[Federal Register Volume 59, Number 197 (Thursday, October 13, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-25022]


[[Page Unknown]]

[Federal Register: October 13, 1994]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[MM Docket Nos. 92-266 and 93-215, FCC 94-234]

 

Cable Television Act of 1992

agency: Federal Communications Commission.

Action: Further notice of proposed rulemaking.

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summary: This further notice of proposed rulemaking is one segment of 
the Fifth Order on Reconsideration and Further Notice of Proposed 
Rulemaking in this proceeding. The final rules adopted in this decision 
may be found elsewhere in this issue. In the Further Notice Proposed 
Rulemaking, the Commission sought comment on possible alternative 
definitions for small cable operators, independent small cable systems, 
and small cable systems owned by small multiple system operators. The 
Commission also sought comment on whether to retain current definitions 
or use different definitions for purposes of establishing special rate 
or administrative treatment for small operators and small multiple 
system operators. The Commission specifically seeks comment on these 
issues in light of Section 3(a) of the Small Business Act, and on 
whether the Commission should employ the current Small Business 
Administration definition of a small cable company in the cable rules. 
A change in the definitions of these categories of cable operators may 
affect eligibility under any final rules which the Commission may adopt 
pertaining to small cable systems.

dates: Comments are due on or before November 16, 1994 and reply 
comments are due on or before December 16, 1994.

addresses: Comments and reply comments should be sent to Federal 
Communications Commission, 1919 M Street NW., Washington, DC 20554.

for further information contact: Susan Cosentino, (202) 416-0800.

supplementary information: This is the proposed rules segment of the 
Commission's Fifth Order on Reconsideration and Further Notice of 
Proposed Rulemaking in MM Docket No. 92-266 and MM Docket No. 93-215, 
FCC 94-234, adopted September 12, 1994 and released September 26, 1994. 
The complete text of this document is available for inspection and 
copying during normal business hours in the FCC Reference Center (room 
239), 1919 M Street, NW., Washington, DC, and also may be purchased 
from the Commission's copy contractor, International Transcription 
Service at (202) 857-3800, 2100 M Street, NW., Suite 140, Washington, 
DC 20037.

Further Notice of Proposed Rulemaking

Background

    In 1992, Congress amended Sec. 3(a) of the Small Business Act to 
require federal agencies to use small business definitions created by 
the Small Business Administration (``SBA''), or in the alternative, 
seek public comment on different definitions and obtain the approval of 
the Small Business Administrator with regard to any regulation 
applicable to small businesses, unless other statutory definitions are 
applicable. SBA rules currently define a small cable company as one 
with $11 million or less in gross revenues. The Cable Television 
Consumer Protection and Competition Act of 1992 defined a small cable 
system as one with 1,000 or fewer subscribers. A small cable operator 
is defined as one with 15,000 or fewer subscribers that is not 
affiliated with a larger operator. In addition, a small multiple system 
operator (``MSO'') is one serving 250,000 or fewer total subscribers 
that owns only systems with less than 10,000 subscribers each and has 
an average system size of 1,000 or fewer subscribers. In this 
rulemaking, the SBA's Office of Advocacy and the Small Cable Business 
Association have expressed concern about the Commission's definitions 
of small operators eligible for transition relief and our definition of 
small MSOs. Specifically, the SBA's Office of Advocacy and the Small 
Cable Business Association believe the current definitions in our rules 
defining eligibility for transition and administrative relief are under 
inclusive and were promulgated in violation of Sec. 3(a) of the Small 
Business Act. They urge us to re-evaluate the definitions and seek 
public input before deciding on permanent standards.
    The Chief Counsel of the SBA's Office of Advocacy has urged the 
Commission to explore a full range of burden-reducing regulatory 
options in our rate proceedings. We are in full agreement with that 
suggestion. Based on the existing record, however, we are not persuaded 
that the actions taken to date to ease the regulatory difficulties 
faced by smaller operators have been undertaken in violation of the 
law. Specifically, the Commission does not believe that Small Business 
Administration size standards, to which federal agencies may be 
required to adhere under Section 3 of the Small Business Act, are 
applicable to the Commission's definitions of small cable operators and 
small cable systems developed in the Second Order on Reconsideration, 
Fourth Report and Order, and Fifth Notice of Proposed Rulemaking MM 
Docket No. 92-266. For example, Section 3(a) of the Small Business Act 
provides that SBA size standards apply for the purposes of all 
legislation, unless the legislation specifically authorizes different 
size standards. The Cable Television Consumer Protection and 
Competition Act of 1992 (``1992 Cable Act'') in fact contains a size 
definition of a small system as one with 1,000 or fewer subscribers. 
See 47 U.S.C. Sec. 543(i). Specifically, the statute requires the 
Commission to develop cable rate regulations that reduce cost and 
administrative burdens for such ``small systems.'' Given the statute's 
small system definition of 1,000 or fewer subscribers, Section 3(a) of 
the Small Business Act is inapplicable. The Commission has implemented 
the statutory provision regarding small system relief in a more 
flexible manner than is explicitly mandated by the 1992 Cable Act and 
is now considering further flexibility through extending relief to 
additional systems. But this does not alter the fact that the 
Commission is implementing a statute with an explicit small business 
standard. Additionally, the Small Business Act defines small-business 
concerns as one ``which is not dominant in its field of operation.'' 15 
U.S.C. Sec. 632(a)(1). Cable systems subject to rate regulation, 
regardless of whether they are large or small, are by definition 
dominant in their field of operation because they do not face effective 
competition. Thus, Section 3(a) of the Small Business Act also does not 
apply because regulated cable systems do not meet the definition of a 
small business concern.

Discussion

    We established transition treatment for small operators pending 
completion of our cost studies, and have established administrative 
relief for independent small systems and small systems owned by small 
multiple system operators (``MSOs''). Under our interim cost-of-service 
rules, independent small systems and small systems owned by small MSOs 
also may use special forms for cost-of-service showings. When cost 
studies are completed, we may make permanent, eliminate, or modify our 
transition rate treatment of small operators. When we develop average 
equipment cost schedules, we may terminate or modify our provisions for 
streamlined rate reductions for independent small systems and small 
systems owned by small MSOs. In our final cost proceeding, we may 
modify our requirements for cost showings by independent small systems 
and small systems owned by small MSOs.
    We believe that it would establish a more complete record for 
purposes of promulgating final rate rules applicable to small 
operators, independent small systems, and small systems owned by small 
MSOs if we obtain comment on possible alternative definitions that we 
could use for purposes of determining eligibility for special rate or 
administrative treatment provisions that could apply to small 
businesses. We are initiating the instant Further Notice of Proposed 
Rulemaking for purposes of obtaining this comment.
    Accordingly, we solicit comment on whether we should retain current 
definitions or use different definitions for purposes of establishing 
special rate or administrative treatment for small operators and small 
MSOs that could be small businesses. We specifically seek comment on 
these issues in light of Section 3(a) of the Small Business Act, and on 
whether we should employ the current SBA definition of a small cable 
company in our cable rules.

Administrative Matters

Initial Regulatory Flexibility Analysis
    Pursuant to Section 603 of the Regulatory Flexibility Act, the 
Commission has prepared the following initial regulatory flexibility 
analysis (IRFA) of the expected impact of these proposed policies and 
rules on small entities. Written public comments are requested on the 
IRFA. These comments must be filed in accordance with the same filing 
deadlines as comments on the rest of the Notice, but they must have a 
separate and distinct heading designating them as responses to the 
regulatory flexibility analysis. The Secretary shall cause a copy of 
the Notice, including the initial regulatory flexibility analysis, to 
be sent to the Chief Counsel for Advocacy of the Small Business 
Administration in accordance with Section 603(a) of the Regulatory 
Flexibility Act, Pub. L. No. 96-354, 94 Stat. 1164, 5 U.S.C. Section 
601 et seq. (1981).
    Reason for action. The Cable Television Consumer Protection and 
Competition Act of 1992 requires the Commission to prescribe rules and 
regulations for determining reasonable rates for basic tier cable 
service and to establish criteria for identifying unreasonable rates 
for cable programming services. The Commission has adopted rate 
regulations that require a comparison to the rates of cable systems 
subject to effective competition, as defined in the Cable Act of 1992 
and represented in the revised benchmark formula. This Notice proposes 
to review and determine appropriate definitions of small systems, small 
operators, and small MSOs for the purpose of determining rate 
regulation applicable to these categories of companies.
    Objectives. To propose rules to implement Section 3 of the Cable 
Television Consumer Protection and Competition Act of 1992. We also 
desire to adopt rules that will be easily interpreted and readily 
applicable and, whenever possible, minimize the regulatory burden on 
affected parties.
    Legal Basis. Action as proposed for this rulemaking is contained in 
Sections 4(i), 4(j), 303(r) and 623 of the Communications Act of 1934, 
as amended.
    Description, potential impact and number of small entities 
affected. We anticipate a possible impact on small entities because the 
Notice addresses the definitions of small systems, small operators and 
small MSOs for use in determining rate rules affecting these classes of 
cable operators.
    Reporting, recordkeeping and other compliance requirements. None.
    Federal rules which overlap, duplicate or conflict with this rule. 
None.
    Any significant alternatives minimizing impact on small entities 
and consistent with stated objectives. None.

Paperwork Reduction Act

    The requirements adopted herein have been analyzed with respect to 
the Paperwork Reduction Act of 1980 and found to impose no new or 
modified information collection requirements on the public.

Procedural Provisions

    Ex parte Rules--Non Restricted Proceeding. This is a non-restricted 
notice and comment rulemaking proceeding. Ex parte presentations are 
permitted, except during the Sunshine Agenda period, provided that they 
are disclosed as provided in Commission rules. See generally 47 CFR 
1.1202, 1.1203, and 1.1206(a).
    Pursuant to applicable procedures set forth in Secs. 1.415 and 
1.419 of the Commission's Rules, 47 CFR 1.415 and 1.419, interested 
parties may file comments on or before November 16, 1993 and reply 
comments on or before December 16, 1994. To file formally in this 
proceeding, you must file an original plus four copies of all comments, 
reply comments, and supporting comments. If you want each Commissioner 
to receive a personal copy of your comments and reply comments, you 
must file an original plus nine copes. You should send comments and 
reply comments to Office of the Secretary, Federal Communications 
Commission, 1919 M Street, NW., Washington, DC 20554. Comments and 
reply comments will be available for public inspection during regular 
business hours in the FCC Reference Center, Room 239, Federal 
Communications Commission, 1919 M Street NW., Washington DC 20554.

Ordering Clauses

    Authority for this Further Notice of Proposed Rulemaking is 
contained in sections 4(i), U.S.C. 154(i), 154(j), 303(r), 532(c) and 
543.
    It is ordered That, pursuant to Sections 4(i), 4(j), 303(r), 
612(c), 622(c) and 623 of the Communications Act of 1934, 47 U.S.C. 
Secs. 154(i), 154(j), 303(r), 532(c), 542(c), and 543, Notice is hereby 
given of proposed amendments to Part 76, in accordance with the 
proposals, discussions, and statement of issues in this Further Notice 
of Proposed Rulemaking, and that Comment is Sought regarding such 
proposals, discussion, and statement of issues.

List of Subjects in 47 CFR Part 76

    Cable television.

Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 94-25022 Filed 10-12-94; 8:45 am]
BILLING CODE 6712-01-M