[Federal Register Volume 66, Number 30 (Tuesday, February 13, 2001)]
[Proposed Rules]
[Pages 10001-10006]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-3638]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 73

[MM Docket No. 00-39; FCC 01-24]


Broadcast Services; Radio Stations, Television Stations

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Commission explores the issues and 
concerns raised by parties regarding DTV reception capability, and we 
propose to require that certain types of new television sets have the 
capability to demodulate and decode over-the-air DTV signals by a date 
certain. We also seek comment on how best to implement such a 
requirement, including alternatives for phasing-in DTV reception 
capability in a manner that would minimize costs for both manufacturers 
and consumers. Finally, we propose to adopt labeling requirements with 
respect to television receivers that are not capable of receiving over-
the-air broadcast television signals but, instead, are intended for use 
only with cable television reception.

DATES: Comments are due by April 6, 2001; reply comments are due by May 
7, 2001.

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

FOR FURTHER INFORMATION CONTACT: Roger Holberg, or Mania Baghdadi, Mass 
Media Bureau, Policy and Rules Division, (202) 418-2120 or Alan 
Stillwell or Bruce Franca, Office of Engineering and Technology, (202) 
418-2470.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Further Notice of 
Proposed Rule Making (``FNPRM'') in MM Docket No. 00-39, FCC 01-24, 
adopted January 18, 2001, and released January 19, 2001. The complete 
text of this document is available for inspection and copying during 
normal business hours in the FCC Reference Center, Room CY-A257, 445 
12th Street, SW., Washington, DC. and may also be purchased from the 
Commission's copy contractor, International Transcription Service (202) 
857-3800, 445 12th Street, SW., Room CY-B402, Washington, DC. The FNPRM 
is also available on the Internet at the Commission's website: http://www.fcc.gov.

Synopsis of Further Notice of Proposed Rule Making

I. Background

    1. In the Commission's digital television proceeding (MM Docket No. 
87-268) we repeatedly indicated our intent to hold periodic reviews of 
the progress of the conversion to digital television and to make such 
mid-course corrections as were necessary to ensure the success of that 
conversion. In the Fifth Report and Order, 62 FR 26966, May 16, 1997 
(``5R&O''), we stated that we would conduct such a review every two 
years. We commenced this, the first, periodic review, with a Notice of 
Proposed Rule Making (``NPRM''), adopted March 6, 2000 (65 FR 15600, 
March 23, 2000). In that NPRM we stated that the conversion is 
progressing and that television stations are working hard to convert to 
digital television. We invited comment on several issues that we 
considered essential to be resolved in order to ensure that progress

[[Page 10002]]

continued and that potential sources of delay were eliminated. In a 
Report and Order (``R&O''), also adopted January 18, 2001, in this 
proceeding we resolved a number of issues raised in the initial NPRM. 
We also adopted this FNPRM in order to solicit comment on the issues of 
whether and, if so, how to implement a DTV receiver requirement, 
whether to require labels on all DTV receivers designed for use only 
with a signal source other than broadcast (e.g., cable, DBS, etc.), and 
whether to update our current DTV standard to reflect amendments to the 
ATSC DTV Standard that have been made since we substantially 
incorporated that standard into our rules.

II. Discussion

    2. In response to the NPRM in this proceeding, a number of parties 
have argued that the Commission should require digital reception 
capability in all receivers, aside from particular performance 
thresholds. Their comments also implicated the accurate identification 
and marketing of receivers with various capabilities. In addition, 
consumer advocates have complained that any requirement that all 
receivers contain digital reception capability places an undue burden 
on consumers, and particularly low-income consumers. These comments 
have raised pertinent questions on which we will seek further 
information and comment to develop a full record on the current 
pertinence of such recommendations.
    3. DTV Receiver Standards--DTV Demodulation Requirement. The NAB 
and the NABA submit that the Commission should adopt rules requiring 
every new television receiver sold to include the capability to receive 
DTV signals. The NAB states that this requirement is needed because 
market forces are not working to effect DTV receiver penetration except 
at an extremely slow pace. It observes that current DTV receivers are 
not in the marketplace in great numbers and existing sales volume of 
DTV receivers will not support the timely conversion and recovery of 
spectrum envisioned by the Commission and Congress. The NAB and the 
NABA argue a requirement that new TV receivers be capable of tuning DTV 
channels is therefore needed to push the transition along quickly. They 
specifically propose that the Commission require all new television 
receivers thirteen inches and greater in diagonal screen size to be 
capable of receiving all frequencies allocated by the Commission to 
television broadcasting, including all NTSC and all DTV channels. 
Although the NAB and NABA conclude the increased burden on consumers is 
temporary and thus acceptable, other commenters have concluded 
otherwise. The Consumer Federation of America (CFA) argued that a tuner 
requirement would place a burden on consumers, especially low-income 
consumers who ``may potentially be priced out of the market. * * *'' 
CFA also stated that ``[w]ithout more programming it is clear that 
there will not be a timely and complete transition to digital 
television. * * *''
    4. The NAB argues that the Commission has authority for such action 
under the All Channel Receiver Act (ACRA), and that there is precedent 
in the all channel television receiver rules. It observes that the 
Senate Report accompanying that legislation noted three points in favor 
of promoting UHF receivers that are equally applicable to DTV: (1) That 
this is a unique situation; (2) while there will be an increased cost, 
it is expected that this will be substantially reduced once the 
benefits of mass production are fully realized; and (3) in any event, 
the relatively slight increase in cost will be a small price to pay for 
the unlocking of the * * * valuable UHF channels. The NAB submits that 
there are obvious parallels to DTV. It states that the DTV process is a 
unique transition of the entire television system to digital 
technology. The NAB and NABA state that while the price the public will 
pay to purchase an all channel receiver will initially be higher, the 
costs of such receivers will fall substantially as production 
increases. And finally, they state that the higher costs will be a 
small price to pay for ``unlocking'' the valuable DTV channels and, in 
addition, unlocking the valuable NTSC channels to be returned for 
public benefit and use.
    5. In addition, in their reply comments CEA and Thomson argue that 
the ACRA does not provide the Commission authority to require DTV 
tuners in every set. They argue that in passing the ACRA, Congress only 
intended to ensure the viability of UHF broadcasting and that it did 
not foresee or intend to accommodate new modes of broadcasting, 
particularly digital broadcasting. CEA further argues that Congress 
explicitly considered but rejected empowering the Commission generally 
to set receiver standards. Thomson argues that in the DTV proceeding, 
the Commission itself acknowledged the ACRA's narrow scope in this area 
when it found that the Act does not mandate the manufacture of so-
called dual-mode receivers, i.e., receivers capable of receiving both 
analog and DTV signals.
    6. As NAB, NABA and other commenters observe, DTV receivers are not 
yet available in the market in large quantities, and certainly not in 
sufficient volume to support a rapid transition to an all-digital 
broadcast television service. We request comment on whether a 
requirement to include DTV reception capability in certain new 
television sets could help to develop the production volumes needed to 
bring DTV prices down to where they are more attractive to consumers 
and thereby promote the more rapid development of high DTV set 
penetration. In particular, we seek comment on whether we should 
require that certain types of TV sets have the capability to demodulate 
and decode over-the-air DTV signals. Under such a requirement, TV sets 
would have to provide useable picture and sound commensurate with their 
video display and audio capabilities when receiving any of the 
recognized ATSC video formats. Such a requirement would not necessitate 
full HDTV capability in TV sets. For example, a TV set that had only 
NTSC level display capabilities would only have to be able to 
demodulate and decode DTV signals and present them at a standard 
definition display level equivalent to its NTSC capabilities. This 
capability would reduce reliance on analog television transmissions. We 
are, however, concerned about the potential impact of such a 
requirement on consumers, especially low-income consumers. We therefore 
seek comment on the initial projected costs of such a requirement as 
well as realistic estimates of those costs over time. We also seek 
comment on consumer television receiver purchasing patterns, especially 
those of low-income consumers.
    7. We request comment on how best to implement DTV reception 
capability requirements, if we were to adopt them. We recognize that 
consumer electronics manufacturers would need time to implement such a 
requirement. The cost of DTV receiver components is still relatively 
high and it would not be economically feasible at this point to include 
DTV capability in smaller screen receivers, i.e., 20 inches or less. In 
this regard, we understand the cost considerations associated with 
including DTV reception capability in TV sets now, and do not wish to 
impose undue costs on consumers or disrupt TV set pricing structure or 
the availability of TV receivers to consumers. One approach to minimize 
the impact of such a requirement would be to phase it in over time to 
take advantage of declining costs associated with electronics 
manufacturing volumes and apply the requirement initially only to

[[Page 10003]]

receivers with large screen sizes, e.g., 32 inches and above. Such 
receivers are typically higher priced units where the cost of DTV 
components would be a smaller percentage of the cost of a receiver. 
Each manufacturer would be required to include DTV capability in an 
increasing percentage of the large screen units it markets each year. 
For example, in the first year of the requirements, 20 percent or some 
other percentage of each manufacturer's large screen models would be 
required to have DTV receive capability and this percentage would 
increase on some schedule in subsequent years. Separate set-top DTV 
receiver could be included in meeting the reception capability 
requirements. As the costs of components decrease, the requirement for 
DTV reception capability could be applied to more units each year by 
reducing the threshold screen size and by increasing the portion of 
units that would have to comply. We seek comment on what would be an 
appropriate minimum screen size for an initial requirement and the 
schedule for extending such requirements to other receivers. We also 
request comment on the cost implications of DTV reception capability 
requirements for both consumers and manufacturers.
    8. We further request comment on whether any DTV reception 
capability requirements we might adopt should be based on percentages 
of the models marketed by each manufacturer, rather than units of 
production. In addition, we invite interested parties to submit other 
plans that would result in new TV receivers being equipped with DTV 
capability that would result in widespread penetration of TV receivers 
in households to enable the transition from analog to digital TV 
service consistent with the intent of Congress in 47 U.S.C. 309(j)(14), 
and a discussion of the likely effectiveness of such alternative plans.
    9. With regard to our authority to establish requirements for DTV 
receiver capabilities, we observe that 47 U.S.C. 303(s), as noted 
above, provides the Commission with authority to require that 
television receivers be capable of adequately receiving all frequencies 
allocated by the Commission to television broadcasting. While Congress 
in 1962 did not anticipate the advent of digital television service, a 
plain language reading of this section does not limit our authority to 
analog television receivers, nor does it limit our authority to 
channels in the UHF band. Inasmuch as the frequencies allocated to 
television broadcasting now include those channels allotted for DTV 
service, 47 U.S.C. 303(s) provides the Commission with authority to 
require that television receivers be capable of adequately receiving 
those channels. Moreover, the ACRA's legislative history suggests that 
Congress' reasoning in enacting the statute supports such a conclusion. 
We seek comment on how to construct any DTV tuner requirement 
consistent with any relevant statutory authority, including 47 U.S.C. 
303(s) and any other relevant sections of the Communications Act.
    10. Receiver Labeling. Turning to another issue concerning digital 
television receivers, we observe that television receivers could be 
marketed that do not have the capability to receive over-the-air 
broadcast signals. For example, receivers intended only for use in 
receiving cable or direct broadcast satellite service might not include 
the capability to tune over-the-air broadcast television signals. While 
we are not aware of any such receivers that are being marketed at this 
time, such devices would be permissible under our rules. In this 
regard, the all-channel reception provisions of 47 CFR 15.117(b) would 
not apply to receivers that did not have any capability for receiving 
broadcast signals. We expect that consumers will continue to expect 
that all digital television receivers will be able to receive over-the-
air digital broadcast signals and that manufacturers therefore will 
continue to equip all television receivers with this capability. If, 
however, manufacturers do at some point chose to produce receivers that 
can be used with digital cable systems but cannot receive digital 
broadcast signals, we believe that consumers should be so notified 
prior to purchase. We therefore intend to explore this question and 
possible Commission responses. We seek comment on whether any 
manufacturers are producing or plan to produce digital television 
receivers that can receive digital cable transmissions but are 
incapable of receiving digital broadcast signals off-the-air. We also 
seek comment on whether the Commission should require any digital 
television receivers that cannot receive off-the-air digital broadcast 
signals to carry a label informing consumers of this limitation on the 
receivers' functionality. Parties supporting such a labeling 
requirement may wish to propose labels keeping in mind our goals of 
ease of understanding for consumers and low cost and ease of compliance 
for manufacturers.
    11. Update of the DTV Standard. As indicated above, there has been 
an update to the ATSC DTV Standard since 1996, when we adopted it. When 
we incorporated most of the ATSC DTV Standard into our rules by 
reference, we made reference to the version of that Standard which was 
the most recent iteration of the Standard at that time. Specifically, 
we incorporated by reference ``ATSC Digital Television Standard, 16 Sep 
95.'' However, as commenters noted, this standard has been updated 
since we incorporated it into our rules. Accordingly, we seek comment 
on whether we should revise our rules to include reference the March 
16, 2000, amendment to the standard. Commenters favoring revision 
should specify whether we should refrain from incorporating any parts 
of this update, as we did with regard to the eighteen video format 
constraints in the original ATSC DTV Standard. Additionally, we 
specifically do not plan on considering in regard to updating the 
standard comments urging us to amend the standard with regard to its 8 
VSB modulation component, or to fundamentally change the standard in 
any other way such as, for example, by prohibiting its use of 
interlaced scanning, changing the audio component of the standard, or 
altering its frame aspect ratios.

III. Conclusion

    12. At the outset of this proceeding we stated that the conversion 
to digital is progressing and television stations are working hard to 
convert to DTV. The comments we received in response to the NPRM have 
mostly further confirmed our initial impressions. We believe that the 
conversion is, indeed, making progress and that the actions we are 
taking, and proposing, herein will hasten this transition. 
Particularly, our choice of an early channel election for commercial 
licensees and our decision not to require replication of NTSC service 
should well conduce to allowing stations to make plans and purchase 
equipment at the earliest practicable times. We believe that specific 
receiver performance standards are neither necessary nor useful at this 
time but we are inclined that a mandatory phase-in of a DTV reception 
capability in receivers will best ensure the rapid progress of the 
transition at a reasonable cost to consumers. We will continue to 
monitor the progress toward the DTV conversion and will in future 
reviews take those actions needed to accomplish a smooth transition by 
December 31, 2006.

IV. Administrative Matters

    13. Comments and Reply Comments. Pursuant to 47 CFR 1.415, 1.419, 
interested parties may file comments on or before April 6, 2001, and 
reply comments on or before May 7, 2001. Comments may be filed using 
the

[[Page 10004]]

Commission's Electronic Comment Filing System (ECFS) or by filing paper 
copies. See Electronic Filing of Documents in Rulemaking Proceedings, 
63 FR 24,121 (1998).
    14. Comments filed through 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 via 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 your e-mail address>.'' A sample form 
and directions will be sent in reply.
    15. Parties who choose to file by paper must file an original and 
four copies of each filing. All filings must be sent to the 
Commission's Secretary, Magalie Roman Salas, Office of the Secretary, 
Federal Communications Commission, 445 Twelfth Street, SW., TW-A325, 
Washington, DC 20554.
    16. Parties who choose to file paper should also submit their 
comments on diskette. These diskettes should be addressed to: Wanda 
Hardy, Paralegal Specialist, Mass Media Bureau, Policy and Rules 
Division, Federal Communications Commission, 445 Twelfth Street, SW., 
2-C221, Washington, DC 20554. Such a submission should be on a 3.5 inch 
diskette formatted in an IBM compatible format using Word 97 or 
compatible software. The diskette should be accompanied by a cover 
letter and should be submitted in ``read only'' mode. The diskette 
should be clearly labeled with the commenter's name, proceeding 
(including the lead docket number in this case (MM Docket No. 00-39), 
type of pleading (comment or reply comment), 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 sent diskette 
copies to the Commission's copy contractor, International Transcription 
Service, Inc., 445 Twelfth Street, SW., CY-B402, Washington, DC 20554.
    17. Comments and reply comments will be available for public 
inspection during regular business hours in the FCC Reference Center, 
Federal Communications Commission, 445 Twelfth Street, SW., CY-A257, 
Washington, DC 20554. Persons with disabilities who need assistance in 
the FCC Reference Center may contact Bill Cline at (202) 418-0270, 
(202) 418-2555 TTY, or [email protected]. Comments and reply comments also 
will be available electronically at the Commission's Disabilities 
Issues Task Force web site: www.fcc.gov/dtf. Comments and reply 
comments are available electronically in ASCII text, Word 97, and Adobe 
Acrobat.
    18. This document is available in alternative formats (computer 
diskette, large print, audio cassette, and Braille). Persons who need 
documents in such formats may contact Martha Contee at (202) 4810-0260, 
TTY (202) 418-2555, or [email protected].
    19. Ex Parte Rules. This proceeding will be treated as a ``permit-
but-disclose'' proceeding, subject to the ``permit-but-disclose'' 
requirements under 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 or 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 section 
47 CFR 1.1206(b).
    20. Initial Regulatory Flexibility Analysis. With respect to this 
FNPRM, an Initial Regulatory Flexibility Analysis (IRFA) is contained. 
As required by the Regulatory Flexibility Act, see 5 U.S.C. 603, the 
Commission has prepared an IRFA of the possible economic impact on 
small entities of the proposals contained in this FNPRM. Written public 
comments are requested on the IRFA. Comments on the IRFA must be filed 
in accordance with the same filing deadlines as comments on the FNPRM, 
and must have a distinct heading designating them as a response to the 
IRFA.
    21. As required by the Regulatory Flexibility Act (RFA), the 
Commission has prepared this present Initial Regulatory Flexibility 
Analysis (IRFA) of the possible significant economic impact on small 
entities by the policies and rules proposed in this FNPRM. 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 FNPRM provided above. The Commission will send a copy 
of the FNPRM, including this IRFA, to the Chief Counsel for Advocacy of 
the Small Business Administration (SBA). See 5 U.S.C. 603(a). In 
addition, the FNPRM and the IRFA (or summaries thereof) will be 
published in the Federal Register.
    22. Need for, and Objectives of, the Proposed Rules. Beginning in 
1987, the Commission undertook to bring the most up-to-date technology 
to broadcast television. That resulted in several Commission decisions 
including those adopting a digital television (DTV) standard, DTV 
service rules, and a Table of DTV Allotments. The Table of DTV 
Allotments provides each existing television broadcaster with a second 
channel on which to operate a DTV station for the transition period 
after which one of its channels will revert to the government for use 
in other services. The transition deadline established by Congress is 
December 31, 2006. The Commission is permitted to extend that deadline 
on a market-by-market basis if more than 15 percent of viewers will be 
left without service from (1) a digital television receiver; (2) an 
analog television receiver equipped with a digital/analog converter; or 
(3) a multi-channel video provider that carries local broadcast 
stations. The Commission is issuing this FNPRM to explore whether a 
requirement to include DTV reception capability in new television sets 
would help develop the production volumes needed to bring DTV receiver 
prices down quickly to where they are more attractive to consumers and 
thereby promote the more rapid development of high DTV set penetration, 
enabling compliance with the statutory transition deadline.
    23. Legal Basis. This FNPRM is adopted pursuant to sections 1, 
2(a), 4(i), 7, and 303 of the Communications Act, 47 U.S.C. 151, 
152(a), 154(i), 157, and 303.
    24. Description and Estimate of the Number of Small Entities To 
Which the Proposed Rules Will Apply. The RFA directs agencies to 
provide a description of, and, where feasible, an estimate of the 
number of small entities that may be affected by the proposed rules, if 
adopted. The RFA defines the term ``small entity'' as having the same 
meaning as the terms ``small business,'' ``small organization,'' and 
``small governmental jurisdiction.'' In addition, the term ``small 
business'' has the same meaning as the term ``small business concern'' 
under section 3 of the Small Business Act. A small business concern is 
one which: (1) Is independently

[[Page 10005]]

owned and operated; (2) is not dominant in its field of operation; and 
(3) satisfies any additional criteria established by the SBA.
    25. Pursuant to 5 U.S.C. 601(3), the statutory definition of a 
small business applies ``unless an agency, after consultation with the 
Office of Advocacy of the [SBA] and after opportunity for public 
comment, establishes one or more definitions of such term which are 
appropriate to the activities of the agency and publishes such 
definition(s) in the Federal Register.'' A ``small organization'' is 
generally ``any not-for-profit enterprise which is independently owned 
and operated and is not dominant in its field.'' Nationwide, as of 
1992, there were approximately 275,801 small organizations. ``Small 
governmental jurisdiction'' generally means ``governments of cities, 
counties, towns, townships, villages, school districts, or special 
districts with a population of less than 50,000.'' As of 1992, there 
were approximately 85,006 local governments in the United States. This 
number includes 38,978 counties, cities, and towns; of these, 37,566, 
or 96 percent, have populations of fewer than 50,000. The Census Bureau 
estimates that this ratio is approximately accurate for all 
governmental entities. Thus, of the 85,006 governmental entities, we 
estimate that 81,600 (91 percent) are small entities.
    26. Rules adopted in this proceeding could apply to manufacturers 
of DTV receiving equipment and, particularly, television receivers. The 
SBA has developed a definition of small entity for manufacturers of 
household audio and video equipment (SIC 3651). This includes all such 
companies employing 750 or fewer employees. 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 indicate 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, and 
particularly television receivers, 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 even, no more than 410 are small 
entities.
    27. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements. At this time, we do not expect that the 
proposed rules would impose any additional recordkeeping or 
recordkeeping requirements. However, compliance may require the 
manufacture of some types of DTV capable receivers. While this would 
have an impact on manufacturers of television receivers, it will be 
similarly costly for both large and small manufacturers and, in any 
event, the cost will ultimately be borne by the consumer. We seek 
comment on whether others perceive a need for extensive recordkeeping.
    28. 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 (among others): (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.
    29. The FNPRM recognizes that if the Commission were to require DTV 
reception capability in new television receivers that action would pose 
new burdens on consumer electronics manufacturers, especially in the 
initial period when production volumes are relatively low. The FNPRM 
further observes that the cost considerations associated with DTV 
reception capability are such that it could not be economically 
feasible at this point in time to include DTV capability in smaller 
screen receivers, i.e., 20 inches or less. We believe that as 
production increases, the price and size of the components needed for 
DTV reception will decline substantially, so that the incremental cost 
of including that capability in TV receivers will eventually become 
low. In addition, as the goal of this effort is to convert broadcast 
television service to digital operation, all television receivers will 
have to be able to receive DTV service at the end of the transition.
    30. In order to minimize the impact of a DTV reception capability 
requirement on manufacturers, if the Commission were to conclude that 
one were needed, the FNPRM suggests a plan by which the requirement 
would first apply to receivers with large screen sizes, i.e., 32 inches 
or larger. Larger screen receivers generally are more expensive units, 
so that the additional cost of manufacturing them with DTV capability 
would be a much lower percentage of the total cost than it would for 
smaller screen units. As discussed, the requirement would apply to only 
a small portion of larger screen receivers at first; over time the 
percentage of units that would have to have DTV reception capability 
would increase and the requirement would also be extended to smaller 
screen units in the same incremental manner. To minimize the impact on 
manufacturers, receivers would only be required to have the capability 
to receive and decode over-the-air DTV signals. Thus, TV sets subject 
to the requirement would only have to provide useable picture and sound 
commensurate with their video and sound capabilities when receiving any 
of the recognized ATSC video formats. The requirement as proposed would 
not mandate full HDTV capability in TV sets. We also requested comment 
on whether we should base a requirement on percentages of the models 
marketed by each manufacturer, rather than units of production. This 
should benefit small entities by allowing them to provide DTV 
capability in their larger receivers, with a higher profit margin, 
rather than requiring them to provide such capability across their 
product line including sets where the market is more price conscious 
and price sensitive.
    31. The FNPRM also solicits comment on a proposal to require 
receiver manufacturers to label as such television sets that are not 
capable of receiving over-the-air DTV broadcasts but which, instead are 
intended for digital use only in conjunction with cable television and/
or broadcast satellite reception. This proposed requirement is intended 
to provide the consuming public with easily understandable information 
concerning

[[Page 10006]]

the capabilities of the receivers being purchased.
    32. The principal alternatives for minimizing the impact of the 
transition on manufacturers include plans that would relax the schedule 
for the percentages of units required to comply. The FNPRM requests 
comments on this proposal and also invites interested parties to submit 
alternatives. The labeling proposal will be made as simple and 
inexpensive to comply with as possible to minimize the impact on small 
entity producers. Comments on how it may be made even simpler are 
solicited.
    33. Federal Rules that May Duplicate, Overlap, or Conflict With the 
Proposed Rules. None.
    34. Initial Paperwork Reduction Act Analysis. This FNPRM may 
contain either proposed or modified information collections. As part of 
our continuing effort to reduce paperwork burdens, we invite the 
general public to take this opportunity to comment on the information 
collections contained in this FNPRM, as required by the Paperwork 
Reduction Act of 1996. Public and agency comments are due at the same 
time as other comments on the FNPRM. Comments should address: (a) 
whether the proposed collection of information is necessary for the 
proper performance of the functions of the Commission, including 
whether the information shall have practical utility; (b) ways to 
enhance the quality, utility, and clarity of the information collected; 
and (c) ways to minimize the burden of the collection of information on 
the respondents, including the use of automated collection techniques 
or other forms of information technology. In addition to filing 
comments with the Secretary, a copy of any comments on the information 
collections contained herein should be submitted to Judy Boley, Federal 
Communications Commission, 445 Twelfth Street, SW., Room C-1804, 
Washington, DC 20554, or via the Internet to [email protected] and to 
Edward C. Springer, OMB Desk Officer, 10236 NEOB, 725 17th Street, NW., 
Washington, DC 20503 or via the Internet to 
[email protected].

II. Ordering Clauses

    35. Pursuant to the authority contained 47 U.S.C. 151, 152(a), 
154(i), 157 and 303, this FNPRM is adopted.
    36. The Commission's Consumer Information Bureau, Reference 
Information Center, shall send a copy of this FNPRM, including the 
Initial Regulatory Flexibility Analysis, to the Chief Counsel for 
Advocacy of the Small Business Administration.

Federal Communications Commission.
Shirley Suggs,
Chief, Publications Branch.
[FR Doc. 01-3638 Filed 2-12-01; 8:45 am]
BILLING CODE 6712-01-P