Band carriers provide
only four of the six nationally distributed superstations (C-Band
carries KTLA, WPIX, KWGN, and WGN. WOR-TV (New York) and WSBK-TV
(Boston) are no longer available.) One of these, WGN, provides a
satellite feed from which all duplicating programming has been deleted.
Thus, the burden on C-Band carriers under the new network non-
duplication and syndicated exclusivity rules is to delete programming
from only three nationally distributed superstations. The information
provided by the satellite commenters in this record describes serious
technical and economic difficulties in accomplishing deletions and
substituting replacement programming. C-Band carriers contend that
Geolocs cannot accomplish the numerous simultaneous deletions that the
network non-duplication and syndicated exclusivity rules may require.
However, it appears that these comments contemplate more widespread
deletions and substitutions than the statute calls for and more than we
impose here on either C-Band or DBS carriers.
55. Notwithstanding that we may not provide a blanket exemption for
C-Band carriers, we have considered their proposal that we defer
application of the rules until after 2004 or pending a further
rulemaking proceeding. We determine to do neither. We note that the
Commission deferred application of the syndicated exclusivity rules in
1991 due to the expectation of full copyright liability in 1994. Now we
are urged again, for the same reasons, to defer because the statutory
copyright license is set to expire in 2004. We are not willing to defer
application until 2004, and then find that the copyright license is
again extended and we are faced again with the same issues and
arguments. We believe that C-Band carriers will be able to implement
these new regulations, in the limited circumstances in which they will
apply to C-Band subscribers, using existing technology modified as
necessary. We also believe that this proceeding has given all sides on
this issue ample opportunity to present evidence and see no need for a
further rulemaking. We do note, however, that we can apply to C-Band
carriers an exception comparable to the cable exceptions for small
systems. C-Band has persuasively argued that the demands of network
non-duplication, syndicated exclusivity, and sports blackout,
cumulatively, may exceed the capacity of their existing system. In this
case, the C-Band carriers would have to develop a new system or
substantially modify their existing system. We believe that this can be
a costly burden, and that it is appropriate to provide an exception
that recognizes the relatively small size of the C-Band carriers, as
compared with the DBS carriers. Therefore, insofar as any C-Band
carrier has fewer than 1,000 subscribers within the zone of protection,
as expressed by zip code areas within the zone, it is not required to
delete programming subject to network non-duplication or syndicated
exclusivity protection. (See Secs. 76.122(l), 76.123(m), and
76.127(e).) The language of these exceptions is not limited to C-Band
carriers and may apply, as well, to any satellite carrier with a
similarly small subscriber base, such as a new carrier in the future.
We will consider, if presented to us, additional information on how
best to tailor a small system exemption that would be meaningful for C-
Band carriers without being significantly broader than the exemption
for small cable systems. Finally, if Congress amends the SHVIA to
expressly exempt C-Band carriers from application of any or all of the
exclusivity rules (including sports blackout, discussed below), we can
conduct a rulemaking proceeding to exempt C-Band from our rules
accordingly.
Exceptions Preventing One Local Station From Blacking Out Another
56. The cable rules contain a number of exceptions that prevent one
local station from asserting exclusivity protection against another
station that has been deemed ``local.'' Often these situations arise
because the rules contain several definitions of ``local'' station.
These exceptions--for significantly viewed stations, stations whose
Grade B includes the community unit to be blacked out, and overlapping
specified zones--were adopted to ensure that cable subscribers receive
the same programming that would be available to over-the-air viewers in
their communities. Consideration of these exceptions in the context of
satellite carriage is made more complicated because superstations could
have dual identities. In the NPRM, we sought comment on the treatment
of superstations within their own markets. We noted that for must carry
purposes, superstations are treated as local signals in their local
markets (DMAs) and distant signals elsewhere. In its own market, a
nationally-distributed superstation acts as any other local station and
is treated as a local station within its local market. In the context
of satellite retransmission of nationally distributed superstations,
however, there is an important difference between a station carried as
a superstation or carried as a local station. As described above,
satellite carriers are not required to obtain retransmission consent to
carry the superstations, but are required to obtain retransmission
consent to carry a local station within its local market. The SHVIA, as
it amended the retransmission consent provisions in the Communications
Act, permits satellite carriers to retransmit the six stations that
meet the definition of nationally distributed superstation without
their consent provided they are transmitted outside their local
markets. We believe that the presence or absence of a requirement for
retransmission consent for nationally distributed superstations is key
to Congress' determination to apply the cable exclusivity and sports
blackout rules in this satellite context. Therefore, within their local
markets, the nationally distributed superstations are not subject to
deletions because they are carried as local stations. However, when a
satellite carrier is retransmitting the station as a nationally
distributed superstation, without its retransmission consent, it must
be treated as a superstation, and the exclusivity and sports blackout
rules will apply. Even in those instances in which the superstation's
terrestrial over-the-air signal is significantly viewed, or the
protected zone is within its Grade B contour, if the satellite
retransmission is outside the station's local market, we will look to
the manner of carriage to determine whether the station is treated as a
superstation subject to deletions and blackouts, or as a local station
that cannot be blacked out by another, overlapping local station. To
the extent the exceptions for overlapping areas in the cable
exclusivity rules are relevant in the satellite context, we will adopt
them, as described below.
57. With respect to the ``significantly viewed signal exception,''
a broadcast television station can be declared ``significantly viewed''
outside what is usually considered its local market on the basis of its
over-the-air viewing in a
[[Page 68094]]
community. Significantly viewed status confers local treatment on a
station under a number of rules and is intended to ensure that cable
subscribers have the same local broadcast service that is available to
noncable subscribers in their communities. Section 76.92(f) provides
that a community unit is not required to delete the duplicating network
programming of a significantly viewed signal. Similarly, under Section
76.156 (amended rule Sec. 76.106), syndicated programming covered by an
exclusivity agreement need not be deleted from a significantly viewed
signal. A few comments note that a superstation could be significantly
viewed in areas surrounding its city of license based on over-the-air
viewing. DirecTV argues that this exception could only apply in a few
cases in which the superstation is functioning as a local station and
since local stations are not covered by this section of SHVIA, the
significantly viewed exception should not be present in the satellite
context. We believe that pursuant to the SHVIA, the local-into-local
copyright license can only apply within the station's DMA. Thus, once
carried outside the DMA, the station cannot be considered a ``local''
station. Therefore, we believe the significantly viewed and Grade B
contour exceptions will rarely, if ever, be applicable in the satellite
context.
Overlapping Specified Zones
58. In a related matter, under the network non-duplication rules,
if a cable community is located in one or more overlapping specified
zones, neither station can blackout the other station's duplicating
programming because both stations have equal priorities. The NPRM
stated that we did not believe that a similar situation could occur in
the satellite context and sought comment on this issue. The one
commenter addressing this issue contends this exception will not be
triggered in the satellite context since superstations do not have
specified zones outside their local markets and SHVIA only applies
network non-duplication to nationally distributed superstations. As
mentioned above, a nationally distributed superstation is a ``local
station'' when carried by a satellite carrier within its local market.
When carried as a local station, the network non-duplication and
syndicated exclusivity rules do not apply to delete its programming. To
the extent the overlapping zones situation could occur, it will be
covered by the exception for significantly viewed or Grade B contour
discussed above.
NCE Must-Carry Exception
59. Under Section 76.92(g) of the rules, a cable community unit is
not required to delete the duplicating network programming of any
qualified noncommercial educational (``NCE'') broadcast television
station that is carried pursuant to the must carry rules. Congress
mandated that this provision be added to the cable network non-
duplication rules as part of the must carry requirements. Congress
recognized that in some situations an NCE station could be considered
``local'' under the must-carry rules, which are based on a 50-mile zone
around the station's community of license, and ``distant'' for purposes
of the network non-duplication rules, which are based on a 35-mile
specified zone. No commenters addressed this issue and we believe that
this exception is not relevant in this context. The SHVIA provision
applies only to a local station asserting exclusivity rights against
one of six nationally distributed superstations, none of which is an
NCE licensee.
Section 339(B)(1)(A) and (B): Application of Sports Blackout to
Retransmission of Nationally Distributed Superstations and Network
Stations
60. In addition to requiring application of the network non-
duplication and syndicated exclusivity rules, section 339(b)(1)(A) also
requires that we apply the sports blackout rule to retransmission of
nationally distributed superstations, and section 339(b)(1)(B) requires
that we apply the sports blackout rule to satellite retransmission of
network stations. Unlike the other cable rules we are required to apply
to satellite carriers, only the sports blackout rule applies to
retransmission of both nationally distributed superstations and network
stations. In the case of retransmission of network stations, we are
instructed to apply the cable sports blackout rule only ``to the extent
technically feasible and not economically prohibitive.
61. The Commission's sports broadcasts rule (``sports blackout
rule'') is designed to allow the holder of the exclusive distribution
rights to local programming, in this case sporting events, to control,
through contractual agreements, the display of that event on local
cable systems. The purpose of the sports blackout rule is to ensure the
continued general availability of sports programming to the public. The
Commission adopted this rule based on a concern that sports teams would
refuse to sell the rights to their local games to television stations
serving distant markets due to their fear of losing gate receipts if
the local cable system imported the local sporting event carried on a
distant station. The cable sports blackout rule is triggered when a
subject sporting event will not be aired live by any local television
station carried on a community unit cable system. Under the cable
sports blackout rule, the holder of the rights to the event (e.g., a
sports team or league, rather than a broadcaster) has the power to
demand that the local cable system blackout the distant importation of
the subject sporting event. The zone of protection afforded by the
sports blackout rule is generally 35 miles surrounding the reference
point of the broadcast station's community of license in which the live
sporting event is taking place. The 35 mile zone of protection is
measured from a television station's reference point based upon the
list of reference points in 47 CFR 76.53. The same reference point
applies to all stations licensed to the same community regardless of
where their transmitter or studios are located. When sports facilities
are located in suburban areas, the downtown reference points may be
inappropriate for purposes of calculating the protected zone (e.g., the
New England Patriots play mid way between Boston and Providence).
Therefore, the Commission has expressed its willingness to consider
waivers ``to substitute a zone of protection extending out 35 miles
from the site of a sports event for the television station specified
zone designated by the rule.'' As with the Commission's exclusivity
rules, the sports blackout rule specifies notification procedures
regarding the sports programming to be deleted. However, the time frame
allowed for notification is significantly shorter in the case of the
sports blackout rule than for network non-duplication and syndicated
exclusivity. Notification for sports blackout can be given as little as
24 hours in advance. Notifications for regularly scheduled events
subject to the sports blackout rule must be received no later than the
Monday preceding the calendar week during which the deletion is to be
made. Notifications for events not regularly scheduled, or when the
schedule is revised, must be received within 24 hours after the time of
the deleted telecast is known, but in no event less than 24 hours
before the event will take place. The sports blackout rule does not
apply to any community unit with fewer than 1,000 subscribers. This
exemption is based on the cost of the equipment needed to delete
programming.
[[Page 68095]]
Technical and Economic Effects of Sports Blackout on Satellite Carriers
62. With respect to retransmission of nationally distributed
superstations, the SHVIA requires us to apply the sports blackout rule
from the cable context to satellite carriers. With respect to
retransmission of network stations, however, the SHVIA provides that
the sports blackout rules should be applied only to the extent
technically feasible and not economically prohibitive. The language
limits the application of the sports blackout rules in this narrow
circumstance but only if the technical and economic difficulties are
serious and harmful to the satellite carriers. In the NPRM we asked for
specific information on the technical and economic problems that would
be encountered by satellite carriers. We requested per subscriber cost
data and asked whether the existing conditional access mechanisms would
work for this purpose. We did not receive specific data or descriptions
of how the requirement to black out sporting events on network stations
would be unfeasible or economically prohibitive to the degree of posing
a serious economic threat to the health of satellite carriers.
63. DirecTV argues that the Commission should invoke the technical/
economic hardship exception of section 339(b)(1)(B) and not apply any
sports blackout requirements on satellite retransmission of network
stations but does not explain why the methods it uses to perform the
blackouts required by its contracts with sports leagues cannot be used
to black out network stations. DirecTV does explain that the actual
blackouts are ``manually triggered'' by a person who can watch and
monitor only four events at a time. DirecTV states that additional
personnel would be needed to monitor and trigger the additional events
that will be covered by the sports blackout rule. It asserts there will
be ``vast numbers of subscribers'' and ``thousands of blackout
requests'' creating a ``monumental, expensive, and time-consuming
task.'' There are no specific costs provided. The Echostar comments
offer even less specific information. Echostar provides no information
about particular burdens that would be imposed by the requirement to
black out sport events from network stations.
64. As the Network Affiliates point out, no commenting party
explains why it would be infeasible to develop the technology to black
out sports programming, if such technology is not already in use, nor
does any commenter offer cost figures to demonstrate that the
technology would be cost prohibitive. We agree with those commenters
that observe that the statutory language and expressions of legislative
intent place a high burden to justify not imposing the sports blackout
requirements for satellite retransmission of network stations. Such
burden cannot be satisfied by the vague assertions and undocumented
conclusions offered in this record. In contrast, the record provides
unrefuted information that the technology to implement the network
station sports blackout exists. Indeed, the satellite carriers
currently black out sports programming pursuant to geographic
restrictions in their contracts with regional sports networks and
sports leagues. Consequently, we find that the heavy burden is not met
to justify not applying the sports blackout obligations to satellite
carriers with respect to network stations.
Notification
65. In one aspect of the sports blackout rules, however, the timing
of notification, we find that the record supports some modification
from the notification periods in the cable sports blackout rules.
DirecTV and Echostar urge that we lengthen the notification periods
with respect to sports blackouts. In this respect, DirecTV describes a
blackout system that is notably more complex than that of a cable
operator. The cable operator controls the programming at a headend,
which facilitates blacking out a particular area of limited geographic
size. The satellite carrier, in contrast, is controlling programming on
a national basis:
First the programmer must notify DirecTV and provide information
about the program to be blacked out, as well as the areas (by zip
code) affected. The information provided by the programmer must then
be reformatted for DirecTV compatibility. Traffic department
employees must then build the blackout by entering the data into the
system and notify the scheduling department. The blackout is then
scheduled and the data regarding the blackout is processed. The
blackout is checked again for accuracy before it hits the air.
Finally the actual blackout itself must be manually triggered, both
in and out, by an employee who determines when the actual event
begins and ends by watching an actual signal of the event.
DirecTV also notes the difficulty of re-programming the time period
that has been blacked out, especially with very short advance notice.
66. While the process generally described by DirecTV does not
appear to present such a serious technical or economic burden as to
excuse compliance with the sports blackout rules altogether, it does
suggest that the challenge of implementing multiple, simultaneous
blackouts and identifying and arranging substitute programming is
greater for satellite carriers than for cable operators. DirecTV
correctly notes that the time frame allowed for notification for sports
blackouts is significantly shorter than it is for either network non-
duplication or syndicated exclusivity, and recognizes that rights
holders may not always have the ability to provide more than 24 hours
notice. The cable sports blackout rules require notice for regularly
scheduled events to be received on the Monday preceding the calendar
week during which the deletion is to be made, and, for events not
regularly scheduled or revisions to previously submitted notices,
within 24 hours after the time of the telecast is known and no later
than 24 hours before the telecast is to occur. This timing was
instituted in 1975 to address sports interests' concerns that playoffs
and weather cancellations often afford little advance notice of
scheduling changes. DirecTV explains that while it may be capable of
deleting a sporting event on short notice, it cannot accomplish the
reprogramming necessary in such a short period of time. DirecTV
proposes a notification period of 60 days prior to the start of a
season for sports with a specific season, 60 days prior to the event
for nonseasonal but regularly scheduled events, 30 days for events not
regularly scheduled, and 10 working days for revisions to previously
submitted notices.
67. Commenters respond to DirecTV's proposal that, while they
sometimes can provide notice as soon as a season's games are scheduled,
the televising schedule may not be set until a later date. We agree
that a 60 day advance notice may allow time for the games to be
scheduled but not for the telecasts to be arranged. Often the
televising schedule is not finally decided until a week before the
beginning of the season. We find that the satellite carriers, although
not providing sufficient data to warrant an exemption from the sports
blackout requirements, have offered reasonable arguments in support of
revising the notification periods in the satellite sports blackout
rules to the extent possible without depriving the teams and leagues of
their contractual rights by establishing time frames that afford no
practical protection.
68. In light of the differences in the structure and operation of
the satellite and cable industries, we are persuaded that some
adjustment in the application of the sports blackout rules is justified
and consistent with Congressional recognition of these differences. We
find, however, that the lack of specific information in the record
limits our ability to finely tailor the requirements
[[Page 68096]]
while providing the protection the statute requires. Moreover, we take
note that satellite carriers currently comply with contractually
mandated blackouts, which require that they delete sporting events and
provide subscribers with replacement programming. We believe it is
appropriate to adjust the notification requirements for satellite
carriers to ensure that the holders of rights to sporting events will
provide the required notice as promptly as possible. The sports
blackout rules for satellite carriers will, therefore, retain the same
advance notice requirements for regularly scheduled events, including
those events that have a specific season (notice must be received the
Monday before the calendar week in which the deletion is to be made)
but will also require that rights holders notify satellite carriers
within forty-eight hours of the time the telecast is scheduled. We will
not make the same requirement for events not regularly scheduled due to
the last minute nature of such events. For these unscheduled events, as
well as for last minute revisions to previously scheduled events, we
must take into account the realities for the sports interests of last
minute revisions, particularly due to weather. Therefore, we retain the
24 hour advance notice minimum to revise previously scheduled
deletions. We hope that where satellite carriers have had adequate time
to line up substitute programming, they will be able to shift the
substitute programming into the revised time slot even with only 24
hours notice. Because this adjustment to the notification requirements
reflects legitimate differences between satellite carriers and cable
operators, we see no reason to limit this distinction to retransmission
of network stations. For purposes of uniformity and clarity, the same
notification requirements will apply to all sports blackout
requirements imposed on satellite carriers, whether with respect to
network stations or nationally distributed superstations.
Use of Zip Codes To Determine the Location of Households Subject to
Sports Blackout
69. As with the network non-duplication and syndicated exclusivity
rules, most commenters agree that the sports blackout rule can best be
applied to satellite carriers by reference to zip codes rather than
community units. For the same reasons discussed in connection with
network non-duplication and syndicated exclusivity, we agree that the
zip codes that comprise the specified zones are appropriate for this
purpose. As in the cable sports blackout rule, the holder of the
broadcast rights, or its agent, shall be responsible for including the
appropriate information identifying areas subject to deletion with its
blackout notification to the satellite carrier. The notification must
include a list of the appropriate zip codes.
Exception for Small Community Units, as Applied to Satellite Carriers
70. DirecTV advocates excepting satellite carriers from the sports
blackout requirement if the blackout would affect fewer than 5% of the
television households in the relevant DMA, on a provider-by-provider
basis. DirecTV asserts that this would have a de minimis impact on
rights holders. The holders of rights to sporting events strongly
disagree. The Commissioner of Baseball states that satellite
subscribers generally constitute less than 5% of households in most
DMAs and contends such an exception would eliminate sports blackouts in
most cases. We agree that there should be exceptions to the blackout
requirements imposed on satellite carriers that are analogous to the
exceptions for cable systems. We do not agree that 5% of television
households in a DMA (which would include cable subscribers as well as
satellite subscribers) is analogous to the small community unit
exception for cable systems.
71. The cable sports blackout rule does not apply ``to any
community unit having fewer than 1,000 subscribers.'' Much has been
made by some commenters of the difference between the language of this
small system exception and the small system exceptions for non-
duplication and syndicated exclusivity, which specifically exempt cable
systems with fewer than 1,000 subscribers. However, there appears to be
no basis in past Commission Orders for emphasizing this difference in
the rule language. The Commission's rationale for exempting either
small systems or small community units is the cost of the equipment for
the cable system, and the relatively de minimis effect on the protected
rights holder of exempting such a small system. Because there is no
specific cost information in the record in this proceeding, it is
difficult for us to draw a direct connection from the Commission's
concerns for small cable systems due to the cost of their blackout
equipment to the satellite carriers who, by all reports, already
possess the necessary equipment to perform the sports blackouts
required by statute.
72. We believe that the same type of exception we apply to the
satellite network non-duplication and syndicated exclusivity rules is
warranted here. Our primary concern here is for the affected
subscribers, as well as the expense imposed upon satellite carriers
relative to the number of subscribers who will be blacked out. The
Commission has found in previous considerations of the cable sports
blackout rule that the effect of excepting up to 1,000 subscribers from
a blackout requirement will have a de minimis effect on the gate
receipts. Insofar as we are using zip codes in lieu of community units,
we believe an exception based upon the number of satellite subscribers,
per carrier, in the zip codes affected by a sports blackout request is
analogous to the exception in the cable sports blackout rule for
community units with fewer than 1,000 subscribers. In this satellite
context we find again that an exception for fewer than 1,000
subscribers per carrier, per zip code area comprising a protected zone,
will not be so detrimental to the sports interests as to warrant the
expense to satellite carriers and the loss of sports programming for
viewers. We will reexamine this issue if, in the future, we receive
information that the loss of 1,000 satellite subscribers is more costly
to the sports interests than the comparable loss of 1,000 cable
subscribers where the small system exception applies in the cable
sports blackout rule.
Other Provisions of Sports Blackout Rule for Satellite Carriers
73. Apart from the changes in the use of zip codes and in the
notification requirements described above, we do not change the other
provisions of the cable sports blackout rules in their application to
satellite carriers. Based upon the general consensus in the comments,
the same 35 mile zone of protection that applies to cable systems will
apply to satellite carriers, and the same willingness to consider
waivers for suburban stadiums applies to the satellite sports blackout
rules as well as to the cable sports blackout rules. The rights holder
will have the obligation of providing a list of the relevant zip codes
to the satellite carrier with its deletion notice. If satellite
carriers want to evaluate each subscriber's address and black out only
those households within the 35 mile zone, the rules will not prevent
them from doing so. For the same reasons cited in the network non-
duplication and syndicated exclusivity rules, we will not require an
electronic list of zip codes, nor will we require that satellite
carriers designate a particular name or address for receipt of the
notification. We do not have such a requirement for cable systems,
which
[[Page 68097]]
are far more numerous and varied, and we see no reason to require it
from satellite carriers. As in the cable sports blackout rule,
satellite carriers may substitute other programming during the time
scheduled for a sporting event that must be blacked out. Satellite
carriers may only use substitute programming for which they have
copyrights, and, when required, retransmission consent. They may
substitute a different distant network station provided they do not
retransmit more than two network stations affiliated with the same
network in a single day. Of course the substitute programming must also
comply with the network non-duplication and syndicated exclusivity
rules.
74. In addition, to afford satellite carriers an opportunity to
adjust their schedules to these new regulatory requirements, we will
require that sports rights holders provide 60 days advance notice for
any sports blackout to occur on or before March 31, 2001. As of April
1, 2001, the regular notice requirements, including 24 hour notice for
changes in previously scheduled blackouts, will apply. Because
satellite carriers are currently complying with contractually required
sports blackouts, we do not believe it is necessary to provide the same
length of time to phase-in the implementation of the sports blackout
rules as we find warranted for the network non-duplication and
syndicated exclusivity. We believe that this 60 day period will be
adequate for satellite carriers to adjust to the additional sports
blackout requests.
Other Issues
Digital Signals
75. In the NPRM, we stated that section 339(b)(1) and the relevant
part of the Joint Explanatory Statement are silent regarding
application of the exclusivity and sports blackout rules to the
retransmission of digital broadcast signals. We noted that in the
pending proceeding considering cable mandatory carriage of digital
signals, we requested comment on how these cable rules would function
for cable carriage of digital signals. In the Notice, we repeated our
question of whether Congress intended to apply these rules to satellite
retransmission of digital broadcast signals. We noted that the SHVIA
may be read to apply to both analog and digital broadcast signals. An
alternative interpretation we posited was that Congress was only
concerned about the carriage of analog signals given that elsewhere in
the statute Congress expressly mentioned digital signals and,
presumably, could have done so in this context as well. We sought
comment on whether and how the exclusivity rules could apply to
satellite carriage of digital broadcast signals, and whether there is a
meaningful distinction between analog and digital carriage issues for
satellite carriers in this context.
76. The responses we received concerning this matter are aligned by
industry. Echostar argues that there is no legislative authority for
the extension of the exclusivity rules to digital signals. NAB argues
that the SHVIA requires exclusivity and sports blackout protection to
apply to both analog and digital signals. Other broadcast groups, such
as Tribune, argue that Congress did not indicate an intent that digital
signals should be excluded from the new exclusivity rules and therefore
that there should be no distinction between analog and digital signals
under the new rules. MPAA asserts that syndicated exclusivity should
apply to both digital and analog signals, pointing out that Congress
made exceptions for digital signals in certain instances but did not do
so for syndicated exclusivity.
77. Because digital exclusivity issues are closely related to
digital carriage issues, we believe that it would be premature to
resolve the matters related to this issue at this time. Exclusivity
requirements cannot be fully fashioned until both cable operators and
satellite carriers know what their carriage responsibilities will be
for digital broadcast television. The digital exclusivity issues should
be decided either when the Commission issues a Report and Order in the
Digital Must Carry proceeding or in another proceeding that discusses a
satellite carrier's digital broadcast signal carriage responsibilities.
78. We do address one aspect of this issue here. We are
disinclined, in the early stage of the DTV transition, to allow a
broadcaster to use an exclusive contract that applies only to digital
programming to prevent a cable system or satellite carrier from
providing that programming in analog form to its subscribers. However,
to the extent contractual rights protect a broadcaster's exclusivity
for both the analog and digital versions of the same program, we see no
reason to limit the effectiveness of the contract to protect only
analog exclusivity. Therefore, contractual language that expressly
applies to analog and digital format of the same program content will
be effective to require deletion of both. That is, the rule will
provide that neither satellite carriers nor cable operators will be
permitted to carry the digital version of a program when the analog
version is required to be deleted and the contract expressly provides
exclusivity for both, any, or all formats.
NFL Proposal to Expand Exclusivity Rules To Apply to Unitary Program
Packages
79. The NPRM sought comment on an additional issue concerning the
distribution of sports programming that is related to, but not directly
covered by, the SHVIA. The National Football League sells packages of
programming to networks on a national basis, but different games are
broadcast locally on a regional basis, often in two-game packages. To
the extent that broadcasts of games are carried into local markets on
distant broadcast signals via satellite, the network non-duplication
and other rules involved in this proceeding appear to offer neither the
stations nor the leagues involved any protection beyond the rights to
the particular games that local stations are authorized to broadcast.
We sought comment on the question of how the patterns of sports
carriage involved are addressed by the new law, and whether they can
and should be addressed in the regulations the Commission is required
to adopt pursuant to it.
80. The NFL asks the Commission to ``complete the work that
Congress began'' by applying the network non-duplication and syndicated
exclusivity rules to network stations as well as to nationally
distributed superstations. The NFL admits that damage to stations'
contractual rights is limited because only unserved and grandfathered
households can receive such stations but argues that the numbers of
viewers involved are significant nonetheless. The NFL further contends
that the Commission should also recognize the unitary nature of the NFL
or any other regional television plan and allow local affiliates to
exercise network non-duplication protections to black out other games
played at the same time but broadcast in other regions of the country
(e.g., Redskins versus Cowboys could blackout Giants versus Packers).
Similarly, the National Hockey League expresses concern that a
satellite carrier that offers local-into-local service could have
access to the four games that the NHL plans to regionalize on ABC this
year and could thereby create a multi-game hockey package to compete
unfairly with the ``Center Ice'' package on ABC. We note that in the
case of local-into-local carriage, retransmission consent is required,
and, presumably, the stations in question could contractually prevent
this from occurring.
[[Page 68098]]
81. The advocates of this expanded application of network non-
duplication have not described why such action would be in the public
interest, although we are persuaded it could be in the Leagues'
interest. The NFL and other sports interests advocating this change ask
us to revise the existing cable rules to require deletion of
programming that does not duplicate protected programming. As noted in
the discussion of the network non-duplication rules, supra, the
Commission has determined in the cable context that the use of
different camera crews and announcers for a sporting event results in
the distant program not being considered the same as the local program.
Here, the NFL asks us to reach a contrary result and decide that a
different event between different teams ``duplicates'' the protected
event. The NFL and others ask us to expand the scope of the new
satellite exclusivity rules beyond what Congress mandated. In light of
the SHVIA's restrictions on households that are eligible to receive
distant network signals, it is not clear to what extent carriage of
distant signals providing different games merits remedial action. The
NFL asserts that allowing satellite carriers (and, presumably, cable
systems as well) to import distant signals carrying different games
would undermine the NFL's regional television plan. The NFL cautions
that it might ``be forced'' to alter its distribution plan in
unspecified ways that would be ``less pro-consumer.'' However, we
believe it would not be pro-consumer to take the action the sports
interests request. There can be no doubt of the negative impact on
viewers of losing access to more and more sports programming. The
sports interests have not provided a compelling need for this
additional protection, and other commenters have argued that it would
deprive viewers unnecessarily. For the reasons given, we decline to
expand the exclusivity rules to apply to regional or so-called unitary
packages. If the program for which protection is sought is not, in
fact, duplicated by the distant programming imported by the cable
system or satellite carrier, then neither the network non-duplication
nor syndicated exclusivity rules apply.
Two Network Affiliates in One DMA
82. In the NPRM we asked for comment on the possibility and
ramifications of a ``two-affiliates-in-one market scenario'' with
respect to the sports blackout rule. We described the possibility that,
in areas in which there are two affiliates of the same network within
the same DMA, a subscriber would be eligible to receive both network
stations based on the satellite carrier's ``local-into-local'' license
because the subscriber resides in the DMA of both stations. Thus, in
this circumstance, the sports blackout requirement of the SHVIA could,
conceivably, apply to retransmission of local, rather than distant,
network stations where the geographic area for purposes of the sports
blackout zone surrounding one of the affiliates is smaller than the
DMA. If one of the affiliates is not carrying the event, the sports
blackout rule might be triggered. If the second affiliate is carrying
the event, then the satellite carrier might be required to black out
the event being transmitted by the second affiliate to subscribers
within the 35 mile zone. We received scant response to this scenario.
We believe these comments confirm that this situation is unlikely ever
to occur because the contractual arrangements allow the rights holder
to prohibit both affiliates from broadcasting the event in question.
Therefore, we see no reason at this time to provide for this situation
in the rules.
Technical Revisions to the Rules: Sec. 76.5(gg)
83. The NPRM identified several of the cable exclusivity rules that
contain out-dated cross-references to other sections. We sought comment
on how these editorial corrections should be made. In particular, we
noted that the cable sports blackout rule (Sec. 76.67, amended rule
Sec. 76.111) contains a cross-reference to Sec. 76.5(gg) to determine
when the sports blackout rule is triggered. Section 76.5(gg) was
eliminated for reasons unrelated to the operation of the sports
blackout rule, and no replacement reference is provided. The NPRM asked
whether we should simply reinstate a standard based on the original
criteria incorporated into former Sec. 76.5(gg) or adopt a new
standard.
84. Former Sec. 76.5(gg) of the Commission's rules referred to the
1972 must carry rules to determine whether a station was considered
``local.'' The cable sports blackout rule is intended to be triggered
only when no ``local'' television station carried by a cable system is
broadcasting the subject sporting event for which protection is sought.
In general, the 1972 must carry rules considered a television station
``local'' if the subject cable community served was located within the
station's specified zone. In contrast, the current must carry rules
consider a television station ``local'' if it is located in the same
DMA as a cable community. The National Hockey League (NHL) maintains
that any replacement for Sec. 76.5(gg) should incorporate the 1972 must
carry rules definition of a ``local'' television station's market area.
We agree. The use of DMA's would unnecessarily undermine the
application of the sports blackout rule because DMAs may encompass
hundreds of miles. In such a DMA, stations carrying the event located
hundreds of miles distant from the relevant protected zone would be
considered ``local.'' If considered ``local,'' the holder of the rights
to the event could not assert the sports blackout rule without blacking
out such distant over-the-air carriage if the station had must carry
rights.
85. For the limited purpose of the application of the sports
blackout rule, the provisions of the former Sec. 76.5(gg) can be
substantially shortened and consolidated. Because the purpose of the
sports blackout rule is simply to ensure that the rights holders to
local events can exercise their contractual exclusivity rights, it is
unnecessary to re-instate the complex definition of ``local'' that was
used for the 1972 must carry regime or the 1987 rate regulations. It is
not our intention to change the operation of the cable sports blackout
rule. This revision merely incorporates within the cable and satellite
sports blackout rules the relevant concept from the former
Sec. 76.5(gg).
Other Technical Corrections
86. The NPRM also included, in Appendix C, two other provisions
that require minor, technical corrections. No comments were received
regarding these provisions. In the absence of any objection, we make
these modifications, as proposed, including an editorial change to the
top 100 market list contained in the rules (correcting the markets
listed at Sec. 76.51(a)(2) and (a)(28)), and a correction to Sec. 76.5
to reflect that the reference to Sec. 76.5(o) in Sec. 76.5(ii) should
be Sec. 76.5(m).
87. In addition, we note that Sec. 73.658(m) contains a reference
to the Arbitron list of smaller markets. As discussed in the
Commission's recent Market Modification Order, Arbitron is no longer
tracking television viewership. The Nielsen Research Company produces a
similar list of markets, which is current. We will, therefore, revise
this section of the rules to accomplish this updated cross-reference.
88. We are also taking this opportunity to delete several
provisions from the cable exclusivity rules (Secs. 76.94, 76.105
(formerly Sec. 76.155), 76.97 and 76.163) that have no further
[[Page 68099]]
applicability. We find that notice and comment are unnecessary under
section 553(b) of the Administrative Procedure Act because the rules
are outdated and have no further applicability.
Procedural Matters
89. The SHVIA requires that these rules become effective within one
year of enactment. The SHVIA was enacted on November 29, 1999. We find
good cause exists under the Administrative Procedure Act (``APA'') to
have the rules adopted in this Report and Order take effect with fewer
than 30 days advance publication in the Federal Register pursuant to
section 553(d)(3) of the APA due to the statutory deadline. The APA
generally requires publication in the Federal Register of substantive
rules 30 days prior to their effective date but permits substantive
rules to become effective with less than 30 days advance publication
for good cause. The Commission has acted expeditiously to adopt these
complex rules, and they will be adopted and published in the Federal
Register before the statutory deadline. We note that the rules
contemplate a phase-in period to allow parties to implement the new
requirements, and thus parties will have time to consider the effect of
the rules before they commence implementation.
Final Regulatory Flexibility Analysis
90. As required by the Regulatory Flexibility Act (``RFA''), see 5
U.S.C. 603, an Initial Regulatory Flexibility Analysis (``IRFA'') was
incorporated in the NPRM. The Commission sought written public comments
on the possible significant economic impact of the proposed policies
and rules on small entities in the Notice, including comments on the
IRFA. No comments were received on the IRFA. Pursuant to the RFA, see 5
U.S.C. 604, a Final Regulatory Flexibility Analysis is contained in the
Report and Order. This Final Regulatory Flexibility Analysis (``FRFA'')
conforms to the RFA.
91. Need for, and Objectives of, this Report and Order. Section
339(b) of the Communications Act of 1934, as amended (``Act''), 47
U.S.C. 339(b)(1), directed the Commission to ``complete all actions
necessary to prescribe regulations required by this section so that the
regulations shall become effective within 1 year after'' enactment of
the Satellite Home Viewer Improvement Act of 1999. The relevant
provisions concern the application of the cable network non-
duplication, syndicated program exclusivity, and sports blackout rules
to satellite carriers' retransmission of nationally distributed
superstations, and, with respect only to the cable sports blackout
rules, to satellite retransmission of network stations.
92. Summary of Significant Issues Raised by Public Comments in
Response to the IRFA. We did not receive any comments in direct
response to the IRFA. However, we received some comments requesting an
exception to the rules analogous to the cable small system exception.
As discussed in Sections V.H. and VI.D., we create an exception to the
rules that will assist any small entities subject to these rules now or
in the future.
93. Description and Estimate of the Number of Small Entities to
Which the Rules Will Apply. The RFA directs the Commission to provide a
description of and, where feasible, an estimate of the number of small
entities that will be affected by the proposed rules. The RFA defines
the term ``small entity'' as having the same meaning as the terms
``small business,'' ``small organization,'' and ``small government
jurisdiction.'' (5 U.S.C. 601(6)) In addition, the term ``small
business concern'' has the same meaning as the term ``small business
concern'' under Section 3 of the Small Business Act. Under the Small
Business Act, a small business concern is one which: (1) Is
independently owned and operated; (2) is not dominant in its field of
operation; and (3) satisfies any additional criteria established by the
Small Business Administration (``SBA''). The rules we adopt affect
television station licensees and satellite carriers.
94. Television Stations: The rules and policies will apply to
television broadcasting licensees, and potential licensees of
television service. The SBA defines a television broadcasting station
that has no more than $10.5 million in annual receipts as a small
business. Television broadcasting stations consist of establishments
primarily engaged in broadcasting visual programs by television to the
public, except cable and other pay television services. Included in
this industry are commercial, religious, educational, and other
television stations. Also included are establishments primarily engaged
in television broadcasting and which produce taped television program
materials. Separate establishments primarily engaged in producing taped
television program materials are classified under another SIC number.
95. Pursuant to 5 U.S.C. 601(3), the statutory definition of a
small business applies ``unless an agency after consultation with the
Office of Advocacy of the SBA and after opportunity for public comment,
establishes one or more definitions of such term which are appropriate
to the activities of the agency and publishes such definition(s) in the
Federal Register.''
96. An element of the definition of ``small business'' is that the
entity not be dominant in its field of operation. We are unable at this
time to define or quantify the criteria that would establish whether a
specific television station is dominant in its field of operation.
Accordingly, the estimates that follow of small businesses to which
rules may apply do not exclude any television station from the
definition of a small business on this basis and are therefore over-
inclusive to that extent. An additional element of the definition of
``small business'' is that the entity must be independently owned and
operated. As discussed further below, we could not fully apply this
criterion, and our estimates of small businesses to which rules may
apply may be over-inclusive to this extent. The SBA's general size
standards are developed taking into account these two statutory
criteria. This does not preclude us from taking these factors into
account in making our estimates of the numbers of small entities.
97. There were 1,509 television stations operating in the nation in
1992. That number has remained fairly constant as indicated by the
approximately 1,616 operating television broadcasting stations in the
nation as of September 1999. For 1992, the number of television
stations that produced less than $10.0 million in revenue was 1,155
establishments. Thus, the new rules will affect approximately 1,616
television stations; approximately 77%, or 1,230 of those stations are
considered small businesses. These estimates may overstate the number
of small entities since the revenue figures on which they are based do
not include or aggregate revenues from non-television affiliated
companies.
98. Small Multiple Video Program Distributors (``MVPDs''): SBA has
developed a definition of small entities for cable and other pay
television services, which includes all such companies generating $11
million or less in annual receipts. This definition includes cable
system operators, direct broadcast satellite services, multipoint
distribution systems, satellite master antenna systems and subscription
television services. According to the Census Bureau data from 1992,
there were 1,758 total cable and other pay television services and
1,423 had less than $11 million in revenue. We address below services
individually to provide a more precise estimate of small entities.
[[Page 68100]]
99. Direct Broadcast Satellite (``DBS''): There are four licensees
of DBS services under Part 100 of the Commission's Rules. Three of
those licensees are currently operational. Two of the licensees which
are operational have annual revenues which may be in excess of the
threshold for a small business. The Commission, however, does not
collect annual revenue data for DBS and, therefore, is unable to
ascertain the number of small DBS licensees that could be impacted by
these proposed rules. DBS service requires a great investment of
capital for operation, and we acknowledge that there are entrants in
this field that may not yet have generated $11 million in annual
receipts, and therefore may be categorized as a small business, if
independently owned and operated.
100. Home Satellite Delivery (``HSD''): The market for HSD service
is difficult to quantify. Indeed, the service itself bears little
resemblance to other MVPDs. HSD owners have access to more than 265
channels of programming placed on C-band satellites by programmers for
receipt and distribution by MVPDs, of which 115 channels are scrambled
and approximately 150 are unscrambled. HSD owners can watch unscrambled
channels without paying a subscription fee. To receive scrambled
channels, however, an HSD owner must purchase an integrated receiver-
decoder from an equipment dealer and pay a subscription fee to an HSD
programming package. Thus, HSD users include: (1) Viewers who subscribe
to a packaged programming service, which affords them access to most of
the same programming provided to subscribers of other MVPDs; (2)
viewers who receive only non-subscription programming; and (3) viewers
who receive satellite programming services illegally without
subscribing. Because scrambled packages of programming are most
specifically intended for retail consumers, these are the services most
relevant to this discussion.
101. According to the most recently available information, there
are approximately 30 program packagers nationwide offering packages of
scrambled programming to retail consumers. These program packagers
provide subscriptions to approximately 2,314,900 subscribers
nationwide. This is an average of about 77,163 subscribers per program
package. This is substantially smaller than the 400,000 subscribers
used in the commission's definition of a small MSO. Furthermore,
because this is an average, it is possible that some program packagers
may be smaller.
102. Description of Projected Reporting, Recordkeeping and other
Compliance Requirements. This Report and Order establishes a series of
rules implementing the Satellite Home Viewer Improvement Act of 1999.
We have adopted a regulatory framework for substantive rules and
procedures concerning network non-duplication, syndicated program
exclusivity, and sports blackout that is substantially similar to, but
separate from, these rules in the cable context. There are certain
compliance requirements involving the satellite broadcast signal
delivery process. Foremost is satellite carriers will have to delete
certain programming from the retransmission of nationally distributed
superstations to satellite subscribers within the protected zone of the
television broadcast station or other rights holder asserting network
non-duplication, syndicated program exclusivity or sports blackout
rights. With respect to satellite retransmission of network stations,
satellite carriers will be required to delete certain sports events
from retransmission to satellite subscribers located within the rights
holder's zone of protection. There will be costs relating to the time
and effort involved in deleting these superstation signals and
replacing the deleted programming. These costs will largely be borne by
satellite carriers. We do not believe any satellite carrier currently
subject to these rules is classified as a small entity.
103. In terms of recordkeeping, entities will likely have to keep a
record of the deletion and blackout requests and entities may be
required to maintain such information within their business
environment. This information is for business purposes and not required
to be provided to the Commission as a matter of course.
104. Steps Taken to Minimize Significant Impact on Small Entities,
and Significant Alternatives Considered. The RFA requires an agency to
describe any significant alternatives that it has considered in
reaching its proposed approach, which may include the following four
alternatives: (1) the establishment of differing compliance or
reporting requirements or timetables that take into account the
resources available to small entities; (2) the clarification,
consolidation, or simplification of compliance or reporting
requirements under the rule for small entities; (3) the use of
performance, rather than design, standards; and (4) an exemption from
coverage of the rule, or any part thereof, for small entities. (5
U.S.C. 603(c).)
105. As indicated above, the Report and Order implements certain
aspects of the Satellite Home Viewer Improvement Act of 1999. Among
other things, as described in Sections II and IV, the new legislation
requires the Commission to apply the cable network non-duplication
rules, syndicated program exclusivity rules, and sports blackout rules
to satellite carriers within one year of the November 29, 1999
enactment date. This legislation applies to both small and large
entities. Because the Commission was instructed to pattern the
satellite rules after the cable rules, the best alternative available
to assist small entities was to create an exception for satellite
carriers that have 1,000 or fewer subscribers within the zip codes
areas that comprise the geographic zone protected by these rules. To
the extent small entities come within this exception, they are exempt
from these rules.
Ordering Clauses
106. Accordingly, It is ordered that, pursuant authority found in
sections 4(i) 4(j), 303(r), and 339 of the Communications Act of 1934,
as amended, 47 U.S.C. 154(i), 154(j), 303(r), and 339, the terms of
this Report and Order and rules as set forth in the rule changes are
adopted. The amendments shall become effective November 29, 2000,
provided that this Report and Order (or a summary thereof) and the
rules have been published in the Federal Register and OMB emergency
approval of the information collections has been obtained on or before
that date.
107. It is further ordered that the Consumer Information Bureau,
Reference Information Center, Shall send a copy of this Report and
Order, including the Final Regulatory Flexibility Analysis, to the
Chief Counsel for Advocacy of the Small Business Administration.
List of Subjects in 47 CFR Parts 73 and 76
Cable television, Satellite carriers, Television broadcast
stations.
Federal Communications Commission.
William F. Caton,
Deputy Secretary.
Rule Changes
For the reasons discussed in the preamble, the Federal
Communications Commission amends Parts 73 and 76 of Title 47 of the
Code of Federal Regulations as follows:
PART 73--RADIO BROADCAST SERVICES
The authority citation for Part 73 continues to read as follows:
[[Page 68101]]
Authority: 47 U.S.C. 154, 303, 334 and 336.
1. Section 73.658(m)(1) is revised to read as follows:
Sec. 73.658 Affiliation agreements and network program practices;
territorial exclusivity in non-network program arrangements.
* * * * *
(m) Territorial exclusivity in non-network arrangements. (1) No
television station shall enter into any contract, arrangement, or
understanding, expressed or implied; with a non-network program
producer, distributor, or supplier, or other person; which prevents or
hinders another television station located in a community over 56.3
kilometers (35 miles) away, as determined by the reference points
contained in Sec. 76.53 of this chapter, (if reference points for a
community are not listed in Sec. 76.53, the location of the main post
office will be used) from broadcasting any program purchased by the
former station from such non-network program producer, distributor,
supplier, or other person, except that a television station may secure
exclusivity against a television station licensed to another designated
community in a hyphenated market specified in the market listing as
contained in Sec. 76.51 of this chapter for those 100 markets listed,
and for markets not listed in Sec. 76.51 of this chapter, the listing
as contained in the Nielsen Media Research DMA Rankings for the most
recent year at the time that the exclusivity contract, arrangement or
understanding is complete under practices of the industry. As used in
this paragraph, the term ``community'' is defined as the community
specified in the instrument of authorization as the location of the
station.
* * * * *
PART 76--MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE
2. The authority citation for Part 76 is revised to read as
follows:
Authority: 47 U.S.C. 151, 152, 153, 154, 301, 302, 303, 303a,
307, 308, 309, 312, 315, 325, 339, 503, 521, 522, 531, 532, 534,
535, 536, 537, 543, 544, 544a, 545, 548, 549, 552, 554, 556, 558,
560, 561, 571, 572, 573.
3. Section 76.5(ii) is revised to read as follows:
Sec. 76.5 Definitions
* * * * *
(ii) A syndicated program is any program sold, licensed,
distributed or offered to television station licensees in more than one
market within the United States other than as network programming as
defined in Sec. 76.5(m).
4. Section 76.51 is amended by revising the entries for paragraphs
(a)(2) and (a)(28) to read as follows:
Sec. 76.51 Major television markets.
* * * * *
(a) * * *
(2) Los Angeles-San Bernardino-Corona-Riverside-Anaheim, Calif.
* * * * *
(28) Tampa-St. Petersburg-Clearwater, Florida.
* * * * *
Sec. 76.67 [Removed]
5. Remove Sec. 76.67.
6. Revise Part 76, subpart F to read as follows:
Subpart F--Network Non-duplication Protection, Syndicated
Exclusivity and Sports Blackout
Sec.
76.92 Cable network non-duplication; extent of protection.
76.93 Parties entitled to network non-duplication protection.
76.94 Notification.
76.95 Exceptions.
76.101 Cable syndicated program exclusivity: extent of protection.
76.103 Parties entitled to syndicated exclusivity.
76.105 Notification.
76.106 Exceptions.
76.107 Exclusivity contracts.
76.108 Indemnification contracts.
76.109 Requirements for invocation of protection.
76.110 Substitutions.
76.111 Cable sports blackout.
76.120 Network non-duplication, syndicated exclusivity and sports
blackout for satellite carriers: Definitions.
76.122 Satellite network non-duplication.
76.123 Satellite syndicated program exclusivity.
76.124 Requirements for invocation of protection.
76.125 Indemnification contracts.
76.127 Satellite sports blackout.
76.128 Application of sports blackout rules.
76.130 Substitutions.
Sec. 76.92 Cable network non-duplication; extent of protection.
(a) Upon receiving notification pursuant to Sec. 76.94, a cable
community unit located in whole or in part within the geographic zone
for a network program, the network non-duplication rights to which are
held by a commercial television station licensed by the Commission,
shall not carry that program as broadcast by any other television
signal, except as otherwise provided below.
(b) For purposes of this section, the order of nonduplication
priority of television signals carried by a community unit is as
follows:
(1) First, all television broadcast stations within whose specified
zone the community of the community unit is located, in whole or in
part;
(2) Second, all smaller market television broadcast stations within
whose secondary zone the community of the community unit is located, in
whole or in part.
(c) For purposes of this section, all noncommercial educational
television broadcast stations licensed to a community located in whole
or in part within a major television market as specified in Sec. 76.51
shall be treated in the same manner as a major market commercial
television broadcast station, and all noncommercial educational
television broadcast stations not licensed to a community located in
whole or in part within a major television market shall be treated in
the same manner as a smaller market television broadcast station.
(d) Any community unit operating in a community to which a 100-watt
or higher power translator is located within the predicted Grade B
signal contour of the television broadcast station that the translator
station retransmits, and which translator is carried by the community
unit shall, upon request of such translator station licensee or
permittee, delete the duplicating network programming of any television
broadcast station whose reference point (See Sec. 76.53) is more than
88.5 km (55 miles) from the community of the community unit.
(e) Any community unit which operates in a community located in
whole or in part within the secondary zone of a smaller market
television broadcast station is not required to delete the duplicating
network programming of any major market television broadcast station
whose reference point (See Sec. 76.53) is also within 88.5 km (55
miles) of the community of the community unit.
(f) A community unit is not required to delete the duplicating
network programming of any television broadcast station which is
significantly viewed in the cable television community pursuant to
Sec. 76.54.
(g) A community unit is not required to delete the duplicating
network programming of any qualified NCE television broadcast station
that is carried in fulfillment of the cable television system's
mandatory signal carriage obligations, pursuant to Sec. 76.56.
Note: With respect to network programming, the geographic zone
within which the television station is entitled to enforce network
non-duplication protection and priority of shall be that geographic
area agreed upon between the network and the
[[Page 68102]]
television station. In no event shall such rights exceed the area
within which the television station may acquire broadcast
territorial exclusivity rights as defined in Sec. 73.658(m) of this
Chapter, except that small market television stations shall be
entitled to a secondary protection zone of 32.2 additional
kilometers (20 additional miles). To the extent rights are obtained
for any hyphenated market named in Sec. 76.51, such rights shall not
exceed those permitted under Sec. 73.658(m) of this Chapter for each
named community in that market.
Sec. 76.93 Parties entitled to network non-duplication protection.
Television broadcast station licensees shall be entitled to
exercise non-duplication rights pursuant to Sec. 76.92 in accordance
with the contractual provisions of the network-affiliate agreement.
Sec. 76.94 Notification.
(a) In order to exercise non-duplication rights pursuant to
Sec. 76.92, television stations shall notify each cable television
system operator of the non-duplication sought in accordance with the
requirements of this section. Except as otherwise provided in paragraph
(b) of this section, non-duplication protection notices shall include
the following information:
(1) The name and address of the party requesting non-duplication
protection and the television broadcast station holding the non-
duplication right;
(2) The name of the program or series (including specific episodes
where necessary) for which protection is sought; and
(3) The dates on which protection is to begin and end.
(b) Broadcasters entering into contracts providing for network non-
duplication protection shall notify affected cable systems within 60
calendar days of the signing of such a contract. In the event the
broadcaster is unable based on the information contained in the
contract, to furnish all the information required by paragraph (a) of
this section at that time, the broadcaster must provide modified
notices that contain the following information:
(1) The name of the network (or networks) which has (or have)
extended non-duplication protection to the broadcaster;
(2) The time periods by time of day (local time) and by network (if
more than one) for each day of the week that the broadcaster will be
broadcasting programs from that network (or networks) and for which
non-duplication protection is requested; and
(3) The duration and extent (e.g., simultaneous, same-day, seven-
day, etc.) of the non-duplication protection which has been agreed upon
by the network (or networks) and the broadcaster.
(c) Except as otherwise provided in paragraph (d) of this section,
a broadcaster shall be entitled to non-duplication protection beginning
on the later of:
(1) The date specified in its notice (as described in paragraphs
(a) or (b) of this section, whichever is applicable) to the cable
television system; or
(2) The first day of the calendar week (Sunday through Saturday)
that begins 60 days after the cable television system receives notice
from the broadcaster.
(d) A broadcaster shall provide the following information to the
cable television system under the following circumstances:
(1) In the event the protection specified in the notices described
in paragraphs (a) or (b) of this section has been limited or ended
prior to the time specified in the notice, or in the event a time
period, as identified to the cable system in a notice pursuant to
paragraph (b) of this section, for which a broadcaster has obtained
protection is shifted to another time of day or another day (but not
expanded), the broadcaster shall, as soon as possible, inform each
cable television system operator that has previously received the
notice of all changes from the original notice. Notice to be furnished
``as soon as possible'' under this paragraph shall be furnished by
telephone, telegraph, facsimile, overnight mail or other similar
expedient means.
(2) In the event the protection specified in the modified notices
described in paragraph (b) of this section has been expanded, the
broadcaster shall, at least 60 calendar days prior to broadcast of a
protected program entitled to such expanded protection, notify each
cable system operator that has previously received notice of all
changes from the original notice.
(e) In determining which programs must be deleted from a television
signal, a cable television system operator may rely on information from
any of the following sources published or otherwise made available:
(1) Newspapers or magazines of general circulation.
(2) A television station whose programs may be subject to deletion.
If a cable television system asks a television station for information
about its program schedule, the television station shall answer the
request:
(i) Within ten business days following the television station's
receipt of the request; or
(ii) Sixty days before the program or programs mentioned in the
request for information will be broadcast; whichever comes later.
(3) The broadcaster requesting exclusivity.
(f) A broadcaster exercising exclusivity pursuant to Sec. 76.92
shall provide to the cable system, upon request, an exact copy of those
portions of the contracts, such portions to be signed by both the
network and the broadcaster, setting forth in full the provisions
pertinent to the duration, nature, and extent of the non-duplication
terms concerning broadcast signal exhibition to which the parties have
agreed.
Sec. 76.95 Exceptions.
(a) The provisions of Secs. 76.92 through 76.94 shall not apply to
a cable system serving fewer than 1,000 subscribers. Within 60 days
following the provision of service to 1,000 subscribers, the operator
of each such system shall file a notice to that effect with the
Commission, and serve a copy of that notice on every television station
that would be entitled to exercise network non-duplication protection
against it.
(b) Network non-duplication protection need not be extended to a
higher priority station for one hour following the scheduled time of
completion of the broadcast of a live sports event by that station or
by a lower priority station against which a cable community unit would
otherwise be required to provide non-duplication protection following
the scheduled time of completion.
Sec. 76.101 Cable syndicated program exclusivity: extent of
protection.
Upon receiving notification pursuant to Sec. 76.105, a cable
community unit located in whole or in part within the geographic zone
for a syndicated program, the syndicated exclusivity rights to which
are held by a commercial television station licensed by the Commission,
shall not carry that program as broadcast by any other television
signal, except as otherwise provided below.
Note: With respect to each syndicated program, the geographic
zone within which the television station is entitled to enforce
syndicated exclusivity rights shall be that geographic area agreed
upon between the non-network program supplier, producer or
distributor and the television station. In no event shall such zone
exceed the area within which the television station has acquired
broadcast territorial exclusivity rights as defined in
Sec. 73.658(m) of this Chapter. To the extent rights are obtained
for any hyphenated market named in Sec. 76.51, such rights shall not
exceed those permitted under
[[Page 68103]]
Sec. 73.658(m) of this Chapter for each named community in that
market.
Sec. 76.103 Parties entitled to syndicated exclusivity.
(a) Television broadcast station licensees shall be entitled to
exercise exclusivity rights pursuant to Sec. 76.101 in accordance with
the contractual provisions of their syndicated program license
agreements, consistent with Sec. 76.109.
(b) Distributors of syndicated programming shall be entitled to
exercise exclusive rights pursuant to Sec. 76.101 for a period of one
year from the initial broadcast syndication licensing of such
programming anywhere in the United States; provided, however, that
distributors shall not be entitled to exercise such rights in areas in
which the programming has already been licensed.
Sec. 76.105 Notification.
(a) In order to exercise exclusivity rights pursuant to
Sec. 76.101, distributors or television stations shall notify each
cable television system operator of the exclusivity sought in
accordance with the requirements of this section. Syndicated program
exclusivity notices shall include the following information:
(1) The name and address of the party requesting exclusivity and
the television broadcast station or other party holding the exclusive
right;
(2) The name of the program or series (including specific episodes
where necessary) for which exclusivity is sought;
(3) The dates on which exclusivity is to begin and end.
(b) Broadcasters entering into contracts on or after August 18,
1988, which contain syndicated exclusivity protection shall notify
affected cable systems within sixty calendar days of the signing of
such a contract. Broadcasters who have entered into contracts prior to
August 18, 1988, and who comply with the requirements specified in
Sec. 76.109 shall notify affected cable systems on or before June 19,
1989. A broadcaster shall be entitled to exclusivity protection
beginning on the later of:
(1) The date specified in its notice to the cable television
system; or
(2) The first day of the calendar week (Sunday through Saturday)
that begins 60 days after the cable television system receives notice
from the broadcaster;
(c) In determining which programs must be deleted from a television
broadcast signal, a cable television system operator may rely on
information from any of the following sources published or otherwise
made available.
(1) Newspapers or magazines of general circulation;
(2) A television station whose programs may be subject to deletion.
If a cable television system asks a television station for information
about its program schedule, the television station shall answer the
request:
(i) Within ten business days following the television station's
receipt of the request; or
(ii) Sixty days before the program or programs mentioned in the
request for information will be broadcast; whichever comes later.
(3) The distributor or television station requesting exclusivity.
(d) In the event the exclusivity specified in paragraph (a) of this
section has been limited or has ended prior to the time specified in
the notice, the distributor or broadcaster who has supplied the
original notice shall, as soon as possible, inform each cable
television system operator that has previously received the notice of
all changes from the original notice. In the event the original notice
specified contingent dates on which exclusivity is to begin and/or end,
the distributor or broadcaster shall, as soon as possible, notify the
cable television system operator of the occurrence of the relevant
contingency. Notice to be furnished ``as soon as possible'' under this
paragraph shall be furnished by telephone, telegraph, facsimile,
overnight mail or other similar expedient means.
Sec. 76.106 Exceptions.
(a) Notwithstanding the requirements of Secs. 76.101 through
76.105, a broadcast signal is not required to be deleted from a cable
community unit when that cable community unit falls, in whole or in
part, within that signal's grade B contour, or when the signal is
significantly viewed pursuant to Sec. 76.54 in the cable community.
(b) The provisions of Secs. 76.101 through 76.105 shall not apply
to a cable system serving fewer than 1,000 subscribers. Within 60 days
following the provision of service to 1,000 subscribers, the operator
of each such system shall file a notice to that effect with the
Commission, and serve a copy of that notice on every television station
that would be entitled to exercise syndicated exclusivity protection
against it.
Sec. 76.107 Exclusivity contracts.
A distributor or television station exercising exclusivity pursuant
to Sec. 76.101 shall provide to the cable system, upon request, an
exact copy of those portions of the exclusivity contracts, such
portions to be signed by both the distributor and the television
station, setting forth in full the provisions pertinent to the
duration, nature, and extent of the exclusivity terms concerning
broadcast signal exhibition to which the parties have agreed.
Sec. 76.108 Indemnification contracts.
No licensee shall enter into any contract to indemnify a cable
system for liability resulting from failure to delete programming in
accordance with the provisions of this subpart unless the licensee has
a reasonable basis for concluding that such program deletion is not
required by this subpart.
Sec. 76.109 Requirements for invocation of protection.
For a station licensee to be eligible to invoke the provisions of
Sec. 76.101, it must have a contract or other written indicia that it
holds syndicated exclusivity rights for the exhibition of the program
in question. Contracts entered on or after August 18, 1988, must
contain the following words: ``the licensee [or substitute name] shall,
by the terms of this contract, be entitled to invoke the protection
against duplication of programming imported under the Compulsory
Copyright License, as provided in Sec. 76.101 of the FCC rules [or `as
provided in the FCC's syndicated exclusivity rules'].'' Contracts
entered into prior to August 18, 1988, must contain either the
foregoing language or a clear and specific reference to the licensee's
authority to exercise exclusivity rights as to the specific programming
against cable television broadcast signal carriage by the cable system
in question upon the contingency that the government reimposed
syndicated exclusivity protection. In the absence of such a specific
reference in contracts entered into prior to August 18, 1988, the
provisions of these rules may be invoked only if the contract is
amended to include the specific language referenced in this section or
a specific written acknowledgment is obtained from the party from whom
the broadcast exhibition rights were obtained that the existing
contract was intended, or should now be construed by agreement of the
parties, to include such rights. A general acknowledgment by a supplier
of exhibition rights that specific contract language was intended to
convey rights under these rules will be accepted with respect to all
contracts containing that specific language. Nothing in this section
shall be construed as a grant of
[[Page 68104]]
exclusive rights to a broadcaster where such rights are not agreed to
by the parties.
Sec. 76.110 Substitutions.
Whenever, pursuant to the requirements of the syndicated
exclusivity rules, a community unit is required to delete a television
program on a broadcast signal that is permitted to be carried under the
Commission's rules, such community unit may, consistent with these
rules and the sports blackout rules at Sec. 76.111, substitute a
program from any other television broadcast station. Programs
substituted pursuant to this section may be carried to their
completion.
Sec. 76.111 Cable sports blackout.
(a) No community unit located in whole or in part within the
specified zone of a television broadcast station licensed to a
community in which a sports event is taking place, shall, on request of
the holder of the broadcast rights to that event, or its agent, carry
the live television broadcast of that event if the event is not
available live on a television broadcast station meeting the criteria
specified in Sec. 76.128. For purposes of this section, if there is no
television station licensed to the community in which the sports event
is taking place, the applicable specified zone shall be that of the
television station licensed to the community with which the sports
event or team is identified, or, if the event or local team is not
identified with any particular community, the nearest community to
which a television station is licensed.
(b) Notification of the programming to be deleted pursuant to this
section shall include the following information:
(1) As to programming to be deleted from television broadcast
signals regularly carried by the community unit:
(i) The name and address of the party requesting the program
deletion;
(ii) The date, time and expected duration of the sports event the
television broadcast of which is to be deleted;
(iii) The call letters of the television broadcast station(s) from
which the deletion is to be made.
(2) As to programming to be deleted from television broadcast
signals not regularly carried by the community unit:
(i) The name and address of the party requesting the program
deletion;
(ii) The date, time and expected duration of the sports event the
television broadcast of which is to be deleted.
(c) Notifications given pursuant to this section must be received,
as to regularly scheduled events, no later than the Monday preceding
the calendar week (Sunday through Saturday) during which the program
deletion is to be made. Notifications as to events not regularly
scheduled and revisions of notices previously submitted, must be
received within twenty-four (24) hours after the time of the telecast
to be deleted is known, but in any event no later than twenty-four (24)
hours from the time the subject telecast is to take place.
(d) Whenever, pursuant to this section, a community unit is
required to delete a television program on a signal regularly carried
by the community unit, such community unit may, consistent with the
rules contained in subpart F of this part, substitute a program from
any other television broadcast station. A program substituted may be
carried to its completion, and the community unit need not return to
its regularly carried signal until it can do so without interrupting a
program already in progress.
(e) The provisions of this section shall not be deemed to require
the deletion of any portion of a television signal which a community
unit was lawfully carrying prior to March 31, 1972.
(f) The provisions of this section shall not apply to any community
unit having fewer than 1,000 subscribers.
Sec. 76.120 Network non-duplication protection, syndicated exclusivity
and sports blackout rules for satellite carriers: Definitions.
For purposes of Secs. 76.122-76.130, the following definitions
apply:
(a) Satellite carrier. The term ``satellite carrier'' means an
entity that uses the facilities of a satellite or satellite service
licensed by the Federal Communications Commission and operates in the
Fixed-Satellite Service under part 25 of title 47 of the Code of
Federal Regulations or the Direct Broadcast Satellite Service under
part 100 of title 47 of the Code of Federal Regulations, to establish
and operate a channel of communications for point-to-multipoint
distribution of television station signals, and that owns or leases a
capacity or service on a satellite in order to provide such point-to-
multipoint distribution, except to the extent that such entity provides
such distribution pursuant to tariff under the Communications Act of
1934, other than for private home viewing.
(b) Nationally distributed superstation. The term ``nationally
distributed superstation'' means a television broadcast station,
licensed by the Commission, that--
(1) Is not owned or operated by or affiliated with a television
network that, as of January 1, 1995, offered interconnected program
service on a regular basis for 15 or more hours per week to at least 25
affiliated television licensees in 10 or more States;
(2) On May 1, 1991, was retransmitted by a satellite carrier and
was not a network station at that time; and
(3) Was, as of July 1, 1998, retransmitted by a satellite carrier
under the statutory license of Section 119 of title 17, United States
Code.
(c) Television network. The term ``television network'' means a
television network in the United States which offers an interconnected
program service on a regular basis for 15 or more hours per week to at
least 25 affiliated broadcast stations in 10 or more States.
(d) Network station. The term ``network station'' means--
(1) A television broadcast station, including any translator
station or terrestrial satellite station that rebroadcasts all or
substantially all of the programming broadcast by a network station,
that is owned or operated by, or affiliated with, one or more of the
television networks in the United States which offer an interconnected
program service on a regular basis for 15 or more hours per week to at
least 25 of its affiliated television licensees in 10 or more States;
or
(2) A noncommercial educational broadcast station (as defined in
Section 397 of the Communications Act of 1934); except that the term
does not include the signal of the Alaska Rural Communications Service,
or any successor entity to that service.
(e) Zone of protection. The term ``zone of protection'' means--
(1) With respect to network non-duplication, the zone of protection
within which the television station is entitled to enforce network non-
duplication protection shall be that geographic area agreed upon
between the network and the television station. In no event shall such
rights exceed the area within which the television station may acquire
broadcast territorial exclusivity rights as defined in Sec. 73.658(m)
of this Chapter, except that small market television stations shall be
entitled to a secondary protection zone of 32.2 additional kilometers
(20 additional miles). To the extent rights are obtained for any
hyphenated market named in Sec. 76.51, such rights shall not exceed
those permitted under Sec. 73.658(m) of this Chapter for each named
community in that market.
(2) With respect to each syndicated program, the zone of protection
within
[[Page 68105]]
which the television station is entitled to enforce syndicated
exclusivity rights shall be that geographic area agreed upon between
the non-network program supplier, producer or distributor and the
television station. In no event shall such zone exceed the area within
which the television station has acquired broadcast territorial
exclusivity rights as defined in Sec. 73.658(m) of this Chapter. To the
extent rights are obtained for any hyphenated market named in
Sec. 76.51, such rights shall not exceed those permitted under
Sec. 73.658(m) of this chapter for each named community in that market.
(3) With respect to sports blackout, the zone of protection is the
``specified zone'' of a television broadcast station, as defined in
Sec. 76.5(e). If there is no television station licensed to the
community in which the sports event is taking place, the applicable
specified zone shall be that of the television station licensed to the
community with which the sports event or team is identified, or, if the
event or local team is not identified with any particular community,
the nearest community to which a television station is licensed.
Sec. 76.122 Satellite network non-duplication.
(a) Upon receiving notification pursuant to paragraph (c) of this
section, a satellite carrier shall not deliver, to subscribers within
zip code areas located in whole or in part within the zone of
protection of a commercial television station licensed by the
Commission, a program carried on a nationally distributed superstation
when the network non-duplication rights to such program are held by the
commercial television station providing notice, except as provided in
paragraphs (j), (k) or (l) of this section.
(b) Television broadcast station licensees shall be entitled to
exercise non-duplication rights pursuant to Sec. 76.122 in accordance
with the contractual provisions of the network-affiliate agreement, and
as provided in Sec. 76.124.
(c) In order to exercise non-duplication rights pursuant to
Sec. 76.122, television stations shall notify each satellite carrier of
the non-duplication sought in accordance with the requirements of this
section. Non-duplication protection notices shall include the following
information:
(1) The name and address of the party requesting non-duplication
protection and the television broadcast station holding the non-
duplication right;
(2) The name of the program or series (including specific episodes
where necessary) for which protection is sought;
(3) The dates on which protection is to begin and end;
(4) The name of the network (or networks) which has (or have)
extended non-duplication protection to the broadcaster;
(5) The time periods by time of day (local time) and by network (if
more than one) for each day of the week that the broadcaster will be
broadcasting programs from that network (or networks) and for which
non-duplication protection is requested;
(6) The duration and extent (e.g., simultaneous, same-day, seven-
day, etc.) of the non-duplication protection which has been agreed upon
by the network (or networks) and the broadcaster; and
(7) A list of the U.S. postal zip code(s) that encompass the zone
of protection under these rules.
(d) Broadcasters entering into contracts providing for network non-
duplication protection shall notify affected satellite carriers within
60 calendar days of the signing of such a contract; provided, however,
that for such contracts signed before November 29, 2000, the
broadcaster may provide notice on or before January 31, 2001, or with
respect to pre-November 29, 2000 contracts that require amendment in
order to invoke the provisions of these rules, notification may be
given within sixty calendar days of the signing of such amendment.
(e) Except as otherwise provided in this section, a broadcaster
shall be entitled to non-duplication protection beginning on the later
of:
(1) The date specified in its notice to the satellite carrier; or
(2) The first day of the calendar week (Sunday through Saturday)
that begins 60 days after the satellite carrier receives notice from
the broadcaster; Provided, however, that with respect to notifications
given pursuant to this section prior to June 1, 2001, a satellite
carrier is not required to provide non-duplication protection until 120
days after the satellite carrier receives such notification.
(f) A broadcaster shall provide the following information to the
satellite carrier under the following circumstances:
(1) In the event the protection specified in the notices described
in paragraph (c) of this section has been limited or ended prior to the
time specified in the notice, or in the event a time period, as
identified to the satellite carrier in a notice pursuant to paragraph
(c) of this section, for which a broadcaster has obtained protection is
shifted to another time of day or another day (but not expanded), the
broadcaster shall, as soon as possible, inform each satellite carrier
that has previously received the notice of all changes from the
original notice. Notice to be furnished ``as soon as possible'' under
this paragraph shall be furnished by telephone, telegraph, facsimile,
e-mail, overnight mail or other similar expedient means.
(2) In the event the protection specified in the notices described
in paragraph (c) of this section has been expanded, the broadcaster
shall, at least 60 calendar days prior to broadcast of a protected
program entitled to such expanded protection, notify each satellite
carrier that has previously received notice of all changes from the
original notice.
(g) In determining which programs must be deleted from a television
signal, a satellite carrier may rely on information from newspapers or
magazines of general circulation, the broadcaster requesting
exclusivity protection, or the nationally distributed superstation.
(h) If a satellite carrier asks a nationally distributed
superstation for information about its program schedule, the nationally
distributed superstation shall answer the request:
(i) Within ten business days following its receipt of the request;
or
(ii) Sixty days before the program or programs mentioned in the
request for information will be broadcast, whichever comes later.
(i) A broadcaster exercising exclusivity pursuant to this section
shall provide to the satellite carrier, upon request, an exact copy of
those portions of the contracts, such portions to be signed by both the
network and the broadcaster, setting forth in full the provisions
pertinent to the duration, nature, and extent of the non-duplication
terms concerning broadcast signal exhibition to which the parties have
agreed.
(j) A satellite carrier is not required to delete the duplicating
programming of any nationally distributed superstation that is carried
by the satellite carrier as a local station with the station's
retransmission consent pursuant to Sec. 76.64
(i) Within the station's local market;
(ii) If the station is ``significantly viewed,'' pursuant to
Sec. 76.54, in zip code areas included within the zone of protection;
or
(iii) If the zone of protection falls, in whole or in part, within
that signal's grade B contour.
(k) A satellite carrier is not required to delete the duplicating
programming of any nationally distributed superstation from an
individual
[[Page 68106]]
subscriber who is located outside the zone of protection,
notwithstanding that the subscriber lives within a zip code provided by
the broadcaster pursuant to paragraph (c) of this section.
(l) A satellite carrier is not required to delete programming if it
has fewer than 1,000 subscribers within the relevant protected zone who
subscribe to the nationally distributed superstation carrying the
programming for which deletion is requested pursuant to paragraph (c)
of this section.
Sec. 76.123 Satellite syndicated program exclusivity.
(a) Upon receiving notification pursuant to paragraph (d) of this
section, a satellite carrier shall not deliver, to subscribers located
within zip code areas in whole or in part within the zone of protection
of a commercial television station licensed by the Commission, a
program carried on a nationally distributed superstation when the
syndicated program exclusivity rights to such program are held by the
commercial television station providing notice, except as provided in
paragraphs (k), (l) and (m) of this section.
(b) Television broadcast station licensees shall be entitled to
exercise exclusivity rights pursuant to this Section in accordance with
the contractual provisions of their syndicated program license
agreements, consistent with Sec. 76.124.
(c) Distributors of syndicated programming shall be entitled to
exercise exclusive rights pursuant to this Section for a period of one
year from the initial broadcast syndication licensing of such
programming anywhere in the United States; provided, however, that
distributors shall not be entitled to exercise such rights in areas in
which the programming has already been licensed.
(d) In order to exercise exclusivity rights pursuant to this
Section, distributors of syndicated programming or television broadcast
stations shall notify each satellite carrier of the exclusivity sought
in accordance with the requirements of this paragraph. Syndicated
program exclusivity notices shall include the following information:
(1) The name and address of the party requesting exclusivity and
the television broadcast station or other party holding the exclusive
right;
(2)The name of the program or series (including specific episodes
where necessary) for which exclusivity is sought;
(3)The dates on which exclusivity is to begin and end; and
(4) A list of the U.S. postal zip code(s) that encompass the zone
of protection under these rules.
(e) A distributor or television station exercising exclusivity
pursuant to this Section shall provide to the satellite carrier, upon
request, an exact copy of those portions of the exclusivity contracts,
such portions to be signed by both the distributor and the television
station, setting forth in full the provisions pertinent to the
duration, nature, and extent of the exclusivity terms concerning
broadcast signal exhibition to which the parties have agreed.
(f) Television broadcast stations or distributors entering into
contracts on or after November 29, 2000, which contain syndicated
exclusivity protection with respect to satellite retransmission of
programming, shall notify affected satellite carriers within sixty
calendar days of the signing of such a contract. Television broadcast
stations or distributors who have entered into contracts prior to
November 29, 2000, and who comply with the requirements specified in
Sec. 76.124 shall notify affected satellite carriers on or before
January 31, 2001; provided, however, that with respect to pre-November
29, 2000 contracts that require amendment in order to invoke the
provisions of these rules, notification may be given within sixty
calendar days of the signing of such amendment.
(g) Except as otherwise provided in this section, a television
broadcast station shall be entitled to exclusivity protection beginning
on the later of:
(1) The date specified in its notice to the satellite carrier; or
(2) The first day of the calendar week (Sunday through Saturday)
that begins 60 days after the satellite carrier receives notice from
the broadcaster.
Provided, however, that with respect to notifications given
pursuant to this section prior to June 1, 2001, a satellite carrier is
not required to provide syndicated exclusivity protection until 120
days after the satellite carrier receives such notification.
(h) In determining which programs must be deleted from a television
broadcast signal, a satellite carrier may rely on information from the
distributor or television broadcast station requesting exclusivity;
newspapers or magazines of general circulation; or the nationally
distributed superstation whose programs may be subject to deletion.
(i) If a satellite carrier asks a nationally distributed
superstation for information about its program schedule, the nationally
distributed superstation shall answer the request:
(1) Within ten business days following the its receipt of the
request; or
(2) Sixty days before the program or programs mentioned in the
request for information will be broadcast; whichever comes later.
(j) In the event the exclusivity specified in paragraph (a) of this
section has been limited or has ended prior to the time specified in
the notice, the distributor or broadcaster who has supplied the
original notice shall, as soon as possible, inform each satellite
carrier that has previously received the notice of all changes from the
original notice. In the event the original notice specified contingent
dates on which exclusivity is to begin and/or end, the distributor or
broadcaster shall, as soon as possible, notify the satellite carrier of
the occurrence of the relevant contingency. Notice to be furnished ``as
soon as possible'' under this Subsection shall be furnished by
telephone, telegraph, facsimile, e-mail, overnight mail or other
similar expedient means.
(k) A satellite carrier is not required to delete the programming
of any nationally distributed superstation that is carried by the
satellite carrier as a local station with the station's retransmission
consent pursuant to Sec. 76.64:
(1) Within the station's local market;
(2) If the station is ``significantly viewed,'' pursuant to
Sec. 76.54, in zip code areas included within the zone of protection;
or
(3) If the zone of protection falls, in whole or in part, within
that signal's grade B contour.
(l) A satellite carrier is not required to delete the duplicating
programming of any nationally distributed superstation from an
individual subscriber who is located outside the zone of protection,
notwithstanding that the subscriber lives within a zip code provided by
the broadcaster pursuant to paragraph (d) of this section.
(m) A satellite carrier is not required to delete programming if it
has fewer than 1,000 subscribers within the relevant protected zone who
subscribe to the nationally distributed superstation carrying the
programming for which deletion is requested pursuant to paragraph (d)
of this section.
Sec. 76.124 Requirements for invocation of protection.
For a television broadcast station licensee or distributor of
syndicated programming to be eligible to invoke the provisions of
Sec. 76.122 or Sec. 76.123 of this subpart, it must have a contract or
other written indicia that it holds network program non-duplication or
syndicated
[[Page 68107]]
exclusivity rights for the exhibition of the program in question.
Contracts entered on or after November 29, 2000, must contain the
following words: ``the licensee [or substitute name] shall, by the
terms of this contract, be entitled to invoke the protection against
duplication of programming imported under the Statutory Copyright
License, as provided in Sec. 76.122 or Sec. 76.123 of the FCC rules [or
'as provided in the FCC's satellite network non-duplication or
syndicated exclusivity rules'].'' Contracts entered into prior to
November 29, 2000, must contain the foregoing language plus a clear and
specific reference to the licensee's authority to exercise exclusivity
rights as to the specific programming against signal carriage by the
satellite carrier in question, or by satellite carriage in general in a
protected, geographic or specified zone. In the absence of such a
specific reference in contracts entered into prior to November 29,
2000, the provisions of these rules may be invoked only if the contract
is amended to include the specific language referenced in this section
or a specific written acknowledgment is obtained from the party from
whom the broadcast exhibition rights were obtained that the existing
contract was intended, or should now be construed by agreement of the
parties, to include such rights. A general acknowledgment by a supplier
of exhibition rights that specific contract language was intended to
convey rights under these rules will be accepted with respect to all
contracts containing that specific language. Nothing in this section
shall be construed as a grant of exclusive rights to a broadcaster
where such rights are not agreed to by the parties.
Sec. 76.125 Indemnification contracts.
No television broadcast station licensee shall enter into any
contract to indemnify a satellite carrier for liability resulting from
failure to delete programming in accordance with the provisions of this
Subpart unless the licensee has a reasonable basis for concluding that
such program deletion is not required by this Subpart.
Sec. 76.127 Satellite sports blackout.
(a) Upon the request of the holder of the broadcast rights to a
sports event, or its agent, no satellite carrier shall retransmit to
subscribers within the area comprising the specified zone a
``nationally distributed superstation'' or ``network station'' carrying
the live television broadcast of a sports event if the event is not
available live on a television broadcast station meeting the criteria
specified in Sec. 76.128. For purposes of this section, if there is no
television station licensed to the community in which the sports event
is taking place, the applicable specified zone shall be that of the
television station licensed to the community with which the sports
event or team is identified, or, if the event or local team is not
identified with any particular community, the nearest community to
which a television station is licensed.
(b) Notification of the programming to be deleted pursuant to this
Section shall include the following information:
(1) The name and address of the party requesting the program
deletion;
(2) The date, time and expected duration of the sports event the
television broadcast of which is to be deleted;
(3) The call letters of the nationally distributed superstation or
network station(s) from which the deletion is to be made;
(4) The U.S. postal zip codes that encompass the specified zone.
(c) Notifications given pursuant to this section must be received
by the satellite carrier, as to regularly scheduled events, within
forty-eight (48) hours after the time of the telecast to be deleted is
known, and no later than the Monday preceding the calendar week (Sunday
through Saturday) during which the program deletion is to be made.
Notifications as to events not regularly scheduled and revisions of
notices previously submitted, must be received within twenty-four (24)
hours after the time of the telecast to be deleted is known, but in any
event no later than twenty-four (24) hours from the time the subject
telecast is to take place.
(d) A satellite carrier is not required to delete a sports event
from an individual subscriber who is located outside the specified
zone, notwithstanding that the subscriber lives within a zip code
provided by the holder of the broadcast rights pursuant to paragraph
(b) of this section.
(e) A satellite carrier is not required to delete a sports event if
it has fewer than 1,000 subscribers within the relevant specified zone
who subscribe to the nationally distributed superstation or network
station carrying the sports event for which deletion is requested
pursuant to paragraph (b) of this section.
(f) Notwithstanding paragraph (c) of this section, for sports
events to be deleted on or before March 31, 2001, notification must be
received by satellite carriers at least 60 full days prior to the day
the telecast is to be deleted.
Sec. 76.128 Application of sports blackout rules.
The cable and satellite sports blackout rules (Secs. 76.111 and
76.127) may apply when the sports event is not available live on any of
the following television broadcast stations carried by a cable system
or other MVPD:
(a) Television broadcast stations within whose specified zone the
community of the community unit or the community within which the
sporting event is taking place is located, in whole or in part;
(b) Television broadcast stations within whose Grade B contours the
community of the community unit or the community within which the
sporting event is taking place is located, in whole or in part;
(c) Television broadcast stations licensed to other designated
communities which are generally considered to be part of the same
television market (Example: Burlington, Vt.-Plattsburgh, N.Y. or
Cincinnati, Ohio-Newport, Ky., television markets);
(d) Television broadcast stations that are significantly viewed,
pursuant to Sec. 76.54, in the community unit or community within the
specified zone.
Sec. 76.130 Substitutions.
Whenever, pursuant to the requirements of the network program non-
duplication, syndicated program exclusivity, or sports blackout rules,
a satellite carrier is required to delete a television program from
retransmission to satellite subscribers within a zip code area, such
satellite carrier may, consistent with this Subpart, substitute a
program from any other television broadcast station for which the
satellite carrier has obtained the necessary legal rights and
permissions, including but not limited to copyright and retransmission
consent. Programs substituted pursuant to this section may be carried
to their completion.
[FR Doc. 00-29028 Filed 11-13-00; 8:45 am]
BILLING CODE 6712-01-U