*Pages 1--7 from Microsoft Word - 14855* Federal Communications Commission DA 02- 326 Before the Federal Communications Commission Washington, D. C. 20554 In the Matter of: Family Stations, Inc. v. DirecTV, Inc. Request for Mandatory Carriage of Television Station KFTL (TV) Stockton, California ) ) ) ) ) ) ) ) ) ) ) CSR- 5763- M MEMORANDUM OPINION AND ORDER Adopted: February 11, 2002 Released: February 14, 2002 By the Deputy Chief, Cable Services Bureau: I. INTRODUCTION 1. Family Stations, Inc. (“ Family”) licensee of commercial station KFTL (TV), Stockton, California (“ KFTL” or the “Station”) filed the above- captioned must carry complaint against DirecTV, Inc. (“ DirecTV”), pursuant to Section 338 of the Communications Act, as amended (the “Act”), and Section 76.66 of the Commission’s rules 1 for its refusal to carry the signal of KFTL on its satellite system. 2 KFTL states that DirecTV is providing “local- into- local” satellite service in the Sacramento-Stockton- Modesto designated market area (“ Sacramento DMA”) where station KFTL operates, pursuant to the statutory copyright license. 3 In its complaint, KFTL alleges that DirecTV has failed to meet its must carry obligations under the Commission’s satellite broadcast signal carriage rules. KFTL requests that the Commission order DirecTV to carry the station’s signal on DirecTV’s satellite system. DirecTV filed a Motion for Summary Dismissal and Answer (“ Answer”) to which Family replied. 4 1 47 C. F. R. § 76. 66. We note that on December 7, 2001, the U. S. Court of Appeals for the Fourth Circuit unanimously upheld the constitutionality of Section 338 of the Act, and Section 76.66 of the Commission’s rules. See SBCA v FCC, Nos. 01- 1151, 01- 1271, 01- 1272 and 01- 1818, 2001 WL 1557809 (4 th Cir. Dec. 7, 2001). 2 The Commission issued a Public Notice on October 15, 2001. Cable Special Relief and Show Cause Petitions, Report No. 0016 (released October 15, 2001). 3 See 17 U. S. C. § 122( a); 47 U. S. C.§ 339. A satellite provider provides “local- into- local” satellite service when it retransmits a local television signal back into the local market of that television station for reception by subscribers. 47 C. F. R. § 76. 66( a)( 6). 4 Under Section76.66( m)( 3) of the Commission’s rules, a local television broadcast station that disputes a response by a satellite carrier that is in compliance with its must carry obligations may obtain review of such denial (continued…) 1 Federal Communications Commission DA 02- 326 2 II. BACKGROUND 2. Section 338 of the Act, adopted as part of the Satellite Home Viewer Improvement Act of 1999 (“ SHVIA”), 5 requires satellite carriers, by January 1, 2002, to carry on request all local television broadcast stations’ signals in local markets in which the satellite carrier carries at least one local television broadcast signal pursuant to the statutory copyright license. 6 For the initial election cycle, broadcast stations were required to notify satellite carriers by July 1, 2001, of their mandatory carriage election for carriage to commence by January 1, 2002. 7 A station’s market for satellite carriage purposes is its DMA, as defined by Nielsen Media Research. 8 In November 2000, the Commission adopted rules to implement the provisions contained in Section 338. 9 3. Whenever a local television broadcast station believes that a satellite carrier has failed to meet its obligations under Section 338 of the Act or our implementing regulations, such station shall first notify the carrier, in writing, of the alleged failure and identify its reasons for believing that the satellite carrier has failed to comply with its obligations. 10 Within 30 days after such written notification, the satellite carrier must respond in writing and comply with its obligations or state its reasons for believing (… continued from previous page) or response by filing a “complaint” with the Commission in accordance with Section 76. 7. See 47 C. F. R. § 76. 66( m)( 3). Although styled a “complaint,” a carriage complaint filed against a satellite carrier is treated by the Commission as a petition for special relief for purposes of the Commission’s pleading requirements. See 1998 Biennial Regulatory Review: Part 76 – Cable Television Service Pleading and Complaint Rules, 14 FCC Rcd 418 (1999). Responsive pleadings filed in this context, therefore, must comply with the requirements set forth in Section 76.7( b)( 1). DirecTV also sent a letter to the Cable Services Bureau Chief addressing issues raised in a letter sent to Congress by KFTL’s counsel regarding a hearing on Multi- Channel Video Competition. (See December 12, 2001 Letter to W. Kenneth Ferree, Chief, Cable Services Bureau from Gary Epstein, Esq. and James Barker, Esq.). KFTL responded by arguing that DirecTV’s letter is an unauthorized pleading because the KFTL letter referenced by DirecTV was sent to Congress and should not be made part of the record in the instant must carry proceeding. (See December 14, 2001 Letter to W. Kenneth Ferree, Chief, from Peter Tannenwald, Esq.). We agree and will not incorporate the letter as part of this proceeding. 5 See Pub. L. No. 106- 113, 113 Stat. 1501, 1501A- 526 to 1501A- 545 (Nov. 29, 1999). 6 See 47 U. S. C. § 338. 7 See 47 C. F. R § 76. 66( c)( 3); see also 76. 66( c)( 4)(“ Except as provided for in paragraphs 76. 66( d)( 2) and (3) local commercial television broadcast stations shall make their retransmission consent- mandatory carriage election by October 1 st of the year preceding the new cycle for all election cycles after the first election cycle.”). 8 A DMA is a geographic area that describes each television market exclusive of others, based on measured viewing patterns. See 17 U. S. C. § 122( j)( 2)( A)-( C); see also Implementation of the Satellite Home Viewer Improvement Act of 1999: Broadband Signal Carriage Issues; Retransmission Consent Issues, 16 FCC Rcd 1918, 1934 (2000)(“ DBS Must Carry Report & Order”); 47 C. F. R. § 76. 66( e)(“ A local market in the case of both commercial and noncommercial television station is the designated market area in which a station is located, and (i) in the case of a commercial television broadcast station, all commercial television broadcast stations licensed to a community within the same designated market area within the same local market; and (ii) in the case of noncommercial educational television broadcast station, the market includes any station that is licensed to a community within the same designated market area as the noncommercial educational television broadcast station.”). 9 See generally DBS Must Carry Report & Order, 16 FCC Rcd at 1918 et seq. The Commission later affirmed and clarified its carriage rules. See Implementation of the Satellite Home Viewer Improvement Act of 1999; Broadcast Signal Carriage Issues, 16 FCC Rcd 16544 (2001)(“ DBS Must Carry Reconsideration Order”). 10 See 47 U. S. C. § 338( f)( 1); see also 47 C. F. R. § 76. 66( m)( 1). 2 Federal Communications Commission DA 02- 326 3 that it is already doing so. 11 If Commission action is needed, as KFTL alleges here, a broadcast station may file a complaint with the Commission within 60 days after the satellite carrier submits a final rejection of the broadcast station’s carriage request. 12 If a satellite carrier provides no response to a must carry election, the 60- day period commences after the time for responding as required by the rule has elapsed. 13 Below, we consider the complaint filed by Station KFTL. III. DISCUSSION 4. In support of its Complaint, Station KFTL states that it is a full- power commercial television station that broadcasts diverse programming and is licensed to Stockton, California, which is in the Sacramento DMA. 14 KFTL asserts that on June 28, 2001, its counsel sent on its behalf a certified letter, return receipt requested, to DirecTV requesting mandatory carriage of KFTL on DirecTV’s system serving the Sacramento DMA. 15 In support, KFTL submits an unsigned letter dated June 28, 2001, printed from counsel’s computer, with a Declaration from KFTL’s counsel who states that he drafted and executed the letter and instructed his administrative assistant to mail the letter to DirecTV via U. S. certified mail, return receipt requested. 16 KFTL also submits a Declaration from the administrative assistant who states that the letter was addressed to DirecTV and mailed via certified mail, return receipt requested, but that the letter and documentation for the return receipt were inadvertently lost. 17 KFTL asserts further that DirecTV failed to respond by July 30, 2001. 18 KFTL contends that DirecTV’s failure to respond is considered a refusal of its must carry request. 19 KFTL notes that following denial of carriage, a broadcaster has 60 days in which to file a complaint. 20 KFTL states that it had until September 11 See 47 C. F. R. § 76. 66( m)( 2). 12 See 47 C. F. R. § 76. 66( m)( 6); DBS Must Carry Reconsideration Order, 16 FCC Rcd 16544, at ¶ 60. If a television station seeks a finding on the facts and a resulting determination of whether it is entitled to carriage pursuant to Section 76. 66 of our rules, then it may file a complaint with the Commission. If, however, a television station is not being carried and seeks damages and other specific forms of monetary or injunctive relief under either Section 338( a) of the Act or Section 501( f) of the Copyright Act, then the United States District Court is the exclusive forum for adjudicating the complaint. DBS Must Carry Report & Order, 16 FCC Rcd at 1974. 13 See DBS Must Carry Reconsideration Order, 16 FCC Rcd at 16574. 14 Complaint at 1. 15 Id. at 1- 2, Exhibit 1. 16 Complaint at 1, n. 1 and Exhibit I. 17 Exhibit I. 18 Complaint at 3. 19 Complaint at 2, citing the DBS Must Carry Report & Order, where the Commission stated that “the denial can be in the affirmative, as in a rejection letter, or by silence, where a carrier does not respond to a carriage request within 30 days of its receipt.” 16 FCC Rcd at 1975. KFTL notes that according to Section 76.66( m)( 2) of the Commission’s rules, a satellite carrier has 30 days to respond in writing to the notification of a full- power television station that it is either electing mandatory carriage or retransmission consent or, in the case of noncommercial stations, requesting carriage. KFTL asserts that the rule differs from the DBS Must Carry Report & Order in that the latter allowed satellite carriers until August 1, 2001 to respond to television station notifications in the first election cycle. Complaint at 3, n. 6. See DBS Must Carry Report & Order, 16 FCC Rcd at 1931- 1932. 20 Complaint at 3, citing 47 C. F. R. § 76. 7( c)( 5). See also DBS Must Carry Report & Order, 16 FCC Rcd at 1975. 3 Federal Communications Commission DA 02- 326 4 28, 2001 to file a complaint and its complaint is therefore timely filed. 21 5. KFTL argues that DirecTV is obligated to carry the KFTL signal and that grant of KFTL’s request for carriage would serve the public interest by helping create a more diverse competitive communications landscape. 22 KFTL states that each satellite carrier providing local- into- local service is obligated to carry every local commercial television station in the particular DMA, unless the station’s programming is duplicative of the programming of another commercial station carried in the DMA. 23 KFTL asserts that DirecTV must carry the station because no other commercial station in the Sacramento DMA duplicates KFTL’s programming. 24 6. With regard to signal quality, KFTL asserts that it is confident that it does provide a good quality signal to DirecTV pursuant to the Commission’s rules. 25 KFTL also states that, if for any reason, the signal of KFTL does not meet the Commission’s signal quality requirements, KFTL pledges to provide DirecTV’s local receive facility in the Sacramento DMA with a good quality signal at its sole expense. 26 7. In its answer, DirecTV contends that the Commission lacks jurisdiction to resolve satellite must carry complaints and maintains that such type of disputes can only be brought in federal district court. 27 In support, DirecTV argues that pursuant to Section 338( a)( 2), the forum to redress any failure to meet a carrier’s carriage obligations is federal court. 28 DirecTV argues further that the Commission cannot consider KFTL’s must carry complaint because the instant case does not involve the issues of good signal quality, substantial duplication, channel positioning or compensation, which are areas over which the Commission has primary jurisdiction. 29 Therefore, according to DirecTV, the Commission must summarily dismiss the instant complaint. 30 8. DirecTV also argues that KFTL is not entitled to carriage rights on the DirecTV system at issue because KFTL failed to make a proper must carry request by July1, 2001. 31 DirecTV asserts that although KFTL states that it mailed its mandatory carriage request by certified mail, DirecTV has no record of receipt of such a letter. 32 According to DirecTV, KFTL has been unable to provide any documentary proof that the letter was mailed to and received by DirecTV, and instead claimed that the administrative assistant who mailed the carriage request failed to retain a copy of the request or the 21 KFTL notes that it arguably had until 60 days after August 1, 2001 to file its complaint. See n. 17, supra. 22 Complaint at 3- 4. 23 Id. at 3, citing the DBS Must Carry Order & Report, 16 FCC Rcd at 1926. 24 Complaint at 4, citing the DBS Must Carry Order & Report, 16 FCC Rcd at 1950. 25 Id. See 47 C. F. R. § 76. 55( c)( 3). 26 Id. at 4- 5. 27 Answer at 2- 4. 28 Id. 29 Id. at 3- 4. 30 Id. at 4 31 Id. 32 Id. at 5. 4 Federal Communications Commission DA 02- 326 5 certified mail receipt. 33 DirecTV notes that it established a process to make sure that all the must carry requests it received were catalogued and evaluated so that they were responded to promptly and correctly. 34 DirecTV maintains that out of hundreds of mandatory carriage election notices it processed, this is one of only three disputes concerning the record of receipt of a carriage request. 35 DirecTV notes that under Commission precedent must carry election deadlines are strictly enforced. In that regard, DirecTV contends that the Bureau’s conclusion in Gannon University Broadcasting, Inc. (“ Gannon”) should govern the dispute here. 36 DirecTV states that in Gannon, the Bureau concluded that the rules and process in connection with making a carriage election, including the requirement that notifications be sent to the carrier by a date certain via certified mail, were specifically designed to provide certainty and avoid embroiling the Commission in notification disputes. 37 Accordingly, DirecTV argues that in the absence of any evidence that KFTL properly and timely submitted its must carry request to DirecTV, KFTL’s complaint should be denied. 38 9. In reply, KFTL argues that it has met its burden of proof that its must carry request was timely sent to DirecTV. 39 In support, KFTL refers to an unsigned copy of the satellite carriage request it asserts was sent to DirecTV on June 28, 2001, via certified mail, return receipt requested. 40 KFTL submits the Declaration of its counsel in which he states that he drafted the carriage request and delivered it to his administrative assistant, instructing her to sign the letter on his behalf and send it to DirecTV via certified mail, return receipt requested. 41 KFTL’s counsel maintains that this is standard office procedure, and asserts that to his knowledge such standard was followed. 42 In addition, KFTL submits the Declaration of the administrative assistant’s supervisor who states that the method used by counsel and his administrative assistant to send certified mail was standard office procedure for the law firm. 43 The supervisor asserts that she witnessed the assistant sending certified mail to ensure that she followed standard office procedures when doing so. 44 KFTL further argues that under the Commission’s own rules, “service by mail is complete upon mailing.” 45 KFTL also argues that circumstantial evidence concerning usual office procedure can establish proof of mailing. 46 33 Id. at 4. 34 Id. 35 Id. at 4- 5. 36 Id. at 6- 7; Gannon, 10 FCC Rcd 8619 (CSB 1995). 37 Answer at 6- 7, citing Gannon, 10 FCC Rcd 8619 (CSB 1995). 38 Answer at 9- 10. 39 Reply at 2. 40 Id., citing Complaint at 1, Exhibit 1. 41 Reply at 3, Exhibit A. 42 Id. 43 Id. 44 Id. 45 Reply at 3; see 47 C. F. R. § 1.47( f). 46 Reply at 3- 4, citing United States v. Bowman, 783 F. 2d 1192, 1197 (5 th Cir. 1986); United States v. Ledesma, 632 F. 2d 670, 675 (7 th Cir. 1980)(“ Testimony as to office practice is sufficient proof of mailing.”), cert. denied, 449 U. S. 998 (1980). 5 Federal Communications Commission DA 02- 326 6 10. KFTL also argues that even if DirecTV somehow failed to receive KFTL’s carriage request, DirecTV now is well aware of KFTL’s desire to be carried. 47 KFTL further contends that DirecTV has not claimed that it would be harmed if it were required to carry KFTL. 48 Additionally, KFTL asserts that the carrier would not incur additional copyright fees by carrying KFTL, 49 and DirecTV has not claimed that it lacks the capacity to carry KFTL. 50 Further, KFTL argues that Congress and the Commission never intended a satellite carrier to shirk its responsibilities based upon a technicality even if one exists, which KFTL asserts it does not concede. 51 KFTL contends that carriage should be denied only when the station does not meet its basic carriage qualifications. 52 11. Based on the record, we deny KFTL’s complaint for mandatory carriage. As an initial matter, we note that we need not consider the jurisdictional issued raised by DirecTV given that it was considered and resolved by the Commission in the DBS Must Carry Report & Order. 53 With regard to the substantive issues raised in KFTL’s complaint, the Commission made clear in the DBS Must Carry Report & Order that local stations are required to make their elections and requests for carriage, in writing, sent to the satellite carrier’s principal place of business by certified mail, return receipt requested. 54 The Commission also stated that contacting a carrier by certified mail is the notification method required to ensure that broadcast stations are able to demonstrate that they submitted their elections by the required deadline, and that the satellite carrier received them. 55 12. KFTL maintains that it sent DirecTV its must carry request by certified mail, return receipt requested. However, DirecTV has no record of ever receiving that request. Moreover, KFTL provides no proof, such as a date- stamped certified mail receipt demonstrating that its must carry request was sent to DirecTV or a certified mail postal card evidencing that the letter was delivered to DirecTV. KFTL instead argues that the standard mailing procedures at the law firm acting on its behalf should be accepted as proof that the mailing of the must carry request materials occurred. KFTL submits declarations from the attorney who drafted the must carry request, the Director of Administration of the law firm and the administrative assistant asserting that standard office practice was followed when the must carry request at issue was purportedly mailed. In addition, although KFTL argues that standard operating procedure is evidence of mailing, the cases KFTL offers to support its assertion can be distinguished from the circumstances in the instant complaint. In the cases cited, the mailing of the documents at issue was accomplished by ordinary mail and there was no requirement that the materials be delivered via certified mail, return receipt requested. 56 It was under those circumstances that the court found that circumstantial evidence was sufficient to establish proof of mailing. Under the Commission’s 47 Reply at 5, 9. 48 Id. 49 See 17 U. S. C. § 122. 50 Reply at 5, 9. 51 Id. at 9. 52 Id. 53 DBS Must Carry Report & Order, 16 FCC Rcd at 1974; see also supra n. 12. 54 Id., 16 FCC Rcd at 1932. 55 DBS Must Carry Reconsideration Order, 16 FCC Rcd at 16576. 56 United States v. Bowman, 783 F. 2d 1192 (5 th Cir. 1986) and United States v. Ledesma, 632 F. 2d 670 (7 th Cir. 1980) are cases involving mail fraud. 6 Federal Communications Commission DA 02- 326 7 rules applicable to this case, there is a specific requirement for mandatory carriage requests to be sent to the satellite carrier by certified mail, return receipt requested. 57 Standard office practice is not sufficient to adduce that mandatory carriage request documents were actually mailed to and received by the intended party. Without evidence of mailing, KFTL’s statement that its must carry request was sent certified mail and received by DirecTV is unsupported. 13. Requiring that notification be accomplished by certified mail provides assurances that satellite carriers are aware of their carriage obligations. Satellite carriers must contend with hundreds of elections and must carry requests from local stations and configuring satellite systems requires some degree of certainty in order to enable satellite carriers to fulfill their obligations. 58 Satellite carriers should not be subject to election and carriage requests that fail to meet the requirements of the Commission’s rules. This bright line approach in the Commission’s rules was designed to avoid the particular types of arguments raised by KFTL. Given KFTL’s failure to provide the proof required by the Commission’s rules, we deem that it has not adequately established that its election was mailed or received. We believe that the DBS Must Carry Report & Order and the Commission’s rules are clear with respect to the must carry request requirements. IV. ORDERING CLAUSES 14. Accordingly, IT IS ORDERED, that DirecTV’s Motion for Summary Dismissal IS DENIED. 15. Further, IT IS ORDERED, pursuant to Section 338 of the Communications Act, as amended (47 U. S. C. § 338), and Section 76. 66 of the Commission’s rules (47 C. F. R. § 76. 66), that the must carry complaint filed by Family Stations, Inc., licensee of commercial station KFTL (TV), Stockton, California, against DirecTV, Inc. IS DENIED. 16. This action is taken by the Deputy Chief, Cable Services Bureau, pursuant to authority delegated by Section 0.321 of the Commission’s rules. 59 FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau 57 See 47 C. F. R. § 76. 66( d)( 1)( ii). 58 See DBS Must Carry Report &Order, 16 FCC Rcd at 1929. 59 47 C. F. R. § 0. 321. 7