[Federal Register Volume 72, Number 157 (Wednesday, August 15, 2007)]
[Rules and Regulations]
[Pages 45670-45693]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-15922]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 73

[MM Docket No. 99-325; FCC 07-33]


Digital Audio Broadcasting Systems and Their Impact on the 
Terrestrial Radio Broadcast Service

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Commission adopts rules to foster the 
development of a vibrant terrestrial digital radio service for the 
public and to ensure that radio stations successfully implement digital 
audio broadcasting. The Commission's goals in this Second Report and 
Order are to begin to adopt service rules and other requirements for 
terrestrial digital radio.

DATES: Effective September 14, 2007, except for the rules in 47 CFR 
73.404(b), 47 CFR 73.404(e), and 47 CFR 73.1201, which contain 
information collection requirements that have not been approved by OMB. 
The Federal Communications Commission will publish a document in the 
Federal Register announcing the effective date.

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

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Second 
Report and Order, First Order on Reconsideration, and Second Further 
Notice of Proposed Rulemaking, FCC 07-33, adopted on March 22, 2007, 
and released on May 31, 2007. 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, 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).

Initial Paperwork Reduction Act of 1995 Analysis

    This document contains modified information collection requirements 
subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-
13. It will be submitted to the Office of Management and Budget (OMB) 
for review under Section 3507(d) of the PRA. The Commission will 
publish a separate Federal Register Notice seeking public comments on 
the modified information collection requirements. Therefore, OMB, the 
general public, and other Federal agencies will be invited to comment 
on the modified information collection requirements contained in this 
proceeding once the Federal Register Notice is published. In addition, 
we note that pursuant to the Small Business Paperwork Relief Act of 
2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we previously 
sought specific comment on how the Commission might ``further reduce 
the information collection burden for small business concerns with 
fewer than 25 employees.''
    In this present document, we have assessed the effects of easing 
the filing requirements imposed on entities that wish to implement 
IBOC, and find that the steps taken will reduce paperwork burdens on 
small entities because they will no longer be required to seek prior 
authorization to implement certain technologies for use with digital 
audio broadcasting.

Summary of the Report and Order

I. Introduction and Executive Summary

    1. In the Digital Audio Broadcasting Report and Order, we selected 
in-band, on-channel (``IBOC'') as the technology enabling AM and FM 
radio broadcast stations to commence digital audio broadcasting 
(``DAB''). We note that in this Second Report and Order as well as in 
the Second Further Notice of Proposed Rulemaking (published elsewhere 
in this issue), DAB generally refers to the digital service broadcast 
by radio stations whereas IBOC generally refers to the technical system 
supporting DAB service. This terminology, and the subject matter 
discussed herein, applies to terrestrial over-the-air broadcasting. 
Satellite radio service, offered by XM and Sirius, is not a subject 
under consideration in this proceeding. In the DAB R&O, we adopted 
notification procedures allowing existing AM and FM radio stations to 
begin digital transmissions immediately on an interim basis using the 
IBOC system developed by iBiquity Digital Corporation (``iBiquity''). 
We concluded that the adoption of a specific technology would 
facilitate the development of digital services for terrestrial 
broadcasters. We deferred consideration of final operational 
requirements and related broadcast licensing and service rule changes 
to a future date. In a Further Notice of Proposed Rule Making 
(``FNPRM''), 69 FR 27874, we addressed issues left unresolved in the 
DAB R&O, 69 FR 78193, and sought comment on what changes and amendments 
to Part 73 of the Commission's rules were necessary to facilitate the 
adoption of DAB.
    2. Through this proceeding, we seek to foster the development of a 
vibrant terrestrial digital radio service for the public and to ensure 
that radio stations successfully implement DAB. Our statutory authority 
for implementing these goals is derived from, inter alia, Sections 1, 
4, 303, 307, 312, and 315 of the Communications Act. Our goals in this 
Second Report and Order are to begin to adopt service rules and other 
requirements for terrestrial digital radio. However, we find it 
necessary to ask additional questions, in a Second Further Notice of 
Proposed Rulemaking, on how to preserve free over-the-air radio 
broadcasting while permitting licensees to offer new services on a 
subscription basis. We also resolve and dispose of several petitions 
for

[[Page 45671]]

reconsideration that were filed in response to the DAB R&O.
    3. In summary, the Commission, in this Second Report and Order, 
First Order on Reconsideration, and Second Further Notice of Proposed 
Rulemaking:
     Refrains from imposing a mandatory conversion schedule for 
radio stations to commence digital broadcast operations;
     Allows FM radio stations to operate in the extended hybrid 
digital mode;
     Requires that each local radio station broadcasting in 
digital mode provide a free over-the-air digital signal at least 
comparable in audio quality to its analog signal;
     Continues to require that the main digital broadcast 
stream simulcast the material aired on the analog signal;
     Adopts a flexible bandwidth policy permitting a radio 
station to transmit high quality audio, multiple program streams, and 
datacasting services at its discretion;
     Allows radio stations to time broker unused digital 
bandwidth to third parties, subject to certain regulatory requirements;
     Applies existing programming and operational statutory and 
regulatory requirements to all free DAB programming streams, but defers 
the issue of whether and how to apply any specific new public interest 
requirements;
     Authorizes AM nighttime operations and FM dual antenna 
configurations;
     Considers and addresses other technical matters, such as 
FM translator and booster operations and TV Channel 6 interference 
issues;
     Defers discussion of whether the Commission should impose 
content control requirements that would prevent listeners from 
archiving and redistributing digital musical recordings transmitted by 
digital broadcast stations;
     Recognizes that further negotiations between the United 
States and the international community are taking place to resolve 
possible disputes about the implementation and operation of DAB by 
domestic radio stations;
     Dismisses several pending Petitions for Reconsideration 
and Petitions for Rulemaking that asked, inter alia, the Commission to 
reconsider the adoption of iBiquity's IBOC system as the technology 
chosen for DAB transmission;
     Seeks further comment on appropriate limits to the amount 
of subscription services that may be offered by radio stations.

II. Background

A. In-Band On-Channel Technology
    4. IBOC technology makes use of the existing AM and FM bands (In-
Band) by adding digital carriers to a radio station's analog signal, 
allowing broadcasters to transmit digitally on their existing channel 
assignments (On-Channel) while simultaneously maintaining their analog 
service. iBiquity's IBOC DAB technology enables radio stations to 
provide enhanced sound fidelity, improved reception, multiple audio 
streams, and new data services. It permits the transmission of near-CD 
quality audio signals on the FM band, and improved fidelity on the AM 
band, to digital-ready radio receivers along with information services, 
such as station, song and artist identification, stock and news 
updates, and local traffic and weather bulletins. These digital signals 
are free from the static, hiss, pops, and fades associated with the 
current analog system. iBiquity's IBOC technology will also allow for 
new radios to be ``backward and forward'' compatible, allowing them to 
receive existing analog broadcasts from stations that have yet to 
convert and digital broadcasts from stations that have converted. 
Existing analog radios will continue to receive analog broadcast 
signals.
    5. The iBiquity IBOC system evaluated by the DAB Subcommittee of 
the National Radio Systems Committee (``NRSC'') are ``hybrids'' in that 
they permit the transmission of both analog and digital signals within 
the spectral emission mask of a single AM or FM channel. In the hybrid 
mode, the iBiquity IBOC system places digital information on 
frequencies immediately adjacent to the analog signal. The digital 
signals are transmitted using orthogonal frequency division 
multiplexing (``OFDM''). The FM IBOC system has an extended hybrid 
mode, providing greater digital capacity than the hybrid mode. The IBOC 
system is also designed to eventually permit radio stations to convert 
to an all-digital mode of operation. The IBOC system uses perceptual 
coding to discard information that the human ear cannot hear. This 
reduces the amount of digital information, and as a result, the 
frequency bandwidth required to transmit a high-quality digital audio 
signal. In addition, the IBOC system in hybrid mode is designed to 
blend to analog when digital reception fails. This blending feature 
eliminates a digital ``cliff effect'' that would otherwise result in 
the complete and abrupt loss of reception at locations where the 
digital signal fails.
B. The Regulatory Development of Digital Audio Broadcasting
    6. In 1990, the Commission first considered the feasibility of 
terrestrial and satellite digital radio services. As to the former, the 
Commission concluded that the digital terrestrial systems then under 
consideration were undeveloped and that it was premature to engage in 
discussions regarding DAB standards, testing, licensing, and other 
policy issues. In 1999, the Commission, recognizing new technological 
developments and innovations, commenced this proceeding to foster the 
adoption of a DAB system and develop a record regarding the legal and 
technical issues raised by the introduction of DAB. In the DAB NPRM, 
the Commission, inter alia, proposed criteria for the evaluation of DAB 
models and systems and considered certain DAB system testing, 
evaluation, and standard selection issues.
    7. In the DAB R&O, the Commission selected the hybrid AM and FM 
IBOC system tested by the NRSC as the de facto standard for interim 
digital operation. As of the effective date of the DAB R&O, we stated 
we would no longer entertain any proposal for digital radio 
broadcasting other than IBOC. We found that IBOC was the best way to 
advance our DAB policy goals. We also found that this technology was 
supported by the broadcast industry and was the only approach that 
could be implemented in the near future. We recognized that the IBOC 
system was spectrum-efficient because it can accommodate digital 
operations for all existing AM and FM radio stations with no additional 
allocation of spectrum. The NRSC tests, as explained in the DAB R&O, 
showed that both AM and FM IBOC systems offer enhanced audio fidelity 
and increased robustness when encountering interference and other 
signal impairments. The tests also indicated that coverage for both 
systems would be at least comparable to analog coverage. We stated that 
audio fidelity and robustness will greatly improve when radio stations 
move to all-digital operations.
    8. We established the following requirements for radio stations in 
the DAB R&O: (1) During interim IBOC operations, stations must 
broadcast the same main channel program material in both analog and 
digital modes; (2) interim IBOC facilities must use the station's 
authorized antenna system; a public notice seeking comment on the use 
of a dual FM antenna system was issued by the Media Bureau after the 
DAB R&O was released. The Media Bureau approved the use of separate FM

[[Page 45672]]

antennas in 2004; (3) due to interference concerns, stations 
implementing IBOC must communicate to the Commission the transmitter 
power output (for both analog and digital transmitters, if applicable) 
and must certify that the analog effective radiated power remains 
consistent with the station's authorization; (4) pending adoption of 
final rules, a licensee's authorization to transmit IBOC signals may be 
modified or cancelled by the Commission without prior notice or a right 
to a hearing to eliminate objectionable interference; and (5) IBOC AM 
stations may only operate during daytime hours.
    9. In the DAB FNPRM, our goal was to create a record that would 
lead to permanent DAB policies and requirements. We sought public input 
on several issues related to digital audio broadcasting. Specifically 
we sought comment on: (1) The appropriate policies the Commission may 
adopt to encourage radio stations to convert from an analog-only radio 
service to a hybrid analog/digital radio service, and, eventually, to 
an all-digital radio service; (2) the types of digital services the 
Commission should permit radio stations to offer; (3) how noncommercial 
educational (``NCE'') FM and low power FM stations may provide digital 
radio service to the public; (4) how the Commission's existing 
programming and operational rules should be applied to DAB; and (5) 
what changes and amendments to the Commission's technical rules are 
necessary to further the introduction of DAB.
    10. In the DAB NOI, we asked whether the transmission of digital 
radio signals, as a free over-the-air service, would create an 
environment for persons to engage in indiscriminate recording and 
Internet redistribution of musical recordings that are part of 
unencrypted free digital audio broadcasts and sought comment on how 
this matter should be addressed. On this point, we have been informed 
that interested parties are attempting to resolve this issue through a 
marketplace solution. We encourage this approach. Accordingly, we will 
defer further action on this issue at this time. In the DAB NOI, we 
also raised for comment whether there were international broadcast 
treaty matters that needed to be addressed at this time to ensure that 
DAB is successfully implemented in the United States.
C. Radio Statistics
    11. As of August 1, 2005, approximately 900 radio stations have 
entered into licensing agreements with iBiquity for its IBOC 
technology. As of September 30, 2005, there were 10,973 commercial 
radio stations, as well as 2,626 FM educational radio stations in the 
United States. Of the commercial stations, 6,215 were FM stations and 
4,758 were AM stations. There were also 3,920 FM translator and booster 
stations. Currently, 1,272 stations (195 AM and 1,077 FM) are 
authorized by the Commission to broadcast using the IBOC system, and 
approximately 700 FM stations have requested and received special 
temporary authority for multicasting. These stations are mostly located 
in the top 50 markets in the country and reach 60 percent of all 
potential listeners. At least 10 stations are on the air in each of the 
following markets: Los Angeles, Chicago, San Francisco, Boston, Detroit 
and Atlanta. Approximately, 85 percent of the IBOC stations on the air 
are FM stations and 15 percent are AM stations. iBiquity has announced 
that 21 of the nation's top radio broadcast groups have committed to 
accelerate broadcast conversion of 2,000 AM and FM stations to IBOC 
technology. Clear Channel Communications, Entercom and Cox Radio have 
all made substantial commitments to convert many of their stations to 
digital over the next few years. Moreover, ten of the largest radio 
firms have formed a strategic alliance to coordinate the rollout of 
DAB. This effort includes the coordination of multicast formats, 
securing digital automotive receiver designs, and lowering the price 
points for digital radio receivers.

III. Policies and Rules for DAB

A. The DAB Standard
    12. In the DAB R&O, we stated that the adoption of a DAB standard 
will facilitate an efficient and orderly transition to digital radio, 
and we supported a public and open standard-setting process. In the DAB 
FNPRM, we encouraged the NRSC to provide us with information on the 
standard setting process as events warrant. On April 16, 2005, the NRSC 
announced approval of the initial NRSC IBOC standard known as NRSC-5. 
The standard is based on iBiquity's IBOC technology. In the iBiquity 
system, audio source coding and compression are handled by iBiquity's 
HD codec. NRSC-5 does not include specifications for audio source 
coding and compression. iBiquity has committed to license all patents 
necessary to implement NRSC-5, either with or without the HD codec. It 
is also possible within the NRSC-5 standard to use audio source coding 
and compression schemes other than iBiquity's HD codec. On May 18, 
2005, the NRSC submitted NRSC-5 to the Commission for consideration and 
evaluation. A Public Notice seeking comments on the NRSC-5 standard was 
issued by the Media Bureau on June 16, 2005. Following the close of the 
comment cycle in August 2005, we will review the filings and then take 
further action. The NRSC adopted the NRSC-5-A IBOC broadcasting 
standard in September 2005. The NRSC-5-A IBOC standard adds sections 
concerning Advanced Application Services and a new reference document 
to the NRSC-5 IBOC standard, but the NRSC has not yet submitted the 
NRSC-5-A IBOC standard to the Commission for review. While our 
consideration of the NRSC-5 IBOC standards is continuing, we find that 
it is in the public interest to adopt certain policies, rules, and 
requirements for digital radio before we have completed our evaluation 
of the standards. Radio stations and equipment manufacturers need to 
move forward with the DAB conversion, and we need not wait until after 
final action is taken on the IBOC standards to provide such guidance to 
them.
B. Conversion Policy
    13. In the DAB FNPRM, we sought comment on the pace of the analog 
to digital radio conversion and the possibility of an all-digital 
terrestrial radio system in the future. We noted that Congress codified 
December 31, 2006, as the analog television termination date with 
certain exceptions, and we recognized that there is no analogous 
congressional mandate for the termination of analog radio broadcasting. 
We stated that the Commission has not considered a date certain as to 
when radio stations should commence digital broadcast operations 
because radio stations, unlike television stations, are not using 
additional spectrum to provide digital service. We also stated that 
band-clearing is not an issue. Based on these factors, we found that 
there was no immediate need to consider mandatory transition policies 
of the type contemplated with respect to DTV. However, we recognized 
the spectrum efficiencies and related new service opportunities 
inherent in the IBOC system. As such, we sought comment on what changes 
in our rules would likely encourage radio stations to convert to a 
hybrid or an all-digital transmission system and asked whether the 
government, the marketplace, or both should determine the speed of 
conversion from analog to hybrid and, eventually, to all digital radio 
service. We also asked whether we should conduct periodic reviews, in 
terms of the number of DAB receivers on the market and DAB stations on 
the air, to

[[Page 45673]]

help us decide how to set policy as the conversion to digital audio 
broadcasting moves forward.
    14. Commenters generally support a marketplace transition to 
digital audio broadcasting. For example, the State Broadcasters 
Associations (``SBAs'') states that the Commission should allow market 
forces to govern the adoption of DAB by the radio industry and that no 
station should be required to adopt IBOC or any other digital 
technology. The Public Interest Coalition (``PIC'') agrees that the 
market should govern the pace of the DAB transition. PIC states that 
allowing market forces to guide the digital radio transition will 
permit stations to convert at a pace dictated by their own needs.
    15. We will not establish a deadline for radio stations to convert 
to digital broadcasting. Stations may decide if, and when, they will 
provide digital service to the public. Several reasons support this 
decision. First, unlike television licensees, radio stations are under 
no statutory mandate to convert to a digital format. Second, a hard 
deadline is unnecessary given that DAB uses an in-band technology that 
does not require the allocation of additional spectrum. Thus, the 
spectrum reclamation needs that exist for DTV do not exist here. 
Moreover, there is no evidence in the record that marketplace forces 
cannot propel the DAB conversion forward, and effective markets tend to 
provide better solutions than regulatory schemes.
    16. iBiquity argues that in the early stages of the transition, the 
Commission should favor and protect existing analog signals. It states 
that this could be accomplished by limiting the power level and 
bandwidth occupancy of the digital carriers in the hybrid mode. At some 
point in the future, when the Commission determines there is sufficient 
market penetration of digital receivers, iBiquity asserts that the 
public interest will be best served by reversing this presumption to 
favor digital operations. At that time, broadcasters will no longer 
need to protect analog operations by limiting the digital signal and 
stations should have the option to implement all-digital broadcasts. We 
decline to adopt iBiquity's presumption policy because it is too early 
in the DAB conversion process for us to consider such a mechanism. We 
find that such a policy, if adopted now, may have unknown and 
unintended consequences for a new technology that has yet to be 
accepted by the public or widely adopted by the broadcast industry.
    17. Nevertheless, as enunciated in more detail below, we take 
significant steps to facilitate the digital radio conversion by 
adopting rules and policies that encourage radio stations to invest in 
digital equipment and programming. For example, we permit radio 
stations to provide various types of digital service as long as one 
free over-the-air digital stream of equal or greater quality than the 
station's existing analog signal is available for listeners. We also 
establish technical rules, such as permitting AM nighttime service, 
intended to reinvigorate the AM band. To ensure that DAB adoption 
proceeds in a timely manner, we will conduct periodic reviews of 
digital service and receiver penetration, as suggested by iBiquity, as 
circumstances warrant. iBiquity states that the Commission should 
conduct periodic reviews of station conversions and receiver 
penetration to ensure the functioning of market forces. iBiquity 
recommends the commencement of a first review five years after adoption 
of a Second Report and Order in this proceeding to check on the 
progress of the conversion. Other commenters agree that the Commission 
should periodically review the progress of the DAB conversion process.
    18. Extended Hybrid Mode. NAB asserts that the Commission's 
authorization of extended hybrid mode DAB operations will further the 
conversion process. According to NAB, the extended hybrid mode, which 
adds up to 50 kbps, (``kbps'' is the acronym for kilobits per second 
(1000 bits per second)), of data carrying capacity to an FM IBOC 
signal, will allow broadcasters to support a range of datacasting 
services without affecting the quality of the 96 kbps main channel 
digital audio signal. NAB asserts that while the use of the FM extended 
hybrid mode increases the bandwidth occupancy of the digital carriers, 
this will not increase interference to adjacent channels since the 
additional (i.e., extended hybrid) digital carriers fall between a 
station's primary digital carriers and its host analog signal. 
Consequently, each broadcaster will be able to control the level of 
impact these extended hybrid signals may have on its own transmission. 
NAB comments that the Commission should authorize broadcasters to adopt 
all three extended hybrid modes and allow broadcasters to make the 
appropriate operational decisions based on the needs of their 
listeners. In the extended hybrid mode, digital carriers are added at 
frequencies immediately adjacent to the analog FM signal. The three 
extended hybrid modes (MP2, MP3, and MP4) are defined by the number of 
digital partitions added (one, two, or four pairs), respectively. NPR 
submitted a detailed report in November 2004 about the effect of 
extended hybrid operation on the host analog signal in various 
receivers. The report concludes that the FM extended hybrid mode does 
not affect host analog reception in car radios, home stereo receivers, 
or subsidiary communications authorization receivers.
    19. The FM extended hybrid mode holds great promise for both 
broadcasters and their listeners. NPR has submitted data showing that 
the FM extended hybrid mode will work in most circumstances. NPR's 
report provides an ample basis for permitting radio stations to operate 
in an extended hybrid mode. Authorization of this digital mode will 
permit broadcasters to offer new and innovative services, especially to 
underserved populations, such as the visually impaired and non-English 
speaking citizens. If interference issues do arise, we are confident 
that the Commission staff will be able to resolve disputes on a case-
by-case basis, and we intend that the staff will address these 
complaints in a timely fashion. In this connection, the Media Bureau 
has full authority to adjust and, if necessary, prohibit hybrid 
operations by broadcasters.
    20. All-digital Mode. In the DAB FNPRM, we recognized that it may 
be premature to adopt policies for all-digital radio operation given 
that there are no standards for this type of broadcasting. NAB agrees 
that adoption of policies and procedures relating to the all-digital 
mode of IBOC operation would be premature in the absence of 
``comprehensive and impartial testing'' of all-digital systems. NAB 
states, however, that it is important to recognize that the all-digital 
mode is an integral part of the IBOC DAB system specification and that 
the software iBiquity provides to its transmitter and receiver 
manufacturer licensees includes an all-digital mode of operation. NAB 
states that when the time is ripe to consider use of the all-digital 
mode, consumers and broadcasters who have already invested in IBOC DAB 
equipment will not be disenfranchised and a smooth transition from a 
hybrid to an all-digital environment will be assured. iBiquity agrees 
that additional work is required before there is an industry consensus 
on the IBOC all-digital system.
    21. NPR states that it is premature for the Commission to 
contemplate a regulatory structure for all-digital terrestrial radio. 
It states that the elegance of the DAB transition is that the public, 
through its response to digital services, will determine the pace

[[Page 45674]]

of the transition. NPR further states that until the transition to all-
digital operation becomes more imminent, the Commission should refrain 
from adopting any policy affecting all-digital DAB. PIC states that the 
Commission should use its authority to facilitate public participation 
in the further development of digital radio technology.
    22. The ultimate goal of this proceeding is to establish a robust 
and competitive all-digital terrestrial radio system. We agree with NPR 
that it is premature, however, to consider the adoption of policies and 
rules for an all-digital mode of operation. There are many unresolved 
technical issues associated with the all-digital radio broadcast system 
and radio stations do not plan to offer all-digital service in the near 
future. Broadcasters, of course, are encouraged to experiment with an 
all-digital service, with appropriate authorization, but for regulatory 
purposes, our principle focus at this stage is to ensure that the 
ground rules are set for the introduction of hybrid IBOC DAB. When DAB 
receiver penetration has reached a critical mass and most, if not all, 
radio stations broadcast in a hybrid digital format, we will begin to 
explore the technical and policy issues germane to an all-digital 
terrestrial radio environment.
C. Service Rules
1. Flexible Uses
    23. As explained above, the IBOC DAB system provides radio stations 
with new flexibility and capabilities. First and foremost, it allows FM 
broadcasters to scale their audio quality from 96 kbps downward in 1 
kbps or smaller increments. Any reduction below 96 kbps frees capacity 
that can be devoted to other services. The AM system offers two levels 
of audio quality. The ``core'' AM carriers provide 20 kbps of robust 
monophonic sound. The ``enhanced'' layer adds an additional 16 kbps of 
digital carriers and enables full stereo sound. The AM system design 
allows broadcasters to devote the full 36 kbps to a single audio signal 
or, in the future, select only the 20 kbps core mode for audio and 
devote the remaining 16 kbps enhanced carriers for other services.
    24. The scaling of the audio codec, which permits broadcasters to 
reduce the number of bits devoted to the main channel audio signal, may 
affect the quality of the audio. An audio codec compresses digital 
audio data prior to transmission and decompresses data received. 
However, it will not impact the robustness of the signal. The audio 
quality may be affected because the reduction in the bit rate may 
increase the likelihood of digital artifacts. The trade-off between 
bits and audio quality is not linear. There can be a substantial 
reduction in bit rate before most listeners would notice any digital 
artifacts that might impact audio quality. The broadcasters' and 
listeners' tolerance for reduced audio quality depends on many factors, 
most importantly, station program format.
    25. The IBOC DAB system thus allows radio stations to broadcast a 
single high quality audio signal, multiple streams of lower quality 
audio, or various combinations of different quality audio signals. In 
addition, the system is capable of non-broadcast uses that are non-
audio and/or subscription-based in nature. In the DAB FNPRM, we 
tentatively found that permitting radio stations to use their bandwidth 
in a flexible manner is in the public interest. Section 303 of the Act 
compels the Commission to ``study new uses for radio, provide for 
experimental uses of frequencies, and generally encourage the larger 
and more effective uses of radio in the public interest.''
    26. NAB states that a digital radio station's service offerings 
should be determined by the licensee rather than by government mandate. 
NAB explains that digital business models will vary from licensee to 
licensee. Some stations, such as those with jazz or classical music 
genres, may choose to focus their resources on promoting the highest 
quality audio signal, while others may want to broadcast multiple 
streams of news, weather or financial information. NAB submits that 
these kinds of decisions are best left to consumer demand and the 
marketplace. NAB states that beyond an obligation to deliver at least 
one main audio channel of equal or better quality than a station's 
existing analog service, broadcasters should retain the flexibility to 
scale signals to enhance audio quality, to upgrade existing 
supplementary services, or offer new services for their audiences. NAB 
concludes that for DAB to fulfill its potential, supplementary services 
must be a viable option. NPR states that the Commission should not 
specify the amount of capacity stations should allocate to any given 
audio or data service. NPR argues that radio station licensees, like 
digital television licensees, should have the freedom to develop 
innovative services for the public.
    27. iBiquity also urges the Commission to adopt a flexible approach 
to its service rules because radio stations have only begun to explore 
the IBOC system options. iBiquity asserts that this approach will 
encourage broadcasters to experiment and will foster the development of 
innovative new services for the listening public. iBiquity states that 
the imposition of unnecessarily restrictive service rules will have the 
effect of stifling the development of new services. Cox likewise 
suggests that the Commission should maintain a ``do no harm'' position, 
arguing that if concerns arise later in the conversion, the Commission 
can always adopt responsive rules at that time. There were no comments 
criticizing the adoption of a flexible use policy.
    28. We expect and intend that the fundamental use of DAB will be 
for the provision of free over-the-air radio service. We will, 
therefore, require radio stations to provide at least one free digital 
over-the-air audio broadcast service. Specifically, radio stations 
operating in a digital mode must provide one free digital audio 
programming service that is comparable to or better in audio quality 
than that of their current analog service. Such a baseline requirement 
mirrors the Commission's analogous requirement for digital television 
stations, and is based on the same underlying policy consideration that 
significant benefits from digital conversion should flow directly to 
the public. We do not here alter the requirement set forth in the DAB 
R&O that a radio station must simulcast its analog programming service 
on its digital signal. However, we will revisit the simulcasting 
requirement in the future when we decide whether or not to approve the 
NRSC-5 standard. In any event, simulcasting is part of the IBOC 
operational structure and a radio station must duplicate its 
programming if it wants the DAB ``blend'' feature to work properly.
    29. Taking these points into consideration, we will permit radio 
stations to use their frequencies as the marketplace dictates, an 
approach supported by dozens of interested parties and consistent with 
our digital television policy. We are hopeful that this flexibility 
also will lead to a more rapid conversion to DAB. We elaborate on this 
issue below by addressing issues raised regarding some of the services 
DAB stations might choose to provide.
a. Digital Audio Broadcasting Signal Quality
    30. In the DAB FNPRM, we sought comment on whether or not we should 
require broadcasters to provide a high quality digital audio signal 
and, if so, what minimum bandwidth should be required for this purpose. 
We also sought comment on the amount of

[[Page 45675]]

capacity necessary to allow radio stations to broadcast a high quality 
digital signal while permitting the introduction of new datacasting and 
audio services.
    31. iBiquity supports the use of the IBOC system to improve audio 
quality. It believes, however, that market forces should be allowed to 
determine the optimal quality levels of the IBOC system. iBiquity 
argues that the Commission should not establish minimum quality 
requirements, but rather should allow radio stations to make their own 
determination of the appropriate level of audio quality for their 
particular listeners. NAB states that, at this early point in the 
digital radio transition, it is impossible to conclude with any measure 
of certainty the number of bits necessary to support a good quality 
main audio signal or how many secondary audio streams an IBOC radio 
station can transmit without degrading audio quality. Cox Radio adds 
that any restrictions contemplated by the Commission may become 
obsolete soon after they are adopted.
    32. As discussed above, we decline to require broadcasters to 
dedicate a minimum level of digital bandwidth to provide a high quality 
digital signal. Instead, we leave the decision as to the quality of the 
signal provided to the discretion of the radio station licensee, 
subject to the comparable signal obligation discussed earlier. The IBOC 
system allows stations to offer the public high quality audio, as well 
as a broad variety of other innovative services. We believe that we 
should provide broadcasters with the freedom to innovate and respond to 
the marketplace in developing not only the mix of services, but also 
the quality of the audio they will offer the public.
b. Multicasting
    33. The IBOC FM DAB system permits an FM radio station to broadcast 
multiple audio programming services within its assigned channel. As AM 
IBOC operation develops, iBiquity plans to introduce the option to 
split the digital AM bitstream into two channels. In order to provide 
multiple digital programming streams, a radio station must reduce the 
audio bit rate of its main channel broadcasts or use the extended 
hybrid mode to obtain additional capacity that can be devoted to a 
lower bit rate supplemental audio channel. Testing conducted by NPR 
established the viability of this functionality and also demonstrated 
that the supplemental channel will have coverage equivalent to the 
coverage of the main channel audio signal. Due in part to IBOC system 
design constraints, however, any supplemental audio services will not 
be able to take advantage of the blend function available to the main 
channel audio. The blend function enhances rapid tuning for the main 
channel digital signal and provides an analog backup signal in the 
event the main channel audio signal is lost. Therefore, any 
supplemental channel will require several seconds for tuning and will 
experience muting of the audio in the event of signal loss.
    34. In the DAB FNPRM, we asked how the availability of additional 
audio streams can further our diversity goals, particularly for people 
with disabilities and minority or underserved segments of the 
community. We tentatively concluded that adopting DAB service rules 
that encourage more audio streams would promote program diversity, and 
that, once the Commission adopts a policy in this area, radio stations 
would no longer need to obtain experimental authority to broadcast 
multiple digital programming streams. Section 303 of the Act compels 
the Commission to ``study new uses for radio, provide for experimental 
uses of frequencies, and generally encourage the larger and more 
effective uses of radio in the public interest.''
    35. Generally, commenters urged the Commission to authorize 
multicasting on a permanent basis, and at the same time, asked us to 
avoid excessive regulation that would disadvantage any new type of 
digital service. Specifically, commenters emphasized the benefits of 
multiple digital audio channels and how that IBOC feature will ensure 
the continuing viability of radio reading services as well as enhance 
the ability of broadcasters to offer more niche programming and public 
affairs broadcasts.
    36. The IBOC system makes it possible for FM radio stations to air 
additional streams of traditional radio programming (e.g., music, news, 
and sports), public safety services (e.g., national security 
announcements), assisted living services (e.g., radio reading 
services), non-English language programming, and news services to 
underserved populations. Experts state that one 96 kbps FM channel 
could be divided into up to eight streams of digital programming. Many 
stations commented that multicasting will foster the expansion of local 
public affairs programming generally and programming serving the 
Latino, Asian, and other communities of common cultural interest, in 
particular. A number of such stations comment that they will use their 
digital capacity to broadcast more foreign language services. Indeed, a 
large number of NCE stations filed comments specifically stating that 
the following program services are likely to emerge: (1) Special 
programming for English as a Second Language (``ESL'') listeners; (2) 
native American programming; (3) public affairs programming, such as 
school board, civic and local government meetings; (4) youth, young 
adult and student productions; (5) reading services for the blind; (6) 
homeland security/public safety programming; (7) arts and culture 
programming; (8) breaking news/special news events/emergency alerts; 
(9) international news coverage; and (10) educational/children's 
programming. NPR has announced that it will offer five music services 
for multicast streams on affiliated public radio stations: classical, 
jazz, electronica, triple-A, and folk. Other program offerings NPR is 
developing for stations with new channels include a news and 
information service and formats that would serve culturally diverse 
audiences. Westwood also said it would make its lineup of news, sports, 
talk and entertainment programming, as well as its traffic and 
information content available to HD Radio FM broadcasters' multicast 
services. In addition, iBiquity reports that commercial radio 
broadcasters, including Infinity, Capitol Broadcasting, and Greater 
Media have all launched new multicast digital radio streams with 
different formats in the summer of 2005.
    37. We will permit radio stations to provide multiple audio streams 
of digital programming without the need for individual station approval 
by the Commission. FM stations currently multicasting pursuant to 
experimental authority from the Commission are released from the 
requirement to submit a report, as specified in the letter granting 
multicasting authority. We believe that radio stations can best 
stimulate consumers' interest in digital audio services if they are 
able to offer the programs that are the most attractive to their 
communities. Further, allowing radio stations the flexibility to 
provide multicast services will allow them to offer a mix of services 
that can promote increased consumer acceptance of DAB, which, in turn, 
will likely speed the conversion process. Additionally, diversity of 
programming services may result from multicasting and provide 
programming to unserved and underserved segments of the population. We 
strongly encourage digital audio broadcasters to use their additional 
channels for local civic and public affairs programming and

[[Page 45676]]

programming that serves minorities, underserved populations, and non-
English speaking communities.
    38. Mt. Wilson Broadcasters opposes Commission action authorizing 
multicasting, at least at the present time, arguing that ``splitting 
the channel'' will derogate the service provided by FM radio stations. 
NPR asserts that Mt. Wilson Broadcasters is misinformed about the 
purposes of DAB, the technical feasibility of multicasting, and the 
competitive consequences of authorizing full-power broadcast stations 
to broadcast multiple audio channels. We find that multicasting will 
not derogate the service as Mt. Wilson argues. An FM station commencing 
DAB operations will have approximately the same geographic reach for 
its digital signal as for its analog signal. Moreover, splitting the FM 
signal into multiple digital streams will not harm listeners in any 
manner. As noted above, a licensee must provide a broadcast stream at 
least equivalent in quality to its existing analog service. In fact, an 
FM station operating a digital service will be able to provide more 
services than it could with only its analog signal. Accordingly we 
perceive no derogation of the type forecast by Mt. Wilson Broadcasters.
    39. Time Brokering. In the DAB FNPRM, we sought comment on the 
extent, if any, to which we should permit radio stations to lease 
unused or excess bandwidth to unaffiliated audio programmers. In this 
context, we noted that an unaffiliated entity may schedule the 
programming output of a particular digital audio stream for a period of 
time under a contract with the licensee. We stated that radio stations 
may benefit from leasing unused or excess air-time because they would 
have additional funds to invest in new programming, which, in turn, 
would benefit the public. We asked whether our diversity goals will be 
furthered if we allow independent programmers to lease excess capacity 
from broadcast licensees.
    40. We will permit radio stations to enter into time brokerage 
agreements for their digital bandwidth. ``Time brokerage'' (also known 
as ``local marketing'') is the sale by a licensee of discrete blocks of 
time to a ``broker'' that supplies the programming to fill that time 
and sells the commercial spot announcements in it. Because these 
agreements are essentially leasing arrangements, they achieve benefits 
similar to those achieved through leasing arrangements. The Commission 
has for many years permitted brokering of FM subcarriers and excess 
digital television bandwidth. Moreover, we permit stations to enter 
into time brokerage agreements on their main broadcast channels. 
Subject to our attribution rules, as noted below, broadcasters will 
have the flexibility in structuring business arrangements and 
attracting capital to make DAB a success. We agree with the SBAs that 
the adoption of this policy will allow licensees to recoup some of the 
costs associated with the digital conversion, and to increase outlet 
diversity. We strongly encourage digital audio broadcasters to enter in 
such agreements with ``eligible entities,'' which often include 
businesses owned by women and minorities. An eligible entity is an 
entity that would qualify as a small business consistent with SBA 
standards for its industry grouping. Moreover, the brokering of 
individual digital streams will provide a means to overcome some 
financial impediments to getting involved in broadcasting and there is 
a potential for new market entrants to take advantage of such 
arrangements. Whatever the agreement, it is the licensee who remains 
responsible for ensuring the fulfillment of all obligations incumbent 
upon a broadcast licensee, including ultimate control over program 
material aired on its station's facilities.
    41. In the DAB FNPRM, we also asked how Section 310(d) of the Act, 
regarding transfers of control, should apply to these situations as 
well as how the Commission's broadcast ownership limits and attribution 
rules would be affected if an unaffiliated programmer, that is also the 
licensee of another station in the same market, leases one of the 
additional audio streams. Moreover, we asked whether there should be an 
overall limit to the amount of programming time a particular radio 
station can broker or lease to others.
    42. A number of commenters raise issues regarding the interplay 
between multiple audio streams, brokering, and ownership issues. For 
example, REC Networks assert that when there is a substantial 
penetration of DAB receivers in the marketplace, owners of multiple FM 
stations in a single market should consolidate their multiple FM 
station broadcasts on a single channel, multicast their programming 
services using IBOC technology, and then divest their additional 
transmitter facilities. The SBAs state that brokering of a multicast 
audio stream would not constitute an illegal transfer of control. They 
argue that leasing of a digital stream is consistent with longstanding 
Commission treatment of time brokerage arrangements. Specifically, PIC 
argues, and we agree, that a licensee owning the maximum permissible 
number of stations in a particular market should not be allowed to 
acquire additional broadcast streams through time brokering agreements. 
Under the Commission's established policies for attribution of such 
agreements, we count the brokered station toward the brokering 
licensee's permissible ownership totals under the local broadcast 
ownership rules. Where an entity owns or has an attributable interest 
in one or more stations in a local radio market, time brokering of 
another station in that market for more than 15 percent of the brokered 
station's broadcast time per week will result in counting the brokered 
station toward the brokering licensee's ownership caps. We clarify 
that, in the multicast context, a station owner who programs more than 
15 percent of the total weekly hours broadcast on a digital audio 
stream of another station in the market will be considered to have an 
attributable interest in the brokered station. The interest 
attributable to a station owner in such circumstances is equivalent to 
the percentage of total broadcast time that the stream which is 
attributable to the station owner constitutes. Under a time brokering 
agreement, licensees must ensure that they maintain full, effective, 
and ultimate control over all material aired on their stations. 
Therefore, time brokering agreements do not raise transfer of control 
issues under Section 310(d) of the Act.
c. Datacasting
    43. In the analog context, all FM stations are authorized to 
transmit secondary services via an automatic subsidiary communications 
authorization (``SCA'') under Section 73.295 of the Commission's rules. 
Subsidiary communication services are those transmitted on a subcarrier 
within the FM baseband signal, not including services that enhance the 
main program broadcast service or exclusively relate to station 
operations. Subsidiary communications include, but are not limited to, 
services such as radio reading services, utility load management, 
market and financial data and news, paging and calling, traffic control 
signal switching, bilingual television audio, and point to point or 
multipoint messages. Some FM broadcasters currently provide emergency 
alert system notifications and paging functions under SCA 
authorization.
    44. Section 73.593 of the Commission's rules pertains to subsidiary 
communications services broadcast by NCE FM radio stations. Under our 
rules, the licensee of an NCE

[[Page 45677]]

FM station is not required to use its subcarrier capacity, but if it 
chooses to do so, it is governed by the SCA rules for commercial FM 
stations regarding the types of permissible subcarrier uses and the 
manner in which subcarrier operations are conducted. A significant 
difference from the commercial FM SCA rules, however, is the 
requirement that the remunerative use of an NCE FM station's subcarrier 
capacity not be detrimental to the provision of existing or potential 
radio reading services for the blind or otherwise inconsistent with its 
public broadcasting responsibilities.
    45. Similarly, Section 73.127 of the Commission's rules permits AM 
broadcast stations to use their AM carriers to transmit signals not 
audible on ordinary consumer receivers for both broadcast and non-
broadcast purposes. A station's AM carrier service authorization may 
not be retained or transferred in any manner separate from the 
station's license. The licensee must establish that the broadcast 
operation is in the public interest wholly apart from the subsidiary 
communications services provided. In the analog context, the station 
identification, delayed recording, and sponsor identification 
announcements required by Sections 73.1201, 73.1208, and 73.1212 are 
not applicable to leased communications services transmitted via 
services that are not of a general broadcast nature. For both AM and FM 
services, the licensee must retain control over all material 
transmitted in a broadcast mode via the station's facilities and has 
the right to reject any material that it deems inappropriate or 
undesirable.
    46. iBiquity, in a partnership with broadcasters and equipment 
manufacturers, has developed IBOC data services for terrestrial radio 
stations. The IBOC system permits radio stations to offer varied and 
robust datacasting applications. Using an established standard ID3 
format (ID3 is a file tagging software used to provide text information 
such as artist name and song title information. ID3 also supports text 
descriptions with ads, such as phone numbers and Web addresses.), 
information services can be used to provide listeners with song, CD 
title, and artist information. In addition, information and host 
profiles will complement advertisements and talk radio formats. 
Synchronized multimedia integration language (``SMIL''), a protocol 
used by iBiquity as the foundation for advanced application services 
(``AAS''), allows for the creation and delivery of new data services in 
the future. Some possible commercial applications envisioned by 
iBiquity include: (1) Enhanced information services such as weather and 
traffic alerts delivered to DAB receivers as a text and/or audio 
format; (2) enhanced advertising services; (3) listener controlled main 
audio services providing the ability to pause, store, fast-forward, 
index, and replay audio programming via an integrated program guide 
with simplified and standard user interface options; and (4) 
supplementary data delivery that will spur the introduction of 
automatic driving assistance applications, navigation and rear-seat 
entertainment programming. Robert Struble, iBiquity's CEO, has noted 
that the text of advertising messages could be synchronized to display 
on a DAB receiver's text screen at the same time as a related 
commercial is broadcast. We sought comment on whether we should permit 
radio stations to distribute any and all types of datacasting services. 
We also sought comment on what data services digital noncommercial 
educational stations should be permitted to offer.
    47. iBiquity urges the Commission to authorize datacasting services 
and to include sufficient flexibility in the datacasting authorization 
to promote innovation in this area. iBiquity states that there is 
tremendous opportunity for the development of low-cost innovative 
datacasting services. iBiquity submits that the greater capacity and 
reliability of data services based on the IBOC system will help ensure 
that data services are introduced. It suggests that promotion of 
datacasting will help introduce new services to the public and will 
also provide added value for consumers who invest in IBOC receivers. 
NAB similarly asserts that datacasting services are still in the 
nascent stage, and that the Commission's main goal at this time should 
be to encourage and enable broadcasters to innovate and experiment with 
these aspects of digital radio. NAB maintains that providing 
broadcasters with flexibility in this area will expedite the emergence 
of DAB. Bloomberg states that the Commission must not unnecessarily 
limit the ability of the DAB platform to carry program-associated data 
or other additional, innovative data services. It argues that the best 
way to encourage investment, and thereby spur terrestrial radio 
broadcasters to make the conversion to DAB, is to provide broadcasters 
with the utmost flexibility to develop new digital applications. The 
SBAs state that the Commission should permit licensees to provide for 
datacasting, within the constraints of the IBOC technical standards, 
mainly because it would enhance the multiplicity of information 
sources. NPR states that the opportunity to offer datacasting services 
will motivate stations to develop new services beyond what is available 
today. It expects stations to use their technical capabilities to 
provide homeland security-related services, addressing local, regional, 
or national events and emergencies, and provide expanded weather 
alerts, traffic safety, and other public safety services.
    48. Consistent with our decision with regard to audio multicasting 
services, we conclude that permitting broadcast licensees flexibility 
with regard to the provision of datacasting services is in the public 
interest. We will permit radio stations to provide any type of digital 
datacasting service, consistent with existing broadcast policies and 
rules applicable to analog SCA services, as long as it does not 
derogate the mandated stream of free audio programming. Our aim is to 
promote innovation and experimentation that will lead to applications 
that will serve the public, such as song and artist information as well 
as enhanced news, weather, and emergency updates. We note that, for 
reasons discussed infra, we will currently only allow datacasting that 
is subscription pursuant to an experimental authorization granted by 
the Commission.
2. Ancillary Subscription Services
    49. Radio stations may wish to offer certain digital audio or data 
content under a subscription model. In this context, ancillary 
subscription services may be available for a fee or the listener may 
simply need to enter a code to access the service. IBOC DAB has the 
potential to limit access to certain channels by receiver serial 
number, just like satellite radio receivers are presently able to do. 
In the DAB FNPRM, we sought comment on whether we should permit 
ancillary subscription services. One proposal offered in the DAB FNPRM 
was to permit ancillary subscription services as long as they do not 
derogate the free services a radio station broadcasts. We also asked 
whether we should impose spectrum fees for that portion of digital 
bandwidth used for ancillary subscription services. Commenters 
generally urged the Commission to permit ancillary subscription 
services, but argued against the imposition of fees associated with the 
offering of such services. iBiquity argues that broadcasters can 
currently provide both datacasting and supplemental audio channels 
using SCA analog frequencies without incurring additional spectrum fees 
and the same approach should be applied to digital services. NAB states

[[Page 45678]]

that it would be inappropriate to consider fees at this time because a 
fee requirement would have the effect of discouraging innovation and 
new services that would benefit the public. Nevertheless, we remain 
concerned that pay services, left unrestricted, could overwhelm free 
over-the-air services, to the detriment of the listening public. We 
expect terrestrial radio service to remain a free over-the-air service 
and, therefore, the amount of capacity devoted to ancillary 
subscription services must be limited. We thus seek further comment on 
ancillary subscription service issues in a Second Further Notice of 
Proposed Rulemaking, found below. Until this Rulemaking is completed 
and a determination is made regarding assessment of the five percent 
fee, discussed infra, we will only allow ancillary subscription 
services pursuant to an experimental authorization granted by the 
Commission. We would grant such authorizations for uses that serve the 
public interest, including current subcarrier services like radio 
reading services.
3. Noncommercial Educational Stations
    50. NCE radio stations face unique opportunities and challenges as 
they move to implement DAB. The Act states that a ``noncommercial 
educational broadcast station'' must be ``owned and operated by a 
public agency or nonprofit private foundation, cooperation, or 
association'' or ``owned and operated by a municipality and which 
transmits only noncommercial programs for educational purposes.'' In 
1981, Congress amended the Act to give NCE stations more flexibility to 
generate funds for their operations. As amended, Section 399B of the 
Act permits NCE stations to provide facilities and services in exchange 
for remuneration as long as those uses do not interfere with the 
station's ``provision of public telecommunications services.'' Section 
399B also requires that public stations engaged in revenue generating 
activities comply with accounting procedures designed to separately 
identify these commercial revenues and costs, and it prohibits 
Corporation for Public Broadcasting funds from being used to defray any 
costs associated with these activities. Section 399B, however, does not 
permit NCE stations to make their facilities ``available to any person 
for the broadcasting of any advertisement.'' Section 73.503 of the 
Commission's rules addresses the licensing requirements and service of 
NCE FM stations. Under our rules, an NCE FM broadcast station will be 
licensed only to a nonprofit educational organization and upon showing 
that the station will be used for the advancement of an educational 
program. Although the Commission does not reserve frequencies for NCE 
use in the AM service, and thus has not codified noncommercial 
eligibility rules for this service, the Commission has treated AM 
stations that satisfy the NCE FM eligibility rules as noncommercial AM 
stations. Under Section 73.621 of the Commission's rules, public 
television stations are required to furnish primarily an educational as 
well as a nonprofit and noncommercial broadcast service. Section 73.621 
of the Commission's rules provides that ``noncommercial educational 
broadcast stations will be licensed only to nonprofit educational 
organizations upon a showing that the proposed stations will be used 
primarily to serve the educational needs of the community; for the 
advancement of educational programs; and to furnish a nonprofit and 
noncommercial television broadcast service.''
    51. In 2001, the Commission concluded that an NCE television 
licensee must use a substantial majority of its digital television 
capacity for nonprofit, noncommercial, educational broadcast services. 
In addition, the Commission held that the statutory prohibition against 
broadcasting of advertising on NCE television stations applies to 
broadcast programming streams provided by NCE licensees, but does not 
apply to any ancillary or supplementary services presented on their 
excess DTV channels that do not constitute broadcasting. Like 
commercial DTV stations, NCE DTV licensees must pay a fee of five 
percent of gross revenues generated by ancillary or supplementary 
services provided on their DTV service. In Office of Communication, 
Inc. of United Church of Christ v. F.C.C., the U.S. Court of Appeals 
for the District of Columbia Circuit upheld the DTV NCE A&S Order. In 
the DAB FNPRM, we sought comment on what, if any, special rules or 
considerations should apply to NCE radio stations in light of our 
decision regarding NCE DTV stations and the D.C. Circuit's UCC 
decision. We also sought comment on how we can ensure NCE radio 
stations remain noncommercial in nature as the radio industry converts 
to DAB.
    52. NPR favors a flexible use policy for NCE station digital 
bandwidth. It states that it does not expect the remunerative use of 
digital bandwidth to result in a profusion of commercial service 
offerings by NCE radio stations. NPR further states that it expects any 
subscription or other services provided by NCE stations to relate to 
each station's NCE mission. For instance, although subscription 
services are not anticipated for several generations of digital radio 
receivers, some NCE radio stations may experiment with offering 
``pledge-free,'' but otherwise identical, versions of their free over-
the-air services to those listeners who financially support the 
station. NPR adds that since the authorization of enhanced underwriting 
and remunerative subcarrier services in the early 1980s, the ensuing 
diversity of revenue sources has emerged as the key to public radio's 
independence from any single revenue source. According to NPR, while 
the remunerative use of NCE station facilities and analog spectrum has, 
to date, provided only modest amounts of revenue, the remunerative use 
of digital technology will enable NCE stations to better weather the 
periodic downturns in corporate and foundation underwriting, membership 
dues, and, in the case of public radio, State and Federal funding.
    53. PIC argues that NCE radio stations, like NCE television 
stations, should be obligated to ``use their entire digital capacity 
primarily for a nonprofit, noncommercial, educational broadcast 
service,'' meaning a ``substantial majority'' of the entire digital 
capacity. PIC urges the Commission not to repeat the ``error'' it made 
in authorizing NCE DTV stations to offer remunerative services. PIC 
also asserts that the ``over commercialization'' resulting from 
remunerative activities will discourage public support for public 
broadcasting. PIC additionally claims that allowing NCE radio stations 
to offer advertising supported non-broadcast services violates the 
intent underlying the original reservation of spectrum and will reduce 
``ratio of noncommercial-to-commercial programming.''
    54. NPR objects to PIC's suggestions, stating that NCE television 
stations are subject to a more exacting regulatory mandate to furnish 
``primarily'' a non-profit and noncommercial television broadcast 
service. NCE radio stations, on the other hand, are licensed ``for the 
advancement of an educational program.'' NPR notes that the Commission 
adopted a higher standard for NCE television stations because such 
stations use greater amounts of spectrum, have more extensive coverage 
areas, and are far fewer in number. NPR also asserts that requiring NCE 
radio stations to reserve a ``substantial majority'' of their entire 
digital capacity for a free NCE service would significantly restrict 
station flexibility to determine the appropriate mix of services, and 
how much capacity to devote to each, based on the specific

[[Page 45679]]

needs of their community of service. NPR states, for example, that such 
a ``substantial majority'' requirement would prevent stations from 
dividing the 96 kbps bitstream into two 48 kbps service streams. This 
is an approach that WAMU-FM is pursuing, as it has found that splitting 
the bandwidth evenly into 48 kbps each was ``extremely good'' for both 
the main and the supplemental channel. According to NPR, a minimum 
quantitative requirement, and one requiring a ``substantial majority'' 
of the bitstream, in particular, would countermand the inevitable 
improvement in audio coding technology that will otherwise permit 
higher quality audio using fewer kilobits.
    55. We defer consideration of the issues discussed above to a later 
date. As noted above, we have decided to further examine the offering 
of subscription services in a Second Further Notice of Proposed 
Rulemaking. In addition to our concern about maintaining the free 
nature of all terrestrial radio services, we wish to preserve the 
noncommercial educational nature of NCE service. We will address both 
issues after considering the comments in response to our Second Further 
Notice of Proposed Rulemaking. In any event, we hold that an NCE radio 
station is obligated, like its commercial counterpart, to provide at 
least one free over-the-air digital programming stream that is 
comparable to or better in audio quality than its analog signal.
4. Low Power FM
    56. In 2000, the Commission authorized the licensing of two new 
classes of FM radio stations, one operating at a maximum power of 100 
watts and one operating at a maximum power of 10 watts. We note that a 
100-watt Low Power FM station can serve an area with a radius of 
approximately 3.5 miles. The Commission has yet to authorize any 10 
watt stations in the LPFM service. Both types of stations, known as low 
power FM (``LPFM'') stations, were authorized in a manner that protects 
existing FM service. The Commission stated that LPFM stations would be 
operated on a NCE basis by entities that do not hold an attributable 
interest in any other broadcast station or other media subject to our 
broadcast ownership rules. The Commission established the new LPFM 
service to create new broadcasting opportunities for locally-based 
organizations to serve their communities. In the DAB FNPRM, we sought 
comment on the conversion of LPFM stations to digital operation and the 
potential impact of such a conversion on other stations.
    57. iBiquity states that LPFM stations should have the option to 
convert to digital operations. It states that IBOC-based equipment can 
operate at the 100-watt power levels authorized for LPFM service. 
iBiquity asserts that in the case of 10-watt stations, however, the 
extremely low power level of those stations may make digital broadcasts 
infeasible. The IBOC system broadcasts the digital signal at one 
percent of the station's analog power level. In the case of a 10-watt 
LPFM station, that digital power level would fall below the noise floor 
and would be difficult for any digital receiver to recover; however, 
this would not be the case with 100-watt LPFM stations. iBiquity notes 
that because these LPFM stations are required to comply with the 
Commission's adjacent channel interference restrictions, the 
introduction of digital broadcasts by these stations should not create 
harmful new interference.
    58. We find that if an LPFM station intends to transmit in digital, 
and is technically capable of doing so, there should be no regulatory 
impediments preventing its adoption of the IBOC technology. We 
recognize that LPFM is a new service which involves non-commercial, 
community-oriented stations and that these stations have limited 
resources. We are committed to working with these stations to address 
issues regarding their transition to digital as they arise. We note 
that in 2005 the Commission released a Second Order on Reconsideration 
and Further Notice of Proposed Rulemaking, which further advanced the 
introduction of LPFM service in numerous areas across the United 
States. This Second Order addressed technical, operational, and 
ownership issues necessary for the further development of the service. 
In the Second Order on Reconsideration, the Commission modified its 
rules governing minor changes and technical minor amendments for LPFM 
stations. We also clarified the definition of locally originated 
programming for purposes of resolving mutually exclusive LPFM 
applications. In the Further Notice of Proposed Rulemaking, the 
Commission sought comment on a number of technical and ownership issues 
related to LPFM.
5. Licensing Procedures
    59. Under Section 73.1695 of the Commission's rules, the Commission 
considers whether a proposed change or modification of a transmission 
standard for a broadcast station would be in the public interest. 
Sections 73.3571 and 73.3573 of the Commission's rules discuss the 
processing of AM and FM broadcast station applications, respectively. 
In the DAB FNPRM, we sought comment on what, if anything, the 
Commission should do to amend or replace these procedural requirements 
in the context of DAB. With regard to mandatory paperwork, Section 
73.3500 of the Commission's rules lists the applications and report 
forms that must be filed by an actual or potential broadcast licensee 
in certain circumstances. In the DAB FNPRM, we sought comment on which 
forms and applications must be modified because of DAB. We note that 
the following forms may be at issue: (1) Form 301--Application for 
Authority to Construct or Make Changes in a Commercial Broadcast 
Station; (2) Form 302-AM--Application for AM Broadcast Station License; 
(3) Form 302-FM--Application for FM Broadcast Station License; (4) Form 
340--Application for Authority to Construct or Make Changes in a 
Noncommercial Educational Broadcast Station; (5) Form 349--Application 
for Authority to Construct or Make Changes in an FM Translator or FM 
Booster Station; and (6) Form 350--Application for an FM Translator or 
FM Booster Station License. In the DAB FNPRM, we sought comment on any 
specific changes to these forms. We find that certain changes to our 
licensing processes are necessary to accommodate DAB operations. Rather 
than amend the administrative licensing requirements and generate new 
forms now, however, we will delegate the authority to make such 
changes, to the extent possible, to the Media Bureau. This delegation 
permits the Bureau staff to make changes on an expedited basis as 
circumstances warrant, subject to Office of Management and Budget 
approval under the Paperwork Reduction Act.
D. Programming and Operational Rules
1. Public Interest Issues
    60. The DAB FNPRM sought comment on a number of policies and 
requirements impacting the public interest. Such subjects as 
sponsorship identification, political advertising, and cigarette 
advertising were raised for comment. The Commission received extensive 
comment on several issues, including radio reading services, the 
emergency alert system, and station identification. Therefore, these 
subjects are discussed separately below.
a. Public Interest Obligations
    61. It is incumbent upon the Commission to ensure that broadcast 
radio and television stations serve the

[[Page 45680]]

``public interest, convenience and necessity.'' To ensure that 
broadcasters' service meets this high standard, both the Congress and 
the Commission have devised various program-related and operational 
duties that licensees must discharge. Broadcasters, for example, are 
required to air programming responsive to community needs and interests 
and have other service obligations. We remain committed to enforcing 
our statutory mandate to ensure that broadcasters serve the public 
interest and remind broadcasters of the importance of meeting their 
existing public interest obligations. We also encourage them to 
increase public disclosure of the ways in which they serve the public 
interest. Our current requirements, including those implementing 
specific statutory requirements, were developed for broadcasters who 
were essentially limited by technology to a single, analog audio 
programming service and minor ancillary services. The potential for a 
more flexible and dynamic use of the radio spectrum, as a result of 
IBOC, gives rise to important questions about the nature of program-
related and operating obligations in digital broadcasting because the 
scope of those responsibilities has not been defined.
    62. In the DAB FNPRM, we sought comment on how to apply such 
obligations to DAB. We also tentatively concluded that the conversion 
to DAB will not require changes to the following requirements: (1) 
Sections 312(a)(7) (Section 312(a)(7) provides that ``[t]he Commission 
may revoke any station license or construction permit for willful or 
repeated failure to allow reasonable access to or permit purchase of 
reasonable amounts of time for the use of a broadcasting station by a 
legally qualified candidate for Federal elective office on behalf of 
his candidacy.'' This right of access does not apply to candidates for 
state or local offices.) and 315 (Section 315(a) of the Act, as 
amended, provides that ``if any licensee shall permit any person who is 
a legally qualified candidate for any public office to use a 
broadcasting station, he shall afford equal opportunities to all other 
such candidates for that office in the use of such broadcasting 
station.'') Section 73.1940 of the Commission's rules defines ``legally 
qualified candidate'' as any person who has publicly announced his or 
her intention to run for nomination or office, is qualified under the 
applicable local, State, or Federal law to hold office for which he or 
she is a candidate, and has qualified for ballot placement or has 
otherwise met all the qualifications set forth in the Commission's 
rules. In addition, both the Act and the rules narrowly define the term 
``use'' and exclude from the definition candidates' appearances in bona 
fide newscasts, interviews, documentaries, and the on-the-spot coverage 
of news events. Licensees have no power of censorship over the material 
broadcast under the equal opportunity provisions of Section 315(a). Two 
years ago, Congress amended the lowest unit charge provision of Section 
315, codified the Commission's existing political file rule, and 
expanded that rule to require that a broadcast's station's public file 
contain information regarding certain issue advertising. The Supreme 
Court upheld these amendments to the Communications Act in McConnell v. 
FEC), of the Act and Sections 73.1940-44 of the Commission's rules--
political broadcasting; (2) Section 507 of the Act and Section 73.4180 
of the Commission's rules--payment disclosure; (Section 507 of the Act 
states that ``Any employee of a radio station who accepts or agrees to 
accept from any person (other than such station), or any person (other 
than such station) who pays or agrees to pay such employee, any money, 
service or other valuable consideration for the broadcast of any matter 
over such station must, in advance of such broadcast, disclose the fact 
of such acceptance or agreement to such station.''). The requirement, 
in industry parlance, addresses ``payola'' and ``plugola.'' Payola 
occurs when a station fails to announce the receipt of something 
valuable in return for the inclusion of material in a broadcast. 
Plugola describes a situation in which a station fails to identify an 
outside business interest of the licensee, its parent, its affiliates, 
or an employee in the broadcast of particular materials.) (3) Section 
508 of the Act--prohibited contest practices; (Section 508 of the Act 
addresses prohibited practices in contests of knowledge, skill, or 
chance. Under the Act, it is unlawful for any person, with intent to 
deceive the listening or viewing public, to supply to any contestant in 
a purportedly bona fide contest of intellectual knowledge or 
intellectual skill any special and secret assistance whereby the 
outcome of such contest will be in whole or in part prearranged or 
predetermined.) (4) Section 317 of the Act and Section 73.1212 of the 
Commission's rules--sponsorship identification (Section 317 of the Act 
and the Commission's rules state that all matter broadcast by any radio 
station for which any money, service or other valuable consideration is 
directly or indirectly paid, must announce that such matter is paid for 
or furnished by the paying party.); (5) Section 1335 of Title 15 and 
Section 73.4055 of the Commission's rules--cigarette advertising; 
(Section 1335 of Title 15 of the U.S. Code, and the Commission's 
implementing regulations, makes it illegal to advertise cigarettes and 
little cigars on any medium of electronic communication subject to the 
Commission's jurisdiction. Thus, application of this rule to DAB is 
statutorily required.) and (6) Section 73.1208 of the Commission's 
rules--broadcast of taped or recorded material. Under Section 73.1208, 
any taped, filmed or recorded program material in which time is of 
special significance, or by which an affirmative attempt is made to 
create the impression that it is occurring simultaneously with the 
broadcast, must be announced at the beginning as taped, filmed or 
recorded. The language of the announcement shall be clear and in terms 
commonly understood by the public. The purpose of this rule is to avoid 
public confusion by informing the listening audience that the material 
presented is not being broadcast in real time. However, we sought 
comment on how such requirements should be applied to multicast 
services and whether the requirements apply to subscription services.
    63. In its comments, PIC outlines certain areas in which the 
Commission should take action to ensure digital radio stations 
adequately serve the public interest. Specifically, PIC promotes the 
following six principles: (1) Free, over-the-air radio is a vital 
national interest that must be preserved and protected for civic, 
public safety, informational, and cultural reasons; (2) broadcasters 
must add as much additional capacity for the provision of new and 
independent voices or for serving underserved communities as they add 
for other purposes, such as offering commercial services that increase 
format diversity or subscription services; (3) radio must use digital 
technology to improve its offering of emergency information to all 
audiences, including those listening to subscription services, no later 
than it deploys other new services; (4) core statutory obligations must 
apply to all newly-created digital channels, and need modest alteration 
for a digital environment; (5) benefits that accrue to digital audio 
broadcasters must be accompanied by specific public interest 
obligations enforced through Commission rules and renewal processing 
guidelines; and (6) the Commission must ensure that

[[Page 45681]]

technology advancements support a broader benefit to the public. For 
example, PIC suggests that a broadcaster's statutory obligations should 
apply to all DAB streams (i.e., free, subscription, and multicast 
streams). PIC also recommends that the Commission develop a flexible 
``menu'' of additional public interest obligations and impose such 
obligations when a broadcaster chooses to implement subscription or 
other non-advertising based services. PIC advocates that this menu 
should place the highest priority on offering capacity for audio 
programming to non-affiliated noncommercial programmers, ``small 
disadvantaged businesses,'' and commercial programmers serving 
underserved audiences. The menu should also include options to offer 
additional news and public affairs programming, and to offer public 
interest data services. WRAL-FM suggests that all radio and television 
stations should be required to meet certain minimum standards of public 
interest performance. It states that a voluntary code of conduct should 
be adopted to encourage higher than minimum standards for the broadcast 
industry and all stations should be required to report quarterly on 
their public interest activities.
    64. NAB states that existing public interest obligations generally 
should apply to hybrid radio stations. NAB asserts, however, that it is 
premature for the Commission to impose more specific or additional 
public interest obligations on new multicast audio services or on 
datacasting services. NAB argues that the proposals made by PIC lack 
justification, are impracticable and overly burdensome, and present a 
number of policy, statutory and constitutional problems. With regard to 
subscription services specifically, NAB notes that the Commission has 
in the past declined to impose traditional ``broadcast type'' public 
interest obligations on subscription services (including video and 
audio program services), especially when those services are in their 
nascent stage of development. The NAB, citing Subscription Video, 
asserts that the Commission has declined to impose traditional 
broadcast regulations on subscription services carried on FM subcarrier 
frequencies, such as background music programs. NAB argues that the 
Commission should refrain from applying the various ``broadcast type'' 
public interest requirements to IBOC radio subscription services, at 
least until those services, if any, have matured. In any event, NAB 
states that this proceeding, which is focused on radio stations' 
implementation of IBOC, is not the proper vehicle for rewriting the 
Commission's broadcast public interest regulations that apply to both 
television and radio stations. NAB states that the proposals made by 
PIC and other commenters are being specifically, thoroughly, and more 
properly addressed in one or more pending proceedings focusing on 
broadcasters' public interest obligations.
    65. We conclude that applying statutory and regulatory public 
interest requirements currently imposed on analog radio to digital 
radio is both necessary and the proper course of action. Specifically, 
the following requirements apply: (1) Political broadcasting; (2) 
payment disclosure; (3) prohibited contest practices; (4) sponsorship 
identification; (5) cigarette advertising; and (6) broadcast of taped 
or recorded material. Further, we will impose these requirements on all 
free over-the-air digital audio programming streams. The application of 
these requirements to subscription services is addressed in the Second 
Further Notice of Proposed Rulemaking, below.
    66. Additionally, radio stations operating in a digital format must 
comply with all other public interest obligations applicable to radio 
broadcasters while operating in that mode. That is, a radio station 
providing digital audio programming service analogous to the analog 
audio service subject to regulation by the Commission must comply with 
such regulations that apply to that service, unless otherwise specified 
or clarified in this Second Report and Order. The Commission's station 
log and public file requirements, under Section 73.1820 and Sections 
73.3526 and 73.3527, respectively, are some of the rules that apply in 
this context. Other statutory requirements and Commission regulations 
that apply to DAB, but need further explanation, are discussed below. 
We again remind broadcasters of the importance of meeting their 
existing public interest obligations and encourage them to increase 
public disclosure of the ways in which they serve the public interest.
    67. While we move forward and apply existing public interest 
obligations to all free digital broadcast streams, we will not adopt 
new ``public interest'' requirements in this Second Report and Order. 
The commenters have raised important and complex issues concerning how 
broadcasters' public interest obligations should be tailored to the new 
radio services made possible through digital technology. Given the 
substance and scope of the proposed requirements, we conclude that it 
is best to defer consideration of any new public interest obligations 
(of the type envisioned by PIC, for example) so that we can, instead, 
promptly establish basic operational requirements in this proceeding. 
Radio stations using IBOC DAB technology, at this stage in the 
conversion process, are generally offering basic hybrid service where 
the digital signal replicates the programming of the analog signal. 
Thus, for the immediate future, we do not expect novel public interest 
problems to arise in this context.
    68. The Commission will issue an annual report as to how the new 
digital radio services are being rolled out, whether multicast streams 
are being offered, and the extent to which programming on digital radio 
and on the multicast streams are fostering the services described in 
paragraph 37. We will obtain data for the report by periodically 
surveying digital audio broadcasters as to the status of their new 
services.
b. Station Identification
    69. Under Section 73.1201 of the Commission's rules, broadcast 
station identification announcements must be made at the beginning and 
end of each time of operation, and as close to the hour as feasible, at 
a natural break in programming. Official station identification 
consists of the station's call letters immediately followed by the 
community or communities specified in its license as the station's 
location. The name of the licensee or the station's frequency or 
channel number, or both, as stated on the station's license may be 
inserted between the call letters and station location. In the DAB 
FNPRM, we sought comment on whether the station identification rules 
should apply to all digital audio content of a radio station. 
Specifically, we sought comment on how a station should identify audio 
channels other than the main channel. We asked whether there should be 
separate call letters for separate streams. We also sought comment on 
how any proposed rule should differ, if at all, for AM radio stations. 
There are rules for simultaneous AM (535-1605 kHz) and expanded band AM 
(1605-1705 kHz) broadcasts. If the same licensee operates an AM 
broadcast station in the 535-1605 kHz band and an AM broadcast station 
in the 1605-1705 kHz band with both stations licensed to the same 
community and simultaneously broadcasts the same programs over the 
facilities of both such stations, station identification announcements 
may be made jointly for both stations for

[[Page 45682]]

periods of such simultaneous operations.
    70. PIC states that clearly understandable station identification 
rules, differentiating between multiple channels offered by the same 
licensee, and identifying the owner and location of the owner of the 
station, are necessary to allow the public to identify the source of 
the programming. It further states that the Commission should expand 
the call letters that a station uses to identify itself to allow 
listeners to easily remember which station and channel they are tuned. 
PIC adds that call letters are an important mechanism the public and 
the Commission use to identify particular broadcast streams, especially 
in the indecency context.
    71. iBiquity argues against any proposal to create a separate 
station identification requirement associated with digital broadcasts. 
iBiquity argues that because hybrid radio stations (that do not 
multicast) broadcast identical programming throughout the day, there is 
no need for additional identification requirements. iBiquity asserts 
that broadcasting a separate digital call sign would require 
significant system and equipment modifications that will deter 
conversions to digital broadcasts.
    72. The SBAs state that multicast programming streams should not be 
subject to station identification requirements. They argue that such 
requirements are unnecessary for listener recognition and Commission 
enforcement efforts. A radio station will voluntarily identify its 
channel position to listeners to develop market recognition. According 
to the SBAs, stations now identify themselves, their call sign, 
identifier slogan, community of license and dial position (e.g., 
``Z105.3'') far more often than the Commission's rules require. They 
assert that further station identification requirements, which reduce 
broadcast flexibility, are not needed to ensure listener recognition of 
particular broadcast channels. Additionally, with new digital 
technologies, the call letters of the licensee can be embedded into the 
bit-stream of a channel. Thus, the Commission will have a means to 
easily identify a station and monitor its compliance with broadcast 
rules. The SBAs posit that DAB technology permits a visual 
identification on all receivers (through an identification included in 
the transmitted bitstream), eliminating the need for an hourly aural 
identification.
    73. We find that station identification requirements for DAB 
stations are necessary to facilitate public participation in the 
regulatory process, a key element in the Commission's supervision of 
broadcast licensees. Accordingly, we will implement the following 
regulations. First, both AM and FM stations with DAB operations will be 
required to make station identification announcements at the beginning 
and end of each time of operation, as well as hourly, for each 
programming stream. Second, proper identification consists of the 
station's call letters followed by the particular program stream being 
broadcast and the community or communities specified in the station's 
license as the station's location. Stations may insert between the call 
letters and the station's community of license the station's frequency, 
channel number, name of the licensee, and/or the name of the network, 
at their discretion. Third, a radio station operating in DAB hybrid 
mode must identify its digital signal, including any free multicast 
audio programming streams, in a manner that appropriately alerts its 
audience to the fact that it is listening to a digital audio broadcast. 
This requirement can be met through auditory means (i.e., voiceovers), 
textual means (i.e., datacast text appearing on the receiver's 
readout), or any other reasonable means of communication. As stations 
convert to a digital format and elect to provide multicast programming, 
thereby increasing the number of program streams potentially available 
to the public, clear identification of the station providing the 
programming, as well as the particular program stream being broadcast, 
becomes increasingly important, both for listeners and for stations 
themselves. These policies and rules are similar to those adopted by 
the Commission for DTV stations and support our goal of applying 
similar rules to similarly situated broadcasters.
c. Emergency Alert System
    74. The current emergency alert system (``EAS'') requirements are 
codified in part 11 of the Commission's rules and, inter alia, mandates 
the delivery of a ``Presidential message'' in the case of a national 
emergency. Along with its primary role as a national public warning 
system, EAS and other emergency notification mechanisms, are part of an 
overall public alert and warning system, over which the Federal 
Emergency Management Agency (``FEMA'') exercises jurisdiction. EAS use 
as part of such a public warning system at the state and local levels, 
while encouraged, is merely voluntary.
    75. Section 73.1250 of the Commission's rules further specifies the 
substance and scope of the emergency information being broadcast. Under 
our rules, and if requested by government officials, a station may, at 
its discretion, and without further Commission authorization, transmit 
emergency point-to-point messages for the purpose of requesting or 
dispatching aid and assisting in rescue operations. If EAS is activated 
for a national emergency while a local area or state emergency 
operation is in progress, the national level EAS operation must take 
precedence. Emergency situations in which the broadcasting of 
information is considered as furthering the safety of life and property 
include, but are not limited to the following: tornadoes, hurricanes, 
floods, tidal waves, earthquakes, icing conditions, heavy snows, 
widespread fires, discharge of toxic gasses, widespread power failures, 
industrial explosions, civil disorders and school closing and changes 
in school bus schedules resulting from such conditions. AM stations 
may, without further Commission authorization, use their full daytime 
facilities during nighttime hours to broadcast emergency information 
when necessary for the safety of life and property, in dangerous 
conditions of a general nature, and when adequate advance warning 
cannot be given with the facilities authorized. All activities must be 
conducted on a noncommercial basis, but recorded music may be used to 
the extent necessary to provide program continuity. In the DAB FNPRM, 
we tentatively concluded that Section 73.1250 should apply to all audio 
streams broadcast by a radio station because the emergency information 
mandate can only be fulfilled if it is broadly applied.
    76. The SBAs state that it is in the public interest to extend the 
emergency alert system to all audio streams broadcast by a radio 
station. NPR states that each free over-the-air audio program service 
should participate in the EAS system. Using relatively inexpensive 
distribution amplifiers and switching devices, NPR states that radio 
stations should be able to carry EAS or other emergency information 
virtually instantaneously via each free over-the-air program channel. 
However, NPR does not believe stations should be compelled to offer 
additional, unspecified ``emergency'' or other services as a condition 
to offering any data services. NAB argues that any questions regarding 
EAS equipment requirements for DAB should be set aside until a later 
date.
    77. Subsequent to the release of the DAB FNPRM, the Commission 
adopted a Notice of Proposed Rulemaking seeking comment on rule changes 
for the emergency alert system. In that

[[Page 45683]]

proceeding, the Commission asked how the EAS system can be improved to 
be a more effective mechanism for warning the American public of an 
emergency. The action originated, in part, from recommendations of the 
Media Security and Reliability Council (an FCC Advisory Committee) and 
the Partnership for Public Warning. The Commission specifically sought 
comment on IBOC DAB and how the EAS system should apply to additional 
digital multicast programming streams. In November 2005, we revised our 
Part 11 EAS rules to apply to all radio stations operating in a digital 
mode and required such stations to air all national EAS messages on all 
audio streams, including subscription services. We found that all 
listeners should be informed of critical emergency information 
regardless of which audio stream they are listening to. We also 
clarified that if DAB stations choose to participate in state and local 
EAS activations, they must comply with Part 11. The Commission stated 
that such rules will become effective on December 31, 2006.
    78. With regard to Section 73.1250, we note that a digital 
simulcast of an analog radio signal will, by virtue of the IBOC system 
design, be transmitting EAS information. Thus, listeners of the free 
digital simulcast will be able to access important emergency 
information per the existing requirements. As for multicast digital 
audio programming streams, we will apply the mandates of Section 
73.1250 to all DAB audio streams in accordance with the revisions made 
to our Part 11 requirements. The public benefit of the Commission's 
emergency information requirements can only be realized if the rule is 
applied in this manner.
d. Radio Reading Services
    79. Radio reading services for the blind (``RRS'') have been one of 
the critical public interest services provided by radio stations and 
others across the country. Radio reading services are conducted by 
nonprofit organizations that read printed materials over electronic 
media for persons who are visually impaired. Radio reading services 
operate on FM radio subcarrier channels, usually under a leasing 
arrangement. Alternatively, RRS use cable television systems, a 
television station's second audio program (``SAP''), or the main 
channel of an AM or FM radio station. RRS represents the most frequent 
use of subcarrier channels on noncommercial stations. In 1983, the 
Commission held that public radio stations, subject to Section 399B of 
the Act, using subcarriers for remunerative activities must ensure that 
neither existing nor potential RRS are diminished in quality or 
quantity by the pursuit of commercial subcarrier undertakings. The 
Commission held that a station using one of its subcarriers for 
commercial purposes would be obliged to accommodate RRS on its other 
subchannel to ensure the availability of alternative subchannel 
capacity for such services. In the DAB R&O, we raised concerns about 
the level of interference to analog SCA services and its potential 
impact on RRS. In the DAB FNPRM, we sought further comment on measures 
to protect established SCA services from interference.
    80. Protecting Analog Radio Reading Services From Interference. 
According to iBiquity, previous field tests presented to the Commission 
and the NRSC demonstrate that, except in limited circumstances, DAB 
stations operating on second-adjacent channels will not cause harmful 
interference to analog radio reading services and other SCA services. 
iBiquity asserts that since the scaling of the HDC codec to obtain 
additional capacity for multicasting or datacasting only impacts the 
audio of the main channel signal, and not the bandwidth occupancy, it 
cannot change the interference potential from the digital signal. 
Although using the extended hybrid mode increases the bandwidth 
occupancy, it extends inward toward the host signal rather than outward 
toward adjacent channel stations. Thus, iBiquity argues the use of the 
extended hybrid mode cannot increase interference to adjacent channel 
SCA signals. iBiquity states that although the extended hybrid mode 
could possibly increase the potential for interference to the host 
station's existing analog SCA services, the host station has the 
ability to address this situation.
    81. In 2002, NPR commissioned a study to estimate the number of 
listeners potentially affected by additional interference from IBOC in 
the top 16 radio markets. The results show that, on average, additional 
interference from IBOC could affect 2.6 percent of eligible radio 
reading service receivers within an FM station's service area. Harris 
points out that the NPR study used mathematically averaged receiver 
performance data to estimate interference potential in the top 16 radio 
markets. Harris emphasizes that actual interference is not widespread, 
and that any possible degradation to radio reading services may be 
ameliorated, at least in part, through antenna alignment, substitution 
of a higher quality analog receiver, or carrying the programming on a 
digital SCA channel. Harris states that it will be testing the use of 
the extended hybrid digital system to provide for a digital transition 
of RRS. Harris recommends that the Commission adopt and enforce the 
revised FM RF mask proposed by iBiquity to further mitigate 
interference to SCA services, other digital services, and second 
adjacent channel analog FM services.
    82. These RR Services provide tremendous value and we wish to 
encourage their development in a digital environment. Based on the 
record, it does not appear that interference generated by IBOC is 
likely to cause significant harm to analog SCA reading services. 
Nevertheless, the Commission staff will act on complaints in the rare 
cases in which interference is shown to cause a problem. In the 
meantime, we encourage NPR and other parties to continue independent 
testing that will provide us with data on possible interference in 
particular circumstances in specific areas. We will defer considering 
Harris' recommendation on the RF mask until such test results are made 
available.
    83. Digital Radio Reading Services. IAAIS urges the Commission to 
adopt rules requiring digital radio stations to carry digital RRS. 
IAAIS essentially argues that before any radio station offers income 
generating secondary audio streams, it should be required to first 
provide digital bandwidth for RRS. IAAIS suggests that digital RRS will 
be best accommodated on the extended hybrid mode where the IBOC codec 
can easily process human speech. IAAIS additionally states that the 
digital information sent to radios can be accessed only after 
authorization, thus protecting the reading service copyright exemption 
for use of the thousands of print materials read aloud. iBiquity 
opposes IAAIS's request that the Commission require digital radio 
stations to offer capacity for RRS. iBiquity asserts that the radio 
reading services do not need a dedicated 20 or 24 kbps channel to match 
their current service. iBiquity indicates that high quality ``voice'' 
channels can be attained using 8 or 10 kbps codecs designed for those 
low bit rates. In some cases, those codecs can support voiceover 
programming with background music. Although this class of codec is not 
designed for higher quality music, iBiquity asserts that high quality 
music programming would be beyond the mission of the reading service 
stations. iBiquity states that it will identify a suitable solution 
that can function at 12 kbps. NPR asserts that it is inappropriate to 
consider IAAIS's proposals at this stage of the DAB

[[Page 45684]]

conversion process because more testing of digital RRS needs to be 
undertaken before regulations are considered. We decline to impose a 
digital RRS requirement, or place conditions of the type suggested by 
IAAIS, on radio stations at this time. The Commission does not require 
radio stations to offer analog RRS and there is no substantial evidence 
in the record supporting enhanced RRS requirements for DAB. Moreover, 
we find that any type of RRS requirement would run counter to our 
flexible bandwidth policy. However, we reiterate our recognition of the 
value of such services and encourage their deployment in the digital 
environment. We also decline to adopt new policies addressing the 
interplay between remunerative services offered by NCEs and the 
availability of RRS, similar to the requirements in Section 73.593 of 
the Commission's rules, because the business and programming decisions 
of noncommercial stations are not yet known. This will be an issue 
addressed in a DAB periodic review in the future.
    84. Receiver Requirements. IAAIS urges the Commission to require 
all digital receivers to include RRS capabilities. In addition, IAAIS 
asks the Commission to require tactile controls and other accessibility 
features to be built into every digital receiver. iBiquity opposes new 
requirements for radio equipment manufacturers, arguing that it would 
impair the development of DAB. It further asserts that the imposition 
of new and potentially expensive regulations on the design and features 
of digital receivers will create a strong disincentive for 
manufacturers to introduce digital devices, particularly if these 
accessibility features would require significant development work or 
redesign of radio receivers. According to iBiquity, these regulations 
would not only increase the costs of digital radio for consumers, but 
it also would slow the introduction of digital receivers and the IBOC 
transition.
    85. Our goal is to see RRS services deployed. As noted below, 
voluntary industry efforts in this regard are continuing and show 
substantial promise. In addition, reception devices for analog RRS are 
available as stand-alone equipment for those with visual impairments. 
Such consumers may subscribe to RRS services and be able to obtain an 
RRS receiver if they so desire. Consumer electronics manufacturers, 
however, are under no obligation to build analog audio receivers with 
RRS capabilities nor should they be required to manufacture IBOC 
receivers with RRS functionalities. IAAIS's proposed mandates would 
make it more costly to produce DAB receivers, which in turn, would make 
it more expensive for consumers to purchase equipment. We note that 
there is no express statutory provision requiring such capabilities. 
IAAIS relies on Section 255 of the Telecommunications Act of 1996 as 
the basis for some of its requests. This section codifies the 
responsibilities of telecommunications manufacturers and service 
providers to meet the needs of the disabled. This section, however, 
applies to entities regulated under Title II of the Act. It does not 
impose any requirements on broadcasters regulated under Title III of 
the Act or on manufacturers of broadcast -related equipment. Moreover, 
we recognize that any regulation of broadcast reception equipment is 
subject to the limitations identified in recent court precedent. 
Although we will not require RRS capability at this time, we do not 
rule out the possibility of revisiting the issue in the future should 
the need arise.
    86. Voluntary Industry Efforts. iBiquity states that it has been 
working with the IAAIS to ensure that radio reading services are 
accommodated as radio stations convert to digital. iBiquity notes that 
it is developing a conditional access solution for the IBOC system to 
ensure that reading services are able to maintain their copyright 
exemption. iBiquity is supplying software, hardware and laboratory 
facilities to facilitate additional testing to determine the 
appropriate low bit rate codec that can be used for reading services. 
iBiquity states that even though it has engineered the HDC codec to 
function at bit rates low enough to accommodate reading services, it 
has consistently assured the reading services that the IBOC system will 
operate compatibly with any low bit rate codec the reading services 
select for inclusion in reading service devices. NPR states that it is 
exploring the use of the extended hybrid spectrum for the digital 
transmission of radio reading services. Pursuant to a Corporation for 
Public Broadcasting grant, NPR conducted full perceptual testing of the 
latest low- and very low-bit rate digital audio coders that may be used 
for radio reading services audio. NPR plans additional tests to measure 
the coverage capabilities of extended hybrid operation. With 
predictions that the prevalence of visual disabilities will increase 
markedly during the next 20 years as the U.S. population ages, NPR 
expects NCE stations to continue leading the way in offering assisted 
living services, including radio reading services for the ``print-
impaired.'' We are encouraged by the voluntary steps taken by iBiquity 
and NPR, so far. We urge these parties to work with IAAIS to forge a 
resolution that would benefit all parties involved.
2. Operating Hours
    87. In the DAB FNPRM, we asked how the conversion to DAB would 
affect the ``minimum hours of operation'' requirement in Sections 
73.1740 and 73.561 Under the relevant rules, AM and FM commercial 
stations are required to operate two-thirds of the total hours they are 
authorized to operate between 6 a.m. and 6 p.m. local time and two-
thirds of the total hours they are authorized to operate between 6 p.m. 
and midnight, local time, each day of the week except Sunday. NCE FM 
stations are required to operate at least 36 hours per week, consisting 
of 5 hours of operation per day on at least 6 days per week. The SBAs 
state that multicasting changes the way radio stations operate. It 
states, for example, that the Commission may want to support multicast 
streams, which do not operate two-thirds of the total hours they are 
authorized to operate between 6 a.m. and 6 p.m. and two-thirds of the 
total hours they are authorized to operate between 6 p.m. and midnight, 
in order to promote more digital multicasting on the air. We find merit 
in the SBAs arguments and will permit radio stations to set their own 
schedule for DAB hybrid mode broadcasts as well as additional multicast 
streams at this stage of the DAB conversion process. We note that 
multicasting is at the discretion of the licensee stations; therefore 
they should be allowed to schedule separate streams as they wish. This 
flexible policy will encourage more radio stations to experiment with 
new programming services that interest the public. We will revisit this 
issue, if necessary, in future periodic reviews.
3. Territorial Exclusivity
    88. In the DAB FNPRM, we sought comment on the application of 
Sections 73.132 and 73.232, the territorial exclusivity rules for AM 
and FM stations. Under these rules, no licensee of an AM or FM 
broadcast station shall have any arrangement with a network 
organization that prevents or hinders another station serving 
substantially the same area from broadcasting the network's programs 
not taken by the former station, or which prevents or hinders another 
station serving a substantially different area from broadcasting any 
program of the network organization. This section does not prohibit 
arrangements under which the station is granted first call within its 
primary service area upon the network's programs. The SBAs states that 
changes will not be necessary to these

[[Page 45685]]

requirements due to the advent of DAB. With regard to these 
requirements, we note that the rules apply to the licensees themselves 
and not the content being broadcast. Due to the expansive language 
contained in the current requirements, and the pro-competition policies 
reflected therein, the territorial exclusivity rules apply to all free 
digital audio programming streams. Any novel issues that may arise from 
our decision here will be addressed on a case-by-case basis.
E. Technical Rules
1. AM Nighttime Operation
    89. In the DAB R&O, we declined to authorize nighttime IBOC 
operation by AM stations because there were insufficient test results 
in the record to support that action. In 2004, NAB submitted its 
analysis of AM nighttime IBOC tests conducted by iBiquity and 
recommended that the Commission ``extend the current interim 
authorization for IBOC service to permit nighttime AM broadcasts.'' On 
April 14, 2004, the Commission issued a Public Notice seeking comments 
on the NAB recommendations. Most of the comments received from 
broadcasters, such as the SBAs, support NAB's recommendation that the 
Commission extend current interim authorizations of IBOC service to 
nighttime AM broadcasts. Several other commenters, however, object to 
nighttime AM IBOC operations citing the potential for increased 
interference due to nighttime AM skywave propagation.
    90. On balance, we find that the benefits of full-time IBOC 
operation by AM stations outweigh the slightly increased risk of 
interference. The studies performed by iBiquity and analyzed by NAB 
indicate that the greatest potential for interference occurs at the 
extremities of the nighttime coverage area of the desired station, 
primarily at locations where substantial interference from existing 
analog operations is already present. We do not anticipate increased 
interference within AM stations' core service areas. Furthermore, the 
interference management procedures established in the DAB R&O provide a 
mechanism whereby particular instances of interference can be readily 
resolved. Therefore, we will extend the permissible hours of IBOC 
interim operation for AM stations to include all hours during which a 
given station is currently authorized for analog operation, subject to 
the notification procedures established in the DAB R&O. In order to 
avoid unnecessary and repetitious notifications, we will not require 
those AM stations which have already notified the Commission of the 
commencement of daytime IBOC operation to file any further 
notification; authority for nighttime IBOC operation is automatically 
conferred upon those stations by the action taken herein. AM stations 
which file IBOC notifications with the Commission after the effective 
date of this Second Report and Order will be presumed to have commenced 
IBOC operation for all hours of currently authorized analog operation, 
unless the notification states otherwise. We note that many Class D AM 
stations are authorized for nighttime secondary operation with 
extremely low operating power, in some cases as low as one watt. In 
some cases, nighttime IBOC power may be so low as to render IBOC 
operation technically infeasible. Nighttime secondary operation for an 
AM station is operation with power less than 250 watts and antenna 
efficiency less than 241 millivolts per meter at one kilometer for one 
kilowatt input. We remind licensees that nighttime secondary analog 
operation by Class D AM stations does not carry any minimum operating 
schedule requirement, and that interim IBOC operation is entirely 
voluntary for all stations at the present time.
2. Dual Antennas
    91. In the DAB R&O, we limited interim IBOC implementation to the 
systems that the NRSC had tested. With respect to FM antennas, the NRSC 
had tested a configuration in which the FM analog and digital signals 
were combined and fed into the same antenna. Consequently, FM stations 
implementing IBOC were initially required to use the single-antenna 
approach. Subsequent testing by NAB, however, showed that separate 
antennas could be used for the analog and digital FM signals within 
specified limits. NAB stated that the dual antenna approach is less 
costly for many FM stations, and may therefore encourage IBOC 
development. By Public Notice, we authorized FM stations to use dual 
antennas for IBOC pursuant to routine special temporary authorization 
(STA) procedures. We raised the issue of dual antennas for further 
comment in the DAB FNPRM. Commenters were unanimous in supporting the 
expansion of IBOC notification procedures to include dual antenna use, 
without the necessity of an STA request. We agree and accordingly 
authorize FM stations to implement IBOC without prior authority using 
separate antennas conforming to the criteria set forth in the Dual 
Antennas Public Notice. Stations must notify the Commission within ten 
days of the commencement of IBOC operations, consistent with the 
digital notification procedures already in place. In addition to the 
information required of all licensees initiating digital operations, FM 
licensees using dual antennas shall provide the following information: 
(1) Geographic coordinates, elevation data, and license file number for 
the auxiliary antenna to be employed for digital transmissions; and (2) 
for systems employing interleaved antenna bays, a certification that 
adequate filtering and/or isolation equipment has been installed to 
prevent spurious emissions in excess of the limits specified in 47 
CFR73.317.
3. FM Translator and Booster Stations
    92. An FM translator station is a station operated for the purpose 
of retransmitting the signals of an FM station or another FM translator 
station without significantly altering any characteristics of the 
incoming signal other than its frequency and amplitude. An FM booster 
station is a station operated for the purpose of retransmitting the 
signals of an FM station by amplifying and reradiating such signals 
without significantly altering any characteristics of the incoming 
signal other than its amplitude. In the DAB FNPRM, we solicited comment 
on digital issues concerning FM translators and boosters. Commenters 
discussed the following seven issues: (1) Conversion of FM translator 
and booster stations to digital operation; (2) permissible uses of 
digital translator and booster stations; (3) use of FM translators and 
boosters to rebroadcast multiplexed audio streams; (4) use of dual 
output digital translators; (5) indefinite continuation of analog FM 
translator and booster station operation; (6) modifications of the 
currently permitted signal delivery methods for FM translators and 
boosters; and (7) requirements related to the simultaneous digital 
conversion of licensed main and FM translators and boosters. The latter 
issue garnered the most attention from interested parties, where most 
agreed that the Commission should not require simultaneous digital 
conversion of the primary station and its FM translators and boosters.
    93. We will permit the use of digital translator and booster 
stations during interim DAB operations. However, we believe that a 
stronger record is necessary to address the complicated issues involved 
in the authorization of these facilities before adopting permanent 
rules for digital translator and booster stations. Pursuant to 
experimental authorization issued by the Commission, KCSN-FM and NPR

[[Page 45686]]

conducted field tests in the Los Angeles metropolitan area in December 
2004 to evaluate KCSN-FM's signal coverage via mobile reception. NPR 
and the station attempted to evaluate IBOC DAB system coverage in terms 
of received signal level. The field tests evaluated reception 
availability and compared actual data to predictions using a 
computerized propagation model. NPR chose KCSN-FM to conduct these 
tests because the station operates the nation's first IBOC DAB booster 
which presents unique challenges for technical performance. The testing 
indicated that the booster generally increased the availability of 
KCSN-FM's digital signal, but that there were still coverage issues in 
certain service areas. We will not require the simultaneous conversion 
of the primary station and its FM translators and boosters. We do not 
want to overburden radio stations with more technical requirements than 
necessary as they commence digital operations.
4. TV Channel 6
    94. Beginning approximately 20 years ago, NCE FM stations operating 
on channels 201 through 220 were required to protect channel 6 TV 
stations from adjacent channel interference based on the performance 
characteristics of analog TV receivers. In the DAB FNPRM, we sought 
comment on what, if any, rule changes are necessary to protect channel 
6 TV stations from interference from digital radio operations, and if 
new rules are needed to protect channel 6 DTV stations. There are 
currently 58 licensed analog channel 6 full-service TV stations and 6 
licensed analog channel 6 Class A TV stations. There are currently no 
licensed or authorized channel 6 digital TV or digital Class A TV 
stations.
    95. NPR and Paul Delaney assert that due to the low signal strength 
of the IBOC digital signal, there is minimal potential for increased 
NCE FM interference to analog channel 6 TV stations. Additionally, both 
question the continued applicability of the existing TV channel 6 
protection requirements in light of the transition to DTV where there 
will be few, if any, channel 6 TV stations, and where the use of 
digital receivers will provide increased immunity to adjacent channel 
FM interference. REC Networks concurs with NPR concerning the re-
examination of the current NCE FM channel 6 protection requirements, 
but, it suggests that perhaps some protection of both analog and 
digital channel 6 TV stations may be appropriate for NCE FM IBOC hybrid 
operations.
    96. We agree that the very low increase in power resulting from the 
addition of the IBOC digital signal likely will not result in any 
increased interference to analog channel 6 TV stations from NCE FM 
stations operating on FM channels 201-220, and that the DTV transition 
may render this issue moot. Therefore, no changes in Section 73.525 
governing TV channel 6 protection are necessary at this time. The 
Commission will, however, initiate a separate proceeding to evaluate 
the existing NCE FM channel 6 TV protection requirements, and seek 
public input on their continued viability, following the completion of 
the DTV transition, a review of the immunity characteristics of DTV 
receivers, and the widespread deployment of DAB transmitting 
facilities.
5. Super-Powered and Short-Spaced Stations
    97. Although this issue was not raised in the DAB FNPRM, Livingston 
Radio Company and Taxi Productions Inc. (``Livingston'') urge the 
Commission to restrict the digital power levels for super-powered FM 
stations. A super-powered FM station is a station for which the power/
antenna height combination exceeds the class limit set forth in 47 CFR 
Sec.  73.211. Such stations were authorized before the current class 
limits were adopted, and have ``grandfathered'' status. Livingston 
asserts that super-powered stations cause more interference than 
stations that comply with class limits. Therefore, according to 
Livingston, IBOC operations by super-powered stations must be limited 
in order to avoid excessive interference to nearby stations on adjacent 
channels. Livingston urges the Commission ``not to extend superpower 
privileges into the IBOC digital environment,'' and suggests 
determining digital signal power based on class maximum facilities. 
Similarly, Press Communications, LLC (``Press'') suggests that the 
Commission adopt limits on IBOC operation by short-spaced FM stations.
    98. Several commenters disagree with Livingston's proposal. WPNT, 
Inc., for example, states that ending the grandfathered status of 
super-powered stations would simply benefit some broadcasters at the 
expense of others. Cox Radio, Inc. and Bonneville International 
Corporation assert that termination of super-power status is outside 
the scope of this proceeding, and that the Commission would violate the 
Administrative Procedures Act if it were to adopt rules without first 
seeking comment from the public. We agree that the consideration of 
super-powered status is beyond the scope of this proceeding, and, 
therefore, decline to adopt special restrictions on digital operations 
by super-powered stations here. In any event, we do not see a 
compelling reason to restrict digital operations by short-spaced FM 
stations, as Press suggests. We will continue to evaluate any 
complaints of possible IBOC interference on a case-by-case basis as we 
stated in the DAB R&O.
6. Expansion of IBOC Notification Procedures
    99. We are hereby changing the procedures for approving IBOC 
operations to allow broadcasters to take advantage of technical 
improvements as they develop, rather than waiting for Commission action 
and rules to do so. In the DAB R&O, we permitted radio stations to 
implement IBOC operations without prior authority, provided that the 
IBOC configurations were substantially the same as those tested by the 
NRSC. The IBOC DAB service is developing rapidly, with new modes of 
operation such as multicasting, datacasting, and dual antenna operation 
all commencing after the DAB R&O was adopted. As test results have been 
added to the record in this proceeding, the staff has sought comment 
and subsequently issued Public Notices authorizing IBOC operations that 
differ from the configurations originally tested by the NRSC. Stations 
wishing to implement multicasting or dual antenna operations have, 
however, been required to request prior authority to operate from the 
Commission. We believe that DAB will continue to evolve rapidly in 
tandem with modifications by iBiquity to the IBOC system. In the 
interests of efficiency, we delegate to the Media Bureau the authority 
to issue Public Notices, seek public input, and review the range of 
permissible IBOC operations as circumstances warrant. After appropriate 
notice and comment, the staff is authorized to act on delegated 
authority on implementing new IBOC notification procedures to cover new 
IBOC configurations. Expansion of the notification procedures will 
allow stations to implement digital operations without unnecessary 
delay.
7. Receivers
    100. According to iBiquity, its systems provide extensibility in 
that the first-generation receivers are designed to operate both in the 
interim hybrid and in all-digital modes. In the DAB R&O, we stated that 
this is an area in which definitive evaluations can only be undertaken 
after we resolve a number of all-digital issues, such as issues 
relating to signal architecture. Recognizing the

[[Page 45687]]

flexibility of the IBOC model, and the possibility of new services, we 
stated that we will address receiver issues in more detail at a later 
date. We sought comment on whether the issues raised, and the policies 
proposed, in the DAB FNPRM require us to address receiver issues at 
this stage of DAB development. We asked, for example, how the adoption 
of a high quality audio requirement would affect receiver 
manufacturers. As noted above, we do not establish a high quality audio 
requirement. The commenters did not address the issue of receiver 
performance standards. Further, there is an open Commission proceeding 
concerning the adoption of receiver performance standards. 
Consequently, we believe that the public interest is better served by 
awaiting the outcome of that proceeding and will address DAB receiver 
issues, if necessary, in the future.
8. Patents
    101. The iBiquity IBOC DAB system uses patented technologies. This 
requires IBOC licensees to pay licensing fees to the patent holders. 
The Commission stated in the DAB R&O that during the interim DAB 
operation period, we will monitor the behavior of the patent holders to 
determine if the required licensing agreements are reasonable and non-
discriminatory and that we will seek additional public comment on this 
matter as required. In the DAB FNPRM, we sought further comment on 
iBiquity's conduct regarding licensing agreements in the interim DAB 
operating period. Although iBiquity has pledged to adhere to the 
Commission's patent policy, certain parties commented that iBiquity 
might resort to unreasonable and discriminatory licensing fees once DAB 
receivers have become widely available. We find that iBiquity has 
abided by the Commission's patent policy up to this point in the DAB 
conversion process. Therefore, we do not believe that it is appropriate 
at this time for us to adopt regulations governing IBOC licensing and 
usage fees. If we receive information that suggests we need to explore 
this issue further, especially in connection with the adoption of the 
NRSC-5 standard, we will take appropriate action at that time.
9. Other Technical Issues
    102. In the DAB FNPRM, we raised for comment other technical issues 
relevant to the discussion of DAB operations, including (1) AM and FM 
definitional issues; (2) interference; (3) AM stereo; (4) operating 
power; and (5) predicted coverage for digital signals. We find that 
these issues have been sufficiently addressed in the DAB R&O to permit 
station authorization on an interim basis. Further evaluation of these 
issues is best undertaken in conjunction with the NRSC-5 standards 
review.

IV. International Issues

    103. In the DAB R&O, the Commission stated that during the period 
of interim IBOC operation, all relevant international agreements will 
be reviewed and any necessary modifications will be addressed at a 
later date. In the DAB NOI, we noted that these matters are being 
informally addressed by the Commission's International Bureau (``IB'') 
and asked what IB should focus on to expedite the rollout of DAB in the 
United States. The Commission has rules pertaining to FM broadcasting 
and international agreements relevant to the service. Specifically, 
Section 73.207 states that under the Canada-United States FM 
Broadcasting Agreement, domestic U.S. allotments and assignments within 
320 kilometers (199 miles) of the common border must be separated from 
Canadian allotments and assignments by not less than the distances 
provided in the Commission's rules. It also states that under the 1992 
Mexico-United States FM Broadcasting Agreement, domestic U.S. 
assignments or allotments within 320 kilometers (199 miles) of the 
common border must be separated from Mexican assignments or allotments 
by not less than the distances stated in the rule.
    104. According to iBiquity, the International Bureau has 
appropriately analyzed the ability of the United States to implement 
IBOC consistent with the United States' treaty obligations to Canada 
and Mexico. The International Bureau also has held informal discussions 
with both the Canadian and Mexican governments concerning 
implementation of IBOC in the United States. iBiquity states that it 
supports these efforts and submits that the current process is 
adequately addressing the international requirements for implementing 
IBOC.
    105. One commenter, Barry McLarnon, states that the current 
broadcast co-channel allocation rules are no longer adequate to prevent 
objectionable interference from operating hybrid AM IBOC radio 
stations. He argues that AM IBOC is not permissible under the terms of 
the U.S.-Canada bilateral agreement on AM broadcasting. Specifically, 
he asserts that AM IBOC interference is in contravention of the article 
in that agreement which states: ``Classes of emission other than A3E, 
for instance to accommodate stereophonic systems, could also be used on 
condition that the energy level outside the necessary bandwidth does 
not exceed that normally expected in A3E. * * *.'' McLarnon asserts 
that the ``necessary bandwidth'' in this case is defined as 10 kHz and 
the hybrid AM IBOC system increases the occupied bandwidth of an AM 
station to approximately 28 kHz. He further asserts that the increased 
power is outside the necessary bandwidth of the AM signal and exceeds 
that normally expected in A3E. He also states that identical wording is 
used in the agreement between the U.S. and Mexico, and therefore, that 
agreement is also violated by any usage of the hybrid AM IBOC system.
    106. All matters pertaining to the relevant international 
agreements, including the above contentions, are being addressed in the 
appropriate bilateral and multilateral fora. While we are optimistic 
that we will be able to resolve any outstanding issues with Canada and 
Mexico or other countries, these issues remain subject to ongoing 
negotiations. Therefore, until the negotiations are completed, we 
advise the radio industry that the following condition will be applied 
to stations operating with IBOC DAB:

    Operation with facilities specified herein is subject to 
modification, suspension or termination without right to hearing, as 
may be necessary to carry out the applicable provisions of the ITU 
Radio Regulations, the Final Acts of the ITU Administrative 
Conference on Medium Frequency Broadcasting in Region 2 (Rio de 
Janeiro, 1981), or any bilateral or multilateral agreement(s) of the 
United States.

V. Order on Reconsideration

    107. The Commission has before it three Petitions for 
Reconsideration of the DAB R&O in which the Commission selected IBOC as 
the sole digital technology for the terrestrial radio broadcasting 
service. More than three years ago, the Commission sought comment on an 
NRSC report documenting extensive laboratory and field tests of the FM 
IBOC system. iBiquity was the only developer to submit digital systems 
to the NRSC for evaluation. The NRSC FM report recommended that the 
Commission adopt iBiquity's FM system for DAB. On April 15, 2002, the 
NRSC filed its evaluation of iBiquity's AM hybrid system, recommending 
that the Commission adopt the system for daytime use pending further 
study under nighttime propagation conditions. Broadcast industry 
commenters, including small and large radio station owners, equipment 
manufacturers, and

[[Page 45688]]

receiver manufacturers expressed strong support for iBiquity's AM and 
FM systems, and both systems were subsequently adopted for interim use 
on a voluntary basis in the DAB R&O. For the reasons discussed below, 
we deny the petitions of the Amherst Alliance and other parties 
(collectively ``Amherst'') and of John Pavlica, Jr. We dismiss the 
petition of Glen Clark and Associates ``Clark'' as moot.
    108. The Amherst Alliance has filed the following pleadings with 
the Commission: (1) A Petition for Reconsideration of the DAB R&O 
(filed October 25, 2002); (2) a Petition for Rulemaking (filed April 
17, 2002); and (3) a request for Environmental Impact Statement (filed 
July 18, 2002). Specifically, Amherst claims that the Commission failed 
to act on a request filed by it and other parties for an environmental 
impact statement concerning the possible effects of IBOC, and on a 
petition by it and other parties for a new rulemaking on digital radio. 
Amherst also claims that the Commission should not have adopted IBOC 
until proceedings on blanketing interference and human exposure to 
electromagnetic radiation were resolved. NAB opposes Amherst stating 
that it ``presents no basis for reconsideration of the DAB R&O and 
virtually no substance or support for its complaints.'' iBiquity states 
that Amherst offers no new information justifying any changes in the 
policies adopted by the Commission in the DAB R&O and is merely an 
attempt to delay IBOC. We agree with NAB and iBiquity that Amherst has 
not presented any arguments that were not already addressed and 
disposed of by the Commission in the DAB R&O. Moreover, we find that 
Amherst has not provided new evidence of the type necessary for the 
Commission to delay the introduction of IBOC and the offering of DAB to 
the public. Therefore, its Petitions for Reconsideration and Rulemaking 
are denied.
    109. We also affirm our conclusion in the DAB R&O that the 
initiation of interim IBOC operations is categorically excluded from 
environmental processing and that the procedure requiring licensees to 
certify compliance with existing RF exposure standards satisfies any 
environmental requirements. Accordingly, preparation of an 
environmental impact statement is unnecessary in the context of IBOC 
operations. We reject the argument that the denial of Amherst's Request 
for Environmental Impact Statement was not ``officially'' denied 
because the denial was not listed in the ordering clause of the DAB 
R&O. Where the text of an order is clear, the omission of the action 
from the ordering clause is not determinative.
    110. John Pavlica, Jr. petition. Pavlica states that the iBiquity 
IBOC systems cause ``substantial and nearly continuous interference'' 
to existing AM and FM stations. According to Pavlica, the Commission 
should consider options such as better receiver technology before 
adopting any digital radio system. Pavlica suggests a one-year period 
for evaluating alternatives to IBOC. Pavlica also expresses concern 
about iBiquity's status as the sole source of proprietary IBOC 
technology. All of Pavlica's contentions were thoroughly addressed in 
the DAB R&O. Beyond the simple assertion that IBOC causes extensive 
interference, the petition offers no technical support for this 
characterization of IBOC operation. In sharp contrast, the NRSC spent 
several years crafting IBOC tests, the results of which are documented 
in detailed comments. The comparison of alternatives for introducing 
digital technology to the AM and FM bands that Pavlica calls for began 
with the DAB NPRM in 1999, and concluded with the selection of IBOC in 
2002 based on a substantial record. It is well established that the 
Commission does not grant reconsideration for the purpose of debating 
matters on which it has already deliberated.
    111. Other Pleadings. In two letters, Amherst suggests that IBOC 
operations may cause interference to the AMBER alert system. In 
participating states, AMBER alerts are broadcast as part of the 
Emergency Alert System. EAS messages are transmitted via the main 
analog radio signal. Amherst offers no support for the allegation. Test 
results presented in the NRSC AM and FM reports demonstrate that analog 
radio signals will not be subject to interference that would impair EAS 
transmissions. Any interference from IBOC is likely to occur at the 
fringes of a station's normally protected coverage area, where the 
analog signal quality is poor. In such circumstances, analog listeners 
are likely to tune to another radio station with a stronger signal, 
particularly in the event of an emergency. Amherst provides no 
countervailing evidence that IBOC will interfere with AMBER alerts, and 
no reason to delay IBOC implementation.
    112. In a petition for rulemaking filed January 24, 2003, Kahn 
Communications, Inc. requests that the Commission initiate a new 
proceeding to revise procedures for evaluating new technology. Kahn 
also requests that the Commission stay the DAB R&O and reevaluate its 
adoption of IBOC in light of any resulting policy revisions. To the 
extent that Kahn's filing is a petition for reconsideration of the DAB 
R&O, the petition is untimely. Kahn provides no justification for 
failing to file timely comments in this proceeding. Moreover, we do not 
find that the public interest would be served by further delay of the 
long-contemplated digital conversion of the terrestrial radio service. 
Therefore, we will not consider Kahn's untimely comments in this 
proceeding.

VI. Procedural Matters

A. Filing Requirements
    113. Ex Parte Rules. The Second Further Notice of Proposed 
Rulemaking in this proceeding will be treated as a ``permit-but-
disclose'' subject to the ``permit-but-disclose'' requirements under 
Section 1.1206(b) of the Commission's rules. Ex parte presentations are 
permissible if disclosed in accordance with Commission rules, except 
during the Sunshine Agenda period when presentations, ex parte or 
otherwise, are generally prohibited. Persons making oral ex parte 
presentations are reminded that a memorandum summarizing a presentation 
must contain a summary of the substance of the presentation and not 
merely a listing of the subjects discussed. More than a one- or two-
sentence description of the views and arguments presented is generally 
required. Additional rules pertaining to oral and written presentations 
are set forth in Section 1.1206(b).
    114. 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 and reply comments on or before the dates 
indicated on the first page of this document. Comments may be filed 
using: (1) The Commission's Electronic Comment Filing System (ECFS), 
(2) the Federal Government's eRulemaking Portal, or (3) by filing paper 
copies.
     Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: http://www.fcc.gov/cgb/ecfs/ 
or the Federal eRulemaking Portal: http://www.regulations.gov. Filers 
should follow the instructions provided on the Web site for submitting 
comments.
     For ECFS filers, if multiple docket or rulemaking numbers 
appear in the caption of this proceeding, filers must transmit one 
electronic copy of the comments for each docket or rulemaking number 
referenced in the caption. In completing the transmittal screen, filers 
should include their full name, U.S. Postal Service mailing

[[Page 45689]]

address, and the applicable docket or rulemaking number. Parties may 
also submit an electronic comment by Internet e-mail. To get filing 
instructions, filers should send an e-mail to [email protected], and include 
the following words in the body of the message, ``get form.'' A sample 
form and directions will be sent in response.
     Paper Filers: 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 appears in the caption of this proceeding, 
filers 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). All filings must be addressed to the Commission's 
Secretary, Office of the Secretary, Federal Communications Commission.
     The Commission's contractor 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, Express, and Priority 
mail must be addressed to 445 12th Street, SW., Washington DC 20554.
    People with Disabilities: To request 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).
    115. Availability of Documents. Comments, reply comments, and ex 
parte submissions will be available for public inspection during 
regular business hours in the FCC Reference Center, Federal 
Communications Commission, 445 12th Street, SW., CY-A257, Washington, 
DC 20554. Persons with disabilities who need assistance in the FCC 
Reference Center may contact Bill Cline at (202) 418-0267 (voice), 
(202) 418-7365 (TTY), or [email protected]. These documents also will 
be available from the Commission's Electronic Comment Filing System. 
Documents are available electronically in ASCII, Word 97, and Adobe 
Acrobat. Copies of filings in this proceeding may be obtained from Best 
Copy and Printing, Inc., Portals II, 445 12th Street, SW., Room CY-
B402, Washington, DC 20554; they can also be reached by telephone, at 
(202) 488-5300 or (800) 378-3160; by e-mail at [email protected]; or via 
their Web site at http://www.bcpiweb.com. To request 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 and Governmental Affairs Bureau at (202) 418-0531 
(voice), (202) 418-7365 (TTY).
    116. Additional Information. For additional information on this 
proceeding, contact Ann Gallagher, [email protected], of the Media 
Bureau, Audio Division, (202) 418-2716 or Brendan Murray, 
[email protected], of the Media Bureau, Policy Division, (202) 
418-2120.
B. Initial and Final Regulatory Flexibility Analysis
    117. The Regulatory Flexibility Act of 1980, as amended (``RFA''), 
requires that 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). By the issuance of this Second Further Notice of 
Proposed Rulemaking, we seek comment on the impact our suggested 
proposals would have on small business entities.
    118. Act. As required by the Regulatory Flexibility Act, the 
Commission has prepared a Final Regulatory Flexibility Analysis 
(``FRFA'') relating to this Second Report and Order and First Order on 
Reconsideration.
C. Paperwork Reduction Act Analysis
    119. The Second Report and Order, First Order on Reconsideration, 
and Second Further Notice of Proposed Rulemaking contains modified 
information collection requirements subject to the Paperwork Reduction 
Act of 1995 (PRA), Public Law 104-13. It will be submitted to the 
Office of Management and Budget (OMB) for review under Section 3507(d) 
of the PRA. The Commission will publish a separate Federal Register 
Notice seeking public comments on the modified information collection 
requirements. Therefore, OMB, the general public, and other Federal 
agencies will be invited to comment on the modified information 
collection requirements contained in this proceeding once the Federal 
Register Notice is published. In addition, we note that pursuant to the 
Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 
U.S.C. 3506(c)(4), we previously sought specific comment on how the 
Commission might ``further reduce the information collection burden for 
small business concerns with fewer than 25 employees.''
    120. In addition to filing comments with the Secretary, a copy of 
any comments on the Paperwork Reduction Act information collection 
requirements contained herein should be submitted to Cathy Williams, 
Federal Communications Commission, Room 1-C823, 445 12th Street, SW., 
Washington, DC 20554, or via the Internet to [email protected] and 
to Jasmeet K. Seehra, Room 10236 NEOB, 725 17th Street, NW., 
Washington, DC 20503, or via the Internet to [email protected], or via fax at 202-395-5167. For additional 
information concerning the Paperwork Reduction Act information 
collection requirements contained in this document, contact Cathy 
Williams at 202-418-2918, or via the Internet at 
[email protected].
Initial Regulatory Flexibility Analysis
    121. As required by the Regulatory Flexibility Act of 1980, as 
amended, the Commission has prepared this Initial Regulatory 
Flexibility Analysis of the possible significant economic impact on a 
substantial number of small entities by the policies and rules proposed 
in the Second Further Notice of Proposed Rulemaking. 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 Second Further Notice of Proposed Rulemaking. The Commission 
will send a copy of this

[[Page 45690]]

entire Second Further Notice of Proposed Rulemaking (``FNPRM''), 
including this IRFA, to the Chief Counsel for Advocacy of the Small 
Business Administration (``SBA''). In addition, the Second Further 
Notice of Proposed Rulemaking and the IRFA (or summaries thereof) will 
be published in the Federal Register.
    122. Need For, and Objectives of, the Proposed Rules. The Second 
FNPRM has been initiated to obtain further comments concerning the 
development and implementation of terrestrial digital audio 
broadcasting. Because free over-the-air terrestrial broadcasting is in 
the public interest, and because spectrum is a limited resource, in the 
Second FNPRM the Commission seeks comment on how to limit ancillary 
subscription services provided by radio stations converting to the IBOC 
DAB format so that terrestrial radio broadcasting remains an 
essentially free over-the-air service. The Commission also seeks 
comment on inter alia, the application of several statutory and 
regulatory public interest requirements to subscription services.
    123. Legal Basis. The authority for this Second Further Notice of 
Proposed Rulemaking is contained in Sections 1, 2, 4(i), 303, 307, 
312(a)(7), 315, 317, 507, and 508 of the Communications Act of 1934, 47 
U.S.C. 151, 152, 154(i), 303, 307, 312(a)(7), 315, 317, 508, and 509.
    124. Description and Estimate of the Number of Small Entities to 
Which the Proposed Rules Will Apply. The RFA directs the Commission to 
provide a description of and, where feasible, an estimate of the number 
of small entities that will be affected by the proposed rules. The RFA 
generally defines the term ``small entity'' as encompassing 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'').
    125. Radio Stations. The proposed rules and policies potentially 
will apply to all AM and commercial FM radio broadcasting licensees and 
potential licensees. The SBA defines a radio broadcasting station that 
has $6.5 million or less in annual receipts as a small business. A 
radio broadcasting station is an establishment primarily engaged in 
broadcasting aural programs by radio to the public. Included in this 
industry are commercial, religious, educational, and other radio 
stations. Radio broadcasting stations which primarily are engaged in 
radio broadcasting and which produce radio program materials are 
similarly included. However, radio stations that are separate 
establishments and are primarily engaged in producing radio program 
material are classified under another NAICS number. According to 
Commission staff review of BIA Publications, Inc. Master Access Radio 
Analyzer Database on March 31, 2005, about 10,840 (95%) of 11,410 
commercial radio stations have revenue of $6.5 million or less. We 
note, however, that many radio stations are affiliated with much larger 
corporations having much higher revenue. Our estimate, therefore, 
likely overstates the number of small entities that might be affected 
by our action.
    126. Electronics Equipment Manufacturers. The rules adopted in this 
proceeding will apply to manufacturers of DAB receiving equipment and 
other types of consumer electronics equipment. The appropriate small 
business size standard is that which the SBA has established for radio 
and television broadcasting and wireless communications equipment 
manufacturing. This category encompasses entities that primarily 
manufacture radio, television, and wireless communications equipment. 
Under this standard, firms are considered small if they have 1,000 or 
fewer employees. Census Bureau data for 2002 indicate that, for that 
year, there were a total of 1,041 establishments in this category. Of 
those, 1,023 had employment under 1,000. Given the above, the 
Commission estimates that the great majority of equipment manufacturers 
affected by these rules are small businesses.
    127. Description of Projected Reporting, Recordkeeping and Other 
Compliance Requirements. The proposed rules on subscription services 
may impose additional reporting or recordkeeping requirements on 
existing radio stations, depending upon how the Commission decides to 
limit subscription services. We seek comment on the possible burden 
these requirements would place on small entities. Also, we seek comment 
on whether a special approach toward any possible compliance burdens on 
small entities might be appropriate.
    128. Steps Taken to Minimize Significant Impact on Small Entities, 
and Significant Alternatives Considered. The RFA requires an agency to 
describe any significant alternatives that it has considered in 
reaching its proposed approach, which may include the following four 
alternatives (among others): (1) The establishment of differing 
compliance or reporting requirements or timetables that take into 
account the resources available to small entities; (2) the 
clarification, consolidation, or simplification of compliance or 
reporting requirements under the rule for small entities; (3) the use 
of performance, rather than design, standards; and (4) an exemption 
from coverage of the rule, or any part thereof, for small entities.
    129. In the Second Report and Order, the Commission permits radio 
stations to offer high quality digital radio signals, multicast digital 
audio programming streams, and datacasting. In the Second Further 
Notice of Proposed Rulemaking, the Commission seeks comment on what 
limitations on ancillary subscription services are necessary and 
appropriate to ensure the viability of free over-the-air radio 
broadcasting. This is an issue of first impression for the Commission; 
there is no history that indicates whether limits on ancillary 
subscription services will be adverse or beneficial to small 
businesses. Therefore, we make no judgment on whether limits on 
ancillary subscription services will adversely affect small business. 
We welcome commenters to address whether limits on ancillary 
subscription services will have any adverse effects on small 
businesses.
    130. Federal Rules Which Duplicate, Overlap, or Conflict With, the 
Commission's Proposals. None.
Final Regulatory Flexibility Analysis
    131. As required by the Regulatory Flexibility Act of 1980, as 
amended (``RFA''), an Initial Regulatory Flexibility Analysis 
(``IRFA'') was incorporated in the Further Notice of Proposed Rule 
Making. The Commission sought written public comment on the proposals 
in the FNPRM, including comment on the IRFA. This Final Regulatory 
Flexibility Analysis (``FRFA'') conforms to the RFA.
    132. Need For, and Objectives of, the Proposed Rules. The policies 
and rules set forth herein are required to ensure a smooth conversion 
of the nation's radio system from an analog to a digital format. In 
this Second Report and Order, the Commission: (1) Reaffirms its 
commitment to providing radio broadcasters with the option of utilizing 
DAB technology; (2) announces public policy objectives resulting from 
the introduction of DAB service, such as more diverse programming 
serving local and community needs; (3) provides radio stations with the 
ability to offer more channels of programming and

[[Page 45691]]

datacasting; (4) adopts technical service rules for DAB, such as the 
authority to commence AM nighttime service and dual antenna operation; 
(5) adopts operational requirements for digital radio stations, such as 
emergency alert systems, station identification, and operating hours. 
In the First Order on Reconsideration, the Commission dismisses or 
denies outstanding Petitions for Reconsideration and Rulemaking which 
questioned the adoption of iBiquity's IBOC technology for use by DAB 
stations.
    133. Summary of Significant Issues Raised by Public Comments in 
Response to the IRFA. None.
    134. Description and Estimate of the Number of Small Entities to 
Which the Adopted Rules Will Apply. The RFA directs the Commission to 
provide a description of and, where feasible, an estimate of the number 
of small entities that will be affected by the rules adopted herein. 
The RFA generally defines the term ``small entity'' as encompassing 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'').
    135. Radio Stations. The proposed rules and policies potentially 
will apply to all AM and commercial FM radio broadcasting licensees and 
potential licensees. The SBA defines a radio broadcasting station that 
has $6.5 million or less in annual receipts as a small business. A 
radio broadcasting station is an establishment primarily engaged in 
broadcasting aural programs by radio to the public. Included in this 
industry are commercial, religious, educational, and other radio 
stations. Radio broadcasting stations which primarily are engaged in 
radio broadcasting and which produce radio program materials are 
similarly included. However, radio stations that are separate 
establishments and are primarily engaged in producing radio program 
material are classified under another NAICS number. According to 
Commission staff review of BIA Publications, Inc. Master Access Radio 
Analyzer Database on March 31, 2005, about 10,840 (95%) of 11,410 
commercial radio stations have revenue of $6.5 million or less. We 
note, however, that many radio stations are affiliated with much larger 
corporations having much higher revenue. Our estimate, therefore, 
likely overstates the number of small entities that might be affected 
by our action.
    136. Electronics Equipment Manufacturers. The rules adopted in this 
proceeding will apply to manufacturers of DAB receiving equipment and 
other types of consumer electronics equipment. The appropriate small 
business size standard is that which the SBA has established for radio 
and television broadcasting and wireless communications equipment 
manufacturing. This category encompasses entities that primarily 
manufacture radio, television, and wireless communications equipment. 
Under this standard, firms are considered small if they have 1,000 or 
fewer employees. Census Bureau data for 2002 indicate that, for that 
year, there were a total of 1,041 establishments in this category. Of 
those, there were 1,023 that had employment under 1,000. Given the 
above, the Commission estimates that the great majority of equipment 
manufacturers affected by these rules are small businesses.
    137. Description of Projected Reporting, Recordkeeping and Other 
Compliance Requirements. The rules adopted in this Second Report and 
Order will impose additional reporting or recordkeeping requirements on 
existing radio stations. First, the Commission applies the existing 
statutory and regulatory obligations to all free digital radio streams, 
thus increasing the scope of a radio station's existing compliance 
requirements. Second, the Commission's policies will increase the 
amount of information that must be kept in a radio station's public 
file. Finally, there will be new forms generated by the Commission's 
Media Bureau that must be processed by each radio station that elects 
to offer IBOC DAB.
    138. Steps Taken to Minimize Significant Impact on Small Entities, 
and Significant Alternatives Considered. The RFA requires an agency to 
describe any significant alternatives that it has considered in 
reaching its proposed approach, which may include the following four 
alternatives (among others): (1) The establishment of differing 
compliance or reporting requirements or timetables that take into 
account the resources available to small entities; (2) the 
clarification, consolidation, or simplification of compliance or 
reporting requirements under the rule for small entities; (3) the use 
of performance, rather than design, standards; and (4) an exemption 
from coverage of the rule, or any part thereof, for small entities.
    139. In this Second Report and Order, the Commission (1) Reaffirms 
its commitment to providing radio broadcasters with the option of 
utilizing DAB technology; (2) announces public policy objectives 
resulting from the introduction of DAB service, such as more diverse 
programming serving local and community needs; (3) provides radio 
stations with the ability to offer more channels of programming and 
datacasting; (4) adopts technical service rules for DAB, such as the 
authority to commence AM nighttime service and dual antenna operation; 
(5) adopts operational requirements for digital radio stations, such as 
emergency alert systems, station identification, and operating hours. 
This adoption of a flexible use policy for DAB, will allow radio 
stations to transmit high quality digital audio, multiplexed digital 
audio streams, and datacasting, which should allow broadcasters to meet 
the policy objectives. In addition, rather than require all radio 
stations to convert to a digital format by a date certain, the 
Commission will allow marketplace forces to dictate the conversion 
process. However, each radio station broadcasting in the IBOC format 
will have to provide one free digital radio programming stream of audio 
quality comparable to that of the analog signal to the public. With 
regard to technical requirements, the Commission satisfies the 
interests of digital AM stations by permitting them to operate during 
nighttime hours; it also lessens the burden of all digital radio 
broadcasters by permitting the use of cost-effective dual antennas to 
transmit digital radio programming. Because the Commission is allowing 
the marketplace to drive adoption of the transition to digital 
broadcasts, the rules and policies set forth herein impose no adverse 
economic impact. This flexibility allows small entities to explore the 
economic choices on their own, and therefore significant alternatives 
to these rules and policies are unnecessary.
    140. Report to Congress. The Commission will send a copy of the 
Second Report and Order, First Order on Reconsideration, and Second 
Further Notice of Proposed Rulemaking, including this FRFA, in a report 
to be sent to Congress pursuant to the Congressional Review Act. In 
addition, the Commission will send a copy of the Second Report and 
Order, First Order on Reconsideration, and Second Further Notice of 
Proposed Rulemaking, including this FRFA, to the Chief Counsel for 
Advocacy of the SBA. A copy of the Second Report and Order,

[[Page 45692]]

First Order on Reconsideration, and Second Further Notice of Proposed 
Rulemaking and FRFA (or summaries thereof) will also be published in 
the Federal Register.

VII. Ordering Clauses

    141. Accordingly, It is ordered, pursuant to the authority 
contained in Sections 1, 2, 4(i), 303, 307, 312, 315, 317, 507, and 508 
of the Communications Act of 1934, 47 U.S.C 151, 152, 154(i), 303, 307, 
312, 315, 508, and 509, this Second Report and Order First Order on 
Reconsideration and Second Further Notice of Proposed Rulemaking IS 
ADOPTED.
    142. It is further ordered that the rules contained herein are : 
Effective September 14, 2007, except for the rules in 47 CFR 73.404(b), 
47 CFR 73.404(e), and 47 CFR 73.1201, which contain information 
collection requirements that have not been approved by OMB. The Federal 
Communications Commission will publish a document in the Federal 
Register announcing the effective date.
    143. It is further ordered that, pursuant to 47 U.S.C. 155(c), the 
Chief, Media Bureau, is granted delegated authority to issue Public 
Notices and consider and grant routine petitions and waivers of the 
Commission's DAB technical requirements, resolve interference disputes, 
amend licensing requirements and generate new forms, and update IBOC 
notification procedures.
    144. It is further ordered that the Petition for Reconsideration 
filed October 25, 2002, by the Amherst Alliance is denied.
    145. It is further ordered that the Petition for Rulemaking filed 
April 17, 2002, by the Amherst Alliance is denied.
    146. It is further ordered that the Petition for Reconsideration 
filed December 10, 2002 by Glen Clark and Associates is dismissed.
    147. It is further ordered that the Petition for Reconsideration 
filed January 13, 2003, by John Pavlica Jr. is denied.
    148. It is further ordered that the Petition for Rulemaking filed 
January 24, 2003, by Kahn Communications, Inc. is dismissed.
    149. It is further ordered that the untimely Petition for 
Reconsideration filed by Kahn Communications, Inc. is denied.
    150. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Second Report and Order First Order on Reconsideration and 
Second Further Notice of Proposed Rulemaking including the Initial and 
Final Regulatory Flexibility Analysis, to the Chief Counsel for 
Advocacy of the Small Business Administration.
    151. It is further ordered that the Commission shall send a copy of 
this Second Report and Order First Order on Reconsideration and Second 
Further Notice of Proposed Rulemaking in a report to be sent to 
Congress and the General Accounting Office pursuant to the 
Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

List of Subjects in 47 CFR Part 73

    Digital television, Radio.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Rule Changes

0
For the reasons discussed in the preamble, the Federal Communications 
Commission amends 47 CFR part 73 as follows:

PART 73--RADIO BROADCAST SERVICES

0
1. The authority citation for part 73 continues to read as follows:

    Authority: 47 U.S.C. 154, 303, 334, 336.


0
2. Subpart C is redesignated as Subpart D


0
3. New Subpart C is added to read as follows:
Subpart C--Digital Audio Broadcasting
Sec.
73.401 Scope.
73.402 Definitions.
73.403 Digital audio broadcasting service requirements.
73.404 Interim hybrid IBOC DAB operation.

Subpart C--Digital Audio Broadcasting


Sec.  73.401  Scope.

    This subpart contains those rules which apply exclusively to the 
digital audio broadcasting (DAB) service, and are in addition to those 
rules in Subparts A, B, C, G and H which apply to AM and FM broadcast 
services, both commercial and noncommercial.


Sec.  73.402  Definitions.

    (a) DAB. Digital audio broadcast stations are those radio stations 
licensed by the Commission and use the In-band On-channel (``IBOC'') 
system for broadcasting purposes.
    (b) In Band On Channel DAB System. A technical system in which a 
station's digital signal is broadcast in the same spectrum and on the 
same channel as its analog signal.
    (c) Hybrid DAB System. A system which transmits both the digital 
and analog signals within the spectral emission mask of a single AM or 
FM channel.
    (d) Extended hybrid operation. An enhanced mode of FM IBOC DAB 
operation which includes additional DAB subcarriers transmitted between 
the analog FM signal and the inner edges of the primary DAB sidebands.
    (e) Primary AM DAB Sidebands. The two groups of hybrid AM IBOC DAB 
subcarriers which are transmitted 10 to 15 kHz above carrier frequency 
(the upper primary DAB sideband), and 10 to 15 kHz below carrier 
frequency (the lower primary DAB sideband).
    (f) Multicasting. Subdividing the digital bitstream into multiple 
channels for additional audio programming uses.
    (g) Datacasting. Subdividing the digital bitstream into multiple 
channels for additional data or information services uses.


Sec.  73.403  Digital audio broadcasting service requirements.

    (a) Broadcast radio stations using IBOC must transmit at least one 
over-the-air digital audio programming stream at no direct charge to 
listeners. In addition, a broadcast radio station must simulcast its 
analog audio programming on one of its digital audio programming 
streams. The DAB audio programming stream that is provided pursuant to 
this paragraph must be at least comparable in sound quality to the 
analog programming service currently provided to listeners.
    (b) Emergency information. The emergency information requirements 
found in Sec.  73.1250 shall apply to all free DAB programming streams.


Sec.  73.404  Interim hybrid IBOC DAB operation.

    (a) The licensee of an AM or FM station, or the permittee of a new 
AM or FM station which has commenced program test operation pursuant to 
Sec.  73.1620, may commence interim hybrid IBOC DAB operation with 
digital facilities which conform to the technical specifications 
specified for hybrid DAB operation in the First Report and Order in MM 
Docket No. 99-325. AM and FM stations may transmit IBOC signals during 
all hours for which the station is licensed to broadcast.
    (b) In situations where interference to other stations is 
anticipated or actually occurs, AM licensees may, upon notification to 
the Commission, reduce the power of the primary DAB sidebands by up to 
6 dB. Any greater reduction of sideband power requires prior authority 
from the Commission via the filing of a request for special temporary 
authority or an informal letter request for modification of license.

[[Page 45693]]

    (c) Hybrid IBOC AM stations must use the same licensed main or 
auxiliary antenna to transmit the analog and digital signals.
    (d) FM stations may transmit hybrid IBOC signals in combined mode; 
i.e., using the same antenna for the analog and digital signals; or may 
employ separate analog and digital antennas. Where separate antennas 
are used, the digital antenna:
    (1) Must be a licensed auxiliary antenna of the station;
    (2) Must be located within 3 seconds latitude and longitude from 
the analog antenna;
    (3) Must have a radiation center height above average terrain 
between 70 and 100 percent of the height above average terrain of the 
analog antenna.
    (e) Licensees must provide notification to the Commission in 
Washington, DC, within 10 days of commencing IBOC digital operation. 
The notification must include the following information:
    (1) Call sign and facility identification number of the station;
    (2) Date on which IBOC operation commenced;
    (3) Certification that the IBOC DAB facilities conform to 
permissible hybrid specifications;
    (4) Name and telephone number of a technical representative the 
Commission can call in the event of interference;
    (5) Certification that the analog effective radiated power remains 
as authorized;
    (6) Transmitter power output; if separate analog and digital 
transmitters are used, the power output for each transmitter;
    (7) If applicable, any reduction in an AM station's primary digital 
carriers;
    (8) If applicable, the geographic coordinates, elevation data, and 
license file number of the auxiliary antenna employed by an FM station 
as a separate digital antenna;
    (9) If applicable, for FM systems employing interleaved antenna 
bays, a certification that adequate filtering and/or isolation 
equipment has been installed to prevent spurious emissions in excess of 
the limits specified in Sec.  73.317;
    (10) A certification that the operation will not cause human 
exposure to levels of radio frequency radiation in excess of the limits 
specified in Sec.  1.1310 of this chapter and is therefore 
categorically excluded from environmental processing pursuant to Sec.  
1.1306(b) of this chapter. Any station that cannot certify compliance 
must submit an environmental assessment (``EA'') pursuant to Sec.  
1.1311 of this chapter and may not commence IBOC operation until such 
EA is ruled upon by the Commission.

0
4. In Sec.  73.1201, revise paragraph (b) to read as follows:


Sec.  73.1201  Station identification.

* * * * *
    (b) Content. (1) Official station identification shall consist of 
the station's call letters immediately followed by the community or 
communities specified in its license as the station's location; 
Provided, That the name of the licensee, the station's frequency, the 
station's channel number, as stated on the station's license, and/or 
the station's network affiliation may be inserted between the call 
letters and station location. DTV stations, or DAB Stations, choosing 
to include the station's channel number in the station identification 
must use the station's major channel number and may distinguish 
multicast program streams. For example, a DTV station with major 
channel number 26 may use 26.1 to identify an HDTV program service and 
26.2 to identify an SDTV program service. A radio station operating in 
DAB hybrid mode or extended hybrid mode shall identify its digital 
signal, including any free multicast audio programming streams, in a 
manner that appropriately alerts its audience to the fact that it is 
listening to a digital audio broadcast. No other insertion between the 
station's call letters and the community or communities specified in 
its license is permissible.
    (2) A station may include in its official station identification 
the name of any additional community or communities, but the community 
to which the station is licensed must be named first.
* * * * *
 [FR Doc. E7-15922 Filed 8-14-07; 8:45 am]
BILLING CODE 6712-01-P