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Discovery  S-  a11.` ` Several commenters urge the Commission to adopt a rule that would require limited   document discovery as a matter of course as a means of fostering more meaningful and vigorous  Sh-  /enforcement of Section 628.q$h*  yO2-ԍAmericast Comments at 912; DIRECTV Comments at 3; WCA Comments at 1112.q In the alternative, Americast supports Commission adoption of strict   {procedures for requiring discovery when Commission Staff has determined that a complainant has  S-  .demonstrated a prima facie case.F%  yOr"-ԍAmericast Comments at 1011. F Americast proposes that the complainant serve the Commission and   >the defendant with a limited document discovery request, which must be granted or denied within 10   business days of the filing of the defendant's answer. If granted, the defendant would then have 10  S-  ybusiness days to provide the relevant documents. The Wireless Cable Association ("WCA") asserts that   alternative MVPDs (like satellite service providers) are denied a full opportunity to present their best case   to the Commission if they are not given access to certain documents within the defendant's possession that   would demonstrate whether a program access violation has occurred. WCA argues that, in price"*J %,`(`(88"   discrimination cases, absent access to such documents, it is virtually impossible to prove that a  S-  yprogrammer has refused to deal on fair and equitable terms.>& yO@-ԍWCA Comments at 1112.> WCA asserts that "by simply establishing   blanket rules as to what documents must be produced in response to specific types of program access   complaints, the Commission can effectively eliminate unnecessary layers of decisionmaking while  S`-  ensuring that all relevant documents are made available to the complaining party as quickly as possible."8'`X {OX-ԍId. at 12.8   MWCA contends that this limited right of discovery would facilitate expeditious resolution of program   access complaints and serve the public interest by minimizing the damage inflicted on alternative MVPDs  S-through the delay tactics of defendants.8( {Or -ԍId. at 13.8  S- ` ` 3. Damages  SH -  12.` ` Several commenters support Ameritech's position that the Commission has the authority   to impose damages and should amend its rules to make damages available as a remedy in program access  S -  cases.|) | {O-ԍSee WCA Comments at 1418; Americast Comments at 1318; DIRECTV Comments at 3.| For example, commenters assert that the Commission has the statutory authority to award  S -  damages based on Section 628(e)(1)'s use of the phrase "appropriate remedies."U*  yO~-ԍAmericast Comments at 13; WCA Comments at 14.U Americast notes that  S -  =in the Order on Reconsideration, the Commission stated that it would reconsider the issue of damages if  S -  the current process for resolving complaints was not preventing anticompetitive behavior.|+  {O-ԍAmericast Comments at 15, citing Order on Reconsideration, 10 FCC Rcd at 1904.| Americast   urges the Commission to establish that monetary damages and forfeitures will be available for violations   [of Section 628 and asserts that the threat of damages is necessary to bring programmers into compliance   with the Commission's rules. In addition, Americast argues that, if necessary, the issues of liability and  S-  damages can be bifurcated.D,0  yO-ԍAmericast Comments at 1617.D WCA also asserts that under Section 4(i) of the Communications Act, the  S-  Commission enjoys significant discretion to choose from a range of reasonable remedies.-B  {O-  wԍWCA Comments at 15; see Communications Act 4(i), 47 U.S.C. 154(i). Section 4(i) of the Communications Act provides that:   #3XX` ` The Commission may perform any and all acts, make such rules and regulations, and issue   #Rsuch orders, not inconsistent with this Act, as may be necessary in the execution of its functions. `  {M$-Id. WCA notes   that the Administrative Procedure Act ("APA") grants federal agencies the authority to impose "sanctions"   on entities subject to its jurisdiction, and that assessment of damages is specifically included in the APA's"j-,`(`(88"  S-  definition of "sanction."d. {Oh-ԍWCA Comments at 16; see 5 U.S.C. 551(10)(E).d Commenters further assert that, in the absence of economic damages, a   defendant has little incentive to negotiate with an aggrieved MVPD before a complaint is filed, nor does  S-  it have the incentive to resolve the matter in a timely manner after a complaint is filed.>/Z yO-ԍWCA Comments at 1617.> WCA asserts   zthat the availability of damages in program access cases will alleviate the problems MVPDs face from  S`-  evasive cable operators and programmers.70` {O-ԍId. at 3.7 DIRECTV agrees that providing for penalties or damages  S8-  awards for proven violations would allow for more meaningful and vigorous enforcement of Section 628.>18| yOT -ԍDIRECTV Comments at 3.>  S-  S- ` ` 4. Other Issues  S-  P 13.` ` Americast argues that the Commission should also consider: (1) whether adjudicated anti  competitive behavior should be treated as raising serious questions of fitness to be a Commission licensee   /at the time of renewal of Commission licenses; and (2) whether the Commission has the authority to   kimpose punitive damages in those limited and egregious cases of willful price discrimination, or denial  S -  of programming, in which exposure to economic damages may be an insufficient deterrent.A2  yO-ԍAmericast Comments at 17.A DIRECTV   supports a Commission proceeding to finetune the program access rules and argues it may be appropriate   for the Commission to reconsider, and to develop a record on, whether the protections of the program   jaccess rules should be extended to cover terrestriallydelivered programming that technically may not fall   .within the definitions of "satellite cable programming" or "satellite broadcast programming" contained in  S0-  Section 628.@30 yOl-ԍDIRECTV Comments at 34.@ DIRECTV contends that the Commission could also examine under what circumstances   the rules should be extended to encompass acts or practices by nonvertically integrated programmers   =whose purpose or effect is to deny MVPDs the fundamental access they need in order to provide viable  S-competition to incumbent cable operators.74,  {O-ԍId. at 4.7  S-  Sh- C.` ` Comments Opposing Ameritech's Petition  S- ` ` 1. Time Limits  S-  14.` ` Several commenters oppose Ameritech's suggestion that the Commission adopt time  S-  deadlines for program access complaints and acknowledge that in Annual Assessment of the Status of  Sz-  Competition in the Market for the Delivery of Video Programming, Third Annual Report ("1996  ST-  >Report"),o5T  {O&-ԍ1996 Report, FCC 96496, at 159 (rel. January 2, 1997).o the Commission considered and rejected suggestions to amend its program access rules to"TP 5,`(`(88"  S-  establish specific decision deadlines.m6 yOh-ԍTime Warner Comments at 2; Rainbow Comments at 3; NCTA Comments at 5.m Home Box Office ("HBO") notes that Ameritech's program access   complaint was resolved in four months, significantly less than the 12 month average touted by Ameritech   in its Petition. In addition, HBO contends that the program access cases that took longer than average   Mto resolve were won by defendants and therefore complainants suffered no injury. HBO asserts that   Ameritech's demand for discovery as of right is inconsistent with its request for short, firm resolution   deadlines by lengthening the complaint process. In this regard, HBO argues that the Commission's   November 1996 proposal to abolish or limit discovery in light of the new statutory deadlines for resolving  S-common carrier complaints is persuasive evidence that Ameritech's time limit proposal should be denied.m7\X {O -  <ԍHBO Comments at 24; see Implementation of the Telecommunications Act of 1996: Amendment of Rules  {O -  KGoverning Procedures to be Followed When Formal Complaints are Filed Against Common Carriers, Notice of Proposed Rulemaking, FCC 96460 at 49 (rel. November 27, 1996).m  S-  15.` ` NCTA asserts that Ameritech has failed to show the need for expedited deadlines for   yresolution of program access complaints, nor has it shown that it has been the victim of a program access  SH -  Zviolation.;8H | yOd-ԍNCTA Comments at 3.; NCTA further notes that, despite the competitive conditions cited by Ameritech in its petition,  S -  MCongress failed to impose a statutory deadline for program access matters in the 1996 Act.79  {O-ԍId. at 6.7 NCTA   asserts that the rules already provide for expeditious resolution of program access complaints. NCTA   argues that requiring an answer within 20 days, instead of the current 30 days, would not afford adequate time for gathering the necessary information to defend such claims.  SX-  q 16.` ` Time Warner asserts that implicit in Ameritech's proposal is the suggestion that   Commission staff have been less than diligent in their consideration of complaints. In defense thereof,   Time Warner notes the 12 instances of settlement, as well as a variety of reasons why a program access  S-  case may remain open for an extended period of time.D: yO-ԍTime Warner Comments at 68.D While the WCA favors expedited resolution of   yprogram access complaints, it is "aware that processing delays in the program access arena in many cases   ?are attributable to chronic staff shortages within the Commission's Cable Services Bureau and, on  Sh-  occasion, requests for extensions of time filed by the complaining or defending parties. . . ."B;h.  yO6-ԍWCA Comments at 10, n. 25.B In lieu of   imposing inflexible time limits on the resolution of program access complaints, WCA favors expediting  S-action on program access matters by assigning more staff to the Cable Services Bureau.B<  yOv"-ԍWCA Comments at 10, n. 25.B  S-  S- ` ` 2. Discovery  Sx-  ~17.` ` Opponents of Ameritech's petition contend that, rather than expediting program access   case resolution, allowing discovery as of right would result in burdensome, time consuming fishing"P N <,`(`(88"  S-  -expeditions by complainants.= yOh-ԍHBO Comments at 78; NCTA Comments at 7; Rainbow Comments at 56; Time Warner Comments at 810. One commenter asserts that a request for discovery under Ameritech's plan   would necessitate at least five rounds of pleadings, as well as interrogatories, objections to interrogatories,  S-  and requests for written documents, and depositions.@>X yO-ԍRainbow Comments at 56.@ HBO argues that Ameritech's petition is   unnecessary because discovery is available under the Commission's current procedures. HBO asserts that   discovery complicates and delays complaint proceedings, and cites a 1996 Common Carrier Bureau Second   Report and Order "authorizing staff to limit the scope of discovery because such limitation `could be an   effective deterrent to attempts by parties to use discovery for purposes of delay or to gain tactical leverage  S-  for settlement purposes.'"? {Op -  ԍHBO Comments at 6, citing Implementation of Section 302 of the Telecommunications Act of 1996, Second Report and Order, 11 FCC Rcd 18223, 18342 (1996). HBO argues that discovery as of right encourages fishing expeditions,   increases the potential for abuses by entities seeking to gain access to competitor's pricing information,   and would provide minimal utility as most complainants receive relevant documents as part of the pleading  Sp-  cycle.<@pB yOR-ԍHBO Comments at 78.< Time Warner notes that in the 1996 Report, the Commission considered and rejected suggestions   to amend its program access rules to permit discovery as of right, finding a uniform discovery process  S" -  .inefficient and inadvisable given the nature of the programming distribution marketplace.hA"  {O-ԍTime Warner Comments at 2, citing 1996 Report, at 159.h Commenters   argue that the fact that litigants have the right to discovery in an antitrust action does not mean that a right  S -of discovery should necessarily be available in this type of administrative proceeding.VB d  yO-ԍNCTA Comments at 8; Time Warner Comments at 9.V  S - ` ` 3. Damages  S2-  18.` ` Several commenters oppose the imposition of damages in program access matters.sC2  yO-ԍHBO Comments; NCTA Comments; Rainbow Comments; Time Warner Comments. s   Commenters contend that the Commission's rules already permit forfeitures in program access cases under  S-  Title V=D  yO-ԍHBO Comments at 911.= and that proposals for the inclusion of damages were presented to and rejected by the  S-  Commission.E {On!-ԍId. at 911; NCTA Comments at 910; Rainbow Comments at 3, n. 10; Time Warner Comments at 2. Commenters assert that Ameritech has not demonstrated that the Commission's earlier  S-  decision was in error.pF yO#-ԍHBO Comments at 911; NCTA Comments at 9; Time Warner Comments at 1011.p In addition, Commenters assert that the agency lacks the authority to award such  Sj-  damages under Section 628.ZGj6 yO@&-ԍHBO Comments at 12; Time Warner Comments at 1011.Z One commenter notes that a recent Common Carrier Bureau ("CCB")   /proceeding observed that the agency did not have the general authority to award punitive damages in"B G,`(`(88"  S-  complaint proceedings.xH {Oh-ԍHBO Comments at 12, citing Just Aaron, 10 FCC Rcd 11519, 11520 (CCB 1995).x In this regard, HBO contends that a damages remedy would require elaborate   kregulatory mechanisms in order to determine economic damages adding unnecessary complication and  S-  further delay to the resolution of most program access claims.;IZ yO-ԍHBO Comments at 13.; Rainbow also asserts that Ameritech's   petition provides no evidence that the existing program access rules are inadequate to implement the  S`-provisions of Section 628.JJ` yO-ԍRainbow Reply at 1. J  S- D.` ` Reply Comments  S-  S-  19.` ` In its reply, Ameritech asserts that access to quality programming is indispensable to   .successful operation of a cable service. In response to Time Warner and NCTA's comments, Ameritech   asserts that its securing of 45 cable franchises does not demonstrate that it is receiving access to quality   programming, nor does it demonstrate the access it is receiving is at nondiscriminatory rates, terms and  S -  conditions.?K z yO:-ԍAmeritech Reply at 45.? Ameritech contends that the Commission's previous consideration of the issues raised by   Mits petition should not preclude the granting thereof. Rather, three principal reasons indicate that the   zCommission should reconsider the issues raised in this proceeding: (1) that the failure of widespread,   meaningful competition to take root in the video marketplace is becoming increasingly evident with the   0passage of time; (2) that there are highly significant, new marketplace developments, such as the  SX-  accelerating trend toward consolidation in the cable industry, which pose a threat to the protections  S0-  .afforded by Section 628;9LZ0  yO-  ԍAmeritech also cites DIRECTV's observation of recent reports of a shift from satellite delivered cable  {O-  programming to fiber optic delivered cable programming. See Ameritech Reply Comments at 8, citing DIRECTV Comments at 3.9 and (3) that future program access complaints are likely to focus increasingly  S-on discriminatory pricing and practices.?M,  yO-ԍAmeritech Reply at 78.?  S-  320.` ` Ameritech asserts that the availability of discovery as a matter of right would alter the  S-  mindset of cable programmers and operators, providing a disincentive to engage in dilatory activities.7N  {O-ԍId. at 7.7   Ameritech argues that the increased complexity and difficulty of proving price discrimination cases  S@-  Lrequires that discovery as of right be available to complainants.=O@N  {O.#-čId. at 9.= Ameritech asserts that discovery as of   right is less demanding on Commission Staff than the current structure of the rules which provides for  S-  direct Staff involvement in discovery.8P {Op&-ԍId. at 11.8 Ameritech challenges the assertion of other commenters that this   new right would lead to expensive and costly fishing expeditions. To remedy any perceived problems" rP,`(`(88B"   with the provision of discovery as of right, Ameritech suggests that protective orders would safeguard  S-against confidentiality breaches.;Q {O@-ԍId. at 1213.;  S-   21.` ` Ameritech cites Section 628(e) to support its assertion that the Commission has the  S`-  authority to award damages.8R`Z {OZ-ԍId. at 14.8 Ameritech asserts that the availability of damages would persuade cable   programmers and operators to comply with the program access rules by providing a disincentive to engage  S-  in dilatory activities.7S {O -ԍId. at 7.7 In addition, Ameritech maintains that, if anticompetitive abuses decline as a   consequence of these rule changes, the Commission will conserve resources because of the reduction in  S-Section 628 complaints.8T~ {O -ԍId. at 10.8  Sp-   22.` ` In its reply, Echostar agrees with Americast's comments that the proposed damages   =remedy would act as a deterrent to violators, and would encourage aboveboard behavior, fair settlements  S -  and competition.EU  yO-ԍEchostar Reply Comments at 6.E Echostar asserts that proof of violations of the program access rules are typically in   the defendant's exclusive custody. Echostar states that the Commission's current rules allow the   prospective plaintiff to request some information from the defendant, but that the defendant has little  S -  incentive to comply with such requests, since there is essentially no sanction for noncompliance.8V  {O-ԍId. at 4. 8   Echostar contends that discovery as of right can be narrowed to obtain only the material relevant to  SX-establishing a complainant's case, and that protective orders can allay confidentiality concerns.7WX2  {O*-ԍId. at 5.7  S-  23.` ` Bell Atlantic/NYNEX argues that the Commission should establish penalties that will stop   systematic violations of the Commission's rules, such as those allegedly committed by Rainbow   Programming Holdings, Inc. Bell Atlantic/NYNEX asserts that without penalties, cable operators have   little incentive to conform to the law and contend that penalties would lighten the Commission's burden  Sh-as well.RXh  yO -ԍBell Atlantic/NYNEX Reply Comments at 34.R  S@-  S-   24.` ` OpTel asserts that the program access process is so time consuming that it denies practical   relief to the complainant. OpTel argues that the relative paucity of program access cases is not due to   increased competition but to complainants' unwillingness to be involved in a process that will yield the  S-  same result whether the case is settled or resolved by the Commission.9YT  yO&-ԍOpTel Reply at 2.9 OpTel argues that delays in the   complaint process serve the interests of the dominant MVPDs by increasing barriers to new entrants and"x Y,`(`(88"  S-  harming new entrants' subscribers by depriving them of desired programming.7Z {Oh-ԍId. at 3.7 OpTel argues that   without the threat of damages, there is no practical incentive for MVPDs to pursue a remedy through the  S-Commission, nor is there an incentive for violators to comply with the rules.B[Z yO-ԍOpTel Reply Comments at 3.B  S`-  `25.` ` In its reply, WCA supports DIRECTV's proposal to expand the scope of the program   access rules to terrestrialdistribution of programming. WCA also urges the Commission to use the   =Ameritech Petition as an opportunity to develop a record as to whether the program access rules should  S-encompass the activities of nonvertically integrated programmers.7\ yOr -ԍWCA Reply at 5.7  S-  26.` ` In its Reply, Lifetime opposes efforts to expand the program access rules to cover non  Lvertically integrated programmers for two reasons. First, Lifetime argues that there is no need to expand   the rules to a broader section of the marketplace than Congress intended. Lifetime notes that Congress   did not expand the rules to non-vertically integrated programmers when, as part of the 1996 Act, it   =amended the section to cover common carriers. Lifetime also notes that the Commission rejected similar  S -  proposals in the 1996 Report.>] z yO-ԍLifetime Reply at 23.> Second, Lifetime notes that expanded program access rules would put   independent programmers at an even greater competitive disadvantage in the marketplace. Lifetime   contends that being subject to program access rules would make less feasible future programming plans  SZ-and ventures.7^Z  {O-ԍId. at 4.7  S -  227.` ` NCTA argues that the Commission lacks the authority to extend the program access rules   to programmers other than verticallyintegrated, satellite delivered cable program services. NCTA asserts  S-  that Section 628 applies only to programmers in which a cable operator has an attributable interest.8_ yO-ԍNCTA Reply at 2.8  S-  NCTA states that the Commission examined this issue in the 1996 Report and found no evidence to  Sl-  warrant action.]`l,  {O8-ԍId. at 3, citing 1996 Report, at 157.] With respect to terrestriallydelivered service, NCTA notes that the Commission found   Lno evidence that satellite programmers were switching to terrestrial delivery to evade the program access   Nrules. NCTA also asserts that the Commission was not able to determine the effect that exclusive  S-arrangements had on competition.^a  {OR#-ԍNCTA Reply at 3, citing 1996 Report, at 157.^  S-  28.` ` Viacom argues that the Commission lacks evidence, either empirical or anecdotal,   justifying a recommendation to Congress regarding DIRECTV's proposals. Viacom asserts that the   !Commission lacks the legal authority to extend the program access rules to terrestriallydelivered   ytransmissions, or to entities that are not vertically integrated cable operators or common carriers engaging", P a,`(`(88"  S-  in the delivery of video services directly to subscribers.:b yOh-ԍViacom Reply at 2.: Viacom also observes that the Commission has   previously rejected attempts to expand the program access rules in this manner. Viacom suggests that   such expansion would impede competition and constrain the entire programming industry by restricting  S-the flow of capital to new and established programming services.7cX {O-ԍId. at 3.7  S8- E.` ` Small Cable Business Association Comments  S-  n29.` ` The Small Cable Business Association ("SCBA") filed comments in response to the Notice   of Inquiry, In the Matter of Annual Assessment of the Status of Competition in Markets for the Delivery  S-  =of Video Programming.d {O$ -  ԍSee Notice of Inquiry, In the Matter of Annual Assessment of the Status of Competition in Markets for the  {O -Delivery of Video Programming, CS Docket No. 97141, 11 FCC Rcd 7413 (1997). Because portions of SCBA's comments bear directly on the subject matter of this proceeding, we see good cause to incorporate and to address them in this proceeding.  S$ -  30.` ` SCBA believes that the Commission should modify its program access rules to preserve   Lsmall cable's ability to compete. SCBA argues that small cable faces substantial challenges in purchasing   =programming at fair rates from large media companies and incurs substantially higher programming costs  S -  than large multiple system operators ("MSO") when measured on a per subscriber basis.Ae F yO-ԍSCBA Comments at 8.A SCBA argues   that small cable will bear the brunt of the continuing consolidation of direct broadcast satellite ("DBS")  S\-  services and cable programming interests.8f\ {O-ԍId. at 10.8 SCBA argues that a large media company that operates DBS   .could deny small cable operators access to its programming because such programming is not "primarily  S -intended for direct receipt by cable operators. . . ."g h  {O-  ԍId. at 11, quoting Communications Act 705(d)(1), 47 U.S.C. 605(d)(1) (definition of satellite cable programming).  S-  %31.` ` SCBA urges the Commission to recommend to Congress the need for legislation to   broaden the program access rules to include programming provided to all MVPDs, rather than just cable  Sl-  operators.;hl  {O -ԍId. at 1112.; SCBA urges the Commission to expand the program access rules to all satellite delivered   programming and asserts that several programming groups have refused to deal with the National Cable   Television Cooperative ("NCTC"), a program buying cooperative through which numerous SCBA  S-members purchase programming.;iT  {O$-ԍId. at 1315.;  S|-  32.` ` In addition, SCBA objects to the joint and several liability rules that some programmers"|i,`(`(88"  S-  assert relieve them of the obligation to sell programming to NCTC.8j {Oh-ԍId. at 12.8 SCBA asserts that certain   programmers have refused to deal with NCTC because it does not require joint and several liability among   its members. Rather, SCBA believes that there is no need for joint and several liability from a practical   Lor legal perspective. SCBA submits that NCTC retains significant financial reserves to ensure its ability  S`-to pay programmers.8k`Z {OZ-ԍId. at 13.8  S- IV.DISCUSSION AND NOTICE OF PROPOSED RULEMAKING  S-   33.` ` Ameritech argues that the Commission should issue an NPRM seeking comment on the   .issues of specific time limits for the resolution of program access proceedings, discovery as of right, and   @the imposition of damages for violations of the Commission's program access rules. We grant   [Ameritech's petition to issue an NPRM with regard to each of these issues. As further discussed below,   we also grant DIRECTV's request that we seek comment on expanding program access protections to   [cover certain satellitedelivered programming that is converted to terrestriallydelivered programming. In   [addition, we seek comment on SCBA's proposal insofar as it requests that the Commission eliminate the  S -joint and several liability requirement relating to cooperative buying groups.l  yO4-  ԍIn addition, SCBA argues that continued consolidation of DBS services and cable programming interests such   that a large media company that operates DBS could deny small cable operators access to its programming as not   Y"primarily intended for direct receipt by cable operators. . . ." SCBA Comments at 11, quoting Communications Act   705(d)(1), 47 U.S.C. 605(d)(1) (definition of satellite cable programming). The Commission continues to monitor this issue. At this time, we do not have sufficient evidence to recommend the issuance of an NPRM on this issue.   S -  SX-  B34.` ` We note that, as mandated by the 1996 Act, the Commission, in Implementation of the   Telecommunications Act of 1996: Amendment of Rules Governing Procedures to Be Followed When  S -  jFormal Complaints Are Filed Against Common Carriers ("Formal Complaint Order"), recently adopted  S-  amended rules applicable to the processing of formal complaints against common carriers.Xm\ {O -  ԍImplementation of the Telecommunications Act of 1996: Amendment of Rules Governing Procedures to Be  {O-  Followed When Formal Complaints Are Filed Against Common Carriers, Report and Order, FCC 97396, CC Docket No. 96238, __ FCC Rcd __ (November 25, 1997).X Where   appropriate, we will discuss the pertinent aspects of that proceeding and their applicability to the program  S-  access rules upon which we seek comment herein. To the extent an amendment adopted in the Formal  Sn-  Complaint Order is not discussed herein, we invite parties advocating the adoption of such amendment in the program access context to comment thereon.  S- A. ` ` Issues Upon Which We Do Not Seek Comment  S-  35.` ` We deny Americast's request that the Commission consider whether adjudicated   anticompetitive behavior should impinge upon the fitness of a candidate in issuing or renewing a   Commission license. The fitness of each candidate for issuance or renewal of a Commission license is   Nproperly analyzed on a casebycase basis in the context of such proceeding, and, in doing so, the   jCommission can consider in connection with the issuance and renewal of broadcast licenses, any relevant" m,`(`(88\"   anticompetitive behavior in accordance with its previously stated character policy and with the renewal  S-standards set forth in Section 309 of the Communications Act.n {O@-  iԍSee Policy Regarding Character Qualifications in Broadcast Licensing, Report, Order and Policy Statement, 102 FCC 2d 1179 (1986); Communications Act 309(k), 47 U.S.C. 309(k) (broadcast license renewals).  S-  D36.` ` DIRECTV and SCBA suggest that the Commission should examine under what   circumstances the program access rules should be extended to encompass acts or practices by non  vertically integrated programmers whose purpose or effect is to deny MVPDs access to programming.  S-The Commission discussed this issue in the 1996 Report, stating that:   #XX` ` we recognize the concern raised by some parties that access to programming from   #nonvertically integrated programmers may inhibit competition in markets for the   #distribution of multichannel video programming. The evidence before us,   #5however, is insufficient for us to make any determination concerning the effect,   #tif any, that exclusive arrangements involving nonvertically integrated   #programmers may have on competition in local markets for the delivery of  S -multichannel video programming.Ro " {O-ԍ1996 Report at 157. R `   The Commission continues to monitor this issue. At this time, we do not have sufficient evidence of a problem to recommend the issuance of an NPRM on this issue.  S - B.` ` Time Limits  S-  S-  37.` `  At the outset of our discussion, we note that Ameritech's assertion that it takes the   Bureau over one year to resolve program access complaints is misleading because it includes geographic  Sj-  uniformity cases where program access concerns were raised only tangentially.pj yO-ԍGeographic uniformity cases concern uniform rate violations of Section 623(d) of the Communications Act. In addition, in some   of the proceedings used to calculate Ameritech's purported 12 month average processing time, the Bureau,   at the request of counsel for complainants and defendants, stayed the matter due to ongoing settlement  S-  negotiations between the parties.~q^D {O-  ԍSee Consumer Satellite Systems,Inc., et. al. v. United Video Satellite Group, 11 FCC Rcd 7428 (1996);OpTel  {O-  v. Century, DA 962146 (CSB rel. Dec. 20, 1996); British American v. Prime Ticket, et. al., DA 971495 (CSB rel.  {Oj-July 17, 1997).~ Consequently, the resolution times involved in these proceedings were   influenced by agreement and at the request of the parties. As the Commission has stated, we encourage   "resolution of program access disputes through negotiated settlements in an effort to avoid time  ]consuming, complex adjudication. This policy favoring private settlement and alternative dispute  SR-  yresolution conserves Commission resources and is thus in the public interest." ,rRj  {O\$-  JԍConsumer Satellite Systems, Inc., et al. v. United Video Satellite Group, Inc., 11 FCC Rcd 7428, 7429 (1996);  {O&%-National Rural Telecommunications Cooperative v. EMI Communications Corp., 10 FCC Rcd 9785 (1995) (same)., Moreover, if negotiated   settlements and cases in which program access was raised as a tangential issue are deleted from"* r,`(`(88"  S-  =Ameritech's calculation, the average processing time of program access cases is reduced to 8.1 months.sZ yOh-  ԍThe 9.5 month average processing time includes a 30 day answer period and a 20 day reply period in all cases   except petitions for exclusivity pursuant to Section 76.1002, which provides for a 30 day answer period and a 10  {O-day reply period. See  47 C.F.R. 76.1003 (d) and (e); 47 C.F.R. 76.10002 (b)(5)(ii) and (iii).   In cases involving a complainant's inability to obtain programming (refusal to sell or exclusivity  S-complaints), the average processing time is 6.5 months.t {O:-  ԍThe 6.5 month average processing time includes both a 30 day answer period and a 20 day reply period. See  47 C.F.R. 76.1003 (d) and (e).  S`-  38.` ` We seek comment on Ameritech's proposed time limits for the processing of program   access complaints: 90 days after the filing of the complaint in cases not involving discovery and 150 days   jafter the filing of the complaint in cases in which discovery is conducted. Specifically, we seek comment   on appropriate time limits for the resolution of program access complaints: should the Commission adopt   the 90day and 150day time periods proposed by Ameritech; should some other time period apply; or   should the Commission not adopt time limits. In addition, we seek comment on whether the time limit,   jif any, should run from the time the complaint was filed, as proposed by Ameritech, or whether the time limit should run from some other point, such as the close of pleadings, or the close of discovery.   S -  39.` ` In addition, Ameritech's request for one universally applicable time limit may not   sufficiently take into account the myriad circumstances faced by the Commission in resolving program   access complaints. In a relatively simple program access complaint, such as a refusal to sell, the   Commission could in most instances fully and fairly resolve such case within the time limits advocated  SX-  by Ameritech.uXD {O<-  ԍSee e.g., Cellularvision v. SportsChannel Associates, 10 FCC Rcd 9273 (1995) (complaint filed February 22,  {O-  y1995, order released August 24, 1995), reconsideration denied, 11 FCC Rcd 3001 (1996); Bell Atlantic Video  {O-  Services v. Rainbow Programming Holdings and Cablevision Systems Corporation, DA 971452 (rel. July 11, 1997)   y(complaint filed March 28, 1997, order released July 11, 1997). In addition, we note that Ameritech filed its   exclusivity complaint on February 29, 1996 and an order resolving Ameritech's complaint was released on July 3,  {O*-  1996.  See Corporate Media Partners d/b/a Americast and Ameritech New Media, Inc. v. Continental Cablevision,  {O-Inc. and Home Box Office, 11 FCC Rcd 7735 (1996). In the instance of a heavily contested price discrimination proceeding, however, full and   fair resolution of such a case in the time limits advocated by Ameritech becomes more problematic and   [may, in fact, disadvantage the complainant. In addition, Ameritech's request for specific time limits may   potentially work at cross purposes to Ameritech's request for discovery as of right. On the one hand,   Ameritech advocates a 90day time limit on resolution of program access complaints; however, Ameritech   also advocates discovery practices which could significantly lengthen the time necessary to resolve   program access complaints. Accordingly, we also seek comment regarding whether one universally   Lapplicable time limit should apply to all program access complaints, or whether one time limit should be   yestablished for cases involving denial of programming, with another longer time limit established for price   discrimination cases, which generally involve issues of greater complexity. We also seek comment on any   other reasonable distinction between program access cases which would impact the appropriate time limit, if any, for resolution of that type of program access proceeding.  SP-  `40.` ` In addition, we seek comment on Ameritech's proposal to shorten the answer (30 days   to 20 days) and reply (20 days to 15 days) pleading periods applicable to program access complaints. We"( u,`(`(88l"  S-  tentatively conclude that the pleading cycle should not be shortened.v yOh-  ԍWe note that our tentative conclusion not to shorten the answer and reply periods is not in accord with the  {O0-  yCommission's decision in the Formal Complaint Order to shorten the answer period by 10 days. See Formal  {O-  Complaint Order at 94. We believe that our tentative conclusion is reasonable in light of the fact that the  {O-  considerable notice and issue clarification inherent in the prefiling procedures required by the Formal Complaint  {O-  ZOrder are not present in the program access context, where a complainant need only give the defendant 10 days  {OX-  notice prior to filing a program access complaint. See Formal Complaint Order at 3646 (common carrier formal complaint prefiling procedures and activities); 47 C.F.R. 76.1003(a) (program access complaint notice requirement).  We believe that the benefit of the   15 days saved by Ameritech's proposal is outweighed by the need to provide sufficient time for parties   to best marshal their arguments and evidence. We believe that processing times for program access   complaints will be shortened through the precise statement of issues and evidence allowed by a sufficient   zpleading cycle. This position is further supported by the possibility that the parties will not only be   generating answers and replies during this 30day and 20day pleading periods, but will also be developing  S-discovery requests and objections to discovery requests.w {O -  iԍSee infra 43, discussing a proposal to have parties file their discovery requests and objections concurrently with their answer and reply.  S- C.` ` Discovery   Sp-  41.` ` In promulgating the program access rules, the Commission addressed the issue of discovery, holding that:  S -  #qXX` ` If the staff determines that the complaint has established a prima facie case, and   #Sfurther information is necessary to resolve the complaint . . . the staff will issue   #a ruling to that effect. The staff will then determine what additional information   #is necessary, and will develop a discovery process and timetable to resolve the   #sdispute expeditiously. Given the nature of the programming distribution   #marketplace, and the wide range of sales practices, we do not believe that it   #would be efficient or advisable to mandate uniform discovery processes herein for   #Section 628 complaints. Instead, we will provide the staff with flexibility to assess each case and order discovery accordingly. `  S-` `  hh,*V*cc*   #XX` ` If the staff cannot readily identify what information is needed, it can direct the   #Cparties to submit discovery requests and supporting memoranda within a specified   #time period. The staff will then schedule a status conference to resolve discovery  S-disputes and establish a timetable for compliance.`xl  {O -ԍFirst Report and Order 8 FCC Rcd at 342021 .` `   <After the conclusion of discovery, the staff will require the parties to submit briefs, together with proposed  Sz-findings of fact, conclusions of law and proposed remedies at a specified date.@yz  {O%-ԍId. at 3421 .@ "* y,`(`(88{"Ԍ S-  42.` ` In response to Ameritech's petition, we seek comment on several means of expediting the   jdiscovery process. In this regard, we seek comment on whether it would speed the discovery process to   have complainants submit proposed discovery requests with their program access complaints and require   ZDefendants to submit their proposed discovery requests and objections to complainants' discovery requests   with their answer. Complainants would submit their objections to defendants' discovery requests with their reply.  S-  343.` ` We seek comment on any other change in the procedures applicable to program access   complaints that would result in the necessary information disclosure in the most efficient, expeditious   fashion possible. In this regard, we seek comment on whether different standards for discovery should   ybe applied to different types of program access complaints, such as price discrimination, exclusivity, and   denial of programming. We also seek comment on whether the issuance of a standardized protective order  S -  applicable to program access complaints would expedite the necessary information disclosure.z  {O -  ԍSee e.g., Notice of Inquiry and Notice of Proposed Rulemaking, 11 FCC Rcd 12406 (1996) (Appendix A: Model Protective Order and Declaration). We have  S -attached for comment a draft standardized protective order.{ " {O-  ԍSee Appendix A: Standard Protective Order and Declaration for Use in Section 628 Program Access Proceedings.  S -  44.` ` We seek comment on Ameritech's proposal that complainants be entitled to discovery as   of right particularly in light of our conclusion not to permit discovery as of right in common carrier formal  SX-  complaint proceedings.\|X| {Ot-ԍSee Formal Complaint Order at 109114.\ We tentatively conclude, however, that Ameritech has not demonstrated that   the current system of Commissioncontrolled discovery is inadequate, or that discovery as of right would   improve the quality or efficiency of the Commission's resolution of program access complaints. In   addition, we tentatively conclude that discovery as of right is inconsistent with the 1992 Act's, and   Ameritech's, goal of expeditious disposition of program access matters. Given the sensitive and   proprietary nature of the information involved in program access matters, we believe that, in any event,   kdiscovery as of right would almost inevitably devolve into Commissioncontrolled discovery. In two  S@-  previous instances, both price discrimination complaints, Commission Staff has implemented discovery.}@ {O-  ԍNRTC v. EMI, 10 FCC Rcd 9785 (1995); Consumer Satellite Systems v. CNN, CSR 4676P, CSR 4677P, CSR  yO-4678P, (consolidated 1996).   jAlthough we tentatively conclude that Commissioncontrolled discovery has worked adequately in these   [instances, and will continue to serve the public interest best, we seek comment on Ameritech's proposed discovery process.  S-  Sx-D.` ` Damages  SP-  S(-  S45.` ` With regard to the issue of damages, the Communications Act provides that the   Commission shall have the power to order "appropriate remedies, including, if necessary, the power to  S-  [establish prices, terms, and conditions of sale of programming."^~h  yO&-ԍCommunications Act 628(e), 47 U.S.C. 628(e).^ The Commission also has the existing" ~,`(`(88="  S-  .authority under Title V to impose forfeitures for violations of the program access rules. In its Order on  S-  Reconsideration, the Commission stated that its authority "is broad enough to include any remedy the  S-  Commission reasonably deems appropriate, including damages."e {O-ԍOrder on Reconsideration, 10 FCC Rcd 1902, 1911 (1994).e In the Order on Reconsideration, the   Commission declined, however, to exercise its authority to award damages at that time, but reserved the  Sf-  right to revisit the issue in the future.:fZ {O`-ԍId. at 1911.: We believe that our initial determination that the sanctions   available to the Commission pursuant to Title V, together with the program access complaint process,   would act as a sufficient check on delaying conduct by cable operators and vertically integrated   programmers was an appropriate first step. We seek comment on whether forfeitures alone are an   adequate deterrent. We also seek comment on whether an additional check on anticompetitive conduct   [such as the imposition of damages for violations of Section 628 of the Communications Act may now be   appropriate and in the public interest. In this regard, we also seek comment on the appropriate interaction,   if any, between damages and the Commission's existing forfeiture authority under Title V to impose forfeitures for violations of the program access rules.  S -  46.` ` We also seek comment regarding the correct procedures through which to implement   damages or forfeitures in the context of specific program access proceedings. For example, we seek   {comment on the date from which damages should be levied for violations of Section 628. We seek   jcomment on whether the operative date should be the date of the notice of intent to file a program access   complaint, as Ameritech suggests, or the date of filing of the program access complaint, or the date on   which the violation first occurred. Because the complainant has the ability to file a complaint at any time   after the 10 day notice requirement set forth in Section 76.1003(a) of the Commission's rules, we seek   comment on whether damages should be calculated from the date upon which the complainant filed its   program access complaint with the Commission. We also seek comment on the adequacy and clarity of   the forfeiture procedures and guidelines set forth in Section 503 of the Communications Act, the  SF-  Commission's rules,FF yO-ԍ47 C.F.R. 1.80(b)(4) Note.F and case law. In addition we seek comment on Americast's proposal that, in some   cases, the most efficient manner of processing program access cases would be to bifurcate the program  S-  Maccess violation determination from the damages or forfeiture determination."| {O-  ԍThe Commission concluded in the Formal Complaint Order that it would exercise discretion where appropriate  {O-to bifurcate liability and damages issues on its own motion. See Formal Complaint Order at 170." We seek comment on   [whether Commission Staff should be given the discretion to bifurcate the violation and sanction portions of program access proceedings and whether doing so would more efficiently process such cases.  SV-  47.` ` We note that our forfeiture guidelines establish a baseline forfeiture of $7,500.00 per day  S.-  zfor violation of the program access rules and seek comment on this amount.\. {O#-  wԍSee The Commission's Forfeiture Policy Statement and Amendment of Section 1.80 of the Rules to Incorporate  {Op$-  the Forfeiture Guidelines, CI Docket No. 956, Appendix A, __ FCC Rcd __ (rel. July 28, 1997) (Note: Guidelines for Assessing Forfeitures, Section I. Base Amounts for Section 503 Forfeitures). We also seek comment   yon the calculation of damages, if assessed. Commenters should consider whether the Commission should   determine damages on a casebycase basis, or whether there should be a standard calculation for damages" ,`(`(88L"   Lin program access matters. Those arguing that damages should be based on a standard calculation should   comment on how the Commission should determine such standard calculation. We also seek comment   =on the basis on which damages, if assessed, should be calculated. For example, should damages be based   on lost profit, the difference between the rate that the complainant was charged and the rate the complainant should have been charged, or some other legitimate basis.  S-  A48.` ` The Formal Complaint Order adopts the requirement that a complainant seeking damages   must file in its complaint or supplemental complaint either a detailed computation of damages or a detailed  S-  explanation of why such a computation is not possible at the time of filing. {O* -  ԍSee Formal Complaint Order at 178. The Formal Complaint Order requires that all complaints or supplemental complaints contain either:  yO -  XX` ` a)X A detailed computation of damages, including supporting documentation and materials; or  yO -XX` ` b) An explanation of: `  yOl- ` `  (i)` What information not in the possession of the complaining party is necessary to develop a detailed computation of damages;(#  yO-` `  (ii)` Why such information is unavailable to the complaining party;(#  yOT- ` `  (iii)` The factual basis the complainant has for believing that such evidence of damages exists; and(#  yO- f` `  (iv)` A detailed outline of the methodology that would be used to create a computation of damages with such evidence.(#  {M-Id.ę We seek comment on   whether a similar requirement should be adopted as part of the program access pleading process.   Commenters advocating the adoption of such a requirement should address whether the explanation  SJ -  standards adopted in the Formal Complaint Order should be adopted, or whether some other explanation standard should apply.  S -  49.` ` Finally, Americast requests that the Commission consider whether it has the authority to   impose punitive damages in those limited and egregious cases of willful price discrimination or denial of  S -  programming. As stated in the Order on Reconsideration, "[b]ecause the statute does not limit the   Commission's authority to determine what is an appropriate remedy, and damages are clearly a form of   remedy, the plain language of this part of Section 628(e) is consistent with a finding that the Commission  S-  has authority to afford relief in the form of damages."a2 {O"-ԍOrder on Reconsideration, 10 FCC Rcd at 1910 .a Americast asserts that this analysis, in its  S-  broadest reading, could apply to the imposition of punitive damages in egregious cases.)^ {OJ%-  hԍWe note that the Just Aaron decision cited by HBO for the proposition that the Commission lacks the general  {O&-  authority to impose punitive damages seems inapposite. See Just Aaron v. GTE California, Inc., 10 FCC Rcd  {O&-  11519, 11520 (CCB 1995). The CCB's decision in Just Aaron does not relate to the Commission's damages"&,`(`(&" authority pursuant to Section 628 of the Communications Act.) We observe,"X,`(`(88"   =however, that Americast has not presented persuasive evidence suggesting that punitive damages should   jbe imposed in program access cases. Accordingly, we tentatively conclude that punitive damages should not be imposed in program access cases. We seek comment on this tentative conclusion.  S-  S`-E.` ` TerrestrialDelivery of Programming  S-  B50.` ` Section 628 of the Communications Act is applicable to cable operators, satellite cable   {programming vendors in which a cable operator has an attributable interest, and satellite broadcast   programming vendors and generally applies to the delivery of "satellite cable programming and satellite  S-  broadcast programming."^X yO -ԍCommunications Act 628(a), 47 U.S.C. 548(a).^ DIRECTV argues that the Commission should consider whether the program   jaccess rules should be extended to cover terrestriallydelivered programming that may not technically fall   within the statutory definitions of "satellite cable programming" or "satellite broadcast programming." As  S -the Commission stated in the 1996 Report:   #XX` ` We recognize that improved technology and lower costs are improving the   #efficiency of terrestrial distribution of programming, particularly over fiber optic   #facilities. As a result, it appears that it may become possible for a vertically  #integrated programmer to switch from satellite delivery to terrestrial delivery for   #the purpose of evading the Commission's rules concerning access to   #programming. If a trend of such conduct were to occur, we would have to  S-consider an appropriate response to ensure continued access to programming.L {Oj-ԍ1996 Report at 154. L `  S-  In the 1996 Report, the Commission also cited In Re Implementation of Section 302 of the  Sl-  Telecommunications Act of 1996 Open Video Systems, Second Report and Order ("Second Report and  SF-  Order"), as holding "we do not foreclose a challenge under Section 628(b) to conduct that involves   moving satellite delivered programming to terrestrial distribution in order to evade application of the  S-program access rules and having to deal with competing MVPDs."sz {O-ԍSee Second Report and Order, 11 FCC Rcd at 18325, n. 451.s   S-  51.` ` On its face, Section 628 does not preclude a programmer from altering its distribution   method from satellitedistribution to terrestrialdistribution. DirectTV seems to suggest, however, that it   contravenes the spirit, if not the letter, of Section 628 if a verticallyintegrated programmer moves from   satellitedelivered programming to terrestrialdelivered programming for the purpose of evading the   program access requirements. Such an action could arguably constitute an "unfair method[ ] of   competition or unfair or deceptive act[ ] or practice[ ], the purpose or effect of which is to hinder   [significantly or to prevent any multichannel video programming distributor from providing satellite cable  S-  programming or satellite broadcast programming to subscribers or consumers."\  yO<&-ԍCommunications Act 628(b), 47 U.S.C. 548(b).\ We seek comment on   Lappropriate ways to address such situations. As a threshold matter, we specifically ask commenters to"h,`(`(88"   address the statutory basis for any suggested remedial action, and whether legislation is needed. To the   extent that commenters contend that Commission action is appropriate, we seek comment on what types   {of evidence a complainant may marshal to prevail on a claim against a programmer that has moved   ysatellitedelivered programming to terrestrial delivery to evade the program access requirements. We also   seek comment on whether programming that has been moved from satellite to terrestrial delivery can or   Mshould be subject to program access requirements based on the effect, rather than the purpose, of the programmer's action.  S- F.` ` Buying Groups: Joint and Several Liability  Sp-52.` ` In the First Report and Order, the Commission determined that:   #XX` ` the regulations we adopt include requirements that a buying group seeking unitary   #treatment from a programming vendor must agree to be financially responsible   #Ufor any fees due under a contract to which it is a party. Alternatively, if   #&individual members are contracting parties, they must agree to joint and several  S -liability for commitments of the group.l  {O-ԍFirst Report and Order, 8 FCC Rcd at 3412 (footnote omitted). l `  S2-In the Order on Reconsideration, the Commission upheld this determination, and clarified that:   #XX` ` in those situations where a seller has reasonable doubts about the financial   #stability and responsibility of the buying group, it may insist on appropriate   #assurances of creditworthiness. Buying groups could satisfy this burden through   #various measures, such as requiring each individual member of the group to   #guarantee to the group its pro rata share of the fees due under a programming  S-contract.[Z {O-ԍOrder on Reconsideration, 10 FCC Rcd at 1948.[ `  S-  53.` ` Despite these determinations, SCBA asserts that certain programmers refuse to deal with   cooperative buying groups unless the members thereof agree to joint and several liability. Accordingly,   0SCBA proposes that the Commission should clarify its program access rules to provide that any   cooperative buying group that maintains adequate financial reserves should not be required to provide joint   and several liability. We seek comment on SCBA's proposal. Specifically, we seek comment on what   financial assurances cooperative buying groups can provide to programming distributors such that joint   /and several liability is not necessary, while adequately protecting programming distributors from the   zfinancial risks associated with such arrangements. For example, we seek comment on whether buying   groups that maintain a cash reserve equal to one month's programming fees would satisfy such a   requirement. In addition, we seek comment on any other proposals that would result in the elimination of joint and several liability while maintaining adequate protection for programmers.  S - " ,`(`(88!"Ԍ S-  V.XREGULATORY FLEXIBILITY ANALYSIS AND INITIAL PAPERWORK REDUCTION  S-ACT OF 1995 ANALYSIS (#  S-  54. ` ` The regulatory flexibility analysis is attached to this order as Appendix B. This NPRM   contains proposals that have been analyzed with respect to the Paperwork Reduction Act of 1995 and found to impose no new or modified information collection requirement on the public.   S- VI.PROCEDURAL PROVISIONS  S-  55. ` ` Ex parte Rules NonRestricted Proceeding. This is a permit but disclose notice and   comment rulemaking proceeding. Ex parte presentations are permitted, except during the Sunshine  SJ -Agenda period, provided that they are disclosed as provided in Commission's rules.mJ  {O -ԍSee generally 47 C.F.R.  1.1202, 1.1203, and 1.1206(a).m   S -  56. ` ` Pursuant to applicable procedures set forth in Sections 1.415 and 1.419 of the  S -  MCommission's rules,H Z yO-ԍ47 C.F.R.  1.415, 1.419.H interested parties may file comments on or before February 2, 1998 and reply  S -  comments on or before February 23, 1998 . To file formally in this proceeding, you must file an original   kand six copies of all comments, reply comments, and supporting comments. Parties are also asked to   submit, if possible, draft rules that reflect their positions. If you want each Commissioner to receive a   personal copy of your comments, you must file an original and eleven copies. Comments and reply   comments should be sent to Office of the Secretary, Federal Communications Commission, 1919 M Street,   LN.W., Room 222, Washington, D.C. 20554, with a copy to Deborah Klein of the Cable Services Bureau,   2033 M Street, N.W., 7th Floor, Washington, D.C. 20554. Parties should also file one copy of any   documents filed in this docket with the Commission's copy contractor, International Transcription   yServices, Inc., 1231 20th Street, N.W., Washington, D.C. 20037. Comments and reply comments will be   available for public inspection during regular business hours in the FCC Reference Center, 1919 M Street, N.W., Room 239, Washington, D.C. 20554.  S-  %57. ` ` Parties are also asked to submit comments and reply comments on diskette, where   Mpossible. Such diskette submissions would be in addition to and not a substitute for the formal filing   Lrequirements addressed above. Parties submitting diskettes should submit them to Deborah Klein of the   Cable Services Bureau, 2033 M Street, N.W., 7th Floor, Washington, D.C. 20554. Such a submission   must be on a 3.5 inch diskette formatted in an IBM compatible form using MS DOS 5.0 and WordPerfect   /5.1 software. The diskette should be submitted in "read only" mode. The diskette should be clearly   labelled with the party's name, proceeding, type of pleading (comment or reply comments) and date of submission. The diskette should be accompanied by a cover letter. ",`(`(88"  S- VII.ORDERING CLAUSES  S-  S-  A58. ` ` IT IS ORDERED that the petition for rulemaking filed by Ameritech New Media, Inc.   is granted as described in this Memorandum Opinion and Order and Notice of Proposed Rulemaking, and in all other respects denied.  S-  59.` ` IT IS FURTHER ORDERED that pursuant to Section 628 of the Communications Act  S-  Lof 1934, as amended,: yOP-ԍ47 U.S.C. 548.: NOTICE IS HEREBY GIVEN of the proposals described in this Notice of Proposed Rulemaking.   Sp-  "60. ` ` IT IS FURTHER ORDERED that the Secretary shall send a copy of this Memorandum  SH -  Opinion and Order and Notice of Proposed Rulemaking, including the Initial Regulatory Flexibility   \Analysis, to the Chief Counsel for Advocacy of the Small Business Administration in accordance the Regulatory Flexibility Act, 5 U.S.C.  603 (2).  SX-` ` hh, FEDERAL COMMUNICATIONS COMMISSION  ` ` hh,Magalie Roman Salas  S-` ` hh,Secretary "hX,`(`(88F"  S-u? APPENDIX A: ă STANDARD PROTECTIVE ORDER AND DECLARATION FOR USE IN  SECTION 628 PROGRAM ACCESS PROCEEDINGSlU  S- KP Before the  Federal Communications Commission ""Washington, D.C. 20554 Sp-lU ` `  hh,Vcc  S -In the Matter of hh,Vcc) ` `  hh,Vcc)  S - [Name of Proceeding] hh,Vcc)  S -` `  hh,Vcc)  S -` `  hh,Vcc) ` `  hh,Vcc)  S- ('PROTECTIVE ORDER ă  This Protective Order is intended to facilitate and expedite the review of documents containing   Otrade secrets and commercial or financial information obtained from a person and privileged or   confidential. It reflects the manner in which "Confidential Information," as that term is defined herein,   is to be treated. The Order is not intended to constitute a resolution of the merits concerning whether any   Confidential Information would be released publicly by the Commission upon a proper request under the Freedom of Information Act or other applicable law or regulation, including 47 C.F.R.  0.442.  Sx-1.` ` Definitions.  S(-  ` ` a. Authorized Representative. "Authorized Representative" shall have the meaning set forth in Paragraph seven.  S-  ` ` b. Commission. "Commission" means the Federal Communications Commission or any arm of the Commission acting pursuant to delegated authority.  S8-  E` ` c. Confidential Information. "Confidential Information" means (i) information   submitted to the Commission by the Submitting Party that has been so designated by the Submitting Party   =and which the Submitting Party has determined in good faith constitutes trade secrets and commercial or   Nfinancial information which is privileged or confidential within the meaning of Exemption 4 of the   Freedom of Information Act, 5 U.S.C.  552(b)(4) and (ii) information submitted to the Commission by   the Submitting Party that has been so designated by the Submitting Party and which the Submitting Party   {has determined in good faith falls within the terms of Commission orders designating the items for   treatment as Confidential Information. Confidential Information includes additional copies of, notes, and information derived from Confidential Information. "&,`(`(88n("Ԍ S-` ` d. Declaration. "Declaration" means Attachment A to this Protective Order.  S- R` ` e. Reviewing Party. "Reviewing Party" means a person or entity participating in this proceeding or considering in good faith filing a document in this proceeding.  S8-  ` ` f. Submitting Party. "Submitting Party" means a person or entity that seeks confidential treatment of Confidential Information pursuant to this Protective Order.  S-  b2.` ` Claim of Confidentiality. The Submitting Party may designate information as  S-  "Confidential Information" consistent with the definition of that term in Paragraph 1 of this Protective  Sp-  Order. The Commission may, sua sponte or upon petition, pursuant to 47 C.F.R  0.459 & 0.461,   Ldetermine that all or part of the information claimed as "Confidential Information" is not entitled to such treatment.  S -  3.` ` Procedures for Claiming Information is Confidential. Confidential Information submitted   to the Commission shall be filed under seal and shall bear on the front page in bold print, "CONTAINS   lPRIVILEGED AND CONFIDENTIAL INFORMATION DO NOT RELEASE." Confidential   .Information shall be segregated by the Submitting Party from all nonconfidential information submitted   to the Commission. To the extent a document contains both Confidential Information and nonconfidential   information, the Submitting Party shall designate the specific portions of the document claimed to contain   Confidential Information and shall, where feasible, also submit a redacted version not containing Confidential Information.  Sj-  _4.` ` Storage of Confidential Information at the Commission. The Secretary of the Commission   or other Commission staff to whom Confidential Information is submitted shall place the Confidential   Information in a nonpublic file. Confidential Information shall be segregated in the files of the   {Commission, and shall be withheld from inspection by any person not bound by the terms of this   Protective Order, unless such Confidential Information is released from the restrictions of this Order either   through agreement of the parties, or pursuant to the order of the Commission or a court having jurisdiction.  S*-  _5.` ` Access to Confidential Information. Confidential Information shall only be made available   [to Commission staff, Commission consultants and to counsel to the Reviewing Parties, or if a Reviewing   \Party has no counsel, to a person designated by the Reviewing Party. Before counsel to a Reviewing   Party or such other designated person designated by the Reviewing Party may obtain access to   yConfidential Information, counsel or such other designated person must execute the attached Declaration.   Consultants under contract to the Commission may obtain access to Confidential Information only if they   have signed, as part of their employment contract, a nondisclosure agreement or if they execute the attached Declaration.  S!-  o6.` ` Counsel to a Reviewing Party or such other person designated pursuant to Paragraph 5   may disclose Confidential Information to other Authorized Representatives to whom disclosure is   permitted under the terms of paragraph 7 of this Protective Order only after advising such Authorized   Representatives of the terms and obligations of the Order. In addition, before Authorized Representatives   may obtain access to Confidential Information, each Authorized Representative must execute the attached Declaration. "&,`(`(88n("Ԍ S-7.` ` Authorized Representatives shall be limited to:  S- S ` ` a.X Counsel for the Reviewing Parties to this proceeding including inhouse counsel  actively engaged in the conduct of this proceeding and their associated attorneys,  paralegals, clerical staff and other employees, to the extent reasonably necessary to render professional services in this proceeding;(#  S- ` ` b. Specified persons, including employees of the Reviewing Parties, requested by  counsel to furnish technical or other expert advice or service, or otherwise  engaged to prepare material for the express purpose of formulating filings in this  proceeding, except that disclosure to persons in a position to use this information for competitive commercial or business purposes shall be prohibited; (# ` `   S - 4` ` c. Any person designated by the Commission in the public interest, upon such terms as the Commission may deem proper.(#  S -  8.` ` Inspection of Confidential Information. Confidential Information shall be maintained by   =a Submitting Party for inspection at two or more locations, at least one of which shall be in Washington,   D.C. Inspection shall be carried out by Authorized Representatives upon reasonable notice not to exceed  S-one business day during normal business hours. cc  S-  B9.` ` Copies of Confidential Information. The Submitting Party shall provide a copy of the   LConfidential Material to Authorized Representatives upon request and may charge a reasonable copying   fee not to exceed twenty five cents per page. Authorized Representatives may make additional copies of   zConfidential Information but only to the extent required and solely for the preparation and use in this   proceeding. Authorized Representatives must maintain a written record of any additional copies made and   >provide this record to the Submitting Party upon reasonable request. The original copy and all other   copies of the Confidential Information shall remain in the care and control of Authorized Representatives   at all times. Authorized Representatives having custody of any Confidential Information shall keep the documents properly secured at all times.  S(-  _10.` ` Filing of Declaration. Counsel for Reviewing Parties shall provide to the Submitting Party   and the Commission a copy of the attached Declaration for each Authorized Representative within five   {(5) business days after the attached Declaration is executed, or by any other deadline that may be prescribed by the Commission.  S`-  11.` ` Use of Confidential Information. Confidential Information shall not be used by any person   granted access under this Protective Order for any purpose other than for use in this proceeding (including   any subsequent administrative or judicial review), shall not be used for competitive business purposes, and   shall not be used or disclosed except in accordance with this Order. This shall not preclude the use of   any material or information that is in the public domain or has been developed independently by any other person who has not had access to the Confidential Information nor otherwise learned of its contents. "p#,`(`(88$"Ԍ S-  A12.` ` Pleadings Using Confidential Information. Submitting Parties and Reviewing Parties may,   jin any pleadings that they file in this proceeding, reference the Confidential Information, but only if they comply with the following procedures:  S`- S` ` a. Any portions of the pleadings that contain or disclose Confidential Information  must be physically segregated from the remainder of the pleadings and filed under seal;(#   S- SX` ` b. The portions containing or disclosing Confidential Information must be covered by a separate letter referencing this Protective Order; (#  SH - ` ` c. Each page of any Party's filing that contains or discloses Confidential Information  subject to this Order must be clearly marked: "Confidential Information included pursuant to Protective Order, [cite proceeding];" and(#  S - S` ` d. The confidential portion(s) of the pleading, to the extent they are required to be  served, shall be served upon the Secretary of the Commission, the Submitting  Party, and those Reviewing Parties that have signed the attached Declaration.  Such confidential portions shall be served under seal, and shall not be placed in  the Commission's Public File unless the Commission directs otherwise (with  notice to the Submitting Party and an opportunity to comment on such proposed  disclosure). A Submitting Party or a Reviewing Party filing a pleading containing  Confidential Information shall also file a redacted copy of the pleading containing  no Confidential Information, which copy shall be placed in the Commission's  public files. A Submitting Party or a Reviewing Party may provide courtesy  Scopies of pleadings containing Confidential Information to Commission staff so long as the notation required by subsection c. of this paragraph is not removed.(#  S-  13.` ` Violations of Protective Order. Should a Reviewing Party that has properly obtained   access to Confidential Information under this Protective Order violate any of its terms, it shall immediately   .convey that fact to the Commission and to the Submitting Party. Further, should such violation consist   of improper disclosure or use of Confidential Information, the violating party shall take all necessary steps   to remedy the improper disclosure or use. The Violating Party shall also immediately notify the   /Commission and the Submitting Party, in writing, of the identity of each party known or reasonably   .suspected to have obtained the Confidential Information through any such disclosure. The Commission   retains its full authority to fashion appropriate sanctions for violations of this Protective Order, including   but not limited to suspension or disbarment of attorneys from practice before the Commission, forfeitures,   cease and desist orders, and denial of further access to Confidential Information in this or any other   Commission proceeding. Nothing in this Protective Order shall limit any other rights and remedies   available to the Submitting Party at law or equity against any party using Confidential Information in a manner not authorized by this Protective Order.  Sp#-  314.` ` Termination of Proceeding. Within two weeks after final resolution of this proceeding   (which includes any administrative or judicial appeals), Authorized Representatives of Reviewing Parties   shall destroy or return to the Submitting Party all Confidential Information as well as all copies and   \derivative materials made, and shall certify in a writing served on the Commission and the Submitting   Party that no material whatsoever derived from such Confidential Information has been retained by any"&,`(`(88n("   person having access thereto, except that counsel to a Reviewing Party may retain two copies of pleadings   submitted on behalf of the Reviewing Party. Any confidential information contained in any copies of   .pleadings retained by counsel to a Reviewing Party or in materials that have been destroyed pursuant to   [this paragraph shall be protected from disclosure or use indefinitely in accordance with paragraphs 9 and   11 of this Protective Order unless such Confidential Information is released from the restrictions of this   Order either through agreement of the parties, or pursuant to the order of the Commission or a court having jurisdiction.  S-  15.` ` No Waiver of Confidentiality. Disclosure of Confidential Information as provided herein   shall not be deemed a waiver by the Submitting Party of any privilege or entitlement to confidential   =treatment of such Confidential Information. Reviewing Parties, by viewing these materials: (a) agree not   to assert any such waiver; (b) agree not to use information derived from any confidential materials to seek   disclosure in any other proceeding; and (c) agree that accidental disclosure of Confidential Information shall not be deemed a waiver of the privilege.  S -  16.` ` Additional Rights Preserved. The entry of this Protective Order is without prejudice to   the rights of the Submitting Party to apply for additional or different protection where it is deemed   necessary or to the rights of Reviewing Parties to request further or renewed disclosure of Confidential Information.  S-  n17.` ` Effect of Protective Order. This Protective Order constitutes an Order of the Commission   and an agreement between the Reviewing Party, executing the attached Declaration, and the Submitting Party.  S@-  p18.` ` Authority. This Protective Order is issued pursuant to Sections 4(i) and 4(j) of the  S-Communications Act as amended, 47 U.S.C.  154(i), (j) and 47 C.F.R.  0.457(d).xx-",`(`(88" Attachment A to Standard Protective Order  S-;@ DECLARATION l  S8-lU In the Matter of hh,Vcc) ` `  hh,Vcc)  S-[Name of Proceeding] hh,Vcc)  S-` `  hh,Vcc)  S-` `  hh,Vcc) ` `  hh,Vcc)  SH -  S -   I, ______________________________, hereby declare under penalty of perjury that I have read the   Protective Order that has been entered by the Commission in this proceeding, and that I agree to be bound   iby its terms pertaining to the treatment of Confidential Information submitted by parties to this proceeding.   I understand that the Confidential Information shall not be disclosed to anyone except in accordance with   the terms of the Protective Order and shall be used only for purposes of the proceedings in this matter.   I acknowledge that a violation of the Protective Order is a violation of an order of the Federal   jCommunications Commission. I acknowledge that this Protective Order is also a binding agreement with the Submitting Party.  XX` ` X XXhh,(signed) _______________________________(#h XX` ` X XXhh,(printed name) _________________________(#h ` `  hh,(representing) ___________________________ ` `  hh,(title) __________________________________ ` `  hh,(employer) _____________________________ ` `  hh,(address) _______________________________  S-` `  hh,    S`-` `  hh,(phone) ________________________________ X  S -` `  hh,(date) __________________________________   "",`(`(88 $"  S-A APPENDIX B:lU  REGULATORY FLEXIBILITY ANALYSISlU Initial Regulatory Flexibility Act Analysis For the Notice of Proposed Rulemaking   S-  ~ 1.` ` As required by the Regulatory Flexibility Act of 1980 ("RFA"),A yO( -ԍ5 U.S.C. 601612.A the Commission has   yprepared an Initial Regulatory Flexibility Analysis ("IRFA") of the expected significant economic impact   <on small entities by the policies and rules proposed in this NPRM. Written public comments are requested   Lin the IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines  S -  .established in paragraph [__] of the NPRM. The Secretary shall send a copy of this NPRM, including   the IRFA, to the Chief Counsel for Advocacy of the Small Business Administration ("SBA") in accordance with the RFA.  S -  2.` ` Need for Action and Objectives of the Proposed Rule. In 1993, the Commission adopted   zits current rules intended to protect, pursuant to Section 628 of the Communications Act, the right of   kmultichannel video programming providers to obtain access to specified types of video programming.   Ameritech filed a petition for rulemaking proposing that certain aspects of the Commission's program   =access rules be amended to better ensure the Communication Act's program access requirements. In this   NPRM, we seek comment as to whether certain aspects of the Commission's program access rules should be amended to better enforce the Communication Act's program access requirements.  SB-  33.` ` Legal Basis. The authority for the action proposed for this rulemaking is contained in  S-Sections 4(i), 303(r), and 628 of the Communications Act.KX yO-ԍ47 U.S.C 4(i), 303(r), 548.K  S-  4.` ` Description and Estimate of the Number of Small Entities Impacted. The RFA directs the   Commission to provide a description of and, where feasible, an estimate of the number of small entities   [that will be affected by the proposed rules. The RFA defines the term "small entity" as having the same   .meaning as the terms "small business," "small organization," and "small business concern" under Section  S.-  z3 of the Small Business Act.m. yO-  ԍ5 U.S.C. 601(3) (1980) (incorporating by reference the definition of "small business concern" in 15 U.S.C.   632). Pursuant to 5 U.S.C. 601(3), the statutory definition of small business applies "unless an agency after   consultation with the Office of Advocacy of the Small Business Administration and after an opportunity for public   hcomment, establishes one or more definitions of such term which are appropriate to the activities of the agency and publishes definitions in the Federal Register.m Under the Small Business Act, a small business concern is one which:   (1) is independently owned and operated; (2) is not dominant in its field of operation; and (3)satisfies any  S-additional criteria established by the SBA.O yO&-ԍSmall Business Act, 15 U.S.C.  632.O " ( ,`(`(88"Ԍ S-   5.` ` Small MVPDs: The SBA has developed a definition of small entities for cable and other   ]pay television services, which includes all such companies generating $11 million or less in annual  S-  receipts.J yO-ԍ13 C.F.R. 121.201 (SIC 4841).J This definition includes cable system operators, closed circuit television services, direct   ]broadcast satellite services, multipoint distribution systems, satellite master antenna systems and   ysubscription television services. According to the Bureau of the Census, there were 1,758 total cable and  S:-  other pay television services and 1,423 had less than $11 million in revenue.:X yO2-  <ԍU.S. Department of Commerce, Bureau of the Census, Industry and Enterprise Receipts Size Report, Table 2D, SIC 4841 (Bureau of the Census data under contract to the Office of Advocacy of the SBA). We address below each service individually to provide a more precise estimate of small entities.  S-  _6.` ` Cable Systems: The Commission has developed, with SBA's approval, our own definition   zof a small cable system operator for the purposes of rate regulation. Under the Commission's rules, a  St-  "small cable company" is one serving fewer than 400,000 subscribers nationwide.$t yO-  Kԍ47 C.F.R.  76.901(e). The Commission developed this definition based on its determinations that a small  {O-  cable system operator is one with annual revenues of $100 million or less. Implementation of Sections of the 1992  {OV-  <Cable Act: Rate Regulation, Sixth Report and Order and Eleventh Order on Reconsideration, 10 FCC Rcd 7393 (1995).  Based on our most   !recent information, we estimate that there were 1439 cable operators that qualified as small cable  S$ -  Mcompanies at the end of 1995.$  {O`-ԍPaul Kagan Associates, Inc., Cable TV Investor, Feb. 29, 1996 (based on figures for Dec. 30, 1995). Since then, some of those companies may have grown to serve over   y400,000 subscribers, and others may have been involved in transactions that caused them to be combined   =with other cable operators. Consequently, we estimate that there are fewer than 1439 small entity cable   =system operators that may be affected by the decisions and rules we are adopting. We believe that only   a small percentage of these entities currently provide qualifying "telecommunications services" as required   kby the Communications Act and, therefore, estimate that the number of such entities are significantly fewer than noted.  S-  7.` ` The Communications Act also contains a definition of a small cable system operator,   which is "a cable operator that, directly or through an affiliate, serves in the aggregate fewer than 1% of   zall subscribers in the United States and is not affiliated with any entity or entities whose gross annual  Sl-  {revenues in the aggregate exceed $250,000,000."Al.  yO:-ԍ47 U.S.C. 543(m)(2).A The Commission has determined that there are   61,700,000 subscribers in the United States. Therefore, we found that an operator serving fewer than   617,000 subscribers shall be deemed a small operator, if its annual revenues, when combined with the total  S-  annual revenues of all of its affiliates, do not exceed $250 million in the aggregate.M  yOR#-ԍ47 C.F.R.  76.1403(b) (SIC 4833).M Based on available  S-  data, we find that the number of cable operators serving 617,000 subscribers or less totals 1450.N  {O%-ԍPaul Kagan Associates, Inc., Cable TV Investor, Feb. 29, 1996 (based on figures for Dec. 30, 1995).   Although it seems certain that some of these cable system operators are affiliated with entities whose gross   annual revenues exceed $250,000,000, we are unable at this time to estimate with greater precision the"|!,`(`(88"   =number of cable system operators that would qualify as small cable operators under the definition in the Communications Act.  S-  `8.` ` Multipoint Multichannel Distribution Systems ("MMDS"): The Commission refined the   Mdefinition of "small entity" for the auction of MMDS as an entity that together with its affiliates has  S:-  average gross annual revenues that are not more than $40 million for the preceding three calendar years.D: yO-ԍ47 C.F.R.  21.961(b)(1).D  S-This definition of a small entity in the context of MMDS auctions has been approved by the SBA.$X {O -  [ԍSee Amendment of Parts 21 and 74 of the Commission's Rules With Regard to Filing Procedures in the   Multipoint Distribution Service and in the Instructional Television Fixed Service and Implementation of Section 309(j)  {O -  ,of the Communications Act Competitive Bidding, MM Docket No. 9431 and PP Docket No. 93253, Report and Order, 10 FCC Rcd 9589 (1995).  S-  9.` ` The Commission completed its MMDS auction in March 1996 for authorizations in 493   !basic trading areas ("BTAs"). Of 67 winning bidders, 61 qualified as small entities. Five bidders   indicated that they were minorityowned and four winners indicated that they were womenowned   businesses. MMDS is an especially competitive service, with approximately 1573 previously authorized   and proposed MMDS facilities. Information available to us indicates that no MMDS facility generates   revenue in excess of $11 million annually. We conclude that, for purposes of this FRFA, there are approximately 1634 small MMDS providers as defined by the SBA and the Commission's auction rules.  S -  10.` ` Direct Broadcast Satellite ("DBS"): Because DBS provides subscription services, DBS   falls within the SBA definition of cable and other pay television services (SIC 4841). As of December   1996, there were eight DBS licensees. However, the Commission does not collect annual revenue data   for DBS and, therefore, is unable to ascertain the number of small DBS licensees that could be affected   by these proposed rules. Although DBS service requires a great investment of capital for operation, in  S-  the Notice, we acknowledged that there are several new entrants in this field that may not yet have   generated $11 million in annual receipts, and therefore may be categorized as a small business, if  Sn-  independently owned and operated. Since the publication of the Notice, however, more information has   become available. Estimates of 1996 revenues for various DBS operators are significantly greater than  S -  $11,000,000 and range from a low of $31,132,000 for Alphastar[X D yO-  ;ԍAlphastar Press Release (via Canada Newswire), March 20, 1997. Revenues were originally stated in Canadian   Dollars ($42,915,000 Canadian). Revenues were recalculated using an exchange rate of $1.3785 (Can) = $1.00 (US). Revenues stated include revenues for Cband service.[ to a high of $1,100,000,000 for  S-Primestar.Nd  {O -ԍThe SkyTrends Report: 19961997.N Accordingly, we now conclude that no DBS operator qualifies as a small entity.  S-  R11.` ` Home Satellite Dish ("HSD"): The market for HSD service is difficult to quantify.   Indeed, the service itself bears little resemblance to other MVPDs. HSD owners have access to more than   y265 channels of programming placed on Cband satellites by programmers for receipt and distribution by  S2-  .MVPDs, of which 115 channels are scrambled and approximately 150 are unscrambled.b2  {O&-ԍ1996 Competition Report, 12 FCC Rcd at 4385 49.b HSD owners"2" ,`(`(88{"   can watch unscrambled channels without paying a subscription fee. To receive scrambled channels,   yhowever, an HSD owner must purchase an integrated receiverdecoder from an equipment dealer and pay   Na subscription fee to an HSD programming packager. Thus, HSD users include: (1) viewers who   subscribe to a packaged programming service, which affords them access to most of the same   programming provided to subscribers of other MVPDs; (2) viewers who receive only nonsubscription  S8-programming; and (3) viewers who receive satellite programming services illegally without subscribing.=8 {O-ԍId. at 50.=  S-  212.` ` According to the most recently available information, there are approximately 30 program  S-  packagers nationwide offering packages of scrambled programming to retail consumers.1Z {O -ԍId.1 These program  S-  packagers provide subscriptions to approximately 2,314,900 subscribers nationwide.1 {O$ -ԍId.1 This is an average   lof about 77,163 subscribers per program packager. This is substantially smaller than the 400,000   subscribers used in the Commission's definition of a small multiple system operator ("MSO").   Furthermore, because this an average, it is likely that some program packagers may be substantially smaller.  S -  13.` ` Open Video System ("OVS"): The Commission has certified nine OVS operators. Of these   nine, only two are providing service. On October 17, 1996, Bell Atlantic received approval for its  SZ-  =certification to convert its Dover, New Jersey Video Dialtone ("VDT") system to OVS.Z~ {Ox-  ԍBell AtlanticNew Jersey, Inc. (Certification to Operate an Open Video System), 11 FCC Rcd 13249 (CSB  {OB-1996) ("Bell Atlantic OVS Certification"). Bell Atlantic   subsequently purchased the division of Futurevision which had been the only operating program package   provider on the Dover system, and has begun offering programming on this system using these  S-  resources. {O\-  xԍBell Atlantic, Bell Atlantic Now Offering Video Services in Dover Township New Jersey (news release), Nov. 1, 1996. Metropolitan Fiber Systems was granted certifications on December 9, 1996, for the   1operation of OVS systems in Boston and New York, both of which are being used to provide  S-  programming.4  {Of-  JԍSee Metropolitan Fiber Systems/New York, Inc. (Certification to Operate an Open Video System), Consolidated Order, 11 FCC Rcd 20896, DA 962075 (CSB Dec. 9, 1996). Bell Atlantic and Metropolitan Fiber Systems have sufficient revenues to assure us that   they do not qualify as small business entities. Little financial information is available for the other entities  SB-  authorized to provide OVS that are not yet operational. We believe that one OVS licensee may qualify   as a small business concern. Given that other entities have been authorized to provide OVS service but   =have not yet begun to generate revenues, we conclude that at least some of the OVS operators qualify as small entities.  Sz-  14.` ` Satellite Master Antenna Television ("SMATVs"): Industry sources estimate that  ST-  yapproximately 5200 SMATV operators were providing service as of December 1995.gT  {O'-ԍ1996 Competition Report, 12 FCC Rcd at 44034404 81.g Other estimates"T# ,`(`(88"   indicate that SMATV operators serve approximately 1.05 million residential subscribers as of September  S-  1996.1 {O@-ԍId.1 The ten largest SMATV operators together pass 815,740 units.1Z {O-ԍId.1 If we assume that these   SMATV operators serve 50% of the units passed, the ten largest SMATV operators serve approximately   40% of the total number of SMATV subscribers. Because these operators are not rate regulated, they are   .not required to file financial data with the Commission. Furthermore, we are not aware of any privately   published financial information regarding these operators. Based on the estimated number of operators   \and the estimated number of units served by the largest ten SMATVs, we conclude that a substantial number of SMATV operators qualify as small entities.  S-  15.` ` Local Multipoint Distribution System ("LMDS"): Unlike the above pay television services,   LMDS technology and spectrum allocation will allow licensees to provide wireless telephony, data, and/or   video services. A LMDS provider is not limited in the number of potential applications that will be   available for this service. Therefore, the definition of a small LMDS entity may be applicable to both   Lcable and other pay television (SIC 4841) and/or radiotelephone communications companies (SIC 4812).  S -  The SBA definition for cable and other pay services is defined in paragraph 59 supra. A small  S -  radiotelephone entity is one with 1500 employees or less.?  yO8-ԍ13 C.F.R.  121.201.? However, for the purposes of this  S -  Memorandum Opinion and Order and Notice of Proposed Rulemaking, we include only an estimate of LMDS video service providers.  S-  16.` ` LMDS is a service that is expected to be auctioned by the FCC in 1998. The vast   majority of LMDS entities providing video distribution could be small businesses under the SBA's  S-  definition of cable and pay television (SIC 4841).| {O-ԍSee para. 269 supra for an estimate of the number of entities under SIC 4841. However, in the Third NPRM,$ {Ol-  xԍIn the Matter of Rulemaking to Amend Parts 1, 2, 21, and 25 of the Commission's Rules to Redesignate the   ;27.529.5 GHz Frequency Band, to Reallocate the 29.530.0 GHz Frequency Band, to Establish Rules and Policies   for Local Multipoint Distribution Service and for Fixed Satellite Services and Suite 12 Group Petition for Pioneer's  {O-Preference, ("Third NPRM") CC Docket No. 92297, 11 F.C.C. Rcd. 53 (1995),  188. we proposed to   define a small LMDS provider as an entity that, together with affiliates and attributable investors, has   average gross revenues for the three preceding calendar years of less than $40 million. We have not yet received approval by the SBA for this definition.  S-  17.` ` There is only one company, CellularVision, that is currently providing LMDS video   services. Although the Commission does not collect data on annual receipts, we assume that  S-  ?CellularVision is a small business under both the SBA definition and our proposed auction rules.   S-  Accordingly, we affirm our tentative conclusion that a majority of the potential LMDS licensees will be small entities, as that term is defined by the SBA.  S-  ~18.` ` Program Producers and Distributors: The Commission has not developed a definition"$ ,`(`(88M"  S-  of small entities applicable to producers or distributors of television programs. yOh-  xԍThe term "television programs" is used in this context to include all video programming outlets, e.g., cable, DBS. Therefore, we will utilize  S-  ythe SBA classifications of Motion Picture and Video Tape Production (SIC 7812),s  yO-  Yԍ"Establishments primarily engaged in the production of theatrical and nontheatrical motion pictures and video   tapes for exhibition or sale, including educational, industrial, and religious films. Included in the industry are   establishments engaged in both production and distribution. Producers of live radio and television programs are   Yclassified in Industry 7922." Standard Industrial Classification Manual, SIC 7812, Executive Office of the President, Office of Management and Budget (1987) (OMB SIC Manual). s Motion Picture and  S-  Video Tape Distribution (SIC 7822),.X yO -  ԍ"Establishments primarily engaged in the distribution (rental or sale) of theatrical and nontheatrical motion   ipicture films or in the distribution of video tapes and disks, except to the general public." OMB SIC Manual, SIC 7822.. and Theatrical Producers (Except Motion Pictures) and  S-  Miscellaneous Theatrical Services (SIC 7922).3X  yO-  ԍ"Establishments primarily engaged in providing live theatrical presentations, such as road companies and   Lsummer theaters. . . . Also included in this industry are producers of . . . live television programs." OMB SIC Manual, SIC 7922.3 These SBA definitions provide that a small entity in the   television programming industry is an entity with $21.5 million or less in annual receipts for SIC 7812  S8-  =and 7822, and $5 million or less in annual receipts for SIC 7922.f8 yO-ԍ13 C.F.R.  121.201.#x6X@`7 iX@#f The 1992 Bureau of the Census data   jindicate the following: (1) there were 7265 U.S. firms classified as Motion Picture and Video Production   [(SIC 7812), and that 6987 of these firms had $16,999 million or less in annual receipts and 7002 of these  S-  firms had $24,999 million or less in annual receipts; yO-  -ԍU.S. Small Business Administration 1992 Economic Census Industry and Enterprise Report, Table 2D, SIC   -7812, (Bureau of the Census data adapted by the Office of Advocacy of the U.S. Small Business Administration)   (SBA 1992 Census Report). The Census data do not include a category for $21.5 million. Therefore, we have   reported the closest increment below and above the $21.5 million threshold. There is a difference of 15 firms   xbetween the $16,999 and $24,999 million annual receipt categories. It is possible that these 15 firms could have annual receipts of $21.5 million or less and, therefore, would be classified as small businesses. (2) there were 1139 U.S. firms classified as Motion   kPicture and Tape Distribution (SIC 7822), and that 1007 of these firms had $16,999 million or less in  Sp-  kannual receipts and 1013 of these firms had $24,999 million or less in annual receipts; p yO(-  YԍSBA 1992 Census Report, SIC 7812. The Census data does not include a category for $21.5 million; therefore,   we have reported the closest increment below and above the $21.5 million benchmark. There is a difference of 6   firms between the $16,999 and $24,999 million annual receipt categories. It is possible that these 6 firms could have annual receipts of $21.5 million or less and, therefore, would be classified as small businesses. and (3) there   were 5671 U.S. firms classified as Theatrical Producers and Services (SIC 7922), and that 5627 of these  S -firms had less than $5 million in annual receipts.I  yO$-ԍSBA 1992 Census Report, SIC 7922.I  S -  19.` ` Each of these SIC categories is very broad and includes firms that may be engaged in   various industries including television. Specific figures are not available as to how many of these firms" %,`(`(88 "   Lexclusively produce and/or distribute programming for television or how many are independently owned   =and operated. Consequently, we conclude that there are approximately 6987 small entities that produce   and distribute taped television programs, 1013 small entities primarily engaged in the distribution of taped   television programs, and 5627 small producers of live television programs that may be affected by the  S`-rules adopted in this Report and Order.  S:-   S-  20. ` ` Reporting, Recordkeeping, and other Compliance Requirements: The rules proposed in  S-this Notice will not require a change in record keeping requirements.  S-  C21. ` ` Significant Alternatives Which Minimize the Impact on Small Entities and which are  Sx-  Consistent with Stated Objectives: The NPRM proposes various alternatives which may expand access to video programming by small entities.  S -  22. ` ` Federal Rules which Overlap, Duplicate, or Conflict with the Commission's Proposal: None.  S -  " &,`(`(88"  S-SEPARATE STATEMENT OF COMMISSIONER HAROLD W. FURCHTGOTT ROTH In re: Ameritech New Media, Inc.: Memorandum Opinion and Order and Notice of Proposed Rulemaking  S-In connection with the Notice of Proposed Rulemaking regarding the possible application of our programaccess rules to certain kinds of terrestriallydelivered programming, I would like to  S-emphasize that the Commission's duty in this area as in all areas is to faithfully implement the law that Congress passed and that the President signed. Section 628 of the Communications Act, the statutory basis for our existing programaccess scheme, by its terms governs the provision of "satellite cable programming" and "satellite broadcast programming." Although we today seek comment on the propriety of extending programaccess rules to terrestriallydelivered programming in some circumstances, in the end we may well conclude that we lack the statutory authority to do so and that Congress, rather than this Commission, is the appropriate governmental entity to redress any competitive issues that may exist with respect to  SX-programming that is not transmitted (or retransmitted) by satellite.  ?<#x6X@`7 iX@#