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9Z .Courier New RegularXXx6X@mX@; 9Z .Courier New RegularXXx6X@nX@; 9Z .Courier New RegularXd6X@o@; 9Z .Courier New RegularXx6X@pX@; 9Z .Courier New RegularXd6X@q@; 9Z .Courier New RegularXx6X@rX@; 9Z .Courier New RegularXd6X@s@; 9Z .Courier New RegularXx6X@tX@; 9Z .Courier New RegularXd6X@u@; 9Z .Courier New RegularXx6X@vX@; 9Z .Courier New RegularX6X@w@9.Courier New RegularX6X@xX@9.Courier New RegularX6X@y@9.Courier New RegularX6X@zX@9.Courier New RegularXX6X@{X@9.Courier New RegularXd6X@|@; 9Z .Courier New RegularXx6X@}X@; 9Z .Courier New RegularXXx6X@~X@; 9Z .Courier New RegularX2bbHX 3|n2b ?<  #Xx6X@>FX@#XxX` ` (#` ,Before the 0 FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 TP x` `  hh@  ?x<x` `  hh@h)pp  xx 0  ?@<In the Matter ofhh@h)pp x` ` hh@h)  ?<Implementation of Section 302 ofh)ppCS Docket No. 9646  ?<the Telecommunications Act of 1996h) ___________________________________) x` `  ? < COMMENTS OF  THE ALLIANCE FOR COMMUNITY MEDIA,  ALLIANCE FOR COMMUNICATIONS DEMOCRACY,  CONSUMER FEDERATION OF AMERICA,  CONSUMER PROJECT ON TECHNOLOGY,  CENTER FOR MEDIA EDUCATION, AND  PEOPLE FOR THE AMERICAN WAY  ?<T TP Of Counsel:  ?8<Gigi B. Sohn hh@hJeffrey Hops  ?<Andrew Jay Schwartzmanhh@hDirector of Government Relations  ?<Media Access Projecthh@hAlliance for Community Media  ?<2000 M Street, N.W.hh@h666 11th Street, N.W., Suite 806  ?X<Washington, D.C. 20036hh@hWashington, D.C. 200014542  ? <(202) 2324300 hh@h(202) 3932650  ?<Karen Edwards hh@hJohn Podesta  ?x<  Graduate Fellow, Georgetown@hInstitute for Public Representation  ?@<University Law Centerhh@hGeorgetown University Law Center x` `  hh@h600 New Jersey Avenue, N.W. x` `  hh@hWashington, D.C. 20001  ?!<Darrell Perry, Law Student@h(202) 6629535  ?`"<Georgetown Universityhh@hpp x` `  hh@hJames N. Horwood, Esq. x` `  hh@hSpiegel & McDiarmid x` `  hh@h1350 New York Ave., N.W. x` `  hh@hWashington, D.C. 20005 x` `  hh@h(202) 8794000"H&0*0*0*-"       ?< EXECUTIVE SUMMARY The Alliance for Community Media, Alliance for Communications Democracy, Consumer Federation of America, Consumer Project on Technology, Center for Media Education, and People for the American Way ( the Coalition) firmly believe that the development of truly open multiprogrammer platforms will benefit consumers and bring a greater diversity of voices to the video programming marketplace, while still promoting Congresss goals of flexible market entry, enhanced competition, streamlined regulation, diversity of programming choices, investment in infrastructure and technology, and increased consumer choice. The Telecommunications Act of 1996, with its promotion of competition in the video delivery marketplace, gives the Commission the ability to ensure that mechanisms like public, educational and governmental access requirements imposed on calbe operators are updated for the emerging media environment. The Act also affords the Commission the tools to correct the problems of the pastlike exorbitant rates for leasedaccess in cablethat have effectively kept nonprofit and unaffiliated programmers off cable. The Coalition believes that this opportunity must not be missed and that the regulatory framework for open video systems must ensure that the commercial marketplace is not allowed to operate to silence the diverse nonprofit programming that is critical to many communities in this country. In enacting the new Part V of Title VI of the Communication Act of 1934 (section 302 of the Telecommunications Act of 1996 (the 1996 Act)), and in repealing the telephonecable crossownership rule and permitting telephone companies the option of entering the video programming market through a number of regulatory paths, Congress has stated an intention to foster more intersystem competition. In enacting Section 653, establishing a new regulatory framework for open video systems ( OVS), Congress created an attractive alternative for spurring telephone company entry into the video programming market. OVS also has the potential to further public interest goals beyond simply providing head to head intersystem competition with the cable television industry. If properly implemented, OVS can further greater diversity of programming, increased consumer choice, lower consumer rates, and increased investment in highend infrastructure, through the vehicle of an open multiprogrammer platform, thus creating a video programming delivery market that operates in the public interest. Using a carrot rather than a stick, Congress has offered telephone companies relief from some regulatory requirements in exchange for providing intrasystem competition and proper support for and allocation of channels for schools and universities, churches, nonprofits and local governments. Congress clearly intended to use this model as a means of fostering a system that would provide the public with the benefits of programming diversity which ought to flow from a platform open to unaffiliated programmers seeking to reach consumers. Congress has offered telephone companies the quid of reduced regulation and has delegated to the Commission the difficult task of setting forth the quo of responsibilities that will fall on telephone companies to prevent improper subsidization, preserve rights of carriage for education, governmental, and other nonprofit groups and preclude nonaffiliated programmers from being improperly denied carriage through unfair rates and conditions. In submitting these comments, the Coalition is aware that this proceeding presents the Commission with the difficult but critical task of steering a narrow course through two obstacles. If the Commission creates too many regulatory disincentives to offering services as an OVS operator, telephone companies can simply abandon OVS and choose to enter the television programming market as cable operators, a strategy many have chosen to pursue rather than continuing to pursue video dialtone. Alternatively, if the Commission does not provide an effective regulatory framework, OVS may simply become cablelite a single programmer, the telephone company, will control the vast percentage of the channel capacity, while simultaneously receiving the benefit of reduced regulation. We submit these comments in the belief that such a course can be found. To that end, we urge the Commission to adopt rules which: ©` ` ` require LECs to offer video programming on an open video system only through a fully separated subsidiary; ©` ` ` direct LECs to comply with strict cost allocation procedures as a prerequisite to OVS ceritification; ©` ` ` ensure that OVS platforms provide the same access and support to public, education and governmental entities as cable operators provide; ©` ` ` require that OVS operators set rates for notforprofit programmers discounted sufficiently to attract a broad diversity of programming to the video marketplace; ©` ` ` adopt marketbased regulatory mechanisms to ensure fair rates and access that are not unjustly discriminatory, and failing that, impose reasonable rate formulas based on an operators incremental costs; ©` ` ` ensure allocation of channel capacity that is fair and reasonable and not unjustly discriminatory, through requirements of public notice of rates, terms and conditions; a minimum number of unaffiliated programmers; and a requirement that OVS operators build out their systems to meet demand; ©` ` ` provide effective dispute resolution mechanisms to resolve questions of rates and terms and conditions of carriage; and ©` ` ` prohibit cable operators from becoming OVS platform operators.   ,X(#%'0*,.8135@8:X@#If the cable operator, the OVSPO and the franchise authority are unable to reach an accord on the joint provision of PEG access facilities, equipment and services, then either (a) the OVSPO should be required to either create its own PEG services according to the terms of the franchise agreement or a negotiated package equivalent to the cable operator's franchise obligations; or (b) #X6X@?X@#an independent auditor chosen jointly by the franchise authority and the OVSPO should be used to determine a cash equivalent to the cable operator's total commitment. That cash equivalent should be paid by the OVSPO to support PEG access.#Xx6X@@X@# The OVSPO should be required either to attach the outstanding franchise agreement, or a separate agreement between the OVSPO and the franchise authority, signed by both parties, with the OVSPO's certification application.  In a case where an OVS provider interconnets with a cable operator that maintains its own internal PEG access operations, the cable operator should be required to keep separate books and create a separate corporate identity for the PEG access entity. Ideally, cable operators should be required to transfer their PEG operations to an independent non-profit organization, local school or governmental agency. Transferring these responsibilities to a separate non-profit entity will guarantee that cash and in-kind support from an OVSPO for an interconnected PEG access center will be used for PEG access. In any dispute between the cable operator and the OVSPO regarding any joint and several responsibilities under their PEG access provision agreement, the franchise authority may be permitted to act as an arbitrator. Any decisions of the franchise authority may be appealed to the Commission. Upon request of the franchise authority, the Commission could order an OVSPO to show cause why it should not be decertified for failure to fulfill its obligation to the franchise authority. Anyone, including managers of PEG access centers, unaffiliated programmers, or cable subscribers, who is aggrieved by the failure of an OVSPO to fulfill the terms of PEG carriage and/or the failure of a franchise authority to enforce the terms of an agreement, should be permitted to take a complaint directly to the Commission. Upon a determination by the Commission that the OVSPO is not in compliance with the terms of the franchise agreement, the Commission may order the OVSPO decertified. An OVSPO may be decertified until the Commission has determined that the breach has been remedied. The Commission may, in conjunction with the OVSPO and the franchise authority, also appoint an independent arbitrator whose determination shall be final. The Commission should not preempt the right of a third party to apply state law remedies, if any, requiring enforcement of agreements on behalf of taxpayer third-party beneficiaries (including any injunctive relief).  C.` ` ` Where There Are No Incumbent PEG Access Requirements, OVSPOs Should Be Required, upon the Request of the Franchise Authority or the Commission, to Offer PEG Access.  In those jurisdictions in which there may be no incumbent cable operator, the Coalition supports a rule that would require OVSPOs to allocate capacity and resources to PEG access even when there is no parallel cable operator. The Coalition would support a rule in this situation requiring the OVSPO to provide PEG according to the terms of the nearest operating cable system that does have a commitment to provide PEG access, facilities, services and equipment. If the OVSPO has bought out an existing cable system and intends to operate it as an OVS, the analogous situation could be created. Cable systems purchased by LECs should, therefore, be required either to abide by the terms of the franchise agreement at the time the system was purchased, or with terms agreed to thereafter by the franchise authority. Finally, if the cable operator is not required to provide PEG access, at the time it is purchased by a LEC,\X` hp x (#%'0*,.8135@8: