31924 Federal Register / Vol. 60, No. 117 / Monday, June 19, 1995 / Rules and Regulations

CAS No. Chemical Name FR cite Sunset dates

116±15±4 Hexafluoropropene 52 FR 21516, 6/8/87 Jan 22, 1994 123±31±9 Hydroquinone 50 FR 53145, 12/30/85 Dec. 11, 1994 149±57±5 2-Ethylhexanoic Acid 51 FR 40318, 11/6/86 June 19, 1993 328±84±7 3,4-Dichlorobenzotrifluoride 52 FR 23547, 6/23/87 Dec. 5, 1993 25550±98±5 Diisodecyl Phenyl Phosphite 54 FR 8112, 2/24/89 May 21, 1995 1 Only substances obtained from the reforming of crude petroleum.

§§ 799.500, 799.925, 799.940, 799.1051, authority to grant waivers to allow ‘‘good cause.’’ We conclude that Section 799.1052, 799.1054, 799.1250, 799.1285, telephone companies to provide video 613(b)(4) authorizes us to grant waivers 799.1550, 799.1650, 799.2175, 799.2200, programming in their telephone service to allow telephone companies to 799.3175, 799.3450, 799.4000, 799.4400 areas on video dialtone networks. The provide video programming directly to [Removed] Commission further concluded that subscribers in their telephone service d. Sections 799.500, 799.925, 799.940, waiving the restriction in that manner is areas under certain conditions. In 799.1051, 799.1052, 799.1054, 799.1250, fully consistent with the language of the particular, in response to decisions of 799.1285, 799.1550, 799.1650, 799.2175, statute and Section 613(b)’s underlying the Fourth and Ninth Circuits, we 799.2200, 799.3175, 799.3450, 799.4000, policy, and obviates the constitutional conclude that under Section 613(b)(4) and 799.4400 are removed. infirmities identified by the court of we have the legal authority to grant appeals. This order is intended to waivers allowing telephone companies § 799.5000 [Amended] provide guidance to the public to provide video programming in their e. Section 799.5000 is amended by regarding the Commission’s legal telephone service areas on video removing from the table the complete authority to grant waivers of the cable- dialtone networks. We adopt that entries for the following substances and/ telco cross-ownership rule to telephone construction of the waiver provision or mixtures: Aniline, 2-nitroaniline, 2- companies seeking to provide video because it is fully consistent with the chloroaniline, 3,4-dichloroaniline, 2,4- programming directly to subscribers in language of the statute and Section dinitroaniline, 2,6-dicloro-4- their telephone service areas. 613(b)’s underlying policy, and because nitroaniline, 4-nitroaniline, 4- EFFECTIVE DATE: June 19, 1995. waiving the restriction in that manner obviates the constitutional infirmities chloroaniline, 3,4- FOR FURTHER INFORMATION CONTACT: dichlorobenzotrifluoride, and diisodecyl identified by the courts of appeals. Aliza Katz, Office of General Counsel, 2. Background and Summary. Section phenyl phosphite. (202) 418–1720. 613(b), the ‘‘cable-telco cross-ownership [FR Doc. 95–14910 Filed 6–16–95; 8:45 am] SUPPLEMENTARY INFORMATION: A rule,’’ prohibits a telephone company BILLING CODE 6560±50±F summary of the Commission’s Third from operating a cable system where it Report and Order (TR&O), adopted May has a monopoly on local telephone 16, 1995 and released May 16, 1995, is service. Although Section 613(b) does FEDERAL COMMUNICATIONS set forth below. The full text of this not bar a telephone company from COMMISSION document is available for inspection acting as a conduit to carry video and copying during normal business programming selected and provided by 47 CFR Part 63 hours in the Administrative Law an unaffiliated party, it does generally Division, Office of General Counsel bar a telephone company from selecting [CC Docket No. 87±266; FCC 95±203] (Room 616), 1919 M Street NW., (or ‘‘exerting editorial control over’’) Cross-Ownership Rules Washington, DC. The full text may also and providing the video programming be purchased from the Commission’s carried over its wires in its local service AGENCY: Federal Communications copy contractor, International area. Two counts of appeals, the Fourth Commission. Transcription Services, Inc. (ITS), 2100 and Ninth Circuits, have recently held ACTION: Final rule. M Street NW., Suite 140, Washington, Section 613(b) unconstitutional because DC 20037. it prohibits telephone companies from SUMMARY: The Commission has voted to choosing the video programming to be Summary of Third Report and Order adopt the tentative conclusion regarding provided in their local exchange the Commission’s legal authority to Introduction. In this Third Report and telephone service areas altogether. See grant waivers to telephone companies Order, we adopt the tentative US West, Inc. v. United States, 48 F.3d allowing them to provide video conclusion set forth in the Fourth 1092 (9th Cir. 1995) (US West); programming directly to subscribers in Further Notice of Proposed Rulemaking Chesapeake and Potomac Tel. Co. v. their telephone service areas. For ‘‘good (‘‘Fourth FNPRM’’), 60 FR 8996, United States, 42 F.3d 181 (4th Cir. cause’’ the Commission may waive February 16, 1995, in the above 1994) (C&P). In so holding, both courts Section 613(b) of the Communications captioned docket regarding the referred to the Commission’s 1992 Act, the cable-telco cross-ownership Commission’s legal authority to waive recommendation to Congress is our restriction, where a waiver is ‘‘justified Section 613(b) of the Communications video dialtone docket, a proposal that by the particular circumstances.’’ In Act, 47 U.S.C. § 533(b). Section 613(b) the Ninth Circuit described in US West response to the decisions of the Fourth generally prohibits telephone as a ‘‘more speech-friendly plan’’ than and Ninth Circuits which found Section companies from providing ‘‘video the absolute ban contained in the 613(b) unconstitutional on First programming directly to subscribers in statute. Under the Commission’s Amendment grounds, the Commission the[ir] telephone service area.’’ legislative recommendations, as concluded that under Section 613(b)(4), However, the statute expressly described by the Fourth Circuit in C&P, the waiver provision, it has the legal authorizes us to waive the restriction for ‘‘telephone companies’ editorial control Federal Register / Vol. 60, No. 117 / Monday, June 19, 1995 / Rules and Regulations 31925 over video programming [would be 6. Discussion. In the Fourth FNPRM, to adopt the cross-ownership ban. These limited] to a fixed percentage of the we asked for comment on the terms and technological developments also channels available; the telephone conditions under which local telephone support the conclusion that ‘‘good companies would be required to lease companies should be permitted to cause’’ exists to authorize telephone the balance of the channels on a provide video programming directly to companies to provide video common carrier basis to various video subscribers in their local service areas. programming within their service areas programmers.’’ In short, the courts of For instance, we asked whether we where that will promote competition in appeals have held that a complete ban should permit them to do so over video the multichannel video programming on editorial control over video dialtone systems. While we construe market. programming in a telephone company’s Section 613(b)(4), the waiver provision, service area ‘‘burden[s] substantially as authorizing us to permit telephone 10. We also conclude that the rules more speech than is necessary,’’ companies to act as programmers on we will promulgate in the immediate especially since there appeared to be an video dialtone systems pursuant to future to authorize telephone companies ‘‘obvious less-burdensome certain conditions, the remaining issues to provide video programming in their alternative[]’’—allowing the telephone raised in the Fourth FNPRM will be service areas will constitute ‘‘particular company to provide some video resolved in a further order in this circumstances * * *, taking into programming in their telephone service proceeding. account the policy’’ of Section 613(b). areas on a video dialtone system. 7. Two statutory issues are presented While we have not yet adopted 3. We now conclude, as we previously in construing Section 613(b)(4): (1) definitive rules governing the proposed in the Fourth NPRM, that we whether ‘‘good cause’’ exists to waive conditions under which telephone have the authority to grant waivers to the statutory restriction to permit a companies may be permitted to act as telephone companies pursuant to telephone company that wants to video programmers over their video Section 613(b)(4) allowing them to provide programming in its service area dialtone systems, the outline of two of provide video programming directly to to do so over a video dialtone system, those requirements is clear. First, video subscribers in their telephone service and (2) whether ‘‘the issuance of such dialtone necessarily includes a common areas over video dialtone networks. waiver is justified by the particular carriage element, and we have Section 613(b)(4) provides that upon a circumstances demonstrated by the previously concluded that a telephone showing of ‘‘good cause’’ the petitioner, taking into account the company may not allocate all or Commission may waive the cable-telco policy of this subsection,’’ when a substantially all of its capacity to a cross-ownership restriction where a telephone company requests waiver of single ‘‘anchor programmer.’’ Second, waiver is ‘‘justified by the particular Section 613(b) to provide video our current video dialtone rules contain circumstances * * *, taking into programming over a video dialtone provisions intended to ensure that account the policy’’ underlying the system. telephone companies providing video cross-ownership restriction. 8. As the D.C. Circuit recognized in its programming directly to subscribers do 4. Construing the waiver provision to 1990 NCTA v. FCC decision, ‘‘the policy not discriminate in favor of their authorize telephone companies to [of Section 613(b)] is to promote affiliated programmers and do not provide video programming over video competition.’’ When the Commission subsidize video programming dialtone networks avoids the adopted its cable-telco cross-ownership operations with rates collected from constitutional infirmity identified by the rules in 1970, it sought to prevent the their provision of monopoly telephone Fourth and Ninth Circuits by making telephone companies from using their services. These restrictions are intended available the ‘‘ ‘obvious less- monopoly position to preempt the to promote the underlying purpose of burdensome alternative’ ’’ referenced by market for cable service by excluding Section 613(b) by fostering fair those courts. Moreover, it is our duty to others from entry. Since 1970, however, competition in the multi-channel video so construe the statute. The Supreme the cable industry has grown from a programming market.2 Court has recently reiterated in United fledgling service to a more mature industry that now serves a majority of 11. Construing the waiver provision to States v. X-Citement Video, Inc., 115 S. authorize telephone companies to Ct. 464, 467 (1964), that ‘‘a statute is to households and Congress’s interest in ensuring that the cable industry not be provide video programming pursuant to be construed where fairly possible so as our video dialtone rules obviates the to avoid substantial constitutional extinguished before it is established is constitutional difficulties associated questions.’’ 1 no longer relevant. ‘‘Good cause’’ is a with Section 613(b). Specifically, the 5. In light of the ongoing litigation phrase that is commonly associated Fourth Circuit and Ninth Circuit have concerning the constitutionality of with changed circumstances. The Section 613(b), we have decided to relevant circumstances have changed held that the cable-telco cross- adopt the construction of Section greatly since the Commission adopted ownership restriction ‘‘burden[s] 613(b)(4) that we proposed in the Fourth its cross-ownership rules in 1970 and substantially more speech than is FNPRM before answering the other Congress ‘‘modeled [Section 613(b)] necessary’’ to promote the government’s questions presented in this rulemaking. after the FCC[’s] rules’’ in 1984. interest in promoting a competitive 9. We also conclude that significant multi-channel video programming 1 While the courts have identified video dialtone advances in technology have changed market. Waiving Section 613(b), as a possible means by which telephone companies the circumstances relevant to however, constitutes implementation of could provide programming in their service areas to determining whether telephone the ‘‘obvious less burdensome remedy the constitutional infirmities of Section companies should be permitted to alternative’’ to the ban identified by the 613(b), and while we agree with the suggestion of these courts that waiving Section 613(b) as provide video programming directly to discussed above will cure these constitutional subscribers in their service areas. These 2 It is possible that we will decide in the ongoing infirmities, we will address the terms and developments have made it possible for rulemaking proceeding that telephone companies conditions under which telephone companies a multitude of programmers to reach ought to be permitted to provide traditional cable should be permitted to provide video programming service, rather than participate as programmers on directly to subscribers in their local service areas in end user customers and have mitigated video dialtone systems, under ‘‘particular a subsequent order addressing the other issues to a fair degree the competitive concerns circumstances’’ that will promote competition in raised in the Fourth FNPRM. that led the Commission and Congress the multichannel video programming market. 31926 Federal Register / Vol. 60, No. 117 / Monday, June 19, 1995 / Rules and Regulations

Fourth Circuit.3 Or, to quote the Ninth 14. Both the United States Telephone by the regulations we will establish Circuit, it implements the ‘‘more Association and US West invoke governing its provision of video speech-friendly plan that allows Secretary of State of Maryland v. programming. Accordingly, there is no telephone companies ‘‘to compete in the Munson, 467 U.S. 947 (1984), to argue ‘‘threat of censorship that by its very video programming market’’ while that the statute cannot be saved by its existence chills free speech.’’ ‘‘requiring that a portion of their waiver provision. But this case is not at 15. In light of our duty to interpret transport volume be set aside for sale to all similar to Munson. The Munson case Section 613(b) in a fashion that renders unaffiliated third parties on a common involved a 25% limitation on the the statute constitutional, there is no carrier basis.’’ As a result of our percentage of funds a charitable merit at all to the suggestion by some construction of the waiver provision, organization could keep, on the theory commenters that the Commission’s telephone companies’ free speech that a charity that used less than 75% interpretation of Section 613(b)(4) is interests are not unduly burdened. of the funds that it raised on charitable barred by res judicata, collateral 12. The fact that waiver of the cable- purposes was engaged in fraud. The estoppel, or some unnamed principle telco cross-ownership restriction Court invalidated the state statute that allegedly prevents the Commission obviates the constitutional difficulties imposing the limitation upon from construing a statute that a court identified by the courts of appeals concluding that ‘‘[t]he flaw in the has held unconstitutional. In X- supports our decision to construe our statute is not simply that it includes Citement Video, the Supreme Court read waiver authority to permit telephone within its sweep some impermissible the federal child pornography statute in companies to provide video applications, but that in all its a manner that the Court acknowledged was not its ‘‘most natural grammatical programming over video dialtone applications it operates on the reading’’ in order to avoid a serious systems. As the Supreme Court recently fundamentally mistaken premise that constitutional issue after a court of reiterated in X–Citement Video, ‘‘a high solicitation costs are an accurate appeals had held the statute statute is to be construed where fairly measure of fraud.’’ Moreover, the Court unconstitutional. In particular, the possible so as to avoid constitutional concluded that the statute stifled speech Court held that the statute required the questions,’’ The Court also articulated and discriminated against certain government to prove that the defendant this principle in Jean v. Nelson, 472 viewpoints, explaining that ‘‘the statute in a child pornography case knew that U.S. 846 (1985), when it found that will restrict First Amendment activity ‘‘[p]rior to reaching any constitutional the material on which the prosecution that results in high costs but is itself a was based contained child pornography questions federal courts must consider part of the charity’s goal or that is nonconstitutional grounds for even though the statute did not appear simply attributable to the fact that the to contain such a scienter requirement. decision.’’ charity’s cause proves to be unpopular.’’ 13. Several commenters opposed our In this case, in contrast, the language of The Court went on to hold that the the waiver provision is flexible, reading of the wavier provision. statute was not saved by a provision Southwestern Bell argued that our speaking of ‘‘good cause’’ and allowing for waivers of the limitation. ‘‘particular circumstances * * *, taking proposal constitutes an evisceration of The Court stated that ‘‘[b]y placing the rule. That is not so. It would into account the policy of this discretion in the hands of an official to subsection.’’ Unlike the Court in X- eviscerate the statute if we were to grant or deny a license, such a statute waive Section 613(b) to allow telephone Citement Video, we do not have to creates a threat of censorship that by its strain to construe the waiver provision companies to provide video very existence chills free speech.’’ so that it renders the statute programming directly to subscribers in ‘‘Particularly where the percentage constitutional. Rather, as we have their service areas over video dialtone limitation is so poorly suited to explained, we believe that such an facilities and, as a general matter, to accomplishing the State’s goal,’’ the interpretation is fully consistent with purchase cable systems in their Court added, ‘‘and where there are both the language of the waiver telephone service areas that do not face alternative means to serve the same provision and the policy underlying competition. But we are not authorizing purpose, there is little justification for Section 613(b), and therefore is the best such waivers in this order. Instead, we straining to salvage the statute by interpretation of Section 613(b)(4). For conclude only that Section 613(b)(4) invoking the possibility of official those reasons, and in light of the fact authorizes us to waive the cable-telco dispensation to engage in protected that such an interpretation also avoids cross-ownership rule to permit a activity.’’ In this case, in contrast, a serious constitutional issue, we now telephone company to provide video permitting telephone companies to adopt our tentative conclusion that the programming over video dialtone provide video programming over a waiver provision should be interpreted systems in its telephone service area in video dailtone system plainly advances to authorize us to consider and approve competition with existing cable the goal of making programming for a requests by telephone companies to operators, a result that furthers the variety of sources available to the provide video programming over video 4 purpose of the rule. public—a goal that furthers rather than dialtone systems, subject to the rules we hinders First Amendment interests. have enacted and any further rules we 3 We recognize that the Fourth Circuit reserved Unlike Munson, speech is not stifled judgment on the constitutionality of our will enact to govern video dialtone recommended model. C&P, 42 F.3d at 202 n.34. and unpopular viewpoints are not systems. However, if that recommended approach does not disadvantaged. Moreover, no discretion 16. Finally, we also conclude that our render the statute constitutional then, contrary to remotely comparable to that in Munson reading of Section 613(b)(4) is not the court’s holding it is not ‘‘ ‘Kobvious less- would be lodged in any official to grant foreclosed by the D.C. Circuit’s 1990 burdensome alternative,’ ’’ because it is no alternative at all. Id. at 202. or deny particular waivers under our decision in NCTA v. FCC, 914 F.2d 285 4 We do not decide today whether we could grant approach. Rather, as part of any (D.C. Cir. 1990). That case did not a waiver authorizing a telephone company to build decision under 47 U.S.C. § 214 involve video dialtone service and a traditional cable system in its telephone service authorizing a telephone company to presented no constitutional issue. It area in competition with an existing cable system. Nor do we address the conditions under which a construct facilities, we will routinely instead involved a waiver of FCC cross- waiver might be warranted to allow a telephone grant a waiver of Section 613(b) where ownership rules authorizing a cable company to purchase an in-region cable system. the telephone company agrees to abide operator to provide cable service over a Federal Register / Vol. 60, No. 117 / Monday, June 19, 1995 / Rules and Regulations 31927 telephone companies’ wires even SUMMARY: This document reallots 47 CFR Part 73 though the cable operator was affiliated Channel 260A from Tuskegee to with the telephone company in Tallassee, Alabama, and modifies the [MM Docket No. 91±129; RM±7664] violation of the rules by virtue of their license of WACQ, Incorporated for joint interest in the contractor that was Station WACQ-FM, as requested, Radio Broadcasting Services; Lake to build the cable system. The court pursuant to the provisions of Section Havasu City, AZ acknowledged that the project ‘‘presents 1.420(i) of the Commission’s Rules. The a number of advantages that might AGENCY: Federal Communications allotment of Channel 260A to Tallassee Commission. justify a good cause waiver.’’ However, will provide a first local FM service to ACTION: it held that the Commission had ‘‘failed the community without depriving Final rule. ** * to explain why any of these Tuskegee of local aural transmission SUMMARY: This document allots FM advantages require [the contractor’s] service. See 57 FR 44354, September 25, participation as [the telephone Channel 244C2 to Lake Havasu City, 1992. Coordinates used for Channel Arizona, as that community’s fourth companies’] contractor.’’ In this case, in 260A at Tallassee, Alabama, are 32–26– contrast, in light of the decisions local FM service, in response to a 30 and 85–47–45. With this action, the petition for rulemaking filed on behalf holding Section 613(b) unconstitutional, proceeding is terminated. it is necessary to waive Section 613(b) of Bridge Broadcasting. See 56 FR 21465, May 9, 1991. Coordinates used to allow affiliates of telephone EFFECTIVE DATE: July 28, 1995. companies to provide video for Channel 244C2 at Lake Havasu City programming in order to render the FOR FURTHER INFORMATION CONTACT: are 34–29–02 and 114–19–18. Lake statute constitutional. The Ninth Circuit Nancy Joyner, Mass Media Bureau, (202) Havasu City is located within 320 recognized that a waiver might be 418–2180. kilometers (199 miles of the United States-Mexico border and therefore, warranted in these circumstances in SUPPLEMENTARY INFORMATION: This is a GTE California, Inc. v. FCC, 39 F.3d 940 concurrence of the Mexican government synopsis of the Commission’s Report to this proposal was obtained. With this (1994), a case that (unlike NCTA v. FCC) and Order, MM Docket No. 92–196, involved a constitutional challenge to action, the proceeding is terminated. adopted June 6, 1995, and released June DATES: Effective July 28, 1995. The Section 613(b). The Ninth Circuit stated 13, 1995. The full text of this in that case, in response to the argument window period for filing applications Commission decision is available for on Channel 244C2 at Lake Havasu City, that Section 613(b) is unconstitutional, inspection and copying during normal that ‘‘GTECA did not present the Arizona, will open on July 28, 1995, and business hours in the FCC’s Reference close on August 28, 1995. constitutional issue to the Commission Center (Room 239), 1919 M Street, NW., at a point in this proceeding where it FOR FURTHER INFORMATION CONTACT: Washington, DC. The complete text of could have tried to obviate the Nancy Joyner, Mass Media Bureau, (202) this decision may also be purchased constitutional question by granting 418–2180. Questions related to the from the Commission’s copy discretionary relief, such as a permanent window application filing process for contractors, International Transcription waiver.’’ As that statement recognizes, a Channel 244C2 at Lake Havasu City, Service, Inc., (202) 857–3800, located at waiver is warranted to implement what Arizona, should be addressed to the 1919 M Street, NW., Room 246, or 2100 the Ninth Circuit in US West termed our Audio Services Division, FM Branch, M Street, NW., Suite 140, Washington, ‘‘more speech-friendly plan’’ and hence (202) 418–2700. DC 20037. avoid a serious constitutional issue. SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission’s Report 17. Conclusion. Accordingly, it is List of Subjects in 47 CFR Part 73 ordered that Section 613(b)(4) of the and Order, MM Docket No. 91–129, Communications Act is interpreted to Radio broadcasting. adopted June 5, 1995, and released June authorize waivers permitting telephone 13, 1995. The full text of this companies to provide video Part 73 of title 47 of the Code of Commission decision is available for programming directly to subscribers in Federal Regulations is amended as inspection and copying during normal their telephone service area pursuant to follows: business hours in the FCC’s Reference the rules we will adopt in this docket or Center (Room 239), 1919 M Street, NW., related rulemaking proceedings. PART 73Ð[AMENDED] Washington, DC. The complete text of this decision may also be purchased List of Subjects in 47 CFR Part 63 1. The authority citation for part 73 from the Commission’s copy Ownership rules, Telephone. continues to read as follows: contractors, International Transcription Federal Communications Commission. Authority: Secs. 303, 48 Stat., as amended, Service, Inc., (202) 857–3800, located at William F. Caton, 1082; 47 U.S.C. 154, as amended. 1919 M Street, NW., Room 246, or 2100 Acting Secretary. M Street, NW., Suite 140, Washington, DC 20037. [FR Doc. 95–14833 Filed 6–16–95; 8:45 am] § 73.202 [Amended] BILLING CODE 6712±01±M 2. Section 73.202(b), the Table of FM List of Subjects in 47 CFR Part 73 Allotments under Alabama, is amended Radio broadcasting. 47 CFR Part 73 by removing Channel 260A at Tuskegee, Part 73 of the title 47 of the Code of and by adding Tallassee, Channel 260A. Federal Regulations is amended as [MM Docket No. 92±196; RM±8041] follows: Federal Communications Commission. Radio Broadcasting Services; John A. Karousos, PART 73Ð[AMENDED] Tallassee and Tuskegee, AL Chief, Allocations Branch, Policy and Rules 1. The authority citation for part 73 AGENCY: Federal Communications Division, Mass Media Bureau. continues to read as follows: Commission. [FR Doc. 95–14835 Filed 6–16–95; 8:45 am] Authority: Secs. 303, 48 Stat., as amended, ACTION: Final rule. BILLING CODE 6712±01±F 1082; 47 U.S.C. 154, as amended.