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