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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 re: ) ) Lorilei Communications, Inc. d/b/a The Firm) ) vs. ) CSR-4839-L ) Harmon Cable Communications ) St. Albans, West Virginia ) ) For leased Access Channels ) MEMORANDUM OPINION AND ORDER Adopted: August 20, 1997 Released: August 28, 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 Harmon Cable Communications ("Harmon") regarding its cable system in St. Albans, West Virginia, alleging violations of the leased access rules. Harmon 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. 96-60 ("Reconsideration Order and Further Notice"). In the Rate Order, the Commission initially required cable operators to provide rates and rate information to potential leased access users "upon request." Subsequently, the Commission established a response time of seven business days and then fifteen calendar days, which is the present rule. 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 from Harmon on several occasions certain leased access information including full time leased access rates, part time leased access rates by day part, the channel number on which leased access programming would appear, the number of cable subscribers reached by leased access, the available access capacity, and a sample leased access contract. It alleges further that Harmon failed to provide the information it requested within seven business days as required by the Commission's rules then in effect. Lorilei states that it eventually received rate information from Harmon and placed an order with Harmon for 39 hours of part time service in half hour time slots between 6:30 and 8:00 p.m. at a total cost of $351, cancelable on two weeks notice. Lorilei asserts further that it never received the information requested regarding leased access capacity available on Harmon's system or a copy of Harmon's sample leased access contract. 4. Lorilei alleges further that Harmon declined to accept the order for service and instead identified certain equipment that Lorilei would need to acquire and make available before the ordered programming could be run. Lorilei alleges that Harmon violated Section 76.971(c) of the Commission's rules by refusing to provide the equipment identified as necessary to carry Lorilei's programming on the cable system. Lorilei argues that our decision in Lorilei Communications, Inc. v. Scripps Howard, 11 FCC Rcd 10431 (CSB 1996) ("Lorilei"), interpreted the Commission's regulations as requiring that Harmon purchase the identified equipment. According to Lorilei, administrative costs, such as purchasing the equipment necessary to present leased access programming on the air, is part of the cable operators' statutory duty as set forth under Section 612 of the Communications Act. Lorilei states that the cost of such equipment is included under the Commission's implicit fee formula. Lorilei notes that in Lorilei, Scripps Howard was ordered to cease and desist from charging an administrative fee to programmers. According to Lorilei, this ruling is germane here because of the proposed administrative fee purporting to cover costs of equipment utilized in providing leased access. 5. Lorilei also states that it has incurred expenses in pursuing its efforts to obtain leased access on Harmon's cable system and in preparing and filing the instant petition and that the economic viability of its programming is in jeopardy because of Harmon's refusal to carry that programming. Lorilei asks for an order (a) requiring Harmon to install equipment necessary to carry its programming, (b) assessing Harmon with a $1,000 per day penalty for each day the remaining requested information is not provided, (c) assessing a $10,000 per day penalty for each day its program fails to air starting on September 30,1996, and (d) admonishing Harmon's counsel "for blocking our statutory rights to leased access." 6. In response, Harmon asserts that Lorilei's claim that Harmon did not respond to the requests for lease access in a timely fashion and is responsible for providing and paying for all equipment necessary for carriage of Lorilei's programming is without merit. Harmon states that it provided Lorilei with a part time leased access rate schedule, pursuant to which Lorilei placed an order for 39 hours of service priced at $351, within twelve business days from Lorilei's initial request. Harmon asserts that providing Lorilei with rate information within twelve business days likely represents the most expeditious timetable in which a cable operator and a leased access programmer have reached agreement on rates. 7. Harmon explains its decision not to provide the identified equipment to Lorilei by stating that the system headend is located on a West Virginia hillside over two miles from the cable office with access by means of a four wheel drive vehicle in good weather and by foot in bad weather, and that presentation of the 39 half hour program segments in the 6:30 to 8:00 p.m. time slots would require 39 costly trips up the mountain that would yield only $351 in revenue. The better alternative, according to Harmon, would be to insert the programming into the system from Harmon's cable office using the equipment which Harmon did not possess but which it identified for Lorilei's benefit. Harmon argues that the Commission in the Rate Order determined that a cable operator is not obligated to invest in equipment or technology not already in its possession, a concept that is embodied in Section 76.971(c) of the rules. It argues further that our decision in Lorilei did not alter that general rule, because Lorilei dealt with an ongoing administrative fee that included a wide variety of cost components not at issue here. DISCUSSION AND ANALYSIS A. Timeliness of Response to Request for Rates and Information 8. Section 76.970(e) of our rules in effect when Lorilei initially placed a request for leased access rates and other information with Harmon required cable operators to provide certain information within seven business days of a prospective leased access programmer's request. While Harmon's provision of rates to Lorilei in twelve business days constituted a technical violation of that provision, we do not find it so untimely as to require assessment of any administrative sanctions. Initially, we required that cable operators provide a schedule of rates "[u]pon request" to prospective leased access programmers. A few months before this petition was filed, the Commission, in the Reconsideration Order and Further Notice, clarified this requirement by indicating 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. It then modified the rules to require that such information be provided within seven business days. In its Second Report and Order, the Commission, recognizing the importance of prompt disclosure of leased access information but concluding that an extension of the response time was justified, further modified its rules to set a fifteen calendar day response time from the date that a request for leased access information is made to the cable operator. While Harmon apparently failed to provide Lorilei the requested information within seven days as the rule then required, we note that Harmon did provided Lorilei with a schedule of rates within twelve business days, which would have satisfied the requirement of the Second Report and Order, had it been in effect at that time. Consequently, we do not believe that formal administrative sanctions are warranted. 9. The record further shows that Harmon failed to provide Lorilei with requested information regarding available leased access capacity or a sample leased access contract. The failure to provide this requested information constitutes a violation of Section 76.970(e) that was applicable when the request for this information was made. However, because the leased access rules in effect at the time these matters initially arose 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. However, we now direct Harmon to provide Lorilei with information regarding available leased access capacity and a sample leased access contract within fifteen calendar days of the release date of this order. We note that cable operators are required under our current rules to provide such information within fifteen days of a request made by a potential leased access user. 10. 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 Section 76.970(h) may result in issuance of a notice of apparent liability for forfeiture pursuant to the provisions of 47 C.F.R.  1.80. B. Provision of Technical Support and Equipment 11. As noted earlier, Harmon stated that certain equipment identified as necessary to insert Lorilei's programming into its cable system was not on hand and indicated that Lorilei must provide such equipment at its expense, in order to have its programming carried. Lorilei contends that the leased access regulations require Harmon to provide any equipment necessary for carriage of its programming. The Commission considered the level of technical support that cable operators are required to provide in the Rate Order. There the Commission noted that technical cooperation between the cable operator and the leased access programmer is likely to be necessary for the programming to be delivered over a cable system The Commission stated that operators will be required to provide programmers with "the minimal amount of technical support, whether it be equipment, technology or other miscellaneous support, which would be necessary for the programmer to present its material on the air." The Commission further explained this requirement by adding that a cable operator must offer to leased access programmers "the same services as would be offered to comparable programming services that use the operator's non-leased access channel capacity." 12. In the Second Report the Commission further clarified these requirements and made it clear that the leased access rate determined under Section 76.970 includes the cost of technical support ordinarily provided in common to other programmers. Under this clarification of the requirements of Section 76.971, a cable operator may not impose an additional charge for technical support ordinarily provided in common to other programmers. If an operator must purchase equipment not typically used by non-leased 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) require the leased access user to purchase the equipment. Consequently, Harmon may impose charges in addition to the charges determined under Section 76.970 for the reasonable cost of other equipment and technical support actually provided to Lorilei only if that equipment and technical support is not also provided with other non-leased access programming. It is not clear from this record whether Harmon provides other programmers with equipment that it has identified here. If that is the case, such equipment must be provided to Lorilei and other leased access users without charge. C. Request for Monetary Penalties and Other Administrative Sanctions 13. Finally, Lorilei requests compensation for the costs incurred in filing the instant petition and imposition of various other monetary and administrative sanctions against Harmon. Nothing in the Communications Act of 1934, as amended, provides for recovery of costs associated with the filing of a petition for relief with the Commission for alleged violations of the statutory provisions or of the Commission's regulations applicable to leased access channels. Accordingly, Lorilei's request for compensation for out-of-pocket expenses of litigation will be denied. Finally, we decline to impose monetary and administrative sanctions in the instance case, because we believe in the first instance that Lorilei failed to establish the need for any such sanctions. Moreover, as noted above, because the leased access rules in effect at the time these matters initially arose were somewhat in flux and not completely familiar to most cable operators as well as to programmers, we believe it would be inappropriate to impose monetary or administrative sanctions in this matter. ORDERING CLAUSES 14. For the foregoing reasons, IT IS ORDERED pursuant to 47 C.F.R.  76.975(f) that respondent Harmon shall, within fifteen days from the release date of this order, provide to Lorilei information regarding available leased access capacity and a sample leased access contract. 15. IT IS FURTHER ORDERED, that the petition for relief of Lorilei (a) IS GRANTED in part insofar as indicated above and (b) IS DENIED insofar as it requests compensation for costs incurred in bringing this matter before the Commission and other forms of relief. 16. This action is taken pursuant to authority delegated by Section 0.321 of the Commission's rules, 47 C.F.R.  0.321. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau