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Herring v. FCC & USA, No. 11-73134 (9th Cir.)

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Released: April 24, 2012
Case: 11-73134 04/24/2012 ID: 8150975 DktEntry: 52 Page: 1 of 108
BRIEF FOR RESPONDENTS
IN THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
NO. 11-73134
HERRING BROADCASTING, INC. DBA WEALTHTV,
PETITIONER,
V.
FEDERAL COMMUNICATIONS COMMISSION
AND UNITED STATES OF AMERICA,
RESPONDENTS,
COMCAST CORPORATION, ET AL.,
RESPONDENT-INTERVENORS.
ON PETITION FOR REVIEW OF AN ORDER OF THE
FEDERAL COMMUNICATIONS COMMISSION
SHARIS A. POZEN
AUSTIN C. SCHLICK
ACTING ASSISTANT ATTORNEY GENERAL
GENERAL COUNSEL
CATHERINE G. O’SULLIVAN
PETER KARANJIA
NANCY C. GARRISON
DEPUTY GENERAL COUNSEL
ATTORNEYS
JACOB M. LEWIS
UNITED STATES
ASSOCIATE GENERAL COUNSEL
DEPARTMENT OF JUSTICE
WASHINGTON, D.C. 20530
MAUREEN K. FLOOD
COUNSEL
FEDERAL COMMUNICATIONS COMMISSION
445 12TH STREET, SW
WASHINGTON, D.C. 20554
(202) 418-1740

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TABLE OF CONTENTS

TABLE OF AUTHORITIES .......................................................................... iii
GLOSSARY .................................................................................................... vi
JURISDICTION................................................................................................2
STATEMENT OF ISSUE PRESENTED .........................................................3
STATUTES AND REGULATIONS ................................................................3
COUNTERSTATEMENT OF THE CASE ......................................................3
I.
STATUTORY AND REGULATORY BACKGROUND.........................5
A.
The 1992 Cable Act...............................................................................5
B.
The FCC’s 1993 Program Carriage Order. .........................................6
II. FACTUAL BACKGROUND. ...................................................................9
A.
WealthTV’s Program Carriage Disputes. .............................................9
B.
The ALJ’s Recommended Decision....................................................13
1.
Burden of proof. ..............................................................................14
2.
Whether WealthTV and MOJO were similarly
situated. ...........................................................................................15
3.
Allegations of discrimination against WealthTV. ..........................17
C.
The Order On Review.........................................................................19
1.
Burden of proof. ..............................................................................19
2.
Record evidence. .............................................................................19
3.
The ALJ’s rulings on witnesses and evidence. ...............................22
D.
Subsequent Developments. .................................................................24
i

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SUMMARY OF ARGUMENT ......................................................................26
ARGUMENT ..................................................................................................29
I.
THE STANDARD OF REVIEW IS HIGHLY
DEFERENTIAL.......................................................................................29
II. SUBSTANTIAL EVIDENCE SUPPORTS THE FCC’S
DECISION TO DENY WEALTHTV’S PROGRAM
CARRIAGE COMPLAINTS...................................................................31
A.
WealthTV Was Not Similarly Situated To MOJO. ............................32
1.
The programming was different......................................................32
2.
The targeted audiences were different. ...........................................37
B.
Substantial Record Evidence Supports The Agency’s
Finding That Intervenors Did Not Discriminate Against
WealthTV On The Basis Of Affiliation. .............................................40
III. WEALTHTV’S CHALLENGES TO THE FCC’S
PROCEDURES LACK MERIT. .............................................................47
A.
The FCC Acted Within Its Discretion In Applying Its
Program Carriage Rules In Case-By-Case Adjudication....................47
B.
The Burden Of Proof Is Immaterial In This Case. ..............................49
C.
The ALJ Properly Engaged In De Novo Review Of
Unresolved Factual Questions Designated For Hearing. ....................52
IV. THE FCC PROPERLY UPHELD THE ALJ’S
EVIDENTIARY RULINGS. ...................................................................54
A.
The ALJ Properly Excluded The Unauthenticated
Testimony Of Mr. Burke In Another Case..........................................55
B.
The ALJ Properly Denied WealthTV’s Untimely Request
To Compel Mr. Jacobson To Testify. .................................................57
CONCLUSION ...............................................................................................60
ii

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TABLE OF AUTHORITIES

CASES

Am. Civil Liberties Union v. FCC, 523 F.2d 1344
(9th Cir. 1975) .............................................................................................29
Atlantic Pac. Constr. Co. v. NLRB, 52 F.3d 260 (9th
Cir. 1995).....................................................................................................54
Beyene v. Coleman Sec. Servs., Inc., 854 F.2d 1179
(9th Cir. 1988) .............................................................................................56
Blackfoot Livestock Comm’n Co. v. Dept. of
Agriculture, Packyards and Stockyards Admin.,
810 F.2d 916 (9th Cir. 1987).......................................................................34
Comcast Corp. v. FCC, 526 F.3d 763 (D.C. Cir.
2008)..................................................................................................... 35, 51
Eagle Broad. Group, Ltd. v. FCC, 563 F.3d 543
(D.C. Cir. 2009)...........................................................................................35
Environmentel LLC v. FCC, 661 F.3d 80 (D.C. Cir.
2011)............................................................................................................38
Fones4All Corp. v. FCC, 550 F.3d 811 (9th Cir.
2008)............................................................................. 29, 35, 38, 39, 46, 47
Ford Motor Co. v. FTC, 673 F.2d 1008 (9th Cir.
1981)............................................................................................................48
Frazier v. Johnson, 312 Fed. Appx. 879 (9th Cir.
2009)..................................................................................................... 38, 54
Geschke v. Astrue, 393 F. App’x 470 (9th Cir.
2010)............................................................................................................58
Grolier, Inc. v. FTC, 699 F.2d 983 (9th Cir. 1983) ........................................48
Hawaii Stevedores, Inc. v. Ogawa, 608 F.3d 642
(9th Cir. 2010) .............................................................................................52
Lackey v. FAA, 386 F. App’x. 689 (9th Cir. 2010) .........................................34
Los Angeles SMSA Ltd. P’ship v. FCC, 70 F.3d
1358 (D.C. Cir. 1995)....................................................................................3
Molina v. Astrue, __ F.3d __, No. 10-16578, 2012
WL 1071637 (9th Cir. Apr. 2, 2012)...........................................................57
iii

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NLRB v. Bell Aerospace Co., 416 U.S. 267 (1974) ........................................48
Northwest Ecosystem Alliance v. United States Fish
& Wildlife Service, 475 F.3d 1136 (9th Cir. 2007) .............................. 29, 30
Orr v. Bank of Am., 285 F.3d 764 (9th Cir. 2002) ..........................................55
Removatron Int’l Corp. v. FTC, 884 F.2d 1489 (1st
Cir. 1989).....................................................................................................57
Rhine v. Stevedoring Svcs. of Am., 596 F.3d 1161
(9th Cir. 2010) ...................................................................................... 26, 30
Schaffer v. Weast, 546 U.S. 49 (2005) ............................................................50
Southwest Sunsites, Inc. v. F.T.C., 785 F.2d 1431
(9th Cir. 1986), cert. denied, 479 U.S. 828 (1986) .....................................34
Stout v. Commissioner, 454 F.3d 1050 (9th Cir.
2006)............................................................................................................52
Sw. Bell Tel. Co. v. FCC, 116 F.3d 593 (D.C. Cir.
1997)..............................................................................................................3
Tommasetti v. Astrue, 533 F.3d 1035 (9th Cir.
2008)......................................................................................... 27, 30, 52, 57
Turner v. Comm’r of Soc. Sec., 613 F.3d 1217 (9th
Cir. 2010).....................................................................................................30
United States v. Pritchett, 699 F.2d 317 (6th Cir.
1983)............................................................................................................56

ADMINISTRATIVE DECISIONS

Implementation of Sections 12 and 19 of the Cable
Television Consumer Protection and Competition
Act of 1992
, 9 FCC Rcd 2642 (1993)...................................................... vi, 6
Revision of the Commission’s Program Carriage
Rules, 26 FCC Rcd 11494 (2011) .......................... 24, 25, 26, 38, 44, 49, 53
TCR Sports Broad. Holding, L.L.P. d/b/a Mid-
Atlantic Sports Network v. Time Warner Cable,
Inc.,
25 FCC Rcd 18099 (2010), pet’n for rev.
pending
, TCR Sports Broad. Holding, L.L.P.,
d/b/a Mid-Atlantic Sports Network v. FCC
(4th
Cir. No. 11-1151) ........................................................................................51
iv

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Tennis Channel, Inc., Complainant v. Comcast
Cable Commc’ns, L.L.C., 26 FCC Rcd 17160
(2011) ............................................................................................. 34, 35, 36

STATUTES AND REGULATIONS

1992 Cable Act § 2(a)(5), Pub. L. No. 102-385, 106
Stat. 1460 .......................................................................................................6
5 U.S.C. § 556(d).............................................................................................50
5 U.S.C. § 706 .................................................................................................57
5 U.S.C. § 706(2)(A) .......................................................................................29
28 U.S.C. § 2342(1) ..........................................................................................3
28 U.S.C. § 2344 ...............................................................................................3
47 U.S.C. § 154(i), (j)......................................................................................49
47 U.S.C. § 402(b).............................................................................................3
47 U.S.C. § 405(a)........................................................................ 28, 35, 46, 47
47 U.S.C. § 409(b)...........................................................................................19
47 U.S.C. § 536 .................................................................................................6
47 U.S.C. § 536(a)(3) ................................... 1, 3, 4, 6, 7, 11, 15, 26, 31, 46, 48
47 C.F.R. § 76.1300 ................................................................................... 6, 49
47 C.F.R. § 76.1301(c) ................................................. 1, 3, 4, 7, 11, 15, 26, 46
47 C.F.R. § 76.1302 ................................................................................... 6, 49
47 C.F.R. § 76.1302(c) ....................................................................................31
47 C.F.R. § 76.1302(c)-(e) ................................................................................7
47 C.F.R. § 76.1302(d)(3)(iii) .........................................................................24
v

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GLOSSARY

1993 Program
Implementation of Sections 12 and 19 of the Cable
Carriage Order
Television Consumer Protection and Competition Act of
1992
, 9 FCC Rcd 2642 (1993)
2011 Program
Revision of the Commission’s Program Carriage Rules,
Carriage Order
26 FCC Rcd 11494 (2011)
& NPRM

Add.

Addendum to Petitioner’s Brief
ALJ
Administrative
Law
Judge
BHN

Intervenor Bright House Networks, LLC
Comcast
Intervenor
Comcast
Corporation
Cox

Intervenor Cox Communications, Inc.
ER
Excerpts
of
Record
FCC
Federal Communications Commission or “Commission”
HD High
Definition
Hearing
Herring Broad., Inc. d/b/a WealthTV, Complainant v.
Designation
Time Warner Cable, Inc., Defendant; Herring Broad., Inc.
Order (“HDO”)
d/b/a WealthTV, Complainant v. Bright House Networks,
LLC, Defendant; Herring Broad. Inc. d/b/a WealthTV,
Complainant v. Cox Commc’ns, Inc., Defendant; Herring
Broad., Inc. d/b/a WealthTV, Complainant v. Comcast
Corp., Defendant; NFL Enterprises LLC, Complainant v.
Comcast Cable Commc’ns, LLC, Defendant; TCR Sports
Broad. Holding, L.L.P. d/b/a Mid-Atlantic Sports
Network, Complainant v. Comcast Corp., Defendant,
23
FCC Rcd 14787 (Med. Bur. 2008)
MVPD
Multichannel Video Programming Distributor
vi

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Order
Herring Broad., Inc. d/b/a WealthTV, Complainant v.
Time Warner Cable, Inc., Defendant; Herring Broad., Inc.
d/b/a WealthTV, Complainant v. Bright House Networks,
LLC, Defendant; Herring Broad. Inc. d/b/a WealthTV,
Complainant v. Cox Commc’ns, Inc., Defendant; Herring
Broad., Inc. d/b/a WealthTV, Complainant v. Comcast
Corp., Defendant,
26 FCC Rcd 8971 (2011)
Recommended
Herring Broad., Inc. d/b/a WealthTV, Complainant v.
Decision (“RD”)
Time Warner Cable, Inc., Defendant; Herring Broad., Inc.
d/b/a WealthTV, Complainant v. Bright House Networks,
LLC, Defendant; Herring Broad. Inc. d/b/a WealthTV,
Complainant v. Cox Commc’ns, Inc., Defendant; Herring
Broad., Inc. d/b/a WealthTV, Complainant v. Comcast
Corp., Defendant,
24 FCC Rcd 12967 (ALJ 2009)
SER
Respondents’ Supplemental Excerpts of Record
Tennis Channel
Initial Decision, Tennis Channel, Inc., Complainant v.
Comcast Cable Commc’ns, L.L.C
, 26 FCC Rcd 17160
(ALJ 2011)
Time Warner
Intervenor Time Warner Cable, Inc.
VOD
Video
on
Demand

vii

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IN THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
NO. 11-73134
HERRING BROADCASTING, INC. DBA WEALTHTV,
PETITIONER,
V.
FEDERAL COMMUNICATIONS COMMISSION
AND UNITED STATES OF AMERICA,
RESPONDENTS,
COMCAST CORPORATION, ET AL.,
RESPONDENT-INTERVENORS.
ON PETITION FOR REVIEW OF AN ORDER OF THE
FEDERAL COMMUNICATIONS COMMISSION
BRIEF FOR RESPONDENTS
This case involves a challenge to the Federal Communications
Commission’s denial of a video programming vendor’s complaint that it was
unlawfully denied carriage by four cable television companies.
Federal law prohibits a cable operator from discriminating in its
distribution of video programming “on the basis of” a programming vendor’s
“affiliation or nonaffiliation” with the cable operator. 47 U.S.C. § 536(a)(3);
see also 47 C.F.R. § 76.1301(c) (same). WealthTV, a programming vendor

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that is unaffiliated with any cable operator, contends that intervenors Comcast
Corporation (“Comcast”), Time Warner Cable, Inc. (“Time Warner”), Cox
Communications, Inc. (“Cox”), and Bright House Networks, LLC (“BHN”)
violated that law when they declined WealthTV’s demand for carriage on
their cable systems.
After reviewing an extensive evidentiary record, the Federal
Communications Commission (“FCC” or “Commission”) determined that the
cable television companies did not unlawfully discriminate against WealthTV
but instead rejected WealthTV’s carriage proposals for legitimate and non-
discriminatory reasons. On judicial review, WealthTV asserts that the FCC
abused its discretion and improperly weighed the evidence in denying
WealthTV’s discrimination claims.

JURISDICTION

1
The FCC released the Order on review on June 13, 2011. Appellant
Herring Broadcasting, Inc. d/b/a WealthTV (“WealthTV”) sought
administrative reconsideration, thereby tolling the period within which to

1 Herring Broad., Inc. d/b/a Wealth TV, Complainant v. Time Warner
Cable, Inc., Defendant; Herring Broad., Inc. d/b/a Wealth TV, Complainant
v. Bright House Networks, LLC, Defendant; Herring Broad. Inc. d/b/a Wealth
TV, Complainant v. Cox Commc’ns, Inc., Defendant; Herring Broad., Inc.
d/b/a Wealth TV, Complainant v. Comcast Corp., Defendant,
26 FCC Rcd
8971 (2011) (“Order”) (ER 135).
2

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seek judicial review. See, e.g., Sw. Bell Tel. Co. v. FCC, 116 F.3d 593, 596-
97 (D.C. Cir. 1997). WealthTV withdrew its petition for reconsideration on
October 7, 2011 (ER 153-56) and filed a timely petition for judicial review of
the Order on October 19, 2011, within the 60-day deadline established by
28 U.S.C. § 2344. This Court has jurisdiction to review the Order under
47 U.S.C. § 402(b) and 28 U.S.C. § 2342(1). See, e.g., Los Angeles SMSA
Ltd. P’ship v. FCC, 70 F.3d 1358, 1359 (D.C. Cir. 1995).

STATEMENT OF ISSUE PRESENTED

Whether the FCC properly upheld an administrative law judge’s
determination that four cable television companies did not unlawfully
discriminate on the basis of affiliation, in violation of 47 U.S.C. § 536(a)(3)
and 47 C.F.R. § 76.1301(c), when they declined to carry WealthTV on their
cable systems.

STATUTES AND REGULATIONS

The pertinent statutory provisions and regulations are set forth in the
addendum to this brief.

COUNTERSTATEMENT OF THE CASE

In 2007 and 2008, WealthTV filed separate complaints with the FCC
against four cable television companies, alleging that the companies had
unlawfully discriminated against WealthTV by refusing to carry its
programming while providing preferential treatment to an affiliated
3

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programming network (MOJO) that the companies carried on their cable
systems between September 2003 and December 2008.
The FCC’s Media Bureau found that the pleadings presented several
unresolved questions of fact. Thus, rather than dismissing WealthTV’s
complaints solely based on the pleadings, the Media Bureau designated the
four complaints for hearing in a consolidated proceeding before an
administrative law judge (“ALJ”). Following the completion of discovery,
and the submission of written direct testimony, proposed exhibits, and trial
briefs, the ALJ conducted ten days of formal hearings involving 21 witnesses.
After weighing the evidence and evaluating the credibility of the
witnesses, the ALJ concluded that WealthTV failed to prove its claims that
the cable companies discriminated against it “on the basis of affiliation or
nonaffiliation,” 47 U.S.C. § 536(a)(3); 47 C.F.R. § 76.1301(c), by declining
to carry WealthTV while carrying MOJO. Relying on, among other things,
WealthTV’s own marketing materials and testimony, the ALJ concluded that
the preponderance of the evidence established that MOJO and WealthTV
neither aired the same type of programming, nor targeted the same audience.
The ALJ also held that the evidence overwhelmingly showed that the cable
television companies chose to carry their affiliated network, but not
WealthTV, for legitimate and non-discriminatory business reasons unrelated
4

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to WealthTV’s status as an independent network. These reasons included:
WealthTV’s lack of an established brand with a proven record of appeal to
subscribers; the fact that WealthTV had not obtained carriage with a number
of other competing cable companies and the nation’s two satellite providers
of video programming; that WealthTV’s owners were inexperienced in
launching networks and lacked outside financing; that the channel space
necessary to carry WealthTV could be more effectively used; and that
WealthTV’s proposed terms of carriage were unfavorable to the cable
companies.
WealthTV filed exceptions to the ALJ’s recommendations. In the
agency Order challenged in this case, the FCC found that the ALJ’s
conclusions were supported by substantial evidence and denied the
exceptions.

COUNTERSTATEMENT OF THE FACTS

I.

STATUTORY AND REGULATORY BACKGROUND.

A. The 1992 Cable Act.

In the Cable Television Consumer Protection and Competition Act of
1992 (“1992 Cable Act”), Congress found that vertical integration (i.e.,
common ownership) between producers and distributors of cable
programming gave cable operators “the incentive and ability to favor their
5

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affiliated programmers” and made it “more difficult for noncable-affiliated
programmers to secure carriage on cable systems.” 1992 Cable Act § 2(a)(5),
Pub. L. No. 102-385, 106 Stat. 1460. To address those concerns, Congress
directed the FCC to establish regulations to prevent cable operators and other
multichannel video programming distributors (“MVPDs”) from
“discriminating in video programming distribution on the basis of affiliation
or nonaffiliation of vendors in the selection, terms, or conditions for carriage
2
of video programming provided by such vendors.” 47 U.S.C. § 536(a)(3).

B.

The FCC’s 1993 Program Carriage Order.

The FCC complied with this statutory mandate by promulgating rules
for adjudicating cable program carriage complaints. Implementation of
Sections 12 and 19 of the Cable Television Consumer Protection and
Competition Act of 1992, 9 FCC Rcd 2642 (1993) (“1993 Program Carriage
Order”); see also 47 C.F.R. §§ 76.1300-76.1302 (FCC’s implementing rules).
“In implementing the provisions of” the program carriage statute, the
FCC explained that its “regulations must strike a balance that not only
pr[o]scribes behavior prohibited by the specific language of the statute, but

2 The 1992 Cable Act amended the Communications Act of 1934 by adding
a new section 616, which is now codified at 47 U.S.C. § 536. We refer to
section 616 and other provisions of the Communications Act by their U.S.
Code number throughout this brief.
6

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also preserves the ability of affected parties to engage in legitimate,
aggressive negotiations.” Id. at 2648 (¶ 14). To achieve that balance, the
FCC “adopt[ed] general rules that are consistent with the statute’s specific
prohibitions regarding actions between distributors and program vendors in
forming program carriage agreements.” Id. Among other things, rule
76.1301(c) (47 C.F.R. § 76.1301(c)), which tracks the language of 47 U.S.C
§ 536(a)(3), provides:
No multichannel video programming distributor shall engage in
conduct the effect of which is to unreasonably restrain the
ability of an unaffiliated video programming vendor to compete
fairly by discriminating in video programming distribution on
the basis of affiliation or non-affiliation of vendors in the
selection, terms, or conditions for carriage of video
programming provided by such vendors.
The FCC recognized that “the practices at issue will necessarily
involve behavior that must be evaluated within the context of specific facts
pertaining to each negotiation.” 1993 Program Carriage Order, 9 FCC Rcd
at 2648 (¶ 14). It therefore decided to “identify specific behavior that
constitutes ‘coercion’ and ‘discrimination’ as [it] resolve[s] particular
complaints” on a case-by-case basis. Id.
The FCC also established procedures for reviewing program carriage
complaints on the basis of a written complaint, answer, and reply. Id. at 2652
(¶ 23); 47 C.F.R. § 76.1302(c)-(e). “When filing a complaint,” the FCC
7

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specified, “the burden of proof will be on the programming vendor to
establish a prima facie showing that the defendant multichannel distributor
has engaged in behavior that is prohibited by [section 536(a)].” Id. at 2654
(¶ 29).
The FCC recognized that the agency’s Media Bureau – to which the
Commission has delegated authority to rule on alleged violations of the
program carriage statute and rule – “will be unable to resolve most program
carriage complaints on the sole basis of a written record.” Id. at 2652 (¶ 24).
The FCC therefore “anticipate[d] that resolution of most … complaints will
require an administrative hearing to evaluate contested facts related to the
parties’ specific negotiations.” Id. at 2652 (¶ 24); see also id. at 2656 (¶ 34).
Where the Media Bureau determines that the complainant has established a
prima facie case but that “disposition of the complaint will require the
resolution of factual disputes or other extensive discovery,” the Bureau is to
notify parties that they have the option of choosing Alternative Dispute
Resolution or an adjudicatory hearing before an ALJ. Id. at 2656 (¶ 34). If
the parties choose the latter, any challenge to the ALJ’s subsequent “ruling on
the merits” must be brought “directly to the Commission” – i.e., to the full
Commission rather than the FCC’s staff in the Media Bureau. Id.
8

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II.

FACTUAL BACKGROUND.

A. WealthTV’s Program Carriage Disputes.

3
WealthTV is a national video programming vendor. Launched on
June 1, 2004, it offers original themed programming featuring “luxury
lifestyles, such as travel, fine dining, luxury transport, gadgetry, finance and
even philanthropy” in a high definition (“HD”) format. RD (¶ 7) (ER 82).
WealthTV’s programming revolves around the theme of “how wealth is
achieved, used and enjoyed.” Id. (¶ 21) (ER 88). WealthTV “is a family-
owned company.” Id. (¶ 7) (ER 82). Its principals, Chief Executive Officer
Robert Herring Sr., and his son, Charles Herring, “have considerable
experience as business entrepreneurs but had not operated a cable network
before establishing WealthTV.” Id.
WealthTV is not affiliated with any MVPD. Id. While “WealthTV
has been able to reach affiliation agreements with over 125 MVPDs,” it “is
not carried by 18 of the 25 largest MVPDs in the United States, including the
two … satellite MVPDs (DirecTV and Dish Network).” Id. (¶ 8) (ER 83).

3 Herring Broad., Inc. d/b/a WealthTV, Complainant v. Time Warner Cable,
Inc., Defendant; Herring Broad., Inc. d/b/a WealthTV, Complainant v. Bright
House Networks, LLC, Defendant; Herring Broad. Inc. d/b/a WealthTV,
Complainant v. Cox Commc’ns, Inc., Defendant; Herring Broad., Inc. d/b/a
WealthTV, Complainant v. Comcast Corp., Defendant,
24 FCC Rcd 12967,
12972 (¶ 7) (ALJ 2009) (“Recommended Decision” or “RD”) (ER 83).
9

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MOJO was a cable network designed to appeal in the last decade to
“early adopters of HD technology,” typically males aged 18-49. Id. (¶ 14)
4
(ER 85). Beginning in 2003, MOJO “acquired and aired HD programming –
i.e., shows featuring sports, movies, and rock music – that was designed to
appeal to this target demographic group.” Id. The intervenor cable television
companies viewed their carriage of MOJO as “a short-term project,”
however, because “[t]hey expected to eventually replace [MOJO] when
[standard definition] networks with established brands and audience
developed HD versions of their existing programming.” Id. (¶ 13) (ER 85).
Consistent with that plan, iN DEMAND’s owners terminated MOJO in
December 2008, when HD programming became more widely available. Id.
(¶ 19) (ER 87). Thereafter, the intervenors used the channel space previously
occupied by MOJO “to carry HD simulcasts of existing networks with
established brands and audiences.” Id.

In 2007 and 2008, after failing in its attempts to negotiate carriage
agreements with the intervenors, WealthTV filed with the FCC separate

4 The intervenors (Comcast, Time Warner, Cox, and BHN) jointly own iN
DEMAND, a company that provided HD programming to intervenors
beginning in 2003 through two channels known as INHD and INHD2. RD
(¶ 12) (ER 84). iN Demand “rebranded” INHD as MOJO in 2007 and shut
down INHD2 on December 31, 2006. RD (¶ 16, n.56) (ER 86).
10

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complaints against Time Warner, Cox, Comcast, and BHN alleging that each
of them had violated 47 U.S.C. § 536(a)(3) and Rule 76.1301(c) by refusing
to carry WealthTV’s video programming while carrying MOJO on
preferential terms. RD (¶ 1) (ER 79); Order (¶ 7) (ER 137-38). According to
WealthTV, MOJO’s programming was similar to WealthTV’s, and MOJO
targeted the same audience. Id. Thus, WealthTV alleged, the cable television
companies were required to carry WealthTV on terms similar to MOJO’s
carriage arrangement. See “Hearing Designation Order” or “HDO” (¶ 9)
(ER 6). While WealthTV did not specify the licensing fees it demanded for
carriage, it sought an FCC order compelling each intervenor to carry
WealthTV for a period of ten years under those general terms. Id.

On October 10, 2008, the FCC’s Media Bureau, acting pursuant to
delegated authority, designated the four complaints for hearing before an ALJ
in a single consolidated proceeding. See HDO (ER 1-60). “After reviewing
the pleadings and supporting documentation filed by parties …, [the Media
Bureau] f[ound] that the complainant[] ha[d] established a prima facie
showing of a violation of the program carriage rules.” Id. (¶ 7) (ER 6). The
Media Bureau, however, also found that the “pleadings and supporting
documentation present[ed] several factual disputes as to whether [Time
Warner], BHN, Cox and Comcast discriminated against WealthTV in favor
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of their affiliated MOJO service,” making it impossible for the Bureau “to
determine on the basis of the existing records whether [it could] grant relief.”
Id. (¶ 58) (ER 28). The Media Bureau therefore ordered the ALJ to conduct a
hearing to “resolve the factual disputes with respect to the claims” and issue a
recommended decision within 60 days. Id. (¶ 120) (ER 29).
In the ensuing proceedings, the ALJ issued an order assigning
WealthTV the burden of proof and the burden of introducing evidence in
support of its claims with respect to the issues designated for hearing.
(ER 34). In a subsequent order, the ALJ ruled that the “evidence adduced at
the hearing in this proceeding will be given de novo consideration” and that
resolution of the disputed factual questions designated for hearing will be
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“based solely on the evidence compiled during the course of the hearing.”
5
(ER 38) (emphasis omitted).
Following the completion of discovery, and the submission of written
direct testimony, proposed exhibits, and trial briefs, the ALJ conducted a
formal hearing from April 20, 2009 through May 1, 2009. RD (¶ 5) (ER 81);
Order (¶ 9) (ER 138). Three witnesses appeared for WealthTV and eighteen
witnesses appeared for the intervenors. Id. The FCC’s Enforcement Bureau,
participating to represent the public interest, conducted cross-examination
and filed comments opposing WealthTV’s four complaints. RD (¶ 5)
(ER 81).

B.

The ALJ’s Recommended Decision.

In a 37-page Recommended Decision that carefully examined the
evidentiary record, the ALJ determined that the intervenor cable television

5 Concluding that the “60-day timeframe set forth in the HDO [could not] be
achieved” in light of the multiple complaints, the unique factual situation of
each case, and the need for discovery, the ALJ set a hearing schedule that
extended beyond the deadline established by the Media Bureau in the HDO.
(ER 38-39). In response to a motion by WealthTV, the Media Bureau in
December 2008 concluded that the ALJ’s authority expired when he failed to
issue a decision within 60 days. (ER 63-65). The Media Bureau stated that it
would therefore resolve the complaints itself. Id. The following month, the
Commission rescinded the Bureau’s order. (ER 75-77). The Commission
explained that “the factual determinations required to fairly adjudicate these
matters are best resolved through hearings before an [ALJ], rather than solely
through pleadings and exhibits as contemplated by the Media Bureau.” Id.
(¶ 2) (ER 76). The Commission thus “reinstate[d] the presiding [ALJ’s]
delegated authority and direct[ed] him to proceed pursuant to the HDO.” Id.
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companies did not discriminate against WealthTV in violation of the program
carriage statute and the FCC’s rule by denying carriage for impermissible
reasons related to WealthTV’s status as an unaffiliated network. RD (¶ 74)
(ER 114).
1.

Burden of proof.

At the outset, the ALJ considered and rejected WealthTV’s argument
that “it need carry only an initial burden of proof in establishing a prima facie
case of discrimination,” and that, after it establishes a prima facie case, “the
burden shifts to [the intervenor cable companies] to prove, by a
preponderance of evidence, … legitimate, non-discriminatory business
reasons for” declining to carry WealthTV. RD (¶ 57) (ER 105). The ALJ
explained that “[n]either the 1992 Cable Act, the Commission’s carriage rule
nor the HDO” specifies such a burden-shifting approach. Id. (¶ 58) (ER 106).
The ALJ accordingly “adher[ed] to the usual practice of requiring that the
party seeking relief by Commission order to bear the burden of proving that
the violations occurred.” Id.
The ALJ ultimately held, however, that “the manner in which the
burden of proof is allocated [is] immaterial” in this case. Id. (¶ 62) (ER 108).
“Whatever the allocation,” he concluded, “the preponderance of the evidence,
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viewed in its entirety, demonstrates that the defendants never violated
[47 U.S.C. § 536(a)(3)] or section 76.1301(c) of the [FCC’s] rules.” Id.
2.

Whether WealthTV and MOJO were similarly
situated.

Turning to the merits of WealthTV’s allegations of discrimination and
preferential treatment of MOJO, the ALJ explained that “[i]n order to
establish an inference of affiliation-motivated discrimination that was based
on defendants’ disparate treatment of WealthTV and MOJO, WealthTV bears
the threshold burden of showing that WealthTV and MOJO are similarly
situated.” RD (¶ 69) (ER 111). The ALJ concluded that “[t]he
preponderance of record evidence establishes that MOJO and WealthTV
neither aired the same type of programming, nor targeted the same audience.”
Id. (¶ 20) (ER 87).
The ALJ first found that WealthTV’s and MOJO’s programming were
substantially different. The ALJ found credible the testimony of intervenors’
expert Michael Egan, who categorized each program aired on the two
networks during sample weeks. Id. (¶ 22) (ER 88). Mr. Egan’s “analysis
established that 54 percent of MOJO’s programming time was devoted to
sports, music, and movies whereas only three percent of WealthTV’s
programming time consisted of shows in those genres.” Id. Moreover, Mr.
Egan’s testimony “established that 60 percent of WealthTV’s programming
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time consisted of shows in the genres of travel & recreation, lifestyle, food &
drink, documentary, and art/design/collectables,” while such programming
“aired only 19 percent of the time on MOJO.” Id. The ALJ also noted that
even WealthTV’s programming expert acknowledged many differences
between the two networks. For example, MOJO but not WealthTV aired
sports and movies, whereas WealthTV but not MOJO broadcast programs
about fashion, shopping, philanthropy and health. Id. (¶ 25) (ER 90).
The ALJ emphasized that Mr. Egan’s testimony showed that “the on-
air ‘look and feel’ of MOJO and WealthTV were demonstrably different.” Id.
(¶ 23) (ER 89). “MOJO conveyed a ‘hip, urban irreverent, aggressive, and
edgy’ image akin to that of the MTV network channels,” with a “hard-
charging production style featur[ing] contemporary music, fast-paced
transitions between shows and advertisements, and off-beat humor.” Id. “In
contrast, WealthTV presented a ‘calmer, more mature attitude,’” using
“orderly transitions to commercial breaks” – “like library background music”
in contrast to “MOJO’s rock and roll.” Id.

The ALJ next held that WealthTV and MOJO did not target the same
audience. Id. (¶ 27) (ER 91). The parties agreed that MOJO’s target
audience consisted of affluent males between the ages of 25 and 49. Id.
(¶ 29) (ER 91). But relying on WealthTV’s own marketing presentations to
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MVPDs and prospective advertisers, statements on its website, and the sworn
testimony of WealthTV’s president in another case, the ALJ concluded that
“the great weight of evidence reflects that WealthTV’s target audience is not
limited” to that group. Id. (¶ 34) (ER 94); see also id. (¶¶ 29-34) (ER 91-94).
3.

Allegations of discrimination against WealthTV.


The ALJ further determined that the intervenors chose to carry MOJO
(and its predecessor network, INHD) “for legitimate, non-discriminatory
business purposes.” RD (¶ 64) (ER 109). These purposes, the ALJ found,
included a need: (1) to showcase HD programming to those customers who
were “early adopters” of HD television sets, thereby enabling intervenors to
“keep up with competing MVPDs”; (2) to preserve intervenors’ “flexibility to
preempt scheduled programming of the MOJO channel depending upon the
regional or local programming interests of its viewers”; and (3) for
“flexibility to drop the MOJO channel when HD versions of programming of
existing cable networks … became available.” Id. (¶¶ 12, 64-65) (ER 84,
109). Emphasizing that “WealthTV had not yet launched at the time the
defendants decided to carry INHD,” the ALJ concluded that “[t]here is no
credible evidence that the defendants, in deciding to carry INHD,
discriminated against WealthTV … on the basis of affiliation or non-
affiliation.” Id. (¶ 65) (ER 109).
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The ALJ also rejected WealthTV’s claim that the intervenors
unlawfully discriminated against WealthTV based on its non-affiliated status
when they decided to carry MOJO (or its predecessor INHD), but not
WealthTV. As the ALJ explained, the evidence demonstrated that the
intervenors declined to carry WealthTV for “non-discriminatory business
reasons” “that are independent of and unrelated to their affiliation with
INHD/MOJO,” including: (1) “their evaluation of WealthTV’s
programming”; (2) “their perception that WealthTV lacked an established
brand with a proven record of appeal to their subscribers”; (3) that
“WealthTV had not obtained carriage with a number of competing MVPDs”;
(4) that “WealthTV’s owners were inexperienced in launching networks”;
(5) that “bandwidth necessary to carry WealthTV could be used for better
purposes”; (6) that “WealthTV lacked outside financing”; and (7) that
“WealthTV’s proposed terms and conditions of carriage were unfavorable” to
the intervenors. Id. (¶¶ 67, 69) (ER 110, 111); see also id. (¶¶ 35-51) (ER 94-
104). The ALJ found “no credible or reliable evidence proving that any
defendant refused to carry WealthTV” to “enhanc[e] the competitive position
of … MOJO.” Id. In fact, the ALJ found that there was no “evidence that
any of the defendants considered MOJO … in deciding whether or not to
carry WealthTV.” Id. (¶ 67) (ER 110).
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C. The

Order

On Review.

WealthTV filed exceptions to the ALJ’s Recommended Decision.
(ER 115-134). Reviewing the ALJ’s decision pursuant to 47 U.S.C. § 409(b),
the FCC “den[ied] WealthTV’s exceptions” and “adopt[ed] the conclusions
of the [ALJ’s] Recommended Decision.” Order (¶ 3) (ER 136).
1.

Burden of proof.

In its exceptions, WealthTV argued that the ALJ abused his discretion
in assigning it the burden of proof and the burden of introducing evidence
after WealthTV had established a prima facie case. Order (¶ 18) (ER 141).
The FCC found that it “need not decide … whether the ALJ properly
allocated the burdens … because [it] agree[d] with the ALJ’s conclusion that
the allocation of the burdens is ‘immaterial to the [ultimate] decision.’” Id.
As the FCC explained, “defendants would have prevailed even if they had
been required to carry the burden of production and proof, as WealthTV
contends was proper.” Id.
2.

Record evidence.

The FCC also found “substantial record evidence supporting the ALJ’s
conclusions.” Id. (¶ 19) (ER 142).
First, the FCC saw no basis to reverse the ALJ’s finding that MOJO
and WealthTV aired different programming (id. (¶ 23) (ER 143)) – a finding
that undermined WealthTV’s theory that MOJO was similarly situated to
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WealthTV and that the intervenors gave preferential treatment to MOJO
because of its status as an affiliate. See id. n.51 (ER 142) (noting that
“WealthTV framed its complaint around the allegation that its channel was
similarly situated with the MOJO channel”). The FCC concluded that the
ALJ properly declined to credit the testimony of WealthTV’s programming
expert, Sandy McGovern, noting that she “based her analysis of WealthTV’s
programming on selections of that channel’s programming provided to her by
WealthTV President Charles Herring,” and not on “any ‘systematic review of
the programming of either WealthTV or MOJO.’” Id. (¶ 24) (ER 143).
Citing the ALJ’s findings, the FCC further noted that WealthTV’s own expert
“acknowledged in her testimony ‘many differences in the programming of
WealthTV and MOJO.’” Id. Like the ALJ, the FCC also gave weight to the
expert evidence produced by the intervenors demonstrating the differences
between the two networks. Id. (citing Mr. Egan’s testimony); see also pp. 15-
16, above. The FCC thus found “ample basis for the ALJ’s conclusion that
the expert testimony presented by defendants was more credible than that of
WealthTV.” Id.
The FCC likewise found that substantial record evidence supported the
ALJ’s conclusion that WealthTV and MOJO did not target similar audiences.
Id. (¶ 26) (ER 144). The FCC agreed with the ALJ’s determination “that the
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‘overwhelming weight of the record evidence … shows that WealthTV
targeted a much broader audience than adult males between the ages of 25
and 49’” targeted by MOJO. Id. (¶ 25) (ER 143). As one example, the FCC
noted a presentation in which “WealthTV described itself as targeting the
most affluent viewer, 25-60+, educated, equal appeal to men and women.”
Id. (¶ 26) (ER 144). The FCC, like the ALJ, “also took note of [WealthTV
president Charles] Herring’s sworn testimony in unrelated litigation –
inconsistent with his testimony [before the FCC] – that WealthTV’s
programming ‘appeals to about a 25 to 65+ crowd,’ irrespective of gender,
and that ‘the only group that would not find WealthTV attractive was monks
that have taken a vow to poverty.’” Id.
Finally, the FCC found no merit to WealthTV’s claim that “the record
contained substantial evidence of discrimination by defendants against it and
in favor of their affiliated network.” Id. (¶ 27) (ER 144). “The
Recommended Decision contains a detailed analysis of each defendant’s
negotiations with WealthTV,” the FCC explained, and “WealthTV’s
exception with respect to discrimination largely ignores these findings.” Id.
(¶ 28) (ER 144); see also id. (¶¶ 28-32) (ER 144-46); RD (¶¶ 36-51) (ER 94-
104). The FCC concluded that “[t]here is substantial record evidence that
defendants’ refusals to carry WealthTV were based on legitimate business
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reasons that were unrelated to WealthTV’s status as an independent
programming vendor.” Order (¶ 32) (ER 146).
3.

The ALJ’s rulings on witnesses and evidence.

The FCC denied WealthTV’s exception to the ALJ’s refusal to permit
it to introduce into evidence the testimony of Stephen Burke, Comcast’s
former chief operating officer, from a separate proceeding, which WealthTV
attempted to use when cross-examining a different Comcast executive,
Madison Bond, in this case. Id. (¶ 35) (ER 146). Noting that “[d]eference is
ordinarily accorded an ALJ in the conduct of a hearing,” the FCC affirmed
the ALJ’s exclusion of this evidence on the ground that “Mr. Bond was not
competent under Rule 901 of the Federal Rules of Evidence to authenticate
the transcript of testimony of a different individual in a separate proceeding.”
Id. (¶ 34) (ER 146).
Likewise, the FCC found that the ALJ did not abuse his discretion
when he denied WealthTV’s request to call Robert Jacobson, former
president and chief executive officer of iN DEMAND, to testify about
MOJO. Id. (¶ 37) (ER 147). The FCC explained that the ALJ reasonably
barred Mr. Jacobson’s testimony because “WealthTV failed to include [him]
on its witness list,” as required by the ALJ’s prior order. Id. The FCC,
moreover, was not persuaded by WealthTV’s excuse that Mr. Jacobson’s
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testimony only became necessary after certain portions of Mr. Charles
Herring’s testimony were excluded. Id. As the FCC explained, WealthTV
“should not have been surprised by the defendants’ challenge to … his
proposed testimony,” because portions of it related to the policies of iN
DEMAND – a matter about which Mr. Herring, a principal of WealthTV, was
not competent to testify. Id. The FCC also found it significant that after “the
defendants and WealthTV subsequently agreed on Mr. Herring’s testimony,
… WealthTV did not renew its request for the testimony of Mr. Jacobson.”
Id. “In any event,” the FCC explained, WealthTV “fail[ed] to demonstrate
how it was harmed,” noting that a fact witness (David Asch, executive vice
president of programming at iN DEMAND) testified at the hearing about iN
DEMAND’s policies. Id. (¶ 37 & n.91) (ER 147).
Finally, the FCC rejected WealthTV’s claim that the testimony of
intervenors’ expert Michael Egan “should have been accorded ‘little weight’
by the ALJ.” Id. (¶ 38) (ER 147). The FCC explained that “an ALJ’s
determination of the credibility of witnesses at a hearing is due substantial
deference,” and it “f[oun]d no basis to conclude that the ALJ abused his
discretion in finding Mr. Egan’s testimony reliable and credible.” Id. (¶ 39)
(ER 147). Indeed, while WealthTV criticized Mr. Egan’s analysis, the FCC
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noted that it “fail[ed] to show how Mr. Egan’s conclusions were erroneous[,]
[n]or did WealthTV present any countervailing evidence.” Id. (ER 147-48).

D. Subsequent Developments.

In 2011, after the FCC released the Order on review in this case, the
Commission amended its rules governing program carriage complaints.
Revision of the Commission’s Program Carriage Rules, 26 FCC Rcd 11494,
11495 (¶ 2) (2011) (“2011 Program Carriage Order & NPRM”).
“Because it is unlikely that direct evidence of a discriminatory motive
will be available to potential complainants,” the FCC explained that “a
complainant can establish … a prima facie case … by providing the
following circumstantial evidence of discrimination ‘on the basis of
affiliation or non-affiliation.’” 2011 Program Carriage Order & NPRM, 26
FCC Rcd at 11504 (¶ 14); see also 47 C.F.R. § 76.1302(d)(3)(iii). First, a
program carriage complainant that relies on circumstantial (rather than direct)
evidence must submit evidence “that it provides video programming that is
similarly situated to video programming provided by a programming vendor
affiliated with the defendant MVPD, based on a combination of factors, such
as genre, ratings, license fees, target audience, target advertisers, target
programming, and other factors.” Id. “Second, the complaint must contain
evidence that the defendant MVPD has treated the video programming
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provided by the complainant programming vendor differently than the
similarly situated video programming provided by the programming vendor
affiliated with the defendant MVPD with respect to the selection, terms, or
6
conditions for carriage.” Id. at 11504-05 (¶ 14).
The FCC “emphasize[d] that a Media Bureau finding that a
complainant has established a prima facie case does not mean that the
complainant has proven its case or any elements of its case on the merits.”
Id. at 11505 (¶ 16) (emphasis added). “Rather,” the FCC explained, “a prima
facie finding means that the complainant has provided sufficient evidence in
its complaint, without the Media Bureau having considered any evidence to
the contrary, to proceed.” Id. Thus, if “the record is not sufficient to resolve
the complaint, the adjudicator … will allow the parties to engage in discovery
and will then conduct a de novo examination of all relevant evidence on each
factual and legal issue.” Id. In that circumstance, the FCC explained, “the
adjudicator … may reach an opposite conclusion after conducting further
proceedings and developing a more complete evidentiary record.” Id.

6 The FCC clarified that the rule amendments adopted in the 2011 Program
Carriage Order & NPRM do not apply to the complaints at issue here. See
26 FCC Rcd at 11496 (¶ 2, n.8) (explaining that “[t]he new procedures … do
not apply to program carriage complaints that are currently pending or to
program carriage complaints that are filed before the effective date of the new
procedures adopted herein”).
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In a Notice of Proposed Rulemaking (“NPRM”) accompanying the
2011 Program Carriage Order & NPRM, the FCC noted that “[o]nly two
program carriage cases have been decided on the merits to date,” and “[i]n
neither case was the Commission required to decide the issue of which party
bears the burdens of production and persuasion.” Id. at 11544 (¶ 79). The
FCC thus “propose[d] to codify in [its] rules which party bears th[ose]
burdens … after the complainant has established a prima facie case.” Id. at
11545 (¶ 80). The FCC has not yet acted on the additional rules proposed in
the NPRM.

SUMMARY OF ARGUMENT

The FCC properly denied WealthTV’s program carriage complaints.
Substantial record evidence supports the agency’s conclusion that the
intervenors carried MOJO but not WealthTV for legitimate business reasons,
and not “on the basis of” WealthTV’s “nonaffiliation” with intervenors.
47 U.S.C. § 536(a)(3); 47 C.F.R. § 76.1301(c). Because this Court in
reviewing an administrative agency’s decision will not “reweigh the
evidence,” Rhine v. Stevedoring Svcs. of Am., 596 F.3d 1161, 1165 (9th Cir.
2010), WealthTV’s claims fail.
1. As the FCC noted, “WealthTV framed its complaint around the
allegation that its channel was similarly situated with the MOJO channel.”
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Order (n.51) (ER 142). Based on their comprehensive review of the record,
however, the ALJ and the FCC concluded the contrary. The two networks
aired different types of programming – as WealthTV’s own expert conceded
on cross-examination – and had a different look and feel. Moreover,
WealthTV and MOJO had different target audiences, as WealthTV’s
marketing materials and statements by its president confirmed.
The record also contained ample evidence that intervenors declined to
carry WealthTV for legitimate business reasons unrelated to WealthTV’s
status as an unaffiliated network. The record showed that the intervenors
based their carriage decisions on, among other things, insufficient demand for
WealthTV’s programming, the inexperience of its management team,
WealthTV’s lack of independent financing, WealthTV’s inability to secure
carriage agreements with other large satellite and cable television providers,
the unfavorable terms upon which WealthTV sought carriage, and constraints
on available channel space on the intervenors’ cable systems.
In sum, WealthTV has failed to carry its heavy burden of showing that
the evidence was not “adequate to support” the FCC’s decision. Tommasetti
v. Astrue, 533 F.3d 1035, 1038 (9th Cir. 2008).
2. This Court lacks jurisdiction to consider WealthTV’s claim that the
FCC acted arbitrarily and capriciously when it adjudicated WealthTV’s
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program carriage complaints without standards or rules that meet WealthTV’s
preferred level of specificity. WealthTV never presented that claim to the
FCC in the proceedings leading to the Order on review and the claim is
therefore statutorily barred. See 47 U.S.C. § 405(a). This claim also fails on
the merits because the FCC properly exercised its authority to adopt general
program carriage rules clarified through case-by-case adjudication.
3. WealthTV’s challenge to the ALJ’s allocation of the burden of
proof is equally unavailing. Neither the statute nor FCC precedent specifies
how the burden of proof should be assigned after a claimant establishes a
prima facie case of program carriage discrimination. And it is traditional to
allocate the burden of proof to the party seeking relief from the agency. But
the issue is immaterial in this case. As both the ALJ and the Commission
held, WealthTV’s complaints failed however the burden of proof was
allocated, based on the overwhelming weight of the record evidence.
4. Lastly, the FCC properly upheld the ALJ’s rulings concerning
WealthTV’s attempts to introduce testimony of two witnesses. The ALJ did
not abuse his discretion when he excluded the unauthenticated testimony of
Comcast employee Stephen Burke in a different case, which WealthTV
attempted to introduce via cross-examination of a different witness in the
present case. Likewise, the ALJ acted well within his discretion when he
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refused to compel the attendance of a witness, Robert Jacobson, whom
WealthTV failed to include on its initial witness list. Indeed, any error was
committed by WealthTV, which never renewed its motion to subpoena that
witness – despite the ALJ’s express permission to do so – later in the
proceeding. But even if there were any error by the ALJ, the error would
have been harmless. Given the overwhelming record evidence, the excluded
testimony, even if admitted, would not have changed the outcome of this
case.

ARGUMENT

I.

THE STANDARD OF REVIEW IS HIGHLY
DEFERENTIAL.

The FCC’s Order must be upheld unless it is “arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance with law.” Fones4All
Corp. v. FCC, 550 F.3d 811, 821 (9th Cir. 2008) (quoting 5 U.S.C. §
706(2)(A)). Judicial review under this standard is “highly deferential,
presuming the agency action to be valid and affirming the agency action if a
reasonable basis exists for its decision.” Northwest Ecosystem Alliance v.
United States Fish & Wildlife Serv., 475 F.3d 1136, 1140 (9th Cir. 2007)
(internal quotations omitted). The scope of review “is narrow”; “[i]t is not
for this court to substitute its judgment for that of the Commission.” Am.
Civil Liberties Union v. FCC, 523 F.2d 1344, 1350 (9th Cir. 1975). The
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Court’s task is simply “to ensure that the agency considered the relevant
factors and articulated a rational connection between the facts found and the
choices made.” Northwest Ecosystem Alliance, 475 F.3d at 1140 (internal
quotations omitted).
To the extent that WealthTV challenges the Commission’s factual
findings and its evaluation of the evidence, the Court “must affirm” the
FCC’s decision so long as it “is supported by substantial evidence and applies
correct legal standards.” Turner v. Comm’r of Soc. Sec., 613 F.3d 1217,
1222, n.2 (9th Cir. 2010). “‘Substantial evidence is such relevant evidence as
a reasonable mind might accept as adequate to support a conclusion.’” Id.
(quoting Tommasetti, 533 F.3d at 1038). Under this standard, “[t]he evidence
must be more than a mere scintilla but not necessarily a preponderance.”
Tommasetti, 533 F.3d at 1038 (internal quotation omitted). Accordingly, the
Court “will uphold” the FCC’s decision even “when the evidence is
susceptible to more than one rational interpretation.” Id. Even if the
Commission reasonably could have reached a different conclusion based on
the record in this case, “[the Court’s] task is not to reweigh the evidence, but
only to determine if substantial evidence supports [the FCC’s] findings.”
Rhine, 596 F.3d at 1165 (internal quotations omitted).
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II.

SUBSTANTIAL EVIDENCE SUPPORTS THE FCC’S
DECISION TO DENY WEALTHTV’S PROGRAM
CARRIAGE COMPLAINTS.

A “central element in WealthTV’s complaints” was its claim that it was
“similarly situated to MOJO,” intervenors’ affiliate, “because the two
networks offered similar types of programming and targeted the same
audience.” Order (¶ 20) (ER 142); see also id. n.51 (ER 142) (noting that
“WealthTV framed its complaint around [that] allegation”). As the FCC and
the ALJ found, however, there was substantial evidence that WealthTV was
not similarly situated to MOJO: the subject matter of WealthTV’s
programming, its “look and feel,” and its target audience were all very
different from that of MOJO’s. Moreover, there was substantial evidence that
intervenors carried MOJO (and its predecessor networks), while declining to
carry WealthTV, for legitimate business reasons unrelated to WealthTV’s
unaffiliated status. Because there was no “discriminat[ion] in video
programming distribution on the basis of affiliation or non-affiliation of
vendors,” 47 U.S.C. § 536(a)(3); 47 C.F.R. § 76.1302(c), the FCC correctly
determined that the intervenors did not violate the program carriage statute or
FCC rule in this case.
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A. WealthTV Was Not Similarly Situated To MOJO.

The FCC correctly affirmed the ALJ’s “conclu[sion] that ‘the
preponderance of the record evidence demonstrates that WealthTV and
MOJO were not similarly situated networks.’” Order (¶ 20) (ER 142), citing
RD (¶ 69) (ER 111). Among other things, “MOJO and WealthTV neither
aired the same type of programming, nor targeted the same audience.” RD
(¶ 20) (ER 87).
1.

The programming was different.

In concluding that the programming offered by the two networks was
different, the ALJ credited the testimony of intervenors’ expert, Michael
Egan, who performed an analysis of the programming of the two channels.
RD (¶¶ 22-23) (ER 88-89); Order (¶ 23) (ER 143); see also TWC Exhibit 85
(Direct Testimony of Michael Egan) (ER 3830-56). Mr. Egan determined
that “54 percent of MOJO’s programming time was devoted to sports, music,
and movies whereas only three percent of WealthTV’s programming time
consisted of shows in those genres.” RD (¶ 22) (ER 88); Order (¶ 23)
(ER 143). Moreover, Mr. Egan explained, “60 percent of WealthTV’s
programming time” consisted of shows on “travel & recreation, lifestyle,
food & drink, documentary, and art/design/collectables,” while such
programming “aired only 19 percent of the time on MOJO.” Id. Mr. Egan
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also contrasted the “hip, urban, irreverent” “look and feel” of MOJO with the
“calmer, more mature attitude” of WealthTV. RD (¶ 23) (ER 89); Order
(¶ 23) (ER 143); see also RD (¶ 24) (ER 89) (noting that where WealthTV
and MOJO presented “programming covering the same subject-matter,” it
7
was “dissimilar” in style and tone).
The ALJ reasonably found Mr. Egan’s testimony to be “far more
credible” than that of WealthTV’s programming expert, Sandy McGovern.
RD (¶ 25) (ER 90); see also Order (¶ 24) (ER 143). The ALJ discounted Ms.
McGovern’s testimony because her opinions were based exclusively on her
review of an unrepresentative sample of programming hand-picked by
WealthTV’s president. Id.; see also Tr. at 3814-15 (ER 1300-01). Moreover,
on cross-examination, Ms. McGovern conceded that there were “many
differences in the programming of WealthTV and MOJO.” RD (¶ 25)
(ER 90); see also id. (acknowledging that WealthTV’s programming was
“family-friendly” whereas MOJO’s programming was not); Tr. at 3799-03

7 WealthTV argues that the ALJ improperly required MOJO and WealthTV
“functionally to be identical.” Br. 54. But as the FCC explained ((¶ 22)
(ER 142)), WealthTV “cites … no specific language from the Recommended
Decision
that imposes such a requirement nor does it point to any discussion
from which one could infer that the ALJ imposed such a standard.” In any
event, as the FCC held, substantial evidence supported the ALJ’s findings
that “there were significant differences in the programming” of the two
networks. Id.
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(ER 1285-89). It is well settled that “[t]his court will not reverse the ALJ’s
credibility findings as affirmed by the [agency] unless they are ‘inherently
incredible or patently unreasonable.’” Blackfoot Livestock Comm’n Co. v.
Dept. of Agriculture, Packyards and Stockyards Admin., 810 F.2d 916, 921
(9th Cir. 1987) (quoting Southwest Sunsites, Inc. v. F.T.C., 785 F.2d 1431,
1437 (9th Cir. 1986), cert. denied, 479 U.S. 828 (1986)). See also Lackey v.
FAA, 386 F. App’x. 689, 697 (9th Cir. 2010) (credibility determinations,
unless made in an arbitrary or capricious manner, are within the “exclusive
providence” of the ALJ). WealthTV does not come close to meeting that
exacting standard.
WealthTV next complains that the ALJ “disapproved of Egan’s
methodology” in a subsequent program carriage case involving the Tennis
Channel. Br. 57. See Initial Decision, Tennis Channel, Inc., Complainant v.
Comcast Cable Commc’ns, L.L.C., 26 FCC Rcd 17160 (2011) (“Tennis
Channel”) (Add. 150a-212a). This argument is not properly before the Court
because it was not raised before the agency (except in the petition for
reconsideration that WealthTV has now withdrawn. See ER 153-56).
Section 405(a) of the Communications Act provides that the filing of a
petition for reconsideration with the FCC is a “condition precedent to judicial
review” of any “questions of fact or law upon which the Commission … has
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been afforded no opportunity to pass.” 47 U.S.C. § 405(a); see also
Fones4All, 550 F.3d at 818 (“Congress … explicitly mandated that the FCC
have ‘the opportunity to pass’ on the merits of any challenges to its orders
before review may be sought in the Courts of Appeals.”).
Moreover, Tennis Channel is an ALJ’s decision that has been appealed
to the Commission, and “an agency is not bound by the actions of its staff if
the agency has not endorsed those actions.” Comcast Corp. v. FCC, 526 F.3d
763, 769 (D.C. Cir. 2008); see also Eagle Broad. Group, Ltd. v. FCC, 563
F.3d 543, 554 (D.C. Cir. 2009).
Further, there is no inconsistency between the ALJ’s rulings
concerning Mr. Egan’s testimony in this case and his testimony in the Tennis
Channel case. The methodology Mr. Egan employed in Tennis Channel was
quite different from the analysis he employed in this case – and on which the
ALJ relied. Here, Mr. Egan distinguished between “broad substantive
categories” of programming (or “genres”) (see RD (¶ 22) (ER 88)); in Tennis
Channel (¶ 28) (Add. 162a), by contrast, Mr. Egan sought to distinguish
among programming (in that case, sports programming) that was concededly
within the same “genre.” It was this attempt to distinguish between
“subgenres” of similar programming – a distinction that the ALJ found to
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“inconsistent” with the genre methodology used in this case – that the ALJ
rejected in Tennis Channel. Tennis Channel (¶ 28) (Add. 162a).

WealthTV also contends that the ALJ and the FCC erred in finding Mr.
Egan’s “look and feel” analysis credible because Mr. Egan allegedly “did not
apply any objective criteria when analyzing the two networks with that
methodology.” Br. 58. The FCC properly rejected that argument, explaining
that WealthTV “fail[ed] to show how Mr. Egan’s conclusions were
erroneous,” and failed to “present any countervailing evidence” to suggest
that the programming was similar in this regard. Order (¶ 39) (ER 147-48).
There is likewise no inconsistency with the ALJ’s refusal to credit Mr. Egan’s
“look and feel” analysis in the Tennis Channel case, since Egan’s analysis in
that case was based on an entirely different set of facts. Tennis Channel
(¶¶ 30-36) (Add. 163a-166a). The disparate “look and feel” of the
programming of the two networks in this case was only one of several factors
that led the FCC and the ALJ to conclude that the programming was not
substantially similar. WealthTV does not argue (nor could it) that, absent
consideration of this single factor, the FCC would have reached a different
result. See Tommasetti, 533 F.3d at 1038.
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2.

The targeted audiences were different.

The ALJ and the FCC also relied on abundant testimony and
documentary evidence showing that WealthTV and MOJO did not target a
similar audience. RD (¶¶ 27-34) (ER 91-94); Order (¶¶ 25-26) (ER 143-44).
While MOJO targeted “affluent males between the ages of 25 and 49” (RD
(¶ 27) (ER 91)), WealthTV’s own marketing presentations to MVPDs and
prospective advertisers “describe Wealth TV as appealing to an audience
broader than [that].” RD (¶¶ 29) (ER 91); see also Order (¶ 26) (ER 144)
(quoting WealthTV presentation stating that it targets viewers aged “25-60+,”
and has “equal appeal to men and women”). Indeed, as the FCC and the ALJ
noted, WealthTV’s president testified elsewhere that “the only group that
would not find WealthTV attractive was ‘monks that have taken a vow to
8
poverty.’” RD (¶ 32) (ER 93); Order (¶ 26) (ER 144).
WealthTV contends that it was improper for the ALJ to compare the
“target” audiences for WealthTV and MOJO rather than the “actual”
audiences for each network. Br. 60-62. Before the ALJ, however, WealthTV
itself relied on evidence of target demographics in claiming that its audience

8 Unlike the unauthenticated testimony of Mr. Burke from a different
proceeding – which WealthTV sought to introduce via cross-examination of a
different witness in the present case (see pp. 55-57, below) – this testimony
from Mr. Herring was properly authenticated. See Tr. at 3055 (ER 717) (Mr.
Herring’s testimony on cross-examination in this case, confirming statement).
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was demographically similar to MOJO’s audience. See Complainant’s
Proposed Findings of Fact and Conclusions of Law (¶¶ 88-91) (SER 2-4).
Further, the ALJ’s approach to audience demographics was fully consistent
with the approach the FCC later adopted in the 2011 Program Carriage
Order & NPRM, which WealthTV argues (Br. 60) should have governed the
analysis in this case. See 26 FCC Rcd at 11504 (¶ 14) (considering “target”
audience in determining whether affiliated and unaffiliated programming
networks are similarly situated). An “ALJ has considerable discretion in
determining what evidence will be allowed.” Frazier v. Johnson, 312 Fed.
Appx. 879, 881 (9th Cir. 2009). WealthTV provides no basis to exclude
intervenors’ target-audience evidence, nor does it dispute that its own
marketing materials described WealthTV as having “broad appeal.” Br. 61;
see also Order (¶¶ 25-26) (ER 143-44).
WealthTV next asserts that the FCC failed to address its argument that
WealthTV targeted the same advertisers as MOJO. Br. 59-60. Although
WealthTV raised this argument before the ALJ, it did not raise it before the
Commission. As a consequence, WealthTV is barred from presenting it to
this Court. Fones4All, 550 F.3d at 818; Environmentel LLC v. FCC, 661 F.3d
80, 84 (D.C. Cir. 2011) (“[R]aising an issue before a designated authority is
not enough to preserve it for review …; a party must raise the issue before the
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Commission as a whole.”). In any event, the ALJ correctly concluded that
the fact that WealthTV and MOJO shared a single advertiser, Grey Goose
Vodka, “d[id] not establish that the two networks generally solicited or
contracted with the same advertisers.” RD (¶ 20, n.72) (ER 87). The ALJ
also made clear that even if “WealthTV had established that it and MOJO
generally dealt with the same advertisers,” the preponderance of the evidence
still demonstrated that the networks were not similarly situated. RD
(¶ 20 n.72) (ER 87).
Finally, WealthTV complains that the ALJ found it significant that
INHD and INHD2 (MOJO’s predecessors) were launched before WealthTV,
but deemed it “immaterial” in Tennis Channel that the complainant had been
launched after the defendant’s affiliated networks. Br. 62. WealthTV’s
contention was not raised before the Commission and is therefore barred.
Fones4All, 550 F.3d at 818. Regardless, the INHD and INHD2 launch date
had nothing to do with “whether Intervenors deemed WealthTV as a
similarly-situated competitor” (Br. 62); instead, it demonstrated that
intervenors did not discriminate against WealthTV when they decided to
carry MOJO. See RD (¶ 12) (ER 84). The evidence was different in Tennis
Channel. Compare RD (¶ 65) (ER 109) (“WealthTV did not show that
defendants had denied carriage to a non-affiliated vendor that could have
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better served defendants’ business objectives than [MOJO],” because
WealthTV had not launched at the time the defendants decided to carry
MOJO.”), with Tennis Channel (¶ 73) (Add. 183a-184a) (ALJ’s finding that
“Comcast Cable does not carry any affiliated network exclusively on the
Sports Tier, even affiliated networks that were launched at the same time or
later than Tennis Channel.”).

B.

Substantial Record Evidence Supports The Agency’s
Finding That Intervenors Did Not Discriminate Against
WealthTV On The Basis Of Affiliation.

The FCC in the Order (¶ 32) (ER 146) also properly upheld the ALJ’s
conclusion that “[t]here is no credible or reliable evidence proving that any
defendant refused to carry WealthTV for any purpose of enhancing the
competitive position of the affiliated programming vendor, MOJO.” RD
(¶ 67) (ER 110); see also id. (¶ 35) (ER 94).
The ALJ’s Recommended Decision contains a “detailed analysis of
each defendant’s negotiations with WealthTV concerning carriage of
WealthTV’s program channel.” Order (¶ 28) (ER 14), citing RD (¶¶ 35-51)
(ER 94-104). In light of that analysis, the FCC concluded that there was
“substantial record evidence that defendants’ refusals to carry WealthTV
were based on legitimate business reasons that were unrelated to WealthTV’s
status as an independent programming vendor.” Order (¶ 32) (ER 146).
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The record showed that Time Warner “officials reasonably believed
that there was little demand from its cable systems for carriage of
WealthTV’s programming.” Id. (¶ 28) (ER 144); see also RD
(¶ 36) (ER 95). Nonetheless, the Time Warner system in San Antonio agreed
to a six-month trial during which it would provide WealthTV programming
9
as a video-on-demand (“VOD”) service, rather than a full-time (or “linear”)
10
programming channel.
RD (¶ 37) (ER 95); Order (¶ 28) (ER 144).
Although “the performance of WealthTV’s VOD was not overwhelming,”
Time Warner’s San Antonio system nonetheless offered to extend the VOD
trial. RD (¶ 37) (ER 95). WealthTV, in response, “refused to extend the
agreement unless [Time Warner] provided a linear carriage agreement.”
Order (¶ 28) (ER 144); see also RD (¶ 37) (ER 95-96). Because of
WealthTV’s insistence on full-time carriage, which Time Warner declined,
the trial period was not extended. Id. The ALJ found that “[t]he weight of
record evidence shows that [Time Warner’s] decision not to offer full linear
carriage to WealthTV was based upon business considerations that were
unrelated to TWC’s affiliation with MOJO.” RD (¶ 39) (ER 96).

9 “VOD is programming offered on a per program basis, either with or
without a separate per program fee.” RD (n.137) (ER 95).
10 “Linear carriage refers to carriage of a programming channel full time,
that is, generally 24 hours a day 7 days a week.” Order (n.71) (ER 144).
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The record also showed that Comcast initially declined to provide
carriage due to “the cost of carriage, the uncertain customer appeal of
WealthTV’s programming, bandwidth constraints, the fact that WealthTV
had attracted relatively few carriage agreements, the lack of experience of its
owners in the programming business, and absence of outside investment
support.” RD (¶ 44) (ER 100); Order (¶ 30) (ER 145). Under threat of
litigation from WealthTV, Comcast subsequently made two offers of
carriage. WealthTV declined both – including an offer that would have given
it linear carriage on Comcast’s cable system in Chicago. RD (¶ 45) (ER 100-
01). The ALJ concluded that “the preponderance of evidence … shows that
Comcast was willing to negotiate in good faith some form of affiliation
agreement with WealthTV.” Id. (ER 101).
The ALJ similarly found that Cox’s decision not to carry WealthTV
was based on its assessment that “WealthTV was a marginal network that
would not bring value to Cox”; in particular, that the network “lacked any
brand appeal that might draw an audience and was indistinguishable from
many other start-up networks seeking carriage on Cox.” Id. (¶¶ 41, 42)
(ER 97, 98) (noting Cox’s conclusion that “WealthTV offered programming
that was closely similar in content and audience to Fine Living, an
unaffiliated network already carried by Cox”). Cox also “found WealthTV’s
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management team to lack experience in video programming,” and it “viewed
the terms of carriage proposed by WealthTV to be unacceptable as a business
proposition.” Id. (¶ 42) (ER 98).

Finally, the ALJ found that BHN’s decision not to carry WealthTV was
primarily based on BHN’s assessment that its subscribers had little interest in
WealthTV’s programming. Id. (¶ 50) (ER 103) (describing a 2007 survey
concluding WealthTV ranked “36th of 37 channels most requested by
subscribers having HDTV,” and “rated next to last among 36 channels that
HDTV owners were likely to watch, if available”). According to BHN’s
president, other factors included “BHN’s view that WealthTV was not an
established brand; was not managed by persons with a track record of
launching successful networks; did not have carriage agreements with many
MVPDs; and did not fill any unique gap in BHN’s lineup.” RD (¶ 51)
(ER 103-04). The ALJ found this testimony “consistent, competent, and
credible.” Id. (ER 104).
In sum, substantial evidence in the record showed that the intervenors
did not deny WealthTV carriage based on its status as an independent
programming vendor. Rather, intervenors based their decisions on
insufficient demand for WealthTV’s programming, the inexperience of its
management team, WealthTV’s lack of independent financing, WealthTV’s
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inability to secure carriage agreements with other large satellite and cable
television providers, the unfavorable terms and conditions upon which
WealthTV sought carriage, and channel capacity constraints on intervenors’
cable systems. RD (¶¶ 35-51) (ER 94-104). In light of the ALJ’s detailed
examination of the record, there is no basis for WealthTV’s suggestion that
the agency did not “meaningfully evaluate[] the various proffered reasons for
declining carriage to WealthTV.” Br. 48.
WealthTV claims that the ALJ “constructively requir[ed] WealthTV to
prove direct discrimination instead of simply making a circumstantial case.”
Br. 47. To the contrary, the ALJ acknowledged that a complainant can
establish discrimination using “direct evidence, such as statements showing a
discriminatory intent, or by circumstantial evidence, such as uneven treatment
11
of similarly situated entities.” RD (¶ 63) (ER 109). The fact of the matter is
that the ALJ considered both types of evidence (see, e.g., RD (¶¶ 63-69)
(ER 108-11)), and concluded that WealthTV failed to demonstrate that

11 The ALJ’s approach was fully consistent with that adopted by the FCC in
the subsequent 2011 Program Carriage Order & NPRM. That order makes
clear that a program carriage complainant can establish a prima facie case of
discrimination on the basis of affiliation or nonaffiliation by “direct evidence”
or “circumstantial evidence.” 26 FCC Rcd at 11504 (¶¶ 13-14).
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intervenors unlawfully discriminated when they denied WealthTV carriage on
its preferred terms and conditions.
WealthTV also contends that intervenors “had a double standard for
program carriage as compared to unaffiliated vendors.” Br. 50. But no
evidence in the record supports that contention. To the contrary, the evidence
showed that intervenors “carried the channel that became MOJO for a
specific business purpose, i.e., obtaining HD programming attractive to the
younger adult male ‘early adopters’ of HD television sets while reserving the
right to preempt the HD network’s programming [i.e., interrupt that
programming with other content] when it suited its business needs and
ultimately to drop the channel when more desirable HD programming became
available.” Id. (n.264) (ER 111). Indeed, intervenors did so in December
2008, when they dropped MOJO after it had “served its purpose[].” Id. (¶ 19)
(ER 87). As the ALJ explained, carriage of WealthTV would not have served
the same business purpose because “WealthTV did not specifically target the
younger adult male early adopters of HD sets,” and “nothing in the record
show[ed] that WealthTV would have permitted its programming to be
preempted at will.” Id. (n.264) (ER 111). Accordingly, no “double standard”
was employed in this case; rather, as the FCC found, intervenors carried
MOJO, but not WealthTV, “based on legitimate business reasons that were
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unrelated to WealthTV’s status as an independent programming vendor.”
12
Order (¶ 32) (ER 146).
WealthTV’s other complaints concerning the terms and conditions of
MOJO’s carriage by intervenors – such as its national rollout and the license
fees paid to iN DEMAND (Br. 10-11, 48-49) – are presented for the first time
to this Court. As such, they are statutorily barred because they were never
raised before the Commission. See 47 U.S.C. § 405(a); Fones4All, 550 F.3d
at 818. They are also unavailing. The program carriage statute and FCC rule
do not broadly require MVPDs, such as intervenors, to carry any non-
affiliated programming. As relevant here, they prohibit only those denials of
carriage that are “on the basis of affiliation or nonaffiliation” and that
unreasonably restrain the ability of the complainant to compete fairly.
47 U.S.C. § 536(a)(3); 47 C.F.R. § 76.1301(c). Thus, differential treatment
between networks, standing alone, does not support a finding of unlawful
discrimination under the program carriage statute and FCC rule. RD (¶ 69)
(ER 111).

12 The ALJ found insignificant “the absence of a written contract” between
intervenors and MOJO. RD (n.266) (ER 111). As the ALJ explained, “the
lack of a written affiliation agreement places the video programmer in a
disadvantageous position” because it “gives an MVPD the ability abruptly to
alter the terms of carriage to suit its own business purposes, to preempt the
network’s programming at will, and to drop the network whenever it suited
their business needs.” Id.
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III.

WEALTHTV’S CHALLENGES TO THE FCC’S
PROCEDURES LACK MERIT.

In addition to its challenges to the sufficiency of the evidence,
WealthTV challenges two aspects of the FCC’s decisional process in this case
– the Commission’s decision to engage in a fact-specific inquiry in an
adjudication conducted pursuant to the agency’s program carriage rules, and
its allocation of the burden of proof.

A. The FCC Acted Within Its Discretion In Applying Its

Program Carriage Rules In Case-By-Case Adjudication.

WealthTV asserts that the FCC “act[ed] arbitrarily and capriciously”
because it “adjudicate[d] [WealthTV’s] case without defined standards, rules,
or guidelines.” Br. 58; see also id. at 26, 53. Like several of WealthTV’s
other arguments, this argument is not properly before the Court because it
was not raised before the agency (except in WealthTV’s now-withdrawn
petition for reconsideration). 47 U.S.C. § 405(a); Fones4All Corp., 550 F.3d
at 818.
Even if the argument were not procedurally barred, it is meritless. In
the 1993 Program Carriage Order, the FCC did “adopt general rules”
implementing the program carriage statute’s “specific prohibitions regarding
actions between distributors and program vendors in forming program
carriage agreements.” 9 FCC Rcd at 2648 (¶ 14). At the same time, the
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agency recognized that 47 U.S.C. § 536(a)(3) did not prohibit MVPDs from
engaging in “legitimate, aggressive negotiations,” or “from acquiring
exclusivity rights or financial interests from programming vendors.” Id. The
FCC accordingly determined that “the practices at issue will necessarily
involve behavior that must be evaluated within the context of specific facts
pertaining to each negotiation,” and that it therefore should “identify specific
behavior that constitutes ‘coercion’ and ‘discrimination’” only “as [it]
resolve[s] particular [program carriage] complaints” through case-by-case
adjudication. Id.
This sensible approach in no way violates the Administrative
Procedure Act. It has long been settled that “‘the choice between rulemaking
and adjudication lies in the first instance within the (agency’s) discretion.’”
Ford Motor Co. v. FTC, 673 F.2d 1008, 1009 (9th Cir. 1981) (quoting NLRB
v. Bell Aerospace Co., 416 U.S. 267, 294 (1974)); see also Grolier, Inc. v.
FTC, 699 F.2d 983, 989 (9th Cir. 1983) (FTC did not abuse its discretion by
proceeding against company through adjudication rather than by enacting
standards for entire industry). Here, the agency has established rules that
have been further clarified through case-by-case adjudication. If an agency
may elect to proceed entirely via adjudication (as the authorities cited above
demonstrate), it surely may adopt the approach taken by the FCC here. That
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is particularly so because the Commission enjoys broad latitude to establish
its own procedures. See 47 U.S.C. § 154(i), (j) (“[t]he Commission may
perform any and all acts, make such rules and regulations, and issue such
orders not inconsistent with this Act, as may be necessary in the execution of
its functions” and “may conduct its proceedings in such a manner as will best
conduce to the proper dispatch of business and to the ends of justice”).
Accordingly, it was well within the FCC’s discretion to engage in case-by-
case inquiry to resolve program carriage complaints.

B.

The Burden Of Proof Is Immaterial In This Case.

Wealth TV complains (Br. 37-52) that the ALJ erred when he assigned
it “both the burden of proceeding with the introduction of evidence and the
burden of proof.” RD (¶ 58) (ER 106). But WealthTV concedes (Br. 40-41)
that the ALJ’s approach did not violate any statute or rule: neither section
536(a)(3) nor the FCC’s program carriage rules (see 47 C.F.R. §§ 76.1300-
76.1302) assign the burden of proof to either party. In fact, how to allocate
the burdens of production and persuasion after a claimant has established a
prima facie case is the subject of a pending FCC rulemaking. See 2011
Program Carriage Order & NPRM, 26 FCC Rcd at 11554 (¶ 79).
In the absence of controlling authority, the ALJ had “discretion to
allocate the burden of proof.” RD (¶ 58 & n.229) (ER 106). The ALJ did not
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abuse that discretion when he followed the general principle that the party
seeking Commission relief has the burden to demonstrate that a violation
occurred. Id. (¶ 58 & n.230) (ER 106) (citing Schaffer v. Weast, 546 U.S. 49,
56 (2005) (noting that where the statute is silent the “ordinary default rule [is]
that plaintiffs bear the risk of failing to prove their claims”); 5 U.S.C.
§ 556(d) (providing in the absence of statutory direction that “the proponent
of a rule or order has the burden of proof”)).
Furthermore, WealthTV did not challenge the ALJ’s assignment of the
burdens of production and proof until “after the record … closed to additional
evidence.” RD (¶ 58) (ER 106); Order (¶ 18) (ER 141). As the ALJ noted, it
would have been “fundamentally unfair” to shift the burdens to intervenors
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retroactively, given that they relied on his earlier ruling when “formulating
13
[their] litigation strategy.” RD (¶ 58) (ER 106-07).
In any event, the allocation of the burden of proof made no difference
in this case. As the ALJ determined, “[i]n the final analysis, the manner in
which the burden of proof is allocated” was “immaterial” to his decision. RD
(¶ 62) (ER 108). Instead, he made clear, “[w]hatever the allocation of
burdens, the preponderance of the evidence, viewed in its entirety,
demonstrates that the defendants never violated section [536(a)(3)] and
section 76.1301(c) of the rules.” Id. The Commission likewise concluded
that “the defendants would have prevailed even if they had been required to
carry the burdens of production and proof,” and the agency therefore found

13 WealthTV contends (Br. 41-43) that the ALJ was bound to follow prior
Media Bureau decisions that assigned the burdens of proof and persuasion to
defendants. Br. 43-46. But it is well settled that the FCC “is not bound by …
staff decisions” that the agency “has not endorsed,” even if those decisions
are “unchallenged.” Comcast, 526 F.3d at 769. Here, the sole program
carriage precedent cited by WealthTV in support of its argument (Br. 41-42)
consists of an order by the Media Bureau staff that was ultimately reversed
by the Commission. See TCR Sports Broad. Holding, L.L.P. d/b/a Mid-
Atlantic Sports Network v. Time Warner Cable, Inc.,
25 FCC Rcd 18099,
18105 (¶ 11) (2010), pet’n for rev. pending, TCR Sports Broad. Holding,
L.L.P., d/b/a Mid-Atlantic Sports Network v. FCC
(4th Cir. No. 11-1151).
Moreover, in reversing the Media Bureau in that case, the Commission
expressly declined to decide whether the burden-shifting approach advocated
by WealthTV applies in the program-carriage context. Id. at 18114 (n.111).
WealthTV does not even claim – much less establish – that the ALJ’s
decision to assign the burden of proof to it in this case was inconsistent with
any binding Commission-level precedent.
51

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that it did not have to “consider whether the burdens were properly allocated
or WealthTV’s objection to the allocation was timely.” Order (¶ 18)
(ER 141-42). Because the allocation of the burdens of proof was
“inconsequential to the . . . determination,” it cannot provide a basis for
reversal under the APA. Stout v. Commissioner, 454 F.3d 1050, 1055 (9th
Cir. 2006); see also Tommasetti, 533 F.3d at 1042; Hawaii Stevedores, Inc. v.
Ogawa, 608 F.3d 642, 648 (9th Cir. 2010).

C. The ALJ Properly Engaged In De Novo

Review Of

Unresolved Factual Questions Designated For Hearing.

WealthTV complains that “the ALJ gave no weight” to the Media
Bureau’s prima facie “finding” in its HDO (Br. 27) when he ruled “that he
would give ‘de novo consideration’ to the evidence adduced and would
resolve the issues ‘solely [up]on the evidence compiled during the course of
the hearing, and not on the basis of how those questions were addressed in the
HDO.” RD (¶ 59) (ER 107).
WealthTV misapprehends the significance of the Media Bureau’s
determination that WealthTV had made out a prima facie case. As the 1993
Program Carriage Order explained, a prima facie case is based on the face
of the threshold carriage complaint pleadings (and supporting
documentation); its purpose is to weed out insubstantial claims. See 9 FCC
Rcd at 2655 (¶ 31). Thus, as the FCC has subsequently affirmed, “a Media
52

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Bureau finding that a complainant has established a prima facie case does not
mean that the complainant has proven its case or any elements of its case on
the merits.” 2011 Program Carriage Order & NPRM, 26 FCC Rcd at 11505
14
(¶ 16).
Moreover, the HDO in this case did not require the ALJ to give the
prima facie finding any weight; to the contrary, it held that “the pleadings and
supporting documentation present several factual disputes, such that we are
unable to determine on the basis of the existing records whether we can grant
relief based on these claims.” HDO (¶ 7) (ER 6); see also id. (¶ 58) (ER 28)
(noting “several factual disputes as to whether [defendants] discriminated
against WealthTV in favor of their affiliated MOJO service”). The HDO
directed the ALJ to “resolve all factual disputes,” not some unidentified
subset thereof. Id. (¶¶ 124, 126, 132, 138) (ER 30-31). The FCC likewise
determined in its order reinstating the hearing “that the factual determinations
required to fairly adjudicate these matters are best resolved through hearings

14 By analogy, a plaintiff who withstands a motion to dismiss in federal
court will not necessarily withstand a motion for summary judgment, much
less ultimately prevail at trial.
53

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before an [ALJ], rather than solely through pleadings and exhibits as
15
contemplated by the Media Bureau.” (ER 76).

IV.

THE FCC PROPERLY UPHELD THE ALJ’S
EVIDENTIARY RULINGS.

WealthTV finally contends that the ALJ erred in (1) excluding certain
testimony by Stephen Burke, Comcast’s former chief operating officer, in a
different adjudicative proceeding before the agency, and (2) refusing to grant
its request to subpoena Robert Jacobson, then-chief executive officer of iN
DEMAND. Br. 63-67.
ALJs are granted “considerable discretion” to make evidentiary rulings.
Frazier, 312 F. App’x. at 881; see also Atlantic Pac. Constr. Co. v. NLRB, 52
F.3d 260, 263 (9th Cir. 1995) (ALJ evidentiary rulings are reviewed under an
abuse of discretion standard). The ALJ did not abuse that discretion here.

15 WealthTV suggests that the ALJ should have given dispositive effect to
the Media Bureau’s finding that WealthTV had established a prima facie case
of program carriage discrimination. Br. 27, 47. But that argument makes
little sense in this context. As the ALJ explained, “[t]he evidence compiled
after the completion of the evidentiary hearings is more complete, accurate,
and reliable than the evidence before the Media Bureau when it issued the
HDO.RD (¶ 60) (ER 107). Unlike the untested allegations in WealthTV’s
complaint, the hearing evidence was developed through discovery and “tested
by searching cross-examination.” Id. Indeed, “WealthTV withdrew evidence
at hearing immediately prior to cross-examination,” and “some of the
material WealthTV had presented to the Media Bureau … was found to be
unreliable at the hearing and was rejected.” Id.
54

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A. The ALJ Properly Excluded The Unauthenticated

Testimony Of Mr. Burke In Another Case.

WealthTV contends that the FCC abused its discretion when it upheld
the ALJ’s decision to exclude excerpts from testimony that Stephen Burke,
then-chief operating officer for Comcast, had presented in a separate case
regarding Comcast’s view of its affiliated networks. Br 63-65. WealthTV’s
claim lacks merit.
WealthTV sought to introduce excerpts of Mr. Burke’s testimony
during its cross-examination of a different witness – Madison Bond, who was
then Comcast’s executive vice president for content acquisition. Order (¶ 34)
(ER 146). Mr. Bond, however, was not competent to authenticate a transcript
of testimony by Mr. Burke from an unrelated proceeding. See Fed. R. Evid.
901; Orr v. Bank of Am., 285 F.3d 764, 776-77 (9th Cir. 2002) (transcripts of
testimony from an unrelated case are inadmissible absent “a proper
foundation laid to authenticate them”); Beyene v. Coleman Sec. Servs., Inc.,
55

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16
854 F.2d 1179, 1182 (9th Cir. 1988) (same). Whether WealthTV might
have sought to introduce the testimony on a different basis is immaterial
because WealthTV made no “further effort … at any other time to introduce
17
this evidence pursuant to appropriate procedures.” Order (¶ 35) (ER 146).
More fundamentally, even if the ALJ had erred, any error would have
been harmless. There is no reason to think that a single statement by Mr.
Burke in an unrelated case could offset the overwhelming weight of the
evidence contradicting WealthTV’s claims of unlawful discrimination by the
intervenors – evidence the FCC and the ALJ (who observed the demeanor of
many witnesses) found to be reliable and credible. See Order (¶¶ 28-31) (ER

16 WealthTV contends that “because Burke had made his statements under
oath before the same ALJ, WealthTV did not need to authenticate them.” Br.
64. That is incorrect. Had the ALJ himself purported to authenticate Mr.
Burke’s testimony, he would have become a witness for WealthTV, in
violation of Fed. R. Evid. § 605. Cf., United States v. Pritchett, 699 F.2d 317,
318-20 (6th Cir. 1983) (where prosecutor was unable to establish that
individual had a prior conviction, presiding judge remarked that he had
previously sentenced the individual; reviewing court characterized judge’s
remark as “improper testimony” because it “confirmed what the prosecutor
had unsuccessfully attempted to solicit”).
17 WealthTV’s reliance on the hearsay rule as it relates to party admissions
is misplaced. Br. 63-65. As the FCC explained, the hearsay rule “was not the
basis for the ALJ’s ruling” excluding Mr. Burke’s prior testimony. Order
(¶ 34) (ER 146). The ALJ excluded that testimony because WealthTV could
not authenticate the transcript of Mr. Burke’s testimony through cross-
examination of Mr. Bond – not because the testimony was otherwise
inadmissible hearsay. Id.
56

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144-45). Thus, even if the ALJ’s evidentiary ruling was incorrect, any error
was harmless. See 5 U.S.C. § 706 (judicial review of administrative action
shall take “due account . . . of the rule of prejudicial error”); Molina v. Astrue,
__ F.3d __, No. 10-16578, 2012 WL 1071637, at *7-*13 (9th Cir. Apr. 2,
2012) (finding ALJ’s decision to discount lay testimony harmless);
Tommasetti, 533 F.3d at 1038; Removatron Int’l Corp. v. FTC, 884 F.2d
1489, 1495 (1st Cir. 1989) (upholding order of Federal Trade Commission
substantially affirming ALJ’s decision where any error in ALJ’s exclusion of
witness’ testimony was harmless).

B.

The ALJ Properly Denied WealthTV’s Untimely Request
To Compel Mr. Jacobson To Testify.

For similar reasons, WealthTV provides no grounds to remand the
Order based on the ALJ’s denial of WealthTV’s request to subpoena Mr.
Jacobson.
WealthTV acknowledges (Br. 66) that it “left Jacobson off its initial
witness list because it anticipated that Charles Herring would be able to
testify about iN DEMAND’s policies.” See also Order (¶ 37) (ER 147).
When intervenors challenged the admissibility of portions of Mr. Herring’s
testimony “as improper expert testimony and hearsay,” WealthTV sought to
have Mr. Jacobson testify in Mr. Herring’s stead. Id. The FCC properly
found that WealthTV “should not have been surprised by the defendants’
57

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challenge to those portions of [Mr. Herring’s] proposed testimony.” Id. Mr.
Herring – president of WealthTV – had no personal knowledge of iN
DEMAND’s business decisions, and any supposed testimony he might have
offered as to iN DEMAND’s policies was unnecessary: a fact witness with
relevant knowledge (David Asch, iN DEMAND’s executive vice president
for programming) was available to testify about those very issues and in fact
did so. Id. (¶ 37 n.91) (ER 147). See, e.g., Geschke v. Astrue, 393 F. App’x
470, 473 (9th Cir. 2010) (upholding ALJ’s discretion to decline to compel
18
testimony of witness that was not necessary to the proceedings). Moreover,
in denying WealthTV’s motion to compel Mr. Jacobson’s appearance, the
ALJ expressly permitted WealthTV to further seek his testimony if Mr.
19
Asch’s testimony proved insufficient.
WealthTV claims that the Commission abused its discretion in
upholding the ALJ’s denial of WealthTV’s untimely pre-hearing request to

18 Mr. Asch testified about iN DEMAND’s business decisions and
strategies, including target audience and demographics, and WealthTV had an
opportunity to cross examine him on those topics. See Tr. at 4281-4412
(ER 1671-1793).
19 See Tr. at 2162-63 (ER 354-55) (stating that, if Mr. “Asch turns out to be
a recalcitrant witness or if Asch is a reluctant witness or if Asch is in any way
giving me a hard time, I’ll reconsider, but if it appears that Asch is telling the
truth and he knows enough about the situation to tell us what we need to
know, then Mr. Jacobson can stay home or do whatever he does”).
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compel Mr. Jacobson’s appearance because no FCC rule specifically
“requires a party to renew a motion” in order to appeal its denial. Br. 66-67.
But if, after the testimony of Mr. Herring and Mr. Asch, WealthTV believed
that the record was somehow deficient regarding iN DEMAND’s business
decisions and strategies, it was incumbent upon WealthTV to renew its
motion and explain what relevant, non-duplicative testimony Mr. Jacobson
could provide. Order (¶ 37) (ER 147). WealthTV failed to do so.
Finally, as with the testimony of Mr. Burke, WealthTV nowhere
explains how the denial of its request to subpoena Mr. Jacobson could have
made a difference to the outcome in this case. See pp. 56-57, above.
WealthTV asserts that it needed Jacobson’s testimony to lay a foundation for
proffering various iN DEMAND “press releases about MOJO” and
unspecified statements by Jacobson “for the truth of the matter asserted.” Br.
67. But such a vague and conclusory allegation falls far short of carrying
WealthTV’s burden of showing that the FCC’s decision was unsupported by
substantial evidence.
59

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CONCLUSION

For the foregoing reasons, the petition for review should be denied.
Respectfully
submitted,
SHARIS A. POZEN
AUSTIN C. SCHLICK
ACTING ASSISTANT ATTORNEY
GENERAL COUNSEL
GENERAL
C
PETER KARANJIA
ATHERINE G. O’SULLIVAN
N
D
ANCY C. GARRISON
EPUTY GENERAL COUNSEL
ATTORNEYS
JACOB M. LEWIS
UNITED STATES
ASSOCIATE GENERAL COUNSEL
DEPARTMENT OF JUSTICE
WASHINGTON, D.C. 20530
/s/ Maureen K. Flood
MAUREEN K. FLOOD
COUNSEL
FEDERAL COMMUNICATIONS
COMMISSION
445 12TH STREET, SW
WASHINGTON, D.C. 20554
(202) 418-1740
April 24, 2012
60

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STATEMENT OF PENDENCY OF OTHER RELATED

PROCEEDINGS OR CASES

The Order on review has not previously been before this Court or any
other court, and counsel is not aware of any related case before this or any
other court.
/s/ Maureen K. Flood
Maureen K. Flood

Counsel
Federal Communications Commission
Washington, D.C. 20554
(202) 418-1740 (Telephone)
(202) 418-2819 (Fax)
April 24, 2012

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STATUTORY AND REGULATORY

APPENDIX

5 U.S.C. § 556
5 U.S.C. § 706
47 U.S.C. § 154
47 U.S.C. § 402
47 U.S.C. § 405
47 U.S.C. § 409
47 U.S.C. § 536
47 C.F.R. § 76.1300
47 C.F.R. § 76.1301
47 C.F.R. § 76.1302


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5 U.S.C. § 556
(a) This section applies, according to the provisions thereof, to hearings required
by section 553 or 554 of this title to be conducted in accordance with this section.
(b) There shall preside at the taking of evidence--
(1) the agency;
(2) one or more members of the body which comprises the agency; or
(3) one or more administrative law judges appointed under section 3105 of this
title.
This subchapter does not supersede the conduct of specified classes of
proceedings, in whole or in part, by or before boards or other employees specially
provided for by or designated under statute. The functions of presiding employees
and of employees participating in decisions in accordance with section 557 of this
title shall be conducted in an impartial manner. A presiding or participating
employee may at any time disqualify himself. On the filing in good faith of a
timely and sufficient affidavit of personal bias or other disqualification of a
presiding or participating employee, the agency shall determine the matter as a part
of the record and decision in the case.
(c) Subject to published rules of the agency and within its powers, employees
presiding at hearings may--
(1) administer oaths and affirmations;
(2) issue subpenas authorized by law;
(3) rule on offers of proof and receive relevant evidence;
(4) take depositions or have depositions taken when the ends of justice would be
served;
(5) regulate the course of the hearing;

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(6) hold conferences for the settlement or simplification of the issues by consent of
the parties or by the use of alternative means of dispute resolution as provided in
subchapter IV of this chapter;
(7) inform the parties as to the availability of one or more alternative means of
dispute resolution, and encourage use of such methods;
(8) require the attendance at any conference held pursuant to paragraph (6) of at
least one representative of each party who has authority to negotiate concerning
resolution of issues in controversy;
(9) dispose of procedural requests or similar matters;
(10) make or recommend decisions in accordance with section 557 of this title; and
(11) take other action authorized by agency rule consistent with this subchapter.
(d) Except as otherwise provided by statute, the proponent of a rule or order has
the burden of proof. Any oral or documentary evidence may be received, but the
agency as a matter of policy shall provide for the exclusion of irrelevant,
immaterial, or unduly repetitious evidence. A sanction may not be imposed or rule
or order issued except on consideration of the whole record or those parts thereof
cited by a party and supported by and in accordance with the reliable, probative,
and substantial evidence. The agency may, to the extent consistent with the
interests of justice and the policy of the underlying statutes administered by the
agency, consider a violation of section 557(d) of this title sufficient grounds for a
decision adverse to a party who has knowingly committed such violation or
knowingly caused such violation to occur. A party is entitled to present his case or
defense by oral or documentary evidence, to submit rebuttal evidence, and to
conduct such cross-examination as may be required for a full and true disclosure of
the facts. In rule making or determining claims for money or benefits or
applications for initial licenses an agency may, when a party will not be prejudiced
thereby, adopt procedures for the submission of all or part of the evidence in
written form.
(e) The transcript of testimony and exhibits, together with all papers and requests
filed in the proceeding, constitutes the exclusive record for decision in accordance
with section 557 of this title and, on payment of lawfully prescribed costs, shall be
made available to the parties. When an agency decision rests on official notice of a
3

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material fact not appearing in the evidence in the record, a party is entitled, on
timely request, to an opportunity to show the contrary.
4

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5 U.S.C. § 706
To the extent necessary to decision and when presented, the reviewing court shall
decide all relevant questions of law, interpret constitutional and statutory
provisions, and determine the meaning or applicability of the terms of an agency
action. The reviewing court shall--
(1) compel agency action unlawfully withheld or unreasonably delayed; and
(2) hold unlawful and set aside agency action, findings, and conclusions found to
be--
(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
with law;
(B) contrary to constitutional right, power, privilege, or immunity;
(C) in excess of statutory jurisdiction, authority, or limitations, or short of statutory
right;
(D) without observance of procedure required by law;
(E) unsupported by substantial evidence in a case subject to sections 556 and 557
of this title or otherwise reviewed on the record of an agency hearing provided by
statute; or
(F) unwarranted by the facts to the extent that the facts are subject to trial de novo
by the reviewing court.
In making the foregoing determinations, the court shall review the whole record or
those parts of it cited by a party, and due account shall be taken of the rule of
prejudicial error.

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47 U.S.C. § 154
a) Number of commissioners; appointment
The Federal Communications Commission (in this chapter referred to as the
“Commission”) shall be composed of five commissioners appointed by the
President, by and with the advice and consent of the Senate, one of whom the
President shall designate as chairman.
(b) Qualifications
(1) Each member of the Commission shall be a citizen of the United States.
(2)(A) No member of the Commission or person employed by the Commission
shall--
(i) be financially interested in any company or other entity engaged in the
manufacture or sale of telecommunications equipment which is subject to
regulation by the Commission;
(ii) be financially interested in any company or other entity engaged in the business
of communication by wire or radio or in the use of the electromagnetic spectrum;
(iii) be financially interested in any company or other entity which controls any
company or other entity specified in clause (i) or clause (ii), or which derives a
significant portion of its total income from ownership of stocks, bonds, or other
securities of any such company or other entity; or
(iv) be employed by, hold any official relation to, or own any stocks, bonds, or
other securities of, any person significantly regulated by the Commission under
this chapter;
except that the prohibitions established in this subparagraph shall apply only to
financial interests in any company or other entity which has a significant interest in
communications, manufacturing, or sales activities which are subject to regulation
by the Commission.

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(B)(i) The Commission shall have authority to waive, from time to time, the
application of the prohibitions established in subparagraph (A) to persons
employed by the Commission if the Commission determines that the financial
interests of a person which are involved in a particular case are minimal, except
that such waiver authority shall be subject to the provisions of section 208 of Title
18. The waiver authority established in this subparagraph shall not apply with
respect to members of the Commission.
(ii) In any case in which the Commission exercises the waiver authority established
in this subparagraph, the Commission shall publish notice of such action in the
Federal Register and shall furnish notice of such action to the appropriate
committees of each House of the Congress. Each such notice shall include
information regarding the identity of the person receiving the waiver, the position
held by such person, and the nature of the financial interests which are the subject
of the waiver.
(3) The Commission, in determining whether a company or other entity has a
significant interest in communications, manufacturing, or sales activities which are
subject to regulation by the Commission, shall consider (without excluding other
relevant factors)--
(A) the revenues, investments, profits, and managerial efforts directed to the
related communications, manufacturing, or sales activities of the company or other
entity involved, as compared to the other aspects of the business of such company
or other entity;
(B) the extent to which the Commission regulates and oversees the activities of
such company or other entity;
(C) the degree to which the economic interests of such company or other entity
may be affected by any action of the Commission; and
(D) the perceptions held by the public regarding the business activities of such
company or other entity.
(4) Members of the Commission shall not engage in any other business, vocation,
profession, or employment while serving as such members.
7

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(5) The maximum number of commissioners who may be members of the same
political party shall be a number equal to the least number of commissioners which
constitutes a majority of the full membership of the Commission.
(c) Terms of office; vacancies
Commissioners shall be appointed for terms of five years and until their successors
are appointed and have been confirmed and taken the oath of office, except that
they shall not continue to serve beyond the expiration of the next session of
Congress subsequent to the expiration of said fixed term of office; except that any
person chosen to fill a vacancy shall be appointed only for the unexpired term of
the Commissioner whom he succeeds. No vacancy in the Commission shall impair
the right of the remaining commissioners to exercise all the powers of the
Commission.
(d) Compensation of Commission members
Each Commissioner shall receive an annual salary at the annual rate payable from
time to time for level IV of the Executive Schedule, payable in monthly
installments. The Chairman of the Commission, during the period of his service as
Chairman, shall receive an annual salary at the annual rate payable from time to
time for level III of the Executive Schedule.
(e) Principal office; special sessions
The principal office of the Commission shall be in the District of Columbia, where
its general sessions shall be held; but whenever the convenience of the public or of
the parties may be promoted or delay or expense prevented thereby, the
Commission may hold special sessions in any part of the United States.
(f) Employees and assistants; compensation of members of Field Engineering and
Monitoring Bureau; use of amateur volunteers for certain purposes; commercial
radio operator examinations
(1) The Commission shall have authority, subject to the provisions of the civil-
service laws and chapter 51 and subchapter III of chapter 53 of Title 5, to appoint
such officers, engineers, accountants, attorneys, inspectors, examiners, and other
8

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employees as are necessary in the exercise of its functions.
(2) Without regard to the civil-service laws, but subject to chapter 51 and
subchapter III of chapter 53 of Title 5, each commissioner may appoint three
professional assistants and a secretary, each of whom shall perform such duties as
such commissioner shall direct. In addition, the chairman of the Commission may
appoint, without regard to the civil-service laws, but subject to chapter 51 and
subchapter III of chapter 53 of Title 5, an administrative assistant who shall
perform such duties as the chairman shall direct.
(3) The Commission shall fix a reasonable rate of extra compensation for overtime
services of engineers in charge and radio engineers of the Field Engineering and
Monitoring Bureau of the Federal Communications Commission, who may be
required to remain on duty between the hours of 5 o'clock postmeridian and 8
o'clock antemeridian or on Sundays or holidays to perform services in connection
with the inspection of ship radio equipment and apparatus for the purposes of part
II of subchapter III of this chapter or the Great Lakes Agreement, on the basis of
one-half day's additional pay for each two hours or fraction thereof of at least one
hour that the overtime extends beyond 5 o'clock postmeridian (but not to exceed
two and one-half days' pay for the full period from 5 o'clock postmeridian to 8
o'clock antemeridian) and two additional days' pay for Sunday or holiday duty. The
said extra compensation for overtime services shall be paid by the master, owner,
or agent of such vessel to the local United States collector of customs or his
representative, who shall deposit such collection into the Treasury of the United
States to an appropriately designated receipt account: Provided, That the amounts
of such collections received by the said collector of customs or his representatives
shall be covered into the Treasury as miscellaneous receipts; and the payments of
such extra compensation to the several employees entitled thereto shall be made
from the annual appropriations for salaries and expenses of the Commission:
Provided further, That to the extent that the annual appropriations which are
authorized to be made from the general fund of the Treasury are insufficient, there
are authorized to be appropriated from the general fund of the Treasury such
additional amounts as may be necessary to the extent that the amounts of such
receipts are in excess of the amounts appropriated: Provided further, That such
extra compensation shall be paid if such field employees have been ordered to
report for duty and have so reported whether the actual inspection of the radio
equipment or apparatus takes place or not: And provided further, That in those
ports where customary working hours are other than those hereinabove mentioned,
the engineers in charge are vested with authority to regulate the hours of such
9

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employees so as to agree with prevailing working hours in said ports where
inspections are to be made, but nothing contained in this proviso shall be construed
in any manner to alter the length of a working day for the engineers in charge and
radio engineers or the overtime pay herein fixed: and Provided further, That, in the
alternative, an entity designated by the Commission may make the inspections
referred to in this paragraph.
(4)(A) The Commission, for purposes of preparing or administering any
examination for an amateur station operator license, may accept and employ the
voluntary and uncompensated services of any individual who holds an amateur
station operator license of a higher class than the class of license for which the
examination is being prepared or administered. In the case of examinations for the
highest class of amateur station operator license, the Commission may accept and
employ such services of any individual who holds such class of license.
(B)(i) The Commission, for purposes of monitoring violations of any provision of
this chapter (and of any regulation prescribed by the Commission under this
chapter) relating to the amateur radio service, may--
(I) recruit and train any individual licensed by the Commission to operate an
amateur station; and
(II) accept and employ the voluntary and uncompensated services of such
individual.
(ii) The Commission, for purposes of recruiting and training individuals under
clause (i) and for purposes of screening, annotating, and summarizing violation
reports referred under clause (i), may accept and employ the voluntary and
uncompensated services of any amateur station operator organization.
(iii) The functions of individuals recruited and trained under this subparagraph
shall be limited to--
(I) the detection of improper amateur radio transmissions;
(II) the conveyance to Commission personnel of information which is essential to
the enforcement of this chapter (or regulations prescribed by the Commission
10

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under this chapter) relating to the amateur radio service; and
(III) issuing advisory notices, under the general direction of the Commission, to
persons who apparently have violated any provision of this chapter (or regulations
prescribed by the Commission under this chapter) relating to the amateur radio
service.
Nothing in this clause shall be construed to grant individuals recruited and trained
under this subparagraph any authority to issue sanctions to violators or to take any
enforcement action other than any action which the Commission may prescribe by
rule.
(C)(i) The Commission, for purposes of monitoring violations of any provision of
this chapter (and of any regulation prescribed by the Commission under this
chapter) relating to the citizens band radio service, may--
(I) recruit and train any citizens band radio operator; and
(II) accept and employ the voluntary and uncompensated services of such operator.
(ii) The Commission, for purposes of recruiting and training individuals under
clause (i) and for purposes of screening, annotating, and summarizing violation
reports referred under clause (i), may accept and employ the voluntary and
uncompensated services of any citizens band radio operator organization. The
Commission, in accepting and employing services of individuals under this
subparagraph, shall seek to achieve a broad representation of individuals and
organizations interested in citizens band radio operation.
(iii) The functions of individuals recruited and trained under this subparagraph
shall be limited to--
(I) the detection of improper citizens band radio transmissions;
(II) the conveyance to Commission personnel of information which is essential to
the enforcement of this chapter (or regulations prescribed by the Commission
under this chapter) relating to the citizens band radio service; and
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(III) issuing advisory notices, under the general direction of the Commission, to
persons who apparently have violated any provision of this chapter (or regulations
prescribed by the Commission under this chapter) relating to the citizens band
radio service.
Nothing in this clause shall be construed to grant individuals recruited and trained
under this subparagraph any authority to issue sanctions to violators or to take any
enforcement action other than any action which the Commission may prescribe by
rule.
(D) The Commission shall have the authority to endorse certification of individuals
to perform transmitter installation, operation, maintenance, and repair duties in the
private land mobile services and fixed services (as defined by the Commission by
rule) if such certification programs are conducted by organizations or committees
which are representative of the users in those services and which consist of
individuals who are not officers or employees of the Federal Government.
(E) The authority of the Commission established in this paragraph shall not be
subject to or affected by the provisions of part III of Title 5 or section 1342 of Title
31.
(F) Any person who provides services under this paragraph shall not be
considered, by reason of having provided such services, a Federal employee.
(G) The Commission, in accepting and employing services of individuals under
subparagraphs (A) and (B), shall seek to achieve a broad representation of
individuals and organizations interested in amateur station operation.
(H) The Commission may establish rules of conduct and other regulations
governing the service of individuals under this paragraph.
(I) With respect to the acceptance of voluntary uncompensated services for the
preparation, processing, or administration of examinations for amateur station
operator licenses pursuant to subparagraph (A) of this paragraph, individuals, or
organizations which provide or coordinate such authorized volunteer services may
recover from examinees reimbursement for out-of-pocket costs.
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(5)(A) The Commission, for purposes of preparing and administering any
examination for a commercial radio operator license or endorsement, may accept
and employ the services of persons that the Commission determines to be
qualified. Any person so employed may not receive compensation for such
services, but may recover from examinees such fees as the Commission permits,
considering such factors as public service and cost estimates submitted by such
person.
(B) The Commission may prescribe regulations to select, oversee, sanction, and
dismiss any person authorized under this paragraph to be employed by the
Commission.
(C) Any person who provides services under this paragraph or who provides goods
in connection with such services shall not, by reason of having provided such
service or goods, be considered a Federal or special government employee.
(g) Expenditures
(1) The Commission may make such expenditures (including expenditures for rent
and personal services at the seat of government and elsewhere, for office supplies,
law books, periodicals, and books of reference, for printing and binding, for land
for use as sites for radio monitoring stations and related facilities, including living
quarters where necessary in remote areas, for the construction of such stations and
facilities, and for the improvement, furnishing, equipping, and repairing of such
stations and facilities and of laboratories and other related facilities (including
construction of minor subsidiary buildings and structures not exceeding $25,000 in
any one instance) used in connection with technical research activities), as may be
necessary for the execution of the functions vested in the Commission and as may
be appropriated for by the Congress in accordance with the authorizations of
appropriations established in section 156 of this title. All expenditures of the
Commission, including all necessary expenses for transportation incurred by the
commissioners or by their employees, under their orders, in making any
investigation or upon any official business in any other places than in the city of
Washington, shall be allowed and paid on the presentation of itemized vouchers
therefor approved by the chairman of the Commission or by such other member or
officer thereof as may be designated by the Commission for that purpose.
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(2)(A) If--
(i) the necessary expenses specified in the last sentence of paragraph (1) have been
incurred for the purpose of enabling commissioners or employees of the
Commission to attend and participate in any convention, conference, or meeting;
(ii) such attendance and participation are in furtherance of the functions of the
Commission; and
(iii) such attendance and participation are requested by the person sponsoring such
convention, conference, or meeting;
then the Commission shall have authority to accept direct reimbursement from
such sponsor for such necessary expenses.
(B) The total amount of unreimbursed expenditures made by the Commission for
travel for any fiscal year, together with the total amount of reimbursements which
the Commission accepts under subparagraph (A) for such fiscal year, shall not
exceed the level of travel expenses appropriated to the Commission for such fiscal
year.
(C) The Commission shall submit to the appropriate committees of the Congress,
and publish in the Federal Register, quarterly reports specifying reimbursements
which the Commission has accepted under this paragraph.
(D) The provisions of this paragraph shall cease to have any force or effect at the
end of fiscal year 1994.
(E) Funds which are received by the Commission as reimbursements under the
provisions of this paragraph after the close of a fiscal year shall remain available
for obligation.
(3)(A) Notwithstanding any other provision of law, in furtherance of its functions
the Commission is authorized to accept, hold, administer, and use unconditional
gifts, donations, and bequests of real, personal, and other property (including
voluntary and uncompensated services, as authorized by section 3109 of Title 5).
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(B) The Commission, for purposes of providing radio club and military-
recreational call signs, may utilize the voluntary, uncompensated, and
unreimbursed services of amateur radio organizations authorized by the
Commission that have tax-exempt status under section 501(c)(3) of Title 26.
(C) For the purpose of Federal law on income taxes, estate taxes, and gift taxes,
property or services accepted under the authority of subparagraph (A) shall be
deemed to be a gift, bequest, or devise to the United States.
(D) The Commission shall promulgate regulations to carry out the provisions of
this paragraph. Such regulations shall include provisions to preclude the
acceptance of any gift, bequest, or donation that would create a conflict of interest
or the appearance of a conflict of interest.
(h) Quorum; seal
Three members of the Commission shall constitute a quorum thereof. The
Commission shall have an official seal which shall be judicially noticed.
(i) Duties and powers
The Commission may perform any and all acts, make such rules and regulations,
and issue such orders, not inconsistent with this chapter, as may be necessary in the
execution of its functions.
(j) Conduct of proceedings; hearings
The Commission may conduct its proceedings in such manner as will best conduce
to the proper dispatch of business and to the ends of justice. No commissioner shall
participate in any hearing or proceeding in which he has a pecuniary interest. Any
party may appear before the Commission and be heard in person or by attorney.
Every vote and official act of the Commission shall be entered of record, and its
proceedings shall be public upon the request of any party interested. The
Commission is authorized to withhold publication of records or proceedings
containing secret information affecting the national defense.
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(k) Annual reports to Congress
The Commission shall make an annual report to Congress, copies of which shall be
distributed as are other reports transmitted to Congress. Such reports shall contain-
(1) such information and data collected by the Commission as may be considered
of value in the determination of questions connected with the regulation of
interstate and foreign wire and radio communication and radio transmission of
energy;
(2) such information and data concerning the functioning of the Commission as
will be of value to Congress in appraising the amount and character of the work
and accomplishments of the Commission and the adequacy of its staff and
equipment;
(3) an itemized statement of all funds expended during the preceding year by the
Commission, of the sources of such funds, and of the authority in this chapter or
elsewhere under which such expenditures were made; and
(4) specific recommendations to Congress as to additional legislation which the
Commission deems necessary or desirable, including all legislative proposals
submitted for approval to the Director of the Office of Management and Budget.
(l) Record of reports
All reports of investigations made by the Commission shall be entered of record,
and a copy thereof shall be furnished to the party who may have complained, and
to any common carrier or licensee that may have been complained of.
(m) Publication of reports; admissibility as evidence
The Commission shall provide for the publication of its reports and decisions in
such form and manner as may be best adapted for public information and use, and
such authorized publications shall be competent evidence of the reports and
decisions of the Commission therein contained in all courts of the United States
and of the several States without any further proof or authentication thereof.
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(n) Compensation of appointees
Rates of compensation of persons appointed under this section shall be subject to
the reduction applicable to officers and employees of the Federal Government
generally.
(o) Use of communications in safety of life and property
For the purpose of obtaining maximum effectiveness from the use of radio and
wire communications in connection with safety of life and property, the
Commission shall investigate and study all phases of the problem and the best
methods of obtaining the cooperation and coordination of these systems.
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47 U.S.C. § 402
(a) Procedure
Any proceeding to enjoin, set aside, annul, or suspend any order of the
Commission under this chapter (except those appealable under subsection (b) of
this section) shall be brought as provided by and in the manner prescribed in
chapter 158 of Title 28.
(b) Right to appeal
Appeals may be taken from decisions and orders of the Commission to the United
States Court of Appeals for the District of Columbia in any of the following cases:
(1) By any applicant for a construction permit or station license, whose application
is denied by the Commission.
(2) By any applicant for the renewal or modification of any such instrument of
authorization whose application is denied by the Commission.
(3) By any party to an application for authority to transfer, assign, or dispose of
any such instrument of authorization, or any rights thereunder, whose application is
denied by the Commission.
(4) By any applicant for the permit required by section 325 of this title whose
application has been denied by the Commission, or by any permittee under said
section whose permit has been revoked by the Commission.
(5) By the holder of any construction permit or station license which has been
modified or revoked by the Commission.
(6) By any other person who is aggrieved or whose interests are adversely affected
by any order of the Commission granting or denying any application described in
paragraphs (1), (2), (3), (4), and (9) of this subsection.
(7) By any person upon whom an order to cease and desist has been served under
section 312 of this title.
(8) By any radio operator whose license has been suspended by the Commission.
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(9) By any applicant for authority to provide interLATA services under section 271
of this title whose application is denied by the Commission.
(10) By any person who is aggrieved or whose interests are adversely affected by a
determination made by the Commission under section 618(a)(3) of this title.
(c) Filing notice of appeal; contents; jurisdiction; temporary orders
Such appeal shall be taken by filing a notice of appeal with the court within thirty
days from the date upon which public notice is given of the decision or order
complained of. Such notice of appeal shall contain a concise statement of the
nature of the proceedings as to which the appeal is taken; a concise statement of
the reasons on which the appellant intends to rely, separately stated and numbered;
and proof of service of a true copy of said notice and statement upon the
Commission. Upon filing of such notice, the court shall have jurisdiction of the
proceedings and of the questions determined therein and shall have power, by
order, directed to the Commission or any other party to the appeal, to grant such
temporary relief as it may deem just and proper. Orders granting temporary relief
may be either affirmative or negative in their scope and application so as to permit
either the maintenance of the status quo in the matter in which the appeal is taken
or the restoration of a position or status terminated or adversely affected by the
order appealed from and shall, unless otherwise ordered by the court, be effective
pending hearing and determination of said appeal and compliance by the
Commission with the final judgment of the court rendered in said appeal.
(d) Notice to interested parties; filing of record
Upon the filing of any such notice of appeal the appellant shall, not later than five
days after the filing of such notice, notify each person shown by the records of the
Commission to be interested in said appeal of the filing and pendency of the same.
The Commission shall file with the court the record upon which the order
complained of was entered, as provided in section 2112 of Title 28.
(e) Intervention
Within thirty days after the filing of any such appeal any interested person may
intervene and participate in the proceedings had upon said appeal by filing with the
court a notice of intention to intervene and a verified statement showing the nature
of the interest of such party, together with proof of service of true copies of said
notice and statement, both upon appellant and upon the Commission. Any person
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who would be aggrieved or whose interest would be adversely affected by a
reversal or modification of the order of the Commission complained of shall be
considered an interested party.
(f) Records and briefs
The record and briefs upon which any such appeal shall be heard and determined
by the court shall contain such information and material, and shall be prepared
within such time and in such manner as the court may by rule prescribe.
(g) Time of hearing; procedure
The court shall hear and determine the appeal upon the record before it in the
manner prescribed by section 706 of Title 5.
(h) Remand
In the event that the court shall render a decision and enter an order reversing the
order of the Commission, it shall remand the case to the Commission to carry out
the judgment of the court and it shall be the duty of the Commission, in the
absence of the proceedings to review such judgment, to forthwith give effect
thereto, and unless otherwise ordered by the court, to do so upon the basis of the
proceedings already had and the record upon which said appeal was heard and
determined.
(i) Judgment for costs
The court may, in its discretion, enter judgment for costs in favor of or against an
appellant, or other interested parties intervening in said appeal, but not against the
Commission, depending upon the nature of the issues involved upon said appeal
and the outcome thereof.
(j) Finality of decision; review by Supreme Court
The court's judgment shall be final, subject, however, to review by the Supreme
Court of the United States upon writ of certiorari on petition therefor under section
1254 of Title 28, by the appellant, by the Commission, or by any interested party
intervening in the appeal, or by certification by the court pursuant to the provisions
of that section.
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47 U.S.C. § 405
(a) After an order, decision, report, or action has been made or taken in any
proceeding by the Commission, or by any designated authority within the
Commission pursuant to a delegation under section 155(c)(1) of this title, any party
thereto, or any other person aggrieved or whose interests are adversely affected
thereby, may petition for reconsideration only to the authority making or taking the
order, decision, report, or action; and it shall be lawful for such authority, whether
it be the Commission or other authority designated under section 155(c)(1) of this
title, in its discretion, to grant such a reconsideration if sufficient reason therefor be
made to appear. A petition for reconsideration must be filed within thirty days
from the date upon which public notice is given of the order, decision, report, or
action complained of. No such application shall excuse any person from complying
with or obeying any order, decision, report, or action of the Commission, or
operate in any manner to stay or postpone the enforcement thereof, without the
special order of the Commission. The filing of a petition for reconsideration shall
not be a condition precedent to judicial review of any such order, decision, report,
or action, except where the party seeking such review (1) was not a party to the
proceedings resulting in such order, decision, report, or action, or (2) relies on
questions of fact or law upon which the Commission, or designated authority
within the Commission, has been afforded no opportunity to pass. The
Commission, or designated authority within the Commission, shall enter an order,
with a concise statement of the reasons therefor, denying a petition for
reconsideration or granting such petition, in whole or in part, and ordering such
further proceedings as may be appropriate: Provided, That in any case where such
petition relates to an instrument of authorization granted without a hearing, the
Commission, or designated authority within the Commission, shall take such
action within ninety days of the filing of such petition. Reconsiderations shall be
governed by such general rules as the Commission may establish, except that no
evidence other than newly discovered evidence, evidence which has become
available only since the original taking of evidence, or evidence which the
Commission or designated authority within the Commission believes should have
been taken in the original proceeding shall be taken on any reconsideration. The
time within which a petition for review must be filed in a proceeding to which
section 402(a) of this title applies, or within which an appeal must be taken under
section 402(b) of this title in any case, shall be computed from the date upon which
the Commission gives public notice of the order, decision, report, or action
complained of.
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(b)(1) Within 90 days after receiving a petition for reconsideration of an order
concluding a hearing under section 204(a) of this title or concluding an
investigation under section 208(b) of this title, the Commission shall issue an order
granting or denying such petition.
(2) Any order issued under paragraph (1) shall be a final order and may be
appealed under section 402(a) of this title.
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47 U.S.C. § 409
a) Filing of initial decisions; exceptions
In every case of adjudication (as defined in section 551 of Title 5) which has been
designated by the Commission for hearing, the person or persons conducting the
hearing shall prepare and file an initial, tentative, or recommended decision, except
where such person or persons become unavailable to the Commission or where the
Commission finds upon the record that due and timely execution of its functions
imperatively and unavoidably require that the record be certified to the
Commission for initial or final decision.
(b) Exceptions to initial decisions; memoranda; determination of Commission or
authority within Commission; prohibition against consideration of own decision
In every case of adjudication (as defined in section 551 of Title 5) which has been
designated by the Commission for hearing, any party to the proceeding shall be
permitted to file exceptions and memoranda in support thereof to the initial,
tentative, or recommended decision, which shall be passed upon by the
Commission or by the authority within the Commission, if any, to whom the
function of passing upon the exceptions is delegated under section 155(d)(1) of this
title: Provided, however, That such authority shall not be the same authority which
made the decision to which the exception is taken.
(c) Notice and opportunity for participation by parties; applicability of
administrative procedure provisions
(1) In any case of adjudication (as defined in section 551 of Title 5) which has
been designated by the Commission for a hearing, no person who has participated
in the presentation or preparation for presentation of such case at the hearing or
upon review shall (except to the extent required for the disposition of ex parte
matters as authorized by law) directly or indirectly make any additional
presentation respecting such case to the hearing officer or officers or to the
Commission, or to any authority within the Commission to whom, in such case,
review functions have been delegated by the Commission under section 155(d)(1)
of this title, unless upon notice and opportunity for all parties to participate.
(2) The provision in section 554(d) of Title 5 which states that such subsection
shall not apply in determining applications for initial licenses, shall not be
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applicable hereafter in the case of applications for initial licenses before the
Federal Communications Commission.
(d) Applicability of administrative procedure provisions
To the extent that the foregoing provisions of this section and section 155(d) of this
title are in conflict with the provisions of subchapter II of chapter 5, and chapter 7,
of Title 5, such provisions of this section and section 155(d) of this title shall be
held to supersede and modify the provisions of subchapter II of chapter 5, and
chapter 7, of Title 5.
(e) Subpenas; witnesses; production of documents; fees and mileage
For the purposes of this chapter the Commission shall have the power to require by
subpena the attendance and testimony of witnesses and the production of all books,
papers, schedules of charges, contracts, agreements, and documents relating to any
matter under investigation. Witnesses summoned before the Commission shall be
paid the same fees and mileage that are paid witnesses in the courts of the United
States.
(f) Designated place of hearing; aid in enforcement of orders
Such attendance of witnesses, and the production of such documentary evidence,
may be required from any place in the United States, at any designated place of
hearing. And in case of disobedience to a subpena the Commission, or any party to
a proceeding before the Commission, may invoke the aid of any court of the
United States in requiring the attendance and testimony of witnesses and the
production of books, papers, and documents under the provisions of this section.
(g) Contempts
Any of the district courts of the United States within the jurisdiction of which such
inquiry is carried on may, in case of contumacy or refusal to obey a subpena issued
to any common carrier or licensee or other person, issue an order requiring such
common carrier, licensee, or other person to appear before the Commission (and
produce books and papers if so ordered) and give evidence touching the matter in
question; and any failure to obey such order of the court may be punished by such
court as a contempt thereof.
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(h) Depositions
The testimony of any witness may be taken, at the instance of a party, in any
proceeding or investigation pending before the Commission, by deposition, at any
time after a cause or proceeding is at issue on petition and answer. The
Commission may also order testimony to be taken by deposition in any proceeding
or investigation pending before it, at any stage of such proceeding or investigation.
Such depositions may be taken before any judge of any court of the United States,
or any United States magistrate judge, or any clerk of a district court, or any
chancellor, justice, or judge of a supreme or superior court, mayor, or chief
magistrate of a city, judge of a county court, or court of common pleas of any of
the United States, or any notary public, not being of counsel or attorney to either of
the parties, nor interested in the event of the proceeding or investigation.
Reasonable notice must first be given in writing by the party or his attorney
proposing to take such deposition to the opposite party or his attorney of record, as
either may be nearest, which notice shall state the name of the witness and the time
and place of the taking of his deposition. Any person may be compelled to appear
and depose, and to produce documentary evidence, in the same manner as
witnesses may be compelled to appear and testify and produce documentary
evidence before the Commission, as hereinbefore provided.
(i) Oaths; testimony in writing
Every person deposing as herein provided shall be cautioned and sworn (or affirm,
if he so request) to testify the whole truth, and shall be carefully examined. His
testimony shall be reduced to writing by the magistrate taking the deposition, or
under his direction, and shall, after it has been reduced to writing, be subscribed by
the deponent.
(j) Foreign depositions
If a witness whose testimony may be desired to be taken by deposition be in a
foreign country, the deposition may be taken before an officer or person designated
by the Commission, or agreed upon by the parties by stipulation in writing to be
filed with the Commission. All depositions must be promptly filed with the
Commission.
(k) Deposition fees
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Witnesses whose depositions are taken as authorized in this chapter, and the
magistrate or other officer taking the same, shall severally be entitled to the same
fees as are paid for like services in the courts of the United States.
(l) Repealed. Pub.L. 91-452, Title II, § 242, Oct. 15, 1970, 84 Stat. 930
(m) Penalties
Any person who shall neglect or refuse to attend and testify, or to answer any
lawful inquiry, or to produce books, papers, schedules of charges, contracts,
agreements, and documents, if in his power to do so, in obedience to the subpena
or lawful requirement of the Commission, shall be guilty of a misdemeanor and
upon conviction thereof by a court of competent jurisdiction shall be punished by a
fine of not less than $100 nor more than $5,000, or by imprisonment for not more
than one year, or by both such fine and imprisonment.
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47 U.S.C. § 536
(a) Regulations
Within one year after October 5, 1992, the Commission shall establish regulations
governing program carriage agreements and related practices between cable
operators or other multichannel video programming distributors and video
programming vendors. Such regulations shall--
(1) include provisions designed to prevent a cable operator or other multichannel
video programming distributor from requiring a financial interest in a program
service as a condition for carriage on one or more of such operator's systems;
(2) include provisions designed to prohibit a cable operator or other multichannel
video programming distributor from coercing a video programming vendor to
provide, and from retaliating against such a vendor for failing to provide, exclusive
rights against other multichannel video programming distributors as a condition of
carriage on a system;
(3) contain provisions designed to prevent a multichannel video programming
distributor from engaging in conduct the effect of which is to unreasonably restrain
the ability of an unaffiliated video programming vendor to compete fairly by
discriminating in video programming distribution on the basis of affiliation or
nonaffiliation of vendors in the selection, terms, or conditions for carriage of video
programming provided by such vendors;
(4) provide for expedited review of any complaints made by a video programming
vendor pursuant to this section;
(5) provide for appropriate penalties and remedies for violations of this subsection,
including carriage; and
(6) provide penalties to be assessed against any person filing a frivolous complaint
pursuant to this section.
(b) “Video programming vendor” defined
As used in this section, the term “video programming vendor” means a person
engaged in the production, creation, or wholesale distribution of video
programming for sale.
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47 C.F.R. 76.1300
a) Affiliated. For purposes of this subpart, entities are affiliated if either entity has
an attributable interest in the other or if a third party has an attributable interest in
both entities.
(b) Attributable interest. The term “attributable interest” shall be defined by
reference to the criteria set forth in Notes 1 through 5 to § 76.501 provided,
however, that:
(1) The limited partner and LLC/LLP/RLLP insulation provisions of Note 2(f)
shall not apply; and
(2) The provisions of Note 2(a) regarding five (5) percent interests shall include all
voting or nonvoting stock or limited partnership equity interests of five (5) percent
or more.
(c) Buying groups. The term “buying group” or “agent,” for purposes of the
definition of a multichannel video programming distributor set forth in paragraph
(e) of this section, means an entity representing the interests of more than one
entity distributing multichannel video programming that:
(1) Agrees to be financially liable for any fees due pursuant to a satellite cable
programming, or satellite broadcast programming, contract which it signs as a
contracting party as a representative of its members or whose members, as
contracting parties, agree to joint and several liability; and
(2) Agrees to uniform billing and standardized contract provisions for individual
members; and
(3) Agrees either collectively or individually on reasonable technical quality
standards for the individual members of the group.
(d) Multichannel video programming distributor. The term “multichannel video
programming distributor” means an entity engaged in the business of making
available for purchase, by subscribers or customers, multiple channels of video
programming. Such entities include, but are not limited to, a cable operator, a
BRS/EBS provider, a direct broadcast satellite service, a television receive-only
satellite program distributor, and a satellite master antenna television system
operator, as well as buying groups or agents of all such entities.
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(e) Video programming vendor. The term “video programming vendor” means a
person engaged in the production, creation, or wholesale distribution of video
programming for sale.
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47 U.S.C. § 76.1301
(a) Financial interest. No cable operator or other multichannel video programming
distributor shall require a financial interest in any program service as a condition
for carriage on one or more of such operator's/provider's systems.
(b) Exclusive rights. No cable operator or other multichannel video programming
distributor shall coerce any video programming vendor to provide, or retaliate
against such a vendor for failing to provide, exclusive rights against any other
multichannel video programming distributor as a condition for carriage on a
system.
(c) Discrimination. No multichannel video programming distributor shall engage in
conduct the effect of which is to unreasonably restrain the ability of an unaffiliated
video programming vendor to compete fairly by discriminating in video
programming distribution on the basis of affiliation or non-affiliation of vendors in
the selection, terms, or conditions for carriage of video programming provided by
such vendors.
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47 C.F.R. § 76.1302
(a) Complaints. Any video programming vendor or multichannel video
programming distributor aggrieved by conduct that it believes constitute a
violation of the regulations set forth in this subpart may commence an adjudicatory
proceeding at the Commission to obtain enforcement of the rules through the filing
of a complaint. The complaint shall be filed and responded to in accordance with
the procedures specified in § 76.7 of this part with the following additions or
changes:
(b) Prefiling notice required. Any aggrieved video programming vendor or
multichannel video programming distributor intending to file a complaint under
this section must first notify the potential defendant multichannel video
programming distributor that it intends to file a complaint with the Commission
based on actions alleged to violate one or more of the provisions contained in §
76.1301 of this part. The notice must be sufficiently detailed so that its recipient(s)
can determine the specific nature of the potential complaint. The potential
complainant must allow a minimum of ten (10) days for the potential defendant(s)
to respond before filing a complaint with the Commission.
(c) Contents of complaint. In addition to the requirements of § 76.7, a carriage
agreement complaint shall contain:
(1) Whether the complainant is a multichannel video programming distributor or
video programming vendor, and, in the case of a multichannel video programming
distributor, identify the type of multichannel video programming distributor, the
address and telephone number of the complainant, what type of multichannel video
programming distributor the defendant is, and the address and telephone number of
each defendant;
(2) Evidence that supports complainant's belief that the defendant, where
necessary, meets the attribution standards for application of the carriage agreement
regulations;
(3) The complaint must be accompanied by appropriate evidence demonstrating
that the required notification pursuant to paragraph (b) of this section has been
made.
(d) Prima facie case. In order to establish a prima facie case of a violation of §
76.1301, the complaint must contain evidence of the following:
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(1) The complainant is a video programming vendor as defined in section 616(b) of
the Communications Act of 1934, as amended, and § 76.1300(e) or a multichannel
video programming distributor as defined in section 602(13) of the
Communications Act of 1934, as amended, and § 76.1300(d);
(2) The defendant is a multichannel video programming distributor as defined in
section 602(13) of the Communications Act of 1934, as amended, and §
76.1300(d); and
(3)(i) Financial interest. In a complaint alleging a violation of § 76.1301(a),
documentary evidence or testimonial evidence (supported by an affidavit from a
representative of the complainant) that supports the claim that the defendant
required a financial interest in any program service as a condition for carriage on
one or more of such defendant's systems.
(ii) Exclusive rights. In a complaint alleging a violation of § 76.1301(b),
documentary evidence or testimonial evidence (supported by an affidavit from a
representative of the complainant) that supports the claim that the defendant
coerced a video programming vendor to provide, or retaliated against such a
vendor for failing to provide, exclusive rights against any other multichannel video
programming distributor as a condition for carriage on a system.
(iii) Discrimination. In a complaint alleging a violation of § 76.1301(c):
(A) Evidence that the conduct alleged has the effect of unreasonably restraining the
ability of an unaffiliated video programming vendor to compete fairly; and
(B)(1) Documentary evidence or testimonial evidence (supported by an affidavit
from a representative of the complainant) that supports the claim that the defendant
discriminated in video programming distribution on the basis of affiliation or non-
affiliation of vendors in the selection, terms, or conditions for carriage of video
programming provided by such vendors; or
(2)(i) Evidence that the complainant provides video programming that is similarly
situated to video programming provided by a video programming vendor affiliated
(as defined in § 76.1300(a)) with the defendant multichannel video programming
distributor, based on a combination of factors, such as genre, ratings, license fee,
target audience, target advertisers, target programming, and other factors; and
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(ii) Evidence that the defendant multichannel video programming distributor has
treated the video programming provided by the complainant differently than the
similarly situated, affiliated video programming described in paragraph
(d)(3)(iii)(B)(2)(i) of this section with respect to the selection, terms, or conditions
for carriage.
(e) Answer.
(1) Any multichannel video programming distributor upon which a carriage
agreement complaint is served under this section shall answer within sixty (60)
days of service of the complaint, unless otherwise directed by the Commission.
(2) The answer shall address the relief requested in the complaint, including legal
and documentary support, for such response, and may include an alternative relief
proposal without any prejudice to any denials or defenses raised.
(f) Reply. Within twenty (20) days after service of an answer, unless otherwise
directed by the Commission, the complainant may file and serve a reply which
shall be responsive to matters contained in the answer and shall not contain new
matters.
(g) Prima facie determination.
(1) Within sixty (60) calendar days after the complainant's reply to the defendant's
answer is filed (or the date on which the reply would be due if none is filed), the
Chief, Media Bureau shall release a decision determining whether the complainant
has established a prima facie case of a violation of § 76.1301.
(2) The Chief, Media Bureau may toll the sixty (60)-calendar-day deadline under
the following circumstances:
(i) If the complainant and defendant jointly request that the Chief, Media Bureau
toll these deadlines in order to pursue settlement discussions or alternative dispute
resolution or for any other reason that the complainant and defendant mutually
agree justifies tolling; or
(ii) If complying with the deadline would violate the due process rights of a party
or would be inconsistent with fundamental fairness.
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(3) A finding that the complainant has established a prima facie case of a violation
of § 76.1301 means that the complainant has provided sufficient evidence in its
complaint to allow the case to proceed to a ruling on the merits.
(4) If the Chief, Media Bureau finds that the complainant has not established a
prima facie case of a violation of § 76.1301, the Chief, Media Bureau will dismiss
the complaint.
(h) Time limit on filing of complaints. Any complaint filed pursuant to this
subsection must be filed within one year of the date on which one of the following
events occurs:
(1) The multichannel video programming distributor enters into a contract with a
video programming distributor that a party alleges to violate one or more of the
rules contained in this section; or
(2) The multichannel video programming distributor offers to carry the video
programming vendor's programming pursuant to terms that a party alleges to
violate one or more of the rules contained in this section, and such offer to carry
programming is unrelated to any existing contract between the complainant and the
multichannel video programming distributor; or
(3) A party has notified a multichannel video programming distributor that it
intends to file a complaint with the Commission based on violations of one or more
of the rules contained in this section.
(i) Deadline for decision on the merits.
(1)(i) For program carriage complaints that the Chief, Media Bureau decides on the
merits based on the complaint, answer, and reply without discovery, the Chief,
Media Bureau shall release a decision on the merits within sixty (60) calendar days
after the Chief, Media Bureau's prima facie determination.
(ii) For program carriage complaints that the Chief, Media Bureau decides on the
merits after discovery, the Chief, Media Bureau shall release a decision on the
merits within 150 calendar days after the Chief, Media Bureau's prima facie
determination.
(iii) The Chief, Media Bureau may toll these deadlines under the following
circumstances:
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(A) If the complainant and defendant jointly request that the Chief, Media Bureau
toll these deadlines in order to pursue settlement discussions or alternative dispute
resolution or for any other reason that the complainant and defendant mutually
agree justifies tolling; or
(B) If complying with the deadline would violate the due process rights of a party
or would be inconsistent with fundamental fairness.
(2) For program carriage complaints that the Chief, Media Bureau refers to an
administrative law judge for an initial decision, the deadlines set forth in § 0.341(f)
of this chapter apply.
(j) Remedies for violations--
(1) Remedies authorized. Upon completion of such adjudicatory proceeding, the
Commission shall order appropriate remedies, including, if necessary, mandatory
carriage of a video programming vendor's programming on defendant's video
distribution system, or the establishment of prices, terms, and conditions for the
carriage of a video programming vendor's programming. Such order shall set forth
a timetable for compliance, and shall become effective upon release, unless any
order of mandatory carriage would require the defendant multichannel video
programming distributor to delete existing programming from its system to
accommodate carriage of a video programming vendor's programming. In such
instances, if the defendant seeks review of the staff, or administrative law judge
decision, the order for carriage of a video programming vendor's programming will
not become effective unless and until the decision of the staff or administrative law
judge is upheld by the Commission. If the Commission upholds the remedy
ordered by the staff or administrative law judge in its entirety, the defendant will
be required to carry the video programming vendor's programming for an
additional period equal to the time elapsed between the staff or administrative law
judge decision and the Commission's ruling, on the terms and conditions approved
by the Commission.
(2) Additional sanctions. The remedies provided in paragraph (j)(1) of this section
are in addition to and not in lieu of the sanctions available under title V or any
other provision of the Communications Act.
(k) Petitions for temporary standstill.
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(1) A program carriage complainant seeking renewal of an existing programming
contract may file a petition along with its complaint requesting a temporary
standstill of the price, terms, and other conditions of the existing programming
contract pending resolution of the complaint. To allow for sufficient time to
consider the petition for temporary standstill prior to the expiration of the existing
programming contract, the petition for temporary standstill and complaint shall be
filed no later than thirty (30) days prior to the expiration of the existing
programming contract. In addition to the requirements of § 76.7, the complainant
shall have the burden of proof to demonstrate the following in its petition:
(i) The complainant is likely to prevail on the merits of its complaint;
(ii) The complainant will suffer irreparable harm absent a stay;
(iii) Grant of a stay will not substantially harm other interested parties; and
(iv) The public interest favors grant of a stay.
(2) The defendant multichannel video programming distributor upon which a
petition for temporary standstill is served shall answer within ten (10) days of
service of the petition, unless otherwise directed by the Commission.
(3) If the Commission grants the temporary standstill, the adjudicator deciding the
case on the merits (i.e., either the Chief, Media Bureau or an administrative law
judge) will provide for remedies that are applied as of the expiration date of the
previous programming contract.
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11-73134

IN THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Herring Broadcasting, Inc., Petitioner

v.

Federal Communications Commission and the United States of
America, Respondents.

CERTIFICATE OF SERVICE

I, Maureen K. Flood, hereby certify that on April 24, 2012, I electronically
filed the foregoing Brief for Respondents with the Clerk of the Court for the
United States Court of Appeals for the Ninth Circuit by using the CM/ECF
system. Participants in the case who are registered CM/ECF users will be
served by the CM/ECF system.
David A. Schlesinger
Nancy C. Garrison
Jacobs Schlesinger & Sheppard LLP
Catherine G. O’Sullivan
The Chamber Building
Antitrust Division/Appellate Section
110 West C. Street, Suite 901
U.S. Department of Justice
San Diego, CA 92101
950 Pennsylvania Avenue, N.W.
Counsel for: Herring Broadcasting,
Room 3224
Inc.
Washington, D.C. 20530
Counsel for: USA

Case: 11-73134 04/24/2012 ID: 8150975 DktEntry: 52 Page: 108 of 108
David H. Solomon
James L. Casserly
Wilkinson Barker Knauer, LLP
Michael H. Hammer
2300 N Street, N.W., Suite 700
Michael Hurwitz
Washington, D.C. 20037
Willkie Farr & Gallagher LLP
Counsel for: Comcast Corporation
1875 K Street, N.W.
Washington, D.C. 20006-1238
Counsel for: Comcast Corporation
Andrew C. Finch
Stephen D. Gavin
Paul, Weiss, et al.
Mark C. Ellison
1285 Avenue of the Americas
Patton Boggs LLP
New York, NY 10019-6064
2550 M Street, N.W.
Counsel for: Time Warner Cable
Washington, D.C. 20037-1350
Inc.
Counsel for: Herring Broadcasting,
Inc.

Adam M. Copeland
David E. Mills
Edwards Wildman Palmer LLP
Dow Lohnes PLLC
1255 23rd Street, N.W.
1200 New Hampshire Avenue, N.W.
Washington, D.C. 20036
Suite 800
Counsel for: Bright House
Washington, D.C. 20036-6802
Networks, LLC
Counsel for: Cox Communications,
Inc

/s/ Maureen K. Flood

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