[Federal Register Volume 84, Number 169 (Friday, August 30, 2019)]
[Proposed Rules]
[Pages 45703-45706]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-18528]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[MB Docket Nos. 17-317, 17-105; FCC 19-69]


Electronic Delivery of MVPD Communications; Modernization of 
Media Regulation Initiative

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Commission addresses how to

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modernize the carriage election process for entities that do not have a 
public file or Cable Operations and Licensing System (COALS) account. 
These entities were excluded in the Commission's Report & Order, 
published elsewhere in this issue of the Federal Register, that 
modernizes the carriage election notice rules by permitting 
broadcasters to post their carriage elections online and send notices 
to covered multichannel video programming distributors (MVPDs) by email 
only when first electing carriage or changing their carriage election 
status from must carry to retransmission consent or vice versa.

DATES: Submit comments on or before September 30, 2019; reply comments 
on or before October 15, 2019.

ADDRESSES: You may submit comments, identified by MB Docket Nos. 17-317 
and 17-105, by any of the following methods:
     Federal Communications Commission's Website: http://fjallfoss.fcc.gov/ecfs2/. Electronic Filers: Comments may be filed 
electronically using the internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/.
     Paper Filers: Parties who choose to file by paper must 
file an original and one copy of each filing. All filings must be 
addressed to the Commission's Secretary, Office of the Secretary, 
Federal Communications Commission. All hand-delivered or messenger-
delivered paper filings for the Commission's Secretary must be 
delivered to FCC Headquarters at 445 12th St. SW, Room TW-A325, 
Washington, DC 20554.
     Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9050 Junction Drive, 
Annapolis Junction, MD 20701. 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 email to [email protected] or call the 
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (TTY).

FOR FURTHER INFORMATION CONTACT: Lyle Elder, [email protected], 202-
418-2120, or Varsha Mangal, [email protected], 202-418-0073.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Further Notice of Proposed Rulemaking (FNPRM), FCC 19-69, in MB Docket 
Nos. 17-317, 17-105, adopted on July 10, 2019, and released on July 11, 
2019. The complete text of this document is available electronically 
via the search function on the FCC's Electronic Document Management 
System (EDOCS) web page at https://apps.fcc.gov/edocs_public/. The 
complete document is available for inspection and copying in the FCC 
Reference Information Center, 445 12th Street SW, Room CY-A257, 
Washington, DC 20554 (for hours of operation, see https://www.fcc.gov/general/fcc-reference-information-center). To request materials in 
accessible formats for people with disabilities (Braille, large print, 
electronic files, audio format), send an email to [email protected] (mail 
to: [email protected]) or call the FCC's Consumer and Governmental Affairs 
Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

Synopsis

Further Notice of Proposed Rulemaking

    1. In this Further Notice of Proposed Rulemaking, we seek comment 
on whether and how to apply the new carriage election notification 
rules adopted in the Report and Order published elsewhere in this issue 
of the Federal Register to certain broadcast stations and covered 
MVPDs. As discussed in the Order, the rules we adopt require the use of 
the online public file and/or COALS. These Commission-maintained 
databases are accessible to the public and used by most, but not all, 
broadcasters and MVPDs. For example, certain qualified low power TV 
broadcasters are eligible to demand carriage on local cable systems 
(though not on DBS providers), but are not required to maintain online 
public files. Similarly, OVS providers are subject to mandatory 
carriage obligations but are not required to maintain public inspection 
files or to use COALS. We seek comment on how to extend the 
modernization of our rules to reach the entities that do not use these 
databases (the Excluded Entities), which no commenters have addressed 
to date in this proceeding. Some entities that are not required to use 
COALS or maintain an online public file nonetheless do so voluntarily. 
We expect, and permit, any entity voluntarily using these systems to 
voluntarily comply with the new election notice process adopted today. 
Pending the resolution of these open questions, the existing carriage 
election rules will continue to apply to these Excluded Entities. This 
means that TV stations that do not have an online public file will 
continue to send carriage election notices to covered MVPDs via 
certified mail in the manner required under our current rules. See 47 
CFR 76.64(h), 76.55(d). In addition, all broadcasters must continue to 
send their carriage elections via certified mail to any Excluded Entity 
MVPD for which they are unable to locate a public file or COALS 
account.
    2. As with other broadcasters and MVPDs, we believe that Excluded 
Entities would have no difficulty establishing an email address and 
phone number to use for carriage-related communications. Given that 
they do not currently maintain accounts in either COALS or the online 
public file system, however, they would need to establish a means to 
publicize this contact information. For example, we could require 
Excluded Entities to establish and maintain a very narrow online public 
file solely for carriage-related information. Excluded Entities also 
could simply post any required public-facing information (i.e., any 
information that would otherwise be provided on COALS or the online 
public file system) on the ``first page'' of a company website. We seek 
comment on these options. Are there other options that would provide 
the public and other parties similar access to this important 
information at minimal cost and with minimal burden? Or, should we 
simply maintain the status quo with respect to this small class of 
broadcasters and MVPDs?

Procedural Matters

    3. Paperwork Reduction Act Analysis. This FNPRM contains 
information collection requirements subject to the Paperwork Reduction 
Act of 1995 (PRA), Public Law 104-13. The Office of Management and 
Budget (OMB), the general public, and other Federal agencies are 
invited to comment on the information collection requirements contained 
in this proceeding. 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), the Commission seeks specific comment on how it 
might further reduce the information collection burden for small 
business concerns with fewer than 25 employees.

Initial Regulatory Flexibility Analysis

    4. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), the Commission has prepared this present Initial 
Regulatory Flexibility Analysis (IRFA) concerning the possible 
significant economic impact on small entities by the policies and rules 
proposed in the FNPRM. Written public comments are requested on this 
IRFA. Comments must be identified as responses to the IRFA and

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must be filed by the deadlines for comments provided on the first page 
of the NPRM. The Commission will send a copy of the FNPRM, including 
this IRFA, to the Chief Counsel for Advocacy of the Small Business 
Administration (SBA). In addition, the FNPRM and IRFA (or summaries 
thereof) will be published in the Federal Register.
    5. Need for, and Objectives of, the Proposed Rules. The Report and 
Order, published elsewhere in this issue of the Federal Register, 
modernizes the triennial election notification process for broadcasters 
and MVPDs that maintain public files or a COALS account. However, some 
cable operators and broadcasters (Excluded Entities) are not required 
to maintain public files or a COALS account and are therefore unable to 
benefit from the new rules in that rulemaking. The FNPRM's objective is 
to modernize the carriage election for these Excluded Entities so that 
they can be relieved of the same burdens caused by sending election 
notifications via certified mail as discussed in the Report and Order.
    6. Legal Basis. The proposed action is authorized pursuant to 
sections 1, 4(i), 4(j), 325, 338, 614, 615, and 653 of the 
Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 154(j), 
325, 338, 534, 535, and 573.
    7. 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. 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 SBA. Below, we provide a 
description of such small entities, as well as an estimate of the 
number of such small entities, where feasible.
    8. Cable Companies and Systems (Rate Regulation Standard). 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. Industry data indicate that, of 1,076 cable operators 
nationwide, all but 11 are small under this size standard. In addition, 
under the Commission's rules, a ``small system'' is a cable system 
serving 15,000 or fewer subscribers. 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. Thus, 
under this second size standard, the Commission believes that most 
cable systems are small.
    9. Cable System Operators. The Act 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 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. Industry data indicate that, of 1,076 cable operators 
nationwide, all but 10 are small under this size standard. 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, and therefore we are unable to estimate 
more accurately the number of cable system operators that would qualify 
as small under this size standard.
    10. Open Video Services. Open Video Service (OVS) systems provide 
subscription services. The open video system framework was established 
in 1996, and is one of four statutorily recognized options for the 
provision of video programming services by local exchange carriers. 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 small business 
size standard covering cable services, which is ``Wired 
Telecommunications Carriers.'' 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 the OVS 
service, the Commission relies on data currently available from the 
U.S. Census for the year 2012. According to that source, there were 
3,117 firms that in 2012 were Wired Telecommunications Carriers. Of 
these, 3,059 operated with less than 1,000 employees. Based on this 
data, the majority of these firms can be considered small. In addition, 
we note that the Commission has certified some OVS operators, with some 
now providing service. Broadband service providers (``BSPs'') are 
currently the only significant holders of OVS certifications or local 
OVS franchises. The Commission does not have financial or employment 
information regarding the entities authorized to provide OVS, some of 
which may not yet be operational. Thus, at least some of the OVS 
operators may qualify as small entities. The Commission further notes 
that it has certified approximately 45 OVS operators to serve 116 
areas, and some of these are currently providing service. Affiliates of 
Residential Communications Network, Inc. (RCN) received approval to 
operate OVS systems in New York City, Boston, Washington, DC, and other 
areas. RCN has sufficient revenues to assure that they do not qualify 
as a small business entity. Little financial information is available 
for the other entities that are authorized to provide OVS and are not 
yet operational. Given that some entities authorized to provide OVS 
service have not yet begun to generate revenues, the Commission 
concludes that up to 44 OVS operators (those remaining) might qualify 
as small businesses that may be affected by the rules and policies 
adopted herein.
    11. Satellite Master Antenna Television (SMATV) Systems, also known 
as Private Cable Operators (PCOs). SMATV systems or PCOs are video 
distribution facilities that use closed transmission paths without 
using any public right-of-way. They 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. SMATV 
systems or PCOs are now included in the SBA's broad economic census 
category, ``Wired Telecommunications Carriers,'' which was developed 
for small wireline firms. Although SMATV systems often use DBS video 
programming as part of their service package to subscribers, they are 
not included in section 340's definition of ``satellite carrier.'' 
Under this category, the SBA deems a wireline business to be small if 
it has 1,500 or fewer employees. Census data for 2012 indicate that in 
that year there were 3,117 firms operating businesses as wired 
telecommunications carriers. Of that 3,117, 3,059 operated with 999 or 
fewer employees. Based on this data, we estimate that a majority of 
operators of SMATV/PCO companies were small under the applicable SBA 
size standard.

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    12. Television Broadcasting. This Economic Census category 
``comprises establishments primarily engaged in broadcasting images 
together with sound.'' These establishments operate television 
broadcast 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 studio, 
from an affiliated network, or from external sources. The SBA has 
created the following small business size standard for such businesses: 
Those having $38.5 million or less in annual receipts. The 2012 
Economic Census reports that 751 firms in this category operated in 
that year. Of this number, 656 had annual receipts of $25 million or 
less, 25 had annual receipts between $25 million and $49,999,999, and 
70 had annual receipts of $50 million or more. Based on this data we 
therefore estimate that the majority of commercial television 
broadcasters are small entities under the applicable SBA size standard.
    13. The Commission has estimated the number of licensed commercial 
television stations to be 1,384. Of this total, 1,264 stations had 
revenues of $38.5 million or less, according to Commission staff review 
of the BIA Kelsey Inc. Media Access Pro Television Database (BIA) on 
February 24, 2017, and therefore these licensees qualify as small 
entities under the SBA definition. In addition, the Commission has 
estimated the number of licensed noncommercial educational (NCE) 
television stations to be 394. The Commission, however, 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.
    14. We note, however, that in assessing whether a business concern 
qualifies as ``small'' under the above definition, business (control) 
affiliations must be 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, 
another element of the definition of ``small business'' requires that 
an 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 broadcast 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.
    15. There are also 417 Class A stations. Given the nature of these 
services, including their limited ability to cover the same size 
geographic areas as full power stations thus restricting their ability 
to generate similar levels of revenue, we will presume that these 
licensees qualify as small entities under the SBA definition. In 
addition, there are 1,968 LPTV stations and 3,776 TV translator 
stations. Given the nature of these services as secondary and in some 
cases purely a ``fill-in'' service, we will presume that all of these 
entities qualify as small entities under the above SBA small business 
size standard.
    16. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements. The Report and Order significantly reduces the 
reporting and recordkeeping obligations for broadcasters and MVPDs that 
maintain a public file. The FNPRM seeks to find a method to similarly 
reduce these burdens for certain broadcasters and cable operators that 
do not maintain a public file (Excluded Entities). We believe we can 
lessen the burden on the Excluded Entities by perhaps requiring them to 
maintain a very narrow public file to post their contact information or 
to simply post the information on the ``first page'' of a company 
website.
    17. 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 and 
reporting requirements under the rule for such 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.''
    18. The majority of the Excluded Entities are small entities. We 
are considering a variety of possibilities to minimize the economic 
impact on small entities, as the FNPRM is specifically seeking 
proposals and information to understand what will be easiest and most 
convenient for these small entities. For example, small broadcasters 
and cable operators may already have a website and therefore posting an 
email address and phone number on the front page of an already existing 
website might impose a negligible burden. Furthermore, the proposed 
rules will relieve them of the much more onerous burden of searching 
for the contact information of several MVPDs and mailing their carriage 
election notice to the MVPDs via certified mail.
    19. Federal Rules that May Duplicate, Overlap, or Conflict with the 
Proposed Rule. None.

Ordering Clauses

    20. It is further ordered that, pursuant to the authority found in 
sections 1, 4(i), 4(j), 325, 338, 614, 615, and 653 of the 
Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 154(j), 
325, 338, 534, 535, and 573 this Notice of Proposed Rulemaking is 
adopted.
    21. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of the Report and Order, including the Initial and Final 
Regulatory Flexibility Analyses, to the Chief Counsel for Advocacy of 
the Small Business Administration.

Federal Communications Commission.
Katura Jackson,
Federal Register Liaison Officer, Office of the Secretary.
[FR Doc. 2019-18528 Filed 8-29-19; 8:45 am]
 BILLING CODE 6712-01-P