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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 ) ) FAL-COMM PRODUCTIONS, ) Petitioner, ) ) vs. )CSR-4937-L ) TCI CABLEVISION OF ) WOODHAVEN, INC., ) Respondent ) MEMORANDUM OPINION AND ORDER Adopted: July 14, 1997Released: July 17, 1997 By the Chief, Cable Services Bureau: INTRODUCTION 1.Fal-Comm Communications ("Fal-Comm") filed a petition for relief pursuant to 76.975 of the rules of the Federal Communications Commission alleging that Fal-Comm has been refused leased access by TCI Cablevision of Woodhaven, Inc. ("TCI-W"), operator of a cable television system serving Woodhaven, Michigan. TCI-W has responded to Fal-Comm's petition. BACKGROUND 2.In 1984, Congress amended the Communications Act by adding, among other things, a commercial leased access requirement contained in 612, pursuant to which cable operators with 36 or more activated channels must set aside part of their channel capacity for use by 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, among other things, rules for determining maximum reasonable rates for commercial leased access. Pursuant to that Congressional directive, the Commission established regulations, including rate regulations, applicable to leased access channels, in the Report and Order and Further Notice of Proposed Rule Making in MM Docket No. 92-266 ("Rate Order"). The Commission revisited these regulations in the 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. 96-60 ("Recon. Order"), and again in the Second Report and Order and Second Order on Reconsideration of the First Report and Order in CS Docket No. 96-90 ("Second Order"). 3. The leased access regulations initially required, among other things, that cable operators provide a schedule of rates "[u]pon request" to prospective leased access programmers. In the Recon. Order, the Commission set a seven business day response time from the time of a request. In the recently adopted Second Order, the Commission set a 15 calendar day response time from the date of a written request. A 30 day response time was established for systems who qualify for "small system" rate relief. Additionally, the regulations provide for the determination of maximum monthly leased access rates by means of an average implicit fee formula, which is described in the regulations. 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 statutory or regulatory provision, and for the filing of a response. SUMMARY OF THE PLEADINGS 4.Fal-Comm initially requested leased access on TCI-W's system by letter dated January 15, 1996. Fal-Comm complains that TCI-W is intentionally delaying providing Fal-Comm with leased access by imposing terms and conditions upon Fal-Comm which are not contemplated by 76.971 of the Commission's rules. Fal-Comm particularly complains about insurance requirements imposed by TCI-W. Fal-Comm states that it can obtain insurance for $750 annually from a local carrier, but that TCI-W's insistence upon being named as an additional insured on a media perils liability policy (also knows as a broadcasters' liability/errors and omissions policy) will require Fal-Comm to apply to an out-of-state insurance carrier and will cost Fal-Comm $1300 annually. Fal-Comm contends that this is too costly a financial burden. Fal-Comm states that TCI-W has never responded to any of Fal-Comm's written communications, and questions whether TCI-W has set aside sufficient leased access capacity as mandated by law. 5.TCI-W argues in opposition to Fal-Comm's complaint that the complaint is in large part untimely, in that it references actions and events prior to December 7, 1996, which is more than sixty days prior to the filing of Fal-Comm's complaint on February 5, 1997. TCI-W notes that it any event it provided a complete schedule of full-time and part-time leased access rates to Fal-Comm on September 6, 1996, together with a sample leased access contract. TCI-W also states that it now has procedures in place to comply with the leased access requirements established in the Recon. Order. TCI-W contends that it has provided Fal-Comm with all the information required by the Commission's rules, and that all that remains is for the parties to negotiate a contract. TCI-W states that these negotiations are exclusively between it and Fal-Comm, citing Tony Chauncey d/b/a Tony Chauncey Productions v. Continental Cablevision of Southern California and Thomas M. Schaefer d/b/a Strategic Video v. Continental Cablevision. DISCUSSION 6.At the time Fal-Comm first approached TCI-W on January 15, 1996, 76.970(e) required that "[u]pon request, a schedule of commercial leased access rates shall be provided to prospective leased access programmers." The Commission's rules did not specify a specific time period for providing leased access information at the time petitioner made his request to TCI-W for information. Subsequently, in the Recon. Order, the Commission amended its rules, effective July 10, 1996, to mandate a seven business day response time from the time of a request. Nevertheless, TCI-W did not provide Fal-Comm with a complete schedule of full time and part time leased access rates until September 6, 1996. This is nearly eight months after Fal-Comm's initial request. Nor has TCI-W denied receiving Fal-Comm's communications. On this record, we cannot find that TCI-W responded to Fal-Comm's requests for leased access rates on a timely basis. Although we see no basis to impose formal sanctions on TCI-W in view of the unsettled nature of our rules at the time of the actions complained of, we nevertheless caution TCI-W that we expect it to adhere to the Commission's current requirements with respect to future requests for leased access rates and information. 7.In the Second Report, the Commission recognized the importance of prompt disclosure of required leased information and emphasized its expectation that cable operators will respond to all leased access requests in a complete and timely manner. Accordingly, we caution cable operators that future failures to provide requested leased access information in a complete and timely manner as required by current 76.970(h) of the Commission's rules may result in issuance of a notice of apparent liability for forfeiture pursuant to the provisions of 47 C.F.R. 1.80. 8.Turning to the merits of Fal-Comm's petition, we note that Fal-Comm provides no evidence for its suggestion that TCI-W lacks sufficient leased access capacity. With regard to Fal-Comm's complaint that TCI-W is using insurance requirements to deny Fal-Comm leased access, we note that with regard to the requirement for a certificate of indemnification insurance, cable operators have been given protection from leased access program liability as provided by 638 of the Communications Act. Section 638 provides program liability protection "unless the program involves obscene material." We are not aware, however, of any statutory provision that completely protects cable operators from all possible program carriage liability, or from the filing of un-meritorious actions against cable operators despite the provisions of 638. Moreover, the Commission does not deny cable operators the right to request indemnification from leased access programmers for the costs and expenses attributable to defending a prosecution for carriage of an allegedly obscene program, stating that "this is a reasonable term and condition relating to use of leased access channel capacity in light of the removal by Congress in amended section 638 of cable operator immunity for carriage of obscene programming." Furthermore, the rules in effect at both the time of the actions complained of and at the time Fal-Comm filed its petition allowed cable operators to "require reasonable security deposits or other assurances from users who are unable to prepay in full for access to leased commercial channels." In Anthony Giannotti vs. Cablevision Systems Corporation, et al., an operator's right to require reasonable liability insurance coverage for leased access programming was confirmed. In that case, we noted that the programmer 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. In this instance, Fal-Comm simply asserts that the fee for making TCI-W an additional insured is prohibitive. 9.We note, however, that the Commission recently revisited this issue and established guidelines for requiring insurance in the Second Order. In connection with the Second Order, some commenting parties contended that the cost of general liability and errors and omissions insurance represents a significant barrier to small independent producers. One party requested that the Commission set a limit on the required amount of general liability insurance. However, the Commission declined to adopt specific conditions or limits regarding the amount of coverage or the type of insurance policy that operators may require on the ground 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 and placed on cable operators the burden of proof in establishing reasonableness. The Commission further stated: 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. 10.In this instance, we believe that TCI-W's requirement that it be named as an additional insured is a reasonable requirement. Being named as an additional insured affords TCI-W significant additional protection. Thus, we find that TCI-W's insurance requirement is reasonable and consistent with the provisions of the Rate Order and the Recon. Order. ORDERING CLAUSES 11.Accordingly, IT IS ORDERED, that the Complaint of Fal-Comm Communications in File No. CSR-4937-L IS GRANTED to the extent indicated in paragraphs 6 and 7, supra, and in all other respects IS DENIED. 12.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