[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 3457 Introduced in Senate (IS)]
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--
(A) video programming;
(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
(B) does not include--
(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--
(I) cash;
(II) credits;
(III) property;
(IV) institutional networks; and
(IV) in-kind contributions
(services or goods); but
(ii) does not include--
(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.
(6) Implementation.--
(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;
(ii) obtain--
(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--
(A) non-discriminatory;
(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:
``(4) Signal quality.--
``(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.
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