******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 ) In the Matter of ) Petition for Relief of ) ) Roderick C. Harsh, ) United Media Concepts ) Petitioner, ) ) vs. ) CSR 4617-L ) TWC Cable Partners d/b/a Emerald Coast Cable ) Television, ) Respondent, ) ) For Leased Access Channels ) MEMORANDUM OPINION AND ORDER Adopted: May 6, 1997 Released: May 12, 1997 By the Chief, Cable Services Bureau: I. Introduction 1. Roderick C. Harsh on behalf of United Media Concepts (herein "United"), a program producer, filed a petition for relief pursuant to 47 C.F.R.  76.970 (e) alleging that TWC Cable Partners d/b/a Emerald Coast Cable (herein "TWC") violated the Commission's commercial leased access rules and requested an order for relief. United filed an amended petition. TWC filed a response asserting that TWC fully complied with its obligations under the commercial leased access requirements and that the petition should be denied. Thereafter, United filed a letter in reply to TWC's response and TWC filed a letter setting forth the current status of the matter. II. Background 2. In 1984, Congress amended the Communications Act of 1934 by adding among other things a commercial leased access requirement, pursuant to which cable operators with 36 or more activated channels must set aside part of their channel capacity for use by video programmers that are not affiliated with them. The Cable Television Consumer Protection and Competition Act of 1992 (the "1992 Cable Act") revisited the leased access requirement and directed the Commission to establish rules for determining maximum reasonable rates for, and reasonable terms and conditions for the use of, commercial leased access channels. Pursuant to that Congressional directive, the Commission established regulations applicable to leased access channels in its proceedings in Implementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992; Rate Regulation, MM Docket 92-266, (the Rate Order), 8 FCC Rcd 5631, 5956-5961 (1993). The Commission revisited these regulation in Implementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992, Leased Commercial Access, Second Report and Order and Second Order on Reconsideration of the First Report and Order, CS Docket 96-90, FCC 97-27, released February 4, 1997 ("Second Order"). III. Petition 3. In its petition, United asserts that it sought access on TWC's cable system in order to air a thirty-minute news magazine program. United initially contended that in response to its request for access, TWC required a number of terms and conditions that were in violation of the leased access rules. However, the record in this case shows that subsequent to the filing of the petition, all issues in dispute have been resolved between the parties except one: TWC's requirement that United procure liability insurance before it grants United's request for leased access. 4. In connection with this issue, United contends that TWC is requiring it to obtain insurance policies in amounts of $1 million and $3 million. United states that the high cost of this insurance (which it estimates to be over $3,500) will prevent it from gaining access. United further argues that this insurance is unwarranted because the TWC is protected from liability arising out of its programming pursuant to Section 638 of the Communications Act. That section provides: "Nothing in this title shall be deemed to affect the criminal or civil liability of cable programmers or cable operators pursuant to the Federal, State, or local law of libel, slander, obscenity, incitement, invasions of privacy, false or misleading advertising, or other similar laws, except that cable operators shall not incur any such liability for any program carried on any channel designated for public, educational, governmental use or on any other channel obtained under Section 612 or under similar arrangements unless the program involves obscene material." 6. In response, TWC contends that its requirement that United procure error and omissions insurance is a standard business practice which is included in its leased access programming agreements. TWC states that the Commission previously found that standard contract provisions do not violate the Commission's rules if the requirements do not require program production standards in excess of those required for public access channels. TWC states that the insurance requirement may be characterized as a standard provision which is unrelated to program production standards, and therefore, it is not unreasonable or inconsistent with Section 76.971(b) of the Commission's rules. TWC further contends that requiring a leased access programmer to obtain errors and omissions insurance is necessary because under current law an operator may be found liable for cablecasting obscene material on commercial leased access channels and further that factual situations might arise in which a cable operator could be subject to a lawsuit based on the content of leased access programming for reasons other than obscenity. TWC also contends that even if a cable operator is insulated from ultimate liability under such lawsuits, it must still incur expenses in defending them. Finally, TWC contends that its insurance requirement was made in good faith and was not a tactic to deny access to TWC's systems and that United has not set forth evidence to demonstrate that its requirement to carry liability insurance is unreasonable. 7. In its reply letter, United states that the insurance that TWC has requested that it obtain is not a standard form of liability insurance used by most businesses, is not designed or intended for use by commercial leased access programmers, and is prohibitive in cost. United further contends that cable operators must not be allowed to discriminate by forcing only certain users of their system to obtain such insurance and that the possibility of having to defend themselves against a lawsuit is a risk that all businesses share. IV. Discussion 8. In Anthony Giannotti v. Cablevision Systems Corporation, we recently confirmed an operator's right to require reasonable liability insurance coverage for leased access programming. In that case, we noted that Mr. Giannotti had not shown that the cost of the required insurance coverage is either prohibitive or imposes an unreasonable cost of doing business as an independent program producer. However, in the instant case, the cost to United of obtaining the insurance required by TWC appears to present an obstacle to United in obtaining leased access. We note that there is no evidence in the record showing the reasonableness of TWC's insurance requirement, such as whether TWC requires non-leased access programmers to obtain insurance or carries insurance in respect of non-leased access programming, whether TWC has incurred litigation costs in this context, or the likelihood that the programming at issue will pose a liability risk. Consequently, we find that TWC's insurance requirement as applied to United is not in compliance with the leased access rules and should be eliminated. V. Ordering Clauses 10. For the foregoing reasons, IT ORDERED that TWC shall eliminate the insurance requirement as applied to United as a prerequisite for leased access, as indicated above. 11. This action is taken pursuant to authority delegated by Section 0.321 of the Commission's rules, 47 C.F.R.  0.321. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau