§ 76.970   Commercial leased access rates.

   (a) Cable operators shall designate channel capacity for commercial use
   by persons unaffiliated with the operator in accordance with the
   requirement of 47 U.S.C. 532. For purposes of 47 U.S.C. 532(b)(1)(A)
   and (B), only those channels that must be carried pursuant to 47 U.S.C.
   534 and 535 qualify as channels that are required for use by Federal
   law or regulation. For cable systems with 100 or fewer channels,
   channels that cannot be used due to technical and safety regulations of
   the Federal Government (e.g., aeronautical channels) shall be excluded
   when calculating the set-aside requirement.

   (b) In determining whether an entity is an “affiliate” for purposes of
   commercial leased access, entities are affiliated if either entity has
   an attributable interest in the other or if a third party has an
   attributable interest in both entities.

   (c) Attributable interest shall be defined by reference to the criteria
   set forth in Notes 1-5 to § 76.501 provided, however, that:

   (1) The limited partner and LLC/LLP/RLLP insulation provisions of Note
   2(f) shall not apply; and;

   (2) The provisions of Note 2(a) regarding five (5) percent interests
   shall include all voting or nonvoting stock or limited partnership
   equity interests of five (5) percent or more.

   (d) The maximum commercial leased access rate that a cable operator may
   charge for full-time channel placement on a tier exceeding a subscriber
   penetration of 50 percent is the average implicit fee for full-time
   channel placement on all such tier(s).

   (e) The average implicit fee identified in paragraph (c) of this
   section for a full-time channel on a tier with a subscriber penetration
   over 50 percent shall be calculated by first calculating the total
   amount the operator receives in subscriber revenue per month for the
   programming on all such tier(s), and then subtracting the total amount
   it pays in programming costs per month for such tier(s) (the “total
   implicit fee calculation”). A weighting scheme that accounts for
   differences in the number of subscribers and channels on all such
   tier(s) must be used to determine how much of the total implicit fee
   calculation will be recovered from any particular tier. The weighting
   scheme is determined in two steps. First, the number of subscribers is
   multiplied by the number of channels (the result is the number of
   “subscriber-channels”) on each tier with subscriber penetration over 50
   percent. For instance, a tier with 10 channels and 1,000 subscribers
   would have a total of 10,000 subscriber-channels. Second, the
   subscriber-channels on each of these tiers is divided by the total
   subscriber-channels on all such tiers. Given the percent of
   subscriber-channels for the particular tier, the implicit fee for the
   tier is computed by multiplying the subscriber-channel percentage for
   the tier by the total implicit fee calculation. Finally, to calculate
   the average implicit fee per channel, the implicit fee for the tier
   must be divided by the corresponding number of channels on the tier.
   The final result is the maximum rate per month that the operator may
   charge the leased access programmer for a full-time channel on that
   particular tier. The average implicit fee shall be calculated by using
   all channels carried on any tier exceeding 50 percent subscriber
   penetration (including channels devoted to affiliated programming,
   must-carry and public, educational and government access channels). In
   the event of an agreement to lease capacity on a tier with less than 50
   percent penetration, the average implicit fee should be determined on
   the basis of subscriber revenues and programming costs for that tier
   alone. The license fees for affiliated channels used in determining the
   average implicit fee shall reflect the prevailing company prices
   offered in the marketplace to third parties. If a prevailing company
   price does not exist, the license fee for that programming shall be
   priced at the programmer's cost or the fair market value, whichever is
   lower. The average implicit fee shall be based on contracts in effect
   in the previous calendar year. The implicit fee for a contracted
   service may not include fees, stated or implied, for services other
   than the provision of channel capacity (e.g., billing and collection,
   marketing, or studio services).

   (f) The maximum commercial leased access rate that a cable operator may
   charge for full-time channel placement as an a la carte service is the
   highest implicit fee on an aggregate basis for full-time channel
   placement as an a la carte service.

   (g) The highest implicit fee on an aggregate basis for full-time
   channel placement as an a la carte service shall be calculated by first
   determining the total amount received by the operator in subscriber
   revenue per month for each non-leased access a la carte channel on its
   system (including affiliated a la carte channels) and deducting the
   total amount paid by the operator in programming costs (including
   license and copyright fees) per month for programming on such
   individual channels. This calculation will result in implicit fees
   determined on an aggregate basis, and the highest of these implicit
   fees shall be the maximum rate per month that the operator may charge
   the leased access programmer for placement as a full-time a la carte
   channel. The license fees for affiliated channels used in determining
   the highest implicit fee shall reflect the prevailing company prices
   offered in the marketplace to third parties. If a prevailing company
   price does not exist, the license fee for that programming shall be
   priced at the programmer's cost or the fair market value, whichever is
   lower. The highest implicit fee shall be based on contracts in effect
   in the previous calendar year. The implicit fee for a contracted
   service may not include fees, stated or implied, for services other
   than the provision of channel capacity (e.g., billing and collection,
   marketing, or studio services). Any subscriber revenue received by a
   cable operator for an a la carte leased access service shall be passed
   through to the leased access programmer.

   (h) The maximum commercial leased access rate that a cable operator may
   charge for part-time channel placement shall be determined by either
   prorating the maximum full-time rate uniformly, or by developing a
   schedule of and applying different rates for different times of the
   day, provided that the total of the rates for a 24-hour period does not
   exceed the maximum daily leased access rate.

   (i)(1) Cable system operators shall provide prospective leased access
   programmers with the following information within 15 calendar days of
   the date on which a request for leased access information is made:

   (i) How much of the operator's leased access set-aside capacity is
   available;

   (ii) A complete schedule of the operator's full-time and part-time
   leased access rates;

   (iii) Rates associated with technical and studio costs; and

   (iv) If specifically requested, a sample leased access contract.

   (2) Operators of systems subject to small system relief shall provide
   the information required in paragraph (h)(1) of this section within 30
   calendar days of a bona fide request from a prospective leased access
   programmer. For these purposes, systems subject to small system relief
   are systems that either:

   (i) Qualify as small systems under § 76.901(c) and are owned by a small
   cable company as defined under § 76.901(e); or

   (ii) Have been granted special relief.

   (3) Bona fide requests, as used in this section, are defined as
   requests from potential leased access programmers that have provided
   the following information:

   (i) The desired length of a contract term;

   (ii) The time slot desired;

   (iii) The anticipated commencement date for carriage; and

   (iv) The nature of the programming.

   (4) All requests for leased access must be made in writing and must
   specify the date on which the request was sent to the operator.

   (5) Operators shall maintain, for Commission inspection, sufficient
   supporting documentation to justify the scheduled rates, including
   supporting contracts, calculations of the implicit fees, and
   justifications for all adjustments.

   (j) Cable operators are permitted to negotiate rates below the maximum
   rates permitted in paragraphs (c) through (g) of this section.

   [ 78 FR 20256 , Apr. 4, 2013]

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