VIDEO CONTENT:Acquisition of Broadcast

Programming

OPASTCO U WORKSHOPWinter MeetingMaui, Hawaii

January 19, 2003

Howard S. Shapiro, Senior Counsel Bennet & Bennet, PLLC

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1972: FCC ADOPTS COMPREHENSIVE CABLE RULES

One Stated Goal --Protection of Local Broadcasting

Must Carry of Local Television Stations Signal Importation Limits Blackout Rules

Rules Triggered by Station Demand

No Retransmission Consent

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1976: STATUTORY COPYRIGHT LICENSE ESTABLISHED

Covers all Secondary Transmissions

Passive Carrier Exemption

Transmissions Must be Simultaneous

No Alteration/Commercial Substitution

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1976: STATUTORY COPYRIGHT LICENSE ESTABLISHED

Payment Based on System Size

Foreign Stations

Based on FCC Signal Carriage Rules

Different Definitions Cable System Network Station

Copyright Office Bias

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1980-1981: DISTANT SIGNAL AND SYNDEX RULES ABOLISHED

No Station Consent Needed

Copyright Office Adopts Punitive Rates

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1985-1987: MUST CARRY CHALLENGED

1985 Quincy Decision

FCC Adopts New Rules

1987 Century Decision

1988-1990: SYNDEX REIMPOSED

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1992 CABLE ACT

Establishes Current Must Carry/Retransmission Consent Regime

Constitutionality Upheld by Divided Supreme Court

Copyright Law Subsequently Amended

Different Rules For Commercial/Non-Commercial Stations

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Applies to Local Commercial Stations Only

Election Made by October 1 (limited

exceptions)

New Stations

New Systems

Channel Dropped

Surrender of Analog Channel

Default Election is Must Carry

Uniform Election

TRIENNIAL ELECTION

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MUST CARRY Request Not Necessary

Notification Requirements for New Systems

All Commercial Stations in DMA (subject to cap) and certain LPTV Stations

Noncommercial Requirements Depend on Channel Capacity

Exceptions Duplication/Antileapfrogging Poor Quality Signal Copyright Indemnification

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MANNER OF CARRIAGE

Primary Video/Audio & Program Related Material

Closed Captioning and EAS

Non-degradation

Channel Positioning

Deletion/Repositioning Notifications

Market Modifications

Cannot Accept Payment (other than Copyright)

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RETRANSMISSION CONSENT

Applies to All MVPDs and All Broadcasters (LPTV)

No Consent = No Carriage

Must Be in Writing

Exceptions

Must Carry Stations (Cable/OVS)

Non-Commercial Stations

Certain Superstations

Network Signals to White Area HSDs

Master Antennas

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RTC NEGOTIATIONS Everything On the Table

Exclusive Agreements Prohibited Until 12/31/05

Duty to Bargain in Good Faith Until 12/31/05

Must Negotiate

Meet at Reasonable Times and Places/No Delays

Designate a Decision Maker

Can’t Offer Single Unilateral Proposal

Must Respond to Counterproposals and Give Reasons

Need Not Give Same Deal to Different MVPDs

Need Not Reach Agreement

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RTC ISSUES Unequal Bargaining Power

Network Consolidation Regional/National Cable Consolidation Joint Ventures and Sweetheart Deals

Cash Compensation/MFN Channel Positioning Dual Carriage/MFN Technical Standards/Bandwidth and Bit Rates HDTV Full Line Forcing Higher Rates for Affiliated Services Confidentiality Ad Avails

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DIGITAL TRANSITION

Digital Tuner Phase-in 2004-2007

Transition Ends 2006 (just kidding)

Simulcasting Requirement Begins in 2003

Digital Rights Management/Copy Protection

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DIGITAL MUST CARRY

No Dual Carriage Broadcaster Elects Analog or Digital

Retransmission Primary Video = Single Stream (Broadcaster

chooses) Ancillary Services Not Entitled to Carriage No General Guide Data (only program related) Provide Equal Quality as For Any Digital Service HDTV Must Be Provided in HDTV Must be on Basic Tier Unless Subject to Effective

Competition

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DIGITAL RTC

Partial Carriage Permitted

Can Tie Consent for Analog to Carriage of Digital

NCEs Can Grant Exclusives Outside Must Carry Area

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QUESTIONS

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