§ 76.1906   Encoding rules for undefined business models.

   (a) Upon public notice and subject to requirements as set forth herein,
   a covered entity may launch a program service pursuant to an undefined
   business model. Subject to Commission review upon complaint, the
   covered entity may initially encode programs pursuant to such undefined
   business model without regard to limitations set forth in § 76.1904(b).

   (1) Notice. Concurrent with the launch of an undefined business model
   by a covered entity, the covered entity shall issue a press release to
   the PR Newswire so as to provide public notice of the undefined
   business model, and the proposed encoding terms. The notice shall
   provide a concise summary of the commercial audiovisual content to be
   provided pursuant to the undefined business model, and of the terms on
   which such content is to be available to consumers. Immediately upon
   request from a party entitled to be a complainant, the covered entity
   shall make available information that indicates the proposed encoding
   terms, including the use of copy never or copy one generation encoding,
   and the encoding of content with respect to “pause” as defined in
   § 76.1904(b)(2).

   (2) Complaint process. Any interested party (“complainant”) may file a
   complaint with the Commission objecting to application of encoding as
   set forth in the notice.

   (i) Pre-complaint resolution. Prior to initiating a complaint with the
   Commission under this section, the complainant shall notify the covered
   entity that it may file a complaint under this section. The notice must
   be sufficiently detailed so that the covered entity can determine the
   specific nature of the potential complaint. The potential complainant
   must allow a minimum of thirty (30) days from such notice before filing
   such complaint with the Commission. During this period the parties
   shall endeavor in good faith to resolve the issue(s) in dispute. If the
   parties fail to reach agreement within this 30 day period, complainant
   may initiate a complaint in accordance with the procedures set forth
   herein.

   (ii) Complaint. Within two years of publication of a notice under
   paragraph (a)(1) of this section, a complainant may file a complaint
   with the Commission objecting to application of the encoding terms to
   the service at issue. Such complaint shall state with particularity the
   basis for objection to the encoding terms.

   (A) The complaint shall contain the name and address of the complainant
   and the name and address of the covered entity.

   (B) The complaint shall be accompanied by a certification of service on
   the named covered entity.

   (C) The complaint shall set forth with specificity all information and
   arguments relied upon. Specific factual allegations shall be supported
   by a declaration of a person or persons with actual knowledge of the
   facts, and exhibits shall be verified by the person who prepares them.

   (D) The complaint shall set forth attempts made by the complainant to
   resolve its complaint pursuant to paragraph (a)(2)(i) of this section.

   (iii) Public notice. The Commission shall give public notice of the
   filing of the complaint. Once the Commission has issued such public
   notice, any person otherwise entitled to be a complainant shall instead
   have the status of a person submitting comments under paragraph
   (a)(2)(iv) of this section rather than a complainant.

   (iv) Comments and reply. (A) Any person may submit comments regarding
   the complaint within thirty (30) days after the date of public notice
   by the Commission. Comments shall be served on the complainant and the
   covered entity and on any persons listed in relevant certificates of
   service, and shall contain a detailed full statement of any facts or
   considerations relied on. Specific factual allegations shall be
   supported by a declaration of a person or persons with actual knowledge
   of the facts, and exhibits shall be verified by the person who prepares
   them.

   (B) The covered entity may file a response to the complaint and
   comments within twenty (20) days after the date that comments are due.
   Such response shall be served on all persons who have filed complaints
   or comments and shall also contain a detailed full showing, supported
   by affidavit or declaration, of any additional facts or considerations
   relied on. Replies shall be due ten (10) days from the date for filing
   a response.

   (v) Basis for Commission determination as to encoding terms for an
   undefined business model. In a permit-but-disclose proceeding, unless
   otherwise specified by the Commission, to determine whether encoding
   terms as noticed may be applied to an undefined business model, the
   covered entity shall have the burden of proof to establish that
   application of the encoding terms in the undefined business model is in
   the public interest. In making any such determination, the Commission
   shall take into account the following factors:

   (A) Whether the benefit to consumers of the new service, including but
   not limited to earlier release windows, more favorable terms,
   innovation or original programming, outweighs the limitation on the
   consumers' control over the new service;

   (B) Ways in which the new service differs from services offered by any
   covered entity prior to December 31, 2002;

   (vi) Determination procedures. The Commission may specify other
   procedures, such as oral argument, evidentiary hearing, or further
   written submissions directed to particular aspects, as it deems
   appropriate.

   (b) Complaint regarding a service not subject to notice. In an instance
   in which an interested party has a substantial basis to believe and
   believes in good faith that a service pursuant to an undefined business
   model has been launched without requisite notice, such party may file a
   complaint pursuant to § 76.7.

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