[Federal Register Volume 72, Number 158 (Thursday, August 16, 2007)]
[Proposed Rules]
[Pages 46014-46020]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-16149]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1, 15, 73, 74, and 76

[MB Docket No. 07-148; FCC 07-128]


DTV Consumer Education Initiative

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: This document proposes to require broadcasters, multichannel 
video programming distributors, retailers, and manufacturers to take 
steps to publicize the DTV transition. These would include public 
service announcements by broadcasters, including notices in cable, 
satellite, and other MVPD bills, notices from consumer electronics 
manufacturers, employee training by retailers, and adjustments to the 
DTV.gov Partners program. Because of the importance of making the 
benefits of the Digital Television transition understandable and 
available to the public, the Commission seeks comment generally on the 
best means of creating a coordinated, national DTV consumer education 
campaign.

DATES: Comments for this proceeding are due on or before September 17, 
2007; reply comments are due on or before October 1, 2007.

ADDRESSES: You may submit comments, identified by MB Docket No. 07-148, 
by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Federal Communications Commission's Web Site: http://www.fcc.gov/cgb/ecfs/. Follow the instructions for submitting comments.
     People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by e-mail: [email protected] or phone: 202-418-
0530 or TTY: 202-418-0432.

For detailed instructions for submitting comments and additional 
information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document.

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

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking (NPRM), FCC 07-128, adopted on July 21, 2007, 
and released on July 30, 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).

I. Introduction

    1. In this Notice of Proposed Rulemaking, we seek public comment on 
several proposals relating to consumer education about the digital 
television (``DTV'') transition. From the beginning of the transition 
of the nation's broadcast television service from analog to digital 
television service, the Commission has been committed to working with 
representatives from industry, public interest groups, and Congress to 
make the significant benefits of digital broadcasting available to the 
public. The digital transition will make valuable spectrum available 
for both public safety uses and expanded wireless competition and 
innovation. It will also provide consumers with better quality 
television picture and sound, and make new services available through 
multicasting. These innovations, however, are dependent upon widespread 
consumer understanding of the benefits and mechanics of the transition. 
The Congressional decision to establish a hard deadline of February 17, 
2009, for the end of full-power analog broadcasting has made consumer 
awareness even more critical.
    2. While the Commission has been engaged in various DTV outreach 
efforts, we seek comment on whether there are additional steps which we 
can and should take. Representatives John D. Dingell, Chairman of the 
Committee on Energy and Commerce, and Edward J. Markey, Chairman of the 
Subcommittee on Telecommunications and the Internet, recently wrote to 
the Commission to express interest in the pace and scope of consumer 
education about the transition. As the Congressmen observed, ``the 
Commission is particularly well suited to lead this effort given its 
existing expertise and resources.'' Noting the particular dangers of 
insufficient outreach to certain communities, they proposed a number of 
specific actions that they believe the Commission should take. This 
notice requests comment on the Commission's authority to take these 
actions and invites discussion of their benefits and any other measures 
we could take to facilitate the transition.

II. Discussion

    3. The Letter suggests that, as a general matter, ``the Commission 
could use its existing authority to compel industry to contribute time 
and resources to a coordinated, national consumer education campaign.'' 
We agree that we should take whatever steps we can to promote a 
coordinated, national DTV consumer education campaign and seek comment 
on the best means of achieving that goal. In particular, we seek 
comment on the potential Commission initiatives raised by 
Representatives Dingell and Markey. For each potential initiative, we 
particularly seek comment on: (1) The Commission's authority to 
implement the proposal; (2) the likely effectiveness of the proposal 
(i.e., whether it would appreciably increase public awareness and 
understanding of the DTV transition); (3) the best methods of 
implementation; (4) the policy implications; and (5) constitutional 
concerns, if any.

A. Broadcaster Public Service Announcements and Other Consumer 
Education Requirements

    4. The Letter suggests that the Commission consider using its 
regulatory authority to ``require television broadcasters to air 
periodic

[[Page 46015]]

public service announcements and a rolling scroll about the digital 
transition.''
    5. We propose to require television broadcast licensees to conduct 
on-air consumer education efforts. Such on-air efforts, we believe, are 
the most effective and efficient way to reach over-the-air television 
viewers about the coming digital switch-over. What should these 
announcements include, and when and how often should they run? Should 
we impose similar requirements on all television broadcast licensees or 
should there be distinctions made among licensees? Should the 
Commission produce an announcement or group of announcements to be used 
by all broadcasters, or simply provide a list of points that must be 
conveyed in any compliant announcement? What text or images should the 
rolling scroll include? Would it be constant or intermittent? On what 
date would it begin to run, and during which hours would it be 
required? Would the on-air education requirements increase as the 
transition date approaches? How would we track the effectiveness of the 
outreach efforts? Should broadcasters be required to formally assess 
and report on consumer awareness and preparedness, particularly in 
certain communities? If so, which communities warrant special 
attention? Should there be some mechanism for making adjustments in our 
requirements to reflect these ongoing assessments? Should we adopt 
certification requirements to ensure that broadcasters are complying? 
Would forfeitures for noncompliance be appropriate in this area? If so, 
how would they be calculated?
    6. We recognize that, even if the proposals discussed herein are 
successful at increasing consumer awareness of the February 17, 2009 
deadline, many consumers will need additional assistance in preparing 
themselves for that date. For instance, consumers may have specific 
questions about the adequacy of their existing antenna or how to 
install a converter box when they get it home. We seek comment on what 
steps the Commission or industry can and should take to ensure that 
consumers have access to the information and assistance they need. This 
could include, for instance, the establishment or further development 
of a dedicated consumer help-line or other targeted assistance.

B. Broadcaster Consumer Education Reporting

    7. The Letter suggests that the Commission consider requiring 
``broadcast licensees and permittees to report, every 90 days, their 
consumer education efforts, including the time, frequency, and content 
of public service announcements aired by each station in a market, with 
civil penalties for noncompliance.''
    8. What level of detail should reports to the Commission on 
consumer education efforts contain? What additional burdens would 
preparing, submitting, and retaining such reports place on licensees 
and permittees? Could these burdens be met by small broadcasters and 
NCE stations? Is there an alternative to requiring the filing of such 
reports with the Commission? For example, could broadcasters publicly 
summarize and describe their consumer outreach efforts via web pages, 
press releases, in their public file, or otherwise? How would this 
approach be monitored and enforced by the Commission? What benefits 
would these reports create for the government and public? How should 
any forfeitures for noncompliance be calculated?

C. MVPD Customer Bill Notices

    9. The Letter suggests that the Commission consider requiring, ``as 
a license condition or through customer service or other consumer 
protection or public interest requirements, all multichannel video 
programming distributors (MVPDs) to insert periodic notices in customer 
bills that inform consumers about the digital television transition and 
their customers' future viewing options, with civil penalties for 
noncompliance.''
    10. What should these notices include and how often should they be 
provided? Should the Commission provide a standard text, describing the 
transition, to be used by MVPDs, or simply a list of points that must 
be conveyed? How should these notices be conveyed to customers who rely 
on electronic billing or automatic billing? How should the phrase 
``future viewing options'' be interpreted? How should any forfeitures 
for noncompliance be calculated?

D. Consumer Electronics Manufacturer Notices

    11. The Letter suggests that the Commission consider requiring 
``manufacturers to include information with television receivers and 
related devices about the transition, with civil penalties for 
noncompliance.''
    12. This proposal would require manufacturers to include 
information describing the transition with any television set or 
related device that they import or distribute in the United States. 
What would it mean to ``include'' information? Must this information be 
in written form and physically packaged with each unit shipped? Could 
manufacturers make arrangements with retailers to provide information, 
either written or verbal, at the point of sale? As for the information 
itself, should the Commission provide a standard text to be used by all 
manufacturers, or simply a list of points that must be conveyed? What 
devices and classes of devices should be considered ``related''? For 
example, should the requirement apply to VCRs, DVRs, DVD players, etc? 
Should this requirement apply to all new ``television receivers and 
related devices,'' that are imported or distributed in the United 
States after the effective date of these rules?

E. Consumer Electronics Retailer Training and Education Reporting

    13. The Letter suggests that the Commission consider working ``with 
NTIA to require retailers who participate in the converter box coupon 
program to detail their employee training and consumer information 
plans and have Commission staff conduct spot inspections to ascertain 
whether such objectives are being met at stores.''
    14. We anticipate that any requirements and enforcement efforts 
tied to the converter box coupon program will be developed in 
consultation with the National Telecommunications and Information 
Administration. What would be an appropriate employee training and 
consumer information plan? Should NTIA and the FCC establish the 
elements of a legally sufficient plan? Would penalties for 
noncompliance be appropriate in this area? If so, would they most 
appropriately be based on failure to report a plan, failure to follow a 
reported plan, failure to establish a sufficient plan, or any of these?

F. DTV.gov Partner Consumer Education Reporting

    15. The Letter suggests that the Commission consider requiring 
``partners identified on the Commission's digital television Web site 
to report their specific consumer outreach efforts.''
    16. At the moment, more than 50 partners are listed at www.dtv.gov/partners.html. What level of detail would be mandated in these reports? 
Would they be confidential reports to the Commission or publicly filed? 
Alternatively, could we provide partners with guidelines and allow them 
to publicly announce, via web pages, press releases, or otherwise, 
their consumer outreach efforts? How would this approach be monitored 
and

[[Page 46016]]

enforced by the Commission? Would reporting simply become a requirement 
for ``partner'' status, such that failure to comply leads only to 
removal from the ``Partners'' page? If other penalties would be 
appropriate, what would they be and what would be the basis for our 
authority to impose them?

G. Other Proposals

    17. We note that the Letter contains several other potential 
consumer education mechanisms, including broadcaster public file 
requirements or other public announcements, notice requirements by 
telecommunications carriers that receive funds under the Low Income 
Federal universal service program, or reporting requirements by 700 MHz 
auction winners. We seek comment on these and other initiatives that 
the Commission can and should undertake to educate the public on the 
DTV transition.

III. Procedural Matters

A. Filing Requirements

    18. Ex Parte Rules. This proceeding will be treated as a ``permit-
but-disclose'' proceeding subject to the ``permit-but-disclose'' 
requirements under Section 1.1206(b) of the Commission's rules, see 47 
CFR 1.1206(b). 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).
    19. Comments and Reply Comments. Pursuant to Sections 1.415 and 
1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested 
parties may file comments on or before the dates indicated on the first 
page of this document. Comments may be filed using the Commission's 
Electronic Comment Filing System (``ECFS'') or by filing paper copies. 
See Electronic Filing of Documents in Rulemaking Proceedings, 63 Fed. 
Reg. 24121 (1998). 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).
    20. Comments filed through ECFS can be sent as an electronic file 
via the Internet to http://www.fcc.gov/e-file/ecfs.html. Generally, 
only one copy of an electronic submission must be filed. In completing 
the transmittal screen, commenters should include their full name, U.S. 
Postal mailing address, and the applicable docket number. Parties may 
also submit an electronic comment by Internet e-mail. To get filing 
instructions for e-mail comments, commenters should send an e-mail to 
[email protected], and should include the following words in the body of the 
message: ``Get form .'' A sample form and 
directions will be sent in reply.
    21. Parties who choose to file by paper must file an original and 
four copies of each filing. Filings can be sent by hand or messenger 
delivery, by commercial overnight courier, or by first-class or 
overnight U.S. Postal Service (although we continue to experience 
delays in receiving U.S. Postal Service mail). The Commission's 
contractor, Natek, Inc., will receive hand-delivered or messenger-
delivered paper filings for the Commission's Secretary at 236 
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing 
hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be 
held together with rubber bands or fasteners. Any envelopes must be 
disposed of before entering the building. Commercial overnight mail 
(other than U.S. Postal Service Express Mail and Priority Mail) must be 
sent to 9300 East Hampton Drive, Capitol Heights, MD 20743. U.S. Postal 
Service first-class mail, Express Mail, and Priority Mail, should be 
addressed to 445 12th Street, SW., Washington, DC 20554. All filings 
must be addressed to the Commission's Secretary: Office of the 
Secretary, Federal Communications Commission.
    22. 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) 418-0530 
(voice), (202) 418-0432 (TTY).
    23. Additional Information. For additional information on this 
proceeding, contact Eloise Gore, [email protected], or Lyle Elder, 
[email protected], of the Media Bureau, Policy Division, (202) 418-
2120.

B. Paperwork Reduction Act of 1995 Analysis

    24. This document contains potential information collection 
requirements. The Commission will invite the general public to comment 
at a later date on any rules developed as a result of this proceeding 
that require the collection of information, as required by the 
Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. The 
Commission will publish a separate notice seeking these comments from 
the public. 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 will also seek specific comment on how the Commission 
might ``further reduce the information collection burden for small 
business concerns with fewer than 25 employees.''

C. Initial Regulatory Flexibility Act Analysis

    1. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA) the Commission has prepared this Initial Regulatory 
Flexibility Analysis (IRFA) of the possible economic impact on a 
substantial number of small entities by the policies and rules proposed 
in this Notice of Proposed Rulemaking (``NPRM''). Written public 
comments are requested on this IRFA. Comments must be identified as 
responses to the IRFA and must be filed by the deadlines for comments 
on the NPRM provided in paragraph 18 of the Order. The Commission will 
send a copy of the NPRM, including this IRFA, to the Chief Counsel for 
Advocacy of the Small Business Administration (SBA). In addition, the 
NPRM and IRFA (or summaries thereof) will be published in the Federal 
Register.

[[Page 46017]]

D. Need for, and Objectives of, the NPRM

    2. Our goals in this proceeding are to further educate consumers 
about the digital television transition; to engage all sectors of the 
television industry in support of that transition; and, in so doing, to 
facilitate the nation's transition to digital broadcast television. 
Specifically, the NPRM considers whether the Commission should compel 
industry to participate in a coordinated, nationwide consumer outreach 
campaign, and seeks comment on other potential Commission initiatives. 
For each of these potential initiatives, we are concerned with the 
Commission's authority to implement them; the best method of 
implementation; their likely effectiveness; any policy implications; 
and any constitutional concerns.
    3. Despite extensive consumer outreach efforts by the Commission 
and others, a large percentage of the public is not sufficiently 
informed about the DTV transition. This is a serious concern, because 
the many benefits of the transition could be severely limited by 
insufficient consumer awareness. Therefore, this NPRM proposes that the 
Commission spearhead a nationwide consumer education campaign, and 
solicits comment on six specific elements that might be part of such a 
campaign. These elements are based on specific potential Commission 
initiatives raised by Congressmen Dingell and Markey. The first 
potential initiative would require all MVPDs to include periodic 
notices about the transition in customer bills, and asks how these 
notices should be conveyed to customers who rely on electronic or 
automatic billing. The second would require all manufacturers of 
``television receivers or related devices'' to include transition 
information with the devices, and asks about the scope of the term 
``related devices.'' The third potential initiative would require that 
the Commission work with NTIA to require retailers who participate in 
the converter box coupon program to create employee training and 
consumer information plans and file them with the Commission, which 
would conduct spot checks to verify compliance. The fourth potential 
initiative would require the ``Partners'' listed on the Commission's 
DTV.gov page to report their consumer outreach efforts, and asks what 
level of detail would be required and whether these reports would be 
publicly available. The final two potential initiatives would require 
public service announcements (``PSAs'') about the transition and 
filings by broadcasters detailing their consumer education efforts. The 
NPRM asks about the content of the announcements, the frequency with 
which they would be shown, and whether there should be forfeitures for 
noncompliance. Finally, the NPRM seeks comment generally on other 
proposals for consumer education.

E. Legal Basis

    4. The authority for the action proposed in this rulemaking is 
contained in Sections 1, 4(i) and (j), 309(j), 325, 336, 338, 614, and 
615 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 
154(i) and (j), 309(j), 325, 336, 338, 534, and 535.

F. Description and Estimate of the Number of Small Entities To Which 
the NPRM Will Apply

    5. The IRFA 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 IRFA defines the term ``small 
entity'' as having the same meaning as the terms ``small business,'' 
``small organization,'' and ``small business concern'' under Section 3 
of the Small Business Act. 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''). The rules we may adopt as a result of the comments filed in 
response to this NPRM would affect all MVPDs (including satellite 
carriers and cable operators), broadcast television stations, consumer 
electronics (``CE'') retailers, and CE manufacturers. A description of 
these small entities, as well as an estimate of the number of such 
small entities, is provided below.
    6. Cable and Other Program Distribution. The SBA has developed a 
small business size standard for cable and other program distribution 
services (aka multichannel video programming distributors, ``MVPDs''), 
which includes all such companies generating $13.5 million or less in 
revenue annually. This category includes, among others, cable 
operators, direct broadcast satellite services, fixed-satellite 
services, home satellite dish services, multipoint distribution 
services, multichannel multipoint distribution service, Instructional 
Television Fixed Service, local multipoint distribution service, 
satellite master antenna television systems, and open video systems. 
Those MVPDs relying primarily or exclusively on satellite transmission 
could also be considered to fall under the ``Satellite 
Telecommunications'' category, NAICS Code 517410. According to Census 
Bureau data, there are 1,311 total cable and other pay television 
service firms that operate throughout the year of which 1,180 have less 
than $10 million in revenue. The amount of $10 million was used to 
estimate the number of small business firms because the relevant Census 
categories stopped at $9,999,999 and began at $10,000,000. No category 
for $12.5 million existed. Thus, the number is as accurate as it is 
possible to calculate with the available information. Consequently, the 
Commission estimates that the majority of providers in this service 
category are small businesses that may be affected by the rules and 
policies adopted herein. We address below each service individually to 
provide a more precise estimate of small entities.
    7. Cable System Operators (Rate Regulation Standard). The 
Commission has developed its own small business size standard for cable 
system operators, for purposes of rate regulation. Under the 
Commission's rules, a ``small cable company'' is one serving fewer than 
400,000 subscribers nationwide. The Commission developed this 
definition based on its determination that a small cable system 
operator is one with annual revenues of $100 million or less. The most 
recent estimates indicate that there were 1,439 cable operators who 
qualified as small cable system operators at the end of 1995. Since 
then, some of those companies may have grown to serve over 400,000 
subscribers, and others may have been involved in transactions that 
caused them to be combined with other cable operators. Consequently, 
the Commission estimates that there are now fewer than 1,439 small 
entity cable system operators that may be affected by the rules and 
policies adopted herein.
    8. Cable System Operators (Telecom Act Standard). The 
Communications Act of 1934, as amended, also contains a size standard 
for small cable system operators, which is ``a cable operator that, 
directly or through an affiliate, serves in the aggregate fewer than 1 
percent of all subscribers in the United States and is not affiliated 
with any entity or entities whose gross annual revenues in the 
aggregate exceed $250,000,000.'' The Commission has determined that 
there are 67,700,000 subscribers in the United States. Therefore, an 
operator serving fewer than 677,000 subscribers shall be deemed a small 
operator, if its annual revenues, when combined with the total annual 
revenues of all its affiliates, do not exceed $250 million in the 
aggregate. Based on available data, the Commission estimates that the 
number of cable operators serving 677,000

[[Page 46018]]

subscribers or fewer, totals 1,450. The Commission neither requests nor 
collects information on whether cable system operators are affiliated 
with entities whose gross annual revenues exceed $250 million, although 
the Commission does receive such information on a case-by-case basis if 
a cable operator appeals a local franchise authority's finding that the 
operator does not qualify as a small cable operator pursuant to Sec.  
76.901(f) of the Commission's rules. Therefore the Commission is 
unable, at this time, to estimate more accurately the number of cable 
system operators that would qualify as small cable operators under the 
size standard contained in the Communications Act of 1934.
    9. Satellite Carriers. The term ``satellite carrier'' includes 
entities providing services as described in 17 U.S.C. 119(d)(6) using 
the facilities of a satellite or satellite service licensed under Part 
25 of the Commission's rules to operate in Direct Broadcast Satellite 
(DBS) or Fixed-Satellite Service (FSS) frequencies. As a general 
practice, not mandated by any regulation, DBS licensees usually own and 
operate their own satellite facilities as well as package the 
programming they offer to their subscribers. In contrast, satellite 
carriers using FSS facilities often lease capacity from another entity 
that is licensed to operate the satellite used to provide service to 
subscribers. These entities package their own programming and may or 
may not be Commission licensees themselves. In addition, a third 
situation may include an entity using a non-U.S. licensed satellite to 
provide programming to subscribers in the United States pursuant to a 
blanket earth station license.
    10. Direct Broadcast Satellite (``DBS'') Service. DBS service is a 
nationally distributed subscription service that delivers video and 
audio programming via satellite to a small parabolic ``dish'' antenna 
at the subscriber's location. Because DBS provides subscription 
services, DBS falls within the SBA-recognized definition of Cable and 
Other Program Distribution. This definition provides that a small 
entity is one with $13.5 million or less in annual receipts. Currently, 
only four operators hold licenses to provide DBS service, which 
requires a great investment of capital for operation. All four 
currently offer subscription services. Two of these four DBS operators, 
DIRECTV and EchoStar Communications Corporation (``EchoStar''), report 
annual revenues that are in excess of the threshold for a small 
business. DirecTV is the largest DBS operator and the second largest 
MVPD, serving an estimated 13.04 million subscribers nationwide. 
EchoStar, which provides service under the brand name Dish Network, is 
the second largest DBS operator and the fourth largest MVPD, serving an 
estimated 10.12 million subscribers nationwide. A third operator, 
Rainbow DBS, which provides service under the brand name VOOM, reported 
an estimated 25,000 subscribers. It is a subsidiary of Cablevision's 
Rainbow Network, which also reports annual revenues in excess of $13.5 
million, and thus does not qualify as a small business. The fourth DBS 
operator, Dominion Video Satellite, Inc. (``Dominion''), which provides 
service under the brand name Sky Angel, offers religious (Christian) 
programming and does not report its annual receipts or publicly 
disclose its subscribership numbers on an annualized basis The 
Commission does not know of any source which provides this information 
and, thus, we have no way of confirming whether Dominion qualifies as a 
small business. Because DBS service requires significant capital, we 
believe it is unlikely that a small entity as defined by the SBA would 
have the financial wherewithal to become a DBS licensee. Nevertheless, 
given the absence of specific data on this point, we acknowledge the 
possibility that there are entrants in this field that may not yet have 
generated $13.5 million in annual receipts, and therefore may be 
categorized as a small business, if independently owned and operated.
    11. Fixed-Satellite Service (``FSS''). The FSS is a 
radiocommunication service between earth stations at a specified fixed 
point or between any fixed point within specified areas and one or more 
satellites. The FSS, which utilizes many earth stations that 
communicate with one or more space stations, may be used to provide 
subscription video service. Therefore, to the extent FSS frequencies 
are used to provide subscription services, FSS falls within the SBA-
recognized definition of Cable and Other Program Distribution, which 
includes all such companies generating $13.5 million or less in revenue 
annually. Although a number of entities are licensed in the FSS, not 
all such licensees use FSS frequencies to provide subscription 
services. Two of the DBS licensees (EchoStar and DirecTV) have 
indicated interest in using FSS frequencies to broadcast signals to 
subscribers. It is possible that other entities could similarly use FSS 
frequencies, although we are not aware of any entities that might do 
so.
    12. Private Cable Operators (PCOs) also known as Satellite Master 
Antenna Television (SMATV) Systems. PCOs, also known as SMATV systems 
or private communication operators, are video distribution facilities 
that use closed transmission paths without using any public right-of-
way. PCOs acquire video programming and distribute it via terrestrial 
wiring in urban and suburban multiple dwelling units such as apartments 
and condominiums, and commercial multiple tenant units such as hotels 
and office buildings. The SBA definition of small entities for Cable 
and Other Program Distribution Services includes PCOs and, thus, small 
entities are defined as all such companies generating $13.5 million or 
less in annual receipts. Currently, there are approximately 135 members 
in the Independent Multi-Family Communications Council (IMCC), the 
trade association that represents PCOs. Individual PCOs often serve 
approximately 3,000-4,000 subscribers, but the larger operations serve 
as many as 15,000-55,000 subscribers. In total, PCOs currently serve 
approximately 1.1 million subscribers. Because these operators are not 
rate regulated, they are not required to file financial data with the 
Commission. Furthermore, we are not aware of any privately published 
financial information regarding these operators. Based on the estimated 
number of operators and the estimated number of units served by the 
largest ten PCOs, we believe that a substantial number of PCOs qualify 
as small entities.
    13. Home Satellite Dish (``HSD'') Service. Because HSD provides 
subscription services, HSD falls within the SBA-recognized definition 
of Cable and Other Program Distribution, which includes all such 
companies generating $13.5 million or less in revenue annually. HSD or 
the large dish segment of the satellite industry is the original 
satellite-to-home service offered to consumers, and involves the home 
reception of signals transmitted by satellites operating generally in 
the C-band frequency. Unlike DBS, which uses small dishes, HSD antennas 
are between four and eight feet in diameter and can receive a wide 
range of unscrambled (free) programming and scrambled programming 
purchased from program packagers that are licensed to facilitate 
subscribers' receipt of video programming. There are approximately 30 
satellites operating in the C-band, which carry over 500 channels of 
programming combined; approximately 350 channels are available free of 
charge and 150 are scrambled and require a subscription. HSD is 
difficult to quantify in terms of annual revenue. HSD owners have 
access to program

[[Page 46019]]

channels placed on C-band satellites by programmers for receipt and 
distribution by MVPDs. Commission data shows that, between June 2003 
and June 2004, HSD subscribership fell from 502,191 subscribers to 
335,766 subscribers, a decline of more than 33 percent, after falling 
more than 28 percent during the previous year. The Commission has no 
information regarding the annual revenue of the four C-Band 
distributors.
    14. Open Video Systems (``OVS''). The OVS framework provides 
opportunities for the distribution of video programming other than 
through cable systems. Because OVS operators provide subscription 
services, OVS falls within the SBA-recognized definition of Cable and 
Other Program Distribution Services, which provides that a small entity 
is one with $13.5 million or less in annual receipts. The Commission 
has certified 25 OVS operators with some now providing service. 
Broadband service providers (BSPs) are currently the only significant 
holders of OVS certifications or local OVS franchises, even though OVS 
is one of four statutorily-recognized options for local exchange 
carriers (LECs) to offer video programming services. As of June 2003, 
BSPs served approximately 1.4 million subscribers, representing 1.49 
percent of all MVPD households. Among BSPs, however, those operating 
under the OVS framework are in the minority, with approximately eight 
percent operating with an OVS certification. Serving approximately 
460,000 of these subscribers, Affiliates of Residential Communications 
Network, Inc. (``RCN'') is currently the largest BSP and 11th largest 
MVPD. WideOpenWest is the second largest BSP and 15th largest MVPD, 
with cable systems serving about 288,000 subscribers as of September 
2003. The third largest BSP is Knology, which currently serves 
approximately 174,957 subscribers as of June 2004. RCN received 
approval to operate OVS systems in New York City, Boston, Washington, 
DC and other areas. The Commission does not have financial information 
regarding the entities authorized to provide OVS, some of which may not 
yet be operational. We thus believe that at least some of the OVS 
operators may qualify as small entities.
    15. Television Broadcasting. The SBA defines a television 
broadcasting station as a small business if such station has no more 
than $13 million in annual receipts. Business concerns included in this 
industry are those ``primarily engaged in broadcasting images together 
with sound.'' This category description continues, ``These 
establishments operate television broadcasting studios and facilities 
for the programming and transmission of programs to the public. These 
establishments also produce or transmit visual programming to 
affiliated broadcast television stations, which in turn broadcast the 
programs to the public on a predetermined schedule. Programming may 
originate in their own studios, from an affiliated network, or from 
external sources.'' Separate census categories pertain to businesses 
primarily engaged in producing programming. According to Commission 
staff review of the BIA Publications, Inc. Master Access Television 
Analyzer Database (BIA) on March 30, 2007, about 986 of an estimated 
1,374 commercial television stations (or approximately 72 percent) have 
revenues of $13.5 million or less and thus qualify as small entities 
under the SBA definition. Although we are using BIA's estimate for 
purposes of this revenue comparison, the Commission has estimated the 
number of licensed commercial television stations to be 1374. We note, 
however, that, in assessing whether a business concern qualifies as 
small under the above definition, business (control) affiliations must 
be included. According to 13 CFR 121.103(a)(1), ``[Business concerns] 
are affiliates of each other when one concern controls or has the power 
to control the other or a third party or parties controls or has the 
power to control both.'' Our estimate, therefore, likely overstates the 
number of small entities that might be affected by our action, because 
the revenue figure on which it is based does not include or aggregate 
revenues from affiliated companies. The Commission has estimated the 
number of licensed NCE television stations to be 380. The Commission 
does not compile and otherwise does not have access to information on 
the revenue of NCE stations that would permit it to determine how many 
such stations would qualify as small entities.
    16. Class A TV, LPTV, and TV translator stations. The rules and 
policies could also apply to licensees of Class A TV stations, low 
power television (LPTV) stations, and TV translator stations, as well 
as to potential licensees in these television services. The same SBA 
definition that applies to television broadcast licensees would apply 
to these stations. The SBA defines a television broadcast station as a 
small business if such station has no more than $13 million in annual 
receipts.
    17. Currently, there are approximately 567 licensed Class A 
stations, 2,227 licensed LPTV stations, 4,518 licensed TV translators 
and 11 TV booster stations. Given the nature of these services, we will 
presume that all of these licensees qualify as small entities under the 
SBA definition. We note, however, that under the SBA's definition, 
revenue of affiliates that are not LPTV stations should be aggregated 
with the LPTV station revenues in determining whether a concern is 
small. Our estimate may thus overstate the number of small entities 
since the revenue figure on which it is based does not include or 
aggregate revenues from non-LPTV affiliated companies. We do not have 
data on revenues of TV translator or TV booster stations, but virtually 
all of these entities are also likely to have revenues of less than $13 
million and thus may be categorized as small, except to the extent that 
revenues of affiliated non-translator or booster entities should be 
considered.
    18. In addition, an element of the definition of ``small business'' 
is that the entity not be dominant in its field of operation. We are 
unable at this time to define or quantify the criteria that would 
establish whether a specific television station is dominant in its 
field of operation. Accordingly, the estimate of small businesses to 
which rules may apply do not exclude any television station from the 
definition of a small business on this basis and are therefore over-
inclusive to that extent. Also as noted, an additional element of the 
definition of ``small business'' is that the entity must be 
independently owned and operated. We note that it is difficult at times 
to assess these criteria in the context of media entities and our 
estimates of small businesses to which they apply may be over-inclusive 
to this extent.
    19. Retailers. The proposals in this NPRM would apply only to 
retailers that choose to participate in the converter box coupon 
program. The list of retailers who will be participating will not be 
finalized until March 2008, but they will likely include dedicated 
consumer electronics stores and Internet-based stores.
    20. Radio, Television, and Other Electronics Stores. The Census 
Bureau defines this economic census category as follows: ``This U.S. 
industry comprises: (1) Establishments known as consumer electronics 
stores primarily engaged in retailing a general line of new consumer-
type electronic products; (2) establishments specializing in retailing 
a single line of consumer-type electronic products (except computers); 
or (3) establishments primarily engaged in retailing these new 
electronic products in combination with repair services.'' The SBA has 
developed a

[[Page 46020]]

small business size standard for Radio, Television, and Other 
Electronics Stores, which is: All such firms having $8 million or less 
in annual receipts. According to Census Bureau data for 2002, there 
were 10,380 firms in this category that operated for the entire year. 
Of this total, 10,080 firms had annual sales of under $5 million, and 
177 firms had sales of $5 million or more but less than $10 million. An 
additional 123 firms had annual sales of $10 million or more. As a 
measure of small business prevalence, the data on annual sales are 
roughly equivalent to what one would expect from data on annual 
receipts. Thus, the majority of firms in this category can be 
considered small.
    21. Electronic Shopping. According to the Census Bureau, this 
economic census category ``comprises establishments engaged in 
retailing all types of merchandise using the Internet.'' The SBA has 
developed a small business size standard for Electronic Shopping, which 
is: All such entities having $23 million or less in annual receipts. 
According to Census Bureau data for 2002, there were 4,959 firms in 
this category that operated for the entire year. Of this total, 4,742 
firms had annual sales of under $10 million, and an additional 133 had 
sales of $10 million to $24,999,999. Thus, the majority of firms in 
this category can be considered small.
    22. Electronics Equipment Manufacturers. Rules adopted in this 
proceeding could apply to manufacturers of television receiving 
equipment and other types of consumer electronics equipment. The SBA 
has developed definitions of small entity for manufacturers of audio 
and video equipment as well as radio and television broadcasting and 
wireless communications equipment. These categories both include all 
such companies employing 750 or fewer employees. The Commission has not 
developed a definition of small entities applicable to manufacturers of 
electronic equipment used by consumers, as compared to industrial use 
by television licensees and related businesses. Therefore, we will 
utilize the SBA definitions applicable to manufacturers of audio and 
visual equipment and radio and television broadcasting and wireless 
communications equipment, since these are the two closest NAICS Codes 
applicable to the consumer electronics equipment manufacturing 
industry. However, these NAICS categories are broad and specific 
figures are not available as to how many of these establishments 
manufacture consumer equipment. According to the SBA's regulations, an 
audio and visual equipment manufacturer must have 750 or fewer 
employees in order to qualify as a small business concern. Census 
Bureau data indicates that there are 554 U.S. establishments that 
manufacture audio and visual equipment, and that 542 of these 
establishments have fewer than 500 employees and would be classified as 
small entities. The amount of 500 employees was used to estimate the 
number of small business firms because the relevant Census categories 
stopped at 499 employees and began at 500 employees. No category for 
750 employees existed. Thus, the number is as accurate as it is 
possible to calculate with the available information. The remaining 12 
establishments have 500 or more employees; however, we are unable to 
determine how many of those have fewer than 750 employees and 
therefore, also qualify as small entities under the SBA definition. 
Under the SBA's regulations, a radio and television broadcasting and 
wireless communications equipment manufacturer must also have 750 or 
fewer employees in order to qualify as a small business concern. Census 
Bureau data indicates that there are 1,215 U.S. establishments that 
manufacture radio and television broadcasting and wireless 
communications equipment, and that 1,150 of these establishments have 
fewer than 500 employees and would be classified as small entities. The 
remaining 65 establishments have 500 or more employees; however, we are 
unable to determine how many of those have fewer than 750 employees and 
therefore, also qualify as small entities under the SBA definition. We 
therefore conclude that there are no more than 542 small manufacturers 
of audio and visual electronics equipment and no more than 1,150 small 
manufacturers of radio and television broadcasting and wireless 
communications equipment for consumer/household use.

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

    23. The Notice of Proposed Rulemaking seeks comment on a range of 
potential changes to existing reporting, recordkeeping or other 
compliance requirements. If adopted, these proposals would require: 
MVPDs to modify their customer billing notices; broadcasters to make 
public service announcements and report their efforts; CE retailers to 
prepare and report transition plans and subject themselves to audit; CE 
manufacturers to provide customer notices about the transition; and 
DTV.gov Partners to report their consumer education efforts.

H. Steps Taken to Minimize Significant Impact on Small Entities, and 
Significant Alternatives Considered

    24. 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. In this instance, we seek comment on the specific proposals 
outlined by Congressmen Dingell and Markey, but we are particularly 
interested in comments regarding alternatives that would reduce any 
burdens from these proposed rules. We urge small entities to provide 
data on the impact of the questions raised in the Notice of Proposed 
Rulemaking and how we might tailor our rules to address and minimize 
the impact on these small businesses. We expect that whichever 
alternatives are chosen, the Commission will seek to minimize any 
adverse effects on small entities.

I. Federal Rules Which Duplicate, Overlap, or Conflict With the 
Commission's Proposals

    25. None.

IV. Ordering Clauses

    26. It is ordered that, pursuant to authority contained in Sections 
4(i), 303(r), 335, and 336, of the Communications Act of 1934, as 
amended, 47 U.S.C. 54(i), 303(r), 335, and 336, this Notice of Proposed 
Rulemaking is hereby adopted.
    27. It is further ordered that the Consumer and Governmental 
Affairs Bureau, Reference Information Center, SHALL SEND a copy of this 
Notice of Proposed Rulemaking, including the Initial Regulatory 
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small 
Business Administration.

Federal Communications Commission.
Jacqueline R. Coles,
Associate Secretary.
 [FR Doc. E7-16149 Filed 8-15-07; 8:45 am]
BILLING CODE 6712-01-P