CABLE ACT REFORM.

SEC. 301. CABLE ACT REFORM. (a) Definitions.— (1) Definition of cable service.— Section 602(6)(B) (47 U.S.C. 522(6)(B)) is amended by inserting “or use” after “the selection”. (2) Change in definition of cable system.— Section 602(7) (47 U.S.C. 522(7)) is amended by striking “(B) a facility that serves only subscribers in 1 or more multiple unit dwellings under common ownership, control, or management, unless such facility or facilities uses any public right-of-way;” and inserting “(B) a facility that serves subscribers without using any public right-of-way;”. (b) Rate Deregulation.— 110 STAT. 115 (1) Upper tier regulation.— Section 623(c) (47 U.S.C. 543(c)) is amended— (A) in paragraph (1)(B), by striking “subscriber, franchising authority, or other relevant State or local government entity” and inserting “franchising authority (in accordance with paragraph (3))”; (B) in paragraph (1)(C), by striking “such complaint” and inserting “the first complaint filed with the franchising authority under paragraph (3)”; and (C) by striking paragraph (3) and inserting the following: “(3) Review of rate changes.— The Commission shall review any complaint submitted by a franchising authority after the date of enactment of the Telecommunications Act of 1996 concerning an increase in rates for cable programming services and issue a final order within 90 days after it receives such a complaint, unless the parties agree to extend the period for such review. A franchising authority may not file a complaint under this paragraph unless, within 90 days after such increase becomes effective it receives subscriber complaints. “(4) Sunset of upper tier rate regulation.— This subsection shall not apply to cable programming services provided after March 31, 1999.”. (2) Sunset of uniform rate structure in markets with effective competition.— Section 623(d) (47 U.S.C. 543(d)) is amended by adding at the end thereof the following: “This subsection does not apply to (1) a cable operator with respect to the provision of cable service over its cable system in any geographic area in which the video programming services offered by the operator in that area are subject to effective competition, or (2) any video programming offered on a per channel or per program basis. Bulk discounts to multiple dwelling units shall not be subject to this subsection, except that a cable operator of a cable system that is not subject to effective competition may not charge predatory prices to a multiple dwelling unit. Upon a prima facie showing by a complainant that there are reasonable grounds to believe that the discounted price is predatory, the cable system shall have the burden of showing that its discounted price is not predatory.”. (3) Effective competition.— Section 623(l)(1) (47 U.S.C. 543(l)(1)) is amended— (A) by striking “or” at the end of subparagraph (B); (B) by striking the period at the end of subparagraph (C) and inserting “; or”; and (C) by adding at the end the following: “(D) a local exchange carrier or its affiliate (or any multichannel video programming distributor using the facilities of such carrier or its affiliate) offers video programming services directly to subscribers by any means (other than direct-to-home satellite services) in the franchise area of an unaffiliated cable operator which is providing cable service in that franchise area, but only if the video programming services so offered in that area are comparable to the video programming services provided by the unaffiliated cable operator in that area.”. 110 STAT. 116 (c) Greater Deregulation for Smaller Cable Companies.— Section 623 (47 U.S.C 543) is amended by adding at the end thereof the following: “(m) Special Rules for Small Companies.— “(1) In general.— Subsections (a), (b), and (c) do not apply to a small cable operator with respect to— “(A) cable programming services, or “(B) a basic service tier that was the only service tier subject to regulation as of December 31, 1994, in any franchise area in which that operator services 50,000 or fewer subscribers. “(2) Definition of small cable operator.— For purposes of this subsection, the term ‘small cable operator’ means a cable operator that, directly or through an affiliate, serves in the aggregate fewer than 1 percent of all subscribers in the United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000.”. (d) Market Determinations.— (1) Market determinations; expedited decisionmaking.— Section 614(h)(1)(C) (47 U.S.C. 534(h)(1)(C)) is amended— (A) by striking “in the manner provided in section 73.3555(d)(3)(i) of title 47, Code of Federal Regulations, as in effect on May 1, 1991,” in clause (i) and inserting “by the Commission by regulation or order using, where available, commercial publications which delineate television markets based on viewing patterns.”; and (B) by striking clause (iv) and inserting the following: “(iv) Within 120 days after the date on which a request is filed under this subparagraph (or 120 days after the date of enactment of the Telecommunications Act of 1996, if later), the Commission shall grant or deny the request.”. (2) Application to pending requests.— The amendment made by paragraph (1) shall apply to— (C) any request pending under section 614(h)(1)(C) of the Communications Act of 1934 (47 U.S.C. 534(h)(1)(C)) on the date of enactment of this Act; and (D) any request filed under that section after that date. (e) Technical Standards.— Section 624(e) (47 U.S.C. 544(e)) is amended by striking the last two sentences and inserting the following: “No State or franchising authority may prohibit, condition, or restrict a cable system’s use of any type of subscriber equipment or any transmission technology.”. (f) Cable Equipment Compatibility.— Section 624A (47 U.S.C. 544A) is amended— (1) in subsection (a) by striking “and” at the end of paragraph (2), by striking the period at the end of paragraph (3) and inserting “; and”; and by adding at the end the following new paragraph: “(4) compatibility among televisions, video cassette recorders, and cable systems can be assured with narrow technical standards that mandate a minimum degree of common design and operation, leaving all features, functions, protocols, and other product and service options for selection through open competition in the market.”; 110 STAT. 117 (2) in subsection (c)(1)— (A) by redesignating subparagraphs (A) and (B) as subparagraphs (B) and (C), respectively; and (B) by inserting before such redesignated subparagraph (B) the following new subparagraph: “(A) the need to maximize open competition in the market for all features, functions, protocols, and other product and service options of converter boxes and other cable converters unrelated to the descrambling or decryption of cable television signals;”; and (3) in subsection (c)(2)— (A) by redesignating subparagraphs (D) and (E) as subparagraphs (E) and (F), respectively; and (B) by inserting after subparagraph (C) the following new subparagraph: “(D) to ensure that any standards or regulations developed under the authority of this section to ensure compatibility between televisions, video cassette recorders, and cable systems do not affect features, functions, protocols, and other product and service options other than those specified in paragraph (1)(B), including telecommunications interface equipment, home automation communications, and computer network services;”. (g) Subscriber Notice.— Section 632 (47 U.S.C. 552) is amended— (1) by redesignating subsection (c) as subsection (d); and (2) by inserting after subsection (b) the following new subsection: “(c) Subscriber Notice.— A cable operator may provide notice of service and rate changes to subscribers using any reasonable written means at its sole discretion. Notwithstanding section 623(b)(6) or any other provision of this Act, a cable operator shall not be required to provide prior notice of any rate change that is the result of a regulatory fee, franchise fee, or any other fee, tax, assessment, or charge of any kind imposed by any Federal agency, State, or franchising authority on the transaction between the operator and the subscriber.”. (h) Program Access.— Section 628 (47 U.S.C. 548) is amended by adding at the end the following: “(j) Common Carriers.— Any provision that applies to a cable operator under this section shall apply to a common carrier or its affiliate that provides video programming by any means directly to subscribers. Any such provision that applies to a satellite cable programming vendor in which a cable operator has an attributable interest shall apply to any satellite cable programming vendor in which such common carrier has an attributable interest. For the purposes of this subsection, two or fewer common officers or directors shall not by itself establish an attributable interest by a common carrier in a satellite cable programming vendor (or its parent company).”. (i) Antitrafficking.— Section 617 (47 U.S.C. 537) is amended— (1) by striking subsections (a) through (d); and (2) in subsection (e), by striking “(e)” and all that follows through “a franchising authority” and inserting “A franchising authority”. 110 STAT. 118 (j) Aggregation of Equipment Costs.— Section 623(a) (47 U.S.C. 543(a)) is amended by adding at the end the following new paragraph: “(7) Aggregation of equipment costs.— “(A) In general.— The Commission shall allow cable operators, pursuant to any rules promulgated under subsection (b)(3), to aggregate, on a franchise, system, regional, or company level, their equipment costs into broad categories, such as converter boxes, regardless of the varying levels of functionality of the equipment within each such broad category. Such aggregation shall not be permitted with respect to equipment used by subscribers who receive only a rate regulated basic service tier. “(B) Revision to commission rules; forms.— Within 120 days of the date of enactment of the Telecommunications Act of 1996, the Commission shall issue revisions to the appropriate rules and forms necessary to implement subparagraph (A).”. (k) Treatment of Prior Year Losses.— (1) Amendment.— Section 623 (48 U.S.C. 543) is amended by adding at the end thereof the following: “(n) Treatment of Prior Year Losses.— Notwithstanding any other provision of this section or of section 612, losses associated with a cable system (including losses associated with the grant or award of a franchise) that were incurred prior to September 4, 1992, with respect to a cable system that is owned and operated by the original franchisee of such system shall not be disallowed, in whole or in part, in the determination of whether the rates for any tier of service or any type of equipment that is subject to regulation under this section are lawful.”. (2) Effective date.— The amendment made by paragraph (1) shall take effect on the date of enactment of this Act and shall be applicable to any rate proposal filed on or after September 4, 1993, upon which no final action has been taken by December 1, 1995.