The Federal Communications Commission first established rules in 1965 for cable systems which received signals by microwave antennas. In 1966, the Commission established rules for all cable systems (whether or not served by microwave). The Supreme Court affirmed the Commission's jurisdiction over cable in United States v. Southwestern Cable Co., 392 U.S. 157 (1968). The Court ruled that "the Commission has reasonably concluded that regulatory authority over CATV is imperative if it is to perform with appropriate effectiveness certain of its responsibilities." The Court found the Commission needed authority over cable systems to assure the preservation of local broadcast service and to effect an equitable distribution of broadcast services among the various regions of the country.
In 1972, new rules regarding cable television became effective. These rules required cable television operators to obtain a certificate of compliance from the Commission prior to operating a cable television system or adding a television broadcast signal. The rules applicable to cable operators fell into several broad subject areas -- franchise standards, signal carriage, network program nonduplication and syndicated program exclusivity, nonbroadcast or cablecasting services, cross-ownership, equal employment opportunity, and technical standards. Cable television operators who originated programming were subject to equal time, sponsorship identification and other provisions similar to rules applicable to broadcasters. Cable operators were also required to maintain certain records and to file annual reports with the Commission concerning general statistics, employment, and finances.
In succeeding years, the Commission modified or eliminated many of the rules. Among the more significant actions, the Commission deleted most of the franchise standards in 1977, substituted a registration process for the certificate of compliance application process in 1978, and eliminated the distant signal carriage restrictions and syndicated program exclusivity rules in 1980. In 1983, the Commission deleted its requirement that cable operators file financial information. In addition, court actions led to the deletion of pay cable programming rules in 1977.
1984 Congressional Policy and Rules
In October 1984, the U.S. Congress amended the Communications Act of 1934 by adopting the Cable Communications Policy Act of 1984. The 1984 Cable Act established policies in the areas of ownership, channel usage, franchise provisions and renewals, subscriber rates and privacy, obscenity and lockboxes, unauthorized reception of services, equal employment opportunity, and pole attachments. The new law also defined jurisdictional boundaries among federal, state and local authorities for regulating cable television systems.
1992 Congressional Policy and Rules
Following the 1984 Cable Act, the number of households subscribing to cable television systems increased, as did the channel capacity of many cable systems. However, competition among distributors of cable services did not increase, and, in many communities, the rates for cable services far outpaced inflation. Responding to these problems, Congress enacted the Cable Television Consumer Protection and Competition Act of 1992. The 1992 Cable Act mandated a number of changes in the manner in which cable television is regulated.
In adopting the 1992 Cable Act, Congress stated that it wanted to promote the availability of diverse views and information, to rely on the marketplace to the maximum extent possible to achieve that availability, to ensure cable operators continue to expand their capacity and program offerings, to ensure cable operators do not have undue market power, and to ensure consumer interests are protected in the receipt of cable service. The Commission has adopted regulations to implement these goals.
1996 Congressional Policy and Rules
In adopting the Telecommunications Act of 1996, Congress noted that it wanted to provide a pro-competitive, de-regulatory national policy framework designed to accelerate rapidly private sector deployment of advanced telecommunications and information technologies and services to all Americans by opening all telecommunications markets to competition. The Commission has adopted regulations to implement the requirements of the 1996 Act and the intent of Congress.
What is Cable Television?
Cable television is a video delivery service provided by a cable operator to subscribers via a coaxial cable or fiber optics. Programming delivered without a wire via satellite or other facilities is not "cable television" under the Commission's definitions.
A cable television system operator is any person or group of persons who provides cable service over a cable system and directly or through one or more affiliates owns a significant interest in such cable system, or who otherwise controls or is responsible for, through any arrangement, the management and operation of such a cable system.
Cable service is the transmission to subscribers of video programming, or other programming service. This definition includes any subscriber selection required in choosing video programming or other programming service.
A cable system is a facility, consisting of a set of closed transmission paths and associated signal generation, reception, and control equipment that is designed to provide cable service which includes video programming and which is provided to multiple subscribers within a community. This term does not include:
(1) a facility that serves only to retransmit the television signals of one or more television broadcast stations;
(2) a facility that serves subscribers without using any public right-of-way;
(3) a facility of a common carrier which is subject in whole or in part, to the provisions of Title II of the Communications Act, except that such facility shall be considered a cable system to the extent such facility is used in the transmission of video programming directly to subscribers, unless the extent of such use is solely to provide interactive on demand services;
(4) an open video system; or
(5) any facilities of any electric utility used solely for operating its electric utility system.
Cable services are often provided in tiers. A tier is a category of cable service or services provided by a cable operator for which a separate rate is charged by the cable operator. There are three types of cable service: basic service, cable programming service, and per-channel or per-program (sometimes called pay-per-view) service.
Basic service is the lowest level of cable service a subscriber can buy. It includes, at a minimum, all over-the-air television broadcast signals carried pursuant to the must-carry requirements of the Communications Act, and any public, educational, or government access channels required by the system's franchise agreement. It may include additional signals chosen by the operator. Basic service is generally regulated by the local franchising authority (the local or state entity empowered by Federal, State, or local law to grant a franchise to a cable company to operate in a given area).
Cable programming service includes all program channels on the cable system that are not included in basic service, but are not separately offered as per-channel or per-program services. Pursuant to a 1996 federal law, the rates charged for cable programming services tiers provided after March 31, 1999 are not regulated. There may be one or more tiers of cable programming service.
Per-channel or per-program service includes those cable services that are provided as single-channel tiers by the cable operator, and individual programs for which the cable operator charges a separate rate Neither of these services is regulated by the local franchising authorities or the Commission.
A local exchange carrier (LEC) is a telephone company which provides local telephone service.
A multichannel video programming distributor (MVPD) is any person such as, but not limited to, a cable operator, a multichannel multipoint distribution service, a direct broadcast satellite service, or a television receive-only satellite program distributor, who makes available for purchase, by subscribers or customers, multiple channels of video programming.
Registration of a Cable System
Before commencing operation, a cable system operator must send the following information to the Secretary of the Commission for each community to be served:
(1) The legal name of the operator, the entity identification or social security number, and whether the operator is an individual, private association, partnership or corporation. If the operator is a partnership, the legal name of the partner responsible for communications with the Commission;
(2) The assumed name (if any) used for doing business in the community;
(3) The mailing address, including zip code, and the telephone number to which all communications are to be directed;
(4) The date the system provided services to 50 or more subscribers;
(In order to comply with the requirements relating to aeronautical frequency usage, a system must register in advance of providing service to any subscribers, so that a subsequent aeronautical notification may be timely filed pursuant to § 76.615(b)).
(5) The name of the community or area served and the county in which it is located;
(6) The television broadcast signals to be carried;
(7) A certification that the applicant is not subject to a denial of federal benefits pursuant to Section 5301 of the Anti-Drug Abuse Act of 1988, 21 U.S.C., 853a, or, in the case of a non-individual applicant (for instance, a corporation, partnership, or other unincorporated association), that no party to the application is subject to a denial of federal benefits pursuant to that section; and
(8) For a cable system (or an employment unit) with six or more full-time employees, a statement of the proposed community unit's equal employment opportunity program, unless such program has previously been filed for the community unit or is not required to be filed based on an anticipated number if fewer than six full-time employees.
A registration statement must be signed by an authorized representative of the cable television company. The Commission issues a public notice setting forth the details of each registration statement as it is received. The cable television operator is not required to serve the registration statement on any party and may begin operation immediately upon filing the registration statement. However, commencement of operation is entirely at the risk of the system operator. If violations of the rules are subsequently discovered, appropriate regulatory sanctions, including imposition of a monetary forfeiture and/or the issuance of a cease and/or desist order, may be employed.
State and Local Regulation of Cable Systems
A variety of laws and regulations for cable television exist at the state and local level. Some states, such as Massachusetts, regulate cable television on a comprehensive basis through a state commission or advisory board established for the sole purpose of cable television regulation. In Alaska, Connecticut, Delaware, New Jersey, Rhode Island, and Vermont, the agencies are state public utility commissions. In Hawaii, regulation of cable television is the responsibility of the Department of Commerce and Consumer Affairs. In other areas of the country, cable is regulated by local governments such as a city cable commission, city council, town council, or a board of supervisors. These regulatory entities are called "local franchising authorities." In addition, most states have one or more state laws specifically applicable to cable television, dealing most commonly with such subjects as franchising, theft of service, pole attachments, rate regulation and taxation.
The 1992 Cable Act codified, and the Commission has adopted, a regulatory plan allowing local and/or state authorities to select a cable franchisee and to regulate in any areas that the Commission did not preempt. Local franchising authorities have adopted laws and/or regulations in areas such as subscriber service requirements, public access requirements and franchise renewal standards. Under the 1992 Cable Act, local franchising authorities have specific responsibility for regulating the rates for basic cable service and equipment.
The Communications Act requires that no new cable operator may provide service without a franchise and establishes several policies relating to franchising requirements and franchise fees. The Communications Act authorizes local franchising authorities to grant one or more franchises within their jurisdiction. However, a local franchising authority may not grant an exclusive franchise, and may not unreasonably withhold its consent for new service. Included in the grant of a franchise to a cable system are rights relating to the construction of the system, including the local franchising authority's authorization to use public rights-of-way, easements, and to establish the areas to be served. In addition, the law requires just compensation to property owners who have suffered damages as a result of a cable operator's construction, operation, installation, or removal of its cable television facilities. Moreover, franchising authorities are required to ensure that access to cable service is not denied to any group of potential residential cable subscribers on the basis of income class. Although the Communications Act also generally precludes the regulation of cable systems as common carriers, it authorizes the Commission, to require, if it chooses, the filing of informational tariffs for intrastate communications services, other than cable service, which are provided by a cable system.
Franchising authorities may charge the cable operator a fee for the right to operate a cable system in that franchise area; however, the franchise fee paid by the cable system can be no more than five percent of its annual gross revenue. A franchising authority may use the money collected from this fee for any purpose. A cable operator may list any applicable franchise fee as a separate item on the subscriber's bill.
Rates for Service
Prior to passage of the 1992 Cable Act, the Commission did not regulate rates for cable television service. Rates for basic cable service were regulated by local franchising authorities. The 1984 Cable Act permitted local franchising authorities to regulate only if the cable franchise area was served off the air by fewer than three unduplicated broadcast signals; in 1991, the Commission raised this number to six. In passing the 1992 Cable Act, Congress found rates for cable services rose significantly following the 1984 Cable Act. Congress directed the Commission to establish rules to govern rate regulation of cable service tiers offered by cable systems that are not subject to effective competition. These rules were intended to improve service to the cable subscriber and to ensure competitive rates.
Each service tier was subject to regulation under the 1992 Cable Act in a slightly different manner. Local franchising authorities are responsible for regulating the basic service tier and, until March 31, 1999 (as provided by the 1996 Act), the Commission was responsible for regulating cable programming services tiers. Both followed rules set by the Commission, which established a "benchmark" rate based on a number of factors, including the number of subscribers, channels, and a number of other factors. Pay-per-channel and pay-per-program services are not regulated.
The 1996 Act modified the regulation of cable programming services and the rate complaint process established under the 1992 Cable Act. Pursuant to the 1996 Act, the Commission's authority to regulate the rates charged for cable programming services (those are the channels that are not on cable system's basic tier and are not sold on a per-channel or per-program basis) was terminated for services provided after March 31, 1999. Therefore, the rates charged for cable programming services are determined by the cable company and the Commission does not have the authority to review these rates or to investigate allegations that the rates are excessive. The 1996 Act did not modify the local franchising authority's ability to regulate basic cable rates. Therefore, complaints about basic cable rates should be filed with the franchise authority.
In addition, under the 1996 Act, small cable operators are partially or wholly exempt from rate regulation. A "small cable operator" is defined to include any operator that serves fewer than 1 percent of all subscribers in the United States and that is not affiliated with entities that have gross annual revenues exceeding $250 million. In any franchise area where a small cable operator serves fewer than 50,000 subscribers, rate regulation does not apply to the operator's basic tier if it was the only tier subject to regulation as of December 31, 1994.
Rates for a cable system's basic service tier and associated equipment may be regulated only if the cable system is not subject to effective competition. There are four separate tests to establish that effective competition exists:
(1) the households subscribing to a cable system constitute fewer than 30 percent of the households in its franchise area; or
(2) (a) there are at least two unaffiliated multichannel video programming distributors (one of which may be the cable system in question), with each offering comparable video programming to at least 50 percent of the households in the franchise area, and (b) the households subscribing to all but the largest multichannel video programming distributor exceed 15 percent of the households in the franchise area; or
(3) the franchising authority is itself a multichannel video programming distributor offering video programming to at least 50 percent of the households in the franchise area; or
(4) a local exchange carrier or its affiliate (or any multichannel video programming distributor using the facilities of such carrier or its affiliate) offers video programming services directly to subscribers by any means (other than direct-to-home satellite services) in the franchise area, but only if the video programming services so offered in that area are comparable to the video programming services provided by the unaffiliated cable operator in that area.
In the absence of a demonstration to the contrary, a franchising authority may presume that a cable system is not subject to effective competition.
In order to exercise its authority to regulate basic cable rates and equipment, a franchising authority must be certified by the Commission. Unless notified otherwise by the Commission, a franchising authority's certification becomes effective 30 days after it is filed with the Commission. A franchising authority whose request for certification has been denied or revoked may petition the Commission for re-certification. In addition, a franchising authority that lacks the resources or legal authority to regulate basic cable service rates may petition the Commission to assume regulation, but the franchising authority must affirmatively demonstrate its inability to regulate to the Commission. The Commission will not intervene to regulate basic cable service rates should a franchising authority choose not to seek certification or choose not to request that the Commission assume jurisdiction. Appeals of local rate decisions will be heard by the Commission.
Customer Service Guidelines
Pursuant to the 1992 Cable Act, the Commission adopted federal guidelines which provide a standard for improving the quality of customer service rendered by cable operators. These guidelines provide minimum levels of service which should be provided by a cable operator. The guidelines address issues such as the cable operator's communications with customers over the telephone, installations, service problems, changes in rates or service, billing practices and information that must be provided to all customers.
Although the standards were issued by the Commission, local franchising authorities are responsible for adopting and enforcing customer service standards. Franchising authorities may also adopt more stringent or additional standards with the consent of the cable operator or through enactment of a state or municipal law.
Subscriber Calls to a Cable System
Under the federal guidelines, each cable system must maintain a local, toll-free or collect-call telephone line available 24 hours a day, 7 days a week. During normal business hours, company representatives must be available to respond to customer inquiries. After normal business hours, (the hours during which most similar businesses in the community are open to serve customers), the cable system may use an answering service or machine so long as messages are answered the next business day. In addition, the cable system's customer service center and bill payment locations must be conveniently located and must be open at least during normal business hours and should include at least one night per week and/or some weekend hours.
A call to a cable system must be answered -- including time the caller is put on hold -- within 30 seconds after the connection is made. If the call is transferred, the transfer time may not exceed 30 seconds. Also, cable system customers may receive a busy signal no more than three percent of the time. Although no special equipment is required to measure telephone answering and hold time, cable operators should use their best efforts in documenting compliance. These requirements must be met 90 percent of the time, measured quarterly, under normal operating conditions.
Installations, Service Interruptions and Service Calls
Federal guidelines state that standard installations -- which are those located up to 125 feet from the existing distribution system -- must be performed within seven days after an order has been placed. Except in situations beyond its control, the cable operator must begin working on a service interruption no later than 24 hours after being notified of the problem. A service interruption has occurred if picture or sound on one or more channels has been lost. The cable operator must begin to correct other service problems the next business day after learning of them. Cable operators may schedule appointments for installations and other service calls either at a specific time or, at a maximum, during a four-hour time block during normal business hours. Cable operators may also schedule service calls outside of normal business hours for the convenience of the customer. No appointment cancellations are permitted after the close of business on the business day prior to the scheduled appointment. If the cable installer or technician is running late and will not meet the specified appointment time, he or she must contact the customer and reschedule the appointment at the convenience of the subscriber. These requirements concerning installations, outages and service calls must ordinarily be met at least 95 percent of the time, measured quarterly, under normal operating conditions.
Changes in Rates or Service and Billing Practices
Thirty days advance written notice (using any reasonable written means) must be given to subscribers and local franchising authorities of any changes in rates, programming services or channel positions, if the change is within the control of the cable operator. Cable operators are not required to provide prior notice of any rate change that is the result of a regulatory fee, franchise fee, or any other fee, tax, assessment, or charge of any kind imposed by a Federal agency, State, or franchising authority on the transaction between the operator and the subscriber. Cable system bills must be clear, concise and understandable, with full itemization. Cable operators should respond to written complaints about billing matters within 30 days. Refunds must be issued no later than either the customer's next billing cycle or 30 days following resolution of the request, whichever is earlier, or upon the return of equipment when service is terminated. Credits must be issued no later than the billing cycle following the determination that a credit is warranted.
Information to Customers
The following information must be provided to customers at the time of installation and at least annually to all subscribers and at any time upon request: products and services offered; prices and options of programming services and conditions of subscription to programming and other services; installation and service maintenance policies; instructions on how to use the cable service; channel positions of programming carried on the system; and billing and complaint procedures, including the address and telephone number of the local franchising authority's office.
The 1984 Cable Act provides damages and penalties of up to two years in prison and/or $50,000 in fines to be assessed against anyone determined to be guilty either of the unauthorized interception or reception of cable television services or of the manufacture or distribution of equipment intended to be utilized for such a purpose. The Commission does not prosecute unauthorized reception of cable services. Rather, cable operators aggrieved by unauthorized reception of cable services may bring an action in a United States district court or in any other court of competent jurisdiction. Knowledge of violations should be reported directly to the cable system.
Signal Carriage Requirements
The 1992 Cable Act established new standards for television broadcast station signal carriage on cable systems. Under these rules, each local commercial television broadcast station was given the option of selecting mandatory carriage ("must-carry") or retransmission consent ("may carry") for each cable system serving the same market as the commercial television station. The market of a television station is currently established by its Designated Market Area (DMA) as defined by Nielsen and/or modified by the Commission. Every county in the country is assigned to a DMA, and those cable systems and television stations in the same DMA are considered to be in the same market. Upon the request of a television station or a cable system, the Commission has the authority to modify the DMA to which a station is assigned.
Must-Carry/Retransmission Consent Election
Every three years, every local commercial television station has the right to elect either must-carry or retransmission consent. The initial election was made on June 17, 1993, and was effective on October 6, 1993. The next election occurred on October 1, 1996, and was effective January 1, 1997. All subsequent elections will occur every three years (e.g., October 1, 2011, to be effective January 1, 2012; October 1, 2014, to be effective January 1, 2015; etc.).
Election of Must-Carry Status
Generally, if a local commercial television station elects must-carry status, it is entitled to insist on cable carriage in its local market. Each cable system with more than 12 channels must set aside up to one-third of its channel capacity for must-carry stations. For example, if a cable system has 60 channels, it must set aside 20 of those channels for must-carry stations. If there are 25 stations in the market which elected must-carry, the cable operator may choose 20 to carry. On the other hand, if only 15 stations elected must-carry in the market, the cable system would have to carry all 15 of these stations. A must-carry station has a statutory right to a channel position, usually its over-the-air channel number, or another channel number on which it has historically been carried.
Retransmission Consent Election
A cable system is not permitted to carry a commercial station without the station's consent. Stations electing must carry status are considered too have given their consent.. Therefore, if the local commercial television station elects retransmission consent, the cable system must obtain that station's consent prior to carrying or transmitting its signal. Except for "superstations," a cable system may not carry the signal of any television broadcast station that is not located in the same market as the cable system without that broadcaster's consent. Superstations are transmitted via satellite, usually nationwide, and the cable system may carry such stations outside their local market without their consent. The negotiations between a television station and a cable system are private agreements which may, but need not, include some form of compensation to the television station such as money, advertising time, or additional channel access.
Noncommercial Educational Television Stations
Every cable system across the country must carry at least one local noncommercial educational ("NCE") station. A noncommercial station which places a digital noise limited service contour (“NLSC”), see section 47 C.F.R. § 73.622(e) of the Commission’s rules, over a cable system's principal headend, or whose city of license is within fifty miles of the cable system's principal headend, is considered "local" for this purpose. Cable systems with more than 36 channels may be required to carry all local noncommercial educational television stations which request carriage. Any cable system operating in a market where no local NCE station is available is required to import one NCE station.
Low Power Television Stations
The 1992 Cable Act provides mandatory carriage for "qualified" low power television stations ("LPTV") in certain situations. A LPTV station has to meet certain qualifications specified in the Act and incorporated into the Commission's Rules, before it is qualified for the right to must-carry. See section 76.55(d) of the Commission’s rules if a LPTV is qualified, it may assert must-carry rights, and, provided the cable operator has not met its mandatory carriage obligations, the LPTV station must be carried. Otherwise, a LPTV station must negotiate for carriage under the retransmission consent provisions or under the leased commercial access provisions.
While the 1992 Cable Act's must-carry provisions only apply to local commercial and noncommercial educational television stations, the Act's retransmission consent provisions apply to all commercial broadcast stations. Many cable systems carry radio stations as an "all-band" offering, meaning that as with any standard radio receiver, all stations which deliver a signal to the antenna are carried on the system. The Commission only requires consent from those radio stations within 57 miles of the cable system's receiving antenna. Thus, even though a cable operator's antenna may pick up a station's signal, operators are not required to obtain the consent of stations outside of the 57 mile zone unless the station affirmatively seeks retransmission consent.
Manner of Carriage
Subject to the Commission's network nonduplication, syndicated exclusivity and sports broadcasting rules, cable systems must carry the entirety of the program schedule of every local television station carried pursuant to the mandatory carriage provisions or the retransmission consent provisions of the 1992 Cable Act. A broadcaster and a cable operator may negotiate for partial carriage of the signal where the station is not eligible for must carry rights, either because of the station's failure to meet the requisite definitions or because the cable system is outside the station's market. In those situations where the carriage in the entirety rule applies, the primary video and accompanying audio of all television broadcast stations must be carried in full, without alteration or deletion of their content. Ancillary services such as closed captioning and program-related material in the vertical blanking interval must be carried. However, other information contained in the vertical blanking interval need not be carried.
Syndicated Program Exclusivity Protection
With respect to non-network programming, cable systems that serve at least 1,000 subscribers may be required, upon proper notification, to provide syndicated protection to broadcasters who have contracted with program suppliers for exclusive exhibition rights to certain programs within specific geographic areas, whether or not the cable system affected is carrying the station requesting this protection. However, no cable system is required to delete a program broadcast by a station which is either significantly viewed or which places a NLSCor better contour over the community of the cable system.
Network Program Nonduplication
Commercial television station licensees are entitled to protect the network programming they have contracted for by exercising nonduplication rights against more distant television broadcast stations carried on a local cable television system that serves more than 1,000 subscribers. Commercial broadcast stations may assert these nonduplication rights regardless of whether or not their signals are being transmitted by the local cable system and regardless of when, or if, the network programming is scheduled to be broadcast. Generally, the zone of protection for such programming cannot exceed thirty-five miles for stations licensed to a community in the Commission's list of top 100 television markets or fifty-five miles for stations licensed to communities in smaller television markets. In addition, a cable operator does not have to delete the network programming of any station which the Commission has previously recognized as significantly viewed in the cable community.
Sports Programming Blackouts
A cable system located within 35 miles of the city of license of a broadcast station where a sporting event is taking place may not carry the live television broadcast of the sporting event on its system if the event is not available live on a local television broadcast station, if the holder of the broadcast rights to the event, or its agent, requests such a blackout. The holder of the rights is responsible for notifying the cable operator of its request for program deletion at least the Monday preceding the calendar week during which the deletion is desired. If no television broadcast station is licensed to the community in which the sports event is taking place, the 35-mile blackout zone extends from the broadcast station's licensed community with which the sports event or team is identified. If the event or local team is not identified with any particular community (for instance, the New England Patriots), the 35-mile blackout zone extends from the community nearest the sports event which has a licensed broadcast station. The sports blackout rule does not apply to cable television systems serving less than 1,000 subscribers, nor does it require deletion of a sports event on a broadcast station's signal that was carried by a cable system prior to March 31, 1972. The rule does not apply to sports programming carried on nonbroadcast program distribution services such as ESPN. These services, however, may be subject to private contractual blackout restrictions.
For example, if the Boston Celtics are playing the Atlanta Hawks at home in a National Basketball Association ("NBA") game, and the game is not broadcast live on a Boston television station, and the NBA sends a blackout notice to cable systems within 35 miles of Boston, those systems will have to delete the game which is carried on their systems by "superstation" WTBS from Atlanta. If a sports event were carried, for example, on ESPN or a regional subscription sports network, any blackout would be the result of a private contractual agreement between the holder of the rights to the event and the sports network.
The Copyright Act requires cable operators to obtain a compulsory license for the carriage of programming. The cable operator pays the fee to the copyright office, for distribution to the copyright holders of the program material. The fee for each cable system is based on the system's "gross receipts" from the carriage of broadcast signals and the number of "distant signal equivalents" a term identifying non-network programming from distant television stations carried by the system.
Under the Commission's must-carry rules, a cable operator is not required to carry a signal of a television broadcast station if that station would be considered a distant signal under the Copyright Act, unless the station agrees to indemnify the cable operator for any increased copyright liability resulting from carriage of the signal.
The Copyright Act requires a cable operator to file semi-annually a statement of account, including information about system revenue and signal carriage as well as the royalty fee payment. For further information regarding copyright regulation, contact the Licensing Division, Copyright Office, Library of Congress, Washington, DC 20557; telephone (202) 707-8380.
Program Content Regulations
Cable television system operators generally make their own selection of channels and programs to be distributed to subscribers in response to consumer demands. The Commission does, however, have rules in some areas that are applicable to programming -- called "origination cablecasting" that is subject to the editorial control of the system operator. The rules generally do not apply to the contents of broadcast signals or access channels over which the system operator has no editorial control.
Cable subscribers may request a "lockbox" from cable operators to prevent viewing of any channel on which objectional programming may appear. Cable operators are required to make lockboxes available for sale or lease to customers who request them. Lockboxes can also be purchased from other commercial distributors.
The 1996 Act included several provisions that were designed to increase the subscriber's ability to control the programming coming into the home. Section 551 of the 1996 Act required representatives of the broadcast and cable television industries to develop, within one year after enactment of the 1996 Act, voluntary rules to rate programming that contains violence and sexual or other indecent material. The industry proposed the TV Parental Guidelines and the proposal was approved by the Commission in March 1998. The TV Parental Guidelines (labels and content indicators and respective meanings) are:
TV-Y-- This program is designed to be appropriate for all children.
TV-Y7-- This program is designed for children age 7 and above. Note: For those programs where fantasy violence may be more intense or more combative than other programs in this category, such programs will be designated TV-Y7-FV.
TV-G-- Most parents would find this program suitable for all ages.
TV-PG-- This program contains some material that parents may find unsuitable for younger children. The program contains one or more of the following: moderate violence (V), some sexual situations (S), infrequent coarse language (L), or some suggestive dialogue (D).
TV-14-- This program contains some material that many parents would find unsuitable for children under 14 years of age. This program contains one or more of the following: intense violence (V), intense sexual situations (S), strong coarse language (L), or intensely suggestive dialogue (D).
TV-MA-- This program is specifically designed to be viewed by adults and therefore may be unsuitable for children under 17. This program contains one or more of the following: graphic violence (V), explicit sexual activity (S), or crude indecent language (L).
The ratings icons and associated symbols appear for 15 seconds at the beginning of all rated programming. Sports, news, commercials, promotions and unedited movies with a Motion Picture Association of America (MPAA) rating that are aired on premium cable channels are exempt from these ratings.
The 1996 Act also required that television receivers manufactured or imported for use in the United States be equipped with circuitry that is capable of identifying all programs with a common rating and blocking individual channels during selected time periods. This is the circuitry commonly referred to as the "V-chip." This requirement applies to all television sets with a least a 13 inch screen. Manufacturers of such equipment were required to include a v-chip on at least 50% of their products by July 1, 1999 and on the remaining 50% by January 1, 2000. The Commission also required that personal computers that include a television tuner and a 13 inch or larger monitor must also include the v-chip. However, the requirement to rate programming applies only to video transmissions that are delivered to the computer by using the television tuner. Video transmissions delivered over the Internet or via computer networks are not required to be rated.
The parental control devices that MVPDs provide to their subscribers offer additional options to filter television viewing. Both analog and digital cable boxes allow parents to block channels and lock the settings with passwords. Newer digital boxes offer more extensive filtering capabilities that allow programs to be blocked by rating, channel, or program title. Movies can be blocked according to MPAA ratings. Some boxes also allow subscribers to block access to an entire service, such as VOD, and allow subscribers to block content based on time and day.
Section 504 of the 1996 Act required a cable operator to fully scramble or block the audio and video portions of programming services not specifically subscribed to by a household. The cable operator must fully scramble or block the programming in question upon the request of the subscriber and at no charge to the subscriber. In addition, Section 505 states that cable operators or other multichannel video programming distributors who offer sexually explicit programming or other programming that is indecent on any
In 1996, the Commission adopted interim rules to implement Section 505 of the 1996 Act. The interim rules established the hours of 6:00 a.m. to 10:00 p.m. as those hours when a significant number of children are likely to have access to and view the programming. However, before the rules could take effect, Section 505 was challenged in the courts and a federal court in Delaware issued a decision (Playboy Entertainment Group v. U.S.) which determined that Section 505 is unconstitutional. An appeal of this decision was filed with the U.S. Supreme Court. In May 2000, the U.S. Supreme Court also determined that Section 505 is unconstitutional. Thus, the Commission’s rules implementing Section 505 cannot be enforced. However, persons who wish to prevent the viewing of such programming may do so by obtaining a “lockbox” or by exercising the options provided in Section 504 of the 1996 Act.
Finally, Section 506 of the 1996 Cable Act allows cable operators to refuse to transmit any public access or leased access program which contains obscenity, indecency, or nudity. In June 1996, the U.S. Supreme Court narrowed application of Section 506 in a decision (Denver Area Educational Telecommunications Consortium, Inc. v. FCC) which held that cable operators may decline to carry indecent programming on leased access channels, but cannot exercise the same control over programming on public access channels.
Once a cable system allows a legally qualified candidate for public office to use its facilities, it must afford "equal opportunities" to all other candidates for that office to use its facilities. The cable system may not censor the content of a candidate's material in any way, and may not discriminate between candidates in practices, regulations, facilities or services rendered while making time available to such candidates. Candidate appearances which are exempt from the "equal opportunities" rules include appearances on a bona fide newscast, bona fide news interview, bona fide news documentary, or during on-the-spot coverage of a bona fide news event.
Cable television systems may charge political candidates only the "lowest unit charge" of the system for the same class and amount of time for the same time period, during the 45 days preceding a primary or runoff election and the 60 days preceding a general or special election. Candidates should be charged no more per unit than the system charges its most favored commercial advertisers for the same classes and amounts of time for the same time periods. Information concerning the rates, terms, conditions and all discounts and privileges offered to commercial advertisers should be disclosed and made available to candidates.
Like broadcasting stations, cable systems are generally prohibited from transmitting information or advertisements concerning lotteries or other schemes offering prizes dependent upon chance in exchange for consideration. The rule exempts information about a state lottery cablecast by a system located in that state or another state which conducts a state lottery, or by a system which is integrated with a cable system in such a state, if it is technically unable to terminate the transmission to other states. It also permits the cablecast of information about a lottery or similar scheme that is not prohibited by the state in which it is conducted and which is (1) conducted by a not-for-profit or governmental organization or (2) conducted by a commercial organization and which is clearly occasional and ancillary to the organization's primary business. Information about gaming conducted pursuant to the Indian Gaming Regulatory Act is also exempt.
On June 14, 1999, the U.S. Supreme Court issued a decision (Greater New Orleans Broadcasting Association, Inc. v. U.S.) which held that this prohibition could not be applied to the advertisements of lawful private casino gambling that are broadcast on radio or television stations located in Louisiana, where such gambling is legal.
The sponsorship identification rule requires the identification of the sponsor of any origination cablecasting which is presented in exchange for money, service or "other valuable consideration." All political spots must contain a visual sponsorship identification in letters equal to at least four percent of the screen height and which are on the air for at least four seconds. Where the cablecast advertises commercial products or services, a mention of the corporate or trade name is usually considered sufficient. Sponsorship identification announcements must also be made before and after certain cablecast material if inducements are given to the cable system in exchange for cablecasting the material.
Commercial Limits in Children's Programs
Regulations implemented pursuant to the Children's Television Act of 1990 restrict the amount of commercial matter that cable operators may cablecast on programs originally produced and broadcast primarily for children 12 years old and younger. Cable operators may transmit no more than 10.5 minutes of commercial matter per hour during children's programming on weekends and no more than 12 minutes of commercial matter per hour on weekdays. Cable systems must maintain records available for public inspection which document compliance with the rule.
Advertisements for cigarettes, little cigars and smokeless tobacco are prohibited on any medium of electronic communication subject to the jurisdiction of the Federal Communications Commission. Laws against these types of advertising have criminal penalties and are administered by the U.S. Department of Justice rather than by the Commission.
Access and Origination Channels
Access channels typically provide community-oriented programming, such as local news, public announcements and government meetings. They are usually programmed by individuals or groups, on either public, educational or governmental access channels or on commercial leased access channels.
Origination channels are usually programmed by the cable system and may include many types of specialized program packages such as movies, sports, national news and public affairs, feature entertainment, children's programming or programming for specific ethnic or other minority groups.
Channels For Public, Educational or Governmental Use
Under the 1984 Cable Act, local franchising authorities may require that cable operators set aside channels for public, educational, or governmental ("PEG") use. In addition, franchising authorities may require cable operators to provide services, facilities, and equipment for the use of these channels. Many cable systems include several PEG channels.
In general, cable operators are not permitted to control the content of programming on PEG channels. Cable operators may impose non-content-based requirements, such as minimum production standards, and may mandate equipment user training.
PEG channel capacity which is not in use for its designated purpose may, with the franchising authority's permission, be used by the cable operator to provide other services. Under certain conditions, a franchising authority may authorize the use of unused PEG channels to carry low power commercial television stations and local noncommercial educational television stations that are required by law.
Leased Commercial Access
The statutory framework for commercial leased access was established by the 1984 Act and amended by the 1992 Cable Act. The 1984 Cable Act established leased access to assure access to the channel capacity of cable systems by parties unaffiliated with the cable operator who want to distribute video programming free of the editorial control of the cable operator. Channel set-aside requirements were established in proportion to a system's total activated channel capacity, in order to "assure that the widest possible diversity of information sources are made available to the public from cable systems in a manner consistent with the growth and development of cable systems." A cable system operator was permitted to use any unused leased access channel capacity for its own purposes, until such time as a written agreement for a leased channel use was obtained. Each system operator subject to this requirement was to establish the "price, terms, and conditions of such use which are at least sufficient to assure that such use will not adversely affect the operation, financial condition, or market development of the cable system."
The only exception to the leased commercial access channel set-aside provides that up to 33 percent of a system's designated leased commercial access channel capacity may be used for qualified minority or educational programming from sources that may or may not be affiliated with the cable operator. The qualified minority or educational source may be affiliated with the operator.
The 1992 Cable Act amendments broadened the statutory purpose to include "the promotion of competition in the delivery of diverse sources of video programming," and the Commission was provided with expanded authority: (1) to determine the maximum reasonable rates that a cable operator may establish for leased access use, including the rate charged for the billing of subscribers and for the collection of revenue from subscribers by the cable operator for such use; (2) to establish reasonable terms and conditions for leased access, including those for billing and collection; and (3) to establish procedures for the expedited resolution of leased access disputes. The legislative history of the 1992 amendments expresses concern that some cable operators may have established unreasonable terms or may have had financial incentives to refuse to lease channel capacity to potential leased access users based on anticompetitive motives, especially if the operator had a financial interest in the programming services it carried.
Any person aggrieved by the failure or the refusal of a cable operator to make commercial channel capacity available or to charge rates as required by Commission rules may file a petition for relief with the Commission within 60 days of the alleged violation. In order to merit relief, the petition must show by clear and convincing evidence that the operator violated the leased access statutory or regulatory provisions or otherwise acted unreasonably or in bad faith. Relief may be in the form of refunds, injunctive relief or forfeitures. The Commission encourages parties to use alternative dispute resolution procedures such as settlement negotiation, conciliation, facilitation, mediation, fact finding, mini-trials and arbitration. The 1992 Cable Act provides for both judicial and Commission review of leased commercial access disputes.
Equal Employment Opportunity ("EEO")
The Communications Act of 1934 and the Commission's rules prohibit multi-channel video programming distributors (“MVPDs”) such as cable operators, satellite master antenna television systems serving 50 or more subscribers, wireless cable operators and certain satellite distributors, from discriminating against any job applicant or employee because of the person's race, color, religion, national origin, age or gender. The law also requires that these entities, if they employ six or more full-time employees, establish, maintain and execute a continuing program to assure equal employment opportunity in recruitment and employment. Key areas which this program must address include: wide recruitment for all full-time openings, use of sources that request to be notified of openings, using general non-job specific outreach initiatives like job fairs or training, and self-assessment of the system's EEO program.
The Commission monitors compliance with the EEO rules on a yearly basis. Entities are subject to an annual certification review which begins when employment units (i.e., MVPDs and their headquarters offices) with six or more full-time employees file an EEO Program Report (FCC Form 396-C) with the Commission by September 30th of each year. The purpose of this review is to determine whether the employment units are engaging in good faith EEO efforts. The Form 396-C requests information about the entity's EEO program.
The Commission also requires operators to respond to selected questions from a Supplemental Investigation Sheet ("SIS") which requires more detailed information regarding the operator's EEO efforts and employee job classifications. SISs are required at least once every five years and responses to them allow the Commission to evaluate in greater detail each employment unit's employment practices, including the accuracy of its job classifications. Those filing an SIS also attach their most recent annual EEO public file report. This report, filed with the Commission only with the SIS or in response or an audit or inquiry, is required of units subject to the recruiting requirements every year. It must be put in a unit’s public file and posted on its website if it has a website.
In addition, the Commission conducts random EEO audits. Audits are conducted by Commission EEO staff and are conducted for 5% of units each year.
The certification process consists of an examination of the information submitted on the Form 396-C, and, if applicable, an SIS response or results of an audit. Any additional information that may have been supplied by the operator or requested by the Commission is also considered. Finally, the Commission notes any final decisions reached regarding charges of discrimination by government agencies and courts established to enforce anti-discrimination laws. If the data indicates compliance with the EEO requirements, a certification of compliance is issued for that year. If the data raises questions about the employment unit's efforts, additional information is requested.
If an operator violates the MVPD EEO rules, the Commission has various remedies and sanctions available. Based on the severity and frequency of the violation, the Commission may issue a letter of caution or decertify a unit. If a unit is decertified, the Commission may also impose reporting conditions, impose a fine, or suspend the unit's Cable Television Relay Service ("CARS") license until the violation is corrected. The Commission may also communicate its adverse findings to the local franchising authority.
Anyone with knowledge of any violation of the FCC's EEO rules committed by a licensee of a broadcast station or an MVPD unit may notify the FCC EEO staff of the alleged violation at any time. Complainants should keep in mind, however, that anyone filing such a complaint should include as much specific information and supporting evidence as possible in order for the EEO staff to investigate properly. Also, because of limits imposed on the Commission by statutes of limitations on violations, it is best to file such a complaint as soon as possible after a violation occurs. Anyone interested in filing a charge alleging that a broadcaster or MVPD has discriminated unlawfully may file with the EEO staff but, in accordance with a Memorandum of Understanding (MOU) between the FCC and the Equal Employment Opportunity Commission (EEOC), the EEOC is the lead federal agency on determining discrimination. If a charge is filed with the FCC, we will act as a receiving agency but will forward the charge to the EEOC for evaluation. In accordance with the MOU, the FCC will take cognizance of any final finding of discrimination determined by the EEOC or other competent body such as a state agency or court. The deadline for filing a charge of discrimination with the EEOC is 180 days from the date of the discrimination. Anyone with questions about how this deadline is determined or to inquire about any possible exceptions to the deadline should contact the EEOC.
In processing discrimination charges, the Commission first determines whether the charge falls within the jurisdiction of the EEOC or a comparable state or local agency. If it does, the charge is referred to the appropriate agency and the Commission defers action on the matter until a final decision is reached. If the matter is not referred, the Commission processes the charge and determines what action or inquiry, if any, is appropriate.
Anyone wishing to file a charge of discrimination or a complaint of violation of any of the Commission’s EEO rules should write to: Federal Communications Commission, Media Bureau, Policy Division, EEO Staff, 45 L Street NE, Washington, D.C. 20554.
To receive more information about complaint procedures or the MVPD EEO provisions in general, please contact the EEO Staff at (202) 418-1450. The current EEO rules for MVPDs took effect on March 10, 2003. For further information on the Commission's Equal Employment Opportunity rules, consult the following: 47 U.S.C. §554; 47 C.F.R. §§76.71 - 76.79 and 76.1702; Review of the Commission’s Broadcast and Cable Equal Employment Opportunity Rules and Policies, 17 FCC Rcd 24018 (2002), recon. pending.
Cable System Ownership
The Commission rules restrict the ownership interest of cable operators and their ability to own or control video programming services. These rules also restrict the ability of Broadcast Radio Service (“BRS”) (formerly known as Multichannel Multipoint Distribution Service ("MMDS")) and SMATV systems to own or control interests in cable systems. While there are no prohibitions on foreign ownership of cable television systems, foreign governments or their representatives may not own CARS stations.
National Subscriber (Horizontal) Limits
Section 613 of the Communications Act requires the Commission to prescribe rules establishing reasonable limits on the number of cable subscribers served by an individual cable operator through its ownership or control of local cable systems. In 1993, the Commission adopted rules prohibiting any person from reaching, through owned or controlled cable systems, more than 30% of all homes passed nationwide by cable. In 1999, the Commission amended this rule to prohibit any person from serving, through owned or controlled cable systems, more than 30% of all multiple video programming distribution ("MVPD") subscribers nationwide. The Commission concluded that actual subscriber numbers, rather than cable homes passed, more accurately reflected the market power of a multiple system operator ("MSO"). In addition, given that DBS and other non-cable providers have a growing impact on the market, the Commission decided to take into account the number of all MVPD subscribers, rather than cable subscribers alone. On that basis, no cable operator shall serve more than 30% of all multichannel-video programming subscribers nationwide through multichannel video programming distributors owned by such operator or in which such cable operator holds an attributable interest. By limiting the horizontal concentration of the cable industry, the Commission seeks to prevent the concentration of local cable systems into the hands of only a few large operators and to limit the ability of multiple system operators to exercise undue influence in the program acquisition market.
The Commission’s 30% ownership limit has been reviewed in the courts several times. In 2001, in Time Warner Entertainment Co. v. FCC, 240 F.3d 1126 (D.C. Cir. 2001) (“Time Warner II”) the court did not vacate the 30% horizontal limit, but found that the record did not adequately support that limit, and reversed and remanded to the Commission. In 2008, the Commission released an Order re-establishing the 30% limit using more recent, empirical data to reach this result. In 2009, in Comcast Corp. v. FCC, 579 F.3d 1 (D.C. Cir. 2009), the court vacated the horizontal ownership limit without remand. In that decision, the court found that the Commission failed to demonstrate that allowing a cable operator to serve more than 30% of all cable subscribers would threaten competition or diversity in programming.
Vertical Ownership Restrictions
To prevent vertically integrated cable systems from unduly favoring their affiliated programmers over non-affiliated program providers, the Commission, in 1993, imposed a 40% limit on the number of channels that can be occupied by video programmers affiliated with the particular cable system. In this context, vertical integration refers to common ownership of both cable systems and program networks, channels, services or production companies. For purposes of determining common ownership, all interests of 5% or greater are recognized unless there is no possibility of such interests exerting control or influence over the cable system. In 2001, the decision in Time Warner II reversed and remanded the 40% channel occupancy limit, finding that the Commission had failed to justify its vertical limit with record evidence, and had failed adequately to consider the benefits and harms of vertical integration or current MVPD market conditions in its analysis. In 2008, the Commission issued a Further Notice of Proposed Rulemaking seeking comment on issues relating to the appropriate vertical ownership limit, including the appropriate methodology for determining the limit and how to define the relevant programming and distribution markets.
Cable/Telephone Cross-Ownership Restrictions
Pursuant to the 1984 Cable Act, the Commission adopted rules placing restrictions on telephone companies providing cable television service. In general, telephone companies were prohibited from providing video programming directly to subscribers within their telephone service areas. However, telephone companies were allowed to provide cable television service in rural areas (defined as places of fewer than 2500 persons), or where the telephone company was able to show that cable service could not exist unless provided by the telephone company. Waivers could also be granted for good cause.
The 1996 Act established various options for local exchange carriers to provide video programming to subscribers. They are: common carrier transport, wireless ("BRS"), cable, and open video systems. The Commission adopted a streamlined regulatory format for open video systems that allowed open video system operators to offer their own programming and afforded independent programmers the ability to reach subscribers directly. By encouraging entry into the video programming distribution market, the Commission positioned open video systems to compete with cable operators, direct broadcast satellite systems, and wireless cable providers.
Cable/BRS and Cable/SMATV Cross-Ownership
Commission rules and the Communications Act generally preclude common ownership of (1) a cable television system and a Broadcast Radio Service (“BRS”) (formerly "MMDS" and referred to as wireless cable) system or (2) a cable television system and a Satellite Master Antenna Television (“SMATV”) system that serves the same area. However, following passage of the 1996 Act, this restriction does not apply to cable systems subject to effective competition in the relevant franchise area. BRS uses an omnidirectional microwave signal that is sent from a central transmission tower to receiving microwave antennas. The microwave signal is a high frequency signal that is converted for television use by a converter located on the subscriber's receiving antenna. A SMATV system is a video distribution system that does not use any public rights-of-way. SMATV systems serve multiple dwelling units, such as apartments and condominiums as well as hotels and office buildings, receiving programming via a satellite dish or antenna and distributing it through the building’s wiring.
Technical Requirements – Pole Attachments
Cable systems distribute TV signals either through optical fiber or through coaxial cable strung on existing poles owned by telephone or electric utility companies. Cable operators also may use their own poles, place their cable underground or use transmission facilities or rights-of-way owned or controlled by a utility or municipality. Some may use combinations of these arrangements. Sometimes conflicts arise between cable television systems and utility companies over pole attachment issues, particularly the rates for use of utility facilities and timely access to the infrastructure. The Commission is authorized to resolve pole attachment disputes by regulating the rates, terms, and conditions for cable TV pole attachments to ensure they are just and reasonable. The Commission does not regulate pole attachments in States that have certified that they regulate pole attachments, unless a State fails to act on a complaint in a timely fashion. The Commission periodically issues public notices listing those states which have filed pole attachment regulation certifications.
The Commission maintains a webpage with information about pole attachment rules and policies. See https://transition.fcc.gov/eb/mdrd/. Recently, the Commission updated its pole attachment rules and policies (by Order FCC 11-50) in conjunction with its National Broadband plan. Pole attachment complaints are handled by the Market Disputes Resolution Division of the Enforcement Bureau and pole attachment policy issues are addressed by the Competition Policy Division of the Wireline Competition Bureau.
To allow compatibility between generic retail televisions and cable systems, the Commission has adopted modulation and channelization standards for analog and some digital cable. This allows TV sets to be sold as “Cable Ready” or “Digital Cable Ready.”
To ensure the delivery of satisfactory television signals to cable subscribers, the Commission also has adopted various technical performance standards which local franchising authorities are generally authorized to enforce through their franchising process. Cable operators are required to establish a complaint resolution process and to advise their subscribers about it annually. The Commission generally preempted conflicting local performance standards. However, Cable systems with fewer than 1,000 subscribers, as well as those serving rural areas, may negotiate with their respective franchising authorities for certain lower performance standards. The Commission has yet to adopt technical performance standards for all-digital systems.
No cable television system may utilize a frequency at power levels equal to or exceeding 10 microwatts within 100 kHz plus tolerance of the emergency aircraft locator frequency 121.5 MHz or within 50 kHz plus tolerance of the distress signal frequencies 156.8 MHz and 243.0 MHz.
Use of Aeronautical Frequencies
The Commission's technical rules include standards to control signal leakage from cable systems. Any cable system, regardless of its size, which intends to use a frequency in the band 108-137 MHz or 225-400 MHz above a power level of 100 microwatts, must first notify the Commission of its intention to do so before using those frequencies. This requirement permits Commission review of the proposed frequency usage and ensures that cable operations are on frequencies which are offset from the air navigation and communications functions of local aeronautical radio services. The standards used to determine the permissibility of proposed frequency usage are based on frequency separation between the proposed cable frequencies and aeronautical station assignments. Certain logging and leakage monitoring obligations are also imposed on operators using frequencies within the above-mentioned bands. The requirements on the use of aeronautical frequencies are contained in 47 C.F.R. §§ 76.611 - 76.617. All cable systems using aeronautical frequencies must file a yearly report demonstrating compliance with these rules.
Cable systems obtain certain signals, sometimes from distances impractical to serve by cable, through microwave relay stations. Microwave systems may also be used by cable operators for distribution of signals within the cable system where it is impractical to run cable due to its cost or due to potential signal deterioration. Cable operators may purchase microwave relay service from companies providing such common carrier services, or they may operate their own relay stations licensed by the Commission as CARS stations.
The rules for CARS stations also authorize licensing of mobile remote pick-up stations for the transmission of programming from the scenes of events outside a studio back to the cable studio or headend. In addition, they provide for the licensing of studio-to-headend link stations. A license is necessary to operate a CARS Station. An applicant must file FCC Form 327 for a license. Cable system owners or cooperative enterprises and cable networks with at least 5 million subscribers are eligible to become CARS licensees. A CARS licensee also may serve nonaffiliated cable systems based on a cost-sharing, nonprofit arrangement. These arrangements permit the delivery of cable programming where economies might otherwise prevent a small system from using microwave transmission. Broadcast microwave facilities, are also permitted to provide signals to cable television systems on a similar nonprofit, cost-sharing basis.
In 1993 the Commission adopted rules pursuant to the 1992 Cable Act which address the “disposition, after a subscriber terminates service, of any cable installed by the cable operator within the premises of such subscriber.” The home wiring rules are intended to encourage competition between multichannel video delivery services by allowing a consumer who voluntarily terminates cable service to use the wiring to receive a competing multichannel video delivery service, such as direct broadcast satellite, wireless cable ("MMDS"), or a different cable service, without the expense and inconvenience of installing new wire.
In 1997 the Commission expanded the scope of the home wiring rules to address disposition of “home run” wiring in multiple dwelling units (“MDUs”) such as apartments and condominiums. “Home run” wiring is the wiring in an MDU that runs from the individual apartment/condominium unit to the point at which the wiring becomes devoted to an individual subscriber, typically the junction box. The disposition rules for “home” wiring and “home run” wiring differ.
Under the Commission's “home” wiring rules, cable subscribers may provide and install their own cable home wiring within their premises and may connect additional home wiring within their premises to the wiring installed and owned by the cable operator prior to the termination of cable service. Under this rule, customers may select who will install their home wiring (e.g., themselves, the cable operator or a commercial contractor). In addition, customers may connect additional wiring, splitters or other equipment to the cable operator's wiring, or redirect or reroute the home wiring, so long as no electronic or physical harm is caused to the cable system and the physical integrity of the cable operator's wiring remains intact. Cable subscribers are not permitted to physically cut, improperly terminate, substantially alter or otherwise destroy cable operator-owned inside wiring. To protect the cable system from signal leakage, electronic and physical harm and other types of degradation, the cable operator may require that any home wiring (including passive splitters, connectors and other equipment used in the installation of home wiring) meets reasonable technical specifications, not to exceed the technical specifications of such equipment installed by the cable operator. However, if the subscriber's connection to, redirection of or rerouting of the home wiring causes electronic or physical harm to the cable system, the cable operator may impose additional technical specifications to eliminate such harm.
When a cable operator owns the “home” wiring within the subscriber's home or apartment/condominium and the subscriber voluntarily terminates cable service, the cable operator may leave such wiring in place, or may notify the subscriber that it will remove the wiring unless the subscriber purchases the wire from the operator (on a replacement cost basis). When the subscriber contacts the cable operator to terminate cable service voluntarily, the cable operator, if it owns and intends to remove the home wiring, must inform the subscriber:
(1) that the cable operator owns the cable home wiring;
(2) that the cable operator intends to remove it;
(3) that the subscriber has the right to purchase it; and
(4) what the per-foot replacement cost (i.e., the total charge) for the wiring would be.
If the consumer declines to purchase the wiring, the cable operator must remove the wiring at no charge to the subscriber within seven days of the subscriber's decision. If the cable company fails to remove the wiring, it forfeits its right to remove the wire or restrict its use at any later time. The cable company must pay for any damage done to the subscriber's home while removing the wire.
When a cable operator owns the “home run” wiring in an MDU (e.g., an apartment or condominium) and the cable operator no longer has a contractual right to provide service to any or all residents in the MDU, the MDU owner may notify the cable operator that it intends to permit a competitor to provide such services. The cable operator will have 30 days to decide whether it will:
(1) remove its “home run” wiring;
(2) abandon that wiring; or
(3) sell the wiring to the MDU owner or the new cable services provider.
If the operator decides to sell the wiring, the selling price will be negotiated or, failing successful negotiations, be determined by arbitration. The significant difference between the disposition rules for “home” wiring and “home run” wiring is that the price for home wiring is the replacement cost of the wiring itself. The price for sale of “home run” wiring is a negotiated, and presumably higher, price representing the value of that wiring to the cable provider.
The point at which “home” wiring becomes “home run” wiring is the demarcation point. The demarcation point is typically about 12 inches outside where the wiring enters the subscriber’s MDU unit. But if home wiring running from a subscriber’s MDU unit is not “accessible” at that point, the wiring maintains its “home” wiring characterization until it becomes accessible, at which point it becomes “home run” wiring. The Commission has ruled that home wiring that is behind brick, metal conduit, cinder blocks, and sheet rock is inaccessible and remains home wiring until it reaches an access point such as a door or junction box. Such wiring is subject to the “home“ wiring disposition rules until it reaches that access point.
Compatibility Between Cable Systems and Consumer Equipment
Subscribers to a digital cable service usually rent a set-top box from their cable operator. But the Commission’s rules allow subscribers to use a CableCARD-ready (sometimes called “plug and play” or “digital cable-ready”) device instead of leasing a set-top box from the cable operator. Purchasers of a television or set-top box that is CableCARD-ready can watch cable television without renting a set-top box from the cable operator. Cable subscribers may purchase a CableCARD-ready device (such as a television or set-top box) from a retailer and insert a CableCARD into the device. The CableCARD may be rented from the cable company. Cable operators typically charge between $2 and $4 per month to lease a CableCARD.
A retail CableCARD-ready device is a television, set-top box, or device that connects to a personal computer, that you can plug directly into your cable system to receive cable channels without having to lease a set-top box from your cable operator. As most cable operators provide some or all of their channels in digital format, old (analog) cable-ready television sets no longer work for all channels. Many consumers purchase CableCARD-ready devices because they prefer the convenience (and cost savings) of being able to receive their cable programming without having to lease a set-top box from their cable operator. CableCARD-ready devices work anywhere in the country on any cable system offering digital services – all that is needed is a cable operator-provided CableCARD. CableCARD-ready devices may have features that the set-top box the cable operator leases does not, such as access to Internet video or advanced searching and recording functions.
Retail devices equipped with CableCARDs can receive all “linear” video programming—pre-scheduled programming that includes premium and high-definition services—but they typically will not provide access to other interactive (two-way) services like video-on-demand. Operators that use a technology called “switched digital video” or SDV may require their subscribers to obtain a separate device called a “tuning adapter” to receive some channels. Cable operators typically provide tuning adapters at no additional charge. A device manufacturer, retailer or cable operator can tell you if video-on-demand is available on a particular device.
CableCARD-ready set-top boxes and devices that connect to a personal computer are currently in retail stores and available for sale on the Internet. To verify that a device is a legitimate CableCARD-ready device, confirm with a retailer that the device is “digital cable-ready” and look for the “CableCARD-ready” or “digital cable-ready” label. Manufacturers that use this label must meet certain technical standards and must complete a testing and verification process.
After purchase a CableCARD-ready device, the subscriber will need to obtain a CableCARD from the cable operator. All cable operators are required to allow subscribers to install the CableCARD in their CableCARD-ready device themselves as long as that device comes with instructions on how to install the CableCARD and a manned toll-free number is provided for customer support. Most cable operators also offer professional installation for a fee.
New rules went into effect in August 2011 that clarified and expanded rights for owners of CableCARD-ready devices. Subscribers have the right to: receive accurate information from their cable operator about CableCARDs; install their CableCARDs themselves; have a technician show up with the correct number and type of CableCARDs if a subscriber opts for professional installation; and receive a discount from a package price if a subscriber chooses to use his own CableCARD-ready device rather than lease the operator’s set-top box. For more information on subscribers’ rights, see the CableCARD Rights Guide.
Subscribers who want to file a complaint about CableCARDs or other equipment leased from the cable provider may click on www.fcc.gov/complaints.
The Commission requires cable operators to maintain various documents and records of their authorization and operation for inspection by the Commission, local franchising authorities and/or the public.
Cable operators must maintain a number of records for Commission inspection. These include a political file, sponsorship identification records, equal employment opportunities ("EEO") records, commercial records for children's programming, records demonstrating compliance with the Commission's leased access provisions, ownership records, the designation and location of the cable system's principal headend, and a list of broadcast television stations carried in fulfillment of the Commission's must-carry provisions.
Records required to be maintained primarily for inspection by the Commission or by local franchising authorities include evidence of compliance with the Commission's technical standards, a current list of channels offered to subscribers, proof-of-performance test data, signal leakage logs and repair records, a copy of the Commission's cable television regulations, records of subscribers (aggregate information used for assessing fees), and records of subscriber complaints on signal quality.
In addition to the above-listed files, cable systems with 1000 subscribers or more must maintain a public inspection file. This file must contain a copy of records to be maintained as part of the political file, sponsorship identification records, EEO documents, commercial records for children's programming, leased access records, ownership records, required proof-of-performance test data, and required signal leakage and repair logs.
The public inspection file must be kept at the office which the system operator maintains for business purposes, such as the place where the operator ordinarily collects subscriber charges, resolves subscriber complaints and conducts other business, or at any accessible place in the community served by the system (such as a public registry for documents or an attorney's office). The public inspection file must be available for public inspection at any time during regular business hours. However, if the cable system serves at least 1,000 but fewer than 5,000 subscribers, these records must only be provided upon request.
Cable operators have the option of maintaining all or part of the public inspection file in a computer database rather than in a paper file. If a cable operator chooses to exercise this option, the cable operator must provide a computer terminal for public use and make paper copies available upon request.
Cable operators must make copies of any materials in the public inspection file available for photocopying at the time of an in-person request. Cable operators may charge a reasonable fee for photocopying. Requests for photocopies must be fulfilled at a location specified by the cable operator, within a reasonable time not to exceed seven days. System operators are not required to honor requests for photocopying by mail but may do so at their discretion.
Protection of Subscriber Privacy
Cable operators generally are prohibited from using their cable systems to collect personally identifiable information concerning any subscriber without the prior written or electronic consent of the subscriber. However, cable operators may collect this information if necessary to render cable television or other service to the subscriber or to detect unauthorized reception of cable communications.
Cable operators generally are also prohibited from disclosing personally identifiable information without the prior written or electronic consent of the subscriber. However, there are certain circumstances where the cable operator may do so. A cable operator may disclose this information if such disclosure is necessary to render, or conduct a legitimate business activity related to, cable television or other service provided to the subscriber. The operator may also disclose such information pursuant to a court order authorizing the disclosure, however, the subscriber must be notified of such an order by the person to whom the order is directed (such as a government agency or the cable operator). Finally, the cable operator may disclose the names and addresses of subscribers, but the cable operator must provide the subscriber the opportunity to prohibit or limit such disclosure. Moreover, the cable operator must ensure the disclosure does not reveal, directly or indirectly, the extent of any viewing or other use by the subscriber or the nature of any transaction made by the subscriber over the cable system.
At the time of entering into an agreement to provide cable service or any other service to a subscriber, cable operators must notify the subscriber of the following: the nature of any personally identifiable information collected, or that will be collected, regarding the subscriber; the nature of the use of such information; the nature, frequency, and purpose of any possible disclosure of such information; including an identification of the types of persons to whom the disclosure may be made, the period during which such information will be maintained by the cable operator, the times and place at which the subscriber may gain access to such information, and the limitations with respect to collection and disclosure of information by a cable operator and the right of subscribers to enforce these limitations. Notice to the subscriber must be in the form of a separate, written statement and must be clear and conspicuous. Notice must also be given at least once every year that the agreed upon service is provided. "Personally identifiable information" does not include any record of aggregate data which does not identify particular persons.
Cable operators must provide a subscriber access to all personally identifiable information regarding that subscriber. Such information must be made available to the subscriber at reasonable times and at a convenient place designated by the cable operator. The subscriber must be provided a reasonable opportunity to correct any error in such information. Cable operators must destroy personally identifiable information if such information is no longer necessary for the purpose for which it was collected and there are no pending requests or orders for access to such information.
Any person aggrieved by a cable operator's violation of these provisions may bring a civil action in a United States district court. As a remedy, the court may award actual damages, punitive damages, and reasonable attorneys' fees and other litigation costs reasonably incurred. A government entity may obtain personally identifiable information concerning a cable subscriber pursuant to a court order only if the entity offers clear and convincing evidence that the subject of the information is reasonably suspected of engaging in criminal activity and that the information sought would be material evidence in the case. In addition, the subject of the information must be afforded the opportunity to appear and contest the entity's claim.
Complaints, Investigations and Inquiries
Under the dual jurisdictional approach to cable television regulation, several important areas of regulation are administered by local franchising authorities rather than by the Commission. These include subscriber rates for basic cable service, installation fees, equipment and customer service, where the local franchising authority has chosen to regulate; bills and billing practices; extension of cable service to individual homes and businesses; repairs; improper wiring; theft of service; and false or misleading advertising concerning the cable system's capabilities. Complainants are urged to make their complaints by letter, directed to local officials responsible for regulation of their cable system. In most cases, the local franchising authority will review the charges for basic cable service and equipment to determine if the charges are justified.
Pursuant to the 1996 Act, the Commission's authority to regulate the rates charged for cable programming service was terminated on March 31, 1999. Therefore, the cable company determines the rate for this service and the Commission does not have the authority to review the rate or to accept complaints about the rate. (Local franchising authorities continue to have authority to regulate basic service tier rates where effective competition has not been shown to exist, if they choose to do so.)
The Commission is particularly interested in interference problems to cable service generated by citizens band or amateur radio operations. These problems may be addressed to the Commission field office located closest to the affected cable system or to the Commission headquarters in Washington, D.C.
Requests for Special Relief
A cable system operator, broadcaster, franchising authority and, under certain circumstances, individuals, by filing a petition for special relief with a filing fee, may seek special relief or a waiver of any rule relating to cable television. Requests for declaratory orders seeking Commission interpretation of a disputed question about the rules may be treated as petitions for special relief or rulemaking. Neither complaints related to the mandatory carriage provisions, nor petitions for declaratory ruling are subject to a filing fee.
A petitioner may submit the request by letter, accompanied by a certification that all interested parties who may be directly affected by any Commission action have been given a copy of the request. In addition to stating the relief requested, the petition should contain the facts demonstrating the need for relief and should show how granting the request would serve the public interest. An original and two copies of the petitions not requiring a filing fee must be filed with the Office of the Secretary, Federal Communications Commission, 45 L Street NE, Washington, D.C. 20554. Any petition requiring a fee must be submitted, along with a check or money order, to:Federal Communications Commission, c/o U.S. Bank – Government Lockbox # 979089, SL-MO-C2-GL, 1005 Convention Plaza, St. Louis, MO 63101 (Attention: FCC Government Lockbox). Notification about the filing of petitions for special relief is given to the general public through Public Notices published by the Commission. These Notices are accessible through the Internet at: Web site: https://www.fcc.gov.
Any person may submit comments in opposition to or in support of the petition generally within 20 days after it is filed. These pleadings also must be served on the petitioner and on all persons listed in the petitioner's certificate of service, and an original and two copies should be submitted to the Secretary. The petitioner may then file reply comments within generally 10 days after the submission of comments or oppositions.
Show Cause Orders and Forfeiture Actions
In response to a petition, or on its own motion, the Commission may issue an order to show cause or initiate a forfeiture proceeding. This action begins a proceeding similar to a civil suit for an injunction; if the complainant prevails at the hearing, the Commission issues a cease and desist order and/or a forfeiture. Such a proceeding may be started by filing an original and two copies of a petition that the Commission subsequently places on public notice. Comments or oppositions may be submitted within 30 days and replies within 20 days. In the case of a forfeiture, a hearing may be held, but in almost all cases, a decision on a forfeiture is made without a hearing.
Such petitions usually seek to remedy an alleged violation of the Commission's rules. A copy of the petition should be sent to the cable system operator and to other interested parties. It is possible, however, for an individual or group to join a cable system in opposing a request for an order to show cause. Once all the pleadings have been submitted, the Commission reviews the arguments and determines whether an order to show cause should be issued or a forfeiture proceeding should be initiated.
The Commission has the authority to impose monetary forfeitures on cable television systems or CARS licensees found to be in violation of the Commission's Rules, terms or conditions of a certificate or license, any Commission order, or any provision of the Communications Act. The Commission may impose forfeitures on cable systems by issuing either a notice affording an opportunity for hearing or a notice of apparent liability. The maximum fine imposed on cable system operators for each separate offense is $25,000 for each day, the total fine not to exceed $250,000 for each notice of apparent liability or hearing. Each day of a continuing violation is considered a separate offense. In the case of cable systems, the Commission must issue any such notice within one year of the offense.
The Commission is continually in the process of adopting new rules or amending existing ones to ensure its regulations serve the public interest. Since many of these rules have widespread impact, the public may want to participate in the rulemaking process. Anyone may petition the Commission to adopt a rule at any time. A petition should include the text or substance of the proposed rule and provide supporting arguments, rationale, and data for the proposed new rule.
If the Commission initiates a rule making proceeding, it will issue a "Notice of Proposed Rulemaking" inviting public comment for a limited time period -- usually 30 days or more. A summary of the notice is published in the Federal Register which is available in many large libraries. In addition, trade publications also report the issuance of rulemaking notices.
The rules require that an original and four copies of all petitions and comments be filed. Participants who want each Commissioner to have a copy may submit 11 copies (an original and 10 copies). Members of the public may participate informally in rulemaking proceedings by submitting a single copy of their comments. This information should be mailed or delivered to the Office of the Secretary, Federal Communications Commission,45 L Street NE, Washington, D.C. 20554.
Citizen Participation in Commission Regulation
The Commission encourages and invites input from the public in all phases of its regulatory proceedings. Persons interested in participating by filing comments but who are unfamiliar with Commission procedures may contact the FCC's Call Center at no charge by dialing 1-888-CALL-FCC (1-888-225-5322). The Call Center offers Commission information and outreach to individual consumers, public interest and consumer organizations, and other interested persons.
Any member of the public may participate in the Commission's regulatory proceedings. The Consumer and Governmental Affairs Bureau maintains and disseminates general information bulletins on the functions and organization of the Commission, historical information on Commission actions and policies as they relate to its minority ownership policies, and fact sheets that provide concise information on policy changes and information concerning new telecommunications services.
As part of its ongoing outreach activities, the Commission conducts workshops and seminars designed to keep the public informed. It also conducts briefings for visitors, colleges, and universities with an interest in learning more about the Commission and its regulatory authority.
The Commission's Office of Public Affairs issues public notices of the filings of cable TV registration statements, petitions, comments and Commission actions. Copies of FCC decisions and comments filed may be obtained from the Commission's duplicating contractor. Selected documents may be obtained through the Internet at the following address: Web site: https://www.fcc.gov. Several commercial distributors will send copies of all, or selected, public notices and news releases on a regular basis for a fee. A list of these distributors is available from the Public Service Division. Other sources of information include trade publications, such as Broadcasting & Cable, Cablevision, Communications Daily, Television Digest, Electronic Media and Multichannel News.
Reports and Forms
The Commission uses a variety of forms for specific purposes. Below is a list of the most frequently requested forms relating to cable television, and those which are required to be filed under our rules. Unless otherwise indicated, copies of these forms may be obtained by calling the Commission at: (202) 418-FORM (3676) or downloaded from the following Internet address: Web site: https://www.fcc.gov/licensing-databases/forms.
Cable System Forms
Form 320 - Basic Signal Leakage Performance Report for Media Bureau. At least once annually, every cable system must file a Form 320 which reports the results of signal leakage tests conducted by the operator.
Form 324 - Cable Operator, Mail Address, and Operational Status Changes. Whenever a change occurs in a system's mailing address, operator legal name or operational status, the operator must notify the Commission of the change within 30 days. The operator must furnish its legal name and type (individual, private association, partnership, or corporation), including the Employment Identity number or the Social Security number (if the company is an individual or partnership); the assumed name, if any; the mailing address; the nature of the operational status change; and the names of the communities affected and their FCC community unit identifier numbers.
Form 325 - Cable Television System Report. FCC Form 325 is used by cable MVPDs to report general information and signal and frequency distribution data. The operator of every operational MVPD that serves 20,000 or more subscribers shall file a Form 325 on a Physical System Identification Number (“PSID”) basis. MVPDs with less than 20,000 subscribers are selected to file by sampling. The report shall be completed and filed with (returned to) the Commission within 60 days after the Commission notifies the operator that the form is due.
Form 1200 - Setting Maximum Initial Permitted Rates for Regulated Cable Services and Equipment. This form is used by operators the first time they filed any form to calculate maximum permissible rate under the rules.
Form 1205 - Determining Costs of Regulated Cable Equipment and Installation. This form is used to calculate allowable equipment costs. Generally, this form is submitted with a Form 1200 and then on an annual basis.
Form 1210 - Updating Maximum Permitted Rates for Regulated Cable Services and Equipment. This form is used to update the maximum permissible rate calculated using Form 1200 or a previous filing of Form 1210.
Form 1220 - Cost of Service Filing for Regulated Cable Services. Generally, this form is used by operators who believe their costs exceed the rates they would be permitted to charge under Form 1200 or 1210.
Form 1230 - Establishing Maximum Permitted Rates for Regulated Cable Services on Small Cable Systems. Pursuant to Commission rules adopted May 5, 1995, qualifying small cable systems owned by a small cable company may use this simplified cost-of-service procedure to set maximum permitted rates.
Form 1235 - Abbreviated Cost-of-Service Filing for Cable Network Upgrades. This form enables cable operators to justify rate increases for significant network upgrades used to improve services to regulated cable subscribers. Form 1235 permits operators seeking rate increases to cover the costs of upgrades to submit only the costs of the upgrade instead of all current costs normally submitted in a cost-of-service filing.
Form 1240 - Annual Updating of Maximum Permitted Rates for Regulated Cable Service. This form enables cable operators to adjust rates once per year to reflect reasonably certain and reasonably quantifiable changes in external costs, inflation, and the number of regulated channels that are projected for the 12 months following the rate change.
Franchise Authority Forms
Form 328 - Certification of Franchising Authority to Regulate Basic Cable Service Rates and Initial Findings of Lack of Effective Competition. This form must be filed by any local franchising authority which intends to regulate basic cable service rates within the franchise area. The form requests information relating to the cable system to be regulated, requests the franchise authority certify that there is no effective competition, and requests that the franchise authority certify that it will adopt rate regulations and procedural regulations consistent with those of the Commission.
Form 394 - Application for Franchise Authority Consent to Assignment or Transfer of Control of Cable Television Franchise. This form is required to be filed by a cable system with its local franchising authority, for its approval prior to the cable system transferring ownership and/or control.
How to Obtain Information
Every cable operator serving 1,000 or more subscribers is required by the Commission to have an up-to-date copy of the Cable Television Rules and Regulations (47 C.F.R. Part 76 and Part 78) and to keep track of Commission actions that might alter the rules.
Due to budgetary constraints, the Commission is unable to supply copies of its regulations and orders free of charge. We regret that we are unable to do so. However, copies of the Commission's rules and orders may be obtained from Web site: http://www.ecfr.gov/.
Text of the Telecommunications Act of 1996, the Cable Television Consumer Protection and Competition Act of 1992, the Cable Policy Act of 1984, and the entire Communications Act in the form of a Compilation of Communications Laws, the Code of Federal Regulations (47 C.F.R. Parts 70-79, including Part 76-Cable Regulations), or the Federal Register Summaries of decisions by published date, are available through the online links indicated herein. Copies also may be purchased from the Government Printing Office (GPO) in Washington, D.C. at (202) 512-1800. GPO outlets are also located in many major cities.
Visit the Media Bureau's Frequently Asked Questions page for additional information on Cable Television Regulation.
Obtaining Further Information from the Commission
The Media Bureau is located at 45 L Street NE, Washington, D.C. 20554. General inquiries should be directed to the Federal Communications Commission, 1-888-225-5322 (1-888-CALL-FCC). This is a toll-free call. Commission offices are normally open from 8:00 a.m. to 5:30 p.m., Monday through Friday, excluding federal holidays, unless otherwise stated.
- Cable Registrations and AFNs: John Kiefer at 202-418-2934
- CARS: Gloria Conway at 202-418-7001
- CLIs and MVPD technical issues: Sean Mirzadegan at 202-418-7111
- Spectrum issues including broadcast: Walid Kassem at 202-418-1031
- For all Media Bureau inquiries, check the MB Subject Matter Expert List