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The probable cause  X- X    X-w  Federal Communications Commission`)(# DA 971182 ă  yxdddy  "JU Ԋ "JU  +2Before the V  Federal Communications Commission  X-Washington, D.C. 20554 ă  X-In re:R#Xj\  P6G;9XP#) R) Lorilei Communications, Inc.R) d/b/a The FirmR) R)  X1-vs.R)hppCSR4716L R) Century Communications Corp., R) d/b/a/ Mickelson Media, Inc.R) Dunnellon, FloridaR) R) For Leased Access ChannelsR)  Xy-  MEMORANDUM OPINION AND ORDER TP  XK-X` hp x (#%'0*,.8135@8:Gx yO' -ԍ8 FCC Rcd 5631 (1993).> the Commission adopted new rules for leased access addressing maximum  x<reasonable rates, reasonable terms and conditions of use, minority and educational programming,  Xz- x<and procedures for resolution of disputes.z` Gx yO-ԍ47 C.F.R. 76.970, 76.971, 76.975 and 76.977; 47 U.S.C. 532(c)(4)(i)(ii)(iii) and 532(i)(1). The Commission recently modified some of its leased  Xc- xaccess rules in the Second Report and Order and Second Order on Reconsideration of the First  VN- xLReport and Order ("Second Report and Order").pN 5 yO-ԍFCC 9727 (released February 4, 1997), 62 FR 11364 (1997). p See also Order on Reconsideration of the  V7- x-First Report and Order and Further Notice of Proposed Rulemaking in MM Docket No. 92266  X -and CS Docket No. 9660 ("Reconsideration Order and Further Notice").@ 5 yOQ-ԍ11 FCC Rcd 16933 (1996).@     X -  ARGUMENTS OF THE PARTIES ă  X - ` }x3.` ` Lorilei describes itself as an advertising agency/video production company which  x<produces thirty minute programs to air on commercial leased access channels. Lorilei alleges that  xit requested that Century provide Lorilei with various leased access information about its system  x=and Century failed to provide the information it requested within seven business days. Lorilei  x<states that it asked for information about rates, channel availability, the number of subscribers on  xZthe system reached by leased access, and the "tape format" used by the system for leased access  xprograms. According to Lorilei, although Century did eventually send a letter in response to its  xKinquiry, the letter did not contain the information that it requested. Instead, Century asked Lorilei  xto complete a questionnaire and an application. Lorilei also states that the letter noted that as a  x.condition of carriage, a general liability and "errors and omissions" insurance policy would be  X-required to be obtained in the amount of $1 million. Gx yO%- xԍLorilei makes reference to this letter as an exhibit to its petition; however, the letter was not attached to Lorilei's petition. "h ,-(-(ZZ"Ԍ X- ` x4.` ` Lorilei further states that it completed the questionnaire/application and forwarded  xit to Century, along with a request for additional information. Lorilei states that it asked for more  xinformation about what the insurance policy should cover, a list of litigation filed against the  X- xparent company, and a list of stockholders in the parent company. Lorilei notes that it did  x[receive a letter in response from Century, but the information received was incomplete and still  X- xdid not contain the original information that it requested. Gx yO- xZԍLorilei states that this letter is attached to its petition as an exhibit; however, the letter was not attached to Lorilei's petition. Lorilei asserts that the request for  xsuch an insurance policy by Century is a general tactic used to block access to its system.  xMoreover, according to Lorilei, mandating the requirement of such a policy by Century and then  xLbeing 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.  X - ` x5.` ` Finally, according to Lorilei, the Commission should consider issuing a notice of  xapparent liability against Century for what Lorilei deems to be flagrant violations of the  xCommission's leased access rules. Lorilei states that it has incurred expenses in its pursuit of  X - xgaining access to Century's system, such as fax and long distance telephone charges, as well as  xlegal research and preparation of the instant petition. In addition, Lorilei alleges that it will suffer  x^a loss of revenue at the rate of $20,000 per month while this petition is pending at the  xCommission. According to Lorilei's calculations, a notice of apparent liability should be issued  Xb-against Century in the amount of $280,000 and paid directly to Lorilei.V Xb Gx yO3- xԍAccording to Lorilei's rationale, it is reasonable to assume that its petition would remain pending at the  xCommission for 14 months. As such, Lorilei states that the notice of apparent liability should be issued for $280,000 ($20,000 per month multiplied by 14 months).V  X4- ` Ox6.` ` In response, Century argues that its leased access contract contains representations  x?that a lessee will not engage in conduct which could create legal liability for the system.  xKAccording to Century, its agreement requires that the lessee indemnify it against any liability that  xKmay accrue. However, Century states that these provisions do not protect a cable operator in the  xLevent of a successful lawsuit since most channel lessees are not financially able to satisfy any  X- xsignificant monetary liability. In order to protect itself, Century states that it requires the lessee  X- xxto obtain standard general liability and "errors and omissions" coverage.Z @Gx yO- xZԍAccording to Century, "errors and omissions" insurance covers such things as copyright violations. General  xKliability insurance is needed to cover torts such as advertising injury. Century also notes that Lorilei's complaint  xthat Century did not supply information to obtain the requested insurance is not pertinent. According to Century,  xthat type of information is needed only for the "primary" insured and Century is only asking to be an "additional" insured on Lorilei's policies. Z According to Century, such coverage is commonly purchased by broadcasters and cable operators. "| ,-(-(ZZ"Ԍ X- ` Bx7.` ` According to Century, while it can be argued that the exculpatory language of  X- xZSection 638 of the Communications ActGx yOb- xԍSection 638 states "Nothing in this title shall be deemed to affect the criminal or civil liability of cable  xprogrammers or cable operators pursuant to the Federal, State, or local law of libel, slander, obscenity, incitement,  xinvasions of privacy, false or misleading advertising, or other similar laws, except that cable operators shall not incur  xxany such liability for any program carried on any channel designated for public, educational, governmental use or  xwon any other channel obtained under section 612 or under similar arrangements unless the program involves obscene material. 47 U.S.C. 558.  renders this concern of Century's unnecessary, Century  xstates that insofar as the provision purports to preempt any liability from accruing to a cable  xoperator for the conduct of a lessee, the list of subjects intended to be covered is not inclusive.  xCentury argues that because Section 638 does not appear to provide comprehensive protection  xfor a cable operator, it is not unreasonable for Century to require a channel lessee to protect the  xcable operator for the content of programming over which it can exercise no control, at least until  xthis provision can be more clearly defined. Century adds that if the securing of general liability  xNand "errors and omissions" coverage proves to be too difficult for parttime lessees, the  x[Commission should allow for the requirement of the posting of a bond in a appropriate amount  x=as a substitute mode of protection. Finally, Century notes that in response to Lorilei's request  xfor 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.  X - ANALYSIS AND DECISION ă  X- ` x8.` ` Based on the information in the record before us in this proceeding, Lorilei's  xpetition will be granted in part and denied in part. We find that Century has not been responsive  xwith regard to Lorilei's request for information regarding leased access rates, technical  xinformation, and channel availability on Century's system. Initially, we required that cable  X4- xoperators provide a schedule of rates "[u]pon request" to prospective leased access programmers.G4@Gx yO%-ԍ47 C.F.R. 76.970(e) (1995).G  X- xxIn the Reconsideration Order and Further Notice, the Commission later clarified that the purpose  xof our rules was to insure that the initial information a potential programmer might need to  X- xpursue leased access on a particular system be provided as soon as practicable.gGx {Or-ԍReconsideration Order and Further Notice at 16949. g The  X- xCommission later modified its rules to provide such information within seven business days.2b Gx {O -ԍId. 2  X- xIn its Second Report and Order, the Commission modified its rules again and set a 15 day  xresponse time from the date that a request for leased access information is made to the cable  X- xoperator.u Gx {O<%-ԍSecond Report and Order, Appendix D, Revised Rules, Section 76.970(h). u Specifically, the Commission stated that the cable operator is required to provide" ,-(-(ZZ3"  xinformation regarding leased access setaside capacity, rate schedules, rates associated with  X-technical and studio costs, and, if specifically requested, a sample leased access contract.1Gx {Ob-ԍId.1  X- ` #x9.` ` In its response to Lorilei's petition, Century does not address why it has failed to  xprovide the leased access information requested by Lorilei. Century only notes that it is now  xxproviding rate schedule information to Lorilei as an attachment to its response in this case. Based  xon the attachment provided to us regarding Century's rate schedule, we do not have enough  x=information before us to determine if a rate violation has occurred. In addition, at this time, we  x.do not believe that it would serve any purpose to request additional information from Century  xin order to determine if the submitted rates were correct. Since the time of the filing of the  xinstant petition, new calculation rules, in the form of the average implicit fee formula, have come  xinto effect and Lorilei is required to provide new rates or rate cards based upon this new method  x.of calculation. Because the leased access rules in effect at the time were somewhat in flux and  xnot completely familiar to most cable operators, as well as to programmers, we will not impose  x.formal sanctions in this matter. Because we have no information before us to indicate that the  xLparties at issue have resolved their dispute regarding rates or the general lack of availability of  xCentury's leased access information, we hold that any future inquiries or negotiations regarding  xleased 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.  X4- ` x10.` ` With regard to insurance coverage, the Commission has confirmed the cable  X- xoperator's right to require reasonable coverage for leased access programming.ZGx {O(-ԍSee Anthony Giannotti v. Cablevision Systems Corporation, 11 FCC Rcd 10441 (1996). ć The  x[Commission has recognized that cable operators have been given some protection from leased  x\access program liability as provided by Section 638, with the exception of obscene program  x material; however, the Commission is not aware of any statutory provision that completely  xprotects cable operators from all possible program carriage liability, or from the filing of  X- xunmeritorious claims against operators.AGx {OG-ԍId. at 10446.A Regarding allegedly obscene programming, however,  xthe Commission does not deny cable operators the right to request indemnification from leased  X|-access programmers for the costs and expenses attributable to defending such a prosecution.H|~Gx {O -ԍId. at 1044610447. H  Xe-  XN- ` x11.` ` The Commission recently addressed insurance requirements by cable operators  X7- xwith regard to leased access providers in its Second Report and Order.V75 {O$-ԍSee Second Report and Order at  112.V In connection with the  X"- xSecond Report and Order, some commenting parties argued that the cost of general liability and"",-(-(ZZ"  X- x"errors and omissions" insurance represents a significant barrier to small independent producers.>Gx {Oy-ԍId. at  109.>  x/In that regard, one commenter requested that the Commission set a limit on general liability  X- xinsurance and to bar operators from requiring "errors and omissions" insurance in any amount.2ZGx {O-ԍId. 2  xThe Commission, however, declined to adopt specific conditions or limits regarding the amount  X- xof coverage or the type of insurance policy that operators may require on the grounds that "a  X- xspecific restriction might not be appropriate for all situations."WGx {O* -ԍSecond Report and Order at  112W Instead, the Commission stated  Xv- xthat it would require that insurance requirements be reasonable in relation to the objective of the  xrequirement. The Commission placed on cable operators the burden of proof in establishing  XH- xreasonableness.1H~Gx {Ow-ԍId.1 The Commission further stated that determinations of what is a "reasonable"  X1- xinsurance requirement will be based on the operator's practices with respect to insurance  xLrequirements imposed on nonleased access programmers, the likelihood that the nature of the  xleased access programming will pose a liability risk for the operator, previous instances of  X -litigation arising from the leased access programming, and any other relevant factors.1 Gx {O-ԍId.1  X - ` x12.` ` In the instant case, we cannot find that Century violated the leased access rules by  ximposing insurance requirements upon Lorilei. However, subsequent to the filing of Lorilei's  xcomplaint, the Commission determined that the burden under its leased access rules is on the  xsubject cable operator to show that the insurance requirements are reasonable. We cannot find  xkthat Century has met its burden in this regard. Century has not been responsive to Lorilei's  xrequest for information about the insurance coverage that Century seeks to impose upon Lorilei.  xWe note, however, that we cannot endorse a programmer's broad, openended request for  xinsurance information from the cable operator. In this case, while Lorilei is entitled to ask about  xwhat the insurance policy in question is intended to cover, it is not appropriate for Lorilei to ask  xfor a list of general litigation filed against the parent company or a list of stockholders in the  xparent company. However, regarding pertinent information that may be requested of the operator,  X- x>as outlined in our Second Report and Order,1Gx {O!-ԍId.1 Century has not explained to Lorilei why its  x\programming will impose a liability risk for the operator or what Century's practices are with  xregard to nonleased access programming. Thus, we find that if Century chooses to continue to  xjimpose insurance requirements upon Lorilei, or other leased access programmers, it must show  Xg- xZthat its requirements are reasonable and consistent with the provisions of the Second Report and  VR-Order. ";4 ,-(-(ZZ"Ԍ X-  ORDERING CLAUSES  X-  X- ` }x13.` ` Accordingly, IT IS ORDERED , pursuant to 612 of the Communications Act of  x1934, as amended (47 U.S.C. 532), that the petition (CSR4716L) filed by Lorilei  xCommunications, Inc. against Century Communications Corporation regarding its cable system  X- x in Dunnellon, Florida IS GRANTED IN PART AND DENIED IN PART to the extent indicated herein.  XH- ` x14.` ` This action is taken pursuant to authority delegated by 0.321 of the Commission's rules, 47 C.F.R. 0.321. "JU  x` `  hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhMeredith J. Jones x` `  hhChief, Cable Services Bureau