Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) Implementation of Section 4(g) ofthe ) Cable Television Consumer Protection ) MM Docket No. 93-8 and Competition Act of 1992 ) ) Home Shopping Station Issues ) COMMENTS OF HOME SHOPPING NETWORK, INC. IN RESPONSE TO PUBLIC NOTICE DA 07-2005 James P. Warner Vice President and Secretary HOME SHOPPING NETWORK, INC. One HSN Drive S1. Petersburg, Florida 33729 Tel: (727) 872-1000 Fax: (727) 872-6866 E-mail: [email protected] July 18, 2007 TABLE OF CONTENTS EXECUTIVE SUMMARY ii I. INTRODUCTION 1 II. PROCEDURAL HISTORy 4 III. THE FCC IS BARRED BY STATUTE FROM EITHER RECONSIDERING ITS FINDING OR UPDATING THE RECORD IN DOCKET NUMBER 93-8 7 IV. THE RECORD IS SUFFICIENT TO ADDRESS - AND DISMISS - THE ISSUES RAISED IN CSC'S PETITION 9 A. The Commission Correctly Determined That Home Shopping Stations Serve the Public Interest and Properly Avoided a Subjective Evaluation ofProgramming Content 10 B. The Commission Appropriately Focused on Competing Demands for the Spectrum for Broadcast Uses Only 15 V. MORE RECENT INFORMATION SOUGHT BY THE COMMISSION CONTINUES TO DEMONSTRATE THAT HOME SHOPPING BROADCASTS SERVE THE PUBLIC INTEREST 18 VI. CONCLUSION 23 EXECUTIVE SUMMARY Home Shopping Network, Inc. ("HSN") is filing these Comments in response to the Commission's Public Notice, DA 07-2005 (reI. May 4,2007) ("Public Notice"), in which the Commission announced that it is seeking public input regarding a handful of issues that were raised in a petition for reconsideration filed by Media Access Project on behalfofthe Center for the Study ofCommercialism ("CSC") nearly 14 years ago. In 1992, pursuant to Section 4(g) ofthe Cable Television Consumer Protection and Competition Act of 1992, Congress directed the Commission to determine whether television stations "predominantly utilized for the transmission ofsales presentations or program length commercials" serve "the public interest, convenience, and necessity." After a thorough review of a full and complete record that was developed in 1993 in Docket Number 93-8, the Commission concluded that home shopping stations do serve the public interest and thereby warrant mandatory must-carry cable carriage like any other full-power local broadcast station. CSC apparently was not satisfied with the Commission's rigorous review and determination and demanded that the Commission reconsider its conclusion; however, no further action was taken in Docket Number 93-8 until the issuance ofthe Public Notice in May 2007. As more fully set forth in these Comments, the Commission is barred by statute from either reconsidering its findings or updating the record in Docket Number 93-8. The record is sufficient to address-and dismiss-the issues raised in CSC's petition for reconsideration. The Commission correctly determined that home shopping stations serve the public interest and properly avoided a subjective evaluation ofprogramming content, which would have taken the Commission down a constitutionally-hazardous road. Furthermore, when evaluating competing demands for the spectrum, the Commission appropriately focused on broadcast uses ofthe 11 spectrum only, as opposed to non-broadcast uses, because that is what Congress had directed it to do. Although the Commission has all it needs to dismiss CSC's petition based on the record established in 1993, the Commission nevertheless solicits in the Public Notice information regarding the current status ofhome shopping stations. In these Comments, HSN has endeavored to provide the requested data by informing the Commission about HSN's current broadcasting operations. HSN continues to provide a desired and valued service to the public via its owned and operated low power television stations and its affiliation agreements with other licensees that deliver HSN's home shopping programming to their viewers. HSN undertook a current survey and identified 73 broadcast stations that air predominantly home shopping programming (either HSN or other home shopping formats) with a combined reach to an estimated 44.4 million television households. As attested to by viewers ofHSN, home shopping programming provides valuable public interest benefits to consumers, a service that is critical to those who are homebound. For the reasons described in these Comments, it is clear that the Commission must reaffirm the conclusion it reached in 1993 that home shopping stations serve the public interest and deny CSC's petition for reconsideration. 111 Before the FEDERAL COMMUNICATIONS COMMISSION Washington, DC 20554 In the Matter of: ) ) Implementation ofSection 4(g) ofthe ) MB Docket No. 93-8 Cable Television Consumer Protection ) and Competition Act of 1992 ) ) Home Shopping Station Issues ) COMMENTS OF HOME SHOPPING NETWORK, INC. IN RESPONSE TO PUBLIC NOTICE DA 07-2005 Home Shopping Network, Inc. ("HSN"), a subsidiary ofIAC/InterActiveCorp, submits these comments by and on behalfofits subsidiaries in response to the Commission's Public Notice in the above-captioned proceeding. 11 I. INTRODUCTION HSN, which this year is celebrating 30 years ofservice to consumers, was the first company in the United States to offer an over-the-air broadcast shop-at-home service. While HSN has in recent years expanded its business across a number ofplatforms, including the Internet, the cornerstone ofthe company remains its television home shopping service. As explained more fully below, 74 low power television stations in 60 Designated Market Areas ("DMAs") today broadcast HSN home shopping programming for more than 86 hours per week, making home shopping available via over-the-air broadcasts to approximately 26.5 million households in these DMAs. In addition to over-the-air broadcasting, HSN delivers its 11 Public Notice, Commission Seeks to Update the Record for a Petition for Reconsideration Regarding Home Shopping Stations, MM Docket No. 93-8, DA 07-2005 (reI. May 4, 2007) ("Public Notice"). For convenience, HSN and its subsidiaries are referred to collectively herein as "HSN." programming directly to DBS operators and cable operators, making HSN one ofthe largest multi-platform television networks in the United States. HSN's over-the-air broadcasts, however, playa key role in the company's strategic objectives, as its broadcast stations often are used to fill gaps in markets where cable and DBS penetration rates are understood to be low. Overall, the HSN video distribution network reaches approximately 89 million (ofthe 111.3 million) homes in the United States with a television set. HSN provides viewers with product information, demonstrations, and entertainment, and in doing so also affords consumers with the convenience ofbeing able to shop and purchase a variety ofproducts without leaving the comfort oftheir own homes. HSN's programming features a wide range ofmerchandise, including fashion, beauty, home, jewelry, and electronic items, and includes both name brand and HSN-exclusive product lines. Unlike the conventional "brick-and-mortar" shopping experience where consumers buy products off-the-shelf, HSN customers make educated purchasing decisions after watching product demonstrations and listening to in-depth information about product specifications and features. Viewers can then order merchandise using their telephones and have HSN deliver the products to their doorsteps. In this regard, the level ofproduct information and convenience provided by HSN programming is unparalleled. HSN programming also provides viewers with entertainment and thematic programming content. This content provides viewers with product demonstrations and enhanced information about HSN products - information not ordinarily available to consumers through more typical broadcast television commercials - in an entertaining manner. For instance, special HSN programs such as Rising Chef, in which three up-and-coming chefs participated in an interactive cooking demonstration using merchandise available for purchase by consumers, and 2 Lukastyle, in which fashion aficionado Wayne Scot Lukas provides fashion advice and teaches viewers how to mix and match clothing and fashion accessories while featuring product offerings, impart useful information to viewers in a format that reflects familiar programming models. Well-known Hollywood celebrities also frequently star in HSN's regular programming, which lends an entertainment-style format to the home shopping experience. For example, just over a month ago, HSN broadcast a 30-minute special featuring Paul McCartney to celebrate and promote the release ofhis latest album, Memory Almost Full. The program featured cuts from the album, lively discussions among McCartney fans, and video segments in which McCartney discussed the inspiration behind his latest work. Other celebrities who appear on HSN programming include, for example, actress Suzanne Somers, who presents fitness and fashion products; celebrity chefs Wolfgang Puck and Roy Yamaguchi, who present kitchen products; Emmy-winning actress Susan Lucci, who presents head-to-toe fashion and lingerie; supermodel/actress Lauren Hutton, who presents cosmetics; model Jennifer Flavin-Stallone, who presents skin care products; and celebrity fashion designer Randolph Duke, who has designed an exclusive line ofapparel for HSN. Additionally, in the style ofother entertainment programming and reality television shows, HSN offers viewer participation opportunities in its programming. Members ofthe public, for example, often are able to interact with on-air personalities