[Federal Register Volume 61, Number 112 (Monday, June 10, 1996)]
[Proposed Rules]
[Pages 29333-29336]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14567]



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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[CS Docket No. 95-178; FCC 96-197]


Definition of Markets for Purposes of the Cable Television Must-
Carry Rules

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: The Commission requests comment on transitional mechanisms to 
facilitate the switch from a local market definition based on 
Arbitron's ``Areas of Dominant Influence'' (``ADIs'') to one using 
Nielsen's ``Designated Market Areas'' (``DMAs'') for purposes of the 
cable television broadcast signal carriage rules. The Commission 
amended its rules to continue to use Arbitron 1991-1992 ADIs to define 
local markets for the triennial must-carry/retransmission consent 
election that must take place by October 1, 1996, and to switch to 
Nielsen's DMAs beginning with the 1999 election in a Report and Order 
adopted concurrently with the Further Notice of Proposed Rulemaking 
(``Further NPRM'') and summarized elsewhere in this issue of the 
Federal Register. The Commission previously anticipated that updated 
market lists

[[Page 29334]]

would be available coincident with the triennial must-carry/
retransmission consent election cycle. However, Arbitron ceased 
publication of its market lists. The Commission is concerned that a 
change in market designation procedures will affect a greater number of 
stations, cable systems, and cable subscribers than would have been 
affected by simply using a newer ADI market list, as had been 
contemplated. Thus, the Further NPRM provides an opportunity for the 
Commission and affected parties to further consider issues related to 
the transition to a revised definition of local markets. The Further 
NPRM also requests comment on procedures to refine the Section 614(h) 
ad hoc market modification process in light of the new statutory 
requirement that the Commission act on such requests within 120 days.

DATES: Comments are due on or before October 31, 1996, and reply 
comments are due on or before November 15, 1996. Written comments by 
the public on the proposed and/or modified information collections are 
due October 31, 1996.

ADDRESSES: Federal Communications Commission, Washington, D.C. 20554. 
In addition to filing comments with the Secretary, a copy of any 
comments on the information collections contained herein should be 
submitted to Dorothy Conway, Federal Communications Commission, Room 
234, 1919 M Street, NW., Washington, DC 20554, or via the Internet to 
[email protected].

FOR FURTHER INFORMATION CONTACT: Marcia Glauberman or John Adams, Cable 
Services Bureau, (202) 418-7200. For additional information concerning 
the information collections contained in this FNPRM contact Dorothy 
Conway at 202-418-0217, or via the Internet at [email protected].

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
Further Notice of Proposed Rulemaking, CS Docket No. 95-178, FCC 96-197 
adopted April 25, 1996, and released May 24, 1996. The full text of 
this decision is available for inspection and copying during normal 
business hours in the FCC Reference Center (room 239), 1919 M Street, 
NW, Washington, DC. 20554.

Paperwork Reduction Act

    This Report and Order and Further Notice of Proposed Rulemaking may 
contain either proposed or modified information collections. The 
Commission, as part of its continuing effort to reduce paperwork 
burdens, invites the general public to comment on the information 
collections contained in this Order/FNPRM, as required by the Paperwork 
Reduction Act of 1995, Pub. L. 104-13. Public and agency comments are 
due at the same time as other comments on this FNPRM. Comments should 
address: (a) Whether the proposed collection of information is 
necessary for the proper performance of the functions of the 
Commission, including whether the information shall have practical 
utility; (b) ways to enhance the quality, utility, and clarity of the 
information collected; and (c) ways to minimize the burden of the 
collection of information on the respondents, including the use of 
automated collection techniques or other forms of information 
technology.

Synopsis of the Further Notice of Proposed Rulemaking

    1. The Further NPRM solicits additional information and provides 
parties an opportunity to further consider issues relating to the 
transition to market designations based on Nielsen's ``Designated 
Market Areas'' (``DMAs''). It also seeks comment on procedures for 
refining the section 614(h) ad hoc market modification process which 
allows the Commission to modify the market areas of individual stations 
and cable systems.
    2. Under the signal carriage provisions added to the Communications 
Act (``Act'') by the Cable Television Consumer Protection and 
Competition Act of 1992 (``1992 Cable Act''), commercial broadcast 
television stations are permitted to elect once every three years 
whether they will be carried by cable systems in their local markets 
pursuant to the must-carry or retransmission consent rules. Section 614 
of the Act, 47 U.S.C. 534, provides that a station electing must-carry 
status is entitled to insist on carriage of its signal. A station 
electing retransmission consent as set forth in section 325 of the Act, 
47 U.S.C. 325 negotiates a carriage agreement with each cable operator 
and may be compensated for its station's carriage.
    3. For purposes of these carriage rights, a station is considered 
local on all cable systems located in the same television market as the 
station. As enacted in 1992, section 614(h)(1)(C) of the Act required, 
through a cross-reference to a Commission rule dealing with broadcast 
ownership issues, that a station's market shall be determined using the 
Arbitron Ratings Company's ``areas of dominant influence'' or ``ADI.'' 
The rules adopted in 1993 to implement these signal carriage provisions 
established a mechanism for determining a station's local market for 
each must-carry/retransmission consent cycle based on ADI market lists. 
For the initial election in 1993, Arbitron's 1991-1992 Television ADI 
Market Guide was used to define local markets and for each subsequent 
election cycle an updated ADI market list was to be used.
    4. However, since we established these procedures, Arbitron left 
the television research business and the market list specified in the 
rules for this year's election is unavailable. Congress also recognized 
that Arbitron no longer publishes television market lists and the 
Telecommunications Act of 1996 (``1996 Act''), Pub. L. 104-104, 110 
Stat. 56 (1996), amended the definition of local market that referenced 
ADIs. Specifically, Section 614(h)(1)(C) of the Act was amended by 
Section 301 of the 1996 Act to provide that for purposes of applying 
the mandatory carriage provisions, a broadcasting station's market 
shall be determined ``by the Commission by regulation or order using, 
where available, commercial publications which delineate television 
markets based on viewing
patterns * * *.''
    5. In addition, section 614(h) of the Act requires the Commission 
to consider petitions for market modifications to add communities to or 
exclude communities from a station's local market based on historical 
carriage, signal coverage, local service, and viewing patterns. The 
1996 Act modified this provision to require the Commission to act on 
all petitions for market modifications within 120 days.
    6. Prior to the 1996 Act, but consistent with its amended 
definition of local market, we issued the Notice of Proposed Rulemaking 
(``NPRM'') in this proceeding, summarized at 61 FR 1888 (January 24, 
1996), seeking comment on three proposals for revising the mechanism 
for determining local markets. First, the Commission could substitute 
Nielsen Media Research's ``designated market areas'' or ``DMAs'' for 
Arbitron's ADIs. While similar in many ways, the differences between 
DMA and ADI market areas could result in a change in the area in which 
a station can insist on carriage rights and a change in the stations 
that a cable system is required to carry. The second option would be to 
continue to use Arbitron's 1991-1992 Television ADI Market Guide to 
define market areas, subject to individual review and refinement 
through the section 614(h) process. Under this option, the local market 
definition would remain unchanged, subject only to future individual 
market modifications. A third proposal would be to retain the existing 
market definitions for the 1996

[[Page 29335]]

election period and switch to a Nielsen based standard for subsequent 
elections.
    7. In this Further Notice of Proposed Rulemaking, we seek comment 
on mechanisms for facilitating the transition from a market definition 
system based on ADIs to one based on DMAs. We believe it will be useful 
to consider various means of easing the difficulties that may be 
associated with what, as the comments indicate, will be changes in the 
carriage requirements applicable to many cable operators and 
broadcasters. These changes potentially affect mandatory carriage 
rights, channel positioning obligations, retransmission consent 
negotiations, copyright payments, the expectations of cable 
subscribers, programming contracts, and even the physical layout and 
construction of cable plant and operations. Thus, by this Further NPRM, 
we seek specific suggestions that would assist in this transition 
process. In particular, we ask commenters to consider whether special 
provisions should be made for particular types of stations or systems 
to minimize the disruptions that could occur due to a switch to DMAs.
    8. The Further NPRM also requests comment on the consequences of a 
shift in definitions on the more particularized market boundary 
redefinition process contained in section 614(h) of the statute, the 
decisions that have been made under that section, and the proceedings 
under it that would result from shifting market definitions. We seek 
specific comment on what changes in the modification process might be 
warranted given that administrative resources available to process 
section 614(h) requests are limited and the 1996 Act establishes a 120-
day time period for action on these petitions. Under the existing 
process, a party is free to make its case using whatever evidence it 
deems appropriate. One means of expediting the modification process 
might be to establish specific evidentiary requirements in order to 
support market modification petitions under section 614(h) of the Act 
and Sec. 76.59 of the rules. Therefore, in the Further NPRM, we propose 
several specific information submission requirements and seek comment 
on these and other alternatives that parties believe will assist the 
Commission in its review of individual requests.
    9. A second potential means of increasing the efficiency of the 
decision making process with respect to market modification petitions 
would be to alter to some extent the burden of producing the relevant 
evidence. In particular, we seek comment on whether the process could 
be expedited by permitting the party seeking the modification to 
establish a prima facie case based on historical carriage, technical 
signal coverage of the area in question, and off-air viewing, which 
could then trigger an obligation on the part of any objecting entity to 
complete the factual record by presenting conflicting evidence as to 
the actual economic market involved.

Initial Regulatory Flexibility Analysis

    10. 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 Further NPRM, but they 
must have a separate and distinct heading designating them as responses 
to the IRFA. The Secretary shall cause a copy of the Further NPRM, 
including the IRFA, 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. 96-354, 94 Stat. 1164, 5 U.S.C. 601 
et seq. (1981). Objectives. The objective of the Further NPRM is to 
solicit comments on ways to ease the transition to a revised market 
definition of local television markets based on Nielsen's DMAs for 
must-carry/retransmission consent elections beginning in 1999. We 
request information that will permit us to develop transitional 
mechanisms to minimize problems that could result from changing market 
designations on broadcasters' must-carry rights, cable operators' 
signal carriage obligations, and the availability of local television 
service to cable subscribers. The Further NPRM also seeks comment on 
requirements intended to make the Section 614(h) market modification 
process more efficient.
    Legal Basis. Authority for this proposed rulemaking is contained in 
sections 4(i), 4(j) and 614 of the Communications Act of 1934, as 
amended, 47 U.S.C. 154(i), 154(j) and 534, and in section 301 of the 
Telecommunications Act of 1996, Pub. L. 104-104 (1996).
    Description, Potential Impact and Number of Small Entities 
Affected. Changing from a market definition based on ADIs to one based 
on DMAs could affect the area in which certain small commercial 
broadcast television stations are entitled to elect must-carry/
retransmission consent rights and change the signal carriage 
obligations of certain small cable systems. The further NPRM requests 
proposals to minimize the impact on such small entities as well as 
other stations and cable systems.
    Reporting, Recordkeeping and Other Compliance Requirements. None.
    Federal Rules which Overlap, Duplicate or Conflict with these 
Rules. None.
    Any Significant Alternatives Minimizing Impact on Small Entities 
and Consistent with Stated Objectives. None.

Ex Parte

    11. 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 the Commission's rules. 
See generally, 47 CFR 1.1202, 1.1203, and 1.1206(a).

Comment Dates

    12. Pursuant to applicable procedures set forth in Secs. 1.415 and 
1.419 of the Commission's rules, interested parties may file comments 
on or before October 31, 1996, and reply comments on or before November 
15, 1996. To file formally in this proceeding, you must file an 
original plus six copies of all comments, reply comments, and 
supporting comments. If you would like each Commissioner to receive a 
personal copy of your comments and reply comments, you must file an 
original plus 11 copies. You should send comments and reply comments to 
the 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

    13. Authority for this proposed rulemaking is contained in sections 
4(i), 4(j) and 614 of the Communications Act of 1934, as amended, 47 
U.S.C. 154(i), 154(j) and 534, and section 301 of the 
Telecommunications Act of 1996, Pub. L. 104-104 (1996), part 76.
    14. It is ordered that, the Secretary shall send a copy of the 
Further Notice of Proposed Rulemaking, including the 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. 
Secs. 601 et seq. (1981).

[[Page 29336]]

List of Subjects in 47 CFR Part 76

    Cable television.

Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 96-14567 Filed 6-7-96; 8:45 am]
BILLING CODE 6712-01-P