[Federal Register Volume 63, Number 134 (Tuesday, July 14, 1998)]
[Proposed Rules]
[Pages 37815-37820]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-18036]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[CS Docket No. 98-82; FCC 98-112]


Cable Television Ownership Attribution Rules

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In the Notice of Proposed Rulemaking (``NPRM''), the 
Commission initiates a review of its cable attribution rules. The 
attribution rules seek to identify those corporate, financial, 
partnership, ownership and other business relationships that confer on 
their holders a degree of ownership or other economic interest, or 
influence or control over an entity engaged in the provision of 
communications services such that the holders should be subject to the 
Commission's regulation. The Commission is initiating this rulemaking 
in light of recent developments in the cable industry.

DATES: Comments are due on or before August 14, 1998, and reply 
comments are due on or before September 3, 1998.

FOR FURTHER INFORMATION CONTACT: John Norton, Cable Services Bureau, 
(202) 418-7200.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
Notice of Proposed Rulemaking (``NPRM'') CS Docket No. 98-82, FCC 98-
112 adopted June 4, 1998, and released June 26, 1998. 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, D.C. 20554, and may be purchased from the Commission's 
copy contractor, International Transcription Service, (202) 857-3800, 
1231 20th Street, NW, Washington, D.C. 20036.

Synopsis of the Notice of Proposed Rulemaking

    1. The NPRM initiates a review of the Commission's cable television 
ownership attribution rules, which seek to identify those corporate, 
financial, partnership, ownership and other business relationships that 
confer on their holders a degree of ownership or other economic 
interest, or influence or control over an entity engaged in the 
provision of communications services such that the holders should be 
subject to the Commission's regulation. The cable attribution rules are 
particularly significant in the context of a number of statutory 
provisions enacted as part of the Cable Television Consumer Protection 
and Competition Act of 1992 (the ``1992 Cable Act''), including: (1) 
former section 613(a)(1), which prohibited the common ownership of 
local television stations and cable systems that serve the same area 
(the ``cable/broadcast station cross-ownership restriction''); (2) 
section 613(f)(1)(A), which requires the Commission to establish 
reasonable limits on the number of cable subscribers a person is 
authorized to reach through cable systems owned by such person, or in 
which such person has an attributable interest (``horizontal cable 
ownership limits''); (3) section 613(f)(1)(B), which requires the 
Commission to establish reasonable limits on the number of channels on 
a cable system that can be occupied by a video programmer in which a 
cable operator has an attributable interest (``vertical occupancy 
limits''); (4) section 613(a)(2), which prohibits a cable operator from 
holding a license to provide multichannel multipoint distribution 
service (``MMDS''), or from offering satellite master antennae 
television (``SMATV'') service separate and apart from any franchised 
cable service, in any portion of the franchise area served by the cable 
operator's cable system (the ``cable/MMDS'' and ``cable/SMATV'' cross-
ownership restrictions); (5) section 628, which, among other things, 
requires the Commission to establish safeguards to prevent a cable 
operator with an attributable interest in a programming vendor from 
engaging in unfair or deceptive acts involving the distribution of 
programming to an unaffiliated multichannel video programming 
distributor (``program access'' rules); and (6) section 616, which, 
among other things, restricts the activities of cable operators and 
other multichannel programming distributors when dealing with 
programming vendors, including prohibiting discrimination in the 
selection, terms, or conditions of carriage, on the basis of a vendor's 
affiliation or non-affiliation (``program carriage'' rules).
    2. For broad structural rules such as the horizontal cable 
ownership limits and vertical channel occupancy limits, that are 
designed to ensure competition and diversity in the video marketplace, 
the Commission adopted attribution rules from the broadcast context 
where the goal is the same. The broadcast attribution standard 
generally provides that partnership interests, direct ownership 
interests, and voting stock interests of 5% or more are attributable. 
For passive investors, the voting stock benchmark is 10%. Non-voting 
stock

[[Page 37816]]

interests (including most ``preferred'' stock classes) are not 
attributable. There are several exceptions to the voting stock 
threshold, including a ``single majority shareholder'' exception, which 
provides that minority interests will not be attributed where a single 
shareholder owns more than 50% of the outstanding voting stock. In 
addition, the interests of ``insulated'' limited partners are not 
attributed.
    3. The Commission adopted a more restrictive attribution standard 
for those rules, such as the program access and program carriage rules 
and the cable/MMDS and cable/SMATV cross-ownership restrictions, that 
are designed not only to promote competition and diversity, but also to 
deter specific discriminatory or improper conduct by cable operators or 
programmers. In contrast to the broadcast attribution standard, this 
more restrictive standard (1) considers a cable operator to have an 
attributable interest if it holds 5% or more of an entity's stock, 
whether voting or non-voting, (2) does not apply the single majority 
shareholder rule, and (3) attributes limited partnership interests of 
5% or more, regardless of insulation.
    4. In addition, the Commission relied upon the attribution rules in 
defining when an entity is considered an ``affiliate'' for certain 
purposes under Title VI. The Commission applied the more restrictive 
attribution standard to the ratemaking context, for purposes of 
analyzing asset transfers and the provision of services between a cable 
operator and its affiliate, and for purposes of limiting the amount of 
pass-throughs permitted for programming services affiliated with cable 
operators. The Commission also applied the more restrictive attribution 
standard to the leased access provisions and the open video system 
provisions.
    5. In the Cable Act Reform proceeding, the Commission is reviewing 
appropriate definitions of ``affiliate'' under other provisions of the 
1996 Act, including the small operator provisions, the new prong of the 
``effective competition'' test, and the cable-telco buy-out provisions. 
Pending the adoption of final rules, the Commission requested comments 
on the appropriate definition of ``affiliate'' for the cable-telco 
buyout provisions and established interim rules for the small operator 
and ``effective competition'' provisions. For the small operator 
provisions, the interim rule adopted the definition of ``affiliate'' 
used for purposes of the Commission's small system cost-of-service 
rules. Thus, an entity is deemed affiliated with a small cable operator 
if that entity has a 20% or greater equity interest in the operator 
(active or passive) or holds de jure or de facto control over the 
operator. By contrast, in the ``effective competition'' context, the 
interim rule provided that an ``affiliate'' is an entity that (directly 
or indirectly) owns or controls, is owned or controlled by, or is under 
common ownership or control with, another person, where the term 
``own'' means to have an equity interest (or the equivalent thereof) of 
more than 10%.
    6. The Commission has initiated a review of the broadcast 
attribution standard under the Notice of Proposed Rule Making, Review 
of the Commission's Regulations Governing the Attribution of Mass Media 
Interests, 60 FR 06483, MM Docket Nos. 94-150, 92-51 and 87-154, FCC 
94-324, 10 FCC Rcd 3606 (1995) (``Broadcast Attribution Notice'') and 
the Further Notice of Proposed Rule Making, Regulations Governing 
Attribution of Broadcast and Cable/MDS Interests, Regulation and 
Policies Affecting Investment in the Broadcast Industry and 
Reexamination of the Commission's Cross-Interest Policy, 61 FR 67275, 
MM Docket Nos. 94-150, 92-51 and 87-154, FCC 96-436, 11 FCC Rcd 19895 
(1996) (``Broadcast Attribution Further Notice'').
    7. Among the issues on which the Commission solicited comment in 
the Broadcast Attribution Notice were: (1) whether to increase the 
voting stock ownership benchmark from 5 percent to 10 percent; (2) 
whether to increase the passive investor stock ownership benchmark from 
10 percent to 20 percent; (3) whether to restrict or eliminate our 
single majority shareholder exemption and whether to attribute 
nonvoting shares in certain circumstances, such as where the minority 
or nonvoting shareholder has contributed a significant portion of the 
equity or debt financing; (4) whether to revise our insulation criteria 
for limited partnership interests, and whether to adopt an equity 
benchmark for noninsulated limited partners; (5) whether to treat 
interests in limited liability companies (``LLCs'') and similar new 
business forms, such as registered limited liability partnerships 
(``RLLPs''), as we now treat limited partnerships; (6) whether to 
eliminate the remaining aspects of our cross-interest policy that 
prevent individuals from having ``meaningful'' interests--including key 
employee relationships, joint ventures, and nonattributable equity 
interests--in two broadcast stations, or a daily newspaper and a 
broadcast station, or a television station and a cable system, when 
both outlets serve ``substantially the same area;'' and (7) how to 
treat non-equity financial relationships and multiple business 
relationships that, although not individually attributable, could 
combine to create sufficient influence to warrant attribution.
    8. In addition to the issues raised in the Broadcast Attribution 
Notice, the Broadcast Attribution Further Notice explored additional 
proposals to increase the precision of the attribution rules. In the 
Broadcast Attribution Further Notice, the Commission invited comment on 
whether it should add a new ``equity or debt plus'' (``EDP'') 
attribution rule. Under such a rule, where an interest holder is a 
program supplier or same-market media entity, the Commission will 
attribute its otherwise non-attributable equity and/or debt interests 
in a licensee or other media entity subject to the cross-ownership 
rules if those aggregated interests exceed a specified benchmark, 
proposed to be set at 33 percent. Second, the Commission tentatively 
concluded that it should treat television time brokerage agreements or 
local marketing agreements (``LMAs'') the same as radio LMAs, and also 
count radio and television LMAs toward all applicable ownership limits. 
Third, the Commission invited comment as to whether it should attribute 
joint sales agreements (``JSAs'') in certain circumstances. Fourth, the 
Commission invited comments on its staff study of attributable 
ownership interests in broadcast television stations, appended to the 
Broadcast Attribution Further Notice, and on the implications of this 
study regarding the impact of the proposed attribution rule changes, 
particularly as to the voting stock benchmarks. Fifth, the Commission 
sought comments on whether a transition period or grandfathering of 
existing interests is appropriate. The Commission tentatively concluded 
that any grandfathering should apply only to the current interest 
holder and that interests acquired on or after December 15, 1994, the 
date of adoption of the Broadcast Attribution Notice, should be subject 
to any final rules adopted. The Commission invited comments as to 
whether it should apply broadcast attribution criteria and add a new 
EDP attribution rule for purposes of the cable/Multipoint Distribution 
Service (``MDS'') cross-ownership restrictions.
    9. This NPRM initiates a similar review of the attribution issues 
as they specifically relate to the Commission's cable rules. The NPRM 
seeks comment on the same issues raised in the broadcast attribution 
proceedings as they pertain to the cable industry, and on whether and 
how these issues should factor into the review of the

[[Page 37817]]

Commission's cable attribution rules. In particular, the Commission 
asks commenters to focus on: (1) the proposed ``equity or debt plus'' 
addition to the current attribution rules, and specifically those 
relationships in the cable context that may provide sufficient 
incentive and ability for an otherwise nonattributable interest holder 
to exert an attributable influence or control; (2) the attribution of 
certain contractual or other business relationships in the cable 
context (including affiliations that allow different cable entities to 
purchase programming, technology or equipment on common terms, 
analogous to JSAs and LMAs in the broadcast context) that may implicate 
diversity and competition concerns, irrespective of debt or equity; (3) 
the impact of raising the stock ownership benchmark for active and 
passive investors in the cable context, particularly seeking empirical 
data and analysis similar to the Commission staff study on the same 
subject in the broadcasting context; (4) whether to retain, modify, or 
eliminate the single majority shareholder exemption; and (5) whether a 
transition period or grandfathering of existing interests is 
appropriate if we decide to adopt more restrictive attribution rules. 
Because the Broadcast Attribution Notice and the Broadcast Attribution 
Further Notice already address application of the attribution rules to 
the cable/MMDS and the cable/broadcast cross-ownership restrictions, 
the Commission will not revisit and therefore does not seek comment on 
those issues in the NPRM.
    10. The NPRM seeks comment on whether the assumptions underlying 
the cable attribution rules are still valid. In particular, comment is 
sought on whether any relevant differences exist between the cable and 
broadcasting industries that would support a distinct cable attribution 
standard even for those cable rules designed, like the broadcasting 
ownership rules, to ensure competition and diversity. In the NPRM, the 
Commission notes that the broadcast attribution rules focus primarily 
on those relationships which confer on their holders influence or 
control over a broadcaster's key business decisions in the areas of 
budget, personnel and programming. Comment is sought on whether, in the 
cable context, these are the appropriate key business areas and whether 
the underlying areas of concern should include cable entities' 
technology decisions and practices. The NPRM seeks comment on whether 
there are differences in ownership, financing or management structures, 
industry health, typical stockholdings, informal business arrangements, 
or outside financial claims that render one of the industries more or 
less subject to the types of influence or control that the attribution 
rules seek to identify. Also, because the current cable attribution 
rules do not distinguish between types of cable operators, comment is 
sought on whether any relevant differences exist among cable operators 
that would warrant different attribution rules.
    11. In the NPRM, the Commission also solicits comment on whether 
and how we should re-evaluate the more restrictive attribution standard 
applicable to certain of the rules described above, such as the program 
access and program carriage rules and the cable/MMDS and cable/SMATV 
cross-ownership restrictions. In particular, the Commission seeks 
comment on: (1) whether the more restrictive standard serves the 
purposes for which it was intended; (2) whether the more restrictive 
standard is over- or under-inclusive; (3) whether the more restrictive 
attribution standard should be revised in relation to the broadcast 
attribution standard; (4) whether these two attribution standards 
should be treated as completely separate and independent formulations; 
and (5) whether, in view of the purposes it serves, we should require a 
more compelling showing before modifying the more restrictive standard.
    12. In the NPRM, comment is sought on whether and how any changes 
in our cable attribution rules should affect the Commission's various 
definitions of ``affiliate.'' In particular, the Commission seeks 
comment on whether and how those affiliation rules that are expressly 
based on the cable attribution rules should change if the underlying 
attribution rules are changed.
    13. In the NPRM, the Commission seeks comment as to the business 
arrangements involved in recent cable system partnerships, joint 
ventures, swaps, transfers, mergers and acquisitions, particularly 
those transactions announced or consummated in 1997 or thereafter, 
including those discussed in the Commission's 1997 annual report on the 
status of competition in the delivery of video programming. Commenters 
should identify the entities involved in each transaction, the 
projected date of consummation, details of the new structure including: 
the percentage and nature (e.g., voting or non-voting, limited or 
general partnership, insulated or non-insulated, rights of conversion) 
of each entity's ownership interests, the number of officers, 
directors, and other key personnel appointed by each entity to a 
management committee, board or other governing body, the portion of the 
equity or debt financing contributed by each entity, and any authority 
or power held by each entity to review, veto or otherwise influence the 
management or operation of the cable systems, as well as the ability to 
purchase programming, technology, or equipment under common contract 
terms. The Commission seeks information, in particular, as to any 
business arrangements undertaken to insulate one or more parties to 
these transactions from control or influence over key business aspects 
of the cable systems at issue. Comment is also sought as to the 
development of the Commission's cable attribution rules to avoid 
inconsistency with any other statutes or regulations (e.g., those of 
the Internal Revenue Service or the Financial Accounting Standards 
Board) that may influence the structuring of the business arrangements 
at issue.
    14. With respect to each ownership or relational interest discussed 
herein, the Commission seeks comment on whether the specified level or 
degree of ownership interest in, or relationship to, an entity would be 
likely to impart the ability to influence or control the operations of 
that entity, including core areas such as budget, personnel, 
programming, technology, or competitive practices, such that the 
ownership rules should be implicated. Consistent with the purpose of 
section 257 of the 1996 Act to reduce market entry barriers for small 
businesses, comment is also sought on the impact that any changes to 
the Commission's cable ownership attribution or affiliation standards 
will have on market entry barriers for small businesses. In the NPRM, 
the Commission asks interested parties to support their comments with 
empirical data and economic analyses regarding levels of influence in 
business organizations and current market conditions.

Initial Regulatory Flexibility Analysis

    15. As required by section 603 of the Regulatory Flexibility Act, 5 
U.S.C. Sec. 603 (``RFA''), the Commission is incorporating an Initial 
Regulatory Flexibility Analysis (``IRFA'') of the expected impact on 
small entities of any policies or proposals contained in this NPRM. 
Written public comments concerning the effect of the proposals in the 
NPRM, including the IRFA, on small businesses are requested. Comments 
must be identified as responses to the IRFA and must be filed by the 
deadlines for the submission of comments in this proceeding. The 
Commission shall send a copy of the NPRM, including the

[[Page 37818]]

IRFA, to the Chief Counsel for Advocacy of the Small Business 
Administration in accordance with paragraph 603(a) of the Regulatory 
Flexibility Act.
    16. Need for, and Objectives of, the Proposed Rules. This 
proceeding is being initiated to obtain comment on whether the 
Commission's cable attribution and affiliation rules continue to serve 
their intended goals, and whether certain aspects of those rules should 
be revised to make them more effective. The actions proposed in the 
NPRM are intended to ensure that the Commission effectively implements 
the various cable rules that include an attribution or affiliation 
standard by identifying those interests that may result in undue market 
power by large entities, such as large cable multiple systems owners, 
and undermine a competitive, diverse and fair marketplace.

Legal Basis

    17. Authority for the actions proposed in the NPRM is contained in 
sections 4, 303, 612, 613, 616, 623, 628, 652 and 653 of the 
Communications Act of 1934, as amended, 47 U.S.C. Secs. 154, 303, 532, 
533, 536, 543, 548, 572 & 573.
    18. Description and Estimate of the Number of Small Entities to 
Which the Proposed Rules Will Apply. The RFA generally defines ``small 
entity'' as having the same meaning as the terms ``small business,'' 
``small organization,'' and ``small governmental jurisdiction'' and 
``the same meaning as the term `small business concern' under the Small 
Business Act unless the Commission has developed one or more 
definitions that are appropriate for its activities. A small business 
concern is one which: (1) is independently owned and operated; (2) is 
not dominant in its field of operation; and (3) satisfies any 
additional criteria established by the Small Business Administration 
(``SBA''). The Small Business Enforcement Fairness Act of 1996 (SBREFA) 
provision of the RFA also applies to nonprofit organizations and to 
governmental organizations such as governments of cities, counties, 
towns, townships, villages, school districts, or special districts with 
populations of less than 50,000. Pursuant to 5 U.S.C. Sec. 601(3), the 
statutory definition of a small business applies ``unless an agency 
after consultation with the Office of Advocacy of the SBA and after 
opportunity for public comment, establishes one or more definitions of 
such term which are appropriate to the activities of the agency and 
publishes such definition(s) in the Federal Register.''
    19. Local Franchising Authorities. There are 85,006 governmental 
entities in the United States. This number includes such entities as 
states, counties, cities, utility districts and school districts. Any 
official actions with respect to cable systems will typically be 
undertaken by local franchising authorities (``LFAs''), which primarily 
consist of counties, cities and towns. Of the 85,006 governmental 
entities, 38,978 are counties, cities and towns. The remainder are 
primarily utility districts, school districts, and states, which 
typically are not LFAs. Of the 38,978 counties, cities and towns, 
37,566 or 96%, have populations of fewer than 50,000. Thus, 
approximately 37,500 ``small governmental jurisdictions'' may be 
affected by the rules proposed in the NPRM.
    20. Cable Services or Systems. SBA has developed a definition of 
small entities for cable and other pay television services under 
Standard Industrial Classification 4841 (SIC 4841), which covers 
subscription television services, which includes all such companies 
with annual gross revenues of $11 million or less. This definition 
includes cable systems operators, closed circuit television services, 
direct broadcast satellite services, multipoint distribution systems, 
satellite master antenna systems and subscription television services. 
According to the Census Bureau, there were 1,323 such cable and other 
pay television services generating less than $11 million in revenue 
that were in operation for at least one year at the end of 1992.
    21. The Commission has developed its own definition of a ``small 
cable company'' and ``small system'' for the purposes of rate 
regulation. Under the Commission's rules, 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 1,439 
cable companies 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 companies. 
Consequently, the Commission estimates that there are fewer than 1,439 
small entity cable companies that may be affected by the proposal 
adopted in the NPRM. The Commission's rules also define a ``small 
system,'' for the purposes of cable rate regulation, as a cable system 
with 15,000 or fewer subscribers. The Commission does not request nor 
does it collect information concerning cable systems serving 15,000 or 
fewer subscribers and thus is unable to estimate at this time the 
number of small cable systems nationwide.
    22. The Communications Act also contains a definition of a ``small 
cable operator,'' which is ``a cable operator that, directly or through 
an affiliate, serves in the aggregate fewer than 1 percent 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 is 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 
1,450. 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. The Commission is likewise unable to estimate the 
number of these small cable operators that serve 50,000 or fewer 
subscribers in a franchise area.
    23. Satellite Master Antennae Television (``SMATV'') Operators. 
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 it is assumed 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 believes that a substantial number of SMATV 
operators qualify as small entities.
    24. Local Exchange Carriers (``LECs''). Neither the Commission nor 
the SBA

[[Page 37819]]

has developed a definition for small LECs. The closest applicable 
definition under the SBA rules is for telephone communications 
companies other than radiotelephone (wireless) companies. The most 
reliable source of information regarding the number of LECs nationwide 
is the data that the Commission collects annually in connection with 
the TRS Worksheet. According to the Commission's most recent data, 
1,347 companies reported that they were engaged in the provision of 
local exchange services. The Commission does not have information on 
the number of carriers that are not independently owned and operated, 
nor what carriers have more than 1,500 employees, and thus the 
Commission is unable at this time to estimate with greater precision 
the number of LECs that would qualify as small business concerns under 
SBA's definition. Consequently, the Commission estimates that there are 
fewer than 1,347 small incumbent LECs.
    25. Cable Programmers. The Commission has not developed a 
definition of small entities applicable to producers or distributors of 
cable television programs. Therefore, the Commission will utilize the 
SBA classifications of Motion Picture and Video Tape Production (SIC 
7812), and Theatrical Producers (Except Motion Pictures) and 
Miscellaneous Theatrical Services (SIC 7922). These SBA definitions 
provide that a small entity in the cable television programming 
industry is an entity with $21.5 million or less in annual receipts for 
SIC 7812, and $5 million or less in annual receipts for SIC 7922. 
Census Bureau data indicate the following: (a) there were 7,265 firms 
in the United States classified as Motion Picture and Video Production 
(SIC 7812), and that 6,987 of these firms had $16.999 million or less 
in annual receipts and 7,002 of these firms had $24.999 million or less 
in annual receipts; and (b) there were 5,671 firms in the United States 
classified as Theatrical Producers and Services (SIC 7922), and that 
5627 of these firms had $4.999 million or less in annual receipts.
    26. Description of Projected Recording, Record keeping, and Other 
Compliance Requirements. If the Commission's cable ownership 
attribution or affiliation standards are changed, the Commission may 
have to change certain cable reporting requirements and cable entities 
may be required to observe new recording, record keeping or other 
compliance requirements that would be necessary to ensure compliance 
with the new attribution or affiliation standards. Cable entities also 
may have to adjust the organization of their business interests in 
order to comply with any new attribution or affiliation standards that 
the Commission may adopt.
    27. Steps Taken to Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered. The actions proposed 
in the NPRM are intended to ensure that the Commission effectively 
implements the various cable rules that include an attribution or 
affiliation standard by identifying more accurately those interests 
that may result in undue market power by large entities, such as large 
cable multiple systems owners, and undermine a competitive, diverse and 
fair marketplace. Accordingly, as discussed in the above descriptions 
of the proposed rule changes, and in the Broadcast Attribution Notice 
and Broadcast Attribution Further Notice, the approaches proposed in 
this NPRM should promote fairness and diversity for all cable systems 
and other small entities listed above. The Commission invites comments 
on these approaches, including comment on whether alternative 
approaches will mitigate any unwarranted expenses incurred by smaller 
entities by virtue of their size alone.
    28. Federal Rules that Overlap, Duplicate or Conflict with the 
Proposed Rules. None.

Paperwork Reduction Act Analysis

    29. The proposals contained herein have been analyzed with respect 
to the Paperwork Reduction Act of 1995 (the ``1995 Act''). The 
Commission has determined that, if we change our cable ownership 
attribution or affiliation standards, the Commission may have to 
require cable entities to comply with new or modified information 
collection requirements that would be necessary to ensure compliance 
with the new attribution or affiliation standards. If the Commission, 
in a subsequent rulemaking in this proceeding, implements new or 
modified information collection requirements, those requirements will 
first be subject to approval by the Office of Management and Budget as 
prescribed by the Act.

Procedural Provisions

    30. This proceeding will be treated as a ``permit-but-disclose'' 
proceeding subject to the ``permit-but-disclose'' requirements under 
Section 1.1206(b) of the rules. 47 CFR 1.1206(b), as revised. Ex parte 
presentations are permissible if disclosed in accordance with 
Commission rules, except during the Sunshine Agenda period when 
presentations, ex parte or otherwise, are generally prohibited. Persons 
making oral ex parte presentations are reminded that a memorandum 
summarizing a presentation must contain a summary of the substance of 
the presentation and not merely a listing of the subjects discussed. 
More than a one or two sentence description of the views and arguments 
presented is generally required. See 47 CFR 1.1206(b)(2), as revised. 
Additional rules pertaining to oral and written presentations are set 
forth in Sec. 1.1206(b).
    31. Pursuant to applicable procedures set forth in Secs. 1.415 and 
1.419 of the Commission's Rules, 47 CFR. 1.415 and 1.419, comments are 
due August 14, 1998, and reply comments are due September 3, 1998. To 
file formally in this proceeding, you must file an original plus four 
copies of all comments, reply comments, and supporting comments. If you 
want each Commissioner to receive a personal copy of your comments and 
reply comments, you must file an original plus nine copies. You should 
send comments and reply comments to Office of the Secretary, Federal 
Communications Commission, 1919 M Street, N.W. Washington, D.C. 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 N.W., Washington D.C. 
20554.

Ordering Clauses

    32. Accordingly, it is hereby ordered that pursuant to the 
authority in sections 4, 303, 612, 613, 616, 623, 628, and 653 of the 
Communications Act of 1934, as amended, 47 U.S.C. 154, 303, 532, 533, 
536, 543, 548, 572 and 573, notice is hereby given of proposed 
amendments to part 76, in accordance with the proposals, discussions, 
and statement of issues in this Notice of Proposed Rulemaking, and that 
comment is sought regarding such proposals, discussion, and statement 
of issues.
    33. It is further ordered that the Office of Public Affairs 
Reference Operation Division shall send a copy of this Notice of 
Proposed Rulemaking, 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, Public Law 96-354, 94 Stat. 1164, 5 U.S.C. 601 et seq. 
(1981).

List of Subjects in 47 CFR Part 76

    Cable television.


[[Page 37820]]


Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 98-18036 Filed 7-13-98; 8:45 am]
BILLING CODE 6712-01-P