9 FCC Red No. 18 Federal Communications Commission Record DA 94-899

a September 28. 1993 letter from CV. However, between Before the Press©s initial notification and CV©s formal rejection there Federal Communications Commission were informal discussions and additional correspondence Washington, D.C. 20554 between the parties regarding channel positioning for WKCF. 4. Press©s argument is. in essence, that CV is required In re: under Section 614(b)(6) of the Communications Act and Section 76.57 of the Commission©s Rules-to negotiate with Complaint of Press Broadcasting, Inc. CSR-4116-M Press for a mutually agreeable channel position. Complain against Cablevision of Central Florida ant believes that the 1992 Cable Act and Commission©s Rules offer it four options with regard to channel position ing, one of which requires CV to negotiate in good faith Request for Carriage and concerning channel positioning and not refuse a channel Channel Positioning positioning request on the basis of what Press terms "un reasonable anti-competitive excuses." Thus. Press requests that the Commission order CV to negotiate with Press in MEMORANDUM OPINION AND ORDER good faith concerning the channel position of station WKCF(TV); that CV be required to provide written ex Adopted: August 10, 1994; Released: August 24, 1994 planations for any refusal to grant Press its preferred chan nel position; and that the Commission rule other By the Chief, Cable Services Bureau: alternatives "including... the possibility of paying CV some consideration in connection with obtaining satisfac tory channel position"6 - not be deemed to have been INTRODUCTION adversely affected or restricted due to CV©s delay in re 1. On October 5. 1992. the Cable Television Consumer sponding to Press©s channel positioning request. Protection and Competition Act of 1992 (1992 Cable Act) 5. In it©s reply to complainant. CV stated its belief that became law. 1 On March 11, 1993, the Commission adopted neither the 1992 Cable Act nor the Commission©s Rules a Report and Order to implement the mandatory broadcast compelled it to negotiate in good faith with Press regarding signal carriage ("must-carry") provisions of the Cable Act.2 WKCF©s channel position, nor required a written explana Pursuant to the rules adopted in the Report and Order, tion as to why it refused to assign WKCF to channel 8. cable systems were required to commence carriage of local broadcast stations entitled to must-carry status beginning June 2. 1993.3 On June 17, 1993, local broadcast stations DISCUSSION were required to make their initial election of either must- 6. There are three options available to broadcast stations carry or retransmission consent status and notify cable electing must-carry: 1) a station may elect to be carried on systems of their election.4 Those broadcast stations which its over-the-air channel: or 2) on the channel on which it elected must-carry status were required to notify the cable was carried on July 19. 1985; or 3) on the channel on system of their preferred channel position at that time.5 which it was carried on January 1. 1992.© The rules also provide that a broadcast station may be carried "on such other channel as is mutually agreed upon by the station SUMMARY OF PLEADINGS and the cable operator."8 Press interprets "on such other 2. On October 5, 1993, Press Broadcasting Company. channel as is mutually agreed upon by the station and the Inc. (Press), licensee of WKCF (TV), filed a complaint cable operator" as a fourth option available to broadcasters, against Cablevision of Central Florida (CV) for the latter©s one that compels CV to engage in good faith negotiations failure to comply with the channel positioning require with Press "designed to provide [Press] with a channel ments of the Commission©s Rules and the 1992 Cable Act. position consistent with [Press©s] competitive situation in 3. According to. its complaint, on June 17, 1993, Press the marketplace."9 We disagree that the 1992 Cable Act or notified CV that Press had elected must-carry status on the Commission©s Rules offer a fourth mandatory channel CV©s system. CV was advised that Press wished to be car positioning option to broadcasters. ried on channel 8 of CV©s system rather than its current 7. We read the 1992 Cable Act and the Commission©s position on channel 18. Press did not receive a formal Rules to unambiguously state the three options available to rejection of its channel positioning request until receipt of a broadcaster. 10 Allowing cable operators and broadcasters

1 Pub. L. No. 102-385. 106 Stat. 1460 (1992). retransmission consent. 2 Report and Order in MM Docket 92-259, 8 FCC Red 2965 7 47 U.S.C. § 534(b)(6); 47 C.F.R. § 76.57(a). (1993). See also. Clarification Order, 58 FR 32449 (June 10, 8 47 U.S.C. § 534(b)(6); 47 C.F.R. § 76.57(c). 1993). q Press©s reply to Cablevision©s response to original complaint, 3 47 C.F.R. § 76.56(a),(b). at page 7. 4 47 C.F.R. § 76.64(f)(l). 10 See Report and Order, 8 FCC Red. at 2986. "The election of 5 47 C.F.R. § 76.57(d). which of these three alternatives is left up to the station in 6 Since cable operators may not accept or request money or volved." "We also note that the 1992 Cable Act provides three other forms of valuable payment in connection with must-carry channel positioning options for each commercial station and or channel positioning obligations, we must assume that Press two for each NCE station, and also provides an opportunity for requests us to rule that it still has the option of pursuing parties to develop their own solutions to conflicting claims." Id. at 2988.

4431 DA 94-899 Federal Communications Commission Record 9 FCC Red No. 18 to mutually agree upon a different channel provides a FEDERAL COMMUNICATIONS COMMISSION mechanism for the two to mutually agree on a channel positioning option outside of the three proposed by the 1992 Cable Act©s provisions. To read this flexibility as a mandatory fourth option would totally obviate the prior three options as broadcasters and cable operators would William H. Johnson clash seeking what they viewed as more favorable channel Acting Chief, Cable Services Bureau positioning. 8. In the present case. WKCF is carried by CV on channel 18. Channel 18 is WKCF©s over-the-air channel. WKCF was not in operation on July 19, 1985, and was carried on channel 30 on January 1. 1992. CV has offered to continue carriage of WKCF on channel 18 or some other channel mutually agreeable to the parties. Originally, Press was satisfied with channel 18 because the location was immediately adjacent to a competitor station. However, once that competitor moved to a lower channel position. Press requested relocation of WKCF. Press sums up its position as having "been left in the second-rate portion of CV©s basic tier, with the odds and ends services, while WKCF (TV)©s primary competitors can easily be found, grouped together in the first-rate portion of the basic tier (although not on their on-air channels)." 11 9. We certainly understand Press©s desire to remain as competitive as possible. However, there is no specific nor implicit requirement that cable operators must arrange their basic tier such that some sort of economic equilib rium amongst broadcasters is attained or maintained. Infer ring such a requirement would complicate channel positioning election beyond anything envisioned by Con gress. Thus, we find that CV has complied with the re quirements of the 1992 Cable Act and find no reason to order CV to negotiate with Press regarding channel posi tioning. Additionally, we find no reason for CV to provide a written explanation for its refusal of Press©s request. 10. Complainant argues that CV©s failure to engage in good faith negotiations well in advance of October 6. 1993 prevented Press from taking advantage of the retransmission consent option. However, the 1992 Cable Act is quite clear that television stations must make an election between must-carry and retransmission consent within one year after the date of enactment of the 1992 Cable Act and every three years thereafter. 12 Press re quested must-carry status on July 17, 1993. Thus, once Press chose carriage via must-carry, it lost its ability to bargain with regard to channel positioning under the 1992 Cable Act©s retransmission consent provisions. 13 11. Accordingly, the petition filed on October 5, 1993, by Press Broadcasting Company. Inc. IS DENIED, in ac cordance with Section 325(b)(3)(B) (47 U.S.C. § 325) of the Communications Act of 1934, as amended. This action is taken by the Chief. Cable Services Bureau, pursuant to authority delegated by Section 0.321 of the Commission©s Rules.

11 Press©s reply to Cablevision©s response to original complaint, realignment [sic] [of channels on CV©s system] which had pre at page 7. viously been part of the system©s secondary service tier (for 12 Section 325(b)(3)(B) of the Communications Act of 1934, as which no additional charge was required)" but now "were seg amended, 47 U.S.C. § 325(b)(3)(B) (1992). regated into a new tier for which CV now charges additional 13 47 C.F.R. § 76.64(f)(l )-(5). We can envision a situation in fees in a negative billing© arrangement automatically costing the which a station initially elects must-carry but then avails itself consumer $3 per month unless the consumer specifically re of retransmission consent, see 8 FCC Red at 3003, para. 162, but quests deletion of any or all of the services." Without more the exception wouid not apply in the present case. One addi information, it is difficult for us to determine whether, assum tional matter has come to our attention, though this issue.does ing true, CV©s billing constitutes negative option billing. How not implicate our must-carry rules. In its reply to CV©s re ever, we would strongly remind all cable operators that such sponse. Press states that it "understands... that there was a practices are impermissible under the 1992 Cable Act.

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