Goto Section: 27.1201 | 27.1203 | Table of Contents
FCC 27.1202
Revised as of October 1, 2008
Goto Year:2007 |
2009
Sec. 27.1202 Cable/BRS cross-ownership.
(a) Initial or modified authorizations for BRS stations may not be granted
to a cable operator if a portion of the BRS station's protected services
area is within the portion of the franchise area actually served by the
cable operator's cable system and the cable operator will be using the BRS
station as a multichannel video programming distributor (as defined in
Sec. 76.64(d) of this chapter). No cable operator may acquire such authorization
either directly, or indirectly through an affiliate owned, operated, or
controlled by or under common control with a cable operator if the cable
operator will use the BRS station as a multichannel video programming
distributor.
(b) No licensee of a station in this service may lease transmission time or
capacity to a cable operator either directly, or indirectly through an
affiliate owned, operated, controlled by, or under common control with a
cable operator, if a portion of the BRS station's protected services area is
within the portion of the franchise area actually served by the cable
operator's cable system the cable operator will use the BRS station as a
multichannel video programming distributor.
(c) Applications for new stations, station modifications, assignments or
transfers of control by cable operators of BRS stations shall include a
showing that no portion of the GSA of the BRS station is within the portion
of the franchise area actually served by the cable operator's cable system,
or of any entity indirectly affiliated, owned, operated, controlled by, or
under common control with the cable operator. Alternatively, the cable
operator may certify that it will not use the BRS station to distribute
multichannel video programming.
(d) In applying the provisions of this section, ownership and other
interests in BRS licensees or cable television systems will be attributed to
their holders and deemed cognizable pursuant to the following criteria:
(1) Except as otherwise provided herein, partnership and direct ownership
interests and any voting stock interest amounting to 5% or more of the
outstanding voting stock of a corporate BRS licensee or cable television
system will be cognizable;
(2) Investment companies, as defined in 15 U.S.C. 80a–3, insurance companies
and banks holding stock through their trust departments in trust accounts
will be considered to have a cognizable interest only if they hold 20% or
more of the outstanding voting stock of a corporate BRS licensee or cable
television system, or if any of the officers or directors of the BRS
licensee or cable television system are representatives of the investment
company, insurance company or bank concerned. Holdings by a bank or
insurance company will be aggregated if the bank or insurance company has
any right to determine how the stock will be voted. Holdings by investment
companies will be aggregated if under common management.
(3) Attribution of ownership interests in a BRS licensee or cable television
system that are held indirectly by any party through one or more intervening
corporations will be determined by successive multiplication of the
ownership percentages for each link in the vertical ownership chain and
application of the relevant attribution benchmark to the resulting product,
except that wherever the ownership percentage for any link in the chain
exceeds 50%, it shall not be included for purposes of this multiplication.
For purposes of paragraph (d)(9) of this section, attribution of ownership
interests in a BRS licensee or cable television system that are held
indirectly by any party through one or more intervening organizations will
be determined by successive multiplication of the ownership percentages for
each link in the vertical ownership chain and application of the relevant
attribution benchmark to the resulting product, and the ownership percentage
for any link in the chain that exceeds 50% shall be included for purposes of
this multiplication. For example, except for purposes of paragraph (d)(9) of
this section, if A owns 10% of company X, which owns 60% of company Y, which
owns 25% of “Licensee,” then X's interest in “Licensee” would be 25% (the
same as Y's interest because X's interest in Y exceeds 50%), and A's
interest in “Licensee” would be 2.5% (0.1 × 0.25). Under the 5% attribution
benchmark, X's interest in “Licensee” would be cognizable, while A's
interest would not be cognizable. For purposes of paragraph (d)(9) of this
section, X's interest in “Licensee” would be 15% (0.6 × 0.25) and A's
interest in “Licensee” would be 1.5% (0.1 × 0.6 × 0.25). Neither interest
would be attributed under paragraph (d)(9) of this section.
(4) Voting stock interests held in trust shall be attributed to any person
who holds or shares the power to vote such stock, to any person who has the
sole power to sell such stock, and to any person who has the right to revoke
the trust at will or to replace the trustee at will. If the trustee has a
familial, personal or extra-trust business relationship to the grantor or
the beneficiary, the grantor or beneficiary, as appropriate, will be
attributed with the stock interests held in trust. An otherwise qualified
trust will be ineffective to insulate the grantor or beneficiary from
attribution with the trust's assets unless all voting stock interests held
by the grantor or beneficiary in the relevant BRS licensee or cable
television system are subject to said trust.
(5) Subject to paragraph (d)(9) of this section, holders of non-voting stock
shall not be attributed an interest in the issuing entity. Subject to
paragraph (d)(9) of this section, holders of debt and instruments such as
warrants, convertible debentures, options or other non-voting interests with
rights of conversion to voting interests shall not be attributed unless and
until conversion is effected.
(6)(i) A limited partnership interest shall be attributed to a limited
partner unless that partner is not materially involved, directly or
indirectly, in the management or operation of the BRS or cable television
activities of the partnership and the licensee or system so certifies. An
interest in a Limited Liability Company (“LLC”) or Registered Limited
Liability Partnership (“RLLP”) shall be attributed to the interest holder
unless that interest holder is not materially involved, directly or
indirectly, in the management or operation of the BRS or cable television
activities of the partnership and the licensee or system so certifies.
(ii) For a licensee or system that is a limited partnership to make the
certification set forth in paragraph (d)(6)(i) of this section, it must
verify that the partnership agreement or certificate of limited partnership,
with respect to the particular limited partner exempt from attribution,
establishes that the exempt limited partner has no material involvement,
directly or indirectly, in the management or operation of the BRS or cable
television activities of the partnership. For a licensee or system that is
an LLC or RLLP to make the certification set forth in paragraph (d)(6)(i) of
this section, it must verify that the organizational document, with respect
to the particular interest holder exempt from attribution, establishes that
the exempt interest holder has no material involvement, directly or
indirectly, in the management or operation of the BRS or cable television
activities of the LLC or RLLP. Irrespective of the terms of the certificate
of limited partnership or partnership agreement, or other organizational
document in the case of an LLC or RLLP, however, no such certification shall
be made if the individual or entity making the certification has actual
knowledge of any material involvement of the limited partners, or other
interest holders in the case of an LLC or RLLP, in the management or
operation of the BRS or cable television businesses of the partnership or
LLC or RLLP.
(iii) In the case of an LLC or RLLP, the licensee or system seeking
installation shall certify, in addition, that the relevant state statute
authorizing LLCs permits an LLC member to insulate itself as required by our
criteria.
(7) Officers and directors of a BRS licensee or cable television system are
considered to have a cognizable interest in the entity with which they are
so associated. If any such entity engages in businesses in addition to its
primary business of BRS or cable television service, it may request the
Commission to waive attribution for any officer or director whose duties and
responsibilities are wholly unrelated to its primary business. The officers
and directors of a parent company of a BRS licensee or cable television
system, with an attributable interest in any such subsidiary entity, shall
be deemed to have a cognizable interest in the subsidiary unless the duties
and responsibilities of the officer or director involved are wholly
unrelated to the BRS licensee or cable television system subsidiary, and a
statement properly documenting this fact is submitted to the Commission. The
officers and directors of a sister corporation of a BRS licensee or cable
television system shall not be attributed with ownership of these entities
by virtue of such status.
(8) Discrete ownership interests will be aggregated in determining whether
or not an interest is cognizable under this section. An individual or entity
will be deemed to have a cognizable investment if:
(i) The sum of the interests held by or through “passive investors” is equal
to or exceeds 20 percent; or
(ii) The sum of the interests other than those held by or through “passive
investors” is equal to or exceeds 5 percent; or
(iii) The sum of the interests computed under paragraph (d)(8)(i) of this
section plus the sum of the interests computed under paragraph (d)(8)(ii) of
this section equal to or exceeds 20 percent.
(9) Notwithstanding paragraphs (d)(5) and (d)(6) of this section, the holder
of an equity or debt interest or interests in a BRS licensee or cable
television system subject to the BRS/cable cross-ownership rule (“interest
holder”) shall have that interest attributed if:
(i) The equity (including all stockholdings, whether voting or nonvoting,
common or preferred) and debt interest or interests, in the aggregate,
exceed 33 percent of the total asset value (all equity plus all debt) of
that BRS licensee or cable television system; and
(ii) The interest holder also holds an interest in a BRS licensee or cable
television system that is attributable under this section (other than this
paragraph) and which operates in any portion of the franchise area served by
that cable operator's cable system.
(10) The term “area served by a cable system” means any area actually passed
by the cable operator's cable system and which can be connected for a
standard connection fee.
(11) As used in this section “cable operator” shall have the same definition
as in Sec. 76.5 of this chapter.
(e) The Commission will entertain requests to waive the restrictions in
paragraph (a) of this section where necessary to ensure that all significant
portions of the franchise area are able to obtain multichannel video
service.
(f) The provisions of paragraphs (a) through (e) of this section will not
apply to one BRS channel used to provide locally-produced programming to
cable headends. Locally-produced programming is programming produced in or
near the cable operator's franchise area and not broadcast on a television
station available within that franchise area. A cable operator will be
permitted one BRS channel for this purpose, and no more than one BRS channel
may be used by a cable television company or its affiliate or lessor
pursuant to this paragraph. The licensee for a cable operator providing
local programming pursuant to a lease must include in a notice filed with
the Wireless Telecommunications Bureau a cover letter explicitly identifying
itself or its lessees as a local cable operator and stating that the lease
was executed to facilitate the provision of local programming. The first
application or the first lease notification in an area filed with the
Commission will be entitled to the exemption. The limitations on one BRS
channel per party and per area include any cable/BRS operations or cable/EBS
operations. The cable operator must demonstrate in its BRS application that
the proposed local programming will be provided within one year from the
date its application is granted. Local programming service pursuant to a
lease must be provided within one year of the date of the lease or one year
of grant of the licensee's application for the leased channel, whichever is
later. If a BRS license for these purposes is granted and the programming is
subsequently discontinued, the license will be automatically forfeited the
day after local programming service is discontinued.
(g) Applications filed by cable television companies, or affiliates, for BRS
channels prior to February 8, 1990, will not be subject to the prohibitions
of this section. Applications filed on February 8, 1990, or thereafter will
be returned. Lease arrangements between cable and BRS entities for which a
lease or a firm agreement was signed prior to February 8, 1990, will also
not be subject to the prohibitions of this section. Leases between cable
television companies, or affiliates, and BRS station licensees, conditional
licensees, or applicants executed on February 8, 1990, or thereafter, are
invalid.
(1) Applications filed by cable operators, or affiliates, for BRS channels
prior to February 8, 1990, will not be subject to the prohibitions of this
section. Except as provided in paragraph (g)(2)of this section, applications
filed on February 8, 1990, or thereafter will be returned. Lease
arrangements between cable and BRS entities for which a lease or a firm
agreement was signed prior to February 8, 1990, will also not be subject to
the prohibitions of this section. Except as provided in paragraph (g)(2) of
this section, leases between cable operators, or affiliates, and BRS/EBS
station licensees, conditional licensees, or applicants executed on or
before February 8, 1990, or thereafter are invalid.
(2) Applications filed by cable operators, or affiliates for BRS channels
after February 8, 1990, and prior to October 5, 1992, will not be subject to
the prohibition of this section, if, pursuant to the then existing overbuild
or rural exceptions, the applications were allowed under the then existing
cable/BRS cross-ownership prohibitions. Lease arrangements between cable
operators and BRS entities for which a lease or firm agreement was signed
after February 8, 1990, and prior to October 5, 1992, will not be subject to
the prohibitions of this section, if, pursuant to the then existing rural
and overbuild exceptions, the lease arrangements were allowed.
(3) The limitations on cable television ownership in this section do not
apply to any cable operator in any franchise area in which a cable operator
is subject to effective competition as determined under section 623(l) of
the Communications Act.
[ 69 FR 72034 , Dec. 10, 2004, as amended at 71 FR 35190 , June 19, 2006]
Goto Section: 27.1201 | 27.1203
Goto Year: 2007 |
2009
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