Promoting the Availability of Diverse and Independent Sources of Video Programming, 10241-10246 [2016-04331]

Download as PDF Federal Register / Vol. 81, No. 39 / Monday, February 29, 2016 / Notices on existing state and tribal bioassessment efforts, with the goal of collecting comparable data at a limited number of sites that can be pooled at a regional level. Pooling data enables more robust regional analyses and improves the ability to detect trends over shorter time periods. This document describes the development and implementation of the RMNs. It includes information on selection of sites, expectations for data collection, the rationale for collecting these data, data infrastructure, and provides examples of how the RMN data will be used and analyzed. The report concludes with a discussion on the status of monitoring activities and next steps. Dated: February 19, 2016. Mary A. Ross, Deputy Director, National Center for Environmental Assessment. [FR Doc. 2016–04087 Filed 2–26–16; 8:45 am] BILLING CODE 6560–50–P ENVIRONMENTAL PROTECTION AGENCY [EPA–HQ–OECA–2011–0239; FRL—9942– 71–OEI] Information Collection Request Submitted to OMB for Review and Approval; Comment Request; NSPS for Grain Elevators (Renewal) Environmental Protection Agency (EPA). ACTION: Notice. AGENCY: The Environmental Protection Agency has submitted an information collection request (ICR), ‘‘NSPS for Grain Elevators (40 CFR part 60, subpart DD) (Renewal)’’ (EPA ICR No. 1130.11, OMB Control No. 2060–0082), to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act (44 U.S.C. 3501 et seq.). This is a proposed extension of the ICR, which is currently approved through February 29, 2016. Public comments were previously requested via the Federal Register (80 FR 32120) on June 5, 2015 during a 60-day comment period. This notice allows for an additional 30 days for public comments. A fuller description of the ICR is given below, including its estimated burden and cost to the public. An Agency may neither conduct nor sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. asabaliauskas on DSK5VPTVN1PROD with NOTICES SUMMARY: VerDate Sep<11>2014 19:23 Feb 26, 2016 Jkt 238001 Additional comments may be submitted on or before March 30, 2016. ADDRESSES: Submit your comments, referencing Docket ID Number EPA– HQ–OECA–2011–0239, to: (1) EPA online using www.regulations.gov (our preferred method), or by email to docket.oeca@epa.gov, or by mail to: EPA Docket Center, Environmental Protection Agency, Mail Code 28221T, 1200 Pennsylvania Ave. NW., Washington, DC 20460; and (2) OMB via email to oira_submission@omb.eop.gov. Address comments to OMB Desk Officer for EPA. EPA’s policy is that all comments received will be included in the public docket without change including any personal information provided, unless the comment includes profanity, threats, information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. FOR FURTHER INFORMATION CONTACT: Patrick Yellin, Monitoring, Assistance, and Media Programs Division, Office of Compliance, Mail Code 2227A, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460; telephone number: (202) 564–2970; fax number: (202) 564–0050; email address: yellin.patrick@epa.gov. SUPPLEMENTARY INFORMATION: Supporting documents which explain in detail the information that the EPA will be collecting are available in the public docket for this ICR. The docket can be viewed online at www.regulations.gov or in person at the EPA Docket Center, WJC West, Room 3334, 1301 Constitution Ave. NW., Washington, DC. The telephone number for the Docket Center is 202–566–1744. For additional information about EPA’s public docket, visit: http:// www.epa.gov/dockets. Abstract: The New Source Performance Standards (NSPS) apply to each affected facility at any grain terminal elevator or any grain storage elevator. The facilities are each truck unloading station, truck loading station, barge and ship loading station, railcar loading station, railcar unloading station, grain dryer and all grain handling operations that commenced construction, modification or reconstruction after August 3, 1978. Owners or operators of the affected facilities must make a one-time-only report of the date of construction or reconstruction, notification of the actual date of startup, notification of any physical or operational change to existing facility that may increase the rate of emission of the regulated pollutant, notification of initial DATES: PO 00000 Frm 00037 Fmt 4703 Sfmt 4703 10241 performance test; and results of initial performance test. Owners or operators are also required to maintain records of the occurrence and duration of any startup, shutdown, or malfunction, or any period during which the monitoring system is inoperative. Form Numbers: None. Respondents/affected entities: Grain elevator operations. Respondent’s obligation to respond: Mandatory (40 CFR part 60, subpart DD). Estimated number of respondents: 200 (total). Frequency of response: Initially. Total estimated burden: 460 hours (per year). Burden is defined at 5 CFR 1320.3(b). Total estimated cost: $46,000 (per year). There are no annualized capital/ startup or O&M costs. Changes in the Estimates: There is a decrease in the respondent and Agency burden in this ICR compared to the previous ICR. This is not due to program changes. The burden and cost decrease because we corrected the burden estimates by removing the annual summary report line item to more accurately reflect the Subpart DD regulatory requirements. The current Subpart DD NSPS does not impose any ongoing monitoring or reporting requirement. Courtney Kerwin, Acting Director, Collection Strategies Division. [FR Doc. 2016–04241 Filed 2–26–16; 8:45 am] BILLING CODE 6560–50–P FEDERAL COMMUNICATIONS COMMISSION [MB Docket No. 16–41; FCC 16–19] Promoting the Availability of Diverse and Independent Sources of Video Programming Federal Communications Commission. ACTION: Notice of inquiry. AGENCY: In this document, the Commission seeks comment on the principal issues that independent video programmers confront in gaining carriage in the current marketplace and possible actions the Commission or others might take to address those issues. The goal of this proceeding is to begin a conversation on the state of independent and diverse programming, and to assess how the Commission or others could foster greater consumer choice and enhance diversity in the evolving video marketplace by SUMMARY: E:\FR\FM\29FEN1.SGM 29FEN1 asabaliauskas on DSK5VPTVN1PROD with NOTICES 10242 Federal Register / Vol. 81, No. 39 / Monday, February 29, 2016 / Notices eliminating or reducing any barriers faced by independent programmers in reaching viewers. The Commission seeks to explore ways to alleviate such barriers, as well as its legal authority to do so. DATES: Comments are due on or before March 30, 2016; reply comments are due on or before April 19, 2016. ADDRESSES: You may submit comments, identified by MB Docket No. 16–41, by any of the following methods: • Federal eRulemaking Portal: http:// www.regulations.gov. Follow the instructions for submitting comments. • Federal Communications Commission’s Web site: http:// fjallfoss.fcc.gov/ecfs2/. 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. 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 email: FCC504@fcc.gov or phone: (202) 418–0530 or TTY: (202) 418–0432. 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 Calisha Myers or Raelynn Remy of the Policy Division, Media Bureau at (202) 418–2120 or Calisha.Myers@fcc.gov; Raelynn.Remy@ fcc.gov. SUPPLEMENTARY INFORMATION: This is a summary of the Commission’s Notice of Inquiry, FCC 16–19, adopted and released on February 18, 2016. The full text is available for public inspection and copying during regular business hours in the FCC Reference Center, Federal Communications Commission, 445 12th Street SW., Room CY–A257, Washington, DC 20554. This document will also be available via ECFS at http:// fjallfoss.fcc.gov/ecfs/. Documents will be available electronically in ASCII, Microsoft Word, and/or Adobe Acrobat. The complete text may be purchased from the Commission’s copy contractor, 445 12th Street SW., Room CY–B402, Washington, DC 20554. Alternative formats are available for people with disabilities (Braille, large print, electronic files, audio format), by sending an email to fcc504@fcc.gov or VerDate Sep<11>2014 19:23 Feb 26, 2016 Jkt 238001 calling the Commission’s Consumer and Governmental Affairs Bureau at (202) 418–0530 (voice), (202) 418–0432 (TTY). Synopsis I. Introduction 1. Over the last quarter century, we have seen significant changes in the media landscape that have fundamentally altered the way in which Americans access and consume video programming. When Congress passed the 1992 Cable Act, the majority of American households had access to only one pay television service, and alternatives to that service were in their incipient stages. By contrast, consumers today can access video programming over multiple competing platforms, and the dominance of incumbent pay TV distributors has eroded. However, incumbent operators retain a very important position in the video programming marketplace. Although competition among video distributors has grown, traditional multichannel video programming distributor (MVPD) carriage is still important for the growth of many emerging programmers. Some independent video programmers 1 have expressed concern that certain carriage practices of cable operators and other MVPDs may limit their ability to reach viewers. 2. A central objective of multichannel video programming regulation is to foster a diverse, robust, and competitive marketplace for the delivery of multichannel video programming.2 As the agency charged by statute with implementing this objective, we seek to start a fact-finding exercise on the current state of programming diversity. Through this NOI, we seek comment on the principal issues that independent video programmers confront in gaining carriage in the current marketplace and possible actions the Commission or others might take to address those issues. Our goal in this proceeding is to begin a conversation on the state of independent and diverse programming, and to assess how the Commission or others could foster greater consumer choice and enhance diversity in the evolving video marketplace by eliminating or reducing any barriers faced by independent programmers in 1 For purposes of this proceeding, we define an ‘‘independent video programmer’’ or ‘‘independent programmer’’ as one that is not vertically integrated with a MVPD. 2 See, e.g., Telecommunications Act of 1996, Pub L. 104–104, § 257(b), 110 Stat. 56, 77, (codified at 47 U.S.C. 257(b)); 47 U.S.C. 521; 47 U.S.C. 532(a); 47 U.S.C. 533(f)(2). See also 47 U.S.C. 521(a)(4), (b)(1) through (5); H.R. No. 102–862, at 2, 1992 U.S.C.C.A.N. 1231, 1232. PO 00000 Frm 00038 Fmt 4703 Sfmt 4703 reaching viewers. For purposes of this NOI, we are particularly interested in starting a dialogue on barriers experienced by all types of independent programmers, including small programmers and new entrants. We seek to explore ways that the Commission can alleviate such barriers, as well as its legal authority to do so. Similar to the Commission’s exploratory efforts in other proceedings, we also seek to be better informed to make any potential recommendations to other agencies, Congress, or the private sector, if we find that solutions to barriers exist that are beyond the authority of this agency. We also are interested in addressing challenges faced by a specific type of independent programmer—namely, public, educational, and governmental (PEG) channels —with respect to MVPD carriage. II. Discussion A. State of the Marketplace for Independent Programming 3. The Commission seeks information on the current state of the marketplace for independent programming and the availability of such programming to consumers. Has the number of independent programmers grown or decreased? Has the diversity of programming available to consumers expanded or contracted? What percentage of non-broadcast networks are independent programmers? We also seek input on the manner in which independent programmers are carried by distributors and whether the answers to the following questions differ for independent programmers and vertically integrated programmers. To what extent are independent programmers carried by traditional MVPDs and to what extent are they carried by over-the-top (OTT) providers? How many of the independent networks distributed by MVPDs are also available on OTT platforms? Is it more difficult for independent programmers to gain carriage on certain MVPDs than others (e.g., cable vs. non-cable MVPDs, or smaller vs. larger MVPDs)? Does the size of the MVPD matter? Is there a disparity in the amount of independent programming on smaller versus larger MVPDs? Do large MVPDs have market power that has an effect on the ability of independent programmers to obtain carriage? Conversely, to what extent does the size of the independent programmer matter? Do large independent programmers have an easier time getting carried than smaller ones? Are there characteristics of independent programmers that enable some to gain MVPD carriage but not E:\FR\FM\29FEN1.SGM 29FEN1 Federal Register / Vol. 81, No. 39 / Monday, February 29, 2016 / Notices others? To what extent does the level of competition among MVPDs impact the bargaining leverage of independent programmers in negotiations for carriage deals? With regard to the foregoing questions, commenters should provide examples of and relevant information regarding specific independent program networks. B. Principal Marketplace Obstacles Faced by Independent Programmers 4. Independent programmers and others have alleged in various proceedings that cable operators and other MVPDs engage in program carriage practices that hamper the ability of programmers with limited bargaining leverage to obtain distribution of their content. They claim that these practices deprive consumers of the benefits of competition, including greater choice and diversity in programming content. We seek input below on several practices that independent programmers allege have an adverse impact on them.3 asabaliauskas on DSK5VPTVN1PROD with NOTICES 1. Insistence on Contract Provisions That Constrain the Ability of Independent Programmers To Compete 5. Independent programmers and others have asserted that certain MVPDs often demand that carriage agreements include certain contractual provisions, such as most favored nation (MFN) and alternative distribution method (ADM) clauses, that hinder programming competition, innovation, and diversity. 6. Most Favored Nation Provisions. In general, MFN provisions entitle the contracting video programming distributor to modify a programming agreement to incorporate more favorable rates, contract terms, or conditions that the contracting programmer later agrees to with another distributor.4 These 3 Pursuant to section 103(c) of the STELA Reauthorization Act of 2014, the Commission recently issued a Notice of Proposed Rulemaking to review the totality of the circumstances test for evaluating whether broadcast stations and MVPDs are negotiating for retransmission consent in good faith. See Implementation of section 103 of the STELA Reauthorization Act of 2014, Totality of the Circumstances Test, MB Docket No. 15–216, Notice of Proposed Rulemaking, 80 FR 59706 (2015) (Totality of the Circumstances NPRM). Some of the issues raised in this NOI regarding negotiations between MVPDs and programmers in general are similar to issues raised in the Totality of the Circumstances NPRM. However, we direct parties wishing to comment on issues relating to retransmission consent negotiations between broadcasters and MVPDs to file any comments on those issues in the Totality of the Circumstances NPRM docket. 4 MFN rights can be conditional or unconditional. A conditional MFN provision entitles a distributor to certain contractual rights that the programmer has granted to another distributor, as long as the distributor also accepts equivalent or related terms and conditions contained in that other distributor’s VerDate Sep<11>2014 19:23 Feb 26, 2016 Jkt 238001 10243 provisions are the result of contractual agreements between programmers and distributors. MFN clauses historically were used to protect favorable carriage rates obtained by MVPDs that brought a large subscriber base to the programmer, but can be misused to anticompetitive means in some cases.5 Independent programmers claim that some MVPDs increasingly have insisted on MFN treatment without regard to the concessions or commitments made by the programmer to secure those terms from another MVPD and without requiring the MVPD to deliver commensurate value to the programmer. 7. Some parties claim that MVPDs’ insistence on MFN provisions precludes an independent programmer from making unique or innovative arrangements designed to achieve initial carriage of new programming, because those same unique terms could then be required to be extended to all MVPDs. They further argue that, given the proliferation of MFN provisions, an independent programmer that achieves some carriage is likely to have numerous MFN obligations, and that this can initiate a ‘‘domino effect’’ when a single term in an agreement with one MVPD or OTT service triggers the MFN obligations in a programmer’s agreements with other MVPDs. In particular, the prospect of having to make the same concessions to all of the MVPDs with which an independent programmer has MFN obligations may impede the ability of independent programmers to negotiate carriage agreements with new-entrant distributors that have smaller subscriber bases, such as new OTT distributors. As a result, programmers and some advocacy groups claim, some MVPDs are able to demand MFN concessions from independent programmers that make OTT distribution economically infeasible, which deters independent programmers from developing new and innovative types of video programming, inhibits new distribution models, and limits the diversity of programming available to consumers. On the other hand, some antitrust analyses have noted that in some situations MFN provisions may yield benefits, such as lower prices, reduced transaction costs, or the development of new products.6 8. We seek comment on the prevalence and scope of MFNs today in contracts for carriage of non-broadcast video programming. Are MFN provisions included in carriage contracts between independent programmers and OTT distributors, or do they tend to be included only in MVPD carriage contracts? Are MFN provisions more often included in carriage contracts involving independent programmers than those involving vertically integrated programmers? Does the size of the MVPD or independent programmer affect whether MFN provisions are included in carriage contracts? Do MFN provisions in carriage agreements between MVPDs and independent programmers cover the terms of both other MVPD agreements and OTT agreements? If so, how often do such MFN provisions extend to OTT agreements? Do both cable and noncable MVPDs require MFN provisions? Do MFN provisions allow MVPDs to ‘‘cherry pick,’’ i.e., to take advantage of the lower price available in a separate carriage agreement without a reciprocal obligation? If so, how often? Will MVPDs accept some reciprocal obligations while refusing other reciprocal obligations? 9. We also seek comment on the costs and benefits of these provisions. Are there specific types of MFN provisions that particularly hinder the creation and distribution of new or niche programming? If so, how do those provisions have this effect? How do distributors enforce MFN provisions? Are there specific means of enforcement that are more common or more onerous to independent programmers than others? 7 What benefits are associated with MFN provisions, and are there contexts in which the benefits outweigh any harmful effects of such provisions? Do MFNs result in lower prices for consumers? Do they enhance the likelihood that a start-up independent programmer will be able to gain carriage on MVPDs? Do they reduce transaction costs between MVPDs and independent programmers? Do independent programmers receive any consideration, economic or non-economic, from agreement. An unconditional MFN provision, by contrast, contains no such requirement that the distributor entitled to MFN rights accept equivalent or related terms and conditions; it can elect to incorporate in its agreement any of the terms of the other distributor’s agreement that it wants to incorporate. 5 See United States v. Apple, 791 F.3d 290, 319 (2d Cir. 2015), citing Blue Cross & Blue Shield United of Wisconsin v. Marshfield Clinic, 65 F.3d 1406, 141 (7th Cir. 1995). 6 See Steven C. Salop & Fiona Scott Morton, Developing an Administrable MFN Enforcement Policy, 27 Antitrust 15, 15 (2013); Jonathan B. Baker & Judith A. Chevalier, The Competitive Consequences of Most-Favored-Nation Provisions, 27 Antitrust 20, 21–22 (2013). 7 For example, some means of enforcement may include ‘‘self-policing’’ by the programmer, an inquiry initiated by the MVPD, or contractual rights that permit an MVPD to periodically audit the programmer. PO 00000 Frm 00039 Fmt 4703 Sfmt 4703 E:\FR\FM\29FEN1.SGM 29FEN1 asabaliauskas on DSK5VPTVN1PROD with NOTICES 10244 Federal Register / Vol. 81, No. 39 / Monday, February 29, 2016 / Notices MVPDs in exchange for agreeing to MFN provisions? 10. Alternative Distribution Method Provisions. An ADM provision restricts a programmer’s ability to distribute its programming via an alternate platform, often explicitly prohibiting specific nonMVPD distribution methods (such as online platforms) and often for a specified period of time (commonly referred to as a ‘‘window’’) following the programming’s original airing on a traditional distribution channel.8 ADMs may take a variety of less-than-absolute forms. For example, some provisions may ban the distribution of content on a platform that carries fewer than a prescribed minimum number of channels. This type of restriction may have the effect of preventing a programmer from taking advantage of a desired distribution opportunity, such as OTT distribution. According to some industry observers, in some cases, a programmer that wishes to distribute its content online faces the risk that MVPDs will refuse to carry its network. Independent video programmers argue that limitations on the sharing or licensing of an independent network’s content online reduce the network’s ability to advertise and promote its content, as well as to share original reporting and newsgathering with other outlets. On the other hand, an ADM provision might encourage an MVPD to provide an independent programmer with distribution that it otherwise would not receive if it decided to also make its content available on alternative platforms. 11. We seek comment on the prevalence and scope of ADMs in contracts for carriage of non-broadcast video programming as well as the costs and benefits associated with such provisions. We request input on the extent to which ADM provisions vary, the consideration offered in exchange for such provisions, and the ways in which distributors enforce ADM provisions. Are ADM provisions included in carriage contracts between independent programmers and OTT distributors, or are they included only in MVPD carriage contracts? Are ADM provisions included only in carriage contracts involving independent programmers or are they included in contracts involving vertically integrated programmers as well? Do both cable and non-cable MVPDs require such provisions? Are there specific provisions or means of enforcement of ADM provisions that are more common 8A traditional distribution channel typically offers linear programming–programming prescheduled by the programming provider. VerDate Sep<11>2014 19:23 Feb 26, 2016 Jkt 238001 to independent programmers than others, or that have a different effect on independent programmers? Is there an industry standard for the windowing restrictions included in ADM provisions? Are certain window requirements more harmful to independent programmers than others, and if so, how prevalent are such requirements? In addition to carriage, do independent programmers receive any consideration, economic or noneconomic, from MVPDs in exchange for agreeing to ADM provisions? By providing MVPDs with incentives to carry new or under-exposed content, can ADM provisions actually enable independent programmers to gain MVPD carriage and thereby increase the exposure of their programming? Are there other benefits associated with these provisions? 12. We also seek comment on the impact of MFN and ADM provisions on the video marketplace and on the availability of independent programming. Do such provisions thwart competition, diversity, or innovation? Or do they increase MVPD’s willingness to contract with independent programmers? Do these types of provisions reflect a proper balance between an MVPD’s legitimate interest in being the exclusive distributor of programming content for a set period of time and a programmer’s legitimate interest in providing its programming to diverse distributors and platforms? We seek comment on whether MFN and ADM provisions may be used to limit the ability of independent programmers to experiment with new or unique distribution models or to tailor deals with smaller MVPDs or online distributors. In particular, how might MFNs or ADMs limit the ability of a programmer to license or distribute its programming over-the-top or via its own platforms, including as part of a directto-consumer Web site or application that offers linear or on-demand content? Are there specific types of provisions (e.g., unconditional MFNs or ADMs restricting paid distribution) that are aimed more at restricting new means of distribution than at facilitating efficient negotiations or protecting an MVPD’s investment in programming? Are there specific types of MFN or ADM provisions that are pro-competitive and enhance independent programmers’ ability to gain MVPD carriage? 13. Other Contractual Provisions and OTT Carriage. We also seek comment on whether there are other types of contractual provisions besides MFN and ADM provisions that are used today that impact, in a negative or positive way, PO 00000 Frm 00040 Fmt 4703 Sfmt 4703 the ability of independent programmers to distribute their programming. Are there circumstances under which these limits actually end up enabling MVPD distribution of program content that might not otherwise be carried? Aside from contractual issues, are there are other aspects of MVPD carriage that are preventing the creation and distribution of diverse, independent programming? Ensuring diverse and novel programming requires a viable, profitable business model, for both MVPDs and programmers. Is it possible to sustain a business model based upon carriage by a collection of small MVPDs, or is it necessary to obtain carriage by a larger MVPD in order to attract carriage by additional MVPDs? Is there a threshold level of MVPD carriage that is necessary to sustain a viable business model? 14. In addition, we request input on the costs and benefits to independent programmers of forgoing MVPD carriage to pursue OTT carriage. While OTT distribution has lower barriers to entry, it is still a nascent service in some respects. Is the OTT platform a viable business model? Is it a viable alternative to MVPD carriage? If not, what must happen before it can be considered a viable business model? Does the OTT platform provide an easier path to marketplace success? What benefits of carriage (e.g., level of viewership or advertising revenue) on OTT platforms are necessary for an independent programmer to remain viable? What are the difficulties new and emerging programmers face in negotiating for these benefits? How do the benefits of carriage on OTT platforms compare with the benefits of carriage on MVPD platforms? Do MVPDs offer favorable carriage terms that OTT platforms are unable to offer? If so, what are these terms and to what extent are these terms necessary to remain viable in today’s marketplace? Can a successful OTT experience lead to future MVPD carriage and/or vice versa? To the extent possible, we request that commenters provide examples of independent programmers that have been able to launch and grow on OTT platforms. Despite such launch and growth, are there additional challenges that independent programmers face in gaining carriage and growing their viewership on OTT platforms? If so, what are they and what effect do they have? Are any of these challenges particular to diverse and niche programmers? 2. Program Bundling 15. MVPDs claim that some large media entities with multiple program E:\FR\FM\29FEN1.SGM 29FEN1 asabaliauskas on DSK5VPTVN1PROD with NOTICES Federal Register / Vol. 81, No. 39 / Monday, February 29, 2016 / Notices offerings, including vertically-integrated programmers, are able to force MVPDs to carry less desirable content through bundling arrangements. In particular, these parties assert that such entities often leverage their marquee programming (e.g., premium channels or regional sports programming) to force MVPDs to carry additional channels that have little or no consumer demand. Some parties maintain that the proliferation of bundling arrangements limits programming choices and raises costs for consumers by forcing MVPDs to accept less desirable programming that may displace independent and diverse programming. Independent programmers argue that bundling arrangements drain the resources and monopolize the channel capacity of MVPDs to the detriment of independent programming. MVPDs that desire to cut costs then may drop independent programming from their lineups, refuse to carry new programming, or offer carriage only on terms less favorable to independent programmers. Other independent programmers argue that forced bundling is merely a pretext used by MVPDs in order to justify continued denial of carriage for independent programming. Along similar lines, some parties have claimed that programmers impose an extra charge on MVPDs for subscriber access to their online programming and that this has the potential to drain resources that might otherwise be devoted to carriage of independent programming. How pervasive is this practice? 16. Large programmers have defended the use of program bundles and refuted arguments that they have adverse effects on MVPDs or consumers. They maintain that, through the bundling of programming, MVPDs have the option of obtaining valuable programming at discounted prices. In this regard, such programmers contend that these programming bundles—offered to both small and large MVPDs—offer substantially greater value to MVPDs and consumers than standalone offers. 17. We invite comment on the impact of bundling practices. To what extent does bundling constrain MVPDs from carrying independent programming? Do smaller MVPDs feel the constraints of bundling more acutely than large MVPDs because of their limited capacity or limited resources? Does bundling benefit consumers by lowering prices for content? Are there any instances of independent programmers being dropped or not carried at all because of the constraints placed on MVPD systems as a result of bundling? To what extent do bundling practices, together with capacity constraints, result in VerDate Sep<11>2014 19:23 Feb 26, 2016 Jkt 238001 independent programmers being dropped from MVPDs’ channel lineups? Are capacity constraints as significant as they were years ago? With technological changes, will capacity constraints be a less significant issue in the future? 18. Recently, the marketplace has trended away from large MVPD bundles. Some MVPDs have begun offering smaller programming packages, and programmers have launched a number ` of online a la carte and on-demand program offerings. We seek comment on what effect, if any, these trends have had on independent programmers. Some MVPDs have argued that these trends threaten independent programmers. They assert, among other things, that these trends undermine the economics of large MVPD bundles that have enabled MVPDs to carry independent programmers offering diverse and niche programming to consumers. Is there evidence to support the claims that marketplace trends ` toward smaller bundles and a la carte or on-demand offerings adversely impact independent programmers or reduce consumer choice in programming? Alternatively, is there any evidence suggesting that these trends may provide benefits to independent programmers? C. Other Marketplace Obstacles 19. In a number of proceedings, independent programmers have cited other obstacles in their efforts to secure carriage by certain MVPDs or OTT providers. According to some programmers, for example, some MVPDs, rather than refusing carriage outright to a programmer (which might spur a complaint), instead will purposefully fail to respond to carriage negotiation requests in a timely manner or fail to acknowledge such requests entirely. Independent programmers further claim that when MVPDs do respond to carriage requests, they in some cases knowingly put forth inadequate counter offers. Independent programmers also claim that some MVPDs have employed a tactic of avoiding negotiations until just before the expiration of existing carriage agreements, thereby forcing independent programmers to accept uncertain, month-to-month carriage arrangements. We seek comment on whether these practices are being employed, and if so, the extent to which they are being used, as well as examples that demonstrate the impact of such practices. To what extent, if at all, do such practices impede entry by or successful growth of independent programmers? Are there other practices or marketplace issues (e.g., demands by PO 00000 Frm 00041 Fmt 4703 Sfmt 4703 10245 MVPDs for an ownership stake in independent programmers, channel placement, or tiering practices) that may impede the entry or growth of independent programmers? Are there practices that benefit the growth of independent programmers? 20. We also seek comment on the extent to which some independent programmers may have leverage over some MVPDs. For example, are there situations in which an independent programmer may condition any potential carriage arrangement on carriage by an MVPD of its suite of programming on distribution to a very high percentage of the MVPD’s customers (i.e., minimum penetration requirements)? How would such practices affect the ability of MVPDs to offer ‘‘skinny’’ bundles that could be combined with OTT services that could include more diverse and independent programming? Similarly, we seek comment on assertions made by some MVPDs that certain programmers insist on tier placement commitments that compel MVPDs to place entire bundles in the most popular programming packages. How do programmers typically calculate the number of video subscribers that minimum penetration requirements are based on? 21. Consumer advocacy groups and PEG providers contend that MVPDs do not make PEG programming and information about PEG programming adequately available to subscribers. For example, they argue that some MVPDs often do not provide in their on-screen menus or guides basic information about PEG channels and programs, such as information about accessibility, channel names, or program names or descriptions. They assert that the failure by MVPDs to provide the same level of program description information for PEG channels that they offer for other programmers discriminates against PEG providers. In other proceedings, these parties have advocated that the Commission mandate a nondiscriminatory approach that would require MVPDs to provide PEG information on their program guides on the same terms and conditions as other programmers if a PEG programmer supplies program-specific information. We seek comment on MVPDs’ practices with respect to making PEG programming information available to subscribers. To the extent that MVPDs do not make this information available, is this for technical reasons, and, if so, can the technical barriers be surmounted? Is the Congressionallyimposed prohibition against editorial control of PEG channels relevant to this E:\FR\FM\29FEN1.SGM 29FEN1 10246 Federal Register / Vol. 81, No. 39 / Monday, February 29, 2016 / Notices asabaliauskas on DSK5VPTVN1PROD with NOTICES issue? 9 What is the source of the Commission’s authority in this area, if any? D. Possible Regulatory Tools for Addressing Market Obstacles Faced by Independent Programmers 22. What role, if any, should the Commission play in addressing any obstacles that prevent greater access by consumers to sources of independent and diverse programming? Are there other entities—including other agencies, Congress or private entities—that could play a role in addressing these obstacles? Can the marketplace evolution toward greater competition and choice among distribution platforms be expected to ease any obstacles, or may it exacerbate them in some respects? Are the Commission’s existing regulatory tools adequate to address any obstacles? Are there actions that we could recommend that others explore in order to promote programming diversity? Is there a role for other federal agencies in this review? Are there concerns that would be appropriate to refer to the Department of Justice and/or the Federal Trade Commission? 10 We seek comment on any regulatory or other approaches the Commission should take to alleviate obstacles to the distribution of independent and diverse programming. 23. We also seek comment on the Commission’s legal authority to alleviate any obstacles. Specifically, we seek comment on whether section 257 of the Communications Act of 1934, as amended (Act), provides the Commission with authority to impose regulations aimed at improving programming diversity. In particular, we seek comment on section 257(b), which directs the Commission to promote the policies and purposes of the Act favoring diversity of media voices, vigorous economic competition, technological advancement, and promotion of the public interest, convenience, and necessity.11 We also request input on whether Section 616(a) of the Act provides the Commission with the authority to take action with respect to program carriage practices that may have an adverse impact on independent programmers. Specifically, we invite comment on section 616(a)’s mandate that the Commission establish regulations governing program carriage agreements and related practices 9 47 U.S.C. 533(e). note that the Commission acts in a manner that is both complementary to the work of the antitrust agencies and supported by their application of antitrust laws. See generally 47 U.S.C. 152(b). 11 47 U.S.C. 257(b). 10 We VerDate Sep<11>2014 19:23 Feb 26, 2016 Jkt 238001 between cable operators or other multichannel video programming distributors and video programming vendors.12 What other authority does the Commission or others have to alleviate obstacles to the distribution of independent and diverse programming? III. Procedural Matters 24. Ex Parte Rules. This is an exempt proceeding in which ex parte presentations are permitted (except during the Sunshine Agenda period) and need not be disclosed.13 25. Filing Requirements. Pursuant to Sections 1.415 and 1.419 of the Commission’s rules, 47 CFR 1.415, 1.419, interested parties may file comments and reply comments on or before the dates indicated on the first page of this document. Comments may be filed using the Commission’s Electronic Comment Filing System (ECFS). See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998). • Electronic Filers: Comments may be filed electronically using the Internet by accessing the ECFS: http:// fjallfoss.fcc.gov/ecfs2/. • Paper Filers: Parties who choose to file by paper must file an original and one copy of each filing. If more than one docket or rulemaking number appears in the caption of this proceeding, filers must submit two additional copies for each additional docket or rulemaking number. Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission’s Secretary, Office of the Secretary, Federal Communications Commission. Æ All hand-delivered or messengerdelivered paper filings for the Commission’s Secretary must be delivered to FCC Headquarters at 445 12th St. SW., Room TW–A325, Washington, DC 20554. The filing hours are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes and boxes must be disposed of before entering the building. Æ Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743. Æ U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street SW., Washington, DC 20554. 12 47 13 47 PO 00000 U.S.C. 536. CFR 1.1204(b)(1). Frm 00042 Fmt 4703 Sfmt 4703 26. Availability of Documents. Comments, reply comments, and ex parte submissions will be available for public inspection during regular business hours in the FCC Reference Center, Federal Communications Commission, 445 12th Street SW., CY– A257, Washington, DC 20554. These documents will also be available via ECFS. Documents will be available electronically in ASCII, Microsoft Word, and/or Adobe Acrobat. 27. People with Disabilities. To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an email to fcc504@fcc.gov or call the FCC’s Consumer and Governmental Affairs Bureau at (202) 418–0530 (voice), (202) 418–0432 (TTY). 28. Additional Information. For additional information on this proceeding, contact Calisha Myers or Raelynn Remy of the Policy Division, Media Bureau, at Calisha.Myers@ fcc.gov, Raelynn.Remy@fcc.gov, or (202) 418–2120. IV. Ordering Clause 29. Accordingly, IT IS ORDERED that, pursuant to Sections 1, 4(i), 4(j), 303(r), and 403 of the Communications Act of 1934, as amended, 47 U.S.C §§ 151, 154(i), 154(j), 303(r), 403, this Notice of Inquiry IS ADOPTED. Federal Communications Commission. Marlene H. Dortch, Secretary. [FR Doc. 2016–04331 Filed 2–26–16; 8:45 am] BILLING CODE 6712–01–P FEDERAL COMMUNICATIONS COMMISSION Federal Advisory Committee Act; Communications Security, Reliability, and Interoperability Council Federal Communications Commission. ACTION: Notice of public meeting. AGENCY: In accordance with the Federal Advisory Committee Act, this notice advises interested persons that the Federal Communications Commission’s (FCC or Commission) Communications Security, Reliability, and Interoperability Council (CSRIC) V will hold its fourth meeting. DATES: March 16, 2016. ADDRESSES: Federal Communications Commission, Room TW–C305 (Commission Meeting Room), 445 12th Street SW., Washington, DC 20554. FOR FURTHER INFORMATION CONTACT: Jeffery Goldthorp, Designated Federal SUMMARY: E:\FR\FM\29FEN1.SGM 29FEN1

Agencies

[Federal Register Volume 81, Number 39 (Monday, February 29, 2016)]
[Notices]
[Pages 10241-10246]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-04331]


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FEDERAL COMMUNICATIONS COMMISSION

[MB Docket No. 16-41; FCC 16-19]


Promoting the Availability of Diverse and Independent Sources of 
Video Programming

AGENCY: Federal Communications Commission.

ACTION: Notice of inquiry.

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SUMMARY: In this document, the Commission seeks comment on the 
principal issues that independent video programmers confront in gaining 
carriage in the current marketplace and possible actions the Commission 
or others might take to address those issues. The goal of this 
proceeding is to begin a conversation on the state of independent and 
diverse programming, and to assess how the Commission or others could 
foster greater consumer choice and enhance diversity in the evolving 
video marketplace by

[[Page 10242]]

eliminating or reducing any barriers faced by independent programmers 
in reaching viewers. The Commission seeks to explore ways to alleviate 
such barriers, as well as its legal authority to do so.

DATES: Comments are due on or before March 30, 2016; reply comments are 
due on or before April 19, 2016.

ADDRESSES: You may submit comments, identified by MB Docket No. 16-41, 
by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Federal Communications Commission's Web site: http://fjallfoss.fcc.gov/ecfs2/. 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. 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 email: FCC504@fcc.gov or phone: (202) 418-
0530 or TTY: (202) 418-0432.
    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 Calisha Myers or Raelynn Remy of the Policy 
Division, Media Bureau at (202) 418-2120 or Calisha.Myers@fcc.gov; 
Raelynn.Remy@fcc.gov.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Inquiry, FCC 16-19, adopted and released on February 18, 2016. The 
full text is available for public inspection and copying during regular 
business hours in the FCC Reference Center, Federal Communications 
Commission, 445 12th Street SW., Room CY-A257, Washington, DC 20554. 
This document will also be available via ECFS at http://fjallfoss.fcc.gov/ecfs/. Documents will be available electronically in 
ASCII, Microsoft Word, and/or Adobe Acrobat. The complete text may be 
purchased from the Commission's copy contractor, 445 12th Street SW., 
Room CY-B402, Washington, DC 20554. Alternative formats are available 
for people with disabilities (Braille, large print, electronic files, 
audio format), by sending an email to fcc504@fcc.gov or calling the 
Commission's Consumer and Governmental Affairs Bureau at (202) 418-0530 
(voice), (202) 418-0432 (TTY).

Synopsis

I. Introduction

    1. Over the last quarter century, we have seen significant changes 
in the media landscape that have fundamentally altered the way in which 
Americans access and consume video programming. When Congress passed 
the 1992 Cable Act, the majority of American households had access to 
only one pay television service, and alternatives to that service were 
in their incipient stages. By contrast, consumers today can access 
video programming over multiple competing platforms, and the dominance 
of incumbent pay TV distributors has eroded. However, incumbent 
operators retain a very important position in the video programming 
marketplace. Although competition among video distributors has grown, 
traditional multichannel video programming distributor (MVPD) carriage 
is still important for the growth of many emerging programmers. Some 
independent video programmers \1\ have expressed concern that certain 
carriage practices of cable operators and other MVPDs may limit their 
ability to reach viewers.
---------------------------------------------------------------------------

    \1\ For purposes of this proceeding, we define an ``independent 
video programmer'' or ``independent programmer'' as one that is not 
vertically integrated with a MVPD.
---------------------------------------------------------------------------

    2. A central objective of multichannel video programming regulation 
is to foster a diverse, robust, and competitive marketplace for the 
delivery of multichannel video programming.\2\ As the agency charged by 
statute with implementing this objective, we seek to start a fact-
finding exercise on the current state of programming diversity. Through 
this NOI, we seek comment on the principal issues that independent 
video programmers confront in gaining carriage in the current 
marketplace and possible actions the Commission or others might take to 
address those issues. Our goal in this proceeding is to begin a 
conversation on the state of independent and diverse programming, and 
to assess how the Commission or others could foster greater consumer 
choice and enhance diversity in the evolving video marketplace by 
eliminating or reducing any barriers faced by independent programmers 
in reaching viewers. For purposes of this NOI, we are particularly 
interested in starting a dialogue on barriers experienced by all types 
of independent programmers, including small programmers and new 
entrants. We seek to explore ways that the Commission can alleviate 
such barriers, as well as its legal authority to do so. Similar to the 
Commission's exploratory efforts in other proceedings, we also seek to 
be better informed to make any potential recommendations to other 
agencies, Congress, or the private sector, if we find that solutions to 
barriers exist that are beyond the authority of this agency. We also 
are interested in addressing challenges faced by a specific type of 
independent programmer--namely, public, educational, and governmental 
(PEG) channels --with respect to MVPD carriage.
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    \2\ See, e.g., Telecommunications Act of 1996, Pub L. 104-104, 
Sec.  257(b), 110 Stat. 56, 77, (codified at 47 U.S.C. 257(b)); 47 
U.S.C. 521; 47 U.S.C. 532(a); 47 U.S.C. 533(f)(2). See also 47 
U.S.C. 521(a)(4), (b)(1) through (5); H.R. No. 102-862, at 2, 1992 
U.S.C.C.A.N. 1231, 1232.
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II. Discussion

A. State of the Marketplace for Independent Programming

    3. The Commission seeks information on the current state of the 
marketplace for independent programming and the availability of such 
programming to consumers. Has the number of independent programmers 
grown or decreased? Has the diversity of programming available to 
consumers expanded or contracted? What percentage of non-broadcast 
networks are independent programmers? We also seek input on the manner 
in which independent programmers are carried by distributors and 
whether the answers to the following questions differ for independent 
programmers and vertically integrated programmers. To what extent are 
independent programmers carried by traditional MVPDs and to what extent 
are they carried by over-the-top (OTT) providers? How many of the 
independent networks distributed by MVPDs are also available on OTT 
platforms? Is it more difficult for independent programmers to gain 
carriage on certain MVPDs than others (e.g., cable vs. non-cable MVPDs, 
or smaller vs. larger MVPDs)? Does the size of the MVPD matter? Is 
there a disparity in the amount of independent programming on smaller 
versus larger MVPDs? Do large MVPDs have market power that has an 
effect on the ability of independent programmers to obtain carriage? 
Conversely, to what extent does the size of the independent programmer 
matter? Do large independent programmers have an easier time getting 
carried than smaller ones? Are there characteristics of independent 
programmers that enable some to gain MVPD carriage but not

[[Page 10243]]

others? To what extent does the level of competition among MVPDs impact 
the bargaining leverage of independent programmers in negotiations for 
carriage deals? With regard to the foregoing questions, commenters 
should provide examples of and relevant information regarding specific 
independent program networks.

B. Principal Marketplace Obstacles Faced by Independent Programmers

    4. Independent programmers and others have alleged in various 
proceedings that cable operators and other MVPDs engage in program 
carriage practices that hamper the ability of programmers with limited 
bargaining leverage to obtain distribution of their content. They claim 
that these practices deprive consumers of the benefits of competition, 
including greater choice and diversity in programming content. We seek 
input below on several practices that independent programmers allege 
have an adverse impact on them.\3\
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    \3\ Pursuant to section 103(c) of the STELA Reauthorization Act 
of 2014, the Commission recently issued a Notice of Proposed 
Rulemaking to review the totality of the circumstances test for 
evaluating whether broadcast stations and MVPDs are negotiating for 
retransmission consent in good faith. See Implementation of section 
103 of the STELA Reauthorization Act of 2014, Totality of the 
Circumstances Test, MB Docket No. 15-216, Notice of Proposed 
Rulemaking, 80 FR 59706 (2015) (Totality of the Circumstances NPRM). 
Some of the issues raised in this NOI regarding negotiations between 
MVPDs and programmers in general are similar to issues raised in the 
Totality of the Circumstances NPRM. However, we direct parties 
wishing to comment on issues relating to retransmission consent 
negotiations between broadcasters and MVPDs to file any comments on 
those issues in the Totality of the Circumstances NPRM docket.
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1. Insistence on Contract Provisions That Constrain the Ability of 
Independent Programmers To Compete
    5. Independent programmers and others have asserted that certain 
MVPDs often demand that carriage agreements include certain contractual 
provisions, such as most favored nation (MFN) and alternative 
distribution method (ADM) clauses, that hinder programming competition, 
innovation, and diversity.
    6. Most Favored Nation Provisions. In general, MFN provisions 
entitle the contracting video programming distributor to modify a 
programming agreement to incorporate more favorable rates, contract 
terms, or conditions that the contracting programmer later agrees to 
with another distributor.\4\ These provisions are the result of 
contractual agreements between programmers and distributors. MFN 
clauses historically were used to protect favorable carriage rates 
obtained by MVPDs that brought a large subscriber base to the 
programmer, but can be misused to anticompetitive means in some 
cases.\5\ Independent programmers claim that some MVPDs increasingly 
have insisted on MFN treatment without regard to the concessions or 
commitments made by the programmer to secure those terms from another 
MVPD and without requiring the MVPD to deliver commensurate value to 
the programmer.
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    \4\ MFN rights can be conditional or unconditional. A 
conditional MFN provision entitles a distributor to certain 
contractual rights that the programmer has granted to another 
distributor, as long as the distributor also accepts equivalent or 
related terms and conditions contained in that other distributor's 
agreement. An unconditional MFN provision, by contrast, contains no 
such requirement that the distributor entitled to MFN rights accept 
equivalent or related terms and conditions; it can elect to 
incorporate in its agreement any of the terms of the other 
distributor's agreement that it wants to incorporate.
    \5\ See United States v. Apple, 791 F.3d 290, 319 (2d Cir. 
2015), citing Blue Cross & Blue Shield United of Wisconsin v. 
Marshfield Clinic, 65 F.3d 1406, 141 (7th Cir. 1995).
---------------------------------------------------------------------------

    7. Some parties claim that MVPDs' insistence on MFN provisions 
precludes an independent programmer from making unique or innovative 
arrangements designed to achieve initial carriage of new programming, 
because those same unique terms could then be required to be extended 
to all MVPDs. They further argue that, given the proliferation of MFN 
provisions, an independent programmer that achieves some carriage is 
likely to have numerous MFN obligations, and that this can initiate a 
``domino effect'' when a single term in an agreement with one MVPD or 
OTT service triggers the MFN obligations in a programmer's agreements 
with other MVPDs. In particular, the prospect of having to make the 
same concessions to all of the MVPDs with which an independent 
programmer has MFN obligations may impede the ability of independent 
programmers to negotiate carriage agreements with new-entrant 
distributors that have smaller subscriber bases, such as new OTT 
distributors. As a result, programmers and some advocacy groups claim, 
some MVPDs are able to demand MFN concessions from independent 
programmers that make OTT distribution economically infeasible, which 
deters independent programmers from developing new and innovative types 
of video programming, inhibits new distribution models, and limits the 
diversity of programming available to consumers. On the other hand, 
some antitrust analyses have noted that in some situations MFN 
provisions may yield benefits, such as lower prices, reduced 
transaction costs, or the development of new products.\6\
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    \6\ See Steven C. Salop & Fiona Scott Morton, Developing an 
Administrable MFN Enforcement Policy, 27 Antitrust 15, 15 (2013); 
Jonathan B. Baker & Judith A. Chevalier, The Competitive 
Consequences of Most-Favored-Nation Provisions, 27 Antitrust 20, 21-
22 (2013).
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    8. We seek comment on the prevalence and scope of MFNs today in 
contracts for carriage of non-broadcast video programming. Are MFN 
provisions included in carriage contracts between independent 
programmers and OTT distributors, or do they tend to be included only 
in MVPD carriage contracts? Are MFN provisions more often included in 
carriage contracts involving independent programmers than those 
involving vertically integrated programmers? Does the size of the MVPD 
or independent programmer affect whether MFN provisions are included in 
carriage contracts? Do MFN provisions in carriage agreements between 
MVPDs and independent programmers cover the terms of both other MVPD 
agreements and OTT agreements? If so, how often do such MFN provisions 
extend to OTT agreements? Do both cable and non-cable MVPDs require MFN 
provisions? Do MFN provisions allow MVPDs to ``cherry pick,'' i.e., to 
take advantage of the lower price available in a separate carriage 
agreement without a reciprocal obligation? If so, how often? Will MVPDs 
accept some reciprocal obligations while refusing other reciprocal 
obligations?
    9. We also seek comment on the costs and benefits of these 
provisions. Are there specific types of MFN provisions that 
particularly hinder the creation and distribution of new or niche 
programming? If so, how do those provisions have this effect? How do 
distributors enforce MFN provisions? Are there specific means of 
enforcement that are more common or more onerous to independent 
programmers than others? \7\ What benefits are associated with MFN 
provisions, and are there contexts in which the benefits outweigh any 
harmful effects of such provisions? Do MFNs result in lower prices for 
consumers? Do they enhance the likelihood that a start-up independent 
programmer will be able to gain carriage on MVPDs? Do they reduce 
transaction costs between MVPDs and independent programmers? Do 
independent programmers receive any consideration, economic or non-
economic, from

[[Page 10244]]

MVPDs in exchange for agreeing to MFN provisions?
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    \7\ For example, some means of enforcement may include ``self-
policing'' by the programmer, an inquiry initiated by the MVPD, or 
contractual rights that permit an MVPD to periodically audit the 
programmer.
---------------------------------------------------------------------------

    10. Alternative Distribution Method Provisions. An ADM provision 
restricts a programmer's ability to distribute its programming via an 
alternate platform, often explicitly prohibiting specific non-MVPD 
distribution methods (such as online platforms) and often for a 
specified period of time (commonly referred to as a ``window'') 
following the programming's original airing on a traditional 
distribution channel.\8\ ADMs may take a variety of less-than-absolute 
forms. For example, some provisions may ban the distribution of content 
on a platform that carries fewer than a prescribed minimum number of 
channels. This type of restriction may have the effect of preventing a 
programmer from taking advantage of a desired distribution opportunity, 
such as OTT distribution. According to some industry observers, in some 
cases, a programmer that wishes to distribute its content online faces 
the risk that MVPDs will refuse to carry its network. Independent video 
programmers argue that limitations on the sharing or licensing of an 
independent network's content online reduce the network's ability to 
advertise and promote its content, as well as to share original 
reporting and newsgathering with other outlets. On the other hand, an 
ADM provision might encourage an MVPD to provide an independent 
programmer with distribution that it otherwise would not receive if it 
decided to also make its content available on alternative platforms.
---------------------------------------------------------------------------

    \8\ A traditional distribution channel typically offers linear 
programming-programming prescheduled by the programming provider.
---------------------------------------------------------------------------

    11. We seek comment on the prevalence and scope of ADMs in 
contracts for carriage of non-broadcast video programming as well as 
the costs and benefits associated with such provisions. We request 
input on the extent to which ADM provisions vary, the consideration 
offered in exchange for such provisions, and the ways in which 
distributors enforce ADM provisions. Are ADM provisions included in 
carriage contracts between independent programmers and OTT 
distributors, or are they included only in MVPD carriage contracts? Are 
ADM provisions included only in carriage contracts involving 
independent programmers or are they included in contracts involving 
vertically integrated programmers as well? Do both cable and non-cable 
MVPDs require such provisions? Are there specific provisions or means 
of enforcement of ADM provisions that are more common to independent 
programmers than others, or that have a different effect on independent 
programmers? Is there an industry standard for the windowing 
restrictions included in ADM provisions? Are certain window 
requirements more harmful to independent programmers than others, and 
if so, how prevalent are such requirements? In addition to carriage, do 
independent programmers receive any consideration, economic or non-
economic, from MVPDs in exchange for agreeing to ADM provisions? By 
providing MVPDs with incentives to carry new or under-exposed content, 
can ADM provisions actually enable independent programmers to gain MVPD 
carriage and thereby increase the exposure of their programming? Are 
there other benefits associated with these provisions?
    12. We also seek comment on the impact of MFN and ADM provisions on 
the video marketplace and on the availability of independent 
programming. Do such provisions thwart competition, diversity, or 
innovation? Or do they increase MVPD's willingness to contract with 
independent programmers? Do these types of provisions reflect a proper 
balance between an MVPD's legitimate interest in being the exclusive 
distributor of programming content for a set period of time and a 
programmer's legitimate interest in providing its programming to 
diverse distributors and platforms? We seek comment on whether MFN and 
ADM provisions may be used to limit the ability of independent 
programmers to experiment with new or unique distribution models or to 
tailor deals with smaller MVPDs or online distributors. In particular, 
how might MFNs or ADMs limit the ability of a programmer to license or 
distribute its programming over-the-top or via its own platforms, 
including as part of a direct-to-consumer Web site or application that 
offers linear or on-demand content? Are there specific types of 
provisions (e.g., unconditional MFNs or ADMs restricting paid 
distribution) that are aimed more at restricting new means of 
distribution than at facilitating efficient negotiations or protecting 
an MVPD's investment in programming? Are there specific types of MFN or 
ADM provisions that are pro-competitive and enhance independent 
programmers' ability to gain MVPD carriage?
    13. Other Contractual Provisions and OTT Carriage. We also seek 
comment on whether there are other types of contractual provisions 
besides MFN and ADM provisions that are used today that impact, in a 
negative or positive way, the ability of independent programmers to 
distribute their programming. Are there circumstances under which these 
limits actually end up enabling MVPD distribution of program content 
that might not otherwise be carried? Aside from contractual issues, are 
there are other aspects of MVPD carriage that are preventing the 
creation and distribution of diverse, independent programming? Ensuring 
diverse and novel programming requires a viable, profitable business 
model, for both MVPDs and programmers. Is it possible to sustain a 
business model based upon carriage by a collection of small MVPDs, or 
is it necessary to obtain carriage by a larger MVPD in order to attract 
carriage by additional MVPDs? Is there a threshold level of MVPD 
carriage that is necessary to sustain a viable business model?
    14. In addition, we request input on the costs and benefits to 
independent programmers of forgoing MVPD carriage to pursue OTT 
carriage. While OTT distribution has lower barriers to entry, it is 
still a nascent service in some respects. Is the OTT platform a viable 
business model? Is it a viable alternative to MVPD carriage? If not, 
what must happen before it can be considered a viable business model? 
Does the OTT platform provide an easier path to marketplace success? 
What benefits of carriage (e.g., level of viewership or advertising 
revenue) on OTT platforms are necessary for an independent programmer 
to remain viable? What are the difficulties new and emerging 
programmers face in negotiating for these benefits? How do the benefits 
of carriage on OTT platforms compare with the benefits of carriage on 
MVPD platforms? Do MVPDs offer favorable carriage terms that OTT 
platforms are unable to offer? If so, what are these terms and to what 
extent are these terms necessary to remain viable in today's 
marketplace? Can a successful OTT experience lead to future MVPD 
carriage and/or vice versa? To the extent possible, we request that 
commenters provide examples of independent programmers that have been 
able to launch and grow on OTT platforms. Despite such launch and 
growth, are there additional challenges that independent programmers 
face in gaining carriage and growing their viewership on OTT platforms? 
If so, what are they and what effect do they have? Are any of these 
challenges particular to diverse and niche programmers?
2. Program Bundling
    15. MVPDs claim that some large media entities with multiple 
program

[[Page 10245]]

offerings, including vertically-integrated programmers, are able to 
force MVPDs to carry less desirable content through bundling 
arrangements. In particular, these parties assert that such entities 
often leverage their marquee programming (e.g., premium channels or 
regional sports programming) to force MVPDs to carry additional 
channels that have little or no consumer demand. Some parties maintain 
that the proliferation of bundling arrangements limits programming 
choices and raises costs for consumers by forcing MVPDs to accept less 
desirable programming that may displace independent and diverse 
programming. Independent programmers argue that bundling arrangements 
drain the resources and monopolize the channel capacity of MVPDs to the 
detriment of independent programming. MVPDs that desire to cut costs 
then may drop independent programming from their lineups, refuse to 
carry new programming, or offer carriage only on terms less favorable 
to independent programmers. Other independent programmers argue that 
forced bundling is merely a pretext used by MVPDs in order to justify 
continued denial of carriage for independent programming. Along similar 
lines, some parties have claimed that programmers impose an extra 
charge on MVPDs for subscriber access to their online programming and 
that this has the potential to drain resources that might otherwise be 
devoted to carriage of independent programming. How pervasive is this 
practice?
    16. Large programmers have defended the use of program bundles and 
refuted arguments that they have adverse effects on MVPDs or consumers. 
They maintain that, through the bundling of programming, MVPDs have the 
option of obtaining valuable programming at discounted prices. In this 
regard, such programmers contend that these programming bundles--
offered to both small and large MVPDs--offer substantially greater 
value to MVPDs and consumers than standalone offers.
    17. We invite comment on the impact of bundling practices. To what 
extent does bundling constrain MVPDs from carrying independent 
programming? Do smaller MVPDs feel the constraints of bundling more 
acutely than large MVPDs because of their limited capacity or limited 
resources? Does bundling benefit consumers by lowering prices for 
content? Are there any instances of independent programmers being 
dropped or not carried at all because of the constraints placed on MVPD 
systems as a result of bundling? To what extent do bundling practices, 
together with capacity constraints, result in independent programmers 
being dropped from MVPDs' channel lineups? Are capacity constraints as 
significant as they were years ago? With technological changes, will 
capacity constraints be a less significant issue in the future?
    18. Recently, the marketplace has trended away from large MVPD 
bundles. Some MVPDs have begun offering smaller programming packages, 
and programmers have launched a number of online [agrave] la carte and 
on-demand program offerings. We seek comment on what effect, if any, 
these trends have had on independent programmers. Some MVPDs have 
argued that these trends threaten independent programmers. They assert, 
among other things, that these trends undermine the economics of large 
MVPD bundles that have enabled MVPDs to carry independent programmers 
offering diverse and niche programming to consumers. Is there evidence 
to support the claims that marketplace trends toward smaller bundles 
and [agrave] la carte or on-demand offerings adversely impact 
independent programmers or reduce consumer choice in programming? 
Alternatively, is there any evidence suggesting that these trends may 
provide benefits to independent programmers?

C. Other Marketplace Obstacles

    19. In a number of proceedings, independent programmers have cited 
other obstacles in their efforts to secure carriage by certain MVPDs or 
OTT providers. According to some programmers, for example, some MVPDs, 
rather than refusing carriage outright to a programmer (which might 
spur a complaint), instead will purposefully fail to respond to 
carriage negotiation requests in a timely manner or fail to acknowledge 
such requests entirely. Independent programmers further claim that when 
MVPDs do respond to carriage requests, they in some cases knowingly put 
forth inadequate counter offers. Independent programmers also claim 
that some MVPDs have employed a tactic of avoiding negotiations until 
just before the expiration of existing carriage agreements, thereby 
forcing independent programmers to accept uncertain, month-to-month 
carriage arrangements. We seek comment on whether these practices are 
being employed, and if so, the extent to which they are being used, as 
well as examples that demonstrate the impact of such practices. To what 
extent, if at all, do such practices impede entry by or successful 
growth of independent programmers? Are there other practices or 
marketplace issues (e.g., demands by MVPDs for an ownership stake in 
independent programmers, channel placement, or tiering practices) that 
may impede the entry or growth of independent programmers? Are there 
practices that benefit the growth of independent programmers?
    20. We also seek comment on the extent to which some independent 
programmers may have leverage over some MVPDs. For example, are there 
situations in which an independent programmer may condition any 
potential carriage arrangement on carriage by an MVPD of its suite of 
programming on distribution to a very high percentage of the MVPD's 
customers (i.e., minimum penetration requirements)? How would such 
practices affect the ability of MVPDs to offer ``skinny'' bundles that 
could be combined with OTT services that could include more diverse and 
independent programming? Similarly, we seek comment on assertions made 
by some MVPDs that certain programmers insist on tier placement 
commitments that compel MVPDs to place entire bundles in the most 
popular programming packages. How do programmers typically calculate 
the number of video subscribers that minimum penetration requirements 
are based on?
    21. Consumer advocacy groups and PEG providers contend that MVPDs 
do not make PEG programming and information about PEG programming 
adequately available to subscribers. For example, they argue that some 
MVPDs often do not provide in their on-screen menus or guides basic 
information about PEG channels and programs, such as information about 
accessibility, channel names, or program names or descriptions. They 
assert that the failure by MVPDs to provide the same level of program 
description information for PEG channels that they offer for other 
programmers discriminates against PEG providers. In other proceedings, 
these parties have advocated that the Commission mandate a 
nondiscriminatory approach that would require MVPDs to provide PEG 
information on their program guides on the same terms and conditions as 
other programmers if a PEG programmer supplies program-specific 
information. We seek comment on MVPDs' practices with respect to making 
PEG programming information available to subscribers. To the extent 
that MVPDs do not make this information available, is this for 
technical reasons, and, if so, can the technical barriers be 
surmounted? Is the Congressionally-imposed prohibition against 
editorial control of PEG channels relevant to this

[[Page 10246]]

issue? \9\ What is the source of the Commission's authority in this 
area, if any?
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    \9\ 47 U.S.C. 533(e).
---------------------------------------------------------------------------

D. Possible Regulatory Tools for Addressing Market Obstacles Faced by 
Independent Programmers

    22. What role, if any, should the Commission play in addressing any 
obstacles that prevent greater access by consumers to sources of 
independent and diverse programming? Are there other entities--
including other agencies, Congress or private entities--that could play 
a role in addressing these obstacles? Can the marketplace evolution 
toward greater competition and choice among distribution platforms be 
expected to ease any obstacles, or may it exacerbate them in some 
respects? Are the Commission's existing regulatory tools adequate to 
address any obstacles? Are there actions that we could recommend that 
others explore in order to promote programming diversity? Is there a 
role for other federal agencies in this review? Are there concerns that 
would be appropriate to refer to the Department of Justice and/or the 
Federal Trade Commission? \10\ We seek comment on any regulatory or 
other approaches the Commission should take to alleviate obstacles to 
the distribution of independent and diverse programming.
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    \10\ We note that the Commission acts in a manner that is both 
complementary to the work of the antitrust agencies and supported by 
their application of antitrust laws. See generally 47 U.S.C. 152(b).
---------------------------------------------------------------------------

    23. We also seek comment on the Commission's legal authority to 
alleviate any obstacles. Specifically, we seek comment on whether 
section 257 of the Communications Act of 1934, as amended (Act), 
provides the Commission with authority to impose regulations aimed at 
improving programming diversity. In particular, we seek comment on 
section 257(b), which directs the Commission to promote the policies 
and purposes of the Act favoring diversity of media voices, vigorous 
economic competition, technological advancement, and promotion of the 
public interest, convenience, and necessity.\11\ We also request input 
on whether Section 616(a) of the Act provides the Commission with the 
authority to take action with respect to program carriage practices 
that may have an adverse impact on independent programmers. 
Specifically, we invite comment on section 616(a)'s mandate that the 
Commission establish regulations governing program carriage agreements 
and related practices between cable operators or other multichannel 
video programming distributors and video programming vendors.\12\ What 
other authority does the Commission or others have to alleviate 
obstacles to the distribution of independent and diverse programming?
---------------------------------------------------------------------------

    \11\ 47 U.S.C. 257(b).
    \12\ 47 U.S.C. 536.
---------------------------------------------------------------------------

III. Procedural Matters

    24. Ex Parte Rules. This is an exempt proceeding in which ex parte 
presentations are permitted (except during the Sunshine Agenda period) 
and need not be disclosed.\13\
---------------------------------------------------------------------------

    \13\ 47 CFR 1.1204(b)(1).
---------------------------------------------------------------------------

    25. Filing Requirements. Pursuant to Sections 1.415 and 1.419 of 
the Commission's rules, 47 CFR 1.415, 1.419, interested parties may 
file comments and reply comments on or before the dates indicated on 
the first page of this document. Comments may be filed using the 
Commission's Electronic Comment Filing System (ECFS). See Electronic 
Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998).
     Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/.
     Paper Filers: Parties who choose to file by paper must 
file an original and one copy of each filing. If more than one docket 
or rulemaking number appears in the caption of this proceeding, filers 
must submit two additional copies for each additional docket or 
rulemaking number.
    Filings can be sent by hand or messenger delivery, by commercial 
overnight courier, or by first-class or overnight U.S. Postal Service 
mail. All filings must be addressed to the Commission's Secretary, 
Office of the Secretary, Federal Communications Commission.
    [cir] All hand-delivered or messenger-delivered paper filings for 
the Commission's Secretary must be delivered to FCC Headquarters at 445 
12th St. SW., Room TW-A325, Washington, DC 20554. The filing hours are 
8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with 
rubber bands or fasteners. Any envelopes and boxes must be disposed of 
before entering the building.
    [cir] Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743.
    [cir] U.S. Postal Service first-class, Express, and Priority mail 
must be addressed to 445 12th Street SW., Washington, DC 20554.
    26. Availability of Documents. Comments, reply comments, and ex 
parte submissions will be available for public inspection during 
regular business hours in the FCC Reference Center, Federal 
Communications Commission, 445 12th Street SW., CY-A257, Washington, DC 
20554. These documents will also be available via ECFS. Documents will 
be available electronically in ASCII, Microsoft Word, and/or Adobe 
Acrobat.
    27. People with Disabilities. To request materials in accessible 
formats for people with disabilities (Braille, large print, electronic 
files, audio format), send an email to fcc504@fcc.gov or call the FCC's 
Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), 
(202) 418-0432 (TTY).
    28. Additional Information. For additional information on this 
proceeding, contact Calisha Myers or Raelynn Remy of the Policy 
Division, Media Bureau, at Calisha.Myers@fcc.gov, Raelynn.Remy@fcc.gov, 
or (202) 418-2120.

IV. Ordering Clause

    29. Accordingly, IT IS ORDERED that, pursuant to Sections 1, 4(i), 
4(j), 303(r), and 403 of the Communications Act of 1934, as amended, 47 
U.S.C Sec. Sec.  151, 154(i), 154(j), 303(r), 403, this Notice of 
Inquiry IS ADOPTED.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2016-04331 Filed 2-26-16; 8:45 am]
 BILLING CODE 6712-01-P