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 operated  stations  without  any  requirements  for  cash  compensation  or  carriage  of  programming  other  than  the  broadcast  signal. 
 HOW  COMMERCIAL  ARBITRATION  WORKS 
 1.  The  MVPD’s  retransmission  consent  (RTC)  to  carry  a  broadcast  station  or  regional  sports  network  contract  expires  (and  there  is  no  new  agreement). 


 2.  Normally,  the  programming  would  be  removed  from  the  MVPD  at  this  point  because  there  is  no  agreement  for  carriage,  however,  if  the  MVPD  notifies  News  Corp.  that  it  wants  to  go  to 
 arbitration,  the  programming  remains  on. 
 3.  The  MVPD  and  News  Corp.  will  then  continue  to  negotiate  and  try  and  reach  an  agreement  for  the  next  15  -  20  days  following  expiration  of  the  contract.  The  FCC  refers  to  this  as  the 


 "cooling-  off"  period,  in  which  they  can  step  back  from  the  brink  of  arbitration  and  try  and  reach  a  mutually  beneficial  agreement. 


 4.  If  they  cannot  reach  an  agreement  after  the  "cooling-  off"  period,  the  MVPD  has  the  option  of  filing  a  demand  for  arbitration  with  the  American  Arbitration  Association  (“  AAA”).  If  it  does  so, 
 both  parties  submit  "final  offers"  to  the  AAA. 
 5.  The  "final  offers"  may  or  may  not  be  related  to  the  offers  made  during  the  cooling-  off  period;  they  are  simply  final  in  that  they  are  what  are  sent  to  the  arbitrator.  They  are  the  proposed 


 contracts  and  include  all  the  terms  and  conditions  for  carriage.  The  final  offers  cannot  include  any  terms  for  carrying  any  programming  other  that  under  dispute  (i.  e.  the  broadcast  station  or  the 
 RSN).  In  addition,  they  can  not  require  the  purchase  of  other  unrelated  products  such  as  electronic  program  guides. 


 6.  The  arbitrator  will  choose  the  "final  offer"  of  the  party  that  most  closely  approximates  the  fair  market  value  of  the  programming.  The  arbitrator  cannot  choose  anything  other  than  one  of  the 
 two  "final  offers."  This  is  referred  to  as  final-  offer  arbitration.  It  is  the  process  used  in  salary  disputes  in  Major  League  Baseball  and  public  employee  labor  disputes  in  some  states.  The  goal 
 of  the  procedure  is  to  induce  the  parties  to  make  reasonable  offers  out  of  fear  that  if  they  don't,  their  opponent's  offer  will  be  accepted. 


 7.  The  parties  are  free  to  continue  negotiating  during  the  entire  arbitration  process  and  could  reach  an  agreement  and  stop  the  process  at  any  time. 
 8.  Parties  may  seek  FCC  review  of  the  arbitrator's  decision.  The  Commission  will  review  the  evidence  and  choose  the  final  offer  that  most  closely  approximates  the  fair  market  value. 


 Action  by  the  Commission,  December  19,  2003,  by  Public  Notice  (FCC  03-  328).  Chairman  Powell,  Commissioners  Abernathy  and  Martin  with  Commissioners  Copps  and 
 Adelstein  dissenting.  Chairman  Powell,  Commissioners  Copps,  Martin  and  Adelstein  issued  separate  statements. 


 -FCC- 
 MB  Docket  03-  124  News  Media  Contacts:  Michelle  Russo  (202)  418-  2358  or  Richard  Diamond  (202)  418-  0506 


 Media  Bureau  Contacts:  Kenneth  Ferree,  Barbara  Esbin  (202)  418-  7200 
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