ORAL ARGUMENT SCHEDULED FEBRUARY 20, 2015

Case No. 14-1242

IN THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
CBS CORPORATION, ET AL.,
Petitioners,
v.
FEDERAL COMMUNICATIONS COMMISSION AND UNITED STATES OF AMERICA,
Respondents.

ON PETITION FOR REVIEW OF AN ORDER OF THE

FEDERAL COMMUNICATIONS COMMISSION
BRIEF OF INTERVENOR
NATIONAL ASSOCIATION OF BROADCASTERS

Jack N. Goodman
LAW OFFICES OF JACK N. GOODMAN
1200 New Hampshire Avenue, NW
Suite 800
Washington, DC 20036
(202) 776-2045

December 15, 2014

Rick Kaplan
Jerianne Timmerman
Justin Faulb
NATIONAL ASSOCIATION OF
BROADCASTERS
1771 N Street, NW
Washington, DC 20036
(202) 429-5430

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.
See Order, 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 IN

THE CONFIDENTIALITY OF PROGRAMMING AGREEMENTS ........ 16

II.

THE PROTECTIVE ORDERS ARE INSUFFICIENT TO PROTECT

BROADCASTERS CONFIDENTIAL 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 ........................................................................................................ 2
47 U.S.C. 325(b) ................................................................................................... 2
47 U.S.C. 325(b)(3)(C)(ii) .................................................................................... 4
47 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 of
Proposed Rulemaking,
26 FCC Rcd. 2718 (2011) .................................................................................. 2
Amendment of the Commns Rules Related to Retransmission Consent, Report and
Order,
29 FCC Rcd. 3351 (2014) ................................................................................ 19
Applications of Comcast Corp., Gen. Elec. Co. & NBC Universal, Inc. for Consent
to 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 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) ........................................................................................................ 7, 9, 14, 23
*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) ..... 4, 5, 8, 9, 12, 13, 14, 20, 21, 22, 23, 24, 25
Exam. of Current Policy Concerning the Treatment of Confidential Info. Submitted
to 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 Docket
No. 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 Control
of 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 In the Matter of Applications of Comcast Corp. and Time

Warner Cable Inc. for Consent to Assign or Transfer Control
Order
of Licenses and Authorizations and AT&T, Inc. and
DIRECTV 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

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 generally Amendment 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
1

See Ex Parte Submission of the U.S. Department of Justice, MB Docket No. 09182 (filed Feb. 20, 2014) at 9 (Although MVPDs may carry hundreds of channels
altogether, the local broadcast television stations usually have the highest
viewership.)
2
Some stations are carried instead under must-carry rules, which guarantee
carriage on the MVPD but do not permit negotiation for compensation. See 47
U.S.C. 534 (2014). The considerable majority of commercial television stations,
including almost all stations affiliated with the major television networks, choose to
negotiate for retransmission consent.
3
See, 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 stations
from retransmission consent fees) (last visited Dec. 11, 2014); see also Mike Farrell,
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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 digitalcapable 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-93b2020/385063 (discussing the growth in retransmission fees paid to broadcasters)
(last visited Dec. 11, 2014).
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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

Section 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 agreements
in good faith, but specifically provides that it shall not be a failure to negotiate in
good faith if the television broadcast station enters into retransmission consent
agreements containing different terms and conditions, including price terms, with
different multichannel video programming distributors. A reciprocal obligation
applies to MVPDs. 47 U.S.C. 325(b)(3)(C)(iii) (2014).
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remain far from adequate only 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 parties DirecTV has 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 a
detailed, industry-wide overview of the current and future
programming market. Indeed, because the AT&T and Comcast
transactions are pending simultaneously, the ability to capture an
understanding 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 programming could materially aid those competitors in future

William Lake, et al., Transaction Reviews and the Public Interest, The Official
FCC Blog, at 2 (Oct. 7, 2014), cited in Reconsideration Order at 11 (J.A. 38).
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negotiations with broadcasters and other programmers. NAB stresses that it is not
challenging Commission access 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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private parties, 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 market and 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. 1457 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
6

Order 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 nature does 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

Reconsideration Order at 17 (J.A. 44). Earlier in the Reconsideration Order, the

Bureau stressed the amount of effort required of the merging parties to identify the
documents 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 to
remove identifying information would have created any significant additional
burden. Even if it had, the merging parties are the ones seeking FCC action and are
also 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, rather
than risking disclosure of third-parties confidential information, was not addressed
by the Bureau.
8
Reconsideration Order at 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, 215 F.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 and all 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 with pay 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 nontraditional 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, industrywide 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 Courts precedent.
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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could be 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 dixit that 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 Order at 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 FCC itself 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 to with
barely any acknowledgement by the Commission is 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 determine are 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
is changing 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 disclosure subject to protective
orders of the results of audits of companies confidential business information
was reversed. Qwest Communs. Intl, 229 F.3d 1172. In Qwest, the Commission
rested its decision as the Bureau did here on 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 them
before resorting to the release of raw audit data. . . . A response that
the protective order adequately protects Qwest against competitive
injury misses the mark. The Commission must explain why only the
release 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 any third-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
Qwest that release of confidential information be the only way 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 Workers Union 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

BROADCASTERS CONFIDENTIAL 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 Order at 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. Goodman
LAW OFFICES OF JACK N. GOODMAN
1200 New Hampshire Avenue, NW
Suite 800
Washington, DC 20036
(202) 776-2045

________________________
Rick Kaplan
Jerianne Timmerman
Justin Faulb
NATIONAL ASSOCIATION OF
BROADCASTERS
1771 N Street, NW
Washington, DC 20036
(202) 429-5430

December 15, 2014

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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, or
cause to be uttered or transmitted, any false or fraudulent signal of distress, or
communication relating thereto, nor shall any broadcasting station rebroadcast the program
or any part thereof of another broadcasting station without the express authority of the
originating station.
(b) Consent to retransmission of broadcasting station signals.
(1) No cable system or other multichannel video programming distributor shall retransmit
the 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 accordance
with 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 accordance
with 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's
local 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 under
the statutory license of section 119 of title 17, United States Code; and
(iii) the satellite carrier complies with any network nonduplication, syndicated
exclusivity, and sports blackout rules adopted by the Commission under section
339(b) of this Act [47 USCS 339(b)];
(C) until December 31, 2014, to retransmission of the signals of network stations
directly 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, other
than a satellite carrier, of the signal of a television broadcast station outside the
station'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 under
the statutory license of section 119 of title 17, United States Code; or
(E) during the 6-month period beginning on the date of the enactment of the Satellite
Home Viewer Improvement Act of 1999 [enacted Nov. 29, 1999], to the
retransmission of the signal of a television broadcast station within the station's local
market 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 the
meanings given those terms, respectively, in section 119(d) of title 17, United States Code,
as in effect on the date of the enactment of the Cable Television Consumer Protection and
Competition Act of 1992 [enacted Oct. 5, 1992], the term "unserved household" has the
meaning given that term under section 119(d) of such title, and the term "local market" has
the 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 Consumer
Protection and Competition Act of 1992 [enacted Oct. 5, 1992], the Commission shall
commence a rulemaking proceeding to establish regulations to govern the exercise by
television broadcast stations of the right to grant retransmission consent under this
subsection and of the right to signal carriage under section 614 [47 USCS 534], and
such other regulations as are necessary to administer the limitations contained in
paragraph (2). The Commission shall consider in such proceeding the impact that the
grant 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 subsection
do 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. Such
rulemaking proceeding shall be completed within 180 days after the date of enactment
of the Cable Television Consumer Protection and Competition Act of 1992 [enacted
Oct. 5, 1992].
(B) The regulations required by subparagraph (A) shall require that television
stations, within one year after the date of enactment of the Cable Television Consumer
Protection and Competition Act of 1992 [enacted Oct. 5, 1992] and every three years
thereafter, make an election between the right to grant retransmission consent under
this subsection and the right to signal carriage under section 614 [47 USCS 534]. If
there is more than one cable system which services the same geographic area, a
station's election shall apply to all such cable systems.
(C) The Commission shall commence a rulemaking proceeding to revise the
regulations governing the exercise by television broadcast stations of the right to grant
retransmission consent under this subsection, and such other regulations as are
necessary to administer the limitations contained in paragraph (2). Such regulations
shall-(i) establish election time periods that correspond with those regulations
adopted under subparagraph (B) of this paragraph;
(ii) until January 1, 2015, prohibit a television broadcast station that provides
retransmission consent from engaging in exclusive contracts for carriage or
failing to negotiate in good faith, and it shall not be a failure to negotiate in
good faith if the television broadcast station enters into retransmission consent
agreements containing different terms and conditions, including price terms,
- A-2 -

with different multichannel video programming distributors if such different

terms and conditions are based on competitive marketplace considerations; and
(iii) until January 1, 2015, prohibit a multichannel video programming
distributor from failing to negotiate in good faith for retransmission consent
under this section, and it shall not be a failure to negotiate in good faith if the
distributor enters into retransmission consent agreements containing different
terms and conditions, including price terms, with different broadcast stations if
such different terms and conditions are based on competitive marketplace
considerations.
(4) If an originating television station elects under paragraph (3)(B) to exercise its right to
grant 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 of
such 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 respect
to a satellite carrier, section 338 [47 USCS 338] shall not apply to the carriage of the signal
of such station by such satellite carrier.
(5) The exercise by a television broadcast station of the right to grant retransmission consent
under 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 signal
carriage under that section.
(6) Nothing in this section shall be construed as modifying the compulsory copyright license
established in section 111 of title 17, United States Code, or as affecting existing or future
video 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 under section 119(d) of title
17, United States Code; and
(B)
"television broadcast station" means an over-the-air commercial or
noncommercial television broadcast station licensed by the Commission under
subpart E of part 73 of title 47, Code of Federal Regulations, except that such term
does 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 other
place 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 be
transmitted or delivered to a radio station in a foreign country for the purpose of being
broadcast from any radio station there having a power output of sufficient intensity and/or
being so located geographically that its emissions may be received consistently in the United
States, without first obtaining a permit from the Commission upon proper application
therefor.
(d) Application for permit.
Such application shall contain such information as the Commission may by regulation
prescribe, and the granting or refusal thereof shall be subject to the requirements of section
- A-3 -

309 [47 USCS 309] hereof with respect to applications for station licenses or renewal or
modification thereof, and the license or permission so granted shall be revocable for false
statements in the application so required or when the Commission, after hearings, shall find
its continuation no longer in the public interest.
(e) Enforcement proceedings against satellite carriers concerning retransmissions of
television 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 television
broadcast station believes that a satellite carrier has retransmitted its signal to any person in
the local market of such station in violation of subsection (b)(1), the station may file with
the 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 whom
the alleged retransmission was made;
(E) a statement that the retransmission was not expressly authorized by the television
broadcast 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 retransmits
the signal of any broadcast station shall be deemed to designate the Secretary of the
Commission as its agent for service of process. A television broadcast station may serve a
satellite carrier with a complaint concerning an alleged violation of subsection (b)(1) through
retransmission of a station within the local market of such station by filing the original and
two copies of the complaint with the Secretary of the Commission and serving a copy of the
complaint on the satellite carrier by means of two commonly used overnight delivery
services, 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 outer
packaging. Service shall be deemed complete one business day after a copy of the complaint
is 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 of
business.
(3) Answers by satellite carriers.
Within five business days after the date of service, the satellite carrier shall file an answer
with the Commission and shall serve the answer by a commonly used overnight delivery
service and by United States mail, on the counsel designated in the complaint at the address
listed for such counsel in the complaint.
- A-4 -

(4) Defenses.
(A) Exclusive defenses.
The defenses under this paragraph are the exclusive defenses available to a satellite
carrier 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 any
person in the local market of the station during the time period specified in the
complaint;
(ii) the television broadcast station had, in a writing signed by an officer of the
television broadcast station, expressly authorized the retransmission of the
station 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 television
broadcast 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 broadcast
station.
(5) Counting of violations.
The retransmission without consent of a particular television broadcast station on a particular
day to one or more persons in the local market of the station shall be considered a separate
violation of subsection (b)(1).
(6) Burden of proof.
With respect to each alleged violation, the burden of proof shall be on a television broadcast
station to establish that the satellite carrier retransmitted the station to at least one person in
the local market of the station on the day in question. The burden of proof shall be on the
satellite 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 Viewer
Improvement Act of 1999 [enacted Nov. 29, 1999], the Commission shall issue
procedural regulations implementing this subsection which shall supersede
procedures under section 312 [47 USCS 312].
(B) Determinations.
(i) In general.
- A-5 -

Within 45 days after the filing of a complaint, the Commission shall issue a
final determination in any proceeding brought under this subsection. The
Commission's final determination shall specify the number of violations
committed by the satellite carrier. The Commission shall hear witnesses only if
it clearly appears, based on written filings by the parties, that there is a genuine
dispute about material facts. Except as provided in the preceding sentence, the
Commission may issue a final ruling based on written filings by the parties.
(ii) Discovery.
The Commission may direct the parties to exchange pertinent documents, and
if necessary to take prehearing depositions, on such schedule as the
Commission may approve, but only if the Commission first determines that
such 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 to
meet its burden of proving one of the defenses under paragraph (4) with respect to such
retransmission, the Commission shall be required to-(A) make a finding that the satellite carrier violated subsection (b)(1) with respect to
that 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 stop
making 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 with
subsection (b)(1) with respect to such station;
(ii) if the satellite carrier is found to have violated subsection (b)(1) with
respect to more than two television broadcast stations, a cease-and-desist order
directing the satellite carrier to stop making any further retransmission of any
television broadcast station to any person within the local market of such
station, 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 to
such 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 to
the United States District Court for the Eastern District of Virginia for a final
judgment enforcing all relief granted by the Commission; and
- A-6 -

(ii) the satellite carrier may apply within 30 days after such entry to the United
States District Court for the Eastern District of Virginia for a judgment
reversing 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 district
court shall be deemed to have personal jurisdiction over the satellite carrier if the
carrier, or a company under common control with the satellite carrier, has delivered
television programming by satellite to more than 30 customers in that district during
the preceding 4-year period. If the United States District Court for the Eastern District
of Virginia does not have personal jurisdiction over the satellite carrier, an
enforcement action or appeal shall be brought in the United States District Court for
the District of Columbia, which may find personal jurisdiction based on the satellite
carrier's ownership of licenses issued by the Commission. An application by a
television broadcast station for an order enforcing any cease-and-desist relief granted
by the Commission shall be resolved on a highly expedited schedule. No discovery
may be conducted by the parties in any such proceeding. The district court shall
enforce the Commission order unless the Commission record reflects manifest error
and 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, a
television 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 any
violation that the Commission has determined to have been committed by a satellite carrier
under this subsection. Such action shall not be subject to transfer under section 1404(a) of
title 28, United States Code. On finding that the satellite carrier has committed one or more
violations 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 the
court that such station will donate the full amount in excess of $ 1,000 of any statutory
damage 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 amounts
so 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 fact
concerning 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 with
respect to all defenses other than the defense under paragraph (4)(B)(i). A judgment under
this 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 decision
under this subsection to the United States Court of Appeals with jurisdiction over that
district court. The Court of Appeals shall not issue any stay of the effectiveness of any
decision granting relief against a satellite carrier unless the carrier presents clear and
convincing evidence that it is highly likely to prevail on appeal and only after posting
- A-7 -

a bond for the full amount of any monetary award assessed against it and for such
further amount as the Court of Appeals may believe appropriate.
(B) Appeal.
If the Commission denies relief in response to a complaint filed by a television
broadcast station under this subsection, the television broadcast station filing the
complaint may file an appeal with the United States Court of Appeals for the District
of 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 before
such date.

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