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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) Petition for Relief of ) ) Car TV Productions, Inc. ) ) v. ) CSR-4771-L ) Time Warner Cable, d/b/a Paragon Cable ) ) For Leased Access Channels ) MEMORANDUM OPINION AND ORDER Adopted: June 4, 1997 Released: June 6, 1997 By the Chief, Cable Services Bureau: INTRODUCTION 1. Car TV Productions, Inc. ("Car TV") filed the captioned complaint alleging that Time Warner Cable, d/b/a Paragon Cable ("Paragon"), is in violation of the Commission's commercial leased access regulations by refusing to lease CAR TV time on Paragon's cable system in Newburgh, New York. Paragon filed a response denying any violation of the leased access regulations and requesting that the complaint be denied. BACKGROUND 2. In 1984, Congress amended the Communications Act of 1934 by adding among other things a commercial leased access requirement, pursuant to which cable operators with 36 or more activated channels must set aside part of their channel capacity for use by video programmers that are not affiliated with them. The Cable Television Consumer Protection and Competition Act of 1992 (the "1992 Cable Act") revisited the leased access requirement and directed the Commission to establish rules for determining maximum reasonable rates for, and reasonable terms and conditions for the use of, commercial leased access channels. Pursuant to that Congressional directive, the Commission established regulations applicable to leased access channels in its proceedings in Implementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992; Rate Regulation, MM Docket 92-266, (the Rate Order), 8 FCC Rcd 5631, 5956-5961 (1993). The Commission revisited these regulations in Implementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992, Leased Commercial Access, Second Report and Order and Second Order on Reconsideration of the First Report and Order, CS Docket 96-90, FCC 97-27, released February 4, 1997 ("Second Report"). THE PLEADINGS 3. Car TV alleges that, after making inquiries about leased access time on Paragon's cable system and receiving quotations of rates for service, it returned to Paragon a completed application for service, a sample video tape of its programming, and payment for one month of service. Car TV alleges further that Paragon responded with a letter stating that it would not provide the requested leased access time, on the grounds that the sample video tape indicates that Car TV is reselling time, and taking the position that a cable operator is not required to lease time to programmers who intend to resell time to third parties. Car TV states that it produces the proposed programming itself and is not reselling time and asserts that it is entitled to leased access time on Paragon's cable system. 4. Paragon asserts in response that the sample video tape provided by Car TV shows that Car TV's programming consists entirely of commercial advertisements for car dealerships and that Car TV thus proposes to resell any leased access time that would be provided by Paragon. Paragon argues that Congress did not mandate that leased access time be offered to resellers of leased access time. Paragon argues that the Commission's leased access rules do not address the relationship between a cable operator and a reseller of leased access time. It asserts that, in the further proposed rulemaking proceeding in Order on Reconsideration of the First Report and Order and Further Notice of Proposed Rulemaking, MM Docket 92-266 & CS Docket 96-60, FCC 96-122, released March 29, 1996, 61 Fed. Reg. 16396 (April 15, 1996) ("Recon. Order"), the Commission requested comment on whether leased access time should be made available to resellers of leased access time. Paragon takes the position here that, because the Commission is thus considering whether to adopt regulations relating to reselling of leased access time, cable operators have no obligation to provide leased access time to anyone proposing to resell such leased time. Paragon argues that requiring cable operators to provide leased access time to resellers of leased access time would undermine Congressional intent in mandating leased access time. DISCUSSION AND ANALYSIS 5. Paragon has failed to establish that Car TV is engaged in reselling leased access time. Car TV stated in its complaint that it is not engaged in reselling leased access time and asserted, "we do the full production and are clearly programmers." On the basis of an examination of the sample programming tape provided by Car TV, Paragon asserts that the tape consisted of "six local car dealership advertisements," and that "Car TV, by proposing to fill all of its leased time with third party advertisements, is not acting as a programmer, but as a reseller of time." We reject Paragon's statement as constituting an evidentiary showing that Car TV is engaged in reselling leased access time to its advertising clients. In the absence of probative information to the contrary, we accept Car TV's representation that it is in full control of the production of its proposed programming and find that Car TV is engaged in program production and is not engaged in reselling leased access time. We note, in any event, that in the Second Report, the Commission concluded that resale of leased access capacity to persons unaffiliated with the cable operator should be permitted, subject to certain contractual conditions not shown to be pertinent here. The Commission found that resale can provide substantial benefits to leased access programmers without an adverse impact on cable operators. 6. We also reject Paragon's argument that it may refuse to provide the requested leased access time because Car TV's programming contained advertising content. This case involves a request by a video production company for time on a leased access channel, designated for that use pursuant to Section 612 of the Communications Act, for the presentation of programming produced by Car TV. Absent a showing of any affiliation between Car TV and Paragon, we find that Car TV qualifies as an unaffiliated "diverse source of video programming" for whom Paragon is required by Section 612 to "designate channel capacity for commercial use." Accordingly, we reject Paragon's argument that Car TV is not entitled to leased access channels because Car TV's program productions contain advertising content. Nothing in Section 612 may be construed as disqualifying Car TV from use of a leased access channel, simply because its program productions contain advertising content. See Lorilei Communications, Inc., d/b/a The Firm v. Continental Cable of Eastern Michigan, Inc., DA 97-1010, (Cable Serv. Bur. released May 15, 1997) (1997 WL 253163). Accordingly, we will direct Paragon to provide such leased access channel capacity as may be requested by Car TV consistent with the requirements of Section 612. ORDERS 7. For the foregoing reasons, IT IS ORDERED pursuant to 47 C.F.R.  76.975(f) that the petition for relief of Car TV Productions, Inc. in File No. CSR 4771-L IS GRANTED. 8. IT IS FURTHER ORDERED that respondent Time Warner Cable, d/b/a/ Paragon, shall, within twenty days from the release date of this order, provide to Car TV with such leased access channel capacity as may be requested consistent with the requirements of 47 U.S.C  532 and the Commission's regulations. 9. This action is taken pursuant to authority delegated by Section 0.321 of the Commission's rules, 47 C.F.R.  0.321. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau