Sec. 76.1503  Carriage of video programming providers on open video 
          systems.

    (a) Non-discrimination principle. Except as otherwise permitted in 
applicable law or in this part, an operator of an open video system 
shall not discriminate among video programming providers with regard to 
carriage on its open video system, and its rates, terms and conditions 
for such carriage shall be just and reasonable and not unjustly or 
unreasonably discriminatory.
    (b) Demand for carriage. An operator of an open video system shall 
solicit and determine the level of demand for carriage on the system 
among potential video programming providers in a non-discriminatory 
manner.
    (1) Notification. An open video system operator shall file with the 
Secretary of the Federal Communications Commission a ``Notice of 
Intent'' to establish an open video system, which the Commission will 
release in a Public Notice. Parties are required to attach a cover sheet 
to the filing indicating that the submission is an Open Video System 
Notice of Intent. The only wording on this cover sheet shall be ``Open 
Video System Notice of Intent'' and ``Attention: Cable Services 
Bureau.'' This wording shall be located in the center of the page and 
should be in letters at least \1/2\ inch in size. Parties shall also 
include the words ``open video systems'' on their mailing envelopes. 
Parties must submit copies of the Notice of Intent with the Office of 
the Secretary and the Bureau Chief, Cable Services Bureau. The Notice of 
Intent shall include the following information:
    (i) A heading clearly indicating that the document is a Notice of 
Intent to establish an open video system;
    (ii) The name, address and telephone number of the open video system 
operator;
    (iii) A description of the system's projected service area;
    (iv) A description of the system's projected channel capacity, in 
terms of analog, digital and other type(s) of capacity upon activation 
of the system;
    (v) A description of the steps a potential video programming 
provider must

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follow to seek carriage on the open video system, including the name, 
address and telephone number of a person to contact for further 
information;
    (vi) The starting and ending dates of the initial enrollment period 
for video programming providers;
    (vii) The process for allocating the system's channel capacity, in 
the event that demand for carriage on the system exceeds the system's 
capacity; and
    (viii) A certification that the operator has complied with all 
relevant notification requirements under the Commission's open video 
system regulations concerning must-carry and retransmission consent 
(Sec. 76.1506), including a list of all local commercial and non-
commercial television stations served, and a certificate of service 
showing that the Notice of Intent has been served on all local cable 
franchising authorities entitled to establish requirements concerning 
the designation of channels for public, educational and governmental 
use.
    (2) Information. An open video system operator shall provide the 
following information to a video programming provider within five 
business days of receiving a written request from the provider, unless 
otherwise included in the Notice of Intent:
    (i) The projected activation date of the open video system. If a 
system is to be activated in stages, the operator should describe the 
respective stages and the projected dates on which each stage will be 
activated;
    (ii) A preliminary carriage rate estimate;
    (iii) The information a video programming provider will be required 
to provide to qualify as a video programming provider, e.g., 
creditworthiness;
    (iv) Technical information that is reasonably necessary for 
potential video programming providers to assess whether to seek capacity 
on the open video system, including what type of customer premises 
equipment subscribers will need to receive service;
    (v) Any transmission or reception equipment needed by a video 
programming provider to interface successfully with the open video 
system; and
    (vi) The equipment available to facilitate the carriage of 
unaffiliated video programming and the electronic form(s) that will be 
accepted for processing and subsequent transmission through the system.
    (3) Qualifications of video programming providers. An open video 
system operator may impose reasonable, non-discriminatory requirements 
to assure that a potential video programming provider is qualified to 
obtain capacity on the open video system.
    (c) One-third limit. If carriage demand by video programming 
providers exceeds the activated channel capacity of the open video 
system, the operator of the open video system and its affiliated video 
programming providers may not select the video programming services for 
carriage on more than one-third of the activated channel capacity on 
such system.
    (1) Measuring capacity. For purposes of this section:
    (i) If an open video system carries both analog and digital signals, 
an open video system operator shall measure analog and digital activated 
channel capacity independently;
    (ii) Channels that an open video system is required to carry 
pursuant to the Commission's regulations concerning public, educational 
and governmental channels and must-carry channels shall be included in 
``activated channel capacity'' for purposes of calculating the one-third 
of such capacity on which the open video system operator and its 
affiliates are allowed to select the video programming for carriage. 
Such channels shall not be included in the one-third of capacity on 
which the open video system operator is permitted to select programming 
where demand for carriage exceeds system capacity;
    (iii) Channels that an open video system operator carries pursuant 
to the Commission's regulations concerning retransmission consent shall 
be included in ``activated channel capacity'' for purposes of 
calculating the one-third of such capacity on which the open video 
system operator and its affiliates are allowed to select the video 
programming for carriage. Such channels shall be included in the one-
third of capacity on which the open video system operator is permitted 
to select programming, where demand for carriage exceeds system 
capacity, to the

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extent that the channels are carried as part of the programming service 
of the operator or its affiliate, subject to paragraph (c)(1)(iv); and
    (iv) Any channel on which shared programming is carried shall be 
included in ``activated channel capacity'' for purposes of calculating 
the one-third of such capacity on which the open video system operator 
and its affiliates are allowed to select the video programming for 
carriage. Such channels shall be included in the one-third of capacity 
on which the open video system operator is permitted to select 
programming, where demand for carriage exceeds system capacity, to the 
extent the open video system operator or its affiliate is one of the 
video programming providers sharing such channel.

    Note to paragraph (c)(1)(iv): For example, if the open video system 
operator and two unaffiliated video programming providers each carry a 
programming service that is placed on a shared channel, the shared 
channel shall count as 0.33 channels against the one-third amount of 
capacity allocable to the open video system operator, where demand for 
carriage exceeds system capacity.

    (2) Allocating capacity. An operator of an open video system shall 
allocate activated channel capacity through a fair, open and non-
discriminatory process; the process must be insulated from any bias of 
the open video system operator and verifiable.
    (i) If an open video system carries both analog and digital signals, 
an open video system operator shall treat analog and digital capacity 
separately in allocating system capacity.
    (ii) Subsequent changes in capacity or demand. An open video system 
operator must allocate open capacity, if any, at least once every three 
years, beginning three years from the date of service commencement. Open 
capacity shall be allocated in accordance with this section. Open 
capacity shall include all capacity that becomes available during the 
course of the three-year period, as well as capacity in excess of one-
third of the system's activated channel capacity on which the operator 
of the open video system or its affiliate selects programming. An 
operator shall maintain a file of qualified video programming providers 
who have requested carriage or additional carriage since the previous 
allocation of capacity. Information regarding how a video programming 
provider should apply for carriage must be made available upon request.

    Note 1 to paragraph (c)(2)(ii): An open video system operator will 
not be required to comply with the regulations contained in this section 
if there is no open capacity to be allocated at the end of the three 
year period.
    Note 2 to paragraph (c)(2)(ii): An open video system operator shall 
be required to accommodate changes in obligations concerning public, 
educational or governmental channels or must-carry channels in 
accordance with Sections 611, 614 and 615 of the Communications Act and 
the regulations contained in this part.

    (iii) Channel sharing. An open video system operator may carry on 
only one channel any video programming service that is offered by more 
than one video programming provider (including the operator's video 
programming affiliate), provided that subscribers have ready and 
immediate access to any such programming service. Nothing in this 
section shall be construed to impair the rights of programming services.

    Note 1 to paragraph (c)(2)(iii): An open video system operator may 
implement channel sharing only after it becomes apparent that one or 
more video programming services will be offered by multiple video 
programming providers. An open video system operator may not select, in 
advance of any duplication among video programming providers, which 
programming services shall be placed on shared channels.
    Note 2 to paragraph (c)(2)(iii): Each video programming provider 
offering a programming service that is carried on a shared channel must 
have the contractual permission of the video programming service to 
offer the service to subscribers. The placement of a programming service 
on a shared channel, however, is not subject to the approval of the 
video programming service or vendor.
    Note 3 to paragraph (c)(2)(iii): Ready and immediate access in this 
context means that the channel sharing is ``transparent'' to 
subscribers.

    (iv) Open video system operator discretion. Notwithstanding the 
foregoing, an operator of an open video system may:
    (A) Require video programming providers to request and obtain system 
capacity in increments of no less than one full-time channel; however, 
an operator of an open video system may not require video programming 
providers

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to obtain capacity in increments of more than one full-time channel;
    (B) Limit video programming providers from selecting the programming 
on more capacity than the amount of capacity on which the system 
operator and its affiliates are selecting the programming for carriage; 
and
    (v) Notwithstanding the general prohibition on an open video system 
operator's discrimination among video programming providers contained in 
paragraph (a) of this section, a competing, in-region cable operator or 
its affiliate(s) that offers cable service to subscribers located in the 
service area of an open video system shall not be entitled to obtain 
capacity on such an open video system, except:
    (A) Where the operator of an open video system determines that 
granting access to the competing, in-region cable operator is in its 
interests; or
    (B) Where a showing is made that facilities-based competition will 
not be significantly impeded.

    Note to paragraph (c)(2)(v)(B): The Commission finds that 
facilities-based competition will not be significantly impeded, for 
example, where:
    (1) The competing, in-region cable operator and affiliated systems 
offer service to less than 20% of the households passed by the open 
video system; and
    (2) The competing, in-region cable operator and affiliated systems 
provide cable service to a total of less than 17,000 subscribers within 
the open video system's service area.

    (3) Nothing in this paragraph shall be construed to limit the number 
of channels that the open video system operator and its affiliates, or 
another video programming provider, may offer to provide directly to 
subscribers. Co-packaging is permissible among video programming 
providers, but may not be a condition of carriage. Video programming 
providers may freely elect whether to enter into co-packaging 
arrangements.

    Note to paragraph (c)(3): Any video programming provider on an open 
video system may co-package video programming that is selected by 
itself, an affiliated video programming provider and/or unaffiliated 
video programming providers on the system.


[ 61 FR 28708 , June 5, 1996, as amended at  61 FR 43176 , Aug. 21, 1996;  62 FR 26239 , May 13, 1997]