[Federal Register Volume 60, Number 157 (Tuesday, August 15, 1995)]
[Proposed Rules]
[Pages 42130-42140]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-20243]



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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 73

[MM Docket No. 87-268; FCC 95-315]


Broadcast Services; Advanced Television Systems

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking, Notice of inquiry.

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SUMMARY: This Fourth Further Notice of Proposed Rule Making and Third 
Notice of Inquiry examines a broad range of issues related to the 
conversion of our current broadcast television to digital technology. 
In previous orders in this Advanced Television (``ATV'') proceeding, 
our focus was on fostering the development of High Definition 
Television. Technological evolution now obliges us to revisit some of 
those decisions, which we do in this document. Accordingly, we invite 
comment on a broad range of issues related to the conversion by 
television broadcasters to digital television, including eligibility 
requirements, 

[[Page 42131]]
spectrum issues, definition of the service, public interest 
obligations, transition issues, recovery of spectrum, length of the 
application/construction period, issues related to small markets and 
noncommercial stations, all-channel receiver issues, and must-carry and 
retransmission consent, to ensure that the rules that we fashion in 
this proceeding serve the public interest in all respects. We also 
institute an inquiry to invite comment as to where in the spectrum 
broadcasters should eventually be located and as to the amount, value 
and uses of the spectrum that could eventually be recovered when the 
conversion to digital television is completed.

DATES: Comments are due by October 18, 1995, and reply comments are due 
by December 4, 1995.

ADDRESSES: Federal Communications Commission, Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT:
Saul Shapiro (202-418-2600) or Roger Holberg (202-776-1653), Mass Media 
Bureau.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
Fourth Notice of Proposed Rule Making and Third Notice of Inquiry in MM 
Docket No. 87-268, FCC 95-315, adopted July 28, 1995, and released 
August 9, 1995. The complete text of this NPRM and NOI 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, (202) 857-3800, 2100 M Street, 
NW., Suite 140, Washington, DC 20037.

Synopsis of Notice of Proposed Rule Making

    1. With this Fourth Further Notice of Proposed Rule Making and 
Third Notice of Inquiry (``Notice''), we continue the process of moving 
toward the next era of broadcast television: digital broadcast 
television. In previous orders in this Advanced Television (``ATV'') 
\1\ proceeding,\2\ our focus was on fostering the development of High 
Definition Television (``HDTV'').\3\ Technological evolution now 
obliges us to revisit some of those decisions and consider new 
information, which we do in this document.

    \1\ Advanced Television (``ATV'') refers to any television 
technology that provides improved audio and video quality or 
enhances the current NTSC television system.
    \2\ Our earlier Notices and Orders are: Notice of Inquiry, 52 FR 
34259, September 10, 1987; Tentative Decision and Further Notice of 
Inquiry, 53 FR 38747, October 3, 1988; First Report and Order, 55 FR 
39275, September 26, 1990; Notice of Proposed Rule Making, 56 FR 
58207, November 18, 1991; Second Report and Order/Further Notice of 
Proposed Rule Making, 57 FR 21744 & 21755, May 22, 1992; Second 
Further Notice of Proposed Rule Making, 57 FR 38652, August 26, 
1992; Memorandum Opinion and Order/Third Report and Order/Third 
Further Notice of Proposed Rule Making in MM Docket No. 87-268, 57 
FR 53679 & 53588, November 12, 1992.
    \3\ High Definition Television offers approximately twice the 
vertical and horizontal resolution of NTSC, which is a picture 
quality approaching 35 millimeter film, and has sound quality 
approaching that of a compact disc.
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    2. The current technology allows for multiple streams, or 
``multicasting,'' of Standard Definition Television (``SDTV'') \4\ 
programming at a quality at least comparable to, and possibly better 
than, the current analog signal, as well as CD-quality audio signals 
and the rapid delivery of huge amounts of data. It allows broadcasters 
to send, simultaneously, video, voice and data. In addition, it allows 
broadcasters to provide a range of services dynamically, that is, it 
allows them to switch easily and quickly from one type of service to 
another.

    \4\ Standard Definition Television (``SDTV'') is a digital 
television system in which picture quality is approximately 
equivalent to the current NTSC television system.
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    3. Revisiting our earlier decisions is consistent with our 
statutory responsibility to ``encourage the provision of new 
technologies and services to the public,'' 47 U.S.C. 157, as well as 
with our general statutory obligations to promote the public interest, 
since these developments have the potential to provide profound 
benefits to the American public.
    4. In deciding what rules should govern the transition to digital 
television, we recognize our obligation to manage the spectrum 
efficiently and in the public interest and to take account of the 
legitimate interests of all those with a stake in that transition. With 
the foregoing considerations in mind, we will pursue and balance the 
following goals in this proceeding: (1) Preserving a free, universal 
broadcasting service; (2) fostering an expeditious and orderly 
transition to digital technology that will allow the public to receive 
the benefits of digital television while taking account of consumer 
investment in NTSC television sets; (3) managing the spectrum to permit 
the recovery of contiguous blocks of spectrum, so as to promote 
spectrum efficiency and to allow the public the full benefit of its 
spectrum; and (4) ensuring that the spectrum--both ATV channels and 
recovered channels--will be used in a manner that best serves the 
public interest.
    5. It has become apparent that the flexibility of the Grand 
Alliance system will allow for more applications and alternative uses 
than we had previously contemplated. We are issuing this Fourth Further 
Notice of Proposed Rule Making and Third Notice of Inquiry to invite 
comment on several aspects of this changed ATV environment and their 
ramifications for this proceeding.

A. Spectrum Issues

    6. The Commission previously decided that ATV would be introduced 
by assigning existing broadcasters a temporary channel on which to 
operate an ATV station during a transition period and that the spectrum 
needed for the transition would be obtained from the spectrum currently 
allocated to broadcasting. We continue to believe that providing 6 MHz 
channels for ATV purposes represents the optimum balance of broadcast 
needs and spectrum efficiency. We invite comment, however, on any means 
of achieving greater spectrum efficiency.
B. Definition of Service

    7. We reaffirm in this proceeding our intention to preserve and 
promote universal, free, over-the-air television. We envision that the 
6 MHz channel earmarked for ATV will be used for free, over-the-air 
broadcasting. The digital transmission system currently proposed would 
provide broadcasters with new flexibility and new capabilities as they 
embark on serving the American public with the next generation of 
television. Broadcasters will be capable of providing through ATV not 
only a vastly improved high definition picture, but also multiple 
program steams. In addition, the ATV system is capable of nonbroadcast 
uses that are nonvideo and/or subscription-based in nature. Allowing at 
least some level of flexibility would increase the ability of 
broadcasters to compete in an increasingly competitive marketplace, and 
would allow them to serve the public with new and innovative services 
Flexibility could also allow for a more rapid transition to digital 
broadcasting. Nonetheless, any flexibility afforded broadcasters must 
not undermine our American system of universal, free, over-the-air 
television. In establishing a regulatory framework for the provision of 
ATV in light of this new flexibility, we therefore seek comment on the 
following questions:
     Should we require broadcasters to provide a minimum amount 
of HDTV and, if so, what minimum amount should be required?
     To what extent should we allow broadcasters to use their 
ATV spectrum for uses other than free, over-the-air broadcasting? We 
recognize that we 

[[Page 42132]]
currently allow broadcasters to use a portion of their analog spectrum 
for ancillary and supplementary uses that do not interfere with or 
detract from their primary broadcast function. Should such uses of the 
ATV spectrum be permitted and, if so, how should they be defined? What 
portion of the ATV system's capacity should be allowed to be used for 
ancillary and supplementary services?
     To what extent should we allow braodcasters to use their 
ATV spectrum for services that go beyond traditional broadcast 
television or ancillary and supplementary uses analogous to those 
allowed under our current regulatory regime? Should broadcasters be 
permitted to provide nonbroadcast and/or subscription services? \5\ If 
so, how should such services be defined and how much of the ATV 
system's capacity should be allowed for such uses? If allowed, what 
regulation, if any, would be appropriate for such services?

    \5\ We note that, under our current rules, a licensee may 
provide video programming primarily on a subscription basis. We also 
note pending legislative proposals that contemplate granting us the 
authority to require licensees to pay annual spectrum fees where 
licensees charge the public for the new services provided on the 
conversion channels. We will publish a Public Notice or other 
appropriate document with respect to the effect on our ATV decisions 
of any relevant law enacted.
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    8. In responding to the above questions, if commenters propose that 
licensees be required to meet any requirements (such as a minimum HDTV 
requirement) or be limited in providing ancillary and supplementary 
services, they should include comment on the administrative processes 
we would use to implement any requirements or limitations. For 
instance, how should we measure use--by the amount of time, data packet 
``headers,'' or by some other means? Should the time of day when 
broadcast or other video service is offered have any significance? What 
administrative process should we use to enforce such a requirement--
self reporting, complaints from the public, operating logs, etc.--and 
what costs would be associated with each?

C. Eligibility Issues

    9. The Commission has previously established that during the 
initial period, existing broadcasters would have the first opportunity 
to acquire ATV channels. Included in the class of existing broadcasters 
were: (a) All full-service television broadcast station licensees; (b) 
permittees authorized as of October 24, 1991, and (c) all parties with 
applications for a construction permit on file as of October 24, 1991, 
who are ultimately awarded full-service broadcast station licenses.
    10. We continue to believe that initial eligibility should be 
limited to existing broadcasters given the shortage of suitable 
spectrum and our decision not to allocate additional spectrum for this 
purpose. We are still asking existing broadcasters to inaugurate a 
television service that will deliver a signal of superior quality. 
Furthermore, we are not creating a new service, and our eligibility 
restriction does not ultimately result in more spectrum for 
broadcasters or less spectrum for others. We are merely moving each 
existing broadcaster from one channel to a different channel in a one-
for-one exchange designed to accomplish a number of long-term public 
interest goals.\6\ Broadcasters will be required to cease their analog 
operations after a relatively short period, thereby permitting a swift, 
certain transition to digital technology and a rapid recovery of 
spectrum for the benefit of the public.

    \6\ There is ample precedent for our reallocation of spectrum in 
the public interest, even where such reallocation results in 
displacement of current users of the spectrum, and it is clear that 
we have broad discretion to do so. We have, in a number of contexts, 
moved users of spectrum to different bands.
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    11. We believe that we are not precluded by Ashbacker Radio Corp. 
v. FCC, 326 U.S. 327 (1945), from limiting initial eligibility to 
incumbent broadcasters, even if we permit flexible use of the digital 
system and especially since the broadcasters' ``analog'' operations 
will be shut down and one of the channels will be relinquished.\7\ 
Under Section 309 of the Communications Act, as applied by the Supreme 
Court in United States v. Storer Broadcasting Co.,\8\ we are authorized 
to set licensee eligibility standards. As an independent matter, we 
note that we also have authority under Section 316 of the 
Communications Act, 47 U.S.C. 316, to modify existing licenses as the 
public interest requires. In so doing, our actions are not governed by 
the hearing and other requirements of Section 309 of the Act.\9\ In 
light of our authority under both Storer and Section 316 of the Act, we 
invite comment on our tentative conclusion that no Ashbacker problem is 
presented by our proposals.

    \7\ The Court of Appeals has held that Ashbacker applies only to 
parties whose applications have been declared mutually exclusive and 
does not apply to ``prospective applicants.'' Reuters Ltd. v. FCC, 
781 F.2d 946, 951 (D.C. Cir. 1986). No Ashbacker rights would be 
triggered because we are defining the category of eligible 
applicants rather than rejecting one bona fide applicant without 
comparing it to the others.
    \8\ 351 U.S. 192 (1956).
    \9\ Section 316 does not require us to accept petitions to deny 
an application filed as a result of a proposed modification, but it 
does require us to consider protests filed by other licensees or 
permittees who believe their own licenses or permits would be 
modified by the Section 316 modification. See 47 U.S.C. 
Sec. 316(a)(3).
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    12. While we reiterate our tentative conclusion to limit initial 
eligibility for ATV frequencies to existing broadcasters, we seek 
comment on the potential impact our proposal would have on the 
Commission's long standing policy of fostering programming and 
ownership diversity. Specifically, we seek comment on what measures, if 
any, the Commission may adopt to include new entrants into this 
emerging era of digital television.
    13. Some parties have suggested that we should auction the spectrum 
intended to be used for ATV service. Section 309(j) of the 
Communications Act of 1934, as amended, limits the uses of spectrum 
that is subject to being auctioned. It specifically requires that, 
``the principal use of such spectrum will involve, or is reasonably 
likely to involve, the licensee receiving compensation from 
subscribers. * * *'' Our experience and our judgment concerning market 
conditions lead us to believe that the broadcasters would use this 
spectrum for free over-the-air broadcast service; therefore, it cannot 
be auctioned under Section 309(j). For this reason, as well as those 
set forth above, we reiterate our previous decision to limit initial 
eligibility to existing licensees. Commenters may address whether any 
changed circumstances should alter this conclusion.
    14. Given our decision not to allocate additional spectrum for 
television broadcasting, the number of transition channels is limited. 
Therefore, we also solicit comment on granting eligibility status to 
those broadcasters that are in bankruptcy, off-the-air, have 
construction permits or are otherwise non-operational, or otherwise 
incapable of engaging in the transition to digital television. We 
specifically request comment on whether the transition channels 
identified for these licensees or permittees would be better used to 
support service to the public if instead they were made available to 
new entrants.

D. Public Interest Obligations

    15. Our rules imposing public interest obligations on broadcast 
licensees flow from the statutory mandate that broadcasters serve the 
``public interest, convenience and necessity,'' \10\ as well as other 
provisions of the Communications Act. Broadcasters are 

[[Page 42133]]
required to air programming responsive to community needs and 
interests. They are required to air programming designed to ``serv[e] 
the educational and informational needs of children.'' They must 
provide ``reasonable access'' to candidates for federal elective 
office, and must afford ``equal opportunities'' to candidates for any 
public office. Broadcasters are also obliged to refrain from airing 
certain programming, such as indecent programming outside the ``safe 
harbor'' period. Finally, in order to promote diversity of viewpoint, 
broadcasters must refrain from discriminating in employment and must 
establish and maintain an equal employment opportunity (``EEO'') 
program designed to provide equal employment opportunities for 
minorities and women. Our previous orders reflect the assumption that 
public interest obligations would attach to ATV broadcasting. Indeed, 
that broadcasters ``have an obligation to serve the public interest'' 
is one of our reasons for limiting initial eligibility for ATV channels 
to existing broadcasters.

    \10\ 47 U.S.C. 307(c). See also id. Sec. 307(a).
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    16. We remain committed to enforcing our statutory mandate to 
ensure that broadcasters serve the public interest. Our current public 
interest rules, including those implementing specific statutory 
requirements, were developed for broadcasters essentially limited by 
technology to a single, analog video programming service. The potential 
for more flexible and dynamic use of the advanced television channel 
than what broadcasters currently enjoy gives rise to important 
questions about the nature of public interest obligations in the 
digital broadcasting world. We request comment on how the conversion to 
digital broadcasting should affect broadcasters' obligation to serve 
the public interest.
    17. Our future rules may allow broadcasters to use their advanced 
television channels to provide a high definition television service, 
multiple standard definition television services and perhaps other 
services, some of which may be on a subscription basis. Should a 
licensee's public interest obligations depend on the nature of the 
services it chooses to provide and, if that is the case, how so? For 
example, if a broadcaster chooses to provide multiple standard 
definition services, should public interest obligations attach to each 
one? What if one or more of those services are provided on a 
subscription basis? Alternatively, should public interest obligations 
be seen as attaching not to services but to licensees, each of whom 
would be required to operate the facilities associated with its 6 MHz 
ATV channel in the public interest? We note that attaching a public 
interest requirement on one type of ``service'' could skew broadcaster 
investment away from providing that service--a situation that could 
potentially result in a net public interest loss. Commenters are 
requested to discuss whether, if Congress grants the Commission the 
requisite authority, we should consider imposing spectrum fees for that 
portion of the spectrum used by broadcasters to provide subscription 
services. We note that the use of spectrum fees may allow the 
Commission to establish a regulatory framework that does not discourage 
broadcasters from providing free over-the-air channels or other 
services to which public interest obligations might attach. We also 
invite comment on whether the conversion to digital broadcasting 
justifies other changes in our public interest framework.
    18. Finally, we express our intention to continue to apply EEO 
requirements on broadcasters. We ask, however, whether there are 
additional means available to further our objective of promoting 
diversity of viewpoints in a digital world.

E. Transition

1. Simulcast Requirement
    19. Previously, we determined that ATV licensees should simulcast 
on their NTSC stations the programming offered on their ATV stations. 
We preliminarily decided that, beginning one year after the six year 
application and construction period, ATV licensees would have to 
simulcast 50 percent of their ATV programming, increasing to 100 
percent two years later. Additionally, we indicated that we would 
review this schedule at the time of our initial review of the pace of 
conversion at the end of the application/construction period and 
immediately prior to the imposition of 100 percent simulcasting.
    20. Our concern was, and remains, that consumers not be prematurely 
deprived of the benefits of existing television equipment. We also 
stated that requiring simulcasting would assist us in reclaiming the 
analog channel as soon as possible by minimizing broadcaster and 
consumer reliance on the ATV and NTSC channels carrying separately 
programmed services. Additionally, we believed that a simulcast 
requirement would ``give added impetus to ATV receiver penetration by 
eliminating the need for dual mode receivers capable of receiving both 
NTSC and ATV,'' thereby helping to lower the cost of ATV receivers, 
spurring increased penetration.
    21. These decisions were appropriate and practical when it appeared 
that ATV would primarily consist of the broadcast of a single HDTV 
program service. However, it is apparent that a digital TV system can 
be used to transmit multiple simultaneous SDTV program services. 
Obviously, a licensee would be unable to simulcast multiple program 
services on its NTSC channel. Under such circumstances, it is clear 
that our simulcasting requirement must be revisited and we must 
consider alternatives.
    22. The simulcasting requirement was in large measure intended to 
allow consumers to avoid being prematurely deprived of the benefits of 
their NTSC video equipment. We hoped to avoid having broadcasters move 
their best programs to HDTV, with the result that large numbers of 
viewers that do not have HDTV equipment would lose much of the value of 
broadcast television service. At the present time, this no longer 
appears to be a likely prospect. We do not foresee broadcasters taking 
their best programming off of their NTSC stations and putting it on 
HDTV where potential audiences will, at first, be small. Similarly, we 
do not see broadcasters moving their best programming off of NTSC and 
on to ATV early in the conversion process. We believe that, instead, 
the market will continue to serve consumer demand by assuring the 
continued presence of good programming on NTSC channels. However, we 
still perceive a need for a simulcast requirement, albeit different 
from that first envisioned.
    23. Some number of consumers, unaware of the transition to digital 
television or unable to afford replacement equipment, may continue 
viewing analog television throughout the transition period. At the end 
of the transition period, we may be confronted with the choice of 
either terminating analog service, causing such viewers to lose their 
only source of free broadcast service, or, alternatively, allowing 
analog broadcasting to continue, thereby depriving the broad general 
public of the benefits that we believe are to be found from the 
recovery of one of the channels. We wish to avoid either alternative 
and believe that a simulcasting requirement may be useful in speeding 
the migration of these consumers from analog to digital broadcasting. 
Accordingly, we propose to require the simulcast of all material being 
broadcast on the licensee's NTSC station (with the exception of 
commercials and promotions) on a 

[[Page 42134]]
program service of the ATV channel. If a program is available only on 
the analog service, then all viewers (those with digitally capable and 
analog-only sets) will need to watch it in the analog service. In a 
simulcast environment, the number of consumers who will lose access to 
a specific program service will be reduced by the number who have a 
digitally capable set or set top converter.
    24. We ask parties to comment on this proposal, including assessing 
its impact on broadcasters' ability to provide HDTV service, and to 
offer other viable alternatives, keeping in mind our goals of avoiding 
a reliance on NTSC service and assuring recovery of large blocks of 
contiguous spectrum at the conclusion of a speedy and smooth transition 
process. We are open to suggestions and will consider any option that 
does not slow the conversion to digital television. For instance, 
commenters may wish to comment on whether the simulcast requirement 
should be tradeable. That is, should a licensee be permitted to 
purchase time on a competitor's ATV station on which to broadcast its 
analog programming?
    25. Also, we seek comment on the phasing in of a simulcasting 
requirement. We believe that at the beginning of the transition a 
broadcaster should be required to simulcast little or no NTSC 
programming. Few viewers would have ATV receivers at that stage. Later, 
as fewer consumers depend upon analog television and ATV equipment 
proliferates, we tentatively believe that the simulcasting requirement 
should be increased. Commenters are invited to comment on the relevant 
time periods for each phase and the amount of simulcasting that should 
be required in each such phase.
2. Licensing of ATV and NTSC Stations
    26. We revisit the question of whether licensees' NTSC and ATV 
station licenses should be considered a single license or two separate 
and distinct licenses. We previously decided to treat the licensee as 
having two paired licenses. That is, each licensee's NTSC and ATV 
station would receive a separate license. Because the licenses were to 
be paired, however, if a licensee's NTSC license were to be revoked or 
not renewed while its ATV application was pending, the licensee would 
lose its priority eligibility status. Also, if either a licensee's NTSC 
or ATV license were revoked or not renewed, the remaining license would 
automatically suffer the same fate. We nonetheless indicated that we 
would consider permitting a licensee to voluntarily surrender its NTSC 
channel while retaining the corresponding ATV channel on a case-by-case 
basis in the interest of spectrum efficiency.
    27. We decided that broadcasters would be operating two distinct 
facilities having different characteristics and, frequently, 
transmitting from different locations. Treating the ATV and NTSC 
channels as separately licensed facilities would, we concluded, 
simplify enforcement and administration. However, we paired the two 
licenses to prevent the separate transfer of one channel of the pair 
because we believed that would make it impossible to recapture one of 
the 6 MHz channels at the end of the transition period and still leave 
the existing licensee with a broadcast outlet.
    28. We tentatively conclude that substantial benefits could be 
obtained if, instead of licensing the NTSC and ATV facilities 
separately, we authorized both under a single, unified license. It 
would ease administrative burdens on the Commission and broadcasters 
alike by reducing the number of applications that would have to be 
filled out, filed and processed. Licensing the two facilities under a 
single authorization is also consistent with our view that the 
authorizations may be issued pursuant to our broad authority under 
Section 316 of the Act to modify an existing license. Finally, treating 
the two facilities under a single license would retain the sound policy 
announced in the Second Report/Further Notice of treating both 
facilities the same from the revocation/non-renewal standpoint. We seek 
comment on this tentative conclusion.
    29. Commenters advocating separate licenses for the ATV channels 
may wish to address whether, if NTSC and ATV licenses were licensed 
separately, we should allow the sale of an authorization for an unbuilt 
ATV facility. Allowing such transfers could speed the transition to 
digital ATV by putting transition spectrum into the hands of parties 
willing and able to construct ATV facilities. Commenters should be 
mindful, however, that even if NTSC and ATV licenses were to be issued 
separately and unpaired the NTSC licensee would have to cease its NTSC 
operations at the end of the transition period. Moreover, unpairing the 
NTSC and ATV licenses would raise complex issues regarding simulcast 
and retransmission/must carry rights. In the event we adopt an NTSC-ATV 
simulcast requirement, should the transfer of a separated ATV license 
be permitted only if the programming on the accompanying NTSC license 
were simulcast in digital?

F. Transition Period

    30. In the Third Report/Further Notice we made a preliminary 
decision to establish a transition period that concludes 15 years from 
the date of adoption of an ATV system or a final Table of ATV 
Allotments is effective, whichever is later. In addition, we adopted a 
schedule of periodic reviews to permit us to monitor the progress of 
ATV implementation and to make any necessary adjustments. We decided 
that the transition period should not be modified without a substantial 
showing that the change is in the public interest. We reiterated that 
we planned to award broadcasters interim use of an additional 6 MHz 
channel to permit a smooth, efficient transition to an improved 
technology with as much certainty and as little inconvenience to the 
public and the industry as possible. Finally, we clarified that, in 
general, broadcaster who do not convert to ATV will nevertheless have 
to cease broadcasting in NTSC at the end of the 15-year transition 
period.
    31. There may now be reasons to expect that broadcasters will adopt 
ATV more rapidly than was anticipated in 1992, when we last analyzed 
the transition period. The broadcast industry, including equipment 
manufacturers, have been at the forefront of developing digital 
technology for television. Other new services, such as ``video 
dialtone,'' that would use digital transmission technologies are also 
being initiated or planned. In this environment, broadcasters have 
added incentive to convert more rapidly in order to remain competitive.
    32. Consumers will buy or rent digitally capable receivers or set-
top converters as their choice of digitally-based video products 
expands. For each household which transitions to any of the new media, 
including over-the-air digital, there will be at least one less 
television set reliant upon over-the-air NTSC analog transmissions. 
Given the degree of competition that exists between suppliers of 
electronic equipment, and expected economies of scale resulting from 
the proliferation of digitally based media, we anticipate that 
declining costs will translate into reduced prices and increased sales 
of digital receivers and converters to consumers.
    33. We previously cautioned that broadcasters' cessation of NTSC 
transmission and surrender of a 6 MHz channel would depend on ATV 
becoming the prevalent medium, stemming in part from our concern over 
the number of households that might 

[[Page 42135]]
continue to rely on NTSC transmissions. As discussed above, purchase of 
an ATV receiver or converter is not the only meaning of ending reliance 
on NTSC transmission, so projections solely of ATV receiver penetration 
may not be the most accurate benchmark for deciding when broadcasters 
should cease NTSC transmission and surrender a 6 MHz channel.
    34. We now wish to consider whether some objective benchmark(s) 
could be used to determine when broadcasters should cease NTSC 
transmission. Is it possible to end the transition period in a market 
by tying the transition period to some objective benchmark(s)? If so, 
what benchmark(s) should be used? The conversion could be considered 
complete when the number of households that rely on NTSC has fallen to 
a given percentage. We ask parties to comment on tying the transition 
period and final conversion date to the percentage of households in a 
market that rely on NTSC transmission. If the final conversion date is 
triggered when the number of households that rely on NTSC falls to a 
given percentage, what should the threshold percentage be that triggers 
the final conversion date? How would we measure the number of 
households that rely on NTSC transmission from year to year? Should we 
measure households or television sets? What other objective benchmarks 
should we consider in determining the transition period and the final 
conversion date? To what extent should the availability of inexpensive 
digital receivers and converters be used as a benchmark in determining 
the length of the transition period?
    35. We previously reasoned that by adopting a target date approach 
we could speed the transition to digital technologies. Are there 
mechanisms other than the date certain approach that we adopted in 
1992, that we could put in place to create incentives for rapid 
adoption of ATV by consumers, broadcasters, manufacturers, and others? 
For example, should we consider having the transition period end at the 
earlier of a date certain or attainment of an objective benchmark? We 
seek information on how broadcasters could assist consumers by 
providing alternate methods of acquiring or leasing digital equipment 
in the short term so that the transition costs can be reduced and the 
transition schedule can be shortened. Could broadcasters in a market 
cooperate in leasing converters and/or ATV receivers to consumers? 
Would cooperation between broadcasters in a market raise anti-
competitive concerns? If so, how could the cooperative arrangements of 
broadcasters be adapted to reduce household reliance on NTSC 
transmission without raising these concerns?

G. Recovery of Spectrum

    36. We have put broadcasters on notice that when ATV becomes the 
prevalent medium, they will be required to surrender a 6 MHz channel 
and cease broadcasting in NTSC, reiterated that we are awarding 
broadcasters interim use of an additional 6 MHz channel, and clarified 
that broadcasters who do not convert to ATV will nevertheless have to 
cease broadcasting in NTSC.
    37. The rationale underlying the recovery of spectrum was the 
freeing of spectrum of significant value for other uses. The spectrum 
to be used for the transition to ATV has significant value for other 
services and benefits and that any delay in reclaiming the reversion 
spectrum carries potential costs to the public.
    38. When the transition to digital technologies is complete, we 
must have some mechanism in place to recover the extra 6 MHz channel. 
One option would be to continue renewing licenses for five year periods 
but explicitly terminate authority to use one of the 6 MHz channels at 
the end of the transition period. If we were to adopt a ``two-license'' 
approach, one of the two licenses could expire at the end of the 
transition period. We ask parties to comment on the advantages and 
disadvantages of each approach.
    39. We remain committed to the recovery of spectrum. In addition, 
we believe that spectrum will be of greater value if available in large 
contiguous nationwide blocks. To create contiguous blocks of spectrum 
following the transition period, it may be necessary to move some 
digital broadcast stations to new channels that are contiguous with 
others. This would have the effect of condensing broadcast assignments 
to a narrower band of spectrum without eliminating any licenses. Today, 
television broadcasters have over 400 MHz assigned to them, but NTSC 
technology does not permit all of the channels to be used in the same 
geographic area. We believe that the ``Grand Alliance'' digital system 
does not have these difficulties. By moving some digital broadcast 
stations, we would be able to obtain a more spectrum-efficient 
arrangement by condensing broadcasting assignments to less than 400 
MHz. We believe that information concerning spectrum recovery and 
moving some digital broadcast stations to new channels should be 
solicited at this time to assure the future availability of contiguous 
spectrum and encourage immediate planning and investment in new 
services. We request comment on our tentative plans to create 
contiguous blocks of spectrum.
    40. While broadcasters have been given notice that they must 
surrender a 6 MHz channel after full conversion to digital 
technologies, no final decisions have been made concerning which of the 
two channels would be surrendered. Allowing licensees to determine 
which 6 MHz channel they would use for digital transmission and which 
channel they would surrender may result in broadcasters providing 
digital services on channels scattered throughout the VHF and UHF 
broadcast band. Allowing this would inhibit the formation of large 
contiguous blocks of spectrum. To minimize the number of digital 
broadcast stations that may need to be moved to new channels to 
facilitate the creation of large contiguous blocks of VHF and/or UHF 
spectrum, it will likely be necessary for us, not the licensee, to 
determine which 6 MHz channel the broadcaster must use for digital 
transmission and which channel must be surrendered. Also, we believe 
that by making these decisions early we can aid broadcasters in their 
investment decisions.
    41. In order to create the maximum amount of contiguous spectrum 
following the transition period, it may be necessary to move some 
digital broadcast stations to new channels. We recognize that there are 
costs associated with moving stations to new channels. We request 
comment on the benefits and costs of moving stations to new channels. 
We also seek comment on how to minimize the costs of moving stations to 
new channels. Finally, we ask parties to comment on whether each 
broadcaster should pay for its own move, whether all broadcasters 
should pay for the costs of relocation, or whether the licensee the 
bumps the broadcaster should pay to move the broadcaster, as was done 
in the emerging technologies band for PCS.

H. Length of Application/Construction Period

    42. We previously granted existing broadcasters three years from 
the effective date of ATV system selection or an ATV Allotment Table, 
whichever is later, in which they exclusively may apply for a preferred 
or ``set-aside'' ATV channel, and a total of six years to both apply 
for and construct an ATV facility. We previously stated that such 
factors as the time needed to raise the necessary capital to invest in 
ATV technology, to plan for the creation of a new station, including, 
in some cases, having to 

[[Page 42136]]
locate a new transmitter site, and to allow ATV equipment to become 
available, required that we establish these application and 
construction periods.
    43. We propose to establish a procedure by which broadcasters have 
six months in which to make an election and confirm to the Commission 
that they want an ATV license. After that, they would have the 
remainder of the three-year period in which to supply supporting data 
as we may require. If they elect not to construct an ATV facility, or 
elect to construct but do not proceed to do so, their NTSC licenses 
will expire at the end of the ATV conversion period and they will have 
to cease broadcasting. This process would have the benefit of 
identifying early on locations where existing broadcasters do not want 
to transition to ATV and where applications from new entrants for ATV 
stations could therefore be considered.
    44. We ask that commenters address all aspects of the construction 
period. Is the current six-year period appropriate, too long, or is it 
insufficient? We believe that the exclusive eligibility period can be 
shortened, primarily by requiring licensees to make an election within 
the first six months after the adoption of an ATV standard or final 
Table of Allocations, whichever is later, as to whether to convert. 
This should not place an undue burden on licensees. Broadcasters have 
now been on notice for a number of years of the general direction in 
which we are moving toward digital television and some, we understand, 
have begun planning in earnest for the transition. Moreover, much 
digital broadcasting equipment has been developed and demonstrated. 
Commenters should provide information on their ability to apply for and 
construct ATV facilities and discuss the difficulties they would have 
in meeting a shorter time frame.
    45. Nevertheless, we are mindful of the difficulties to be 
encountered by television broadcasters converting to ATV. Sources of 
financing may be limited and their willingness to support the 
conversion is unknown. For some stations tower sites may need to be 
found, leases negotiated and towers built. Equipment will have to be 
purchased and installed, and the capacity of industry to supply over 
1500 broadcasters with new equipment, from cameras to transmitters to 
antennas, all within the same time frame is not currently known. Given 
the different aspect ratio for ATV as opposed to NTSC, new studio sets 
may have to be designed and constructed in order for stations to 
originate programming. We fully appreciate that this transition will 
not be an easy task. Accordingly, we request comment on the practical 
difficulties licensees will have in successfully undertaking the 
conversion and on proposed solutions.

I. Small Markets

    46. We previously decided not to adopt a ``staggered approach'' to 
initial ATV implementation with large markets required to implement 
first and small markets last. While recognizing that small market 
stations produce less revenue than those in large markets, adversely 
affecting their ability to finance the transition, we also noted that 
our extension of the application/construction period to a total of six 
years, and our ``sliding scale'' approach \11\ should provide small 
market stations adequate relief. Nevertheless, we indicated that if the 
application/construction period appeared insufficient, we could adjust 
it at later reviews.

    \11\ Under the sliding scale approach, parties applying early in 
the six-year application/construction period would have the 
remainder of the application period and the full three-year 
construction period in which to construct. Thus, they would have a 
longer time to devote to construction of ATV facilities than those 
applying later. Should we adopt our proposal to require an election 
by the end of the sixth month, licensees filing earlier in the 
remaining two-and-one-half years would still have more time in which 
to construct than those filing later in that period.
---------------------------------------------------------------------------

    47. We now seek comment on whether we should reconsider this 
decision, and if so, on what type of relief should be provided from the 
six year deadline and to whom? For example, should there be a general 
extension of the deadline for a certain class of stations? If so, for 
how long and to whom? Should it be to stations that make a showing of 
financial hardship and if so how would that be defined? Should there be 
a different rule for small markets? What about stations serving 
economically disadvantaged areas? How should ``small markets'' or 
``economically disadvantaged areas'' be defined? Commenters should 
address whether such a general extension would result in slowing the 
implementation of advanced television in these markets.
    48. We also seek comment on whether a waiver would be an 
appropriate way to address the issues of stations who can not afford to 
make the transition to digital. If commenters believe a waiver would be 
an appropriate mechanism, they should specify what factors the 
Commission should consider in granting such a waiver. They should also 
address ways to reduce the administrative burden of such a waiver 
process on the Commission and on licensees.
    49. Finally, we seek comment on an alternative proposal which would 
allow the Commission to automatically extend the deadline for a 
licensee that has not built after the six-year period if no one else 
files for the ATV license. If, at the end of the six-year period, 
another party applies to construct the unbuilt ATV facility, should we 
permit the incumbent broadcaster to retain its preferential status if 
it makes a sufficient showing in this regard? Such a policy would 
recognize that in some markets economic factors may not support all of 
the stations introducing digital broadcast within the six-year time 
frame. If, however, there is a new entrant who can provide service 
immediately, then the public might be better served by the immediate 
initiation of service.

J. Noncommercial Stations

    50. We earlier sought comment on whether some additional measures 
of relief or further action should be taken on behalf of noncommercial 
stations with respect to the presumptive six-year application/
construction deadline. We indicated that we would consider a wide array 
of alternatives to mitigate the problems faced by noncommercial 
broadcasters.
    51. Commenters addressing the difficulties of noncommercial 
broadcasters in converting to digital television chiefly seek relief 
with respect to the financial qualifications that they would have to 
demonstrate. The Association of America's Public Television Stations, 
Corporation for Public Broadcasting, and Public Broadcasting Service 
(``Public Television'') argue that, because of funding constraints, it 
will take substantially longer than three, or even six years, for 
public stations to be able to obtain necessary funds to convert to ATV. 
Public Television asks that noncommercial educational stations be 
allowed to file ATV applications without certifying or demonstrating 
financial qualifications on the filing date. Rather, it believes such 
licensees should be given three years after the filing of an ATV 
application to demonstrate, with a business plan, how they will raise 
matching funds and that public broadcasters should not have to make any 
showing with respect to having sufficient access to funds to meet their 
operating costs in the first 90 days of operation. Public Television 
asks that we accept no competing applications while that application is 
being processed. In this way, public broadcasters would be able to 
timely file and avoid the possibility of being able to obtain only a 
short-spaced UHF 

[[Page 42137]]
channel, a VHF transition channel, or no channel at all.
    52. The National Association of College Broadcasters (``NACB'') 
asks that the Commission reserve ATV channels in the same proportion as 
they are reserved on NTSC. Arizona State also urges that each vacant 
noncommercial allocation be kept in reserve for future public ATV use. 
Both NACB and Arizona State ask that we provide noncommercial 
educational television stations with additional time in which to apply 
for, and construct ATV facilities.
    53. It is clear from comments received that noncommercial licensees 
will face unique problems in their transition to ATV, chiefly in the 
area of funding, where noncommercial broadcasters appear to be subject 
to the vagaries of forces and parties beyond their control. Indeed, 
historically, we have recognized ``that in making our statutory 
findings as to financial qualifications, greater leeway must be 
accorded the educational station because of its very nature.'' NTA 
Television Broadcasting Corp., 44 FCC 2563, 2574 (1961). (Citation 
omitted.)
    54. Commenters should address whether noncommercial broadcasters 
would obtain sufficient relief in the event that we adopt for all 
existing broadcasters a paired channel assignment scheme and 
requirements such as proposed above. If we do not adopt that proposal 
or, if adopted, it does not provide sufficient relief for noncommercial 
broadcasters, we ask for comment on what further relief would be 
appropriate and will permit them to participate in the channel 
assignment process on an equitable basis. In particular, commenters may 
address the implications of our system instead of a fixed channel 
scheme.
    55. A second problem that noncommercial broadcasters commented on 
was the length of the application/construction period. We have 
previously expressed our belief that to provide different schedules for 
commercial and noncommercial broadcasters would not be conducive to the 
goal of a speedy and smooth transition. It is still our preference to 
establish a firm transition schedule, but with the safeguard of having 
that schedule subject to periodic review. Additionally, unique problems 
can be dealt with on a case-by-case basis. We believe this may be 
preferable to establishing two separate classes of broadcasters, each 
with its own schedule, causing confusion to the public and additional 
administrative burdens to the Commission.
    56. Additionally, commenters should address other things that the 
Commission can do to assist them in their conversion to ATV. For 
instance, the broadcast of ``advertisements'' is currently prohibited 
by Section 399B of the Communications Act. Commenters may want to 
address whether this should be viewed as applying only to one program 
service or, if to all program services broadcast by noncommercial 
broadcasters, whether it would be desirable for the Commission to seek 
legislative alteration of this prohibition. We also ask commenters to 
discuss whether the transition to digital by noncommercial broadcasters 
might be facilitated through re-defining what ``noncommercial'' means. 
If the Commission mandated only that the minimum required broadcast 
programming must be ``noncommercial,'' would it be possible for 
noncommercial broadcasters to finance the transition through commercial 
and flexible uses of the spectrum that would not interfere with the 
noncommercial broadcast stream? Is there other relief that we can grant 
noncommercial broadcasters to minimize restrictions on their operations 
and allow them greater flexibility?

K. All-Channel Receiver Issues

    57. In 1962, Congress adopted the All Channel Receiver Act, which 
authorizes us to require that television receivers ``be capable of 
adequately receiving all frequencies allocated by the Commission to 
television broadcasting.'' \12\ Pursuant to this authority we required 
that all TV receivers be capable of UHF channel reception and adopted 
standards to make reception of UHF channels comparable with reception 
of VHF channels.\13\ We previously determined in this proceeding that 
the All Channel Receiver Act does not mandate the manufacture of dual-
mode (ATV and NTSC) receivers. We expressed concern that such a 
requirement might overly or prematurely burden consumers, and sought 
comment on whether there is any need to require that manufacturers 
produce receivers capable of both NTSC and ATV reception during the 
period prior to full conversion to ATV.

    \12\ 47 U.S.C. 303(s).
    \13\ See 47 CFR 15.117.
---------------------------------------------------------------------------

    58. With ATV now considered to include both HDTV and SDTV, we 
request comment on whether SDTV receivers should be required to have 
the ability to receive an HDTV signal or vice versa, and whether we 
should regulate how such a signal must be displayed. We understand that 
companies are working on receiver designs that would display the Grand 
Alliance HDTV signal as a lower resolution SDTV picture. Such as 
conversion could result in relatively inexpensive receivers or 
converter boxes for NTSC receivers, compared with the projected HDTV 
receiver costs. We seek comment on whether permitting the manufacture 
and sale of receivers that display only NTSC, SDTV, or HDTV signals, or 
a combination of two but not all three, would be consistent with the 
All Channel Receiver Act or otherwise would be in the public interest. 
Should we require that, during the transition period, all sets be 
capable of receiving and displaying NTSC and SDTV signals? Should we 
require ``all-format'' receivers capable of receiving and displaying 
NTSC, SDTV and HDTV signals, and, if so, how should we require HDTV 
signals to be displayed, in a true HDTV fashion or as a lower 
resolution SDTV picture? What impact should a decision not to require 
HDTV broadcasting have on whether we should require all receivers to 
have HDTV reception and display capabilities? Should a decision on one 
be coupled with the other? What impact should a decision to adopt only 
minimal broadcast SDTV requirements have on this question? Would 
limiting the sale of NTSC equipment help consumers by assuring that 
they do not purchase equipment that will soon be obsolete, or harm them 
by, for example, depriving them of access to equipment they may need to 
obtain the benefit of other video equipment they have, such as VCRs? If 
we permit the sale of NTSC equipment, should we require a visible label 
warning that, as of a date certain, it will no longer be able to 
provide over-the-air broadcast reception? Or, if we permit the sale of 
NTSC equipment after the specified date, should we require that the 
sale of such equipment be accompanied by the provision of or ability to 
use a digital converter? We believe that the All Channel Receiver Act 
provides us with adequate authority to address these issues. We ask for 
comment on how we should exercise it.
L. Must Carry and Retransmission Consent

    59. We have not previously addressed the impact of ATV on cable 
television carriage or retransmission consent obligations. Sections 614 
and 615 of the Communications Act of 1934 contain the cable television 
``must carry'' requirements. Section 325 contains revised 
``retransmission consent'' requirements, pursuant to which cable 
operators may be required to obtain the 

[[Page 42138]]
consent of broadcasters before retransmitting their signals. Within 
local market areas broadcasters have an option to proceed under either 
the retransmission consent or the mandatory carriage requirements. 
These provisions were added by the Cable Television Consumer Protection 
and Competition Act of 1992,\14\ subsequent to the adoption of our last 
decision in this proceeding.

    \14\ Pub. L. 102-385, 106 Stat. 1460, codified at 47 U.S.C. 521 
et seq.
---------------------------------------------------------------------------

    60. Under the mandatory carriage provisions, cable operators, 
subject to certain capacity based limitations, are generally required 
to carry the signals of local television stations on their cable 
systems.\15\ Section 614(b)(4)(B) of the Act requires that, at the time 
we prescribe standards for advanced television, we ``initiate a 
proceeding to establish any changes in the signal carriage requirements 
of cable television systems necessary to ensure cable carriage of such 
broadcast signals of local commercial television stations which have 
been changed to conform with such * * * standards.'' While we have not 
yet prescribed standards for advanced television, in the sense of 
having defined or determined final standards, we believe it timely to 
begin our consideration of must-carry obligations at this point.

    \15\ Although we recognize that there is an ongoing challenge to 
the constitutionality of the existing requirements, Turner 
Broadcasting System v. FCC, 114 S. Ct. 2445 (1994), we assume for 
purposes of this discussion the validity of the existing statutory 
provisions. Parties are welcome to comment on the implications of 
any of the issues involved in this proceeding in terms of the 
judicial sustainability of any future requirements.
---------------------------------------------------------------------------

    61. Clearly, during the transition period, at least the station's 
NTSC channel will be subject to must carry obligations. During the 
transition period, when, under our original plan, the NTSC channel 
would have been carrying 100% of the HDTV programming being aired on 
the conversion channel, there did not appear to be a must-carry problem 
because, as long as the two were carrying duplicative programming, the 
NTSC and commonly owned HDTV stations would not both have had to have 
been carried.\16\ But, if we change the simulcast requirement, 
programming on the NTSC and ATV channels might not be duplicative, and 
both might qualify for carriage. Additional issues are raised if the 
conversion channel is being used for the transmission of multiple SDTV 
program services. If carriage of all material being broadcast by the 
station were required, the dedication of, for instance, five cable 
channels (one for the NTSC programming and, for example, four multicast 
programs being offered on the conversion channel) might be required. 
Thus, a review of the must carry and retransmission consent rules now 
is an important component of this proceeding. In addition, it is 
necessary to clearly identify any issues regarding cable carriage that 
need to be factored into the ATV transitional rules, technical 
standards, and regulatory policies in order to facilitate the most 
productive possible interaction between ATV broadcasting and cable 
television service.

    \16\ See Section 614(b)(5) of the Communications Act of 1934, as 
amended (47 U.S.C. Sec. 534(b)(5)).
---------------------------------------------------------------------------

    62. We seek comment on any relevant differences in rules or 
policies that might be needed both during the transition and as a 
consequence of ATV having replaced NTSC broadcasting. For instance, how 
should channel capacity be defined in a digital environment, i.e., in 
terms of channels, bandwidth, or bits of data per second? Does ``on-
channel'' carriage have the same meaning in a digital as it does in an 
analog environment? Should ``substantially duplicates'' include 
duplication of programming in different transmission formats? Will 
changes in station coverage require changes in carriage obligations? 
Additionally, what is the meaning of ``primary video'' in the context 
of digital broadcast transmission? \17\ Is there appropriate parallel 
to line 21 of the vertical blanking interval of NTSC stations for ATV 
stations? What, if any, flexibility does the Commission have under 
Section 614(b)(4)(B) to modify requirements applied by the 
Communications Act to NTSC signals in the new digital environment? For 
example, does the Commission have authority to address ``A/B'' switch 
issues to enhance subscriber access to signals or portions of signals 
that may not receive carriage notwithstanding the existing prohibition? 
Is a revised definition of ``basic tier'' needed? Is a common 
retransmission/must carry election required for all of the video 
programming from an individual broadcast license in a market or just 
for one ``primary video'' stream, as defined by the broadcast licensee? 
In the more flexible broadcast environment associated with digital 
transmission would changes be needed in the rules that mandate that 
local signals be carried in their entirety even if carried under the 
retransmission consent option? Are there other issues relating to the 
retransmission consent process that would need to be addressed?

    \17\ Section 614 of the Act requires carriage of ``the primary 
video, accompanying audio, and line 21 closed caption transmission'' 
of each local commercial broadcast station carried on the cable 
system. Also required, to the extent technically feasible, is 
carriage of program-related material carried in the vertical 
blanking interval or on subcarriers. Similar requirements are found 
in Section 615 with respect to noncommercial educational stations. 
However, ``[r]etransmission of other material in the vertical 
blanking interval or other nonprogram-related material (including 
teletext and other subscription and advertiser supported information 
services) shall be at the discretion of the cable operator.''
---------------------------------------------------------------------------

    63. A second set of issues relates to the technical interface and 
associated coast and rate issues. We expect that there will be parallel 
development of both cable and broadcast digital video communications. 
At the same time, it is inevitable that particular cable systems and 
particular broadcast markets will progress on different time schedules. 
Accordingly, issues will arise as to how digital broadcasts may be 
carried on cable systems that are still entirely analog in their 
opinions, are partially analog and partially digital, or that are 
entirely digital. With respect to each type of operation there are 
potential issues relating to headend equipment, transmission plant, 
subscriber premises equipment, and type of digital transmission system 
that may arise. Accordingly, we seek information on what technical 
modifications may be needed to enable cable systems to deliver ATV 
signals to subscribers and what costs may be associated with these 
modifications. How should digital broadcast programming be required to 
be carried? Should it be required to be carried digitally or would it 
be adequate to have it carried in whatever format the cable operator 
selects? Does ``material degradation'' in the statute require that HDTV 
signals be carried in an HDTV format? Further, we need to begin to 
consider and seek comment on what, if any, changes may be warranted in 
the rate regulation process, in the technical standards, or in other 
rules to account for the changes resulting from ATV carriage.
    64. Assuming that an appropriate set of rules can be developed for 
application at the end of the transition period, an interim process is 
still needed to govern the transition from NTSC to ATV broadcasting. 
During the period when broadcast licensees are broadcasting in both the 
existing NTSC analog mode and in the new ATV mode, what should the 
carriage obligations be? Must both signals be carried and if not should 
the change from NTSC to the ATV signals be at the discretion of the 
cable operator or the broadcaster? Alternatively, should it be based on 
a fixed transition schedule or on an external event such as the market 
penetration of digital television 

[[Page 42139]]
receivers or the system operator's transmission of its own digital 
video programming? Given the complex economic and technical 
interrelationships between broadcasters and cable operators during this 
transitional period, are there market mechanisms that can be 
incorporated into the rules to facilitate cooperation?

V. Third Notice of Inquiry
    65. Over 400 MHz of spectrum in the VHF and UHF bands is currently 
allocated to television broadcasting. As part of our long-term plans to 
promote spectrum efficiency, we are considering reducing the amount of 
spectrum allocated television broadcasting, which, as explained above, 
could be accomplished in the digital environment without reducing the 
number of broadcasters in any market due to the inherent efficiencies 
of the proposed digital system. If we were to readjust channel 
assignments, we would need to know where in current broadcast spectrum 
broadcasters would eventually be located. Although we previously 
preliminarily viewed UHF as the part of the spectrum to which all 
television broadcasting would be moved, we now question the tentative 
conclusion. Accordingly, at this time, we ask parties to comment on the 
best place for broadcasting. Specifically, we seek comment on which 
parts of the VHF and UHF bands are most highly valued for broadcast use 
(e.g., VHF, lower UHF, middle UHF, upper UHF). We also request 
commenters to identify the costs associated with placing television 
broadcasting in each of the four possible locations.
    66. Today, TV broadcasters have over 400 MHz assigned to them, but 
because of interference and market forces, on average only 80 MHz is 
used per market. In the top markets, around 120 MHz is used. Digital 
broadcasting will allow much more efficient and intensive use of this 
spectrum. During the transition period, however, digital TV stations 
must operate alongside NTSC stations. The digital TV system will enable 
us to authorize these stations under controlled circumstances (each 
channel will be available only at certain locations with limits on 
radiated power and effective antenna height) to minimize interference 
to NTSC and digital TV service. While these digital stations allow for 
the development of many new broadcast services, they would be of 
limited value for other users because they generally would not occupy a 
contiguous block of channels, there would be no common nationwide 
channels, and their use would be restricted by the need to avoid 
interference with NTSC analog television sets. When the transition to 
digital is completed, however, and the analog NTSC stations are turned 
off, we have an opportunity to create contiguous blocks of spectrum 
nationwide. Some or all of this spectrum could be allocated and 
auctioned. We ask commenters to provide estimates of the total amount 
of contiguous spectrum blocks that could be created following recovery 
of the NTSC channels. We also seek estimates of the total market value 
of these contiguous blocks of spectrum. What services would be most 
efficiently provided using contiguous blocks of spectrum? We request 
that commenters explain the methodology and analysis used to derive 
estimates of the amount and value of contiguous spectrum. In addition 
to the broadcast industry, we solicit comment from other industries 
(e.g. land mobile and computer) that may have an interest in providing 
services using these blocks of spectrum.

Administrative Matters

    67. Pursuant to applicable procedures set forth in Sections 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 April 17, 1995, and reply 
comments on or before May 17, 1995. All relevant and timely comments 
will be considered by the Commission before final action is taken in 
this proceeding. To file formally in the proceeding, you must file an 
original plus four copies of all comments, reply comments, and support 
comments. If you want each Commissioner to receive a personal copy of 
your comments you must file an original plus nine copies. You should 
send comments and reply comments to Office of the Secretary, Federal 
Communications Commission, Washington, DC 20554. Comments and reply 
comments will be available for public inspection during regular 
business hours in the FCC Reference Center (Room 239), 1919 M Street, 
NW., Washington, DC 20554.
    68. This is a non-restricted notice and comment rulemaking 
proceeding. Ex parte presentations are permitted, except during the 
Sunshine Agenda period, provided they are disclosed as provided in the 
Commission Rules. See generally 47 CFR 1.1202, 1.1203, and 1.1206(a).

Initial Regulatory Flexibility Analysis

I. Reason for Action

    69. The Commission seeks comment not only on a variety of new 
issues central to the development of advanced television service in the 
United States, but on several of the tentative decisions made earlier 
in this proceeding because of the rapidly changing nature of digital 
television. Advanced television, at the time this proceeding was 
initiated was envisioned primarily as a system for improving higher 
picture and sound quality, limited to transmitting/receiving a single 
channel of television. The emergence of digital technology with its 
extensive flexibility and the approach of the National Information 
Infrastructure require that the Commission review the issues 
surrounding high definition television from a new, more expansive 
perspective.

II. Objectives of the Action

    70. The Fourth Further Notice of Proposed Rulemaking portion of 
this decision solicits comment on a variety of issues, several of which 
are being revisited, in order to establish an accurate, comprehensive, 
reliable record on which to base the Commission's ultimate decisions in 
this proceeding. The record established from comments filed in response 
to this decision, as well as other Commission decisions, and the 
combined efforts of the Commission, the affected industries, the 
Advisory Committee on Advanced Television Service, and ATV testing 
process, will lead to implementation of ATV in the most harmonious 
fashion and to selection of the most desirable ATV system.

III. Legal Basis

    71. Authority for this action may be found at 47 U.S.C. 154 and 
303.

IV. Reporting, Recordkeeping and Other Compliance Requirements

    72. Such requirements are not proposed in this phase of the 
proceeding, but may be raised and comment sought in future decisions in 
this proceeding.

V. Federal Rues Which Overlap, Duplicate or Conflict With These Rules

    73. There are no rules which would overlap, duplicate, or conflict 
with these rules.

VI. Description, Potential Impact and Number of Small Entities Involved

    74. There are approximately 1,539 UHF and VHF, commercial and 
educational television stations, 2,509 UHF translator stations, 2,261 
VHF translator stations, and 1,648 UHF and VHF low power television 
stations which would be affected by decisions reached in this 
proceeding. The impact of actions taken in this proceeding on small 
entities would ultimately depend 

[[Page 42140]]
on the final decisions taken by the Commission. However, the 
Commission, in taking future action will continue to balance the need 
to provide the public with affordable, flexible, accessible high 
definition television service with the economic and administrative 
interests of the affected industries.

VII. Any Significant Alternatives Minimizing the Impact on Small 
Entities Consistent With Stated Objectives.

    75. In re-examining issues discussed in past decisions, the 
Commission is seeking not only to establish a more comprehensive, 
reliable record, but, with that intent, is soliciting comments and 
suggestions that hopefully will represent the views of all of the 
industries concerned, and thus the commission will be better able to 
minimize whatever negative impact might face small entities as a result 
of our decisions.
    76. As required by Section 603 of the Regulatory Flexibility Act, 
the Commission has prepared an Initial Regulatory Flexibility Analysis 
(IRFA) of the expected impact on small entities of the proposals 
suggested in this document. The IRFA is set forth above. 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 Initial Regulatory Flexibility 
Analysis. The Secretary shall send a copy of this Fourth Further Notice 
of Proposed Rule Making and Third Notice of Inquiry, including the 
Initial Regulatory Flexibility Analysis, to the Chief Counsel for 
Advocacy of the Small Business Administration in accordance with 
paragraph 603(a) of the Regulatory Flexibility Act. Pub. L. No. 96-354, 
94 Stat. 1164, 5 U.S.C. 601 et seq (1981).

List of Subjects in 47 CFR Part 73

    Television broadcasting.

Federal Communications Commission.
LaVera F. Marshall,
Acting Secretary.
[FR Doc. 95-20243 Filed 8-14-95; 8:45 am]
BILLING CODE 6712-01-M