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À ?        ? ? ?      ?    8?       ? ? ~  ?  ? ?  ? ?  ?    ?  ? ??  ?   ?   ? ??  ?   ?  ? ? ? ? ? ? ? ? ?  ? ?   ?   ?   ?  ?  ? ?? ? ? ??? ~?   ? ? ? ?? ? ??  ? ? ??  ?  ?  ?À? ? ?? ?? ?? ? ? ? ?? ?? ??? ? ?? ?? ? ? ?? ? ?? ??  ??  ???  ?  ?  ? ?? ??  ?  ?  >?  ?  ?? - ?: 9 4ǀ? ?4 4 4? 4 4 4 4 5? 5 4 ?4 ?4 5 5 5 ?1? ?1 ?1 ?1 ?0 1x 1 / /? ?/π / / / .? ??.? ?. <. - - - --,,?,,-?----?+?* ??* ?+,>,,,?,?,?,--.?.?.?.%?À%%%%%%?%%?%?%?%&&'''?'?'?''?'())))x)?)?)?))*+++ǀX? π? ? ??? ##?&#&#? %#0%#x?%#?x%#?|%#?%#?%#?%#?%#%#%#%# ?%# $# ?$#?$# $# ?$# $#$#$#$#$#$#$#$###??####?##?##?#$ ?#$'$?'$'*'*'+'++XC Y0   '|= X0  ` $A#K2pPG;#News media Information 202 / 4180500 `$@Recorded listing of release and texts `R!$202 / 4182222  L50#&h2pPG;&#Federal Communications Commission 1919 M Street, N.W. Washington, D. C. 20554  #^2pPG;#y: m dddy  M8`#^2pPG;##,92pPG;3,#This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).  y:  dddhy  M8` U 1  1  Figure 1  Figure 1 y!HH@Uddfcclogo.wpgHHy! Xz ddK8{ H#S2pPG;#NEWSľ' X   #Xw PE37|XP#Report No. CS 9814 FCABLE SERVICES ACTION&  X August 6, 1998  X0u~ COMMISSION REVISES PROGRAM ACCESS ENFORCEMENT PROCESS Ja(CS DOCKET NO. 97248) d The Commission has adopted an order revising its program access rules. The revised rules will further the Commission's goal of increasing competition in the market for multichannel video programming by improving access to programming for all providers. In enacting the program access provisions of the 1992 Cable Act, Congress expressed its concern that potential competitors to incumbent cable operators were unable to gain access to the programming needed to provide a viable and competitive multichannel alternative to cable. These provisions prohibit unfair and discriminatory practices in the sale of satellite cable and satellite broadcast programming and prohibit or limit the types of exclusive programming contracts that may be entered into between cable operators and verticallyintegrated programming vendors.  Y0 Key elements of this order include:  Yb0XTime Limits for the Resolution of Program Access Disputes. 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  Y0of the complaint to the Commission. The order also concludes that the adoption of time limits makes it necessary to institute a more streamlined 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.(#  YN0XSanctions for Program Access Violations.  The order finds 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. The Commission intends to make greater use of this authority to sanction unlawful conduct.(# X(# XThe order also affirms the Commission's statutory authority to impose damages for program access violations and finds that establishing rules for damages at this time is an appropriate next step in the implementation of our program access rules. The Commission believes that the ability to impose damages will promote competition by"#,D%D% ""  %EF  %EF providing additional incentives for verticallyintegrated programmers to avoid program access violations, while compensating those entities injured by willful program 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 may  Y0be awarded. The order concludes that punitive damages should not be imposed in program access cases at this time.(#  YH0XDiscovery Rights. The order affirms that the current system of Commissioncontrolled discovery be retained. The Order finds that discovery asofright, or expanded discovery, would not improve the quality or efficiency of the Commission's resolution of program access complaints. The Commission has determined that it would be useful to adopt a procedure whereby defendants are required to attach certain documents to their pleadings similar to that adopted in the common carrier  Y 0Formal Complaint Order. The order clarifies Commission rules to provide that, to  Y 0the extent that a defendant references and relies upon a document or documents within its control in defending a program access claim, the defendant must attach that document or documents to its answer. The order also adopts a standardized protective order.(#  Y60XBuying Groups. The Commission has previously determined that members of buying groups must agree to joint and several liability for commitment of the group. The order 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 protected from excessive financial risk. The order provides that, in lieu of joint and several liability, buying groups may maintain liquid cash or credit reserves equal to cover the cost of one month's programming for all of the buying groups members.(#  Yg0XTerrestrial Delivery of Programming. The Commission believes that generalized action, such as the adoption of rules governing the moving of programming from satellite to terrestrial delivery is not appropriate at this time. The order also acknowledges that Congress has introduced legislation which, if enacted, would clarify the Commission's jurisdiction related to this issue. The order provides that the Commission will continue to monitor this issue and its impact on competition in the video marketplace.(# Action by the Commission, August 6, 1998, by Order (FCC 98189). Chairman Kennard, Commissioners Ness, Powell, FurchtgottRoth and Tristani with Commissioner Powell issuing a statement and Commissioner FurtchgottRoth dissenting in part and issuing a statement. FCC News Media Contact: Morgan Broman at (202) 4182358 Cable Services Bureau Contacts: Steve Broeckaert and Deborah Klein at (202) 4187200  Y)0TTY: (202) 4187172"),**("Ԍ X0#Xxjp P7 SXP## Xxjp P7 SXP## Xm2PG; XP## x6X@`7X@##Xj\  P6G;ynXP# ` `  ,hh^pp&   XAugust 6, 1998 SEPARATE STATEMENT OF COMM. HAROLD W. FURCHTGOTT ROTH  X0J  DISSENTING IN PART  à  X0 In re: Petition for Rulemaking of Ameritech New Media, Inc., Regarding Development  Xv0of Competition and Diversity in Video Programming Distribution and Carriage Although I support the bulk of this Report & Order and commend the Cable Services  X10Bureau 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.  X 0uIn 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. There 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 ruled in favor of the complainant. Accordingly, the Commission has on several occasions declined to expand the program access rules on the  X70ground that they seemed to be achieving their intended purpose. See Program Access First  X"0Reconsideration, 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  X0Report, 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  X@&0forfeitures, which 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 go 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 commenting on, rulemakings that produce regulations that are not clearly necessary. Unfortunately, this item 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. The 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 statutory 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 $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  X0seems not that forfeitures per se are ineffective but that the limits on forfeiture amounts are,  X 0in the eyes of those who advocate damages, 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 done 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 but prompt findings in these reviews, regulated industries will simply find private mechanisms for resolving compensation questions and bypass the administrative process altogether. II. 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  X0extend 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 issues that may exist with respect to  X0programming 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. "),**("Ԍ XX #Xj\  P6G;ynXP#` `  ,hh^ppAugust 6, 1998    ASEPARATE STATEMENT OF dK COMMISSIONER MICHAEL POWELL d  Xv0Re:X In re: Petition for Rulemaking of Ameritech New Media, Inc., Regarding Development of Competition and Diversity in Video Programming Distribution and  XJ0Carriage, CS Docket No. 97248, RM No. 9097(# Among the many responsibilities Congress gave the FCC in the 1992 Cable Act, is a duty to implement 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. I 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 forfeitures 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, I 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.