Cable Act of 1992Must-Carry and Retransmission Consent Provisions

[Federal Register Volume 59, Number 232 (Monday, December 5, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-29443]

Page Unknown

[Federal Register: December 5, 1994]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 73 and 76

[MM Docket No. 92-259; FCC 94-251]

Cable Act of 1992--Must-Carry and Retransmission Consent Provisions

AGENCY: Federal Communications Commission.

ACTION: Final rule.

SUMMARY: In response to petitions for reconsideration, and in order to complete the implementation of the must-carry and retransmission consent provisions of the Cable Television Consumer Protection and Competition Act of 1992 and to clarify the obligations of cable operators and broadcasters, this Memorandum Opinion and Order amends the Commission's rules regarding must-carry and retransmission consent.

EFFECTIVE DATE: The stay of Sec. 76.62(a) and Sec. 76.64(e) is lifted and the revisions of those paragraphs is effective January 4, 1995. Other rule provisions of Part 76 are effective January 4, 1995. Rule provisions of Part 73 shall be effective upon approval from OMB. We will issue a notice at a later date stating that such approval has been granted.

FOR FURTHER INFORMATION CONTACT: Elizabeth W. Beaty or Meryl S. Icove, Cable Services Bureau, (202) 416- 0800.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's Memorandum Opinion and Order in MM Docket 92-259, FCC 94-251, adopted September 28, 1994, and released November 4, 1994. The complete text of this document is available for inspection and copying during normal business hours in the FCC Reference Center, 1919 M St., N.W., Washington, D.C., and also may be purchased from the Commission's copy contractor, International Transcription Service, (ITS), at 2100 M St., N.W., Washington, D.C. 20037, (202) 857-3800.

Synopsis of the Memorandum Opinion and Order

I. Introduction

1. This Memorandum Opinion and Order addresses issues raised in petitions for reconsideration of our Report and Order adopted March 11, 1993, 58 FR 17350 (4/2/93) which established rules to implement the mandatory television broadcast signal carriage (``must-carry'') and retransmission consent provisions of the Cable Television Consumer Protection and Competition Act of 1992 (``1992 Cable Act''). In a Clarification Order adopted on May 28, 1993, 58 FR 32449 (6/10/93), we addressed specific concerns raised in these petitions relating to signal quality, copyright indemnification and translator ownership. In an Order adopted on July 15, 1993, 58 FR 40366 (7/28/93), we addressed additional concerns relating to carriage rights, to the failure of broadcast stations to elect either must-carry or retransmission consent status, and to the channel position for such stations. On October 5, 1993, we adopted a Stay Order, 58 FR 53429 (10/15/93), which stayed two provisions of the retransmission consent rules, with respect to VHF/UHF antenna ownership and carriage in the entirety of broadcast signals, pending our resolution of those issues in this proceeding. In this Memorandum Opinion and Order we will address all remaining issues raised in the petitions for reconsideration, as well as the outstanding issues from the Stay Order. We will also take this opportunity, on our own motion, to clarify certain other issues raised in the Report and Order. 2. We note that the constitutionality of the must-carry provisions of the 1992 Cable Act were challenged before the Supreme Court. In Turner Broadcasting Systems, Inc. v. FCC, a special three-judge panel of the District Court found the must-carry provisions constitutional. On appeal, the Supreme Court vacated the decision and remanded the case back to the three-judge panel for further proceedings. While the case is pending, the must-carry provisions of the 1992 Cable Act remain in effect, as do the Commission's must-carry rules.

II. Must-Carry Regulations

A. Carriage of Local Noncommercial Educational Television Stations 1. Definition of a Qualified Noncommercial Station. 3. Section 615(l)(1) provides that a local noncommercial educational television (``NCE'') station qualifies for must-carry rights if it is licensed by the Commission as an NCE station and if it is owned and operated by a public agency, nonprofit foundation, or corporation or association that is eligible to receive a community service grant from the Corporation for Public Broadcasting.\1\ An NCE station is also considered qualified if it is owned and operated by a municipality and transmits predominantly noncommercial programs for educational purposes.\2\ For purposes of must-carry rights, an NCE station is considered local if its community of license is within 50 miles of, or its signal places a Grade B contour over, the principal headend of the cable system. This definition includes the translator of any NCE station with five watts or higher power serving the franchise area, a full-service station or translator licensed to a channel reserved for noncommercial educational use, and such stations and translators operating on channels not so reserved as the Commission determines are qualified NCE stations. ---------------------------------------------------------------------------

\1\All references to Section 614, Section 615 and Section 325 are references to those sections of the Communications Act of 1934, as amended by the 1992 Cable Act, Sections 4, 5 and 6. \2\In defining a qualified noncommercial educational television station, Sec. 76.55(a)(2) incorrectly refers to Sec. 73.612 rather than Sec. 73.621. We are revising Sec. 76.55(a)(2) to refer to Sec. 73.621. ---------------------------------------------------------------------------

4. The staff has received informal inquiries requesting clarification as to when a translator is ``serving the franchise area'' of the cable system. Because the service area of a translator differs from that of a full power broadcast station, we believe that guidance should be provided to assist interested parties in determining whether a translator serves the franchise area of the cable system. We believe it appropriate to adopt a standard based on coverage and contour, which has been used in the past and which should be easily identifiable. Therefore, for purposes of a translator serving the cable system's franchise area, the coverage area of such translator shall be its predicted protected contour as specified in Sec. 74.707 of our rules. 2. Signal Carriage Obligations. 5. In the Report and Order, we indicated that Section 615(b) requires cable systems to carry any qualified local NCE television station requesting carriage. Systems with 12 or fewer activated channels must carry the signal of one qualified local NCE station. Systems with 13 to 36 activated channels must carry at least one qualified local NCE station, but need not carry more than three such stations. Cable systems with more than 36 activated channels are generally required to carry all NCE stations requesting carriage. If a system with fewer than 36 activated channels operates beyond the presence of a qualified local NCE station, it is required to import and carry a qualified NCE station. In addition, cable systems must continue to provide carriage to all qualified local NCE television stations whose signals were carried on their systems as of March 29, 1990, regardless of the proximity of those stations to the system's principal headend. 6. First, on our own motion, we clarify the carriage requirements of a system with more than 36 activated channels. The 1992 Cable Act states that systems with more than 36 channels must carry the signal of all NCE stations requesting carriage, with one exception: systems with more than 36 channels are not required to carry an additional local NCE station if the programming of such station substantially duplicates the programming of a qualified local NCE station already being carried. It has come to our attention that Sec. 76.56(a)(1)(iii) of the Commission's rules as adopted in the Report and Order has been interpreted by some cable operators to require that only three stations need be carried. However, with respect to systems with more than 36 channels, we clarify that the reference to the number three is a minimum, not a maximum number. A system with more than 36 channels must carry all NCE stations requesting carriage, but is not required to carry more than three NCE stations if the additional station substantially duplicates the signal of NCE stations already carried by the system. Section 76.56(a)(1)(iii) is being revised accordingly. 7. Second, we emphasize that the requirement in Section 615(c) to continue carriage of stations carried as of March 29, 1990 applies only to qualified local NCE television stations and does not apply to a non-local NCE television station which was being imported as of that date. A cable system which was carrying a non-local NCE station in excess of its mandatory carriage requirements is permitted to drop that station, subject to giving appropriate notice. However, if a cable system which would be required to import a NCE signal pursuant to Section 615 (b)(3)(B) or (b)(2)(B) was importing a non-local qualified NCE station on March 29, 1990, the system is required to continue carriage of such station. Prior carriage of the non-local NCE station generally indicates that a good quality signal is received at the cable system's headend. In addition, where the cable system voluntarily had been importing such signal prior to March 29, 1990, the continued carriage of such station will not result in additional copyright liability for the cable system. In the event a local NCE station subsequently becomes qualified, the cable operator may drop the distant signal (subject to notification requirements) and substitute the qualified local NCE station. Section 76.56(a)(5) is being revised accordingly. 8. Although the Act generally does not require copyright liability to be paid by a cable operator for the carriage of local NCE station signal added after March 29, 1990, in the case of importation, the non-local NCE station has neither must-carry nor retransmission rights. We do not believe it appropriate for a non-local NCE station which is being imported to be required to reimburse the cable operator for copyright costs. The 1992 Cable Act specifically provides that a cable system can recover such costs as part of the basic service tier rate, and we believe that this is the appropriate manner for dealing with such costs. B. Carriage of Local Commercial Television Stations 1. General Signal Carriage Requirements. 9. Small System Exception. Section 614(a) requires carriage of local commercial television stations and qualified low power television stations. Section 614(b) establishes the number of signals which must be carried by cable systems based on their channel capacity. In particular, it provides that a cable system with 12 or fewer usable activated channels must carry the signals of at least three local commercial television stations. Such a system is exempt from any requirements of Section 614, however, if it serves 300 or fewer subscribers, as long as it does not delete from carriage the signal of any broadcast television station. In the Report and Order, the Commission concluded that, under this exception, a system must not delete any station it carried on October 5, 1992. 10. Although the language of the text accurately reflects this intention, the Community Antenna Television Association (``CATA'') points out that the related rule is misleading because it implies that the system must have 300 or fewer subscribers as of October 5, 1992. We are revising Sec. 76.56(b)(1) of our rules to reflect that, at any time that a cable system with 12 or fewer activated channels serves 300 or fewer subscribers, it is exempt from the mandatory carriage requirements under Section 614, as long as it does not delete any signal of a broadcast television station which was carried on that system on October 5, 1992. 11. Definition of Local Commercial Television Station. Section 614(h)(1)(A) defines a local commercial television station for the purpose of the must-carry rules as ``any full power television broadcast station, other than a qualified noncommercial television station within the meaning of Section 615(l)(1), licensed and operating on a channel regularly assigned to its community by the Commission that, with respect to a particular cable system, is within the same television market as the cable system.'' In the Report and Order, we inadvertently defined local commercial television station as ``any full power commercial television station * * *'', which had the unintended effect of excluding non-qualified noncommercial stations from the definition. A non-qualified NCE station is any NCE station which does not meet the qualification criteria established in Section 615(g). Such a station is not entitled to must-carry rights under that section. We believe that the definition of local commercial television station contained in the 1992 Cable Act clearly includes non-qualified NCE stations; the definition includes all stations other than ``qualified NCE stations.'' Consistent with the language of the 1992 Cable Act, we determine that NCE stations which are not ``qualified'' NCE stations for must-carry purposes may assert must-carry rights under Section 614 within their local market, just like any other broadcast station.\3\ ---------------------------------------------------------------------------

\3\We interpret local commercial television station to include stations operating under a valid construction permit. ---------------------------------------------------------------------------

12. Availability and Identification of Must-Carry Signals. Section 614(b)(7) provides that all must-carry signals shall be provided to every subscriber of a cable system and shall be viewable via cable on all television receivers of a subscriber which are connected to a cable system by a cable operator or for which the cable operator provides a connection. In the Report and Order we declined to grant a request to provide a special exception for commercial subscribers (e.g., hotels, hospitals) that receive specially designed channel line-ups. We stated our belief that the 1992 Cable Act is clear in its application of Section 614(b)(7) to every subscriber of a cable system, that it grants no authority to exempt a specific class of cable subscribers from the carriage requirements, and that there is no reason to believe that such commercial subscribers are not interested in receiving local broadcast signals. 13. On reconsideration, we note that the must-carry provisions do not distinguish between commercial and residential viewers. Congress made clear its intent that all subscribers have access to local commercial broadcast signals. We do not believe that petitioners have presented sufficient cause to change our earlier interpretation of the 1992 Cable Act. Therefore, we affirm that all subscribers must have access to these signals on all television sets connected by the cable operator or for which the cable operator provides a connection. 14. It is our understanding that the on-channel carriage of some UHF signals has resulted in situations where a converter box supplied by a cable operator does not contain the necessary channel capacity to permit a subscriber to access a UHF must-carry signal through the converter. For example, a converter may supply channels 2-36 while the must-carry station is on channel 55. Where a cable operator chooses to provide subscribers with signals of must-carry stations through the use of converter boxes supplied by the cable operator, the converter boxes must be capable of passing through all of the signals entitled to carriage on the basic service tier of the cable system, not just some of them. In addition, any converter boxes provided for this purpose must be provided at rates in accordance with Section 623(b)(3). Therefore, in a situation where the subscriber's converter is supplied by the cable operator, and is incapable of receiving all signals as required by Section 614(b)(7), the cable operator must make provision for a converter which is capable of providing these signals.\4\ If it is necessary to replace the converter, the subscriber must not be required to pay additional sums nor to pay for the installation.\5\ As discussed below, we have provided a mechanism for relief for cable systems which cannot meet the on-channel requests of must-carry stations. A decision not to seek such relief may not be used to contravene the directives of the 1992 Cable Act. ---------------------------------------------------------------------------

\4\See Memorandum Opinion and Order (CSR-3903-M) (Complaint of WLIG-TV, Inc. against Cablevision Systems Corporation), DA-93-1365 (released November 10, 1993), in which the Mass Media Bureau noted that converter boxes provided by the cable system must be capable of transmitting all the signals entitled to mandatory carriage on the basic tier, and required Cablevision, because it was in the midst of an upgrade of its system, to switch station WLIG to a channel receivable by all subscribers, without the necessity of an additional converter box, during the rebuilding of its system. \5\We note that where the cable operator authorizes subscribers to install additional receiver connections, but does not provide the subscriber with such connections, or with the equipment and materials for such connections, the operator must notify such subscribers of all broadcast stations carried on the cable system which cannot be viewed via cable without a converter box and the operator must offer to sell or lease such a converter box to such subscribers at rates in accordance with section 623(b)(3). ---------------------------------------------------------------------------

2. Definition of a Television Market. 15. Use of ADI Markets and the Home County Exception. Under the 1992 Cable Act, a local commercial television station is entitled to must-carry status on all cable systems located in the same television market as the cable system. The 1992 Cable Act states that the television market shall be determined pursuant to Sec. 73.3555(d)(3)(i) of our rules, which in turn defines a television market in terms of the Area of Dominant Influence (``ADI''), as defined by Arbitron.\6\ In the Report and Order, the Commission noted that each county in the contiguous United States is assigned by Arbitron exclusively to one ADI, and that each broadcast station licensed to a community located in an ADI is considered local throughout that ADI. The Commission established one exception to that rule, determining that each broadcast station will also be considered a must-carry station in its home county, even if that station is assigned to a different ADI from that of its home county (the ``home county exception''). ---------------------------------------------------------------------------

\6\We note that Arbitron has cancelled its television ratings service. However, the decision will not have an impact on the use of Arbitron-designated ADIs until the next must-carry/retransmission consent election which must take place by October 1, 1996. We will address this issue sufficiently before that date. ---------------------------------------------------------------------------

16. The Administrative Procedure Act (``APA'') requires an agency, when issuing a general notice of proposed rule making, to provide the public with ``either the terms or the substance of a proposed rule or a description of the subject and issues involved.'' The APA, however, ``does not require an agency to publish in advance every precise proposal which it may ultimately adopt as a rule.'' 17. The Notice, 57 FR 56298 (11/27/92), set forth the 1992 Cable Act's direction that such markets would be determined primarily in the manner provided in Sec. 73.3555(d)(3)(i) of the Commission's rules, (which section uses Arbitron-defined ADIs), and specifically sought comment from the public concerning the Congressionally recognized need for adjustments to or modifications of television markets.\7\ The Commission specifically stated that ``it may determine that particular communities are part of more than one television market,'' and further explained that it would act upon written requests to add or delete communities to a station's market ``to better reflect market realities and effectuate the purposes of this Act.'' We believe that it was apparent that the Commission was likely to receive comments and suggestions regarding methods to assure that television stations' must-carry markets, both generally and in individual cases, best reflect market realities and the objective of localism underlying broadcast signal carriage obligations. While the Notice did not specifically seek comment on the home county exception, we believe that the home county exception is a ``logical outgrowth'' of the Notice. ---------------------------------------------------------------------------

\7\Section 614(h)(1)(C)(i) states that a broadcasting station's market shall be determined in the manner provided in Sec. 73.3555(d)(3)(i) of the Commission's rules, except that the Commission may include or exclude additional communities to better effectuate the purposes of Section 614. 47 U.S.C. 534(h)(1)(C)(i). ---------------------------------------------------------------------------

18. The home county exception does not violate either the spirit or letter of the 1992 Cable Act. Specifically, we disagree with the proposition that although a television station's must-carry rights are defined primarily by Arbitron ADIs, there can be no must-carry rights beyond the ADI to which a station is assigned by Arbitron. Section 614(h)(1)(C)(i) recognizes a potential, but easily corrected, deficiency in the use of Arbitron ADIs to define a station's must-carry market. We find no basis to presume that the Commission may not adjust ADIs generally to ensure that stations have must-carry rights in those areas where their service is appropriately ``local.'' We agree with Granite that adoption of the home county exception is separate and apart from the procedure established to make individual station market adjustments based on particular situations. 19. Modification of ADI Markets. As noted in the Report and Order, the 1992 Cable Act permits the Commission to add or subtract communities from a television station's market to better reflect marketplace conditions or to promote the goal of localism underlying the signal carriage provisions. In its petition, INTV requests that the Commission add or subtract a community for all stations in the market, not for an individual station. INTV suggests that upon the addition of a community to a market, every station in the community would attain must-carry rights in that market. 20. The Commission has already addressed this subject in the Report and Order in response to parties' contentions that ADI modification should be made on a community, rather than on a station, basis. Both the 1992 Cable Act and our rules require, for each broadcast station, an evidentiary showing from an interested party, with opportunity for comment. INTV's request would not meet this requirement and therefore must be rejected. We reiterate our statement in the Report and Order that we will accept joint filings by a group of stations or a single request from a cable operator for changes for more than one station licensed to the same community, so long as the submitted information demonstrates that each station is entitled to have its market modified. The relief procedures will ensure that the 1992 Cable Act's objectives of promoting localism and reflecting market realities are achieved.\8\ ---------------------------------------------------------------------------

\8\The same logic applies to a single station requesting the addition of multiple communities. ---------------------------------------------------------------------------

21. As noted above, Section 614(h)(1)(C) directs the Commission, when considering ADI modification requests, to promote localism by taking into account the four factors listed in that section. Press Broadcasting Company, Inc. (``Press''), the licensee of WKCF (TV), Clermont, Florida, seeks clarification or partial reconsideration of the types of evidence the Commission has indicated that it will consider in assessing proposed changes in a station's must-carry market. 22. We clarify that the two factors mentioned in the Report and Order are merely examples of the types of evidence that might be considered in a request to modify an ADI. The Commission purposely did not restrict the types of evidence that may be used to demonstrate that a station's must-carry market should be modified. The Commission declined to prejudge the importance of any of the factors set forth in the statute, noting that each case will be unique. Accordingly, we note that the factors suggested by Press may be employed by parties to show the appropriateness of altering a station's must-carry market, although the importance of such factors may differ from one situation to the next.\9\ ---------------------------------------------------------------------------

\9\We note that, in stating that a station may demonstrate that it is located close to the community in terms of mileage, a station may present evidence, as suggested by Press, regarding the distance between the cable community and the station's community of license, transmitter, or other aspect of the station's operation. ---------------------------------------------------------------------------

23. Section 76.51 Top 100 Market List. Section 614(f) of the 1992 Cable Act directs the Commission to issue regulations that include revisions needed to update the list of top 100 television markets and their designated communities contained in Sec. 76.51. Although the Notice sought guidance on how to fulfill this requirement, the comments were general in nature and did not offer a mechanism for revising the top 100 market list, including criteria for determining when a city of license should become a designated community in a television market. Accordingly, the Commission concluded in the Report and Order that a wholesale revision of Sec. 76.51 was unnecessary and stated that it would only update the existing list by adding those designated communities requested by parties providing specific evidence that a particular market change is warranted. The Commission made three specific market modifications, and stated that further revisions to this list would be made on a case-by-case basis. The Commission stated that requests for modification should demonstrate ``commonality'' between the proposed community to be added to a market designation and the market as a whole, and that such requests would be made in accordance with the factors in Section 614(h)(1)(C) and the related rules. 24. A number of broadcast television licensees in Columbus, Ohio filed petitions for reconsideration respecting the addition of Chillicothe to the Columbus, Ohio television market. These petitioners allege that the Commission's action was taken without sufficient notice to interested parties and was therefore based on an inadequate factual record. 25. As noted above, the APA requires an agency, when issuing a general notice of proposed rule making, to provide the public with ``either the terms or the substance of a proposed rule or a description of the subject and issues involved,'' but ``does not require an agency to publish in advance every precise proposal which it may ultimately adopt as a rule.'' In the Notice, the Commission specifically requested that interested parties ``comment on what modifications to the television markets specified in Sec. 76.51 of our rules is needed to ensure that it reflects current market realities.'' In so doing, the Commission observed that this proceeding necessarily overlaps with an ongoing proceeding involving, inter alia, the makeup of the Sec. 76.51 market list in relation to the Commission's program exclusivity rules.\10\ Therefore, the Commission explicitly stated that Docket 87- 24 would be reopened for further comment in the context of this rulemaking in order to facilitate coordination of the overlapping aspects of the two proceedings.\11\ ---------------------------------------------------------------------------

\10\Further, the pendency of Triplett's request to modify the Columbus, Ohio television market is referenced in Docket No. 87-24, 3 FCC 2d at 6176 n. 15, which was incorporated into the instant proceeding. \11\In response to the Notice in this proceeding, the proponents of three previously-filed market change petitions for rulemaking filed comments which incorporated by reference their rulemaking petitions and urged the adoption of their Sec. 76.51 market amendment proposals. One of these proponents, Star Cable Associates (``Star''), operator of a cable television system serving the community of Brazoria, Texas, and portions of Brazoria County, Texas, filed a petition for reconsideration based on the concept that although the Commission granted other requests to modify existing television markets, the Commission did not act on Star's request to amend Sec. 76.51 to add the community of Alvin to the Houston, Texas market. Star states that it has had such a request pending before the Commission since January 1991. Star's comments to the Notice in this proceeding were incorporated into and filed with Adelphia, et al. and included numerous other cable operators. These parties were arguing that the Commission need not revise the Sec. 76.51 market list, stating that ``[n]o revision to this list is needed to implement the must-carry rules since the current ADI markets are to be used for determining must-carry rights.'' It was suggested in those comments that the Commission ``might wish to update the list * * * to add new communities to existing markets for stations which have gone on the air since the list was last revised'' and, in that context noted the copyright consequences explained in the pending petition regarding the Houston market. However, neither Adelphia nor Star specifically requested action in the must-carry context on Star's pending petition for rulemaking. Under these circumstances, we do not believe that it was erroneous to defer action on the Star petition. ---------------------------------------------------------------------------

26. In light of the nature of this proceeding, the statutory instruction to amend, as necessary, Sec. 76.51, and the incorporation by reference of the issues in Docket 87-24, we conclude that the Notice amply alerted the public that potential amendments to that rule section could be made in the context of this specific proceeding.\12\ The Commission explicitly sought public comment on what modifications to Sec. 76.51 would be necessary to fulfill the directive of Section 614(f), and we believe that specific market change proposals are a natural and logical outgrowth of the range of issues presented in the Notice and discussed in the comments filed in this proceeding. Accordingly, we are not persuaded by the petitioners that the Notice did not provide adequate notice to interested parties that specific amendments to Sec. 76.51 were likely to be considered in this proceeding. ---------------------------------------------------------------------------

\12\Neither the APA nor the Commission's rules specifically required that the petitioners receive personal service of the particular market change proposals tendered in comments filed in this proceeding. Moreover, we observe that at least one petitioner, Outlet, notes that the filing of Triplett's submission was referenced in a public notice of comments received in this docket. However, we do not agree that the Commission was somehow obligated to indicate the nature of Triplett's comments, and the petitioners offer no support for that particular proposition. To the extent that Triplett incorporated by reference its previous request regarding Chillicothe, which was also noted in Docket 87-24, we do not believe that obviated the responsibility of interested parties to assess the nature of comments received in response to the general rulemaking issues specifically raised in the Notice. ---------------------------------------------------------------------------

27. We disagree with the petitioners' contentions that amendment of the Columbus market first required the issuance of an independent notice of proposed rulemaking. The fact that we said in the Notice that we may consider further revisions to Sec. 76.51 on an ad hoc basis did not preclude the Commission's taking specific action on particular modifications consistent with the guidance provided by the 1992 Cable Act where the record indicated that such changes were warranted.\13\ ---------------------------------------------------------------------------

\13\We do not agree that the action taken with respect to a proposal to include Athens in the Atlanta market indicates that the Commission could only act in independent and separate rulemaking proceedings. The Georgia Public Television Commission (``GPTC''), licensee of noncommercial educational television station WGTV(TV), Athens, Georgia, sought to include Athens as a designated community in the Atlanta market essentially to increase the station's visibility and fund raising in the market. GPTC's proposal was not submitted in the instant proceeding directly or incorporated by reference, but rather in comments supporting the requested action in MM Docket 92-295, which specifically addressed the Rome proposal. Parties commenting on MM Docket 92-295 had no opportunity to comment upon the Athens proposal in the context of that proceeding. Moreover, GPTC's proposal differs significantly from the competition and carriage issues vis-a-vis commercial stations raised in either the instant proceeding or in MM Docket 92-295 (relating specifically to Rome). In light of the action taken in the Report and Order, the Commission appropriately terminated MM Docket 92-295, and invited GPTC to refile its proposal for consideration in an independent proceeding. ---------------------------------------------------------------------------

3. Selection of Signals. 28. Definition of Substantial Duplication. Section 614(b)(5) provides that a cable operator is not required to carry the signal of any local commercial television station that substantially duplicates the signal of another local commercial television station which is carried on its cable system, or to carry the signals of more than one local commercial television station affiliated with a particular broadcast network.\14\ In the Report and Order, based on the legislative history of this section of the 1992 Cable Act, we decided that two stations ``substantially duplicate'' each other ``if they simultaneously broadcast identical programming for more than 50 percent of the broadcast week.'' For purposes of this definition, identical programming means the identical episode of the same program series.\15\ ---------------------------------------------------------------------------

\14\Western Broadcasting Corporation of Puerto Rico, licensee of Station WOLE, Aguadilla, requests that the Commission reconsider its rules with respect to their application to WOLE, ``given the unique situation in Puerto Rico.'' We note that such a request is more appropriately made as a petition for special relief rather than as part of a general rulemaking proceeding. \15\We also consider programming to be duplicative where the stations involved are located in contiguous time zones and the hour of broadcast differs by one hour. ---------------------------------------------------------------------------

29. We continue to believe that our definition of substantial duplication is appropriate for determining signal carriage obligations. We note that it is consistent with the legislative history that indicates that this term refers to the ``simultaneous transmission of identical programming on two stations'' and which ``constitutes a majority of the programming on each station.'' While we agree with NCTA that Congress gave the Commission discretion to define substantial duplication, we continue to believe that the most appropriate approach here is to act consistently with the legislative history. Congress did not intend for a single duplicative program, whether subject to blackout or not, to be the determining factor. Finally, we observe that our rules often use different definitions for similar terms based on the purpose of the policy involved. The Commission's exclusivity rules are intended to protect the rights that a broadcaster has bargained for with the supplier of a particular program. The must-carry rules, however, are intended to ensure that local stations are available to cable subscribers. Thus, we reject the proposed modification to our definition of substantial duplication. 4. Low Power Television Stations. 30. Qualified Low Power Television Station. Section 614(h)(2) contains the statutory requirements a low power television station (LPTV) must meet before it will be considered ``qualified'' for must-carry purposes. Section 614(h)(2) provides that an LPTV station must broadcast for at least the minimum number of hours the Commission requires of commercial broadcast stations. The station must adhere to certain Commission requirements regarding non-entertainment programming and employment. The station must address local news and informational needs that full power stations are not adequately serving because the full power stations are distant from the LPTV station's community of license. The station must comply with the Commission's LPTV interference regulations. The station must be within 35 miles of the cable headend and deliver a good quality over-the-air signal to the headend. The station's community of license and the cable system's franchise area both must have been located outside of the largest 160 Metropolitan Statistical Areas (MSA's) on June 30, 1990, and the population of the LPTV station's community of license must not have exceeded 35,000 on that date. Lastly, there cannot be any full power television station licensed to any community within the county or other political subdivision served by the cable system. As we stated in the Report and Order, a low power television station must meet all of the statutory requirements to be ``qualified'' for must-carry status. Cable systems are required to carry a qualified LPTV station only if there are not sufficient full power local commercial television stations to fulfill the cable operator's must-carry obligations under Section 614(b). 31. Moran Communications (``Moran'') and the Community Broadcaster Association (``CBA'') request a revision to the requirement in Section 614(h)(2)(F) that, in order for an LPTV station to be qualified, there cannot be any full power station licensed to any community within the county or political subdivision served by the cable system. Under this exception, Moran and CBA explain, an LPTV station would qualify for must-carry rights if it meets all the requirements of subsections 614(h)(2), except for subsection F, and if none of the full power stations in the county or political subdivision served by the cable system offers local news or informational programming. They contend that when a satellite station is repeating another station's signal and not broadcasting any local news or informational programming to meet the needs of the local community, the satellite station should not be considered a full power station for the purposes of Section 614(h)(2)(F). CBA also argues that a satellite station is a ``passive repeater,'' and because Section 614(h)(1)(b)(1) specifically excludes passive repeaters from the definition of a local commercial television station, it follows that Congress intentionally gave less to repeaters than to originating stations in terms of must-carry rights. Therefore, argues CBA, ``[t]he Congressional recognition of the lesser value of the repeaters must be incorporated into the must-carry rule * * *.'' In opposition, NCTA argues that the Commission cannot rewrite the statute, which defines qualified LPTV stations and governs the must-carry rights of LPTV stations. 32. We agree with NCTA that the provisions of the 1992 Cable Act may not be amended by the Commission through the rule making process. Further, contrary to CBA's interpretation of Section 614(h), satellite stations meet the definition of a local commercial television station, are full power stations pursuant to Section 614(h)(2)(F), and are generally not simply passive repeaters. We disagree with CBA's contention that Congress intended satellite stations to be treated differently from other full power stations when reviewing the statutory requirements an LPTV station must meet to gain must-carry status. Moran and CBA request that we codify the exception in footnote 217 to the qualification requirements of an LPTV station. While the Report and Order had suggested the possibility of additional circumstances in which LPTV carriage might be warranted, it now appears that this is an area where the specific statutory provisions and the balancing incorporated therein must necessarily guide our enforcement of the mandatory carriage provisions for LPTV stations. C. Manner of Carriage Provisions Applicable to Commercial and Noncommercial Stations 1. Content To Be Carried. 33. Section 614(b)(3)(A) and Section 615(g)(1) require cable operators to carry the primary video, accompanying audio, and line 21 closed caption transmission, in its entirety, of both qualified local commercial and NCE stations when fulfilling their must-carry obligations. With respect to qualified local commercial stations, cable operators also are required, to the extent technically feasible, to retransmit program-related material carried in the vertical blanking interval (VBI) or on subcarriers. Retransmission of other material in the VBI or other non-program-related material (including teletext and other subscription and advertiser-supported information services) is at the discretion of the operator. With respect to local qualified NCE stations, cable operators are required to transmit, to the extent technically feasible, program-related material carried in the VBI, or on subcarriers, that may be necessary for receipt of programming by handicapped persons or for educational or language purposes. Retransmission of other material in the VBI or on subcarriers is at the discretion of the operator. Cable operators may, where technically feasible and appropriate, remove ghost-cancelling information carried in a station's VBI if the cable operator applies an adequate alternative methodology at the headend. 34. In the Report and Order, we decided that the factors enumerated in WGN Continental Broadcasting, Co. vs. United Video Inc. (``WGN''), provide useful guidance for what constitutes program-related material.\16\ We declined to further define ``program-related,'' noting that carriage of information in the VBI is rapidly evolving. As a result of our reliance on the approach followed in WGN for guidance, we rejected a proposal by A.C. Nielsen Company (``Nielsen'') to require program identification codes to be carried by a cable system. ---------------------------------------------------------------------------

\16\In the Report and Order, we used a cite of 685 F.2d 218 (7th Cir. 1982), which was the original citation for the case, prior to rehearing. Upon rehearing, the court affirmed the factors on which we are relying. ---------------------------------------------------------------------------

35. The WGN case addressed the extent to which the copyright on a television program also included program material in the VBI of the signal. The WGN court set out three factors for making a copyright determination. First, the broadcaster must intend for the information in the VBI to be seen by the same viewers who are watching the video signal. Second, the VBI information must be available during the same interval of time as the video signal. Third, the VBI information must be an integral part of the program. The court accepted WGN's future programming schedules as an ``integral part of the program.'' The court in WGN held that if the information in the VBI is intended to be seen by the viewers who are watching the video signal, during the same interval of time as the video signal, and as an integral part of the program on the video signal, then the VBI and the video signal are one copyrighted expression and must both be carried if one is to be carried. While the court did not define an ``integral part of the program,'' the WGN VBI information not only included local news, but also contained future programming schedules for WGN, and the court upheld the VBI as one copyrightable expression with the video signal.\17\ ---------------------------------------------------------------------------

\17\In an ex parte presentation, StarSight requested that the Commission determine that its product, which is transmitted in the VBI, meets the WGN test. We believe that such a request should not be resolved in the context of a rulemaking proceeding, but rather should be dealt with separately through the special relief process. ---------------------------------------------------------------------------

36. We continue to believe that the factors articulated in WGN provide the best guidance for determining whether material in the VBI is program-related and, therefore, must be carried by the cable system. Accordingly, material that is intended to be seen by the viewers of the main program, during the same time interval as the main program, and which is an integral part of the main program will be entitled to carriage along with the main signal of the must-carry station. However, on reconsideration, we clarify that the factors set forth in WGN do not necessarily form the exclusive basis for determining program-relatedness. We believe there will be instances where material which does not fit squarely within the factors listed in WGN will be program-related under the statute. For example, on reconsideration, although SID codes may not precisely meet each factor in WGN, we find that they are program-related under the statute because they constitute information intrinsically related to the particular program received by the viewer. Further, SID codes provide important information that is useful to both broadcasters and cable operators. We note that the 1992 Cable Act recognized the importance of the national ratings period and prohibited cable operators from repositioning or deleting stations during that time. This interpretation is consistent with previous Commission decisions in which SID codes were found to be program-related in other contexts. Finally, we reiterate that, in order to be program-related, it is not necessary that the copyright holder in the main program and in the material in the VBI be the same. 2. Channel Positioning. 37. The 1992 Cable Act provides both commercial and NCE television stations which elect must-carry status the additional right to select the channel position on which they will be carried by the cable system, within certain specified options. Section 614(b)(6) provides that the signals of a local commercial television station carried pursuant to the must-carry rules must be carried on either (1) the same channel on which the station is broadcast over-the-air, (2) the cable channel on which it was carried on July 19, 1985, or (3) the cable channel on which it was carried on January 1, 1992. The election, in the absence of conflicts, is left up to the station involved. See 47 U.S.C. 534(b)(6). Similarly, Section 615(g)(5) requires that NCE signals carried pursuant to must-carry requirements must appear on the cable system channel number on which the qualified local NCE station is broadcast over-the-air, or on the channel on which it was carried on July 19, 1985, at the election of the station. In either case, another channel number that is mutually agreed upon by the station and the cable operator may be selected. Alternatively, the broadcast station and cable operator may agree on a mutually acceptable alternative channel position. We note that, with respect to channel position, a qualified LPTV station enjoys the channel positioning rights of a commercial television station. Section 76.57 is being revised accordingly. 38. Based on comments received in response to the Notice, we declined in the Report and Order to adopt a formal priority structure for resolving conflicting channel positioning claims. We stated that we expected compliance with the channel positioning requests of broadcasters ``absent a compelling technical reason for not being able to accommodate such requests,'' and that ``inconvenience, marketing problems, the need to reconfigure the basic tier or the need to employ additional traps or make technical changes'' would not be sufficient reasons to deny a channel positioning request. In addition, we determined that ``only where placement of a signal on a chosen channel results in interference or degraded signal quality to the must-carry station or an adjacent channel, or causes a substantial technical or signal security problem, will we permit cable operators to carry a broadcast signal on a channel not chosen by the station.'' We noted that most systems would be able to configure their service to meet this statutory requirement and that a cable system claiming that it cannot meet a channel positioning request for technical reasons will have to provide evidence that clearly demonstrates that inability. 39. In the Order adopted July 15, 1993, we addressed certain issues relating to continued carriage of retransmission consent stations and the channel position for ``default'' must-carry stations. In that Order, we stated that cable systems which are required to carry the signal of a default station ``shall place that signal on one of the statutorily defined positions, at the system's discretion.'' Although the footnote to that sentence correctly stated that the station licensee makes the election, the text incorrectly stated ``at the system's discretion.'' We clarify that, as required by the 1992 Cable Act, the choice of statutorily defined channel position is made by the station, not the cable system. The Order also determined that, in the event of a conflict, the station making an affirmative election has priority over the default station. Finally, we stated that, where the station making an affirmative election has selected the only statutory channel position available to the default station, the cable system may place the default station on a channel of the cable system's choice, so long as that channel is included on the basic tier. Section 76.57 of our rules was amended to reflect the channel positioning options discussed and adopted in the Order. 40. The 1992 Cable Act provides that the channel position of a station which has elected must-carry rights is a decision to be made by the broadcaster from among the listed statutory alternatives. The Act does not distinguish between VHF and UHF stations. We emphasize that our statements in the Report and Order regarding channel positioning apply to UHF, in addition to VHF, stations. As noted there, cable operators must comply with the channel positioning requirements absent a compelling technical reason.\18\ Further, in response to a broadcaster's complaint regarding denial of a channel positioning request, a cable system will be required to provide evidence to the Commission clearly demonstrating that the operator cannot meet the request for technical reasons. As part of such a showing, a cable operator may present evidence as to the costs involved in remedying the technical problem. ---------------------------------------------------------------------------

\18\As noted above, inconvenience, marketing problems, the need to reconfigure the basic tier or to employ additional traps or make technical changes are not sufficient reasons for denying the channel positioning request of a must-carry signal. Only where placement of a signal on a chosen channel results in interference or degraded signal quality to the must-carry station or an adjacent channel, or causes a substantial technical or signal security problem will we permit cable operators to carry a broadcast station on a channel not chosen by the station. ---------------------------------------------------------------------------

3. Signal Quality 41. In the Report and Order and the Clarification Order we addressed issues relating to the signal quality of a broadcast station asserting must-carry rights. We noted that Section 614(h) established specific minimum signal levels for a good quality signal of a commercial television station (i.e.,-45 dBm for UHF signals and -49 dBm for VHF signals). Neither the 1992 Cable Act nor the Commission's Orders specifically stated what would be considered a ``good quality signal'' for must-carry purposes with respect to noncommercial stations, educational translator stations, and low power television stations, but Section 615(g)(4) states that the Commission may define a ``signal of good quality'' for noncommercial stations. We do so now, on our own motion. 42. We note that in a Memorandum Opinion and Order (Independence Public Media of Philadelphia, Inc. against Suburban Cable TV Co., Inc.) CSR-3806-M), 8 FCC Rcd 6319 (1993), the Mass Media Bureau decided to utilize the standards for commercial television stations as prima facie tests to initially determine, absent other evidence, whether noncommercial stations place adquate signal levels over a cable system's principal headend. The Mass Media Bureau has relied on this test in processing must-carry complaint cases and we believe that is appropriate. With respect to low power and NCE translator stations, we are adopting the same signal quality standard of -49 dBm for VHF and -45 dBm for UHF signals. 43. With respect to the manner of testing for a good quality signal, we find that the Mass Media Bureau has adopted an appropriate method for measuring signal strength in the Memorandum Opinion and Order. Generally, if a test measuring signal strength results in an initial reading of less than -51 dBm for a UHF station, at least four readings must be taken over a two-hour period. If the initial readings are between -51 dBm and -45 dBm, inclusive, readings must be taken over a 24-hour period with measurements not more than four hours apart to establish reliable test results. For a VHF station, if the initial readings are less than -55 dBm, we believe that at least four readings must be taken over a two-hour period. Where the initial readings are between -55 dBm and -49 dBm, inclusive, readings should be taken over a 24-hour period, with measurements no more than four hours apart to establish reliable test results. 44. Cable operators are further expected to employ sound engineering measurement practices. Therefore, signal strength surveys should, at a minimum, include the following: (1) Specific make and model numbers of the equipment used, as well as its age and most recent date(s) of calibration; (2) description(s) of the characteristics of the equipment used, such as antenna ranges and radiation patterns; (3) height of the antenna above ground level and whether the antenna was properly oriented; and (4) weather conditions and time of day when the tests were done. We believe that adherence to these procedures and requirements will result in fewer disputes over the signal quality of broadcasting stations. D. Procedural Requirements 1. Compensation for Carriage. 45. Copyright Liability.\19\ Under the 1992 Cable Act, a cable operator is generally not required to carry a station that would otherwise qualify for must-carry status if the station would be considered distant for copyright purposes, unless the station indemnifies the cable operator for its copyright liability.\20\ The Commission required cable operators to notify local commercial and noncommercial stations by May 3, 1993 that they may not be entitled to must-carry status because their carriage may cause an increased copyright liability. In the Report and Order, the Commission stated that it expected cable operators and broadcasters to cooperate with each other to ensure that operators are compensated for the cost of carriage of ``distant'' must-carry signals and that broadcast licensees pay only their fair share.\21\ The Commission stated that each licensee should be responsible for the increased copyright costs specifically associated with carriage of its station as a must-carry signal and that stations should be counted in the order they satisfy all the necessary conditions for attaining must-carry status. The Commission also determined that it would be reasonable for a cable operator to receive a written commitment for such payments from a broadcaster in return for an estimate of the broadcaster's expected copyright liability, based on previous payments and financial information. ---------------------------------------------------------------------------

\19\We note that the Satellite Home Viewer Act of 1994, P.L. 103-369, 108 Stat. 3477, which was signed into law on October 18, 1994, includes a provision to amend Section 111(f) of title 17, United States Code, specifically with reference to the definition of ``local service area of a primary transmitter'' by inserting after ``April 15, 1976,'' the following: ``or such station's television market as defined in Sec. 76.55(e) of title 47, Code of Federal Regulations (as in effect on September 18, 1993), or any modifications to such television market made, on or after September 18, 1993, pursuant to Sec. 76.55(e) or Sec. 76.59 of title 47 of the Code of Federal Regulations,''. We acknowledge that there may be some effect on pending petitions and on our current rules. We will revisit, to the extent necessary, those rules and policies which may be affected. \20\However, a qualified local noncommercial station that has been carried continuously since March 29, 1990 is not required to reimburse a cable operator for its copyright liability to retain its must-carry status. In addition, a distant noncommercial station that has been imported prior to March 29, 1992, and which continues to be imported to meet the statutory requirements of Section 615, shall not be required to reimburse for copyright liability. \21\We clarify that, in situations where copyright liability is incurred for carriage in some of the communities served by a single cable system, the broadcaster must indemnify the operator for that copyright liability for carriage in any community served by the system, unless the operator is able to provide different channel line-ups to the different communities. ---------------------------------------------------------------------------

46. On May 28, 1993, the Commission adopted a Clarification Order (``Clarification'') that, among other things, addressed certain copyright issues. We stated that we would require a cable operator to provide a broadcast station with a good faith estimate of the potential copyright liability for carriage of the station during the next copyright accounting period, as well as a copy of the most recent form filed with the Copyright Office for existing distant signal carriage that details the payments made for carriage of distant signals. The cable operator, however, is not required to make legal judgments pertaining to the amount of indemnity involved. In addition, a cable operator is required to provide such information within three business days of receipt of a written request from a broadcaster.\22\ Any cable operator not providing sufficient information to a broadcast station regarding potential copyright liability in the required timely fashion may be subject to Commission sanctions. ---------------------------------------------------------------------------