NEWSReport No. DC-2680 ACTION IN DOCKET CASE November 10, 1994 COMMISSION ACTS ON PETITIONS TO RECONSIDER RULES TO PREVENT UNFAIR OR DISCRIMINATORY PRACTICES IN THE SALE OF VIDEO PROGRAMMING (MM DOCKET 92-265) The Commission has acted on various petitions for reconsideration of the First Report and Order in this proceeding which set forth the rules implementing the program access provisions of the 1992 Cable Act. Those provisions, contained in Section 628 of the Act, prohibit unfair or discriminatory practices in the sale of video programming by vertically integrated cable operators. Section 628 was adopted to address the concern that potential competitors to cable television, such as direct broadcast satellite and wireless cable systems, often face unfair hurdles when attempting to gain access to the programming they need to compete. Specifically, the Commission generally affirmed its initial determinations that (1) a showing of harm is not required for actions brought under Section 628(c); (2) differences in costs at the programming distributor's level cannot justify pricing differences by a satellite broadcast programming vendor in the sale or delivery of satellite cable programming or satellite broadcast programming among or between cable systems, cable operators, or other multichannel video programming distributors; (3) the Commission's rules apply to contracts that were in existence before the effective date of the rules; and (4) the five percent attribution standard should be used to assess the existence of vertical integration. The Commission granted various petitions to the extent they request the Commission (1) to extend the existing confidentiality protection in the rules to proprietary materials exchanged during the pre-complaint negotiation period required under the rules; (2) to permit a party to seek permission from the Commission to further restrict an opposing party's access to proprietary information; (3) to amend the rules on subdistribution arrangements in areas unserved by cable to clarify that nonexclusive subdistribution agreements in both served and unserved areas are treated the same and subject to the protection provided by the rules; (4) to clarify the rules regarding the financial liability of buying groups; and (5) to determine that, once a programmer has shown the Commission that a "similarly-situated" competitor is the proper focus for comparison in justifying price differentials between distributors, a "similarly-situated" competitor is also the proper focus to justify a de minimis differential. (over) - 2 - In addition, the Commission determined that it did have the authority under Section 628 to award damages for violations of the program access rules, but determined that creating such a remedy for violations of the program access rules is not necessary at this time. The Commission stated that if, contrary to its expectations, it is brought to the Commission's attention that the current process for resolving complaints is not working, it will consider revisiting this issue. The petitions for reconsideration addressed in today's order were filed by Black Entertainment Television, Caribbean Satellite Network, Discovery Communications, Inc., Liberty Media, Time Warner Entertainment Co., L.P., Viacom International, Inc., Wireless Communications Association International, National Rural Telecommunications Cooperative and WJB-TV Fort Pierce Limited Partnership. A petition filed by the National Rural Telecommunications Cooperative governing the permissibility of exclusive contracts in areas unserved by cable operators will be addressed in a future order. Action by the Commission November 10, 1994, by Memorandum Opinion and Order (FCC 94-287). Chairman Hundt, Commissioners Quello, Barrett, Ness and Chong, with Commissioner Barrett issuing a statement. - FCC - News Media contact: Morgan Broman at (202) 416-0852. Cable Services Bureau contacts: Nancy Markowitz at (202) 416-0807 and Maura Cantrill at (202) 416-0820.