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Regarding Development of Competition and  S-  =Diversity in Video Programming Distribution and Carriage, the Commission addressed Ameritech New   Media, Inc.'s ("Ameritech") petition for rulemaking requesting that the Commission amend our program  S-  access rules.& {O-  ԍImplementation of the Cable Television Consumer Protection and Competition Act of 1992: Petition for   Rulemaking of Ameritech New Media, Inc. Regarding Development of Competition and Diversity in Video  {O-  YProgramming Distribution and Carriage, Memorandum Opinion and Order and Notice of Proposed Rulemaking, 12  {ON-FCC Rcd 22840 (1997) ("NPRM"). Ameritech requested that the Commission amend its rules in three specific ways: (i) to   provide time limits for the resolution of program access complaints; (ii) to provide program access litigants discovery asofright; and (iii) to impose damages for adjudicated program access viola  S-  Բtions.> {Oh -ԍId. at 2285561.> The Commission sought comment on two additional issues: (i) whether to expand program access   zprotections to cover certain satellitedelivered programming that is converted to terrestrially delivered   programming; and (ii) whether the Commission should amend the joint and several liability requirement  S-  relating to cooperative buying groups.>H {O-ԍId. at 2286162.> The Commission also asked commenters to address whether such  Sr-  Kproposed rule changes are consistent with the procedures established by the Commission in Implementation   of the Telecommunications Act of 1996: Amendment of Rules Governing Procedures to be Followed When  S$ -Formal Complaints are Filed Against Common Carriers ("Formal Complaint Order"). $  {O-  .ԍId. at 22854, discussing Implementation of the Telecommunications Act of 1996: Amendment of Rules  {Oh-  Governing Procedures to be Followed When Formal Complaints are Filed Against Common Carriers, Report and   Order, 12 FCC Rcd 22497, 22504 (1997). As part of the 1996 Act, Congress enacted deadlines for the   Commission's resolution of complaints alleging unreasonably discriminatory or otherwise unlawful conduct filed   against the Bell Operating Companies, local exchange carriers, and other telecommunications carriers that are subject  {O-  to the requirements of the Communications Act. See Communications Act  208(b)(1), 260(b), 271(d)(6)(B), and  {OT-  J275(c), 47 U.S.C.  208(b)(1), 260(b), 271(d)(6)(B), and 275(c); Formal Complaint Order, 12 FCC Rcd at 22499  w500. Provisions of the 1996 Act further direct the Commission to establish such procedures as are necessary for the  {O-  /review and resolution of such complaints within the statutory deadlines. See e.g., Communications Act   {O-  w271(d)(6)(B), 47 U.S.C.  271(d)(6)(B); Formal Complaint Order, 12 FCC Rcd at 22499. In the Formal Complaint  {Oz-  Order, the Commission adopted new or amended standards and procedures related to the processing and resolution  {OD-  of formal complaints against common carriers, including, inter alia, prefiling negotiation requirements, service   requirements, pleading requirements, pleading cycles, discovery, referral of issues to Administrative Law Judges,  {O-  status conferences, damages procedures, motions, briefs, prima facie claims, and burdens of proof. See Formal  {O-  g Complaint Order, 12 FCC Rcd at 2251417, 2252029, 2252938, 2254041, 2254154, 2255456, 2255763, 2257287, 2259196, 22603607, 2261314, 2261518.   S - III.SUMMARY  S -    5. ` ` This Order adopts rules and policies amending our program access rules promulgated  S`-  pursuant to Section 628 of the Communications Act. The decisions made in this Order may be summarized as follows:  S- XThe Commission finds that its existing statutory forfeiture authority can be used in appropriate  ^circumstances as an enforcement mechanism for program access violations. Forfeitures can be"6,`(`(88" an effective deterrent to anticompetitive conduct.(#  S- ]XThe Commission affirms its statutory authority to impose damages for program access violations  Band finds that the imposition of damages at this time is an appropriate next step in the  {implementation of our program access rules. The Commission recognizes that the law of program  Oaccess continues to be refined, and it is not appropriate in all instances to impose damages for  Qprogram access violations. Where there are circumstances through either rulemaking or  adjudicatory proceedings, such that a program access defendant knew, or should have known, that  it was engaging in conduct violative of Section 628, damages are appropriate and may be  S-awarded. (#  SH - ^X The Commission believes that damages can best be calculated on a casebycase basis and that  the most efficient method for determining damage claims in the program access area is to adopt  }procedures similar to those used by the Commission in adjudicating common carrier formal  S -complaints modified to reflect the program access context. (#  S - ^X The Commission finds that the adoption of time limits for program access disputes serves the  SX- public interest. The Order finds that denial of programming cases (unreasonable refusal to sell,  petitions for exclusivity, and exclusivity complaints) should be resolved within five months of the  !submission of the complaint to the Commission. All other program access complaints, including  _price discrimination cases, should be resolved within nine months of the submission of the complaint to the Commission. (#  Sj- XThe Commission finds that the adoption of time limits makes it necessary to impose a more  1streamlined pleading cycle. Program access defendants must file an answer within 20 days of  service of the complaint, unless otherwise directed by the Commission. Program access  ?complainants must file a reply within 15 days of service of the answer, unless otherwise directed by the Commission.(#  Sz- OXThe Commission retains the current system of Commissioncontrolled discovery. The Order  mclarifies our rules to provide that, to the extent that a defendant expressly references and relies  Aupon a document or documents within its control in defending a program access claim, the  S- ]defendant must attach that document or documents to its answer. The Order adopts, with minor  revisions, the standardized protective order for program access matters that was attached to the  S-NPRM.(#  Sh- XThe Commission finds that the record fails to establish that the movement of programming from  satellite to terrestrial delivery to avoid the program access rules is significant and causing  demonstrative competitive harm at this time. The Order indicates that the Commission will  S -continue to monitor this issue and its impact on competition in the video marketplace. (#  S"- lX The Commission finds that the record justifies adopting an alternative method to joint and several  liability that buying groups can satisfy which ensures that programming distributors are adequately  SP$- protected from excessive financial risk. The Order requires that, in lieu of joint and several  liability, buying groups maintain liquid cash or credit reserves equal to cover the cost of one  S&-month's programming for all of the buying group's members. (# #&a\  P6G;&P#"&,`(`(88n("Ԍ S-IV.DISCUSSION  S- A.` ` Sanctions  S`- ` ` 1. Adequacy and Interaction of Forfeitures  S8-  S-  6. ` ` Background. The Commission has existing authority under Title V to impose forfeitures  S-  for violations of the program access rules.^ yOR-ԍ Communications Act  502, 47 C.F.R.  502.^ The Communications Act establishes a baseline forfeiture  S-  of up to $10,000.00 per day for violation of the program access rules not to exceed a total of $75,000.00.rX yO -  LԍCommunications Act  503(b)(2)(C), 47 U.S.C.  503(b)(2)(C). The Commission's forfeiture guidelines  {O -  Yestablish a baseline forfeiture of $7,500.00 per day for violation of the program access rules. See The Commission's  {OL -  Forfeiture Policy Statement and Amendment of Section 1.80 of the Rules to Incorporate the Forfeiture Guidelines,   i12 FCC Rcd 17087, Appendix A (1997) (Note: Guidelines for Assessing Forfeitures, Section I. Base Amounts for Section 503 Forfeitures).r   MThe Commission requested comment on this amount. We also sought comment on the adequacy and   clarity of the forfeiture procedures and guidelines set forth in Section 503 of the Communications Act,  SJ -  the Commission's rules,FJ  yO-ԍ47 C.F.R. 1.80(b)(4) Note.F and case law. We sought comment on the relation, if any, between damages and the Commission's existing Title V authority.  S -  B7. ` ` Several commenters argue that the existence of forfeiture authority alone is insufficient  S -  to curb anticompetitive activity relating to program access.7  yO-  ԍConsumers Union, Consumer Federation of America and Media Access Project ("Consumers Union") Comments   at 11; GTE Service Corporation ("GTE") Comments at 1112; RCN Telecom Services, Inc. ("RCN") Comments at   i8; Ameritech New Media, Inc. ("Ameritech") Comments at 2122; BellSouth Corporation, BellSouth Interactive   Media Services, Inc. and BellSouth Wireless Cable, Inc. ("BellSouth") Reply Comments at 12; DirecTV, Inc. ("DirecTV") Reply Comments at 25.7 Bell Atlantic argues that forfeitures alone   are insufficient because they do not reflect the full economic and competitive damage accruing from  SZ-  [unlawful behavior.jZL  yOF-ԍBell Atlantic Telephone Companies ("Bell Atlantic") Comments at 7.j Most cable commenters believe that the existing forfeiture amounts and procedures  S2-  [are adequate.*X2 yO-  ԍLiberty Media Corporation ("Liberty") Comments at 15; Encore Media Group, LLC ("Encore") Comments at   11; Home Box Office ("HBO") Reply Comments at 3; Fox/Liberty Networks, LLC and FX Networks LLC ("Fox") Reply Comments at 34.* Several commenters assert that, in cases which demonstrate repeated and willful violation  S -  of the program access rules, the imposition of both damages and forfeitures is justified.s  yO#-ԍSNET Personal Vision, Inc. ("SNET") Comments at 45; GTE Comments at 1013.s Ameritech   =argues that "[t]he key distinction is that forfeitures strictly redress offenses to the governmental interest   zin protecting consumers and promoting competition, while damages uniquely redress the concomitant",`(`(88"  S-injuries to the complaining party which forfeitures alone would neglect."i {Oh-ԍAmeritech Comments at 22; see DirecTV Reply Comments at 26.i  S-  8. ` ` Ameritech asserts that the current forfeiture amount of $7,500 per day, without a cap on   Nthe total amount which may be assessed over the course of the violation, is an adequate forfeiture  S`-  amount. `Z yOZ-  ,ԍAmeritech Comments at 2021. Ameritech also suggests that the Commission recommend to Congress that it   ,enact legislation amending Section 503 to increase the statutory forfeiture caps for violation of the program access   rules to $1 million, commensurate with the maximum caps for common carriers. Ameritech Reply Comments at 1617. Consumers Union asserts that the Commission's existing forfeiture amounts are insufficient to   deter anticompetitive activity and proposes raising the forfeiture amount for program access violations  S-  from $7,500 to $25,000 per day for each single cable television system or franchise.B yO -  ԍConsumers Union Comments at 1213. A vertically integrated MSO with 100 cable systems daily forfeiture  {O -would increase to $2,500,000. Id. Noting that the   yforfeiture daily penalty of $7,500 is equal to approximately one millionth of TCI Communications, Inc.'s  S-annual revenue, RCN argues that the current forfeiture amount should be raised to $27,500 per day. {O-ԍRCN Comments at 911; see Echostar Communications Corporation ("Echostar") Reply Comments at 7.  Sp-  Q9. ` ` We believe that the Commission's existing statutory forfeiture authority can be used in   appropriate circumstances as an enforcement mechanism for program access violations. Forfeitures can   =be an effective deterrent to anticompetitive conduct. We intend to make greater use of this authority to   sanction unlawful conduct. While statutory changes to the Commission's forfeiture authority could add   additional tools for the Commission to use in the enforcement of these statutory provisions, we believe   that the Commission's existing forfeiture authority provides an appropriate remedial measure for program   Maccess violations. As discussed below, we intend to use damages to further enhance our enforcement   efforts. The Commission has the authority to assess forfeitures and damages separately and in   combination depending upon the circumstances of a given case. The Commission also retains the authority to issue entirely prospective relief as it has in previous decisions.  S-` ` 2. Damages for Program Access Violations  Sh-   10. ` ` Background. The Communications Act provides that the Commission shall have the   power to order "appropriate remedies, including, if necessary, the power to establish prices, terms, and  S-  conditions of sale of programming."^.  yO -ԍCommunications Act 628(e), 47 U.S.C. 628(e).^ In its Order on Reconsideration, the Commission stated that this   <authority "is broad enough to include any remedy the Commission reasonably deems appropriate, including  S-  ?damages."e  {O*$-ԍOrder on Reconsideration, 10 FCC Rcd 1902, 1911 (1994).e In the Order on Reconsideration, the Commission declined, however, to exercise its  S-  authority to award damages at that time, but reserved the right to revisit the issue in the future.2P  {O&-ԍId. 2 In   response to Ameritech's petition, the Commission sought comment on whether an additional check on anti"~,`(`(88"ԫ  }competitive 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.  S-   11. ` ` Discussion. Many commenters favor the imposition of damages for program access  Sb-  violations.^ xb yO-  JԍConsumers Union Comments at 11; National Rural Telecommunications Cooperative ("NRTC") Comments at   y12; SNET Comments at 4; OpTel, Inc. ("OpTel") Comments at 4; Bell Atlantic Comments at 7; Small Cable   YBusiness Association ("SCBA") Comments at 13; American Programming Service, Inc., Consumer Satellite Systems,   Inc., Programmers Clearing House, Inc., and Satellite Receivers, Ltd., and Satellite Distributors Cooperative   ("Satellite Distributors") Comments at 1213; GTE Comments at 1011; Echostar Comments at 7; World Satellite   -Network, Inc. ("WSN") Comments at 22; RCN Comments at 10; Wireless Cable Association International, Inc. ("WCA") Comments at 15; BellSouth Comments at 17; DirecTV Comments at 23.^ Other commenters argue that, i n light of the fact that there have been relatively few program   access complainants most of which have been dismissed or denied, there is no need for the Commission  S-  .to impose damages for violations of the program access rules.!  yO -  .ԍNational Cable Television Association ("NCTA") Comments at 11; Liberty Comments at 16; Comcast   JCorporation ("Comcast") Comments at 7; HBO Comments at 18; Cablevision Systems Corporation ("Cablevision")   Comments at 2728; Encore Comments at 11; Time Warner Cable ("Time Warner") Comments at 6; Cable News Network, Inc. ("CNN") Reply Comments at 5. After consideration of the record in this   .proceeding, we believe that the Commission should impose damages for violations of Section 628 where   necessary to remedy the harm stemming from a programmer's anticompetitive conduct. As discussed   below, the damages remedy will operate in concert with our existing forfeiture authority which the  Sr-Commission will enforce in appropriate cases."r  {O-ԍ See supra 69, discussing the Commission's program access forfeiture authority.  S" -` `  a.Statutory Authority  S -  p 12. ` ` Several commenters argue that the Commission lacks statutory authority to impose  S -  damages for program access violations.x#  yO-ԍLiberty Comments at 1924; Time Warner Comments at 6; Fox Reply Comments at 24.x Liberty argues that, if the Commission's expansive interpretation   yof the term "appropriate remedies" contained in Section 628(e)(1) were correct, then Congress would not   Nhave needed to add Section 628(e)(2) to inform the Commission that the remedies provided for in  S2-  subsection (e)(1) were in addition to other remedies available under the Communications Act.B$2 yO-ԍLiberty Comments at 1920.B Liberty   contends that the only way to give effect to the Commission's reading of Section 628(e) is to render  S-  [Section 628(e)(2) inoperative or superfluous, which the Commission is prohibited from doing.x% {O$"-ԍId. at 20, citing Reiter v. Sonotone Corp. 442 U.S. 330, 339 (1979).x Liberty   argues that this interpretation is reinforced by the "if necessary" and "including" qualifiers set forth in  S-  Section 628(e)(1).8&4 {Of%-ԍId. at 21.8 According to Liberty, the "if necessary" language modifies the phrase "the power to"   thus indicating that the Commission has the power to order a remedy under subsection (e)(1) only if such"j&,`(`(88"  S-  [remedy is necessary.1' {Oh-ԍId.1 Liberty argues that the record in this proceeding indicates that a damages remedy  S-  {is not necessary.1(Z {O-ԍId.1 In addition, Liberty argues that the doctrine of ejusdem generis means that the  S-  "including" qualifier reinforces that subsection (e)(1) is limited to specific, prospective remedies.)\ {O>-  yԍId. at 2122. Liberty argues that, under the doctrine of ejusdem generis, a general term is limited by the   specific terms which follow it, so that the general term embraces objects similar in nature to the specific  {O-enumerations. Id., citing 2A Sutherland Stat. Const.  47.17 (5th. ed.).  By   specifying that the general term "appropriate remedies" includes the power to establish "prices, terms, and   conditions," Liberty argues that Congress further indicated that the class of remedies available under  S:-  ySection 628(e)(1) was limited to prospective, injunctive relief.8*: {O -ԍId. at 22.8 Liberty also argues that the fact that the   Federal Trade Commission has determined that it does not have authority to impose damages under   Section 5 of the Federal Trade Commission Act ("FTCA"), a provision related to unfair methods of   competition, serves as further evidence that Congress did not intend for the Commission to award damages  S-under Section 628.a+ {O-ԍId. at 2324, citing FTCA 5, 15 U.S.C.  45.a   SJ -  Q 13. ` ` Consumers Union argues that the cable commenters interpretation of Section 628(e) as  S" -  kprohibiting the imposition of damages for program access violations is incorrect.P," 4  yO-  iԍConsumers Union Reply Comments at 1112. Bell Atlantic observes that the cable commenters' arguments   that the Commission lacks authority to award damages in program access cases is time barred because such   arguments should have been as part of an appeal or reconsideration request of the Commission's determination that  {ON-  it had the authority to award damages for program access violations in the Order on Reconsideration. Bell Atlantic Reply Comments at 23. P Consumers Union   Lasserts that Sections 628(e)(1) and (e)(2) work in conjunction Section 628(e)(1) gives the Commission   power to order appropriate remedies, while Section 628(e)(2) clarifies that any such remedy the   =Commission might impose for program access violations is not limited to those otherwise enumerated in  S -  the Communications Act.V-  yO-ԍConsumers Union Reply Comments at 1112.V With regard to the argument that Congress intended to limit the broad   language "appropriate remedies" with the language relating to the "power to establish prices, terms and   conditions," Consumers Union argues that the language of Section 628(e)(2) which permits the   mCommission to adopt remedies "in addition to" those specifically enumerated elsewhere in the   Communications Act demonstrates that Congress intended the Commission to have remedial powers that  S-  extended far beyond forfeitures and prospective injunctive relief.;.v {O#-ԍId. at 1213.; Ameritech also notes that the word  S-  L"including" is generally interpreted as a term of enlargement and not of limitation./ {O:&-  KԍAmeritech Reply Comments at 20, citing 2A Sutherland Stat. Const. 47.07 (5th ed.) (citing Argosy Ltd. v.  {O'-Hennigan, 404 F.2d 14 (5th Cir. 1968)). WCA states that, as" d/,`(`(88"   the Commission recognized in a program access decision relating to exclusive programming contracts in   [the direct broadcast satellite ("DBS") industry, the use of the term "including" in another program access  S-  provision "indicates that the specified list . . that follows is illustrative, not exclusive."0& {O-  ԍWCA Reply Comments at 1314, citing Implementation of the Cable Television Consumer Protection Act of  {O-  1992 Development of Competition and Diversity in Video Programming Distribution and Carriage, 10 FCC Rcd  {O-  3105, 3122 n.85 (citing Puerto Rico Maritime Shipping Authority v. Interstate Commerce Commission, 645 F.2d 1102, 1112 n.26 (D.C. Cir. 1981). Two commenters   also cite the Commission's broad authority to fashion appropriate remedies under Section 4(i) of the  S`-Communications Act.a1` yO -ԍAmeritech Reply Comments at 19; WCA Reply Comments at 15.a  S-  p 14. ` ` We disagree with those commenters that argue that the Commission lacks statutory   authority to impose damages for program access violations. Section 628(e) of the Communications Act provides:  Sp- #X(1) Remedies Authorized. Upon completion of such adjudicatory proceeding, the  Commission shall have the power to order appropriate remedies, including, if necessary,  the power to establish prices, terms, and conditions of sale of programming to the aggrieved multichannel video programming distributor.   S - X(2) Additional Remedies. The remedies provided in paragraph (1) are in addition to  S -and not in lieu of the remedies available under title V or any other provision of the Act.^2 F yO-ԍCommunications Act  628(e), 47 U.S.C.  548(e).^    The Commission has interpreted its authority under Section 628(e) as "broad enough to include any  S0-  {remedy the Commission reasonably deems appropriate, including damages."e30 {O-ԍOrder on Reconsideration, 10 FCC Rcd 1902, 1911 (1994).e We reject Liberty's   confined interpretation of Section 628(e), and do not agree that determining damages to be an appropriate   remedy thereunder renders subsection (e)(2) superfluous. The Commission's interpretation of Section   628(e) is that subsection (e)(1) authorizes the Commission to order appropriate remedies, including   Odamages, while subsection (e)(2) clarifies that the remedies authorized under subsection (e)(1)   =complement, and may be exercised in tandem with, other remedies permitted under the Communications  S@-  Act, including forfeitures. With regard to Liberty's ejusdem generis argument, we agree with Ameritech   and WCA that the appropriate interpretation of the term "including" in Section 628(e)(1) indicates that  S-the phrase relating to prices, terms and conditions is illustrative, rather than exclusive.4h  {O -  ԍSee Puerto Rico Maritime Shipping Authority v. Interstate Commerce Commission, 645 F.2d 1102, 1112 n.26   -(D.C. Cir. 1981) ("It is hornbook law that the use of the word including indicates that the specified list [] that  {O"-  follows is illustrative, not exclusive."); see also 2A Sutherland Stat. Const.  47.07 (5th ed.) ("It has been said the   word includes is usually a term of enlargement, and not of limitation . . . It therefore conveys the conclusion that there are other items includable, though not specifically enumerated. . . .") (internal quotes omitted).  S-  15. ` ` We disagree with Liberty's analogy between the program access provisions of the   Communications Act and Section 5 of the FTCA. Section 5(a) of the FTCA provides that "[u]nfair   [methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting"R 4,`(`(88"  S-  {commerce, are hereby declared unlawful."L5 yOh-ԍFTCA 5(a), 15 U.S.C.  45(a).L Upon a finding that an entity has engaged in an unfair   method of competition or an unfair or deceptive act or practice, Section 5(b) empowers the Federal Trade   Commission to issue an order requiring that the entity ". . . cease and desist from using such method of  S-  /competition or act or practice.";6X {O-ԍId. 5(b).; The Federal Trade Commission has conceded that Section 5 of the  S`-  FTCA does not grant it the power to order damages for violations of Section 5(a).g7` {O-ԍSee Heater v. FTC, 503 F.2d 321, 323 n.6 (9th Cir. 1974).g That Section 5 of   the FTCA and Section 628 have certain facial similarities is not a basis to conclude that Section 628   >remedies are similarly limited to the remedies under the FTCA. Indeed, the similarities remain facial.   By its terms, Section 5(b) limits the Federal Trade Commission to prospective injunctive relief in the form   {of cease and desist orders. In contrast, Section 628(e) grants the Commission "the power to order  S-  appropriate remedies."b8| yO-ԍCommunications Act 628(e)(1), 47 U.S.C. 548(e)(1).b In scope and statutory language, we find Liberty's analogy between the two   provisions to be unpersuasive. Accordingly, we reaffirm our statutory authority to impose damages in redressing violations of Section 628.  S -` `  b.Need for a Damages Remedy  S -  S -  16. ` ` Several commenters argue that the Commission should continue to refrain from imposing   damages, even if it has authority to do so. Fox states that there is no evidence contained in the comments  SX-  filed in response to the NPRM, or elsewhere, to base a finding that existing remedies have not been  S2-  sufficient to accomplish the goals of Section 628 or that a damages remedy is particularly necessary.]92  yO-ԍFox Reply Comments at 4; Liberty Reply Comments at 3.]   =Numerous commenters note that the Commission has never exercised its authority to impose forfeitures   >for violations of the program access rules. NCTA states that the intent of Section 628 is to promote   ]competition among multichannel video programming distributors ("MVPDs") and that there is no   indication that the Commission's existing remedies have been inadequate to enable complaining MVPDs  Sj-  to compete on fair terms in the video marketplace._:j {O-ԍNCTA Comments at 12; see Fox Reply Comments at 3._ Other commenters argue that a damages remedy will   reduce the efficiency of the program access provisions by imposing significant delays and additional costs  S-  on the resolution of program access cases.;.  yO -  wԍLiberty Comments at 17; HBO Comments at 1821; Encore Comments at 12; Time Warner Comments at 67; NCTA Reply Comments at 9. HBO argues that damages are particularly inappropriate in   the area of program access where the law is nascent and provides little guidance on actions that will or  S-  zwill not result in a program access violation.><  yO$-ԍHBO Comments at 2122.> Cablevision argues that the imposition of damages will   cause programmers to cease negotiating contracts based on legitimate price differentials because the   .programmer faces a significant risk that the Commission will simply disagree with its economic analysis"z <,`(`(88"  S-and order a rate reduction.C= yOh-ԍCablevision Comments at 28.C  S-  17. ` ` When the Commission determined in the Order on Reconsideration that it had the   authority to impose damages but would, at that time, refrain from doing so, the Commission had no  Sb-  experience in enforcing the program access provisions of the Communications Act.a>bX {OZ-ԍ Order on Reconsideration, 10 FCC Rcd at 1911.a In the interim, the   Commission and the multichannel video programming industry have had almost six years of experience   under Section 628, and the Commission believes that sufficient understanding of the parameters of   jprogram access exist. It is appropriate to take a logical next step the compensation of victims of clear  cut anticompetitive conduct which violates the program access rules. Restitution in the form of damages   is an appropriate remedy to return improper gains obtained by verticallyintegrated programmers to unjustly injured MVPDs.  S" -  18. ` ` We also recognize, as argued by HBO, that the law of program access continues to be   refined, and it is not appropriate in all instances to impose damages for program access violations. We   !believe Section 628 permits the Commission to exercise discretion in this area. Section 628(e)(1)  S -  authorizes the Commission to order "appropriate" remedies.d?  yO4-ԍCommunications Act  628(e)(1), 47 U.S.C.  548(e)(1).d Where a program access defendant relies   upon a good faith interpretation of an ambiguous aspect of the program access provisions for which there   is no guidance, we do not believe it would promote competition, or otherwise benefit the video   marketplace, to require damages from a programming provider in such circumstances. Where, however,   there are circumstances through either rulemaking or adjudicatory proceedings, such that a program access   ydefendant knew, or should have known, that it was engaging in conduct violative of Section 628, damages   are appropriate and will be imposed. Since the enactment of the program access rules, the Commission   >has encountered several program access complaints involving repeated conduct involving the same or   !substantially the same conduct by programming providers. Where encountered in the future, the Commission may impose damages, if appropriate, in such instances.  S-  19. ` ` Echostar argues that the Commission should apply any damages remedy adopted in this  S-  proceeding to all pending program access cases.I@z yO-ԍEchostar Reply Comments at 1011.I Fox opposes Echostar's proposal as against established  S-  precedent that the rules adopted by an agency in notice and comment rulemaking have prospective effect.@A  yOL -ԍFox Reply Comments at 6.@   We believe that it would be fairer to apply the rules adopted herein only to conduct violative of Section 628 that occurs on or after the effective date of the rules.  S*-  S-` `  c. Punitive Damages  S-   20. ` `  Background.  We tentatively concluded in the NPRM that punitive damages should not be imposed in program access cases and sought comment on this tentative conclusion. "d A,`(`(88"Ԍ S-  21. ` ` Discussion. Bell Atlantic advocates that the Commission refrain from adopting a blanket  S-  rule that punitive damages will not be awarded in program access cases.DB yOB-ԍBell Atlantic Comments at 8.D Commenters failed to establish   a record regarding the need for the imposition of punitive damages in program access cases. We adopt   our tentative conclusion that punitive damages should not be imposed in program access cases at this time.  Sb-#&a\  P6G;&P#  S-` ` 3. Procedural Considerations  S-  22. ` ` Background. The Commission sought comment regarding the correct procedures to   implement damages or forfeitures in the context of specific program access proceedings. In addition we   sought comment on Americast's proposal that, in some cases, the most efficient manner of processing   [program access cases would be to bifurcate the program access violation determination from the damages  S$ -  or forfeiture determination.+C$ X {O-  hԍThe 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 12 FCC Rcd at 22575.+ We also sought comment on the calculation of damages, if assessed. We   requested that commenters consider whether the Commission should determine damages on a casebycase   basis, or whether there should be a standard calculation for damages in program access matters. Those   arguing that damages should be based on a standard calculation were asked to comment on how the Commission should determine such standard calculation.  Q\-  S4-  23.` ` We also sought comment on whether we should adopt the requirement, contained in the  S -  -Formal Complaint Order, that a complainant seeking damages must file with its complaint or supplemental   Lcomplaint either a detailed computation of damages or a detailed explanation of why such a computation   \is not possible at the time of filing. Commenters advocating the adoption of such a requirement were  S-  yadvised to address whether the explanatory standards adopted in the Formal Complaint Order should be adopted, or whether some other explanation standard should apply.  S -  24. ` ` Discussion. Several commenters argue that no definitive damages calculation be adopted   and that damages be tailored to the specific circumstances of each proceeding and calculated on a caseby S-  case basis.nD yO&-ԍGTE Comments at 12; Echostar Comments at 10; BellSouth Comments at 19.n Similarly, several commenters favor adopting the casebycase approach to calculating  S-  ydamages established by the Commission in the Formal Complaint Order.ED {O-  ,ԍBell Atlantic Comments at 8; WCA Comments at 18; Ameritech Comments at 23; see Echostar Comments at 11. OpTel supports a procedure   lwhereby successful program access complainants be permitted to demonstrate the actual damages  S\-  attributable to the violation.<F\ yO#-ԍOpTel Comments at 5.< In addition, many commenters favor the bifurcation of the violation  S4-  determination from the damages portion of the proceeding.G4.  yO&-  ԍSNET Comments at 5; OpTel Comments at 4; Bell Atlantic Comments at 9; BellSouth Comments at 19; Ameritech Reply Comments at 22; WSN Reply Comments at 7; Echostar Reply Comments at 10. HBO argues however that bifurcation of the"4 G,`(`(88"   violation determination from the damages portion of the proceeding will not alleviate the problem that the   imposition and calculation of damages will needlessly mire the Commission in complex damages  S-assessment procedures.@H yO-ԍHBO Reply Comments at 8.@  S`-  B25. ` ` Consumers Union proposes that the Commission adopt a dual approach to calculating   damages. For price discrimination cases, Consumers Union suggests that the Commission impose damages   jbased upon the price differential between what the complainant was paying and should have paid for the  S-  kprogramming.`IXX yO -  ԍConsumers Union Comments at 14; see Satellite Distributors Comments at 13. Echostar also agrees with this   Japproach but cautions that successful program access complainants should not be prevented that their harm actually exceeded the price differential. Echostar Comments at 11. ` In denial of programming cases, where assessment of damages may be more difficult,   zConsumers Union advocates standardized damages based on what the programmer charges competing  S-MVPDs for the particular programming at issue.JZx yO-  ԍConsumer Union Comments at 14. For example, if a programmer charges competing MVPDs one dollar per   subscriber per month for program A and refuses to sell that programming to another competing MVPD with 100,000  {O@-subscribers for three months in violation of the program access rules, damages would equal $300,000. Id. at 1415.  SH -  26. ` ` SCBA suggests a liquidated damages approach to the calculation of damages requiring the   /programmer violating the Commission's rules to provide the disputed programming to the successful  S -  complainant at a discounted rate for two years.<K  yO2-ԍSCBA Comments at 14.< Under SCBA's proposal, the Commission would   jcalculate the discounted price as the lower of: (i) 80% of the price charged at the time the complaint was  S -  [filed; or (ii) 80% of the price charged at the date of the Commission's decision.1L *  {Or-ԍId.1 Echostar proposes that   denial of programming damages be calculated by statistical studies on the percentage of MVPD subscribers   who did not purchase the aggrieved MVPD's service based on the inability to provide the denied  S0-  =programming.CM0  yO-ԍEchostar Comments at 1011.C WSN asserts that damages should be the higher of: (i) the complainant's loss; or (ii) the  S-  programmer's gain, together with attorney's fees and expenses for a prevailing petitioner.;NL  yO-ԍWSN Comments at 22.; RCN proposes   .that the Commission adopt a series of escalating penalties which increase throughout the duration of the  S-  jviolation and that are tied to a defendantspecific indicator, such as a percentage of revenue.;O yO4"-ԍRCN Comments at 11.; Ameritech   favors calculating damages on established antitrust principles through which a successful plaintiff is   required to demonstrate: (i) that its profits have been reduced due to the defendant's anticompetitive  S@-conduct; and (ii) the extent of the loss.AP@l yOL&-ԍAmeritech Comments at 22.A "P,`(`(88"Ԍ S-  B27. ` ` The various proposals for calculating damages offered by commenters, while reflecting   jsome merit in allowing a specific amount to be determined, fall short because they do not provide general   guidance for all circumstances and also fail to present a format by which the actual damages experienced   jcan be determined. We agree with those commenters that advocate the position that damages can best be   calculated on a casebycase basis. In particular, we believe the most efficient method for determining   damage claims in the program access area is to adopt procedures similar to those used by the Commission  S-  in adjudicating common carrier formal complaints.uQ {Ox-ԍSee supra n.17, discussing the common carrier formal complaint process.u As several commenters have stated, development  S-  of the Formal Complaint Order damages procedures involved extensive consideration of issues that are  S-  substantially similar to the issues that the Commission faces in this proceeding.RZ {O -  ԍSee WCA Comments at 1819, discussing Formal Complaint Order's consideration of bifurcation and damages  {O -  Lcomputation procedures; Ameritech Comments at 23, discussing Formal Complaint Order's consideration of   bifurcation and the need to expeditiously resolve the liability issue and subsequently determining damages issues;  {O -  Bell Atlantic Comments at 8, discussing Formal Complaint Order's consideration of damages computation  {O -  procedures; Echostar Comments at 1112, discussing Formal Complaint Order's consideration of damages computation procedures. Moreover, the record   =established in this proceeding does not indicate that the adoption of program access damages procedures  Sr-  that are fundamentally different from the Formal Complaint Order procedures better serves the public  SL -  interest. We believe that the damages procedures set forth in the Formal Complaint Order, modified to   reflect the program access context, provide the most fair and efficient procedure for determining  S -  damages.S"  {Ox-  ԍThe Formal Complaint Order procedures adopted herein include: (i) the damage pleading requirements of   Section 1.722(c)(1)&(2), 47 C.F.R.  1.722(c)(1)&(2); (ii) the damage adjudication procedures of Section   <1.722(d)(4), 47 C.F.R.  1.722(d)(4); and the ability to designate damages issues to an Administrative Law Judge set forth in Section 1.722(d)(1), 47 C.F.R.  1.722(d)(1). It also provides program access litigants with established procedures for complex damages   =determinations which the adoption of a whollynew set of procedures would lack. In addition, adopting  S -  [the damages procedures set forth in the Formal Complaint Order, modified to reflect the program access   context, lends at least partial symmetry to the treatment of damages issues arising under the   Communications Act that, while not statutorily required, adds further consistency to our regulations which  S8-  better serves the public. If the Formal Complaint Order procedures prove to be insufficient or too   Lcumbersome in certain respects when applied in the program access context, the Commission will revisit this issue and further modify our rules.  S-  28. ` ` We believe that the most efficient method by which to administer damages is to provide  Sr-  the Commission with discretion to bifurcate the violation determination from any damages adjudication.T"r  yO -  kԍSee Appendix A, 76.1003(s)(3)(i). Where the Commission bifurcates the program access violation   ,determination from the damages determination, the time limits adopted herein shall apply solely to program access  {Of"-  violation determination and not to any damages determination. See infra  41, discussing the adoption of time limits for the resolution of program access complaints.   We require that a complainant seeking damages for a program access violation must file as part of its complaint either:  S-Xa)` ` A detailed computation of damages, including supporting documentation ` ` and materials; or "T,`(`(88"Ԍ S-ԙXb)` ` An explanation of:   S- ` ` (i) What information not in the possession of the complaining party is necessary to develop a detailed computation of damages;(#  S8-` ` (ii) Why such information is unavailable to the complaining party;(#  S- ` ` (iii) The factual basis the complainant has for believing that such evidence of damages exists; and (#  Sp- ` ` (iv) A detailed outline of the methodology that would be used to create a computation  SH -of damages with such evidence.UH  {O -ԍSee Appendix A, 76.1003(c)(5); see Formal Complaint Order, 12 FCC Rcd at 22579.(#   Where a violation is found, the Cable Services Bureau ("Bureau") will indicate in its order whether the   Lviolation is the type for which the Commission will impose damages or forfeitures. As with all program  S -  access orders, the parties may file an application for review of the Bureau's decision to the Commission.wV Z {O-ԍSee 47 C.F.R.  1.115, Commission's application for review procedures.w   The burden of proof regarding damages rests with the complainant, who must demonstrate with specificity  SX-  Mthe damages arising from the program access violation.VWX {O-ԍSee Appendix A, 76.1003(s)(3)(ii). V We note that, given the one year limitations   Nperiod for bringing program access complaints, the Commission will not entertain damages claims  S-  /asserting injury predating the program access complaint by more than one year.X~ {O&-ԍSee 47 C.F.R.  76.1003(r), providing one year statute of limitations for program access complaints.  The Commission   cautions potential complainants that grossly overstating the amount of damages incurred will result in a  S-Commission determination that the complainant has failed to meet its burden of proof.1Y {Oj-ԍId.1  Sj-  ~29. ` ` As in the Formal Complaint Order, we believe this rule strikes the appropriate balance   >between the need for complainants to be diligent in establishing their claims and a recognition that, in   certain instances, a complainant may not possess sufficient facts at the initial stages of a complaint   proceeding to prepare a detailed computation of damages alleged. This rule is also consistent with the   Commission's policy of encouraging complainants to have damages claims resolved separately from  S-liability issues.^Z {O!-ԍFormal Complaint Order, 12 FCC Rcd at 22579580.^  ST-  30. ` ` The Commission may adjudicate damages by determining the sufficiency of the damages  S,-  calculation or computation methodology submitted by the complainant.[,4  {O&-ԍSee Appendix A,  76.1003(s)(3)(iii); see Formal Complaint Order, 12 FCC Rcd at 22581. Alternatively, the Commission   @may find the damages calculation or computation methodology submitted by the complainant" [,`(`(88"   unsatisfactory, or, in its discretion, modify such calculation or computation methodology or require the  S-  Lcomplainant to resubmit such calculation or computation methodology.\ {O@-ԍSee Appendix A,  76.1003(s)(3)(iii); see Formal Complaint Order, 12 FCC Rcd at 22581. Where the Commission issues   ]a written order approving or modifying a damages calculation, the defendant shall recompense the  S-  complainant as directed in the Commission's order.\]Z {O-ԍSee Appendix A,  76.1003(s)(3)(iii)(A)(1).\ Where the Commission issues a written order   =approving or modifying a damages computation methodology, the parties shall negotiate in good faith to  S8-  reach an agreement on the exact amount of damages pursuant to the Commissionmandated methodology.\^8 {O -ԍSee Appendix A,  76.1003(s)(3)(iii)(A)(2).\   LTo ensure that the parties are diligent in their negotiations to apply the approved methodology, we shall   require that, within thirty days of the date the damages computation method is approved and released, the   parties must file with the Commission a joint statement which will do one of the following: (1) detail the   parties' agreement as to the amount of damages; (2) state that the parties are continuing to negotiate in   =good faith and request that the parties be given an extension of time to continue such negotiations, or (3)  SH -  detail the bases for the continuing dispute and the reasons why no agreement can be reached._H ~ {Of-ԍSee Appendix A,  76.1003(s)(3)(iii)(B); see Formal Complaint Order, 12 FCC Rcd at 22581. In this   way, the Commission will monitor the parties' compliance with its directive to negotiate a resolution of   the dispute in good faith using the mandated computation method. We also adopt a rule authorizing the   Chief of the Cable Services Bureau to refer damages disputes to administrative law judges ("ALJ") for  S -  \either decision following a finding of liability or, by agreement of the parties, mediation.`"  {OX-  wԍSee Appendix A,  76.1003(s)(3)(iii)(C)(2). Regarding appeals of ALJ decisions, we note that the ALJ hearing  yO"-  rules provide the means for parties to seek review of an ALJ decision. 47 C.F.R.  1.2711.282. If the parties agree   <to mediation, however, the right to seek review of the ALJ's mediation resolution would be contained within the terms pursuant to which the parties agreed to such mediation. In cases in   which the parties cannot resolve the amount of damages within a reasonable time period, the Commission  SX-  retains the right to determine the actual amount of damages on its own, or through referral to an ALJ.]aX  {O-ԍSee Appendix A,  76.1003(s)(3)(iii)(C)(1).]   We also note that our rules require that program access complaints be filed within one year of an alleged  S-violation.b  {O4-ԍSee 47 C.F.R.  76.1003(r), providing one year limitations period for program access complaints.  S-  31. ` ` This rule permits the Commission to avoid the detailed and timeconsuming investigation   .of the facts necessary to establish an exact amount of damages where such investigation may reasonably   ybe determined by the parties. At the same time, however, it provides a means for parties to return to the   Commission for resolution of ongoing disputes if parties are unable to agree to a final amount of damages.   MThis rule encourages good faith negotiation among the parties by requiring parties to provide detailed   Lexplanations if they fail to resolve their dispute. We emphasize that the Commission retains the right to   jdetermine the actual amount of damages in those cases where the establishment of damages does not lend   jitself to such a means of resolution. We also conclude that requiring parties to reach an agreement within   a limited time addresses the concerns raised by some commenters that the parties would have no recourse   /if they are unable to apply a damages computation method successfully. Interest on the amount of"Pb,`(`(88"   Ldamages awarded will accrue from either the date indicated in the Commission's written order or the date   agreed upon by the parties as a result of their negotiations. Interest shall be computed at applicable rates  S-published by the Internal Revenue Service for tax refunds.c {O-  ԍSee 47 C.F.R.  76.961(d), applying Internal Revenue Service interest rate to cable programming service rate refunds.  S`-` ` 4. Damages Accrual Date  S-  32. ` ` Background. The Commission sought comment on the date from which damages should   be levied for violations of Section 628. Specifically, we sought comment on whether the operative date   should be the date of the notice of intent to file a program access complaint, or the date of filing of the program access complaint, or the date on which the violation first occurred.  SJ -   33. ` ` Discussion. Commenters disagree regarding the date from which damages should accrue.   =Several commenters believe that damages should accrue from the date on which cable operators are given   notice pursuant to Section 76.1003(a) of the Commission's rules that a complainant intends to file a  S -  program access complaint.d " yO-  ԍConsumers Union Comments at 13; Satellite Distributors Comments at 13; RCN Comments at 10, citing 47 C.F.R. 76.1003(a). Other commenters believe that appropriate date is the date on which the  S -  violation first occurred.e z yO-  ԍGTE Comments at 12; Echostar Comments at 910; BellSouth Comments at 19; NRTC Reply Comments at 7; WSN Reply Comments at 7. Another group of commenters assert that damages should be measured from  S -  the date on which a complaint is filed with the Commission.;f  yO-ԍWCA Comments at 17.; We believe that the appropriate date from   which damages should accrue is the date on which the violation first occurred. The burden is on the   complainant to establish this date. Whether the complainant has been unfairly denied programming or   charged an unfair price for programming received, the injury flows from the date on which the violation  S-first occurred and the complainant should, in appropriate cases, be compensated accordingly.agZb  yO-  wԍWe note that, as expressly provided above, the rules adopted herein apply only to conduct violative of Section  {O-  J628 that occurs on or after the effective date of the rules.  See supra  19, discussing prospective application of the amended rules adopted herein.a  S-  S- B.` ` Timing Issues  SD-` ` 1.  Time Limits for the Resolution of Program Access Cases  S-  a!34. ` ` Background. Although Congress did not enact specific time limits for Commission   resolution of program access disputes, Congress did provide that "[t]he Commission's regulations shall  S-  . . . provide for an expedited review of any [program access] complaints. . . ."bh  yO%-ԍCommunications Act 628(f)(1), 47 U.S.C. 548(f)(1).b In initially implementing   ySection 628, the Commission did not impose time limits for the resolution of program access complaints. "Vh,`(`(88"Ԍ S-  ԙ"35. ` ` In the NPRM, the Commission requested comment on appropriate time limits for the   resolution of program access complaints: should the Commission adopt Ameritech's proposed time limits   >(90 days for cases not involving discovery, and 150 days for cases in which discovery is conducted);   should some other time period apply; or should the Commission not adopt time limits. In addition, we   sought comment on whether the time limit, if 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. Recognizing that one universally applicable time limit may not   /sufficiently take into account all of the circumstances faced by the Commission in resolving program   yaccess complaints, the Commission sought comment regarding whether one time limit should apply to all   program access complaints, or whether one time limit should be established for cases involving denial of   .programming, with a longer time limit established for price discrimination cases, which generally involve   issues of greater complexity. We also sought 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.  S -  #36. ` `  Discussion.  Most commenters favor, or do not oppose, the adoption of some form of time  S -  limit for the resolution of program access complaints.i   yO-  ԍAmeritech Comments at 8; Liberty Comments at 30; DirecTV Comments at 24; BellSouth Comments at 9;   =WCA Comments at 14; NRTC Comments at 12; RCN Comments at 4; WSN Comments at 23; Bell Atlantic   Comments at 3; HBO Comments at 4; OpTel Comments at 2; GTE Comments at 7; SNET Comments at 2; Satellite Distributors Comments at 6. Ameritech argues that the absence of firm  S\-  deadlines undermines the effectiveness of Section 628 as an instrument of competition.@j\ yO-ԍAmeritech Comments at 8.@ Commenters   maintain that, from the perspective of injured competitors, "justice delayed is justice denied" and that   mexpeditious resolution of such complaints will, at least partially, alleviate the harm and cost to  S-  complainants.sk@ yO-ԍAmeritech Comments at 8; BellSouth Reply Comments at 7; WCA Comments at 14.s Cable commenters generally oppose the adoption of time limits for the processing of  S-  program access complaints.l yO,-  hԍNCTA Comments at 5; Comcast Comments at 2; Time Warner Comments at 3; CNN Comments at 2; Encore Comments at 4. Commenters point out that, while it established specific statutory time   limits for processing numerous Commission actions in the Communications Act, Congress established no  Sl-  specific time limits for the resolution of program access disputes.qml(  yO4-ԍNCTA Comments at 5; Comcast Comments at 34; Time Warner Comments at 45.q These commenters argue that, to now   adopt specific time deadlines, the Commission would establish an artificial priority to, and occupy scarce  S-  Commission resources for, program access cases which Congress did not intend.hn  yOt"-ԍNCTA Comments at 5; Comcast Comments at 4; Encore Comments at 5.h In addition,   commenters argue that the establishment of specific time limits could prevent the Commission from giving   yadequate consideration to the facts and issues of particular cases increasing the likelihood of an erroneous  S-decision.oH  yO&-ԍNCTA Comments at 56; Time Warner Comments at 5; CNN Comments at 2; Encore Comments at 4. "|o,`(`(88"Ԍ S-  $37. ` `  Ameritech continues to propose that a Commission decision in Section 628 proceedings   should be required within 90 days from the filing of the complaint in cases where there is no discovery  S-  Land 150 days from the filing of a complaint in cases where discovery is conducted.p {O-  ԍAmeritech Comments at 9; see NRTC Comments at 14; SNET Comments at 2 (each supporting Ameritech's proposed time limits). Commenters argue   Zthat Ameritech's proposed deadlines are completely consistent with the various statutory deadlines (ranging   =from 90 to 150 days) for resolution of different types of common carrier disputes imposed by Congress  S8-  in the 1996 Act.eq|8" yO-  ,ԍAmeritech Comments at 9. One commenter argues that the Commission should adopt the same deadlines for   iresolving program access complaints as Congress mandated for common carrier formal complaints. Bell Atlantic  {O -  Comments at 3, discussing Formal Complaint Order, 12 FCC Rcd at 22504 (1997) (requiring common carrier formal  {OT -  complaints to be resolved within 5 months of submission to the Commission); see 47 U.S.C. 208(b) (five month   Lrequirement). Several commenters propose that a single 45day time limit which commences at the close of   hpleadings should suffice for all program access proceedings. BellSouth Comments at 10; OpTel Comments at 3; GTE Comments at 8. e One commenter argues that any time limits adopted by the Commission must account   for the complexities of program access disputes and allow the parties sufficient time to develop and  S-  present their positions.:rf  yO-ԍHBO Comments at 5.: This commenter asserts that the Commission should be careful that any   deadlines adopted not interfere with the opportunity for private settlement of such disputes by the  S-  parties.7s  {O.-ԍId. at 6.7 Two commenters assert that it would be unwise for the Commission to adopt different time  Sp-  limits based upon the type of program access complaint.Ttp  yO-ԍAmeritech Comments at 13; RCN Comments at 5.T Ameritech argues that shorter time periods   yfor certain types of program access complaints might lead to the Commission refusing discovery in those   cases. One commenter argues that running the time limit from the filing from the date of filing of the   kprogram access complaint may not allow the Commission sufficient time to review the record in such  S -cases.Rux  yO-  ԍWCA Comments at 14. WCA proposes that the Commission require that price discrimination complaints be   resolved within 90 days from the close of the formal pleading cycle (including any pleadings filed out of time with   Kthe Commission's consent), while all other program access complaints be resolved within 60 days of the close of   Jpleadings. WCA Comments at 1415. Another commenter argues that appropriate time limits for the resolution of   program access complaints should run from the date of a mandatory initial status conference, suggesting a 150day   time limit for price discrimination cases and a 90day time limit for all other program access disputes. Satellite Distributors Comments at 9. R  S -  %38. ` ` We believe that the adoption of time limits for the resolution of program access disputes   [can enhance competition in the video marketplace by providing certainty to program access litigants that   >their complaints will be timely resolved. Of course, we recognize that any time limits imposed must   reflect the myriad circumstances and complexity inherent in the program access provisions. We recognize   jthat the expeditious resolution of these complaints is dependent in many circumstances upon the actions   Lof the parties. In this regard, by adopting appropriate time limits, which also impose responsibilities on   0the parties, the Commission will be afforded sufficient time to analyze fully each program access"Xu,`(`(88"   complaint. We disagree with those commenters that argue that we are artificially prioritizing program   access complaints contrary to Congress' intent, as the law imposes the obligation to resolve complaints   expeditiously. If the Commission can fully and fairly adjudicate program access complaints in the time   frames discussed below, while also meeting its other statutory duties, we believe that Congress' overall structure for regulation and competition in the video marketplace is better served.  S-  ~&39. ` ` In imposing time limits the Commission must ascertain what can be accomplished in all   cases on a consistent basis. The specific time limit proposals suggested by certain commenters do not   reflect the range of competing priorities faced by the Commission. Many of these competing priorities  S-  also serve important roles in promoting competition.HvF yO -  ԍCongress imparted to the Commission authority to certify open video systems, and mandated that the  yO -  Commission grant or deny such certifications within 10 days. Communications Act 653(a)(1), 47 U.S.C. 573(a)(1);   47 C.F.R. 76.1502(f). The Commission is also required to resolve open video system disputes within 180 days after  {OX -  [notice of such dispute is submitted to the Commission. Id. 653(a)(2); 47 C.F.R. 76.1513(a). Congress also   Zrequired that the Commission resolve "must carry" complaints and Area of Dominant Influence ("ADI") market  {O -  determinations within 120 days of submission. Id.614(d)(3) & (h)(1)(C)(iv). The Commission also must resolve  {O-  cable programming services rate complaints within 90 days. Id. 623(c)(3). Any time limits imposed for program access must take into account these statutory mandates. H We agree with those commenters that advocate   assigning different time limits for different types of program access disputes. Our experience indicates   that, while complex in themselves, denial of programming cases involving refusal to sell or issues of   exclusivity can typically be processed more expeditiously than price discrimination cases, which often  S -  involve numerous issues requiring legal, economic and accounting expertise.w  {On-  ;ԍ See Turner Vision, Inc., Satellite Receivers, Ltd., Consumer Satellite Systems, Inc., and Programmers Clearing  {O8-House, Inc. v. Cable News Network, Inc., DA 981295 (CSB rel. June 30, 1998) ("CNN"). We believe that a single   time limit would require the Commission to adopt a longer time limit than would be necessary in many cases to account for the time involved in resolving price discrimination disputes.  SX-  }'40. ` ` Many commenters argue that any time limits adopted by the Commission should run from  S0-  the date of filing of a program access complaint. One commenter argues that any time limits which the   Commission may adopt for the resolution of program access cases should run from the close of the  S-  "pleading cycle (including any extensions granted by the Commission).yxX2  yO-  ԍLiberty Reply Comments at 910. Liberty asserts that starting the time limit at the close of pleadings would   motivate parties to include in their pleadings all of the arguments and information needed to accurately argue their case and thereby expedite a Commission decision. Liberty Reply Comments at 10.y Consistent with the   Commission's other statutory deadlines discussed above, we believe that the time limits adopted herein should commence to run from the time a party submits its complaint to the Commission.  S@-  B(41. ` ` We believe that denial of programming cases (unreasonable refusal to sell, petitions for   exclusivity, and exclusivity complaints) should be resolved within five months of the submission of the  S-  Mcomplaint to the Commission.y$R  yO$-  wԍWe note that our decision to resolve denial of programming complaints within five months of their submission   to the Commission is consistent with the five month period in which Congress requires the Commission to resolve  {Or&-  certain complaints against common carriers. Communications Act 208(b)(1), 47 U.S.C. 208(b)(1); See Formal  {O<'-Complaint Order, 12 FCC Rcd at 22499, n.4. All other program access complaints, including price discrimination">y,`(`(88"   Mcases, should be resolved within nine months of the submission of the complaint to the Commission.   1Where the Commission bifurcates the program access violation determination from a damages   <determination, the time limits adopted herein apply solely to the resolution of the program access violation.   These dates reflect not what the Commission would select if afforded unlimited resources, but rather what   we believe to be realistic goals that are achievable given the Commission's limited resources and overall   <statutory duties. These time limits contemplate resolution times applicable to most typical program access   disputes which do not involve complex or repeated discovery, pleading extensions or extra pleadings based   upon new information, or requests that the Commission stay proceedings pending settlement negotiations.   Program access disputes involving these circumstances may impact the Commission's ability to resolve   .such disputes within the time limits discussed herein. We believe that this certainty, combined with the  Sp-  other actions approved in this Order, will provide further incentive for programming providers to avoid scrupulously program access violations, as well as expeditiously resolve program access disputes.  S -  )42. ` ` Commenters argued that any time limits imposed by the Commission must afford a   meaningful opportunity to pursue settlement negotiations. We agree. As the Commission stated in the  S -  NPRM, "we encourage resolution of program access disputes through negotiated settlements in an effort   to avoid timeconsuming, complex adjudication. This policy favoring private settlement and alternative  S\-  -dispute resolution conserves Commission resources and is thus in the public interest."wz\ {O-ԍ NPRM, 12 FCC Rcd at 22855 (internal quotation marks omitted).w Where the parties   \to a program access dispute submit a motion to stay proceedings pending settlement discussions, the   Commission will afford the parties the time necessary to determine whether a negotiated settlement is   possible. If parties choose to pursue negotiations, an alternative that we think provides the most efficient   and effective resolution of program access disputes, these time limits will be suspended. We think this  S-  properly places on the parties a commensurate responsibility that these matters be resolved expeditiously. We also think it avoids the confusion and delay that inevitably accompanies resetting time periods.  SD-  S- ` ` 2. Pleading Cycle  S-  *43.` ` Background. The Commission sought comment on Ameritech's proposal to shorten the   answer (from 30 days to 20 days) and reply (from 20 days to 15 days) pleading periods applicable to   program access complaints. We tentatively concluded that the pleading cycle should not be shortened.  S.-  +44. ` `  Discussion.  Several commenters favor the shortening of the pleading cycle for program  S-  Laccess proceedings.l{Z yO-ԍAmeritech Comments at 1011; NRTC Comments at 14; RCN Comments at 4.l Ameritech requests that a defendant file its answer to a complaint within 20 days  S-  after the receipt of service of the complaint.|" {Oj!-  ԍAmeritech Complaint at 10; see NRTC Comments at 14 (supporting Ameritech's proposed abbreviated pleading   hcycle); RCN Comments at 45 (same). RCN proposes that the Commission should require answers to contain copies   =of programming agreements and other documentary evidence of practices challenged in the complaint. RCN Comments at 5. Commenters assert that the required 10day notice   ]preceding the filing of a program access complaint, and the discussions between the parties which   inevitably ensue, also permit the narrowing of the issues, making 20 days from service of the complaint"|,`(`(88"  S-  sufficient for filing an answer.A} yOh-ԍAmeritech Comments at 11.A Ameritech proposes that within 5 days of the service of the answer, the   parties shall advise each other and the Commission whether they intend to seek discovery. If neither party   Mseeks discovery, the complainant shall be permitted to file a reply within 20 days after service of the  S-answer, as currently provided in Section 76.1003(e).)~DX yO-  hԍAmeritech Comments at 11, citing 47 C.F.R. 76.1003(e). If either party requests discovery, the Commission   will convene a status conference within 10 days of the service of the answer to determine the scope and amount of   discovery. Ameritech Comments at 12. All discovery would be completed within 45 days following the status   ;conference. If discovery is permitted, within 15 days following the completion of discovery, both complainant and   defendant would be required to submit briefs containing proposed findings of fact and conclusions of law, including  {Oh -  evidentiary exhibits, and, if possible, a joint stipulation of facts not in dispute. Id. The parties would be permitted  {O2 -  to file reply briefs within seven days of the service of briefs. Id. One Commenter supports a 20 day answer period coupled with a 7 day reply period. OpTel Comments at 2.)  S8-  ,45. ` ` Several commenters strongly oppose Ameritech's proposal to shorten the pleading cycle   for program access complaints arguing that the benefit of 15 days saved by Ameritech's proposal is   outweighed by the need to provide sufficient time for parties to formulate the most effective arguments  S-  and evidence.d  yO-  ԍLiberty Comments at 31; HBO Comments at 6; Satellite Distributors Comments at 7; NCTA Comments at 7; Comcast Comments at 45; Encore Comments at 5. Commenters assert that the complainant may take as long as necessary to develop and   .file their complaints (subject to the one year statute of limitations on program access complaints), while   defendants currently have only 30 days to prepare an answer which may be the only substantive pleading  SH -  .permitted the defendant.H  {O-  ԍNCTA Comments at 7; Comcast Comments at 5; Encore Comments at 56; see 47 C.F.R. 76.1003(r) (one year statute of limitations for program access complaints). One commenter notes that unlike civil lawsuits where abbreviated pleadings   establish the basic elements of claims and defenses to be later proven at trial, in the case of program  S -  [access actions the pleadings are the heart of the case and form the basis for the Commission's decision.M  yO-ԍSatellite Distributors Comments at 7.M   One commenter also argues that comparisons between the program access complaint pleading cycle and   kthe common carrier formal complaint process pleading cycle are ill advised because the shorter formal   complaint pleading cycle is directly related to the considerable notice and issue clarification aspects of the  SX-  ynew prefiling procedures adopted in the Formal Complaint Order.BX yO-ԍLiberty Comments at 3132.B This commenter observes that, in   program access complaints, no formal prefiling procedures exist and a complainant need only give  S -  prospective defendants 10 days' notice prior to filing a complaint.8 6 {O"-ԍId. at 32.8 One commenter argues that such  S-  concerns can be alleviated by also adopting the Formal Complaint Order prefiling procedures for program  S-  access complaints.D yO$&-ԍBell Atlantic Comments at 4.D In response, another commenter states that "[o]ther than to provide aesthetic  S-  symmetry, however, it is not evident why [the] wholly different rules and processes [of the  Formal"X,`(`(88"  S-Complaint Order and program access] should be conformed."A yOh-ԍNCTA Reply Comments at 6.A  S-  _-46. ` ` We stated in the NPRM "[w]e believe that the benefit of the 15 days saved by Ameritech's   lproposal is outweighed by the need to provide sufficient time for the parties to best marshal their  Sd-  arguments and evidence."QdX {O\-ԍNPRM, 12 FCC Rcd at 2285657.Q In light of our decision to impose time limits for the resolution of program  S<-  access disputes, however, we believe that it is necessary to adopt a more streamlined pleading cycle.< yO -  ԍOur decision to shorten the pleading cycle is consistent with the action taken by the Commission in revising  {O -  xthe rules applicable to common carrier formal complaints.  See Formal Complaint Order, 12 FCC Rcd at 22541,   reducing answer period from 30 to 20 days. We note that Section 76.1002 of our rules imposes a slightly different   pleading cycle for petitions for exclusivity (oppositions within 30 days of public notice, responses to oppositions due  {O -  10 days after receipt of opposition). See 47 C.F.R.  76.1002(c)(5). Our decision today does not affect this pleading cycle.    As discussed above, the adoption of time limits for the resolution of program access disputes requires that   we impose additional responsibilities not just on the Commission, but on the parties as well. Program   access defendants must file an answer within 20 days of service of the complaint, unless otherwise  S-  [directed by the Commission.Pf  {O-ԍSee Appendix A, 76.1003(d)(1).P Program access complainants must file a reply within 15 days of service  St-  of the answer, unless otherwise directed by the Commission.Mt  {O -ԍSee Appendix A, 76.1003(e).M We disagree with commenters who assert   that defendants will be overlyburdened by having to file answers within 20 days of the date of service.   The prefiling notice will provide the defendant at least 10 days, and often more than 10 days, notice of   \the existence of a programming dispute, as well as alert the defendant of the basis of the dispute. We   ]believe that the 10 day reduction in the answer period will not adversely impact a program access   defendant's ability to establish and support its defense. Ameritech also proposes significant additional   procedures related to status conferences, discovery, and briefing. We note that our existing regulations  S\-already encompass sufficiently each of these areas.\  yO-ԍ 47 C.F.R. 76.1003(g),(j)&k) (Commission's rules relating to discovery, status conferences and briefs).  S4-#&a\  P6G;&P#  S - C.` ` Discovery  S-` ` 1. Discovery Rights  S-  Sl-  a.47. ` ` Background. The Commission sought comment on several means of expediting the   discovery process. While tentatively concluding that the Commission should retain its existing discovery   =procedures, we sought comment on whether it would speed the discovery process to have complainants   Ksubmit proposed discovery requests with their program access complaints and require defendants to submit   [their proposed discovery requests and objections to complainants' discovery requests with their answer.   Complainants would then submit their objections to defendants' discovery requests with their reply. The   Commission also sought 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"V,`(`(88"   fashion possible. Specifically, we sought 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.  S`-  /48.` ` Discussion. Several commenters support the amendment of the Commission's program  S:-  kaccess rules to provide parties discovery asofright.: yO-ԍDirecTV Comments at 25; Satellite Distributors Comments at 9; Bell Atlantic Comments at 45. These parties argue that an automatic right to   discovery in a form that, at a minimum, ensures that program access plaintiffs have access to the   programming contracts and agreements involved in the dispute is necessary to counteract the structural  S-  bias working against aggrieved parties under current Commission practice. X yO -  ԍDirecTV Comments at 25, stating that program access complainants are frequently disadvantaged by the   inability to access critical documentation; RCN Comments at 6, stating that lack of access to programming   information hampers the establishment of price discrimination; Echostar Comments at 4, stating that, without a right of discovery, complainants must rely on voluntary or public disclosures of information by program access defendants. Several commenters argue   kthat granting a right of discovery will lead to fewer program access cases because verticallyintegrated   programmers facing a complainant with discovery rights will be far more likely than current programmers  SJ -  to negotiate a precomplaint settlement to program access disputes.J @ yO*-ԍEchostar Reply Comments at 4; BellSouth Reply Comments at 11; RCN Reply Comments at 10. Numerous commenters also believe   -that it would speed the discovery process if the parties filed their discovery requests and objections as part  S -of the pleading process.   yOj-  [ԍRCN Comments at 8; Echostar Comments at 7; DirecTV Reply Comments at 28. Several commenters   advocate permitting the complainant to make additional discovery requests at the time of its reply in order to respond   to information or documents revealed in the defendant's answer. Echostar Comments at 7; Satellite Distributors Comments at 11.   S -  `049. ` ` Cable commenters generally agree with the Commission's tentative conclusion to retain   -Commissioncontrolled discovery and oppose expanding the program access discovery process arguing that  SZ-  ]doing so will only encumber and lengthen the process.Z  yO-  ԍNCTA Comments at 7; Time Warner Comments at 56; Liberty Comments at 78; Comcast Comments at 5; Cablevision Comments at 2526; Encore Comments at 6; CNN Reply Comments at 6; HBO Reply Comments at 8. These commenters assert that expanded   discovery rights are unnecessary as the Commissioncontrolled discovery procedures currently provide  S -  complainants with the opportunity to obtain all relevant information to prove their claims.U  yO-ԍNCTA Comments at 910; Liberty Comments at 8.U HBO asserts   Lthat discovery asofright would destroy a programmers ability to fashion individual agreements through   good faith negotiations, arguing that "[t]he most advantageous term of each negotiated agreement would,   if disclosed, become the lowest common denominator of the next negotiation with another party, whether  Sj-  warranted or not.">j yO$-ԍHBO Comments at 1213.> Moreover, assert cable commenters, expanded discovery rights would lead to "fishing   {expeditions" for the purpose of: (i) obtaining confidential terms and conditions from competitor's   Magreements; (ii) harassing programmers into granting more favorable prices, terms, and conditions not   Mrequired by the program access rules; and (iii) determining whether any of their affiliation agreements"0,`(`(88C"  S-  might conceivably be discriminatory under the program access rules. yOh-  ,ԍNCTA Comments at 8; Liberty Comments at 1011; Encore Comments at 67; Cablevision Comments at 26; Comcast Comments at 6; HBO Reply Comments at 10. Liberty quotes the Formal  S-  /Complaint Order in which the Commission decided not to adopt expanded discovery procedures for   Lcommon carrier formal complaints, stating "[i]n our experience, discovery has been the most contentious   jand protracted component of the formal complaint process. . . . Discovery is inherently timeconsuming  Sd-and often fails to yield information that aids in the resolution of the complaint."d  {O$-  ԍLiberty Comments at 89, quoting Formal Complaint Order, 12 FCC Rcd at 22541; see also Comcast Comments at 6.  S-  150. ` ` Echostar argues that the Commission should adopt the discovery asofright principles  S-  contained in the Federal Rules of Civil Procedure.z yO -  ԍEchostar Comments at 5. WSN supports Echostar's proposal to use the Federal Rules of Civil Procedure discovery model for program access disputes. WSN Reply Comments at 8. Bell Atlantic argues that limited discovery should   apply to denial of programming and exclusivity complaints, while discovery asofright should be afforded  S-  [to price discrimination complaints.F yO-ԍBell Atlantic Comments at 45.F OpTel supports limited discovery, for example, 30 interrogatories  St-and five requests for the production of documents.<tb  yOv-ԍOpTel Comments at 4.<  S$ -  251. ` ` BellSouth proposes that the Commission adopt a right of discovery limited to contracts  S -  !and documentation concerning programming rates, and/or other terms and conditions of access.A  yO-ԍBellSouth Comments at 13.A   BellSouth asserts that the Commission should modify its rules to require that a program access   =complainant file with its complaint any discovery requests, limited to contracts or other documents that  S -relate to programming rates, and/or other terms and conditions of access in dispute.L  {O-  <ԍId. at 13. Under BellSouth's proposal, the defendant would file its requested discovery and/or objections, if  {Op-  any, to the scope of the discovery requests with its answer. Id. If the defendant provides the requested discovery,   Mor if no discovery is requested, the plaintiff files its reply within the standard 20 days provided for by the  {O-  Commission's rules and the Commission proceeds to decision. Id. at 1314. Where the defendant objects to the scope   hof discovery, BellSouth proposes that the Commission, within a 10day period, either approve, reject, or narrow the  {O-  discovery request as described in a public notice. Id. at 14. The defendant would then have 10 days to produce the  {O^ -  Zapproved or narrowed discovery request. Id. BellSouth also proposes a mechanism whereby the Commission can  {O(!-permit more extensive discovery when the unique circumstances of a particular dispute so warrant. Id.ĕ  S4-  352. ` ` Ameritech now favors a limited form of discovery similar to that adopted in the Formal  S-  <Complaint Order. {OD%-  ԍAmeritech Comments at 1314, discussing Formal Complaint Order, 12 FCC Rcd at 22536. SNET supports Ameritech's discovery proposal. SNET Comments at 4. Specifically, Ameritech proposes that the Commission amend its rules to provide that   certain documents be appended to a defendant's answer, including: all documents that the defendant",`(`(88 "   intends to rely on in establishing its defense; in exclusivity cases, the exclusive contract, or a statement   /that no such contract exists; in price discrimination cases, all contracts between the defendant and all   Mcompeting MVPDs in all Designated Market Areas ("DMAs") the complainant serves or reasonably   expects to serve; all other documents, such as side letters, affecting the prices, terms and conditions of  S`-  such service and all relevant rate cards.NZ` yO-  ԍAmeritech Comments at 15. GTE proposes amending Section 76.1003(d)(6)(iii) to require that ". . . the  {O-  defendant shall submit an alternative contract. . . ." GTE Comments at 9, discussing 47 C.F.R. 76.1003(d)(6)(iii) (emphasis added).N Ameritech asserts that the production of documents with the   defendants answer may not be sufficient, and complainants should be permitted, following a status  S-  /conference, to request depositions or propound written interrogatories.G yO -ԍAmeritech Comments at 16.G Ameritech argues that the  S-  Commission should establish a presumption in favor of granting such requests.1z {O -ԍId.1 WCA also advocates  S-  a limited form of discovery requiring a complainant to submit its discovery requests with its complaint.  yOl-  =ԍWCA Comments at 10. The discovery request will be limited to relevant documents in the defendant's   possession and no more than 10 written interrogatories, along with a brief explanation of why the information is  {O-  Krelevant to the dispute and unavailable from any other source. Id. at 12. The defendant would be required to file   objections within 10 days of receipt of the complaint. The Commission must rule on the objections with 15 days,   -and the time period for the defendant's answer would be suspended until the Commission rules on the objections.  {OV-  Id. All unobjectionable or Commission sanctioned discovery must be provided when the defendant files its answer.  {O -  Id. WCA also suggests prohibiting requests for oral depositions or additional discovery absent a showing of  {O-  Ycompelling need. Id. at 13. In addition, to prevent "fishing expeditions," WCA suggests that the Commission adopt  {O-express sanctions related to abuse of the discovery process. Id.    MGTE proposes that the complaint and discovery request be served on a designated Commission staff  Sp-  member who must within 10 business days permit the discovery if the complainant has made a prima facie  SJ -case.;J  yO-ԍGTE Comments at 10.;  S -  453. ` ` Liberty opposes Ameritech's limited discovery proposal because it institutionalizes a  S -  discovery process in every program access dispute regardless of its complexity.? v yO-ԍLiberty Comments at 13.? Moreover, Liberty   .complains that Ameritech's proposed procedures grant a right to discovery even before the Commission  S -  has determined that a complainant has established a prima facie case that a program access violation has  S\-occurred.1\ {O"-ԍId.1  S -  554. ` ` We affirm our tentative conclusion that the current system of Commissioncontrolled   discovery be retained. We do not believe that discovery asofright, or expanded discovery, would   improve the quality or efficiency of the Commission's resolution of program access complaints. We  S-  Nreiterate our belief first stated in the NPRM that, given the sensitive and proprietary nature of the   information involved in program access matters, expanded discovery would inevitably devolve into"n,`(`(88"  S-  Commissioncontrolled discovery.H {Oh-ԍNPRM, 12 FCC Rcd at 22858.H We do not believe that expanded discovery will necessarily lend   Lgreater focus to program access disputes. In this regard, the Bureau recently discussed the limitations of   discovery in the program access context, stating that ". . . we are unsure that a broader and more extensive   kprocess to ascertain [certain] factors, with more information and analysis, would bring a more precise  S`-  resolution, as we do not think the parties purposefully avoided providing more specific information."`Z {OZ-ԍCNN, DA 981295 at 6; see also Formal Complaint Order, 12 FCC Rcd at 22541. Đ   [Later in its decision the Bureau also stated "[w]e have had to balance requests for additional information,   and the burden these entail, against the need to bring this matter to resolution. This has proven to be a   difficult process. The information received is not conducive to resolve this matter from a strictly cost S-  accounting perspective."H {OL -ԍCNN, DA 981295 at 27.H We agree with commenters who assert that expanded discovery would be more   likely to encumber and lengthen resolution times for program access proceedings, which directly  Sp-  contradicts commenters' views that program access cases should be resolved expeditiously. The record   jdoes not indicate that expanded discovery would enhance the process of substantively adjudicating these   cases. We are not persuaded by any of the commenters that their proposals would be preferable to the current system of discovery.  S -  _655. ` ` We decline to adopt different standards of discovery for different types of program access   /complaints, such as limited discovery for unreasonable refusals to sell and exclusivity complaints, or   Mdiscovery asofright for price discrimination matters. In many program access matters, the record is   sufficient for the Commission to make a determination. In matters where the Commission determines that   the record is not sufficient, the current rules allow the Commission to seek additional information. The   kCommission has ordered discovery in two price discrimination proceedings, and the Commission will  S-continue to order parties to provide the information necessary to resolve complaints at issue.~ {O-ԍ#X\  P6G;P#See NRTC v. EMI, 10 FCC Rcd 9785(1995); CNN, DA 981295 at 3 .  Sh-  } 756. ` ` We agree with Ameritech that it would be useful to adopt a procedure whereby defendants  S@-  are required to attach certain documents to their pleadings similar to that adopted in the Formal Complaint  S-  Order.& {O-  ԍSee Formal Complaint Order, 12 FCC Rcd at 2253438. This requirement is also consistent with the  {O-  -Commission's recent decision in Implementation of the Telecommunications Act of 1996: Amendment of Rules  {O^-  Governing Procedures to be Followed When Formal Complaints are Filed Against Common Carriers, Second Report and Order, FCC 98154 at  4858 (July 14, 1998). Our rules already provide that program access defendants must support any defense to program  S-  .access allegations with written documentation.A  yO"-ԍ47 C.F.R. 76.1003(d).A We clarify our rules to provide that, to the extent that   a defendant expressly references and relies upon a document or documents within its control in responding  S-  to a program access complaint, the defendant must attach that document or documents to its answer.P  {O%-ԍSee Appendix A, 76.1003(d)(2).P   We decline, however, to adopt Ameritech's specific proposals regarding the type of documents which a"| ,`(`(88"  S-  Mdefendant must attach to its answer for specific program access complaints.u {Oh-ԍSee supra n.154 and accompanying text, discussing Ameritech's proposal.u Our rules require that  S-  program access defendants defend each allegation contained in a prima facie program access complaint  S-  =or face default judgement by the Commission.DZ yO-ԍ47 C.F.R. 76.1003(d)(2).D Once a prima facie complaint has been determined, the   burden of proof is on the defendant to establish that it did not violate the program access provisions of  Sd-  [the Communications Act.ad {O-ԍFirst Report and Order, 8 FCC Rcd at 3405, 341920.a We leave to the discretion of the defendant how best to defend against such   allegations, requiring only that any documents expressly referenced and relied upon in responding to a   program access complaint be attached to the answer, or other responsive pleading permitted by the  S-Commission.| yO -ԍAny material may be submitted by the defendant with a claim of confidentiality. See 47 C.F.R. 76.1003(h).  S- ` ` 2. Standardized Protective Order  SL -  }857. ` ` Background. The Commission sought comment on whether the issuance of a standardized   protective order applicable to program access complaints would expedite the necessary information  S -disclosure.X\  {O-  ԍSee e.g., Examination of Current Policy Concerning the Treatment of Confidential Information Submitted to  {Ot-  the Commission, Notice of Inquiry and Notice of Proposed Rulemaking, 11 FCC Rcd 12406 (1996) (Appendix A: Model Protective Order and Declaration).X  S -  #958. ` ` Discussion. Numerous parties support the adoption of the standardized protective order  S -  yfor program access proceedings attached to the NPRM with little or no alteration. 0  yOX-  iԍAmeritech Comments at 1617; WCA Comments at 13; RCN Comments at 67; Echostar Comments at 7; Satellite Distributors Comments at 11; DirecTV Reply Comments at 28. Ameritech proposes   that the protective order permit an individual that may be involved with programming decisions and   negotiations to have access to materials covered by the protective order where such individual's  S-  jinvolvement is essential to the analysis of the defense.G  yO:-ԍAmeritech Comments at 17.G Ameritech asserts that such individuals, like all   kindividuals subject to the protective order, must certify that they will use such information solely for  S-  purposes of resolving the program access complaint.1 {Oz!-ԍId.1 Ameritech argues that aspiring competitors to   >cable often have small staffs with employees serving the company in multiple capacities. Ameritech   asserts that, absent this amendment, complainants will be faced with the decision of involving key   1personnel in a program access dispute, and foregoing their abilities in the purchasing of future  S"-programming, or not involving the bestsituated employees to analyze program access defenses.1" {Ol&-ԍId.1 "<,`(`(88a"Ԍ S-  :59. ` ` Encore also supports the adoption of the proposed standardized protective order with  S-  Lthree amendments.? yO@-ԍEncore Comments at 79.? First, Encore proposes that the Commission amend Section 0.457(d)(1) to include   .a specific reference to materials for which a party has requested that confidential treatment in a program   access case be included among the types of materials for which it is unnecessary to submit a special  S`-  request for confidentiality.7`X {OX-ԍId. at 8.7 Second, Encore proposes that the standardized protective order be clarified   that consultants under contract to the Commission be granted access to confidential information only if  S-  they have executed the Declaration attached to the protective order.7 {O -ԍId. at 9.7 Third, Encore proposes that the   .protective order be clarified that at the termination of a proceeding all copies of confidential materials be   yreturned to the submitting party, or destroyed by the reviewing party, at the discretion of the submitting  S-  party.2| {O-ԍId. 2 Encore also asks that the Commission designate as part of the instant proceeding the appropriate  Sp-sanctions to be imposed on individuals who violate the protective order.8p {O-ԍId. at 10.8  S -  q;60. ` ` Cable commenters argue that the standardized protective order proposed by the   [Commission will not adequately protect programmers and it would be highly likely that any confidential   =business information revealed would ultimately be used in an improper manner unrelated to the program  S -  access dispute at issue.S  yO-ԍLiberty Comments at 12; HBO Comments at 14.S These commenters argue that the imposition of sanctions for breaching a   lprotective order will provide little comfort for the programmers whose confidential information is  SX-  /divulged.SX0  yO(-ԍLiberty Comments at 12; HBO Comments at 14.S In response to Ameritech's proposal to modify the proposed protective order to permit   employees involved in programming negotiations access to confidential materials subject to a protective   [order, HBO states that "Ameritech does not and cannot offer any justification for why persons involved   in negotiating programming contracts must have access to a programmer's confidential contracts in order  S-for the Commission to resolve a program access dispute."A  yO-ԍHBO Reply Comments at 10.A  Sh-  <61. ` ` We adopt the standardized protective order that was attached to the NPRM for program  S@-  -access matters with several minor revisions.@P  {O0#-  ԍSee Appendix B: Standard Protective Order and Declaration for Use in Section 628 Program Access Proceedings. The Commission has used the standardized protective order   in other situations and we are confident that it affords adequate protection to all parties involved. We also   believe that the adoption of a standardized protective order will facilitate the resolution of program access   matters. In one recent program access petition, resolution was delayed when the parties had difficulty",`(`(88B"  S-  negotiating a satisfactory protective order. {Oh-ԍ#X\  P6G;P#See Outdoor Life Network and Speedvision Network, DA 981241 at 29 (CSB rel. June 26, 1998). Had a standardized protective order been adopted for   program access proceedings, we believe the petition would have been resolved in a more expeditious manner.  S`-  P=62. ` ` We decline to adopt Encore's proposal that we establish blanket confidential treatment for   all materials submitted as evidence in a program access proceeding. In the Commission's experience, a   portion of such materials do not require confidential treatment, and the Commission's existing procedures   for confidentiality have thus far sufficiently protected confidential materials submitted by program access   litigants. We agree with Encore and clarify the protective order to reflect that, at the termination of the   proceeding, all copies of confidential materials be returned to the submitting party, or destroyed by the  Sp-  reviewing party, at the discretion of the submitting party.pZ yOj -  ԍEncore proposes that consultants under contract to the Commission be granted access to confidential   information only if they have executed the Declaration attached to the protective order. We clarify that, to the extent   they have not signed, as part of their employment contract, a nondisclosure agreement covering the confidential   material in question, consultants under contract to the Commission will be granted access to confidential information only if they have executed the declaration attached to the protective order. We decline to adopt Ameritech's proposal   that the protective order permit an individual that may be involved with programming decisions and   negotiations to have access to materials covered by the protective order where such individual's   ?involvement is essential to the analysis of the defense. We think that the circumstances to which Ameritech refer can best be considered, on a casebycase basis, through waiver requests.  S -  S - D.` ` TerrestrialDelivery of Programming  S0-  Q>63. ` ` Background. Section 628 of the Communications Act is applicable to cable operators,   satellite cable programming vendors where a cable operator has an attributable interest, and satellite   broadcast programming vendors, and generally applies to the delivery of "satellite cable programming and  S-  satellite broadcast programming."\  yOd-ԍCommunications Act 628(a), 47 U.S.C. 548(a).\ In the NPRM the Commission stated that, on its face, Section 628   does not preclude a programmer from altering its distribution method from satellitedistribution to  Sl-  Lterrestrialdistribution.Hl {O-ԍNPRM, 12 FCC Rcd at 22861.H The NPRM sought comment on the statutory basis for Commission action if a   verticallyintegrated programmer moves from satellitedelivered programming to terrestrialdelivered  S-  programming for the purpose of evading the program access requirements. The NPRM also sought   /comment on the need for legislation to address such circumstances. Where commenters contend that  S-  /Commission action is appropriate, the NPRM sought comment on what evidence a complainant may   \marshal to prevail on a claim against a programmer that has moved satellitedelivered programming to  S-terrestrial delivery to evade the program access requirements.;,  {ON$-ԍId. at 22862.;  S2-  ?64. ` ` Discussion. Numerous commenters assert that the Commission has the statutory authority   .under Section 628 of the Communications Act to enforce remedial measures upon a verticallyintegrated"  ,`(`(88k"   yprogrammer that moves from satellitedelivered programming to terrestrialdelivered programming for the  S-  .purpose of evading the program access requirements. {O@-  xԍSee BellSouth Comments at 1929, Reply Comments at 1620; Consumer Union Comments at 311, Reply   Comments at 410; Ameritech Comments at 2426, Reply Comments at 2326; Echostar Comments at 1215, Reply   Comments at 1115; Bell Atlantic Comments at 911, Reply Comments at 58; DIRECTV Comments at 923, Reply   [Comments at 623; WCA Comments at 1924, Reply Comments at 1720; RCN Comments at 1217, Reply   JComments at 48; NRTC Comments at 1618, Reply Comments at 1114; WSN Comments at 2324; OpTel Reply Comments at 23. Commenters state that the nation's largest cable   operators have been clustering their systems so that terrestrial distribution of national or regional cable  S-  zprogramming services has become a feasible option.B yOj -  ԍDIRECTV Comments at 910; Ameritech Reply Comments at 24; Consumer Union Comments at 89; Bell Atlantic Comments at 11; WCA Comments at 22. Moreover, commenters describe the increasing   importance of the availability of regional sports and other regional programming for alternative MVPDs  S8-  to be able to compete for subscribers.8 yOr-  ԍDIRECTV Reply Comments at 2122; BellSouth Comments at 20; WCA Comments at 21; RCN Comments at 13; NRTC Comments at 17. These commenters maintain that as regional networks proliferate   and consolidate, it is clear that the cable industry intends to use terrestrial distribution as a means to   replicate the exclusive dealing practices that warranted intervention by Congress and the Commission in  S-  1992.E  yOR-ԍDIRECTV Reply Comments at 22.E Cable commenters stress that noncable MVPDs increasingly have their own exclusive access   to a growing variety of sports and entertainment programming that is unavailable to incumbent cable  Sp-  operators.Dp  yO-  ԍComcast Comments at 14, discussing programming agreements which permit DirecTV to exclusively provide   xan NFL programming package, an NCAA college basketball package, a weekly music magazine, original, firstrun   television movies and series, and the Channel Earth programming; Cablevision Reply Comments at 1213, discussing   programming agreements which permit DirecTV to exclusively provide Major League Baseball, NBA and NHL programming packages; NCTA Comments at 17.D Cable commenters also assert that there is no evidence of restricted programming availability   that would justify extending the scope of the program access rules to terrestriallydelivered  S -programming.{ 2 yO-ԍComcast Comments at 13; Cablevision Reply Comments at 8; Time Warner Comments at 8.{  S -  Q@65. ` ` Several commenters argue that terrestrialdelivery for purposes of evading the program  S -  access rules is directly addressable under Section 628(b) of the Communications Act.^  yO !-ԍDIRECTV Comments at 13; Echostar Reply Comments at 12.^ In such   circumstances, commenters argue that a cable operator or its affiliated programming provider would   unfairly refuse to provide a competing MVPD nondiscriminatory access to programming that it has made   yavailable to other MVPDs and that the purpose or effect of such refusal hinders significantly or prevents  S-  that MVPD from providing satellite cable programming to its subscribers.XR yO%-  -ԍDIRECTV Comments at 14; BellSouth Comments at 2223; Consumer Union Comments at 45; Echostar   Comments at 14; Bell Atlantic Comments at 10; WCA Comments at 22; RCN Comments at 14; NRTC Comments at 17. One commenter asserts that" r,`(`(88"   kthe anticompetitive conduct arises not from the use of an exclusively terrestrial delivery method, but   ]rather "from the intentional migration of satellitedelivered programming to terrestrial facilities (or   purposeful bypass of satellitedelivery in the first instance) to deny MVPD competitors access to  S-  programming without any legitimate business justification."` yO-ԍBellSouth Comments at 23; Echostar Reply Comments at 14.` Commenters assert that a vertically  integrated programming provider that has converted its programming to terrestrial delivery is in no way   exempted from Section 628(b)'s proscription against unfair practices if a cable operator has taken action   ]that has the "purpose or effect" of denying or eliminating a competing MVPD's access to satellite  S-  delivered programming.\X yO -ԍDIRECTV Comments at 1718; WCA Reply Comments at 18.\ Commenters also argue that the Commission can address terrestrial evasion  S-under its authority pursuant to Sections 4(i) and 303(r) of the Communications Act. yOH -  ԍDIRECTV Reply Comments at 14 (Section 4(i) only); Ameritech Comments at 2526; Consumer Union Comments at 57; Echostar Reply Comments at 13; NRTC Reply Comments at 13.  Sp-  QA66. ` ` Other commenters argue that the general prohibition contained in Section 628(b) by its  SH -  express language applies only to satellite delivered service.H @ yO(-  hԍNCTA Comments at 15; Comcast Comments at 8; Cablevision Comments at 1314; Liberty Comments at 26; Viacom, Inc. ("Viacom") Reply Comments at 2; A&E Television Networks ("A&E") Reply Comments at 4. These commenters argue that because   {Congress expressly opted to exclude terrestrial programming from the reach of the program access   provisions, a programmer's decision to utilize terrestrial delivery cannot constitute an unfair method of  S -  competition or an unfair or deceptive act or practice.C  yO-ԍCablevision Comments at 17.C Commenters also argue that where a programming   provider has legitimate reasons for switching to terrestrial delivery, there is no basis for treating the switch  S -  as an unfair method of competition or an unfair practice.A (  yOH-ԍNCTA Comments at 1516. A Cable commenters argue that terrestrial   .delivery has become an efficient alternative to satellite delivery in certain circumstances, making it likely  S0-that such a switch has a legitimate business justification.ex0  yO-  [ԍComcast Comments at 15, discussing Comcast's assertion that its Philadelphia regional sports network,   Comcast SportsNet, saves between $310,000 and $1,680,000 per year, depending on the type of satellite delivery   ;method selected, by using existing terrestrial delivery methods instead of satellite delivery; NCTA Reply Comments   at 15, discussing Comcast's cost savings related to the terrestrial distribution of Comcast SportsNet. Commenters   <also assert that terrestrialdelivery for purposes of evading the program access rules is directly addressable under   Section 628(c) of the Communications Act. DIRECTV Comments at 18; BellSouth Reply Comments at 19; Echostar Reply Comments at 12; NRTC Reply Comments at 12. e  S-  B67. ` ` NCTA argues that the fact that certain programmers cannot obtain access to some   terrestrially delivered programming does not constitute a harm recognized by Section 628(b) of the  S-  Communications Act.B yO(&-ԍNCTA Reply Comments at 16.B NCTA asserts that the test is not whether the denial of a particular programming   service to an MVPD significantly hinders or prevents the MVPD from providing that programming"h!,`(`(88"   service. The test is whether the unavailability of a service has a significant adverse effect on the ability  S-  to compete in the provision of video programming to subscribers or consumers.1 {O@-ԍId.1 NCTA states that it   is extremely unlikely that the loss of any particular service that may switch from satellite to terrestrial  S-delivery would inflict significant competitive harm on an MVPD.2Z {O-ԍId. 2  S8-  C68. ` ` Several commenters argue that the legislative history of the 1992 Cable Act demonstrates   jthat Congress specifically considered whether to extend the program access requirements to terrestrially S-  delivered programming and declined to do so. yOt -  xԍNCTA Comments at 13; Cablevision Comments at 16; Time Warner Reply Comments at 4; Liberty Reply Comments at 7. These commenters note that the Senate version of the   program access provisions applied to all verticallyintegrated national and regional programmers regardless  S-  of how they were distributed.D yO|-  iԍNCTA Comments at 13; Cablevision Comments at 16; Time Warner Reply Comments at 4; Liberty Reply Comments at 7. Conversely, the House provisions applied only to satellite delivered   programming. The program access provisions of the conference agreement which was enacted as the 1992  SH -  yCable Act adopted the narrower House version.H  yO-  JԍNCTA Comments at 1314; Cablevision Comments at 16; Time Warner Reply Comments at 4; Liberty Reply Comments at 7. Other commenters claim that there is no evidence that   Congress made an affirmative determination to limit program access solely to satellite delivered   programming, and that the use of the term "satellitedelivered" should not carry the dispositive weight that  S -  the cable industry ascribes to such term.  yOd-ԍDIRECTV Reply Comments at 19; Ameritech Reply Comments at 25; Consumer Union Comments at 7. Commenters argue that Congress selected the term "satellite   delivered" because in 1992 virtually all cable programming, particularly the national and regional  S -programming to which Congress was seeking to protect access, was delivered by satellite.  yO-  ԍAmeritech Reply Comments at 25; Consumer Union Reply Comments at 5; Bell Atlantic Comments at 11, Reply Comments at 7; WCA Reply Comments at 19; RCN Reply Comments at 7.   S0-  AD69. ` ` Cable commenters maintain that, as a matter of policy, the Commission should not extend  S-  Section 628 to terrestriallydelivered cable programming.f yO -ԍCablevision Comments at 17; Time Warner Reply Comments at 56.f Such action would involve the Commission   [in lengthy, factintensive disputes concerning the motives underlying the programmer's decision thereby  S-  forcing the Commission to secondguess the business judgement exercised by programmers.Fl yO#-ԍCablevision Comments at 1718.F The   terrestrial delivery program access exception, argue commenters, strengthens incentives for cable operators   to invest in the development of local and regional cable programming because it permits them to utilize"h",`(`(88"  S-  the full range of programmer distribution strategies, including exclusivity.g yOh-ԍCablevision Comments at 18; Time Warner Reply Comments at 56. g Some commenters argue that   such programming is an essential means of increasing their local identity and differentiating themselves  S-from other MVPDs.eX yO-ԍTime Warner Reply Comments at 6; Liberty Comments at 2728. e  S`-  &E70. ` ` In response, certain commenters argue that the so called "bad policy" argument   propounded by the cable operators cannot be sustained for the reason that the programming that has been,   ?and will be, diverted from satellite to terrestrial delivery remains the very same programming that   Congress in the 1992 Cable Act sought to make accessible to cable's competitors on a nondiscriminatory  S-  >basis.` yOH -ԍBellSouth Reply Comments at 17; RCN Reply Comments at 8.` In addition, commenters assert that extending the program access requirements to terrestrial  S-  ldelivered programming will not discourage development of new local and regional programming.OXx yO-  <ԍConsumer Union Reply Comments at 910; Echostar Reply Comments at 15; RCN Reply Comments at 8.   ;RCN notes that the inability to offer exclusive deals for new programming did not deter cable MSOs from launching 38 new offerings since 1992. RCN Reply Comments at 8.O  Sp-   Ameritech argues that proving terrestrial delivery for purposes of evading the program access rules will  SH -be extremely difficult to prove.CH  yO-ԍAmeritech Comments at 26. C  S -  F71. ` ` The record developed in this proceeding fails to establish that the conduct complained of,  S -  i.e., moving the transmission of programming from satellite to terrestrial delivery to avoid the program   access rules, is significant and causing demonstrative competitive harm at this time. The Commission has   received only two complaints against the same verticallyintegrated programmer related to moving the  SZ-  ztransmission of programming from satellite to terrestrial delivery to avoid the program access rules.Z(  {O"-  wԍ See DirecTV, Inc. v. Comcast Corporation, et. al (filed September 23, 1997); Echostar Corporation v. Comcast  {O-Corporation, et. al (filed May 19, 1998).   Where the record fails to indicate a significant competitive problem, we are reluctant to promulgate   general rules prohibiting activity particularly where reasonable issues are raised regarding the scope of the  S-  /statutory language.  yO-  /ԍBecause we conclude that the record does not justify action under Section 628, we need not address commenters arguments regarding action under Sections 4(i) and 303(r). In circumstances where anticompetitive harm has not been demonstrated, we   perceive no reason to impose detailed rules on the movement of programming from satellite delivery to   terrestrial delivery that would unnecessarily inject the Commission into the daytoday business decisions   of verticallyintegrated programmers. While the record does not indicate a significant anticompetitive   impact necessitating Commission action at this time, we believe that the issue of terrestrial distribution   of programming could eventually have substantial impact on the ability of alternative MVPDs to compete   in the video marketplace. We note that Congress is considering legislation which, if enacted, would   introduce important changes to the program access provisions, including clarification of the Commission's"#,`(`(88$"  S-  jurisdiction over terrestriallydelivered programming.y yOh-ԍ Video Competition and Consumer Choice Act of 1998, HR 4352 (July 29, 1998).y The Commission will continue to monitor this  S-issue and its impact on competition in the video marketplace.oZX {O-  ԍSee Annual Assessment of the Status of Competition in Markets for the Delivery of Video Programming, Notice   hof Inquiry, FCC 98137 at  21 (June 26, 1998), seeking information on cases of MVPDs being denied programming when a satellitedelivered service becomes terrestriallydelivered.o  S- E. ` ` Buying Groups: Joint and Several Liability  S8-  G72.` ` Background. In the First Report and Order, the Commission determined that members   Nof buying groups must agree to joint and several liability for commitments of the group to require  S-  =verticallyintegrated programmers to negotiate collectively with the group.Xz {O -ԍFirst Report and Order, 8 FCC Rcd at 3412.X SCBA argued that there is   /no legal or practical need for joint and several liability if a buying group maintains sufficient financial  S-  zreserves to ensure its ability to pay programmers. The NPRM sought comment on SCBA's proposal.  St-  ySpecifically, the NPRM sought comment on what type of 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 financial risks associated with such  S -arrangements.H  {O-ԍNPRM, 12 FCC Rcd at 22862.H  S -  AH73. ` ` Discussion. The majority of those commenting on this issue favor the elimination of joint   1and several liability for buying groups that provide adequate financial assurances to safeguard  S`-  lprogramming providers.` yO-  hԍSCBA Comments at 29; Satellite Distributors Comments at 1415; HBO Comments at 8; Comcast Comments at 16; BellSouth Reply Comments at 16. HBO does not oppose the elimination of the joint and several liability   requirement, but urges the Commission to protect verticallyintegrated programmers ability to demand,   to its satisfaction, sufficient assurances of creditworthiness and financial stability as required by the  S-  =Commission's rules.^  yO~-ԍHBO Comments at 8, citing 47 C.F.R. 76.1002(b)(1).^ The commenters differ on what requirements the Commission should impose, in   lieu of the joint and several liability requirement. SCBA argues that the Commission should establish a  S-  zdual requirement based upon buying group size and financial reserves.  yO -  ԍSCBA Comments at 7. BellSouth argues that the joint and several liability requirement should be eliminated and supports SCBA's proposed approach. BellSouth Reply Comments at 16. SCBA asserts that a buying  Sp-  group must have sufficient size in order to diversify the risk of individual member default.Ap yO#-ԍSCBA Comments at 7.A SCBA  SH-  recommends that qualified buying groups serve an aggregate of at least 5 million subscribers.1Hn {OV&-ԍId.1 SCBA's  S -  second proposed requirement is that a buying group must have liquid cash or credit reserves (i.e., cash," $,`(`(88"   cash equivalents, or letters or lines of credit) equal to cover the cost of one month's programming upon  S-  the default of the buying group's largest member.1 {O@-ԍId.1 SCBA argues that its dual approach provides a   simple and objective measure that avoids involving the Commission in subjective disputes regarding the  S-creditworthiness of specific buying groups.Z {O-  ԍId. at 78. SCBA asserts that the refusal of a verticallyintegrated programmer to contract with or through a  {OL-qualified buying group should constitute an unreasonable refusal to sell. Id. at 89.  S8-  ~I74. ` ` Satellite Distributors argue that verticallyintegrated programming providers should not   be permitted to refuse to deal with a buying group provided that the members of the buying group each  S-  .guarantees to the programming provider its individual, prorata share of the programming license fees.N yO> -ԍSatellite Distributors Comments at 14.N   jSatellite Distributors maintain that its approach ensures that the responsibility for payment of fees is no   different than if the programming providers were dealing with the buying group members on an individual  Sp-basis.8pF {OV-ԍId. at 15.8  S -  J75. ` ` WSN is the sole commenter to oppose the elimination of the joint and several liability   >requirement. WSN argues that SCBA's approach actually seeks a special exemption for the National  S -  /Cable Television Cooperative ("NCTC").;  yOH-ԍWSN Comments at 18.; Because it is a cooperative that will not assume the full   responsibility for the obligations of its programming contracts, WSN argues that NCTC is undeserving  S -  of such special assistance from the Commission.1 h  {O-ԍId.1 WSN asserts that NCTC merely needs to assume full  SX-  responsibility for its obligations as a programmer to eliminate the joint and several liability requirement.1X  {O-ԍId.1   kAccording to WSN, if NCTC becomes a buying group by allocating one month's programming fees as   Man adequate financial reserve, then all similarly situated MVPDs must be permitted to also limit their  S-contractual liability to one month's programming fees.8  {O -ԍId. at 19.8  S-  K76. ` ` We believe that the record justifies adopting an alternative method to joint and several   liability that buying groups can satisfy which ensures that programming distributors are adequately   protected from excessive financial risk. We reject Satellite Distributors proposed approach because it does   not adequately protect programming providers. The reason smaller MVPDs enter buying groups is to   obtain programming at a discount resulting from the group's aggregate purchasing power. In return for   Lthis discount, programming providers are entitled to protection that dealing with such groups will not be   Mexposed to excessive financial risk or excessive expense such as having to routinely collect delinquent   programming fees from individual buying group members. While Satellite Distributors proposed approach   affords buying groups the advantages of aggregate purchasing power, it affords the programming provider"P%,`(`(88"   with no more protection or cost savings than if the programming provider had contracted individually with each buying group member.  S-  L77. ` ` We also reject SCBA's dual approach as inconsistent with the Commission's objectives.   jFirst, SCBA's proposal that a qualifying buying group maintain at least 5 million subscribers is excessive   and would limit the alternative financial assurances method to far too few buying groups. In addition, we   .believe the proposal that such group maintain liquid reserves equal to one month's programming fees for   yonly the largest buying group member does not adequately protect programming providers from financial risk.  Sp-  }M78. ` ` We believe that the most reasonable approach is a modified combination of the approaches   zproposed by both SCBA and Satellite Distributors. To qualify for the alternative to joint and several  S -  Nliability, we will require that buying groups maintain liquid cash or credit reserves (i.e., cash, cash   Mequivalents, or letters or lines of credit) equal to cover the cost of one month's programming for all of   the buying groups members. In addition, each member of the buying group will remain liable to the   programmer for its prorata share of the buying group's programming. Under this approach, the   alternative financial assurances method is available to buying groups of all sizes. At the same time,   [programming providers are adequately protected from the catastrophic default by multiple members of a   buying group. If multiple members of a particular buying group default on their obligations to the buying   group, and the buying group is unable to meet its obligations with existing resources, the programming   \provider is ensured payment for all programming thus far provided. At such point, the programming   provider would have the option of terminating its contract with the buying group, retaining the one   [month's programming fees, and contracting with buying group members on terms negotiated between the   [programmers and the individual MVPDs. Alternatively, the programming provider could retain only the   portion of the one month's programming fees that were actually defaulted upon, continue providing   [programming to the buying group, and look to the individual member for the balance of its prorata share   of the buying groups contractual obligations. We believe that this approach addresses WSN's concerns   that the approach proposed by SCBA artificially caps the financial obligations of certain buying groups   zthrough government regulation. For those buying groups that cannot, or will not, satisfy the financial   requirements of this alternative approach, we clarify that the options to provide joint and several liability, or separately negotiate financial assurances satisfactory to the programming provider, remain effective.  S*-  S-F.` ` Miscellaneous Issues   S-  3N79. ` ` Discussion. WSN argues that all verticallyintegrated programmers should be required  S-  =to promulgate a publicly available rate card.8 {O-ԍId. at 13.8 WSN also argues that the program access rules should be  Sd-  expressly amended to expressly prohibit discrimination based on the use of KU Band technology.8dZ {O^"-ԍId. at 10.8 WSN  S<-  asserts that the five cent per subscriber price differential necessary to establish a prima facie price  S -  discrimination case should be eliminated.  {O%-ԍId. at 20, discussing 47 C.F.R. 1003(d)(6) (five cent price differential requirement). Several commenters argue that the Commission should" &~,`(`(88!"  S-  support the expansion of the program access rules to nonverticallyintegrated programmers. yOh-  =ԍWSN Comments at 24; WCA Comments at 25; GE American Communications, Inc. ("GE American") Comments at 6. SCBA   Mstrongly urges the Commission to require verticallyintegrated programmers to disclose program cost  S-  information that would facilitate private resolution of price discrimination complaints.<  yOp-ԍSCBA Comments at 10.< We decline to  S-  zadopt each of these proposals. The Commission did not seek comment on these issues in the NPRM. Accordingly, there is no record upon which to base any action regarding these proposals. #&a\  P6G;&P#  S-  V.XREGULATORY FLEXIBILITY ANALYSIS AND PAPERWORK REDUCTION ACT OF  S-1995 ANALYSIS (#  S-  SO80. ` ` The regulatory flexibility analysis is attached to this order as Appendix C. The   requirements adopted in this Report and Order have been analyzed with respect to the Paperwork   kReduction Act of 1995 (the "1995 Act") and found to impose new or modified information collection   requirements on the public. The Commission, as part of its continuing effort to reduce paperwork   \burdens, invites the general public to take this opportunity to comment on the information collection   requirements contained in this Order, as required by the 1995 Act. Public comments are due 60 days from   date of publication of this Order in the Federal Register. Comments should address: (a) whether the   proposed collection of information is necessary for the proper performance of the functions of the   {Commission, including whether the information shall have practical utility; (b) the accuracy of the   Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information   collected; and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology.  S-  S-  &P81. ` ` Written comments by the public on the new or modified information collection  Sj-  requirements are due 60 days from date of publication of this Order in the Federal Register. Comments   on the information collections contained herein should be submitted to Judy Boley, Federal   /Communications Commission, Room 234, 1919 M Street, N.W., Washington, DC 20554, or via the   Internet to jboley@fcc.gov. For additional information on the information collection requirements, contact Judy Boley at 2024180214 or via the Internet at the above address.  Sz- VI.PROCEDURAL PROVISIONS  S*-  Q82. ` ` Effective Date. Upon approval by the Office of Management and Budget ("OMB"), the  S-  .rules adopted in this Order shall become effective. The Commission will publish a notice in the Federal Register announcing the effective date. "',`(`(88"  S- VII.ORDERING CLAUSES  S-  S-  #R83. ` ` IT IS ORDERED that, pursuant to authority found in Sections 4(i), 303(r) and 628 of   the Communications Act of 1934, as amended, 47 U.S.C.  154(i), 303(r) and 548, the Commission's  S`-rules ARE HEREBY AMENDED as set forth in Appendix A.  S-  2S84. ` ` IT IS FURTHER ORDERED that the rules as amended in Appendix A shall become  S-effective upon approval by the Office of Management and Budget .   S-  "T85. ` ` IT IS FURTHER ORDERED that the Commission's Office of Public Affairs, Reference  Sp-  Operations Division, shall send a copy of this Report and Order, including the Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.  S -` ` hh, FEDERAL COMMUNICATIONS COMMISSION  ` ` hh,Magalie Roman Salas ` ` hh,Secretary"(,`(`(88"  S- ) I  Appendix A ĐlU Part 76 of Title 47 of the Code of Federal Regulations is amended as follows: PART 76 MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE  S-1.` ` The authority citation for Part 76 continues to read as follows:   AUTHORITY: 47 U.S.C. 151, 152, 153, 154, 301, 302, 303, 303a, 307, 308, 309, 312, 315, 317, 325,   >503, 521, 522, 531, 532, 533, 534, 535, 536, 537, 543, 544, 544a, 545, 548, 549, 552, 554, 556, 558, 560, 561, 571, 572, 573.  S -  S -  2.` ` Section 76.1003 is amended by adding paragraph (c)(5) and amending paragraphs (d), (e) and (s) as follows:  S -  76.1003 Adjudicatory proceedings. ***** (c) ***  S- (5)  Damages requests. (i) In a case where recovery of damages is sought, the complaint shall contain   a clear and unequivocal request for damages and appropriate allegations in support of such claim in accordance with the requirements of subpart (iii) of this section.  S-  (ii)` ` Damages will not be awarded upon a complaint unless specifically requested. Damages   may be awarded if the complaint complies fully with the requirement of subpart (iii) of this section where the defendant knew, or should have known that it was engaging in conduct violative of Section 628.  S-  (iii)` ` In all cases in which recovery of damages is sought, the complainant shall include within, or as an attachment to, the complaint, either:  SR-  A(A)` ` A computation of each and every category of damages for which recovery is sought, along   with an identification of all relevant documents and materials or such other evidence to be used by the complainant to determine the amount of such damages; or  S-(B)` ` An explanation of:  S-  (1)` ` The information not in the possession of the complaining party that is necessary to develop a detailed computation of damages;  Sb-(2)` ` The reason such information is unavailable to the complaining party;  S:-  (3)` ` The factual basis the complainant has for believing that such evidence of damages exists; and  S -  (4)` ` A detailed outline of the methodology that would be used to create a computation of damages when such evidence is available. *****  S%- P(d)Answer. (1) Any cable operator, satellite cable programming vendor or satellite broadcast   programming vendor upon which a program access complaint is served under this section shall answer"&),`(`(88n(" within twenty (20) days of service of the complaint, unless otherwise directed by the Commission.  S-  (2)` ` The answer shall advise the parties and the Commission fully and completely of the nature   [of any and all defenses, and shall respond specifically to all material allegations of the complaint. To the   extent that a cable operator, satellite cable programming vendor or satellite broadcast programming vendor   jexpressly references and relies upon a document or documents within its control in asserting a defense or   .responding to a material allegation, such document or documents shall be included as part of the answer.   jCollateral or immaterial issues shall be avoided in answers and every effort should be made to narrow the   issues. Any defendant failing to file and serve an answer within the time and in the manner prescribed   Mby these rules may be deemed in default and an order may be entered against defendant in accordance with the allegations contained in the complaint. *****  S - (e)Reply. Within fifteen (15) days after service of an answer, unless otherwise directed by the   Commission, the complainant may file and serve a reply which shall be responsive to matters contained   in the answer and shall not contain new matters. Failure to reply will not be deemed an admission of any   allegations contained in the answer, except with respect to any affirmative defense set forth therein.   Replies containing information claimed by defendant to be proprietary under paragraph (h) of this section   shall be submitted to the Commission in confidence pursuant to the requirements of  0.459 of this chapter   jand clearly marked "Not for Public Inspection." An edited version removing all proprietary data shall be   .filed with the Commission for inclusion in the public file within five (5) days from the date the unedited reply is submitted, and shall be served on the defendant. *****  S- (s)Remedies for violations (1) Remedies authorized. Upon completion of such adjudicatory   proceeding, the Commission shall order appropriate remedies, including, if necessary, (i) the imposition   of damages, and/or (ii) the establishment of prices, terms, and conditions for the sale of programming to   the aggrieved multichannel video programming distributor. Such order shall set forth a timetable for compliance, and shall become effective upon release.  ST-  (2)` ` Additional sanctions. The remedies provided in paragraph (s)(1) of this section are in   maddition to and not in lieu of the sanctions available under title V or any other provision of the Communications Act.  S-  (3)` ` Imposition of Damages. (i)  Bifurcation. In all cases in which damages are requested,   the Commission may bifurcate the program access violation determination from any damage adjudication.  Sh-  A(ii)` ` Burden of Proof. The burden of proof regarding damages rests with the complainant, who   must demonstrate with specificity the damages arising from the program access violation. Requests for   damages that grossly overstate the amount of damages may result in a Commission determination that the   complainant failed to satisfy its burden of proof to demonstrate with specificity the damages arising from the program access violation.  S"-  (iii)` ` Damages Adjudication. (A) The Commission may, in its discretion, end adjudication of   damages with a written order determining the sufficiency of the damages computation submitted in   yaccordance with subpart (c)(5)(iii)(A) or the damages computation methodology submitted in accordance   ywith subpart (c)(5)(iii)(B)(4), modifying such computation or methodology, or requiring the complainant  S&- _? " to resubmit such computation or methodology. cc(1)Where the Commission issues a written   order approving or modifying a damages computation submitted in accordance with subpart (c)(5)(iii)(A),"&*,`(`(88n(" the defendant shall recompense the complainant as directed therein.  S-  (2)` ` Where the Commission issues a written order approving or modifying a damages   -computation methodology submitted in accordance with subpart (c)(5)(iii)(B)(4), the parties shall negotiate   ?in good faith to reach an agreement on the exact amount of damages pursuant to the Commissionmandated methodology.  S8-  (B)` ` Within thirty days of the issuance of a subpart (c)(5)(iii)(B)(4) damages methodology order, the parties shall submit jointly to the Commission either:  S-(1)` ` A statement detailing the parties' agreement as to the amount of damages;  S-  Q(2)` ` A statement that the parties are continuing to negotiate in good faith and a request that the parties be given an extension of time to continue negotiations; or  Sp-  (3)` ` A statement detailing the bases for the continuing dispute and the reasons why no agreement can be reached.  S -  q(C)` ` (1) In cases in which the parties cannot resolve the amount of damages within a   reasonable time period, the Commission retains the right to determine the actual amount of damages on its own, or through the procedures described in subpart (s)(3)(iii)(C)(2) of this section.  S -  (2)` ` Issues concerning the amount of damages may be designated by the Chief, Cable Services   Bureau for hearing before, or, if the parties agree, submitted for mediation to, a Commission Administrative Law Judge.  S0-  o(D)` ` Interest on the amount of damages awarded will accrue from either the date indicated in   the Commission's written order issued pursuant to subpart (s)(3)(iii)(A)(1) or the date agreed upon by the   parties as a result of their negotiations pursuant to subpart (s)(3)(iii)(A)(2). Interest shall be computed at applicable rates published by the Internal Revenue Service for tax refunds. #&a\  P6G;&P#"+,`(`(88u"  S-  I #&a\  P6G;&P#Appendix B ĐlU STANDARD PROTECTIVE ORDER AND DECLARATION FOR USE INlU SECTION 628 PROGRAM ACCESS PROCEEDINGSlU  S- KP Before the  Federal Communications Commission ""Washington, D.C. 20554 S-lU ` `  hh,Vcc  SH -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.  S-1.` ` Definitions.  SP-  ` ` 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.  S`-  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.  S&-` ` d. Declaration. "Declaration" means Attachment A to this Protective Order."&,,`(`(88n("Ԍ S- Rԙ` ` 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.  S-  ` ` 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  S-  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.  S-  _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.  Sz-  _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 the scope of which includes the Confidential Information, 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. ""%-,`(`(88&"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-  Ap12.` ` 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 pby 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, at the direction of the Submitting Party, 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"&/,`(`(88n("   Information has been retained by any person having access thereto, except that counsel to a Reviewing   LParty 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-"0,`(`(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. ` `  hh,(signed) _______________________________ ` `  hh,(printed name) __________________________ ` `  hh,(representing) ___________________________ ` `  hh,(title) __________________________________ ` `  hh,(employer) _____________________________ ` `  hh,(address) _______________________________ ` `  hh, _______________________________  S`-` `  hh,(phone) ________________________________ X  S -` `  hh,(date) __________________________________ "p#1,`(`(88$"  S-  H  Appendix C ĐlU  S-  FINAL REGULATORY FLEXIBILITY ANALYSIS ĐlU  R`- A.` ` Background   1. 1. 1. a.(1)(a) i) a)U I. 1. 1. a.(1)(a) i) a)  S-  31. ` ` As required by the Regulatory Flexibility Act (RFA),Z {Ox-#X\  P6G;P#эSee 5 U.S.C. 603. The RFA, see 5 U.S.C. 601 et seq,. has been amended by the Contract With America Advancement Act of 1996, Pub. L. No. 104121, 110 Stat. 847 (1996) ("CWAAA"). Title II of the  yO -CWAAA is the Small Business Regulatory Enforcement Fairness Act of 1996 ("SBREFA").  an Initial Regulatory Flexibility  S-  NAnalysis ("IRFA") was incorporated into the Notice of Proposed Rule Making ("NPRM") in this  S-  proceeding.& {OL -#X\  P6G;P#эImplementation of the Cable Television Consumer Protection and Competition Act of 1992: Petition for Rulemaking of Ameritech New Media, Inc. Regarding Development of Competition and Diversity in Video  {O -Programming Distribution and Carriage, Memorandum Opinion and Order and Notice of Proposed Rulemaking,  {O-12 FCC Rcd 22840, 22871 (1997) ("NPRM"). The Commission sought written public comment on the possible impact of the proposed  S-  policies and rules on small entities in the NPRM, including comments on the IRFA. This Final Regulatory  St-Flexibility Analysis ("FRFA") in this Report and Order ("Order") conforms to the RFA.tt {O-#X\  P6G;P#эSee 5 U.S.C. 604. t  S& - B.` ` Need for Action and Objectives of the Rules  S -  P2. ` ` Section 628 of the Communications Act prohibits unfair or discriminatory practices in the   Msale of satellite cable and satellite broadcast programming and is intended to increase competition and   diversity in the multichannel video programming market, as well as to foster the development of   Lcompetition to traditional cable systems, by prescribing regulations that govern the access by competing  S7-  multichannel systems to cable programming services.a7j  yOA-ԍCommunications Act 628(a) 47 U.S.C. 548(a).a Pursuant to Congress's mandate in the 1992 Cable   Act, the Commission promulgated regulations implementing the Communication Act's program access  S-  provisions.m^  {O-ԍImplementation of Sections 12 and 19 of the Cable Television Consumer Protection and Competition Act of  {OK-1992: Development of Competition and Diversity in Video Programming Distribution and Carriage, First Report  {O-and Order ("First Report and Order"), 8 FCC Rcd 3359 (1993). m In 1997, Ameritech New Media, Inc. filed a petition for rulemaking requesting that the  S-  >Commission amend our program access rules. The Commission issued a NPRM seeking comment on  S-  \amendments to our program access rules.B  {OY"-ԍSee supra n.2.B After reviewing the comments filed in this proceeding, we   !conclude that the public interest in increased competition and diversity in the multichannel video   kprogramming and the development of competition to traditional cable systems is further enhanced by  S!-amending our program access rules as described in the Order. "2,`(`(884"Ԍ R- 8C.` ` Summary of Significant Issues Raised by the Public Comments in Response to the IRFA   S-  %3. ` ` No comments were filed specifically in response to the IRFA. We have, however,   considered the economic impact on small entities through consideration of comments that pertain to issues   o8f concern to MVPDs and programming producers and distributors. In particular, the Small Cable   Business Association ("SCBA") filed comments addressing a number of issues. One of the rule changes  S-  adopted in the Order is intended to assist program buying cooperatives, many members of which are small  S-entities, in gaining access to verticallyintegrated cable programming at competitive rates.J {OR-ԍSee Order at  7278.J  R-   D.` ` Description and Estimate of the Number of Small Entities to Which the Rules Will  Rr-Apply (#`  S" -  4.` ` The RFA directs the Commission to provide a description of and, where feasible, an   estimate of the number of small entities that might be affected by the rules here adopted. The RFA   defines the term "small entity" as having the same meaning as the terms "small business," "small  S -  organization," and "small governmental jurisdiction." Z yO-#X\  P6G;P#э#X\  P6G;P#5 U.S.C.  601(6). In addition, the term "small business" has the same  S -  meaning as the term "small business concern" under the Small Business Act.R   yO -#X\  P6G;P#э5 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 comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and publishes such definitions in the Federal Register."R Under the Small Business   Act, a small business concern is one which: (a) is independently owned and operated; (b) is not dominant  S2-  in its field of operation; and (c)satisfies any additional criteria established by the SBA. 2 {Ol-#X\  P6G;P#эSmall Business Act, 15 U.S.C.  632; see also Appendix C, n.6, supra.į The rules we   adopt in this Report and Order will affect cable systems, multipoint multichannel distribution systems,   direct broadcast satellites, home satellite dish manufacturers, satellite master antenna television, open video   systems, local multipoint distribution systems, and program producers and distributors. Below, we set   forth the general SBA and FCC cable small size standards, and then address each service individually to provides a more precise estimate of small entities. We also describe program producers and distributors.  S-  o5. ` ` SBA Definitions for Cable and Other Pay Television Services: The SBA has developed   a definition of small entities for cable and other pay television services, which includes all such companies  S-  generating $11 million or less in annual receipts.q ,  yO"-#X\  P6G;P#э13 C.F.R. 121.201 (SIC 4841).q This definition includes cable system operators, closed   kcircuit television services, direct broadcast satellite services, multipoint distribution systems, satellite   [master antenna systems and subscription television services. According to the Census Bureau data from   1992, there were approximately 1,758 total cable and other pay television services and 1,423 had less than"T3 ,`(`(88"  S-$11 million in revenue.  yOh-#X\  P6G;P#эU.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).  Q-  S-  Q6. ` ` Additional Cable System Definitions: In addition, the Commission has developed, with   =SBA's approval, our own definition of a small cable system operator for the purposes of rate regulation.   [Under the Commission's rules, a "small cable company" is one serving no more than 400,000 subscribers  S:-  nationwide. $:  yO-#X\  P6G;P#э47 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  {O -1992 Cable Act: Rate Regulation, Sixth Report and Order and Eleventh Order on Reconsideration, 10 FCC Rcd 7393 (1995). Based on recent information, we estimate that there were 1439 cable operators that qualified  S-  as small cable companies at the end of 1995.  {O -#X\  P6G;P#эPaul 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 400,000 subscribers, and others may have been involved in transactions that caused them to   ybe 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   =conclude that only a small percentage of these entities currently provide qualifying "telecommunications   services" as required by 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  SZ-  ?revenues in the aggregate exceed $250,000,000."hZ yO-#X\  P6G;P#э47 U.S.C. 543(m)(2).h The Commission has determined that there are   61,700,000 cable 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  S-  the total annual revenues of all of its affiliates, do not exceed $250 million in the aggregate.t.  yO-#X\  P6G;P#э47 C.F.R.  76.1403(b) (SIC 4833).t Based on  S-  available data, we find that the number of cable operators serving 617,000 subscribers or less totals 1450.  {O-#X\  P6G;P#эPaul 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   =number of cable system operators that would qualify as small cable operators under the definition in the Communications Act.  S-  38. ` ` Multipoint Multichannel Distribution Systems ("MMDS"): The Commission refined its   Mdefinition of "small entity" for the auction of MMDS as an entity that together with its affiliates has  S|-  Laverage gross annual revenues that are not more than $40 million for the preceding three calendar years.k|P  yOl'-#X\  P6G;P#э47 C.F.R.  21.961(b)(1).k "|4,`(`(88"  S-This definition of a small entity in the context of MMDS auctions has been approved by the SBA.& {Oh-#X\  P6G;P#эSee 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  {O-309(j) of the Communications Act Competitive Bidding, MM Docket No. 9431 and PP Docket No. 93253,  {O-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   japproximately 1634 small MMDS providers as defined by the SBA and the Commission's auction rules.  SH -  $ 10. ` ` ITFS: There are presently 2032 ITFS licensees. All but 100 of these licenses are held  S" -  by educational institutions. Educational institutions are included in the definition of a small business.rZ"  yOx-#X\  P6G;P#эSBREFA also applies to nonprofit organizations and governmental organizations such as cities, counties, towns, townships, villages, school districts, or special districts, with populations of less than 50,000. 5 U.S.C.  {O-601(5). See Appendix C (D) supra.r   However, we do not collect annual revenue data for ITFS licensees and are not able to ascertain how   many of the 100 noneducational licensees would be categorized as small under the SBA definition. No   commenters address these noneducational licensees. Accordingly, we conclude that there may be as many as 2032 licensees that are small businesses.  S2-   11. ` ` 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  Sl-  the NPRM, we acknowledged that there are several new entrants in this field that may not yet have   generated $11 million in annual receipts, and therefore may be categorized as a small business, if  S-  =independently owned and operated. Since the publication of the NPRM, however, more information has  S-  Lbecome available. In light of the 1997 gross revenue figures for the various DBS operators, we conclude that no DBS operator qualifies as a small entity.  S-  R 12. ` ` Home Satellite Dish ("HSD"): The market for HSD service is difficult to quantify.   Indeed, the service itself bears little resemblance to other MVPDs. HSD owners have access to more than   y500 channels of programming placed on Cband satellites by programmers for receipt and distribution by  S -  MVPDs, of which 350 channels are scrambled and approximately 150 are unscrambled.4  {O$-#X\  P6G;P#эAnnual Assessment of the Status of Competition in Markets for the Delivery of Video Programming, CS  {OL%-Docket No. 97141, Fourth Annual Report ("1997 Report"), 13 FCC Rcd 1034 at  68 (1997).4 HSD owners   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"54 ,`(`(88"   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  S-programming; and (3) viewers who receive satellite programming services illegally without subscribing.d {O-#X\  P6G;P#эId. at 69.d  S8-  Q 13. ` ` According to the most recently available information, there are approximately 20 to 25  S-  jprogram packagers nationwide offering packages of scrambled programming to retail consumers.dZ {O -#X\  P6G;P#эId. at 68.d These  S-  .program packagers provide subscriptions to approximately 2,184,470 subscribers nationwide.d {Ot -#X\  P6G;P#эId. at  69.d This is   an average of 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").  S -   14. ` ` Satellite Master Antenna Television ("SMATVs"): Industry sources estimate that  S -  Lapproximately 5200 SMATV operators were providing service as of December 1995.9 ~ {O-#X\  P6G;P#эAnnual Assessment of the Status of Competition in Markets for the Delivery of Video Programming, CS  {O-Docket No. 96133, Third Annual Report ("1996 Report"), 12 FCC Rcd 4358 at 81 (1996).9 Other estimates   =indicate that SMATV operators serve approximately 1.162 million residential subscribers as of June 30,  S -  i1997.~  {O$-#X\  P6G;P#э1997 Report, 13 FCC Rcd at  84.~ The ten largest SMATV operators together pass 848,450 units.r l  {O-#X\  P6G;P#эId. at Appendix D, Table D1.r If we assume that these SMATV   Loperators 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.  Sj-  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).   =The SBA approved definition for cable and other pay services that qualify as a small business is defined  S|-  -in paragraphs 56, supra. A small radiotelephone entity is one with 1500 employees or fewer.f|  yO%-#X\  P6G;P#э13 C.F.R.  121.201.f However,  SV-  for the purposes of this Report and Order on navigation devices, we include only an estimate of LMDS video service providers."06 ,`(`(88"Ԍ S-  ԙ16. ` ` An auction for licenses to operate LMDS systems was recently completed by the   Commission. The vast majority of the LMDS license auction winners were small businesses under the  S-  >SBA's definition of cable and pay television (SIC 4841). {O-#X\  P6G;P#эSee Appendix C (D), supra, for an estimate of the number of entities under SIC 4841. In the Second R&O, &Z {O-#X\  P6G;P#эIn 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  {O<-Policies for Local Multipoint Distribution Service, CC Docket No. 92297, Second Report and Order, Order on  {O-Reconsideration, and Fifth Notice of Proposed Rule Making, 62 FR 23148 (1997) ("Second R&O").  we adopted a small   business definition for entities bidding for LMDS licenses as an entity that, together with affiliates and   controlling principles, has average gross revenues not exceeding $40 million for each of the three preceding years. 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  S-  services. In the IRFA, we assumed that CellularVision was a small business under both the SBA   definition and our auction rules. No commenters addressed the tentative conclusions we reached in the  St-  yNPRM. 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. ` ` Open Video System ("OVS"): The Commission has certified 15 OVS operators. Of these   nine, only two are providing service. On October 17, 1996, Bell Atlantic received approval for its  S -  certification to convert its Dover, New Jersey Video Dialtone ("VDT") system to OVS. H {O-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  S`-  provider on the Dover system, and has begun offering programming on this system using these resources. ` {O-ԍBell 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 operation of OVS  S-  ysystems in Boston and New York, both of which are being used to provide programming.!  {O-ԍSee 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 authorized to provide OVS  S-  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.  S-  19. ` ` Program Producers and Distributors:  The Commission has not developed a definition  S-  of small entities applicable to producers or distributors of television programs."X  yO%-ԍThe term "television programs" is used in this context to include all video programming outlets, e.g., cable, DBS. Therefore, we will utilize"7",`(`(88"  S-  Lthe SBA classifications of Motion Picture and Video Tape Production (SIC 7812),+# yOh-ԍ"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 classified in Industry 7922." Standard Industrial Classification Manual, SIC 7812, Executive Office of the President, Office of Management and Budget (1987) (OMB SIC Manual). + Motion Picture and Video  S-  Tape Distribution (SIC 7822),$Xx yO-ԍ"Establishments primarily engaged in the distribution (rental or sale) of theatrical and nontheatrical motion picture 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 Miscellaneous  S-  /Theatrical Services (SIC 7922).%X yO -ԍ"Establishments primarily engaged in providing live theatrical presentations, such as road companies and summer theaters. . . . Also included in this industry are producers of . . . live television programs." OMB SIC Manual, SIC 7922. 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 and 7822,  S8-  zand $5 million or less in annual receipts for SIC 7922.f&8  yO-ԍ13 C.F.R.  121.201.#x6X@`7 iX@#f The 1992 Bureau of the Census data indicate   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 firms  S-  had $24,999 million or less in annual receipts;'H  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 between 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-  annual receipts and 1013 of these firms had $24,999 million or less in annual receipts;(p yO-ԍSBA 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 firms  S -had less than $5 million in annual receipts.I) p yO0#-ԍSBA 1992 Census Report, SIC 7922.I  S -  20.` ` 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   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"X8),`(`(88Z"   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.  Rb- E.` ` Description of Reporting, Recordkeeping and Other Compliance Requirements (#`  S-  221. ` ` This analysis examines the costs and administrative burdens associated with our rules and   requirements. To the extent expressly relied upon in responding to a program access complaint, the rules   we adopt require program access defendants to attach documents within their control to their answer or  S-  \other responsive pleading permitted by the Commission.C* {O -ԍSee Order at  56.C In addition, the rules we adopt, in certain   situations, require program access complainants and defendants to negotiate in good faith regarding the  SJ -  Lamount of damages based upon a Commissionapproved computation methodology.C+J Z {OD -ԍSee Order at  30.C The Commission   believes, however, that this requirement would not necessitate significant additional costs or skills beyond   those already utilized in the ordinary course of business by MVPDs and program producers and distributors.  R -    F.` ` Steps Taken to Minimize Significant Economic Impact On Small Entities and  RZ-Significant Alternatives Considered (#`  S -  22. ` ` We believe that our amended rules relating to program access will have a positive impact   on small entities. The purpose of the program access provisions is to prohibit unfair or discriminatory   practices in the sale of satellite cable and satellite broadcast programming and increase competition and   0diversity in the multichannel video programming market. Small entities play an important role in   =effectuating this purpose. The rules we adopt will enable small entities to more fairly and expeditiously   obtain programming and compensate such entities, in appropriate circumstances, when such programming is denied or obtained through unfair rates, terms or conditions.   R- G.` ` Report to Congress    Sz-  23. ` ` The Commission will send a copy of the Report and Order, including this FRFA, in a   report to Congress pursuant to the Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C.  S,-  801(a)(1)(A). The Report and Order and this FRFA (or summaries thereof) will also be published in  S-  zthe Federal Register, see 5 U.S.C. 604(b), and will be sent to the Chief Counsel for Advocacy of the Small Business Administration.  "9+,`(`(88"  S-   ` `  hh,Vcc    SEPARATE STATEMENT OF COMM. HAROLD W. FURCHTGOTTROTH  S-$  DISSENTING IN PART  à   X In re: Petition for Rulemaking of Ameritech New Media, Inc., Regarding Development of  S-Competition and Diversity in Video Programming Distribution and Carriage  !Although I support the bulk of this Report & Order and commend the Cable Services Bureau for   its fine work, I disagree with the Commission's decision in Part III.A to impose damages for violations   of the program access rules. I also write to express my view that we possess no clear statutory authority to extend these rules to govern terrestriallydelivered programming.  S -hI.  |In my opinion, damages are neither necessary nor advisable. Moreover, they may undermine   =the Communication Act's statutory caps on forfeiture limits. For these reasons, I would not create such a remedy.  "As an initial matter, I note that a simple finding of liability carries with it a great deal of costs   for the program access violator. The "black mark" on the company's regulatory record affects its dealings   here at the Commission and may also make it a riskier candidate, from the point of view of the capital   markets, for investments and loans. Such a finding also encourages other wouldbe complainants to come   .forward and initiate program access proceedings against the company, in itself another substantial effect on the company.  OThere is no real evidence that the current penalty scheme for program access lacks a sufficient   deterrent effect. Since the passage of the program access statute, the Commission has hardly been overrun   with complaints pursuant to that provision. In fact, over the last 5 years, only 34 program access   complaints have been filed at the Commission, and of that number, in only 3 cases has the Commission   Mruled in favor of the complainant. Accordingly, the Commission has on several occasions declined to   expand the program access rules on the ground that they seemed to be achieving their intended purpose.  S-  See Program Access First Reconsideration, 10 FCC Rcd at 1911; 1996 Video Competition Report, Annual   Assessment of the Status of Competition in Markets for the Delivery of Video Programming, Third Annual  S-  zReport, 12 FCC Rcd. 4358 (1997) at paras. 14964. Subsequent to those decisions, there has been no   discernible upward trend in program access violations that would indicate inadequate deterrents, so today's   movement towards strengthened regulations seems hard to explain on the basis of need. And from a   general perspective, there is no shortage of "leverage," for better or worse, that this Commission can   exercise over regulated entities for violation of our rules and regulations; in the end, we have power over their licenses and thus their livelihoods.  Why damages would as a general matter pose any greater deterrent effect than forfeitures, which  St#-  .we are clearly authorized by statute to impose, is also unanswered by the record before us. As a matter   of fact, the Commission has never exercised its forfeiture power; it is thus hard to see how we could know   such a penalty to be ineffective. I do not think it makes for good public policy for the Commission to   Lgo out of its way to create an entirely new set of regulations on industry without a showing that existing   rules are not working. Taxpayers should not fund, and private companies should not expend resources"&:+,`(`(88n("   Lcommenting on, rulemakings that produce regulations that are not clearly necessary. Unfortunately, this   kitem increases the layers of regulation to which certain multichannel video programming providers are subject without the antecedent conclusion that the underlying rules are inadequate to the task at hand.  OThe creation of a damages remedy is also inadvisable as a practical matter. Much of the point   =of this item is to expedite the adjudication of program access complaints. But a bifurcated proceeding in   which we must determine damages will only prolong and complicate these adjudications. I fear that the   Cable Services Bureau will expend as much, if not more time, assessing damages in these cases as on the   basic question of liability. How does one determine what position a programmer would have occupied   if they had had access to certain programming? How many more subscribers would they have gained,   how much more could they have earned in advertising revenue? The difficulty that we will have in   defining these essentially speculative issues (not to mention the production and review of the mountain   of documents theoretically relevant documents) is almost certain to bog down the process. In this regard,   it is telling that even in this item the Commission is unable to define with any precision the outlines for   calculating damages for program access violations. And to the extent the Commission sidesteps this   problem by moving toward "standardized" damages, as some have suggested, then we would simply be replicating forfeitures under another name.  Finally, I find it relevant that the imposition of unlimited damages may be an endrun around the   kstatutory caps on forfeitures contained in sections 503(b)(2)(A) and (C) of the Communications Act.   Those sections provide that forfeitures against cable television operators "shall not exceed $25,000 for   each violation or each day of a continuing violation, except that the amount assessed for any continuing   violation shall not exceed a total of $250,000 for any single act" and that in any other case, such as one   involving a vertically integrated programmer, "the amount of any forfeiture penalty . . . shall not exceed   L$10,000 for each violation or each day of a continuing violation, except that the amount assessed for any   continuing violation shall not exceed a total of $75,000 for any single act." These sections thus express a clear Congressional intent to limit the monetary liability of regulated entities.  @If the Commission is creating a damages remedy merely to avoid these limits on liability, I am   unsure about the legal propriety of such an approach. The real problem here seems not that forfeitures  SP-  /per se are ineffective but that the limits on forfeiture amounts are, in the eyes of those who advocate  S*-  kdamages, too low. See Reply Comments of Ameritech at 16 ("The incentive for violating the rules is   even greater in light of the woefully inadequate statutory caps on forfeitures for cable operators and   {affiliated programmers. Ameritech . . . [believes] that the statutory maximum for violations of the   Commission's rules by cable companies $250,000 is far too low to deter anticompetitive behavior   by incumbent cable operators. Moreover, the statutory cap on forfeitures for vertically integrated   programmers is only $75,000. These amounts are incredibly low when compared to the sizable economic   benefits realized by incumbents when they violate the rules."). But if that is the case, the answer lies   with Congress, which has the power to revise these limits. In fact, that is precisely what Congress has   Ndone in the common carrier context, raising the forfeiture limit for those entities to an aggregate of   ?$100,000,000. If Congress wanted to raise the limits for cable operators and vertically integrated   programmers too, they surely could do so. They have not amended those limits, however, and we should not take backdoor measures to undermine them.  In closing, I would observe that the most important thing in program access proceedings as in   all other Commission proceedings is a timely resolution of complaints. For that reason, I am pleased   that we have established clear time limits for program access proceedings. If we do not make accurate"&;+,`(`(88n("   but prompt findings in these reviews, regulated industries will simply find private mechanisms for resolving compensation questions and bypass the administrative process altogether. fII.  As I noted in the Notice of Proposed Rulemaking in this proceeding, 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." I have not been   persuaded by those who urge us to extend our regulations to cover terrestriallydelivered programming that the import of this plain language can be overcome.  Accordingly, while I agree entirely with the rationale given in the item for declining to extend  S -  program access rules to terrestriallydelivered programming, i.e., that the issue appears to be a nonproblem   at this point in time, I also believe that we lack statutory authority to make such rules in any event.   Congress, rather than this Commission, is the appropriate governmental entity to redress any competitive  S -  =issues that may exist with respect to programming that is not transmitted (or retransmitted) by satellite.   In fact, legislation was recently introduced by Congressmen Tauzin and Markey that would extend the   program access rules to govern terrestriallydelivered programming. To my mind, the introduction of this   legislation is a further indication that current statute does not cover such programming. We should, at the very least, stay our hand while Congress debates the matter.  "<+,`(`(88V"  l $SEPARATE STATEMENT OF lU COMMISSIONER MICHAEL POWELL lU  S-Re:X In re: Petition for Rulemaking of Ameritech New Media, Inc., Regarding Development of  S-Competition and Diversity in Video Programming Distribution and Carriage, CS Docket No.  S-97248, RM No. 9097(#   Among the many responsibilities Congress gave the FCC in the 1992 Cable Act, is a duty to   Limplement the program access provisions of Section 628 of the Communications Act. After six years of   !experience with program access complaints we have decided that some changes are needed to our   program. The changes we implement today are intended to speed our handling of these complaints and   put some additional teeth into the program. I am pleased to support these changes because I believe they are necessary and appropriate to implement the will of the Congress.  OI write separately to emphasize one point. We make clear in this item that we intend to make   greater use of our forfeiture authority to address program access violations. I believe that this authority   should be our first line of defense to curb program access abuses. Our authority to impose such   jforfeitures is clear and, unlike damages, the imposition of a forfeiture does not require a lengthy, resource   intensive proceeding. Forfeitures are most likely to provide an efficient and effective deterrent. If the   -amounts permitted under the forfeiture provisions prove to be an inadequate deterrent to unlawful conduct,   yI would urge Congress to consider raising those caps to more serious levels as needed. It is my hope that   we will use our forfeiture authority as our primary tool of enforcement and only resort to damages proceedings in the most extreme of cases.  X-#Xj\  P6G; 9XP#