[Federal Register Volume 77, Number 100 (Wednesday, May 23, 2012)]
[Rules and Regulations]
[Pages 30423-30427]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-12551]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 73 and 76

[ET Docket No. 10-235; FCC 12-45]


Innovation in the Broadcast Television Bands: Allocations, 
Channel Sharing and Improvements to VHF, Report and Order

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In the Report and Order, the Commission takes preliminary 
steps toward making a portion of the UHF and VHF frequency bands 
currently used by the broadcast television service available for new 
uses as required under the recently enacted Spectrum Act, while also 
preserving the integrity of the television broadcast service.

DATES: Effective June 22, 2012.

FOR FURTHER INFORMATION CONTACT: Shaun Maher, [email protected] of 
the Media Bureau, Video Division, (202) 418-2324.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order, FCC 12-45, adopted on April 27, 2012, and released on April 
27 2012. The full text of the Report and Order is available for 
inspection and copying during regular business hours in the FCC 
Reference Center, 445 12th Street SW., Room CY-A257, Portals II, 
Washington, DC 20554, and may also be purchased from the Commission's 
copy contractor, BCPI, Inc., Portals II, 445 12th Street SW., Room CY-
B402, Washington, DC 20554. Customers may contact BCPI, Inc. via their 
Web site, http://www.bcpi.com, or call 1-800-378-3160. This document is 
available in alternative formats (computer diskette, large print, audio 
record, and Braille). Persons with disabilities who need documents in 
these formats may contact the FCC by email: [email protected] or phone: 
202-418-0530 or TTY: 202-418-0432.

Executive Summary

    In the Report and Order, the Commission takes a preliminary step 
toward making a significant portion of the UHF and VHF frequency bands 
(U/V Bands) currently used by the broadcast television service 
available for new uses. This action serves to further address the 
nation's growing demand for wireless broadband services, promote the 
ongoing innovation and investment in mobile communications and ensure 
that the United States keeps pace with the global wireless revolution. 
At the same time, the approach helps preserve broadcast television as a 
healthy, viable medium and would be consistent with the general 
proposal set forth in the National Broadband Plan to repurpose spectrum 
from the U/V bands for new wireless broadband uses through, in part, 
voluntary contributions of spectrum to an incentive auction. This 
action is consistent with the recent enactment by Congress of new 
incentive auction authority for the Commission (Spectrum Act). 
Specifically, this item sets out a framework by which two or more 
television licensees may share a single six MHz channel in connection 
with an incentive auction.

Paperwork Reduction Act of 1995 Analysis

    The Report and Order contains no new or revised information 
collection requirements subject to the Paperwork Reduction Act of 1995 
(``PRA''), Public Law 104-13 (44 U.S.C. 3501 through 3520).

Synopsis

    The Report and Order does not act on the proposals in the Notice of 
Proposed Rulemaking to establish fixed and mobile allocations in the U/
V bands or to improve TV service on VHF channels. The Report and Order 
states that the Commission will undertake a broader rulemaking to 
implement the Spectrum

[[Page 30424]]

Act's provisions relating to an incentive auction for U/V band 
spectrum, and that it believes it will be more efficient to act on new 
allocations in the context of that rulemaking. In addition, the record 
created in response to the Notice of Proposed Rulemaking does not 
establish a clear way forward to significantly increase the utility of 
the VHF bands for the operation of television services. The Report and 
Order states that the Commission will revisit this matter in a future 
proceeding.
    With respect to the channel sharing provisions, the Report and 
Order makes clear that channel sharing arrangements will be voluntary. 
Broadcasters will decide whether to enter into a channel sharing 
arrangement and will be given flexibility with respect to determining 
some of the key parameters under which they will combine their multiple 
television stations onto a single six MHz channel.
    Despite sharing a single channel and transmission facility, each 
station will continue to be licensed separately, have its own call sign 
and will separately be subject to all of the Commission's obligations, 
rules, and policies. Each station must comply with the technical, 
operational, and programming obligations (e.g., children's programming, 
political broadcasting, minimum operating hours, main studio, Emergency 
Alert System).
    Stations utilizing a shared channel will be required to retain at 
least enough capacity to operate one standard definition (``SD'') 
programming stream in order to meet the Commission's requirement to 
``transmit at least one over-the-air video broadcast signal provided at 
no direct charge to viewers.'' However, stations will have the 
flexibility within this ``minimum capacity'' requirement to tailor 
their agreements. This flexible channel sharing will allow parties to 
meet their individual programming and economic needs.
    Class A television stations may participate in channel sharing in 
connection with an incentive auction but low power television and TV 
translators may not.
    Any full power television or Class A television permittee, as well 
as any applicant for an original construction permit may execute a 
channel sharing agreement. The party relinquishing spectrum, though, 
must hold a license prior to the commencement of the auction process.
    Commercial and noncommercial educational (NCE) stations are 
permitted to share a single television channel.
    The Report and Order defers consideration of ownership issues that 
may arise as a result of channel sharing arrangements until a future 
proceeding.
    As mandated in the Spectrum Act, the channel sharing rules will 
neither increase nor decrease the cable and satellite carriage rights 
currently afforded broadcast licensees. Specifically, regardless of the 
number of stations sharing a single six MHz channel, each station will 
be licensed separately and will therefore continue to have at least 
one--but only one--``primary'' stream of programming entitled to 
carriage rights under the rules so long as the licensee continues to 
meet all relevant technical requirements.
    The Report and Order leaves for future consideration the subject of 
channel sharing by stations outside the context of an incentive 
auction.

Final Regulatory Flexibility Act Analysis

    As required by the Regulatory Flexibility Act of 1980, as amended 
(``RFA'') \1\ an Initial Regulatory Flexibility Analysis (``IRFA'') was 
included in the Notice of Proposed Rulemaking (FNPRM) in this 
proceeding.\2\ Written public comments were requested on the IRFA. This 
present Final Regulatory Flexibility Analysis.\3\
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    \1\ See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601 et. seq., has 
been amended by the Small Business Regulatory Enforcement Fairness 
Act of 1996 (``SBREFA''), Public Law 104-121, Title II, 110 Stat. 
847 (1996).
    \2\ See FNPRM, 25 FCC Rcd 13833.
    \3\ See 5 U.S.C. 604.
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A. Need for, and Objectives of, the Proposed Rules

    In the Report and Order, the Commission amends its rules to 
establish a framework that permits two or more television licensees to 
share a single six megahertz TV channel. The new channel sharing rules 
framework will, for the first time, permit two or more television 
stations to share a single channel. Such sharing will allow stations to 
relinquish a portion of their spectrum for new uses while continuing to 
provide television service to viewers.

B. Summary of Significant Issues Raised by Public Comments in Response 
to the IRFA

    There were no comments received in response to the IRFA.

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

    The RFA directs agencies to provide a description of and, where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules, if adopted.\4\ The RFA generally 
defines the term ``small entity'' as having the same meaning as the 
terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' \5\ In addition, the term ``small 
business'' has the same meaning as the term ``small business concern'' 
under the Small Business Act.\6\ 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 SBA.\7\
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    \4\ 5 U.S.C. 603(b)(3).
    \5\ 5 U.S.C. 601(6).
    \6\ 5 U.S.C. 601(3) (incorporating by reference the definition 
of ``small business concern'' in 15 U.S.C. 632). Pursuant to the 
RFA, the statutory definition of a small business applies ``unless 
an agency, after consultation with the Office of Advocacy of the 
Small Business Administration and after opportunity for public 
comment, establishes one or more definitions of such term which are 
appropriate to the activities of the agency and publishes such 
definition(s) in the Federal Register.'' 5 U.S.C. 601(3).
    \7\ Small Business Act, 15 U.S.C. 632 (1996).
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    Television Broadcasting. This Economic Census category ``comprises 
establishments primarily engaged in broadcasting images together with 
sound. These establishments operate television broadcasting studios and 
facilities for the programming and transmission of programs to the 
public.'' \8\ The SBA has created the following small business size 
standard for Television Broadcasting firms: Those having $14 million or 
less in annual receipts.\9\ The Commission has estimated the number of 
licensed commercial television stations to be 1,387.\10\ In addition, 
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 1,387 commercial television stations (or 
approximately 72 percent) had revenues of $13 million or less.\11\ We 
therefore estimate that the majority of commercial television 
broadcasters are small entities.
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    \8\ U.S. Census Bureau, 2007 NAICS Definitions, ``515120 
Television Broadcasting'' (partial definition); http://www.census.gov/naics/2007/def/ND515120.HTM#N515120.
    \9\ 13 CFR 121.201, NAICS code 515120 (updated for inflation in 
2008).
    \10\ See FCC News Release, ``Broadcast Station Totals as of 
December 31, 2011,'' dated January 11, 2012; http://transition.fcc.gov/Daily_Releases/Daily_Business/2012/db0106/DOC-311837A1.pdf
    \11\ We recognize that BIA's estimate differs slightly from the 
FCC total given supra.
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    We note, however, that in assessing whether a business concern 
qualifies as small under the above definition, business (control) 
affiliations \12\ must be

[[Page 30425]]

included. 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. 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 does not 
exclude any television station from the definition of a small business 
on this basis and is therefore possibly over-inclusive to that extent.
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    \12\ ``[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 to power to control both.'' 13 CFR 
21.103(a)(1).
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    In addition, the Commission has estimated the number of licensed 
noncommercial educational (NCE) television stations to be 393.\13\ 
These stations are non-profit, and therefore considered to be small 
entities.\14\
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    \13\ See FCC News Release, ``Broadcast Station Totals as of 
December 31, 2011,'' dated January 11, 2012; http://transition.fcc.gov/Daily_Releases/Daily_Business/2012/db0106/DOC-311837A1.pdf
    \14\ See generally 5 U.S.C. 601(4), (6).
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    In addition, there are also 6,739 low power television stations 
(LPTV), TV Translators and Class A television stations.\15\ Given the 
nature of this service, we will presume that all of these licensees 
qualify as small entities under the above SBA small business size 
standard.
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    \15\ See FCC News Release, ``Broadcast Station Totals as of 
December 31, 2011,'' dated January 11, 2012; http://transition.fcc.gov/Daily_Releases/Daily_Business/2012/db0106/DOC-311837A1.pdf.
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    Cable Television Distribution Services. Since 2007, these services 
have been defined within the broad economic census category of Wired 
Telecommunications Carriers; that category is defined as follows: 
``This industry comprises establishments primarily engaged in operating 
and/or providing access to transmission facilities and infrastructure 
that they own and/or lease for the transmission of voice, data, text, 
sound, and video using wired telecommunications networks. Transmission 
facilities may be based on a single technology or a combination of 
technologies.'' \16\ The SBA has developed a small business size 
standard for this category, which is: All such firms having 1,500 or 
fewer employees. To gauge small business prevalence for these cable 
services we must, however, use current census data that are based on 
the previous category of Cable and Other Program Distribution and its 
associated size standard; that size standard was: All such firms having 
$13.5 million or less in annual receipts.\17\ According to Census 
Bureau data for 2002, there were a total of 1,191 firms in this 
previous category that operated for the entire year.\18\ Of this total, 
1,087 firms had annual receipts of under $10 million, and 43 firms had 
receipts of $10 million or more but less than $25 million.\19\ Thus, 
the majority of these firms can be considered small.
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    \16\ U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired 
Telecommunications Carriers'' (partial definition); http://www.census.gov/naics/2007/def/ND517110.HTM#N517110.
    \17\ 13 CFR 121.201, NAICS code 517110.
    \18\ U.S. Census Bureau, 2002 Economic Census, Subject Series: 
Information, Table 4, Receipts Size of Firms for the United States: 
2002, NAICS code 517510 (issued November 2005).
    \19\ Id. An additional 61 firms had annual receipts of $25 
million or more.
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    Cable Companies and Systems. The Commission has also developed its 
own small business size standards, for the purpose of cable rate 
regulation. Under the Commission's rules, a ``small cable company'' is 
one serving 400,000 or fewer subscribers, nationwide.\20\ Industry data 
indicate that, of 1,076 cable operators nationwide, all but eleven are 
small under this size standard.\21\ In addition, under the Commission's 
rules, a ``small system'' is a cable system serving 15,000 or fewer 
subscribers.\22\ Industry data indicate that, of 6,635 systems 
nationwide, 5,802 systems have under 10,000 subscribers, and an 
additional 302 systems have 10,000-19,999 subscribers.\23\ Thus, under 
this second size standard, most cable systems are small.
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    \20\ 47 CFR 76.901(e). The Commission determined that this size 
standard equates approximately to a size standard of $100 million or 
less in annual revenues. Implementation of Sections of the 1992 
Cable Act: Rate Regulation, Sixth Report and Order and Eleventh 
Order on Reconsideration, 10 FCC Rcd 7393, 7408 (1995).
    \21\ These data are derived from: R.R. Bowker, Broadcasting & 
Cable Yearbook 2006, ``Top 25 Cable/Satellite Operators,'' pages A-8 
& C-2 (data current as of June 30, 2005); Warren Communications 
News, Television & Cable Factbook 2006, ``Ownership of Cable Systems 
in the United States,'' pages D-1805 to D-1857.
    \22\ 47 CFR 76.901(c).
    \23\ Warren Communications News, Television & Cable Factbook 
2008, ``U.S. Cable Systems by Subscriber Size,'' page F-2 (data 
current as of Oct. 2007). The data do not include 851 systems for 
which classifying data were not available.
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    Cable System Operators. 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.'' \24\ The 
Commission has determined that 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.\25\ Industry data indicate 
that, of 1,076 cable operators nationwide, all but ten are small under 
this size standard.\26\ We note that the Commission neither requests 
nor collects information on whether cable system operators are 
affiliated with entities whose gross annual revenues exceed $250 
million,\27\ and therefore we are unable to estimate more accurately 
the number of cable system operators that would qualify as small under 
this size standard.
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    \24\ 47 U.S.C. 543(m)(2); see 47 CFR 76.901(f) & nn. 1-3.
    \25\ 47 CFR 76.901(f); see Public Notice, FCC Announces New 
Subscriber Count for the Definition of Small Cable Operator, DA 01-
158 (Cable Services Bureau, Jan. 24, 2001).
    \26\ These data are derived from: R.R. Bowker, Broadcasting & 
Cable Yearbook 2006, ``Top 25 Cable/Satellite Operators,'' pages A-8 
& C-2 (data current as of June 30, 2005); Warren Communications 
News, Television & Cable Factbook 2006, ``Ownership of Cable Systems 
in the United States,'' pages D-1805 to D-1857.
    \27\ 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. See 47 CFR 
76.909(b).
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D. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities

    The Report and Order contains no new or revised information 
collection requirements subject to the Paperwork Reduction Act of 
1995.\28\
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    \28\ The Paperwork Reduction Act of 1995 (``PRA''), Public Law 
104-13, 109 Stat. 163 (1995) (codified in Chapter 35 of title 44 
U.S.C.).
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E. Steps Taken To Minimize Significant Economic 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

[[Page 30426]]

coverage of the rule, or any part thereof, for small entities.\29\
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    \29\ See 5 U.S.C. 603(c).
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    The Report and Order adopted general channel sharing rules and 
policies. Among these, the Commission determined that only licensees 
would be permitted to participate in channel sharing in conjunction 
with the reverse auction. The Commission found that the burden on small 
entities of limiting channel sharing to only licensees is outweighed by 
the need to clear as many television channels as possible for 
reallocation and use by commercial wireless entities to enhance 
broadband wireless offerings.
    The Commission permitted Class A television stations to participate 
in channel sharing but channel sharing by low power television stations 
and TV translators was not permitted. The Commission determined that 
the burden on small entities is outweighed by the intent of Congress to 
limit channel sharing in conjunction with the reverse auction to only 
full power television and Class A stations as well as the need to 
complete the successful repacking of television channels and identify 
channels for reallocation to broadband wireless use.
    The Commission determined that commercial and noncommercial 
educational television stations could share a single television 
channel. The Commission did not find that there would be a significant 
impact on small entities by this decision. The decision would have 
little impact and any impact would affect all entities equally.
    The Commission adopted a requirement that stations involved in 
channel sharing retain the right to use at least enough spectrum to 
operate one SD channel. The Commission did not find that there would be 
a significant impact on small entities by this requirement. Since 
channel sharing is voluntary, the requirement of retaining sufficient 
channel capacity to operate at least 1 SD channel would have little 
impact and any impact would affect all entities equally.

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

    None.

G. Report to Congress

    The Commission will send a copy of the Report and Order, including 
the FRFA, in a report to be sent to Congress pursuant to the 
Congressional Review Act.\30\ In addition, the Commission will send a 
copy of the Report and Order, including FRFA, to the Chief Counsel for 
Advocacy of the Small Business Administration. A copy of this Report 
and Order and FRFA (or summaries thereof) will be published in the 
Federal Register.\31\
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    \30\ See 5 U.S.C. 801(a)(1)(A). The Congressional Review Act is 
contained in Title II, section 251, of the CWAAA, see Public Law 
104-121, Title II, section 251, 110 Stat. 868.
    \31\ See 5 U.S.C. 604(b).
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List of Subjects

47 CFR Part 73

    Television, television broadcasting.

47 CFR Part 76

    Cable television.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Final Rule

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR parts 73 and 76 as follows:

PART 73--RADIO BROADCAST SERVICES

0
1. The authority citation continues to read:

    Authority: 47 U.S.C. 154, 303, 334, 336, and 339.


0
2. Add Sec.  73.3700 to read as follows:


Sec.  73.3700  Channel sharing.

    (a) Channel sharing generally. For purposes of this subsection, 
``reverse auction'' shall mean the reverse auction set forth in section 
6403(a) of the See Middle Class Tax Relief and Job Creation Act of 
2012. Subject to the provisions of this section, qualified television 
stations may voluntarily seek Commission approval to share a single six 
megahertz channel in conjunction with a proposal submitted in the 
reverse auction. Each station sharing a single channel shall continue 
to be licensed and operated separately, have its own call sign and be 
separately subject to all of the Commission's obligations, rules, and 
policies.
    (b) Basic qualifications. (1) Any full power television station or 
Class A television station permittee or licensee, as well as any 
applicant for an original construction permit may execute a channel 
sharing agreement to be considered in conjunction with the reverse 
auction.
    (2) The party relinquishing spectrum pursuant to a channel sharing 
agreement must hold a license prior to the commencement of the reverse 
auction wherein its channel sharing agreement shall be considered.
    (3) Channel sharing agreements shall contain a provision requiring 
that each channel sharing licensee shall retain spectrum usage rights 
adequate to ensure a sufficient amount of the shared channel capacity 
to allow it to provide at least one Standard Definition (SD) program 
stream at all times.
    (4) Channel sharing is permissible between commercial and 
noncommercial educational television stations.
    (5) Channel sharing is permissible between full power television 
stations, between Class A television stations and between full power 
and Class A television stations.
    (c) Preservation of carriage rights. A broadcast television station 
that voluntarily relinquishes spectrum usage rights under this section 
in order to share a television channel and that possessed carriage 
rights under section 338, 614, or 615 of the Communications Act of 1934 
(47 U.S.C. 338; 534; 535) on November 30, 2010, shall have, at its 
shared location, the carriage rights under such section that would 
apply to such station at such location if it were not sharing a 
channel.

PART 76--MULTICHANNEL VIDEO AND CABLE SERVICE

0
3. The authority citation continues to read:

    Authority:  47 U.S.C. 151, 152, 153, 154, 301, 302, 302a, 303, 
303a, 307, 308, 309, 312, 315, 317, 325, 339, 340, 341, 503, 521, 
522, 531, 532, 534, 535, 536, 537, 543, 544, 544a, 545, 548, 549, 
552, 554, 556, 558, 560, 561, 571, 572, 573.


0
4. Add 76.56(g) to read as follows:


Sec.  76.56  Signal carriage obligations.

* * * * *
    (g) Channel sharing carriage rights. A broadcast television station 
that voluntarily relinquishes spectrum usage rights under 73.3700 of 
this chapter in order to share a television channel and that possessed 
carriage rights under section 338, 614, or 615 of the Communications 
Act of 1934 (47 U.S.C. 338; 534; 535) on November 30, 2010, shall have, 
at its shared location, the carriage rights under such section that 
would apply to such station at such location if it were not sharing a 
channel.

0
5. Add 76.66(n) to read as follows:

Sec.  76.66  Satellite broadcast signal carriage.

* * * * *
    (n) Channel sharing carriage rights. A broadcast television station 
that voluntarily relinquishes spectrum usage rights under Sec.  73.3700 
of this chapter in order to share a television channel and

[[Page 30427]]

that possessed carriage rights under section 338, 614, or 615 of the 
Communications Act of 1934 (47 U.S.C. 338; 534; 535) on November 30, 
2010, shall have, at its shared location, the carriage rights under 
such section that would apply to such station at such location if it 
were not sharing a channel.

[FR Doc. 2012-12551 Filed 5-22-12; 8:45 am]
BILLING CODE 6712-01-P