WPCrS 2M BR ZCG Times Roman#|w}Xw PE37XPHP LaserJet 4SiHPLAS4SI.PRSXw P7\F WXP|D8D\dDXdXdXDdd88d8ddddDL8ddddX`(`lD4l\DDD4DDDDDDDDd8XXXXXX|X|X|X|XD8D8D8D8ddddddddddXdbdddpdXXXXXlX~|X|X|X|XdddldldD8DdDDDdplld|8|P|D|D|8dvddddDDDpLpLpLpl|T|8|\ddddddl|X|X|Xd|DdpL|Dd~4ddC$CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxH\dDXddddd8@d<@d<DDXXdDDxddzHxxHvppDXd<"dxtldpxxdCG TimesCG Times BoldHPLAS4SI.PRSXj\  P6G;\F WXP2 Z#|\HP LaserJet IIIHPLASIII.PRSXw P7,\,OuXP  ЊX01Í ÍX81Í Í2vpZkk5a8DocumentgDocument Style StyleXX` `  ` a4DocumentgDocument Style Style . a6DocumentgDocument Style Style GX  a5DocumentgDocument Style Style }X(# 2vwtaa2DocumentgDocument Style Style<o   ?  A.  a7DocumentgDocument Style StyleyXX` ` (#` BibliogrphyBibliography:X (# a1Right ParRight-Aligned Paragraph Numbers:`S@ I.  X(# 2 -  w # a2Right ParRight-Aligned Paragraph Numbers C @` A. ` ` (#` a3DocumentgDocument Style Style B b  ?  1.  a3Right ParRight-Aligned Paragraph Numbers L! ` ` @P 1. ` `  (# a4Right ParRight-Aligned Paragraph Numbers Uj` `  @ a. ` (# 2:    aa5Right ParRight-Aligned Paragraph Numbers _o` `  @h(1)  hh#(#h a6Right ParRight-Aligned Paragraph Numbersh` `  hh#@$(a) hh#((# a7Right ParRight-Aligned Paragraph NumberspfJ` `  hh#(@*i) (h-(# a8Right ParRight-Aligned Paragraph NumbersyW"3!` `  hh#(-@p/a) -pp2(#p 2l+8cca1DocumentgDocument Style StyleXqq   l ^) I. ׃  Doc InitInitialize Document Style  0*0*  I. A. 1. a.(1)(a) i) a) I. 1. A. a.(1)(a) i) a)DocumentgTech InitInitialize Technical Style. k I. A. 1. a.(1)(a) i) a) 1 .1 .1 .1 .1 .1 .1 .1 Technicala5TechnicalTechnical Document Style)WD (1) . 2Qa6TechnicalTechnical Document Style)D (a) . a2TechnicalTechnical Document Style<6  ?  A.   a3TechnicalTechnical Document Style9Wg  2  1.   a4TechnicalTechnical Document Style8bv{ 2  a.   2a1TechnicalTechnical Document StyleF!<  ?  I.   a7TechnicalTechnical Document Style(@D i) . a8TechnicalTechnical Document Style(D a) . PleadingHeader for numbered pleading paperP@n   $] X X` hp x (#%'0*,.8135@8:><q*"xxxxWWxxxWWkkxxxSf B~"zMFb",tB^ f ^;C]ddCCCdCCCCddddddddddCCdxN`xoCCCddCdoYoYFdo8Co8odooYNCodddYdddd4dddddCddddddddo8dddddYYYYYN8N8N8N8oddddooooddpddddxodddXXddXddXdddddooL8doddNorddo8PdN8ppoddXXdpLoNpLodPDdopoopodXYXodoodddCddCCCWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNdddCdUUddddddFddddFCCssd44ddzzddd~ooCsdF"dsd9dCCzCddoddCdYds`zUvdddCCCCzozoYNYYYN8YooYdYzzdzddYYzozzzNdzYzzzzCCdddddddzCzdYC\   pxtll\tll@\@\`L"i~'K2^$(8<><q*"xxxxWWxxxWWkkxxxv4| Y ԍContra Joint Comments of National League of Cities, et al., CS Docket No. 9646, at 4650 (filed Apr. 1, 1996); Comments of New York State Department of Public Service, CS Docket No. 9646, at 6 (filed Apr. 1, 1996). As Viacom advised in its original comments, however, a video service provider's decision to transform itself into an OVS operator should not be deemed grounds for abrogating private contracts, such as current licensing agreements between programmers and cable operators. Viacom Comments at 7, n.12.> The policy goal of two-wire competition would not be advanced, however, if a local cable operator were permitted to use up scarce channel capacity on an Open Video  Y System. r | Y= ԍViacom Comments at 10 (citing Congressional policy underlying the 1996 Act's prohibition on telco/cable buyouts and joint ventures). Rather, the Commission itself should bar an incumbent cable operator from  Y taking capacity on a competing LEC's Open Video System,r | Y ԍAccord Joint LEC Comments at 1516; U S WEST Comments at 1213.r at least in cases where  Y demand for analog capacity exceeds supply. | Y, ԍThe same rule should apply where a cable operator opts to proceed under the OVS rules and the local LEC attempts to become a packager on that OVS facility. This issue could be revisited once digital capacity offers subscriber access generally comparable to that of analog and thereby renders the local cable operator's presence on an Open Video System less of an impediment to competition.4W0*&&33Ԍ X ٙ IV.The Record Supports Granting OVS Operators Limited Discretion In Structuring Carriage Rates, Terms, And Conditions That Do Not Discriminate In Favor Of The  X OVS-Affiliated Packager   The record supports Viacom's call for allowing OVS operators limited discretion in establishing rates, terms, and conditions for carriage on Open Video Systems. Specifically, Viacom reiterates its support for an approach, suggested in the Notice, that would require an OVS operator to apply to unaffiliated program packagers the same rate structure that it offers  Y (or could be fairly imputed) to its OVS-affiliated packager.i | YN ԍAs Viacom and others have made plain, any FCCrequired disclosure of the carriage rates OVS operators charge packagers need not, and should not, spill into the separate domain of licensing agreements between OVS packagers and individual programmers. See, e.g., Viacom Comments at 14; HBO Comments at 22.i For example, a distinction between the rates charged for analog and digital capacity would not be justified to the extent such a distinction was unfairly employed to effectively reserve analog capacity to an affiliated (or other favored) packager and to relegate disfavored packagers to less desirable digital  Y channels.M4| Y ԍCf. HBO Comments at 2021.M   X  V.XThe Record Strongly Confirms The Primacy Of Programmers'(# Control Over Licensing In The Structuring Of Channel  X Sharing And Other OVS Licensing Arrangements  The record compellingly supports the Commission's proposed predicate for OVS channel sharing: any program packager who wants to offer a program service carried on a  Y  shared channel "must first obtain permission from the program service to do so." | Y% ԍNotice at  41. See, e.g., HBO Comments at 2324; MPAA Comments at 67.  0*&&33 Accordingly, the Commission should expressly reject any suggestion that an OVS operator may have broader authority to deny programmers any rights they may otherwise have "to  Y license or not license" their program services to one or more packagers.E| Y ԍNotice at  41.E Neither channel sharing nor any other elements of the OVS operator's "network administrator" role should be leveraged to advance the OVS-affiliated packager's efforts to extract an unreasonable license for an unaffiliated program service either directly from the programmer or through a competing packager that the programmer has licensed. Thus, the Commission must reject the suggestion that an OVS operator may deny unaffiliated packagers carriage where such packagers are licensed to carry program services for which the OVS-affiliated packager (or any other packager) has not obtained a license on terms to its  Y4 liking.L4y| Y^ ԍSee NYNEX Comments at 12.L Not only does this suggestion lack any statutory basis, but it would also flout the Act's prohibition against discrimination in favor of affiliated packagers and would undermine packager differentiation that would well serve the consumer's interest and the quest for intra-system competition. The record also contains other explicit or implicit suggestions regarding application of program access rules to Open Video Systems that likewise lack any statutory basis and, indeed, contravene the specific limits of the express statutory authority for program access  Y rules.Y*| Y$ ԍSee, e.g., NYNEX Comments at 21.Y In particular, there is no statutory authority whatsoever for extending program0*&&33 access rules to apply either, first, to terrestriallydelivered program services or, second, to any program service in which an OVS packager that is neither a LEC nor a cable operator has an interest.   X_  VI.XThe Record Demonstrates That Non-Discriminatory Navigational(# Devices Are Critical To Supporting Intra-System Competition On Open Video Systems   Commenters have shown that OVS menus and navigational devices must function in a non-discriminatory manner if the service is ever to deliver on its promise for genuine intra-  Y system competition.p | Y  ԍSee, e.g., HBO Comments at 1316; MPAA Comments at 56.p The Commission's OVS safeguards should thus ensure a non-discriminatory interface between the subscriber and all packagers offering program services on the Open Video System, permitting subscribers to access both affiliated and  Y unaffiliated program packagers with comparable ease.My| YG ԍSee HBO Comments at 1416.M The 1996 Act's clear mandate in this regard cannot be reconciled with the suggestion of some commenters that an OVS operator may circumvent its non-discrimination obligation by simply offering subscribers a navigational device that works only within the operator's affiliated package. The Commission need not preclude an OVS operator's reasonable discretion in arranging the presentation of the programming choices carried within its affiliated package. Congress was explicit, however, in prohibiting the OVS operator from  *0*&&33 excluding unaffiliated packagers from any navigational device the operator employs with its  Y system.H| YK ԍViacom explained previously how the Act's OVS framework clearly reflects a congressional vision of a single settop box (if any) or, at a minimum, the absence of any technological obstacle to OVS subscribers gaining access to all packagers' offerings on an OVS system. See Viacom at 17. At the same time, Viacom concurs with other commenters' concern that OVS operators not be allowed freely to remove or otherwise alter information carried in the vertical blanking interval of a broadcast signal that might be used for navigational devices that subscribers acquire independently. See Comments of the National Association of Broadcasters, CS Docket No. 9646, at 15 (filed Apr. 1, 1996).   Y G2 CONCLUSION ׃ Viacom respectfully urges the Commission to adopt the foregoing proposals so that unaffiliated program packagers can enjoy fair access to, and non-discriminatory treatment on, OVS facilities, while LECs enjoy sufficient flexibility to create and design Open Video Systems that can vigorously compete in the marketplace.   Respectfully submitted, VIACOM INC. By:____________________________  ( Lawrence W. Secrest, III Peter D. Ross Rosemary C. Harold WILEY, REIN & FIELDING 1776 K Street, N.W. Washington, D.C. 20006 (202) 429-7000  WO Its Attorneys  ( April 11, 1996