Client Alert

The Federal Communications Commission (“FCC”) has reiterated that cable operators must provide at least thirty days written notice to customers and Local Franchising Authorities (“LFAs”) if subscribers would tend to perceive any service change as a change in programming.

On August 22, 2008, in response to several consumer complaints, the FCC issued a Notice of Apparent Liability for Forfeiture, finding that Oceanic Time Warner Cable (“Oceanic”) had willfully violated Section 76.1603(c) of the Commission’s rules and fining Oceanic $7500. The Commission conceded that Oceanic properly noticed its customers. However, the Commission found that Oceanic failed to provide the required thirty day advance written notice to the appropriate LFA prior to implementing a service change due to the migration of channels to its digital platform.

Specifically, the Commission found that Oceanic’s migration of channels to a digital platform amounted to a programming service change due to the deletion of channels and rendered those channels inaccessible to users of its CableCARD service, which permits the reception of certain digital services without the use of a set-top box.

According to the complaints, the migration of channels necessarily required customers to obtain additional equipment—i.e., a set-top box—from Oceanic to continue to receive the channels available to them on the CableCARD platform prior to the service change. Oceanic sent a notice to its customers permitting them to exchange their CableCARDs for digital cable boxes at no extra cost, but failed to send this notice to the LFA, thus violating Section 76.1603(c).

The Commission rejected Oceanic’s argument that notice was not required because the migration amounted to an equipment change, requiring only annual notice to the LFA and customers. The Commission, however, reiterated the applicable standard: it is the “subscribers’ perspective” not the cable operators’ that determines whether a change in programming has occurred. In this case, the migration of channels resulted in a loss of more than forty channels from the CableCARD system, which consumers would view as a significant programming change and not a “mere equipment compatibility issue.” Cable operators should be mindful of this standard as they continue to deploy advanced digital service offerings to customers.

Please contact any one of Womble Carlyle's cable attorneys below if you have any questions regarding programming changes and the notification requirements set forth in Section 76.1603(c) of the Commission’s rules.

Danielle M. Benoit, (202) 857-4537
Eric E. Breisach, (202) 857-4446
Lisa Chandler Cordell, (202) 857-4533
Peter Gutmann, (202) 857-4532
Mark J. Palchick, (202) 857-4411
Michael H. Shacter, (202) 857-4494
Gregg P. Skall, (202) 857-4441