NEWS
Report No. CS 96-16            ACTION IN DOCKET CASE                    March 11, 1996

         COMMISSION ADOPTS NOTICE OF PROPOSED RULEMAKING SEEKING
       COMMENT ON IMPLEMENTING THE TELECOMMUNICATIONS ACT OF 1996
         PROVISIONS GOVERNING OPEN VIDEO SYSTEMS AND ELIMINATES
           VIDEO DIALTONE AND VIDEO RELATED SECTION 214 RULES
                           (CS Docket No. 96-46)

     The Commission has adopted a Report and Order and Notice of Proposed Rulemaking
("NPRM") which seeks comment on implementing the provisions of the Telecommunications
Act of 1996 (the "1996 Act") governing open video systems (FCC 96-99).  The Commission
also modifies its rules, effective immediately, to eliminate its video dialtone rules and
policies and the applicability of Section 214 to a telephone company's video programming
delivery systems.

     Section 302 of the 1996 Act establishes new sections 651 through 653 of Title VI of
the Communications Act of 1934.  These sections establish various options for telephone
companies to enter video programming markets, one of which is providing cable service over
an open video system.  Section 653 provides that if a telephone company certifies that it
complies with certain non-discrimination and other requirements established by the
Commission, its open video system will not be subject to regulation under Title II and will
be entitled to reduced regulation under Title VI.  In the NPRM the Commission seeks
comment on the best method of implementing the requirements of the open video system
framework in a way that will promote Congress' goals of flexible market entry, enhanced
competition, streamlined regulation, diversity of programming choices, investment in
infrastructure and technology, and increased consumer choice.

     The Commission seeks comment on how to implement the 1996 Act's provisions on
     the following issues with respect to open video systems:

          Allocation of capacity

          Statutory requirement that the rates, terms and conditions for carriage of video
          programming are just, reasonable and not unjustly or unreasonably
          discriminatory

          Channel sharing

          Application of Commission rules on sports exclusivity, network non-
          duplication, and syndicated exclusivity rules

          Statutory requirement that operators do not unreasonably discriminate in favor
          of their affiliates with respect to materials or information provided to
          subscribers

          Application of public, educational and governmental, must-carry, and
          retransmission consent obligations, program access rules, and other Title VI
          rules

          The ability of cable operators and other persons to be operators or
          programmers

          Certification of operators

          Dispute resolution

     Section 302(b)(1) of the 1996 Act repeals the Commission's video dialtone rules and
regulations, which were established to permit telephone companies to participate in the video
marketplace under the repealed statutory cable-telephone cross ownership ban.  New
subsection 651(c) of the Communications Act provides that a common carrier shall no longer
be required to obtain certification under Section 214 to establish or operate a system for the
delivery of video programming.  In the Report and Order, the Commission modifies its
rules, effective immediately, to comply with the mandates of the 1996 Act.

     Commenting on the NPRM, Cable Services Bureau Chief Meredith J. Jones said,
"This important Commission action is a milestone in the implementation of the 1996 Act. 
The establishment of open video systems will give consumers another choice in video
programming."

Action by the Commission by Report and Order and Notice of Proposed Rulemaking    
(FCC 96-99), Chairman Hundt, Commissioners Quello, Barrett, Ness and Chong

                                  - FCC -

News Media Contact: Morgan Broman at (202) 41-0852
Cable Services Bureau Contact: Rick Chessen at (202) 416-0800