Telecom Law Blog

April 2008: DTV transition education notice mandatory

Beginning in late April 2008, all cable television operators will be required to provide specific customer notices in monthly bills to educate customers about the digital television (DTV) transition. All cable operators and other multichannel video programming distributors (MVPDs) should take immediate steps to comply with the notification requirements outlined in this post.

The FCC has now released the text of the Commercial Leased Access (“CLA”) Report and Order it adopted in late November. The Order drastically reduces the rates cable operators may charge for the lease of channel capacity. It establishes a 10 cent per subscriber per month cap on CLA rates, but also creates a complicated formula likely to produce actual CLA rates well below that amount.

On Sept. 11, 2007, the FCC adopted an order setting rules governing the carriage of broadcast signals by cable operators for a period of at least three years after the Feb. 17, 2009 transition from analog to digital broadcasting. Under new rules reflecting a compromise position offered by the National Cable & Telecommunications Association, cable operators whose systems are not all-digital will be required to carry two, and possibly three, streams of each signal of every local broadcaster that elects “must-carry” carriage—one stream in digital and one stream in analog format, and possibly a third stream in high-definition as well. However, the FCC rejected a proposed requirement that cable operators “pass-through” all of the “bits” in digital broadcast streams in favor of maintaining the existing requirement to carry signals with “no material degradation,” i.e., with picture quality as good as any other programming carried by the operator.

On March 5, 2007, the California Public Utilities Commission (Commission) released its Final Decision on the Commission's rulemaking to implement California's new Digital Infrastructure and Video Competition Act (DIVCA). The Final Decision is similar to the Proposed Decision released by Commissioner Rachelle Chong on Jan. 16, 2007, on which we previously reported. There are a few important differences between the Proposed Decision and Final Decision, however, which are summarized in this memo. To view a copy of our previous memo summarizing the Proposed Decision, click here.

On February 20, the FCC released a Notice of Proposed Rulemaking (NPRM) requesting comment on whether it should again extend the existing prohibition on exclusive distribution agreements between cable operators and cable-owned programming networks. The exclusivity prohibition, enacted as part of the 1992 Cable Act, was originally scheduled to sunset on Oct. 5, 2002. However, in the Cable Act, Congress authorized the FCC to extend the prohibition upon a finding that the prohibition “continues to be necessary to preserve and protect competition and diversity in the distribution of video programming.” In June 2002, prior to the originally scheduled sunset, the FCC extended the prohibition for five years until Oct. 5, 2007. The FCC’s recently released NPRM primarily raises the question of whether to extend the exclusivity prohibition yet again. It also seeks comment on whether and how its complaint procedures for program access disputes should be modified.

California Public Utilities Commissioner Rachelle Chong recently released a lengthy proposed decision (“Proposed Decision”) in the Commission’s rulemaking to implement California’s new Digital Infrastructure and Video Competition Act (DIVCA), which phases out the local cable television franchising scheme in California and replaces it with a new state video franchising scheme. This memo summarizes the major features of the Proposed Decision.