Recent FCC Actions Affecting Cable Television Systems, Programmers, And Broadcast Stations

In this client advisory, Thelen reviews several recent FCC actions affecting cable television systems, cable programmers, and broadcast stations:

Cable systems are required to provide subscribership information under the 70/70 rule to determine whether the FCC has authority to impose additional programming regulations such as a la carte.

The leased access rules are amended to expand programmers' rights, and comments are sought regarding further changes to the leased access rules.

The FCC, in a split decision, requires Cablevision to carry WRNN in new communities reached by the expanded WRNN DTV signal, and sets a precedent for how the FCC will apply the must-carry rules to expanded DTV coverage areas.

Carriage of television signals without material degradation and availability of television signals after the DTV transition are defined, and comments are sought on application of the rules to retransmission agreements, channel placement, and reformatting.

Exclusive service contracts with MDUs and other real estate developments are prohibited, and comments are sought on prohibiting exclusive marketing and bulk billing contracts.

Pole attachment regulations are proposed to be amended to establish a higher rate for attachments used to provide cable modem service, conform the cable and telephone attachment rates, set rates for wireless attachments, and revise the access and complaint rules.

1. Cable systems are required to provide subscribership information under the 70/70 rule to determine whether the FCC has authority to impose additional programming regulations such as a la carte.

   As part of the FCC's 13th Annual Report to Congress on Video Competition, the FCC decided to require cable television systems to file subscribership information that will determine whether the 70/70 test has been met. Meeting the 70/70 test would allow the FCC to impose additional program regulations on cable television operators. Rule changes may encourage or require a la carte program offerings. A la carte programming, if required, would significantly affect the economics of program carriage for both cable television systems and cable programmers.

   The 70/70 rule provides, "At such time as cable systems with 36 or more activated channels are available to 70 percent of households within the United States and are subscribed to by 70 percent of the households to which such systems are available," the FCC may impose additional rules, "necessary to provide diversity of information sources." The FCC considered whether the 13th Annual Report should include a finding that the 70/70 test has been met based upon information from one source. The FCC was prepared to find that cable systems cover 70 percent of households but not that 70 percent of the homes passed subscribe to cable.

   In order to determine whether the second prong of the 70/70 test has been met, the 13th Annual Report will require each cable operator to submit the following information for 2006 under penalty of perjury: 1) the total number of homes the cable operator currently passes; 2) the total number of homes the cable operator currently passes with 36 or more...