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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 ) ) CARTOGRAPHICS PUBLICATIONS, INC., ) Petitioner, ) vs. ) CSR 4337-L ) TCI WEST, INC., ) Respondent, ) ) For Leased Access Channels ) MEMORANDUM OPINION AND ORD ER Adopted: October 15, 1997 Released: October 17, 1997 By the Chief, Cable Services Bureau: 1. Introduction 1. Cartographics Publications, Inc. ("CPI") filed a complaint on August 2, 1994 claiming that TCI West, Inc. ("TCI") had violated Section 612(c)(2) of the Communications Act. CPI claims that TCI violated this section by refusing to carry CPI's adult-oriented programming unless the programming is scrambled and segregated from other non-adult oriented programming. On September 1, 1994, TCI filed a motion to dismiss the complaint claiming that the Commission lacked jurisdiction over the complaint. By Memorandum Opinion and Order, DA 94-1300, 9 FCC Rcd 7200, (Cab. Serv. Bur. 1994), that motion was denied. That order also granted TCI an extension of time to file a response to the complaint. 2. TCI filed its response to the complaint on December 5, 1994, reasserting its request that the complaint be dismissed for lack of jurisdiction and, in the alternative, requesting that the complaint be denied on the merits. TCI then filed a petition for review under 47 C.F.R.  1.115 on December 23, 1994 of the Bureau's order DA 94-1300 in order to reargue that the Commission does not have jurisdiction to hear the complaint. In this Order, after considering the complaint and TCI's response thereto, we dismiss petitioner's complaint and accordingly deny as moot TCI's petition for review of the Bureau's previous order DA 94-1300 which denied TCI's initial motion to dismiss the complaint for lack of jurisdiction. 2. Background 3. It is undisputed that CPI distributes programming which includes "adult-oriented presentations with sexually oriented content" during night hours over commercial leased access channels in several cable markets. In its complaint, CPI asserts that TCI has refused to carry CPI's programming unless the programming is scrambled, segregated onto a separate channel apart from other programming, and offered in a manner that provides customers an opportunity to consent affirmatively to receive the programming. CPI states that TCI has relied on Section 76.701(b) and (c) of the Commission's rules as grounds for imposing these conditions on the carriage of CPI's programming. CPI asserts that TCI cannot legally rely on these rules because the rules have been stayed by order of the United States Court of Appeals for the District of Columbia Circuit. Thus, CPI asserts that "TCI is unilaterally censoring CPI's programming in blatant violation of law and in defiance of the stay." 4. TCI asserts in opposition that it does not rely solely on Section 76.701 as authority for imposing conditions on the carriage of CPI's "adult-oriented" programming. Instead TCI asserts that Section 612(h) of the Communications Act permits cable operators to establish their own written polices for setting conditions on carrying such programming, regardless of whether the Commission rules for the carriage of "adult-oriented" programming have been stayed. 5. TCI further asserts that its decision to require that the programming be scrambled is a good faith exercise of sound business judgment, designed to assure that possible adverse customer reaction to such programming will not detrimentally affect the operation, financial condition or market development of the cable system, consistent with Section 612(c)(1) of the Communications Act. In addition, TCI submits that CPI has not presented clear and convincing evidence as required under Section 76.975(g) of the rules that the requirement to scramble CPI's programming and offer it only to customers who affirmatively request it is unreasonable and in bad faith. Finally, TCI states that it has no intention of altering or affecting the content of CPI's programming, other than the proposed scrambling and segregation of the programming to a protected channel. 6. We note that Congress imposed on cable operators commercial leased access requirements when Section 612 was added to the Communications Act of 1934 in 1984. Section 612(b) requires operators of cable systems with 36 or more activated channels to set aside part of their channel capacity for use by programmers that are not affiliated with them. Section 612(c)(2) bars a cable operator from exercising editorial control over, or considering the content of, such programming, with the limited exception that content may be considered for the purpose of establishing the charges for the use of the designated channels. 7. Congress subsequently amended Section 612 by the enactment of Sections 10(a) and 10(b) of the Cable Television Consumer Protection and Competition Act of 1992 (the "1992 Act"). Section 10(a) of the 1992 Act, codified as Section 612(h) of the Communications Act, provides that cable service offered pursuant to Section 612(b) shall not be provided, or shall be provided pursuant to conditions, if such cable service in the judgment of the franchising authority or the cable operator is obscene, or is in conflict with community standards in that it is lewd, lascivious, filthy, or indecent or is otherwise unprotected by the Constitution of the United States. Further, this subsection permits the cable operator to enforce prospectively a written and published policy of prohibiting programming that the cable operator reasonably believes describes or depicts sexual or excretory activities or organs in a patently offensive manner as measured by contemporary community standards. Section 10(b) of the 1992 Act, codified as Section 612(j) of the Communications Act, directed the Commission to promulgate regulations designed to limit children's access to indecent programming on cable systems that have not voluntarily prohibited such programming under Section 612(h). Section 612(j) further directs cable operators to comply with such regulations. 8. In a rule making proceeding to implement the mandate of Section 612(j), the Commission, after addressing First Amendment challenges to Sections 612(h) and (j), adopted Section 76.701 of the rules to implement Section 612(j) but not to implement Section 612(h) which was self- executing. In this connection, in the First Report, the Commission observed that Section 612(h) permits cable operators to enforce voluntarily a written and published policy for prohibiting programming described in that provision on leased access channels. The Commission read Section 612(h) as expressing a congressional intent that cable operators have wide discretion in establishing policy with respect to the described leased access programming without involvement by the Commission. The Commission concluded that cable operators are not required to prohibit the described programming but are free to ban such programming on leased access channels "as long as they have a written and published policy and, in enforcing such policy, exercise their reasonable belief about which programming fits" the statutory description. It further observed that because Congress appears to have deliberately omitted any role for the Commission in the implementation of Section 612(h) and because programmers may enforce their leased access rights in federal district court, the federal courts, rather than the Commission, are the appropriate forums for resolution of any disputes concerning whether cable operators have properly denied access pursuant to Section 612(h). On the other hand, Section 76.701 of the rules followed Section 612(j)'s direction to require cable operators that do not voluntarily publish a policy pursuant to Section 612(h) to block programming defined in that provision from viewer access and to unblock it only after receipt of a viewer's request. 9. In the appeal of a decision on the merits from the United States Court of Appeals for the District of Columbia Circuit, which had stayed the rules pending its decision, the United States Supreme Court, in Denver Area Educational Tele-Communications Consortium, Inc. v. Federal Communications Commission, held Section 612(h) of the Communications Act, which permitted cable operators to establish carriage conditions of their own, did not violate the United States Constitution's First Amendment, but struck down Section 612(j) of the Communications Act, and our rules implementing Section 612(j), 47 C.F.R. 76.701(b), (c), (g), because Section 612(j) and the above-referenced rules violated the First Amendment. III. Discussion 10. In this proceeding, the parties dispute whether TCI has the right under federal law to impose conditions on the carriage of CPI's "adult-oriented" programming over TCI's cable system. In its complaint, CPI states that TCI cannot rely on Section 76.701(b) and (c) of our rules in order to place conditions on the carriage of CPI's programming because the Commission's rules have been stayed. Now that the Supreme Court has struck down these rules, CPI is certainly correct that TCI cannot rely on these rules in order to decline carriage of CPI programming. 11. Nevertheless, the Supreme Court's decision does not end this dispute because Section 612(h), which was upheld by the Supreme Court, permits cable operators to enforce their own written policies imposing conditions on carriage in order to enforce that section. As set forth above, in the First Report, the Commission read Section 612(h) to leave cable operators the discretion to exercise "their reasonable belief about which programming is or is not indecent," and to determine whether proffered programming should be blocked for the reasons stated in that subsection. The Commission also concluded that the Congress deliberately omitted any role for the Commission in implementing Section 612(h) and that the federal courts are the only appropriate fora for resolution of disputes regarding denial of access pursuant to that section. In its response, TCI states that it has established policies pursuant to Section 612(h) to impose conditions on the carriage of CPI's programming. Because the question as to whether TCI's policies imposing conditions on carriage comply with Section 612(h) is one for the courts, and not the Commission, we cannot decide whether TCI properly denied carriage of CPI's programming and therefore must dismiss CPI's complaint. 12. In addition, because we are dismissing the underlying complaint, TCI's petition for review of our Order DA 94-1300, which denied its motion to dismiss the complaint on other grounds, is moot; thus, the petition for review will also be dismissed. 13. Accordingly, IT IS ORDERED, pursuant to authority delegated by Section 0.321 of the Commission's rules, 47 C.F.R.  0.321, that the complaint of Cartographic Publications, Inc. in File No. 4337-L is hereby DISMISSED and that TCI's petition for review is also DISMISSED AS MOOT. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau