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                            Before the
                 Federal Communications Commission
                      Washington, D.C. 20554

In re:                          )
                                )
Lorilei Communications, Inc.    )
d/b/a The Firm                  )
                                )
vs.                             )       CSR-4716-L
                                )
Century Communications Corp.,   )
d/b/a/ Mickelson Media, Inc.    )
Dunnellon, Florida              )
                                )
For Leased Access Channels      )

                  MEMORANDUM OPINION AND ORDER

   Adopted:  June 4, 1997               Released:  June 6, 1997

By the Chief, Cable Services Bureau:

                           INTRODUCTION

     1.   Lorilei Communications, Inc., d/b/a The Firm ("Lorilei" or "petitioner") has filed the
above-captioned petition pursuant to the Commission's rules against Century Communications
Corporation, d/b/a Mickelson Media, Inc. ("Century") regarding its cable system in Dunnellon,
Florida, alleging violations of the Commission's leased access rules.  Century filed a response to
Lorilei's petition.

                            BACKGROUND

     2.   The commercial leased access requirements for cable operators were established
by the 1984 Cable Act and amended by the 1992 Cable Act.  The 1984 Cable Act established
a federal scheme through channel leasing to assure access to cable systems by third parties
unaffiliated with the cable operator who have a desire to distribute video programming free of
the editorial control of the cable operator.  Channel set-aside requirements were established
proportionate to a system's total activated channel capacity.  The 1992 Cable Act revised the leased
access requirements and directed the Commission to implement rules to govern this system of
channel leasing.    In its 1993 Report and Order and Further Notice of Proposed Rule Making ("Rate
Order"), the Commission adopted new rules for leased access addressing maximum reasonable
rates, reasonable terms and conditions of use, minority and educational programming, and
procedures for resolution of disputes.  The Commission recently modified some of its leased access
rules in the Second Report and Order and Second Order on Reconsideration of the First Report and
Order ("Second Report and Order").   See also Order on Reconsideration of the First Report and
Order and Further Notice of Proposed Rulemaking in MM Docket No. 92-266 and CS Docket No.
9660 ("Reconsideration Order and Further Notice").  

                     ARGUMENTS OF THE PARTIES

     3.   Lorilei describes itself as an advertising agency/video production company which
produces thirty minute programs to air on commercial leased access channels.  Lorilei alleges that
it requested that Century provide Lorilei with various leased access information about its system and
Century failed to provide the information it requested within seven business days.  Lorilei states that
it asked for information about rates, channel availability, the number of subscribers on the system
reached by leased access, and the "tape format" used by the system for leased access programs. 
According to Lorilei, although Century did eventually send a letter in response to its inquiry, the
letter did not contain the information that it requested.  Instead, Century asked Lorilei to complete
a questionnaire and an application.  Lorilei also states that the letter noted that as a condition of
carriage, a general liability and "errors and omissions" insurance policy would be required to be
obtained in the amount of $1 million. 

     4.   Lorilei further states that it completed the questionnaire/application and forwarded
it to Century, along with a request for additional information.  Lorilei states that it asked for more
information about what the insurance policy should cover, a list of litigation filed against the parent
company, and a list of stockholders in the parent company.  Lorilei notes that it did receive a letter
in response from Century, but the information received was incomplete and still did not contain the
original information that it requested.  Lorilei asserts that the request for such an insurance policy
by Century is a general tactic used to block access to its system.  Moreover, according to Lorilei,
mandating the requirement of such a policy by Century and then being unwilling to supply the
information necessary to obtain the policy is a de facto denial of access to its system in violation of
the Commission's rules.    

     5.   Finally, according to Lorilei, the Commission should consider issuing a notice of
apparent liability against Century for what Lorilei deems to be flagrant violations of the
Commission's leased access rules.  Lorilei states that it has incurred expenses in its pursuit of gaining
access to Century's system, such as fax and long distance telephone charges, as well as legal research
and preparation of the instant petition.  In addition, Lorilei alleges that it will suffer a loss of revenue
at the rate of $20,000 per month while this petition is pending at the Commission.  According to
Lorilei's calculations, a notice of apparent liability should be issued against Century in the amount
of $280,000 and paid directly to Lorilei.   

     6.   In response, Century argues that its leased access contract contains representations
that a lessee will not engage in conduct which could create legal liability for the system.  According
to Century, its agreement requires that the lessee indemnify it against any liability that may accrue. 
However, Century states that these provisions do not protect a cable operator in the event of a
successful lawsuit since most channel lessees are not financially able to satisfy any significant
monetary liability.  In order to protect itself, Century states that it requires the lessee to obtain
standard general liability and "errors and omissions" coverage.  According to Century, such
coverage is commonly purchased by broadcasters and cable operators.

     7.   According to Century, while it can be argued that the exculpatory language of Section
638 of the Communications Act renders this concern of Century's unnecessary, Century states that
insofar as the provision purports to preempt any liability from accruing to a cable operator for the
conduct of a lessee, the list of subjects intended to be covered is not inclusive.  Century argues that
because Section 638 does not appear to provide comprehensive protection for a cable operator, it is
not unreasonable for Century to require a channel lessee to protect the cable operator for the content
of programming over which it can exercise no control, at least until this provision can be more
clearly defined.  Century adds that if the securing of general liability and "errors and omissions"
coverage proves to be too difficult for part-time lessees, the Commission should allow for the
requirement of the posting of a bond in a appropriate amount as a substitute mode of protection. 
Finally, Century notes that in response to Lorilei's request for its rate schedule, it is now providing
such a schedule as an attachment to its response in this proceeding, and therefore this issue is now
rendered moot.

                      ANALYSIS AND DECISION

     8.   Based on the information in the record before us in this proceeding, Lorilei's petition
will be granted in part and denied in part.  We find that Century has not been responsive with regard
to Lorilei's request for information regarding leased access rates, technical information, and channel
availability on Century's system.  Initially, we required that cable operators provide a schedule of
rates "[u]pon request" to prospective leased access programmers.  In the Reconsideration Order
and Further Notice, the Commission later clarified that the purpose of our rules was to insure that
the initial information a potential programmer might need to pursue leased access on a particular
system be provided as soon as practicable.  The Commission later modified its rules to provide
such information within seven business days.  In its Second Report and Order, the Commission
modified its rules again and set a 15 day response time from the date that a request for leased access
information is made to the cable operator.  Specifically, the Commission stated that the cable
operator is required to provide information regarding leased access set-aside capacity, rate schedules,
rates associated with technical and studio costs, and, if specifically requested, a sample leased access
contract.

     9.   In its response to Lorilei's petition, Century does not address why it has failed to
provide the leased access information requested by Lorilei.  Century only notes that it is now
providing rate schedule information to Lorilei as an attachment to its response in this case.  Based
on the attachment provided to us regarding Century's rate schedule, we do not have enough
information before us to determine if a rate violation has occurred.  In addition, at this time, we do
not believe that it would serve any purpose to request additional information from Century in order
to determine if the submitted rates were correct.  Since the time of the filing of the instant petition,
new calculation rules, in the form of the average implicit fee formula, have come into effect and
Lorilei is required to provide new rates or rate cards based upon this new method of calculation. 
Because the leased access rules in effect at the time were somewhat in flux and not completely
familiar to most cable operators, as well as to programmers, we will not impose formal sanctions in
this matter.  Because we have no information before us to indicate that the parties at issue have
resolved their dispute regarding rates or the general lack of availability of Century's leased access
information, we hold that any future inquiries or negotiations regarding leased access rates or other
leased access information should be resolved under our new rules and we caution Century to adhere
to the mandated response time under these rules.

     10.   With regard to insurance coverage, the Commission has confirmed the cable
operator's right to require reasonable coverage for leased access programming.  The Commission
has recognized that cable operators have been given some protection from leased access program
liability as provided by Section 638, with the exception of obscene program material; however, the
Commission is not aware of any statutory provision that completely protects cable operators from
all possible program carriage liability, or from the filing of unmeritorious claims against operators. 
Regarding allegedly obscene programming, however, the Commission does not deny cable operators
the right to request indemnification from leased access programmers for the costs and expenses
attributable to defending such a prosecution.

     11.   The Commission recently addressed insurance requirements by cable operators with
regard to leased access providers in its Second Report and Order.  In connection with the Second
Report and Order, some commenting parties argued that the cost of general liability and "errors and
omissions" insurance represents a significant barrier to small independent producers.  In that
regard, one commenter requested that the Commission set a limit on general liability insurance and
to bar operators from requiring "errors and omissions" insurance in any amount. The Commission,
however, declined to adopt specific conditions or limits regarding the amount of coverage or the type
of insurance policy that operators may require on the grounds that "a specific restriction might not
be appropriate for all situations." Instead, the Commission stated that it would require that
insurance requirements be reasonable in relation to the objective of the requirement.  The
Commission placed on cable operators the burden of proof in establishing reasonableness.  The
Commission further stated that determinations of what is a "reasonable" insurance requirement will
be based on the operator's practices with respect to insurance requirements imposed on non-leased
access programmers, the likelihood that the nature of the leased access programming will pose a
liability risk for the operator, previous instances of litigation arising from the leased access
programming, and any other relevant factors.

     12.  In the instant case, we cannot find that Century violated the leased access rules by
imposing insurance requirements upon Lorilei.  However, subsequent to the filing of Lorilei's
complaint, the Commission determined that the burden under its leased access rules is on the subject
cable operator to show that the insurance requirements are reasonable.  We cannot find that Century
has met its burden in this regard.  Century has not been responsive to Lorilei's request for
information about the insurance coverage that Century seeks to impose upon Lorilei.  We note,
however, that we cannot endorse a programmer's broad, open-ended request for insurance
information from the cable operator.  In this case, while Lorilei is entitled to ask about what the
insurance policy in question is intended to cover, it is not appropriate for Lorilei to ask for a list of
general litigation filed against the parent company or a list of stockholders in the parent company. 
However, regarding pertinent information that may be requested of the operator, as outlined in our
Second Report and Order, Century has not explained to Lorilei why its programming will impose
a liability risk for the operator or what Century's practices are with regard to non-leased access
programming.  Thus, we find that if Century chooses to continue to impose insurance requirements
upon Lorilei, or other leased access programmers, it must show that its requirements are reasonable
and consistent with the provisions of the Second Report and Order.

                         ORDERING CLAUSES

     13.  Accordingly, IT IS ORDERED, pursuant to 612 of the Communications Act of
1934, as amended (47 U.S.C. 532), that the petition (CSR-4716-L) filed by Lorilei
Communications, Inc. against Century Communications Corporation regarding its cable system in
Dunnellon, Florida IS GRANTED IN PART AND DENIED IN PART to the extent indicated
herein.

     14.  This action is taken pursuant to authority delegated by 0.321 of the Commission's
rules, 47 C.F.R. 0.321.

                         FEDERAL COMMUNICATIONS COMMISSION



                         Meredith J. Jones
                         Chief, Cable Services Bureau