FCC Updates Program Carriage Complaint Rules, Seeks Additional Comment

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In a 120-page Second Report and Order and Notice of Proposed Rulemaking released Aug. 1, the Federal Communications Commission made several changes to its cable program carriage complaint procedures and sought comment on several more issues. Revision of the Commission's Program Carriage Rules, FCC 11-119, 8/1/11.

The Commission took several “initial steps” to improve its procedures for addressing program carriage complaints, including:

• Codifying what a program carriage complainant must demonstrate to establish a prima facie case of a program carriage violation;

• Providing the defendant with 60 days (rather than the current 30 days) to file an answer to a program carriage complaint;

• Establishing deadlines for action by the Media Bureau and Administrative Law Judges when acting on program carriage complaints; and

• Establishing procedures for the Media Bureau's consideration of requests for a temporary standstill of the price, terms, and other conditions of an existing programming contract by a program carriage complainant seeking renewal of such a contract.

The new procedures do not apply to program carriage complaints that are currently pending or to program carriage complaints that are filed before their effective date.

The rules were authorized by Section 616 of the Communications Act of 1934, as amended, which directs the Commission to establish regulations prohibiting a cable operator or other MVPD from using its market power to extract financial concessions, exclusive rights, or other anticompetitive concessions from program owners. Section 616 also mandates expedited review of complaints by video programming vendors and appropriate penalties and remedies for violations and for frivolous complaints. The Commission adopted implementing regulations in 1993, but initiated a new proceeding in 2007 when it appeared that the implementation scheme was ineffective.

The Commission's imposition of requirements for a prima facie case and a 60-day response window were designed to give the process greater focus and expedite resolutions. While extension of the reply period might seem contrary to that goal, the Commission noted that “requiring a complainant to provide specific evidence in its complaint and providing a defendant with additional time to respond to this evidence and provide specific evidence supporting its response … will allow for the development of a more robust factual record earlier in the complaint process than under our current rules,” which will “better enable the Media Bureau to either resolve cases on the merits based on the pleadings without referring the matter to an ALJ, or narrow the factual issues in dispute that warrant discovery or referral to an ALJ.”

The accompanying Notice of Proposed Rulemaking seeks comment on additional proposed revisions or clarifications, including modifications to the statute of limitations, discovery procedures, and remedies. The availability of damages is proposed for the first time. The NPRM imposes good faith negotiating requirements and proposes codification of the prohibition against retaliation by an MVPD.

The Commission also invites commenters to suggest “any other changes to the program carriage rules that would improve our procedures and promote the goals of the program carriage statute.”

Republican Commissioner Robert McDowell dissents from portion of the Report and Order adopting “standstill” arrangements (i.e., rules requiring MVPDs to continue to carry programming on pre-existing terms and conditions until a program carriage dispute is resolved). The dissenter believes that the Commission did not provide adequate notice and opportunity for comment under the Administrative Procedure Act, and opines that “analysis of a possible standstill framework would benefit significantly from further debate.”

By Robert Emeritz