Skip Navigation

Federal Communications Commission

English Display Options

Commission Document

NPRM, Sports Blackout Rules

Download Options

Released: December 18, 2013

Federal Communications Commission

FCC 13-162

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
)

Sports Blackout Rules
)
MB Docket No. 12-3
)

NOTICE OF PROPOSED RULEMAKING

Adopted: December 17, 2013

Released: December 18, 2013

Comment Date: [30 days after date of publication in the Federal Register]
Reply Comment Date: [60 days after date of publication in the Federal Register]

By the Commission:

TABLE OF CONTENTS

Heading
Paragraph #
I. INTRODUCTION.................................................................................................................................. 1
II. BACKGROUND.................................................................................................................................... 2
A. History of the Sports Blackout Rules............................................................................................... 2
B. Petition for Rulemaking................................................................................................................. 13
III. DISCUSSION ...................................................................................................................................... 14
A. Legal Authority.............................................................................................................................. 15
B. Assessing the Continued Need for Sports Blackout Rules ............................................................ 16
1. Blackouts of Sports Events...................................................................................................... 17
2. Gate Receipts and Other Revenues ......................................................................................... 22
3. Effect of Blackouts on Gate Receipts...................................................................................... 24
4. Other Relevant Data ................................................................................................................ 28
C. Elimination of the Sports Blackout Rules...................................................................................... 29
IV. PROCEDURAL MATTERS................................................................................................................ 40
A. Ex Parte Presentations.................................................................................................................... 40
B. Initial Regulatory Flexibility Analysis........................................................................................... 41
C. Paperwork Reduction Act Analysis. .............................................................................................. 43
D. Comment Filing Procedures .......................................................................................................... 44
V. ORDERING CLAUSES....................................................................................................................... 46
APPENDIX A - List of Commenters
APPENDIX B - Text of Sports Blackout Rules
APPENDIX C - Proposed Rules
APPENDIX D - Initial Regulatory Flexibility Act Analysis

I.

INTRODUCTION

1.
In this Notice of Proposed Rulemaking (“NPRM”), we propose to eliminate the
Commission’s sports blackout rules, which prohibit certain multichannel video programming distributors
(“MVPDs”) from retransmitting, within a protected local blackout zone, the signal of a distant broadcast
station carrying a live sporting event if the event is not available live on a local television broadcast

Federal Communications Commission

FCC 13-162

station.1 The sports blackout rules were originally adopted nearly 40 years ago when game ticket sales
were the main source of revenue for sports leagues.2 These rules were intended to address concerns that
MVPDs’ importation of a distant signal carrying a blacked-out sports event could result in lost revenue
from ticket sales, which might cause sports leagues to expand the reach of blackouts by refusing to sell
their rights to sports events to all distant stations.3 The rationale underpinning the rules was to ensure to
the greatest extent possible the continued availability of sports telecasts to the public.4 Changes in the
sports industry in the last four decades have called into question whether the sports blackout rules remain
necessary to ensure the overall availability of sports programming to the general public. In this
proceeding, we will determine whether the sports blackout rules have become outdated due to
marketplace changes since their adoption, and whether modification or elimination of those rules is
appropriate.5 We recognize that elimination of our sports blackout rules alone might not end sports
blackouts, but it would leave sports carriage issues to private solutions negotiated by the interested parties
in light of current market conditions and eliminate unnecessary regulation.

II.

BACKGROUND

A.

History of the Sports Blackout Rules

2.
Prior to 1953, National Football League (“NFL”) bylaws prohibited member teams from,
among other things, (i) telecasting their games into the home territory of another team that was playing at
home, and (ii) telecasting their games into the home territory of another team that was playing away from
home and was telecasting its game into its home territory.6 In 1953, a federal court held that the NFL’s
prohibition on the telecast of outside games into the home territory of a team that was playing at home
was a reasonable method of protecting the home team’s gate receipts and was not illegal under the
antitrust laws.7 The court found, however, that restricting the telecast of outside games into the home

1 See 47 C.F.R. §§ 76.111 (cable operators), 76.127 (satellite providers), 76.128 (application of sports blackout
rules), 76.1506(m) (open video systems).
2 See Amendment of Part 76 of the Commission’s Rules and Regulations Relative to Cable Television Systems and
the Carriage of Sports Programs on Cable Television Systems
, Report and Order, 54 FCC 2d 265, 274, ¶ 31 (1975)
(“Cable Sports Blackout Order”), recon. granted in part, denied in part, 56 FCC 2d 561 (1975). The sports
blackout rules were initially applied to cable systems and later extended to open video systems (“OVS”) and satellite
systems. See Implementation of Section 302 of the Telecommunications Act of 1996, Second Report and Order, 11
FCC Rcd 18223, 18226-7, ¶ 1 (1996) (“OVS Second Report and Order”), recon. granted in part, denied in part,
Third Report and Order and Second Order on Reconsideration, 11 FCC Rcd 20227 (1996); Implementation of the
Satellite Home Viewer Improvement Act of 1999: Application of Network Non-Duplication, Syndicated Exclusivity,
and Sports Blackout Rules to Satellite Retransmissions of Broadcast Signals
, Report and Order, 15 FCC Rcd 21688,
21689, ¶ 1 (2000) (“Satellite Exclusivity Order”), recon. granted in part, denied in part, Order on Reconsideration,
17 FCC Rcd 27875 (2002).
3 See Cable Sports Blackout Order, 54 FCC 2d at 282, ¶ 57.
4 See id.
5 This NPRM promotes the goals of Executive Order 13579, which states that “[t]o facilitate the periodic review of
existing significant regulations, independent regulatory agencies should consider how best to promote retrospective
analysis of rules that may be outmoded, ineffective, insufficient, or excessively burdensome, and to modify,
streamline, expand, or repeal them in accordance with what has been learned.” See Exec. Order No. 13,579, § 2, 76
Fed. Reg. 41,587 (July 11, 2011); Final Plan for Retrospective Analysis of Existing Rules, 2012 WL 1851335 (May
18, 2012).
6 See U.S. v. National Football League et al., 116 F.Supp. 319, 321 (E.D. Pa., 1953) (“U.S. v. NFL I”). “Home
territory” is defined in the NFL’s bylaws as “the city in which [a] club is located and for which it holds a franchise
and plays its home games and includes the surrounding territory to the extent of 75 miles in every direction from the
exterior corporate limits of such city.” See Constitution and Bylaws of the National Football League (Eff. Feb. 1,
1970, 2006 Rev.), at http://static.nfl.com/static/content//public/static/html/careers/pdf/co_.pdf.
7 U.S. v. NFL I, 116 F.Supp. at 326.
2

Federal Communications Commission

FCC 13-162

territory of a team not playing at home was an unreasonable restraint on trade because, when the home
team was playing away, there was no gate to protect.8
3.
In 1961, the NFL entered into an agreement with the CBS television network under
which the NFL’s member teams pooled the television rights to their games and authorized the league to
sell the rights to the network as a package, with the revenue from the league sales to be distributed equally
among the member teams.9 Under this agreement, CBS was permitted to determine which games would
be televised and where the games would be televised.10 The NFL then petitioned the court for a ruling on
whether the terms of its contract with CBS violated the court’s 1953 final judgment.11 The court
concluded that the provision giving CBS the power to determine which games would be televised and
where was contrary to the final judgment and that execution and performance of the contract was
therefore prohibited.12 This ruling did not, however, apply to a similar contract between the newly
formed American Football League (“AFL”) and the ABC television network, because the AFL was not a
party to the court’s 1953 final judgment.13 Concerned that the court’s ruling placed it at a disadvantage to
the AFL, the NFL petitioned Congress for relief, arguing that packaged network contracts were desirable
because they allowed the member teams to negotiate for the sale of television rights with a single voice
and equalized revenue among the member teams.14
4.
Congress responded to the NFL’s plea for relief with its passage of the Sports
Broadcasting Act of 1961.15 The Sports Broadcasting Act exempts from the antitrust laws joint
agreements among individual teams engaged in professional football, baseball, basketball, or hockey that
permit the leagues to pool the individual teams’ television rights and sell those rights as a package.16 This
statute also expressly permits these four professional sports leagues to black out television broadcasts of
home games within the home territory of a member team.17 At the time the Sports Broadcasting Act was

8 Id. at 326-7. The court entered a final judgment in this case on December 28, 1953. See U.S. v. National Football
League et al.
, 196 F.Supp. 445, 447 (E.D. Pa. 1961) (“U.S. v. NFL II”).
9 See id. at 445-46.
10 See id. at 447.
11 See id. at 445.
12 See id. at 447.
13 See Amendment of Part 76 of the Commission’s Rules and Regulations Relative to Cable Television Systems and
the Carriage of Sports Programs on Cable Television Systems
, Notice of Proposed Rulemaking, 36 FCC 2d 641,
642, 6 (1972) (“Sports Programs NPRM”); see also H.R. REP. NO. 87-1178, at 2-3 (1961); S. REP. NO. 87-1107, at
2-3 (1961).
14 See Sports Programs NPRM, 36 FCC 2d at 642, ¶ 6; see also H.R. REP. NO. 87-1178, at 2-3; S. REP. NO. 87-
1107, at 2-3.
15 P.L. 87-331, §1, 75 Stat. 732 (1961), codified at 15 U.S.C. §§ 1291-1295.
16 See 15 U.S.C. § 1291 (“The antitrust laws … shall not apply to any joint agreement by or among persons
engaging in or conducting the organized professional team sports of football, baseball, basketball, or hockey, by
which any league of clubs participating in professional football, baseball, basketball, or hockey contests sells or
otherwise transfers all or any part of the rights of such league’s member clubs in the sponsored telecasting of the
games of football, baseball, basketball, or hockey, as the case may be, engaged in or conducted by such clubs.”).
17 See id. § 1292 (“Section 1291 of this title shall not apply to any joint agreement described in the first sentence in
such section which prohibits any person to whom such rights are sold or transferred from televising any games
within any area, except within the home territory of a member club of the league on a day when such club is playing
a game at home.”). See also Cable Sports Blackout Order, 54 FCC 2d at 267, ¶ 9 (noting that § 1292 “stipulates that
the anti-trust exemption afforded by [§ 1291] shall not apply when the resulting package contracts provide for
television blackouts other than in the ‘home territory of a member club of the league on a day when such club is
playing a game at home.’”).
3

Federal Communications Commission

FCC 13-162

enacted, television blackouts were believed to be necessary to protect gate receipts, and the packaging of
individual teams’ television rights was thought to be necessary to enhance the financial stability of the
leagues by assuring equal distribution of revenues among all teams.18 The NFL subsequently instituted a
practice of blacking out the television broadcast of all home games of its member teams in their home
territory, irrespective of whether the games were sold out.19
5.
In August 1971, the Commission sent a letter to Congress seeking guidance on the
Commission’s proposed regulatory scheme for the then-nascent cable television industry, which included
several proposals relating to sports programming.20 The Commission noted the exemptions from the
antitrust laws granted to professional sports leagues under the Sports Broadcasting Act and stated that
“cable systems should not be permitted to circumvent the purpose of th[is] law by importing the signal of
a station carrying the home game of a professional team if that team has elected to black out the game in
its home territory.”21 The Commission indicated that it would follow the “spirit and letter” of the Sports
Broadcasting Act “since it represents Congressional policy in this important area” and stated that it
intended to initiate a rulemaking proceeding on this issue in the near future.22 The Commission
commenced a rulemaking proceeding proposing a sports blackout rule for cable television systems in
February 1972.23
6.
In 1973, during the pendency of the Commission’s rulemaking proceeding, Congress
enacted Public Law 93-107 in response to complaints from dissatisfied football fans who were unable to
view the sold out home games of their local teams on the public airwaves due to the NFL’s blackout
policy.24 Public Law 93-107 added new Section 331 to the Communications Act of 1934, as amended
(“Communications Act”), which prohibited professional sports leagues from blacking out the television
broadcast of a home game in a team’s home territory if the game was televised elsewhere pursuant to a
league television contract and the game sold out 72 hours in advance of game time.25 Public Law 93-107
was intended as a limited experiment to allow all affected parties to assess the impact of the statute and
expired by its own terms effective December 31, 1975.26 Although the statute was not renewed, the NFL
subsequently continued to follow the practice of blacking out the television broadcast of home games in a
team’s home territory only if the game was not sold out 72 hours in advance of game time.27

18 See H.R. REP. NO. 87-1178, at 2-3.
19 See S. REP. NO. 93-347, at 2 (1973); H.R. REP. NO. 93-483, at 6-7 (1973).
20 See Commission’s Proposals for Regulation of Cable Television, Letter, 31 FCC 2d 115, 124-25 (1971) (“1971
Letter
”).
21 See id., 31 FCC 2d at 124; see also supra n.17. While the NFL’s practice in 1971 was to black out all home
games, the other major professional sports leagues televised the majority of their home games at that time. See H.R.
REP. NO. 93-483, at 5, 7.
22 See 1971 Letter, 31 FCC 2d at 124.
23 See Sports Programs NPRM, 36 FCC 2d at 643, ¶ 9.
24 P.L. 93-107, 87 Stat. 350 (1973). Although Public Law 93-107 applied to all four major professional sports
leagues, the statute was enacted primarily in response to the blackout practices of the NFL. See S. REP. NO. 93-347,
at 1-3; H.R. REP. NO. 93-483, at 6-7. At that time, MLB, the NBA, and the NHL contracted with the television
networks on a pooled basis for only a limited number of games. The majority of these leagues’ games were
televised pursuant to contracts negotiated between individual clubs and local television licensees. See H.R. REP.
NO. 93-483, at 5, 7.
25 47 U.S.C. § 331 (Dec. 31, 1975). See H.R. REP. NO. 93-483, at 2.
26 See P.L. 93-107, § 2; see also S. REP. NO. 93-347, at 3.
27 See Single Notice Provision of Sports Program Deletion Rule Affirmed, Public Notice, 61 FCC 2d 455, 455 (1976)
(“[I]n the case of televised professional football games, the Commissioner of the National Football League has
agreed to carry out the provisions of now-expired Public Law 93–107, 47 U.S.C. 331, by allowing to be televised in
(continued….)
4

Federal Communications Commission

FCC 13-162

7.
In the meantime, the Commission adopted the cable sports blackout rule in 1975 to
address concerns that cable systems could frustrate sports leagues’ blackout policies by importing the
distant signal of a television station carrying the home game of a sports team that has elected to black out
the game in its home territory.28 Specifically, the Commission found that
[g]ate receipts are the primary source of revenue for sports clubs, and teams have a reasonable
interest in protecting their home gate receipts from the potentially harmful financial effects of
invading telecasts of their games from distant television stations. If cable television carriage of
the same game that is being played locally is allowed to take place, the local team’s need to
protect its gate receipts might require that it prohibit the telecasting of its games on [distant]
television stations which might be carried on local cable systems. If this were to result, the
overall availability of sports telecasts would be significantly reduced.29
The Commission emphasized that its concern was not in ensuring the profitability of organized sports, but
rather in ensuring the overall availability of sports telecasts to the general public, which it found was “of
vital importance to the larger and more effective use of the airwaves.”30 The cable sports blackout rule
adopted by the Commission is designed to allow the holder of the exclusive distribution rights to the
sports event (i.e., a sports team, league, promoter, or other agent, rather than a broadcaster) to control,
through contractual agreements, the display of that event on local cable systems.31 Under this rule, the
rights holder may demand that a cable system located within the specified zone of protection of a
television broadcast station licensed to a community in which a sports event is taking place black out the
distant importation of the sports event if the event is not being carried live by a television broadcast
station in that community.32 The zone of protection afforded by the cable sports blackout rule is generally
35 miles surrounding the reference point of the broadcast station’s community of license in which the live
sporting event is taking place.33 The cable sports blackout rule applies to all sports telecasts in which the
event is not exhibited on a local television station, including telecasts of high school, college, and
professional sports, and individual as well as team sports.34
(Continued from previous page)__________________
a team’s home market games which are sold out 72 hours in advance of starting time.”); see also NFL Comments at
3 (“[T]he NFL has a local blackout policy if the game is not sold out 72 hours in advance.”); Sports Economists
Comments at 3; NAB Comments at 4.
28 See Cable Sports Blackout Order, 54 FCC 2d at 282, ¶ 57. The sports blackout rule for cable was originally
codified in Section 76.67 of the Commission’s rules. See id. at 285, Appendix C. In 2000, the cable sports blackout
rule was renamed, slightly revised, and renumbered as Section 76.111 of the Commission’s rules. See Satellite
Exclusivity Order
, 15 FCC Rcd at 21741-42, Appendix B. The full text of Section 76.111, 47 C.F.R. § 76.111, is
provided in Appendix B of this NPRM.
29 See Cable Sports Blackout Order, 54 FCC 2d at 281, ¶ 55.
30 See id. at 281, ¶ 57.
31 See id. at 285, ¶ 62; see also 47 C.F.R. § 76.111(a).
32 See 47 C.F.R. §§ 76.111(a), 76.128. The holder of the rights to the sports event must follow certain notification
procedures in order to trigger deletion of the programming from affected cable systems. See id. § 76.111(b), (c).
33 See 47 C.F.R. § 76.5(e). The reference points are listed in Section 76.53 of the Commission’s rules. See id. §
76.53. If there is no television station licensed to the community in which the sports event is taking place, the
applicable zone of protection is that of the television station licensed to the community with which the sports event
or team is identified, or if the event or local team is not identified with any particular community, the nearest
community to which a television station is licensed. See id. § 76.111(a).
34 See Cable Sports Blackout Order, 54 FCC 2d at 282, ¶ 58. The Commission has exempted cable systems with
fewer than 1,000 subscribers from the sports blackout rule, concluding that it would be burdensome on these
systems to purchase the equipment needed to black out sports programming. See Amendment of Part 76 of the
Commission’s Rules and Regulations with Respect to the Definition of a Cable Television System and the Creation

(continued….)
5

Federal Communications Commission

FCC 13-162

8.
The Telecommunications Act of 1996 (the “1996 Act”)35 added a new Section 653 to the
Communications Act, which established a new framework for entry into the video programming
distribution market, the open video system.36 Congress’s intent in establishing the open video system
framework was “to encourage telephone companies to enter the video programming distribution market
and to deploy open video systems in order to ‘introduce vigorous competition in entertainment and
information markets’ by providing a competitive alternative to the incumbent cable operator.”37 As an
incentive for telephone company entry into the video programming distribution market, Section 653
provides for reduced regulatory burdens for open video systems subject to the systems’ compliance with
certain non-discrimination and other requirements set forth in Section 653(b)(1).38 Section 653(b)(1)(D)
directed the Commission to extend to the distribution of video programming over open video systems the
Commission’s rules on sports blackouts, network nonduplication, and syndicated exclusivity.39 The
Commission amended its rules in 1996 to directly apply the existing cable sports blackout rule to open
video systems.40
9.
In November 1999, Congress enacted the Satellite Home Viewer Improvement Act of
1999 (“SHVIA”), which provides statutory copyright licenses for satellite carriers to provide additional
local and national broadcast programming to subscribers.41 In enacting SHVIA, Congress sought to place
satellite carriers on an equal footing with cable operators with respect to the availability of broadcast
programming.42 Section 1008 of SHVIA added a new Section 339 to the Communications Act.43 Section
339(b) directed the Commission to apply the cable network nonduplication, syndicated exclusivity, and
sports blackout rules to satellite carriers’ retransmission of nationally distributed superstations and, to the
extent technically feasible and not economically prohibitive, to extend the cable sports blackout rule to
satellite carriers’ retransmission of network stations to subscribers.44
(Continued from previous page)__________________
of Classes of Cable Systems, Second Report and Order, 68 FCC 2d 18, 33-34, ¶ 32 (1978); see also 47 C.F.R. §
76.111(f).
35 Telecommunications Act of 1996, Pub. L. No 104-104, 110 Stat. 56 (1996).
36 47 U.S.C. § 573.
37 OVS Second Report and Order, 11 FCC Rcd at 18227, ¶ 2.
38 See id.; see also 47 U.S.C. § 573(c).
39 47 U.S.C. § 573(b)(1)(D).
40 See OVS Second Report and Order 11 FCC Rcd at 18326-27, ¶¶ 201-4. The full text of the sports blackout rule
for OVS, which is codified at 47 C.F.R. § 76.1506(m), is provided in Appendix B of this NPRM. We note that
Section 76.1506(m) references Section 76.67 of the Commission’s rules, which has been renumbered as Section
76.111. See supra n.28. If the sports blackout rule for OVS is retained, we propose to update Section 76.1506(m) to
cite the appropriate rule section, Section 76.111.
41 SHVIA was enacted as Title I of the Intellectual Property and Communications Omnibus Reform Act of 1999
(relating to copyright licensing and carriage of broadcast signals by satellite carriers, codified in scattered sections of
17 and 47 U.S.C.), P.L. No. 106-113, 113 Stat. 1501, Appendix I (1999).
42 See Satellite Exclusivity Order, 15 FCC Rcd at 21690, ¶¶ 4-5; see also Joint Explanatory Statement of the
Committee of Conference on H.R. 1554, 106th Cong. (“Joint Explanatory Statement”), 145 Cong. Rec. H11793,
H11796 (daily ed. Nov. 9, 1999) (stating that the network nonduplication, syndicated exclusivity, and sports
blackout rules for satellite carriers “should be as similar as possible to that applicable to cable services”).
43 See 47 U.S.C. § 339 (as enacted by § 1008 of SHVIA).
44 Id. § 339(b).
6

Federal Communications Commission

FCC 13-162

10.
The Commission adopted a sports blackout rule for satellite carriers in November 2000.45
This rule provides that, on the request of the holder of the rights to a sports event, a satellite carrier may
not retransmit a nationally distributed superstation46 or a network station47 carrying the live television
broadcast of the sports event to subscribers if the event is not being carried live by a local television
broadcast station.48 This rule applies within the same 35-mile zone of protection that applies to cable
systems; that is, 35 miles surrounding the reference point of the broadcast station’s community of license
in which the live sporting event is taking place.49
11.
The Commission last examined the sports blackout rules more than seven years ago, in a
2005 report to Congress required by the Satellite Home Viewer Extension and Reauthorization Act of
2004 (“SHVERA”).50 SHVERA directed the Commission to complete an inquiry and submit a report to
Congress “regarding the impact on competition in the multichannel video programming distribution
market of the current retransmission consent, network non-duplication, syndicated exclusivity, and sports
blackout rules, including the impact of those rules on the ability of rural cable operators to compete with
direct broadcast satellite (‘DBS’) industry in the provision of digital broadcast television signals to
consumers.”51 SHVERA also directed the Commission to “include such recommendations for changes in
any statutory provisions relating to such rules as the Commission deems appropriate.”52 The Commission
concluded in its report that the sports blackout rules do not affect competition among MVPDs, that
commenters failed to advance any link between the blackout rules and competition among MVPDs, and
that no commenter pressed the case for repeal or modification of the sports blackout rules.53 The

45 See Satellite Exclusivity Order, 15 FCC Rcd at 21689, ¶ 1. The full text of the satellite sports blackout rule, which
is codified at 47 C.F.R. § 76.127, is provided in Appendix B of the NPRM.
46 A “nationally distributed superstation” is defined as “a television broadcast station, licensed by the Commission,
that: (1) [i]s not owned or operated by or affiliated with a television network that, as of January 1, 1995, offered
interconnected program service on a regular basis for 15 or more hours per week to at least 25 affiliated television
licensees in 10 or more states; (2) [o]n May 1, 1991, was retransmitted by a satellite carrier and was not a network
station at that time; and (3) [w]as, as of July 1, 1998, retransmitted by a satellite carrier under the statutory license of
section 119 of title 17, United States Code.”). 47 U.S.C. § 339(d)(2); 47 C.F.R. § 76.120(b). The television
broadcast stations that meet this definition are limited to KTLA-TV (Los Angeles), WPIX-TV (New York), KWGN-
TV (Denver), WSBK-TV (Boston), WWOR-TV (New York) and WGN-TV (Chicago). See Satellite Exclusivity
Order,
15 FCC Rcd at 21692-93, ¶¶ 9-10.
47 A “network station” is a television broadcast station that is owned or operated by, or affiliated with, a television
network as defined in 17 U.S.C. § 119(d). See 47 U.S.C. § 339(d)(3); 47 C.F.R. § 76.120(d).
48 See Satellite Exclusivity Order, 15 FCC Rcd at 21725-26, ¶ 74; see also 47 C.F.R. § 76.127(a). Although SHVIA
provides that the sports blackout rule should be applied to satellite carriers’ retransmission of network stations “only
to the extent technically feasible and not economically prohibitive,” the Commission concluded that satellite carriers
failed to meet the heavy burden of demonstrating that the sports blackout rule should not be imposed on satellite
retransmission of network stations. See Satellite Exclusivity Order, 15 FCC Rcd at 21721, ¶ 64.
49 See Satellite Exclusivity Order, 15 FCC Rcd at 21725, ¶ 74; see also 47 C.F.R. § 76.120(e)(3). In order to trigger
deletion of a sports event from a satellite carrier, the holder of the rights to the sports event must comply with certain
notification procedures, including providing the satellite carrier a list of the U.S. postal zip codes that encompass the
applicable zone of protection. See 47 C.F.R. § 76.127(b), (c). A satellite carrier is not required to delete a sports
event if it has fewer than 1,000 subscribers within the relevant zone of protection who subscribe to the nationally
distributed superstation or network station carrying the sports event for which deletion is requested. See id.
§ 76.127(e).
50 See Retransmission Consent and Exclusivity Rules: Report to Congress Pursuant to Section 208 of the Satellite
Home Viewer Extension and Reauthorization Act of 2004
, 2005 WL 2206070 (Sept. 5, 2005) (“SHVERA Section
208 Report to Congress
”); see also P.L. No. 108-447, 118 Stat. 2809 (2004).
51 P.L. No. 108-447, § 208.
52 Id.
7

Federal Communications Commission

FCC 13-162

Commission therefore declined to recommend any regulatory or statutory revisions to modify the
protections afforded to the holders of sports programming rights.54
12.
Today, sports leagues’ blackout policies determine which games are blacked out locally.
These policies are given effect primarily through contractual arrangements negotiated between the
leagues or individual teams that hold the rights to the games and the entities to which they grant
distribution rights, including television networks, local television broadcast stations, Regional Sports
Networks (“RSNs”), and MVPDs.55 The Commission’s rules, described above, supplement these
contractual relationships by requiring MVPDs to black out games that are required by the sports leagues
or individual teams to be blacked out on local television stations.

B.

Petition for Rulemaking

13.
In November 2011, the Sports Fan Coalition, Inc., National Consumers League, Public
Knowledge, League of Fans, and Media Access Project (collectively, “Petitioners” or “SFC”) filed a joint
Petition for Rulemaking urging the Commission to eliminate the sports blackout rules.56 The Petitioners
assert that, at a time when ticket prices for sports events are at historic highs and high unemployment
rates persist, making it difficult for many consumers to afford attending local sports events, the
Commission should not support the “anti-consumer” blackout policies of professional sports leagues.57
The Petitioners also argue that the sports leagues’ blackout policies are no longer needed to protect gate
receipts and therefore should not be facilitated by the Commission’s sports blackout rules.58 The
Petitioners maintain that, “without a regulatory subsidy from the federal government in the form of the
[sports blackout rules], sports leagues would be forced to confront the obsolescence of their blackout
policies and could voluntarily curtail blackouts.”59 On January 12, 2012, the Media Bureau issued a
Public Notice seeking comment on the Petition.60 Comments in support of the petition were filed by SFC,
a group of nine sports economists,61 several members of Congress,62 and thousands of individual
(Continued from previous page)__________________
53 See SHVERA Section 208 Report to Congress, 2005 WL 2206070, at *18.
54 See id.
55 See NAB Comments at 1, 3-6; Sports Economists Comments at 2-5; Network Affiliates Reply Comments at 1.
56 See Sports Fan Coalition, Inc. et al., Petition for Rulemaking, MB Docket No. 12-3, at 3 (Nov. 11, 2011)
(“Petition”).
57 See id. at 4-6.
58 See id. at 8-11.
59 Id. at 3.
60 See Commission Seeks Comment on Petition for Rulemaking Seeking Elimination of the Sports Blackout Rule,
Public Notice, 27 FCC Rcd 260 (MB 2012).
61 The nine sports economists who jointly filed comments on the petition for rulemaking are: Robert Baade of
Forest College; Dennis Coates of the University of Maryland Baltimore County; Rodney Fort of the University of
Michigan; Ira Horowitz of the University of Florida; Brad Humphreys of the University of Alberta; Roger G. Noll of
Stanford University; Allen Sanderson of the University of Chicago; John J. Siegfried of Vanderbilt University; and
Andrew Zimbalist of Smith College (collectively, “Sports Economists”). They state that they are academic
economists who have published research on the economics of major league team sports, that they prepared their
comments independently, and that they have received no payment or assistance of any kind from any party for
preparing their comments. See Sports Economists Comments at 1.
62 Joint comments were submitted by Senators Richard Blumenthal, Sherrod Brown, Tom Harkin, Debbie Stabenow,
and Frank Lautenberg (deceased) (“Senator Blumenthal et al. Comments”). Congressman Brian Higgins also filed
comments (“Congressman Higgins Comments”). In addition, Senators Richard Blumenthal and John McCain
submitted a letter urging the Commission to issue a Notice of Proposed Rulemaking on the sports blackout rules.
See Letter from Senator Richard Blumenthal and Senator John McCain to Acting Chairwoman Mignon Clyburn,
Federal Communications Commission (June 19, 2013) (“Blumenthal/McCain June 19, 2013 Ex Parte Letter”),
(continued….)
8

Federal Communications Commission

FCC 13-162

consumers. The NFL, the Office of the Commissioner of Baseball (“Baseball Commissioner”), the
National Association of Broadcasters (“NAB”), and a group of network television affiliates (“Network
Affiliates”) filed comments opposing the Petition.

III.

DISCUSSION

14.
We propose to eliminate the sports blackout rules. The sports blackout rules were first
adopted nearly four decades ago to ensure that the potential loss of gate receipts resulting from cable
system importation of distant stations did not lead sports clubs to refuse to sell their rights to sports events
to distant stations, which would reduce the overall availability of sports programming to the public.63 The
rules were extended to open video systems and then to satellite carriers to provide parity between cable
and newer video distributors.64 The sports industry has changed dramatically in the last 40 years,
however, and the Petitioners argue that the economic rationale underlying the sports blackout rules may
no longer be valid. Below we seek comment on whether we have authority to repeal the sports blackout
rules. Next, we examine whether the economic considerations that led to adoption of the sports blackout
rules continue to justify our intervention in this area. Finally, we propose to eliminate the sports blackout
rules and seek comment on the potential benefits and harms of that proposed action on interested parties,
including sports leagues, broadcasters, and consumers.

A.

Legal Authority

15.
We seek comment on whether we have the authority to repeal the sports blackout rules.
As discussed above, Congress did not explicitly mandate that the Commission adopt the cable sports
blackout rule.65 Rather, the Commission adopted the cable sports blackout rule as a regulatory measure
premised on the policy established by Congress in the Sports Broadcasting Act, which exempts from the
antitrust laws joint agreements among individual teams engaged in professional football, baseball,
basketball, or hockey that permit the leagues to pool the individual teams’ television rights and sell those
rights as a package and expressly permits these four professional sports leagues to black out television
broadcasts of home games within the home territory of a member team.66 Section 653(b)(1)(D) of the
Act, as added by the 1996 Act, directed the Commission to extend to open video systems “the
Commission’s regulations concerning sports exclusivity (47 C.F.R. 76.67).”67 Similarly, Section 339(b)
of the Communications Act, as added by SHVIA in 1999, directed the Commission to “apply … sports
blackout protection (47 CFR 76.67) to the retransmission of the signals of nationally distributed
superstations by satellite carriers” and, “to the extent technically feasible and not economically
prohibitive, apply sports blackout protection (47 CFR 76.67) to the retransmission of the signals of
network stations by satellite carriers.”68 Reflecting the language used in these statutory provisions, the
legislative history of Section 339(b) states that Congress’s intent was to place satellite carriers on an equal
footing with cable operators with respect to the availability of television programming.69 Petitioners
(Continued from previous page)__________________
available at http://www.blumenthal.senate.gov/newsroom/press/release/blumenthal-calls-on-fcc-to-end-sports-
blackout-rule.
63 See supra ¶ 7.
64 See supra ¶¶ 8-10.
65 See supra ¶¶ 5, 7.
66 See Cable Sports Blackout Order, 54 FCC 2d at 278-81, ¶¶ 43-54; see also supra ¶ 5.
67 See supra ¶ 8; see also supra n.28.
68 See 47 U.S.C. § 339(b).
69 See supra n.42; see also H.R. Conf. Rep. No. 106-464, at 103 (1999) (directing that the sports blackout rules on
DBS “are to be imposed ‘to the extent technically feasible and not economically prohibitive’ with respect to affected
parties. The burden of showing that conforming to rules similar to cable would be ‘economically prohibitive’ is a
heavy one. It would entail a very serious economic threat to the health of the carrier. Without that showing, the
(continued….)
9

Federal Communications Commission

FCC 13-162

argue that the Commission has the authority to repeal the sports blackout rules for both cable and DBS
because Congress never directed the Commission to issue the sports blackout rules in the first instance
and only directed the Commission to establish parity between the cable and DBS regimes.70 Senators
Blumenthal and McCain likewise assert that “[i]t is important to note that Congress never instructed the
Commission to promulgate the Sports Blackout Rule in the first place. The Commission therefore
possesses ample authority to amend the Sports Blackout Rule sua sponte, without any action by
Congress.”71 Several commenters opposing elimination of the sports blackout rules assert that Congress
mandated the sports blackout rule for DBS.72 These commenters do not, however, expressly argue that
the Commission does not have authority to eliminate the sports blackout rules, either for cable or for DBS
and OVS. We tentatively conclude that repeal of the cable sports blackout rule is authorized by the
Communications Act, which grants the Commission general rulemaking power, including the authority to
revisit its rules and modify or repeal them where it concludes such action is appropriate.73 We seek
comment on this tentative conclusion. We also seek comment on whether we have the authority to repeal
the sports blackout rules for DBS and OVS. We observe that when Congress enacted the sports blackout
provisions in Sections 339(b) and 653(b)(1)(D) of the Act, Congress directed the Commission to apply to
DBS and OVS the sports blackout protection applied to cable, set forth in 47 C.F.R. § 76.67, rather than
simply directing the adoption of sports blackout rules for those services.74 The statute does not withdraw
the Commission’s authority to modify its cable rule at some point in the future, nor is there any indication
in the legislative history that Congress intended to withdraw this authority. Given that the DBS and OVS
provisions are expressly tied to the cable sports blackout rule, does this evince an intent on the part of
Congress that the Commission should accord the same regulatory treatment to DBS and OVS as cable,
i.e., if the Commission modifies or repeals the cable rule it should also modify or repeal the DBS and
OVS rules? Would Congress’s intent to subject open video systems to reduced regulatory burdens as an
incentive for their entry into the video market support an assertion of authority to eliminate the sports
blackout rule for OVS if we determine that the cable sports blackout rule is no longer needed?
Alternatively, are Congress’s directives to the Commission regarding the application of sports blackout
protection to open video systems and to satellite carriers more appropriately interpreted to mean that the
Commission does not have the authority to repeal the sports blackout rules for these types of entities,
even if it does so for cable? If we determine that we do not have the authority to repeal the satellite sports
blackout rule and/or the OVS sports blackout rule, would it nevertheless be appropriate to repeal the cable
(Continued from previous page)__________________
rules should be as similar as possible to that applicable to cable services”); H.R. Rep. No. 106-86(I), at 16 (1999)
(“The Federal Communications Commission is directed to adopt … sports blackout rules applicable to satellite
retransmission of television signals. To the extent possible, the Commission should model its new regulations after
those that currently apply to the cable industry”).
70 See SFC Comments at 14-18; see also Letter from David R. Goodfriend, Chairman, Sports Fan Coalition, Inc., to
Marlene H. Dortch, Secretary, FCC, MB Docket No. 12-3 (July 10, 2013) (“SFC July 10, 2013 Ex Parte Letter”), at
1-2, citing Blumenthal/McCain June 19, 2013 Ex Parte Letter. The Petitioners do not address the Commission’s
authority to eliminate the sports blackout rule for open video systems.
71 Blumenthal/McCain June 19, 2013 Ex Parte Letter at 1.
72 See NFL Comments at 10 (“Indeed, in 1999 Congress explicitly required that the FCC extend the cable sports
blackout rule to satellite operators in order to reinforce these goals.”); NAB Comments at 5 (“In 1999, Congress
mandated a similar rule for Direct Broadcast Satellite (‘DBS’), limiting the importation of local sports telecasts by
satellite providers, which the FCC adopted in 2000.”); Baseball Commissioner Comments at 3-4 (noting that in
SHVIA, “Congress directed the Commission to extend the Sports Rule to satellite carriers.”).
73 See 47 U.S.C. §154(i) (authorizing the agency to “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 function”); 47 U.S.C.
§ 303(r) (providing that the Commission may “[m]ake such rules and regulations … not inconsistent with this law,
as may be necessary to carry out the provisions of this Act….”).
74 See 47 U.S.C. §§ 339(b), 573(b)(1)(d).
10

Federal Communications Commission

FCC 13-162

sports blackout rule? Would eliminating the sports blackout rule for cable but not for DBS and/or OVS
create undue disparities or unintended consequences for any of these entities?

B.

Assessing the Continued Need for Sports Blackout Rules

16.
We request comment on whether the economic rationale underlying the sports blackout
rules remains valid in today’s marketplace. Specifically, we invite commenters to submit information,
and to comment on information currently in the record, regarding (i) the extent to which sports events
continue to be blacked out locally as a result of the failure of the events to sell out, (ii) the relative
importance of gate receipts vis-à-vis other revenues in organized sports today, and (iii) whether local
blackouts of sports events significantly affect gate receipts. We invite commenters also to submit any
other information that may be relevant in assessing whether the sports blackout rules are still needed to
ensure the overall availability of sports telecasts to the public. We ask commenters to assess whether this
information, as updated and supplemented, supports retaining or eliminating the sports blackout rules.
1.

Blackouts of Sports Events

17.
We seek comment on the extent to which sports events are blacked out locally today due
to the failure of the events to sell out. The record indicates that professional football continues to be the
sport most affected by blackouts.75 Under the NFL’s longstanding blackout policy, the television
broadcast of home games in a team’s home territory has been blacked out if the game was not sold out 72
hours in advance of game time.76 In 1974, just prior to the Commission’s adoption of the cable sports
blackout rule, 59 percent of regular season NFL games were blacked out due to failure of the games to
sell out.77 During the 2011 NFL season, only 16 out of 256 regular season games, or six percent of
games, were blacked out.78 These 16 blackouts occurred in just four cities: Buffalo, Cincinnati, San
Diego, and Tampa Bay.79 Thus, the percentage of NFL games that are blacked out today has dropped
substantially since the sports blackout rules were adopted, and blackouts of NFL games are relatively
rare.80 Does this substantial reduction in the number of blacked-out NFL games suggest that the sports
blackout rules are no longer needed? Conversely, does the relatively small number of blackouts of NFL
games argue against the need to eliminate the sports blackout rules? To what extent are blackouts of NFL
games averted when teams and local businesses work together to “sell” outstanding tickets, thereby
allowing local coverage of games?81 Has the cable sports blackout rule had any impact on the number of
NFL blackouts? How should this affect our analysis?
18.
We note that in 2012, after the petition for rulemaking in this proceeding was put out for
comment, the NFL modified its blackout policy to allow its member teams the option of avoiding a
blackout in their local television market if the team sold at least 85 percent of game tickets at least 72

75 See Sports Economists Comments at 5-6.
76 See supra n.27.
77 See NFL Comments at 4.
78 See NFL Comments at 3; see also Sports Economists Comments at 5-6.
79 See NFL Comments at 3-4 n.5; Sports Economists Comments at 13. SFC notes that, in 2011, the NFL blacked out
six (75 percent) of Cincinnati’s home games; five (71.4 percent) of Tampa Bay’s home games; three (37.5 percent)
of Buffalo’s home games; and two (25 percent) of San Diego’s home games. See SFC Comments at 7 & n.11.
80 See NFL Comments at 3; Sports Economists Comments at 13.
81 See e.g., Sports Economists Comments at 15 (noting that “teams can use the threat of blackouts as a strategic
marketing tool. A team may know that attendance is not affected by whether a game is televised locally, but still
can market the opportunity to avoid a blackout. A firm that buys the last block of tickets just before the blackout
deadline can then claim credit for lifting the blackout. For example, a local restaurant bought the remaining unsold
tickets to the last Buffalo Bills home game in 2010 to assure that the game would be televised.”).
11

Federal Communications Commission

FCC 13-162

hours prior to the game.82 Specifically, under this new policy, individual teams are required to determine
their own blackout threshold – anywhere from 85 percent to 100 percent – at the beginning of the season
and adhere to that number throughout that season.83 If ticket sales exceed the threshold set by the team,
the team must share a higher percentage of the revenue from those ticket sales than usual with the visiting
team.84 We seek comment on the extent to which this new policy has impacted blackouts of NFL games.
According to SFC, there were 15 NFL games blacked out affecting five NFL franchises during the 2012
season.85 Which teams opted to take advantage of the NFL’s new blackout policy and what effect, if any,
did the NFL’s relaxation of its blackout policy have on ticket sales for the home games of these teams?
Does the NFL’s recent relaxation of its sports blackout policy weigh in favor of or against elimination of
the Commission’s sports blackout rules?86
19.
We note that the record is largely silent on the prevalence of blackouts affecting sports
other than the NFL; thus, we invite comment on the extent to which these sports events are blacked out
locally today. As noted above, the sports blackout rules apply to all sports telecasts in which the event is
not available live on a local television station, including telecasts of high school, college, and professional
sports, and individual as well as team sports.87 The Sports Economists assert, however, that “major
professional sports leagues in the U.S. [other than the NFL] generally do not use blackout rules to prevent
a game from being televised in the locality in which it is being played” because they “sell television rights
to only some games through national broadcast agreements.”88 The Sports Economists explain that
[t]he FCC’s rules currently have little relevance with respect to television rights that are sold by a
team rather than the league. The FCC’s rules apply only to games in the local area where they are
being played. Thus, the FCC’s blackout rules bear no relation to league policies that prevent

82 See Letter from Brian S. Frederick, Executive Director, Sports Fan Coalition, Inc., to Marlene H. Dortch,
Secretary, FCC, MB Docket No. 12-3, at 2 (July 26, 2012) (“SFC July 26, 2012 Ex Parte Letter”).
83 See id.
84 See id.
85 Specifically, the blackouts involved the Tampa Bay Buccaneers (weeks 1, 4, 6, 10, 12, and 16), the San Diego
Chargers (weeks 3, 12, 13, and 15), the Buffalo Bills (weeks 13 and 17), the Cincinnati Bengals (weeks 10 and 12),
and the Oakland Raiders (week 13). See http://sportsfans.org (last accessed Sept. 6, 2013). Although SFC’s website
states that 15 NFL games were blacked out during the 2012 season, it listed only 14 blacked out games. We note
that in addition to the 14 games specifically listed on SFC’s website, the Cincinnati Bengals game during week 12
was also blacked out. See Josh Kirkendall, Cincinnati Bengals Fall “Several Thousand Tickets Short Of A Sellout”
Against Oakland Raiders
, CincyJungle.com (Nov. 23, 2012), available at
http://www.cincyjungle.com/2012/11/23/3682516/cincinnati-bengals-fall-several-thousand-tickets-short-of-a-
sellout.
86 See SFC July 26, 2012 Ex Parte Letter at 1 (asserting that the NFL’s relaxation of its blackout policy
“acknowledges the outdated nature of existing local sports blackout practices”).
87 See Cable Sports Blackout Order, 54 FCC 2d at 282, ¶ 58.
88 Sports Economists Comments at 6-7. The Sports Economists note that in these other leagues, the distribution
rights to most games are held by the home team, which then enters into reciprocal arrangements with other teams
that allow each team to telecast its away games as well as its home games. Such arrangements allow teams to sell
distribution rights to both home and away games to local television stations in their home market and/or to RSNs
that deliver games to areas that are not part of the home territory of any team. Thus, each individual team is in
control of deciding how many of its games, both home and away, will be telecast live in its local and regional
markets. Id. at 7.
12

Federal Communications Commission

FCC 13-162

telecasts in a team’s home market of a game being played elsewhere. For games that are played
locally, the vast majority of teams choose to sell television rights to all or most of their
games….89
To what extent are the sports blackout rules still relevant for sports other than professional football, where
individual teams, rather than the league, hold and sell the distribution rights for all or most of the games?
In this regard, we seek comment on the importance of retaining the sports blackout rules to protect the
viability of any nascent sports leagues that may emerge in the future.
20.
Professional baseball is the only other sport for which commenters provided any
information on blackouts. Commenters indicate that the number of MLB games blacked out is relatively
small because individual MLB teams, rather than the league, negotiate with local broadcast television
flagship stations or RSNs90 for exclusive rights to televise most of the teams’ games, both home and away
games, in the teams’ home territories.91 According to the Baseball Commissioner, in 2011, 151 of 162
regular season games of each MLB team, on average, were televised on the team’s local broadcast
television station or RSN.92 Therefore, the Baseball Commissioner asserts, at most eleven of 162 regular
season games of each MLB team were affected by the sports blackout rules.93 To the extent that more
specific data are available regarding the number of home games of MLB teams blacked out pursuant to

89 Id.; see also SFC Reply Comments at 6 n.6 (agreeing that the sports blackout rules have little relevance for
professional sports other than the NFL).
90 “Regional Sports Network” has been defined by the Commission as
any non-broadcast video programming service that (1) provides live or same-day distribution
within a limited geographic region of sporting events of a sports team that is a member of Major
League Baseball, the National Basketball Association, the National Football League, the National
Hockey League, NASCAR, NCAA Division I Football, NCAA Division I Basketball, Liga de
Béisbol Profesional de Puerto Rico, Baloncesto Superior Nacional de Puerto Rico, Liga Mayor de
Fútbol Nacional de Puerto Rico, and the Puerto Rico Islanders of the United Soccer League's First
Division, and (2) in any year, carries a minimum of either 100 hours of programming that meets
the criteria of subheading 1, or 10% of the regular season games of at least one sports team that
meets the criteria of subheading 1.
Review of the Commission’s Program Access Rules and Examination of Programming Tying Arrangements, First
Report and Order, 25 FCC Rcd 746 783-84, ¶ 53 (2010), affirmed in part and vacated in part sub nom. Cablevision
Sys. Corp. et al. v. FCC
, 649 F.3d 695 (D.C. Cir. 2011).
91 See Baseball Commissioner Comments at 6, 10-11; see also SFC Comments at 6 n.6; Sports Economists
Comments at 7-8. MLB allocates the territorial television rights of MLB clubs by assigning each team to a “home
territory,” which is generally much larger than the 35-mile zone of protection specified in the Commission’s rules.
See Baseball Commissioner Comments at 5; see also Sports Economists Comments at 8; Senator Blumenthal et al.
Comments at 2. All television markets in the U.S., even markets that are located hundreds of miles from the nearest
MLB team, are part of the home territory of at least one team, and some localities are in the home territory of as
many as six teams. See Sports Economists Comments at 8; see also Senator Blumenthal et al. Comments at 2.
92 See Baseball Commissioner Comments at 6.
93 See id. The Baseball Commissioner suggests that this number (eleven of 162 regular season games of each MLB
team) may overstate the extent of blackouts under the Commission’s rules because some of these eleven games may
have been away games not subject to the Commission’s sports blackout rules or were available from other sources,
such as one of the league’s national rights holders. See id. For example, MLB sells exclusive national rights to the
FOX network to show one Saturday afternoon game and to ESPN to show one Sunday evening game. See Senator
Blumenthal et al. Comments at 2. During these exclusive Saturday afternoon and Sunday evening periods, a team
may not televise a game locally anywhere, even a home game that is not being televised by the national network.
Thus, since the game is not being televised locally anywhere, the game is not being “blacked out” under the
Commission’s rules. See Sports Economists Comments at 8.
13

Federal Communications Commission

FCC 13-162

the Commission’s sports blackout rules, as opposed to MLB’s blackout policies,94 we request that
commenters provide those data.95 Specifically, for each MLB team, we seek current data on whether
exclusive rights to televise most of the teams’ games have been granted to local broadcast flagship
stations or RSNs and the number of home games that are blacked out pursuant to the Commission’s rules.
Does the number of games blacked out argue in favor of or weigh against repeal of the sports blackout
rules? In addition, for home games that are blacked out under our rules, we seek information as to why
they are blacked out. In this regard, the Baseball Commissioner states that “[t]he vast majority of MLB
games are not sold out. While there are specific instances in which MLB clubs do take account of gate
attendance in making decisions about telecasting patterns (and invoking the [Commission’s sports
blackout rules]), MLB clubs do not routinely black out games that are not sold out.”96 Accordingly, what
factors other than attendance are taken into account in determining which MLB games are blacked out
locally? How many MLB games were blacked out due to failure to sell out and how many were blacked
out for other reasons? If, as reported, few MLB games are blacked out due to failure to sell out, does this
support the conclusion that the sports blackout rules are not needed to promote attendance at sports
events?
21.
We likewise request specific data detailing the extent to which any other sports events,
including games of other major professional sports leagues (e.g., the NBA and NHL), and any other
professional, collegiate, or high school sports events, are blacked out locally. To the extent that these
other sports events are blacked out, are they blacked out due to failure of the event to sell out or for some
other reason?
2.

Gate Receipts and Other Revenues

22.
We seek comment on the relative importance of gate receipts vis-à-vis other revenues in
sports today. As discussed above, when the Commission adopted the cable sports blackout rule in 1975,
it found that “gate receipts were the primary source of revenue for sports clubs.”97 The record before us
indicates, however, that the importance of gate receipts has diminished dramatically for NFL clubs in the
past four decades, particularly in relation to television revenues. The Sports Economists state that in 1970

94 Most of the consumer complaints in the record regarding blackouts of MLB games involve blackouts that result
from MLB’s use of expansive home territories and MLB’s blackout policy, rather than the Commission’s sports
blackout rules. See supra n.91 for description of MLB’s home territories. Under MLB’s blackout policy, fans can
generally only watch their “home” team (either home or away games) on the local station or RSN that has exclusive
distribution rights in their assigned “home territory.” For example, the State of Iowa, which does not have its own
major league team, is assigned to the “home territories” of six MLB teams: the Chicago Cubs, Chicago White Sox,
Kansas City Royals, Milwaukee Brewers, Minnesota Twins, and St. Louis Cardinals. Some or all of the games of
these “home” teams may not be available to residents in certain areas of Iowa, however, because the residents’ cable
system or satellite carrier does not carry the local television station or RSN with exclusive distribution rights to the
team’s games. Even if these residents purchase a premium package such as MLB’s Extra Innings (MLB’s premium
cable network channel) or MLB.tv (MLB’s premium internet streaming service), the games of their “home” team
will be blacked out on the premium service under the terms of MLB’s agreement with the premium service. See
Senator Blumenthal et al. Comments at 2; see also SHVERA Section 208 Report to Congress at ¶ 56; MLB
Blackouts FAQ at http://mlb.mlb.com/mlb/help/faq_blackout.jsp.
95 The Baseball Commissioner asserts that in order to obtain the protection afforded by the Commission’s sports
blackout rules, it “incur[s] the significant cost of identifying all of the potentially affected cable systems and games
for each U.S. club and sending notices in the form and within the time frame required” by the Commission’s rules.
See Baseball Commissioner Comments at 5. Thus, it appears that detailed information on the number of MLB
regular season games blacked out pursuant to the Commission’s rules is readily available. Particularly in view of
the Baseball Commissioner’s strong opposition to elimination of the Commission’s sports blackout rules, it would
be useful to have more specific data on the number of MLB games blacked out under these rules.
96 Baseball Commissioner Comments at 8.
97 Cable Sports Blackout Rules, 54 FCC 2d at 281, ¶ 55 (emphasis added).
14

Federal Communications Commission

FCC 13-162

the estimated average revenue of an NFL team was approximately $5 million and the estimated average
operating income was less than $1 million, whereas in 2009 the estimated average revenue of an NFL
team was about $250 million and the estimated average operating income was $33 million.98 The Sports
Economists further state that ticket sales today account for around 20 percent of NFL revenues, while
television revenues account for around 60 percent.99 According to SFC, television revenues, which are
shared equally among teams, are 80 times what they were in 1970 and now account for 50 percent of the
NFL’s total revenues.100 SFC asserts that gate receipts, which are split 60/40 between the home team and
visiting team, account for only 21.6 percent of the NFL’s total revenues.101 These figures indicate that
television revenues have replaced gate receipts as the most significant source of revenue for NFL clubs.
Does this shift in the source of revenue for NFL clubs undermine the economic rationale for the sports
blackout rules? We invite commenters to supplement the record with more current data on NFL
revenues, including total revenues, gate receipts, and television revenues, to the extent that such data are
available. If gate receipts are no longer the primary or most significant source of revenue for NFL clubs,
are the sports blackout rules still necessary to promote attendance at games and to ensure the overall
availability of telecasts of these sports to the public? If so, why?
23.
There is scant information in the record regarding the significance of gate receipts in
relation to other sources of revenue for sports other than professional football. The Baseball
Commissioner states only that, “in any given year, ticket sales and television revenues account for
roughly the same portion of [MLB’s] revenues and both are critically important to an MLB club’s
economic health.”102 To the extent that commenters assert that the sports blackout rules remain necessary
to ensure the overall availability of telecasts of particular sports to the public, we request that they provide
current revenue data for such sports, including total revenues, television revenues, and gate receipts.103
We note that, during recent years, MLB has entered into other revenue-generating ventures, such as the
MLB Channel, a baseball-related programming channel available to MVPD subscribers, and Extra
Innings, which offers regular season game premium (pay) packages through MVPDs to their subscribers.
MLB also offers regular season game packages directly to customers through MLB.tv. Such
programming is streamed over the Internet and can be viewed on computers and mobile devices, as well
as on televisions using devices such as Apple TV. Moreover, many teams either own the RSNs that carry
their game telecasts or have obtained ownership interests in RSNs. Does the emergence of these
additional revenue sources impact the relative importance of gate receipts and, accordingly, the continued

98 See Sports Economists Comments at 13. The Sports Economists state that “[p]recise quantification of the
increases in the prices and profits of the NFL is not possible because the NFL does not publicly release financial
statements” but assert that “through the years scholars and journalists (notably the annual Forbes analysis of
financial conditions in team sports) have estimated the revenues, costs, profits and ticket prices of NFL teams.” Id.
at 12-13.
99 See id. at 13.
100 See SFC Comments at 10-11, citing Jeff Howe, Judge David Doty Rules that NFL Will Not Have Access to $4
Billion in Television Revenue During a Lockout
, NESN (Mar. 1, 2011), available at
http://www.nesn.com/2011/03/judge-rules-that-nfl-will-not-have-access-to-4-billion-in-television-revenue-during-a-
lockout.html (noting NFL total revenue at about $8 billion a year with television revenue at about $4 billion of that),
and John Vrooman, The Football Players’ Labor Market, ECONOMICS OF THE NATIONAL FOOTBALL LEAGUE: THE
STATE OF THE ART, at 3 (2011), available at http://www.vanderbilt.edu/econ/faculty/Vrooman/vrooman-football-
labor-market.pdf (“NFL national television rights have exploded eighty-fold since 1970 and the League will take in
$4 billion annually in TV rights through 2013. These collectively negotiated fees are about 50 percent of total
revenue and are shared equally among NFL clubs.”).
101 See SFC Comments at 11, citing Vrooman, The Football Players’ Labor Market, at 3.
102 Baseball Commissioner Comments at 7.
103 We note that commenters may submit such information with a request for confidential treatment if necessary to
prevent competitive harm. See 47 C.F.R. § 0.459.
15

Federal Communications Commission

FCC 13-162

need for the sports blackout rules? If gate receipts are not the primary or most significant source of
revenue for these sports, why are the sports blackout rules necessary to ensure the overall availability of
telecasts of these sports to the public?
3.

Effect of Blackouts on Gate Receipts

24.
We seek comment on the extent to which local blackouts of sports events affect
attendance and gate receipts at those events and the extent to which the cable sports blackout rule itself
affects attendance and gate receipts at sports events. As discussed above, the sports blackout rules are
intended to address concerns that MVPDs’ importation of a distant signal carrying a blacked-out sports
event could lead to lost revenue from ticket sales, which might cause sports leagues to expand the reach
of blackouts by refusing to sell their rights to sports events to all distant stations.104 The objective of the
sports blackout rules is not to ensure the profitability or financial viability of sports leagues, but rather to
ensure the overall availability of sports programming to the general public.105 Thus, we are interested in
gate receipts and other revenues of sports leagues only to the extent that such revenues are relevant to this
objective. Based on their review of several econometric studies of attendance at NFL games as well as
other team sports in the U.S. and Europe, the Sports Economists conclude that there is no evidence that
local blackouts of NFL games significantly affect either ticket sales or no-shows at those games.106 We
seek comment on the Sports Economists’ conclusion and the underlying studies on which it relies. Do
these studies support the conclusion that our sports blackout rules are no longer needed? For example, if
local blackouts of NFL games do not significantly affect either ticket sales or no-shows at those games,
does it follow that the cable sports blackout rule has no significant effect on attendance? Additionally, we
invite commenters to submit any additional studies or evidence showing the extent to which local
blackouts of NFL games impact gate receipts at those games and the extent to which the cable sports
blackout rule itself impacts gate receipts. In particular, we note that the NFL asserts that its blackout
policy, as supported by the Commission’s sports blackout rules, is designed to promote high attendance at
games.107 We invite the NFL and other interested commenters to submit any available data or evidence
indicating that the NFL’s blackout policy in fact has the intended effect of promoting attendance at
games. As noted above, only four cities were affected by local blackouts of NFL games in 2011:
Buffalo, Cincinnati, San Diego, and Tampa Bay; in 2012, local blackouts of NFL games were limited to
five cities: Buffalo, Cincinnati, Oakland, San Diego, and Tampa Bay. We seek comment on whether
certain teams or cities are routinely disproportionately affected by local blackouts of NFL games and, if
so, why. For example, some commenters suggest that certain cities are more severely impacted by
blackouts because of conditions in the local economy (e.g., locally high unemployment)108 or a large

104 See supra ¶ 7.
105 See id.
106 See Sports Economists Comments at 13-16. The Sports Economists list the studies upon which they rely and also
note that more studies can be found by consulting the references in the listed studies. See id. at 14, 20-22. In
addition, many of the individual consumers who commented indicate that blackouts of games do not motivate them
to purchase tickets. See, e.g., Paul Kane Comments at 1 (“The fact that a game isn’t sold out, and therefore isn’t
televised, does not in any way compel me to purchase tickets, as I cannot afford them.”); Mike Campbell Comments
at 1 (“If a game gets blacked out, it doesn’t entice me to buy a ticket, it just means I miss the game.”); Michael
Everett Comments at 1 (“I do not believe that enforcing [the sports blackout rule] causes the fan base to purchase
more tickets. All it does is antagonize fans who already subsidize the team and stadium.”); Paul Norconk
Comments at 1 (“Simply put, blackouts don’t make me by tickets to games, they just make me mad at the NFL.…”);
Corinne McDaniels Comments at 1 (“TV blackouts do not encourage fans to purchase tickets; they only drive fans
away from their beloved sport.”).
107 See NFL Comments at 7-9.
108 See Petition at 6-7 (“Markets with above-average unemployment tend to suffer more blackouts. In the 2010 and
2011 seasons, the Tampa Bay Buccaneers had 10 straight games blacked out and the Cincinnati Bengals have had
(continued….)
16

Federal Communications Commission

FCC 13-162

stadium capacity in a city with a relatively small population.109 If these are the factors that lead to failure
to sell out games, does blacking out a game promote attendance at future games in those cities? Are any
cities affected by these factors able to sell out games on a regular basis? If so, why? To what extent does
a team’s performance lead to poor attendance and blackouts? For example, are blackouts more common
when a team is not in playoff contention? Should this affect our analysis? If so, how?
25.
Are the sports blackout rules necessary to sustain gate receipts or other revenues for NFL
clubs? Commenters who assert that eliminating the sports blackout rules would result in a significant
reduction in gate receipts or other revenues for NFL clubs should quantify or estimate the anticipated
reduction and explain the basis for their estimates. We also seek comment on the connection between any
such lost revenues and the willingness of teams to enter into agreements allowing broadcast coverage of
their games, maximizing the availability of such broadcasts to the public
26.
There is no specific information in the record regarding the effect of blackouts on gate
receipts for any other sports events. We seek comment on whether blackouts have any significant effect
on gate receipts for any sports events other than NFL games. Commenters should provide any available
data or evidence to support their positions. What impact, if any, would elimination of the sports blackout
rules be expected to have on gate receipts and other revenues for these sports? To the extent that
commenters argue that eliminating the sports blackout rules would result in a significant reduction in gate
receipts or other revenues for these sports, we request that they quantify or estimate the anticipated
reduction and explain the basis for their estimates.
27.
Some commenters suggest that blacking out games may actually harm, rather than
support, ticket sales.110 We seek comment on whether blacking out sports events may have the
unintended effect of alienating sports fans and discouraging their attendance at home games. According
to the Petitioners, recent empirical studies suggest that televising professional sports may actually have a
positive effect on attendance at home games.111 Does televising sports events serve to generate interest
among sports fans and thereby promote higher attendance at home games in the long run? If this is the
case, then why would a professional sports league, such as the NFL, ever seek to black out games? For
example, do commenters believe that the NFL is operating pursuant to a mistaken understanding of the
relationship between blackouts and attendance? Or do commenters believe that the NFL has reason for
maintaining its blackout policy other than attendance? Commenters are invited to submit any studies or
evidence supporting the view that televising sports events encourages attendance at home games.
4.

Other Relevant Data

28.
We invite commenters to submit any other information or data that they believe is
relevant to our assessment of whether the sports blackout rules remain necessary to ensure the overall
(Continued from previous page)__________________
their last seven games blacked out.”); SFC Comments at 6 (noting that the unemployment rate for Tampa Bay was
among the highest in the nation in 2011 at 11%).
109 See Senator Blumenthal et al. Comments at 1 (“Ralph Wilson Stadium, home of the Buffalo Bills, seats 73,079.
Soldier Field, home of the Chicago Bears, seats 61,500. Buffalo’s population is 261,000; Chicago’s is nearly 2.7
million. Yet despite these vast differences in population, Buffalo is expected to fill its larger stadium or its fans will
not be able to watch their team play.”); Sports Economists Comments at 14 (“[T]he principal cause of differences in
attendance among NFL teams is differences in stadium capacity.”).
110 See SFC Comments at 11; see also George Crissman Comments at 1 (“Although few of the local team games
have been actually blacked-out, a great many more have been threatened with a blackout. The suspense of not
knowing if the game will be telecast has reduced my interest in the sport to the point where I no longer plan to watch
(or attend) the games. The blackout rule is a big reason why I no longer follow the local sports teams.”); Jennifer
Batt Comments at 1 (“when the Buffalo Bills black out games that do not sell out that is when I stop going to all
games for the rest of that season.”).
111 See SFC Comments at 12 & n.28.
17

Federal Communications Commission

FCC 13-162

availability of sports telecasts to the public. For example, are changes in the video distribution market in
the 40 years since the sports blackout rules were originally adopted, such as those described above in
paragraph 23, relevant to our assessment? To what extent do sports leagues distribute games via such
premium services today and what impact do such premium services have on the leagues’ revenues and
blackout policies? Commenters should explain how any such information supports or undercuts the
economic basis for the sports blackout rules.

C.

Elimination of the Sports Blackout Rules

29.
We propose to eliminate the sports blackout rules. With respect to professional football,
the sport most affected by the sports blackout rules, it appears from the existing record that television
revenues have replaced gate receipts as the most significant source of revenue for NFL clubs in the 40
years since the rules were first adopted.112 Moreover, the record received thus far indicates no direct link
between blackouts and increased attendance at NFL games.113 The record also suggests that the sports
blackout rules have little relevance for sports other than professional football, because the distribution
rights for most of the games in these sports are sold by individual teams, rather than the leagues.114
Finally, it appears that the sports blackout rules are unnecessary because sports leagues can pursue local
blackout protection through private contractual negotiations. Thus, it appears that the sports blackout
rules have become obsolete. Accordingly, if the record in this proceeding, as updated and supplemented
by commenters, confirms that the sports blackout rules are no longer necessary to ensure the overall
availability to the public of sports telecasts, we propose to repeal these rules. We seek comment on this
proposal.
30.
We seek comment on how elimination of the sports blackout rules would affect sports
leagues and teams and their ability, as holders of the exclusive distribution rights to their games, to
control the distribution of home games in the teams’ home territories. As discussed above, the sports
leagues, not the Commission, are the source of sports blackouts.115 And the Commission’s rules
supplement the contractual relationships between the leagues or individual teams that hold the rights to
the games and the entities to which they grant distribution rights by requiring MVPDs to black out games
that are required by the sports leagues or individual teams to be blacked out on local television stations.
To the extent that the Commission’s rules are no longer needed to assure the continued availability of
sports programming to the public, does the Commission have any continued interest in supplementing
these contractual relationships? Should it instead be left to the sports leagues and individual teams to
negotiate in the private marketplace whatever local blackout protection they believe they need?116
31.
Several commenters argue that the compulsory copyright licenses granted to MVPDs
under Sections 111 and 119 of the Copyright Act117 would make it difficult or impossible for sports
leagues or teams to negotiate the protection provided by the sports blackout rules through private
contracts.118 The compulsory licenses permit cable systems and, to a more limited extent, satellite carriers

112 See supra ¶ 22.
113 See supra ¶ 24.
114 See supra ¶ 19.
115 See supra ¶¶ 2-10; see also NAB Comments at 1, 3-6; Sports Economists Comments at 2-5; NAB Reply
Comments at 3; Network Affiliates Reply Comments at 1.
116 The Petitioners assert that if the sports leagues wish to continue their obsolete blackout policies, they should be
required to do so through private contractual negotiations with MVPDs. See SFC Comments at 8, 14; SFC Reply
Comments at 13-16; see also Sports Economists Comments at 18-19 (“If the FCC eliminates its blackout rules, the
NFL can continue the status quo through provisions in its television contracts.”).
117 See 17 U.S.C. §§ 111 (cable compulsory license), 119 (satellite compulsory license).
118 See NFL Comments at 4-6; Baseball Commissioner Comments at 10; NAB Comments at 8; Network Affiliates
Comments at 1-2.
18

Federal Communications Commission

FCC 13-162

to retransmit the signals of distant broadcast stations without obtaining the consent of the sports leagues
whose games are carried on those stations, when the carriage of such stations is permitted under FCC
rules.119 Absent the sports blackout rules, these commenters argue, an MVPD would be able to take
advantage of the compulsory license to retransmit the signal of a distant station carrying a game that has
been blacked out locally by a sports league or team.120
32.
We seek comment on how the compulsory licenses would affect the ability of sports
leagues and sports teams to obtain through market-based negotiations the same protection that is currently
provided by the sports blackout rules. The NFL contends that, since it contracts with the CBS, NBC, and
FOX networks for broadcast distribution of its games, it lacks privity with the local network affiliates that
carry the games and with the MVPDs that retransmit the broadcast signals.121 Thus, it claims that
ensuring that all of the other parties involved in the distribution of its games are contractually bound to
honor the NFL’s sports blackout policy would require rewriting hundreds of contracts, including contracts
between the NFL and the CBS, NBC, and FOX networks, contracts between the networks and their
affiliates, and contracts between the network affiliates and the MVPDs.122 The Petitioners assert that this
argument ignores the direct privity of contract the sports leagues have with the MVPDs themselves,
noting that virtually all MVPDs carry networks or game packages owned directly by the sports leagues,
such as the NFL Network, MLB Network, NBA TV, NHL Network, and NFL Sunday Ticket
(DIRECTV).123 We seek comment on the extent to which the sports leagues contract directly with
MVPDs for carriage of networks or game packages owned directly by the sports leagues. Do such
contracts already include some form of blackout protection and, if so, what protection do these contracts
provide? In this connection, the Commission has previously found that sports leagues routinely negotiate
with MVPDs greater blackout protection than that afforded by the sports blackout rules, and the
comments in the record support this finding.124 For example, sports leagues and teams contractually
negotiate with MVPDs blackouts of games throughout the teams’ home territories, which generally
extend well beyond the limited 35-mile zone of protection afforded by our sports blackout rules.125 In

119 Under the Copyright Act, unlicensed retransmission of the copyrighted material in a broadcast signal constitutes
copyright infringement. See 17 U.S.C. § 111(b). The Copyright Act grants cable systems a compulsory license for
the retransmission of all local broadcast signals and distant signals that the Commission has permitted them to carry.
See id. § 111(c). The Copyright Act also grants satellite carriers a compulsory license to retransmit the signals of
local stations to any subscriber within a station’s local market (“local-into-local” service). See id. § 122(a). The
compulsory license granted to satellite carriers under the Copyright Act for distant stations is more limited than that
granted to cable systems. Satellite carriers may retransmit signals of superstations (non-network stations) to any
household and may retransmit the signals of distant network stations to subscribers only if local network stations are
unavailable to the subscribers as part of a local-into-local satellite package or over the air. See id. § 119(a); see also
47 U.S.C. § 339.
120 See NFL Comments at 4-6; Baseball Commissioner Comments at 10; NAB Comments at 8.
121 See NFL Comments at 6.
122 See id.
123 See SFC Reply Comments at 14.
124 See SHVERA Section 208 Report to Congress at ¶ 56; see also Baseball Commissioner Comments at 5 (“Indeed,
the scope of blackout protection afforded by the Sports Blackout Rule is much narrower than the protection that
[MLB] (and the other leagues) routinely negotiate in arms-length marketplace transactions….”).
125 See SHVERA Section 208 Report to Congress at ¶ 56; Baseball Commissioner Comments at 5 (“market-
negotiated blackouts typically extend to a team’s entire home territory, rather than only the limited 35-mile zone in
which the Sports Rule applies.”). For example, the NFL’s agreement with DIRECTV (NFL Sunday Ticket)
provides blackout protection throughout NFL teams’ home territories, which typically extend well beyond the 35-
mile zone of protection specified in the Commission’s blackout rules. Under this agreement, San Diego Chargers
fans that live in the Los Angeles area – more than 150 miles away from San Diego – are unable to watch the
Chargers on NFL Sunday Ticket if the game is not sold out 72 hours in advance. See
http://support.directv.com/app/answers/detail/a_id/484/kw/nfl%20sunday%20ticket%20blackouts/related/1 (“The
(continued….)
19

Federal Communications Commission

FCC 13-162

addition, the sports blackout rules afford blackout protection only to the home teams, whereas sports
leagues or teams often negotiate blackout protection for both the home and away teams.126 Accordingly,
if sports leagues and teams are able to obtain greater protection than that afforded under the sports
blackout rules in arm’s length marketplace negotiations, why do they need the sports blackout rules to
avoid the impact of the compulsory licenses?
33.
Moreover, the Commission has found that “[s]ports leagues control both broadcast
carriage and MVPD retransmission of their programming.”127 It observed that a broadcaster cannot carry
a sports event without the permission of the sports leagues or clubs that hold the rights to the event and,
under the retransmission consent rules, MVPDs, with limited exceptions, cannot carry a broadcaster’s
signal without the permission of the broadcaster.128 Thus, the Commission reasoned that a sports league
could prevent unwanted MVPD retransmission through its contracts with broadcasters by requiring, as a
term of carriage, the deletion of specific sports events.129 Because the sports leagues could obtain local
blackout protection through their contracts with broadcast stations, the Commission suggested that the
sports leagues may not need the sports blackout rules to prevent MVPDs from using the compulsory
licenses to carry blacked-out games.130 Instead, it stated that the sports blackout rules may serve primarily
as an enforcement mechanism for existing contracts between broadcasters and sports leagues.131 We seek
comment on this analysis. Could sports leagues or teams prevent MVPDs from retransmitting certain
sports events through their contracts with broadcasters? If so, especially given the popularity of certain
sports programming, would leagues such as the NFL be well positioned to secure blackout protection
through private contractual negotiations? Would leagues need to renegotiate existing contracts with
broadcasters to secure such protection? If so, should that affect our analysis? What effect, if any, would
the NFL’s lack of direct privity with the local network affiliates that carry the games have on its ability to
control MVPD retransmission? What are the costs and benefits to sports leagues and teams of our
elimination of the sports blackout rules? To the extent possible, we encourage commenters to quantify
any costs and benefits and to submit supporting data.
34.
We seek comment also on whether and how repeal of the sports blackout rules would
affect consumers. We received more than 7,500 comments on the Petition from individual consumers
who support elimination of the sports blackout rules. These comments indicate that sports blackouts,
while less frequent now than when the sport blackout rules were first adopted, are still a significant source
of frustration for consumers. Some of these consumers are disabled or elderly sports fans who are
physically unable to attend games in person and rely on television (either broadcast or pay TV) to watch
(Continued from previous page)__________________
NFL has extended certain team’s home territory to cover all markets based on the nearest NFL franchise. For
example, the San Diego Chargers home team territory has been extended to cover the Los Angeles area. This means
that any home Chargers game will be blacked out in the entire Chargers home territory on both NFL SUNDAY
TICKET and local CBS or FOX affiliates if it does not sell out at least 72 hours prior to kickoff.”). Similarly,
MVPDs that offer their subscribers MLB’s Extra Innings package are contractually required to black out specific
games on Extra Innings throughout the home territories of the teams participating in those games. See Senator
Blumenthal et al. Comments at 2; SHVERA Section 208 Report to Congress at ¶ 56; MLB Blackouts FAQ at
http://mlb.mlb.com/mlb/help/faq_blackout.jsp.
126 See SHVERA Section 208 Report to Congress at ¶ 56.
127 Id. at ¶ 59.
128 See id.; see also SFC Reply Comments at 12 (“[I]n granting retransmission consent to a pay-TV provider to carry
its signal locally, a broadcaster may demand that its signal not be used in another market, despite the fact that the
copyright statutes would allow it.”).
129 See SHVERA Section 208 Report to Congress at ¶ 59.
130 See id.
131 See id.
20

Federal Communications Commission

FCC 13-162

their favorite teams.132 Others complain that they can no longer afford to attend games due to high ticket
prices, the economy, or reduced income following retirement;133 that they already subsidize professional
sports through publicly funded stadiums and should be able to watch the games at home;134 or that they
pay a substantial premium to watch their favorite NFL team on DIRECTV’s NFL Sunday Ticket but are
sometimes unable to watch due to a blackout, even though they may live 150 miles or more from the
team’s stadium.135 We seek comment on what impact, if any, repeal of the Commission’s sports blackout
rules would have on these and other consumers.
35.
The Petitioners acknowledge that eliminating the Commission’s sports blackout rules
alone likely would not end local sports blackouts as sports fans may wish.136 We note that the leagues’
underlying blackout policies would remain, and, as discussed above, the leagues may be able to obtain the
same blackout protection provided under our rules through free market negotiations.137 The leagues also
could still require local television stations to black out games; thus, consumers that rely on over-the-air
television would still be unable to view blacked-out games.138 Moreover, repeal of our sports blackout
rules alone would not provide relief to consumers that are subject to blackouts resulting from the leagues’
use of expansive home territories.139 Nevertheless, the Petitioners assert that, “unless and until the
Commission eliminates the [sports blackout rules], the sports leagues will be under no pressure to
contractually negotiate for the protection that they claim is necessary.”140 The Petitioners suggest that, if
the leagues find that such negotiations would be too daunting, eliminating the sports blackout rules may
compel the leagues to lower ticket prices until all seats are sold out or perhaps to end blackouts
altogether.141 We seek comment on whether there is any benefit to consumers of repealing the sports
blackout rules if the sports leagues’ underlying blackout policies remain. Is removing unnecessary or
obsolete regulations in itself a sufficient justification for eliminating the sports blackout rules, even if
there is no direct or immediate benefit to consumers?142 If the evidence in this proceeding, including any
data or studies submitted by commenters, suggests that there are no tangible benefits to retaining the
sports blackout rules but that these rules also do not cause any tangible harms, should the Commission
repeal the sports blackout rules? Would removing the Commission’s tacit endorsement of the leagues’
blackout policies serve the public interest? Are the leagues more likely to relax or reconsider their
blackout policies if the Commission’s sports blackout rules are repealed? How does our analysis of the

132 See, e.g., Dora Lindemuth Comments at 1; Jane O’Boyle Comments at 1; Kevin Hanna Comments at 1; Jane
Beaudet Comments at 1; Richard Cunningham Comments at 1; Ron Williamson Comments at 1; Kenneth B.
Agbayani Comments at 1; Karen Monett Comments at 1; Leo Pagliei Comments at 1.
133 See, e.g., John Hass Comments at 1; Debra Posey Comments at 1; Larry D. Cover Comments at 1; Melvin
Dalrymple Comments at 1; Vanessa Hernandez Comments at 1; Mary Cross Comments at 1.
134 See, e.g., Roger Gordon Comments at 1; Patrick Moran Comments at 1; Terry Hatcher Comments at 1; Kimberly
Burke Comments at 1; Robert Johnson Comments at 1; Kelly Madruga Comments at 1; David J. Reynoso
Comments at 1; Daryl Masamitsu Comments at 1.
135 See, e.g., Tim Rose Comments at 1; Daniel Smith Comments at 1; Robert McDermott Comments at 1; David
Coffaro Comments at 1; David Rea Comments at 1; Jon Witt Comments at 1; Michael Myers Comments at 1;
Edward Smith Comments at 1; Michael E. Olin Comments at 1. See supra n.125.
136 See SFC Reply Comments at 9.
137 See supra ¶¶ 32-33
138 See NFL Comments at 13.
139 See supra nn.94, 125.
140 See SFC Reply Comments at 16.
141 See id.
142 See Sports Economists Comments at 19 (noting that one of the main reasons to abandon the sports blackout rules
is “to get rid of unnecessary regulation”).
21

Federal Communications Commission

FCC 13-162

issues differ between professional sports leagues which have been granted exemptions from the antitrust
laws and sports leagues which have not been granted antitrust protections?
36.
Further, we invite comment on any potential harm to consumers of eliminating the sports
blackout rules. Some commenters express concern that eliminating the sports blackout rules could
accelerate the migration of sports from free over-the-air television to pay TV, which would be harmful to
consumers who cannot afford pay TV.143 As noted above, the compulsory copyright licenses granted to
MVPDs apply to the retransmission of broadcast signals, not to pay TV content.144 According to NAB, if
the sports blackout rules are eliminated, “sports leagues wishing to retain control over distribution of their
content would have an incentive to move to pay platforms where the compulsory license would not
undermine their private agreements.”145 Similarly, the NFL asserts that eliminating the sports blackout
rules “would make broadcast television distribution more difficult, expensive and uncertain and
accordingly would make cable network distribution a more appealing prospect.”146 What percentage of
consumers watch the sports programming they view on broadcast television channels rather than pay TV
or via the Internet using premium services such as MLB.tv? Would repeal of the sports blackout rules
hasten the migration of NFL games from broadcast television channels to pay TV? If so, is it appropriate
for the Commission to have the objective of preventing such a migration? We note that the NFL recently
extended its contracts with the CBS, FOX, and NBC television networks, ensuring that many NFL games
will remain on broadcast television channels at least through the 2022 season.147 In view of these contract
extensions, it appears unlikely that NFL games would migrate further from broadcast television channels
to pay TV in the near future.148 We nevertheless seek comment on whether repeal of the sports blackout
rules would likely encourage migration of NFL games to pay TV in the immediate future or in the longer
term. What effect, if any, would repeal of the sports blackout rules have on migration to pay TV of sports
other than professional football? In this regard, the record suggests that other professional sports teams
already distribute a majority of their regular season games via RSNs and other cable networks.149 Is
elimination of the sports blackout rules likely to result in any further migration of these sports from
broadcast television channels to pay TV? Are there any other potential harms to consumers from
repealing the sports blackout rules? We encourage commenters to quantify, to the extent possible, any
benefits and costs to consumers of eliminating the sports blackout rules and to submit supporting data.
37.
Some commenters argue that eliminating the sports blackout rules would undermine
broadcasters’ local program exclusivity and harm localism.150 These commenters assert that the sports

143 See NAB Comments at 8; NAB Reply Comments at 4; NFL Comments at 13; NFL Reply Comments at 2;
Network Affiliates Comments at 2.
144 See supra ¶ 31.
145 See NAB Comments at 8; see also Network Affiliates Reply Comments at 2 (“Because sports leagues would be
limited in their ability to manage the television distribution of their events, they would have a substantial incentive
to move their programming to pay-television services, with whom compulsory copyright license regime would not
undermine private distribution agreements.”).
146 See NFL Comments at 13.
147 See id. at 3. The Sports Economists note that the NFL has moved Monday Night Football (17 games) from ABC
to ESPN, and in 2012 televised 15 Thursday night games on NFL Network. See Sports Economists Comments at 17.
148 See SFC Reply Comments at 8 (asserting that “[t]he recently announced multi-year, multi-billion dollar NFL
broadcast agreements would probably remain in effect regardless of any changes” to the sports blackout rules). We
seek comment on the accuracy of this prediction.
149 See NFL Comments at 10 (“the migration of sports to cable television networks has been pronounced, with every
other major sport moving a majority of its regular season games (and indeed, many playoff games) to cable
television networks”).
150 See NAB Comments at 6-7; Network Affiliates Reply Comments at 1-2; see also NFL Comments at 2. See also
H.R. Rep. No. 106-86(I), at 10 (“the Committee reasserts the importance of protecting and fostering the system of
(continued….)
22

Federal Communications Commission

FCC 13-162

blackout rules, together with the network non-duplication and syndicated exclusivity rules, support local
broadcasters’ investments in high quality, diverse informational and entertainment programming.151 By
hindering the ability of local broadcast stations to obtain and enforce exclusive local program rights, they
assert, elimination of the sports blackout rules would make it more difficult for the stations to attract
advertising, which in turn would reduce their ability to invest in local information programming and
popular programming.152 Would elimination of the sports blackout rules have a negative impact on
localism? What, if any, costs and benefits would repeal of the sports blackout rules have on broadcasters?
To the extent possible, we encourage commenters to quantify any costs and benefits and to submit data
supporting their positions.
38.
We seek comment also on whether and how elimination of the sports blackout rules
would affect any other entities. Some commenters assert that under the Copyright Act any change in the
sports blackout rules will trigger a proceeding before the Copyright Royalty Tribunal to adjust the
compulsory licensing rates that cable systems pay.153 Would such a rate adjustment proceeding be
mandatory or discretionary on the part of the Copyright Royalty Tribunal? In this regard, we note that the
Copyright Act provides that, if the sports blackout rules are changed, the compulsory licensing rates “may
be adjusted
to assure that such rates are reasonable in light of the changes.”154 What burdens and costs
would a rate adjustment proceeding impose on the Copyright Royalty Tribunal and any other entities?
Are there any other entities that would be impacted by elimination of the sports blackout rules? If so,
what are the benefits and costs of elimination for those entities? We request that commenters quantify
any benefits and costs to the extent possible and submit supporting data.
39.
Finally, we seek comment on whether, as an alternative to outright repeal of the sports
blackout rules, we should make modifications to these rules. If so, what modifications should we make,
and why would such modifications be preferable to repeal of the sports blackout rules? Commenters that
propose any such modifications should quantify the benefits and costs of their proposals and provide
supporting data.

IV.

PROCEDURAL MATTERS

A.

Ex Parte Presentations

40.
The proceeding this Notice initiates shall be treated as a “permit-but-disclose” proceeding
in accordance with the Commission’s ex parte rules.155 Persons making ex parte presentations must file a
copy of any written presentation or a memorandum summarizing any oral presentation within two
business days after the presentation (unless a different deadline applicable to the Sunshine period applies).
(Continued from previous page)__________________
television networks as they relate to the concept of localism. It is well recognized that television broadcast stations
provide valuable programming tailored to local needs, such as news, weather, special announcements and
information related to local activities. To that end, the Committee has adopted provisions that grant local broadcast
stations … network nonduplication, syndicated exclusivity and sports blackout provisions to protect local
broadcasters’ program exclusivity rights.”). But see Cable Sports Blackout Order, 54 FCC Rcd at 277-278, ¶¶ 40-
43 (noting that the Commission has restricted the number of distant signals which may be imported into television
markets by cable television systems and concluding that “the distant signals permitted will not adversely affect local
television service”).
151 See NAB Comments at 7; Network Affiliates Reply Comments at 2.
152 See NAB Comments at 7; Network Affiliates Reply Comments at 2.
153 See Baseball Commissioner Comments at 9; NAB Reply Comments at 3-4; see also 17 U.S.C. § 801(b)(2)(C)
(“In the event of any change in the rules and regulations of the Federal Communications Commission with respect to
syndicated and sports program exclusivity after April 15, 1976, the rates established by section 111(d)(1)(B) may be
adjusted to assure that such rates are reasonable in light of the changes to such rules and regulations ….”).
154 See 17 U.S.C. § 801(b)(2)(C) (emphasis added).
155 47 C.F.R. §§ 1.1200 et seq.
23

Federal Communications Commission

FCC 13-162

Persons making oral ex parte presentations are reminded that memoranda summarizing the presentation
must (1) list all persons attending or otherwise participating in the meeting at which the ex parte
presentation was made, and (2) summarize all data presented and arguments made during the
presentation. If the presentation consisted in whole or in part of the presentation of data or arguments
already reflected in the presenter’s written comments, memoranda or other filings in the proceeding, the
presenter may provide citations to such data or arguments in his or her prior comments, memoranda, or
other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be
found) in lieu of summarizing them in the memorandum. Documents shown or given to Commission
staff during ex parte meetings are deemed to be written ex parte presentations and must be filed
consistent with rule 1.1206(b). In proceedings governed by rule 1.49(f) or for which the Commission has
made available a method of electronic filing, written ex parte presentations and memoranda summarizing
oral ex parte presentations, and all attachments thereto, must be filed through the electronic comment
filing system available for that proceeding, and must be filed in their native format (e.g., .doc, .xml, .ppt,
searchable .pdf). Participants in this proceeding should familiarize themselves with the Commission’s ex
parte
rules.

B.

Initial Regulatory Flexibility Analysis.

41.
The Regulatory Flexibility Act of 1980, as amended (“RFA”), requires that a regulatory
flexibility analysis be prepared for notice and comment rule making proceedings, unless the agency
certifies that “the rule will not, if promulgated, have a significant economic impact on a substantial
number of small entities.” The RFA generally defines the term “small entity” as having the same
meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In
addition, the term “small business” has the same meaning as the term “small business concern” under the
Small Business Act. A “small business concern” is one which: (1) is independently owned and operated;
(2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the
Small Business Administration (SBA).
42.
With respect to this Notice, an Initial Regulatory Flexibility Analysis (“IRFA”) under the
Regulatory Flexibility Act156 is contained in Appendix D. Written public comments are requested in the
IFRA, and must be filed in accordance with the same filing deadlines as comments on the NPRM, with a
distinct heading designating them as responses to the IRFA. The Commission will send a copy of this
NPRM, including the IRFA, in a report to Congress pursuant to the Congressional Review Act. In
addition, a copy of this NPRM and the IRFA will be sent to the Chief Counsel for Advocacy of the SBA,
and will be published in the Federal Register.

C.

Paperwork Reduction Act Analysis.

43.
This document does not contain proposed information collections subject to the
Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In addition, therefore, it does not contain
any new or modified information collection burden for small business concerns with fewer than 25
employees, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44
U.S.C. § 3506(c)(4).

D.

Comment Filing Procedures

44.
Pursuant to Sections 1.415 and 1.419 of the Commission’s rules, 47 C.F.R. §§ 1.415,
1.419, interested parties may file comments and reply comments on or before the dates indicated on the
first page of this document. Comments may be filed using the Commission’s Electronic Comment Filing
System (ECFS). See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998).

Electronic Filers: Comments may be filed electronically using the Internet by accessing the
ECFS: http://fjallfoss.fcc.gov/ecfs2/.

156 See 5 U.S.C. § 603.
24

Federal Communications Commission

FCC 13-162


Paper Filers: Parties who choose to file by paper must file an original and one copy of each
filing. If more than one docket or rulemaking number appears in the caption of this proceeding,
filers must submit two additional copies for each additional docket or rulemaking number.

Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-
class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission’s
Secretary, Office of the Secretary, Federal Communications Commission.

All hand-delivered or messenger-delivered paper filings for the Commission’s Secretary
must be delivered to FCC Headquarters at 445 12th St., SW, Room TW-A325,
Washington, DC 20554. The filing hours are 8:00 a.m. to 7:00 p.m. All hand deliveries
must be held together with rubber bands or fasteners. Any envelopes and boxes must be
disposed of before entering the building.

Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority
Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.

U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th
Street, SW, Washington DC 20554.

People with Disabilities: To request materials in accessible formats for people with disabilities
(braille, large print, electronic files, audio format), send an e-mail to fcc504@fcc.gov or call the
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).
45.
Additional Information: For additional information on this proceeding, please contact
Kathy Berthot of the Media Bureau, Policy Division, Kathy.Berthot@fcc.gov, (202) 418-7454.

V.

ORDERING CLAUSES

46.
Accordingly,

IT IS ORDERED

that, pursuant to the authority contained in Sections 1,
4(i), 4(j), 303(r), 339(b), and 653(b) of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151,
154(i), 154(j), 303(r), 339(b), 573(b), this Notice of Proposed Rulemaking

IS ADOPTED

.
47.

IT IS FURTHER ORDERED

that the Commission’s Consumer and Governmental
Affairs Bureau, Reference Information Center,

SHALL SEND

a copy of this Notice of Proposed
Rulemaking, including the Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of
the Small Business Administration.
48.

IT IS FURTHER ORDERED

that the Petition for Rulemaking filed by Sports Fan
Coalition, Inc. et al.

IS GRANTED

.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
25

Federal Communications Commission

FCC 13-162

APPENDIX A

List of Commenters

Comments filed in MB Docket No. 12-3

Congressman Brian Higgins
Economists Robert Baade of Forest College, Dennis Coates of the University of Maryland Baltimore
County, Rodney Fort of the University of Michigan, Ira Horowitz of the University of Florida, Brad
Humphreys of the University of Alberta, Roger G. Noll of Stanford University, Allen Sanderson of the
University of Chicago, John J. Siegfried of Vanderbilt University, and Andrew Zimbalist of Smith
College (“Sports Economists”)
National Association of Broadcasters (“NAB”)
The National Football League (“NFL”)
The Office of the Commissioner of Baseball (“Baseball Commissioner”)
Senators Richard Blumenthal, Sherrod Brown, Tom Harkin, Debbie Stabenow, and Frank Lautenberg
(deceased) (“Senator Blumenthal et al.”)
Sports Fan Coalition, Inc., National Consumers League, Public Knowledge, League of Fans, and Media
Access Project (“Petitioners” or “SFC”)

Reply Comments filed in MB Docket No. 12-3

CBS Television Network Affiliates Association, NBC Television Affiliates, and ABC Television
Affiliates Association (“Network Affiliates”)
National Association of Broadcasters (“NAB”)
The National Football League (“NFL”)
Sports Fan Coalition, Inc., National Consumers League, Public Knowledge, League of Fans, and Media
Access Project (“Petitioners” or “SFC”)
In addition, a number of individual consumers filed comments in this proceeding.
26

Federal Communications Commission

FCC 13-162

APPENDIX B

Text of Sports Blackout Rules

§ 76.111 Cable sports blackout.
(a) No community unit located in whole or in part within the specified zone of a television broadcast
station licensed to a community in which a sports event is taking place, shall, on request of the holder of
the broadcast rights to that event, or its agent, carry the live television broadcast of that event if the event
is not available live on a television broadcast station meeting the criteria specified in § 76.128. For
purposes of this section, if there is no television station licensed to the community in which the sports
event is taking place, the applicable specified zone shall be that of the television station licensed to the
community with which the sports event or team is identified, or, if the event or local team is not identified
with any particular community, the nearest community to which a television station is licensed.
(b) Notification of the programming to be deleted pursuant to this section shall include the following
information:
(1) As to programming to be deleted from television broadcast signals regularly carried by the community
unit:
(i) The name and address of the party requesting the program deletion;
(ii) The date, time and expected duration of the sports event the television broadcast of which is to be
deleted;
(iii) The call letters of the television broadcast station(s) from which the deletion is to be made.
(2) As to programming to be deleted from television broadcast signals not regularly carried by the
community unit:
(i) The name and address of the party requesting the program deletion;
(ii) The date, time and expected duration of the sports event the television broadcast of which is to be
deleted.
(c) Notifications given pursuant to this section must be received, as to regularly scheduled events, no later
than the Monday preceding the calendar week (Sunday-Saturday) during which the program deletion is to
be made. Notifications as to events not regularly scheduled and revisions of notices previously submitted,
must be received within twenty-four (24) hours after the time of the telecast to be deleted is known, but in
any event no later than twenty-four (24) hours from the time the subject telecast is to take place.
(d) Whenever, pursuant to this section, a community unit is required to delete a television program on a
signal regularly carried by the community unit, such community unit may, consistent with the rules
contained in Subpart F of this part, substitute a program from any other television broadcast station. A
program substituted may be carried to its completion, and the community unit need not return to its
regularly carried signal until it can do so without interrupting a program already in progress.
(e) The provisions of this section shall not be deemed to require the deletion of any portion of a television
signal which a community unit was lawfully carrying prior to March 31, 1972.
(f) The provisions of this section shall not apply to any community unit having fewer than 1,000
subscribers.
§76.127 Satellite sports blackout.
(a) Upon the request of the holder of the broadcast rights to a sports event, or its agent, no satellite carrier
shall retransmit to subscribers within the area comprising the specified zone a “nationally distributed
superstation” or “network station” carrying the live television broadcast of a sports event if the event is
not available live on a television broadcast station meeting the criteria specified in § 76.128. For purposes
of this section, if there is no television station licensed to the community in which the sports event is
taking place, the applicable specified zone shall be that of the television station licensed to the community
with which the sports event or team is identified, or, if the event or local team is not identified with any
particular community, the nearest community to which a television station is licensed.
27

Federal Communications Commission

FCC 13-162

(b) Notification of the programming to be deleted pursuant to this Section shall include the following
information:
(1) The name and address of the party requesting the program deletion;
(2) The date, time and expected duration of the sports event the television broadcast of which is to be
deleted;
(3) The call letters of the nationally distributed superstation or network station(s) from which the deletion
is to be made;
(4) The U.S. postal zip codes that encompass the specified zone.
(c) Notifications given pursuant to this Section must be received by the satellite carrier, as to regularly
scheduled events, within forty-eight (48) hours after the time of the telecast to be deleted is known, and
no later than the Monday preceding the calendar week (Sunday-Saturday) during which the program
deletion is to be made. Notifications as to events not regularly scheduled and revisions of notices
previously submitted, must be received within twenty-four (24) hours after the time of the telecast to be
deleted is known, but in any event no later than twenty-four (24) hours from the time the subject telecast
is to take place.
(d) A satellite carrier is not required to delete a sports event from an individual subscriber who is located
outside the specified zone, notwithstanding that the subscriber lives within a zip code provided by the
holder of the broadcast rights pursuant to paragraph (b) of this Section.
(e) A satellite carrier is not required to delete a sports event if it has fewer than 1,000 subscribers within
the relevant specified zone who subscribe to the nationally distributed superstation or network station
carrying the sports event for which deletion is requested pursuant to paragraph (b) of this Section.
(f) Notwithstanding paragraph (c) of this Section, for sports events to be deleted on or before March 31,
2001, notification must be received by satellite carriers at least 60 full days prior to the day the telecast is
to be deleted.
§ 76.128 Application of sports blackout rules.
The cable and satellite sports blackout rules (§§ 76.111 and 76.127) may apply when the sports event is
not available live on any of the following television broadcast stations carried by a cable system or other
MVPD:
(a) Television broadcast stations within whose specified zone the community of the community unit or
the community within which the sporting event is taking place is located, in whole or in part;
(b) For communities in television markets other than major markets as defined in § 76.51, television
broadcast stations within whose Grade B contours the community of the community unit or the
community within which the sporting event is taking place is located, in whole or in part;
(c) Television broadcast stations licensed to other designated communities which are generally considered
to be part of the same television market (Example: Burlington, Vt.–Plattsburgh, N.Y. or Cincinnati,
Ohio–Newport, Ky., television markets);
(d) Television broadcast stations that are significantly viewed, pursuant to § 76.54, in the community unit
or community within the specified zone.
§ 76.1506 Carriage of television broadcast signals.
(m) Section 76.67 shall apply to open video systems in accordance with the provisions contained in this
paragraph.
(1) Any provisions of section 76.67 that refers to a “community unit” shall apply to an open video system
or that portion of an open video system that operates or will operate within a separate and distinct
community or municipal entity (including unincorporated communities within unincorporated areas and
including single, discrete unincorporated areas).
(2) Notification of programming to be deleted pursuant to this section shall be served on the open video
system operator. The open video system operator shall make all notifications immediately available to the
appropriate video programming providers on its open video system. An open video system operator shall
not be subject to sanctions for any violation of these rules by an unaffiliated program supplier if the
28

Federal Communications Commission

FCC 13-162

operator provided proper notices to the program supplier and subsequently took prompt steps to stop the
distribution of the infringing program once it was notified of a violation.
29

Federal Communications Commission

FCC 13-162

APPENDIX C

Proposed Rules

The Federal Communications Commission proposes to amend Part 76 of Title 47 of the Code of Federal
Regulations (CFR) as set forth below:

PART 76 – Multichannel Video and Cable Television Service

1.
The authority citation for Part 76 continues to read as follows:
AUTHORITY: 47 U.S.C. 151, 152, 153, 154, 301, 302, 302a, 303, 303a, 307, 308, 309, 312, 315, 317, 325,
339, 340, 341, 503, 521, 522, 531, 532, 534, 535, 536, 537, 543, 544, 544a, 545, 548, 549, 552, 554, 556,
558, 560, 561, 571, 572, 573.
2.
Remove §§ 76.111, 76.127 and 76.128.
3.
Amend § 76.120 by removing paragraph (e)(3) and revising the heading of § 76.120 to
read as follows:
§ 76.120 Network non-duplication protection and syndicated exclusivity rules for satellite carriers:
Definitions.

4.
Amend § 76.130 by revising the first sentence to read as follows:
§ 76.130 Substitutions.
Whenever, pursuant to the requirements of the network program non-duplication or syndicated program
exclusivity rules, a satellite carrier is required to delete a television program from retransmission to
satellite subscribers within a zip code area, such satellite carrier may, consistent with this Subpart,
substitute a program from any other television broadcast station for which the satellite carrier has
obtained the necessary legal rights and permissions, including but not limited to copyright and
retransmission consent. * * *
5.
Amend § 76.1506 by removing paragraph (m) and redesignating paragraphs (n) and (o)
as paragraphs (m) and (n).
30

Federal Communications Commission

FCC 13-162

APPENDIX D

Initial Regulatory Flexibility Act Analysis

1.
As required by the Regulatory Flexibility Act of 1980, as amended (“RFA”),1 the
Commission has prepared this present Initial Regulatory Flexibility Analysis (“IRFA”) concerning the
possible significant economic impact on small entities by the policies and rules proposed in the Notice of
Proposed Rulemaking
(“NPRM”). Written public comments are requested on this IRFA. Comments
must be identified as responses to the IRFA and must be filed by the deadlines for comments provided on
the first page of the NPRM. The Commission will send a copy of the NPRM, including this IRFA, to the
Chief Counsel for Advocacy of the Small Business Administration (“SBA”).2 In addition, the NPRM and
IRFA (or summaries thereof) will be published in the Federal Register.3

A.

Need for, and Objectives of, the Proposed Rule Changes

2.
The NPRM proposes to eliminate the sports blackout rules, which prohibit certain
multichannel video programming distributors (“MVPDs”) (cable, satellite, and open video systems
(“OVS”)) from retransmitting, within a protected local blackout zone, the signal of a distant broadcast
station carrying a live sports event if the event is not available live on a local television broadcast station.4
The sports blackout rules were originally adopted nearly 40 years ago, when the primary source of
revenue for sports leagues was game ticket sales.5 The sports blackout rules were intended to ensure that
the potential loss of ticket sales resulting from MVPD retransmission of distant stations did not cause
sports leagues to refuse to sell their rights to sports events to the distant stations, thereby reducing the
overall availability of sports telecasts to the public.6 The sports industry has changed dramatically in the
past four decades, however, and it appears that the sports blackout rules may no longer be necessary to
assure the overall availability of sports programming.
3.
The NPRM tentatively concludes that the Commission has the authority to eliminate the
cable sports blackout rule under its general rulemaking power, given that Congress did not explicitly
mandate that the Commission adopt the cable sports blackout rule.7 Because Congress directed the
Commission to extend the sports blackout protection applied to cable to satellite and OVS, the NPRM
seeks comment on whether the Commission also has the authority to repeal the sports blackout rules for
satellite and OVS.8 In addition, the NPRM seeks comment on whether there is a continued need for the

1 See 5 U.S.C. § 603. The RFA, see 5 U.S.C. §§ 601 – 612, has been amended by the Small Business Regulatory
Enforcement Fairness Act of 1996 (“SBREFA”), Pub. L. No. 104-121, Title II, 110 Stat. 857 (1996).
2 See 5 U.S.C. § 603(a).
3 See id.
4 See 47 C.F.R. §§ 76.111, 76.127, 76.128, 76.1506(m).
5 See Amendment of Part 76 of the Commission’s Rules and Regulations Relative to Cable Television Systems and
the Carriage of Sports Programs on Cable Television Systems
, Report and Order, 54 FCC 2d 265, 282, ¶ 57 (1975),
recon. granted in part, denied in part, 56 FCC 2d 561 (1975). The sports blackout rules were initially applied to
cable systems and later extended to OVS and satellite systems. See Implementation of Section 302 of the
Telecommunications Act of 1996,
Second Report and Order, 11 FCC Rcd 18223, 18226-7, ¶ 1 (1996), recon.
granted in part, denied in part
, Third Report and Order and Second Order on Reconsideration, 11 FCC Rcd 20227
(1996); Implementation of the Satellite Home Viewer Improvement Act of 1999: Application of Network Non-
Duplication, Syndicated Exclusivity, and Sports Blackout Rules to Satellite Retransmissions of Broadcast Signals
,
Report and Order, 15 FCC Rcd 21688, 21689, ¶ 1 (2000), recon. granted in part, denied in part, Order on
Reconsideration, 17 FCC Rcd 27875 (2002).
6 See id.
7 See NPRM at ¶ 15.
8 See id.
31

Federal Communications Commission

FCC 13-162

sports blackout rules. In particular, the NPRM seeks comment on whether the economic rationale
underlying the sports blackout rules is still valid.9 Finally, the NPRM proposes to repeal the sports
blackout rules and seeks comment on the benefits and costs of such repeal on interested parties, including
the sports leagues, broadcasters, and consumers.10

B.

Legal Basis

4.
The proposed action is authorized pursuant to the authority found in Sections 1, 4(i), 4(j),
303(r), 339(b), and 653(b) of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151, 154(i),
154(j), 303(r), 339(b), and 573(b).

C.

Description and Estimate of the Number of Small Entities to Which the Proposed
Rules Will Apply

5.
The RFA directs agencies to provide a description of, and where feasible, an estimate of
the number of small entities that may be affected by the proposed rules, if adopted.11 The RFA generally
defines the term “small entity” as having the same meaning as the terms “small business,” “small
organization,” and “small governmental jurisdiction.”12 In addition, the term “small business” has the
same meaning as the term “small business concern” under the Small Business Act.13 A small business
concern is one which: (1) is independently owned and operated; (2) is not dominant in its field of
operation; and (3) satisfies any additional criteria established by the SBA.14 Below, we provide a
description of such small entities, as well as an estimate of the number of such small entities, where
feasible.
6.
Wired Telecommunications Carriers. The 2007 North American Industry Classification
System (“NAICS”) defines “Wired Telecommunications Carriers” as follows: “This industry comprises
establishments primarily engaged in operating and/or providing access to transmission facilities and
infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using
wired telecommunications networks. Transmission facilities may be based on a single technology or a
combination of technologies. Establishments in this industry use the wired telecommunications network
facilities that they operate to provide a variety of services, such as wired telephony services, including
VoIP services; wired (cable) audio and video programming distribution; and wired broadband Internet
services. By exception, establishments providing satellite television distribution services using facilities
and infrastructure that they operate are included in this industry.”15 All establishments listed above are
included in the SBA’s broad economic census category, Wired Telecommunications Carriers,16 which
was developed for small wireline businesses. Under this category, the SBA deems a wireline business to
be small if it has 1,500 or fewer employees.17 Census data for 2007 shows that there were 31,996

9 See id. at ¶¶16-28.
10 See id. at ¶¶29-39.
11 5 U.S.C. § 603(b)(3).
12 5 U.S.C. § 601(6).
13 5 U.S.C. § 601(3) (incorporating by reference the definition of “small-business concern” in 15 U.S.C. § 632).
Pursuant to 5 U.S.C. § 601(3), the statutory definition of a small business applies “unless an agency, after
consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public
comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and
publishes such definition(s) in the Federal Register.” 5 U.S.C. § 601(3).
14 15 U.S.C. § 632.
15 U.S. Census Bureau, 2012 NAICS Definitions, “517110 Wired Telecommunications Carriers,” at
http://www.census.gov/cgi-bin/sssd/naics/naicsrch.
16 See 13 C.F.R. § 121.201; 2012 NAICS code 517110.
17Id.
32

Federal Communications Commission

FCC 13-162

establishments that operated that year.18 Of this total, 30,178 establishments had fewer than 100
employees, and 1,818 establishments had 100 or more employees.19 Therefore, under this size standard,
the majority of such businesses can be considered small entities.
7.
Cable Television Distribution Services. Since 2007, these services have been defined
within the broad economic census category of Wired Telecommunications Carriers, which was developed
for small wireline businesses. This category is defined as follows: “This industry comprises
establishments primarily engaged in operating and/or providing access to transmission facilities and
infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using
wired telecommunications networks. Transmission facilities may be based on a single technology or a
combination of technologies. Establishments in this industry use the wired telecommunications network
facilities that they operate to provide a variety of services, such as wired telephony services, including
VoIP services; wired (cable) audio and video programming distribution; and wired broadband Internet
services.”20 The SBA has developed a small business size standard for this category, which is: all such
businesses having 1,500 or fewer employees.21 Census data for 2007 shows that there were 31,996
establishments that operated that year.22 Of this total, 30,178 establishments had fewer than 100
employees, and 1,818 establishments had 100 or more employees.23 Therefore, under this size standard,
we estimate that the majority of such businesses can be considered small entities.
8.
Cable Companies and Systems. The Commission has also developed its own small
business size standards, for the purpose of cable rate regulation. Under the Commission’s rules, a “small
cable company” is one serving 400,000 or fewer subscribers nationwide.24 Industry data shows that there
were 1,141 cable companies at the end of June 2012.25 Of this total, all but ten cable operators nationwide

18 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information:
Subject Series – Estab and Firm Size: Employment Size of Establishments for the United States: 2007 – 2007
Economic Census,” NAICS code 517110, Table EC0751SSSZ2; available at
http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml.
19 Id.
20 U.S. Census Bureau, 2012 NAICS Definitions, “517110 Wired Telecommunications Carriers” (partial definition),
at http://www.census.gov/cgi-bin/sssd/naics/naicsrch. Examples of this category are: broadband Internet service
providers (e.g., cable, DSL); local telephone carriers (wired); cable television distribution services; long-distance
telephone carriers (wired); closed circuit television (CCTV) services; VoIP service providers, using own operated
wired telecommunications infrastructure; direct-to-home satellite system (DTH) services; telecommunications
carriers (wired); satellite television distribution systems; and multichannel multipoint distribution services (MMDS).
21 13 C.F.R. § 121.201; 2012 NAICS code 517110.
22 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information:
Subject Series – Estab and Firm Size: Employment Size of Establishments for the United States: 2007 – 2007
Economic Census,” NAICS code 517110, Table EC0751SSSZ2; available at
http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml.
23 Id.
24 47 C.F.R. § 76.901(e). The Commission determined that this size standard equates approximately to a size
standard of $100 million or less in annual revenues. Implementation of Sections of the Cable Television Consumer
Protection And Competition Act of 1992: Rate Regulation,
MM Docket No. 92-266, MM Docket No. 93-215, Sixth
Report and Order and Eleventh Order on Reconsideration, 10 FCC Rcd 7393, 7408, ¶ 28 (1995).
25 NCTA, Industry Data, Number of Cable Operating Companies (June 2012), http://www.ncta.com/Statistics.aspx
(visited Sept. 28, 2012). Depending upon the number of homes and the size of the geographic area served, cable
operators use one or more cable systems to provide video service. See Annual Assessment of the Status of
Competition in the Market for Delivery of Video Programming,
MB Docket No. 12-203, Fifteenth Report, 28 FCC
Rcd 10496, 10505-6, ¶ 24 (2013) (“15th Annual Competition Report).
33

Federal Communications Commission

FCC 13-162

are small under this size standard.26 In addition, under the Commission’s rate regulation rules, a “small
system” is a cable system serving 15,000 or fewer subscribers.27 Current Commission records show 4,945
cable systems nationwide.28 Of this total, 4,380 cable systems have less than 20,000 subscribers, and 565
systems have 20,000 or more subscribers, based on the same records. Thus, under this standard, we
estimate that most cable systems are small entities.
9.
Cable System Operators (Telecom Act Standard). The Communications Act of 1934, as
amended, also contains a size standard for small cable system operators, which is “a cable operator that,
directly or through an affiliate, serves in the aggregate fewer than 1 percent of all subscribers in the
United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate
exceed $250,000,000.”29 There are approximately 56.4 million incumbent cable video subscribers in the
United States today.30 Accordingly, an operator serving fewer than 564,000 subscribers shall be deemed a
small operator if its annual revenues, when combined with the total annual revenues of all its affiliates, do
not exceed $250 million in the aggregate.31 Based on available data, we find that all but ten incumbent
cable operators are small entities under this size standard.32 We note that the Commission neither
requests nor collects information on whether cable system operators are affiliated with entities whose
gross annual revenues exceed $250 million.33 Although it seems certain that some of these cable system
operators are affiliated with entities whose gross annual revenues exceed $250,000,000, we are unable at
this time to estimate with greater precision the number of cable system operators that would qualify as
small cable operators under the definition in the Communications Act.
10.
Television Broadcasting. This Economic Census category “comprises establishments
primarily engaged in broadcasting images together with sound. These establishments operate television
broadcasting studios and facilities for the programming and transmission of programs to the public.”34
The SBA has created the following small business size standard for such businesses: those having $14

26 See SNL Kagan, “Top Cable MSOs – 12/12 Q”; available at
http://www.snl.com/InteractiveX/TopCableMSOs.aspx?period=2012Q4&sortcol=subscribersbasic&sortorder=desc.
We note that, when applied to an MVPD operator, under this size standard (i.e., 400,000 or fewer subscribers) all
but 14 MVPD operators would be considered small. See NCTA, Industry Data, Top 25 Multichannel Video Service
Customers (2012), http://www.ncta.com/industry-data (visited Aug. 30, 2013). The Commission applied this size
standard to MVPD operators in its implementation of the CALM Act. See Implementation of the Commercial
Advertisement Loudness Mitigation (CALM) Act
, MB Docket No. 11-93, Report and Order, 26 FCC Rcd 17222,
17245-46, ¶ 37 (2011) (“CALM Act Report and Order”) (defining a smaller MVPD operator as one serving 400,000
or fewer subscribers nationwide, as of December 31, 2011).
27 47 C.F.R. § 76.901(c).
28 The number of active, registered cable systems comes from the Commission’s Cable Operations and Licensing
System (COALS) database on Aug. 28, 2013. A cable system is a physical system integrated to a principal headend.
29 47 U.S.C. § 543(m)(2); see 47 C.F.R. § 76.901(f) & nn. 1-3.
30 See NCTA, Industry Data, Cable Video Customers (2012), http://www.ncta.com/industry-data (visited Aug. 30,
2013).
31 47 C.F.R. § 76.901(f); see FCC Announces New Subscriber Count for the Definition of Small Cable Operator,
Public Notice, 16 FCC Rcd 2225 (Cable Services Bureau 2001).
32 See NCTA, Industry Data, Top 25 Multichannel Video Service Customers (2012), http://www.ncta.com/industry-
data (visited Aug. 30, 2013).
33 The Commission does receive such information on a case-by-case basis if a cable operator appeals a local
franchise authority’s finding that the operator does not qualify as a small cable operator pursuant to § 76.901(f) of
the Commission’s rules. See 47 C.F.R. § 76.901(f).
34 U.S. Census Bureau, 2012 NAICS Definitions, “515120 Television Broadcasting,” at http://www.census.gov./cgi-
bin/sssd/naics/naicsrch.
34

Federal Communications Commission

FCC 13-162

million or less in annual receipts.35 The Commission has estimated the number of licensed commercial
television stations to be 1,386.36 In addition, according to Commission staff review of the BIA Advisory
Services, LLC’s Media Access Pro Television Database on March 28, 2012, about 950 of an estimated
1,300 commercial television stations (or approximately 73 percent) had revenues of $14 million or less.37
We therefore estimate that the majority of commercial television broadcasters are small entities.
11.
We note, however, that in assessing whether a business concern qualifies as small under
the above definition, business (control) affiliations38 must be included. Our estimate, therefore, likely
overstates the number of small entities that might be affected by our action because the revenue figure on
which it is based does not include or aggregate revenues from affiliated companies. In addition, an
element of the definition of “small business” is that the entity not be dominant in its field of operation.
We are unable at this time to define or quantify the criteria that would establish whether a specific
television station is dominant in its field of operation. Accordingly, the estimate of small businesses to
which rules may apply does not exclude any television station from the definition of a small business on
this basis and is therefore possibly over-inclusive to that extent.
12.
In addition, the Commission has estimated the number of licensed noncommercial
educational (NCE) television stations to be 396.39 These stations are non-profit, and therefore considered
to be small entities.40
13.
Direct Broadcast Satellite (DBS) Service. DBS service is a nationally distributed
subscription service that delivers video and audio programming via satellite to a small parabolic “dish”
antenna at the subscriber’s location. DBS, by exception, is now included in the SBA’s broad economic
census category, Wired Telecommunications Carriers,41 which was developed for small wireline
businesses. Under this category, the SBA deems a wireline business to be small if it has 1,500 or fewer
employees.42 Census data for 2007 shows that there were 31,996 establishments that operated that year.43

35 13 C.F.R. § 121.201; 2012 NAICS code 515120.
36 See Broadcast Station Totals as of June 30, 2013, Press Release (MB rel.July 10, 2013) (“July 10, 2013 Broadcast
Station Totals Press Release
”), at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-322079A1.pdf.
37 We recognize that BIA’s estimate differs slightly from the FCC total given supra.
38 “[Business concerns] are affiliates of each other when one concern controls or has the power to control the other
or a third party or parties controls or has to power to control both.” 13 C.F.R. § 21.103(a)(1).
39 See July 10, 2013 Broadcast Station Totals Press Release.
40 See generally 5 U.S.C. §§ 601(4), (6).
41 See 13 C.F.R. § 121.201, 2012 NAICS code 517110. This category of Wired Telecommunications Carriers is
defined as follows: “This industry comprises establishments primarily engaged in operating and/or providing access
to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text,
sound, and video using wired telecommunications networks. Transmission facilities may be based on a single
technology or a combination of technologies. Establishments in this industry use the wired telecommunications
network facilities that they operate to provide a variety of services, such as wired telephony services, including VoIP
services; wired (cable) audio and video programming distribution; and wired broadband Internet services. By
exception, establishments providing satellite television distribution services using facilities and infrastructure that
they operate are included in this industry.
” (Emphasis added to text relevant to satellite services.) U.S. Census
Bureau, 2012 NAICS Definitions, “517110 Wired Telecommunications Carriers,” at http://www.census.gov/cgi-
bin/sssd/naics/naicsrch.
42 13 C.F.R. § 121.201; 2012 NAICS code 517110.
43 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information:
Subject Series – Estab and Firm Size: Employment Size of Establishments for the United States: 2007 – 2007
Economic Census,” NAICS code 517110, Table EC0751SSSZ2; available at
http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml.
35

Federal Communications Commission

FCC 13-162

Of this total, 30,178 establishments had fewer than 100 employees, and 1,818 establishments had 100 or
more employees.44 Therefore, under this size standard, the majority of such businesses can be considered
small entities. However, the data we have available as a basis for estimating the number of such small
entities were gathered under a superseded SBA small business size standard formerly titled “Cable and
Other Program Distribution.” The definition of Cable and Other Program Distribution provided that a
small entity is one with $12.5 million or less in annual receipts.45 Currently, only two entities provide
DBS service, which requires a great investment of capital for operation: DIRECTV and DISH Network.46
Each currently offer subscription services. DIRECTV and DISH Network each report annual revenues
that are in excess of the threshold for a small business. Because DBS service requires significant capital,
we believe it is unlikely that a small entity as defined under the superseded SBA size standard would have
the financial wherewithal to become a DBS service provider.
14.
Satellite Master Antenna Television (SMATV) Systems, also known as Private Cable
Operators (PCOs). SMATV systems or PCOs are video distribution facilities that use closed
transmission paths without using any public right-of-way. They acquire video programming and
distribute it via terrestrial wiring in urban and suburban multiple dwelling units such as apartments and
condominiums, and commercial multiple tenant units such as hotels and office buildings. SMATV
systems or PCOs are now included in the SBA’s broad economic census category, Wired
Telecommunications Carriers,47 which was developed for small wireline businesses. Under this category,
the SBA deems a wireline business to be small if it has 1,500 or fewer employees.48 Census data for 2007
show that there were 31,996 establishments that operated that year.49 Of this total, 30,178 establishments
had fewer than 100 employees, and 1,818 establishments had 100 or more employees.50 Therefore, under
this size standard, the majority of such businesses can be considered small entities.
15.
Home Satellite Dish (HSD) Service. HSD or the large dish segment of the satellite
industry is the original satellite-to-home service offered to consumers, and involves the home reception of
signals transmitted by satellites operating generally in the C-band frequency. Unlike DBS, which uses
small dishes, HSD antennas are between four and eight feet in diameter and can receive a wide range of
unscrambled (free) programming and scrambled programming purchased from program packagers that
are licensed to facilitate subscribers’ receipt of video programming. Because HSD provides subscription
services, HSD falls within the SBA-recognized definition of Wired Telecommunications Carriers.51 The
SBA has developed a small business size standard for this category, which is: all such businesses having
1,500 or fewer employees.52 Census data for 2007 show that there were 31,996 establishments that

44 Id.
45 See 13 C.F.R. § 121.201, NAICS code 517510 (2002).
46 See 15th Annual Competition Report, 28 FCC Rcd at 10507, ¶ 27. As of June 2012, DIRECTV is the largest DBS
operator and the second largest MVPD in the United States, serving approximately 19.9 million subscribers. DISH
Network is the second largest DBS operator and the third largest MVPD, serving approximately 14.1 million
subscribers. Id. at 10507, 10546, ¶¶ 27, 110-11.
47 13 C.F.R. § 121.201; 2012 NAICS code 517110.
48 See id.
49 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information:
Subject Series – Estab and Firm Size: Employment Size of Establishments for the United States: 2007 – 2007
Economic Census,” NAICS code 517110, Table EC0751SSSZ2; available at
http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml.
50 Id.
51 13 C.F.R. § 121.201; 2012 NAICS code 517110.
52 See id.
36

Federal Communications Commission

FCC 13-162

operated that year.53 Of this total, 30,178 establishments had fewer than 100 employees, and 1,818
establishments had 100 or more employees.54 Therefore, under this size standard, the majority of such
businesses can be considered small entities.
16.
Open Video Systems. The open video system (OVS) framework was established in 1996,
and is one of four statutorily recognized options for the provision of video programming services by local
exchange carriers.55 The OVS framework provides opportunities for the distribution of video
programming other than through cable systems. Because OVS operators provide subscription services,56
OVS falls within the SBA small business size standard covering cable services, which is “Wired
Telecommunications Carriers.”57 The SBA has developed a small business size standard for this
category, which is: all such businesses having 1,500 or fewer employees.58 Census data for 2007 shows
that there were 31,996 establishments that operated that year.59 Of this total, 30,178 establishments had
fewer than 100 employees, and 1,818 establishments had 100 or more employees.60 Therefore, under this
size standard, we estimate that the majority of these businesses can be considered small entities. In
addition, we note that the Commission has certified some OVS operators, with some now providing
service.61 Broadband service providers (BSPs) are currently the only significant holders of OVS
certifications or local OVS franchises.62 The Commission does not have financial or employment
information regarding the other entities authorized to provide OVS, some of which may not yet be
operational. Thus, again, at least some of the OVS operators may qualify as small entities.
17.
Cable and Other Subscription Programming. The Census Bureau defines this category
as follows: “This industry comprises establishments primarily engaged in operating studios and facilities

53 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information:
Subject Series – Estab and Firm Size: Employment Size of Establishments for the United States: 2007 – 2007
Economic Census,” NAICS code 517110, Table EC0751SSSZ2; available at
http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml.
54 Id.
55 47 U.S.C. § 571(a)(3)-(4); see Implementation of Section 19 of the 1992 Cable Act and Annual Assessment of the
Status of Competition in the Market for the Delivery of Video Programming
, MB Docket No. 06-189, Thirteenth
Report, 24 FCC Rcd 542, 606, ¶ 135 (2009) (”13th Annual Competition Report”).
56 See 47 U.S.C. § 573.
57 See 13 C.F.R. § 121.201, 2012 NAICS code 517110. This category of Wired Telecommunications Carriers is
defined in part as follows: “This industry comprises establishments primarily engaged in operating and/or providing
access to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text,
sound, and video using wired telecommunications networks. Transmission facilities may be based on a single
technology or a combination of technologies. Establishments in this industry use the wired telecommunications
network facilities that they operate to provide a variety of services, such as wired telephony services, including VoIP
services; wired (cable) audio and video programming distribution; and wired broadband Internet services.” U.S.
Census Bureau, 2012 NAICS Definitions, “517110 Wired Telecommunications Carriers,” at
http://www.census.gov/cgi-bin/sssd/naics/naicsrch.
58 13 C.F.R. § 121.201; 2012 NAICS code 517110.
59 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information:
Subject Series – Estab and Firm Size: Employment Size of Establishments for the United States: 2007 – 2007
Economic Census,” NAICS code 517110, Table EC0751SSSZ2; available at
http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml.
60 Id.
61 A list of OVS certifications may be found at http://www.fcc.gov/mb/ovs/csovscer.html.
62 See 13th Annual Competition Report, 24 FCC Rcd at 606-07, ¶ 135. BSPs are newer businesses that are building
state-of-the-art, facilities-based networks to provide video, voice, and data services over a single network.
37

Federal Communications Commission

FCC 13-162

for the broadcasting of programs on a subscription or fee basis. These establishments produce
programming in their own facilities or acquire programming from external sources. The programming
material is usually delivered to a third party, such as cable systems or direct-to-home satellite systems, for
transmission to viewers.”63 The SBA has developed a small business size standard for this category,
which is: all such businesses having $15 million dollars or less in annual revenues.64 Census data for
2007 show that there were 659 establishments that operated that year.65 Of that number, 462 operated
with annual revenues of $9,999,999 dollars or less.66 One hundred ninety-seven (197) operated with
annual revenues of between $10 million and $100 million or more.67 Thus, under this size standard, the
majority of such businesses can be considered small entities.

D.

Description of Projected Reporting, Recordkeeping, and Other Compliance
Requirements

18.
The proposed rule changes discussed in the NPRM would affect compliance
requirements. The proposed rule changes would eliminate the sports blackout rules, which prohibit
certain MVPDs from televising the home game of a sports team within a specified geographic area
surrounding a television broadcast station licensed to the community in which the game is being played if
the game is not available live on a television broadcast station in that community.

E.

Steps Taken to Minimize Significant Impact on Small Entities and Significant
Alternatives Considered

19.
The RFA requires an agency to describe any significant alternatives that it has considered
in reaching its proposed approach, which may include the following four alternatives (among others): (1)
the establishment of differing compliance or reporting requirements or timetables that take into account
the resources available to small entities; (2) the clarification, consolidation, or simplification of
compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather
than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small
entities.68
20.
As discussed in the NPRM, repeal of the sports blackout rules would not eliminate the
sports leagues’ underlying blackout policies.69 Rather, it would simply remove Commission support for
these policies. Sports leagues would still be able to require local television broadcast stations to black out
games. In addition, sports leagues would likely be able to obtain the same protection afforded under the
sports blackout rules either through market-based negotiations with MVPDs or through their contracts
with broadcasters by requiring, as a term of carriage, the deletion of specific sports events. Accordingly,
we believe that repeal of the sports blackout rules would impose only minimal burdens on any affected
entities. For this reason, an analysis of alternatives to the proposed rule changes is unnecessary. We
invite comment on whether there are any alternatives we should consider that would minimize any
adverse impact on small entities, but which maintain the benefits of our proposal.

63 U.S. Census Bureau, 2012 NAICS Definitions, “515210 Cable and Other Subscription Programming,”at
http://www.census.gov/cgi-bin/sssd/naics/naicsrch.
64 13 C.F.R. § 121.201; 2012 NAICS code 515210.
65 See U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder,
“Information: Subject Series – Estab and Firm Size: Receipts Size of Establishments for the United
States: 2007 – 2007 Economic Census,” NAICS code 515210, Table EC0751SSSZ2; available at
http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml.
66 Id.
67 Id.
68 5 U.S.C. § 603(c).
69 See NPRM at ¶¶ 30, 35.
38

Federal Communications Commission

FCC 13-162

F.

Federal Rules that May Duplicate, Overlap, or Conflict with the Proposed Rule

21.
None.
39

Note: We are currently transitioning our documents into web compatible formats for easier reading. We have done our best to supply this content to you in a presentable form, but there may be some formatting issues while we improve the technology. The original version of the document is available as a PDF, Word Document, or as plain text.

close
FCC

You are leaving the FCC website

You are about to leave the FCC website and visit a third-party, non-governmental website that the FCC does not maintain or control. The FCC does not endorse any product or service, and is not responsible for, nor can it guarantee the validity or timeliness of the content on the page you are about to visit. Additionally, the privacy policies of this third-party page may differ from those of the FCC.