Sec. 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 a party is an ``affiliate'' for purposes 
of commercial leased access, the definitions contained in the notes to 
Sec. 76.501 shall be used, provided, however, that the single majority 
shareholder provision 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 the provisions of Note 2(a) to Sec. 76.501 regarding five (5) 
percent interest shall include all voting or nonvoting stock or limited 
partnership equity interest of five (5) percent or more. Actual working 
control, in whatever manner exercised, shall also be deemed a cognizable 
interest.
    (c) 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).
    (d) 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

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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).
    (e) 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.
    (f) 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.
    (g) 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.
    (h)(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 Sec. 76.901(c) and are owned by a 
small cable company as defined under Sec. 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

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

[ 58 FR 29753 , May 21, 1993, as amended at  61 FR 16400 , Apr. 15, 1996;  62 FR 11380 , Mar. 12, 1997]