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Jones d/b/a Community Cable,R) x` `  Petitioner,R) R)  S -vs.R)hppCSR 4817L R) The Armstrong Group of CompaniesR) d/b/a Armstrong Cable Services,R) x` `  RespondentR) R) For Leased Access ChannelsR)  S-  MEMORANDUM OPINION AND ORDER TP  SP-X` hp x (#%'0*,.8135@8:headend. Armstrong also claims it has not received complaints from subscribers about the quality of Jones's programming.  S - ` Ax12.` ` Armstrong claims that it provides to Jones a cost effective, convenient and relatively non xtechnical interface, which in its experience is preferred by leased access programmers. It contends that  xthe $14.42 per hour charge for this interface is reasonable, in light of the costs that would be incurred if  xjArmstrong personnel collected the program tapes, travelled to the headend, activated the channel, played  xthe tapes, and returned with them after deactivating the channel. Armstrong estimated that the personnel  xkcosts alone would run between $52 and $70 per hour during nonbusiness hours, and that those costs would have to be passed on to Jones.  S- ` x13.` ` Armstrong states that, like the cable industry in general, it generally obtains from all  xunaffiliated advertiser supported cable programmers three minutes per hour of advertising which is sold  S- xyin the local market. Armstrong notes that the Commission, in the Recon. Order excluded home shopping  Sj- xrevenue from the formula for determining the maximum reasonable rate.Hj {O-ԍSee Recon. Order,  37.H It argues that advertising time  x"given back" to the operator, like home shopping revenue, should not impact the maximum reasonable  x=leased access rate in this instance. Armstrong argues that this "give back" provision of the contract with  xJones is not unreasonable in light of industry practice, because it effectively constitutes a payment by the  xzprogrammer to the operator in much the same way that operators obtain payments as a percentage of  xrevenue from home shopping networks. Finally, Armstrong contends that Jones' request for  xreimbursement of litigation expenses, monetary damages and assessment of forfeitures should be dismissed, on the grounds the Commission lacks authority to grant such relief.  S- DISCUSSION AND ANALYSIS ă  S-x A. Reasonableness of Insurance Requirement  Sb- ` x14.` ` Cable operators have been given protection from leased access program liability as  S:- xprovided by Section 638 of the Communications Act.E:Z {O4#-ԍSee 47 U.S.C.  558.E Section 638 provides program liability protection  S - xy"unless the program involves obscene material."E  {O%-ԍSee 47 U.S.C.  558.E We are not aware, however, of any statutory provision  xLthat completely protects cable operators from all possible program carriage liability, or from the filing of  x unmeritorious actions against cable operators despite the provisions of Section 638. Moreover, the"!~,_(_(IIU#"  x{Commission does not deny cable operators the right to request indemnification from leased access  xprogrammers for the costs and expenses attributable to defending a prosecution for carriage of an allegedly  xobscene program, stating, "this is a reasonable term or condition relating to use of leased access channel  xcapacity in light of the removal by Congress in amended [S]ection 638 of cable operator immunity for  S`- xcarriage of obscene programming."` {O-ԍSee First Report and Order in MM Docket No. 92258, 8 FCC Rcd 998, 1007(1993), n.44.Ĉ In Anthony Giannotti v. Cablevision Systems Corporation, 11 FCC  S:- xRcd 10441 (CSB 1996) ("Giannotti"), an operator's right to require reasonable liability insurance coverage for leased access programming was confirmed.  S- ` 3x15.` ` The Commission, however, recently clarified the insurance requirements in the Second  S- xReport.J Z {O -ԍSee Second Report,  112.J In the Second Report, the Commission declined to adopt specific conditions or limits regarding  x.the amount of coverage or the type of insurance policy that operators may require on the ground that "a  xspecific restriction might not be appropriate for all situations." Instead, the Commission stated that it  xwould require that insurance requirements be reasonable in relation to the objective of the requirement and  xplaced on cable operators the burden of proof in establishing reasonableness. The Commission further  xstated that determinations of what is a "reasonable" insurance requirement will be based on the operator's  xpractices with respect to insurance requirements for nonleased access programming, the likelihood that  xLthe nature of the leased access programming will pose a liability risk for the operator, previous instances  S`-of litigation arising from the leased access programming, and any other relevant factors.1 ` {O-ԍId.1  S- ` x16.` ` In its petition, Jones merely asserts that requirement for $1,000,000 in liability coverage  S- xkis unreasonable. In Giannotti the Commission concluded that cable operators could require reasonable  xindemnification protection from leased access users. Consequently based on the Commission's holding  S- xat the time the petition was filed, which is set out in the Giannotti decision, we cannot find that Armstrong  xacted unreasonably in requiring an indemnification policy. As noted above, the Commission revisited this  SL- xarea in its Second Report and placed the burden on the subject cable operator to show in the future that  xan indemnification requirement is reasonable. Consequently, should Armstrong require an indemnification  xpolicy from a potential leased access user in future leased access contracts, it must show the  S-reasonableness of that requirement consistent with the provision's of the Second Report.  S-x B. Reasonableness of Technical Support Fees  S8- ` `x17.` ` At the time Jones filed its petition, the leased access rules permitted cable operators to  xLcharge leased access users for providing the minimal level of technical support necessary to present their  x.material on a cable system. However, such charges were limited to the "reasonable cost of any technical  S- xsupport that operators actually provide."Q ~ {O#-ԍSee 47 C.F.R.  76.971(c)(1995).Q The Commission revisited the area of technical costs in its  S- xMSecond Report. There, the Commission clarified that the leased access rates determined under Section  x[76.970 include the cost of technical support ordinarily provided to other programmers. For that reason a  xcable operator may not impose an additional charge for technical support ordinarily provided to other"L ,_(_(II "  S- xprogrammers.V Z {Oh- xԍSee Second Report,  114. The Second Report noted that an operator may impose a charge to recover the cost  x,of providing equipment such as a tape recorder or camera, if such equipment would be provided to nonleased access programmers for the same charge.V Neither Armstrong's contract with Jones nor any other information before us indicates  xwhat equipment or technical support services were actually provided by Armstrong for which Jones is  x-assessed the $14.42 per hour equipment charge. Indeed, the contract imposes on Jones the duty to provide  S- xand deliver the necessary playback equipment and to insert all programming tapes for play.\  {O-ԍSee Opposition, Exhibit C, p. 2, at  3.B. \ Armstrong's  xopposition mentions only the provision of an "interface," which is mentioned nowhere in the contract.  x.On these facts, it appears that no technical support was actually provided by Armstrong to Jones. It is  xalso unclear whether this equipment charge is imposed on other programmers or, if so, what equipment  xor technical services are covered by such charges to other programmers. Armstrong may not charge Jones  xa technical support fee if it does not charge other programmers such a fee. Accordingly, we conclude that  xLArmstrong must eliminate the $14.42 per hour equipment charge, since it appears that no actual services were provided.  S -x C. Demand for 30 Day Advanced Payment of Monthly Charges  S - ` 5x18.` ` Jones' allegation that the provision in Armstrong's contract requiring thirty day  S - xMprepayment of monthly charges is unreasonable will be rejected. In the Rate Order, the Commission  xyconcluded that cable operators should have the discretion to require reasonable security deposits or other  SZ- xassurances from programmers that are unable to prepay in full for leased access channel capacity.Z| {Ov-ԍSee Rate Order, 8 FCC Rcd at 59425943,  501. See also 47 C.F.R.  76.971(d) (1995). In  S2- xthe Recon. Order, the Commission, while confirming that conclusion, declined to set specific guidelines  x\in this area but stated that the amount of any deposit should be sufficient to insure payment without  x[discouraging leased access and that the determination of what constitutes a "reasonable" security deposit  S- xwill be made on a case by case basis, taking into consideration the relevant circumstances.K {Oj-ԍSee Recon. Order,  5253.K The  xyCommission made it clear, however, that cable operators could not require payment of a security deposit  Sl- xby a programmer that paid a "full monthly rate" in advance.:l {O-ԍId,  53.: Armstrong's contract with Jones requires  xypayment of charges thirty days prior to the commencement of the calendar month in which programming  S- x is presentedZ2  {O -ԍSee Opposition, Exhibit C, p.2, at  6.C.Z but does not require any security deposit. We find that this provision of Armstrong's  xMcontract, which does not require a deposit but requires thirty days advance payment of each month's  S-charges is not unreasonable or inconsistent with the requirements of the Recon. Order.  S~-x D. Operator Advertising Time on Leased Access Channels  S.- ` 3x19.` ` Jones objects to the provision in the second leased access contract granting Armstrong  xthree minutes per hour of advertising time during leased access programming, or alternatively, payment" ,_(_(IIz"  xof an additional $22 per minute for those spots if those spots are not provided. Armstrong argues that  xythis provision is not unreasonable in light of industry practices with respect to such "give backs." It also  xsuggests that such practice effectively constitutes payment by the programmer to the operator in the same  x<way that home shopping networks provide compensation through percentages of sales revenues and should  xynot impact on the maximum reasonable leased access rate. We note in this connection first that this "give  S8- xjback" provision is contained in the second JonesArmstrong leased access contract,8 {O- x<ԍSee Opposition, Exhibit C, p. 3 ( 6.B.). This clause was also included in the initial six month leased access contract but was waived by Armstrong. and Jones conceded  S- xthat Armstrong revised its rate schedule "to reflect a more appropriate implicit rate."" yO -ԍPetition, p. 3, 10. A copy of Armstrong's revised rate schedule was not provided for the record. In the Rate Order,  xthe Commission stated that the highest implicit rate fee in effect when the petition was filed would be the  S- xmmaximum reasonable rate that a cable operator could charge a programmer.P {O -ԍSee Rate Order, 8 FCC Rcd at 5950.P The Commission  S- x{emphasized in the Second Report that cable operators are not required to charge the maximum rate  xestablished under our regulations and that operators have the discretion to negotiate rates below the  SL -maximum rates.LZL D {O0-  ԍSee Second Report,  24. The Commission noted that the legislative history of the 1992 amendments to Section   x612 specifically indicated that cable operators and programmers may bargain for a rate below the maximum rate.  {M-Id.L  S - ` %x20.` ` With this as background, we conclude that the statutory and regulatory provisions  xapplicable to leased access do not preclude Jones and Armstrong from negotiating leased access rate  xprovisions that include an advertising "give back," so long as the total monthly rate for the leased access  xchannel, including any charges associated with the "give back," does not exceed the maximum reasonable  xrate determined under Section 76.970 of the rules. The record before us contains no information on  xArmstrong's schedule of leased access rates other than that associated with the "give back" provision. For  xythat reason, we are unable to make a determination whether Armstrong's total monthly rate, including the  x\$22 per minute charges associated with the three minute per hour "give back" provision at issue here,  xexceeds the maximum rates determined under Section 76.970. However, to the extent that the maximum  xreasonable rate is exceeded, Armstrong must make an appropriate reduction so that the total rate does not exceed the maximum reasonable rate.  S-x E. Miscellaneous Issues  S- ` _x21.` ` Jones provided no evidence to support the allegation that Channel 19, which carries Jones'  xprogramming, is an inferior channel. Accordingly, this allegation will be denied. Other than the  xunsupported allegation that the channel is inferior, the only supporting evidence Jones presented consisted  xof a report of a telephone conversation between a potential client of Jones and one of Armstrong's  xtechnicians. Although Armstrong admitted that a few subscribers near the system headend may experience  xtemporary signal fluctuations from a nearby paging tower, no relevant technical information of any sort  x0was provided regarding signal quality. Moreover, Armstrong stated it had received no subscriber complaints about the quality of Jones programming. "f ,_(_(II"Ԍ S- ` #x22 .` ` Jones also provided no evidence in support of the allegation that Armstrong attempted to  xkexercise editorial control over his leased access programming. Accordingly, this allegation will also be  xdenied. Jones' entire allegation on this point is a statement in the petition that Armstrong attempted to  xexercise editorial control "by eliminating programming originating out of a drinking establishment in the  S`- xcity of Meadville."7` yO-ԍPetition, p. 5.7 However, no other information concerning this matter is provided. On the facts  xpresented, we decline to find that Armstrong attempted to exercise editorial control over Jones' programming.  S- ` x23.` ` We will also deny Jones' allegation regarding an Armstrong requirement for payment of  xMan additional $2,000 for airing his programs. Again, no specific information is provided regarding the  xcircumstances giving rise to this allegation. Jones does indicate that the scope of his programming was  xyincreased from 40 hours per week to 140 hours per week. Such an increased level of program production  xwould likely require a substantial increase in carriage fees. Armstrong's opposition added no additional  xinformation on this point. Section 76.975(c) of the rules require that a petition for relief provide a concise  S - xstatement of the facts constituting the alleged violations of the statute or the Commission's rules.R X {O-ԍSee 47 C.F.R.  76.975(c) (1996).R Jones  xjpetition for relief failed to comply with this requirement with respect of each of the miscellaneous issues discussed in this portion of this Order.  S0-x F. Recovery of Litigation Expenses and Compensatory Damages  S- ` x24.` ` Finally, Jones asks for reimbursement of expenses incurred in filing the petition, for  xattorney's fees, for ancillary damages caused by Armstrong's violations of statutory and regulatory  x>provisions, for consequential damages as a result of inability to fulfill contractual obligations, and for  ximposition of monetary forfeitures on Armstrong as a deterrent to future violations. The Commission's  x.rules do not provide for recovery of litigation expenses or monetary damages for violations of the leased  x\access rules. Also no case for imposition of monetary forfeitures has been established. Accordingly, Jones' request for monetary damages and imposition of monetary forfeitures will be also denied.  S-1 ORDERING CLAUSES ă  SP- ` x25.` ` Accordingly, IT IS ORDERED , pursuant to 47 C.F.R.  76.975(f) that the petition filed  S(- xby Scott E. Jones in File No. CSR 4917L IS GRANTED to the extent indicated in paragraph 17 above  S-and in all other respects IS DENIED .  S- ` #x26.` ` This action is taken pursuant to authority delegated by 0.321 of the Commission's rules, 47 C.F.R. 0.321. x` `  hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhMeredith J. Jones  Sp#-x` `  hhChief, Cable Services Bureau#Xj\  P6G;9XP#