[Federal Register Volume 63, Number 84 (Friday, May 1, 1998)]
[Proposed Rules]
[Pages 24145-24148]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-11617]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[CS Docket No. 98-54; FCC 98-68]


1998 Biennial Regulatory Review

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: In the Notice of Proposed Rulemaking (``NPRM``), the 
Commission seeks comment or ways to simplify and make more uniform the 
Cable Television Service pleading and complaint process rules. This 
proceeding is initiated in conjunction with the Commission's 1998 
biennial regulatory review. The intended effect of this proceeding is 
to reduce the regulatory burden on franchising authorities, cable 
operators, and other interested persons making filings under the rules.

DATES: Comments are due on or before June 22, 1998. Reply comments are 
due on or before July 7, 1998. Public Information requirements are due 
June 30, 1998.
ADDRESSES: Federal Communications Commission, 1919 M Street, NW., Room 
222, Washington, D.C. 20554.

FOR FURTHER INFORMATION CONTACT: Thomas Horan, Consumer Protection and 
Competition Division, Cable Services Bureau, at (202) 418-7200.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Notice of Proposed 
Rulemaking in CS Docket No. 98-54, FCC 98-68 which was adopted on April 
13, 1998 and released on April 22, 1998. A copy of the complete item is 
available for inspection and copying during normal business hours in 
the FCC Reference Center, Room 239, 1919 M Street, NW., Washington, 
D.C. 20554. The complete text may be purchased from the Commission's 
copy contractor, International Transcription Service, Inc., 1231 20th 
Street, NW., Washington, D.C. 20036, (202) 857-3800. The complete 
Notice of Proposed Rulemaking also is available on the Commission's 
Internet home page (http://www.fcc.gov).

Summary of Action:

    I. Background
    1. On April 13, 1998, the Federal Communications Commission 
(``Commission'') adopted a Notice of Proposed Rulemaking which sought 
comment or ways to simplify and make more uniform the Cable Television 
Service pleading and complaint process rules, 47 CFR 76. The NPRM is 
summarized below.
    A. Introduction
    2. Under the Commission's current part 76 rules, the procedures for 
initiating Commission action on a cable television service issue vary 
depending on the rules upon which the pleading or complaint is based. 
Although there are practical and legal reasons for the different 
pleading procedures, there may be some common elements to every 
pleading or complaint that could be made uniform across the broad 
spectrum of issues raised under part 76. The Commission thus seeks 
comment on whether we can or should institute some uniform pleading 
process and, if so, what form it should take.
    B. Discussion
    3. The Commission is initiating this proceeding in conjunction with 
the Commission's 1998 biennial regulatory review pursuant to section 11 
of the 1996 Telecommunications Act, 47 U.S.C. 161. Pursuant to section 
11, Congress instructed the Commission to conduct a biennial review of 
regulations that apply to operations and activities of any provider of 
telecommunications service and to repeal or modify any regulation it 
determines to be no longer in the public interest. Although section 11 
does not specifically refer to cable operators, the Commission has 
determined that the first biennial review presents an opportunity for a 
thorough examination of all of the Commission's regulations. The 
Commission believes that, where possible, simplification of the 
complaint processes for part 76 rules by instituting a uniform system 
would likely serve the public interest by lessening confusion and 
reducing the regulatory burden on franchising authorities, cable 
operators, and other interested persons making filings under the part 
76 rules.
    4. At least thirteen different types of petitions or complaints 
could be filed to initiate Commission action related to the part 76 
rules. Each type of petition or complaint has particular requirements 
regarding the conditions that must be satisfied before a filing can be 
made, who must be served with the filing, and the deadline time for a 
response. One reason for this variation is that our rules have been 
adopted over a period of time in response to changes in the 
Communications Act and, more specifically, for changes with respect to 
cable issues passed in 1984, 1992, and 1996. The rules adopted to 
implement changes in the law may have adopted a complaint process with 
its own unique procedures when an existing complaint process would have 
been sufficient. For example, following the filing of a petition for 
special relief, interested persons may submit comments or oppositions 
within twenty days after the date of public notice of the filing of 
such petition. In contrast, with respect to a petition for an issuance 
of an order to show cause, interested persons may submit comments or 
oppositions within thirty days after the petition has been filed. In 
this proceeding, the Commission seeks comment on whether these types of 
differences should be maintained or whether in circumstances of similar 
pleadings, the procedural rules associated with those pleadings should 
be the same.
    5. The rules associated with each different pleading type are 
designed to establish fair and expeditious procedures for receiving, 
considering, and resolving issues related to the cable television 
service rules. The Commission believes that there are some aspects of 
the pleading requirements in part 76 rules that could be made uniform. 
The Commission seeks comment on which aspects of the pleading processes 
can be made consistent regardless of the part 76 rule under which the 
complaint is being filed; or alternatively, which pleading processes 
are similar and should have similar procedures. Specifically, is it 
appropriate to have the same or different (1) periods of time to 
formulate and file a complaint; (2) service requirements; (3) pleading 
cycles; (4) affidavit and evidentiary requirements; and (5) burdens of 
proof? The Commission also seek proposals on how to achieve a more 
streamlined complaint process for part 76 pleadings. Specifically,the 
Commission seeks comment on those filing requirements, now unique to a 
particular type of pleading or complaint, that are beneficial and 
should be applied universally to all part 76 pleadings; and conversely, 
which filing requirements are not useful and should be eliminated.
    II. Procedural Matters
    A. Regulatory Flexibility Analysis
    6. As required by the Regulatory Flexibility Act (RFA), 5 U.S.C. 
603, the Commission has prepared an Initial

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Regulatory Flexibility Analysis (IRFA) of the expected impact on small 
entities of the proposals in the NPRM. Written public comments are 
requested on the IRFA. Comments on the IRFA must have a separate and 
distinct heading designating them as responses to the IRFA and must be 
filed by the deadlines for comments on the NPRM. The Commission will 
send a copy of the NPRM, including this IRFA, to the Chief Counsel for 
Advocacy of the Small Business Administration.
     1. Need for, and objectives of, the proposed rules.
    7. The Commission has proposed to simply and unify the pleading and 
complaint process rules for Cable Television Service, 47 CFR 76. The 
Commission has tentatively concluded that such a procedure would serve 
the public interest by making the pleading and complaint process for 47 
CFR 76 less confusing and less burdensome.
     2. Legal basis.
    8. The authority for the action proposed for this rulemaking is 
contained in Section 4 of the Communications Act of 1934, 47 U.S.C. 
154.
     3. Description and estimate of the number of small entities 
    9. The Commission is required to provide a description of and, 
where feasible, an estimate of the number of small entities that will 
be affected by the proposed rules, if adopted. The RFA defines the term 
``small entity'' as having the same meaning as the terms ``small 
business'' and ``small organization.'' In addition, the term ``small 
business'' has the same meaning as the term ``small business concern'' 
under section 3 of the Small Business Act. Under the Small Business 
Act, a ``small business concern'' is one which: (1) is independently 
owned and operated; (2) is not dominant in its field of operation; and 
(3) meets any additional criteria established by the Small Business 
Administration (``SBA'').
    10. Small MVPDs. The SBA has developed a definition of small 
entities for cable and other pay television services, which includes 
all such companies generating $11 million or less in annual receipts. 
This definition includes cable system operators, closed circuit 
television services, direct broadcast satellite services, multipoint 
distribution systems, satellite master antenna systems and subscription 
television services. According to the Bureau of the Census, there were 
1,758 total cable and other pay television services and 1,423 had less 
than $11 million in revenue. The Commission addresses below each 
service individually to provide a more precise estimate of small 
entities.
    11. Cable Systems. The Commission has developed, with SBA's 
approval, our own definition of a small cable system operator for the 
purposes of rate regulation. Under 47 CFR 76.901(e), a ``small cable 
company'' is one serving fewer than 400,000 subscribers nationwide. 
Based on our most recent information, the Commission estimates that 
there were 1439 cable operators that qualified as small cable companies 
at the end of 1995. Since then, some of those companies may have grown 
to serve over 400,000 subscribers, and others may have been involved in 
transactions that caused them to be combined with other cable 
operators. Consequently, the Commission estimates that there are fewer 
than 1439 small entity cable system operators that may be affected by 
the decisions and rules the Commission is adopting. The Commission 
believes that only a small percentage of these entities currently 
provide qualifying ``telecommunications services'' as required by the 
Communications Act and, therefore, estimate that the number of such 
entities are significantly fewer than noted.
    12. The Communications Act also contains a definition of a small 
cable system operator, which is ``a cable operator that, directly or 
through an affiliate, serves in the aggregate fewer than 1% of all 
subscribers in the United States and is not affiliated with any entity 
or entities whose gross annual revenues in the aggregate exceed 
$250,000,000.'' The Commission has determined that there are 61,700,000 
subscribers in the United States. Therefore, the Commission found that 
an operator serving fewer than 617,000 subscribers shall be deemed a 
small operator, if its annual revenues, when combined with the total 
annual revenues of all of its affiliates, do not exceed $250 million in 
the aggregate. Based on available data, the Commission finds that the 
number of cable operators serving 617,000 subscribers or less totals 
1450. Although it seems certain that some of these cable system 
operators are affiliated with entities whose gross annual revenues 
exceed $250,000,000, the Commission is unable at this time to estimate 
with greater precision the number of cable system operators that would 
qualify as small cable operators under the definition in the 
Communications Act.
    13. Multipoint Multichannel Distribution Systems (``MMDS''). The 
Commission refined the definition of ``small entity'' for the auction 
of MMDS as an entity that together with its affiliates has average 
gross annual revenues that are not more than $40 million for the 
preceding three calendar years. This definition of a small entity in 
the context of MMDS auctions has been approved by the SBA.
    14. The Commission completed its MMDS auction in March 1996 for 
authorizations in 493 basic trading areas (``BTAs''). Of 67 winning 
bidders, 61 qualified as small entities. Five bidders indicated that 
they were minority-owned and four winners indicated that they were 
women-owned businesses. MMDS is an especially competitive service, with 
approximately 1573 previously authorized and proposed MMDS facilities. 
Information available to us indicates that no MMDS facility generates 
revenue in excess of $11 million annually. The Commission concludes 
that, for purposes of this FRFA, there are approximately 1634 small 
MMDS providers as defined by the SBA and the Commission's auction 
rules.
    15. Direct Broadcast Satellite (``DBS''). Because DBS provides 
subscription services, DBS falls within the SBA definition of cable and 
other pay television services (SIC 4841). As of December 1996, there 
were eight DBS licensees. Estimates of 1996 revenues for various DBS 
operators are significantly greater than $11,000,000 and range from a 
low of $31,132,000 for Alphastar to a high of $1,100,000,000 for 
Primestar. Accordingly, the Commission concludes that no DBS operator 
qualifies as a small entity.
    16. Home Satellite Dish (``HSD''). The market for HSD service is 
difficult to quantify. Indeed, the service itself bears little 
resemblance to other MVPDs. HSD owners have access to more than 265 
channels of programming placed on C-band satellites by programmers for 
receipt and distribution by MVPDs, of which 115 channels are scrambled 
and approximately 150 are unscrambled. HSD owners can watch unscrambled 
channels without paying a subscription fee. To receive scrambled 
channels, however, an HSD owner must purchase an integrated receiver-
decoder from an equipment dealer and pay a subscription fee to an HSD 
programming packager. Thus, HSD users include: (1) viewers who 
subscribe to a packaged programming service, which affords them access 
to most of the same programming provided to subscribers of other MVPDs; 
(2) viewers who receive only nonsubscription programming; and (3) 
viewers who receive satellite programming services illegally without 
subscribing.
    17. According to the most recently available information, there are

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approximately 30 program packagers nationwide offering packages of 
scrambled programming to retail consumers. These program packagers 
provide subscriptions to approximately 2,314,900 subscribers 
nationwide. This is an average of about 77,163 subscribers per program 
packager. This is substantially smaller than the 400,000 subscribers 
used in the Commission's definition of a small multiple system operator 
(``MSO''). Furthermore, because this an average, it is likely that some 
program packagers may be substantially smaller.
    18. Open Video System (``OVS''). The Commission has certified nine 
OVS operators. Of these nine, only two are providing service. On 
October 17, 1996, Bell Atlantic received approval for its certification 
to convert its Dover, New Jersey Video Dialtone (``VDT'') system to 
OVS. Bell Atlantic subsequently purchased the division of Futurevision 
which had been the only operating program package provider on the Dover 
system, and has begun offering programming on this system using these 
resources. Metropolitan Fiber Systems was granted certifications on 
December 9, 1996, for the operation of OVS systems in Boston and New 
York, both of which are being used to provide programming. Bell 
Atlantic and Metropolitan Fiber Systems have sufficient revenues to 
assure us that they do not qualify as small business entities. Little 
financial information is available for the other entities authorized to 
provide OVS that are not yet operational. The Commission believes that 
one OVS licensee may qualify as a small business concern. Given that 
other entities have been authorized to provide OVS service but have not 
yet begun to generate revenues, the Commission concludes that at least 
some of the OVS operators qualify as small entities.
    19. Satellite Master Antenna Television (``SMATVs''). Industry 
sources estimate that approximately 5200 SMATV operators were providing 
service as of December 1995. Other estimates indicate that SMATV 
operators serve approximately 1.05 million residential subscribers as 
of September 1996. The ten largest SMATV operators together pass 
815,740 units. If the Commission assumes that these SMATV operators 
serve 50% of the units passed, the ten largest SMATV operators serve 
approximately 40% of the total number of SMATV subscribers. Because 
these operators are not rate regulated, they are not required to file 
financial data with the Commission. Furthermore, the Commission is not 
aware of any privately published financial information regarding these 
operators. Based on the estimated number of operators and the estimated 
number of units served by the largest ten SMATVs, the Commission 
concludes that a substantial number of SMATV operators qualify as small 
entities.
    20. Local Multipoint Distribution System (``LMDS''). Unlike the 
above pay television services, LMDS technology and spectrum allocation 
will allow licensees to provide wireless telephony, data, and/or video 
services. A LMDS provider is not limited in the number of potential 
applications that will be available for this service. Therefore, the 
definition of a small LMDS entity may be applicable to both cable and 
other pay television (SIC 4841) and/or radiotelephone communications 
companies (SIC 4812). The SBA definition for cable and other pay 
services is defined above. A small radiotelephone entity is one with 
1500 employees or less. However, for the purposes of this NPRM, the 
Commission includes only an estimate of LMDS video service providers.
    21. LMDS is a service for which licenses were auctioned by the FCC 
beginning in February 1998. The vast majority of LMDS entities 
providing video distribution could be small businesses under the SBA's 
definition of cable and pay television (SIC 4841). However, the 
Commission proposed to define a small LMDS provider as an entity that, 
together with affiliates and attributable investors, has average gross 
revenues for the three preceding calendar years of less than $40 
million. The Commission has not yet received approval by the SBA for 
this definition.
    22. There is only one company, CellularVision, that is currently 
providing LMDS video services. Although the Commission does not collect 
data on annual receipts, the Commission assumes that CellularVision is 
a small business under both the SBA definition and our proposed auction 
rules.  Accordingly, the Commission affirms its tentative conclusion 
that a majority of the potential LMDS licensees will be small entities, 
as that term is defined by the SBA.
    23. Program Producers and Distributors. The Commission has not 
developed a definition of small entities applicable to producers or 
distributors of television programs. Therefore, the Commission will 
utilize the SBA classifications of Motion Picture and Video Tape 
Production (SIC 7812), Motion Picture and Video Tape Distribution (SIC 
7822), and Theatrical Producers (Except Motion Pictures) and 
Miscellaneous Theatrical Services (SIC 7922). These SBA definitions 
provide that a small entity in the television programming industry is 
an entity with $21.5 million or less in annual receipts for SIC 7812 
and 7822, and $5 million or less in annual receipts for SIC 7922. The 
1992 Bureau of the Census data indicate the following: (1) there were 
7265 U.S. firms classified as Motion Picture and Video Production (SIC 
7812), and that 6987 of these firms had $16,999 million or less in 
annual receipts and 7002 of these firms had $24,999 million or less in 
annual receipts; (2) there were 1139 U.S. firms classified as Motion 
Picture and Tape Distribution (SIC 7822), and that 1007 of these firms 
had $16,999 million or less in annual receipts and 1013 of these firms 
had $24,999 million or less in annual receipts; and (3) there were 5671 
U.S. firms classified as Theatrical Producers and Services (SIC 7922), 
and that 5627 of these firms had less than $5 million in annual 
receipts.
    24. Each of these SIC categories is very broad and includes firms 
that may be engaged in various industries including television. 
Specific figures are not available as to how many of these firms 
exclusively produce and/or distribute programming for television or how 
many are independently owned and operated. Consequently, the Commission 
concludes that there are approximately 6987 small entities that produce 
and distribute taped television programs, 1013 small entities primarily 
engaged in the distribution of taped television programs, and 5627 
small producers of live television programs that may be affected by the 
rules adopted in this proceeding.
     4. Description of reporting, recordkeeping, and other compliance 
requirements
    25. The Commission is not proposing any new or modified 
recordkeeping or information collection requirements.
     5. Significant alternatives which minimize the impact on small 
entities, and which are consistent with stated objectives.
    26. The Notice solicits comments and proposals for means to 
simplify or make uniform 47 CFR 76 pleading and complaint process 
rules. Any significant alternatives presented in the comments will be 
considered.
     6. Federal rules which overlap, duplicate, or conflict with these 
rules.
    27. None.
     7. Report to Congress. 
    28. The Commission shall send a copy of this IRFA along with this 
Notice in a report to Congress pursuant to the Small Business 
Regulatory Enforcement Fairness Act of 1996, codified at 5

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U.S.C. 801(a)(1)(A). A copy of this IRFA will also be published in the 
Federal Register.
     B. Paperwork Reduction Act of 1995 Analysis
    29. The requirements proposed in this Notice have been analyzed 
with respect to the Paperwork Reduction Act of 1995 (the ``1995 Act'') 
and would impose new and modified information collection requirements 
on the public. The Commission, as part of its continuing effort to 
reduce paperwork burdens, invites the general public to take this 
opportunity to comment on the proposed information collection 
requirements contained in this Notice, as required by the 1995 Act. 
Public comments are due June 30, 1998. 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 would have practical utility; (b) the accuracy 
of the Commission's burden estimates; (c) ways to enhance the quality, 
utility, and clarity of the information collected; and (d) 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.
    30. Written comments by the public on the proposed new and modified 
information collection requirements are June 30, 1998. Comments should 
be submitted to Judy Boley, Federal Communications Commission, Room 
234, 1919 M Street, NW., Washington, D.C. 20554, or via the Internet to 
[email protected]. For additional information on the proposed information 
collection requirements, contact Judy Boley at 202-418-0214 or via the 
Internet at the above address.
    C. Ex Parte Presentations
    31. The NPRM is a permit but disclose notice and comment rule 
making proceeding. Ex parte presentations are permitted, except during 
the Sunshine Agenda period, provided they are disclosed as provided in 
Commission rules. See generally 47 CFR 1.1202, 1.1203, and 1.1206(a).
    D. Comments
    32. 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 June 22, 1998 and reply comments on or before July 7, 
1998. To file formally in this proceeding, you must file an original 
and four copies of all comments, reply comments, and supporting 
comments. Parties are also asked to submit, if possible, draft rules 
that reflect their positions. If you want each Commissioner to receive 
a personal copy of your comments, you must file an original and eleven 
copies. Comments and reply comments should be sent to Office of the 
Secretary, Federal Communications Commission, 1919 M Street, NW., Room 
222, Washington, D.C. 20554, with a copy to Thomas Horan of the Cable 
Services Bureau, 2033 M Street, NW., 7th Floor, Washington, D.C. 20554. 
Parties should also file one copy of any documents filed in this docket 
with the Commission's copy contractor, International Transcription 
Services, Inc., 1231 20th Street, NW., Washington, D.C. 20037. Comments 
and reply comments will be available for public inspection during 
regular business hours in the FCC Reference Center, 1919 M Street, NW., 
Room 239, Washington, D.C. 20554.
    33. Parties are also asked to submit comments and reply comments on 
diskette, where possible. Such diskette submissions would be in 
addition to and not a substitute for the formal filing requirements 
addressed above. Parties submitting diskettes should submit them to 
Thomas Horan of the Cable Services Bureau, 2033 M Street, NW., 7th 
Floor, Washington, D.C. 20554. Such a submission must be on a 3.5 inch 
diskette formatted in an IBM compatible form using MS DOS 5.0 and 
WordPerfect 5.1 software. The diskette should be submitted in ``read 
only'' mode. The diskette should be clearly labelled with the party's 
name, proceeding, type of pleading (comment or reply comments) and date 
of submission. The diskette should be accompanied by a cover letter.

List of Subjects in 47 CFR Part 76

    Administrative practice and procedure.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 98-11617 Filed 4-30-98; 8:45 am]
BILLING CODE 6712-01-F