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(1) (a) (i) 1) a)D )DDDFrfQq "i~'^09FSS999Sq+9+/SSSSSSSSSS99qqqSggnxggxx9In]nxgxgS]xgg]]?/?FS9SSISI/SS//I/xSSSS??/SInII?C/CZ9+ZF999+999999S9S/gSgSgSgSgSnnIgIgIgIgI9/9/9/9/nSxSxSxSxSxSxSxSxS]IgSxSxSxS]IxSgSgSgSgSnInInZnIxdgIgIgIgIxSxSxSxZxSxZxS9/9S999SSZZnI]/]<]9]5]/nSanSnSxSxSng?g?g?S?S?S?ZZ]<]/]FxSxSxSxSxSxSn]Z]?]?]?xS]9nSS?]9]Sd+SS8%8WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuddddddddddddddddddddddddddddddddddddddddN)* yO- X   ) X-w #Xj\  P6G;9XP# Federal Communications Commission`)(#5DA 971010 ă  yxdddy )vK Before the Federal Communications Commission  yO}"Washington, D.C. 20554 ă  yO -l#Xj\  P6G;9XP#у  X-In the Matter of  hh,V)  X-Petition for Relief of hh,V) ` `  hh,V)  X-LORILEI COMMUNICATIONS INC.,V)  X- d/b/a THE FIRM, hh,V)  Xu-X` hp x (#%'0*,.8135@8:-  the regulations.j>6  {O%-ԍSee Second Order, Appendix D, Revised Rules, Section 76.970.j The Commission also adopted procedures for resolution of disputes, providing   for the filing of a petition for relief within sixty days of an alleged violation of a leased access  X-statutory or regulatory provision and for the filing of a response.  {O!-ԍSee Second Order, Appendix D, Revised Rules, Section 76.975 and 47 C.F.R.  76.975 (1996).  X- III. THE PLEADINGS  X- A. The Petitioner's Allegations  X-  4.` ` The petition describes The Firm as an advertising agency and video production"Z ,N(N(ZZP"   company, which produces thirty minute programs for automotive dealers, recreational vehicle  X-  dealers, and real estate companies to air on commercial leased access channels.7  yOb-ԍPetition, p. 1.7 The Firm states   .that it initially tried to obtain a leased access channel on Continental's cable system through a   series of letters, facsimile messages and phone conversations exchanged with Continental. The   Firm states that it requested from Continental information including the number of system   channels, full time and part time leased access rates, the number of system subscribers reached   by leased access and system format for playback of leased access tapes. The Firm states that an   initial response from Continental indicated that a minimum purchase of thirty days was required   for part time leased access, that Continental did not provide facilities for the playing of tapes,   irequiring that a video and audio signal be delivered to the cable system headend. The Firm states   that Continental's representative subsequently declined to negotiate these matters over the phone   yand indicated that the thirty day minimum purchase requirement was nonnegotiable. The Firm   further states the Continental representative later indicated that tape playback might be provided for a fee but refused to specify the amount of the fee.  X -  5.` ` The Firm asserts that Continental's refusal to provide the minimum level of   jtechnical support to present its material is inconsistent with the requirements of Section 76.971   of the Commission's rules. The Firm asserts also that Continental's refusal to specify the playback fee results in blocking access to the cable system in violation of the Commission's rules.  X4- B. Continental's Response  X-  @6.` ` Continental asserts in response that The Firm is an advertising agency and, as such,   is not entitled to leased access channels and thus lacks standing to file a leased access petition.   lIt asserts that the Congress did not intend for the leased access obligations to extend to  X-  icommercial advertising. Continental cites as support for this argument Sofer v. United States, No. 2:94cv1182, slip op. (E.D.VA., June 7, 1995), 1995 WL 576833 (E.D.Va.).  X~-  47.` ` Continental states that it provided The Firm with a schedule of rates and a   -proposed leased access contract for execution. Continental, however, continues to argue that its   thirty day minimum purchase requirement is reasonable and consistent with the Commission's   rules. Furthermore, Continental maintains that, although not required to purchase equipment not   already owned to facilitate carriage of leased access programming, certain video playback  X -equipment requested by The Firm has been purchased for use in providing leased access services.  X- "X ,N(N(ZZ"  X-III. DISCUSSION   X- A. Eligibility for Commercial Leased Access Channels  X-  8.` ` We first address Continental's claim that it has no obligation under Section 612   of the 1992 Cable Act, or the Commission's implementing regulations, to make a leased access   channel available for the presentation of programming that includes commercial advertising. We conclude that it does.  X1-  9.` ` Section 612(a) states that the purpose of the commercial leased access requirement   Kis to promote competition "in the delivery of diverse sources of video programming and to assure   that the widest possible diversity of information sources are made available to the public from  X -  cable systems in a manner consistent with the growth and development of cable systems.">  yOe -ԍ47 U.S.C.  532(a).>   Section 612(b) implements this goal by mandating that cable operators "designate channel   capacity for commercial use by persons unaffiliated with the operator," and requiring that  X -  specifically stated percentages of activated channels be so designated.> X yO-ԍ47 U.S.C.  532(b).> The Commission's   dispute resolution rules provide that any person aggrieved by the failure or refusal of a cable   operator to make commercial channel capacity available in accordance with the provisions of   .Section 612 or the Commission's implementing regulations may file a petition for relief with the  XK-Commission.B K yO-ԍ47 C.F.R.  76.975(b).B  X-  10.` ` The Firm states that it is "an advertising agency/video production company" which   produces thirty minute programs for automotive dealers, recreational vehicle dealers, real estate  X-  companies, camp grounds, and others "to air on commercial leased access channels."7 x yO-ԍPetition, p. 1.7 We read   this statement as a representation by The Firm that it is a video production company (as well as   an advertising agency) and that it seeks to present its video program productions on a commercial   ileased access channel to be obtained from Continental. Continental has presented nothing which   ldisputes that representation. Absent a showing of any affiliation between The Firm and   Continental, we find that The Firm qualifies as an unaffiliated "diverse source of video   jprogramming" for whom Continental is required by Section 612 to "designate channel capacity  XN-  for commercial use."FN yO$-ԍ47 U.S.C.  532(a) and (b).F Accordingly, we reject Continental's argument that The Firm is not   xentitled to leased access channels because The Firm is an advertising agency. Nothing in Section   612 may be construed as disqualifying The Firm from use of a leased access channel, simply   because it is engaged in business as an advertising agency, in addition to being engaged in" ,N(N(ZZ"   business as a video production company providing a "diverse source of video programming" within the meaning of Section 612.  X- B. Standing to File Section 76.975 Petition for Relief  X-  11.` ` Moreover, we disagree with Continental that Sofer vs. United States, supra,   ysupports the proposition that The Firm does not have standing to file a petition for relief under  Xa-  47 C.F.R.  76.975. Sofer involved a claim that a cable operator refused to sell commercial   Madvertising time on a cable system and allegations, not specified in the court's Opinion and  X5-  Order, of violations of Section 612 and related regulations. The court in Sofer found that Section  X -  612 and related Commission regulations have no application to commercial advertising.   However, the case before us deals with advertising time on a leased access channel. Nothing in   ?Section 612 or the Commission's leased access rules prohibits a leased access user from   distributing advertisements let alone programming containing advertisements. The inclusion of  X -  advertising content in video program productions?  {O=-ԍSee  3 above.? does not disqualify independently produced   video programming, such as that produced by The Firm, from carriage on Section 612 designated   jleased access channels. Moreover, cable operators may consider the content of leased access   programming only to the extent necessary to establish which pricing category applies to such  Xh-  jprogramming.hZ {Os-  ԍSee 47 U.S.C.  532(c)(2) and 47 C.F.R.  76.970(f) (1995). The pricing categories applicable when the  {O=-petition was filed have been modified. See Second Order,  49, 50. Accordingly, we will direct Continental to provide such leased access channel capacity as may be requested by The Firm consistent with the requirements of Section 612.  X#- C. ThirtyDay Minimum Purchase Requirement  X-  p12.` ` Continental asserts that nothing in the Cable Act or the Commission's rules   prohibits the establishment of a thirtyday minimum purchase requirement for parttime leased   .access. Exhibit "A" to the Channel Lease Agreement provided to The Firm states, at item 4.a.,  X-  "30Day minimum purchase applies."H {O-ԍSee Response, Exhibit E. H Neither The Firm nor Continental provided any   description of how the thirtyday purchase requirement would be applied. However, Continental   argues that cable operators must be permitted to maintain minimum purchase requirements, in   lorder to minimize the number of time slots that will otherwise become blank on a channel   carrying parttime leased access programming. Continental asserts that carriage of parttime   programming will inevitably displace fulltime programming services and will lead to waste of   valuable channel capacity that will harm cable operators, fulltime programmers and subscribers   alike. It suggests that, absent minimum purchase requirements, cable operators will be forced to   replace fulltime programming with disjointed, randomly spaced blocks of parttime programming   on channels with the remaining unused time slots probably remaining dark. Continental asserts   .that cable operators will otherwise be unable to use slots not taken by parttime programming. " H,N(N(ZZ"   Continental asserts that a further reduction of available channel capacity for new and innovative   fulltime programmers will result from such inefficient devotion of valuable channel space to   Lparttime programmers. Continental asserts that parttime minimum purchase requirements will   tend to add some measure of programming continuity and help reduce the resulting confusion and   .dissatisfaction among subscribers that will otherwise result from an disjointed mix of parttime   programming on a leased access channel. Continental also argues that a minimum purchase   requirement will guarantee cable operators a minimum amount of compensation for use of extremely valuable channel capacity.   X1-  }13.` ` Continental has provided no empirical evidence that supports the suggestion that   parttime leased access will displace fulltime service, or that enough time slots will remain   unused on channels carrying parttime leased access programs to cause confusion and   dissatisfaction among subscribers. Furthermore, Continental has not described how the thirtyday  X -minimum requirement would be applied.  yON-  ԍ The Commission recently visited the question of minimum contract length and declined to establish a minimum  {O-  contract length. See Second Report,  110. The Commission noted that the requirement that operators accommodate   Zall leased access requests as long as capacity exceeds demand should assure leased access programmers access until the statutory setaside of channels is met.    X - D. Technical Equipment Support  Xy-  14.` ` The record shows that certain video playback equipment requested by The Firm   has been purchased, although the cable operator initially took the position that it had no   obligation to do so. Section 76.971(c) of the rules provide that a cable operator must provide the   minimum level of technical support necessary for the leased access programmer to present their  X-  Mmaterial on the air.Az yOH-ԍ47 C.F.R.  76.971(c).A In the Second Report, the Commission clarified the obligation of cable   [operators with respect to technical support, such as the provision of equipment. If an operator   <must purchase equipment not typically used by nonleased access programmers to accommodate   a leased access programmer, the operator may either (1) purchase the equipment for itself and   lease it to the programmer at a reasonable rate or (2) purchase the equipment and require the  X-  programmer to repurchase the equipment at full price and take ownership of it.J  {Og -ԍSee Second Report,  115.J The   Commission also made it clear that the maximum leased access rate determined under Section   "76.970 includes the cost of technical equipment ordinarily provided in common to all  Xg-programmers.;g {O$-ԍId.  114.; In the future, we expect Continental to comply with these requirements. "P. ,N(N(ZZ"Ԍ X- E. Other Forms of Relief hh,  X-  #15.` ` The Firm requests relief in the form of compensation for time expended and costs   zincurred in bringing this action before the Commission. Neither the Communications Act of   1934, as amended, nor the 1992 Cable Act provides for recovery of costs associated with the   filing of a petition for relief with the Commission for alleged violations of the statutory leased   yaccess provisions or of the Commission's regulations issued under those statutory provisions.  X_-Accordingly, petitioner's request for compensation for such costs will be denied.BX_ yO-  JԍContinental's request for imposition of sanctions against The Firm will be denied. The record does not support   [the assertion that The Firm misused the Commission's leased access rules in its efforts to obtain leased access services from Continental.B  X1- "Py  IV. ORDERING CLAUSES  X -  16.` ` For the foregoing reasons, IT IS ORDERED pursuant to 47 C.F.R.  76.975(f)   that the respondent Continental, the current operator of the subject cable systems, shall, within   twenty days from the release date of this order, provide to The Firm such leased access channel capacity as may be requested consistent with the requirements of 47 U.S.C  532.  X-17.` ` IT IS FURTHER ORDERED , that the petition for relief of The Firm (a) IS  Xy-GRANTED to the extent indicated in paragraphs 8 through 11 and paragraph 15 above and  Xb-(b) in all other respects IS DENIED.  X4-18.` ` IT IS FURTHER ORDERED that the request of Continental for imposition of  X-sanctions against The Firm IS DENIED.  X-19.` ` This action is taken pursuant to authority delegated by Section 0.321 of the Commission's rules, 47 C.F.R.  0.321. X` hp x (#%'0*,.8135@8: