Full Text of SB1873 95th General Assembly
SB1873sam001 95TH GENERAL ASSEMBLY
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Sen. James F. Clayborne Jr.
Filed: 3/11/2008
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| AMENDMENT TO SENATE BILL 1873
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| AMENDMENT NO. ______. Amend Senate Bill 1873 by replacing | 3 |
| everything after the enacting clause with the following:
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| "Section 5. The Public Utilities Act is amended by adding | 5 |
| Section 21-1150 as follows: | 6 |
| (220 ILCS 5/21-1150 new) | 7 |
| Sec. 21-1150. Program carriage dispute resolution. | 8 |
| (a) For purposes of this Section: | 9 |
| "AAA" means the American Arbitration Association. | 10 |
| "Affiliated" with a cable operator means, with respect to a | 11 |
| cable programming channel, that the channel is owned or | 12 |
| operated by a person or entity (1) that is controlling, | 13 |
| controlled by, or under common ownership or control with a | 14 |
| cable operator, (2) in which any ownership interest, voting or | 15 |
| non-voting, or any debt or other instrument that is convertible | 16 |
| to an ownership interest, is held by a cable operator, or (3) |
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| in which any financial interest that enables a person or entity | 2 |
| to benefit from the financial performance of the cable | 3 |
| programming channel is held by a cable operator. | 4 |
| "Cable operator" includes (1) any multichannel video | 5 |
| programming distributor, as that term is defined at 47 U.S.C. | 6 |
| 522, and (2) any affiliate or subsidiary of the cable operator | 7 |
| or multichannel video programming distributor. | 8 |
| "Extended basic service" means a category of cable service | 9 |
| provided by a cable operator that is immediately superior, in | 10 |
| terms of price and number of channels, to an offering of basic | 11 |
| cable service, as that term is defined at 47 U.S.C. 522. | 12 |
| "Final offer" means a submission in the form of (1) a | 13 |
| contract for carriage of the programming for a period of at | 14 |
| least 3 years, which is certified by the party making such | 15 |
| final offer to reflect terms and conditions, other than price | 16 |
| and carriage tier, actually agreed to by an unaffiliated third | 17 |
| party in a carriage contract covering at least 100,000 homes, | 18 |
| and (2) a related price and distribution tier based on such | 19 |
| certified form of contract. | 20 |
| "Independent programmer" means a person (1) that is engaged | 21 |
| in the production, creation, or wholesale distribution of video | 22 |
| programming, and (2) that is not affiliated with a vertically | 23 |
| integrated cable operator and (3) that offers a cable | 24 |
| programming channel that competes in the same programming | 25 |
| genre, or targets the same demographic or advertiser base, or | 26 |
| competes to acquire the same programming as a cable programming |
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| channel owned by a vertically integrated cable operator. | 2 |
| "Programming genre" means a channel whose programming | 3 |
| principally consists of the following: | 4 |
| (i) sports; | 5 |
| (ii) news and public affairs; | 6 |
| (iii) entertainment; or | 7 |
| (iv) any additional or more specific genre that the | 8 |
| arbitrator may identify. | 9 |
| "Programming channel" means a channel with programming | 10 |
| generally considered comparable in terms of signal quality and | 11 |
| other features to programming provided by a television | 12 |
| broadcast station or a widely available cable programming | 13 |
| service, including, but not limited to, ESPN, TBS, TruTV, and | 14 |
| E! Entertainment Television. | 15 |
| "Vertically integrated cable operator" means a cable | 16 |
| system franchisee (1) to which more than 50% of the television | 17 |
| households in its franchise area subscribe for video service, | 18 |
| and (2) that, through one or more companies controlling, | 19 |
| controlled by, or under common control with the cable system | 20 |
| franchisee, acts as both a distributor of content, as well as a | 21 |
| producer of content for its own and other cable systems. For | 22 |
| purposes of clarification but not limitation, in a vertically | 23 |
| integrated cable operator there is common direct or indirect | 24 |
| ownership between the cable system franchisee and certain cable | 25 |
| networks that are carried by the cable system franchisee. | 26 |
| (b) A vertically integrated cable operator that carries, on |
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| its extended basic service, a programming channel that it owns | 2 |
| has a duty to treat, in a fair, reasonable, and | 3 |
| nondiscriminatory manner, an independent programming channel | 4 |
| that competes in the same programming genre with the | 5 |
| programming channel that the vertically integrated cable | 6 |
| operator owns. | 7 |
| (c) If an independent programmer whose programming channel | 8 |
| is available in at least 100,000 homes within the United States | 9 |
| has reason to believe that it has not been treated in a fair, | 10 |
| reasonable, and nondiscriminatory manner by a vertically | 11 |
| integrated cable operator concerning carriage of a competing | 12 |
| programming channel, then it may submit a request for | 13 |
| commercial arbitration with the vertically integrated cable | 14 |
| operator over the terms and conditions of carriage within 90 | 15 |
| days after a first-time request for carriage or renewal of a | 16 |
| carriage agreement. If the dispute remains unresolved 10 days | 17 |
| after submission of the request for arbitration, then either | 18 |
| party may file with the AAA a formal demand for arbitration and | 19 |
| shall include a final offer with the AAA filing. The AAA shall | 20 |
| notify the other party of the demand for arbitration. Within 15 | 21 |
| business days after receipt of that notice from the AAA, the | 22 |
| other party shall submit its final offer to the AAA. | 23 |
| Immediately after receipt of the responding party's final | 24 |
| offer, the AAA shall provide to each party the other party's | 25 |
| final offer. | 26 |
| (d) Arbitration proceedings shall be conducted in the |
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| following manner: | 2 |
| (1) The arbitration shall be decided by a single | 3 |
| arbitrator under the expedited procedures of the | 4 |
| commercial arbitration rules of the AAA that are in effect | 5 |
| at the time of arbitration. The arbitrator shall conduct a | 6 |
| baseball-style arbitration, in which the arbitrator shall | 7 |
| choose the final offer of the party that most closely | 8 |
| approximates the fair market value of and market demand for | 9 |
| the programming carriage rights at issue. | 10 |
| (2) In order to determine fair market value and market | 11 |
| demand, the arbitrator may consider any relevant evidence | 12 |
| and may require the parties to submit, on a confidential | 13 |
| basis, such evidence to the extent that it is in their | 14 |
| actual possession or control, including, but not limited | 15 |
| to, the following: | 16 |
| (A) current or previous contracts between the | 17 |
| independent programmer and other cable operators in | 18 |
| which the vertically integrated cable operator does | 19 |
| and does not have an interest, as well as offers made | 20 |
| in such negotiations; | 21 |
| (B) current or previous contracts for the | 22 |
| affiliated channel with other cable operators, | 23 |
| including related and integrated carriage or other | 24 |
| arrangements for the affiliated programming channel; | 25 |
| (C) price, terms, and conditions that the | 26 |
| independent programmer has for carriage with other |
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| cable operators; | 2 |
| (D) evidence of the relative value, including | 3 |
| without limitation ratings and advertising rates, of | 4 |
| the independent programming compared to the affiliated | 5 |
| programming channel being carried by the vertically | 6 |
| integrated cable operator; | 7 |
| (E) the extent of national carriage of the | 8 |
| independent programmer's competing cable programming; | 9 |
| (F) other evidence of the value of independent | 10 |
| programming; | 11 |
| (G) whether the independent programmer and any | 12 |
| company controlled by, controlling, or under common | 13 |
| control by the vertically integrated cable operator | 14 |
| have pursued the same programming from third parties in | 15 |
| the past 5 years; and | 16 |
| The arbitrator may not consider offers prior to the | 17 |
| arbitration made by the independent programmer or the | 18 |
| vertically integrated cable operator in the course of their | 19 |
| negotiations. | 20 |
| (e) A judgment upon an award by the arbitrator may be | 21 |
| entered by any court having competent jurisdiction over the | 22 |
| matter. If the arbitrator finds that one party's conduct during | 23 |
| the course of the arbitration has been unreasonable, then the | 24 |
| arbitrator may assess all or a portion of the other party's | 25 |
| costs and expenses, including attorney fees, against the | 26 |
| offending party. ".
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