§  27.1202   Cable/BRS cross-ownership.

   (a) Initial or modified authorizations for BRS stations may not be
   granted to a cable operator if a portion of the BRS station's protected
   services area is within the portion of the franchise area actually
   served by the cable operator's cable system and the cable operator will
   be using the BRS station as a multichannel video programming
   distributor (as defined in §  76.64(d) of this chapter). No cable
   operator may acquire such authorization either directly, or indirectly
   through an affiliate owned, operated, or controlled by or under common
   control with a cable operator if the cable operator will use the BRS
   station as a multichannel video programming distributor.

   (b) No licensee of a station in this service may lease transmission
   time or capacity to a cable operator either directly, or indirectly
   through an affiliate owned, operated, controlled by, or under common
   control with a cable operator, if a portion of the BRS station's
   protected services area is within the portion of the franchise area
   actually served by the cable operator's cable system the cable operator
   will use the BRS station as a multichannel video programming
   distributor.

   (c) Applications for new stations, station modifications, assignments
   or transfers of control by cable operators of BRS stations shall
   include a showing that no portion of the GSA of the BRS station is
   within the portion of the franchise area actually served by the cable
   operator's cable system, or of any entity indirectly affiliated, owned,
   operated, controlled by, or under common control with the cable
   operator. Alternatively, the cable operator may certify that it will
   not use the BRS station to distribute multichannel video programming.

   (d) In applying the provisions of this section, ownership and other
   interests in BRS licensees or cable television systems will be
   attributed to their holders and deemed cognizable pursuant to the
   following criteria:

   (1) Except as otherwise provided herein, partnership and direct
   ownership interests and any voting stock interest amounting to 5% or
   more of the outstanding voting stock of a corporate BRS licensee or
   cable television system will be cognizable;

   (2) Investment companies, as defined in 15 U.S.C. 80a-3, insurance
   companies and banks holding stock through their trust departments in
   trust accounts will be considered to have a cognizable interest only if
   they hold 20% or more of the outstanding voting stock of a corporate
   BRS licensee or cable television system, or if any of the officers or
   directors of the BRS licensee or cable television system are
   representatives of the investment company, insurance company or bank
   concerned. Holdings by a bank or insurance company will be aggregated
   if the bank or insurance company has any right to determine how the
   stock will be voted. Holdings by investment companies will be
   aggregated if under common management.

   (3) Attribution of ownership interests in a BRS licensee or cable
   television system that are held indirectly by any party through one or
   more intervening corporations will be determined by successive
   multiplication of the ownership percentages for each link in the
   vertical ownership chain and application of the relevant attribution
   benchmark to the resulting product, except that wherever the ownership
   percentage for any link in the chain exceeds 50%, it shall not be
   included for purposes of this multiplication. For purposes of paragraph
   (d)(9) of this section, attribution of ownership interests in a BRS
   licensee or cable television system that are held indirectly by any
   party through one or more intervening organizations will be determined
   by successive multiplication of the ownership percentages for each link
   in the vertical ownership chain and application of the relevant
   attribution benchmark to the resulting product, and the ownership
   percentage for any link in the chain that exceeds 50% shall be included
   for purposes of this multiplication. For example, except for purposes
   of paragraph (d)(9) of this section, if A owns 10% of company X, which
   owns 60% of company Y, which owns 25% of "Licensee," then X's interest
   in "Licensee" would be 25% (the same as Y's interest because X's
   interest in Y exceeds 50%), and A's interest in "Licensee" would be
   2.5% (0.1 *0.25). Under the 5% attribution benchmark, X's interest in
   "Licensee" would be cognizable, while A's interest would not be
   cognizable. For purposes of paragraph (d)(9) of this section, X's
   interest in "Licensee" would be 15% (0.6 *0.25) and A's interest in
   "Licensee" would be 1.5% (0.1 *0.6 *0.25). Neither interest would be
   attributed under paragraph (d)(9) of this section.

   (4) Voting stock interests held in trust shall be attributed to any
   person who holds or shares the power to vote such stock, to any person
   who has the sole power to sell such stock, and to any person who has
   the right to revoke the trust at will or to replace the trustee at
   will. If the trustee has a familial, personal or extra-trust business
   relationship to the grantor or the beneficiary, the grantor or
   beneficiary, as appropriate, will be attributed with the stock
   interests held in trust. An otherwise qualified trust will be
   ineffective to insulate the grantor or beneficiary from attribution
   with the trust's assets unless all voting stock interests held by the
   grantor or beneficiary in the relevant BRS licensee or cable television
   system are subject to said trust.

   (5) Subject to paragraph (d)(9) of this section, holders of non-voting
   stock shall not be attributed an interest in the issuing entity.
   Subject to paragraph (d)(9) of this section, holders of debt and
   instruments such as warrants, convertible debentures, options or other
   non-voting interests with rights of conversion to voting interests
   shall not be attributed unless and until conversion is effected.

   (6)(i) A limited partnership interest shall be attributed to a limited
   partner unless that partner is not materially involved, directly or
   indirectly, in the management or operation of the BRS or cable
   television activities of the partnership and the licensee or system so
   certifies. An interest in a Limited Liability Company ("LLC") or
   Registered Limited Liability Partnership ("RLLP") shall be attributed
   to the interest holder unless that interest holder is not materially
   involved, directly or indirectly, in the management or operation of the
   BRS or cable television activities of the partnership and the licensee
   or system so certifies.

   (ii) For a licensee or system that is a limited partnership to make the
   certification set forth in paragraph (d)(6)(i) of this section, it must
   verify that the partnership agreement or certificate of limited
   partnership, with respect to the particular limited partner exempt from
   attribution, establishes that the exempt limited partner has no
   material involvement, directly or indirectly, in the management or
   operation of the BRS or cable television activities of the partnership.
   For a licensee or system that is an LLC or RLLP to make the
   certification set forth in paragraph (d)(6)(i) of this section, it must
   verify that the organizational document, with respect to the particular
   interest holder exempt from attribution, establishes that the exempt
   interest holder has no material involvement, directly or indirectly, in
   the management or operation of the BRS or cable television activities
   of the LLC or RLLP. Irrespective of the terms of the certificate of
   limited partnership or partnership agreement, or other organizational
   document in the case of an LLC or RLLP, however, no such certification
   shall be made if the individual or entity making the certification has
   actual knowledge of any material involvement of the limited partners,
   or other interest holders in the case of an LLC or RLLP, in the
   management or operation of the BRS or cable television businesses of
   the partnership or LLC or RLLP.

   (iii) In the case of an LLC or RLLP, the licensee or system seeking
   installation shall certify, in addition, that the relevant state
   statute authorizing LLCs permits an LLC member to insulate itself as
   required by our criteria.

   (7) Officers and directors of a BRS licensee or cable television system
   are considered to have a cognizable interest in the entity with which
   they are so associated. If any such entity engages in businesses in
   addition to its primary business of BRS or cable television service, it
   may request the Commission to waive attribution for any officer or
   director whose duties and responsibilities are wholly unrelated to its
   primary business. The officers and directors of a parent company of a
   BRS licensee or cable television system, with an attributable interest
   in any such subsidiary entity, shall be deemed to have a cognizable
   interest in the subsidiary unless the duties and responsibilities of
   the officer or director involved are wholly unrelated to the BRS
   licensee or cable television system subsidiary, and a statement
   properly documenting this fact is submitted to the Commission. The
   officers and directors of a sister corporation of a BRS licensee or
   cable television system shall not be attributed with ownership of these
   entities by virtue of such status.

   (8) Discrete ownership interests will be aggregated in determining
   whether or not an interest is cognizable under this section. An
   individual or entity will be deemed to have a cognizable investment if:

   (i) The sum of the interests held by or through "passive investors" is
   equal to or exceeds 20 percent; or

   (ii) The sum of the interests other than those held by or through
   "passive investors" is equal to or exceeds 5 percent; or

   (iii) The sum of the interests computed under paragraph (d)(8)(i) of
   this section plus the sum of the interests computed under paragraph
   (d)(8)(ii) of this section equal to or exceeds 20 percent.

   (9) Notwithstanding paragraphs (d)(5) and (d)(6) of this section, the
   holder of an equity or debt interest or interests in a BRS licensee or
   cable television system subject to the BRS/cable cross-ownership rule
   ("interest holder") shall have that interest attributed if:

   (i) The equity (including all stockholdings, whether voting or
   nonvoting, common or preferred) and debt interest or interests, in the
   aggregate, exceed 33 percent of the total asset value (all equity plus
   all debt) of that BRS licensee or cable television system; and

   (ii) The interest holder also holds an interest in a BRS licensee or
   cable television system that is attributable under this section (other
   than this paragraph) and which operates in any portion of the franchise
   area served by that cable operator's cable system.

   (10) The term "area served by a cable system" means any area actually
   passed by the cable operator's cable system and which can be connected
   for a standard connection fee.

   (11) As used in this section "cable operator" shall have the same
   definition as in §  76.5 of this chapter.

   (e) The Commission will entertain requests to waive the restrictions in
   paragraph (a) of this section where necessary to ensure that all
   significant portions of the franchise area are able to obtain
   multichannel video service.

   (f) The provisions of paragraphs (a) through (e) of this section will
   not apply to one BRS channel used to provide locally-produced
   programming to cable headends. Locally-produced programming is
   programming produced in or near the cable operator's franchise area and
   not broadcast on a television station available within that franchise
   area. A cable operator will be permitted one BRS channel for this
   purpose, and no more than one BRS channel may be used by a cable
   television company or its affiliate or lessor pursuant to this
   paragraph. The licensee for a cable operator providing local
   programming pursuant to a lease must include in a notice filed with the
   Wireless Telecommunications Bureau a cover letter explicitly
   identifying itself or its lessees as a local cable operator and stating
   that the lease was executed to facilitate the provision of local
   programming. The first application or the first lease notification in
   an area filed with the Commission will be entitled to the exemption.
   The limitations on one BRS channel per party and per area include any
   cable/BRS operations or cable/EBS operations. The cable operator must
   demonstrate in its BRS application that the proposed local programming
   will be provided within one year from the date its application is
   granted. Local programming service pursuant to a lease must be provided
   within one year of the date of the lease or one year of grant of the
   licensee's application for the leased channel, whichever is later. If a
   BRS license for these purposes is granted and the programming is
   subsequently discontinued, the license will be automatically forfeited
   the day after local programming service is discontinued.

   (g) Applications filed by cable television companies, or affiliates,
   for BRS channels prior to February 8, 1990, will not be subject to the
   prohibitions of this section. Applications filed on February 8, 1990,
   or thereafter will be returned. Lease arrangements between cable and
   BRS entities for which a lease or a firm agreement was signed prior to
   February 8, 1990, will also not be subject to the prohibitions of this
   section. Leases between cable television companies, or affiliates, and
   BRS station licensees, conditional licensees, or applicants executed on
   February 8, 1990, or thereafter, are invalid.

   (1) Applications filed by cable operators, or affiliates, for BRS
   channels prior to February 8, 1990, will not be subject to the
   prohibitions of this section. Except as provided in paragraph (g)(2)of
   this section, applications filed on February 8, 1990, or thereafter
   will be returned. Lease arrangements between cable and BRS entities for
   which a lease or a firm agreement was signed prior to February 8, 1990,
   will also not be subject to the prohibitions of this section. Except as
   provided in paragraph (g)(2) of this section, leases between cable
   operators, or affiliates, and BRS/EBS station licensees, conditional
   licensees, or applicants executed on or before February 8, 1990, or
   thereafter are invalid.

   (2) Applications filed by cable operators, or affiliates for BRS
   channels after February 8, 1990, and prior to October 5, 1992, will not
   be subject to the prohibition of this section, if, pursuant to the then
   existing overbuild or rural exceptions, the applications were allowed
   under the then existing cable/BRS cross-ownership prohibitions. Lease
   arrangements between cable operators and BRS entities for which a lease
   or firm agreement was signed after February 8, 1990, and prior to
   October 5, 1992, will not be subject to the prohibitions of this
   section, if, pursuant to the then existing rural and overbuild
   exceptions, the lease arrangements were allowed.

   (3) The limitations on cable television ownership in this section do
   not apply to any cable operator in any franchise area in which a cable
   operator is subject to effective competition as determined under
   section 623(l) of the Communications Act.

   [ 69 FR 72034 , Dec. 10, 2004, as amended at  71 FR 35190 , June 19, 2006]

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