[Federal Register Volume 70, Number 168 (Wednesday, August 31, 2005)]
[Rules and Regulations]
[Pages 51658-51669]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-17324]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[MB Docket No. 05-181; FCC 05-159]


Implementation of Section 210 of the Satellite Home Viewer 
Extension and Reauthorization Act of 2004 To Amend Section 338 of the 
Communications Act

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Commission adopts final rules 
implementing section 210 of the Satellite Home Viewer Extension and 
Reauthorization Act of 2004, which amends section 338(a)(4) of the 
Communications Act to require satellite carriage of the analog signals 
and digital signals of local stations in Alaska and Hawaii. Satellite 
carriers with more than five million subscribers must carry these 
signals to substantially all of their subscribers in each station's 
local market by December 8, 2005 for analog signals and by June 8, 2007 
for digital signals

DATES: Effective September 30, 2005.

FOR FURTHER INFORMATION CONTACT: For additional information on this 
proceeding, contact Eloise Gore, [email protected] of the Media 
Bureau, Policy Division, (202) 418-2120.

SUPPLEMENTARY INFORMATION: This is a summary of the Federal 
Communications Commission's Report and Order, FCC 05-159, adopted on 
August 22, 2005 and released on August 23, 2005. The full text of this 
document is available for public inspection and copying during regular 
business hours in the FCC Reference Center, Federal Communications 
Commission, 445 12th Street, SW., CY-A257, Washington, DC 20554. These 
documents will also be available via ECFS (http://www.fcc.gov/cgb/ecfs/
). (Documents will be available electronically in ASCII, Word 97, and/
or Adobe Acrobat.) The complete text may be purchased from the 
Commission's copy contractor, Best Copy and Printing, Inc., 445 12th 
Street, SW., Room CY-B402, Washington, DC 20554. To request this 
document in accessible formats (computer diskettes, large print, audio 
recording, and Braille), send an e-mail to [email protected] or call the 
Commission's Consumer and Governmental Affairs Bureau at (202) 418-0530 
(voice), (202) 418-0432 (TTY).

Paperwork Reduction Act

    This document does not contain proposed information collection(s) 
subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-
13. The Commission received approval for the information collection 
requirements contained in this Order from the Office of Management and 
Budget on June 14, 2005. There have been no changes to the information 
collection requirements since receiving OMB approval. In addition, 
therefore, it does not contain any new or modified ``information 
collection burden for small business concerns with fewer than 25 
employees,'' pursuant to the Small Business Paperwork Relief Act of 
2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4). As described in the 
Final Regulatory Flexibility Certification, supra, the businesses 
affected by our action are not small.

Summary of the Report and Order

Introduction

    1. In this Report and Order (``Order''), we adopt rules to 
implement section 210 of the Satellite Home Viewer Extension and 
Reauthorization Act of 2004 (``SHVERA''). The Satellite Home Viewer 
Extension and Reauthorization Act of 2004 (SHVERA), Public Law 108-447, 
section 210, 118 Stat 2809 (2004). SHVERA was enacted on December 8, 
2004, as title IX of the ``Consolidated Appropriations Act, 2005.'' 
Section 210 of the SHVERA amends section 338(a) of the Communications 
Act of 1934, as amended, (``Communications Act'' or ``Act''). Section 
338 of the Act governs the carriage of local television broadcast 
stations by satellite carriers; see 47 U.S.C. 338. In general, the 
SHVERA amends this section to require satellite carriers to carry the 
analog and digital signals of television broadcast stations in local 
markets in states that are not part of the contiguous United States, 
and to provide these signals to substantially all of their subscribers 
in each station's local market by December 8, 2005 for analog signals 
and by June 8, 2007 for digital signals; see 47 U.S.C. 338(a)(4). Our 
rules will implement the SHVERA requirements for carriage of analog and 
digital signals in Alaska and Hawaii. This Order concludes that such 
carriage shall include high definition and multicast signals as 
broadcast by local stations in these states. We adopt a two-step 
carriage election process beginning with carriage elections for analog 
signals by October 1, 2005, and followed by carriage elections for 
digital signals by April 1, 2007.

[[Page 51659]]

Background

Satellite Home Viewer Act (SHVA) and Satellite Home Viewer Improvement 
Act of 1999 (SHVIA)

    2. In 1988, Congress passed the Satellite Home Viewer Act 
(``SHVA''), which established a statutory copyright license for 
satellite carriers to offer subscribers access to broadcast programming 
via satellite when they are unable to receive the signal of a broadcast 
station over the air (that is, an ``unserved'' household). The 
Satellite Home Viewer Act of 1988, Pub. L. No. 100-667, 102 Stat. 3935, 
Title II (1988) (codified at 17 U.S.C. 111, 119). SHVA was enacted on 
November 16, 1988, as an amendment to the copyright laws. SHVA gave 
satellite carriers a statutory license to offer signals to ``unserved'' 
households. In 1999, Congress enacted the Satellite Home Viewer 
Improvement Act (``SHVIA''), which expanded the 1988 SHVA by amending 
both the 1988 copyright laws (see 17 U.S.C. 119, 122), and the 
Communications Act (see 47 U.S.C. 325, 338, 339 and 340) to permit 
satellite carriers to retransmit local broadcast television signals 
directly to subscribers in the station's local market (``local-into-
local'' service) without requiring that they be ``unserved'' 
households. The Satellite Home Viewer Improvement Act of 1999, Pub. L. 
No. 106-113, 113 Stat. 1501 (1999) (codified in scattered sections of 
17 and 47 U.S.C.). SHVIA was enacted on November 29, 1999, as Title I 
of the Intellectual Property and Communications Omnibus Reform Act of 
1999 (``IPACORA'') (relating to copyright licensing and carriage of 
broadcast signals by satellite carriers).
    3. A satellite carrier provides ``local-into-local'' service when 
it retransmits a local television station's signal back into the local 
market of the television station for reception by subscribers; see 17 
U.S.C. 122(j). If a carrier carries one or more stations in the market 
pursuant to the statutory copyright license, it is required to carry 
all of the other local stations in that market upon the station's 
request (that is, the ``carry-one, carry-all'' requirement); see 47 
U.S.C. 338(a)(1). Generally, a television station's ``local market'' is 
the designated market area (``DMA'') in which it is located. Section 
340(i)(1) (as amended by section 202 of the SHVERA) defines the term 
``local market'' by using the definition in 17 U.S.C. 122(j)(2): ``The 
term `local market,' in the case of both commercial and noncommercial 
television broadcast stations, means the designated market area in 
which a station is located, and--(i) In the case of a commercial 
television broadcast station, all commercial television broadcast 
stations licensed to a community within the same designated market area 
are within the same local market; and (ii) in the case of a 
noncommercial educational television broadcast station, the market 
includes any station that is licensed to a community within the same 
designated market area as the noncommercial educational television 
broadcast station.'' DMAs describe each television market in terms of a 
unique geographic area, and are established by Nielsen Media Research 
based on measured viewing patterns; see 17 U.S.C. 122(j)(2)(A)-(C). 
There are 210 DMAs that encompass all counties in the 50 states, except 
for certain areas in Alaska; see Nielsen Station Index Directory and 
Nielsen Station Index United States Television Household Estimates 
(2004-5 ed.); see also Television and Cable Factbook 2005 (Warren 
Communications) A-73. A satellite carrier choosing to provide such 
local-into-local service is generally obligated to carry any qualified 
local station in a particular DMA that has made a timely election for 
mandatory carriage, unless the station's programming is duplicative of 
the programming of another station carried by the carrier in the DMA, 
or the station does not provide a good quality signal to the carrier's 
local receive facility; see 47 U.S.C. 338(a)(1), (b)(1) and (c)(1).

Satellite Home Viewer Extension and Reauthorization Act of 2004 
(SHVERA)

    4. In December 2004, Congress passed and the President signed the 
Satellite Home Viewer Extension and Reauthorization Act of 2004. SHVERA 
again amends the 1988 copyright laws and the Communications Act. This 
rulemaking is required to implement provisions in section 210 of the 
SHVERA which establishes new and special requirements for satellite 
carriage of local stations in states outside the contiguous United 
States.

Discussion

    5. Section 210 of the SHVERA creates a new subsection of the 
Communications Act, 338(a)(4), that requires satellite carriers with 
more than five million subscribers in the United States to carry the 
analog and digital signals of each television broadcast station 
licensed in local markets ``within a State that is not part of the 
contiguous United States.'' Due to an apparent inconsistency in 
numbering the provisions added by the SHVERA, it is not clear if this 
provision will ultimately be codified as 338(a)(4) or (a)(5); see 47 
U.S.C.A. 338 n.1 (West 2005) (``So in original. Two pars. (3) 
enacted.''). In this Order we use the subsection as enacted by section 
210, 338(a)(4). Analog signals are required to be carried by December 
8, 2005, and digital signals by June 8, 2007. A carrier is required to 
provide these signals to substantially all of its subscribers in each 
station's local market. In addition, a satellite carrier is required to 
make available the stations that it carries in at least one local 
market to substantially all of its subscribers located outside of local 
markets and in the same state. The SHVERA also mandates that satellite 
carriers may not charge subscribers for these local signals more than 
they charge subscribers in other States to receive local market 
television stations. Although most of the requirements imposed by the 
new section 338(a)(4) are self-effectuating, the SHVERA requires the 
Commission to promulgate regulations concerning the timing of carriage 
elections by stations in local markets covered by section 338(a)(4) of 
the Act; see 47 U.S.C. 338(a)(4) (as amended by the SHVERA), which 
provides:
    (4) Carriage of Signals of Local Stations in Certain Markets--A 
satellite carrier that offers multichannel video programming 
distribution service in the United States to more than 5,000,000 
subscribers shall (A) within 1 year after the date of the enactment of 
the Satellite Home Viewer Extension and Reauthorization Act of 2004, 
retransmit the signals originating as analog signals of each television 
broadcast station located in any local market within a State that is 
not part of the contiguous United States, and (B) within 30 months 
after such date of enactment retransmit the signals originating as 
digital signals of each such station. The retransmissions of such 
stations shall be made available to substantially all of the satellite 
carrier's subscribers in each station's local market, and the 
retransmissions of the stations in at least one market in the State 
shall be made available to substantially all of the satellite carrier's 
subscribers in areas of the State that are not within a designated 
market area. The cost to subscribers of such retransmissions shall not 
exceed the cost of retransmissions of local television stations in 
other States. Within 1 year after the date of enactment of that Act, 
the Commission shall promulgate regulations concerning elections by 
television stations in such State between mandatory carriage pursuant 
to this section and retransmission consent pursuant to section 325(b), 
which shall take into account the schedule on which

[[Page 51660]]

local television stations are made available to viewers in such State.
    6. We adopted the required Notice of Proposed Rulemaking (``NPRM'') 
on April 29, 2005 and established a short pleading cycle due to the 
need to implement the new rules before the upcoming carriage cycle; see 
Implementation of Section 210 of the Satellite Home Viewer Extension 
and Reauthorization Act of 2004 to Amend Section 338 of the 
Communications Act, 20 FCC Rcd 9319, 9330, paragraph 30 (2005) 
(``NPRM''). We received comments from six parties. As we stated in the 
NPRM, the new and amended rules apply only to satellite service in the 
states covered by section 338(a)(4), which we herein conclude are 
Alaska and Hawaii. The existing signal carriage provisions in Sec.  
76.66 of the Commission's rules also continue to apply to satellite 
service in these states, where relevant and not inconsistent with the 
rules adopted in this proceeding; see 47 CFR 76.66.

Satellite Carriers With More Than 5,000,000 Subscribers

    7. Section 338(a)(4) of the Act expressly applies to a ``satellite 
carrier that offers multichannel video programming distribution service 
in the United States to more than 5,000,000 subscribers;'' see 47 
U.S.C. 338(a)(4) (as amended by the SHVERA). In the NPRM, we proposed 
that this provision applies to satellite carriers that have more than 
five million subscribers in 2005 and, in the future, to any carriers 
with more than five million subscribers. Currently, DIRECTV and 
EchoStar qualify under this definition; see Annual Assessment of the 
Status of Competition in the Market for the Delivery of Video 
Programming, Eleventh Annual Report, MB Docket No. 04-227, FCC 05-13 at 
paragraphs 54-55 (2004). We received no comments relevant to the 
proposed rule, which follows the statutory language and which we adopt 
as new Sec.  76.66(b)(2) without change. Section 76.66(a)(1) of the 
current rules defines ``satellite carrier;'' see 47 CFR 76.66(a)(1). If 
in the future there are new satellite carriers with more than five 
million subscribers, they would be required to comply with this 
carriage provision and to follow the rule provisions that apply to 
``new local-into-local service;'' see 47 CFR 76.66(d)(2).

Noncontiguous States

    8. Section 338(a)(4) of the Act as amended by section 210 of the 
SHVERA applies to ``a State that is not part of the contiguous United 
States;'' see 47 U.S.C. 338(a)(4) (as amended by the SHVERA). Because 
the general definition of ``State'' in the Communications Act includes 
``the Territories and possessions,'' we sought comment on whether 
``State'' as used in the SHVERA should be read to include the 
noncontiguous territories and possessions of the United States, 
including but not limited to Puerto Rico and Guam, and whether 
considerations such as a satellite carrier's regulatory authorizations 
and/or actual service area are relevant to interpreting the obligation 
under section 338(a)(4) of the Act to serve ``noncontiguous states.'' 
Territories in the Pacific, such as Guam, are in a different 
International Telecommunication Union (``ITU'') region from the 50 
states. The contiguous United States, Alaska, Hawaii, Puerto Rico and 
the U.S. Virgin Islands are located in ITU Region 2 and have orbital 
assignments in the Region 2 BSS Plan. The ``Region 2 Plans'' comprise 
the Plan for BSS in the band 12.2-12.7 GHz in ITU Region 2 as contained 
in Appendix 30 of the ITU Radio Regulations, and the associated Plan 
for the feeder-links in the frequency band 17.3-17.8 GHz for the 
broadcasting-satellite service in Region 2 as contained in Appendix 30A 
of the ITU Radio Regulations. Guam, the Northern Marianas, Wake Island 
and Palmyra Island are located in ITU Region 3 and have orbital 
assignments in the Region 3 BSS plan at 122.0[deg] E.L., 121.80[deg] 
E.L., 140.0[deg] E.L. and 170.0[deg] E.L. respectively. Satellites 
operating pursuant to the Region 2 BSS plan are subject to different 
technical requirements and use different frequency bands than 
satellites authorized to operate in Region 3. Therefore, satellites 
designed to serve Region 2 areas would not meet the technical 
requirements necessary to serve Region 3 areas. We requested comment on 
the impact of regulatory differences (e.g., use of different frequency 
bands) between ITU regions in providing service to these locations, but 
we noted in the NPRM that spot beam technology may allow coverage of 
widely spaced areas if visible from the satellite location; see NPRM, 
20 FCC Rcd at 9322, paragraph 7.
    9. We recognize that the phrase ``a State that is not part of the 
contiguous United States'' is susceptible to different interpretations. 
It is unclear from the statutory text whether the intended application 
of the term ``State'' means the definition of ``State'' as it appears 
in the Communications Act, which includes all territories and 
possessions, or whether it refers to the literal or colloquial use of 
the word ``State,'' meaning one of the fifty more or less internally 
autonomous territorial and political units composing the United States 
of America. In determining the proper interpretation, we bear in mind 
that section 3 of the Communications Act provides definitions of terms 
that apply for the purposes of this Act, ``unless the context otherwise 
requires;'' see 47 U.S.C. 153. As explained below, we believe the best 
construction of this phrase, based on context and the current record 
before us, is that ``a State that is not part of the contiguous United 
States'' was intended to refer only to Alaska and Hawaii and not to the 
broader definition of the Communications Act which includes territories 
and possessions. This conclusion is consistent with arguments made by 
satellite carriers EchoStar and DIRECTV, who point out the serious 
technical difficulties of serving all the territories and possessions. 
Several broadcast stations in Puerto Rico argue that ``State'' should 
be read to include territories and possessions so that stations in 
Puerto Rico will be entitled to mandatory carriage. In addition to the 
technical difficulties, EchoStar also argues that Congress' intent to 
limit section 338(a)(4) of the Act to Alaska and Hawaii is evidenced by 
the related copyright provisions in the SHVERA. We agree. As mentioned 
in the NPRM, Alaska is the only one of the 50 states that is not 
entirely subsumed within one or more DMAs; see Notice, 20 FCC Rcd at 
9326, paragraph 18. Similarly, none of the noncontiguous territories 
and possessions are included in a DMA. However, section 122 of title 
17, which defines ``local market'' for the statutory copyright license, 
as well as for section 338 of the Act generally, was amended only to 
add the areas in the State of Alaska that are outside of all DMAs to 
the definition of ``local market;'' see 17 U.S.C. 122(j)(2) (generally 
defining local market as ``the designated market area in which a 
station is located'' and further defining ``designated market area'' by 
reference to determinations by ``Nielsen Media Research and published 
in the 1999-2000 Nielsen Station Index Directory and Nielsen Station 
Index United States Television Household Estimates or any successor 
publication.''); 47 U.S.C. 338(k) (3). Critically, the noncontiguous 
territories and possessions were not added; see 17 U.S.C. 122(j)(2)(D), 
as amended by section 111(b) of the SHVERA (``Certain areas outside of 
any designated market area.--Any census area, borough, or other area in 
the State of Alaska that is outside of a designated market area, as 
determined by Nielsen Media Research,

[[Page 51661]]

shall be deemed to be part of one of the local markets in the State of 
Alaska. A satellite carrier may determine which local market in the 
State of Alaska will be deemed to be the relevant local market in 
connection with each subscriber in such census area, borough, or other 
area.''); 47 U.S.C. 338(k)(3). Consequently, were we to apply ``State'' 
to the noncontiguous territories and possessions, satellite carriers 
would not have a statutory copyright license to retransmit the stations 
in these markets because they would not fall within the definition of 
``local market'' in section 122(j).
    10. Satellite carriers do not and are not required to reach all 
geographic areas that include the possessions and territories of the 
United States. Many areas are not visible to all satellites. For 
example, Guam is below the horizon for United States satellite 
assignment east of 148[deg] W.L. The Commission has recognized that 
contiguous United States (``CONUS'') antenna beams modified to include 
Puerto Rico and the U.S. Virgin Islands could divert power from other 
regions and potentially adversely affect the services of other 
countries; see Policies and Rules for Direct Broadcast Satellite 
Service Report and Order, 17 FCC Rcd 11,368, 11,372 (2002). We 
acknowledge that EchoStar and a company affiliated with DIRECTV 
currently provide service to Puerto Rico, including some local 
stations, and to the U.S. Virgin Islands. No one disputes, however, 
that service to Guam and other islands in the far Pacific would be 
outside the range of these companies and that requiring service to 
islands without television stations and without permanent populations 
would be absurd. Based on the serious technical difficulties of serving 
the territories and possessions, and the fact that the affected 
satellite carriers have never before served any subscribers in much of 
these areas, we believe Congress did not have in mind the definition of 
``State'' as set forth in the Communications Act. For all the reasons 
discussed above, we believe the best reading of the statute, and the 
one most consistent with Congressional intent, is that section 
338(a)(4) of the Act's use of the phrase ``State that is not part of 
the contiguous United States'' was not meant to include the 
noncontiguous territories and possessions, but instead was meant to 
refer only to the states of Alaska and Hawaii; see Griffin v. Oceanic 
Contractors, Inc., 458 U.S. 564, 575 (1982) (stating that 
interpretations of a statute which would produce absurd results are to 
be avoided if alternative interpretations consistent with the 
legislative purpose are available); Lawson v. Suwanee Fruit & S.S. Co., 
69 S. Ct. 503 (1949) (Statutory definitions usually control the meaning 
of statutory words, but not where obvious incongruities in language 
would be created and major purpose of statute would be destroyed); Teva 
Pharm., USA, Inc. v. FDA, 182 F.3d 1003, 1011 (D.C. Cir. 1999) (citing 
Robinson v. Shell Oil Co., 519 U.S. 337, 346 (1997)) (asserting that 
the FDA must interpret that statute to avoid absurd results and further 
congressional intent).

Analog and Digital Signals

    11. We explained in the NPRM that the SHVERA requirements for 
satellite carriage to the noncontiguous states differ significantly 
from the existing satellite broadcast carriage requirements, both in 
scope and timing; see Notice, 20 FCC Rcd at 9323, paragraph 8. 
Currently, under the Communications Act and Commission rules 
implementing the Act, satellite carriers choose whether to rely on the 
statutory copyright license in section 122 of title 17 to offer 
``local-into-local service,'' which in turn triggers the carry-one, 
carry-all obligation; see 47 U.S.C. 338(a)(1) and 47 CFR 76.66(b); see 
also Implementation of the Satellite Home Viewer Improvement Act of 
1999, 16 FCC Rcd 1918 (2000) (``DBS Must Carry Report and Order''), 16 
FCC Rcd 16544 (2001) (``DBS Must Carry Reconsideration Order''). The 
U.S. Court of Appeals for the Fourth Circuit upheld the constitutional 
validity of SHVIA and the reasonableness of the Commission's rules 
promulgated thereunder. See Satellite Broadcasting and Communications 
Ass'n v. FCC, 275 F.3d 337 (2001), cert. denied, 536 U.S. 922 (2002). 
The Communications Act, moreover, prohibits a multichannel video 
programming distributor from retransmitting the signal of a broadcast 
station unless it has ``the express authority'' of the station. 47 
U.S.C. 325(b)(1)(A). See also 17 U.S.C. 122(a) (as amended by section 
1002 of the SHVIA) and 47 U.S.C. 338(a)(1) (as amended by section 1008 
of the SHVIA); see 47 U.S.C. 338(a)(1) and 47 CFR 76.66(b); see also 
Implementation of the Satellite Home Viewer Improvement Act of 1999, 16 
FCC Rcd 1918 (2000) (``DBS Must Carry Report and Order''), 16 FCC Rcd 
16544 (2001) (``DBS Must Carry Reconsideration Order''). The U.S. Court 
of Appeals for the Fourth Circuit upheld the constitutional validity of 
SHVIA and the reasonableness of the Commission's rules promulgated 
thereunder. See Satellite Broadcasting and Communications Ass'n v. FCC, 
275 F.3d 337 (2001), cert. denied, 536 U.S. 922 (2002). The 
Communications Act, moreover, prohibits a multichannel video 
programming distributor from retransmitting the signal of a broadcast 
station unless it has ``the express authority'' of the station. 47 
U.S.C. 325(b)(1)(A). See also 17 U.S.C. 122(a) (as amended by section 
1002 of the SHVIA) and 47 U.S.C. 338(a)(1) (as amended by section 1008 
of the SHVIA). Satellite carriers are not currently required to offer 
local-into-local service in any market. The question of satellite 
carriage obligations concerning a station's digital signal is currently 
pending before the Commission; see MB Docket Nos. 98-120 and 00-96; see 
also WHDT v. Echostar, 18 FCC Rcd 396 (MB 2003) (``WHDT Order'').
    12. Section 338(a)(4) of the Act supersedes carry-one, carry-all by 
mandating analog and digital carriage in Alaska and Hawaii. A satellite 
carrier with more than five million subscribers is now required to 
retransmit the analog signals of each television station in local 
markets in Alaska and Hawaii to subscribers in those local markets by 
December 8, 2005 (one year after enactment of the SHVERA) and to 
retransmit the digital signals of each station no later than June 8, 
2007 (30 months after enactment of SHVERA). We sought comment in the 
NPRM on whether the statute unambiguously means that if any or all of 
the local stations in these states are still broadcasting analog 
signals as well as digital signals as of June 8, 2007, the SHVERA 
requirement mandates dual must carry; see NPRM, 20 FCC Rcd at 9323-24, 
paragraph 9. The Communications Act provides for termination of analog 
signal licenses as of December 31, 2006, unless local stations request 
an extension and demonstrate that one or more criteria exist in their 
markets; see 47 U.S.C. 309(j)(14) (criteria include the so-called ``85% 
test'').
    13. DIRECTV contends that section 338(a)(4) of the Act does not 
unambiguously require that satellite carriers must continue carrying 
analog signals after they begin carrying digital signals. DIRECTV 
suggests that there are two plausible readings of the text: that 
satellite carriers must retransmit analog signals either as long as 
Alaska and Hawaii broadcasters transmit in analog, or until satellite 
carriers are required to retransmit digital signals. It advocates that 
latter reading as the wiser policy. DIRECTV therefore reads section 
338(a)(4) of the Act to require that satellite carriers replace the 
analog signals with digital signals in June 2007. DIRECTV explains that 
because satellite

[[Page 51662]]

carriers digitize analog broadcast signals, there is little quality 
difference between an analog and SD digital signal to the DBS 
subscriber. Microcom, a satellite distributor and dealer in Alaska, 
argues that dual carriage is not warranted when a broadcast station is 
operating both its digital and analog service in a standard definition 
format because the law requires the content of those two services to be 
identical. Microcom, however, is in error as the ``simulcasting'' 
requirements were eliminated in our Second DTV Periodic Review last 
year. In contrast, IBC and R y F, representing broadcast stations in 
Puerto Rico, argue that SHVERA requires satellite carriers to 
retransmit both the analog and digital signals by the mandated dates.
    14. We find that section 338(a)(4) of the Act is ambiguous with 
respect to the question of dual carriage. The statutory provision 
states that satellite carriers ``shall (A) within 1 year after December 
8, 2004, retransmit the signals originating as analog signals of each 
television broadcast station located in any local market within a State 
that is not part of the contiguous United States; and (B) within 30 
months after December 8, 2004, retransmit the signals originating as 
digital signals of each such station.'' While this language clearly 
contains two separate carriage requirements, it is unclear from the 
text whether Congress intended the analog carriage requirement to 
continue after commencement of the digital carriage requirement (i.e., 
simultaneous or dual carriage) or whether it intended the analog 
requirement to end when the digital requirement takes effect. The 
statute does not speak directly to the issue, and there is no 
legislative history to shed light on what Congress intended. Where the 
statutory language is ambiguous, we must construe the statute so as to 
effectuate the legislative purpose and intent; see Chevron U.S.A. Inc. 
v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843 (1984) 
(asserting that if a statute is silent or ambiguous, the question for 
the court is whether the agency's interpretation is based on a 
permissible construction of the statute). The Supreme Court stated, 
``If Congress has explicitly left a gap for the agency to fill, there 
is express delegation of authority to the agency to elucidate a 
specific provision of the statute by regulation. Such legislative 
regulations are given controlling weight unless they are arbitrary, 
capricious, or manifestly contrary to the statute;'' see Id. at 843-44; 
see also Nat'l Cable & Telecomm. Assn. v. Brand X Internet Serv., 125 
S. Ct. 2688, 2699 (2005) (citing Smiley v. Citibank, 517 U.S. 735, 742 
(1996)) (clarifying that Chevron established the presumption that 
Congress, when it left a statute ambiguous, understood that the 
ambiguity would be resolved by an agency and desired the agency to 
possess whatever degree of discretion the ambiguity allowed). The 
Supreme Court noted that where a statute's plain terms admit two or 
more reasonable ordinary usages, the Commission's choice of one of them 
is entitled to deference; see Id. at 2704. Here, we agree with DIRECTV 
that the most reasonable interpretation of section 338(a)(4) of the Act 
is that the analog carriage requirement ends upon commencement of the 
digital carriage requirement. We therefore conclude that satellite 
carriers must carry the signals of local stations in Alaska and Hawaii 
that originate as analog beginning no later than December 8, 2005, and 
the signals that originate as digital beginning no later than June 8, 
2007, but that the analog carriage requirement ends when the digital 
carriage requirement begins. Based on the record in this proceeding, 
requiring carriage of both analog and digital signals simultaneously 
would likely increase the burden on satellite carriers without offering 
subscribers a substantial benefit. Because satellite carriers digitize 
analog broadcast signals, there is essentially no difference from a 
satellite subscriber's perspective between the analog signal and the 
standard definition (SD) digital signal broadcast when such signals are 
carrying the same programming, as is currently the general practice in 
the industry. Thus, a dual carriage requirement would often result in a 
satellite carrier carrying the same programming with essentially the 
same signal quality twice. Moreover, in light of the requirement to 
carry multicast signals described below, satellite subscribers will be 
able to receive multiple digital programming streams offered by local 
stations, and we do not believe that the remote likelihood that certain 
programming transmitted by analog signals would not be transmitted by 
any of a station's digital signals justifies the burden that a dual 
carriage requirement would impose on satellite carriers. Therefore, we 
conclude that simultaneous carriage of both analog and digital signals 
is not required and would serve no useful purpose in light of our other 
decisions in this proceeding. We will address other issues related to 
carriage of digital signals in the context of the proceeding addressing 
satellite carriage of local stations pursuant to section 338 of the Act 
as it applies throughout the United States during and after the 
transition to digital television; see Carriage of Digital Television 
Broadcast Signals: Amendment to Part 76 of the Commission's Rules, CS 
Docket Nos. 98-120 and 00-96 (pending rulemaking proceeding to 
determine satellite carriers' obligations with respect to carriage of 
digital signals pursuant to section 338 of the Act.

Digital Signal Content and Format

    15. Section 338(a)(4) of the Act requires carriage of ``signals 
originating as analog signals'' and ``signals originating as digital 
signals.'' We stated in the NPRM that there is no reference to 
``primary video'' or any other term in section 338(a)(4) of the Act 
that expressly limits or describes the nature, format or content of the 
broadcast signal that satellite operators must carry in the 
noncontiguous states; see NPRM, 20 FCC Rcd at 9323-24, paragraph 9; see 
also 47 U.S.C. 338(j), 534(b)(3) and 535(g). The Commission recently 
concluded that the statutory term relating to cable mandatory carriage, 
``primary video,'' was ambiguous with respect to whether it requires 
cable operators to carry broadcasters' multicast signals. Faced with an 
ambiguous statute, the Commission did not require mandatory carriage of 
multicast signals by cable systems; see Carriage of Digital Television 
Broadcast Signals: Amendment to Part 76 of the Commission's Rules, CS 
Docket No. 98-120, Second Report and Order and First Order on 
Reconsideration, FCC 05-27, at paragraph 33 (rel. Feb. 23, 2005) (``DTV 
Second Report and Order'') (declining, based on the record, to require 
cable operators to carry more than one programming stream of a digital 
station that multicasts). The NPRM concluded, therefore, that the 
amendment requires that satellite carriers carry all multicast signals 
of each station in noncontiguous states and carry the high definition 
digital signals of stations in noncontiguous states in high definition 
format. We also referenced the pending proceeding on satellite carriage 
of digital signals, in general, and sought comment on our view of the 
statutory language and any alternative construction of the SHVERA as 
the statute relates to the carriage of multicast and/or high definition 
signals. Satellite carriage of high definition and multicast local 
signals is also under review in the ongoing broadcast carriage 
rulemaking docket in the context of applying the statutory prohibition 
on material degradation; see Implementation of the Satellite Home

[[Page 51663]]

Viewer Improvement Act of 1999, 16 FCC Rcd 1918, 1970-72 , paragraphs 
120-123 (2000) (``Report and Order''); Carriage of Digital Television 
Broadcast Signals: Amendment to Part 76 of the Commission's Rules, 16 
FCC Rcd 2598, 2600, 2658, paragraphs 3 and 136 (2001) (``First Report 
and Order''). See also NPRM, 20 FCC Rcd at 9323-24, paragraph 9.
    16. As explained in the NPRM, we continue to believe that the 
statutory language requires that satellite carriers carry all multicast 
signals and high definition (HD) signals of each local broadcast 
station in the noncontiguous states. We find section 338(a)(4)of the 
Act's use of the plural term ``signals'' in requiring carriage of 
``signals originating as digital signals'' to unambiguously mean 
carriage of the entire free over-the-air digital broadcast, without 
limitation, being transmitted by a broadcaster. While DIRECTV argues 
that, because Congress also used the plural term ``signals'' with 
respect to analog signals (and there is no analog multicast or analog 
HD), the phrase ``signals of each station'' could be interpreted to 
mean the transmission of a single station's signal over time, we do not 
believe that this constitutes a reasonable interpretation of the 
statute. Section 338(a)(4) of the Act contains no limitation on the 
nature of the digital broadcast signal--such as the term ``primary 
video'' as used in the cable context--in describing the digital signals 
the satellite operator must carry in the noncontiguous states. At the 
time the SHVERA was enacted in December 2004, the Commission had 
interpreted, in the cable carriage proceeding three years earlier, the 
term ``primary video'' in section 614(b)(3) of the Act to mean ``a 
single programming stream and other program-related content.'' Had 
Congress intended to limit digital carriage to only a single standard 
definition stream, we believe Congress would have included similar 
limiting language in the satellite context. Section 338(a)(4) of the 
Act, by contrast, contains a broad requirement that satellite carriers 
retransmit ``the signals originating as digital signals.'' We also find 
unconvincing DIRECTV's reliance on section 338(j) of the Act's general 
directive that the Commission prescribe requirements on satellite 
carriers that are ``comparable'' to the must carry requirements imposed 
on cable operators; see 47 U.S.C. 338(j). According to DIRECTV, because 
cable operators in Alaska and Hawaii are not yet required to carry most 
digital signals in HD format nor are they required to carry multicast 
signals, the Commission cannot impose such requirements on satellite 
carriers in Alaska and Hawaii without running afoul of section 338(j) 
of the Act. We disagree. Under principles of statutory construction, 
section 338(a)(4) of the Act's specific mandate requiring carriage of 
``the signals originating as digital signals'' in Alaska and Hawaii 
supercedes the general comparability directive set forth in section 
338(j) of the Act. Where the statute is clear and unambiguous, we must 
implement the express meaning of the statutory language; Chevron U.S.A. 
Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43 
(1984). Requiring carriage of multicast and HD signals most accurately 
reflects the requirement set forth in the statutory language itself. We 
decline to read into the statute a limitation where none exists. We 
believe that section 338(a)(4) of the Act requires carriage of Alaska 
and Hawaii broadcasters' entire free over the air broadcast, including 
multicast and HD signals. This decision, however, is limited to section 
338(a)(4) of the Act and does not interpret any other statutory 
provision that regulates cable or satellite carriage obligations.
    17. Even if we were to find ambiguity in the statutory language, 
however, we believe, for the reasons given above, that the better 
reading, and the one that most accurately reflects Congress's intent, 
requires satellite carriers to carry all multicast and HD signals. We 
also reject EchoStar and DIRECTV's argument that in order to avoid an 
unconstitutional construction of section 338(a)(4) of the Act, the 
Commission must not construe the statute to impose a multicast and HD 
carriage obligation. As explained below, we find interpreting section 
338(a)(4) of the Act as mandating multicast and HD carriage is 
consistent with the First Amendment. The Supreme Court has held that 
must carry ``is a content-neutral regulation'' that must be analyzed 
under the intermediate level of scrutiny. Under this test, a content-
neutral regulation will be upheld if: (1) It furthers an important or 
substantial governmental interest; (2) the government interest is 
unrelated to the suppression of free expression; and (3) the provisions 
do not burden substantially more speech than is necessary to further 
those interests.
    18. With regard to the first prong of the analysis, we find that 
the multicast and HD carriage obligation imposed under section 
338(a)(4) of the Act furthers two important governmental interests. 
First, it ensures that the citizens of Alaska have full access to 
television programming. In enacting section 338(a)(4), we believe 
Congress recognized the unique situation in Alaska which makes 
communications services critically important to the public safety, 
education, and economic development of the state. Alaska has the lowest 
population density in the country, and communities in rural Alaska are 
unique in several ways. Most rural Alaskan communities are quite 
small--almost 90% of Alaskan communities have fewer than 1,000 people; 
25% of the communities have between 100 and 250 people; and 29% of the 
communities have fewer than 100 people. Most Alaskan communities are 
also very remote and isolated--most rural communities in Alaska do not 
have access via road systems to the relatively urban areas of the State 
(Anchorage, Fairbanks and Juneau), and, indeed, many Alaskan 
communities can be accessed only by air or by water and are frequently 
inaccessible because of weather conditions. These characteristics taken 
together significantly limit the communications options available to 
Alaskan communities. Indeed, Alaska's unique geography when combined 
with the State's unique population distribution presents many rural 
Alaskans with serious challenges in obtaining a diverse range of 
television programming, particularly through over-the-air broadcasting. 
Moreover, cable service and other forms of multichannel video 
programming distribution services are often not available to them. As 
the Alaska Broadcasters have reported, 23% of Alaskan households are 
unable to access cable television, and these rural households on 
average are able to receive only one television station through over-
the-air broadcasting. Service transmitted by satellite is one of the 
few viable means of transcending these obstacles, and the ability to 
receive multiple programming streams from local stations through 
satellite carriers would be the only way that many rural Alaskan 
households would be able to access these programming streams. Moreover, 
given the important role that DBS service plays in rural Alaska, unless 
satellite customers are provided with access to multicasting, there may 
not be sufficient incentive for Alaskan television stations to develop 
additional programming streams targeted to the needs and interests of 
rural communities, thus denying these Alaskans the benefits of the 
digital transition. We thus believe Congress intended section 338(a)(4) 
of the Act to be interpreted broadly, without limitations, in order to 
further the important governmental interest of providing the Alaskan 
community with full access to digital communications.

[[Page 51664]]

    19. In addition, we find that multicast and HD carriage obligations 
imposed under section 338(a)(4) of the Act further a second important 
governmental interest of ensuring Alaska and Hawaii an equitable 
distribution of satellite service. We recognize that section 338(a)(4) 
of the Act is responsive to a long history of more limited DBS service 
in Alaska and Hawaii than in the lower 48 states. Filings in prior 
Commission proceedings indicate that, with respect to DBS service, 
Alaskans had ``far fewer choices than other Americans do, often their 
signal reception is poorer, and the reception equipment required is 
often much larger.'' In Hawaii, the DBS subscriber packages were not 
comparable to the subscriber packages available in the 48 lower states, 
particularly in the area of programming. For example, some of the most 
popular programming channels--such as CNN, ESPN, Headline News, 
Discovery Channel--were not offered to subscribers in Hawaii. The State 
of Hawaii continues to maintain today that the level of service 
provided to Hawaiian subscribers remains significantly lower than that 
provided to subscribers in the lower 48 states. According to the State 
of Hawaii, every television market that is larger than Honolulu already 
receives local-into-local service from DIRECTV and nearly half of the 
130 markets that receive local-into-local service from DIRECTV are 
smaller than Honolulu. We believe section 338(a)(4) of the Act was 
intended to remedy the situation in the noncontiguous states by 
providing Alaska and Hawaii with access to all of the programming 
offered through free over-the-air broadcasts, including all multicast 
and HD signals. We find that interpreting the statute in this manner 
best achieves the important governmental interest of making available 
``to all people of the United States'' a ``rapid, efficient, Nation-
wide, and world-wide wire and radio communication service'' and of 
providing ``a fair, efficient, and equitable distribution of radio 
services'' among the several States.
    20. With respect to the second prong of the constitutional 
analysis, we find the Government's interest in ensuring the citizens of 
Alaska full access to television programming and the equitable 
distribution of satellite service are aimed at bringing a more robust 
communications service to the citizens of Alaska and Hawaii, not at 
stemming expression. These governmental interests are thus ``unrelated 
to the suppression of free expression.'' Indeed, they are aimed at 
providing the residents of Alaska and Hawaii with access to more 
information. We therefore find the second prong of the intermediate 
scrutiny test to be easily satisfied.
    21. With respect to the third prong of the analysis, we find that 
this multicast and HD carriage requirement will not burden 
substantially more speech than is necessary to further the important 
governmental interests. Satellite carriage of local digital broadcast 
signals pursuant to section 338 of the Act as it will apply in the 
contiguous states, including carriage of HD and multicast signals, is 
under review in the ongoing broadcast carriage rulemaking docket; see 
Carriage of Digital Television Broadcast Signals: Amendment to Part 76 
of the Commission's Rules, CS Docket No. 98-120. Congress took steps to 
confine the breadth and burden of the regulation by directing the 
multicast and HD carriage obligation to apply only in the states of 
Alaska and Hawaii. The carriage requirement is thus narrowly tailored 
to serve the important government interests identified above in a 
direct and effective way. In addition, while DIRECTV makes a number of 
claims as to the burdensomeness of the regulation, the actual effects 
of a multicast and HD requirement in the States of Alaska and Hawaii 
remain unclear. We find speculative DIRECTV's argument that imposing an 
HD and multicast carriage requirement for Alaska and Hawaii would place 
a substantial capacity burden on its system. The requirement for 
carriage of multicast and HD signals does not begin until June 2007. We 
do not know at this time how many programming streams Alaskan and 
Hawaiian local broadcast stations will be multicasting in 2007. At this 
point, for example, no station in Alaska or Hawaii is broadcasting more 
than two streams of programming; see e.g. www.CheckHD.com (showing one 
station, each, in Anchorage, Fairbanks, and North Pole, Alaska 
currently broadcasting two streams and none in Hawaii). Moreover, by 
the time the multicast and HD carriage requirement would take effect, 
many of the capacity issues may well be remedied through improvements 
in satellite technology.
    22. In short, we believe that in enacting section 338(a)(4), 
Congress sought to address the specific communications problems and 
special needs that exist in the states of Alaska and Hawaii and 
intended, through expanded satellite carriage, that subscribers in 
Alaska and Hawaii would be ensured full, not limited, access to the 
benefits of the digital transition. The multicast and HD carriage 
requirement furthers these important governmental interests without 
burdening substantially more speech than necessary and thus satisfies 
the requirements under the First Amendment. We note, however, that the 
foregoing analysis interprets section 338(a)(4) of the Act only, and 
thus does not interpret sections 614 and 615 or section 338 with 
respect to satellite carriage of digital signals throughout the United 
States.

Carriage Elections

    23. Section 338(a)(4) of the Act leaves implementation of carriage 
election rules expressly to the Commission's discretion; see 47 U.S.C. 
338(a)(4). Consequently, in the NPRM we proposed regulations concerning 
the timing of the carriage elections related to the new carriage 
requirements in Alaska and Hawaii; see NPRM, 20 FCC Rcd at 9324-25, 
paragraphs 10-15. The first satellite carriage cycle (pursuant to the 
SHVIA) will end on December 31, 2005. The carriage election deadline 
for the second cycle is October 1, 2005, for carriage beginning January 
1, 2006; see 47 CFR 76.66(c)(4). As described in the NPRM, the analog 
signal carriage requirement for Alaska and Hawaii commences December 8, 
2005, which is just a few weeks before the carriage cycle that applies 
to satellite carriers and broadcast stations in the contiguous states, 
which commences January 1, 2006, and continues until December 31, 2008; 
see NPRM, 20 FCC Rcd at 9324, paragraph 11; see 47 CFR 76.66(c). The 
carriage election process enables stations to choose between carriage 
pursuant to retransmission consent or mandatory carriage; see 47 U.S.C. 
325(b). Retransmission consent is based on an agreement between a 
broadcast station and satellite carrier, and includes a station's 
authorization and terms for allowing its broadcast signal to be 
carried. Broadcast stations and satellite carriers are required to 
negotiate retransmission consent agreements in good faith. 47 U.S.C. 
338(b)(3)(c) (as amended by section 207 of the SHVERA). If a station 
elects must-carry status, it is, in general, entitled to insist without 
other terms that the satellite carrier carry its signal in its local 
market; see 47 U.S.C. 338(a); see also 47 CFR 76.66(c).
    24. To implement the carriage election timing requirements in 
section 210 of the SHVERA, we will track the existing regulations as 
closely as possible so that carriage elections in Alaska and Hawaii 
will be synchronized with carriage elections in the contiguous states. 
Because the analog carriage requirement in Alaska and Hawaii takes

[[Page 51665]]

effect only 24 days before the carriage cycle in the rest of the 
country, we will use the same carriage election deadline of October 1, 
2005. Thus, commercial television broadcast stations in a local market 
in the noncontiguous states are required to make a retransmission 
consent-mandatory carriage (must carry) election by October 1, 2005, 
which is the same deadline for local stations in local-into-local 
markets in the contiguous states; see amended Sec.  76.66(c)(6). No 
commenter disagreed with this proposal and we adopt rules to implement 
it now; see amended rule Sec.  76.66(c)(6).
    25. With respect to carriage of the digital signals of stations in 
Alaska and Hawaii, the NPRM proposed that the retransmission consent-
must carry election by a station in a local market in Alaska or Hawaii 
should be a two-step process with one election that applies to the 
analog signal carriage, which commences December 8, 2005, and a second 
carriage election that would govern carriage of the digital signal. 
Carriage of signals originating as digital must commence by June 8, 
2007, but may begin pursuant to retransmission consent at any time. We 
proposed that the deadline for the second carriage election, for 
digital carriage, would be April 1, 2007, two months before carriage 
must commence. As an alternative, we suggested a one-step process in 
which the station's election by October 1, 2005, for its analog signal, 
would also apply to its digital signal, for which mandatory carriage 
will commence by June 8, 2007.
    26. Two commenters, EchoStar and Microcom, favored the one-step 
approach on the basis of simplicity for satellite carriers and reduced 
burden for broadcasters. We believe, however, that the two-step 
approach better tracks Congress' decision to mandate carriage of analog 
and digital signals in two separate steps. Two separate elections is 
also more consistent with the Commission's Cable Must Carry decision in 
2001, which permits stations broadcasting both analog and digital 
signals to elect must carry for their analog signal and retransmission 
consent for their digital signal; see Carriage of Digital Television 
Broadcast Signals: Amendment to Part 76 of the Commission's Rules, 
etc., 16 FCC Rcd 2598, 2610 (2001) (``DTV Carriage First Report and 
Order''). The two-step approach is also consistent with treating 
carriage of the digital signal as sequential rather than concurrent 
with the analog signal. It is important for local stations in Alaska 
and Hawaii to have a second, separate opportunity to elect between must 
carry and retransmission consent for their digital signals. We adopt 
the rule, as proposed in the NPRM, which establishes the procedures for 
this two-step carriage election; see amended rule Sec.  76.66(c)(6).
    27. As further described in the NPRM, after the initial carriage 
cycle in Alaska and Hawaii (January 1, 2006 through December 31, 2008), 
the election cycle and carriage election procedures provided in section 
76.66(c) will apply in the future; see NPRM, 20 FCC Rcd at 9325, 
paragraph 14. For example, the next carriage election (after the 
upcoming 2005 election) is required by October 1, 2008, for the 
carriage cycle beginning January 1, 2009; see 47 CFR 76.66(c)(2) and 
(4). We received no comments on this point.
    28. We also confirm that stations in Alaska and Hawaii should be 
permitted to elect must carry for their analog signals and negotiate 
for carriage of the digital signals via retransmission consent before 
the mandatory digital signal carriage takes effect. We received no 
comments on this point. Therefore, prior to June 8, 2007, when the 
mandatory digital carriage rights for local stations in Alaska and 
Hawaii take effect, such stations may separately negotiate for 
voluntary carriage of their digital signals even if they elect 
mandatory carriage for their analog signals; see amended Sec.  
76.66(c)(6). This flexibility is also consistent with the approach 
generally taken in the digital carriage rulemaking proceeding thus far.
    29. We also described in the NPRM that new television stations in 
Alaska or Hawaii should follow Sec.  76.66(d)(3) of the Commission's 
rules to notify the satellite carrier and elect carriage. Based on 
section 338(a)(4) of the Act, a new station in Alaska or Hawaii will 
have a right to mandatory carriage for its analog signal if it begins 
service after December 8, 2005, and for its digital signal if it begins 
service after June 8, 2007. The existing rule describes the procedures 
and timing for requesting and obtaining carriage; thus, no rule 
amendments are needed; see 47 CFR 76.66(d)(3)(ii) through (iv). We 
received no comments on this issue, except that EchoStar asked that we 
clarify that stations that commence digital service after March 1, 2007 
be required to comply with the Commission's rules for new stations. 
This date was related to the proposed special notification rules, which 
are discussed, infra. We provide that clarification here: new 
television broadcast stations in Alaska and Hawaii should follow the 
new station rule in Sec.  76.66(d)(3) of the Commission's rules to 
notify satellite carriers and elect must carry or retransmission 
consent for their analog and digital signals.

Procedures for Carriage

    30. The NPRM provided that in all other respects related to the 
mechanics of carriage, other than the carriage election cycle, we would 
apply the existing rules pertaining to satellite carriage as they were 
adopted to implement section 338 pursuant to the SHVIA; see NPRM, 20 
FCC Rcd at 9324, paragraph 10; see also 47 U.S.C. 338(a)(1), (b)(1), 
and (c); 47 CFR 76.66(g) and (h). As noted in the NPRM, section 
338(a)(4) of the Act also refers to the ``cost to subscribers of such 
transmissions'' but does not require rules for implementation. NPRM, 20 
FCC Rcd at 9324, n. 34. We received no comments with respect to the 
mechanics for carriage and application of the existing rules. 
Therefore, our amended rules provide that carriage may be requested by 
television broadcast stations in local markets in Alaska and Hawaii 
effective December 8, 2005 for analog signals, and June 7, 2007 for 
digital signals; see amended rule Sec.  76.66(b)(2). The carriage 
procedures for stations in Alaska and Hawaii shall follow the existing 
requirements, except with respect to the carriage election process, as 
described herein; see amended rule Sec.  76.66(c)(6). Non-commercial 
television stations do not elect carriage because they cannot elect 
retransmission consent; see 47 U.S.C. 325(b)(2)(A). They are entitled 
to mandatory carriage; see 47 U.S.C. 338.

Availability of Signals

    31. Section 338(a)(4) of the Act provides that satellite 
retransmissions of local stations in Alaska and Hawaii ``shall be made 
available to substantially all of the satellite carrier's subscribers 
in each station's local market;'' see 47 U.S.C. 338(a)(4) (as amended 
by section 210 of the SHVERA). The provision did not define 
``substantially all'' subscribers, and we sought comment on its meaning 
in this context. Given that the statute refers to ``subscribers,'' 
obviously it is not referring to parts of the state that the carrier 
cannot reach at all. Rather, as the NPRM pointed out, this wording is 
consistent with the physical limitations of some satellite technology 
that may not be able to reach all parts of a state or a DMA where a 
spot beam is used to provide local stations. EchoStar agrees with our 
interpretation, noting that the existing geographic service rules apply 
to both Alaska and Hawaii and provide well-established parameters for 
service offerings. Microcom asserts that, at a minimum, ``substantially 
all'' should be defined as those that could be served by a satellite 
providing primary services

[[Page 51666]]

within the engineering constraints of the primary or spot beams.
    32. We believe that this statutory provision recognizes the 
existing physical limitations on satellite service, particularly in 
these noncontiguous states. With respect to DBS service to Alaska, for 
example, the Commission has stated that although reliable service 
usually requires a minimum elevation angle of ten degrees or more, 
service to Alaska is often offered at elevation angles as low as five 
degrees; see Policies and Rules for the Direct Broadcast Satellite 
Service, 17 FCC Rcd 11,331, 11,358-59 (2002). The Commission defined 
elevation angle ``as the upward tilt of an earth station antenna 
measured in degrees relative to the horizontal plane (ground), that is 
required to aim the earth station antenna at the satellite. When aimed 
at the horizon, the elevation angle is zero. If the satellite were 
below the horizon, the elevation angle would be less than zero. If the 
earth station antenna were tilted to a point directly overhead, it 
would have an elevation angle of 90[deg].'' In addition, the Commission 
determined that in some areas of Alaska, from some orbital locations, 
the elevation angle was less than five degrees, or even below the 
horizon, thereby making service to those areas impossible. For example, 
the elevation angle for Attu Island, Alaska is less than zero or below 
the horizon for the 61.5[deg], 101[deg], and 110[deg] orbit locations 
and only 4 for the 119[deg] location. Microcom asserts that no location 
in Alaska has an elevation angle less than 10 degrees to the DBS 
orbital locations at 148 and 157 degrees West Longitude and proposes 
that carriers that use these orbital locations to provide local-into-
local service to local markets on the west coast could do the same to 
provide the local stations in one or more of the Alaska DMAs, as well 
as to serve parts of Alaska not in a DMA. We are inclined to agree with 
Microcom that satellite carriers that have these orbital slots and can 
serve these areas should do so, and we note that satellite carriers 
must abide by the geographic service rules that require service where 
technically feasible; see Policies and Rules for the Direct Broadcast 
Satellite Service, 17 FCC Rcd at 11,358-62.
    33. In the NPRM we said it is not necessary to adopt new rules to 
implement this provision and noted that this provision is similar to 
the Commission interpretation adopted in the implementation of the 
SHVIA, that satellite carriers that offer local-into-local service are 
not required to provide service to every subscriber in a DMA. Only 
EchoStar commented and agreed that no special rules were necessary on 
this point.

Areas Outside Local Markets

    34. As described above, Alaska is the only one of the fifty states 
that has areas that are not included within any DMA. Section 338(a)(4) 
of the Act requires a satellite carrier in Alaska to make available the 
signals of all the local television stations that it carries in at 
least one local market to substantially all of its subscribers in areas 
outside of local markets who are in the same state; see 47 U.S.C. 
338(a)(4), as amended by section 210 of SHVERA. Congress also modified 
the copyright provisions of title 17 to include these areas of Alaska 
that are outside of all DMAs within the definition of ``local market'' 
as it pertains to the statutory copyright license for carriage of local 
stations; see 17 U.S.C. 122(j)(2)(D) as amended by section 111(b) of 
the SHVERA. In Alaska, there are three DMAs covering the main 
population centers, but most of the state, which is sparsely populated, 
is not included in a DMA. Thus, a satellite carrier in Alaska will be 
required to provide the television stations that it carries in at least 
one of the three DMAs, in which carriage of local stations is required 
by section 338(a)(4) of the Act, to areas of the State not included in 
DMAs. In the NPRM we said that we believe the statute speaks for itself 
and that no special rule is required to implement this statutory 
requirement.
    35. No commenter disputed that the statutory language is largely 
self-effectuating, but Microcom recommended that the Commission allow 
subscribers that are outside all DMAs to subscribe to any local package 
that they are technically capable of receiving. DIRECTV contends that 
section 338(a)(4) of the Act does not contemplate giving subscribers 
this option and that the SHVERA leaves the choice of which package to 
offer to the satellite carrier. DIRECTV explains that it could not 
comply with a rule that allowed subscribers outside of DMAs to choose 
which DMA package of local signals they want due to limitations in the 
set top box based upon the ``market ID'' that DIRECTV assigns to each 
local market. The market ID is critical to the operation of DIRECTV's 
billing and customer service system, which cannot function with 
differing choices of local market packages within a given zip code or 
county. We agree that the statute does not require that the choice of 
local package rest with the individual subscriber, and, therefore, it 
is unnecessary to require a satellite carrier to reconfigure its 
operations to afford this choice. Moreover, the statutory copyright 
license in section 122 of title 17 specifies that: ``A satellite 
carrier may determine which local market in the State of Alaska will be 
deemed to be the relevant local market in connection with each 
subscriber in such census area, borough, or other area;'' see 17 U.S.C. 
122(j)(2)(D) as amended by section 111(b) of the SHVERA We note, too, 
that DIRECTV has committed to working with local officials in Alaska to 
identify the appropriate local market to offer to Alaska subscribers 
who are not in a DMA. A satellite carrier that wishes to offer 
subscribers their choice of Alaska DMA package, however, is free to do 
so, as the statutory language neither compels nor forbids this 
approach.
    36. Microcom also raises a separate issue concerning signal 
availability, which is related to the revisions to the distant signal 
statutory copyright license, as revised by the SHVERA in conjunction 
with local signal availability pursuant to section 338(a)(4). Section 
119(a)(16) of title 17 provides that the statutory copyright license 
for satellite retransmission of distant signals shall not apply with 
respect to satellite retransmission of a network station located 
outside of the State of Alaska to any subscriber in Alaska if a 
television station located in Alaska is made available by the satellite 
carrier pursuant to section 122; see 17 U.S.C. 119(a)(16)(A) as amended 
by section 111 of the SHVERA. Section 119(a)(16)(B) limits the 
restriction in (A) if the distant signal is a digital signal and no 
television station licensed to a community in Alaska and affiliated 
with the same network is transmitting a digital signal. See also, 17 
U.S.C. 122(j)(2)(D) as amended by section 111(b) of the SHVERA, which 
amends the definition of ``local'' and thereby creates the copyright 
license for the areas in Alaska that are outside of a DMA: ``Any census 
area, borough, or other area in the State of Alaska that is outside of 
a designated market area, as determined by Nielsen Media Research, 
shall be deemed to be part of one of the local markets in the State of 
Alaska. A satellite carrier may determine which local market in the 
State of Alaska will be deemed to be the relevant local market in 
connection with each subscriber in such census area, borough, or other 
area.'' Microcom asks that we define when a signal is made 
``available'' for this purpose and to consider the cost to a subscriber 
to obtain the equipment to access the local signal package. We did not 
raise this question in the NPRM, as it applies

[[Page 51667]]

specifically to eligibility for distant signals. We note, however, that 
the statute defines ``available,'' as it pertains to the copyright 
license in section 119, to mean that the station is available if the 
satellite carrier offers that local station to other subscribers who 
reside in the same zip code as the subscriber in question; see 17 
U.S.C. 119(a)(4)(G) as amended by section 103 of the SHVERA; see also 
47 U.S.C. 339(a)(2)(H) as amended by section 204 of the SHVERA, which 
is substantially the same definition. Thus, we cannot agree with 
Microcom's proposal to determine availability based on the cost of 
equipment to receive the local station package. Microcom also asks the 
Commission to address questions pertaining to ``commercial 
retransmission consent'' for commercial establishments in Alaska that 
are not within a DMA. This issue is not within the scope of this 
proceeding, which is limited to implementation of section 338(a)(4).
    37. The rules governing satellite carriage of local stations that 
were adopted to implement the SHVIA define ``local market'' based upon 
the copyright definition cited in section 338 of the Act; see 47 U.S.C. 
338(k)(3) (formerly (h)(3)); see also 47 CFR 76.66(e). EchoStar 
referred to the notification proposal in connection with its request 
for clarification concerning new stations. Accordingly, we amend our 
rule section to track the revised definition of local market in section 
122 of title 17 to reflect the revisions related to areas of Alaska 
outside of all DMAs; see adopted Sec.  76.66(e)(2) and (3).

Notification by Satellite Carrier

    38. In the NPRM we sought comment on a proposal to require special 
satellite carrier notifications to local stations in connection with 
the new carriage requirements in Alaska and Hawaii, although section 
338(a)(4) of the Act does not require such notification. We proposed 
two special notifications: the first for the forthcoming carriage 
election for analog signals, and the second for carriage of digital 
signals in 2007. We received no comments on this proposal. We conclude 
that it is unnecessary to establish a special notification procedure 
for the upcoming carriage election with respect to analog signal 
carriage. Moreover, there is inadequate time to adopt such a provision 
and make it effective in time to be meaningful for the analog carriage 
election deadline adopted in this Order. The deadline for stations to 
make carriage elections is October 1, 2005, for the carriage cycle that 
commences January 1, 2006, and that will govern carriage for local 
stations' analog signals in Alaska and Hawaii beginning December 8, 
2005. Thus, satellite carriers would have to send the proposed 30 day 
notification before September 1, which would require Federal Register 
publication of this Order no later than August 1, 2005. We note that 
EchoStar currently provides local-into-local service in the Honolulu 
and Anchorage DMAs, assuring that the stations in those markets are 
aware that they should make carriage elections no later than October 1, 
2005 to ensure continued carriage. With respect to the other local 
markets in Alaska and Hawaii, if satellite carriers follow the existing 
rule for initiating local service, the notifications, elections, and 
carriage would come too late to satisfy the statutory requirement of 
commencing carriage of analog signals by December 8, 2005; see 47 CFR 
76.66(d)(2) (Requires 60 day notice prior to commencing service in a 
new market, gives stations 30 days to elect carriage, requires carriage 
to commence 90 days later). We will instead rely on the publication of 
this Order and the existing carriage election deadline to assure that 
stations in Alaska and Hawaii receive adequate notice for the October 
1, 2005 carriage election deadline.
    39. We will adopt the second notification requirement to ensure 
that local stations in Alaska and Hawaii are reminded of their digital 
carriage rights commencing in June 2007. We will require satellite 
carriers with more than 5 million subscribers to notify all television 
broadcast stations located in local markets in Alaska and Hawaii that 
they are entitled to carriage of their digital signals as of June 8, 
2007, and that they must elect mandatory carriage or retransmission 
consent by April 1, 2007, to be assured of carriage, as provided in 
Sec. Sec.  76.66(b)(2) and (c)(6). This notification will be required 
by March 1, 2007, with respect to the carriage election for digital 
signals; see adopted Sec.  76.66(d)(2)(iii). The amended rule provides 
for carriage requests from both commercial and noncommercial television 
broadcast stations.
    40. As further described in the NPRM, a new satellite carrier that 
meets the definition in section 338(a)(4) of the Act in the future will 
be required to comply with Sec.  76.66(d)(2) of the Commission's rules 
regarding ``new local-into-local service'' (imposes requirements when a 
new satellite carrier intends to retransmit a local television station 
back into its local market).

Procedural Matters

    41. Accessibility Information. To request this Report and Order or 
other materials in accessible formats for people with disabilities 
(braille, large print, electronic files, audio format), send an e-mail 
to [email protected] or call the Consumer & Governmental Affairs Bureau at 
202-418-0530 (voice), 202-418-0432 (tty). This document can also be 
downloaded in Word and Portable Document Format (PDF) at: http://www.fcc.gov.
    42. The Commission will send a copy of this Report and Order in a 
report to be sent to Congress and the Government Accountability Office 
(GAO) pursuant to the Congressional Review Act, see U.S.C. 
801(a)(1)(A).

Final Regulatory Flexibility Certification

    43. The Regulatory Flexibility Act of 1980, as amended (RFA), 
requires a regulatory flexibility analysis be prepared for notice-and-
comment rule making proceedings, unless the agency certifies that ``the 
rule will not, if promulgated, have a significant economic impact on a 
substantial number of small entities.'' 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).
    44. We are amending Sec.  76.66 of the Commission's rules as 
required by section 210 of the SHVERA. We expect these rule amendments 
will not have a significant economic impact on a substantial number of 
small entities. The rules are required by statute and will allow for 
local television stations to elect carriage pursuant to retransmission 
consent or mandatory carriage with respect to satellite carriers with 
more than 5 million subscribers in a non-contiguous state. ``Satellite 
carriers,'' including Direct Broadcast Satellite (DBS) carriers, will 
be directly and primarily affected by the rules.
    45. The satellite carriers covered by these rules are governed by 
the SBA-recognized small business size standard of Cable and Other 
Program Distribution. This size standard provides that a small entity 
is one with $12.5 million or less in annual receipts. The two satellite 
carriers that are subject

[[Page 51668]]

to these rule amendments because they currently have more than five 
million subscribers, DIRECTV and EchoStar, report annual revenues that 
are in excess of the threshold for a small business. We anticipate that 
any satellite carrier that, in the future, has more than five million 
subscribers would necessarily have more than $12.5 million in annual 
receipts. Thus, the entities directly affected by the proposed rules 
are not small entities.
    46. We also note that, in addition to satellite carriers, 
television broadcast stations are indirectly affected by the amended 
rule in that they potentially benefit from the satellite carriage 
required by the rule and must elect between mandatory carriage and 
retransmission consent. This carriage election, however, follows the 
existing Commission rules. These existing rules currently permit 
stations in Alaska and Hawaii to elect carriage if and when a satellite 
carrier offers local-into-local service in their market. The amended 
rules affect these election rights by merely providing a date certain 
for carriage in these specified markets, and this change does not 
amount to a significant economic impact.
    47. Therefore, we certify that the adopted rules will not have a 
significant economic impact on a substantial number of small entities. 
The Commission will send a copy of this Report and Order, including a 
copy of this Final Regulatory Flexibility Certification, to the Chief 
Counsel for Advocacy of the SBA. This certification will also be 
published in the Federal Register.

Final Paperwork Reduction Act of 1995 Analysis

    48. This document does not contain new or modified information 
collection requirements subject to the Paperwork Reduction Act of 1995 
(PRA), Public Law 104-13. The Commission received approval for the 
information collection requirements contained in this Order from the 
Office of Management and Budget on June 14, 2005. There have been no 
changes to the information collection requirements since receiving OMB 
approval. In addition, we note that there is no new or modified 
``information burden for small business concerns with fewer than 25 
employees,'' pursuant to the Small Business Paperwork Relief Act of 
2002, Public Law 107-198, see U.S.C. 3506(c)(4). As described in the 
Final Regulatory Flexibility Certification, supra, the businesses 
affected by our action are not small.
    49. Further Information. For additional information concerning the 
PRA information collection requirements contained in this Order, 
contact Cathy Williams at 202-418-2918, or via the Internet to 
[email protected].
    50. Additional Information. For additional information on this 
proceeding, contact Eloise Gore, [email protected], of the Media 
Bureau, Policy Division, (202) 418-2120.

Ordering Clauses

    51. Accordingly, it is ordered that pursuant to section 210 of the 
Satellite Home Viewer Extension and Reauthorization Act of 2004, and 
sections 1, 4(i) and (j), and 338(a)(4) of the Communications Act of 
1934, as amended, 47 U.S.C. 151, 154(i) and (j), and 338(a)(4), that 
this Report and Order is adopted and the commission's rules are hereby 
amended and shall become effective October 31, 2005.
    52. It is further ordered that the Consumer and Governmental 
Affairs Bureau, Reference Information Center, shall send a copy of this 
Report and Order, including the Final Regulatory Flexibility 
Certification, to the Chief Counsel for Advocacy of the Small Business 
Administration.

List of Subjects in 47 CFR Part 76

    Cable television, Television.

Federal Communications Commission
William F. Caton,
Deputy Secretary.

Rule Changes

0
For the reasons discussed in the preamble, the Federal Communications 
Commission amends 47 CFR part 76 as follows:

PART 76--MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE

0
1. The authority citation for part 76 continues to read:

    Authority: 47 U.S.C. 151, 152, 153, 154, 301, 302, 302a, 303, 
303a, 307, 308, 309, 312, 315, 317, 325, 338, 339, 340, 503, 521, 
522, 531, 532, 533, 534, 535, 536, 537, 543, 544, 544a, 545, 548, 
549, 552, 554, 556, 558, 560, 561, 571, 572 and 573.

0
2. Section 76.66 is amended by revising paragraphs (b)(2) and (c)(4), 
by adding paragraph (c)(6), redesignate paragraphs (d)(2)(iii) and (iv) 
as paragraphs (d)(2)(iv) and (v), add new paragraph (d)(2)(iii) and 
revise paragraphs (e)(2) and (3) to read as follows:


Sec.  76.66  Satellite broadcast signal carriage.

* * * * *
    (b) * * *
    (2) A satellite carrier that offers multichannel video programming 
distribution service in the United States to more than 5,000,000 
subscribers shall, no later than December 8, 2005, carry upon request 
the signal originating as an analog signal of each television broadcast 
station that is located in a local market in Alaska or Hawaii; and 
shall, no later than June 8, 2007, carry upon request the signals 
originating as digital signals of each television broadcast station 
that is located in a local market in Alaska or Hawaii. Such satellite 
carrier is not required to carry the signal originating as analog after 
commencing carriage of digital signals on June 8, 2007. Carriage of 
signals originating as digital signals of each television broadcast 
station that is located in a local market in Alaska or Hawaii shall 
include the entire free over-the-air signal, including multicast and 
high definition digital signals.
* * * * *
    (c) * * *
    (4) Except as provided in paragraphs (c)(6), (d)(2) and (d)(3) of 
this section, local commercial television broadcast stations shall make 
their retransmission consent-mandatory carriage election by October 1st 
of the year preceding the new cycle for all election cycles after the 
first election cycle.
* * * * *
    (6) A commercial television broadcast station located in a local 
market in Alaska or Hawaii shall make its retransmission consent-
mandatory carriage election by October 1, 2005, for carriage of its 
signal that originates as an analog signal for carriage commencing on 
December 8, 2005, and by April 1, 2007, for its signal that originates 
as a digital signal for carriage commencing on June 8, 2007 and ending 
on December 31, 2008. For analog and digital signal carriage cycles 
commencing after December 31, 2008, such stations shall follow the 
election cycle in paragraphs (c)(2) and (4). A noncommercial television 
broadcast station located in a local market in Alaska or Hawaii must 
request carriage by October 1, 2005, for carriage of its signal that 
originates as an analog signal for carriage commencing on December 8, 
2005, and for its signal that originates as a digital signal for 
carriage commencing on June 8, 2007 and ending on December 31, 2008.
* * * * *
    (d) * * *
    (2) * * *
    (iii) A satellite carrier with more than five million subscribers 
shall provide the notice as required by paragraphs (d)(2)(i) and (ii) 
of this section to each television broadcast station located in a local 
market in Alaska or Hawaii, not

[[Page 51669]]

later than March 1, 2007 with respect to carriage of digital signals; 
provided, further, that the notice shall also describe the carriage 
requirements pursuant to 47 U.S.C. 338(a)(4), and paragraph (b)(2) of 
this section.
* * * * *
    (e) * * *
    (2) A designated market area is the market area, as determined by 
Nielsen Media Research and published in the 1999-2000 Nielsen Station 
Index Directory and Nielsen Station Index United States Television 
Household Estimates or any successor publication. In the case of areas 
outside of any designated market area, any census area, borough, or 
other area in the State of Alaska that is outside of a designated 
market area, as determined by Nielsen Media Research, shall be deemed 
to be part of one of the local markets in the State of Alaska.
    (3) A satellite carrier shall use the 1999-2000 Nielsen Station 
Index Directory and Nielsen Station Index United States Television 
Household Estimates to define television markets for the first 
retransmission consent-mandatory carriage election cycle commencing on 
January 1, 2002 and ending on December 31, 2005. The 2003-2004 Nielsen 
Station Index Directory and Nielsen Station Index United States 
Television Household Estimates shall be used for the second 
retransmission consent-mandatory carriage election cycle commencing 
January 1, 2006 and ending December 31, 2008, and so forth for each 
triennial election pursuant to this section. Provided, however, that a 
county deleted from a market by Nielsen need not be subtracted from a 
market in which a satellite carrier provides local-into-local service, 
if that county is assigned to that market in the 1999-2000 Nielsen 
Station Index Directory or any subsequent issue of that publication. A 
satellite carrier may determine which local market in the State of 
Alaska will be deemed to be the relevant local market in connection 
with each subscriber in an area in the State of Alaska that is outside 
of a designated market, as described in paragraph (e)(2) of this 
section.
* * * * *
[FR Doc. 05-17324 Filed 8-30-05; 8:45 am]
BILLING CODE 6712-01-P