[Federal Register Volume 65, Number 189 (Thursday, September 28, 2000)]
[Proposed Rules]
[Pages 58255-58258]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-24902]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[CS Docket No. 97-80; FCC 00-341]


Commercial Availability of Navigation Devices

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document seeks comments regarding rules adopted to 
implement Section 629 of the Communications Act. Section 304 of the 
1996 Telecommunications Act, which became law on February 5, 1996, 
added Section 629 to the Communications Act. Section 629 concerns the 
commercial availability of navigation devices. This document may result 
in information collection(s) subject to the Paperwork Reduction Act 
(PRA) of 1995.

DATES: Comments are due November 15, 2000; reply comments are due 
December 18, 2000.

ADDRESSES: Federal Communications Commission, 445 12th Street, SW., 
Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Thomas Horan at (202) 418-7200 or via 
internet at [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Further Notice of Proposed Rulemaking (``FNPRM''), FCC 00-341, adopted 
September 14, 2000; released September 18, 2000. The full text of the 
Commission's FNPRM is available for inspection and copying during 
normal business hours in the FCC Reference Center (Room CY-A257) at its 
headquarters, 445 12th Street, SW., Washington, DC 20554, or may be 
purchased from the Commission's copy contractor, International 
Transcription Service, Inc., (202) 857-3800, 1231 20th Street, NW., 
Washington, DC 20036, or may be reviewed via internet at http://www.fcc.gov/csb/.

I. Synopsis of the Further Notice of Proposed Rulemaking

A. Development of OpenCable Specifications.

    1. In this Further Notice of Proposed Rulemaking (``Notice''), we 
seek comment on whether the specifications provided by CableLabs allow 
consumer electronics manufacturers to build a navigation device that 
provides consumers a viable alternative to the equipment provided by 
their service provider. In addition, we also seek comment on whether 
there are further steps the Commission should undertake to ensure 
compliance with section 629 and achieve the statutory objective of 
commercial availability of navigation devices.

B. Integrated Boxes

    2. We seek comment on the extent of the effect operator provision 
of integrated equipment has had on achieving a competitive market for 
commercially available navigation devices. We seek comment on whether 
the 2005 date for the phase-out of integrated boxes remains 
appropriate. Alternatively, we seek comment on whether it would it be 
satisfactory to permit multichannel video programming distributors 
(MVPD) or retail distribution of integrated boxes after January 1, 2005 
if integrated boxes are also commercially available or for other 
reasons necessary to further the objectives of Section 629. In 
addition, we seek comment on the considerations that factor into a 
decision regarding the date of the phase-out of integrated boxes. For 
example, would an earlier or later date create incentives for the 
development of a commercial market for navigation devices? We also seek 
comment on the economic impact an earlier or later date would have on 
manufacturers and on MVPDs. In this regard, we believe the following 
information would be beneficial to the Commission's analysis: (1) The 
number of integrated boxes that MVPDs have deployed to customers to 
date; (2) the number of integrated boxes MVPDs expect to be deployed in 
2003; (3) the number of orders MVPDs and retailers have made for non-
integrated equipment; and (4) the number of orders for integrated boxes 
MVPDs have placed since the release of Implementation of Section 304 of 
the Telecommunications Act of 1996: Commercial Availability of 
Navigation Devices, 64 FR 29599 (June 2, 1999), and (5) the total cost 
differential (including manufacturing, marketing, research and 
development, and distribution costs), if any, between an integrated box 
and a host/POD combination.
    C. Obstacles to Commercial Availability
    3. We note that a retail market for cable modems is developing in 
certain regions of the country, while commenters assert that there are 
no host devices available at retail. We seek comment on this apparent 
disparity. We seek comment on any obstacles or barriers preventing or 
deterring the development of a retail market for navigation devices. We 
note that cable systems are in development that utilize technology 
outside that of traditional cable architecture. We seek comment on

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the impact of such systems on the commercial availability of navigation 
devices.

D. Other Factors

    4. In addition to the specific requests for comments set forth 
above, we also request comments regarding other factors that commenters 
believe may be impeding or affecting achievement of the goals of 
Section 629. For example, recent articles indicate that retail 
availability of equipment has been slowed by market participants' 
failure to achieve mutually beneficial business arrangements. We seek 
comment as to what additional actions, if any, the Commission should 
initiate to achieve the statutory objective of competition in the 
navigation devices market.

II. Administrative Matters

A. Initial Regulatory Flexibility Act Analysis

    5. As required by the Regulatory Flexibility Act (RFA), the 
Commission has prepared this Initial Regulatory Flexibility Analysis 
(IRFA) of the possible significant economic impact on small entities by 
the possible policies and rules that would result from this Further 
Notice of Proposed Rulemaking (Notice). 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 Notice. The 
Commission will send a copy of the Notice, including this IRFA, to the 
Chief Counsel for Advocacy of the Small Business Administration.
    6. Need for, and Objectives of, the Proposed Rules. The navigation 
devices rules were adopted to implement Section 629 of the 
Communications Act. They are designed to assure the commercial 
availability from retail outlets of equipment used to access service 
from multichannel video programming systems. In adopting these rules, 
the Commission indicated that it would monitor the development of the 
commercial availability of navigation devices and on reconsideration 
stated that it would commence a proceeding in the year 2000 to review 
the effectiveness of the rules and consider any necessary changes. In 
this proceeding, we undertake that review. This Notice is designed to 
seek comment on the Commission's navigation devices rules and to elicit 
comment on whether any changes to the current rules are necessary in 
order to promote commercial availability.
    7. Legal Basis. Authority for this proposed rulemaking is contained 
in Sections 4(i), 303(r), and 629 of the Communications Act of 1934, as 
amended, 47 U.S.C. 154(i), 303(r), and 549.
    8. Description and Estimate of the Number of Small Entities to 
Which the Proposed Rules Will Apply. The IRFA directs the Commission to 
provide a description of and, where feasible, an estimate of the number 
of small entities that will be affected by the proposed rules. The IRFA 
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 
Small Business Administration (``SBA''). Nationwide, as of 1992, there 
were approximately 275,801 small organizations. Rules adopted in this 
proceeding could apply to manufacturers of DTV equipment, including 
television receivers, set-top boxes and ``point of deployment'' 
modules. Distributors of this equipment, including retailers of 
consumer electronics equipment and, in the case of ``point of 
deployment'' modules, cable operators, would also be affected.
    9. Cable Systems. The SBA has developed a definition of small 
entity for cable and other pay television services, which includes all 
such companies generating $11 million or less in revenue annually. 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.
    10. The Commission has developed its own definition of a small 
cable system operator 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, we estimate that there were 1,439 cable operators that 
qualified as small cable system operators at the end of 1995. Since 
then, some of those companies may have grown to serve over 400,000 
subscribers, and others may have been involved in transactions that 
caused them to be combined with other cable operators. Consequently, we 
estimate that there are fewer than 1,439 small entity cable system 
operators that may be affected by the decisions and rules proposed in 
this Notice.
    11. The Communications Act also contains a definition of a small 
cable system operator, which is ``a cable operator that, directly or 
through an affiliate, serves in the aggregate fewer than 1% of all 
subscribers in the United States and is not affiliated with any entity 
or entities whose gross annual revenues in the aggregate exceed 
$250,000,000.'' The Commission has determined that there are 66,690,000 
subscribers in the United States. Therefore, we found that an operator 
serving fewer than 666,900 subscribers shall be deemed a small 
operator, if its annual revenues, when combined with the total annual 
revenues of all of its affiliates, do not exceed $250 million in the 
aggregate. Based on available data, we find that the number of cable 
operators serving 666,900 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, we are 
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.
    12. Small Manufacturers. The SBA has developed definitions of small 
entity for manufacturers of household audio and video equipment (SIC 
3651) and for radio and television broadcasting and communications 
equipment (SIC 3663). In each case, the definition includes all such 
companies employing 750 or fewer employees.
    13. Electronic Equipment Manufacturers. The Commission has not 
developed a definition of small entities applicable to manufacturers of 
electronic equipment. Therefore, we will utilize the SBA definition of 
manufacturers of Radio and Television Broadcasting and Communications 
Equipment. According to the SBA's regulations, a TV equipment 
manufacturer must have 750 or fewer employees in order to qualify as a 
small business concern. Census Bureau data indicates that there are 858 
U.S. firms that manufacture radio and television broadcasting and 
communications equipment, and that 778 of these firms have fewer than 
750 employees and would be classified as small entities. The Census 
Bureau category is very broad, and specific figures are not available 
as to how many of these firms are exclusive manufacturers of television 
equipment or how many are independently owned and operated. We conclude 
that there are approximately

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778 small manufacturers of radio and television equipment.
    14. Electronic Household/Consumer Equipment. The Commission has not 
developed a definition of small entities applicable to manufacturers of 
electronic equipment used by consumers, as compared to industrial use 
by television licensees and related businesses. Therefore, we will 
utilize the SBA definition applicable to manufacturers of Household 
Audio and Visual Equipment. According to the SBA's regulations, a 
household audio and visual equipment manufacturer must have 750 or 
fewer employees in order to qualify as a small business concern. Census 
Bureau data indicates that there are 410 U.S. firms that manufacture 
radio and television broadcasting and communications equipment, and 
that 386 of these firms have fewer than 500 employees and would be 
classified as small entities. The remaining 24 firms have 500 or more 
employees; however, we are unable to determine how many of those have 
fewer than 750 employees and therefore, also qualify as small entities 
under the SBA definition. Furthermore, the Census Bureau category is 
very broad, and specific figures are not available as to how many of 
these firms are exclusive manufacturers of television equipment for 
consumers or how many are independently owned and operated. We conclude 
that there are approximately 386 small manufacturers of television 
equipment for consumer/household use, but in any event, no more than 
410 are small entities.
    15. Computer Manufacturers. The Commission has not developed a 
definition of small entities applicable to computer manufacturers. 
Therefore, we will utilize the SBA definition of Electronic Computers. 
According to SBA regulations, a computer manufacturer must have 1,000 
or fewer employees in order to qualify as a small entity. Census Bureau 
data indicates that there are 716 firms that manufacture electronic 
computers and of those, 659 have fewer than 500 employees and qualify 
as small entities. The remaining 57 firms have 500 or more employees; 
however, we are unable to determine how many of those have fewer than 
1,000 employees and therefore also qualify as small entities under the 
SBA definition. We conclude that there are approximately 659 small 
computer manufacturers.
    16. Small Retailers. The Commission has not developed a definition 
of small entities applicable to retail sellers of navigation devices. 
Therefore, we will utilize the SBA definition. The 1992 Bureau of the 
Census data indicate: there were 9,663 U.S. firms classified as Radio, 
Television, and Consumer Electronic Stores (SIC 5731), and that 9,385 
of these firms had $4.999 million or less in annual receipts and 9,473 
of these firms had $7.499 million or less in annual receipts. 
Consequently, we tentatively conclude that there are approximately 
9,663 such small retailers that may be affected by the decisions and 
rules proposed in this Notice.
    17. Description of Projected Reporting, Recordkeeping and other 
Compliance Requirements. At this time, it is not expected that the 
proposed actions will require any additional recordkeeping or 
compliance requirements. We seek comment on whether others perceive a 
need for extensive recordkeeping.
    18. Steps Taken to Minimize Significant Impact on Small Entities, 
and Significant Alternatives Considered. The RFA requires an agency to 
describe any significant alternatives that it has considered in 
reaching its proposed approach, which may include the following four 
alternatives: (1) The establishment of differing compliance or 
reporting requirements or timetables that take into account the 
resources available to small entities; (2) the clarification, 
consolidation, or simplification of compliance or reporting 
requirements under the rule for small entities; (3) the use of 
performance, rather than design, standards; and (4) an exemption from 
coverage of the rule, or any part thereof, for small entities.
    19. Parties have requested that we consider accelerating the date 
on which the prohibition of integrated devices goes into effect. We 
have sought comment on this issue and will examine the effect on 
businesses and small entities that such a change would entail. We have 
also sought comment on other suggestions that would facilitate the 
development of a commercial marketplace for navigation devices. We will 
consider and examine the effect of those suggestions on businesses and 
small entities as well. Should commenters disagree with any of our 
conclusions, we welcome comments suggesting ways in which any perceived 
burden upon small entities could be mitigated.
    20. Federal Rules Which Duplicate, Overlap, or Conflict with the 
Commission's Proposals. None.

B. Ex Parte Rules

    21. Subject to the provisions of 47 CFR 1.1203 concerning 
``Sunshine Period'' prohibitions, this proceeding is exempt from ex 
parte restraints and disclosure requirements, pursuant to 47 CFR 
1.1204(b)(1).

C. Filing of Comments and Reply Comments

    22. Interested parties may file comments on or before November 15, 
2000, and reply comments on or before December 18, 2000. Comments may 
be filed using the Commission's Electronic Comment Filing System 
(``ECFS'') or by filing paper copies. Comments filed through the ECFS 
can be sent as an electronic file via the Internet to 
http://www.fcc/e-file/ecfs.html>. Generally, only one copy of an 
electronic submission must be filed. If multiple docket or rulemaking 
numbers appear in the caption of this proceeding, however, commenters 
must transmit one electronic copy of the comments to each docket or 
rulemaking number referenced in the caption. 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 formyour e-mail address.'' A sample 
form and directions will be sent in reply.
    23. Parties who choose to file by paper must file an original and 
four copies of each filing. If participants want each Commissioner to 
receive a personal copy of their comments, an original plus nine copies 
must be filed. If more than one docket or rulemaking number appears in 
the caption of this proceeding commenters must submit two additional 
copies for each additional docket or rulemaking number. All filings 
must be sent to the Commission's Secretary, Magalie Roman Salas, Office 
of the Secretary, Federal Communications Commission, 445 12th Street, 
SW., Washington, DC 20554. The Cable Services Bureau contact for this 
proceeding is Thomas Horan at (202) 418-7200, TTY (202) 418-7172, or at 
[email protected].
    24. Parties who choose to file by paper should also submit their 
comments on diskette. Parties should submit diskettes to Thomas Horan, 
Cable Services Bureau, 445 12th Street NW., Room 4-A817, Washington, DC 
20554. Such a submission should be on a 3.5-inch diskette formatted in 
an IBM compatible form using MS DOS 5.0 and Microsoft Word, or 
compatible software. The diskette should be accompanied by a cover 
letter and should be submitted in ``read only'' mode. The diskette

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should be clearly labeled with the party's name, proceeding (including 
the lead docket number in this case [CS Docket No. 97-80]), type of 
pleading (comments or reply comments), date of submission, and the name 
of the electronic file on the diskette. The label should also include 
the following phrase ``Disk Copy--Not an Original.'' Each diskette 
should contain only one party's pleadings, preferably in a single 
electronic file. In addition, commenters must send diskette copies to 
the Commission's copy contractor, International Transcription Service, 
1231 20th Street, NW., Washington, DC 20036.

D. Paperwork Reduction Act

    25. This document may result in information collection(s) subject 
to the Paperwork Reduction Act (PRA) of 1995. If an information 
collection results, it will be submitted to the Office of Management 
and Budget (OMB) for review under the PRA.

III. Ordering Clause

    26. Pursuant to sections 4(i), 303(r), and 629 of the 
Communications Act of 1934, as amended, 47 USC 154(i), 303(r), and 549, 
notice is given of the proposals described in this FNPRM.
    27. The Commission's Consumer Information Bureau, Reference 
Information Center, shall send a copy of this FNPRM, including the 
IFRA, to the Chief Counsel for Advocacy of the Small Business 
Administration.

List of Subjects in 47 CFR Part 76

    Cable television.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 00-24902 Filed 9-27-00; 8:45 am]
BILLING CODE 6712-01-P