Sec. 21.912  Cable television company eligibility requirements.

    (a) Nothwithstanding the provisions of Sec. 21.900 of this part, 
initial or modified authorizations for stations in the 2150-2162 MHz and 
2596-2680 MHz frequency bands may not be granted to a cable operator if 
a portion of the Multipoint Distribution Service (MDS) station's 
protected services area is within the portion of the franchise area 
actually served by the cable operator's cable system. 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.
    (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 Multipoint 
Distribution Service (MDS) station's protected services area is within 
the portion of the franchise area actually served by the cable 
operator's cable system.
    (c) Applications for new stations, station modifications, 
assignments or transfers of control by cable operators of stations in 
the 2150-2162 MHz and 2596-2680 MHz frequency bands shall include a 
showing that no portion of the protected service area of the MDS 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.


    Note 1: (A) In applying the provisions of this section an 
attributable ownership interest shall be defined by reference to the 
definitions contained in the notes to Sec. 76.501, provided however, 
that:

    (i) The single majority shareholder provisions of Note 2(b) to 
Sec. 76.501 and the limited partner insulation provisions of Note 2(g) 
to Sec. 76.501 shall not apply; and
    (ii) The provisions of Note 2(a) to Sec. 76.501 regarding five (5) 
percent interests shall include all voting or nonvoting stock or limited 
partnership equity interests of five (5) percent or more.
    (B) 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.
    (C) As used in this section ``cable operator'' shall have the same 
definition as in Sec. 76.5.

    Note 2: 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. Such waiver requests should be filed

[[Page 71]]

in accordance with special relief procedures set forth in Sec. 76.7.


    (d) The provisions of paragraphs (a) through (c) of this section 
will not apply to one MDS or MMDS 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 MDS channel in an MMDS 
protected service area for this purpose, and no more than one MDS 
channel in an MMDS protected service area 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 Common 
Carrier Bureau a cover letter explicitly identifying itself or its 
lessee 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 MDS channel 
per party and per area include any cable/MDS operations grandfathered 
pursuant to paragraph (f) of this section or cable/ITFS operations 
grandfathered pursuant to Sec. 74.931(e) of this chapter.\1\ The cable 
operator must demonstrate in its MDS/MMDS 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 an MDS 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.
    (e) Applications filed by cable television companies, or affiliates, 
for MDS 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 MDS 
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 
MDS/MMDS station licensees, conditional licensees, or applicansts 
executed on February 8, 1990, or thereafter, are invalid.
    (1) Applications filed by cable operators, or affiliates, for MMDS 
channels prior to February 8, 1990, will not be subject to the 
prohibitions of this section. Except as provided in paragraph (e)(2) 
below, applications filed on February 8, 1990, or thereafter will be 
returned. Lease arrangements between cable and MDS 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 (e)(2) below, leases between cable operators, or 
affiliates, and MDS/MMDS 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 MDS 
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/MMDs cross-ownership prohibitions. Lease 
arrangements between cable operators and MDS 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.
    (f) Interested persons may file a petition to deny an application 
filed pursuant to paragraph (d) of this section within 30 days after the 
Commission gives public notice that the application

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or petition has been filed. Petitions must be served upon the applicant, 
and must contain a complete and detailed showing, supported by 
affidavit, of any facts or considerations relied upon. The applicant may 
file an opposition to the petition to deny within 30 days after the 
filing of the petition, and must serve copies upon all persons who have 
filed petitions to deny. The Commission, after consideration of the 
pleadings, will determine whether the public interest, convenience and 
necessity would be served by the grant or denial of the application, in 
whole or in part. The Commission may specify other procedures, such as 
oral argument, evidentiary hearing or further written submission 
directed to particular aspects, as it deems appropriate.

    Notes: In these grandfathered situations, we will consider granting 
waivers to permit the use of a second MDS channel for the delivery of 
locally produced programming. Because allocating a second channel to 
this use would further reduce the channel capacity available for 
wireless cable service, we will require an applicant for the second 
channel to demonstrate, at a minimum, that it is ready and able to 
provide additional locally produced programming to area cable systems, 
and that no other practical means of delivering the programming are 
available to it. In considering requests for waiver, we will also take 
into account the competitive environment for the production and delivery 
of locally produced programming in the relevant markets.
[ 55 FR 46011 , Oct. 31, 1990, as amended at  56 FR 57818 , Nov. 14, 1991; 
 58 FR 42018 , Aug. 6, 1993;  58 FR 45064 , Aug. 26, 1993;  61 FR 15387 , Apr. 
8, 1996]