Amendment of the Commission's Rules Related to Retransmission Consent, 17071-17088 [2011-7250]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 76, Number 59 (Monday, March 28, 2011)]
[Proposed Rules]
[Pages 17071-17088]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-7250]



[[Page 17071]]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[MB Docket No. 10-71; FCC 11-31]


Amendment of the Commission's Rules Related to Retransmission 
Consent

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Federal Communications Commission (FCC) 
seeks comment on a series of proposals to streamline and clarify the 
Commission's rules concerning or affecting retransmission consent 
negotiations. The Commission believes that these rule changes could 
allow the market-based negotiations contemplated by the statute to 
proceed more smoothly, provide greater certainty to the negotiating 
parties, and help protect consumers.

DATES: Submit comments on or before May 27, 2011, and submit reply 
comments on or before June 27, 2011. See SUPPLEMENTARY INFORMATION 
section for additional comment dates.

ADDRESSES: You may submit comments, identified by MB Docket No. 10-71, 
by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Federal Communications Commission's Web site: https://www.fcc.gov/cgb/ecfs/. Follow the instructions for submitting comments.
     Mail: Filings can be sent by hand or messenger delivery, 
by commercial overnight courier, or by first-class or overnight U.S. 
Postal Service mail (although the Commission continues to experience 
delays in receiving U.S. Postal Service mail). All filings must be 
addressed to the Commission's Secretary, Office of the Secretary, 
Federal Communications Commission.
     People With Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by e-mail: FCC504@fcc.gov or phone: 202-418-
0530 or TTY: 202-418-0432.
    In addition to filing comments with the Secretary, a copy of any 
comments on the Paperwork Reduction Act proposed information collection 
requirements contained herein should be submitted to the Federal 
Communications Commission via e-mail to PRA@fcc.gov and to Nicholas A. 
Fraser, Office of Management and Budget, via e-mail to 
nfraser@omb.eop.gov or via fax at 202-395-5167. For detailed 
instructions for submitting comments and additional information on the 
rulemaking process, see the SUPPLEMENTARY INFORMATION section of this 
document.

FOR FURTHER INFORMATION CONTACT: For additional information on this 
proceeding, contact Diana Sokolow, Diana.Sokolow@fcc.gov, of the Media 
Bureau, Policy Division, 202-418-2120. For additional information 
concerning the Paperwork Reduction Act information collection 
requirements contained in this document, send an e-mail to PRA@fcc.gov 
or contact Cathy Williams at 202-418-2918. To view or obtain a copy of 
this information collection request (ICR) submitted to OMB: (1) Go to 
this OMB/GSA Web page: https://www.reginfo.gov/public/do/PRAMain, (2) 
look for the section of the Web page called ``Currently Under Review,'' 
(3) click on the downward-pointing arrow in the ``Select Agency'' box 
below the ``Currently Under Review'' heading, (4) select ``Federal 
Communications Commission'' from the list of agencies presented in the 
``Select Agency'' box, (5) click the ``Submit'' button to the right of 
the ``Select Agency'' box, and (6) when the list of FCC ICRs currently 
under review appears, look for the OMB control number of the ICR as 
show in the Supplementary Information section below (3060-0649) and 
then click on the ICR Reference Number. A copy of the FCC submission to 
OMB will be displayed.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking (NPRM), MB Docket No. 10-71, FCC No. 11-31, 
adopted and released March 3, 2011. The full text of the NPRM is 
available for public inspection and copying during regular business 
hours in the FCC Reference Information Center, Portals II, 445 12th 
Street, SW., Room CY-A257, Washington, DC 20554. It also may be 
purchased from the Commission's duplicating contractor at Portals II, 
445 12th Street, SW., Room CY-B402, Washington, DC 20554; the 
contractor's Web site, https://www.bcpiweb.com; or by calling 800-378-
3160, facsimile 202-488-5563, or e-mail FCC@BCPIWEB.com. Copies of the 
NPRM also may be obtained via the Commission's Electronic Comment 
Filing System (ECFS) by entering the docket number, MB Docket No. 10-
71. Additionally, the complete item is available on the Federal 
Communications Commission's Web site at https://www.fcc.gov.
    This document contains proposed information collection 
requirements. The Commission, as part of its continuing effort to 
reduce paperwork burdens, invites the general public and the Office of 
Management and Budget (OMB) to comment on the information collection 
requirements contained in this document, as required by the Paperwork 
Reduction Act of 1995, Public Law 104-13. Written comments on the 
Paperwork Reduction Act proposed information collection requirements 
must be submitted by the public, Office of Management and Budget (OMB), 
and other interested parties on or before May 27, 2011.
    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; (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; and (e) 
ways to further reduce the information collection burden on small 
business concerns with fewer than 25 employees. In addition, pursuant 
to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, 
see 44 U.S.C. 3506(c)(4), we seek specific comment on how we might 
further reduce the information collection burden for small business 
concerns with fewer than 25 employees.
    OMB Control Number: 3060-0649.
    Title: Sections 76.1601, Deletion or Repositioning of Broadcast 
Signals, 76.1617 Initial Must-Carry Notice, 76.1607 and 76.1708 
Principal Headend.
    Form Number: Not applicable.
    Type of Review: Revision of a currently approved collection.
    Respondents: Businesses or other for-profit entities; Not-for-
profit institutions.
    Number of Respondents and Responses: 3,380 respondents and 4,200 
responses.
    Estimated Time per Response: 0.5 to 2 hours.
    Frequency of Response: On occasion reporting requirement; Third 
party disclosure requirement; Recordkeeping requirement.
    Total Annual Burden: 2,400 hours.
    Total Annual Costs: None.
    Obligation to Respond: Required to obtain or retain benefits. The 
statutory authority for this information collection is contained in 
Section 4(i) of the

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Communications Act of 1934, as amended.
    Nature and Extent of Confidentiality: No need for confidentiality 
required with this collection of information.
    Privacy Impact Assessment: No impact(s).
    Needs and Uses: 47 CFR 76.1601 requires that effective April 2, 
1993, a cable operator shall provide written notice to any broadcast 
television station at least 30 days prior to either deleting from 
carriage or repositioning that station. Such notification shall also be 
provided to subscribers of the cable system.
    47 CFR 76.1607 states that a cable operator shall provide written 
notice by certified mail to all stations carried on its system pursuant 
to the must-carry rules at least 60 days prior to any change in the 
designation of its principal headend.
    47 CFR 76.1617(a) states within 60 days of activation of a cable 
system, a cable operator must notify all qualified NCE stations of its 
designated principal headend by certified mail.
    47 CFR 76.1617(b) states within 60 days of activation of a cable 
system, a cable operator must notify all local commercial and NCE 
stations that may not be entitled to carriage because they either:
    (1) Fail to meet the standards for delivery of a good quality 
signal to the cable system's principal headend, or
    (2) May cause an increased copyright liability to the cable system.
    47 CFR 76.1617(c) states within 60 days of activation of a cable 
system, a cable operator must send by certified mail a copy of a list 
of all broadcast television stations carried by its system and their 
channel positions to all local commercial and noncommercial television 
stations, including those not designated as must-carry stations and 
those not carried on the system.
    47 CFR 76.1708(a) states that the operator of every cable 
television system shall maintain for public inspection the designation 
and location of its principal headend. If an operator changes the 
designation of its principal headend, that new designation must be 
included in its public file.
    The NPRM proposes to redesignate 47 CFR 76.1601 as 47 CFR 
76.1601(a), and to add a new 47 CFR 76.1601(b). If adopted, new 47 CFR 
76.1601(b) would require broadcast television stations and multichannel 
video programming distributors (MVPDs) to notify affected subscribers 
of the potential deletion of a broadcaster's signal a minimum of 30 
days in advance of a retransmission consent agreement's expiration, 
unless a renewal or extension agreement has been executed, and 
regardless of whether the signal is ultimately deleted. All other 
remaining existing information collection requirements would stay as 
they are, and the various burden estimates would be revised to reflect 
new 47 CFR 76.1601(b).

Synopsis of the Notice of Proposed Rulemaking

I. Introduction

    1. In this Notice of Proposed Rulemaking (NPRM), we seek comment on 
a series of proposals to streamline and clarify our rules concerning or 
affecting retransmission consent negotiations. Our primary objective is 
to assess whether and how the Commission rules in this arena are 
ensuring that the market-based mechanisms Congress designed to govern 
retransmission consent negotiations are working effectively and, to the 
extent possible, minimize video programming service disruptions to 
consumers.
    2. The Communications Act of 1934, as amended (the Act), prohibits 
cable systems and other multichannel video programming distributors 
(MVPDs) from retransmitting a broadcast station's signal without the 
station's consent. 47 U.S.C. 325(b)(1)(A). This consent is what is 
known as ``retransmission consent.'' The law requires broadcasters and 
MVPDs to negotiate for retransmission consent in good faith. See 47 
U.S.C. 325(b)(3)(C)(ii) and (iii); 47 CFR 76.65. Since Congress enacted 
the retransmission consent regime in 1992, there have been significant 
changes in the video programming marketplace. One such change is the 
form of compensation sought by broadcasters. Historically, cable 
operators typically compensated broadcasters for consent to retransmit 
the broadcasters' signals through in-kind compensation, which might 
include, for example, carriage of additional channels of the 
broadcaster's programming on the cable system or advertising time. See, 
e.g., General Motors Corp. and Hughes Electronics Corp., Transferors, 
and The News Corp. Ltd., Transferee, Memorandum Opinion and Order, 19 
FCC Rcd 473, 503, para. 56 (2004). Today, however, broadcasters are 
increasingly seeking and receiving monetary compensation from MVPDs in 
exchange for consent to the retransmission of their signals. Another 
important change concerns the rise of competitive video programming 
providers. In 1992, the only option for many local broadcast television 
stations seeking to reach MVPD customers in a particular Designated 
Market Area (DMA) was a single local cable provider. Today, in 
contrast, many consumers have additional options for receiving 
programming, including two national direct broadcast satellite (DBS) 
providers, telephone providers that offer video programming in some 
areas, and, to a degree, the Internet. One result of such changes in 
the marketplace is that disputes over retransmission consent have 
become more contentious and more public, and we recently have seen a 
rise in negotiation impasses that have affected millions of consumers.
    3. Accordingly, we have concluded that it is appropriate for us to 
reexamine our rules relating to retransmission consent. We consider 
below revisions to the retransmission consent and related rules that we 
believe could allow the market-based negotiations contemplated by the 
statute to proceed more smoothly, provide greater certainty to the 
negotiating parties, and help protect consumers. Accordingly, as 
discussed below, we seek comment on rule changes that would:
     Provide more guidance under the good faith negotiation 
requirements to the negotiating parties by:
    [cir] Specifying additional examples of per se violations in Sec.  
76.65(b)(1) of the Commission's rules; and
    [cir] Further clarifying the totality of the circumstances standard 
of Sec.  76.65(b)(2) of the Commission's rules;
     Improve notice to consumers in advance of possible service 
disruptions by extending the coverage of our notice rules to non-cable 
MVPDs and broadcasters as well as cable operators, and specifying that, 
if a renewal or extension agreement has not been executed 30 days in 
advance of a retransmission consent agreement's expiration, notice of 
potential deletion of a broadcaster's signal must be given to consumers 
regardless of whether the signal is ultimately deleted;
     Extend to non-cable MVPDs the prohibition now applicable 
to cable operators on deleting or repositioning a local commercial 
television station during ratings ``sweeps'' periods; and
     Allow MVPDs to negotiate for alternative access to network 
programming by eliminating the Commission's network non-duplication and 
syndicated exclusivity rules.

We also seek comment on any other revisions or additions to our rules 
within the scope of our authority that would improve the retransmission 
consent negotiation process and help protect consumers from programming 
disruptions. The Commission does not have the power to force 
broadcasters to consent to MVPD carriage of their

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signals nor can the Commission order binding arbitration. See infra 
para. 18. See also Letter from Chairman Julius Genachowski, FCC, to The 
Honorable John F. Kerry, Chairman, Subcommittee on Communications, 
Technology, and the Internet, Committee on Commerce, Science, and 
Transportation, U.S. Senate, at 1 (Oct. 29, 2010) (``[C]urrent law does 
not give the agency the tools necessary to prevent service 
disruptions.'').

II. Background

A. Retransmission Consent

    4. The current regulatory scheme for carriage of broadcast 
television stations was established by the Cable Television Consumer 
Protection and Competition Act of 1992 (1992 Cable Act), Public Law 
102-385, 106 Stat. 1460 (1992). In 1992, unlike today, local broadcast 
television stations seeking to reach viewers in a particular DMA 
through an MVPD service often had only one option--namely, a single 
local cable provider. While broadcasters benefited from cable carriage, 
Congress recognized that broadcast programming ``remains the most 
popular programming on cable systems, and a substantial portion of the 
benefits for which consumers pay cable systems is derived from carriage 
of the signals of network affiliates, independent television stations, 
and public television stations.'' See 1992 Cable Act sec. 2(a)(19). In 
adopting the retransmission consent provisions of the 1992 Cable Act, 
Congress found that cable operators obtained great benefit from the 
local broadcast signals that they were able to carry without 
broadcaster consent or copyright liability, and that this benefit 
resulted in an effective subsidy to cable operators. See id. 
Accordingly, Congress adopted its retransmission consent provisions to 
allow broadcasters to negotiate to receive compensation for the value 
of their signals. Through the 1992 Cable Act, Congress modified the 
Communications Act, inter alia, to provide television stations with 
certain carriage rights on cable television systems in their local 
market. See 47 U.S.C. 325, 534.
    5. Pursuant to the statutory provisions enacted in 1992, television 
broadcasters elect every three years whether to proceed under the 
retransmission consent requirements of section 325 of the Act, or the 
mandatory carriage (must carry) requirements of sections 338 and 614 of 
the Act. See 47 U.S.C. 325(b), 338, 534. Section 338 governs mandatory 
carriage on satellite, and Section 614 (codified at 47 U.S.C. 534) 
governs mandatory carriage of commercial television stations on cable. 
There are important differences between the retransmission consent and 
must carry regimes. Specifically, a broadcaster electing must carry 
status is guaranteed carriage on cable systems in its market, and the 
cable operator is generally prohibited from accepting or requesting 
compensation for carriage, whereas a broadcaster who elects carriage 
under the retransmission consent rules may insist on compensation. In 
order to reach MVPD customers, most broadcasters elected carriage under 
the must carry rules in the early years following enactment of the new 
regime. By 2009, only 37 percent of stations relied on must carry. See 
Omnibus Broadband Initiative, Spectrum Analysis: Options for Broadcast 
Spectrum, OBI Technical Paper No. 3, at 8 (June 2010); see also id. at 
Exhibit C (showing decrease in must carry elections and increase in 
retransmission consent elections since 2003); id. at n. 23.
    6. Since 2001, broadcasters have also had mandatory carriage rights 
on DBS systems. The Satellite Home Viewer Improvement Act of 1999 
(SHVIA) gives satellite carriers a statutory copyright license to 
retransmit local broadcast stations to subscribers in the station's 
market, also known as ``local-into-local'' service. SHVIA was enacted 
as Title I of the Intellectual Property and Communications Omnibus 
Reform Act of 1999 (IPACORA) (relating to copyright licensing and 
carriage of broadcast signals by satellite carriers, codified in 
scattered sections of 17 and 47 U.S.C.), Public Law 106-113, 113 Stat. 
1501, Appendix I (1999). Generally, when a satellite carrier provides 
local-into-local service pursuant to the statutory copyright license, 
the satellite carrier is obligated to carry any qualified local 
television station in the particular DMA that has made a timely 
election for mandatory carriage, unless the station's programming is 
duplicative of the programming of another station carried by the 
carrier in the DMA or the station does not provide a good quality 
signal to the carrier's local receive facility. See 47 U.S.C. 338.
    7. As an alternative to seeking mandatory carriage, a broadcaster 
may elect carriage under the retransmission consent rules, which allow 
for negotiations with cable operators and other MVPDs for carriage. A 
broadcaster electing retransmission consent may accept or request 
compensation for carriage in retransmission consent negotiations. The 
legislative history of section 325 indicates that Congress intended 
``to establish a marketplace for the disposition of the rights to 
retransmit broadcast signals; it is not the Committee's intention in 
this bill to dictate the outcome of the ensuing marketplace 
negotiations.'' S. Rep. No. 92, 102nd Cong., 1st Sess. 1991, reprinted 
in 1992 U.S.C.C.A.N. 1133, 1169. Under section 325(b)(1)(A) of the Act, 
if a broadcaster electing retransmission consent and an MVPD are unable 
to reach an agreement, or do not agree to the extension of an existing 
agreement prior to its expiration, then the MVPD may not retransmit the 
broadcasting station's signal because the signal cannot be carried 
without the broadcast station's consent. Section 325(b)(1)(A) of the 
Act states, ``No cable system or other multichannel video programming 
distributor shall retransmit the signal of a broadcasting station, or 
any part thereof, except--(A) with the express authority of the 
originating station. * * *'' 47 U.S.C. 325(b)(1). Pursuant to section 
325(b)(2), there are five circumstances in which the retransmission 
restrictions do not apply.

 B. Good Faith Negotiations

    8. Initially, section 325 of the Act did not include any standards 
governing retransmission consent negotiations between broadcasters and 
MVPDs. That changed in 1999 when Congress adopted SHVIA, which 
contained provisions concerning the satellite industry, as well as 
television broadcast stations and terrestrial MVPDs. Specifically, 
Congress required broadcast television stations engaging in 
retransmission consent negotiations with any MVPD to negotiate in good 
faith. See 47 U.S.C. 325(b)(3)(C). SHVIA also prohibited broadcasters 
from entering into exclusive retransmission consent agreements. See 47 
U.S.C. 325(b)(3)(C). Congress required the Commission to revise its 
regulations so that they:

    * * * prohibit a television broadcast station that provides 
retransmission consent from * * * failing to negotiate in good 
faith, and it shall not be a failure to negotiate in good faith if 
the television broadcast station enters into retransmission consent 
agreements containing different terms and conditions, including 
price terms, with different multichannel video programming 
distributors if such different terms and conditions are based on 
competitive marketplace considerations.

47 U.S.C. 325(b)(3)(C)(ii). The Joint Explanatory Statement of the 
Committee of Conference (Conference Report) did not explain or clarify 
the statutory language, instead merely stating that the regulations 
would:


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    * * * prohibit a television broadcast station from * * * 
refusing to negotiate in good faith regarding retransmission consent 
agreements. A television station may generally offer different 
retransmission consent terms or conditions, including price terms, 
to different distributors. The [Commission] may determine that such 
different terms represent a failure to negotiate in good faith only 
if they are not based on competitive marketplace considerations.

Conference Report at 13. This good faith negotiation obligation was 
later made reciprocal to MVPDs as well as broadcasters by the Satellite 
Home Viewer Extension and Reauthorization Act of 2004 (SHVERA), Public 
Law 108-447, 118 Stat. 2809 (2004).

    9. In implementing the good faith negotiation requirement, the 
Commission concluded ``that the statute does not intend to subject 
retransmission consent negotiation to detailed substantive oversight by 
the Commission. Instead, the order concludes that Congress intended 
that the Commission follow established precedent, particularly in the 
field of labor law, in implementing the good faith retransmission 
consent negotiation requirement.'' Implementation of the Satellite Home 
Viewer Improvement Act of 1999; Retransmission Consent Issues: Good 
Faith Negotiation and Exclusivity, 65 FR 15559, March 23, 2000 (Good 
Faith Order). Given the dearth of guidance in section 325 and its 
legislative history, the Commission drew guidance from analogous 
statutory standards, such as the good faith bargaining requirement of 
section 8(d) of the Taft-Hartley Act. Id. The Commission also looked to 
its own rules implementing the good faith negotiation requirement of 
section 251 of the Act, which largely relies on labor law precedent. 
Id.
    10. The Commission adopted a two-part framework to determine 
whether broadcasters and MVPDs negotiate retransmission consent in good 
faith. First, the Commission established a list of seven objective good 
faith negotiation standards, the violation of which is considered a per 
se breach of the good faith negotiation obligation. See 47 CFR 
76.65(b)(1). Second, even if the seven specific standards are met, the 
Commission may consider whether, based on the totality of the 
circumstances, a party failed to negotiate retransmission consent in 
good faith. See 47 CFR 76.65(b)(2). The Commission has stated that, 
where ``a broadcaster is determined to have failed to negotiate in good 
faith, the Commission will instruct the parties to renegotiate the 
agreement in accordance with the Commission's rules and section 
325(b)(3)(C).'' Good Faith Order. While the Commission did not find any 
statutory authority to impose damages, it noted ``that, as with all 
violations of the Communications Act or the Commission's rules, the 
Commission has the authority to impose forfeitures for violations of 
section 325(b)(3)(C).'' Id. In discussing remedies for a violation of 
the good faith negotiation requirement, the Commission did not 
reference continued carriage as a potential remedy, and stated that it 
could not adopt regulations permitting retransmission during good faith 
negotiation or while a good faith complaint is pending before the 
Commission, absent broadcaster consent to such retransmission. Id.
    11. The Commission concluded that Congress did not intend for it to 
sit in judgment of the terms of every executed retransmission consent 
agreement. Id. Rather, the Commission said, ``[w]e believe that, by 
imposing the good faith obligation, Congress intended that the 
Commission develop and enforce a process that ensures that broadcasters 
and MVPDs meet to negotiate retransmission consent and that such 
negotiations are conducted in an atmosphere of honesty, purpose and 
clarity of process.'' Id. In adopting the good faith negotiation rules, 
the Commission pointed to commenters' arguments that intrusive 
Commission action was unnecessary because of the thousands of 
retransmission consent agreements that had been concluded successfully 
since the adoption of the 1992 Cable Act. Id.
    12. There have been very few complaints filed alleging violations 
of the Commission's good faith rules. For example, in 2001, the former 
Cable Services Bureau issued an order denying EchoStar Satellite 
Corporation's retransmission consent complaint alleging that Young 
Broadcasting, Inc. et al. failed to negotiate in good faith. See 
EchoStar Satellite Corp. v. Young Broadcasting, Inc. et al., Memorandum 
Opinion and Order, 16 FCC Rcd 15070 (CSB 2001). More recently, in 2007, 
the Media Bureau issued an order denying Mediacom Communications 
Corporation's (Mediacom) retransmission consent complaint alleging that 
Sinclair Broadcast Group, Inc. (Sinclair) failed to negotiate in good 
faith. See Mediacom Communications Corp. v. Sinclair Broadcast Group, 
Inc., Memorandum Opinion and Order, 22 FCC Rcd 47 (MB 2007). Although 
Mediacom filed an application for review of the Media Bureau's order, 
Mediacom and Sinclair subsequently announced the completion of a 
retransmission consent agreement, and the Media Bureau thus granted 
Mediacom's motion to dismiss the case with prejudice. See Mediacom 
Communications Corp. v. Sinclair Broadcast Group, Inc., Order, 22 FCC 
Rcd 11093 (MB 2007). Also in 2007, the Media Bureau ruled that a cable 
operator failed to negotiate in good faith under the totality of the 
circumstances, and ordered resumption of negotiations within 10 days 
and status updates every 30 days. See Letter to Jorge L. Bauermeister, 
22 FCC Rcd 4933 (MB 2007); see also infra para. 33. Further, in 2009, 
the Media Bureau issued an order denying ATC Broadband LLC and Dixie 
Cable TV, Inc.'s retransmission consent complaint alleging that Gray 
Television Licensee, Inc. failed to negotiate in good faith. See ATC 
Broadband LLC and Dixie Cable TV, Inc. v. Gray Television Licensee, 
Inc., Memorandum Opinion and Order, 24 FCC Rcd 1645 (MB 2009). Also in 
2009, Mediacom filed another retransmission consent complaint alleging 
that Sinclair failed to negotiate in good faith, but, following an 
agreed-upon extension, the parties announced the completion of a 
retransmission consent agreement and the Media Bureau granted 
Mediacom's motion to dismiss the case with prejudice. See Mediacom 
Communications Corp. v. Sinclair Broadcast Group, Inc., Order, 25 FCC 
Rcd 257 (MB 2010). Accordingly, there is little Commission precedent 
regarding the good faith rules, and there has only been one finding 
that a party to a retransmission consent agreement negotiated in bad 
faith.

C. Petition for Rulemaking

    13. In March 2010, 14 MVPDs and public interest groups filed a 
rulemaking petition arguing that the Commission's retransmission 
consent regulations are outdated and are harming consumers. Time Warner 
Cable Inc. et al. Petition for Rulemaking to Amend the Commission's 
Rules Governing Retransmission Consent, MB Docket No. 10-71, at 1 
(filed Mar. 9, 2010) (the Petition). The petitioners argued that 
changes in the marketplace, and the increasingly contentious nature of 
retransmission consent negotiations, justify revisions to the 
Commission's rules governing retransmission consent. Specifically, the 
Petition stated that, in 1992, Congress acted out of ``concern that 
cable operators were functioning as monopolies and in turn threatened 
to undercut the public interest benefits associated with over-the-air 
broadcasting.'' Petition at 2-3 (footnote omitted). The petitioners 
argued that broadcasters today ``enjoy distribution options beyond the 
cable incumbent in

[[Page 17075]]

nearly every [DMA].'' Id. at 4. The Petition also contended that 
Congress expected broadcaster demands for compensation, if any, to be 
modest, because of the benefits that broadcasters derive from carriage. 
Id. The Petition argued that the recent shift of bargaining power to 
broadcasters has resulted in retransmission consent negotiations in 
which MVPDs must either agree to the significantly higher fees 
requested by broadcasters or lose access to programming. Id. at 5.
    14. On March 19, 2010, the Media Bureau released a Public Notice 
inviting public comment on the Petition. See Public Notice, Media 
Bureau Seeks Comment on a Petition for Rulemaking to Amend the 
Commission's Rules Governing Retransmission Consent, DA 10-474 (MB 
2010) (the Public Notice). Following the grant of an extension, 
comments were due May 18, 2010, and reply comments were due June 3, 
2010. See Petition for Rulemaking to Amend the Commission's Rules 
Governing Retransmission Consent, Order, 25 FCC Rcd 3334 (MB 2010). 
While some commenters agree with the petitioners that the 
retransmission consent regime is in need of reform, others argue that 
the retransmission consent process is working as intended and that the 
shift in retransmission consent pricing represents a market correction 
reflecting the increased competition faced by incumbent cable 
operators.

D. Consumer Impact

    15. In the past year, we have seen high profile retransmission 
consent disputes result in carriage impasses. When Cablevision Systems 
Corp. (Cablevision) and News Corp.'s agreement for two Fox-affiliated 
television stations and one MyNetwork TV-affiliated television station 
expired on October 15, 2010 and the parties did not reach an extension 
or renewal agreement, Cablevision was forced to discontinue carriage of 
the three stations until agreement was reached on October 30, 2010. The 
carriage impasse resulted in affected Cablevision subscribers being 
unable to view on cable the baseball National League Championship 
Series, the first two games of the World Series, a number of NFL 
regular season games, and other regularly scheduled programs. 
Previously, on March 7, 2010, Walt Disney Co. (Disney) and Cablevision 
were unable to reach agreement on carriage of Disney's ABC signal for 
nearly 21 hours after a previous agreement expired. As a result, the 
approximately 3.1 million households served by Cablevision were unable 
to view the first 14 minutes of the Academy Awards through their cable 
provider. Most recently, we are aware of losses of programming 
resulting from retransmission consent carriage impasses involving DISH 
Network and Chambers Communications Corp., Time Warner Cable and Smith 
Media LLC, DISH Network and Frontier Radio Management, DirecTV and 
Northwest Broadcasting, Mediacom and KOMU-TV, and Full Channel TV and 
Entravision.
    16. In addition, consumers have been concerned about other high 
profile retransmission consent negotiations that seemed close to an 
impasse. For example, a retransmission consent agreement with Time 
Warner Cable for News Corp.'s Fox television stations expired at 
midnight on December 31, 2009. A statement from FCC Chairman Julius 
Genachowski at the time acknowledged that a failure to conclude a new 
agreement could harm consumers, noting that ``[c]ompanies shouldn't 
force cable-watching football fans to scramble for other means of TV 
delivery on New Year's weekend.'' See News Release, FCC Chairman Julius 
Genachowski Statement on Retransmission Disputes, (rel. Dec. 31, 2009). 
Ultimately, Fox and Time Warner reached agreement without any carriage 
interruption, but consumers who were aware of the dispute were unsure 
if they would have continued access to Fox programming through their 
Time Warner subscription. We are concerned about the uncertainty that 
consumers have faced regarding their ability to continue receiving 
certain broadcast television stations during recent contentious 
retransmission consent negotiations. The early termination fees imposed 
by some MVPDs may cause consumers faced with a potential retransmission 
consent negotiating impasse to be unwilling or unable to consider 
switching to another MVPD to maintain access to a particular broadcast 
station. See infra para. 30. Accordingly, recognizing the consumer harm 
caused by retransmission consent negotiation impasses and near 
impasses, the Commission seeks comment on certain proposals to modify 
the rules governing retransmission consent.

III. Discussion

    17. Our goal in this proceeding is to take appropriate action, 
within our existing authority, to protect consumers from the disruptive 
impact of the loss of broadcast programming carried on MVPD video 
services. Subscribers are the innocent bystanders adversely affected 
when broadcasters and MVPDs fail to reach an agreement to extend or 
renew their retransmission consent contracts. In light of the changing 
marketplace, our proposals in this NPRM are intended to update the good 
faith rules and remedies in order to better utilize the good faith 
requirement as a consumer protection tool. While one way to protect 
consumers' interests might be for the Commission to order that a 
station continue to be carried notwithstanding the parties' failure to 
reach an agreement, the statute does not authorize carriage without the 
station's consent, as discussed below. Therefore, we have identified 
other measures that we could take to improve the process and decrease 
the occurrence of these disruptions. As detailed in this NPRM, we seek 
comment on these measures and on others that could be beneficial and 
constructive. Is there an impact on the basic service rate that 
consumers pay as a result of the retransmission consent fees or 
disputes?
    18. As a threshold matter, we note that the Petition proposed, 
among other suggestions, that the Commission adopt a mandatory 
arbitration mechanism for retransmission consent disputes, and provide 
for mandatory interim carriage while an MVPD negotiates in good faith 
or while dispute resolution proceedings are pending. Petition at 31-40. 
In response to the Public Notice seeking comment on the Petition, some 
commenters have agreed that the Commission should adopt mandatory 
dispute resolution procedures and/or interim carriage mechanisms. In 
contrast, other commenters have argued that the Commission should not, 
as a matter of policy, adopt mandatory dispute resolution procedures or 
interim carriage mechanisms, and/or that in any event the Commission 
lacks authority to adopt such procedures and mechanisms. We do not 
believe that the Commission has authority to adopt either interim 
carriage mechanisms or mandatory binding dispute resolution procedures 
applicable to retransmission consent negotiations. First, regarding 
interim carriage, examination of the Act and its legislative history 
has convinced us that the Commission lacks authority to order carriage 
in the absence of a broadcaster's consent due to a retransmission 
consent dispute. Rather, section 325(b) of the Act expressly prohibits 
the retransmission of a broadcast signal without the broadcaster's 
consent. 47 U.S.C. 325(b)(1)(A) (``No cable system or other 
multichannel video programming distributor shall retransmit the signal 
of a broadcasting station, or any part thereof, except--(A) with the 
express authority of the originating station''). Furthermore, 
consistent with the

[[Page 17076]]

statutory language, the legislative history of section 325(b) states 
that the retransmission consent provisions were not intended ``to 
dictate the outcome of the ensuing marketplace negotiations'' and that 
broadcasters would retain the ``right to control retransmission and to 
be compensated for others' use of their signals.'' S.Rep.No. 92, 102nd 
Cong., 1st Sess. 1991, reprinted in 1992 U.S.C.C.A.N. 1133, 1169. We 
thus interpret section 325(b) to prevent the Commission from ordering 
carriage over the objection of the broadcaster, even upon a finding of 
a violation of the good faith negotiation requirement. Consistent with 
this interpretation, the Commission previously found that it has ``no 
latitude * * * to adopt regulations permitting retransmission during 
good faith negotiation or while a good faith or exclusivity complaint 
is pending before the Commission where the broadcaster has not 
consented to such retransmission.'' Good Faith Order. Contrary to the 
suggestion of some commenters, section 4(i) of the Act does not 
authorize the Commission to act in a manner that is inconsistent with 
other provisions of the Act, and thus does not support Commission-
ordered carriage in this context. Second, we believe that mandatory 
binding dispute resolution procedures would be inconsistent with both 
section 325 of the Act, in which Congress opted for retransmission 
consent negotiations to be handled by private parties subject to 
certain requirements, and with the Administrative Dispute Resolution 
Act (ADRA), which authorizes an agency to use arbitration ``whenever 
all parties consent.'' 5 U.S.C. 575(a)(1).
    19. In light of the statutory mandate in section 325 and the 
restrictions imposed by the ADRA, we do not believe that we have 
authority to require either interim carriage requirements or mandatory 
binding dispute resolution procedures. Parties may comment on that 
conclusion. We seek comment below on other ways the Commission can 
protect the public from, and decrease the frequency of, retransmission 
consent negotiation impasses within our existing statutory authority.

A. Strengthening the Good Faith Negotiation Standards of Sec.  
76.65(b)(1) of the Commission's Rules

    20. When the Commission originally adopted the good faith standards 
in 2000, the circumstances were different from the conditions industry 
and consumers face today. At that time programming disruptions due to 
retransmission consent disputes were rare. The Commission's approach 
then was to provide broad standards of what constitutes good faith 
negotiation but generally leave the negotiations to the parties. See, 
e.g., Good Faith Order (``[T]he Commission concluded in the Broadcast 
Signal Carriage Order that Congress did not intend that the Commission 
should intrude in the negotiation of retransmission consent. We do not 
interpret the good faith requirement of SHVIA to alter this settled 
course and require that the Commission assume a substantive role in the 
negotiation of the terms and conditions of retransmission consent.''). 
As the Commission stated, ``The statute does not appear to contemplate 
an intrusive role for the Commission with regard to retransmission 
consent.'' See id. Instead, the Commission stated that ``[w]e believe 
that, by imposing the good faith obligation, Congress intended that the 
Commission develop and enforce a process that ensures that broadcasters 
and MVPDs meet to negotiate retransmission consent and that such 
negotiations are conducted in an atmosphere of honesty, purpose and 
clarity of process.'' See id. The good faith provision of SHVIA was 
specifically targeted at constraining unacceptable negotiating conduct 
on the part of broadcasters, but Congress subsequently recognized that 
it is necessary to constrain unacceptable retransmission consent 
negotiating conduct of MVPDs as well as broadcasters, and thus imposed 
a reciprocal bargaining obligation in SHVERA. See, e.g., Implementation 
of Section 207 of the Satellite Home Viewer Extension and 
Reauthorization Act of 2004; Reciprocal Bargaining Obligation, 70 FR 
40216, July 13, 2005 (SHVERA Reciprocal Bargaining Order) (``Section 
207 [of SHVERA] * * * amends [section 325(b)(3)(C) of the Act] to 
impose a reciprocal good faith retransmission consent bargaining 
obligation on [MVPDs]. This section alters the bargaining obligations 
created by [SHVIA] which imposed a good faith bargaining obligation 
only on broadcasters.'') (footnote omitted). In recent times, the 
actual and threatened service disruptions resulting from increasingly 
contentious retransmission consent disputes present a growing 
inconvenience and source of confusion for consumers. We believe that 
these changes in circumstances support reevaluation of the good faith 
rules, particularly to ameliorate the impact of retransmission consent 
negotiations on innocent consumers. We note that recent letters from 
members of Congress have emphasized the effect of retransmission 
consent negotiations on consumers.
    21. As discussed above, in implementing the reciprocal good faith 
negotiation requirement of section 325 of the Act, the Commission 
established a list of seven objective good faith negotiation standards. 
Violation of any of these standards by a broadcast station or MVPD is 
considered a per se breach of its obligation to negotiate in good 
faith. The record indicates that there is some uncertainty in the 
marketplace about whether certain conduct constitutes a failure to 
negotiate in good faith. Accordingly, we seek comment on augmenting our 
rules to include additional objective good faith negotiation standards, 
the violation of which would be considered a per se breach of Sec.  
76.65 of the Commission's rules. We believe that additional per se good 
faith negotiation standards could increase certainty in the 
marketplace, thereby promoting the successful completion of 
retransmission consent negotiations and protecting consumers from 
impasses or near impasses. In addition, we seek comment on clarifying 
various aspects of our existing good faith rules.
    22. First, we seek comment on whether it should be a per se 
violation for a station to agree to give a network with which it is 
affiliated the right to approve a retransmission consent agreement with 
an MVPD or to comply with such an approval provision. In response to 
the Public Notice seeking comment on the Petition, certain commenters 
discussed network involvement in the retransmission consent process. 
Some commenters have argued that the Commission should consider 
preventing networks from dictating whether and by what terms an 
affiliated station may grant retransmission consent. Others have argued 
that provisions in network-affiliate agreements do not interfere with 
the requirement that broadcasters negotiate retransmission consent in 
good faith. Interested parties have argued that, in recent 
retransmission consent negotiations, a network's exercise of its 
contractual approval right has hindered the progress of the 
negotiations. The good faith rules currently require the Negotiating 
Entity to designate a representative with authority to make binding 
representations on retransmission consent and not unreasonably delay 
negotiations. 47 CFR 76.65(b)(1)(ii) and (iii). If a station has 
granted a network a veto power over any retransmission consent 
agreement with an MVPD, then it has arguably impaired its own ability 
to designate a representative who can

[[Page 17077]]

bind the station in negotiations, contrary to our rules. Do provisions 
in network affiliation agreements giving the network approval rights 
over the grant of retransmission consent by its affiliate represent a 
reasonable exercise by a network of its distribution rights in network 
programming? If so, in considering revisions to the good faith rules, 
how should the Commission balance the networks' rights against the 
stations' obligation to negotiate in good faith and the regulatory goal 
of protecting consumers from service disruptions? We seek comment on 
the appropriate parameters of network involvement in retransmission 
consent negotiations. We would also welcome comment and data regarding 
how frequently a network's assertion of the right to review or approve 
an agreement affects negotiations. In our consideration of the role of 
the network in its affiliates' retransmission consent negotiations, we 
do not intend to interfere with the flow of revenue between networks 
and their affiliates. We recognize the special value of broadcast 
network programming to local broadcast television stations and to 
MVPDs. Accordingly, we do not propose to prevent a network from 
contracting to receive a portion of its affiliates' retransmission 
consent fees. Rather, we seek comment on the permissible scope of a 
network's involvement in the negotiations or right to approve an 
agreement. If the Commission decides to prohibit stations from granting 
networks the right to approve their affiliates' retransmission consent 
agreements, should we, on a going-forward basis, abrogate any 
provisions restricting an affiliate's power to grant retransmission 
consent without network approval that appear in existing agreements?
    23. Second, we seek comment on whether it should be a per se 
violation for a station to grant another station or station group the 
right to negotiate or the power to approve its retransmission consent 
agreement when the stations are not commonly owned. Such consent might 
be reflected in local marketing agreements (LMAs), Joint Sales 
Agreements (JSAs), shared services agreements, or other similar 
agreements. Some commenters have noted problems that occur when one 
station or station group negotiates retransmission consent on behalf of 
a station or station group that is not commonly owned. The Commission 
believes that, when a station relinquishes its responsibility to 
negotiate retransmission consent, there may be delays to the 
negotiation process, and negotiations may become unnecessarily 
complicated if an MVPD is forced to negotiate with multiple parties 
with divergent interests, potentially including interests that extend 
beyond a single local market. The proposal on which we seek comment 
would effectively prohibit joint retransmission consent negotiations by 
stations that are not commonly owned. Should the Commission, on a 
going-forward basis, abrogate any such terms that appear in existing 
agreements? One commenter has argued that the negotiating arrangements 
about which others complain are rare, and that they are largely in 
small markets ``where such sharing agreements may well be necessary for 
the stations to survive economically.'' Accordingly, we seek comment on 
the prevalence of agreements that grant one station or station group 
the right to negotiate or approve the retransmission consent agreement 
of a station or station group that is not commonly owned; the impact of 
such arrangements on the negotiation process; and the potential harms 
and benefits of prohibiting such agreements. How should the Commission 
balance any asserted benefits of such sharing agreements against the 
goal of protecting consumers from service disruptions?
    24. Third, we seek comment on whether it should be a per se 
violation for a Negotiating Entity to refuse to put forth bona fide 
proposals on important issues. One commenter has stated that a refusal 
to make proposals as to key issues is a bad faith tactic in 
retransmission consent negotiations. How should we identify the 
category of issues about which a Negotiating Entity is required to put 
forth a bona fide proposal? How should we determine what constitutes a 
bona fide proposal, or whether a proposal is sufficiently unreasonable 
as to constitute bad faith? We note that the Commission has defined a 
bona fide request in the context of a programmer's request for leased 
access on a system of a small cable operator. See 47 CFR 76.970(i)(3).
    25. Fourth, we seek comment on whether it should be a per se 
violation for a Negotiating Entity to refuse to agree to non-binding 
mediation when the parties reach an impasse within 30 days of the 
expiration of their retransmission consent agreement. We seek comment 
on whether 30 days from the expiration of the retransmission consent 
agreement is the appropriate time frame within which to require non-
binding mediation. In previous retransmission consent disputes, the 
Commission has encouraged parties to engage in voluntary dispute 
resolution mechanisms as a means to reach agreement because a neutral 
third party may be able to facilitate agreement where the parties have 
otherwise failed. The Commission previously stated its belief ``that 
voluntary mediation can play an important part in the facilitation of 
retransmission consent and [we] encourage parties involved in 
protracted retransmission consent negotiations to pursue mediation on a 
voluntary basis.'' See Good Faith Order (also stating that the 
Commission would revisit the issue of mandatory retransmission consent 
mediation if its experience in enforcing the good faith provision 
indicates that it is necessary). If parties are unable to reach 
agreement on their own and the expiration of their existing agreement 
is imminent, should we consider it bad faith for them to refuse to 
participate in non-binding mediation? Would mediation advance the 
successful completion of retransmission consent negotiations, even if 
it is not binding on the parties? Although as noted above we do not 
believe we have authority to mandate binding arbitration, we believe 
that we have authority to require non-binding mediation. Because the 
mediation would be non-binding, we believe that it would be consistent 
with the statutory prohibition on retransmission without the 
originating station's express authority. Non-binding mediation would 
also be consistent with the ADRA, which prohibits compelled binding 
arbitration. See 5 U.S.C. 571 through 584. We seek comment on our 
proposal to require non-binding mediation. If we require mediation, how 
should a mediator be selected, and how should the parties determine who 
is responsible for the costs of mediation? How would the ground rules 
of the mediation be determined?
    26. Fifth, we seek comment on what it means to ``unreasonably'' 
delay retransmission consent negotiations. Section 76.65(b)(1)(iii) of 
the Commission's rules currently provides that ``[r]efusal by a 
Negotiating Entity to meet and negotiate retransmission consent at 
reasonable times and locations, or acting in a manner that unreasonably 
delays retransmission consent negotiations,'' constitutes a violation 
of the Negotiating Entity's duty to negotiate retransmission consent in 
good faith. 47 CFR 76.65(b)(1)(iii). Commenters report that 
negotiations have been adversely affected by a party--either a 
broadcaster or an MVPD--delaying the commencement or progress of a 
negotiation as a tactic to gain advantage rather than out of necessity. 
We believe that delaying retransmission consent negotiations could 
predictably and intentionally lead

[[Page 17078]]

to the type of impasse and threat of disruption that inconveniences 
consumers. Accordingly, we seek comment on what standards we should 
consider in determining whether a Negotiating Entity has acted in a 
manner that ``unreasonably'' delays retransmission consent negotiations 
and thus violates the duty to negotiate in good faith.
    27. Sixth, we seek comment on whether a broadcaster's request or 
requirement, as a condition of retransmission consent, that an MVPD not 
carry an out-of-market ``significantly viewed'' (SV) station violates 
Sec.  76.65(b)(1)(vi) of the Commission's rules. Section 
76.65(b)(1)(vi) of the Commission's rules provides that ``[e]xecution 
by a Negotiating Entity of an agreement with any party, a term or 
condition of which, requires that such Negotiating Entity not enter 
into a retransmission consent agreement with any other television 
broadcast station or multichannel video programming distributor'' is a 
violation of the Negotiating Entity's duty to negotiate in good faith. 
See 47 CFR 76.65(b)(1)(vi). Despite the existence of this rule, in the 
Commission's proceeding implementing section 203 of the Satellite 
Television Extension and Localism Act of 2010 (STELA), DISH Network 
L.L.C. requested that the Commission adopt a rule to ``clarify that 
tying retransmission consent to restrictions on SV station carriage'' 
violates the requirement that parties negotiate retransmission consent 
in good faith. See Comments and Petition for Further Rulemaking of DISH 
Network L.L.C., MB Docket No. 10-148, at 9 (filed Aug. 17, 2010). DISH 
Network stated that some ``local stations have tied the grant of their 
retransmission consent for local-into-local service to concessions from 
satellite carriers that the carriers will not introduce any SV stations 
of the same network.'' Id. (footnote omitted). We note that the 
Commission previously interpreted Sec.  76.65(b)(1)(vi) of the 
Commission's rules narrowly, as involving collusion between a 
broadcaster and an MVPD. See, e.g., Good Faith Order (``For example, 
Broadcaster A is prohibited from agreeing with MVPD B that it will not 
reach retransmission consent with MVPD C.''); SHVERA Reciprocal 
Bargaining Order (``As is evidenced by the discussion in the Good Faith 
Order, that provision is intended to cover collusion between a 
broadcaster and an MVPD requiring non-carriage by another MVPD * * 
*.''); see also ATC Broadband LLC and Dixie Cable TV, Inc. v. Gray 
Television Licensee, Inc., 24 FCC Rcd at 1649, para. 7. We seek comment 
on whether to interpret this rule more expansively to preclude a 
broadcast station from executing an agreement prohibiting an MVPD from 
carrying an out-of-market SV station that might otherwise be available 
to consumers as a partial substitute for the in-market station's 
programming, in the event of a retransmission consent negotiation 
impasse. Should we expand our prior interpretation of this rule to 
cover any additional scenarios? Have there been instances in which an 
MVPD would have carried an out-of-market SV station, but for a local 
broadcaster's request or requirement to the contrary? Do the holders of 
the rights to certain programming, including but not limited to 
broadcast networks, impose geographic restrictions on the stations to 
which they license programming, such that an out-of-market SV station 
may be prohibited from consenting to carriage, in any event? We also 
invite comment on whether stations have threatened to delay or refuse 
to reach a retransmission agreement unless the MVPD commits to forego 
carriage of out-of-market SV stations without including such commitment 
in the executed agreement. Do such threats circumvent the rule as 
written by keeping the commitment out of the executed document? Should 
we revise the rule to prevent such circumvention?
    28. Finally, we seek comment on whether there are any additional 
actions or practices that should be deemed to constitute per se 
violations of a Negotiating Entity's duty to negotiate retransmission 
consent agreements in good faith under Sec.  76.65 of the Commission's 
rules, or that we should otherwise prohibit in order to protect 
consumers. For example, if a broadcaster or MVPD repeatedly insists on 
month-to-month retransmission consent agreements or a new agreement 
term of less than one year, should that constitute a per se violation 
of the Negotiating Entity's duty to negotiate retransmission consent in 
good faith? Month-to-month retransmission consent agreements are 
different from short-term extensions to existing retransmission consent 
agreements for the purpose of negotiating a mutually satisfactory long-
term retransmission consent agreement, which the Commission encourages 
as a means of avoiding a loss of programming. In addition, how should 
the Commission view the required inclusion of a ``most favored nation'' 
(MFN) clause in a retransmission consent agreement? An MFN clause 
refers to an agreement that if Party A awards terms or conditions to a 
third party that are more favorable than those currently in place with 
Party B, then Party A must offer the more favorable terms or conditions 
to Party B. How often are MFN clauses included in retransmission 
consent agreements, what is their intended purpose, and what is their 
effect on retransmission consent negotiations?
    29. With respect to other practices the Commission should consider, 
one commenter stated, ``Small and mid-size MVPDs could greatly enhance 
their ability to negotiate with broadcasters if they were permitted to 
pool their resources, appoint an agent, and negotiate as a group.'' We 
seek comment on this proposal, including how to reconcile it with the 
proposal described above that would prevent a broadcast station from 
granting to another station or station group the right to negotiate or 
the power to approve its retransmission consent agreement when the 
stations are not commonly owned. In addition, we ask parties to comment 
on whether small and new entrant MVPDs are typically forced to accept 
retransmission consent terms that are less favorable than larger or 
more established MVPDs, and if so, whether this is fair. And, several 
commenters have suggested that the Commission should address the 
ability of broadcasters to condition retransmission consent on the 
purchase of other programming services, such as the programming of 
affiliated non-broadcast networks. We note that a number of commenters 
see problems with such broadcaster requirements. Is this something that 
the Commission should consider in evaluating whether broadcasters have 
negotiated in good faith?
    30. Are there additional actions that should be listed as 
presumptive breaches of good faith but subject to arguments rebutting 
the presumption in special circumstances? Would the approach of 
rebuttable presumptions rather than per se violations offer beneficial 
flexibility or diminish the benefits of greater specificity in the good 
faith rule? We also invite comment on ways the Commission can 
strengthen the remedies available upon finding a violation of the good 
faith standards to encourage compliance with the rules. Are there 
additional penalties that the Commission can impose for failure to 
negotiate in good faith that would provide a meaningful incentive for 
compliance with the good faith standard, such as considering such 
failure in the context of license renewals, including, e.g., satellite 
and CARS licenses? See, e.g., 47 CFR 25.102, 25.156, 25.160, 78.11 et 
seq.; 47 U.S.C. 301, 308(b), 309. Finally, to what extent do MVPDs 
impose early termination

[[Page 17079]]

fees (ETFs) on their subscribers, and what effect, if any, do ETFs have 
on retransmission consent negotiations and on consumers' ability to 
switch MVPDs in the event of a negotiation impasse? What actions, if 
any, could the Commission take to address any problems involving ETFs?

B. Specification of the Totality of the Circumstances Standard of Sec.  
76.65(b)(2) of the Commission's Rules

    31. We seek comment on revising the ``totality of the 
circumstances'' standard for determining whether actions in the 
negotiating process are taken in good faith, in an effort to improve 
the standard's utility and to better serve innocent consumers. As 
described in greater detail below, we invite comment on how the 
Commission can more effectively evaluate complaints that do not allege 
per se violations but involve behavior calculated to threaten 
disruption of consumer access as a negotiating tactic. We seek comment 
on particular behavior that the Commission should evaluate in the 
context of the ``totality of the circumstances'' standard.
    32. Pursuant to Sec.  76.65(b)(2) of the Commission's rules, ``a 
Negotiating Entity may demonstrate, based on the totality of the 
circumstances of a particular retransmission consent negotiation, that 
a television broadcast station or multichannel video programming 
distributor breached its duty to negotiate in good faith * * *.'' 47 
CFR 76.65(b)(2). The Commission has stated, ``[w]e do not intend the 
totality of the circumstances test to serve as a `back door' inquiry 
into the substantive terms negotiated between the parties.'' Good Faith 
Order. Rather, the totality of the circumstances test enables the 
Commission to consider a complaint alleging that, while a Negotiating 
Entity did not violate the per se objective standards, its proposals or 
actions were ``sufficiently outrageous,'' or included terms or 
conditions not based on competitive marketplace considerations, so as 
to violate the good faith negotiation requirement. See id.
    33. Some commenters have argued that the Commission should clarify 
or expand on the totality of the circumstances standard, including the 
related concept of competitive marketplace considerations, while others 
do not support changes to our rules governing retransmission consent. 
We seek comment on whether to provide more specificity for the meaning 
and scope of the ``totality of the circumstances'' standard of Sec.  
76.65(b)(2) of the Commission's rules, in order to define more clearly 
the instances in which a Negotiating Entity may violate this standard. 
For example, the Media Bureau previously found a violation of the 
totality of the circumstances standard, in response to a petition filed 
by WLII/WSUR Licensee Partnership, G.P. against Choice Cable T.V. 
(Choice), regarding the parties' negotiations for carriage of WLII-TV 
and its booster stations WSUR-TV and WORA-TV. See Letter to Jorge L. 
Bauermeister, 22 FCC Rcd 4933. While Choice stated that it halted 
negotiations because it began carrying WLII's programming through 
arrangements with WORA, Choice failed to provide evidence of a valid 
retransmission consent agreement with WORA, and thus the Media Bureau 
found that Choice breached its duty to negotiate in good faith. See id. 
at 4933-34. Are there additional circumstances that the Commission 
should consider in evaluating the totality of the circumstances, or is 
the ``totality of the circumstances'' best left as a general provision 
to capture those actions and behaviors that we do not now foresee but 
that may impede productive and fair negotiations? We note that the 
Commission previously provided examples of bargaining proposals that 
are presumptively consistent and presumptively inconsistent with 
competitive marketplace considerations and the good faith negotiation 
requirement. See Good Faith Order. Should any of the potential 
additional per se violations proposed in Section III.A., above, instead 
be considered as part of the totality of the circumstances of a 
particular negotiation? Is it sufficient to retain the existing 
flexible standard, and look to precedent to provide specificity as 
warranted? We seek comment on particular ways in which we could provide 
more specificity in defining when conduct would breach the duty of good 
faith negotiation under the ``totality of the circumstances.''

C. Revision of the Notice Requirements

    34. A