CBS v. FCC - NAB Intervenor

8/10/2019 CBS v. FCC - NAB Intervenor

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ORAL ARGUMENT SCHEDULED FEBRUARY 20, 2015

Case No. 14-1242

IN THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

CBSCORPORATION,ET AL.,

Petitioners,

v.

FEDERAL COMMUNICATIONS COMMISSION AND UNITED STATES OF AMERICA,

Respondents.

ON PETITION FOR REVIEW OF AN ORDER OF THEFEDERAL COMMUNICATIONS COMMISSION

BRIEF OF INTERVENOR

NATIONAL ASSOCIATION OF BROADCASTERS

Jack N. GoodmanLAW OFFICES OF JACKN.GOODMAN1200 New Hampshire Avenue, NWSuite 800Washington, DC 20036(202) 776-2045

December 15, 2014

Rick KaplanJerianne TimmermanJustin Faulb

NATIONAL ASSOCIATION OFBROADCASTERS

1771 N Street, NWWashington, DC 20036

(202) 429-5430


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CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES

Pursuant to D.C. Circuit Rule 28(a)(1), Intervenor National Association of

Broadcasters states as follows:

A. Parties, Intervenors & Amici Curiae

All parties, intervenors and amici appearing in this Court are listed in the Brief

for Petitioners CBS Corporation, et al.

B. Ruling Under Review

The rule under review is the November 10, 2014 order issued by the FCC.

SeeOrder, FCC 14-202,In the Matter of Applications of Comcast Corp. and Time

Warner Cable Inc. for Consent to Assign or Transfer Control of Licenses and

Authorizations and AT&T, Inc. and DIRECTV for Consent to Assign or Transfer

Control of Licenses and Authorizations, Media Bureau Docket Nos. 14-57 & 14-90

(Nov. 10, 2014).

C. Related Cases

Intervenor is not aware of any related cases pending before this Court or any

other Court. Some of the issues presented in this case were the subject of an earlier

petition for review and a related petition for a writ of mandamus, both filed in this

Court on November 10, 2014. See In re CBS Corp., 14-1236;CBS Corp. v. F.C.C.,

14-1237. Before this Court issued any orders in those proceedings, the parties

stipulated to a dismissal of the proceedings on November 12, 2014.


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RULE 26.1 DISCLOSURE STATEMENT

Pursuant to Fed. R. App. P. 26.1 and D.C. Circuit Rule 26.1, Intervenor

National Association of Broadcasters (NAB)states as follows:

NAB is a nonprofit, incorporated association of radio and television stations.

It has no parent company, and has not issued any shares or debt securities to the

public; thus no publicly-held company owns ten percent or more of its stock. As a

continuing association of numerous organizations operated for the purpose of

promoting the interests of its membership, NAB is a trade association for purposes

of D.C. Circuit Rule 26.1.


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TABLE OF CONTENTS

CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES ............. i

RULE 26.1 DISCLOSURE STATEMENT .............................................................. ii

TABLE OF AUTHORITIES ................................................................................... iv

GLOSSARY ............................................................................................................. vi

STATUTES AND REGULATIONS ........................................................................ 1

STATEMENT OF THE CASE ................................................................................. 1

STANDARD OF REVIEW ...................................................................................... 9

SUMMARY OF ARGUMENT .............................................................................. 10

ARGUMENT .......................................................................................................... 15

I. THE FCC FAILED TO WEIGH THIRD PARTIES INTERESTS INTHE CONFIDENTIALITY OF PROGRAMMING AGREEMENTS ........ 16

II. THE PROTECTIVE ORDERS ARE INSUFFICIENT TO PROTECTBROADCASTERSCONFIDENTIAL INFORMATION .......................... 21

CONCLUSION ....................................................................................................... 25

CERTIFICATE OF COMPLIANCE ..................................................................... 26

CERTIFICATE OF SERVICE............................................................................... 27

ADDENDUM: STATUTORY SUPPLEMENT .................................................. A-1


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TABLE OF AUTHORITIES*

Cases Page(s)

Achernar Broad. Co. v. FCC,

62 F.3d 1441 (D.C. Cir. 1995) ......................................................................... 20

Allied Local & Regl Mfrs. Caucus v. U.S. EPA,215 F.3d 61 (D.C. Cir. 2000) ........................................................................... 10

Communs. & Control, Inc. v. FCC,374 F.3d 1329 (D.C. Cir. 2004) ....................................................................... 18

FCC v. Fox Television Stations, Inc.,556 U.S. 502 (2009) ................................................................................... 10, 17

Greater Bos. Television Corp. v. FCC,444 F.2d 841 (D.C. Cir. 1970) ......................................................................... 18

Intl Ladies' Garment Workers' Union v. Donovan,722 F.2d 795 (D.C. Cir. 1983) ......................................................................... 20

Motor Vehicle Mfrs. Assn of U.S., Inc. v. State Farm Mut. Auto. Ins. Co.,463 U.S. 29 (1983) ............................................................................................. 9

*Qwest Communs. Intl v. FCC,229 F.3d 1172 (D.C. Cir. 2000) ....................................................... 6, 12, 18, 20

Verizon Tel. Cos. v. FCC,570 F.3d 294 (D.C. Cir. 2009) ......................................................................... 17

Statutes

5 U.S.C. 706(2) ..................................................................................................... 9

18 U.S.C. 1905 .............................................................................................. 12, 16

47 U.S.C. 325 ........................................................................................................1

47 U.S.C. 534 ........................................................................................................ 247 U.S.C. 325(b) ................................................................................................... 2

47 U.S.C. 325(b)(3)(C)(ii) .................................................................................... 447 U.S.C. 325(b)(3)(C)(iii) ...................................................................................4

*Authorities upon which we chiefly rely are marked with asterisks.


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Rules and Regulations

47 C.F.R. 0.457(d)(1) .......................................................................................... 16

Administrative Decisions and Notices

Amendment of the Commns Rules Related to Retransmission Consent, Notice ofProposed Rulemaking,

26 FCC Rcd. 2718 (2011) .................................................................................. 2

Amendment of the Commns Rules Related to Retransmission Consent , Report andOrder,

29 FCC Rcd. 3351 (2014) ................................................................................ 19

Applications of Comcast Corp., Gen. Elec. Co. & NBC Universal, Inc. for Consentto Assign Licenses & Transfer Control of Licenses, Memorandum Opinion and

Order,26 FCC Rcd. 4238 (2011) ................................................................................ 19

*Applications of Comcast Corp. and Time Warner Cable Inc. for Consent toAssign or Transfer Control of Licenses and Authorizations, and AT&T, Inc. andDIRECTV for Consent to Assign or Transfer Control of Licenses andAuthorizations, Order, FCC 14-202, MB Docket Nos. 14-57 and 14-90 (Nov. 10,2014) ........................................................................................................ 7, 9, 14, 23

*Applications of Comcast Corp. and Time Warner Cable Inc. for Consent toAssign or Transfer Control of Licenses and Authorizations, and AT&T, Inc. andDirecTV for Consent to Assign or Transfer Control of Licenses andAuthorizations, Order on Reconsideration, DA 14-1601, MB Docket Nos. 14-57and 14-90 (Med. Bur. Nov. 4, 2014) ..... 4, 5, 8, 9, 12, 13, 14, 20, 21, 22, 23, 24, 25

Exam. of Current Policy Concerning the Treatment of Confidential Info. Submittedto the Commn,

13 FCC Rcd. 24,816 (1998) ............................................................................. 17

The Bell Tel. Operating Cos. Request for Confidential Treatment,10 FCC Rcd. 11,541 (1995) ............................................................................... 8

Other Authorities

Ex Parte Submission of the U.S. Department of Justice, MB Docket No. 09-182(filed Feb. 20, 2014) ................................................................................................. 2

Supplemental Comments of the National Association of Broadcasters, MB DocketNo. 10-71 (filed May 29, 2013) .............................................................................23


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GLOSSARY

APA Administrative Procedure Act

Bureau Media Bureau of the Federal Communications Commission

Commission Federal Communications Commission

FCC Federal Communications Commission

MVPD Multichannel video programming distributor

Order In the Matter of Applications of Comcast Corp. and Time

Warner Cable Inc. for Consent to Assign or Transfer Controlof Licenses and Authorizations and AT&T, Inc. and

DIRECTV for Consent to Assign or Transfer Control of

Licenses and Authorizations, FCC 14-202, MB Docket Nos.14-57 and 14-90 (Nov. 10, 2014).

Reconsideration

Order

In the Matter of Applications of Comcast Corp. and TimeWarner Cable Inc. for Consent to Assign or Transfer Control

of Licenses and Authorizations and AT&T, Inc. andDIRECTV for Consent to Assign or Transfer Control of

Licenses and Authorizations, DA 14-1601, MB Docket Nos.14-57 and 14-90 (Med. Bur. Nov. 4, 2014).


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STATUTES AND REGULATIONS

With the exception of 47 U.S.C. 325 (2014), which is set forth in the

addendum to this brief, all applicable statutes and regulations are contained in the

Brief for Petitioners CBS Corporation, et al.

STATEMENT OF THE CASE

Intervenor National Association of Broadcasters (NAB) adopts the

Statement of the Case in the Brief of Petitioners CBS Corporation, et al., and

supplements it as follows:

This case arises out of two proposed mergers between large pay television

providers, one between Comcast Corporation and Time Warner Cable, and the other

between AT&T and DirecTV. Comcast is the nations largest multi-channel video

programming distributor (MVPD); DirecTV ranks second; Time Warner Cable

ranks fourth; and AT&T fifth. The Comcast-Time Warner Cable merger also

involves agreements to sell certain cable systems to Charter Communications, itself

the seventh largest MVPD. Thus, the two mergers involve four of the five largest

MVPDs and five of the seven largest MVPDs, which together provide pay television

service to approximately 64 million subscribing households in almost every market

in the United States.

MVPDs obtain much of the programming they transmit to subscribers from

independent programmers. Some programming, like Nickelodeon, the Food


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Network, ESPN and HBO, is created for and distributed only by MVPDs or in some

cases online. The most viewed programming channels on MVPDs, however,

consistently are those carrying broadcast television stations in subscribers local

television markets.1 Section 325(b) of the Communications Act, 47 U.S.C. 325(b)

(2014), requires that MVPDs obtain the consent of television broadcast stations to

retransmit their signals, if those stations choose to negotiate for retransmission.2

MVPDs and local television stations enter into retransmission consent agreements

under which the MVPDs obtain the rights (and most often the obligation) to

retransmit the signals of local stations, in exchange for various forms of

compensation, including cash payments. See generallyAmendment of the Commns

Rules Related to Retransmission Consent, Notice of Proposed Rulemaking, 26

F.C.C.R. 2718, 2720-21 (2011).

For many television broadcasters, retransmission consent increasingly

provides a substantial portion of their revenues.3 Retransmission agreements govern

1SeeEx ParteSubmission of the U.S. Department of Justice, MB Docket No. 09-182 (filed Feb. 20, 2014) at 9 (Although MVPDs may carry hundreds of channelsaltogether, the local broadcast television stations usually have the highestviewership.)2 Some stations are carried instead under must-carry rules, which guaranteecarriage on the MVPD but do not permit negotiation for compensation. See 47U.S.C. 534 (2014). The considerable majority of commercial television stations,including almost all stations affiliated with the major television networks, choose tonegotiate for retransmission consent.3See, e.g., Justin Nelson, TV Station-Level Retrans Revenue Analysis, 2012-2020,SNL Kagan (Nov. 13, 2014, 9:57 PM), https://www.snl.com/InteractiveX/Article.aspx?id=29490049(discussing the rising percentage of revenue for stationsfrom retransmission consent fees) (last visited Dec. 11, 2014);see also Mike Farrell,
https://www.snl.com/InteractiveX/%20Article.aspx?id=29490049https://www.snl.com/InteractiveX/%20Article.aspx?id=29490049https://www.snl.com/InteractiveX/%20Article.aspx?id=29490049https://www.snl.com/InteractiveX/%20Article.aspx?id=29490049https://www.snl.com/InteractiveX/%20Article.aspx?id=29490049


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not only the revenues stations receive, but also frequently address myriad additional

issues, such as providing a viewable signal to subscribers who are not using a digital-

capable television receiver; the use by an MVPD of broadcaster-created

programming to provide video on-demand service; the distribution of broadcaster

programming online to MVPD subscribers; provision of fiber-optic networks by

MVPDs to enable distribution of television stations signals to repeater stations in

geographically large markets; MVPD carriage of other broadcast programming such

as local stations weather and other multicast streams; and commitments to purchase

advertising on television stations. These agreements with MVPDs now rank among

the most important factors in determining many broadcasters profitability and

ability to compete in the marketplace.

MVPDs and the conditions in local markets vary considerably; thus, the terms

of a local stations retransmission consent agreements may similarly vary. One

MVPD might, for example, control a large percentage of the television households

in a stations market; another might provide facilities that are valuable to a station;

one might agree to carry additional programming streams while another one declines

to do so. A station might agree on a contractual provision with one MVPD that

Kagan: Retrans Fees Rise to $9.3B by 2020, SNL Kagan (Oct. 27, 2014, 10:00 AM),http://www.multichannel.com/news/news-articles/kagan-retrans-fees-rise-93b-2020/385063 (discussing the growth in retransmission fees paid to broadcasters)(last visited Dec. 11, 2014).
http://www.multichannel.com/news/news-articles/kagan-retrans-fees-rise-93b-2020/385063http://www.multichannel.com/news/news-articles/kagan-retrans-fees-rise-93b-2020/385063http://www.multichannel.com/news/news-articles/kagan-retrans-fees-rise-93b-2020/385063http://www.multichannel.com/news/news-articles/kagan-retrans-fees-rise-93b-2020/385063http://www.multichannel.com/news/news-articles/kagan-retrans-fees-rise-93b-2020/385063


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might not be acceptable with another or at least not at the same price.4

Accordingly, television stations regard the terms of agreements with MVPDs as

extremely confidential.

In information requests to the MVPD parties to the proposed mergers, the

Federal Communications Commission (FCC or Commission) required them to

produce unredacted copies of the final versions of all their contracts for video

programming, each draft of those agreements, and e-mails and records of telephone

conversations concerning those agreements. Applications of Comcast Corp. and

Time Warner Cable Inc. for Consent to Assign or Transfer Control of Licenses and

Authorizations, and AT&T, Inc. and DirecTV for Consent to Assign or Transfer

Control of Licenses and Authorizations, Order on Reconsideration, DA 14-1601,

MB Docket Nos. 14-57 and 14-90 (Med. Bur. Nov. 4, 2014) at 2 (J.A. 29)

(hereinafter Reconsideration Order);see also J.A. 155. Although the Commission

recognized that these documents were confidential, it initially provided only

minimal protection against disclosure, and added additional protections which

4Section 325(b)(3)(C)(ii) of the Communications Act, 47 U.S.C. 325(b)(3)(C)(ii)(2014), requires television stations to negotiate retransmission consent agreementsin good faith, but specifically provides that it shall not be a failure to negotiate ingood faith if the television broadcast station enters into retransmission consentagreements containing different terms and conditions, including price terms, withdifferent multichannel video programming distributors. A reciprocal obligationapplies to MVPDs. 47 U.S.C. 325(b)(3)(C)(iii) (2014).


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remain far from adequateonly following repeated requests by affected companies,

internal agency appeals and after Petitioners sought review in this Court.

The sheer size of the merging parties and the scope of their agreements

exacerbate the risk of harm from disclosure to third parties of broadcasters

negotiating strategies and contract terms with the five affected MVPDs. One of the

merging partiesDirecTVhas retransmission consent agreements with television

broadcasters in all but a handful of the nations 210 television markets. Comcast,

Time Warner, AT&T and Charter collectively have agreements covering most of the

major television markets in the United States. The Chief of the FCCs Media

Bureau, its General Counsel and Chief of the Wireline Competition Bureau

confirmed the breathtaking scope of the documents the Commission demanded that

the merger parties reveal:

Access to the Applicants contracts could allow someone to obtain adetailed, industry-wide overview of the current and future

programming market. Indeed, because the AT&T and Comcasttransactions are pending simultaneously, the ability to capture anunderstanding of the programming marketplace is greater, and

potentially more troublesome, than if only one were before us.5

There should be no dispute, therefore, that access to the documents the FCC has

required to be produced and which it would reveal to competing purchasers of

broadcast and other programmingcould materially aid those competitors in future

5William Lake, et al., Transaction Reviews and the Public Interest, The OfficialFCC Blog, at 2 (Oct. 7, 2014), cited in Reconsideration Order at11 (J.A. 38).


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negotiations with broadcasters and other programmers. NAB stresses that it is not

challenging Commissionaccess to these materials.

Importantly, NABs member television stations (with the exception of stations

owned by Comcast) are not parties to the merger applications. Our members are not

asking the FCC for any affirmative relief based on the content of programming

agreements or the conduct of retransmission consent negotiations. Instead, the FCC

has dragged our member stations unwillingly into the current controversy by

permitting disclosure of their most confidential information to third parties who

would use that information to disadvantage them. The Court of Appeals, in

considering a previous FCC disclosure decision, noted that where the FCC had

required disclosure of confidential financial information, it did so in circumstances

where the party whose information was being disclosed had placed its financial

condition at issue. Qwest Communs. Intl v. FCC, 229 F.3d 1172, 1182 & n.21

(D.C. Cir. 2000). Broadcast television stations have not done so, but the FCC

nonetheless has overridden their entirely reasonable and routine expectations of

confidentiality.

Indeed, television broadcasters and other programmers routinely negotiate

confidentiality provisions in their agreements with programming distributors,

including the merging parties. Broadcasters and other programmers certainly had

no expectations that their programming agreements would be made available to


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privateparties, yet the FCCs action here would give representatives of competing

distributors the exact information that television stations contracted to keep secret.

Notably, the two intervenors in this case supporting the Commissions broad

disclosure orders, are DISH Network a satellite distributor of broadcast

programming in every U.S. television marketand the American Cable Association

(ACA), which is the trade association representing small and medium-sized cable

television systems across the country. It is most certainly in their commercial

interests to discover as much as possible about the agreements NAB members have

reached with the proposed merging entities and the negotiations that led to those

agreements. As Commissioner ORielly concluded in his dissenting statement, this

appears to be more of a fishing expedition by interest[] groups and competitors to

obtain market-sensitive information. Applications of Comcast Corp. and Time

Warner Cable Inc. for Consent to Assign or Transfer Control of Licenses and

Authorizations, and AT&T, Inc. and DIRECTV for Consent to Assign or Transfer

Control of Licenses and Authorizations, Order, FCC 14-202, MB Docket Nos. 14-

57 and 14-90 (Nov. 10, 2014) at 5 (J.A. 5) (hereinafter Order).

The Commission, by summarily approving the Media Bureaus

Reconsideration Order for the reasons stated by the Bureau,6 rejected the

alternatives television stations and other programmers proposed that would have

6Order at 1 (J.A. 1).


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been most effective in preventing harmful disclosures to third parties. In particular,

programmers suggested that programming agreements and related material could be

anonymized or redacted before they were revealed. The Commission in earlier

proceedings recognized that release of commercial and financial information of

only a summary naturedoes not present the concerns about competitive harm that

normally lead us to withhold . . . information from public disclosure. The Bell Tel.

Operating Cos. Request for Confidential Treatment, 10 F.C.C.R. 11541, 11542

(1995) (emphasis added). The Bureau nonetheless brushed this alternative aside,

blithely accepting the merging parties contention that doing so would be

burdensome.7 The Bureau then stated that commenting parties might need to know

things about contracts, such as the size of the parties involved, and other terms to

evaluate the relevance of a programming agreement.8 It failed to even consider

alternatives, such as summaries of categories of agreements by market size or other

factors, which might preserve programmers confidential material while being more

7Reconsideration Orderat 17 (J.A. 44). Earlier in theReconsideration Order, theBureau stressed the amount of effort required of the merging parties to identify thedocuments responsive to the FCCs information requests. Id.at 16 (J.A. 43). The

FCC apparently made no attempt to analyze whether the additional effort needed toremove identifying information would have created any significant additionalburden. Even if it had, the merging parties are the ones seeking FCC action and arealso the ones making claims about the impact of the proposed mergers on their

programming costs. Why they should not bear the costs of any compliance, ratherthan risking disclosure of third-parties confidential information, was not addressed

by the Bureau.8Reconsideration Orderat 17 (J.A. 44).


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useful to parties analyzing the mergers by relieving them of the need to plow through

literally thousands of agreements and hundreds of thousands of pages of documents.

Finally, the Bureau in the Reconsideration Order exacerbated the risk to

broadcasters from the required disclosures by permitting access to agreements and

negotiating material, even by individuals whose right of access under the FCCs

protective orders has been challenged, only five days after a Bureau decision

rejecting a challenge. Reconsideration Order at 18 (J.A. 45). As dissenting

Commissioner ORielly observed, once the documents are revealed, [t]his bell

cannot be unrung. Order at 5 (J.A. 5). This unprecedented decision to cut off the

right of review further demonstrates the arbitrary nature of the Commissions

dismissal of programmers legitimate interests in the confidentiality of their business

dealings.

STANDARD OF REVIEW

This Court will vacate an FCC order that is in excess of statutory jurisdiction

or authority, or that is arbitrary, capricious, an abuse of discretion, or otherwise not

in accordance with law. 5 U.S.C. 706(2) (2014). An order is arbitrary and

capricious if the FCC has relied on factors which Congress has not intended it to

consider, entirely failed to consider an important aspect of the problem, [or] offered

an explanation for its decision that runs counter to the evidence before the agency.

Motor Vehicle Mfrs. Assn of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S.


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29, 43 (1983). An agency must also consider significant alternatives to the course

it ultimately chooses,Allied Local & Regl Mfrs. Caucus v. U.S. EPA, 215F.3d 61,

80 (D.C. Cir. 2000) and display awareness of and provide reasoned explanation

for a change in its position. FCC v. Fox Television Stations, Inc., 556 U.S. 502,

515 (2009).

SUMMARY OF ARGUMENT

In reviewing two proposed mergers among five of the nations largest cable

and satellite television providers, the Federal Communications Commission (FCC

or Commission) required the merging pay TV companies to submit all agreements

under which they obtain the rights to distribute broadcast television and other video

programming andall drafts of those agreements, as well as e-mails and other records

of the related negotiations. The FCCs demand for negotiating materials was

unprecedented, and the Commission went even further by determining to make all

these materials available to third parties. That decision was also unprecedented; the

FCC has previously reviewed other large media mergers without making

confidential programming agreements available to third parties. The FCC did not

explain its change of position, and failed to identify any persuasive reason why third

parties needed unprecedented access to unredacted agreements and negotiation

materials. Its decisions cannot stand.


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For television station members of the National Association of Broadcasters

(NAB), agreements withpay TV providers (also known as multichannel video

programming distributors, or MVPDs) to permit retransmission of their broadcast

signals are among their most closely guarded secrets. The revenues from

retransmission consent agreements with MVPDs are increasingly important to many

stations profitability; the specific terms governing how their signals are distributed

by MVPDs (for example, the distribution of programs on-demand or to non-

traditional devices such as tablets) are carefully negotiated.

NAB is not arguing that the Commission should not have access to the

programming agreements and negotiating materials submitted by the merging

MVPDs. But revealing to other MVPDs or their representatives the terms of

agreements and details of negotiations with the merging companies which

collectively negotiate with television stations in almost all of the nations 210

television markets would play havoc with broadcasters ability to negotiate

retransmission consent agreements on anything approaching a competitively level

playing field. Notably, those entities supporting the broadest third-party disclosure

before the FCC and in this Court are either competing MVPDs or trade associations

representing them.

The Commission recognized that programming agreements and negotiating

materials are extremely confidential, and senior officials even acknowledged that


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the FCCs decisions would result in other parties obtaining a detailed, industry-

wide overview of the current and future programming market, a prospect they

called troublesome. Reconsideration Order at 11 (J.A. 38). Nonetheless, the

Commission summarily rejected options that would preserve television stations

confidentiality, such as limiting review to the FCC and the Department of Justice or

redacting, summarizing or anonymizing the documents to allow third parties to

evaluate the merging companies programming agreements collectively without

revealing details of specific agreements and negotiation strategies, contrary to its

own and this Courtsprecedent.

Under the Trade Secrets Act, 18 U.S.C. 1905 (2014), and the FCCs

implementing rules, trade secrets or confidential financial information can only be

disclosed after a persuasive showing of the need for disclosure. And under the

FCCs long-standing interpretation of that mandate, confidential information should

not be disclosed, even under a protective order, on the mere chance that it might be

helpful. This Court also instructed the FCC that it should not require disclosure of

trade secret information unless it explains why only the release of [confidential

documents] will achieve meaningful public comment. Qwest Communs. Intl,229

F.3d at 1184 (D.C. Cir. 2000) (emphasis added).

The FCC did not even attempt to meet this high bar in this case, but merely

surmised that access to hundreds of thousands of pages of confidential information


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couldbe relevant to third parties analyses of the two mergers. The Commission

notably failed to explain why evaluations of previous large mergers did not require

the blanket breach of confidentiality approved here. Indeed, only a few months ago,

the FCC adopted a rule changing negotiating practices for retransmission consent

agreements between MVPDs and television stations without reviewing actual

agreements, let alone other negotiating materials. Its ipse dixitthat third party access

to highly confidential materials is now needed is blatantly inconsistent with the

FCCs own behavior.

The Commissions argument that its protective orders will prevent

competitive harm is not only legally insufficient, but also does not withstand

examination as a practical matter. The more than 260 individuals who have

requested access to television station agreements and negotiation materials, with few

exceptions, represent competing MVPDs. While the Commission says that no one

involved in Competitive Decision-Making should have access to confidential

materials, outside counsel for other MVPDs or their trade association would not be

barred from using the detailed, industry-wide knowledge they obtain about the

current and future programming market to advise clients about FCC rulemakings

governing programming negotiations. Reconsideration Orderat 11, 13 (J.A. 38,

40). These counsel also would gain insights useful for advising companies about


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negotiating strategies, giving those entities a greatly enhanced ability to negotiate

competitively favorable terms with broadcasters and other programmers.

Further, the FCC must be aware that individuals who currently work for

MVPDs as outside counsel have in the past and may in the future move in-house as

counsel to that or another MVPD, where they easily could become directly involved

in negotiating programming agreements. If such an in-house attorney has seen the

agreements and negotiating materials that the FCC plans to reveal, then, as

dissenting Commissioner Pai remarked, the cat cannot be put back in the bag.

Order at 3-4 (J.A. 3-4).

Protective orders simply cannot stop the flow of information and knowledge,

especially in the relatively small, inter-connected world of MVPDs, law firms and

cable trade associations involved in retransmission consent issues generally and in

negotiating programming agreements for MVPDs serving most television markets

specifically. And the FCC exacerbated these deficiencies in its protective orders by

taking the unprecedented step of cutting off programmers right of review by

permitting disclosure to specific third parties, even while objections to those parties

rights to see confidential material remains pending at the Commission or in court.

Reconsideration Order at 18 (J.A. 45).

The FCCs action means that television broadcasters who are not parties to

the mergers would have their most confidential documents and information


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revealed to programming distributors who compete with the merger parties and with

whom broadcasters must negotiate vital distribution agreements. The Commission

failed to give serious consideration to whether this sweeping disclosure was

necessary, whether alternatives would meet third parties needs, or whether the holes

in its protective orders would render them nugatory. Under well-established

standards, the ruling under review cannot be sustained.

ARGUMENT

The Commissions actions place the competitive information of hundreds of

unaffiliated parties at risk without a sufficient basis for doing so. The contracts and

negotiating materials that the FCC intends to reveal are at the core of television

stations businesses and competitive positions. The FCC has recognized as much.

Moreover, most of the individuals seeking access to these documents have been

representatives of either other programming distributors or their trade associations,

with a great deal to gain from such an unprecedented opportunity to peer directly

into the details of television stations contracts and negotiations. This competitive

advantage, obtained in the course of a proceeding that otherwise does not involve

the Petitioners or any broadcast television stations (beyond Comcasts NBC

properties), coupled with the limited, if any, value in making these confidential

documents available for public review, makes the FCCs actions here particularly

egregious.


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The FCCs responses essentially are: (1) the information could be relevant

and another party could claim that they were deprived a full opportunity to

participate in the merger proceedings without complete access to all programmer

agreements, and (2) the FCCs protective orders will protect the information. For

the reasons discussed in detail below, these responses are wholly inadequate and

thus this Court should grant the Petition.

I. THE FCC FAILED TO WEIGH THIRD PARTIES INTERESTS IN

THE CONFIDENTIALITY OF PROGRAMMING AGREEMENTS

Broadcasters have not argued that the FCCitself should not have access to

contracts and negotiating materials, if it indeed believes that thousands of separate

retransmission consent and other programming agreements are relevant to its

consideration of the two mergers. What broadcast stations have objected towith

barely any acknowledgement by the Commissionis the FCCs intent to make these

unredacted documents available on request to anyone who claims an interest in the

mergers. The FCCs decision to do so is based on a classic ipse dixit; the documents

must be produced because some or all of them could be relevant to issues the

Commission could determineare relevant to its public interest analysis. But the

Commissions obligation under the Trade Secrets Act, 18 U.S.C. 1905(2014), and

the Commissions own regulations require that disclosure of trade secrets be

permitted only after a persuasive showing of the need for such disclosure. 47

C.F.R. 0.457(d)(1).


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In fact, the FCC itself has rejected arguments that trade secrets and other

confidential financial information should be disclosed, even under a protective order,

on the mere chance that it might be helpful. Exam. of Current Policy Concerning

the Treatment of Confidential Info. Submitted to the Commn, 13 F.C.C.R. 24816,

24823 (1998) (citations omitted). The Commissions multiple orders here, however,

offer nothing more than assumption and speculation that hundreds of thousands of

pages of confidential information, to which the FCC and the Department of Justice

have full access, could be relevant to some third partys argument. The Commission

failed to acknowledge this departure from its own governing standard, contrary to

the Administrative Procedure Act (APA). See FCC v. Fox Television Stations,

Inc., 556 U.S. 502 515 (2009) (the requirement that an agency provide reasoned

explanation for its action would ordinarily demand that it display awareness that it

ischanging position) (emphasis in original).

Similarly, the Commission did not acknowledge that it has never required

disclosure of draft agreements and negotiation details in any media merger, yet

insists on that disclosure now. None of the decisions at issue here explain that

dramatic departure from precedent. As this Court has repeatedly reminded the

Commission, an unexplained departure from precedent means that its decision

cannot be sustained. See, e.g., Verizon Tel. Cos. v. FCC, 570 F.3d 294, 304 (D.C.


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Cir. 2009); Communs. & Control, Inc. v. FCC, 374 F.3d 1329, 1335-36 (D.C. Cir.

2004); Greater Bos. Television Corp. v. FCC, 444 F.2d 841, 852 (D.C. Cir. 1970).

This Courts precedent also requires reversal of the Commissions position

here. In Qwest, the FCCs decision requiring disclosuresubject to protective

ordersof the results of audits of companies confidential business information

was reversed. Qwest Communs. Intl, 229 F.3d 1172. In Qwest, the Commission

rested its decisionas the Bureau did hereon a mere assertion that access to the

audit data would assist the Commission. The Court held that this bare conclusion

was insufficient to meet the Commissions obligation to limit third-party access to

trade secrets. The Court pointed to a suggestion that a composite of raw data

without identifying an individual[s] . . . sensitive commercial information would

suffice to meet the Commissions and parties needs. Id.at 1183. The Court went

on to hold that,

the Commission must consider plausible alternatives and discount thembefore resorting to the release of raw audit data. . . . A response thatthe protective order adequately protects Qwest against competitiveinjury misses the mark. The Commission must explain why onlytherelease of raw audit data will achieve meaningful public comment.

Id.at 1183-84 (emphasis added).

The Commissions decisions here fail to meet the Qwest standard. It failed to

explain why it was able to address similar claims of potential efficiencies in the

programming market by the merging parties in the Comcast-NBCU merger without


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requiring anythird-party disclosure of confidential programming agreements. See

Applications of Comcast Corp., Gen. Elec. Co. and NBC Universal, Inc. for Consent

to Assign Licenses and Transfer Control of Licenses, Memorandum Opinion and

Order, 26 F.C.C.R. 4238 (2011).

The Commission has even demonstrated in other contexts that it can make

judgments about the retransmission consent market with little or no examination of

actual contracts, let alone other negotiating documents. Earlier this year, the FCC

adopted rules limiting certain retransmission consent negotiating practices by certain

types of parties, and did so on the basis of economic theory and a small number of

examples from commenters. Amendment of the Commissions Rules Related to

Retransmission Consent, Report and Order, 29 F.C.C.R. 3351, 3359-62 & n.56

(2014). If the Commission could in one proceeding make judgments about the

programming marketplace without examining actual retransmission consent

agreements and related materials, the Commission cannot now logically claim it is

compelled to allow unlimited roaming by competitors into programmers trade

secrets in another proceeding dealing with the same marketplace. It would be

difficult to imagine two decisions adopted only months apart that are more

directly inconsistent with each other.

Similarly, while the Commission has acknowledged that anonymized or

summarized data can often be used to evaluate marketplace arguments, it rejected


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programmers requests to consider that alternative. Its only reasons were that doing

so would be burdensome (without even trying to quantify that burden), and that some

kinds of information that a commenter might want would not be provided in

anonymized or summarized production. Reconsideration Order at 8, 15 (J.A. 35,

42). But that is far from meeting the obligation the Court placed on the FCC in

Qwestthat release of confidential information be the onlyway to obtain meaningful

comment. 229 F.3d at 1184. This failure to seriously consider alternatives,

moreover, makes the FCCs decision arbitrary and capricious under the APA. See,

e.g., Achernar Broad. Co. v. FCC, 62 F.3d 1441, 1447 (D.C. Cir. 1995);Intl Ladies

Garment WorkersUnion v. Donovan, 722 F.2d 795, 815-16 (D.C. Cir. 1983).

The information the FCC wants to give hundreds of individuals access to

includes the most sensitive and closely-guarded secrets of television stations and

other programmers. It is information uniformly protected by confidentiality

agreements and relates to transactions that are among the most significant in

determining the success or failure of television stations. The Commissions own

standards require it to respect the confidential nature of these agreements and related

negotiating materials, unless third parties make a persuasive showing that, without

access, they could not participate in the FCCs review of the two mergers. The

FCCs acquiescence to a standard of could be relevant, without more, utterly fails

to meet the obligations imposed on it by statute and its own rules.


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II.

THE PROTECTIVE ORDERS ARE INSUFFICIENT TO PROTECT

BROADCASTERSCONFIDENTIAL INFORMATION

The Commission claims that its protective orders sufficiently guard against

any competitive harm to broadcasters and other programmers stemming from

disclosure of their most confidential information to distributors with whom those

programmers must negotiate vital program distribution agreements. That conclusion

cannot be sustained.

Most of the individuals who have sought access to programming agreements

and negotiating material are either representatives of other MVPDs or of a trade

association representing cable television systems. Thus, the organizations seeking

access to confidential retransmission consent and other programming agreements

are either directly involved in negotiating programming agreements for themselves

or represent MVPDs that negotiate for programming carriage. Few of the

individuals seeking access are not directly employed by entities that have the

strongest competitive interest in learning about agreements other parties have made

with the merging companies, and the negotiating strategies that either succeeded or

failed in the discussions leading up to those agreements.

The Commission believes that it provided adequate protection by limiting

access only to individuals who are not involved in Competitive Decision-Making.

Reconsideration Orderat 13-14(J.A. 40-41). But that standard is far too forgiving.

For example, one of DISH Networks or the American Cable Associations outside


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counsel might not now or in the future be directly involved in negotiating

programming agreements. That individual, however, could without restriction

advise a client about positions to take in an FCC proceeding examining the rules

governing retransmission consent negotiations, or limiting program exclusivity

rights, or otherwise affecting the programming market, and could do so using the

insights he or she obtained in reviewing the programming agreements of almost

every television station in the nation.

In the same way, attorneys or outside consultants not directly involved in

negotiating programming agreements could advise DISH Network or another

MVPD about changes in the retransmission consent marketplace and suggest general

negotiation strategies. Even if those persons could not and did not use specific

examples gleaned from reviewing documents produced in the merger proceedings,

their access to what the FCC acknowledged would be a detailed, industry-wide

overview of the current and future programming market, would enhance any

MVPDs ability to negotiate competitively favorable terms with broadcasters and

other programmers. Reconsideration Order at 11 (J.A. 38).

Further, individuals who currently work for an MVPD as outside counsel may

move in-house as counsel to that or another MVPD. Counsel with experience in

cable and other MVPD issues are the most natural source for new in-house counsel

for MVPDs, and a number of attorneys in fact have moved between private law firms


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and MVPDs and between MVPDs, including the MVPDs involved in this

proceeding. If such an in-house attorney who becomes involved in negotiating

retransmission consent or other programming agreements has seen the programming

agreements and negotiating materials that the FCC plans to reveal, as Commissioner

Pai remarked, the cat cannot be put back in the bag. Order at 3-4 (J.A. 3-4). In

response to this quite practical problem, the Bureau merely stated that it would

expect a certain cooling off period before a person having access to confidential

materials would become involved in negotiations. Reconsideration Order at 15 (J.A.

42). Its statement, however, was merely precatory, and the Commission imposed no

time period during which an attorney or representative with access to confidential

material could not later become involved in negotiations with broadcasters and

programmers.

Finally, while ACA does not itself directly negotiate programming

agreements, its primary outside counsel represents multiple cable television systems

in negotiations with television broadcasters. As NAB previously pointed out to the

Commission, ACA has provided its members with boilerplate retransmission

consent agreements. Supplemental Comments of the National Association of

Broadcasters, MB Docket No. 10-71 (filed May 29, 2013), at 14 and n. 37. In

addition, we reported to the FCC that a television station proposing a change to a

retransmission consent agreement with a cable system member of ACA received the


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response that, I am a member of the legal team at ACA and these requests are

troubling to my team. Id. ACA has never explained the makeup or role of its legal

team, or the extent to which ACAs counsel share information with members of

that team. Nothing in the FCCs protective orders would prevent ACAs

representatives from advising its members or other cable systems who are their

clients based on the knowledge they gleaned from access to thousands of

retransmission consent and other programming agreements.

The Commission made much of the fact that individuals who review

programming agreements and related materials would be required to destroy their

notes and any copies of confidential material. Reconsideration Order at 2 (J.A. 29).

But they would not be required to destroy copies of pleadings that reference

confidential material, and, most importantly, no FCC order can compel someone to

forget something he or she has seen. Given the limited number of people involved

in negotiating retransmission consent agreements for MVPDs serving most

television markets, the Commissions protective orders would be remarkably

ineffective in protecting broadcasters and other programmers confidential material

from later use, to their competitive detriment.

The holes in the Commissions protective orders were bad enough on their

own. The Reconsideration Order made the risk of disclosure of competitive

information far worse by permitting disclosure to individuals whose rights to see


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confidential material have been challenged, long before internal agency review or

any court appeals could be concluded. Id. at 18 (J.A. 45). The Commissions

reliance on protective orders to compensate for the myriad weaknesses of its decision

requiring disclosure cannot be sustained.

CONCLUSION

For the foregoing reasons and the reasons set forth in the Brief of Petitioners

CBS Corporation, et al., the Commissions decision permitting disclosure of

retransmission consent and other programming agreements and negotiating

materials to third parties should be vacated and the proceeding remanded to the

Commission.

Respectfully submitted,

Jack N. GoodmanLAW OFFICES OF JACKN.GOODMAN1200 New Hampshire Avenue, NWSuite 800Washington, DC 20036(202) 776-2045

December 15, 2014

________________________Rick KaplanJerianne TimmermanJustin Faulb

NATIONAL ASSOCIATION OFBROADCASTERS

1771 N Street, NWWashington, DC 20036(202) 429-5430


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CERTIFICATE OF COMPLIANCE

This brief complies with the type-volume limitations of Federal Rule of

Appellate Procedure 32(a)(7) and Circuit Rule 32(a)(2)(B)(i) because it contains

5,591 words, excluding the parts of the brief exempted by Fed. R. App. P.

32(a)(7)(B)(iii) and D.C. Circuit Rule 32(a)(1). This brief complies with the typeface

requirements of Fed. R. App. P. 32(a)(5) and the type-style requirements of Fed. R.

App. P. 32(a)(6) because it has been prepared in a proportionally spaced typeface

using Microsoft Word 2013 in Times New Roman 14 point font.

_______________________Rick Kaplan

December 15, 2014


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CERTIFICATE OF SERVICE

I hereby certify that on December 15, 2014, I caused the foregoing Brief of

Intervenor National Association of Broadcasters to be electronically filed with the

Clerk of the U.S. Court of Appeals for the D.C. Circuit using the CM/ECF system,

which will send notice of such filing to all parties that have entered an appearance

in this action. I also certify that I caused eight paper copies of the Brief to be hand

delivered to the Clerk of the Court.

_________________________Rick Kaplan


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ADDENDUM: STATUTORY SUPPLEMENT

47 U.S.C. 325 False, fraudulent, or unauthorized transmissions

(a) False distress signals; rebroadcasting programs.

No person within the jurisdiction of the United States shall knowingly utter or transmit, orcause to be uttered or transmitted, any false or fraudulent signal of distress, orcommunication relating thereto, nor shall any broadcasting station rebroadcast the programor any part thereof of another broadcasting station without the express authority of theoriginating station.

(b) Consent to retransmission of broadcasting station signals.

(1) No cable system or other multichannel video programming distributor shall retransmitthe signal of a broadcasting station, or any part thereof, except--

(A) with the express authority of the originating station;

(B) under section 614 [47 USCS 534], in the case of a station electing, in accordancewith this subsection, to assert the right to carriage under such section; or

(C) under section 338 [47 USCS 338], in the case of a station electing, in accordancewith this subsection, to assert the right to carriage under such section.

(2) This subsection shall not apply--

(A) to retransmission of the signal of a noncommercial television broadcast station;

(B) to retransmission of the signal of a television broadcast station outside the station'slocal market by a satellite carrier directly to its subscribers, if--

(i) such station was a superstation on May 1, 1991;

(ii) as of July 1, 1998, such station was retransmitted by a satellite carrier underthe statutory license ofsection 119 of title 17, United States Code; and

(iii) the satellite carrier complies with any network nonduplication, syndicatedexclusivity, and sports blackout rules adopted by the Commission under section339(b) of this Act [47 USCS 339(b)];

(C) until December 31, 2014, to retransmission of the signals of network stationsdirectly to a home satellite antenna, if the subscriber receiving the signal--

(i) is located in an area outside the local market of such stations; and

(ii1) resides in an unserved household;

(D) to retransmission by a cable operator or other multichannel video provider, otherthan a satellite carrier, of the signal of a television broadcast station outside thestation's local market if such signal was obtained from a satellite carrier and--

(i) the originating station was a superstation on May 1, 1991; and
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(ii) as of July 1, 1998, such station was retransmitted by a satellite carrier underthe statutory license ofsection 119 of title 17, United States Code; or

(E) during the 6-month period beginning on the date of the enactment of the SatelliteHome Viewer Improvement Act of 1999 [enacted Nov. 29, 1999], to theretransmission of the signal of a television broadcast station within the station's localmarket by a satellite carrier directly to its subscribers under the statutory license of

section 122 of title 17, United States Code.

For purposes of this paragraph, the terms "satellite carrier" and "superstation" have themeanings given those terms, respectively, insection 119(d) of title 17, United States Code,as in effect on the date of the enactment of the Cable Television Consumer Protection andCompetition Act of 1992 [enacted Oct. 5, 1992], the term "unserved household" has themeaning given that term under section 119(d) of such title, and the term "local market" hasthe meaning given that term in section 122(j) of such title.

(3) (A) Within 45 days after the date of enactment of the Cable Television ConsumerProtection and Competition Act of 1992 [enacted Oct. 5, 1992], the Commission shallcommence a rulemaking proceeding to establish regulations to govern the exercise by

television broadcast stations of the right to grant retransmission consent under thissubsection and of the right to signal carriage under section 614 [47 USCS 534], andsuch other regulations as are necessary to administer the limitations contained in

paragraph (2). The Commission shall consider in such proceeding the impact that thegrant of retransmission consent by television stations may have on the rates for the

basic service tier and shall ensure that the regulations prescribed under this subsectiondo not conflict with the Commission's obligation under section 623(b)(1) [47 USCS 543(b)(1)] to ensure that the rates for the basic service tier are reasonable. Suchrulemaking proceeding shall be completed within 180 days after the date of enactmentof the Cable Television Consumer Protection and Competition Act of 1992 [enactedOct. 5, 1992].

(B) The regulations required by subparagraph (A) shall require that televisionstations, within one year after the date of enactment of the Cable Television ConsumerProtection and Competition Act of 1992 [enacted Oct. 5, 1992] and every three yearsthereafter, make an election between the right to grant retransmission consent underthis subsection and the right to signal carriage under section 614 [47 USCS 534]. Ifthere is more than one cable system which services the same geographic area, astation's election shall apply to all such cable systems.

(C) The Commission shall commence a rulemaking proceeding to revise theregulations governing the exercise by television broadcast stations of the right to grantretransmission consent under this subsection, and such other regulations as arenecessary to administer the limitations contained in paragraph (2). Such regulationsshall--

(i) establish election time periods that correspond with those regulationsadopted under subparagraph (B) of this paragraph;

(ii) until January 1, 2015, prohibit a television broadcast station that providesretransmission consent from engaging in exclusive contracts for carriage orfailing to negotiate in good faith, and it shall not be a failure to negotiate ingood faith if the television broadcast station enters into retransmission consentagreements containing different terms and conditions, including price terms,


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with different multichannel video programming distributors if such differentterms and conditions are based on competitive marketplace considerations; and

(iii) until January 1, 2015, prohibit a multichannel video programmingdistributor from failing to negotiate in good faith for retransmission consentunder this section, and it shall not be a failure to negotiate in good faith if thedistributor enters into retransmission consent agreements containing different

terms and conditions, including price terms, with different broadcast stations ifsuch different terms and conditions are based on competitive marketplaceconsiderations.

(4) If an originating television station elects under paragraph (3)(B) to exercise its right togrant retransmission consent under this subsection with respect to a cable system, the

provisions of section 614 [47 USCS 534] shall not apply to the carriage of the signal ofsuch station by such cable system. If an originating television station elects under paragraph(3)(C) to exercise its right to grant retransmission consent under this subsection with respectto a satellite carrier, section 338 [47 USCS 338]shall not apply to the carriage of the signalof such station by such satellite carrier.

(5) The exercise by a television broadcast station of the right to grant retransmission consentunder this subsection shall not interfere with or supersede the rights under section 338, 614,or 615 [47 USCS 338,534 or 535] of any station electing to assert the right to signalcarriage under that section.

(6) Nothing in this section shall be construed as modifying the compulsory copyright licenseestablished insection 111 of title 17, United States Code, or as affecting existing or futurevideo programming licensing agreements between broadcasting stations and video

programmers.

(7) For purposes of this subsection, the term--

(A) "network station" has the meaning given such term undersection 119(d) of title17, United StatesCode;and

(B) "television broadcast station" means an over-the-air commercial ornoncommercial television broadcast station licensed by the Commission undersubpart E of part 73 of title 47, Code of Federal Regulations, except that such termdoes not include a low-power or translator television station.

(c) Broadcast to foreign countries for rebroadcast to United States; permit.

No person shall be permitted to locate, use, or maintain a radio broadcast studio or otherplace or apparatus from which or whereby sound waves are converted into electrical energy,

or mechanical or physical reproduction of sound waves produced, and cause to betransmitted or delivered to a radio station in a foreign country for the purpose of beingbroadcast from any radio station there having a power output of sufficient intensity and/orbeing so located geographically that its emissions may be received consistently in the UnitedStates, without first obtaining a permit from the Commission upon proper applicationtherefor.

(d) Application for permit.

Such application shall contain such information as the Commission may by regulationprescribe, and the granting or refusal thereof shall be subject to the requirements of section
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309 [47 USCS 309] hereof with respect to applications for station licenses or renewal ormodification thereof, and the license or permission so granted shall be revocable for falsestatements in the application so required or when the Commission, after hearings, shall findits continuation no longer in the public interest.

(e) Enforcement proceedings against satellite carriers concerning retransmissions oftelevision broadcast stations in the respective local markets of such carriers.

(1) Complaints by television broadcast stations.

If after the expiration of the 6-month period described under subsection (b)(2)(E) a televisionbroadcast station believes that a satellite carrier has retransmitted its signal to any person inthe local market of such station in violation of subsection (b)(1), the station may file withthe Commission a complaint providing--

(A) the name, address, and call letters of the station;

(B) the name and address of the satellite carrier;

(C) the dates on which the alleged retransmission occurred;(D) the street address of at least one person in the local market of the station to whomthe alleged retransmission was made;

(E) a statement that the retransmission was not expressly authorized by the televisionbroadcast station; and

(F) the name and address of counsel for the station.

(2) Service of complaints on satellite carriers.

For purposes of any proceeding under this subsection, any satellite carrier that retransmitsthe signal of any broadcast station shall be deemed to designate the Secretary of theCommission as its agent for service of process. A television broadcast station may serve asatellite carrier with a complaint concerning an alleged violation of subsection (b)(1) throughretransmission of a station within the local market of such station by filing the original andtwo copies of the complaint with the Secretary of the Commission and serving a copy of thecomplaint on the satellite carrier by means of two commonly used overnight deliveryservices, each addressed to the chief executive officer of the satellite carrier at its principal

place of business, and each marked "URGENT LITIGATION MATTER" on the outerpackaging. Service shall be deemed complete one business day after a copy of the complaintis provided to the delivery services for overnight delivery. On receipt of a complaint filed

by a television broadcast station under this subsection, the Secretary of the Commission shall

send the original complaint by United States mail, postage prepaid, receipt requested,addressed to the chief executive officer of the satellite carrier at its principal place ofbusiness.

(3) Answers by satellite carriers.

Within five business days after the date of service, the satellite carrier shall file an answerwith the Commission and shall serve the answer by a commonly used overnight deliveryservice and by United States mail, on the counsel designated in the complaint at the addresslisted for such counsel in the complaint.


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(4) Defenses.

(A) Exclusive defenses.

The defenses under this paragraph are the exclusive defenses available to a satellitecarrier against which a complaint under this subsection is filed.

(B) Defenses.The defenses referred to under subparagraph (A) are the defenses that--

(i) the satellite carrier did not retransmit the television broadcast station to anyperson in the local market of the station during the time period specified in thecomplaint;

(ii) the television broadcast station had, in a writing signed by an officer of thetelevision broadcast station, expressly authorized the retransmission of thestation by the satellite carrier to each person in the local market of the television

broadcast station to which the satellite carrier made such retransmissions for

the entire time period during which it is alleged that a violation of subsection(b)(1) has occurred;

(iii) the retransmission was made after January 1, 2002, and the televisionbroadcast station had elected to assert the right to carriage under section 338[47 USCS 338] as against the satellite carrier for the relevant period; or

(iv) the station being retransmitted is a noncommercial television broadcaststation.

(5) Counting of violations.

The retransmission without consent of a particular television broadcast station on a particularday to one or more persons in the local market of the station shall be considered a separateviolation of subsection (b)(1).

(6) Burden of proof.

With respect to each alleged violation, the burden of proof shall be on a television broadcaststation to establish that the satellite carrier retransmitted the station to at least one person inthe local market of the station on the day in question. The burden of proof shall be on thesatellite carrier with respect to all defenses other than the defense under paragraph (4)(B)(i).

(7) Procedures.

(A) Regulations.

Within 60 days after the date of the enactment of the Satellite Home ViewerImprovement Act of 1999 [enacted Nov. 29, 1999], the Commission shall issue

procedural regulations implementing this subsection which shall supersedeprocedures under section 312 [47 USCS 312].

(B) Determinations.

(i) In general.


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Within 45 days after the filing of a complaint, the Commission shall issue afinal determination in any proceeding brought under this subsection. TheCommission's final determination shall specify the number of violationscommitted by the satellite carrier. The Commission shall hear witnesses only ifit clearly appears, based on written filings by the parties, that there is a genuinedispute about material facts. Except as provided in the preceding sentence, theCommission may issue a final ruling based on written filings by the parties.

(ii) Discovery.

The Commission may direct the parties to exchange pertinent documents, andif necessary to take prehearing depositions, on such schedule as theCommission may approve, but only if the Commission first determines thatsuch discovery is necessary to resolve a genuine dispute about material facts,consistent with the obligation to make a final determination within 45 days.

(8) Relief.

If the Commission determines that a satellite carrier has retransmitted the television

broadcast station to at least one person in the local market of such station and has failed tomeet its burden of proving one of the defenses under paragraph (4) with respect to suchretransmission, the Commission shall be required to--

(A) make a finding that the satellite carrier violated subsection (b)(1) with respect tothat station; and

(B) issue an order, within 45 days after the filing of the complaint, containing--

(i) a cease-and-desist order directing the satellite carrier immediately to stopmaking any further retransmissions of the television broadcast station to any

person within the local market of such station until such time as the

Commission determines that the satellite carrier is in compliance withsubsection (b)(1) with respect to such station;

(ii) if the satellite carrier is found to have violated subsection (b)(1) withrespect to more than two television broadcast stations, a cease-and-desist orderdirecting the satellite carrier to stop making any further retransmission of anytelevision broadcast station to any person within the local market of suchstation, until such time as the Commission, after giving notice to the station,that the satellite carrier is in compliance with subsection (b)(1) with respect tosuch stations; and

(iii) an award to the complainant of that complainant's costs and reasonable

attorney's fees.

(9) Court proceedings on enforcement of Commission order.

(A) In general.

On entry by the Commission of a final order granting relief under this subsection--

(i) a television broadcast station may apply within 30 days after such entry tothe United States District Court for the Eastern District of Virginia for a final

judgment enforcing all relief granted by the Commission; and


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(ii) the satellite carrier may apply within 30 days after such entry to the UnitedStates District Court for the Eastern District of Virginia for a judgmentreversing the Commission's order.

(B) Appeal.

The procedure for an appeal under this paragraph by the satellite carrier shall

supersede any other appeal rights under Federal or State law. A United States districtcourt shall be deemed to have personal jurisdiction over the satellite carrier if thecarrier, or a company under common control with the satellite carrier, has deliveredtelevision programming by satellite to more than 30 customers in that district duringthe preceding 4-year period. If the United States District Court for the Eastern Districtof Virginia does not have personal jurisdiction over the satellite carrier, anenforcement action or appeal shall be brought in the United States District Court forthe District of Columbia, which may find personal jurisdiction based on the satellitecarrier's ownership of licenses issued by the Commission. An application by atelevision broadcast station for an order enforcing any cease-and-desist relief granted

by the Commission shall be resolved on a highly expedited schedule. No discoverymay be conducted by the parties in any such proceeding. The district court shall

enforce the Commission order unless the Commission record reflects manifest errorand an abuse of discretion by the Commission.

(10) Civil action for statutory damages.

Within 6 months after issuance of an order by the Commission under this subsection, atelevision broadcast station may file a civil action in any United States district court that has

personal jurisdiction over the satellite carrier for an award of statutory damages for anyviolation that the Commission has determined to have been committed by a satellite carrierunder this subsection. Such action shall not be subject to transfer under section 1404(a) oftitle 28, United States Code. On finding that the satellite carrier has committed one or moreviolations of subsection (b), the District Court shall be required to award the television

broadcast station statutory damages of $ 25,000 per violation, in accordance with paragraph(5), and the costs and attorney's fees incurred by the station. Such statutory damages shall

be awarded only if the television broadcast station has filed a binding stipulation with thecourt that such station will donate the full amount in excess of $ 1,000 of any statutorydamage award to the United States Treasury for public purposes. Notwithstanding any other

provision of law, a station shall incur no tax liability of any kind with respect to any amountsso donated. Discovery may be conducted by the parties in any proceeding under this

paragraph only if and to the extent necessary to resolve a genuinely disputed issue of factconcerning one of the defenses under paragraph (4). In any such action, the defenses under

paragraph (4) shall be exclusive, and the burden of proof shall be on the satellite carrier withrespect to all defenses other than the defense under paragraph (4)(B)(i). A judgment underthis paragraph may be enforced in any manner permissible under Federal or State law.

(11) Appeals.

(A) In general.

The nonprevailing party before a United States district court may appeal a decisionunder this subsection to the United States Court of Appeals with jurisdiction over thatdistrict court. The Court of Appeals shall not issue any stay of the effectiveness of anydecision granting relief against a satellite carrier unless the carrier presents clear andconvincing evidence that it is highly likely to prevail on appeal and only after posting


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a bond for the full amount of any monetary award assessed against it and for suchfurther amount as the Court of Appeals may believe appropriate.

(B) Appeal.

If the Commission denies relief in response to a complaint filed by a televisionbroadcast station under this subsection, the television broadcast station filing the

complaint may file an appeal with the United States Court of Appeals for the Districtof Columbia Circuit.

(12) Sunset.

No complaint or civil action may be filed under this subsection after December 31, 2001.This subsection shall continue to apply to any complaint or civil action filed on or beforesuch date.

Documents

CBS v. FCC - NAB Intervenor