[Federal Register Volume 68, Number 187 (Friday, September 26, 2003)]
[Proposed Rules]
[Pages 55566-55573]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-24328]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 74

[MB Docket No. 03-185; FCC 03-198]


Broadcast Services; Television Stations

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Commission seeks comment on rules for 
digital low power television (``LPTV'') and television translator 
stations, and considers issues related to digital television booster 
stations. This proceeding marks the beginning of the digital television 
conversion for these services. The rules and policies that will be 
adopted as a result of this proceeding will provide the framework for 
this conversion.

DATES: Comments are due November 25, 2003; reply comments are due 
December 26, 2003.

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

FOR FURTHER INFORMATION CONTACT: Keith Larson, Media Bureau (202) 418-
2607. For additional information concerning the information 
collection(s) contained in this document, contact Shirley Suggs at 202-
418-1568, or via the Internet at [email protected].

SUPPLEMENTARY INFORMATION: This is a synopsis of the Notice of Proposed 
Rule Making (``NPRM'') in MB Docket No. 03-185, FCC 03-198, adopted 
August 6, 2003, and released August 29, 2003. The complete text of this 
NPRM 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, Qualex International, Portals II, 445 12th Street SW., CY-
B402, Washington, DC 20554. The Notice is also available on the 
Internet at the Commission's Web site: http://www.fcc.gov.

Synopsis

    1. The NPRM contemplates that a digital TV translator station 
should be technically capable of rebroadcasting the entire incoming 
signal of its primary DTV broadcast station and producing a digital 
output signal that can be satisfactorily viewed on a receiver designed 
for the Commission's DTV transmission standard. The Commission seeks a 
definition for a digital TV translator consistent with this tentative 
conclusion. If the Commission were to extend the current analog 
translator definition, a digital TV translator would be a station 
operating for the purpose of retransmitting the programs and signals of 
a DTV broadcast station for reception by the general public, without 
significantly altering any characteristic of the original signal other 
than its frequency and amplitude. A digital TV translator would ``pass 
through'' the content and video format of a primary DTV station (e.g., 
an HDTV input signal would be retransmitted as an HDTV output signal). 
The Commission seeks comment on how to define digital TV translators 
and, in particular, how allowances for local message insertions should 
be incorporated into the definition.

[[Page 55567]]

    2. In a pending DTV proceeding, the Commission has asked whether 
the rules should permit TV translators to down-convert to analog format 
a signal originally broadcast by the parent station in digital format. 
The Commission seeks comment here on how these issues relate to the 
appropriate definition of a ``digital TV translator'' and what, if any, 
limitations should be imposed on the ability of a translator to alter 
the signal of the main station.
    3. The Commission seeks comment on two transmission modes for 
digital TV translator rebroadcasts: (1) Heterodyne frequency conversion 
that simply shifts the signal information on the translator input 
channel onto a different TV output channel and (2) a ``regenerative'' 
mode that also processes the input signal to correct errors in the 
digital bit stream and mitigate signal distortion.
    4. The NPRM seeks comment on the merits of local message insertion 
and the permissible nature and duration of such messages. Should 
digitally transmitted local messages be limited to the types of 
messages permitted for analog TV translators? The Commission also seeks 
comment on available technical means for local message insertion and 
transmission and related costs.
    5. The NPRM requests comment on whether a digital translator 
operator should be permitted some flexibility to alter the content or 
video format of a DTV broadcast signal prior to retransmission, 
provided it has been given the consent of its primary DTV station. As 
one means, the NPRM explains permitting DTV translators to rebroadcast 
in the same output channel multiple video program streams of different 
broadcast stations, pursuant to arrangements with the involved TV 
station licensees, and seeks comment on the technical and economic 
feasibility of this concept.
    6. The Commission also proposes to allow digital TV translators to 
receive DTV broadcast signals using any of the signal delivery means 
available to analog TV translators (e.g., a TV translator relay or 
other suitable terrestrial microwave source).
    7. The NPRM seeks comment on how to distinguish between digital 
LPTV and TV translator stations. The Commission questions whether it 
likely that digital LPTV and TV translator stations will serve 
different purposes. The Commission asks if a digital LPTV station be 
defined as a station that may originate programming more than 30 
seconds per hour. How should this benchmark and the term ``program 
origination'' be interpreted given the differences between analog TV 
and DTV signals?
    8. The Commission tentatively conclude that digital LPTV stations 
should be subject to the same minimum video program service requirement 
applicable to DTV broadcast and digital Class A stations. Accordingly, 
digital LPTV stations would be required to use some of their channel 
capacity to provide a free video programming service of at least NTSC 
technical quality, intended for reception by the general public.
    9. The Commission also tentatively concludes that digital LPTV 
stations should be permitted to use their bit stream dynamically to 
transmit one or more digital programs in any DTV video format. Upon 
meeting the minimum video service requirement, the Commission believes 
that digital LPTV stations should be permitted to offer all of the 
ancillary and supplemental services, including subscription services, 
allowed for DTV and digital Class A TV broadcasters. They should also 
be permitted to enter into arrangements with outside parties with 
regard to ancillary and supplementary service operations in the manner 
permitted for DTV broadcasters. The Commission also asks: what 
circumstances, if any, would justify exclusion of a minimum free over-
the-air digital video program service requirement?
    10. The NPRM proposes to apply to digital LPTV stations the public 
interest related obligations to analog LPTV stations (e.g., certain 
provisions for broadcast by candidates for political office).
    11. To facilitate digital service opportunities, the NPRM proposes 
to make available for digital LPTV and translator stations VHF channels 
2-13, inclusive, and UHF channels 14-59, inclusive (except channel 37 
reserved for radio astronomy). The Commission proposes the use of these 
channels for both on-channel analog to digital station conversions and 
for new digital LPTV and TV translator stations and alternatively seeks 
comment on whether these channels should be made available only when 
applicants can demonstrate the unavailability of lower TV channels. 
These stations will be required to operate on a non-interfering basis 
to primary users of these channels and also protect earlier-authorized 
secondary users. Thus, digital LPTV and TV translator operations would 
not preclude or impede service from DTV stations or new primary 
services.
    12. The Commission seeks comment on whether TV channels 60-69 (746 
MHz to 806 MHz) should be made available during the DTV transition for 
new digital LPTV and translator stations and/or digital conversions of 
existing analog stations possibly excluding the channels reallocated 
for use by public safety entities.
    13. The NPRM proposes the following protected signal contour values 
for digital LPTV and TV translator stations, as calculated from the 
F(50,90) propagation method in Section 73.625(b)(1) of the Commission's 
rules: 43 dBu for stations on channels 2-6, 48 dBu for stations on 
channels 7-13, and 51 dBu for stations on channels 14-69.
    14. The NPRM proposes to base standards for accepting digital LPTV 
and TV translator station application proposals on D/U protection 
ratios for analysis of predicted interference. The Commission proposes 
to apply to digital LPTV and translator interference analysis the co-
channel D/U ratios for ``DTV-into-analog TV,'' ``Analog TV-into-DTV'' 
and ``DTV-into-DTV'' given in Section 73.623(c)(2) and the DTV-to-DTV 
co-channel adjustment formula and analog-to-DTV co-channel adjustment 
table given in 47 CFR Section 73.623(c)(3). The Commission proposes 
that analog LPTV and TV translator station proposals protect 1st 
adjacent channel digital LPTV and TV translator stations based on the 
following D/U ratios, the values given in our DTV rules: ``Lower analog 
TV-into-DTV'' -48 dB and ``Upper analog TV-into-DTV'' -49 dB. The NPRM 
seeks comment on D/U ratios for first adjacent channel protection from 
digital LPTV and translator stations.
    15. In this proceeding, the Commission will adopt a methodology for 
interference analysis to be used in the application process for 
accepting digital LPTV and TV translator applications. One possible 
choice would be the contour protection approach now used to evaluate 
analog LPTV and TV translator station proposals. As an alternative to 
the contour overlap approach, the Commission contemplates basing 
application acceptance on its more flexible DTV interference prediction 
methodology possibly tailored to reflect the characteristics of 
transmitting antennas typically used by LPTV and translator stations.
    16. The NPRM seeks comments on proposals and on issues related to 
co-located adjacent channel operations involving digital LPTV and TV 
translator stations. The Commission also seeks comment on any other 
technical means for demonstrating interference avoidance that could 
facilitate channel availability for digital LPTV and TV translator 
service without compromising

[[Page 55568]]

the interference protection rights of other stations.
    17. The NPRM proposes to subject LPTV, Class A, TV translator and 
TV booster digital stations to the requirements of 47 CFR Section 
73.1030 regarding interference protection to radio astronomy research 
and certain receiving installations. The Commission also requests 
comment on whether it might be appropriate to subject digital low power 
television stations to those requirements only with regard to the more 
sensitive operations of the radio astronomy observatories at Green 
Bank, West Virginia and Arecibo, Puerto Rico. The NPRM seeks comments 
on the means of interference protection for land mobile radio 
operations on TV channels 14-20 in certain metropolitan areas.
    18. Assuming the Commission adopts the contour values it proposed 
for digital LPTV and TV translator stations, it invites comment on the 
adequacy of certain digital effective radiated power limits. The 
Commission also seeks comment on the appropriate out-of-channel 
emission limitations for digital LPTV and TV translator stations. The 
Commission also seeks to establish the minimally necessary standards 
for the transmitting equipment that will be used for digital low power 
operations, primarily related to interference avoidance and the process 
for addressing compliance with these standards: either FCC 
certification or verification procedures.
    19. Assuming the Commission adopts a certification requirement, its 
questions under what circumstances, if any, should it permit LPTV or TV 
translator equipment certified for analog operation to be used for 
digital transmissions?
    20. The NPRM invites comment on whether to require minimum hours of 
operation for digital TV translator and/or LPTV stations and, if so, 
how should the Commission should structure the requirement. The 
Commission also proposes to apply the provisions for unattended analog 
station operation to digital LPTV and TV translator operations.
    21. The NPRM seeks comment on appropriate means for digital LPTV 
and TV translator station identification and related costs of 
compliance. The Commission seeks comment on station identification 
requirements for digital LPTV stations equipped to originate local 
programming.
    22. The NPRM proposes to authorize the digital on-channel 
conversion of a licensed analog LPTV or TV translator station, or a 
station holding a construction permit for such a facility, as a 
``minor'' facilities change provided: (1) The proposed digital facility 
would not involve a channel change not related to channel displacement, 
and (2) the protected digital signal contour of the proposed facility 
would overlap some portion of the protected contour based on the 
station's analog authorization. Consistent with the rules for LPTV 
minor change applications, the Commission proposes to grant ``digital 
conversion'' applications on a first-come, first-served basis under the 
current processing procedures.
    23. The Commission asks whether the auction exemption provisions in 
Section 309(j)(2)(B) of the Communications Act apply to mutually 
exclusive applications for new LPTV and TV translator digital stations 
or where such applications are mutually exclusive with other 
applications in the LPTV or Class A TV services. Should the Commission 
determine that the auction exemption does apply, it seeks comment as to 
an alternative proposal for resolving mutually exclusive applications 
for low power and television translator digital stations.
    24. The NPRM tentatively concludes that the Commission should place 
a high priority on facilitating the digital transition of existing LPTV 
and TV translator service. It seeks comment on the following approach 
for accepting applications for construction permits for new digital 
LPTV and TV translator stations. Under this approach, the Commission 
would first issue a Public Notice announcing a digital-only application 
filing window with filing eligibility limited to LPTV, TV translator 
and Class A TV licensees and permittees (``incumbents''). Class A TV 
licensees and permittees would be filing for digital authorizations in 
the low power television service. This window would not be 
geographically restricted. At some time after processing the 
applications received in the initial window, the Commission would 
announce the commencement of a separate filing procedure referred to as 
``rolling one-day filing windows.'' In this first-come-first-served 
filing procedure, the applicant eligibility would not be restricted. As 
an application acceptance condition, proposed facilities would be 
required to protect those in all earlier-filed applications. 
Applications having predicted interference conflicts with other 
applications filed in such a window on the same day would be considered 
to be mutually exclusive and whether incumbents authorized channels 
through this window should be required to surrender an equal number of 
channels at the end of the DTV transition period or some other time. 
The NPRM also asks if the Commission should continue to accept 
applications for new analog LPTV and TV translator stations; for 
example, only in those geographic areas with the greatest unmet TV 
service needs.
    25. The NPRM seeks comment on how to structure application filing 
policies and procedures to appropriately balance our digital service 
objectives and analog LPTV service needs. The Commission invites 
comment on the merits of an initial digital-only application filing 
window limited to incumbent LPTV, TV translator, and Class A TV 
licensees and permittees. The Commission asks whether it should limit 
the number of applications that could be filed by a single entity.
    26. The NPRM seeks comment on whether the licensing approach 
detailed in Section 336(f)(4) of the Communications Act is the only 
means by which the Commission might award additional digital channels 
to Class A and translator stations or whether the Commission may use 
the ``all-secondary'' channel approach proposed in the item and defer 
the implementation of the 336(f)(4) licensing scheme until a later 
point in the digital transition.
    27. Section 309(j)(14)(A) of the Communications Act provides that 
the Commission may not renew a license for analog broadcast television 
service for a period extending beyond December 31, 2006 or later if 
certain conditions apply. Section 336(f)(4) of the Act provides that 
Class A TV stations (formerly LPTV stations) and TV translator stations 
shall not be required to convert to digital operation until the end of 
the DTV transition period. The Commission seeks comment on whether 
these provisions apply to analog authorizations in the low power 
television service.
    28. The NPRM proposes to apply to digital LPTV and TV translator 
stations the construction period provisions applicable to analog LPTV 
and TV translator stations.
    29. The NPRM seeks comment on whether to establish a digital 
booster class of station in our LPTV service rules and, if so, what 
requirements should govern the authorization and operation of such 
stations including who should be eligible to operate such stations. The 
Commission asks: should digital boosters be limited to improving signal 
coverage within a station's protected signal contour as is the case for 
analog TV boosters (i.e., by requiring the service contour of a digital 
booster to be encompassed by the service contour of the station whose 
signal is being retransmitted)? Should digital

[[Page 55569]]

boosters also be permitted to deliver programming to communities or 
areas located beyond the protected area of the station whose signal is 
being retransmitted (i.e., where technically feasible, as an 
alternative delivery mechanism to a digital TV translator)? Could such 
use of boosters enable more efficient spectrum use (e.g., in areas of 
hilly or mountainous terrain where spectrum opportunities are limited 
due to a high density of analog translators)?
    30. The Commission also asks if it should apply to digital boosters 
the interference protection methodology and technical standards we 
adopt for digital LPTV and TV translator stations (e.g., protected 
signal contour, effective radiated power limits, emission mask and 
interference protection D/U ratios and methodology, excluding co-
channel protection of the station whose signal is retransmitted by the 
booster.
    31. The NPRM seeks comment on an appropriate call sign suffix for 
digital TV translator and LPTV stations. The Commission also seeks 
comment on what fees should apply to digital LPTV and TV translator 
stations. The Commission also proposes extending broadcast auxiliary 
service (BAS) eligibility provisions to permit digital LPTV and TV 
translator stations to operate on the same bands and for the same 
purposes as analog LPTV and TV translators, subject to the BAS rules 
governing digital operations. The Commission also seeks comment on 
whether a particular digital service contour would be more appropriate 
with regard to defining the area for locally produced programming of 
digital Class A TV stations.
    32. The NPRM also seeks comments on a request by Association of 
Public Television Stations, the Public Broadcasting Service and the 
Corporation for Public Broadcasting that the Commission: (1) Facilitate 
the relocation of analog translators that provide a noncommercial 
service; (2) facilitate the transition of existing or relocated analog 
noncommercial educational translators to digital operation; and (3) 
make additional technical modifications to its rules to support the 
licensing of translators and repeaters.

Administrative Matters

    33. Comments and Reply Comments. Pursuant to sections 1.415 and 
1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested 
parties may file comments on or before November 25, 2003 and reply 
comments on or before December 26, 2003. Comments may be filed using 
the Commission's Electronic Comment Filing System (ECFS) or by filing 
paper copies. See Electronic Filing of Documents in Rulemaking 
Proceedings, 63 FR 24,121 (1998). Written comments by the public on the 
proposed information collections are due November 25, 2003. Written 
comments must be submitted by the Office of Management and Budget (OMB) 
on the proposed information collection(s) on or before November 25, 
2003.
    34. 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. 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 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, Marlene H. Dortch, Office of 
the Secretary, Federal Communications Commission.
    35. Parties who choose to file by paper should also submit their 
comments on diskette. These diskettes should be submitted to: Wanda 
Hardy, 445 Twelfth Street, SW., Room, 2-C207, Washington, DC 20554. 
Such a submission should be on a 3.5 inch diskette formatted in an IBM 
compatible format using MS Word 97 for Windows 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 docket number in 
this case, MM Docket No. 02-113, 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 send diskette copies to the Commission's copy 
contractor, Vistronix, Portals II, 445 12th Street SW., CY-B402, 
Washington, DC 20554.
    36. In addition to filing comments with the Secretary, a copy of 
any comments on the information collections contained herein should be 
submitted to Shirley Suggs, Federal Communications Commission, 445 12th 
Street, SW., Washington, DC 20554, or via the Internet to 
[email protected], and to Jeanette Thornton, OMB Desk Officer, Room 
10236 NEOB, 725 17th Street, NW., Washington, DC 20503 or via the 
Internet to [email protected].
    37. 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: http://www.fcc.gov/dtf. Comments and reply 
comments are available electronically in ASCII text, Word 97, and Adobe 
Acrobat.
    38. 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

[[Page 55570]]

(202) 4810-0260, TTY (202) 418-2555, or [email protected].
    39. Ex Parte Rules. This is a permit-but-disclose notice and 
comment rulemaking proceeding. Ex parte presentations are permitted 
except during the Sunshine Agenda period, provided they are disclosed 
as provided in the Commission's Rules. See generally 47 CFR 1.1202, 
1.1203, and 1.1206(a).
    40. Initial Regulatory Flexibility Analysis. As required by Section 
603 of the Regulatory Flexibility Act, the Commission has prepared the 
following IRFA of the possible significant economic impact on small 
entities of the proposals contained in this NPRM. Written public 
comments are requested on the IRFA. In order to fulfill the mandate of 
the Contract with America Advancement Act of 1996 regarding the Final 
Regulatory Flexibility Analysis, we ask a number of questions in our 
IRFA regarding the prevalence of small businesses in the radio 
broadcasting industry. Comments on the IRFA must be filed in accordance 
with the same filing deadlines as comments on the NPRM, but they must 
have a distinct heading designating them as responses to the IRFA.
    41. 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 NPRM. Written 
public comments are requested on this IRFA. Comments must be identified 
as responses to the IRFA and must be filed by the deadlines for 
comments on the NPRM provided above in paragraph 16. The Commission 
will send a copy of the NPRM, 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 NPRM and the IRFA (or summaries thereof) will 
be published in the Federal Register.

A. Need for, and Objectives of, the Proposed Rules

    42. As described in the NPRM, the proposed rules are intended to 
permit LPTV, television translator, and television booster stations to 
transition to digital service. Provisions in the NPRM may also 
facilitate the digital transition of Class A TV stations. 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 rules proposed in the 
Notice are a fundamental part of the Commission's effort to establish 
rules to help effectuate the transition of the nation's television 
broadcast service from analog to digital format.
    43. The proposed rules are intended to meet the need recognized by 
the Commission to provide flexible and affordable opportunities for low 
power digital service, both through the digital conversion of existing 
analog service and, where spectrum is available, new digital stations. 
The Commission's goals are to hasten the transition of LPTV and TV 
translator stations to digital operations, and to do so in a manner 
that minimizes disruption of existing service to the consumers served 
by analog LPTV and translator stations. The following proposals in the 
Notice serve as examples of how the Commission seeks to realize these 
objectives. As one example, the NPRM seeks comment on flexible means 
for digital translator operations, including combining the signals of 
two or more DTV broadcast station signals on a translator's transmitted 
output channel, provided such operations are technically and 
economically feasible. The NPRM also proposes to permit digital LPTV 
stations to provide ancillary and supplementary services upon meeting a 
minimum video program service requirement, and seeks to impose as few 
interference requirements on digital low power service stations as 
necessary to ensure interference-free operation. In addition, to 
expedite authorization of service, the NPRM proposes that LPTV and 
translator operators be permitted to convert to digital on their 
existing analog channels by applying for a minor facilities change at 
any time. The NPRM also seeks comment on filing procedures for new 
digital stations that would facilitate the transition of existing LPTV 
and translator service and quicken the authorization of digital 
service.

B. Legal Basis

    44. The authority for the action proposed in this rulemaking is 
contained in Sections 4(i) & (j), 303, 307, 309 and 336 of the 
Communications Act of 1934, as amended, 47 U.S.C. 154(i) & (j), 303, 
307, 309 and 336.

C. Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules Will Apply

    45. 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. The RFA generally defines the term 
``small entity'' as having the same meaning as the terms ``small 
business,'' ``small organization,'' and ``small governmental entity.'' 
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'').
    46. In this context, the application of the statutory definition to 
television stations is of concern. An element of the definition of 
``small business'' is that the entity not be dominant in its field of 
operation. We are unable at this time to define or quantify the 
criteria that would establish whether a specific television station is 
dominant in its field of operation. Accordingly, the estimates that 
follow of small businesses to which rules may apply do not exclude any 
television station from the definition of a small business on this 
basis and therefore might be over-inclusive.
    47. An additional element of the definition of ``small business'' 
is that the entity must be independently owned and operated. It is 
difficult at times to assess these criteria in the context of media 
entities and our estimates of small businesses might therefore be over 
inclusive.
    48. Class A TV, LPTV, TV translator, and TV booster stations. The 
proposed rules and policies would apply to licensees of LPTV, TV 
translator, and TV booster stations, and to potential licensees in 
these television services. Certain rules and policies would also apply 
to licensees of Class A TV stations. The Small Business Administration 
defines a television broadcasting station that has no more than $12 
million in annual receipts as a small business. Television broadcasting 
consists of establishments primarily engaged in broadcasting images 
together with sound, including the production or transmission of visual 
programming which is broadcast to the public on a predetermined 
schedule. Included in this category are establishments primarily 
engaged in television broadcasting and which produce programming in 
their own studios. Separate establishments primarily engaged in 
producing programming are classified under other NAICS numbers.
    49. Currently, there are approximately 2,100 licensed LPTV 
stations, 600 licensed Class A stations, 4,700 licensed TV translators 
and 11 TV booster stations. According to Commission staff review of the 
BIA Publications, Inc.,

[[Page 55571]]

Master Access Television Analyzer Database, virtually all LPTV 
broadcast stations, including LPTV stations that have converted to 
Class A status, have revenues of less than $12 million. We note, 
however, that under the SBA's definition, revenue of affiliates that 
are not LPTV stations should be aggregated with the LPTV station 
revenues in determining whether a concern is small. Our estimate may 
thus overstate the number of small entities since the revenue figure on 
which it is based does not include or aggregate revenues from non-LPTV 
affiliated companies. We do not have data on revenues of TV translator 
or TV booster stations, but virtually all of these entities are also 
likely to have revenues of less than $12 million and thus may be 
categorized as small, except to the extent that revenues of affiliated 
non-translator or booster entities should be considered.
    50. Cable and Other Program Distribution. Cable systems often 
receive the television service transmitted over the cable system from a 
TV translator or LPTV station. Thus, cable systems may also be affected 
by the rules proposed in the Notice. 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 
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.
    51. 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 the decisions and rules proposed in this Notice.
    52. 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 less 
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.
    53. 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. Therefore, we will 
assume all four licensees are small, for the purpose of this analysis.
    54. 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. As 
noted, supra, for the category Cable and Other Program Distribution, 
most of providers of these services are considered small.
    55. 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 services. LMDS is a fixed broadband 
point-to-multipoint microwave service that provides for two-way video 
telecommunications.
    56. 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. In addition, MDS includes licensees of stations authorized 
prior to the auction. As noted, the SBA has

[[Page 55572]]

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, using the SBA small business size 
standard, we find that there are approximately 850 small MDS providers.
    57. The SBA definition of small entities for Cable and Other 
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.
    58. 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.
    59. Satellite Master Antenna Television (``SMATV'') Systems. The 
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. As noted, supra, for the 
category Cable and Other Program Distribution, most of providers of 
these services are considered small.
    60. 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.
    61. Electronics Equipment Manufacturers. Rules adopted in this 
proceeding could affect manufacturers of digital transmitting and 
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 
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.
    62. 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 
manufacturing. According to SBA regulations, a computer manufacturer 
must have 1,000 or fewer employees in order to qualify

[[Page 55573]]

as a small entity. Census Bureau data indicates that there are 563 
firms that manufacture electronic computers and of those, 544 have 
fewer than 1,000 employees and qualify as small entities. The remaining 
19 firms have 1,000 or more employees. We conclude that there are 
approximately 544 small computer manufacturers.

D. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements

    63. This NPRM contains additional reporting and recordkeeping 
requirements. While the requirements proposed in the NPRM could have an 
impact on LPTV, Class A, TV translator, and TV booster licensees, and 
potential licensees in these services, we believe such impact would be 
similarly costly for both large and small entities. We seek comment on 
whether others perceive a need for more extensive recordkeeping and, if 
so, whether the burden would fall on large and small entities 
differently.

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

    64. 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.

F. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules

    65. None.
    66. Authority. This NPRM is issued pursuant to authority contained 
in Sections 4(i), 303, and 307 of the Communications Act of 1934, as 
amended, 47 U.S.C. 154(i), 303, and 307, and Section 202(h) of the 
Telecommunications Act of 1996.

Ordering Clauses

    67. Pursuant to the authority contained in sections 1, 2(a), 4(i), 
303, 307, 309, and 310 of the Communications Act of 1934, as amended, 
47 U.S.C. 151, 152(a), 154(i), 303, 307, 309, and 310, and Section 
202(h) of the Telecommunications Act of 1996, this NPRM is adopted.
    68. The Commission's Consumer and Governmental Affairs Bureau, 
Reference Information Center, shall send a copy of this NPRM, including 
the Initial Regulatory Flexibility Analysis, to the Chief Counsel for 
Advocacy of the Small Business Administration.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 03-24328 Filed 9-25-03; 8:45 am]
BILLING CODE 6712-01-P