FCC 76.1504 Revised as of October 1, 2014
Goto Year:2013 |
§ 76.1504 Rates, terms and conditions for carriage on open video systems.
(a) Reasonable rate principle. An open video system operator shall set
rates, terms, and conditions for carriage that are just and reasonable,
and are not unjustly or unreasonably discriminatory.
(b) Differences in rates. (1) An open video system operator may charge
different rates to different classes of video programming providers,
provided that the bases for such differences are not unjust or
(2) An open video system operator shall not impose different rates,
terms, or conditions based on the content of the programming to be
offered by any unaffiliated video programming provider.
(c) Just and reasonable rate presumption. A strong presumption will
apply that carriage rates are just and reasonable for open video system
operators where at least one unaffiliated video programming provider,
or unaffiliated programming providers as a group, occupy capacity equal
to the lesser of one-third of the system capacity or that occupied by
the open video system operator and its affiliates, and where any rate
complained of is no higher than the average of the rates paid by
unaffiliated programmers receiving carriage from the open video system
(d) Examination of rates. Complaints regarding rates shall be limited
to video programming providers that have sought carriage on the open
video system. If a video programming provider files a complaint against
an open video system operator meeting the above just and reasonable
rate presumption, the burden of proof will rest with the complainant.
If a complaint is filed against an open video system operator that does
not meet the just and reasonable rate presumption, the open video
system operator will bear the burden of proof to demonstrate, using the
principles set forth below, that the carriage rates subject to the
complaint are just and reasonable.
(e) Determining just and reasonable rates subject to complaints
pursuant to the imputed rate approach or other market based approach.
Carriage rates subject to complaint shall be found just and reasonable
if one of the two following tests are met:
(1) The imputed rate will reflect what the open video system operator,
or its affiliate, "pays" for carriage of its own programming. Use of
this approach is appropriate in circumstances where the pricing is
applicable to a new market entrant (the open video system operator)
that will face competition from an existing incumbent provider (the
incumbent cable operator), as opposed to circumstances where the
pricing is used to establish a rate for an essential input service that
is charged to a competing new entrant by an incumbent provider. With
respect to new market entrants, an efficient component pricing model
will produce rates that encourage market entry. If the carriage rate to
an unaffiliated program provider surpasses what an operator earns from
carrying its own programming, the rate can be presumed to exceed a just
and reasonable level. An open video system operator's price to its
subscribers will be determined by several separate costs components.
One general category are those costs related to the creative
development and production of programming. A second category are costs
associated with packaging various programs for the open video system
operator's offering. A third category related to the infrastructure or
engineering costs identified with building and maintaining the open
video system. Contained in each is a profit allowance attributed to the
economic value of each component. When an open video system operator
provides only carriage through its infrastructure, however, the
programming and packaging flows from the independent program provider,
who bears the cost. The open video system operator avoids programming
and packaging costs, including profits. These avoided costs should not
be reflected in the price charged an independent program provider for
carriage. The imputed rate also seeks to recognize the loss of
subscribers to the open video system operator's programming package
resulting from carrying competing programming.
Note to paragraph (e)(1): Examples of specific "avoided costs" include:
(1) All amounts paid to studios, syndicators, networks or others,
including but not limited to payments for programming and all related
(2) Packaging, including marketing and other fees;
(3) Talent fees; and
(4) A reasonable overhead allowance for affiliated video service
(2) An open video system operator can demonstrate that its carriage
service rates are just and reasonable through other market based
[ 61 FR 28708 , June 5, 1996, as amended at 61 FR 43176 , Aug. 21, 1996]
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