WPC 2MBR ZCourierw Roman#|x'x6X@`7X@HP LaserJet 4SiHPLAS4SI.PRSx  @\F WX@|D8D\dDXdXdXDdd88d8ddddDL8ddddX`(`lD4l\DDD4DDDDDDDDd8XXXXXX|X|X|X|XD8D8D8D8ddddddddddXdbdddpdXXXXXlX~|X|X|X|XdddldldD8DdDDDdplld|8|P|D|D|8dvddddDDDpLpLpLpl|T|8|\ddddddl|X|X|Xd|DdpL|Dd~4ddC$CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxH\dDXddddd8@d<@d<DDXXdDDxddzHxxHvppDXd<"dxtldpxxdCourierCourier BoldHPLAS4SI.PRSXj\  P6G;\F WXP2 Z#|xHP LaserJet 4SiHPLAS4SI.PRSx  @\[ X@CourierCourier Bold2X:JE<?xxx,x6X@`7X@?xxx,x `7X<R&HHH,~ ,H6X@`7h@      2` ^ B ^ efore the 0 Federal Communications Commission ,Washington, D.C. 20554 \  ?<In the Matter ofhhCqh) x` `  hh@h)  ?<Implementation of Section 302 ofh)ppCS Docket No. 9646  ?` <the Telecommunications Act of 1996h) ` `  hhCq)  ? <Open Video Systemshh@h)  ?0<  REPLY COMMENTS OF ACCESS 2000 x` `  hh@hppSamuel A. Simon, Esq. x` `  hh@hpp901 15th Street, NW ` `  hhCqppSuite 230 x` `  hh@hppWashington, D.C. 20005 x` `  hh@hpp(202) 4081400 x` `  hh@hppHarvey Kahn x` `  hh@hpp2656 29th Street ` `  hhCqppSanta Monica, CA 90405 x` `  hh@hpp(310) 5810070 April 11, 1996 "$0*0*0*,"      COMMENTS OF ACCESS 2000  ? <  ?<  k<xAccess 2000T  ?< x[<ԍ Access 2000 is a membership organization of independent  xh<film, television, video and new media producers whose mission is to  xx<maximize access to new media and technologybased markets for its  x<members' products. Access 2000 aims to promote its membership's  xh<interests by articulating members' needs and concerns to regulatory bodies, distributors, investors and the public. submits the following Reply Comments in response  x<to the Notice of Proposed Rulemaking (hereafter Notice) in the above titled proceeding.  ? < I.XxOVS COULD END UP ON THE REGULATORY JUNK PILE WITH VDT (#  ? <  <xIn our Comments, Access 2000 urged the FCC to implement  x<Section 302 of the Telecommunications Act of 1996 (the Act) with  d(#0<minimum regulatory requirements and maximum flexibility to  xh<encourage telephone companies to choose the open video system model for their video programming services.   <xOVS was designed by Congress to be an alternative to both the  d(#h<common carrier model and the closed cable model. Congress did not,  xx<however, intend that OVS regulation would be an amalgam of common  x<carrier and cable regualtion. In fact, just the opposite is true. " ?< P<"X"New section 653(c) sets forth rthe reduced regulatory  <burdens imposed on open video systems. There are several  P<reasons for streamlining the regulatory obligations of  <sych systems. First, the conferes hope that this  P<apporach will encourage common carriers to deploy open  <video systems and introduce vigorous competition in  p<entertainment and informatin markets. Second, the  @<conferes recognize that common carriers that deploy open  <systems will be "new" entrants in established marekts and  <deserve lighter regulatory burdens to level the playing"!@0*((P("  <field. Third, the development of competition and the  ?< <operation of market forces mean that government oversight  ?< 3<and regulation can and should be reduced.i  ?<ԍ Telecommunications Act of 1996, Conference Report, at 62.i (emphasis   added)    <xNotwithstanding this general admonition, the Act does  x<establish a regulatory framework for OVS. The Comments filed in   <this proceeding push and pull the Commission in different   <directions on each of the issues discussed in the Notice of   x<Proposed Rulemaking. Access 2000 urges the Commission to measure   <its decisions against Congress's admonition to streamline   h<regulatory obligations for OVS providers. If not, OVS could end up  ?<on the regulatory junk pile with video dialtone.vXT  ?< x[<ԍ In fact, in many areas OVS may already be a nonoption.  xh<Ameritech has just been awarded its fourteenth franchise to provide  x<cable television service in its region demonstrating that the  x<closed cable model is an attractive option for local exchange carriers. v  ?h<  ?< z<II.XOVS PROVIDERS SHOULD HAVE SIGNIFICANTLY FLEXIBILITY IN  <SETTING RATES FOR DIFFERENT CATEGORIES OF VIDEO  ?<PROGRAMMERS   <In our Comments, Access 2000 argued that allowing OVS   <operators to charge different rates for different categories of   <programming is permissible and in the public interest. We believe   <that within each of these categories the Commission should require  d(#<that rates for carriage be "just and reasonable and ... not   0<unjustly or unreasonably discriminatory," but that between  ? <  h<categories, the OVS operator should have a fair degree of latitude. " 0*((p&"  ?< <Comments filed by MFS are consistent with our position.FT  ?X<ԍ See Comments of MFS at 814.F  ?<  <Comments filed by others,XT  ?x<  ;<ԍ See, for example, Comments of the National Cable Television Association and the National League of Cities. however, ask the Commission to impose   0<common carrierlike regulations on OVS rates and should be  d(#x<rejected. The Motion Picture Association of America (MPAA) urges  ?@<  <the Commission to adopt rules, "that would prohibit any kind of   @<discrimination based on content or that otherwise is not  ?` <  <economically justified."A` T  ?<ԍ Comments of MPAA at 9.A It is unclear what MPAA means by   x<"economically justified." However, MPAA opposes the Commission's   x<proposal to adopt a presumption that rates are reasonable if some  d(#x<number of nontelco programmers gain access to the OVS network or   x<if rates for nontelco programmers are the same as for the telco  <affiliated programmer. Further, MPAA urges the Commission to  d(#<adopt a cost based formula for rates and strict cost allocation  d(#<requirements. We can only presume then that the phrase "economically justified" refers solely to OVS network based costs.  v <Access 2000 believes that in order to ensure that OVS  d(#x<subscribers have access to the widest variety of programming from  d(#@<the widest variety of sources, OVS operators should have  d(#<significant flexibility in establishing rates for different  d(#<categories of programmers. One way to achieve this goal is to allow OVS operators to develop prospective payment models.  ? < " @0*((`'"Ԍ ?< v <III.XOVS OPERATORS SHOULD BE ALLOWED TO DEVELOP PROSPECTIVE PAYMENT  ?<MODELS (#  v <Notwithstanding the fact the OVS was adopted by Congress as an  d(#h<alternative to the common carrier and closed cable models, very few  d(#<of the Comments received by the Commission demonstrate thinking  d(#x<beyond these two approaches. For example, in our Comments Access  d(#<2000 argued that OVS operators should be allowed to develop  d(#<prospective payment models and apply those models to categories of  d(#<video programmers. Payment could be based upon the number of  d(#x<subscribers, or set as a fixed percentage of a video programmer's  d(# <revenues. OVS operators and their affiliates should also be  d(#x<allowed to develop other business and financial models to develop  d(#<or license programming that would be distributed over the OVS  d(#x<network. Such arrangements could include underwriting production  d(#h<costs and eliminating the need for an upfront payment or entry fee into the OVS network.  ?<  ?< CONCLUSION  v <Congress adopted an OVS model to provide a significant degree  d(#<of regulatory flexibility for telephone companies entering the  d(#<video programming market. The Commission can best achieve this  d(#<goal by providing for maximum business flexibility, minimum regulation, and appropriate oversight and review. ` `  hhCqRespectfully submitted,   ` `  hhCq ` `  hhCqHarvey Kahn ` `  hhCq2656 29th Street ` `  hhCqSanta Monica, CA 90405 ` `  hhCq(310) 5810070 ` `  hhCqSamuel A. Simon, Esq. ` `  hhCq901 15th Street, NW, Suite 230 ` `  hhCqWashington, D.C. 20005 ` `  hhCqCounsel to ACCESS 2000   April 11, 1996