[Federal Register Volume 68, Number 116 (Tuesday, June 17, 2003)]
[Proposed Rules]
[Pages 35833-35837]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-15188]



[[Page 35833]]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[CS Docket No. 97-80; FCC 03-89]


Commercial Availability of Navigation Devices

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document initiates a rulemaking reassessing the retail 
market for navigation devices and the need for the upcoming July 1, 
2006 ban on integrated navigation devices. This reassessment is needed 
to determine whether the July 1, 2006 ban on integrated navigation 
devices remains appropriate or is no longer necessary as a result of 
ongoing industry negotiations for a bidirectional specification for 
digital cable receivers and products. This rulemaking is initiated 
pursuant to Section 629 of the Communications Act which directs the 
Commission to adopt regulations to assure the commercial availability 
of navigation devices equipment used by consumers to access services 
from multichannel video programming distributors.

DATES: Comments due February 19, 2004; reply comments are due March 10, 
2004. Written comments by the public on the proposed information 
collections are due February 19, 2004. Written comments must be 
submitted by the Office of Management and Budget (OMB) on the proposed 
information collection(s) on or before August 18, 2003.

ADDRESSES: Federal Communications Commission, 445 12th Street, SW., 
Washington, DC 20554. For further filing information, see Supplementary 
Information.

FOR FURTHER INFORMATION CONTACT: Susan Mort, 202-418-1043 or 
[email protected]. In addition to filing comments with the Secretary, a 
copy of any comments on the information collection(s) contained herein 
should be submitted to Leslie Smith, Federal Communications Commission, 
Room 1-A804, 445 12th Street, SW., Washington, DC 20554, or via the 
Internet at [email protected]., or at 202-418-0217, and to Kim A. 
Johson, OMB Desk Officer, Room 102236 NEOB, 725 17th Street, NW., 
Washington, DC 20503 or via the Internet to [email protected].

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's Order 
and Further Notice of Proposed Rulemaking (``FNPRM''), FCC 03-89, 
adopted April 14, 2003; released April 25, 2003. 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, Qualex International, 
(202) 863-2893, Portals II, Room CY-B402, 445 12th St., SW., 
Washington, DC 20554, or may be reviewed via Internet at http://www.fcc.gov/mb.

Paperwork Reduction Act

    The FNPRM portion of this document contains a proposed information 
collection. 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 comment on the information collection(s) 
contained in the FNPRM, as required by the Paperwork Reduction Act of 
1995, Public Law 104-13. Public and agency comments are due at the same 
time as other comments on this FNPRM; OMB notification of action is due 
August 18, 2003. 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) 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.
    In addition to filing comments with the Secretary, a copy of any 
PRA comments on the information collections contained herein should be 
submitted to Leslie Smith, Federal Communications Commission, Room 1-
A804, 445 12th Street, SW., Washington, DC 20554, or via the Internet 
to [email protected], and to Kim A. Johnson, OMB Desk Officer, Room 
10236 NEOB, 725 17th Street, NW., Washington, DC 20503, or via the 
Internet to [email protected].
    OMB Control Number: 3060-0849.
    Title: Commercial Availability of Navigation Devices.
    Form Number: N/A.
    Type of Review: Revision of a currently approved collection.
    Respondents: Business or other for-profit entities.
    Number of Respondents: 215.
    Estimated Time per Response: 10 minutes to 40 hours.
    Frequency of Response: Quarterly and semi-annual reporting 
requirements; Third party disclosure.
    Total Annual Burden: 3,384 hours.
    Total Annual Costs: $33,450.
    1. Needs and Uses: The FNPRM initiates a reassessment of the state 
of the navigation devices market by the Commission prior to January 1, 
2005. Pursuant to this reassessment, the Commission shall determine 
whether the July 1, 2006 ban on integrated navigation devices remains 
appropriate or whether the ban will no longer be necessary. The state 
of the navigation devices market will be significantly impacted by 
ongoing negotiations between the cable and consumer electronics 
industries for a bidirectional specification for digital cable 
receivers and products. As a result, the cable and consumer electronics 
industries are requested to provide the Commission with status reports 
on these negotiations at 90, 180 and 270 day intervals following 
release of this FNPRM.

Synopsis of the Further Notice of Proposed Rulemaking

    2. The Commission initiated its Commercial Availability of 
Navigation Devices proceeding by notice of proposed rulemaking in CS 
Docket No. 97-80 (FCC 97-53), 62 FR 10011, March 5, 1997. This action 
was taken pursuant to Section 629 of the Communications Act which 
directs the Commission to adopt regulations to assure the commercial 
availability of navigation devices equipment used by consumers to 
access services from multichannel video programming distributors 
(``MVPDs''). Pursuant to this directive, the Commission issued the 
Report and Order in the above-captioned proceeding establishing, inter 
alia, a January 1, 2005, deadline for MVPDs to cease deploying new 
navigation devices that perform both conditional access functions and 
other functions in a single integrated device. The Commission adopted 
the requirement to separate the conditional access function from the 
basic navigation device (the ``host device'') in order to permit 
unaffiliated manufacturers, retailers, and other vendors to 
commercially market host devices while allowing MVPDs to retain control 
over their system security. The Commission later issued a Further 
Notice of Proposed Rulemaking and Declaratory Ruling (``Further Notice 
and Declaratory Ruling'') (FCC 00-341), 65 FR 58255, September 28, 
2000, that sought comment on the effectiveness of the Commission's 
navigation device

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rules, including the 2005 prohibition on integrated devices.
    3. Since Section 629 and the Commission's rules were adopted, the 
cable and consumer electronics industries have made, and continue to 
make, significant progress in the development of technical standards in 
this area. However, the commercial market for navigation devices used 
in conjunction with the distribution of digital video programming 
remains in its infancy. In an effort to spur the transition to digital 
television, the cable and consumer electronics industry recently 
reached a Memorandum of Understanding (``MOU'') on a cable 
compatibility standard for a unidirectional digital cable television 
receiver with host device functionality, as well as other 
unidirectional digital cable products. This standard would allow 
consumers to directly attach their DTV receivers to cable systems using 
a point of deployment (``POD'') module and receive one-way cable 
television services without the need for an external navigation device. 
The Commission issued a Further Notice of Proposed Rulemaking (``MOU 
FNPRM'') seeking public comment on the MOU issued in the above-
captioned proceeding and in the Compatibility Between Cable Systems and 
Consumer Electronics Equipment proceeding.
    4. In its earlier Further Notice and Declaratory Ruling, the 
Commission had already sought comment, inter alia, on whether the 2005 
date for the phase-out of integrated boxes remains appropriate, on 
what, if any, incentives the requirement creates for the development of 
a commercial retail market for navigation devices, and on the economic 
impacts and costs associated with the requirement. In response, the 
cable industry and set-top box manufacturers generally urged that the 
2005 deadline should be eliminated in favor of the continued offering 
of integrated navigation devices for rent to consumers. Other equipment 
manufacturing and retail interests urged that the date should be 
advanced to ensure the timely development of a retail market in host 
devices. Given the equipment ordering and manufacturing cycles 
involved, it is necessary at this point to provide guidance as to the 
Commission's expectations with respect to the 2005 date. Other issues 
raised in the Further Notice and Declaratory Ruling will be addressed 
separately at a later time.
    5. Commission action in response to the MOU FNPRM could have a 
significant impact upon the development of a commercial market in 
separate host devices. In addition, the cable and consumer electronic 
industries are in the midst of negotiations on specifications for 
bidirectional digital cable receivers and products which would permit 
the receipt of advanced cable television services by direct connection 
to cable systems. This ongoing process, which we are hopeful will 
produce results in the near term, could impact the development of 
technical specifications relating to host devices and POD modules. In 
light of the ongoing notice and comment cycle relating to the MOU 
FNPRM, the evolving nature of technical specifications relating to 
navigation devices, and the imminent business ordering and 
manufacturing cycles facing MVPDs and consumer electronics 
manufacturers in anticipation of the pending 2005 prohibition, we 
hereby extend the deadline concerning the prohibition on integrated 
devices until July 1, 2006.
    6. This eighteen month extension should provide adequate time for 
the parties to complete their ongoing negotiations and for the 
Commission to make a more knowledgeable decision as to any further 
changes in the compliance date. By January 1, 2005, the Commission 
shall complete a reassessment of the state of the navigation devices 
market and determine whether the designated time frame remains 
appropriate or whether the ban on integrated devices will no longer be 
necessary. In the interim, the cable and consumer electronics 
industries are requested to provide the Commission with status reports 
on their negotiations on specifications for bidirectional digital cable 
receivers and products at 90, 180 and 270 day intervals following 
release of this Order. Following submission of the last status report 
to the Commission, the public shall have thirty days to submit comments 
on the status reports and whether any further changes in the phase-out 
date for integrated devices are warranted.
    7. Based upon the record in the above-captioned proceeding and 
ongoing industry developments, we have concluded that a limited 
deferral of the date is consistent with the ultimate objectives of this 
proceeding and our statutory directive to act ``in consultation with 
appropriate industry standard-setting organizations.'' We are not 
persuaded at this point to eliminate the prohibition on integrated 
devices since future developments in both the marketplace and ongoing 
industry negotiations may yet dictate a need for this requirement in 
order to achieve the objectives of Section 629. However, the conclusion 
of the unidirectional MOU, as well as the ongoing negotiations towards 
a bidirectional agreement, do reflect progress towards the development 
of a retail market for consumer electronics equipment with navigation 
device functionality. As such, we do not believe that advancing the 
prohibition date, as previously suggested by a number of equipment 
manufacturing and retail interests, is necessary to further these 
objectives or would provide sufficient lead time for ordering and 
manufacturing prior to completion of the next phase of the 
standardization process.
    8. Authority. This FNPRM is issued pursuant to authority contained 
in Sections 4(i), 303(r), and 629 of the Communications Act of 1934, as 
amended.
    9. Ex Parte Rules--Non-Restricted Proceeding. This is a non-
restricted notice and comment rulemaking proceeding. Ex parte 
presentations are permitted, except during the Sunshine Agenda period, 
provided that they are disclosed as provided in the Commission's Rules. 
See generally 47 CFR 1.1202, 1.1203, and 1.1206(a).
    10. Accessibility Information. Accessible formats of this FNPRM 
(computer diskettes, large print, audio recording and Braille) are 
available to persons with disabilities by contacting Brian Millin, of 
the Consumer & Governmental Affairs Bureau, at (202) 418-7426, TTY 
(202) 418-7365, or at [email protected].
    11. Comment Information. Pursuant to Sec. Sec.  1.415 and 1.419 of 
the Commission's rules, 47 CFR 1.415, 1.419, interested parties may 
file comments on or before February 19, 2004, and reply comments on or 
before March 10, 2004. 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 24121 
(1998).
    12. 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. 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, U.S. 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

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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. Parties who choose to file by paper must file an original and 
four copies of each filing. If more than one docket or rulemaking 
number appear in the caption of this proceeding, commenters must submit 
two additional copies for each additional docket or rulemaking number. 
Filings can be sent by hand or messenger delivery, by commercial 
overnight courier, or by first-class or overnight U.S. Postal Service 
mail (although we continue to experience delays in receiving U.S. 
Postal Service mail). The Commission's contractor, Vistronix, Inc., 
will receive hand-delivered or messenger-delivered paper filings for 
the Commission's Secretary at 236 Massachusetts Avenue, NE., Suite 110, 
Washington, DC 20002. The filing hours at this location are 8 a.m. to 7 
p.m. All hand deliveries must be held together with rubber bands or 
fasteners. Any envelopes must be disposed of before entering the 
building. Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743. U.S. Postal Service first-class mail, 
Express Mail, and Priority Mail should be addressed to 445 12th Street, 
SW., Washington, DC 20554. All filings must be addressed to the 
Commission's Secretary, Office of the Secretary, Federal Communications 
Commission.
    13. Paperwork Reduction Act of 1995 Analysis. This FNPRM contains 
modified information collection(s) subject to the PRA. It will be 
submitted to the Office of Management and Budget (``OMB'') for review 
under Section 3507(d) of the PRA. OMB, the general public, and other 
Federal agencies are invited to comment on the new or modified 
information collection(s) contained in this proceeding.
    14. Written comments by the public on the proposed information 
collection(s) are due August 18, 2003. Written comments must be 
submitted by the public, Office of Management and Budget and other 
interested parties on the proposed information collection(s) on or 
before August 18, 2003. In addition to filing comments with the 
Secretary, a copy of any comments on the information collection(s) 
contained herein should be submitted to Leslie Smith, Federal 
Communications Commission, Room 1-A804, 445 12th Street, SW., 
Washington, DC 20554, or via the Internet to [email protected], and 
to Kim A. Johnson, OMB Desk Officer, Room 10236 NEOB, 725 17th Street, 
NW., Washington, DC 20503, or via the Internet to [email protected].
    15. Regulatory Flexibility Act. As required by the Regulatory 
Flexibility Act, the Commission has prepared an Initial Regulatory 
Flexibility Analysis (``IRFA'') of the possible significant economic 
impact on a substantial number of small entities of the proposals 
addressed in this FNPRM. The IRFA is set forth below. Written public 
comments are requested on the IRFA. These comments must be filed in 
accordance with the same filing deadlines for comments on the FNPRM, 
and they should have a separate and distinct heading designating them 
as responses to the IRFA.

Initial Regulatory Flexibility Analysis

    16. As required by the Regulatory Flexibility Act of 1980, as 
amended (``RFA'') the Commission has prepared this present Initial 
Regulatory Flexibility Analysis (``IRFA'') of the possible significant 
economic impact on a substantial number of small entities by the 
policies and rules proposed in this Order and Further Notice of 
Proposed Rulemaking (``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 in 
paragraph 10-11. The Commission will send a copy of this entire, 
including this IRFA, to the Chief Counsel for Advocacy of the Small 
Business Administration (``SBA''). In addition, the FNPRM and the IRFA 
(or summaries thereof) will be published in the Federal Register.
    17. Need for, and Objectives of, the Proposed Rules. In this FNPRM, 
we extend our review of the development of the commercial availability 
of navigation devices in light of ongoing industry negotiations which 
may affect the technical specifications relating to navigation devices. 
Our objective is to seek comment on the appropriateness of the new July 
1, 2006 ban on integrated devices based upon the status of these 
negotiations. This objective is commensurate with our statutory 
directive in Section 629 of the Communications Act of 1934, as amended, 
to act ``in consultation with appropriate industry standard-setting 
organizations'' to assure the commercial availability of navigation 
devices used in conjunction with services provided by multichannel 
video programming distributors (``MVPDs'').
    18. Legal Basis. The 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.
    19. Description and Estimate of the Number of Small Entities To 
Which Rules Will Apply. The RFA 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, if adopted. The 
RFA generally 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 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'').
    20. Cable and Other Program Distribution. The SBA has developed a 
small business size standard for cable and other program distribution 
services, which includes all such companies generating $12.5 million or 
less in revenue annually. This category includes, among others, cable 
operators, direct broadcast satellite (``DBS'') services, home 
satellite dish (``HSD'') services, multipoint distribution services 
(``MDS''), multichannel multipoint distribution service (``MMDS''), 
Instructional Television Fixed Service (``ITFS''), local multipoint 
distribution service (``LMDS''), satellite master antenna television 
(``SMATV'') systems, and open video systems (``OVS''). According to the 
Census Bureau data, there are 1,311 total cable and other pay 
television service firms that operate throughout the year of which 
1,180 have less than $10 million in revenue. We address below each 
service individually to provide a more precise estimate of small 
entities.
    21. Cable Operators. The Commission has developed, with SBA's 
approval, our 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. We last estimated that there were 1,439 cable operators 
that qualified as small cable companies. 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

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the decisions and rules proposed in this Order and FNPRM.
    22. The Communications Act, as amended, also contains a size 
standard for 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 68,500,000 subscribers in the United States. Therefore, an 
operator serving fewer than 685,000 subscribers shall be deemed a small 
operator if its annual revenues, when combined with the total annual 
revenues of all of its affiliates, do not exceed $250 million in the 
aggregate. Based on available data, we find that the number of cable 
operators serving 685,000 subscribers or less totals approximately 
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.
    23. Direct Broadcast Satellite (``DBS'') Service. Because DBS 
provides subscription services, DBS falls within the SBA-recognized 
definition of cable and other program distribution services. This 
definition provides that a small entity is one with $12.5 million or 
less in annual receipts. There are four licensees of DBS services under 
Part 100 of the Commission's Rules. Three of those licensees are 
currently operational. Two of the licensees that are operational have 
annual revenues that may be in excess of the threshold for a small 
business. The Commission, however, does not collect annual revenue data 
for DBS and, therefore, is unable to ascertain the number of small DBS 
licensees that could be impacted by these proposed rules. DBS service 
requires a great investment of capital for operation, and we 
acknowledge, despite the absence of specific data on this point, that 
there are entrants in this field that may not yet have generated $12.5 
million in annual receipts, and therefore may be categorized as a small 
business, if independently owned and operated.
    24. Home Satellite Dish (``HSD'') Service. Because HSD provides 
subscription services, HSD falls within the SBA-recognized definition 
of cable and other program distribution services. This definition 
provides that a small entity is one with $12.5 million or less in 
annual receipts. The market for HSD service is difficult to quantify. 
Indeed, the service itself bears little resemblance to other MVPDs. HSD 
owners have access to more than 265 channels of programming placed on 
C-band satellites by programmers for receipt and distribution by MVPDs, 
of which 115 channels are scrambled and approximately 150 are 
unscrambled. HSD owners can watch unscrambled channels without paying a 
subscription fee. To receive scrambled channels, however, an HSD owner 
must purchase an integrated receiver-decoder from an equipment dealer 
and pay a subscription fee to an HSD programming package. Thus, HSD 
users include: (1) viewers who subscribe to a packaged programming 
service, which affords them access to most of the same programming 
provided to subscribers of other MVPDs; (2) viewers who receive only 
non-subscription programming; and (3) viewers who receive satellite 
programming services illegally without subscribing. Because scrambled 
packages of programming are most specifically intended for retail 
consumers, these are the services most relevant to this discussion.
    25. Multipoint Distribution Service (``MDS''), Multichannel 
Multipoint Distribution Service (``MMDS'') Instructional Television 
Fixed Service (``ITFS'') and Local Multipoint Distribution Service 
(``LMDS''). MMDS systems, often referred to as ``wireless cable,'' 
transmit video programming to subscribers using the microwave 
frequencies of the MDS and ITFS. LMDS is a fixed broadband point-to-
multipoint microwave service that provides for two-way video 
telecommunications.
    26. In connection with the 1996 MDS auction, the Commission defined 
small businesses as entities that had annual average gross revenues of 
less than $40 million in the previous three calendar years. This 
definition of a small entity in the context of MDS auctions has been 
approved by the SBA. The MDS auctions resulted in 67 successful bidders 
obtaining licensing opportunities for 493 Basic Trading Areas 
(``BTAs''). Of the 67 auction winners, 61 met the definition of a small 
business. MDS also includes licensees of stations authorized prior to 
the auction. As noted, the SBA has developed a definition of small 
entities for pay television services, which includes all such companies 
generating $12.5 million or less in annual receipts. This definition 
includes multipoint distribution services, and thus applies to MDS 
licensees and wireless cable operators that did not participate in the 
MDS auction. Information available to us indicates that there are 
approximately 850 of these licensees and operators that do not generate 
revenue in excess of $12.5 million annually. Therefore, for purposes of 
the IRFA, we find there are approximately 850 small MDS providers as 
defined by the SBA and the Commission's auction rules.
    27. The SBA definition of small entities for cable and other 
program distribution services, which includes such companies generating 
$12.5 million in annual receipts, seems reasonably applicable to ITFS. 
There are presently 2,032 ITFS licensees. All but 100 of these licenses 
are held by educational institutions. Educational institutions are 
included in the definition of a small business. However, we do not 
collect annual revenue data for ITFS licensees, and are not able to 
ascertain how many of the 100 non-educational licensees would be 
categorized as small under the SBA definition. Thus, we tentatively 
conclude that at least 1,932 licensees are small businesses.
    28. Additionally, the auction of the 1,030 LMDS licenses began on 
February 18, 1998, and closed on March 25, 1998. The Commission defined 
``small entity'' for LMDS licenses as an entity that has average gross 
revenues of less than $40 million in the three previous calendar years. 
An additional classification for ``very small business'' was added and 
is defined as an entity that, together with its affiliates, has average 
gross revenues of not more than $15 million for the preceding calendar 
years. These regulations defining ``small entity'' in the context of 
LMDS auctions have been approved by the SBA. There were 93 winning 
bidders that qualified as small entities in the LMDS auctions. A total 
of 93 small and very small business bidders won approximately 277 A 
Block licenses and 387 B Block licenses. On March 27, 1999, the 
Commission re-auctioned 161 licenses; there were 40 winning bidders. 
Based on this information, we conclude that the number of small LMDS 
licenses will include the 93 winning bidders in the first auction and 
the 40 winning bidders in the re-auction, for a total of 133 small 
entity LMDS providers as defined by the SBA and the Commission's 
auction rules.
    29. In sum, there are approximately a total of 2,000 MDS/MMDS/LMDS 
stations currently licensed. Of the approximate total of 2,000 
stations, we estimate that there are 1,595 MDS/MMDS/LMDS providers that 
are small businesses as deemed by the SBA and the Commission's auction 
rules.
    30. Satellite Master Antenna Television (``SMATV'') Systems. The

[[Page 35837]]

SBA definition of small entities for cable and other program 
distribution services includes SMATV services and, thus, small entities 
are defined as all such companies generating $12.5 million or less in 
annual receipts. Industry sources estimate that approximately 5,200 
SMATV operators were providing service as of December 1995. Other 
estimates indicate that SMATV operators serve approximately 1.5 million 
residential subscribers as of July 2001. The best available estimates 
indicate that the largest SMATV operators serve between 15,000 and 
55,000 subscribers each. Most SMATV operators serve approximately 
3,000-4,000 customers. Because these operators are not rate regulated, 
they are not required to file financial data with the Commission. 
Furthermore, we are not aware of any privately published financial 
information regarding these operators. Based on the estimated number of 
operators and the estimated number of units served by the largest ten 
SMATVs, we believe that a substantial number of SMATV operators qualify 
as small entities.
    31. Open Video Systems (``OVS''). Because OVS operators provide 
subscription services, OVS falls within the SBA-recognized definition 
of cable and other program distribution services. This definition 
provides that a small entity is one with $12.5 million or less in 
annual receipts. The Commission has certified 25 OVS operators with 
some now providing service. Affiliates of Residential Communications 
Network, Inc. (``RCN'') received approval to operate OVS systems in New 
York City, Boston, Washington, DC and other areas. RCN has sufficient 
revenues to assure us that they do not qualify as small business 
entities. Little financial information is available for the other 
entities authorized to provide OVS that are not yet operational. Given 
that other entities have been authorized to provide OVS service but 
have not yet begun to generate revenues, we conclude that at least some 
of the OVS operators qualify as small entities.
    32. Electronics Equipment Manufacturers. Rules adopted in this 
proceeding could apply to manufacturers of DTV receiving equipment and 
other types of consumer electronics equipment. The SBA has developed 
definitions of small entity for manufacturers of audio and video 
equipment as well as radio and television broadcasting and wireless 
communications equipment. These categories both include 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 definitions applicable to manufacturers of audio and 
visual equipment and radio and television broadcasting and wireless 
communications equipment, since these are the two closest NAICS Codes 
applicable to the consumer electronics equipment manufacturing 
industry. However, these NAICS categories are broad and specific 
figures are not available as to how many of these establishments 
manufacture consumer equipment. According to the SBA's regulations, an 
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 554 U.S. establishments that 
manufacture audio and visual equipment, and that 542 of these 
establishments have fewer than 500 employees and would be classified as 
small entities. The remaining 12 establishments 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. Under the SBA's regulations, a radio and 
television broadcasting and wireless communications equipment 
manufacturer must also have 750 or fewer employees in order to qualify 
as a small business concern. Census Bureau data indicates that there 
are 1,215 U.S. establishments that manufacture radio and television 
broadcasting and wireless communications equipment, and that 1,150 of 
these establishments have fewer than 500 employees and would be 
classified as small entities. The remaining 65 establishments 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. We therefore conclude that 
there are no more than 542 small manufacturers of audio and visual 
electronics equipment and no more than 1,150 small manufacturers of 
radio and television broadcasting and wireless communications equipment 
for consumer/household use.
    33. 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 recordkeeping.
    34. 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.
    35. We have sought comment on the appropriateness of the July 1, 
2006 prohibition on integrated navigation devices in light of, inter 
alia, ongoing developments regarding this industry. As a part of this 
effort, we wish to consider and examine the effect of changing or 
eliminating the prohibition deadline on small entities. We welcome 
comments suggesting ways in which any perceived burden upon small 
entities could be mitigated.
    36. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules. None.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 03-15188 Filed 6-16-03; 8:45 am]
BILLING CODE 6712-01-P