109th CONGRESS
2d Session
S. 3457
To provide a national franchise and other regulatory relief to
video service providers who offer a-la-carte programming for cable television,
and for other purposes.
IN THE SENATE OF THE UNITED STATES
June 7, 2006
Mr. MCCAIN introduced the following bill; which was read twice and referred
to the Committee on Commerce, Science, and Transportation
A BILL
To provide a national franchise and other regulatory relief to
video service providers who offer a-la-carte programming for cable television,
and for other purposes.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Consumers Having Options in Cable Entertainment
Act' or the `CHOICE Act'.
SEC. 2. DEFINITIONS.
(a) IN GENERAL- In this Act:
(1) A-LA-CARTE- The term `a-la-carte' means offering a channel on an individual
per-channel basis rather than solely as part of a package or tier of programming.
(2) DIGITAL VIDEO SERVICE- The term `digital video service' means--
(A) the two-way transmission of video service using digital video compression;
and
(B) subscriber interaction, if any, required for the selection or use
of such service.
(3) ELIGIBLE VIDEO SERVICE PROVIDER- The term `eligible video service
provider' means a video service provider that--
(A)(i) has an attributable interest in a cable channel (as defined in
section 602(4) of the Communications Act of 1934 (47 U.S.C. 522(24)))
that is currently offered on the expanded basic tier (within the meaning
of section 623(b)(7) of that Act (47 U.S.C. 543(b)(7)));
(ii) offers that cable channel on an a-la-carte basis to its subscribers
of digital video service in addition to any other channel bundles it
offers as of the date of enactment of this Act;
(iii) does not prohibit any other multichannel video programming distributor
(as defined in section 602(13) of the Communications Act of 1934 (47
U.S.C. 522(24))) from offering that channel on an a-la-carte basis to
its subscribers; and
(iv) files with the Commission a declaration of intention to offer to
its digital video service subscribers on an a-la-carte basis any cable
channels it carries that are offered to it on an a-la-carte basis; or
(B) does not have an attributable interest in a cable channels but files
with the Commission a declaration of intention to offer to its digital
video service subscribers on an a-la-carte basis any cable channels
it carries that are offered to it on an a-la-carte basis.
(4) VIDEO SERVICE- The term `video service' means--
(B) interactive on demand services; and
(C) other programming services.
(5) VIDEO SERVICE PROVIDER- The term `video service provider'--
(A) means a provider of video service that utilizes a public right-of-way
in the provision of such service; and
(i) a provider of direct broadcast satellite service;
(ii) any person providing video programming to end users using radio
communication;
(iii) any other provider of video service that does not use a public
right-of-way in the provision of its service; or
(iv) any person providing video service by means of a commercial mobile
service, unless such person has substantially replaced an eligible
video service provider described in subparagraph (A) by occupying
a position in the video service market comparable to that occupied
by such provider.
(b) Common Terminology- Except as otherwise provided in subsection (a),
terms used in this Act shall have the same meaning given to such terms under
sections 3, 332(d), and 602 of the Communications Act of 1934 (47 U.S.C.
153, 332(d), and 522).
SEC. 3. REGULATORY RELIEF FOR ELIGIBLE VIDEO SERVICE PROVIDERS.
(a) Eligible Video Service Providers-
(1) REGULATORY RELIEF- An eligible video service provider may not be required--
(A) to obtain a State or local video franchise;
(B) to build out its video distribution system in any particular manner;
or
(C) to provide leased or common carrier access to its video distribution
facilities and equipment to any other video service provider.
(2) BUILD-OUT ENCOURAGED; DISCRIMINATION NOT PERMITTED- It is the policy
of the United States that an eligible video service provider--
(A) should build out to provide service to the greatest number of communities
practicable; and
(B) should comply fully with the requirements of sections 202 and 621(a)(3)
of the Communications Act of 1934 (47 U.S.C. 202 and 541(a)(3)) prohibiting
the denial of access to service of any group of residential subscribers
because of the income of residents of the area in which the group resides.
(b) Local Government Authority to Regulate-
(1) FEE FOR MANAGING LOCAL GOVERNMENT'S PUBLIC RIGHTS-OF-WAY-
(A) COMPENSATING LOCAL GOVERNMENTS-
(i) IN GENERAL- A local government may require an eligible video service
provider to pay a reasonable fee on an annual basis to the units of
local government in which the video service provider provides video
service for the purpose of compensating such local government for
the costs that it incurs in managing the public rights-of-way used
by such provider.
(ii) AMOUNT OF FEE- The fee imposed under clause (i) shall not exceed
3.7 percent of gross video revenues. Notwithstanding the preceding
sentence, a local government may petition the Commission for, and
the Commission may grant, a fee that exceeds 3.7 percent of gross
video revenues to the extent that the local government demonstrates
that the higher fee is necessary to cover its costs of managing the
public rights-of-way used by the provider.
(iii) IN-KIND CONTRIBUTIONS PROVIDED TO STATE AND LOCAL GOVERNMENTS-
A local government may not solicit in-kind contributions from an eligible
video service provider unless the value of the in-kind contribution
is credited to the provider as part of that fee described in clause
(i).
(iv) INSTITUTIONAL NETWORKS PROVIDED TO STATE AND LOCAL GOVERNMENTS-
A local government may not solicit the provision of institutional
network services (as defined by the Federal Communications Commission)
from an eligible video service provider on a free or reduced fee basis
unless the value of the services provided for free, or the amount
of the reduction in the fee, is credited to the provider as part of
the fee described in clause (i).
(B) DEFINITION- For purposes of this paragraph, the term `gross video
revenues'--
(i) means all consideration of any kind or nature received by an eligible
video service provider from its subscribers for the provision of video
service within a municipality, including--
(IV) institutional networks; and
(IV) in-kind contributions (services or goods); but
(I) revenue not actually received, even if billed, including bad
debt;
(II) revenue received by any affiliate or any other person in exchange
for supplying goods or services used by an eligible video service
provider to provide video service;
(III) refunds, rebates, or discounts provided to--
(aa) subscribers;
(bb) leased access providers;
(cc) advertisers; or
(dd) the municipality;
(IV) revenue from services not classified as video service, including--
(aa) revenue received from telecommunications services;
(bb) revenue received from information services, including Internet
access;
(cc) revenue received in connection with advertising;
(dd) revenue received in connection with home shopping services;
or
(ee) any other revenue attributed by an eligible video service
provider to non-video service in accordance with any applicable rules, regulations,
standards, or orders;
(V) revenue paid by subscribers to home shopping programmers directly
from the sale of merchandise through any home shopping channel offered
as part of the video service;
(VI) any tax of general applicability--
(aa) imposed upon an eligible video service provider or upon subscribers
by a Federal, State, city, or any other governmental entity; and
(bb) required to be collected by a eligible video service provider
and remitted to the taxing entity, including--
(AA) sales or use taxes;
(BB) gross receipts taxes;
(CC) excise taxes;
(DD) utility users taxes;
(EE) public service taxes;
(FF) communication taxes; and
(GG) the fee described in subclause (VI);
(VII) the provision of video service to public institutions, public
schools, or governmental entities at no charge;
(VIII) any foregone revenue from the provision of free or reduced-cost
video service by an eligible video service provider to any person,
including--
(aa) the municipality;
(bb) other public institutions; and
(cc) other institutions;
(IX) sales of capital assets or sales of surplus equipment;
(X) reimbursement by programmers of marketing costs incurred by
an eligible video service provider for the introduction or promotion
of programming;
(XI) directory or Internet advertising revenue, including revenue
from--
(aa) yellow page sales;
(bb) white page sales;
(cc) banner advertisement; and
(dd) electronic publishing; and
(XII) copyright fees paid to the United States Copyright Office.
(2) RIGHTS-OF-WAY DISPUTES TO BE RESOLVED BY THE COMMISSION OR FEDERAL
COURTS- Any dispute regarding the application or amount of fees charged
under paragraph (1) shall, upon request of a local unit of government
or affected video service provider, be resolved--
(A) by the Commission; or
(B) by filing a claim in the district court of the United States that
meets applicable requirements relating to venue under section 1931 of
title 28, United States Code.
(3) FEE APPEARANCE ON SUBSCRIBER'S BILL- A video service provider may
designate that portion of a subscriber's bill attributable to the fee
imposed under paragraph (1) as a separate item on the subscriber's bill.
(c) Applicability of Communications Act of 1934-
(1) IN GENERAL- Except as provided in this subsection, the Communications
Act of 1934 (47 U.S.C. 151 et seq.) shall not apply to the provision of
video service by an eligible video service provider.
(2) RETRANSMISSION CONSENT OBLIGATIONS- An eligible video service provider
shall be subject to the retransmission consent obligations of section
325(b) of the Communications Act of 1934 (47 U.S.C. 325(b)).
(3) TITLE VI PROVISIONS- An eligible video service provider shall--
(A) not be subject to any provision of title VI of the Communications
Act of 1934 (47 U.S.C. 521 et seq.), except as otherwise provided in
this paragraph;
(B) except as provided in paragraph (4), carry and determine the appropriate
channel positioning and grouping, for the area in which it is providing
video service, of up to 3 public, educational, or governmental use channels
as required under section 611 of that Act (47 U.S.C. 531);
(C) carry the signals of local commercial television stations as required
under section 614 of that Act (47 U.S.C. 534);
(D) carry the signals of local noncommercial educational television
stations as required under section 615 of that Act (47 U.S.C. 535);
(E) be subject to the regulation of carriage agreements under section
616 of that Act (47 U.S.C. 536);
(F) be subject to the antidiscrimination provisions of section 621(a)(3)
of that Act (47 U.S.C. 541(a)(3));
(G) be subject to the requirements regarding obscene or indecent programming
under section 624(d)(2) of that Act (47 U.S.C. 544(d)(2));
(H) be entitled to the benefits and protections under section 624(f)(1)
of that Act (47 U.S.C. 544(f)(1)) regarding the content of video service;
(I) be subject to the emergency information requirements under section
624(g) of that Act (47 U.S.C. 544(g));
(J) be subject to the consumer electronics equipment capability requirements
under section 624A of that Act (47 U.S.C. 545);
(K) be entitled to the benefits and protections under section 628 of
that Act (47 U.S.C. 548);
(L) be subject to the requirements under section 629 of that Act (47
U.S.C. 549);
(M) protect the personally identifiable information of its subscribers
in the same manner as is required of cable operators with respect to
subscribers to cable services under section 631 of that Act (47 U.S.C.
551);
(N) be entitled to the benefits and protections under section 633 of
that Act (47 U.S.C. 553);
(O) be subject to the equal employment provisions as required under
subsections (a) through (h) of section 634 of that Act (47 U.S.C. 554);
(P) be subject to criminal or civil liability under section 638 of that
Act (47 U.S.C. 558);
(Q) be subject to the penalties prescribed for the transmission of obscene
programming under section 639 of that Act (47 U.S.C. 559); and
(R) be required to comply with the scrambling requirements under section
640 of that Act (47 U.S.C. 560).
(4) UTILIZATION AND OTHER REQUIREMENTS FOR PUBLIC, EDUCATIONAL, OR GOVERNMENTAL
CHANNELS-
(A) WITHDRAWAL FOR INSUFFICIENT USE- Notwithstanding paragraph (1)(C),
an eligible video service provider--
(i) is not required to carry a public, educational, or governmental
channel that has less than 8 hours programming per day; and
(ii) may terminate carriage of any such channel and reprogram it not
less than 30 days after notifying the franchising authority of its
intended action.
(B) REINSTATEMENT- An eligible video service provider shall restore
carriage of a public, educational, or governmental channel the carriage
of which was terminated under subparagraph (A) when the entity responsible
for the channel certifies that it is ready, willing, and able to provide
at least 8 hours of daily programming for the channel.
(C) NONREPEAT PROGRAMMING REQUIREMENT- At least 4 hours of the programming
required to meet the 8 hours of daily programming for a public, educational,
or governmental channel shall be nonrepeat programming.
(D) OPERATIONAL RESPONSIBILITY- The operation of a public, educational,
or governmental channel shall be the responsibility of the entity operating
the channel and not the responsibility of the eligible video service
provider. The responsibility of the eligible video service provider
is limited to carriage of the channel.
(5) DETERMINATIONS OF LOCAL SIGNALS- For purposes of complying with subparagraphs
(C) and (D) of paragraph (1), an eligible video service provider shall
treat as local stations, with respect to a customer located within the
jurisdiction of any franchising authority, the same stations that are
treated as local television stations for a cable system located within
such jurisdiction as of the date of enactment of this Act.
(A) REGULATIONS REQUIRED- Not later than 90 days after the date of enactment
of this Act, the Commission shall prescribe regulations to implement
the requirements of paragraph (1) that are no greater or lesser than
the obligations required by the specifically referenced provisions of
the Communications Act of 1934 (47 U.S.C. 151 et seq.).
(B) EFFECTIVE DATE OF REGULATIONS- The regulations required under subparagraph
(A) shall take effect 6 months after the date of enactment of this Act.
(7) PREEMPTION OF INCONSISTENT FRANCHISE TERMS AND STATE AND LOCAL LAWS
FOR ELIGIBLE VIDEO SERVICE PROVIDERS-
(A) IN GENERAL- Any provision in any franchise granted by a franchising
authority to an eligible video service provider, and any provision of
State or local laws, regulations, or rules, that is inconsistent with
the provisions of this Act is preempted and superseded.
(B) TREATMENT AS AN ELIGIBLE VIDEO SERVICE PROVIDER- Subparagraph (A)
does not apply to a franchise agreement--
(i) that is in effect on the date of enactment of this Act; and
(ii) pursuant to which a cable operator that is not an eligible video
service provider is operating.
(8) CABLE CHANNELS FOR PUBLIC, EDUCATIONAL, AND GOVERNMENTAL USE- The
governmental entity that was the franchising authority for a State or
a political subdivision of a State on the date of enactment of this Act,
and any successor entity, shall for that State or political subdivision
determine which public, educational, or governmental entities shall be
authorized to designate the channels required under paragraph (1)(C).
(9) CONSUMER PROTECTION AND CUSTOMER SERVICE-
(A) REGULATIONS REQUIRED- Not later than 90 days after the date of enactment
of this Act, the Commission shall promulgate regulations with respect
to customer service and consumer protection requirements of the eligible
video service provider.
(B) EFFECTIVE DATE OF REGULATIONS- The regulations required under subparagraph
(A) shall take effect 6 months after the date of enactment of this Act.
(C) PREEMPTION- The regulations promulgated under subparagraph (A) preempt
any statute, regulation, or rule of any State or political subdivision
thereof under which liability would be imposed on an eligible video
service provider for failure to comply with any statute, regulation,
or rule in pari materia with those regulations, other than State laws
that are not specific to customer service and consumer protection requirements
of the video service provider.
(10) STATE AND LOCAL GOVERNMENT AUTHORITY-
(A) IN GENERAL- Notwithstanding any other provision of this Act, a State
or local government shall have the authority to enforce the requirements
of paragraph (9)(A).
(B) LOCAL POINT OF CONTACT- Each State or local government shall designate
a local point of contact, which residents of such geographic area may
contact to alert such State or local government of any potential violations
of the requirements and obligations established under paragraph (9)(A).
(C) LIMITATION ON CLASS ACTIONS- No class action alleging a violation
of the obligations set forth in the regulations promulgated by the Commission
under paragraph (9)(A) shall be maintained under this subsection by
an individual or any private party in Federal or State court.
(D) PARENS PATRIAE AUTHORITY- In any case in which a State or local
government has reason to believe that an act or practice violates the
obligations set forth in the regulations promulgated by the Commission
under paragraph (9)(A), the State or local government may bring a civil
action on behalf of the residents within its jurisdiction in a district
court of the United States of appropriate jurisdiction, or any other
court of competent jurisdiction, to--
(i) enjoin the act or practice;
(I) damages in the sum of actual damages, restitution, or other
compensation on behalf of affected residents of the State or locality;
and
(II) punitive damages, if the violation is willful or intentional;
or
(iii) obtain such other legal and equitable relief as the court may
consider to be appropriate.
(E) LIMITATION- In enforcing the requirements of paragraph (6), a State
or local government may not impose additional obligations beyond those
established by the Commission in paragraph (9)(A).
(d) Commission to Act if State Commission Will Not Act- If a State or local
government fails to carry out its enforcement responsibilities under subsection
(c)(7), the Commission shall--
(1) issue an order preempting the jurisdiction of the State commission;
and
(2) assume exclusive enforcement authority.
(e) Ability to Manage Public Rights-of-Way-
(1) IN GENERAL- Except as provided in this section, nothing in this Act
shall affect the authority of a State or local government to manage the
public right-of-way in a manner that is--
(B) competitively neutral;
(C) consistent with applicable State law; and
(D) not inconsistent with this Act.
(2) CONSTRUCTION PERMITS-
(A) IN GENERAL- In managing the public rights-of-way a State or local
government may require the issuance of a construction permit, without
cost, to an eligible video service provider that is locating facilities
in such public right-of-way.
(B) RESPONSE WORK OR REPAIR- If there is an emergency necessitating
response work or repair in the public right-of-way, an eligible video
service provider may begin such work or repair upon obtaining any required
permit or authorization without prior approval from a State or local
government, if such provider notifies the State or local government
as promptly as possible after beginning such work or repair.
(3) TIMELY ACTION REQUIRED- In managing the public rights-of-way a State
or local government that is required to issue permits or licenses for
such use shall be required to act upon any such request for use in a timely
manner.
(4) NEW ROADS- Nothing in this section shall effect the ability of a State
or local government to impose reasonable limits on access to public rights-of-way
associated with newly constructed roads.
(f) Conforming Amendments to the Communications Act of 1934-
(1) POLE ATTACHMENTS- Section 224 of the Communications Act of 1934 (47
U.S.C. 224) is amended--
(A) in subsection (a)(1), by striking `local exchange carrier' and inserting
`telecommunications carrier';
(B) by striking subsections (a)(5) and (d)(3);
(C) in subsection (d)(3), in the first sentence by striking all after
`cable television system' through the period at the end and inserting
`and facilities of other video service providers, regardless of the
nature of the services provided.'; and
(D) by adding at the end the following:
`(j) Wireless Service Facility Exemption- Nothing in this section applies
to a wireless service facility, including to towers of a provider of mobile
services.'.
(2) CARRIAGE OF LOCAL COMMERCIAL TELEVISION SIGNALS- Section 614(b)(4)
of the Communications Act of 1934 (47 U.S.C. 534(b)(4)) is amended to
read as follows:
`(A) NON-DEGRADATION- The signals of local commercial television stations
that a cable operator carries shall be carried without material degradation.
`(B) CARRIAGE STANDARDS- The Commission shall adopt carriage standards
to ensure that, to the extent technically feasible, the quality of signal
processing and carriage provided by a cable system for the carriage
of local commercial television stations will be no less than that provided
by the system for carriage of any other type of broadcast local commercial
television signal when using the same transmission technology.'.
(3) CARRIAGE OF NONCOMMERCIAL EDUCATIONAL TELEVISION- Section 615(g)(2)
of the Communications Act of 1934 (47 U.S.C. 535(g)(2)) is amended to
read as follows--
`(2) BANDWITH AND TECHNICAL QUALITY- A cable operator shall--
`(A) provide each qualified local non-commercial television station
whose signal is carried in accordance with this section with bandwith
and technical capacity equivalent to that provided to commercial television
stations carried on the cable system when using the same transmission
technology; and
`(B) carry the signal of each qualified local non-commercial educated
television station without material degradation.'.
(4) REGULATIONS REQUIRED- Not later than 90 days after the date of enactment
of this Act, the Commission shall prescribe such regulations as may be
necessary to implement the amendments made by this section.
(g) Rulemaking on Section 629- Not later than January 1, 2008, the Commission
shall conduct a proceeding to determine the appropriateness of the requirements
under subsection (c)(1)(L) taking into account changes and advancements
in technology.
SEC. 4. BENEFIT OF NETWORK NON-DUPLICATION RULES TO BROADCASTERS.
(a) IN GENERAL- Notwithstanding any other provision of law, or any regulation
promulgated by the Federal Communications Commission, if a local commercial
television station is under common control with a cable channel the station
may not have the benefit of the Commission's network program non-duplication
rules in subpart F of part 76.92 of title 47, Code of Federal Regulations,
unless the cable channel is made available to multichannel video programming
distributors on an a-la-carte basis in addition to any other channel bundles
it offers to subscribers.
(b) DEFINITIONS- In this section:
(1) COMMON CONTROL- A local commercial television station is considered
to be under common control with a cable channel if--
(A) it is owned by a person that has an attributable interest in a cable
channel; or
(B) is owned or controlled by a coorporation or other legal entity the
chairman or controlling shareholder of which--
(i) has an attributable interest in a cable channel; or
(ii) owns or controls a cable channel.
(2) LOCAL COMMERCIAL TELEVISION STATION- The term `local commercial television
station' has the meaning given that term in section 614(h)(1) of the Communications
Act of 1934 (47 U.S.C. 534(h)(1))).
SEC. 5. ALTERNATIVE DISTRIBUTION OUTLETS.
Section 616(a)(2) of the Communications Act of 1934 (47 U.S.C. 536(a)) is
amended by striking `distributors' and inserting `distributors, or against
other video programming distributors using any medium or platform for such
programming distribution (including the Internet),'.
SEC. 6. FEDERAL COMMUNICATIONS COMMISSION TO ADMINISTER.
The Federal Communications Commission may prescribe such rules and regulations
as may be necessary in the public interest to carry out this Act.
SEC. 7. SEVERABILITY.
If any provision of this Act, an amendment made by this Act, or the application
of such provision or amendment to any person or circumstance is held to
be unconstitutional, the remainder of this Act, the amendments made by this
Act, and the application of such provisions to any person or circumstance
shall not be affected thereby.
END
