Federal Communications Commission.
This document finds that the Administrative Law Judge exceeded his authority by setting a hearing date beyond the 60-day deadline specified in the Hearing Designation Order for issuing a recommended decision regarding the above-captioned program carriage disputes and orders that the Media Bureau will proceed to resolve these disputes without the benefit of a recommended decision from the ALJ.
Federal Communications Commission, 445 12th Street, SW., Washington, DC 20554.Start Further Info
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This is a summary of the Memorandum Opinion and Order, DA 08-2805, adopted and released on December 24, 2008. The full text of this document is available for public inspection and copying during regular business hours in the FCC Reference Center, Federal Communications Commission, 445 12th Street, SW., CY-A257, Washington, DC 20554. This document will also be available via ECFS (http://www.fcc.gov/cgb/ecfs/). (Documents will be available electronically in ASCII, Word 97, and/or Adobe Acrobat.) The complete text may be purchased from the Commission's copy contractor, 445 12th Street, SW., Room CY-B402, Washington, DC 20554. To request this document in accessible formats (computer diskettes, large print, audio recording, and Braille), send an e-mail to email@example.com or call the Commission's Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).
Synopsis of the Order
1. On October 10, 2008, the Media Bureau issued a Memorandum Opinion and Hearing Designation Order (“HDO”) in the above captioned matters. 73 FR 65312, November 3, 2008. The HDO, among other things, referred certain program carriage disputes to an Administrative Law Judge (“ALJ”) to resolve factual disputes as to whether the defendant cable operators had discriminated against the complainant video programmers in violation of the Commission's program carriage rules. 73 FR 65312, 65318, 65327, November 3, 2008. The HDO ordered the ALJ to make and return a recommended decision to the Commission within 60 days of the release date of the HDO, i.e., by December 9, 2008. Unfortunately, the ALJ has not issued a recommended decision by the deadline but, instead, has set a date to begin a hearing more than three months past the HDO's deadline without indicating when a recommended decision will be released. Herring Broadcasting, Inc. v. Time Warner Cable Inc. et al., Order, MB Docket No. 08-214, FCC 08M-50 (rel. Dec. 2, 2008). Maintaining that administrative delay will cause harm to the programmers, complainant Herring Broadcasting, Inc. d/b/a WealthTV (“WealthTV”) filed a motion to revoke the HDO and complainant TCR Sports Broadcasting Holding, L.L.P., d/b/a Mid-Atlantic Sports Network (“MASN”) filed a motion to reconsider the HDO, requesting that the Commission or the Media Bureau reclaim jurisdiction over the matters.
2. For the reasons stated below, we find the ALJ exceeded his authority by setting a hearing date beyond the HDO's 60-day deadline for issuing a recommended decision. The ALJ's limited authority to consider these matters extended through December 9, 2008. That deadline has passed, and the ALJ's delegated authority over these hearing matters has thus expired under the terms of the HDO. Accordingly, the Media Bureau will proceed to resolve the above-captioned program carriage disputes without the benefit of a recommended decision from the ALJ.Start Printed Page 3038
3. Program Carriage Provisions. Section 616 of the Communications Act of 1934, as amended (the “Communications Act”), directs the Commission to “establish regulations governing program carriage agreements and related practices between cable operators or other multichannel video programming distributors and video programming vendors.” 47 U.S.C. 536. Among other things, Congress directed that the regulations:
(3) contain provisions designed to prevent a [MVPD] from engaging in conduct the effect of which is to unreasonably restrain the ability of an unaffiliated video programming vendor to compete fairly by discriminating in video programming distribution on the basis of affiliation or nonaffiliation of vendors in the selection, terms, or conditions for carriage of video programming provided by such vendors. 47 U.S.C. 536(a)(3); see also 47 CFR 76.1301(c).
4. The Commission adopted rules in 1993 to implement Section 616. See 47 CFR 76.1300-76.1302; Second Report and Order, 58 FR 60390, November 16, 1993. Specifically, Sections 76.1301(c) prohibits a cable operator or other MVPD from engaging in conduct that unreasonably restrains the ability of an unaffiliated programming vendor to compete fairly by discriminating against such vendor on the basis of its affiliation or nonaffiliation. 47 CFR 76.1301(c).
5. Delegated Authority. Under the Commission's delegation rules, the person “to which functions are delegated shall, with respect to such functions, have all the jurisdiction, powers, and authority conferred by law upon the Commission,” and “any action taken pursuant to delegated authority shall have the same force and effect and shall be made, evidenced, and enforced in the same manner as actions of the Commission.” 47 CFR 0.203. The Media Bureau is granted authority to administer and enforce rules and policies regarding program carriage. 47 CFR 0.61(f)(7). The procedural rules for program carriage provide that disputes are to be resolved on the basis of a complaint, answer and reply. See 47 CFR 76.1302(c), (d), (e). The general procedural rules set forth under Section 76.7 apply to program carriage proceedings unless specified otherwise under the program carriage rules. 47 CFR 76.1302(a). Section 76.7(g)(1) authorizes the Media Bureau to refer matters to an administrative law judge (“ALJ”):
(1) After reviewing the pleadings, and at any stage of the proceeding thereafter, the Commission staff may, in its discretion, designate any proceeding or discrete issues arising out of any proceeding for an adjudicatory hearing before an administrative law judge. 47 CFR 76.7(g).
The Commission recognized that “resolution of Section 616 complaints [would] necessarily focus on the specific facts pertaining to each negotiation, and the manner in which certain rights were obtained, in order to determine whether a violation has, in fact, occurred.” Second Report and Order, 58 FR 60390, 60391, November 16, 1993. The Commission anticipated that the “staff would be unable to resolve most carriage agreement complaints on the sole basis of a written record. * * *” Second Report and Order, 58 FR 60390, 60392, November 16, 1993. In such cases, if the staff determines that the complainant has established a prima facie case but that the existing record is not sufficient to resolve the complaint and grant relief, the staff can either “determine and outline the appropriate procedures for discovery, or will refer the case to an ALJ for an administrative hearing.” Second Report and Order, 58 FR 60390, 60393-94, November 16, 1993. Thus, the decision to refer a case for resolution of factual disputes by an ALJ is discretionary.
6. Program Carriage Complaints. WealthTV, a video programming vendor, filed program carriage complaints against multichannel video programming distributors (“MVPDs”) Time Warner Cable Inc. (“TWC”), Bright House Networks, LLC (“BHN”), Cox Communications, Inc. (“Cox”), and Comcast Corporation (“Comcast”), alleging that they violated Section 76.1301(c) of the Commission's rules by discriminating against WealthTV's programming in favor of a similarly situated video programming vendor, MOJO, which is affiliated with TWC, BHN, Cox, and Comcast. MOJO is owned by iN DEMAND L.L.C., which is owned 54.1% by Comcast iN DEMAND Holdings, Inc.; 15.6% by Cox Communications Holdings, Inc.; and 30.3% by Time Warner Entertainment-Advance/Newhouse Partnership (“TWE-A/N”).
7. MASN, a regional sports network (“RSN”) which owns the rights to produce and exhibit the games of the Baltimore Orioles and Washington Nationals as well as other sporting events, filed a program carriage complaint against Comcast, the nation's largest MVPD, which holds an attributable ownership interest in two RSNs, Comcast SportsNet Philadelphia (“CSN-P”) and Comcast SportsNet Mid-Atlantic (“CSN-MA”), among other networks. MASN alleged that Comcast discriminated against MASN in favor of its affiliated video programming vendors in violation of Section 76.1301(c) of the Commission's rules. 47 CFR 76.1301(c).
8. Hearing Designation Order. On October 10, 2008, after reviewing the pleadings and supporting documentation filed by the parties in each case, the Media Bureau released a consolidated Memorandum Opinion and Hearing Designation Order (“HDO”). 73 FR 65312, November 3, 2008. The HDO determined that each of the complainants had established a prima facie showing of discrimination by the MVPDs in violation of Section 76.1301(c) of the program carriage rules. 73 FR 65312, 65314, 65316, 65317, 65318, 65327, November 3, 2008. The HDO set forth findings of fact in support of the determinations that a prima facie showing had been made (73 FR 65312, 65313-14, 65314-16, 65316-17, 65317-18, November 3, 2008), and resolved other procedural issues (73 FR 65312, 65324-25 (statute of limitations), 65325 (res judicata), November 3, 2008). The HDO further found that the pleadings and supporting documentation presented factual disputes as to whether the MVPDs discriminated against the video programmers in favor of their affiliated services. 73 FR 65312, 65318, 65327, November 3, 2008. Accordingly, the HDO designated the matters for hearing before an ALJ, ordering the ALJ to make and return a recommended decision and a recommended remedy, if necessary, to the Commission within 60 days of the release date of the HDO. 73 FR 65312, 65318, 65327, November 3, 2008. The HDO stated that upon receipt of the ALJ's recommended decision and remedy, the Commission would make the requisite legal determinations as to whether the MVPDs discriminated against the complainants' programming in favor of their own programming, with the effect of unreasonably restraining the complainants' ability to compete fairly in violation of Section 76.1302(c) and, if necessary would then decide upon appropriate remedies. 73 FR 65312, 65327, November 3, 2008. Under the terms of the grant of authority under the HDO, the ALJ's recommended decision was required to be made within 60 days of the October 10, 2008 release date of the HDO, i.e., by December 9, 2008. 73 FR 65312, 65327, November 3, 2008.
9. Proceedings Before the ALJ. On October 23, 2008, Administrative Law Judge Steinberg issued an order stating that complainants will have the burden of proof with respect to specific issues identified in the Erratum to the HDO and setting a procedural schedule Start Printed Page 3039providing for the exchange of direct case exhibits, stipulations, and a list of witnesses, if any, to be called for oral testimony; a date for the commencement of the hearing; and the filing of proposed findings of fact and conclusions of law, as well as any replies thereto. Herring Broadcasting, Inc. v. Time Warner Cable Inc. et al., Order, MB Docket No. 08-214, FCC 08M-44 (rel. Oct. 23, 2008). The order established December 10 as the deadline for the filing of post-hearing briefs. Id. The order further determined that “due to the time constraints imposed in the HDO discovery would not be practicable and WILL NOT BE PERMITTED.” Id. at ¶ 3 (emphasis in original).
10. On November 20, 2008, Judge Steinberg issued a second order that reversed each of these determinations. Herring Broadcasting, Inc. v. Time Warner Cable Inc. et al., Memorandum Opinion and Order, MB Docket No. 08-214, FCC 08M-47 (rel. Nov. 20, 2008). In response to motions for modification and clarification of the HDO filed by the cable operators, the ALJ indicated that, rather than limit the hearing to a resolution of factual disputes that the HDO designated for hearing, the ALJ would require re-litigation of all disputes in the case and review all evidence de novo. Id. at ¶ 6. In addition, the ALJ ruled that the 60-day timeframe set forth in the HDO “cannot be achieved.” Id. at ¶ 7 & n. 10. The ALJ further determined that some limited discovery should be undertaken. Id.
11. On November 24, 2008, Chief Administrative Law Judge Richard Sippel released an order announcing that Judge Steinberg would be retiring on January 3, 2009, and that Judge Sippel would be taking control of the case. Herring Broadcasting, Inc. v. Time Warner Cable Inc. et al., Order, MB Docket No. 08-214, FCC 08M-48 (rel. Nov. 24, 2008). On November 25, the parties held a status conference with Judge Sippel, where the ALJ indicated that he would not adhere to the 60-day time frame specified in the HDO and that he would not give weight to the Bureau's findings of a prima facie case of discrimination in the HDO. See Herring Broadcasting, Inc. v. Time Warner Cable Inc. et al., Transcript of Proceedings, MB Docket No. 08-214 (Nov. 25, 2008), at 97 (indicating the cases will be decided de novo); 104 (same); 141 (establishing March 17, 2009 as the date for commencement of the hearing). See also TCR's Motion for Reconsideration of Hearing Designation Order, filed Nov. 26, 2008, at 2. Judge Sippel thereafter set a date of March 17, 2009, to begin a hearing, but did not indicate how long the hearing would take or when his recommended decision would be released. Herring Broadcasting, Inc. v. Time Warner Cable Inc. et al., Order, MB Docket No. 08-214, FCC 08M-50 (rel. Dec. 2, 2008); Herring Broadcasting, Inc. v. Time Warner Cable Inc. et al., Revised Procedural and Hearing Order, MB Docket No. 08-214, FCC 08M-53 (rel. Dec. 15, 2008).
12. Requested Relief. On November 24, 2008, WealthTV filed a Motion for Revocation of Hearing Designation, requesting that the Media Bureau resolve the program carriage matters on the basis of the existing record since administrative delay in resolving the program carriage matter would result in irrevocable harm to the programmer. On November 26, 2008, MASN filed a Motion for Reconsideration of the Hearing Designation Order, requesting that the Commission or the Media Bureau reclaim jurisdiction over the matter. MASN contended that relief is necessary to resolve MASN's program carriage complaint expeditiously, as the Commission and Congress intended.
13. TWC, BHN, Comcast and Cox filed oppositions to WealthTV's Motion for Revocation, arguing that WealthTV has offered no basis for revoking the HDO and has chosen a procedurally improper means to remove the hearing from the ALJ. The cable operators request the Bureau to deny WealthTV's Motion for Revocation. Comcast filed a similar opposition to MASN's Motion for Reconsideration, arguing that reconsideration at this stage of the proceeding would be procedurally improper and outside the delegated authority of the Bureau. For these reasons, Comcast maintains the motion should be summarily dismissed or denied.
14. For the reasons stated below, we find that the Administrative Law Judge's limited grant of authority under the HDO to issue a recommended decision by December 9, 2008, has expired under the terms of the HDO, and the ALJ thus no longer has delegated authority to conduct hearings in the above-captioned proceedings. Accordingly, the Media Bureau will proceed to resolve the above-captioned program carriage disputes and will conduct any further discovery as may be necessary for it to resolve any factual disputes.
15. The HDO resolved procedural issues and set forth factual findings based on a review of the pleadings and supporting documentation. 73 FR 65312, 65313-14, 65314-16, 65316-17, 65317-18, 65324-25, November 3, 2008. The HDO directed the ALJ to resolve factual disputes concerning whether the cable operators discriminated against the complainant programmers in favor of their affiliated programming service. 73 FR 65312, 65318, 65327, November 3, 2008. The HDO ordered the ALJ to issue a recommended decision within 60 days of the release date of the HDO. 73 FR 65312, 65318, 65327, November 3, 2008. The HDO was released on October 10, 2008, and under the terms of the HDO, the ALJ's recommended decision was to be issued by December 9, 2008. The expedited deadline for issuing the recommended decision was a critical component of the HDO. As complainants point out in their requests for relief, administrative delay in resolving program carriage disputes could result in irrevocable harm to an independent programmer (e.g., a competing cable operator could use Commission procedures to delay a carriage remedy and thus potentially drive a competing unaffiliated programmer out of business) and potentially deprive viewers of access to desired programming. See Herring Broadcasting, Inc.'s Motion for Revocation of Hearing Designation, filed Nov. 24, 2008, at 2-3 (“The HDO's 60-day deadline reasonably and fairly took into account the harms that administrative delays can inflict, particularly on small businesses such as WealthTV. The deadline reflects congressional concern that holders of bottleneck power could utilize FCC procedures to delay a remedy, and thereby potentially drive competitors out of business”); TCR Sports Broadcasting Holding, L.L.P.'s Motion for Reconsideration of Hearing Designation Order, filed Nov. 26, 2008, at 6 (“under the [expedited deadline of] the HDO, a decision favorable to MASN would have been made well in advance of the next Major League Baseball (“MLB”) season (which begins April 6, 2009); under the ALJ's schedule, a decision by this Commission would not be possible until well into the next MLB season, thereby depriving hundreds of thousands of consumers of an opportunity to watch the Washington National and Baltimore Orioles baseball games in those markets where Comcast has discriminatorily refused to carry MASN”); see also Supplement to Herring Broadcasting, Inc.'s Motion for Revocation of Hearing Designation, filed Dec. 3, 2008.
16. Unfortunately, rather than set an expedited hearing schedule consistent with the HDO deadline, the ALJ greatly expanded the designated issues for hearing, then determined that the 60-day deadline for a recommended Start Printed Page 3040decision could not be achieved. Herring Broadcasting, Inc. v. Time Warner Cable Inc. et al., Memorandum Opinion and Order, MB Docket No. 08-214, FCC 08M-47 (rel. Nov. 20, 2008). The ALJ did not issue a recommended decision by December 9, 2008. Indeed, the hearing in these proceedings is not even scheduled to begin until March 17, 2009, more than three months past the HDO's December 9th deadline. Herring Broadcasting, Inc. v. Time Warner Cable Inc. et al., Order, MB Docket No. 08-214, FCC 08M-50 (rel. Dec. 2, 2008). The ALJ had no authority to act inconsistently with the terms of the HDO from which he derived his authority. Tequesta Television, Inc., 2 FCC Rcd 41, 42 ¶ 10 (1987) (“an ALJ may not countermand a designation order issued under delegated authority as to matters already considered by the delegating authority”). Commission case law makes clear that an Administrative Law Judge has no authority to act inconsistently with the terms of a Hearing Designation Order. Anax Broadcasting, Inc., 87 FCC2d 483 ¶ 11 (1981) (ALJ has no authority to dismiss an application on grounds that were considered by an operating bureau in designating the application for hearing under delegated authority); Frank H. Yemm, 39 RR 2d 1657, 1659 (1977) (ALJ has no authority to dismiss as defective a show cause order issued by the Private Radio Bureau acting under delegated authority). See also Algreg Cellular Engineering, 9 FCC Rcd 5098 ¶ 75 (Rev. Bd. 1994) (ALJ has no authority to grant exceptors' request to confine the intervenors' participation to the Applicants where HDO accorded the intervenors full party status). Thus, by the express terms of the HDO, the ALJ's authority to issue a recommended decision in these proceedings expired after December 9, 2008. The Media Bureau will thus proceed to resolve the carriage disputes in the above-captioned matters.
17. We reject the cable operators' argument that a fair hearing could not be accomplished within the 60-day timeframe described in the HDO. The HDO defined the issues designated for hearing: Whether the cable operators discriminated against the complainant programmers in favor of their affiliated programming service. A 60-day deadline provided adequate time for the parties to present their case on this issue so that the ALJ could meet the December 9 deadline. Indeed, the ALJ's first scheduling order released October 23, 2008, established an expedited schedule more closely in line with the HDO deadline. See Herring Broadcasting, Inc. v. Time Warner Cable Inc. et al., Order, MB Docket No. 08-214, FCC 08M-44 (rel. Oct. 23, 2008). It was not until the ALJ decided to disregard the facts and conclusions recited in the HDO, and instead give de novo consideration to all issues in the matter, that the ALJ determined that the 60-day deadline could not be achieved. See Herring Broadcasting, Inc. v. Time Warner Cable Inc. et al., Memorandum Opinion and Order, MB Docket No. 08-214, FCC 08M-47 (rel. Nov. 20, 2008). We note that under the Adelphia Merger Order, the program carriage condition required certain program carriage disputes to be resolved through arbitration and required the arbitrator to render a decision within 45 days of a request for arbitration. See Applications for Consent to the Assignment and/or Transfer of Control of Licenses, Adelphia Communications Corp., Assignors to Time Warner Cable, Inc. et al., Memorandum Opinion and Order, 21 FCC Rcd 8203, 8287-8288 Appendix B (2006). See also TCR Sports Broadcasting, LLP v. Time Warner Cable, Order on Review, DA 08-2441 (MB rel. Oct. 30, 2008). Moreover, a 60-day deadline is consistent with Commission precedent for deciding program carriage disputes. In another program carriage complaint proceeding involving MASN and Comcast, the Commission directed the ALJ to hold a hearing to resolve factual disputes with respect to the programmer's claims and return a recommended decision and remedy to the Commission within 45 days. See In the Matter of TCR Sports Broadcasting Holding, L.L.P. v. Comcast Corp., Memorandum Opinion and Hearing Designation Order, 71 FR 47222, 47222-23, August 16, 2006. For these reasons, we believe that the 60-day deadline imposed by the Bureau under the HDO was reasonable under Commission precedent and provided sufficient time to address these matters. In any event, as reviewed above, the ALJ had no authority to expand the designated issues for hearing in this manner or extend the deadline for issuing a recommended decision.
18. We also reject the cable operators' argument that resolving disputed issues of fact is a function reserved to the ALJ, and may not be conducted by Media Bureau staff. To the contrary, the Bureau is delegated broad authority over program carriage disputes to administer and enforce rules and policies regarding program carriage. 47 CFR 0.61(f)(7). The Bureau acts under delegated authority invested with the full powers of the Commission. 47 CFR 0.203(a). Nothing in the Commission's rules requires the Bureau to designate a program carriage dispute for hearing before an ALJ. We reject Comcast's argument that the Bureau may not reclaim jurisdiction over the proceedings because in the HDO the Bureau found there were factual disputes that it was unable to determine on the basis of the existing records. The Bureau is not confined to the existing record and has procedural tools at its disposal to have the parties supplement the existing record in order to resolve the factual disputes. See, e.g., 47 CFR 76.7(e)(1) (“The Commission may specify other procedures, such as oral argument or evidentiary hearing directed to particular aspects, as it deems appropriate”); 76.7(e)(2) (“The Commission may require the parties to submit any additional information it deems appropriate for a full, fair, and expeditious resolution of the proceeding, including copies of all contracts and documents reflecting arrangements and understandings alleged to violate the requirements set forth in the Communications Act and in this part, as well as affidavits and exhibits); 76.7(f)(1) (“The Commission staff may in its discretion order discovery limited to the issues specified by the Commission. Such discovery may include answers to written interrogatories, depositions or document production.”). As the ALJ's authority to resolve the factual disputes and return a recommended decision has expired, the Media Bureau will proceed to resolve the factual disputes using the tools at its disposal and render a decision. Commission rules authorize the Media Bureau to refer such matters to an ALJ “in its discretion.” 47 CFR 76.7(g); see also Second Report and Order, 58 FR 60390, 60393-94, November 16, 1993 (contemplating resolution of factual disputes either by the staff or by referral to an ALJ, at the Bureau's discretion). Moreover, the HDO directed the ALJ to issue a recommended decision, but made clear that the Commission would render the ultimate decision, i.e., make the requisite legal determination as to whether the defendants had discriminated against the complainants' programming in favor of its own programming in violation of the program carriage rules. 73 FR 65312, 65327, November 3, 2008. Under Commission rules, the Media Bureau has broad authority to perform these functions. 47 CFR 0.61. Likewise, we reject Comcast's argument that the Bureau cannot proceed here because it is “statutorily forbidden” under Section 5(c)(1) and (8) of the Communications Act from reviewing the rulings of the Start Printed Page 3041ALJ. Section 5(c)(1) and (8) of the Act describe the employees to whom the Commission may delegate review functions in cases of adjudications. 47 U.S.C. 155(c)(1), (8). These statutory provisions are inapplicable here because the Bureau is not reviewing any decision of the ALJ. Indeed, the ALJ has not issued any decision as required by the HDO so there is no ALJ recommended decision to review. The ALJ's authority under the HDO was limited to issuing a recommended decision within 60 days of the release date of the HDO. The HDO made clear that the Commission was to render the ultimate decision and nothing in the HDO divested the Commission (or the Media Bureau on delegated authority) from resolving the factual disputes and issuing a decision in the event that the ALJ failed to exercise its delegated authority under the HDO.
19. The cable operators also argue that the period for seeking reconsideration under Section 405 of the Act (47 U.S.C. 405) has passed, and that a request for revocation of the hearing designation would be an improper appeal of an interlocutory ruling. We need not address these arguments because we are neither reconsidering nor revoking the HDO. As indicated above, the grant of authority in the instant matters was limited to the ALJ issuing a recommended decision by December 10, 2008. That date having passed, the ALJ has no further authority over these matters and revocation and reconsideration are unnecessary. Thus, the petitions to revoke or reconsider the HDO are moot.
IV. Ordering Clauses
20. Accordingly, It is ordered, that the Hearing Designation Order for the above captioned matters has Expired, the proceedings set for hearing before the Administrative Law Judge are Terminated, and the Media Bureau will proceed to resolve the above captioned program carriage disputes.
21. It is further ordered that all parties to the above-captioned proceedings will be served with a copy of this Memorandum Opinion and Order by e-mail and by certified mail, return receipt requested.
22. It is further ordered that a copy of this Memorandum Opinion and Order or a summary thereof shall be published in the Federal Register.Start Signature
Federal Communications Commission
Monica Shah Desai,
Chief, Media Bureau.
[FR Doc. E9-1064 Filed 1-15-09; 8:45 am]
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