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Before the
               Federal Communications Commission
                     Washington, D.C. 20554



In the Matter of:

Paxson Communications Corporation

v.

DirecTV

Requests for Mandatory Carriage 
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             CSR-5731-M



                  MEMORANDUM OPINION AND ORDER

   Adopted:  January 11, 2002           Released:  January 14, 2002

By the Deputy Chief, Cable Services Bureau:

     I.   introduction
1.     Paxson Communications Corporation ("Paxson"), licensee of several full power commercial
television stations filed the above-captioned must carry complaint against DirecTV, pursuant to Section 338
of the Communications Act of 1934, as amended (the "Act"), and Section 76.66 of the Commission's rules,
for its refusal to carry Paxson's television broadcast signals on its satellite system.  Paxson states that
DirecTV is providing "local-into-local" satellite service in the 31 designated market areas ("DMAs") where
the stations operate, pursuant to the statutory copyright license.  In its complaint, Paxson alleges that DirecTV
has refused to meet its must carry obligations under the Commission's satellite broadcast signal carriage rules. 
DirecTV filed an opposition to the complaint and Paxson filed a reply.   
II.         BACKGROUND 
2.     Section 338 of the Act, adopted as part of the Satellite Home Viewer Improvement Act of 1999
("SHVIA"), requires satellite carriers, by January 1, 2002, to carry upon request all local television broadcast
stations' signals in local markets in which the satellite carrier carries at least one local television broadcast
signal pursuant to the statutory copyright license. A station's market for satellite carriage purposes is its
DMA, as defined by Nielsen Media Research.  In November 2000, the Commission adopted rules to
implement the provisions contained in Section 338.  For the initial election cycle, broadcast stations were
required to notify satellite carriers by July 1, 2001, of their mandatory carriage election for carriage to
commence by January 1, 2002. 
3.     Whenever a local television broadcast station believes that a satellite carrier has failed to meet its
obligations under Section 338 of the Act or our implementing regulations, such station shall first notify the
carrier, in writing, of the alleged failure and identify its reasons for believing that the satellite carrier failed to
comply with such obligations.  Within 30 days after such written notification, the satellite carrier must
respond in writing and comply with its obligations or state its reasons for believing that it is already doing so. 
If Commission action is needed, as Paxson alleges here, a broadcast station may file a complaint with the
Commission within 60 days after the satellite carrier submits a final rejection of the station's carriage request. 
If a satellite carrier provides no response to a must carry election, the 60 day period commences after the time
for responding as required by the rule has elapsed. 
1    positions and DISCUSSION
2.     DirecTV seeks summary dismissal of Paxson's Complaint on jurisdictional grounds, arguing that
the exclusive remedy for the failure of a satellite carrier to meet its carriage obligations under Section 338(a)(1)
of the Communications Act is a civil action in federal district court.  We note that this argument was
previously considered and rejected by the Commission.  We have the authority to reach and decide the
substance of Paxson's complaint.  
3.     Paxson asserts that all of its stations are entitled to carriage under the Act and the Commission's
rules.  First, Paxson asserts that DirecTV provides local-into-local service in the DMAs in which it has
stations; therefore the satellite carrier shall carry upon request the signals of all television broadcast stations,
including its own, located within those local markets.  Second, Paxson asserts that its stations fit the definition
of "television broadcast stations" under the Act, and therefore, are entitled to carriage.  Third, Paxson asserts
that the stations are capable of delivering a good quality signal to DirecTV's local receive facilities in
accordance with the Act and the Commission's rules.  Paxson asserts that it duly requested carriage for the
stations in accordance with the Commission's rules.
4.     To ensure that its stations could enforce must carry rights against DirecTV, Paxson sent a letter,
on June 22, 2001, formally electing mandatory carriage.  Paxson states that on June 29, 2001, DirecTV
responded to the election letter and denied its requests.  Paxson states that although it would prefer to resolve
this matter through the completion and execution of a mutually acceptable carriage agreement, the
Commission's rules impose a strict 60 day deadline for filing complaints against satellite operators that deny
a broadcaster's carriage election.  Paxson asserts that it has timely filed its complaint with the Commission on
August 28, 2001.  Paxson adds that had it not elected must carry in June 2001, it would have risked losing
its must carry rights until January 1, 2006, an event which would have given DirecTV the incentive to prevent
the execution of a mutually acceptable Definitive Agreement.
5.     DirecTV does not address, at this juncture, whether Paxson's stations are qualified for carriage
under the Act and the Commission's rules.   Rather, DirecTV asserts that Paxson cannot request mandatory
carriage because it has obtained carriage for its stations through retransmission consent.  DirecTV asserts
that the retransmission consent agreement, which does not expire until 2005, does not permit Paxson to seek
mandatory carriage during the term of the agreement.  DirecTV cites to an April 27, 2000 letter agreement
between the parties, which states, in part:
     Paxson will provide DIRECTV with retransmission consent, at zero cost, for the analog and
     Primary Digital Channel Equivalent. . . .of all PAX TV television stations (now or hereafter
     acquired) for so long as DIRECTV distributes the national PAX TV feed, with no carriage
     obligation for the analog and Primary Digital Channel Equivalent of any such station. 
     DIRECTV may elect to carry any or all PAX TV stations, but shall in no event be required
     to do so.  Such retransmission consent will not include any must carry/retransmission consent
     obligations relating to the digital signals of such PAX TV television stations comprising the
     Multicast Digital Channels.
DirecTV states that it properly denied Paxson's request for carriage because the broadcaster cannot avail itself
of the rights and remedies of Section 338 when it has chosen retransmission consent.
6.     Paxson acknowledges that it executed a letter agreement with DirecTV that sets forth the "basic
terms" regarding, among other things, DirecTV's carriage of PAX TV programming.  According to Paxson,
the agreement expressly provides that the parties would negotiate and attempt to enter into a "Definitive
Agreement" that would include the basic terms set forth in the letter agreement and such other terms and
conditions customarily found in similar agreements.  Paxson explains that the letter agreement provides that,
if the parties have not entered into the Definitive Agreement by May 30, 2000, either party could terminate the
letter agreement "with no obligations."  Paxson asserts that the Definitive Agreement expressly required by
the letter agreement was not signed by the May 30, 2000 deadline.  Paxson asserts that the only explicit
language in the record granting DirecTV retransmission consent is found in the draft retransmission consent
agreement, and that document remains the subject of negotiations.  Paxson argues that the letter agreement
obligated the parties to negotiate a long term carriage arrangement, but it certainly cannot be considered a valid
election of retransmission consent under the Act and the Commission's rules.  Moreover, Paxson states that
it never agreed to waive its right to assert mandatory carriage in any of its draft agreements with DirecTV.
Paxson states that the discussions between itself and DirecTV essentially concern not the retransmission of the
stations' signals, but the carriage of the PAX TV non-broadcast programming service.  Paxson additionally
argues that it could not have elected retransmission consent through its letter agreement because the
Commission had, at that point in time, not yet adopted election rules or mandatory carriage rules in general.
7.     The question presented is whether Paxson validly elected retransmission consent or mandatory
carriage for the first election and carriage cycle.  In the context of satellite carriage of local broadcast stations,
in contrast to cable carriage, in the absence of any election, the station is deemed to have elected retransmission
consent. Thus, had Paxson not elected must carry by the July 1, 2001 deadline established in our rules, it
would have defaulted to retransmission consent as the only option to gain carriage on DirecTV's satellite
system.  Failing to elect must carry would have left Paxson in the precarious position of losing its right to
assert mandatory carriage had DirecTV terminated the Letter Agreement.  Based on the evidence and the law,
we find that Paxson validly elected mandatory carriage for the stations subject to this complaint.  Whether
Paxson has a binding carriage agreement with respect to its non-broadcast PAX TV programming service is
beyond the scope of this proceeding and the Commission's broadcast carriage rules, but we do find, as
discussed below, that Paxson granted permission for retransmission of its broadcast stations if DirecTV chose
to carry them from the date the Letter Agreement was signed until it was terminated.
8.     Based on the information presented to us, the April 27, 2000 letter agreement appears to be a grant
of Paxson's consent to DirecTV's voluntary retransmission of the signals of its broadcast stations for the term
of the Letter Agreement or until terminated by one or the other of the parties, whichever event first occurs. 
At the time the Letter Agreement was signed, the SHVIA provided that, beginning May 29, 2000, satellite
carriers would not be permitted to carry local-into-local broadcast stations without the station's retransmission
consent.  At that time, the procedures for stations to elect between mandatory carriage and retransmission
consent were not in effect.  Thus, in the context of the time in which this Letter Agreement was made, the
choice was not between asserting mandatory carriage or retransmission consent, but rather between granting
or denying a satellite carrier the right to carry the station's signal.  It appears that Paxson and DirecTV never
finalized a long-term retransmission consent agreement.  Although the April 27, 2000 letter can be considered
an interim consent for retransmission, we believe that it does not constitute an irrevocable election of
retransmission consent in lieu of must carry.  Before the July 1, 2001 deadline for carriage elections, Paxson
followed the Commission's carriage election procedures and made its election request for mandatory carriage. 
Therefore, in light of the specific facts and circumstances of this matter, we believe that it is appropriate to
conclude that Paxson properly elected mandatory carriage for the stations that are the subject of this proceeding
by the July 1, 2001 deadline.
9.     Based on the evidence in the record, we do not believe that Paxson had waived its right to
mandatory carriage by virtue of granting retransmission consent on an interim, temporary basis prior to the
establishment of the procedures for mandatory carriage and the establishment of an election cycle. We note
that disputes as to the terms of the private Letter Agreement between the parties would  generally be a private
contractual matter for the parties or the courts to resolve.  Our review of the Letter Agreement herein is limited
to the necessary determination that although retransmission consent was granted, the Letter Agreement does
not appear to constitute an election of retransmission consent over mandatory carriage for purposes of the
Commission's rules. 
10.    Effective with the release of this Order, Paxson's stations are entitled to mandatory carriage unless
DirecTV provides specific evidence that one or more of the stations is not entitled to mandatory carriage due
to any of the statutory reasons for which DirecTV has reserved its arguments. We recognize that DirecTV
requires some period of time to make the necessary technical arrangements to commence carriage of each of
these stations.  Therefore, DirecTV must commence carriage of Paxson's stations within sixty (60) days of the
release of this Order or explain in writing to Paxson, within fifteen (15) business days from the date of the
release of this Order, why it refuses to carry any of the stations.  This writing must specify DirecTV's
reasonable basis for believing a particular station is not entitled to immediate mandatory carriage.  If Paxson
disagrees with DirecTV's assertions, it must so state in writing to DirecTV within seven (7) business days of
receiving the satellite carrier's rejection letter.  If Paxson so states its disagreement, and DirecTV fails to agree
to carry the station in question within seven (7) business days of receipt of Paxson's letter, Paxson may file
a new carriage complaint with the Commission within seven (7) business days of receipt of DirecTV's refusal. 
While we believe it was incumbent upon DirecTV to raise all of its affirmative defenses to carriage in its
Opposition, including the duplication defense and the signal quality defense, we recognize that it declined to
do so because it did not believe it was necessary given its contractual claim and defense.  In this circumstance,
at the beginning of new carriage requirements with untested procedures and issues, we will permit DirecTV
to argue these defenses provided they are raised and substantiated promptly, as provided in this Order.  Such
a piecemeal approach will not normally be permitted in the future.
11.    We further note that, with respect to stations carried pursuant to mandatory carriage, the parties
may not make any agreements inconsistent with the statute or our rules concerning mandatory carriage. 
12.    DirecTV also argues that Paxson has failed to negotiate in good faith the terms of a definitive
agreement for retransmission consent as contemplated by the current agreement that is in place.  Paxson
counters that DirecTV cannot use the Commission's good faith rules as an affirmative defense in broadcast
signal carriage disputes brought before the Commission.  Given our decision above, we find it is not necessary
to rule on DirecTV's good faith argument in this proceeding. In light of Paxson's election of must carry, it
cannot be heard to object to carriage of any or all of its broadcast stations listed herein for the duration of this
election cycle on the grounds that it has not granted retransmission consent. Thus DirecTV's argument that
Paxson has not engaged in good faith retransmission consent negotiations is mooted by Paxson's election and
our decision.
     XIII.     ORDERING CLAUSES
14.    Accordingly, IT IS ORDERED, pursuant to Section 338 of the Communications Act, as
amended, 47 U.S.C.  338, and Section 76.66 of the Commission's rules, 47 C.F.R.  76.66, that the must
carry complaint filed by Paxson Communications Corporation against DirecTV IS GRANTED to the extent
indicated herein.    
15.    IT IS FURTHER ORDERED that DirecTV, Inc. IS ORDERED to commence carriage of
WPXN-TV (New York, NY); KPXN-TV (San Bernardino, CA); WCPX-TV (Chicago, IL); WPPX-TV
(Wilmington, DE); KKPX-TV (San Jose, CA); WPXB-TV (Merrimack, NH); WBPX-TV (Boston, MA);
WPXG-TV (Concord, NH); WDPX-TV (Vineyard Haven MA); KPXD-TV (Arlington, TX); WPXW-TV
(Manassas, VA); WWPX (Martinsburg, WV); WPXD-TV (Ann Arbor, MI); WPXA-TV (Rome, GA); KPXB
(Conroe, TX); KWPX-TV (Bellevue, WA); KPXM-TV (St. Cloud, MN); WXPX-TV (Bradenton, FL);
WVPX-TV (Akron, OH); WPXM-TV (Miami, FL); KPPX-TV (Tolleson, AZ); KPXC-TV (Denver, CO);
KSPX-TV (Sacramento, CA); WOPX-TV (Melbourne, FL); KPXG-TV (Salem, OR); WIPX-TV
(Bloomington, IN); WFPX-TV (Fayetteville, NC); WRPX-TV (Rocky Mount, NC); KPXE-TV (Kansas City,
MO); WNPX-TV (Cookeville, TN); WPXE-TV (Kenosha, WI); KUPX-TV (Provo, UT); KPXL-TV (Uvalde,
TX); WPXH-TV (Gadsden, AL); WPXP-TV (Lake Worth, FL); and WGPX-TV (Burlington, NC) within sixty
(60) days of the release date of this Order unless DirecTV, Inc. provides Paxson Communications Corporation
with specific reasons for refusing to carry any of these stations and the reasonable bases therefor within fifteen
(15) business days of the release date of this Order, and subsequent actions are taken as provided herein.
16.    This action is taken by the Deputy Chief, Cable Services Bureau, pursuant to authority delegated
by Section 0.321 of the Commission's rules, 47 C.F.R.  0.321.

                              FEDERAL COMMUNICATIONS COMMISSION


                              William H. Johnson                 
                                   Deputy Chief, Cable Services Bureau