Sec. 73.658  Affiliation agreements and network program practices; 
          territorial exclusivity in non-network program arrangements.

    (a) Exclusive affiliation of station. No license shall be granted to 
a television broadcast station having any contract, arrangement, or 
understanding, express or implied, with a network organization under 
which the station is prevented or hindered from, or penalized for, 
broadcasting the programs of any other network organization. (The term 
``network organization'' as used in this section includes national and 
regional network organizations. See ch. VII, J, of Report on Chain 
Broadcasting.)
    (b) Territorial exclusively. No license shall be granted to a 
television broadcast station having any contract, arrangement, or 
understanding, express or implied, with a network organization which 
prevents or hinders another broadcast station located in the same 
community from broadcasting the network's programs not taken by the 
former station, or which prevents or hinders another broadcast station 
located in a different community from broadcasting any program of the 
network organization. This section shall not be construed to prohibit 
any contract, arrangement, or understanding between a station and a 
network organization pursuant to which the station is granted the first 
call in its community upon the programs of the network organization. As 
employed in this paragraph, the term ``community'' is defined as the 
community specified in the instrument of authorization as the location 
of the station.
    (c)  [Reserved]
    (d) Station commitment of broadcast time. No license shall be 
granted to a television broadcast station having any contract, 
arrangement, or understanding, express or implied, with any network 
organization, which provides for optioning of the station's time to the 
network organization, or which has the same restraining effect as time 
optioning. As used in this section, time optioning is any contract, 
arrangement, or understanding, express or implied, between a station and 
a network organization which prevents or hinders the station from 
scheduling programs before the network agrees to utilize the time during 
which such programs are scheduled, or which requires the station to 
clear time already scheduled when the network organization seeks to 
utilize the time.
    (e) Right to reject programs. No license shall be granted to a 
television broadcast station having any contract, arrangement, or 
understanding, express or implied, with a network organization which, 
with respect to programs offered or already contracted for pursuant to 
an affiliation contract, prevents or hinders the station from:

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    (1) Rejecting or refusing network programs which the station 
reasonably believes to be unsatisfactory or unsuitable or contrary to 
the public interest, or
    (2) Substituting a program which, in the station's opinion, is of 
greater local or national importance.
    (f)  [Reserved]
    (g) Dual network operation. A television broadcast station may 
affiliate with a person or entity that maintains two or more networks of 
television broadcast stations unless such dual or multiple networks are 
composed of:
    (1) Two or more persons or entities that, on February 8, 1996, were 
``networks.'' For the purposes of this paragraph, the term network means 
any person, entity, or corporation which offers an interconnected 
program service on a regular basis for 15 or more hours per week to at 
least 25 affiliated television licensees in 10 or more states; and/or 
any person, entity, or corporation controlling, controlled by, or under 
common control with such person, entity, or corporation; or
    (2) Any network described in paragraph (g)(1) of this section and an 
English-language program distribution service that, on February 8, 1996, 
provided four or more hours of programming per week on a national basis 
pursuant to network affiliation arrangements with local television 
broadcast stations in markets reaching more than 75 percent of 
television homes (as measured by a national ratings service).
    (h) Control by networks of station rates. No license shall be 
granted to a television broadcast station having any contract, 
arrangement, or understanding, express or implied, with a network 
organization under which the station is prevented or hindered from, or 
penalized for, fixing or altering its rates for the sale of broadcast 
time for other than the network's programs.
    (i) No license shall be granted to a television broadcast station 
which is represented for the sale of non-network time by a network 
organization or by an organization directly or indirectly controlled by 
or under common control with a network organization, if the station has 
any contract, arrangement or understanding, express or implied, which 
provides for the affiliation of the station with such network 
organization: Provided, however, That this rule shall not be applicable 
to stations licensed to a network organization or to a subsidiary of a 
network organization.
    (j)--(l)  [Reserved]
    (m) Territorial exclusivity in non-network arrangements. (1) No 
television station shall enter into any contract, arrangement, or 
understanding, expressed or implied; with a non-network program 
producer, distributor, or supplier, or other person; which prevents or 
hinders another television station located in a community over 56.3 
kilometers (35 miles) away, as determined by the reference points 
contained in Sec. 76.53 of this chapter, (if reference points for a 
community are not listed in Sec. 76.53, the location of the main post 
office will be used) from broadcasting any program purchased by the 
former station from such non-network program producer, distributor, 
supplier, or other person, except that a television station may secure 
exclusivity against a television station licensed to another designated 
community in a hyphenated market specified in the market listing as 
contained in Sec. 76.51 of this chapter for those 100 markets listed, 
and for markets not listed in Sec. 76.51 of this chapter, the listing as 
contained in the ARB Television Market Analysis for the most recent year 
at the time that the exclusivity contract, arrangement or understanding 
is complete under practices of the industry. As used in this paragraph, 
the term ``community'' is defined as the community specified in the 
instrument of authorization as the location of the station.
    (2) Notwithstanding paragraph (m)(1) of this section, a television 
station may enter into a contract, arrangement, or understanding with a 
producer, supplier, or distributor of a non-network program if that 
contract, arrangement, or understanding provides that the broadcast 
station has exclusive national rights such that no other television 
station in the United States may broadcast the program.

    Note 1: Contracts, arrangements, or understandings that are complete 
under the practices of the industry prior to August 7, 1973, will not be 
disturbed. Extensions or renewals

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of such agreements are not permitted because they would in effect be new 
agreements without competitive bidding. However, such agreements that 
were based on the broadcaster's advancing ``seed money'' for the 
production of a specific program or series that specify two time 
periods--a tryout period and period thereafter for general exhibition--
may be extended or renewed as contemplated in the basic agreement.

    Note 2: It is intended that the top 100 major television markets 
listed in Sec. 76.51 of this chapter shall be used for the purposes of 
this rule and that the listing of the top 100 television markets 
appearing in the ARB Television Market Analysis shall not be used. The 
reference in this rule to the listing of markets in the ARB Television 
Market Analysis refers to hyphenated markets below the top-100 markets 
contained in the ARB Television Market Analysis. If a community is 
listed in a hyphenated market in Sec. 76.51 and is also listed in one of 
the markets in the ARB listing, the listing in Sec. 76.51 shall govern.

    Note 3: The provisions of this paragraph apply only to U.S. 
commercial television broadcast stations in the 50 states, and not to 
stations in Puerto Rico or the Virgin Islands, foreign stations or 
noncommercial educational television or ``public'' television stations 
(either by way of restrictions on their exclusivity or on exclusivity 
against them).

    Note 4: New stations authorized in any community of a hyphenated 
market listed in Sec. 76.51 of this chapter or in any community of a 
hyphenated market listed in the ARB Television Market Analysis (for 
markets below the top-100 markets) are subject to the same rules as 
previously existing stations therein. New stations authorized in other 
communities are considered stations in separate markets unless and until 
Sec. 76.51 is amended by Commission action, or the ARB listing is 
changed.

(Sec. 5, 48 Stat. 1068 (47 U.S.C. ))

[28 155 FR 13660 , Dec. 14, 1963]

    Editorial Note: For Federal Register citations affecting 
Sec. 73.658, see the List of CFR Sections Affected in the Finding Aids 
section of this volume.

Secs. 73.659--73.663  [Reserved]