[Federal Register Volume 63, Number 234 (Monday, December 7, 1998)]
[Proposed Rules]
[Pages 67439-67449]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-32397]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 73

[CS Docket No. 98-201; FCC 98-302]


Satellite Delivery of Broadcast Network Signals Under the 
Satellite Home Viewer Act

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document requests comment on the Commission's authority 
to modify the Grade B construct in response to petitions for rulemaking 
filed by the National Rural Telecommunications Cooperative (NRTC) and 
EchoStar Communications Corporation (Echostar) in connection with the 
Satellite Home Viewer Act. The intended effect is to better identify 
those households that are ``unserved,'' for purposes of the SHVA, by 
their local broadcast stations using conventional rooftop antennas.


[[Page 67440]]


DATES: Comments are due on or before December 11, 1998 and reply 
comments are due on or before December 21, 1998. Comments by the public 
on the modified information collection requirements are due on or 
before January 6, 1999. Comments by the Office of Management and Budget 
(``OMB'') on the modified information collection requirements are due 
on or before February 5, 1999.

ADDRESSES: Federal Communications Commission, Office of the Secretary, 
445 12th Street, SW, Room TW-A325, Washington, DC 20554. Comments may 
be filed using the Commission's Electronic Comment Filing System (ECFS) 
or by filing paper copies. See Electronic Filing of Documents in 
Rulemaking Proceedings, 63 FR 24, 121 (Friday, January 2, 1998). 
Comments filed through the ECFS can be sent as an electronic file via 
the Internet to <http://www.fcc.gov/e-file/ecfs.html>. Generally, only 
one copy of an electronic submission must be filed. In completing the 
transmittal screen, commenters should include their full name, Postal 
Service mailing address, and the applicable docket or rulemaking 
number. Parties may also submit an electronic comment by Internet e-
mail. To get filing instructions for e-mail comments, commenters should 
send an e-mail to [email protected], and should include the following words 
in the body of the message, ``get form .'' A 
sample form and directions will be sent in reply. A copy of any 
comments on the new and modified information collection requirements 
contained herein should be submitted to Judy Boley, Federal 
Communications, Room C1804, 445 12th Street, SW, Washington, DC 20554, 
or via the Internet to [email protected], and to Timothy Fain, OMB Desk 
Officer, 10236 NEOB, 725--17th Street, N.W., Washington, DC 20503 or 
via the Internet to [email protected].

FOR FURTHER INFORMATION CONTACT: Donnie Fowler at (202) 418-7200 or via 
internet at [email protected]. For additional information concerning the 
modified information collection requirements contact Judy Boley at 
(202) 418-0214 or via internet at [email protected].

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
Notice of Proposed Rulemaking, FCC 98-302, CS Docket No. 98-201, 
adopted November 17, 1998 and released November 17, 1998. The full text 
of this Notice is available for inspection and copying during normal 
business hours in the FCC Reference Center (Room 239), 1919 M Street, 
NW, Washington, DC 20554, or may be purchased from the Commission's 
copy contractor, International Transcription Service (``ITS''), (202) 
857-3800, 1231 20th Street, NW, Washington, DC 20036, or may be 
reviewed via internet at <http://www.fcc.gov/Bureaus/Cable/
News__Releases/1998/nrcb8022.html>. For copies in alternative formats, 
such as braille, audio cassette or large print, please contact Sheila 
Ray at ITS.

Ex Parte Rules

    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 47 CFR 1.1206(b).

Synopsis of Notice of Proposed Rulemaking

I. Introductory Background

    1. In this proceeding we respond to petitions for rulemaking filed 
by the National Rural Telecommunications Cooperative (NRTC) and 
EchoStar Communications Corporation (EchoStar). The petitions address 
the methods for determining whether a household is ``unserved'' by 
local network affiliated television broadcast stations for purposes of 
the 1988 Satellite Home Viewer Act (SHVA) (17 CFR 119 (1998). The NRTC 
petition was filed July 8, 1998 and placed on public notice on August 
5, 1998. The EchoStar petition was filed August 18, 1998 and placed on 
public notice on August 26, 1998. The Commission has received comments 
on both petitions.

A. The Satellite Home Viewer Act

    2. In the Satellite Home Viewer Act, Congress granted a limited 
exception to the exclusive programming copyrights enjoyed by television 
networks and their affiliates because it recognized that some 
households are unable to receive network station signals over the air. 
The exception is a narrow compulsory copyright license that direct-to-
home (DTH) satellite video providers may use for retransmitting signals 
of a defined class of television network stations ``to persons who 
reside in unserved households.'' The term ``unserved household,'' with 
respect to a particular television network station is defined by SHVA 
to mean a household that--
    ``(A) cannot receive, through the use of a conventional outdoor 
rooftop receiving antenna, an over-the-air signal of grade B intensity 
(as defined by the Federal Communications Commission) of a primary 
network station affiliated with that network, and
    (B) has not, within 90 days before the date on which that household 
subscribes, either initially or on renewal, to receive secondary 
transmissions by a satellite carrier of a network station affiliated 
with that network, subscribed to a cable system that provides the 
signal of a primary network station affiliated with that network.'' 17 
CFR 119(d)(10).
    In any action brought under the SHVA, the law specifies that ``the 
satellite carrier shall have the burden of proving that its secondary 
transmission of a primary transmission by a network station is for 
private home viewing to an unserved household.''
    3. The network station compulsory copyright licenses created by the 
Satellite Home Viewer Act are limited because Congress recognized the 
importance that the network-affiliate relationship plays in delivering 
free, over-the-air broadcasts to American families, and because of the 
value of localism in broadcasting. Localism, a principle underlying the 
broadcast service since the Radio Act of 1927, serves the public 
interest by making available to local citizens information of interest 
to the local community (e.g., local news, information on local weather, 
and information on community events). Congress was concerned that 
without copyright protection, the economic viability of local stations, 
specifically those affiliated with national broadcast networks, might 
be jeopardized, thus undermining one important source of local 
information.

B. Grade B Contours and Signal Intensity

    4. The Grade B intensity standard is a Commission-defined measure 
of the strength of a television station's broadcast signal. (See 47 CFR 
73.683 and 73.685.) Developed in the 1950s, the Commission has used the 
Grade B standard for a variety of purposes, many of which were not 
envisioned at the time it was adopted. Significantly, while the 
Commission anticipated that the Grade B standard might be used

[[Page 67441]]

generally to determine the service area, or contour, of a television 
station, use of the standard to identify individual unserved households 
under SHVA was not then at issue. Grade B represents the field strength 
of a signal 30 feet above ground that is strong enough, in the absence 
of man-made noise or interference from other stations, to provide a 
television picture that the median observer would classify as 
``acceptable'' using a receiving installation (antenna, transmission 
line, and receiver) typical of outlying or near-fringe areas. (See 
O'Connor, Robert A., ``Understanding Television's Grade A and Grade B 
Service Contours,'' IEEE Transactions on Broadcasting, 139 (December 
1968).) The Grade B contour is defined as the set of points along which 
the best 50% of the locations should get an acceptable picture at least 
90% of the time. The ``time variability'' planning factor used in the 
determination of the Grade B standard may create some confusion. In the 
TV & Cable Factbook, TV Stations Volume (1998 edition page A-15), the 
Grade B is described as providing service to 50% of locations 90% of 
the time. The Commission's Sixth Report and Order in Dockets 8736 et 
al. 41 FCC 148, 177 (1952), which adopted the initial television 
station allocation rules, states, ``In the case of Grade B service the 
figures are 90 percent of the time and 50 percent of the locations.'' 
Both the broadcast and satellite parties state the time variability 
factor differently than stated. They describe the field strength at the 
Grade B contour as being available to at least 50% of the locations at 
least 50% of the time. This apparent inconsistency arises from an 
adjustment the Commission adopted for the Grade B signal strength 
values when it originally established them. This adjustment results in 
a Grade B value that predicts reception of an acceptable picture 90% of 
the time. For example, on channels 2-6, a signal strength of 41 dBu is 
needed for an acceptable picture. In order for this signal strength to 
be available 90% of the time, the median or F(50,50) field strength is 
set at 47 dBu.
    5. The Grade B contour values (which represent the required field 
strength in dB above one micro-volt per meter) are defined for each 
television channel in section 73.683 of the Commission's rules:

Channels 2-6--47 dBu
Channels 7-13--56 dBu
Channels 14-69--64 dBu

    Section 73.684 contains the Commission's ``traditional'' 
methodology for predicting station service coverage and section 73.686 
describes a procedure for making field strength measurements.

C. The PrimeTime 24 Lawsuits

    6. This proceeding was precipitated by petitions for rulemaking 
filed following the decisions of the United States District Court for 
the Southern District of Florida in CBS, Inc. et al. v. PrimeTime 24 
Joint Venture, 9 F.Supp.2d 1333 (S.D. FL., May 13, 1998). In that 
litigation, the plaintiffs--CBS Inc.; Fox Broadcasting Co.; CBS 
Television Affiliates Association; Post-Newsweek Stations Florida, 
Inc.; KPAX Communications, Inc.; LWWI Broadcasting, Inc.; and Retlaw 
Enterprises--brought a copyright infringement action against PrimeTime 
24, a satellite carrier, for retransmitting distant network programming 
to satellite dish owners in violation of the SHVA. The plaintiffs 
alleged that PrimeTime 24 distributed the signals of distant network-
affiliated television broadcast stations by satellite to subscribers 
that were not ``unserved households'' within the meaning of the SHVA. 
Finding evidence that violations of the Act had taken place, the court 
issued a preliminary, nationwide injunction ordering PrimeTime 24 not 
to deliver CBS or Fox television network programming to any customer 
that does not live in an unserved household. It was specifically 
enjoined from providing CBS or Fox network programming:

to any customer within an area shown on Longley-Rice propagation maps, 
created using Longley-Rice Version 1.2.2 in the manner specified by the 
Federal Communications Commission (``FCC''), as receiving a signal of 
at least grade B intensity of a CBS or Fox primary network station, 
without first either (i) obtaining the written consent of the CBS or 
Fox station affiliated or the relevant network, or (ii) after giving 15 
business days written advance notice to the stations of its intention 
to conduct a test and of the time and place at which the test will be 
conducted, providing the station with a signal strength test at the 
customer's household showing that the household cannot receive a signal 
of grade B intensity.
    The court ruled that the signal strength test at individual 
households within a station's predicted Longley-Rice contour should be 
``conducted in accordance with the procedures outlined in the 
Declaration of Jules Cohen, filed on March 11, 1997.''
    7. The court initially provided PrimeTime 24 with 90 days to comply 
with the preliminary injunction, which applies only to subscribers who 
signed up with PrimeTime 24 after March 11, 1997 (the day the 
plaintiffs filed their lawsuit). The parties subsequently and jointly 
agreed to an extension of the compliance date to February 28, 1999, and 
the court approved the parties' agreement on October 6, 1998. If 
enforced, the preliminary injunction could result in the termination of 
network signals to an estimated 700,000 to one million subscribers. A 
permanent injunction could end satellite network service to as many as 
2.2 million subscribers. If the court issues a permanent injunction, 
the 700,000 to one million subscribers affected by the preliminary 
injunction will increase to include PrimeTime 24's subscribers before 
March 11, 1997. This would be an additional 1.5 million subscribers, 
thus raising the total subscribers affected by the Miami court orders 
to 2.2 million.
    8. On July 16, 1998, a Raleigh, North Carolina, federal district 
court ruled against PrimeTime 24 in a similar lawsuit brought by the 
local ABC affiliate, ABC, Inc. v. PrimeTime 24, Joint Venture, 1998 WL 
544286 (M.D. N.C., July 16, 1998) (Case No. Civ. A. 1:97CV00090). A 
permanent injunction followed on August 19, 1998 (1998 WL 544297 (M.D. 
N.C., Aug. 19, 1998) (Case No. Civ. A. 1:97CV00090)). Similar to the 
Miami ruling, the court found that the SHVA defines unserved household 
and Grade B using strictly objective standards. The court stated, 
``PrimeTime's screening procedures have systematically substituted a 
subjective inquiry into the quality of the picture on a potential 
subscriber's television set for any signal strength showing. PrimeTime 
has ignored or turned a blind eye to the necessity of objective signal 
strength testing and thus willfully or repeatedly provides network 
programming to subscribers under SHVA.'' In contrast to the Miami 
ruling, the Raleigh court did not use the Longley-Rice predictive model 
to identify the affected subscribers, but applied the injunction to all 
subscribers living within 75 miles of the affiliate's transmitting 
tower. PrimeTime 24 has provided network services to as many as 35,000 
households in the ABC affiliate's Raleigh/Durham market. At the time of 
the court's decision, PrimeTime 24 continued to serve more than 9,000 
subscribers within the affiliate's Grade B contour. A third lawsuit was 
brought by an NBC affiliate in Amarillo, Texas, and awaits judgment by 
a federal court. Kannan Communications, Inc. v. Primetime 24 Joint 
Venture, No. 2-96-CV-086 (N.D. Tex.). A fourth lawsuit was filed by 
EchoStar against CBS, Fox,

[[Page 67442]]

NBC, and ABC on October 19, 1998. EchoStar asks the court to find that 
the Commission has never endorsed a particular model for predicting or 
measuring Grade B intensity for the purposes of the SHVA. EchoStar 
wants the court to declare that a viewer's own opinion of the quality 
of his or her signal quality is adequate for determining whether that 
home is unserved under the SHVA, and asks the court to endorse a 
predictive model for identifying served households such that 95% of 
households receive a Grade B signal 95% of the time with a 50% degree 
of confidence. (EchoStar's 95 / 95 / 50 court request contrasts with 
the request in its petition before the Commission, in which it asks for 
a 99 / 99 / 99 model.

D. The NRTC and EchoStar Petitions

    9. In response to the Miami court case, the NRTC and EchoStar filed 
their petitions.
    We address both Petitions in this rulemaking because the issues are 
similar and for reasons of administrative efficiency. The NRTC, a 
distributor of DirecTV DBS service, has asked the Commission to adopt, 
exclusively for purposes of interpreting the SHVA, a new definition of 
``unserved'' that includes all households located outside a Grade B 
contour encompassing a geographic area in which 100 percent of the 
population receives over-the-air coverage by network affiliates 100 
percent of the time using readily available, affordable receiving 
equipment. EchoStar, which is a provider of DBS service, urges the 
Commission to adopt a prediction model to locate unserved households. 
EchoStar endorses a model that predicts an area where 99 percent of 
households receive a Grade B signal 99 percent of the time with a 99 
percent confidence level. EchoStar also urges adoption of a methodology 
for measuring signal strength that more closely reflects the signal 
that a viewer's television set actually receives. It argues that a 
number of flaws exist in the current measurement and prediction 
processes when they are used for SHVA purposes.
    10. Several parties filed comments either opposing or supporting 
the petitions. Those opposing the petitions generally represented 
broadcast interests, while those supporting the petitions generally 
included DTH satellite interests. Broadcasters generally argue that 
Congress did not grant the Commission the authority to amend the 
definition of Grade B for purposes of the SHVA.
    Specifically, they contend that Congress chose the Grade B 
definition that existed at the time of the SHVA's adoption because it 
wanted to balance the viability of network/affiliate relationships with 
consumers' interest in receiving broadcast network service. If the 
Commission alters the Grade B definition, the petitioners' opponents 
argue, the number of households entitled to receive distant network 
signals may inappropriately rise and the number of people watching the 
local stations will fall as the stations' viewing area shrinks. Fewer 
viewers could mean lower ratings and less advertising revenue. Further, 
the petitioners' opponents argue that a reduced viewing area might 
impact a network station's ability to enforce its exclusivity rights 
within that area.
    11. Opponents to the petitions also contend that Congress did not 
craft the SHVA with competition in mind, and, although competition is 
an important goal, it carries little weight in this context. 
Furthermore, broadcasters challenge the DTH industry's concerns about 
subscribers who will lose their network signals under the Miami court's 
injunction by declaring that many of those subscribers are receiving 
that service illegally. The broadcasters advocate a local-into-local 
approach for satellite-delivery of network signals, whereby all local 
network signals would be retransmitted into a local area (e.g., Boston 
network affiliates would be retransmitted to Boston subscribers). Until 
that time, broadcasters urge the Commission to refrain from acting on a 
copyright issue that falls outside of its purview.
    12. The DTH industry, on the other hand, contends that Congress did 
not freeze the definition of Grade B when it enacted the SHVA, and 
asserts that the Commission has legal authority to change that 
definition. The supporters of the petitions argue that the Commission 
can and should conduct a rulemaking to make the definition of Grade B 
more applicable to the SHVA. Some commenters contend that the current 
Grade B standard makes it more difficult for DTH providers to compete 
with cable companies, because DTH providers cannot offer network 
programming to subscribers while cable can. These commenters argue that 
subscribers are therefore less likely to consider DTH as a true 
alternative to cable. The DTH industry states that the Commission has 
not adopted a definition of Grade B for purposes of SHVA and urges 
adoption of a standard that reflects actual reception of an adequate 
television signal at a household's television set. Moreover, instead of 
an actual testing regime for determining a household's eligibility for 
retransmission of a network television station's signal, they argue, 
the Commission should adopt a predictive testing methodology that will 
be accurate and cost-effective. The DTH industry suggests a predictive 
testing methodology that will return results that reveal, with 99 to 
100% confidence, that 99 to 100% of households within a given area can 
receive a network television station's signal 99 to 100% of the time. 
The DTH industry requests that the Commission act now to further 
consumer choice, foster competition, and respond to congressional 
support for action.
    13. Members of Congress and the Executive Branch have expressed 
their concern about the issues raised in the petitions. On July 8, 
1998, Senator McCain, Chairman of the Senate Commerce Committee, and 
Representative Bliley, Chairman of the House Commerce Committee, wrote 
the Commission, indicating that the Miami injunction ``threatens to 
undermine the progress the Congress has made in promoting 
competition.'' On August 7, 1998, Representative Boucher and 22 other 
members of Congress stated in a letter to the Commission that the 
court's preliminary injunction ``raises serious consumer and 
competitive issues that require immediate review and action by the 
Commission.'' The letter continued, ``As the expert regulatory agency 
in telecommunications matters, the Commission was specifically 
authorized by Congress to define `Grade B' for purposes of the SHVA. . 
. . [W]e believe the Commission should expeditiously act to prevent the 
imminent disenfranchisement of more than a million satellite 
customers.''
    14. Larry Irving, director of the National Telecommunications 
Information Administration (NTIA) at the Department of Commerce, stated 
that, depending upon which predictive methodology is used, as many as 
nine million households (10 percent of American television households) 
could change from served to unserved households. He reiterated the 
Administration's support for ``robust competition'' in the MVPD 
industry and noted that the definition of Grade B intensity could have 
a ``marked effect'' on satellite companies'' competitive position in 
the market.

II. Analysis and Request for Comments

    15. These rulemaking petitions address issues that are significant 
to consumers and the promotion of competition, as well as to the 
affected industry parties, and we believe that an expedited rulemaking 
is necessary to protect satellite subscribers who are

[[Page 67443]]

truly unserved from losing network service. We seek to ensure that as 
many consumers as possible can receive a broadcast network signal 
consistent with the intent of the SHVA. We also seek to promote 
competition among multichannel video programming distributors, where 
that is possible under the SHVA, and we recognize the important role 
that local broadcast stations play in their communities. We acknowledge 
that the SHVA limits the proposals we can make to further these goals 
and address the petitions. Further, we do not appear to have the 
statutory authority to prevent most of PrimeTime 24's subscribers from 
losing their network service under the Miami preliminary injunction 
(and under a possible permanent injunction). The evidence in the Miami 
and Raleigh court cases strongly suggests that many, if not most, of 
those subscribers do not live in ``unserved households'' under any 
interpretation of that term.
    16. Two courts have noted that Congress used the Grade B standard 
when it defined ``unserved households'' because it wanted an objective 
measure of a television signal's strength. The Commission has sought in 
its own regulations to advance this approach by establishing discrete 
field strength values (measured in dBu's) when it defined Grade B and 
when it created a detailed methodology for determining Grade B 
contours. (See 47 CFR 73.683 and 73.684.) Consequently, a satellite 
company may not deliver network signals to a viewer simply because the 
viewer is subjectively unhappy with his or her television picture. The 
Miami and Raleigh district courts both concluded that PrimeTime 24 has 
chosen not to abide by the SHVA's and the Commission's objective 
standard.
    17. We will explore four issues in this NPRM. First, we seek 
comment on the Commission's authority to address the issues raised in 
the court decisions and the NRTC and EchoStar petitions. Second, we 
seek comment on changing the definition of Grade B intensity so that 
truly unserved households can be better identified. Third, we seek 
comment on endorsing or developing a methodology for accurately 
predicting whether an individual household is able to receive a signal 
of Grade B intensity. Fourth, we seek comment on developing an easy-to-
use and inexpensive method for testing the strength of a broadcast 
network signal at an individual household.

A. Commission's Authority to Proceed

    18. Several broadcasters contend that the Commission lacks the 
authority to grant the relief requested in the NRTC and EchoStar 
petitions. They state that Congress incorporated by reference the 
Commission's Grade B definitions and measurement procedures--
effectively freezing them in place--when the SHVA was adopted in 1988. 
Accordingly, the broadcasters conclude that the Commission may not 
change its rules now. Some commenters cite legislative history 
purporting to show that section 73.683 was specifically included as 
part of an early draft of the unserved household definition, thus 
demonstrating Congress' intention to incorporate the definition as it 
existed at passage. Commenters argue that Congress did not explicitly 
direct the Commission to conduct a rulemaking on the definition, so the 
Commission has no authority to change it. They note that the SHVA is a 
copyright statute, not a communications law to be administered by the 
Commission. The National Association of Broadcasters cites a number of 
cases, including the Supreme Court's decision in Hassett v. Welch, for 
the ``well settled canon'' that ``[w]here one statute adopts the 
particular provisions of another by a specific and descriptive 
reference to the statute or provisions adopted * * * [s]uch adoption 
takes the statute as it exists at the time of adoption and does not 
include subsequent additions or modifications by the statute so taken 
unless it does so by express intent.'' (303 U.S. 303, 314 (1938).)
    19. Parties supporting the petitions respond that Grade B intensity 
is an ambiguous and open-ended term in the SHVA, evidenced by Congress' 
failure to explicitly incorporate a rule section into the SHVA's 
definition of unserved households. These commenters conclude that 
Congress intentionally left the definition in the Commission's hands. 
EchoStar cites the Supreme Court's holding in Lukhard v. Reed that 
``[i]t is of course not true that whenever Congress enacts legislation 
using a word that has a given administrative interpretation it means to 
freeze that administrative interpretation in place.'' (481 U.S. 368, 
379 (1989).)
    20. There are four matters relating to the Commission's authority 
to proceed on particular issues in this rulemaking. First, we seek 
comment on whether Congress ``froze'' the definition of a signal of 
Grade B intensity for purposes of the SHVA when it adopted the Act in 
1988. That is, if the Commission were to revise the definition as a 
general matter, would the definition nevertheless remain unchanged for 
the purposes of the SHVA? We tentatively conclude that Congress did not 
``freeze'' the definition of a signal of Grade B intensity for SHVA 
purposes in 1988 and seek comment on this tentative conclusion. When 
Congress incorporated Grade B into the definition of ``unserved 
households'' it did not incorporate specific values, such as the dBu 
levels the Commission uses in section 73.683. Further, nothing in the 
SHVA or legislative history indicates that Congress intended to freeze 
the value of Grade B when it passed the law in 1988 or when it renewed 
it in 1994. Where Congress intended to incorporate regulations as they 
existed on a certain date, it has expressly done so. For example, in 
section 111(f) of the Copyright Act, Congress' definition of ``local 
service area of a primary transmitter'' explicitly references 
Commission regulations ``in effect on April 15, 1976, or such station's 
television market as defined in section 76.55(e) of title 47, Code of 
Federal Regulations (as in effect on September 18, 1993) * * * ``The 
federal courts and the Copyright Office of the Library of Congress are 
primarily responsible for enforcing and administering the copyright 
laws, but Congress unquestionably turned to the Commission's expertise 
when it defined unserved household in reference to a ``signal of Grade 
B intensity (as defined by the Federal Communications Commission).''
    21. With respect to the cases cited by commenters, we note that in 
reaching its conclusion in Lukhard v. Reed, the Court followed 
Helvering v. Wilshire, in which it held that ``a regulation 
interpreting a provision of one act [does not become] frozen into 
another act merely by reenactment of that provision.'' (308 US 90, 100-
101 (1939).) Indeed, the Supreme Court reasoned that if legislation so 
constrained an agency's ability to conduct rulemaking under its 
enabling legislation, then ``the result would be to read into the grant 
of express administrative powers an implied condition that they were 
not to be exercised unless, in effect, the Congress had consented. We 
do not believe that such impairment of the administrative process is 
consistent with the statutory scheme which the Congress has designed.'' 
Both Helvering and Lukhard suggest that the meaning of ``signal of 
Grade B intensity'' in SHVA was not frozen for purposes of that Act 
when SHVA was enacted, but rather can be modified over time by the 
Commission.
    22. Second, we seek comment on whether the Commission has the 
authority to revise its Grade B construct specifically for the purposes 
of the SHVA. The Grade B construct includes (1) the signal intensity 
levels assigned to Grade B, 47 CFR 73.683; (2) models for

[[Page 67444]]

predicting where a Grade B signal exists in an area or at an individual 
point (or household), e.g., 47 CFR 73.684 and 73.686 predictive models; 
and (3) the methodologies for testing signal strength in an area or at 
an individual point. Initially, we note that it is indisputable that 
the Commission has the authority, as a general matter, to revise any of 
its rules, as long as we explain our reasons for doing so. But may we 
create special provisions that would apply only to SHVA? Does the 
statute permit the Commission to promulgate a special definition of 
Grade B intensity for the exclusive purposes of the SHVA? What was the 
Congress' intent? Some commenters argue that we ought to make a 
specific definition for the SHVA because the Grade B construct is most 
often used for determining signal intensity over broad areas, not for 
individual households as the SHVA contemplates. The Commission has 
tailored its rules for specific purposes in the past. For example, the 
Commission determines television stations' service areas using two 
different, but related, methods, depending on the purpose. For 
exceptions to the cable syndicated exclusivity rules and for cross-
ownership purposes, the Commission uses its traditional Grade B contour 
scheme, but for digital television stations, the Commission uses the 
Longley-Rice predictive model.
    23. Third, we seek comment on whether the Commission has the 
authority to develop a model for predicting whether an individual 
household can receive a signal of Grade B intensity for purposes of the 
SHVA. The Commission has developed and used predictive models for 
determining signal intensity in other contexts--for example, the 
traditional Grade B contour and the Longley-Rice models. Broadcasters 
argue that the Commission does not have the authority to develop a 
predictive model for SHVA purposes, because the definition of 
``unserved households'' depends on a household's actual ability to 
receive a signal of Grade B intensity as measured at the household 
itself. While satellite providers and broadcasters may negotiate the 
use of a predictive model, the argument continues, the SHVA does not 
provide the Commission with jurisdiction to interfere with or to 
endorse a particular predictive methodology. The satellite providers 
respond by citing the Commission's current use of predictive 
methodologies for other purposes. They argue that the Commission may 
therefore develop a predictive model specifically for the SHVA.
    24. A predictive model need not replace actual measurement, but 
could serve as a presumption of service or lack of service for purposes 
of the SHVA. We note that some broadcasters have entered into 
agreements with Primestar and Netlink (satellite television providers) 
to resolve disputes arising from the SHVA requirements. These 
settlements assign five-digit zip codes to each station and classify 
each zip code as ``red light'' if more than 50% of the zip code's 
population is served--based on Longley-Rice propagation data--and as 
``green light'' of 50% or less of the population in the zip code is 
served. A presumption could make administration of the unserved 
household rule easier and more cost-effective for consumers and the 
industry. Broadcasters and satellite providers would be able to rely on 
a Commission-endorsed model when deciding whether individual consumers 
are presumed to be eligible to receive satellite-delivered network 
signals. Moreover, a predictive process might be a judicially 
acceptable means for a satellite service provider to carry its burden 
of showing ``that its secondary transmission of a primary transmission 
by a network station is for private home viewing to an unserved 
household.'' Such an approach is consistent with the federal court's 
use of a variation of the Commission's Longley-Rice predictive 
methodology in its preliminary injunction in the PrimeTime 24 
proceeding in Miami.
    25. Fourth, we seek comment on our conclusion that the Commission's 
authority to define a signal of Grade B intensity reasonably includes 
the authority to adopt a method of measuring signal intensity at an 
individual household. The Commission has already established a method 
of measuring service within an area or for propagation analysis, but 
has not established a method specifically for measuring signal 
intensity at an individual household. The SHVA is concerned with 
adequate television signals at individual households. Importantly, it 
does not matter to consumers that other households (a next-door 
neighbor or a family across town) can actually receive network signals 
when they cannot.

B. Definition, Prediction, and Measurement Proposals

    26. The measurement and prediction techniques included in part 73 
of the Commission's rules and as developed in other contexts constitute 
a set of tools relating to signal propagation and reception that are 
useful for a variety of purposes. Although this proceeding focuses on 
concerns that are specific to SHVA, we recognize that refinements in 
the rules and in our knowledge about the in-home viewing environment 
(antennas, transmission lines, and receivers) and prediction 
methodologies have potential carryover into some other aspects of the 
Commission's rules. In some respects, however, the matters are unique 
to the SHVA context. Thus, for example, the Commission's rules do not 
typically focus on signal availability measurement techniques relating 
to service to a single discrete location or household. Standardization 
of a single household measurement process would thus not necessarily 
have broad implications for other parts of the Commission's rules. 
Although our focus is on changes specifically relevant for SHVA 
purposes, we seek comment on the general question of what other non-
SHVA rules or policies might be implicated by the changes that are 
discussed below. We note, for example, that our DTV service replication 
models are also based upon duplicating the Grade B service area of 
existing analog broadcast stations. Certain interference criteria also 
incorporate the Grade B service area of television broadcast stations. 
We also note that the Commission has a history of using different tools 
in different contexts depending on the degree of precision desired, the 
expense of the process used, and the economic and technical tradeoffs 
involved in any specific issue. We invite comment on this issue and 
request that parties provide specific rationales for any differences 
between SHVA and non-SHVA definitions, prediction models, and 
measurement methods that they advocate.
1. Defining a Signal of Grade B Intensity
    27. A signal of Grade B intensity is an objective standard that, as 
currently defined in section 73.683, may not distinguish adequately 
between served and unserved households. The Grade B signal intensity 
values specified in our rules were designed to enable reception of a 
television picture that is acceptable to the median observer, 
``assuming a receiving installation (antenna, transmission line, and 
receiver) considered to be typical of outlying or near-fringe areas.'' 
Grade B service also assumes the absence of man-made noise or 
interference from other stations. There was little specific comment in 
the NRTC and EchoStar petitions or in the responsive pleadings 
addressing possible changes in the field strength levels specified in 
the rules. Has what constitutes a ``conventional outdoor rooftop 
receiving antenna'' and the concept of the quality of service that 
viewers consider acceptable changed

[[Page 67445]]

since the Commission adopted the Grade B signal strength levels in the 
1950s? Would these standards need modification so that the median 
observer would continue to find the service acceptable? For example, 
receivers may have improved, or the assumptions regarding interference 
in outlying areas may no longer be valid. (See, e.g., Gary S. Kalagian, 
``A review of the Technical Planning Factors for the VHF Television 
Service,'' FCC, Office of Chief Engineer, Bulletin RS77-01 (March 1, 
1977), p. 11.) Changing the standard of an acceptable signal could have 
detrimental effects on the viability of local television stations and, 
potentially, on the goal of localism. We have no evidence that the 
underlying technical planning factors have changed in a way that would 
justify revising the current Grade B signal intensity levels. We 
welcome comments, supported by evidence, regarding any claimed changes 
to the assumptions made in deriving the Grade B signal intensity.
    28. In soliciting comments on this issue, we recognize that our 
flexibility to change the Grade B intensity values is naturally 
constrained by the existence of the Grade A standard. The Grade A 
intensity values are based on 70% of the locations receiving an 
acceptable picture 90% of the time. Therefore, we believe that we 
cannot modify Grade B intensity so much that it effectively equals or 
exceeds Grade A signal intensity. We invite comments on all the factors 
that determine the Grade B signal intensity. We also seek comment on 
whether changes to the current intensity values would have a 
detrimental effect on network-affiliate relationships and localism, as 
well as other Commission rules that involve the current Grade B 
standard.
2. Predicting a Signal of Grade B Intensity
    29. The definition of an unserved household as a household that 
``cannot receive * * * a signal of Grade B intensity'' most logically 
refers to signal measurement at an individual household to determine if 
an adequate signal is actually received. Because of the costs and 
difficulties of individual measurements, however, for many purposes a 
predictive model is used in lieu of actual measurements. Consistent 
with this notion, the EchoStar petition asks the Commission to adopt or 
endorse an accurate model for predicting whether an individual 
household receives a Grade B intensity signal.
    30. We believe that predictive models can be effective proxies for 
individual household measurements. The satellite and broadcast industry 
currently make use of predictive models such as the Longley-Rice 
methodology. However, different parties do not always agree on which 
model is most appropriate for identifying unserved households. Even 
when parties use the same model, they may disagree on the factors that 
are considered in that model. For example, different variations of the 
Longley-Rice model may or may not account for vegetation or buildings. 
In addition, studies using the Longley-Rice model, such as our DTV 
analyses, may account for interference. If the Commission endorses a 
predictive model in this rulemaking, parties will not need to spend 
future resources and time debating methodology. However, consistent 
with the SHVA, no Commission-endorsed model will preclude a party from 
using actual measurements at individual households.
    31. The difference in taking actual measurements at individual 
households and using predictive models is significant, because 
measurement requires time, money, and other resources that often 
outweigh the benefits. For example, it may cost more for a satellite 
company to take a measurement than it can recover through subscriber 
fees. To avoid these costs, satellite providers, broadcasters, and 
consumers have often turned to predictive models that erroneously 
permit some served households to receive satellite network service, or, 
conversely, that prevent some unserved households from being eligible 
to receive network stations via satellite.
    32. Even though Grade B signal intensity is defined as discrete 
values measured in dBu's, the intensity of broadcast signals at 
particular locations and at particular times cannot be precisely 
determined, regardless of the predictive method used. Signal strength 
varies randomly over location and time, so signal propagation must be 
considered on a statistical basis. This is true whether the signal 
intensity is predicted at a fixed location (such as an individual 
household) or over an area. Some prediction methods, including the 
Commission's propagation curves, predict the occurrence of median 
signal strengths (i.e., signal strengths expected to be exceeded at 50% 
of the locations in a particular area at least 50% of the time). Under 
this approach, ``location'' and ``time'' variability factors are added 
to the signal level for an acceptable picture so that the desired 
statistical reliability is achieved. The values chosen for the Grade B 
signal intensity account for this variability, and therefore, predict 
that the best 50% of the locations along the Grade B contour will 
receive an acceptable picture 90% of the time. In other predictive 
models, including the Longley-Rice point-to-point model, this 
variability is built into the model, rather than into the signal 
intensity value. We seek comment on whether it would be appropriate to 
consider changing the location and time variability percentages. For 
example, should more than 50% of viewers receive an acceptable picture 
more than 90% of the time? We also seek comment on whether such changes 
should be incorporated into the signal intensity values or the 
predictive model.
    33. As previously noted, the Commission has used predictive models 
for determining signal intensity in the past. We seek comment on the 
application of these models in the SHVA context. We tentatively 
conclude that the Commission's traditional predictive methodology for 
determining a Grade B contour, outlined in section 73.684 of the 
Commission's rules, is insufficient for predicting signal strength at 
individual households. We seek comment on this tentative conclusion. 
The traditional Grade B methodology predicts a signal's strength by 
using radial lines extending ten miles from a television station's 
transmitter. (See 47 CFR 73.684(d) and 73.686(b).) This methodology 
does not accurately reflect topographic differences in a station's 
transmission area, and explicitly does not account for interference 
from other signals. These omissions result in an imperfect methodology 
for predicting whether an individual household can receive an adequate 
signal. For example, terrain features beyond 10 miles from a station's 
transmitter site may block a house's reception or a house that sits at 
the edge of two different television markets may suffer from 
interfering signals.
    34. While our traditional Grade B contour methodology is inadequate 
for predicting the signal level at a single location, we have recently 
adopted rules in the DTV proceeding for analyzing TV service using a 
point-to-point prediction method based on the Longley-Rice propagation 
model. Our implementation of the Longley-Rice model for analysis of DTV 
and analog TV service in the DTV proceeding is described in ``Longley-
Rice Methodology for Evaluating TV Coverage and Interference,'' OET 
Bulletin 69, Federal Communications Commission (July 2, 1997) <http://
www.fcc.gov/oet/info/documents/bulletins/#69>. Longley-Rice is the 
Commission's designated methodology for determining where service is 
provided by a DTV station. (See 47 CFR 73.622(e).) We propose that

[[Page 67446]]

the Longley-Rice propagation model, as implemented for DTV, be used to 
refine the Grade B service prediction for the purpose of SHVA 
determinations. The Longley-Rice propagation model is the most widely-
used private means of predicting a Grade B coverage area for SHVA 
purposes. It provides an estimate of signal strength, similar to the 
traditional Grade B contour method. However, the Longley-Rice model 
adjusts the predictions for changes in terrain (e.g., hills and 
valleys) along the entire path from the transmitter site to the 
specified receive site. Thus, while the traditional method often 
results in smooth concentric circles surrounding a transmission tower, 
the Longley-Rice method more precisely describes actual areas of 
coverage. While the broadcasters support the use of the Longley-Rice 
model in the SHVA context, the satellite interests claim it is 
insufficient. The detractors agree that a Longley-Rice analysis has 
advantages over a traditional Grade B contour, but note that it fails 
to account for several important factors that affect signal 
availability, including interference from other signals, vegetation, 
and buildings. We seek comment generally on this proposal, as well as 
specifically on the following questions. Should consideration of co-
channel and adjacent-channel interference as implemented for DTV be 
part of the methodology used for SHVA purposes? Is it necessary to 
prescribe how accurately receive location coordinates are specified? 
Can Longley-Rice be modified to increase the probability of identifying 
served and unserved households more accurately? How? What are the 
predictive factors that are missing in the current Longley-Rice model? 
Can Longley-Rice reasonably be modified to account for all these 
factors? What effect would incorporation of these additional factors 
have on the cost and practicality of the Longley-Rice methodology? Can 
Longley-Rice or a modified version of Longley-Rice be used in 
conjunction with a commercially available geocoding process to provide 
a workable predictive model for satellite providers, broadcasters, and 
consumers to use for determining whether a given subscriber is presumed 
to be unserved? We seek comment on whether such currently-available 
approaches are working well for the industries and consumers. For 
example, Decisionmark Corporation is currently working with 
broadcasters and satellite providers to provide mapping information 
about signal areas. They sponsor web sites, <http://www.shva.com/maps> 
and <http://getawaiver.com>, that provide information about served and 
unserved areas to consumers, broadcasters and participating satellite 
providers.
    35. We also invite parties to submit any other methodology that 
they believe will more accurately and cost-effectively predict whether 
an individual household is able to receive a signal of Grade B 
intensity. We seek to identify a predictive model that more accurately 
determines whether a household is unserved for purposes of the SHVA. Is 
there a predictive methodology that will increase the probability that 
unserved households will be more accurately identified (e.g., by taking 
into account interference)? What is that methodology? For either a 
version of the Longley-Rice model or another alternative methodology, 
how might parties use a new predictive model? Can and should the 
Commission endorse or develop a predictive model? Should we endorse a 
model that already exists or endorse such a model with modifications? 
What are the costs associated with any of the suggested methodologies?
    36. We acknowledge and reiterate Congress' decision in the SHVA to 
protect network-affiliate relationships and to foster localism in 
broadcasting. If we change the number of viewers predicted to receive a 
local station, we may substantially affect these policies. As we have 
noted, localism is central to our policies governing broadcasting and 
the obligation of broadcasters to serve the public interest. In 
proposing a new or modified predictive model for purposes of the SHVA, 
we seek comment on what, if any, effects different predictive models 
will have on these policies, and what, if any, steps we can take to 
further such policies.
3. Testing for Signal Intensity at Individual Households
    37. For the SHVA to function properly, a relatively low cost, 
accurate, and reproducible methodology for measuring the presence of a 
Grade B intensity signal in a household is of particular importance. 
Although, because of the costs and delays involved, it would be 
desirable to minimize the need for individual testing to the extent 
possible, individual testing is the key safety net mechanism under the 
SHVA for proving that a specific household is unserved and thus 
eligible under the law to receive satellite delivery of network 
affiliated television stations. We therefore propose to explore a 
method of measuring signal intensity at individual households that is 
accurate, easier, and less expensive than the current method.
    38. The Commission's current method of measuring the field strength 
of over-the-air signals in a station service area requires a so-called 
100-foot mobile run. The run typically involves a truck with a 30-foot 
antenna that takes continuous measurements while being driven a 
distance of 100 feet. The antenna must be rotated to the best receiving 
position, and engineers record factors that might affect signals, such 
as topography, height and type of vegetation, buildings, obstacles, and 
weather. If overhead obstacles get in the way, a cluster of 
measurements must be taken at locations within 200 feet of each other. 
This elaborate procedure can cost several hundred dollars each time it 
is performed. This is an expensive proposition for a satellite company 
or a consumer who wants to prove that a household is unserved by over-
the-air signals. When multiplied over hundreds of households at the 
outer edges of a station's service area, the cost may become 
prohibitive and may prevent many truly unserved consumers from 
receiving broadcast network service.
    39. In addition to the difficulties inherent in this test, many of 
its assumptions may not hold in individual situations. For example, 
many homes do not have antennas 30 feet above the ground, especially if 
they are one-story homes. The definition of unserved household only 
describes reception over a conventional outdoor rooftop receiving 
antenna, so requiring measurements on a 30-foot antenna may not reflect 
what is ``conventional.'' Requiring the truck's antenna to face the 
direction of the station's tower ignores the reality that consumers' 
antennas receive several stations, and many do not rotate to the best 
position for each station. Finally, requiring clusters of tests and a 
100-foot mobile run ignores the fact that homes are stationary and that 
reception may vary considerably over a mobile run on a nearby street. 
The purpose of the procedure specified in the rules is not to determine 
the receivability of a signal at a single spot, but to determine, 
through measurements at a series of grid intersections over a 
community, the nature of service to the community. The Miami court 
ruled that the signal strength test should be ``conducted in accordance 
with the procedures outlined in the Declaration of Jules Cohen, filed 
on March 11, 1997,'' which ``was based on that prescribed by the FCC in 
47 CFR 73.686.'' At an accessible road closest to a household, a 100-
foot mobile run is made with a conventional rooftop antenna elevated to 
30 feet. During the run, a station's field intensity is

[[Page 67447]]

recorded and the data is stored in a computer. Analysis of the data, 
made with the aid of a computer program, permits the extraction of the 
maximum, minimum, and median field intensity found, together with the 
standard deviation. Median field intensity minus standard deviation is 
a measure of the least signal intensity likely to be found at the 
specific location of the household. In contrast, EchoStar proposed a 
signal strength test that focuses more directly on a single point at a 
household, involving placement of a conventional outdoor rooftop 
antenna within three feet of the home and raised to the height of the 
roof. The antenna is oriented to maximize signal strength for the one 
local station that the consumer watches most often. A length of 
standard household cable is attached to the antenna, and a number of 
splitters are attached to duplicate the number of splitters the 
consumer uses to service multiple televisions. A signal measurement is 
then conducted. If the signal strength is not stable, the antenna is 
relocated and the same procedure utilized until a stable signal 
strength is achieved. Readings are taken approximately every thirty 
seconds for a period of five minutes. If any of the signal strength 
readings register less than the Grade B signal strength threshold as 
established by Congress and the FCC, the consumer will be deemed an 
``unserved household'' eligible to receive distant network signals.
    40. We seek comment on the modification of the current testing 
methodology or the creation of a new methodology for measuring signal 
strength. Any recommendations should lead to a test that is relatively 
easy to use and inexpensive enough to make it economically practical 
for the industry and for consumers. We seek comment on what qualifies 
as ``a conventional outdoor rooftop receiving antenna.'' Are different 
antennas required for different parts of the country, or as one moves 
farther from a television transmitter? What special problems do viewers 
in multiple dwelling unit buildings (``MDUs'') face in gaining access 
to a conventional outdoor rooftop television antenna? Should the 
testing methodology be different for high-rise MDUs? Does 
``conventional outdoor rooftop receiving antenna'' include a rotor? 
How, if at all, should the Grade B criterion of typical of outlying or 
near-fringe areas influence the concept of ``conventional'' antenna? On 
another note, how do we ensure the objectivity and accuracy of any 
signal strength test? How do we do so without making the test more 
difficult, impractical, or expensive? How should antenna height be 
measured? Should antenna height be set at 30 feet, should it be five 
feet above the roof, or something else? Should the measurement be 
related to the placement of the satellite receiver in situations where 
the satellite and local signal antennas are integrated? If antenna 
designs are improved over those historically available so that the 
definition of ``conventional'' changes, how should that be accommodated 
in the measurement process? How should we account for the challenges of 
raising a rooftop antenna in multiple dwelling units? How should the 
test account for rotation, or lack of rotation, of antennas that 
receive the signals of several stations? What type and calibration of 
measurement equipment is needed? How can the process account for the 
variations of signal level over the course of a day or with seasonal 
changes?

C. Other Issues

    41. We seek comment on whether the lack of an established 
methodology for measuring Grade B signal intensity at individual 
households has hampered the effective functioning of the SHVA. In 
particular, we note that the SHVA contains a ``loser pays'' mechanism 
that allows recovery, in any civil action, of signal measurement costs 
at a subscriber's household. (17 CFR 119(a)(9).) Under the SHVA, if a 
network station questions whether a particular subscriber is unserved, 
an actual measurement at the subscriber's household may result. If the 
household is unserved, the broadcast station must pay for the 
measurement; if the household is served, the satellite carrier must 
pay. We believe that the loser pays mechanism, if used even in the 
absence of a civil action, would substantially alleviate the cost 
burden of actual signal measurements by giving both parties an economic 
incentive to avoid actual measurements in most circumstances. We seek 
comment on whether parties are making use of the ``loser pays'' 
mechanism. If they are not, why not? Can and should we establish rules 
or policies that will facilitate their ability to do so? We also seek 
comment on whether the loser pays mechanism, combined with a predictive 
model that would minimize the need for individual testing in most 
cases, would facilitate the effective functioning of the Act.
    42. We also seek comment on whether we can and should adopt a 
procedure similar to the SHVA's expired transitional ``loser pays'' 
mechanism. (17 CFR 119(a)(8)(B)(ii) and (C)(ii).) Does that provision 
represent a workable system for allocating burdens of proof, and 
appropriate incentives to challenge a presumptive rule, in determining 
who is and who is not an unserved household? Establishing a system 
based on an initial presumption would help create certainty and provide 
a good starting point for managing this issue on a large scale. Are 
there other mechanisms that can better serve the purposes of the SHVA? 
One alternative might be the agreement reached between broadcasters and 
two satellite carriers, Primestar Partners and Netlink USA, that 
created presumptive zones of served and unserved households based on 
zip codes. Yet another alternative might be the methodology developed 
by Decisionmark Corporation of Cedar Rapids, Iowa, that is used by both 
PrimeTime 24 and broadcasters in the Miami federal court case. This 
methodology uses a variation of the Longley-Rice methodology to 
determine whether individual homes are unserved. We seek comment on 
these approaches. Are there additional actions the Commission can and 
should take to make enforcement of the SHVA more effective?
    43. Finally, we seek comment on the prospect that the industry will 
develop ``local-into-local'' technology to serve every community. The 
local-into-local concept means that satellite carriers would provide 
subscribers with the signals of their local broadcast network 
affiliates instead of signals from distant stations. If satellite 
carriers were allowed to retransmit a broadcast network station's 
signal into that station's local market, then the risks of damaging the 
goals of broadcast localism could be mitigated. Some satellite carriers 
have already developed limited plans for accomplishing local-into-local 
service. For example, EchoStar has a local-into-local option for 
unserved households in more than a dozen television markets, and 
Capitol Broadcasting Inc. of Raleigh, North Carolina, has reportedly 
developed the technology to deliver local-into-local service for most, 
if not all, television markets. We note that some interested parties 
have argued that a local-into-local extension of the compulsory license 
in the current copyright laws might obviate the need for Commission 
action in this area. The Commission, of course, lacks the statutory 
authority to create such an extension. However, section 335(a) of the 
Communications Act of 1934 instructs the Commission to ``examine the 
opportunities that the establishment of direct broadcast satellite 
service provides for the principle of localism under this Act, and the 
methods by which such

[[Page 67448]]

principle may be served through technological and other developments 
in, or regulation of, such service.'' If Congress adopted a local-into-
local extension of the compulsory license, how would such a change 
affect the need for, and viability of, the proposals in this 
rulemaking? We seek comment on the feasibility--particularly the 
technical feasibility--of a local-into-local option and on a time frame 
for implementing this possible solution to the demands for satellite 
delivery of network station signals.

III. Paperwork Reduction Act

    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 and the Office of 
Management and Budget (``OMB'') 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 on or 
before 30 days from date of publication of this Notice in the Federal 
Register. OMB comments are due on or before 60 days from date of 
publication of this Notice in the Federal Register. 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.
    OMB Approval Number: None. This is a new collection.
    Title: Satellite Delivery of Network Signals to Unserved Households 
for Purposes of the Satellite Home Viewer Act.
    Type of Review: New collection.
    Respondents: Business or other for-profit entities.
    Number of Respondents: 848. The proposed action in this NPRM 
applies to entities providing DBS service. According to Census Bureau 
data, there are 848 firms that fall under the category of 
Communications Services, Not Elsewhere Classified that could 
potentially fall into the DBS category.
    Estimated Time Per Response: Two hours.
    Frequency of Response: On occasion.
    Total Annual Burden to Respondents: 2,000,000 hours. At this time 
the Commission provides broad estimates of the annual paperwork burden 
resulting from the proposed new and modified information collection 
requirements contained in this Notice. Based on comments received in 
this proceeding, the Commission will be in a position to provide more 
accurate paperwork burden estimates upon adoption of final rules. In 
our current estimates, we define a response to the proposed information 
collection requirements as including the burden to conduct signal 
strength measurements at individual households or by using predictive 
models; to report measurement findings to appropriate parties; and to 
keep records of such findings. We estimate that as many as one million 
responses will be typically be initiated in the course of a year. Each 
response is estimated to entail a burden of two hours.

    1,000,000 responses x 2 hours each = 2,000,000 hours.

    Total Annual Cost to Respondents: $500,000. Cost to respondents is 
defined as capital, start-up, operation and maintenance costs pursuant 
to the Paperwork Reduction Act of 1995. The DBS industry has conducted 
signal strength measurements and has reported the findings of such 
measurements for several years pursuant to requirements set forth by 
the Satellite Home Viewer Act; therefore the Commission foresees no 
additional capital or start-up costs as a result of proposals contained 
in this Notice. However, here we account for postage and stationery 
costs incurred by entities at an estimated 50 cents per response. 
1,000,000 responses x 50 cents = $500,000.
    Needs and Uses: The information gathered as part of Grade B signal 
strength tests, as proposed, will be used to indicate whether a 
consumers are ``unserved'' by over-the-air network signals. Parties 
using this information will include consumers, the Commission, and the 
satellite and broadcasting industries.

IV. Initial Regulatory Flexibility Analysis

    As required by the Regulatory Flexibility Act (``RFA'') (5 CFR 
603), the Commission has prepared this Initial Regulatory Flexibility 
Analysis (``IRFA'') of the possible significant economic impact on 
small entities by the policies and proposed action in this NPRM. 
Written public comments are requested on this IRFA. Comments must be 
identified as responses to the IRFA and must be filed by the deadlines 
for comments on the NPRM provided above. The Commission will send a 
copy of this NPRM, including this IRFA, to the Chief Counsel for 
Advocacy of the Small Business Administration (``SBA'') and to 
Congress.

A. Need for, and Objective of, the NPRM

    In this NPRM, the Commission responds to Petitions for Rulemaking 
filed by the National Rural Telecommunications Cooperative and EchoStar 
Communications Corporation requesting that the Commission address the 
methods for determining whether a household is ``unserved'' by network 
television stations for purposes of the 1988 Satellite Home Viewer Act 
(17 CFR 119).

B. Legal Basis

    This NPRM is authorized under sections 1, 4(i), 4(j) of the 
Communications Act of 1934, as amended, 47 CFR 151, 154(i), and 154(j) 
and section 119(d)(10)(a) of the Copyright Act, 17 CFR 119(d)(10)(a).

C. Description and Estimate of the Number of Small Entities To Which 
the NPRM Will Apply

    The RFA directs the Commission to provide a description of and, 
where feasible, and estimate of the number of small entities that will 
be affected by the proposed action. The RFA defines the term ``small 
entity'' as having the same meaning as the terms ``small business,'' 
``small organization,'' and ``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) satisfies any 
additional criteria established by the SBA. The proposed action in this 
NPRM will affect television broadcasting licensees and DBS operators.

Television Stations

    The policies and proposed action in this NPRM will apply to 
television broadcasting licensees, and potential licensees of 
television service. The SBA defines a television broadcasting station 
that has no more than $10.5 million in annual receipts as a small 
business (Standard Industrial Code (``SIC'') 4833 (1996)). Television 
broadcasting stations consist of establishments primarily engaged in 
broadcasting visual programs by television to the public, except cable 
and other pay television services. Included in this industry are 
commercial, religious, educational, and other television stations. Also 
included

[[Page 67449]]

are establishments primarily engaged in television broadcasting and 
that produce taped television program materials. Separate 
establishments primarily engaged in producing taped television program 
materials are classified under SIC 7812 (Motion Picture and Video Tape 
Production) and SIC 7922 (Theatrical Producers and Miscellaneous 
Theatrical Services (producers of live radio and television programs). 
There were 1,509 television broadcasting stations operating in the 
nation in 1992. That number has remained fairly constant as indicated 
by the approximately 1,579 operating full power television broadcasting 
stations in the nation as of May 31, 1998. In addition, as of October 
31, 1997, there were 1,880 low power television broadcasting (``LPTV'') 
broadcasting stations that may also be affected by our proposed rule 
changes. Given the nature of LPTV stations, we will presume that all 
LPTV's qualify as small entities. For 1992 the number of television 
broadcasting stations that produced less than $10.0 million in revenue 
was 1,155 establishments.
    Thus, the proposed action will affect many of the approximately 
1,574 television broadcasting stations; approximately 1,200 of those 
stations are considered small businesses. Given the nature of LPTV 
stations, we will presume that all LPTV's qualify as small entities. 
These estimates may overstate the number of small entities because the 
revenue figures on which they are based do not include or aggregate 
revenues from non-television affiliated companies.
    In addition to owners of operating television broadcasting 
stations, any entity who seeks or desires to obtain a television 
broadcasting license may be affected by the proposed action contained 
in this item. The number of entities that may seek to obtain a 
television broadcasting license is unknown. We invite comment as to 
such number.

DBS

    The Commission has not developed a definition of small entities 
applicable to geostationary or non-geostationary orbit fixed-satellite 
or DBS service applicants or licensees. Therefore, the applicable 
definition of small entity is the definition under the SBA rules 
applicable to Communications Services, Not Elsewhere Classified. This 
definition provides that a small entity is one with $11.0 million or 
less in annual receipts (SIC Code 4899). According to Census Bureau 
data, there are 848 firms that fall under the category of 
Communications Services, Not Elsewhere Classified that could 
potentially fall into the DBS category. Of those, approximately 775 
reported annual receipts of $11 million or less and qualify as small 
entities. The proposed action in this NPRM applies to entities 
providing DBS service. Small businesses do not have the financial 
ability to become DBS licensees because of the high implementation 
costs associated with satellite services. Because this is an 
established service, however, with limited spectrum and orbital 
resources for assignment, we estimate that no more than fifteen 
entities will be Commission licensees providing these services. 
Therefore, because of the high implementation costs and the limited 
spectrum resources, we do not believe that small entities will be 
impacted by proposed action in this NPRM.

D. Description of Projected Reporting, Record-keeping, and Other 
Compliance Requirements

    There may be reporting, record-keeping, and compliance requirements 
for television broadcasting stations and DBS operators in the form of 
testing, record-keeping, and reporting, if the Commission adopts any 
rule changes as a result of this NPRM. We solicit comments on how these 
projected requirements may be eliminated, reduced, or streamlined.

E. Steps Taken to Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    In discussing the proposed action contained in this NPRM, we have 
attempted to minimize the burdens on all entities. We seek comment on 
the impact of our proposed action on small entities and on any possible 
alternatives that would minimize its impact on small entities.

F. Federal Rules that May Duplicate, Overlap, or Conflict with the 
Proposed Rule Changes

    None.

Ordering Clauses

    It is ordered that, pursuant to sections 1, 4(i), 4(j) of the 
Communications Act of 1934, as amended, 47 CFR 151, 154(i), and 154(j); 
and section 119(d)(10)(a) of the Copyright Act, 17 CFR 119(d)(10)(a), 
notice is hereby given of proposed amendments to Part 73, in accordance 
with the proposals, discussions and statements of issues in this Notice 
of Proposed Rulemaking, and that comment is sought regarding such 
proposals, discussions and statements of issues. It is further ordered 
that the Commission's Office of Public Affairs, Reference Operations 
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, Pub. L. 96-
354, 94 Stat. 1164, 5 U.S.C. 601 et seq. (1981).

Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 98-32397 Filed 12-2-98; 12:21 pm]
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