Before the Federal Communications Commission Washington, D.C. 20554
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Before the Federal Communications Commission Washington, D.C. 20554 Amendment of Commission Rule ) MB Docket No. 20-35 Requiring Records of Cable Operator ) Interests in Video Programming ) ) Modernization of Media Regulation ) MB Docket No. 17-105 Initiative ) COMMENTS ACA Connects—America’s Communications Association (“ACA Connects”) hereby provides brief comments on the Commission’s most recent media modernization proposal.1 We share the Commission’s goal of reducing regulatory burdens—including the requirement to keep records showing cable ownership of video services. Such information about “vertical integration,” however, is useful in the program access context. We urge the Commission to find a solution in which this information remains available in some less burdensome form or fashion for those who must provide it. 1 Amendment of Commission Rule Requiring Records of Cable Operator Interests in Video Programming; Notice of Proposed Rulemaking, FCC No. 20-19, MB Docket Nos. 20-35 & 17-105 (rel. Mar. 2, 2020) (“Notice”). The Notice seeks comment on eliminating or modifying two sections of the Commission’s rules: • Section 76.1710, which requires that cable operators maintain records in their online public inspection files regarding the nature and extent of their attributable interests in video programming services. • Section 76.1700(a)(7), which lists cable operator interests in video programming as one of the records to be maintained by cable system operators in their public inspection file.2 The Notice explains that the Commission originally adopted these rules as a method of monitoring compliance with the Commission’s cable channel occupancy limits, which restricted the number of channels that could be occupied on a vertically integrated cable system by video programmers in which the cable operator had an attributable interest.3 Since the DC Circuit ordered the Commission to repeal those limits, the Notice suggests, the recordkeeping requirements may no longer serve a purpose.4 While the recordkeeping requirements may no longer serve their original intended purpose, they nonetheless remain helpful in one specific context. The Communications Act and the Commission’s program access rules prohibit unfair practices by, among others, a “satellite cable programming vendor in which a cable operator has an attributable interest.”5 Thus, a party wishing to file a program access complaint against a “satellite cable programming vendor” must demonstrate that a 2 Id. ¶ 1. 3 Id. ¶ 2. 4 Id. ¶ 4. 5 47 U.S.C. § 548(b); 47 C.F.R. § 76.1000. 2 “cable operator has an attributable interest” in such vendor.6 The obligation thus assists in the enforcement of the Commission’s program access rules, just as it had originally assisted with the Commission’s cable channel occupancy limits. This is precisely the information that the existing recordkeeping requirements require cable operators to place in their public files. For example, the public files for Comcast, Charter, and Cox each contain a statement listing all of the programmers in which the cable operator has an attributable interest, including the percentage of the interest and related information.7 While a prospective complainant can collect this information for some programmers and cable operators,8 we are aware of no other public, reliable, and readily available source for the vertical integration status of all vertically integrated programmers and cable operators. The Commission, for its part, no 6 47 C.F.R. § 76.1003(c)(2) (requiring complainant to provide “[e]vidence that supports complainant's belief that the defendant, where necessary, meets the attribution standards for application of the program access requirements”); Implementation of Sections 12 & 19 of the Cable Television Consumer Prot. & Competition Act of 1992 Dev. of Competition & Diversity in Video Programming Distribution & Carriage, First Report & Order, 8 FCC Rcd. 3359 ¶ 76 (1993) (“The complaint must identify both the programmer and cable operator who are parties to the alleged prohibited agreement. The complaint must be supported by documentary evidence of the violation, or an affidavit (signed by an officer of the complaining MVPD) setting forth the basis for the complainant's allegations. The complainant must also demonstrate that the relevant vertically integrated programming vendor meets the attribution standards adopted herein.”). 7 See Exhibit 1 hereto (Comcast), also available at https://publicfiles.fcc.gov/cable- system/006535-comcast-of-maryland-lp/operator-interests-in-video-programming/4cb979a5- d0cb-4f4b-c48d-2af814178508/; Exhibit 2 hereto (Charter), also available at https://publicfiles.fcc.gov/cable-system/006045-spectrum-mid-america,-llc/operator-interests- in-video-programming/fdf408a4-59aa-9097-73e2-931c77e11b3a/.; Exhibit 3 hereto (Cox), also available at https://publicfiles.fcc.gov/cable-system/000709-cox-communications- arizona,-llc/operator-interests-in-video-programming/ea78b1ed-2046-84ec-db87- cfb5c34c3780/. 8 Notice ¶ 10 n.24. (“For example, in the past, the Commission has used information from various sources, such as cable company websites, published articles, and SNL Kagan, to identify affiliations between programming services and MVPDs for its Video Competition Reports.”). 3 longer lists this information in its Marketplace Reports.9 Some cable operators report some (but not all) of this information in their annual reports.10 Others are privately held and have no such reports.11 Such information could therefore be burdensome for a prospective plaintiff to collect—especially in light of the sometimes complicated ownership structures of vertically integrated programmers.12 Since information regarding vertical integration is available now, we think it would not serve the public interest to require ACA Connects members, some of whom have very limited resources, to hunt down this information and make these calculations themselves.13 9 Communications Marketplace Report et al., FCC No. 18-181, GN Docket No. 18-231 et al., ¶ 67 (rel. Dec. 26, 2018) (describing vertical integration generally). 10 NBC Universal’s most recent annual report lists many, but not all, programmers listed in Comcast’s public file. For example, it fails to specify NBC Universal’s interest in SportsNet New York. Securities & Exchange Commission Form 10-K, NBC Universal (2019), https://www.cmcsa.com/static-files/d3de7993-a16b-42bf-bebd-a45b938dcbfc. On the other hand, Comcast’s public file may be out of date. For example, it lists the Esquire channel, a now defunct joint venture between NBC Universal and Hearst. Charter’s annual report contains no details about its affiliate programming. 2019 Annual Report, Charter Communications (2019), https://ir.charter.com/static-files/b453964b-6b96-4fb8-aebc- 91cec0fda968. 11 Investor Relations, Cox Communications, https://www.cox.com/aboutus/investor- relations.html. We do not know whether Cox’s programming is otherwise subject to the program access rules and do not contend as much here. We are simply illustrating the point that some cable operators who own programming are privately held and do not issue public reports. 12 See, e.g., Exhibit 2 (Charter Public File) at 3 (“Dr. Malone (described above) owns 93.6% of the series B common stock of Discovery and 6% of the series C common stock of Discovery, and has a 28% voting interest in Discovery for the election of directors. Advance/Newhouse Partnership has a 12.8% equity interest in Charter. Its affiliate Advance/Newhouse Programming Partnership owns 100% of the Series A-1 preferred stock of Discovery and 100% of the Series C-1 preferred stock of Discovery, and has a 24.2% voting interest for the election of directors. Inclusion of any programming service on this schedule is not an admission that any such service is subject to any regulatory obligation or requirement. With regard to other entities and individuals with interests in Charter, we have relied on public information available to Charter.”). 13 As the Notice indicates, “as the recordkeeping requirement does not apply to other video programming distributors, the information in these records would only be useful for monitoring vertical integration in cable operators.” Notice ¶ 8. The program access rules, 4 ACA Connects supports the goal of eliminating unnecessary and unreasonable recordkeeping burdens on cable operators. After all, its members are cable operators themselves. We question, however, whether this obligation imposes substantial burdens on vertically integrated cable operators since ownership of programming does not change very often. In any event, we believe it should be possible to keep this information readily available while reducing the already modest administrative burdens that the existing rule creates for vertically integrated cable operators. Perhaps, for example, the Commission could eliminate the part of the rule that requires reporting of carriage on a particular system, given that channel lineup information is widely available elsewhere.14 The Commission could also revise the rules to require cable operators to post this information only once and update it when it changes. Further, it could allow cable operators to post “classes” of ownership percentages (5%—25%, 26%—50%; 51%—75%; 76%—100%) so that they would not have to update the filings based on minor ownership changes. We are, of course, open to other ideas to further ease cable recordkeeping burdens while maintaining the rule’s utility and would be happy to participate in discussions on how