FEDERAL COMMUNICATIONS COMMISSION

FACT SHEET
June 2000

CABLE TELEVISION

INFORMATION BULLETIN

EVOLUTION OF CABLE TELEVISION

Cable television (also called CATV or community antenna television) was developed in the late
1940's for communities unable to receive TV signals because of terrain or distance from TV
stations. Cable television system operators located antennas in areas with good reception, picked
up broadcast station signals and then distributed them by coaxial cable to subscribers for a fee.

In 1950, cable systems operated in only 70 communities in the United States. These systems
served 14,000 homes. By October 1998 there were more than 10,700 systems serving more than
65 million subscribers in more than 32,000 communities. Cable systems are operating in every
state of the United States and in many other countries, including Austria, Canada, Belgium,
Germany, Great Britain, Italy, Japan, Mexico, Spain, Sweden and Switzerland.

Most cable systems are technically capable of offering between 36 and 60 channels. Channel
capacity in the industry has increased dramatically in recent years; some systems now offer in
excess of 100 channels. Most cable subscribers receive service from a system offering more than
54 channels.

The channel capacity of a cable system makes it possible for a cable television system operator
to provide many services. In addition to over-the-air television broadcast signals, most systems
also offer diverse program services, including, for example, news, weather, business information,
movies, sports, special entertainment features, and programming designed for specific audiences
such as children, women, and ethnic and racial groups. Within the past few years, some cable
systems have begun offering a full-range of telecommunications services, including high-speed
Internet access and local telephone service. High-speed Internet access allows subscribers to
connect to the Internet more than 100 times faster than the fastest standard analog modem.

Some cable operators also create their own local programming and provide access channels for
public and institutional uses. They also provide leased access channels for "rent" to those
wishing to show specific programs. Electronic banking, shopping, utility meter reading, and
home security are some of the home services that are possible using the two-way transmission
capabilities of cable television systems.

INITIAL JURISDICTION AND RULES

The Federal Communications Commission first established rules in 1965 for cable systems
which received signals by microwave antennas. In March 1966, the Commission established
rules for all cable systems (whether or not served by microwave). The Supreme Court affirmed
the Commission's jurisdiction over cable in United States v. Southwestern Cable Co., 392 U.S.
157 (1968). The Court ruled that "the Commission has reasonably concluded that regulatory
authority over CATV is imperative if it is to perform with appropriate effectiveness certain of its
responsibilities." The Court found the Commission needed authority over cable systems to assure
the preservation of local broadcast service and to effect an equitable distribution of broadcast
services among the various regions of the country.

In March 1972, new rules regarding cable television became effective. These rules required cable
television operators to obtain a certificate of compliance from the Commission prior to operating
a cable television system or adding a television broadcast signal. The rules applicable to cable
operators fell into several broad subject areas -- franchise standards, signal carriage, network
program nonduplication and syndicated program exclusivity, nonbroadcast or cablecasting
services, cross-ownership, equal employment opportunity, and technical standards. Cable
television operators who originated programming were subject to equal time, Fairness Doctrine,
sponsorship identification and other provisions similar to rules applicable to broadcasters. Cable
operators were also required to maintain certain records and to file annual reports with the
Commission concerning general statistics, employment and finances.

In succeeding years, the Commission modified or eliminated many of the rules. Among the more
significant actions, the Commission deleted most of the franchise standards in 1977, substituted a
registration process for the certificate of compliance application process in 1978, and eliminated
the distant signal carriage restrictions and syndicated program exclusivity rules in 1980. In 1983,
the Commission deleted its requirement that cable operators file financial information. In
addition, court actions led to the deletion of the pay cable programming rules in 1977.

1984 CONGRESSIONAL POLICY AND RULES

In October 1984, the U.S. Congress amended the Communications Act of 1934 by adopting the
Cable Communications Policy Act of 1984. The 1984 Cable Act established policies in the areas
of ownership, channel usage, franchise provisions and renewals, subscriber rates and privacy,
obscenity and lockboxes, unauthorized reception of services, equal employment opportunity, and
pole attachments. The new law also defined jurisdictional boundaries among federal, state and
local authorities for regulating cable television systems.

1992 CONGRESSIONAL POLICY AND RULES

Following the 1984 Cable Act, the number of households subscribing to cable television systems
increased, as did the channel capacity of many cable systems. However, competition among
distributors of cable services did not increase, and, in many communities, the rates for cable
services far outpaced inflation. Responding to these problems, Congress enacted the Cable
Television Consumer Protection and Competition Act of 1992. The 1992 Cable Act mandated a
number of changes in the manner in which cable television is regulated.
In adopting the 1992 Cable Act, Congress stated that it wanted to promote the availability of
diverse views and information, to rely on the marketplace to the maximum extent possible to
achieve that availability, to ensure cable operators continue to expand their capacity and program
offerings, to ensure cable operators do not have undue market power, and to ensure consumer
interests are protected in the receipt of cable service. The Commission has adopted regulations to
implement these goals.

1996 CONGRESSIONAL POLICY AND RULES

In adopting the Telecommunications Act of 1996, Congress noted that it wanted to provide a
pro-competitive, de-regulatory national policy framework designed to accelerate rapidly private
sector deployment of advanced telecommunications and information technologies and services to
all Americans by opening all telecommunications markets to competition. The Commission has
adopted regulations to implement the requirements of the 1996 Act and the intent of Congress.

WHAT IS CABLE TELEVISION?

Cable television is a video delivery service provided by a cable operator to subscribers via a
coaxial cable or fiber optics. Programming delivered without a wire via satellite or other
facilities is not "cable television" under the Commission's definitions.

A cable television system operator is any person or group of persons who provides cable
service over a cable system and directly or through one or more affiliates owns a significant
interest in such cable system, or who otherwise controls or is responsible for, through any
arrangement, the management and operation of such a cable system.

Cable service is the transmission to subscribers of video programming, or other programming

service. This definition includes any subscriber selection required in choosing video
programming or other programming service.

A cable system is a facility, consisting of a set of closed transmission paths and associated signal
generation, reception, and control equipment that is designed to provide cable service which
includes video programming and which is provided to multiple subscribers within a community.
This term does not include a facility that serves only to retransmit the television signals of one or
more television broadcast stations; a facility that serves subscribers without using any public
right-of-way; a facility of a common carrier which is subject in whole or in part, to the provisions
of Title II of the Communications Act, except that such facility shall be considered a cable
system to the extent such facility is used in the transmission of video programming directly to
subscribers; unless the extent of such use is solely to provide interactive on demand services; an
open video system; or any facilities of any electric utility used solely for operating its electric
utility system.

Cable services are often provided in tiers. A tier is a category of cable service or services
provided by a cable operator for which a separate rate is charged by the cable operator. There are
three types of cable service: basic service, cable programming service, and per-channel or per-
program (sometimes called pay-per-view) service. Basic service is the lowest level of cable
service a subscriber can buy. It includes, at a minimum, all over-the-air television broadcast
signals carried pursuant to the must-carry requirements of the Communications Act, and any
public, educational, or government access channels required by the system's franchise agreement.
It may include additional signals chosen by the operator. Basic service is generally regulated by
the local franchising authority (the local or state entity empowered by Federal, State, or local law
to grant a franchise to a cable company to operate in a given area). Cable programming service
includes all program channels on the cable system that are not included in basic service, but are
not separately offered as per-channel or per-program services. Pursuant to a 1996 federal law, the
rates charged for cable programming services tiers provided after March 31, 1999 are not
regulated. There may be one or more tiers of cable programming service.

Per-channel or per-program service includes those cable services that are provided as single-
channel tiers by the cable operator, and individual programs for which the cable operator charges
a separate rate Neither of these services is regulated by the local franchising authorities or the
Commission.

A local exchange carrier (LEC) is a telephone company which provides local telephone
service.

A multichannel video programming distributor is any person such as, but not limited to, a
cable operator, a multichannel multipoint distribution service, a direct broadcast satellite service,
or a television receive-only satellite program distributor, who makes available for purchase, by
subscribers or customers, multiple channels of video programming.

REGISTRATION OF A CABLE SYSTEM

Before commencing operation, a cable system operator must send the following information to
the Secretary of the Commission for each community to be served:

(1) The legal name of the operator, the entity identification or social security number, and
whether the operator is an individual, private association, partnership or corporation. If the
operator is a partnership, the legal name of the partner responsible for communications with the
Commission;

(2) The assumed name (if any) used for doing business in the community;

(3) The mailing address, including zip code, and the telephone number to which all
communications are to be directed;

(4) The date the system provided services to 50 or more subscribers;

(In order to comply with the requirements relating to aeronautical frequency usage, a system
must register in advance of providing service to any subscribers, so that a subsequent
aeronautical notification may be timely filed pursuant to § 76.615(b)).

(5) The name of the community or area served and the county in which it is located;
(6) The television broadcast signals to be carried;

(7) A certification that the applicant is not subject to a denial of federal benefits pursuant to
Section 5301 of the Anti-Drug Abuse Act of 1988, 21 U.S.C., 853a, or, in the case of a non-
individual applicant (for instance, a corporation, partnership, or other unincorporated
association), that no party to the application is subject to a denial of federal benefits pursuant to
that section; and

(8) For a cable system (or an employment unit) with six or more full-time employees, a
statement of the proposed community unit's equal employment opportunity program, unless such
program has previously been filed for the community unit or is not required to be filed based on
an anticipated number if fewer than six full-time employees.

A registration statement must be signed by an authorized representative of the cable television

company. The Commission issues a public notice setting forth the details of each registration
statement as it is received. The cable television operator is not required to serve the registration
statement on any party and may begin operation immediately upon filing the registration
statement. However, commencement of operation is entirely at the risk of the system operator. If
violations of the rules are subsequently discovered, appropriate regulatory sanctions, including
imposition of a monetary forfeiture and/or the issuance of a cease and/or desist order, may be
employed.

STATE AND LOCAL REGULATION OF CABLE SYSTEMS

A variety of laws and regulations for cable television exist at the state and local level. Some
states, such as Massachusetts, regulate cable television on a comprehensive basis through a state
commission or advisory board established for the sole purpose of cable television regulation. In
Alaska, Connecticut, Delaware, Nevada, New Jersey, Rhode Island, and Vermont, the agencies
are state public utility commissions. In Hawaii, regulation of cable television is the responsibility
of the Department of Regulatory Agencies. In other areas of the country, cable is regulated by
local governments such as a city cable commission, city council, town council, or a board of
supervisors. These regulatory entities are called "local franchising authorities." In addition, at
least 30 other states have one or more laws specifically applicable to cable television, dealing
most commonly with such subjects as franchising, theft of service, pole attachments, rate
regulation and taxation.

The 1992 Cable Act codified, and the Commission has adopted, a regulatory plan allowing local
and/or state authorities to select a cable franchisee and to regulate in any areas that the
Commission did not preempt. Local franchising authorities have adopted laws and/or regulations
in areas such as subscriber service requirements, public access requirements and franchise
renewal standards. Under the 1992 Cable Act, local franchising authorities have specific
responsibility for regulating the rates for basic cable service and equipment.

The Communications Act requires that no new cable operator may provide service without a
franchise and establishes several policies relating to franchising requirements and franchise fees.
The Communications Act authorizes local franchising authorities to grant one or more franchises
within their jurisdiction. However, a local franchising authority may not grant an exclusive
franchise, and may not unreasonably withhold its consent for new service. Included in the grant
of a franchise to a cable system are rights relating to the construction of the system, including the
local franchising authority's authorization to use public rights-of-way, easements, and to
establish the areas to be served. In addition, the law requires just compensation to property
owners who have suffered damages as a result of a cable operator's construction, operation,
installation, or removal of its cable television facilities. Moreover, franchising authorities are
required to ensure that access to cable service is not denied to any group of potential residential
cable subscribers on the basis of income class. Although the Communications Act also generally
precludes the regulation of cable systems as common carriers, it authorizes the Commission, to
require, if it chooses, the filing of informational tariffs for intrastate communications services,
other than cable service, which is provided by a cable system.

Franchising authorities may charge the cable operator a fee for the right to operate a cable system
in that franchise area; however, the franchise fee paid by the cable system can be no more than
five percent of its annual gross revenue. A franchising authority may use the money collected
from this fee for any purpose. A cable operator must list any applicable franchise fee as a
separate item on the subscriber's bill.

RATES FOR SERVICE

Prior to passage of the 1992 Cable Act, the Commission did not regulate rates for cable
television service. Rates for basic cable service were regulated by local franchising authorities.
The 1984 Cable Act permitted local franchising authorities to regulate only if the cable franchise
area was served off the air by fewer than three unduplicated broadcast signals; in 1991, the
Commission raised this number to six. In passing the 1992 Cable Act, Congress found rates for
cable services rose significantly following the 1984 Cable Act. Congress directed the
Commission to establish rules to govern rate regulation of cable service tiers offered by cable
systems that are not subject to effective competition. These rules are intended to improve service
to the cable subscriber and to ensure competitive rates.

Each service tier is regulated in a slightly different manner. Local franchising authorities are
responsible for regulating the basic service tier and, until March 31, 1999 (as provided by the
1996 Act), the Commission was responsible for regulating cable programming services tiers.
Both follow rules set by the Commission, which established a "benchmark" rate based on a
number of factors, including the number of subscribers, channels, and a number of other factors.
Pay-per-channel and pay-per-program services are not regulated.

In addition, under the 1996 Act, small cable operators are partially or wholly exempt from rate
regulation. A "small cable operator" is defined to include any operator that serves fewer than 1
percent of all subscribers in the United States and that is not affiliated with entities that have
gross annual revenues exceeding $250 million. In any franchise area where a small cable
operator serves fewer than 50,000 subscribers, rate regulation does not apply to the operator's
cable programming services tiers, or to its basic tier if it was the only tier subject to regulation as
of December 31, 1994.
Rates for a cable system's service tiers and associated equipment may be regulated only if the
cable system is not subject to effective competition. There are four separate tests to establish that
effective competition exists: (1) the households subscribing to a cable system constitute fewer
than 30 percent of the households in its franchise area; or (2) (a) there are at least two
unaffiliated multichannel video programming distributors (one of which may be the cable system
in question), with each offering comparable video programming to at least 50 percent of the
households in the franchise area, and (b) the households subscribing to all but the largest
multichannel video programming distributor exceed 15 percent of the households in the franchise
area; or (3) the franchising authority is itself a multichannel video programming distributor
offering video programming to at least 50 percent of the households in the franchise area; or (4)
a local exchange carrier or its affiliate (or any multichannel video programming distributor using
the facilities of such carrier or its affiliate) offers video programming services directly to
subscribers by any means (other than direct-to-home satellite services) in the franchise area, but
only if the video programming services so offered in that area are comparable to the video
programming services provided by the unaffiliated cable operator in that area. In the absence of a
demonstration to the contrary, a franchising authority may presume that a cable system is not
subject to effective competition.

In order to exercise its authority to regulate basic cable rates and equipment, a franchising
authority must be certified by the Commission. Unless notified otherwise by the Commission, a
franchising authority's certification becomes effective 30 days after it is filed with the
Commission. A franchising authority whose request for certification has been denied or revoked
may petition the Commission for re-certification. In addition, a franchising authority that lacks
the resources or legal authority to regulate basic cable service rates may petition the Commission
to assume regulation, but the franchising authority must affirmatively demonstrate its inability to
regulate to the Commission. The Commission will not intervene to regulate basic cable service
rates should a franchising authority choose not to seek certification or choose not to request that
the Commission assume jurisdiction. Appeals of local decisions will be heard by the
Commission or by state or local courts, depending upon the subject matter involved.

The 1996 Act modified the regulation of cable programming services and the rate complaint
process established under the 1992 Cable Act. Pursuant to the 1996 Act, the Commission's
authority to regulate the rates charged for cable programming services (those are the channels
that are not on cable system's basic tier and are not sold on a per-channel or per-program basis)
was terminated for services provided after March 31, 1999. Therefore, the rates charged for cable
programming services are determined by the cable company and the Commission does not have
the authority to review these rates or to investigate allegations that the rates are excessive.

The 1996 Act did not modify the local franchising authority's ability to regulate basic cable rates.
Therefore, complaints about basic cable rates should be filed with the franchise authority.

Rates for channels sold on a per-channel or per-program basis are not regulated.

CUSTOMER SERVICE GUIDELINES

Pursuant to the 1992 Cable Act, the Commission adopted federal guidelines which provide a
standard for improving the quality of customer service rendered by cable operators. These
guidelines provide minimum levels of service which should be provided by a cable operator. The
guidelines address issues such as the cable operator's communications with customers over the
telephone, installations, service problems, changes in rates or service, billing practices and
information that must be provided to all customers. Although the standards were issued by the
Commission, local franchising authorities are responsible for adopting and enforcing
customer service standards. Franchising authorities may also adopt more stringent or
additional standards with the consent of the cable operator or through enactment of a state
or municipal law.

Subscriber Calls to a Cable System

Under the federal guidelines, each cable system must maintain a local, toll-free or collect-call
telephone line available 24 hours a day, 7 days a week. During normal business hours, company
representatives must be available to respond to customer inquiries. After normal business hours,
(the hours during which most similar businesses in the community are open to serve customers),
the cable system may use an answering service or machine so long as messages are answered the
next business day. In addition, the cable system's customer service center and bill payment
locations must be conveniently located and must be open at least during normal business hours
and should include at least one night per week and/or some weekend hours.

A call to a cable system must be answered -- including time the caller is put on hold  -- within 30
seconds after the connection is made. If the call is transferred, the transfer time may not exceed
30 seconds. Also, cable system customers may receive a busy signal no more than three percent
of the time. Although no special equipment is required to measure telephone answering and hold
time, cable operators should use their best efforts in documenting compliance. These
requirements must be met 90 percent of the time, measured quarterly, under normal operating
conditions.

Installations, Service Interruptions and Service Calls

Federal guidelines state that standard installations -- which are those located up to 125 feet from
the existing distribution system -- must be performed within seven days after an order has been
placed. Except in situations beyond its control, the cable operator must begin working on a
service interruption no later than 24 hours after being notified of the problem. A service
interruption has occurred if picture or sound on one or more channels has been lost. The cable
operator must begin to correct other service problems the next business day after learning of
them. Cable operators may schedule appointments for installations and other service calls either
at a specific time or, at a maximum, during a four-hour time block during normal business hours.
Cable operators may also schedule service calls outside of normal business hours for the
convenience of the customer. No appointment cancellations are permitted after the close of
business on the business day prior to the scheduled appointment. If the cable installer or
technician is running late and will not meet the specified appointment time, he or she must
contact the customer and reschedule the appointment at the convenience of the subscriber. These
requirements concerning installations, outages and service calls must ordinarily be met at least
95 percent of the time, measured quarterly, under normal operating conditions.

Changes in Rates or Service and Billing Practices

Thirty days advance written notice (using any reasonable written means) must be given to
subscribers and local franchising authorities of any changes in rates, programming services or
channel positions, if the change is within the control of the cable operator. Cable operators are
not required to provide prior notice of any rate change that is the result of a regulatory fee,
franchise fee, or any other fee, tax, assessment, or charge of any kind imposed by a Federal
agency, State, or franchising authority on the transaction between the operator and the
subscriber. Cable system bills must be clear, concise and understandable, with full itemization.
Cable operators should respond to written complaints about billing matters within 30 days.
Refunds must be issued no later than either the customer's next billing cycle or 30 days following
resolution of the request, whichever is earlier, or upon the return of equipment when service is
terminated. Credits must be issued no later than the billing cycle following the determination that
a credit is warranted.

Information to Customers

The following information must be provided to customers at the time of installation and at least
annually to all subscribers and at any time upon request: products and services offered; prices
and options of programming services and conditions of subscription to programming and other
services; installation and service maintenance policies; instructions on how to use the cable
service; channel positions of programming carried on the system; and billing and complaint
procedures, including the address and telephone number of the local franchising authority's
office.

UNAUTHORIZED RECEPTION OF CABLE SERVICES

The 1984 Cable Act provides damages and penalties of up to two years in prison and/or $50,000
in fines to be assessed against anyone determined to be guilty either of the unauthorized
interception or reception of cable television services or of the manufacture or distribution of
equipment intended to be utilized for such a purpose. The Commission does not prosecute
unauthorized reception of cable services. Rather, cable operators aggrieved by a violation may
bring an action in a United States district court or in any other court of competent jurisdiction.
Knowledge of violations should be reported directly to the cable system.

SIGNAL CARRIAGE REQUIREMENTS

The 1992 Cable Act established new standards for television broadcast station signal carriage on
cable systems. Under these rules, each local commercial television broadcast station was given
the option of selecting mandatory carriage ("must-carry") or retransmission consent ("may
carry") for each cable system serving the same market as the commercial television station. The
market of a television station is established by its Area of Dominant Influence ("ADI"), as
defined by Arbitron and/or modified by the Commission. Every county in the country is assigned
to an ADI, and those cable systems and television stations in the same ADI are considered to be
in the same market. Upon the request of a television station or a cable system, the Commission
has the authority to change the ADI to which a station is assigned. As a result of Arbitron
abandoning the television research business, the Commission has determined that, effective
January 1, 2000, the market of a television station shall be its Designated Market Area ("DMA")
as determined by Nielsen Media Research.

Must-Carry/Retransmission Consent Election

Every three years, every local commercial television station has the right to elect either must-
carry or retransmission consent. The initial election was made on June 17, 1993, and was
effective on October 6, 1993. The next election occurred on October 1, 1996, and was effective
January 1, 1997. All subsequent elections will occur every three years (October 1 1999, to be
effective January 1, 2000; October 1, 2002, to be effective January 1, 2003; etc.).

Election of Must-Carry Status

Generally, if a local commercial television station elects must-carry status, it is entitled to insist
on cable carriage in its local market. Each cable system with more than 12 channels must set
aside up to one-third of its channel capacity for must-carry stations. For example, if a cable
system has 60 channels, it must set aside 20 of those channels for must-carry stations. If there are
25 stations in the market which elected must-carry, the cable operator may choose 20 to carry.
On the other hand, if only 15 stations elected must-carry in the market, the cable system would
have to carry all 15 of these stations. A must-carry station has a statutory right to a channel
position, usually its over-the-air channel number, or another channel number on which it has
historically been carried.

Retransmission Consent Election

A cable system is not permitted to carry a commercial station without the station's consent.
Therefore, if the local commercial television station elects retransmission consent, the cable
system must obtain that station's consent prior to carrying or transmitting its signal. Except for
"superstations," a cable system may not carry the signal of any television broadcast station that is
not located in the same market as the cable system without that broadcaster's consent.
Superstations are transmitted via satellite, usually nationwide, and the cable system may carry
such stations outside their local market without their consent. The negotiations between a
television station and a cable system are private agreements which may, but need not, include
some form of compensation to the television station such as money, advertising time or
additional channel access.

Noncommercial Educational Television Stations

Every cable system across the country must carry at least one local noncommercial educational
("NCE") station. A noncommercial station which places a Grade B signal over a cable system's
principal headend, or whose city of license is within fifty miles of the cable system's principal
headend, is considered "local" for this purpose. Cable systems with more than 36 channels may
be required to carry all local noncommercial educational television stations which request
carriage. Any cable system operating in a market where no local NCE station is available is
required to import one NCE station.

Low Power Television Stations

The 1992 Cable Act provides mandatory carriage for "qualified" low power television stations
("LPTV") in certain situations. A LPTV station has to meet certain qualifications specified in the
Act and incorporated into the Commission's Rules, before it is qualified for the right to must-
carry. If a LPTV is qualified, it may assert must-carry rights, and, provided the cable operator
has not met its mandatory carriage obligations, the LPTV station must be carried. Otherwise, a
LPTV station must negotiate for carriage under the retransmission consent provisions or under
the leased commercial access provisions.

Radio Programming

While the 1992 Cable Act's must-carry provisions only apply to local commercial and
noncommercial educational television stations, the Act's retransmission consent provisions apply
to all commercial broadcast stations. Many cable systems carry radio stations as an "all-band"
offering, meaning that as with any standard radio receiver, all stations which deliver a signal to
the antenna are carried on the system. The Commission only requires consent from those radio
stations within 57 miles of the cable system's receiving antenna. Thus, even though a cable
operator's antenna may pick up a station's signal, operators are not required to obtain the consent
of stations outside of the 57 mile zone unless the station affirmatively seeks retransmission
consent.

Manner of Carriage

Subject to the Commission's network nonduplication, syndicated exclusivity and sports

broadcasting rules, cable systems must carry the entirety of the program schedule of every local
television station carried pursuant to the mandatory carriage provisions or the retransmission
consent provisions of the 1992 Cable Act. A broadcaster and a cable operator may negotiate for
partial carriage of the signal where the station is not eligible for must carry rights, either because
of the station's failure to meet the requisite definitions or because the cable system is outside the
station's market. In those situations where the carriage in the entirety rule applies, the primary
video and accompanying audio of all television broadcast stations must be carried in full, without
alteration or deletion of their content. Ancillary services such as closed captioning and program-
related material in the vertical blanking interval must be carried. However, other information
contained in the vertical blanking interval need not be carried.

Syndicated Program Exclusivity Protection

With respect to non-network programming, cable systems that serve at least 1,000 subscribers
may be required, upon proper notification, to provide syndicated protection to broadcasters who
have contracted with program suppliers for exclusive exhibition rights to certain programs within
specific geographic areas, whether or not the cable system affected is carrying the station
requesting this protection. However, no cable system is required to delete a program broadcast
by a station which is either significantly viewed or which places a Grade B or better contour over
the community of the cable system.

Network Program Nonduplication

Commercial television station licensees are entitled to protect the network programming they
have contracted for by exercising nonduplication rights against more distant television broadcast
stations carried on a local cable television system that serves more than 1,000 subscribers.
Commercial broadcast stations may assert these nonduplication rights regardless of whether or
not their signals are being transmitted by the local cable system and regardless of when, or if, the
network programming is scheduled to be broadcast. Generally, the zone of protection for such
programming cannot exceed thirty-five miles for stations licensed to a community in the
Commission's list of top 100 television markets or fifty-five miles for stations licensed to
communities in smaller television markets. In addition, a cable operator does not have to delete
the network programming of any station which the Commission has previously recognized as
significantly viewed in the cable community.

Sports Programming Blackouts

A cable system located within 35 miles of the city of license of a broadcast station where a
sporting event is taking place may not carry the live television broadcast of the sporting event on
its system if the event is not available live on a local television broadcast station, if the holder of
the broadcast rights to the event, or its agent, requests such a blackout. The holder of the rights is
responsible for notifying the cable operator of its request for program deletion at least the
Monday preceding the calendar week during which the deletion is desired. If no television
broadcast station is licensed to the community in which the sports event is taking place, the 35-
mile blackout zone extends from the broadcast station's licensed community with which the
sports event or team is identified. If the event or local team is not identified with any particular
community (for instance, the New England Patriots), the 35-mile blackout zone extends from the
community nearest the sports event which has a licensed broadcast station. The sports blackout
rule does not apply to cable television systems serving less than 1,000 subscribers, nor does it
require deletion of a sports event on a broadcast station's signal that was carried by a cable
system prior to March 31, 1972. The rule does not apply to sports programming carried on
nonbroadcast program distribution services such as ESPN. These services, however, may be
subject to private contractual blackout restrictions.

For example, if the Boston Celtics are playing the Atlanta Hawks at Boston Gardens in a
National Basketball Association ("NBA") game, and the game is not broadcast live on a Boston
television station, and the NBA sends a blackout notice to cable systems within 35 miles of
Boston, those systems will have to delete the game which is carried on their systems by
"superstation" WTBS from Atlanta. If a sports event were carried, for example, on ESPN or a
regional subscription sports network, any blackout would be the result of a private contractual
agreement between the holder of the rights to the event and the sports network.

Copyright
The Copyright Act requires cable operators to obtain a compulsory license for the carriage of
programming. The cable operator pays the fee to the copyright office, for distribution to the
copyright holders of the program material. The fee for each cable system is based on the system's
"gross receipts" from the carriage of broadcast signals and the number of "distant signal
equivalents" a term identifying non-network programming from distant television stations
carried by the system.

Under the Commission's must-carry rules, a cable operator is not required to carry a signal of a
television broadcast station if that station would be considered a distant signal under the
Copyright Act, unless the station agrees to indemnify the cable operator for any increased
copyright liability resulting from carriage of the signal.

The Copyright Act requires a cable operator to file semi-annually a statement of account,
including information about system revenue and signal carriage as well as the royalty fee
payment. For further information regarding copyright regulation, contact the Licensing Division,
Copyright Office, Library of Congress, Washington, DC 20557; telephone (202) 707-8380.

Program Content Regulations

Cable television system operators generally make their own selection of channels and programs
to be distributed to subscribers in response to consumer demands. The Commission does,
however, have rules in some areas that are applicable to programming -- called "origination
cablecasting" that is subject to the editorial control of the system operator. The rules generally do
not apply to the contents of broadcast signals or access channels over which the system operator
has no editorial control.

Cable subscribers may request a "lockbox" from cable operators to prevent viewing of any
channel on which objectional programming may appear. Cable operators are required to make
lockboxes available for sale or lease to customers who request them. Lockboxes can also be
purchased from other commercial distributors.

The 1996 Act included several provisions that were designed to increase the subscriber's ability
to control the programming coming into the home. Section 551 of the 1996 Act required
representatives of the broadcast and cable television industries to develop, within one year after
enactment of the 1996 Act, voluntary rules to rate programming that contains violence and
sexual or other indecent material. The industry proposed the TV Parental Guidelines and the
proposal was approved by the Commission on March 12, 1998. The TV Parental Guidelines
(labels and content indicators and respective meanings) are:

TV-Y -- This program is designed to be appropriate for all children.

TV-Y7 -- This program is designed for children age 7 and above. Note: For those programs
where fantasy violence may be more intense or more combative than other programs in this
category, such programs will be designated TV-Y7-FV.

TV-G -- Most parents would find this program suitable for all ages.
TV-PG -- This program contains some material that parents may find unsuitable for younger
children. The program contains one or more of the following: moderate violence (V), some
sexual situations (S), infrequent coarse language (L), or some suggestive dialogue (D).

TV-14 -- This program contains some material that many parents would find unsuitable for
children under 14 years of age. This program contains one or more of the following: intense
violence (V), intense sexual situations (S), strong coarse language (L), or intensely suggestive
dialogue (D).

TV-MA -- This program is specifically designed to be viewed by adults and therefore may be
unsuitable for children under 17. This program contains one or more of the following: graphic
violence (V), explicit sexual activity (S), or crude indecent language (L).

The ratings icons and associated symbols appear for 15 seconds at the beginning of all rated
programming. Sports, news, commercials, promotions and unedited movies with a Motion
Picture Association of America rating that are aired on premium cable channels are exempt from
these ratings.

The 1996 Act also required that television receivers manufactured or imported for use in the
United States be equipped with circuitry that is capable of identifying all programs with a
common rating and blocking individual channels during selected time periods. This is the
circuitry commonly referred to as the "V-chip." This requirement applies to all television sets
with a least a 13 inch screen. Manufacturers of such equipment were required to include a v-chip
on at least 50% of their products by July 1, 1999 and on the remaining 50% by January 1, 2000.
The Commission also required that personal computers that include a television tuner and a 13
inch or larger monitor must also include the v-chip. However, the requirement to rate
programming applies only to video transmissions that are delivered to the computer by using the
television tuner. Video transmissions delivered over the Internet or via computer networks are
not required to be rated.

Section 504 of the 1996 Act required a cable operator to fully scramble or block the audio and
video portions of programming services not specifically subscribed to by a household. The cable
operator must fully scramble or block the programming in question upon the request of the
subscriber and at no charge to the subscriber. In addition, Section 505 states that cable operators
or other multichannel video programming distributors who offer sexually explicit programming
or other programming that is indecent on any channel(s) primarily dedicated to sexually-oriented
programming must fully scramble or block both the audio and video portions of the channels so
that someone who does not subscribe to the channel does not receive it. Until a multichannel
video distributor complies with this provision, the distributor cannot provide the programming
during hours when a significant number of children are likely to view it.

On March 4, 1996, the Commission adopted an Order and Notice of Proposed Rulemaking (FCC
96-84) establishing interim rules to implement Section 505 of the 1996 Act. The interim rules
established the hours of 6:00 a.m. to 10:00 p.m. as those hours when a significant number of
children are likely to have access to and view the programming. However, before the rules could
take effect, Section 505 was challenged in the courts and the Commission was subsequently
prevented from enforcing the rules because of a temporary restraining order and a number of
stays granted by the United States District Court for the District of Delaware. On March 24,
1997, the United States Supreme Court affirmed the District Court's decision to deny the request
for a preliminary injunction of section 505. Thus, on April 17, 1997, the Commission adopted an
Order establishing May 18, 1997 as the effective date of our rules implementing section 505.
However, on December 28, 1998, a federal court in Delaware issued a decision (Playboy
Entertainment Group v. U.S.) which determined that Section 505 is unconstitutional. Therefore,
the Commission's rules based on Section 505 could not be enforced. An appeal of this decision
was filed with the U.S. Supreme Court. On May 22, 2000, the U.S. Supreme Court also
determined that Section 505 is unconstitutional. Thus, the Commission’s rules implementing
Section 505 cannot be enforced. However, persons who wish to prevent the viewing of such
programming may do so by obtaining a “lockbox” or by exercising the options provided in
Section 504 of the 1996 Act.

Finally, Section 506 of the 1996 Cable Act allows cable operators to refuse to transmit any
public access or leased access program which contains obscenity, indecency, or nudity. On June
28, 1996, the U.S. Supreme Court issued a decision (Denver Area Educational
Telecommunications Consortium, Inc. v. FCC) which held that cable operators may decline to
carry indecent programming on leased access channels, but cannot exercise the same control
over programming on public access channels.

Political Cablecasting

Once a cable system allows a legally qualified candidate to use its facilities, it must afford "equal
opportunities" to all other candidates for that office to use its facilities. The cable system may not
censor the content of the candidate's "equal opportunity" material in any way, and may not
discriminate between candidates in practices, regulations, facilities or services rendered pursuant
to the equal opportunities rules. Candidate appearances which are exempt from the "equal
opportunities" rules include appearances on a bona fide newscast, bona fide news interview,
bona fide news documentary, or on-the-spot coverage of a bona fide news event.

Cable television systems may charge political candidates only the "lowest unit charge" of the
system for the same class and amount of time for the same period, during the 45 days preceding
a primary or runoff election and the 60 days preceding a general or special election. Candidates
should be charged no more per unit than the system charges its most favored commercial
advertisers for the same classes and amounts of time for the same periods. Information
concerning the rates, terms, conditions and all discounts and privileges offered to commercial
advertisers should be disclosed and made available to candidates.

Fairness Doctrine

Prior to the Fairness Doctrine's repeal in 1987, cable television system operators engaging in
origination cablecasting were required to afford reasonable opportunity for the discussion of
conflicting views on controversial issues of public importance. Although this requirement still
appears in the Commission's rules, the fairness doctrine in its broadcast application and from
which the cable rules is derived, is no longer enforced as a consequence of a Commission
proceeding and a court decision.

Personal Attacks

When an attack is made upon the honesty, character, integrity, or like personal qualities of an
identified person or group during origination cablecasting concerning controversial issues of
public importance, the cable system must give the following to the person or group attacked
within one week: (1) notification and identification of the cablecast, (2) a script, tape or accurate
summary of the attack, and (3) an offer of a reasonable opportunity to respond over the cable
facilities. The rule exempts attacks by political candidates and their associates on other
candidates, including attacks that occur during "uses" by candidates such as attacks made during
bona fide newscasts, bona fide news interviews and on-the-spot coverage of bona fide news
events; and attacks on foreign groups or foreign public figures.

Political Editorials

Once a cable system carries an editorial endorsing or opposing a legally qualified political
candidate, it must give opposing candidates (or the candidate opposed in the editorial) an
opportunity to respond. Within 24 hours after the political editorial, the cable system must give
to the other candidates or the candidate opposed the following: (1) notification and identification
of the editorial, (2) a script or tape of the editorial, and (3) an offer of a reasonable opportunity
for the candidate or his or her spokesman to respond over the cable facilities. Where an editorial
is cablecast within 72 hours prior to election day, the cable system is obliged to give notice and
an opportunity to respond sufficiently far in advance to enable the candidate opposed or not
endorsed a reasonable opportunity to prepare a response and to present it in a timely fashion.

Lottery Information

Like broadcasting stations, cable systems are generally prohibited from transmitting information
or advertisements concerning lotteries or other schemes offering prizes dependent upon chance
in exchange for consideration. The rule exempts information about a state lottery cablecast by a
system located in that state or another state which conducts a state lottery, or by a system which
is integrated with a cable system in such a state, if it is technically unable to terminate the
transmission to other states. It also permits the cablecast of information about a lottery or similar
scheme that is not prohibited by the state in which it is conducted and which is (1) conducted by
a not-for-profit or governmental organization or (2) conducted by a commercial organization and
which is clearly occasional and ancillary to the organization's primary business. Information
about gaming conducted pursuant to the Indian Gaming Regulatory Act is also exempt.

On June 14, 1999, the U.S. Supreme Court issued a decision (Greater New Orleans
Broadcasting Association, Inc. v. U.S.) which held that this prohibition could not be applied to
the advertisements of lawful private casino gambling that are broadcast on radio or television
stations located in Louisiana, where such gambling is legal.

Sponsorship Identification
The sponsorship identification rule requires the identification of the sponsor of any origination
cablecasting which is presented in exchange for money, service or "other valuable
consideration." All political spots must contain a visual sponsorship identification in letters equal
to at least four percent of the screen height and which are on the air for at least four seconds.
Where the cablecast advertises commercial products or services, a mention of the corporate or
trade name is usually considered sufficient. Sponsorship identification announcements must also
be made before and after certain material if inducements are given to the cable system in
exchange for cablecasting the material.

Commercial Limits in Children's Programs

Regulations implemented pursuant to the Children's Television Act of 1990 restrict the amount
of commercial matter that cable operators may cablecast on programs originally produced and
broadcast primarily for children 12 years old and younger. Cable operators may transmit no more
than 10.5 minutes of commercial matter per hour during children's programming on weekends
and no more than 12 minutes of commercial matter per hour on weekdays. Cable systems must
maintain records available for public inspection which document compliance with the rule.

Cigarette Advertising

Advertisements for cigarettes, little cigars and smokeless tobacco are prohibited on any medium
of electronic communication subject to the jurisdiction of the Federal Communications
Commission. Laws against these types of advertising have criminal penalties and are
administered by the U.S. Department of Justice rather than by the Commission.

ACCESS AND ORIGINATION CHANNELS

Access channels typically provide community-oriented programming, such as local news, public
announcements and government meetings. They are usually programmed by individuals or
groups, on either public, educational or governmental access channels or on commercial leased
access channels.

Origination channels are usually programmed by the cable system and may include many types
of specialized program packages such as movies, sports, national news and public affairs, feature
entertainment, children's programming or programming for specific ethnic or other minority
groups.

The Commission's rules do not require cable operators to originate programming. Operators who
originate programming, however, are required to comply with the Commission's program content
rules.

Channels For Public, Educational, Or Governmental Use

Under the 1984 Cable Act, local franchising authorities may require that cable operators set aside
channels for public, educational, or governmental ("PEG") use. In addition, franchising
authorities may require cable operators to provide services, facilities, and equipment for the use
of these channels. Many cable systems include several PEG channels.

In general, cable operators are not permitted to control the content of programming on PEG
channels. Cable operators may impose non-content-based requirements, such as minimum
production standards, and may mandate equipment user training.

PEG channel capacity which is not in use for its designated purpose may, with the franchising
authority's permission, be used by the cable operator to provide other services. Under certain
conditions, a franchising authority may authorize the use of unused PEG channels to carry low
power commercial television stations and local noncommercial educational television stations
that are required by law.

Information relating to PEG channels may be obtained directly from the cable system or the local
franchising authority.

Leased Commercial Access

The statutory framework for commercial leased access was established by the 1984 Act and
amended by the 1992 Cable Act. The 1984 Cable Act established leased access to assure access
to the channel capacity of cable systems by parties unaffiliated with the cable operator who want
to distribute video programming free of the editorial control of the cable operator. Channel set-
aside requirements were established in proportion to a system's total activated channel capacity,
in order to "assure that the widest possible diversity of information sources are made available to
the public from cable systems in a manner consistent with the growth and development of cable
systems." A cable system operator was permitted to use any unused leased access channel
capacity for its own purposes, until such time as a written agreement for a leased channel use
was obtained. Each system operator subject to this requirement was to establish the "price, terms,
and conditions of such use which are at least sufficient to assure that such use will not adversely
affect the operation, financial condition, or market development of the cable system."

The only exception to the leased commercial access channel set-aside provides that up to 33
percent of a system's designated leased commercial access channel capacity may be used for
qualified minority or educational programming from sources that may or may not be affiliated
with the cable operator. The qualified minority or educational source may be affiliated with the
operator.

The 1992 Cable Act amendments broadened the statutory purpose to include "the promotion of
competition in the delivery of diverse sources of video programming," and the Commission was
provided with expanded authority: (1) to determine the maximum reasonable rates that a cable
operator may establish for leased access use, including the rate charged for the billing of
subscribers and for the collection of revenue from subscribers by the cable operator for such use;
(2) to establish reasonable terms and conditions for leased access, including those for billing and
collection; and (3) to establish procedures for the expedited resolution of leased access disputes.
The legislative history of the 1992 amendments expresses concern that some cable operators may
have established unreasonable terms or may have had financial incentives to refuse to lease
channel capacity to potential leased access users based on anticompetitive motives, especially if
the operator had a financial interest in the programming services it carried.

Any person aggrieved by the failure or the refusal of a cable operator to make commercial
channel capacity available or to charge rates as required by Commission rules may file a petition
for relief with the Commission within 60 days of the alleged violation. In order to merit relief,
the petition must show by clear and convincing evidence that the operator violated the leased
access statutory or regulatory provisions or otherwise acted unreasonably or in bad faith. Relief
may be in the form of refunds, injunctive relief or forfeitures. The Commission encourages
parties to use alternative dispute resolution procedures such as settlement negotiation,
conciliation, facilitation, mediation, fact finding, mini-trials and arbitration. The 1992 Cable Act
provides for both judicial and Commission review of leased commercial access disputes.

EQUAL EMPLOYMENT OPPORTUNITY ("EEO")

The Communications Act of 1934 and the Commission's rules prohibit cable operators, satellite
master antenna television systems serving 50 or more subscribers and multichannel video
programming distributors ("MVPDs") including, wireless cable operators and certain satellite
distributors, from discriminating against any job applicant or employee because of the person's
race, color, religion, national origin, age or gender. The law also requires that these entities
establish, maintain and execute a continuing program to assure equal employment opportunity.
Key areas which this program must address include: recruitment of minority and female
applicants for job vacancies; promotions of minorities and women to positions of greater
responsibility; and assessment of the system's EEO program.

The Commission monitors compliance with the EEO rules on a yearly basis. Entities are subject
to an annual certification review which begins when employment units (i.e., local cable systems,
MVPDs and their headquarters offices) with six or more full-time employees file an Annual
Employment Report (FCC Form 395-A or 395-M) with the Commission by May 1st of each
year. The purpose of this review is to determine whether the employment units are engaging in
good faith EEO efforts. The Form 395-A or 395-M requests information about the entity's EEO
program as well as employee profiles, hiring and promotion data, and job title information, by
race and gender, for all employees classified among 15 job categories.

The Commission also requires operators to respond to selected questions from a Supplemental
Investigation Sheet ("SIS") which requires more detailed information regarding the operator's
EEO efforts and employee job classifications. SISs are sent out at least once every five years and
responses to them allow the Commission to evaluate in greater detail each employment unit's
employment practices, including the accuracy of its job classifications.

In addition, the Commission conducts random on-site audits. Audits are usually conducted by
Commission staff and consist of interviews and a review of documents and employment
practices at the main office or work-site of the employment unit.

The certification process consists of an examination of the information submitted on the Form
395-A or 395-M, and, if applicable, an SIS response or results of an audit. Any additional
information that may have been supplied by the operator or requested by the Commission is also
considered. Finally, the Commission notes any final decisions reached regarding complaints of
discrimination by government agencies and courts established to enforce anti discrimination
laws. If the data indicates compliance with the EEO requirements, a certification of compliance
is issued for that year. If the data raises questions about the employment unit's efforts, additional
information is requested.

If an operator violates the cable EEO rules, the Commission has various remedies and sanctions
available. Based on the severity and frequency of the violation, the Commission may issue a
letter of caution or decertify a unit. If a unit is decertified, the Commission may also impose
reporting conditions, impose a fine, or suspend the unit's Cable Television Relay Service
("CARS") license until the violation is corrected. The Commission may also communicate its
adverse findings to the local franchising authority.

EEO complaints may be filed by an employee, an applicant for employment or any other
interested person. An interested person is an individual who lives within the cable system's
franchise area. Complaints must be in writing, sworn and signed and must allege facts raising a
prima facie case of non-compliance with the EEO provisions. To be timely, a complaint must be
filed within 180 days of the alleged EEO violation.

In processing EEO complaints, the Commission first determines whether the complaint falls
within the jurisdiction of the Equal Employment Opportunity Commission or a comparable state
or local agency. If it does, the complaint is referred to the appropriate agency and the
Commission defers action on the matter until a final decision is reached. If the matter is not
referred, the Commission processes the complaint and determines what action or inquiry, if any,
is appropriate.

Anyone wishing to file a complaint should write to: Federal Communications Commission, Mass
Media Bureau, Enforcement Division, EEO Branch, 445 12th Street, S.W., Washington, D.C.
20554.

To receive more information about complaint procedures or the cable EEO provisions in general,
please contact the EEO Branch at (202) 418-1450.

In 1998, a federal court issued a decision (Lutheran Church - Missouri Synod v. FCC) which
held that the Commission's EEO requirements for broadcast stations were unconstitutional.
However, the court made clear that other requirements of this type could be constitutional and
remanded the issue to the Commission. Pursuant to the court's remand, the Commission issued a
Notice of Proposed Rulemaking which sought comment on proposals to modify the broadcast
EEO rules in a manner that would be consistent with the court's decision. Although the court
decision did not specifically address the cable EEO rules, the Notice proposed to modify the
cable EEO rules to conform the cable rules to any new broadcast EEO rules. On January 20,
2000, the Commission adopted a Report and Order (FCC 00-20) in which it modified its EEO
policies. The new policies became effective on April 17, 2000. However, the Commission's
revies EEO policies have been challenged in federal court. The court's decision is pending.
For further information on the Commission's Equal Employment Opportunity rules, consult the
following: 47 U.S.C. §554; 47 C.F.R. §§76.71 - 76.79; Report and Order in MM Docket No. 92-
261, 8 FCC Rcd 5389 (1993); Report and Order in MM Docket No. 85-61, 102 FCC 2d 562
(1985).

CABLE SYSTEM OWNERSHIP

The Commission rules restrict the ability of television broadcast stations, national television
networks, MMDS, and SMATV systems to own or control interests in cable systems. These rules
also restrict the ownership interest of cable operators and their ability to own or control video
programming services. While there are no prohibitions on foreign ownership of cable television
systems, foreign governments or their representatives may not own CARS stations.

Cable/Telephone Cross-Ownership Restrictions

Pursuant to the 1984 Act, the Commission's rules placed restrictions on telephone companies
providing cable television service. In general, telephone companies were prohibited from
providing video programming directly to subscribers within their telephone service areas.
However, telephone companies were allowed to provide cable television service in rural areas
(defined as places of fewer than 2500 persons), or where the telephone company was able to
show that cable service could not exist unless provided by the telephone company. Waivers
could also be granted for good cause.

The 1996 Act established various options for local exchange carriers to provide video
programming to subscribers. They are: common carrier transport, wireless ("MMDS"), cable,
and open video systems. The Commission has structured a streamlined regulatory format for
open video systems that allows open video system operators to offer their own programming and
affords independent programmers the ability to reach subscribers directly. By encouraging entry
into the video programming distribution market, the open video system framework will provide
competitors to cable operators, direct broadcast satellite systems and wireless cable providers.
Open video systems will advance competition in two areas of the video market, distribution and
carriage. In the latter, open video systems will afford broad capability for video programming
providers to reach subscribers directly, independent of the open video system operator.

Cable/MMDS Cross-Ownership

Commission rules and the Communications Act provisions generally preclude common
ownership of a cable television system and a Multichannel Multipoint Distribution Service
("MMDS") system that serves the same area. However, following passage of the 1996 Act, this
restriction does not apply to cable systems subject to effective competition in the relevant
franchise area.

With MMDS, often referred to as "wireless cable," an omnidirectional microwave signal is sent
from a central transmission tower to receiving microwave antennas. The signals involve "line of
sight" transmission and, as a result, the signals are subject to degradation when obstructed. On
the other hand, absent obstacles, the signals can travel up to 70 miles, providing television
pictures comparable to those received through cable television. The microwave signal is a high
frequency signal which is converted for television use by a converter located on the subscriber's
receiving antenna.

Vertical Ownership Restrictions

To prevent vertically integrated cable systems from unduly favoring their affiliated programmers
over non-affiliated program providers, the Commission imposes a 40% limit on the number of
channels that can be occupied by video programmers affiliated with the particular cable system.
In this context, vertical integration refers to common ownership of both cable systems and
program networks, channels, services or production companies. For purposes of determining
common ownership, all interests of 5% or greater are recognized unless there is no possibility of
such interests exerting control or influence over the cable system.

National Subscriber Limits

Section 613 of the Communications Act requires the Commission to prescribe rules establishing
reasonable limits on the number of cable subscribers served by an individual cable operator
through its ownership or control of local cable systems. In 1993, the Commission adopted rules
prohibiting any person from reaching, through owned or controlled cable systems, more than
30% of all homes passed nationwide by cable. In 1999, the Commission amended this rule to
prohibit any person from serving, through owned or controlled cable systems, more than 30% of
all multiple video programming distribution ("MVPD") subscribers nationwide. The
Commission concluded that actual subscriber numbers, rather than cable homes passed, more
accurately reflected the market power of a multiple system operator ("MSO"). In addition, given
that DBS and other non-cable providers have a growing impact on the market, the Commission
decided to take into account the number of all MVPD subscribers, rather than cable subscribers
alone. For cable operators, the 30% limit includes only those cable subscribers that any one MSO
serves through incumbent cable franchises. An "incumbent cable franchise" is one that was in
existence on October 20, 1999, and includes all subsequent owners of the franchise. In
determining the 30% limit, the MSO must include all subscribers served by the incumbent cable
franchise, regardless of when the subscriber actually purchased cable service. By limiting the
horizontal concentration of the cable industry, the Commission seeks to prevent the
concentration of local cable systems into the hands of only a few large operators and to limit the
ability of multiple system operators to exercise undue influence in the program acquisition
market.

The U.S. District Court for the District of Columbia ruled in Daniels Cablevision, Inc. v. United
States, 835 F. Supp. 1 (1993), that governmentally-mandated subscriber limits are
unconstitutional under the First Amendment. In light of this ruling and in order to avoid
confusion, the Commission stayed the effective date of the subscriber-limit rules and determined
that the rules would become effective upon the issuance of a court decision that upheld Section
613. On May 19, 2000, the U.S. Court of Appeals for the D.C. Circuit ruled in Time Warner v.
U.S. that Section 613 is constitutional. This court decision means that the Commission’s rules
imposing a national limit on the number of cable subscribers that may be served by a single cable
operator may be enforced. The Commission has determined that affected parties must comply
with these rules no more than 180 days following the issuance of the court decision.

TECHNICAL REQUIREMENTS

Cable systems distribute TV signals either through optical fiber or through coaxial cable strung
on existing poles owned by telephone or electric utility companies. Cable operators also may use
their own poles, place their cable underground or use transmission facilities or rights-of-way
owned or controlled by a utility or municipality. Some may use combinations of these
arrangements. Sometimes conflicts arise between cable television systems and utility companies
over pole attachment issues, particularly the rates for use of utility facilities. The
Communications Act Amendments of 1978 authorized the Commission to resolve such disputes
by regulating the rates, terms, and conditions for cable TV pole attachments to ensure they are
just and reasonable unless a state regulates such factors.

In 1985, the Commission adopted rules requiring each state to certify that: it has issued, and
made effective, rules implementing the state's regulatory authority over pole attachments; its
rules and regulations include a specific methodology for regulating pole attachments, and; the
methodology has been made publicly available in the state. Local pole attachment requirements
may be obtained from local franchising authorities. The amended rules also require that
jurisdiction revert to the Commission unless a state acts on a complaint in a timely fashion. The
Commission periodically issues public notices listing those states which have filed pole
attachment regulation certifications.

The 1996 Act made the existing maximum just and reasonable pole attachment rate formulas
temporary applicable to telecommunications carriers and cable operators providing
telecommunications services. The 1996 Act also created a distinction between pole attachments
used by cable operators solely to provide cable service and pole attachments used by cable
operators or by any telecommunications carrier to provide any telecommunications service. The
Act prescribed a new methodology for determining pole attachment rates for the latter group.
The new formulas will require that, in addition to paying their share of a pole's usable space,
these telecommunications service providers also must pay their share of the fully allocated costs
associated with the unusable space of the pole, duct, conduit, or right-of-way. In order to
implement these new formulas, Congress directed the Commission to issue new pole attachment
regulations relating to telecommunications carriers within two years after the date of enactment
of the 1996 Act, to become effective 5 years after enactment.

Technical Standards

To ensure the delivery of satisfactory television signals to cable subscribers, the Commission has
adopted various technical performance standards which local franchising authorities are
generally authorized to enforce through their franchising process. Cable operators are required to
establish a complaint resolution process and to advise their subscribers about it annually.

In addition to establishing new standards for the delivery of color signals and of closed captioned
data, the Commission generally preempted conflicting local standards. Cable systems with fewer
than 1,000 subscribers, as well as those serving rural areas, may negotiate with their respective
franchising authorities for certain lower standards.

Prohibited Frequencies

No cable television system may utilize a frequency at power levels equal to or exceeding 10
microwatts within 100 kHz plus tolerance of the emergency aircraft locator frequency 121.5
MHz or within 50 kHz plus tolerance of the distress signal frequencies 156.8 MHz and 243.0
MHz.

Use of Aeronautical Frequencies

The Commission's technical rules include standards to control signal leakage from cable systems.
Any cable system, regardless of its size, which intends to use a frequency in the band 108-137
MHz or 225-400 MHz above a power level of 100 microwatts, must first notify the Commission
of its intention to do so before using the proposed frequencies. This requirement permits
Commission review of the proposed frequency usage and insures that cable operations are on
frequencies which are offset from the air navigation and communications functions of local
aeronautical radio services. The standards used to determine the permissibility of proposed
frequency usage are based on frequency separation between the proposed cable frequencies and
aeronautical station assignments. Certain logging and leakage monitoring obligations are also
imposed on operators using frequencies within the above-mentioned bands. The requirements on
the use of aeronautical frequencies are contained in 47 C.F.R. §§ 76.611 - 76.617. All cable
systems using aeronautical frequencies must file a yearly report demonstrating compliance with
these rules.

Microwave Facilities

Cable systems obtain certain signals, sometimes from distances impractical to serve by cable,
through microwave relay stations. Microwave systems may also be used by cable operators for
distribution of signals within the cable system where it is impractical to run cable due to its cost
or due to potential signal deterioration. Cable operators may purchase microwave relay service
from companies providing such common carrier services, or they may operate their own relay
stations licensed by the Commission as CARS stations.

The rules for CARS stations also authorize licensing of mobile remote pick-up stations for the
transmission of programming from the scenes of events outside a studio back to the cable studio
or headend. In addition, they provide for the licensing of studio-to-headend link stations. A
license is necessary to operate a CARS Station. An applicant must file FCC Form 327 for a
license. Cable system owners or cooperative enterprises and cable networks with at least 5
million subscribers are eligible to become CARS licensees. A CARS licensee also may serve
nonaffiliated cable systems based on a cost-sharing, nonprofit arrangement. These arrangements
permit the delivery of cable programming where economies might otherwise prevent a small
system from using microwave transmission. Broadcast microwave facilities, are also permitted to
provide signals to cable television systems on a similar nonprofit, cost-sharing basis.
The advent of satellite-earth station transmission capability adds another dimension to
microwave communications. The interface between a receive-only earth station and a CARS
network now offers greater flexibility in the distribution of programming to cable systems and a
relatively inexpensive means of providing a long-haul transmission capability.

The rapid growth of the cable industry has led to increased demand for CARS band frequencies.
In 1979, the Commission expanded the band from 12.7-12.95 GHz to 12.7-13.20 GHz. In 1983,
the Commission allowed cable system operators to use frequencies in the 18 GHz area
(specifically 17.7-18.58 GHz and 19.26-19.7 GHz). The Commission added the 31 GHz band for
microwave services including CARS and provided access by cable operators and networks to the
2 and 6 GHz Bands (specifically 1.990-2.190, 6.425-6.525 and 6.875-7.125 GHz) for CARS
mobile use only.

HOME WIRING

The home wiring rules are intended to encourage competition between multichannel video
delivery services by allowing a consumer who voluntarily terminates cable service to use the
wiring to receive a competing multichannel video delivery service, such as direct broadcast
satellite, wireless cable ("MMDS"), or a different cable service, without the expense and
inconvenience of installing new wire.

Under the Commission's rules, cable subscribers may provide and install their own cable home
wiring within their premises and may connect additional home wiring within their premises to
the wiring installed and owned by the cable operator prior to the termination of cable service.
Under this rule, customers may select who will install their home wiring (e.g., themselves, the
cable operator or a commercial contractor). In addition, customers may connect additional
wiring, splitters or other equipment to the cable operator's wiring, or redirect or reroute the home
wiring, so long as no electronic or physical harm is caused to the cable system and the physical
integrity of the cable operator's wiring remains intact. Cable subscribers are not permitted to
physically cut, improperly terminate, substantially alter or otherwise destroy cable operator-
owned inside wiring. To protect the cable system from signal leakage, electronic and physical
harm and other types of degradation, the cable operator may require that any home wiring
(including passive splitters, connectors and other equipment used in the installation of home
wiring) meets reasonable technical specifications, not to exceed the technical specifications of
such equipment installed by the cable operator. However, if the subscriber's connection to,
redirection of or rerouting of the home wiring causes electronic or physical harm to the cable
system, the cable operator may impose additional technical specifications to eliminate such
harm.

When a subscriber who does not own the cable wiring within the subscriber's home voluntarily
terminates cable service, the cable operator may leave the wiring in place, or may notify the
subscriber that it will remove the home wiring unless the subscriber purchases the wire from the
operator (on a replacement cost basis). When the subscriber contacts the cable operator to
terminate cable service voluntarily, the cable operator, if it owns and intends to remove the home
wiring, must inform the subscriber: (1) that the cable operator owns the cable home wiring; (2)
that the cable operator intends to remove it; (3) that the subscriber has the right to purchase it;
and (4) what the per-foot replacement cost and the total charge for the wiring would be. If the
consumer declines to purchase the wiring, the cable operator must remove the wiring at no
charge to the subscriber within seven days of the subscriber's decision, under normal operating
conditions. If the cable company fails to remove the wiring within the seven business day period,
it forfeits its right to remove the wire or restrict its use at any later time. The cable company must
pay for any damage done to the subscriber's home while removing the wire.

COMPATIBILITY BETWEEN CABLE SYSTEMS AND CONSUMER EQUIPMENT

Televisions and videocassette recorders ("VCRs") have many special features and functions that
may not work when consumers are connected to cable services. The Commission has proposed
regulations to allow consumers to use and enjoy the enhanced features of their TVs and VCRs
such as "picture-in picture", viewing a program on one channel while simultaneously recording a
program on another channel, and recording two or more consecutive programs that appear on
different channels. The proposed rules do allow cable operators to protect their premium services
from receipt by non-subscribers.

The Commission has established rules to assure compatibility between home electronic
equipment and cable television systems so the advanced features of television receivers (TVs)
and VCRs will function when connected to cable service. These rules were adopted in
accordance with the provisions of Section 17 of the 1992 Cable Act.

The compatibility rules specify a number of measures to promote improved compatibility

between existing cable system and consumer electronics equipment. They also include
provisions for achieving additional improvements in compatibility through new cable and
consumer equipment. These compatibility standards facilitate the recording of one program
while viewing another, recording consecutive programs that appear on different channels, use of
"picture-in-picture" and other advanced features of newer television sets, and operation of
subscriber-owned remote control units. In addition, the Commission intends to adopt standards
for a Decoder Interface connector in new "cable ready" equipment and requirements for cable
systems to support its use. This feature of consumer equipment will eliminate the need for set top
converters, allowing them to be replaced with electronic components that plug into a special plug
in the back of "cable ready" TV equipment.

With respect to existing equipment, the rules address problems associated with the existing
universe of cable system and consumer electronic equipment. They require cable systems that
use scrambling technology to offer their subscribers supplemental equipment that will enable
subscribers to use the extended features of their TVs and VCRs such as "picture-in-picture" and
timed recording. To meet such a requirement, the operator can offer to provide subscribers: (1) a
single integrated device with dual descramblers/decoders and/or timers and bypass switches or
(2) two independent set-top devices which support similar functionalities. The rules further
provide that cable operators must offer subscribers the option of having all signals whose
reception does not require use of a converter to pass those signals directly to the subscriber's TV
or VCR, without passing through the set-top device. This capability can be provided through a
by-pass switch or through internal by-pass circuitry in a set-top box. Cable operators are required
to provide supplemental equipment on the request of individual subscribers and may charge for
equipment provided under these requirements in accordance with the rate regulations for
customer premises equipment.

The rules prohibit cable operators from scrambling signals on the basic tier of cable service. This
prohibition ensures that consumers who have TVs and VCRs capable of tuning basic service
channels are able to continue to receive service on those channels without a set-top device.

Cable operators who employ set-top devices that incorporate remote control capability must
permit such operation with commercially available remote control units, or otherwise take no
action that would prevent the use such remote control units. Upon a subscriber's request, a cable
operator is, however, allowed to disable the remote control functions of a subscriber's set-top
box.

The rules require cable operators to provide a consumer education program on compatibility
matters to their subscribers. This information must be presented in writing and provided to
consumers at least annually and when they first subscribe to the cable service. The consumer
education program must alert subscribers that where a set-top device is used to receive service,
subscribers may be prevented from using some of the special features and functions of their TVs.
These functions include those that allow subscribers to: view one program on one channel and
record a program on another channel; record two or more consecutive programs on different
channels; and use advanced picture generation features such as "picture-in-picture," channel
review and other functions that necessitate channel selection by the consumer device. Under the
consumer education program requirements, cable operators must also inform subscribers that:
certain TVs and VCRs simply may not be able to receive all of the channels offered by the cable
system once they are connected directly to the cable system; there are various types of
channelization (tuner reception) incompatibilities; and offer suggestions for resolving
channelization problems, e.g., use a set-top channel converter device that could be obtained from
either the cable system or a retailer (in the latter case, only simple channel converter devices that
do not include descrambling capability); and subscribers may purchase compatible remote
control units from other sources. With respect to this last element, cable systems must provide a
list of the models of set-top devices they provide to subscribers and a representative list of the
remote control units currently available from retailers that are compatible with the set-top
devices they employ.

The rules provide standards for new consumer TVs and VCRs marketed as "cable ready" (or
"cable compatible") and are intended to provide the necessary flexibility for the transition from
the existing analog cable to the new digital systems. The technical standards for "cable ready"
consumer electronics equipment only apply to TVs and VCRs specifically marketed as "cable
ready" or "cable compatible." The rules specify that new TVs and VCRs marketed using the
terms "cable ready" or "cable compatible" after June 30, 1997, must comply with the "cable
ready" equipment standards. The rules further prohibit use of the terms "cable ready," "cable
compatible" and other terms and descriptors that convey the impression a device is fully
compatible with cable service, in the labeling and packaging of consumer TVs and VCRs
manufactured or imported for sale to consumers in this country after October 31, 1994, unless
the equipment complies with the "cable ready" technical standards.
RECORD RETENTION

The Commission requires cable operators to maintain various documents and records of their
authorization and operation for inspection by the Commission, local franchising authorities
and/or the public.

Cable operators must maintain a number of records for Commission inspection. These include a
political file, sponsorship identification records, equal employment opportunities ("EEO")
records, commercial records for children's programming, records demonstrating compliance with
the Commission's leased access provisions, ownership records, the designation and location of
the cable system's principal headend, and a list of broadcast television stations carried in
fulfillment of the Commission's must-carry provisions.

Records required to be maintained primarily for inspection by the Commission or by local

franchising authorities include evidence of compliance with the Commission's technical
standards, a current list of channels offered to subscribers, proof-of-performance test data, signal
leakage logs and repair records, a copy of the Commission's cable television regulations, records
of subscribers (aggregate information used for assessing fees), and records of subscriber
complaints on signal quality.

In addition to the above-listed files, cable systems with 1000 subscribers or more must maintain
a public inspection file. This file must contain a copy of records to be maintained as part of the
political file, sponsorship identification records, EEO documents, commercial records for
children's programming, leased access records, ownership records, required proof-of-
performance test data, and required signal leakage and repair logs.

The public inspection file must be kept at the office which the system operator maintains for
business purposes, such as the place where the operator ordinarily collects subscriber charges,
resolves subscriber complaints and conducts other business, or at any accessible place in the
community served by the system (such as a public registry for documents or an attorney's office).
The public inspection file must be available for public inspection at any time during regular
business hours. However, if the cable system serves at least 1,000 but fewer than 5,000
subscribers, these records must only be provided upon request.

Cable operators have the option of maintaining all or part of the public inspection file in a
computer database rather than in a paper file. If a cable operator chooses to exercise this option,
the cable operator must provide a computer terminal for public use and make paper copies
available upon request.

Cable operators must make copies of any materials in the public inspection file available for
photocopying at the time of an in-person request. Cable operators may charge a reasonable fee
for photocopying. Requests for photocopies must be fulfilled at a location specified by the cable
operator, within a reasonable time not to exceed seven days. System operators are not required to
honor requests for photocopying by mail but may do so at their discretion.

PROTECTION OF SUBSCRIBER PRIVACY

Cable operators generally are prohibited from using their cable systems to collect personally
identifiable information concerning any subscriber without the prior written or electronic consent
of the subscriber. However, cable operators may collect this information if necessary to render
cable television or other service to the subscriber or to detect unauthorized reception of cable
communications.

Cable operators generally are also prohibited from disclosing personally identifiable information
without the prior written or electronic consent of the subscriber. However, there are certain
circumstances where the cable operator may do so. A cable operator may disclose this
information if such disclosure is necessary to render, or conduct a legitimate business activity
related to, cable television or other service provided to the subscriber. The operator may also
disclose such information pursuant to a court order authorizing the disclosure, however, the
subscriber must be notified of such an order by the person to whom the order is directed (such as
a government agency or the cable operator). Finally, the cable operator may disclose the names
and addresses of subscribers, but the cable operator must provide the subscriber the opportunity
to prohibit or limit such disclosure. Moreover, the cable operator must ensure the disclosure does
not reveal, directly or indirectly, the extent of any viewing or other use by the subscriber or the
nature of any transaction made by the subscriber over the cable system.

At the time of entering into an agreement to provide cable service or any other service to a
subscriber, cable operators must notify the subscriber of the following: the nature of any
personally identifiable information collected, or that will be collected, regarding the subscriber;
the nature of the use of such information; the nature, frequency, and purpose of any possible
disclosure of such information; including an identification of the types of persons to whom the
disclosure may be made, the period during which such information will be maintained by the
cable operator, the times and place at which the subscriber may gain access to such information,
and the limitations with respect to collection and disclosure of information by a cable operator
and the right of subscribers to enforce these limitations. Notice to the subscriber must be in the
form of a separate, written statement and must be clear and conspicuous. Notice must also be
given at least once every year that the agreed upon service is provided. "Personally identifiable
information" does not include any record of aggregate data which does not identify particular
persons.

Cable operators must provide a subscriber access to all personally identifiable information
regarding that subscriber. Such information must be made available to the subscriber at
reasonable times and at a convenient place designated by the cable operator. The subscriber must
be provided a reasonable opportunity to correct any error in such information. Cable operators
must destroy personally identifiable information if such information is no longer necessary for
the purpose for which it was collected and there are no pending requests or orders for access to
such information.

Any person aggrieved by a cable operator's violation of these provisions may bring a civil action
in a United States district court. As a remedy, the court may award actual damages, punitive
damages, and reasonable attorneys' fees and other litigation costs reasonably incurred. A
government entity may obtain personally identifiable information concerning a cable subscriber
pursuant to a court order only if the entity offers clear and convincing evidence that the subject
of the information is reasonably suspected of engaging in criminal activity and that the
information sought would be material evidence in the case. In addition, the subject of the
information must be afforded the opportunity to appear and contest the entity's claim.

COMPLAINTS, INVESTIGATIONS AND INQUIRIES

Under the dual jurisdictional approach to cable television regulation, several important areas of
regulation are administered by local franchising authorities rather than by the Commission.
These include subscriber rates for basic cable service, installation fees, equipment and customer
service, where the local franchising authority has chosen to regulate; bills and billing practices;
extension of cable service to individual homes and businesses; repairs; improper wiring; theft of
service; and false or misleading advertising concerning the cable system's capabilities.
Complainants are urged to make their complaints by letter, directed to local officials responsible
for regulation of their cable system. In most cases, the local franchising authority will review the
charges for basic cable service and equipment to determine if the charges are justified.

Pursuant to the 1996 Act, the Commission's authority to regulate the rates charged for cable
programming service was terminated on March 31, 1999. Therefore, the cable company
determines the rate for this service and the Commission does not have the authority to review the
rate or to accept complaints about the rate.

The Commission is particularly interested in interference problems to cable service generated by

citizens band or amateur radio operations. These problems may be addressed to the Commission
field office located closest to the affected cable system or to the Commission headquarters in
Washington, D.C.

REQUESTS FOR SPECIAL RELIEF

A cable system operator, broadcaster, franchising authority and, under certain circumstances,
individuals, by filing a petition for special relief with a filing fee, may seek special relief or a
waiver of any rule relating to cable television. Requests for declaratory orders seeking
Commission interpretation of a disputed question about the rules may be treated as petitions for
special relief or rulemaking. Neither complaints related to the mandatory carriage provisions, nor
petitions for declaratory ruling are subject to a filing fee.

A petitioner may submit the request by letter, accompanied by a certification that all interested
parties who may be directly affected by any Commission action have been given a copy of the
request. In addition to stating the relief requested, the petition should contain the facts
demonstrating the need for relief and should show how granting the request would serve the
public interest. An original and two copies of the petitions not requiring a filing fee must be filed
with the Office of the Secretary, Federal Communications Commission, 445 12th Street, S.W.,
Washington, D.C. 20554. Any petition requiring a fee must be submitted, along with a check or
money order, to: Federal Communications Commission, Cable Services Bureau, P.O. Box
358205, Pittsburgh, Pennsylvania 15251. Notification about the filing of petitions for special
relief is given to the general public through Public Notices published by the Commission. These
Notices are accessible through the Internet at: Web site: http://www.fcc.gov.
Any person may submit comments in opposition to or in support of the petition generally within
20 days after it is filed. These pleadings also must be served on the petitioner and on all persons
listed in the petitioner's certificate of service, and an original and two copies should be submitted
to the Secretary. The petitioner may then file reply comments within generally 10 days after the
submission of comments or oppositions.

SHOW CAUSE ORDERS AND FORFEITURE ACTIONS

In response to a petition, or on its own motion, the Commission may issue an order to show
cause or initiate a forfeiture proceeding. This action begins a proceeding similar to a civil suit for
an injunction; if the complainant prevails at the hearing, the Commission issues a cease and
desist order and/or a forfeiture. Such a proceeding may be started by filing an original and two
copies of a petition that the Commission subsequently places on public notice. Comments or
oppositions may be submitted within 30 days and replies within 20 days. In the case of a
forfeiture, a hearing may be held, but in almost all cases, a decision on a forfeiture is made
without a hearing.

Such petitions usually seek to remedy an alleged violation of the Commission's rules. A copy of
the petition should be sent to the cable system operator and to other interested parties. It is
possible, however, for an individual or group to join a cable system in opposing a request for an
order to show cause. Once all the pleadings have been submitted, the Commission reviews the
arguments and determines whether an order to show cause should be issued or a forfeiture
proceeding should be initiated.

Forfeiture Authority

The Commission has the authority to impose monetary forfeitures on cable television systems or
CARS licensees found to be in violation of the Commission's Rules, terms or conditions of a
certificate or license, any Commission order, or any provision of the Communications Act. The
Commission may impose forfeitures on cable systems by issuing either a notice affording an
opportunity for hearing or a notice of apparent liability. The maximum fine imposed on cable
system operators for each separate offense is $25,000 for each day, the total fine not to exceed
$250,000 for each notice of apparent liability or hearing. Each day of a continuing violation is
considered a separate offense. In the case of cable systems, the Commission must issue any such
notice within one year of the offense.

RULEMAKING PROCEEDINGS

The Commission is continually in the process of adopting new rules or amending existing ones
to ensure its regulations serve the public interest. Since many of these rules have widespread
impact, the public may want to participate in the rulemaking process. Anyone may petition the
Commission to adopt a rule at any time. A petition should include the text or substance of the
proposed rule and provide supporting arguments, rationale, and data for the proposed new rule.

If the Commission initiates a rule making proceeding, it will issue a "Notice of Proposed
Rulemaking" inviting public comment for a limited time period -- usually 30 days or more. A
summary of the notice is published in the Federal Register which is available in many large
libraries. In addition, trade publications also report the issuance of rulemaking notices.

The rules require that an original and five copies of all petitions and comments be filed.
Participants who want each Commissioner to have a copy may submit 12 copies (an original and
11 copies). Members of the public may participate informally in rulemaking proceedings by
submitting a single copy of their comments. This information should be mailed or delivered to
the Office of the Secretary, Federal Communications Commission, 445 12th Street, S.W.,
Washington, D.C. 20554.

CITIZEN PARTICIPATION IN COMMISSION REGULATION

The Commission encourages and invites input from the public in all phases of its regulatory
proceedings. Persons interested in participating by filing comments but who are unfamiliar with
Commission procedures may contact the FCC's Call Center at no charge by dialing 1-888-
CALLFCC (1-888-225-5322). The Call Center offers Commission information and outreach to
individual consumers, public interest and consumer organizations, and other interested persons.

Any member of the public may participate in the Commission's regulatory proceedings. The
Consumer Assistance Branch maintains and disseminates general information bulletins on the
functions and organization of the Commission, historical information on Commission actions
and policies as they relate to its minority ownership policies, and fact sheets that provide concise
information on policy changes and information concerning new telecommunications services.

As part of its ongoing outreach activities, the Commission holds a monthly "brown bag"
luncheon series on issues and recent policy changes. It conducts other workshops and seminars
designed to keep the public informed. It conducts briefings for visitors, colleges and universities
with an interest in learning more about the Commission and its regulatory authority.

The Commission's Office of Public Affairs issues public notices of the filings of cable TV
registration statements, petitions, comments and Commission actions. Copies of FCC decisions
and comments filed may be obtained from the Commission's duplicating contractor, International
Transcription Service, telephone (202) 857-3800. Selected documents may be obtained through
the Internet at the following address: Web site: http://www.fcc.gov. Several commercial
distributors will send copies of all, or selected, public notices and news releases on a regular
basis for a fee. A list of these distributors is available from the Public Service Division. Other
sources of information include trade publications, such as Broadcasting & Cable, Cablevision,
Communications Daily, Television Digest, Electronic Media and Multichannel News.

REPORTS AND FORMS

The Commission uses a variety of forms for specific purposes. Below is a list of the most
frequently requested forms relating to cable television, and those which are required to be filed
under our rules. Unless otherwise indicated, copies of these forms may be obtained by calling the
Commission at: (202) 418-FORM (3676).
Cable System Forms:

Form 320 - Signal Leakage - At least once annually, every cable system must file a Form 320
which reports the results of signal leakage tests conducted by the operator. This form can be
downloaded from the following Internet address: Web site: http://www.fcc.gov/formpage.html.

Form 325A - Annual Report - This report is required to be filed by every cable system on an
annual basis. The Commission sends these forms to the operator and requests verification of the
accuracy of the information on the form.

Form 394 - Application for Franchise Authority Consent to Assignment or Transfer of

Control of Cable Television Franchise - This form is required to be filed by a cable system
with its local franchising authority, for its approval prior to the cable system transferring
ownership and/or control. This form can be downloaded from the following Internet address:
Web site: http://www.fcc.gov/formpage.html.

Form 395A- Employment Report - At least once annually each cable operator must file an
annual employment report. These forms are sent to the operator by the Commission for the
operator to verify the accuracy of information. To request a copy of this form, call the
Commission at (202) 418-1450.

*****The following 1200 series forms can be downloaded from the following Internet address:
Web site: http://www.fcc.gov/formpage.html.*****

Form 1200 Setting Maximum Initial Permitted Rates for Regulated Cable Services
Pursuant to Rules Adopted February 22, 1994 -- "First Time Filers Form" This form is used
by operators the first time they filed any form to calculate maximum permissible rate under the
rules.

Form 1205 Determining Regulated Equipment and Installation Costs -- "Equipment

Form". This form is used to calculate allowable equipment costs. Generally, this form is
submitted with a Form 1200 and then on an annual basis.

Form 1210 Updating Maximum Permitted Rates for Regulated Cable Services and
Equipment -- "Update Form". This form is used to update the maximum permissible rate
calculated using Form 1200 or a previous filing of Form 1210.

Form 1215 A La Carte Channel Offerings. This form is filed with each Form 1200 and each
Form 1210 that you file to provide information on your a la carte service offerings.

Form 1220 Cost of Service Filing for Regulated Cable Services. Generally, this form is used
by operators who believe their costs exceed the rates they would be permitted to charge under
Form 1200 or 1210.
Form 1225 Cost of Service Filing for Regulated Cable Services for Small Systems. This
form is used to file a streamlined cost of service showing by a small system, as defined in the
Form, whose costs exceed maximum permissible rates.

Form 1230 Establishing Maximum Permitted Rates for Regulated Cable Services on Small
Cable Systems. Pursuant to Commission rules adopted May 5, 1995, qualifying small cable
systems owned by a small cable company may use this simplified cost-of-service procedure to
set maximum permitted rates.

Form 1235 Abbreviated Cost-of-Service Filing for Cable Network Upgrades. This form
enables cable operators to justify rate increases for significant network upgrades used to improve
services to regulated cable subscribers. Form 1235 permits operators seeking rate increases to
cover the costs of upgrades to submit only the costs of the upgrade instead of all current costs
normally submitted in a cost-of-service filing.

Form 1240 Annual Updating of Maximum Permitted Rates for Regulated Cable Services.
This form enables cable operators to adjust rates once per year to reflect reasonably certain and
reasonably quantifiable changes in external costs, inflation, and the number of regulated channels
that are projected for the 12 months following the rate change.

Franchise Authority Form:

Form 328 - Certification of Franchise Authority to Regulate Basic Service Rates and Initial
Finding of Lack of Effective Competition - This form must be filed by any local franchising
authority which intends to regulate basic cable service rates within the franchise area. The form
requests information relating to the cable system to be regulated, requests the franchise authority
certify that there is no effective competition, and requests that the franchise authority certify that
it will adopt rate regulations and procedural regulations consistent with those of the Commission.
This form can be downloaded from the following Internet address: Web site:
http://www.fcc.gov/formpage.html.

Cable System Additional Reporting Requirements (No Form Required)

Whenever a change occurs in a system's mailing address, operator legal name or operational
status, the operator must notify the Commission of the change within 30 days. The operator must
furnish its legal name and type (individual, private association, partnership, or corporation),
including the Employment Identity number or the Social Security number (if the company is an
individual or partnership); the assumed name, if any; the mailing address; the nature of the
operational status change; and the names of the communities affected and their FCC community
unit identifier numbers.

HOW TO OBTAIN INFORMATION

Every cable operator serving 1,000 or more subscribers is required by the Commission to have
an up-to-date copy of the Cable Television Rules and Regulations (47 C.F.R. Part 76 and 78) and
to keep track of Commission actions that might alter the rules.
Due to budgetary constraints, the Commission is unable to supply copies of its regulations and
orders free of charge. We regret that we are unable to do so. However, photocopies of the
Commission's rules and orders may be obtained from International Transcription Services (ITS)
at (202) 857-3800, or through the Internet at the following addresses: Gopher site:
gopher.fcc.gov; Web site: http://www.fcc.gov/; and FTP site: ftp://ftp.fcc.gov/.

Copies of the Telecommunications Act of 1996, the Cable Television Consumer Protection and
Competition Act of 1992, the Cable Communications Policy Act of 1984, and the entire
Communications Act in the form of a Compilation of Communications Laws, the Code of
Federal Regulations (47 C.F.R. Parts 70-79, including Part 76-Cable Regulations), or the Federal
Register Summaries of decisions by published date, may be purchased from the Government
Printing Office (GPO) in Washington, D.C. at (202) 512-1800. GPO outlets are also located in
many major cities.

Copies of Fact Sheets on Cable Television Regulation may be obtained via the Internet at
http://www.fcc.gov/csb/facts/csogpofa.html, from the Call Center at 1-888-225-5322, or through
the use of Fax-on-Demand, or the Internet at the following electronic addresses: Gopher site:
gopher.fcc.gov; Web site: http://www.fcc.gov/; and FTP site: ftp://ftp.fcc.gov/.

OBTAINING FURTHER INFORMATION FROM THE COMMISSION

The Cable Services Bureau is located at 445 12th Street, S.W., Washington, D.C. General
inquiries should be directed to the Federal Communications Commission, 1-888-225-5322 (1-
888-CALLFCC). This is a toll-free call. Commission offices are normally open from 8:00 a.m. to
5:30 p.m., Monday through Friday, excluding federal holidays, unless otherwise stated.

How to Start a Cable Contracting Company

By Sam Williams, eHow Contributor

updated: February 5, 2011

Contractors unravel the mysteries of cable wiring.

Contractors unravel the mysteries of cable wiring.

cable image by François MOUNIER from Fotolia.com

Cable contracting companies not only install cable, they also provide maintenance and repairs. With this
business model, you can start small, right out of your truck, and grow your business at your own pace.
Your customers can range from residents of the suburbs to the U.S. Navy, which often installs
complicated networks in its ships. As long as you keep your knowledge of the industry and the technical
aspects of cable wiring up-to-date, you can be competitive and enjoy a lucrative business.

Difficulty: Moderately Challenging

Instructions

Things You'll Need:

* Van

* Business Cards

* Cell Phone

* Installation Tools

* Laptop

1.

Create a business plan. In it describe local customers that would most likely hire your company, such
as homeowners, apartment dwellers, apartment building owners, or new businesses that are opening in
the area. List possible obstacles that could keep your cable contracting company from getting off the
ground, such as competition or the lack of a sufficient cable and satellite coverage area. Calculate your
costs to start the business and run it for a year without profit.

2.

Determine the types of jobs you will accept. You can install cable and satellite television, and install
and service telephone land lines as well to increase your chances of gaining customers. Add to your list
Closed Circuit Television installation and maintenance. Choose to specialize or be a jack of all trades.
Follow your strengths as a cable contractor.

3.

3
 Apply for a business license by requesting an application from your state's department of revenue. If
your state requires professional licensing as well, submit that application at the same time. You may
need a cable contractor's license or a telecommunications contractor's license.

4.

Apply for a bank loan for your business. Submit your business plan to the bank. If its loan officer does
not approve you for the full amount, ask for a lesser amount or a secured loan to cover the van you will
need to store your installation equipment and travel to your customers.

5.

Buy a motor vehicle, preferably a van. To cut costs, search the classifieds or auto magazines to find a
used utility van. Load up on equipment you will need, like wire cutters, tool belts and cabling wire.

6.

Start small by keeping your office in your van. Purchase a laptop with a wireless card. Subscribe to a
wireless Internet service so you are always connected. Buy a cell phone to use for business only.

7.

Insure your tools, your van and yourself. Contact a state-authorized insurance agent to discuss
coverage options for your business property. Also ask how to insure against something happening to you
before you earn enough to hire additional help.

8.

8
 Provide free cable and wiring for nonprofit organizations and churches to build up your referral list.
Get your business name out there in any positive way you can think of.

9.

Become an authorized dealer or an affiliate with the major names in cable and satellite like DISH
Network and DirecTV. You may need to submit your business plan and references before you are able to
join. Network with telephone companies and security companies as well.

10.

10

Market your business by advertising in the local newspaper. Contact the paper's advertising sales
representative. Negotiate a long-term ad rate to save money. Print business cards and pass them out
freely. Build a website to which you can direct new customers so they can learn more about your
services.

11.

11

Bid on government contracts. Search for announcements in newspapers and on municipal websites.
Submit proposals in response to local, state and federal requests for bids. Hire a professional writer to
help you with the proposals.