[Federal Register Volume 88, Number 135 (Monday, July 17, 2023)]
[Proposed Rules]
[Pages 45378-45384]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-14409]
[[Page 45378]]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 73 and 74
[GN Docket No. 16-142; FCC 23-53; FR ID 152602]
Authorizing Permissive Use of the ``Next Generation'' Broadcast
Television Standard
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: In this document, the Federal Communications Commission
(Commission) seeks further understanding of the current marketplace for
ATSC 3.0 Standard Essential Patents (SEPs) and the ability of third
parties to develop products that rely upon them. The Commission also
seeks comment on the impact on consumers if the Commission were to
adopt, or not adopt, rules to require essential patent holders in 3.0
technology to commit to licensing them on reasonable and non-
discriminatory (RAND) terms.
DATES: Comments are due on or before September 15, 2023; reply comments
are due on or before October 16, 2023.
ADDRESSES: You may submit comments, identified by GN Docket No. 16-142,
by any of the following methods:
Electronic Filers: Federal Communications Commission's
website: https://apps.fcc.gov/ecfs/. Follow the instructions for
submitting comments.
Paper Filers: Parties who choose to file by paper must
file an original and one copy of each filing.
People with Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by email: [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 Evan Baranoff, [email protected], of the Media
Bureau, Policy Division, (202) 418-7142. Direct press inquiries to
Janice Wise at (202) 418-8165.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Fourth
Further Notice of Proposed Rulemaking (FNPRM), FCC 23-53, adopted on
June 20, 2023 and released on June 23, 2023. The full text of this
document is available electronically via the FCC's Electronic Document
Management System (EDOCS) website at https://www.fcc.gov/edocs or via
the FCC's Electronic Comment Filing System (ECFS) website at https://www.fcc.gov/ecfs. (Documents will be available electronically in ASCII,
Microsoft Word, and/or Adobe Acrobat.) Alternative formats are
available for people with disabilities (Braille, large print,
electronic files, audio format), by sending an email to [email protected]
or calling the Commission's Consumer and Governmental Affairs Bureau at
(202) 418-0530 (voice), (202) 418-0432 (TTY).
Synopsis
I. Introduction
1. In the Fourth Further Notice of Proposed Rulemaking (FNPRM)
(accompanying the Third Report and Order, published elsewhere in this
issue of the Federal Register), we seek to further our understanding of
the current marketplace for ATSC 3.0 Standard Essential Patents (SEPs)
and the ability of third parties to develop products that rely upon
them. We also seek comment on the impact on consumers if the Commission
were to adopt, or not adopt, rules to require essential patent holders
in 3.0 technology to commit to licensing them on reasonable and non-
discriminatory (RAND) terms.
II. Fourth Further Notice of Proposed Rulemaking
2. With this FNPRM, we seek to further our understanding of the
current marketplace for ATSC 3.0 Standard Essential Patents (SEPs) and
the ability of third parties to develop products that rely upon them.
As the Commission has previously observed in this proceeding, the
Advanced Television Systems Committee (ATSC), which developed the ATSC
3.0 standard, requires patent owners to disclose that they hold
essential patents and to commit to licensing them on reasonable and
non-discriminatory (RAND) terms. The Commission decided in 2017 that
``[w]ith no evidence of patent licensing issues, . . . it [was]
premature to impose regulations on the private licensing marketplace.''
After reviewing the record developed in response to the Sunsets FNPRM,
we invite additional comments about both the specific issues raised
below and the general state of the market. This will inform the
Commission's consideration of its authority to act on these issues, as
well as the need for, appropriateness of, and potential benefits of
rules governing the RAND licensing of SEPs.
3. A number of commenters identify issues with the current ATSC 3.0
patent marketplace and encourage the Commission to ``closely monitor''
the market or even to immediately adopt Commission rules formalizing
RAND requirements for SEPs. The Alliance for Automotive Innovation
(AAI), for example, explains that ``[t]he ability to license patents
declared essential to technical standards on reasonable and non-
discriminatory . . . terms is critical to enabling automotive companies
to deploy new technologies.'' However, they contend that, despite the
ATSC RAND requirement, ``some ATSC 3.0 SEP holders have refused to
license to some willing implementers on RAND terms.'' AAI thus proposes
that the Commission not just monitor the market to ensure compliance
with the existing ATSC requirements, but also actively inquire into the
licensing practices of SEP holders and their representatives. Likewise,
other commenters urge the Commission to take an active role. Finally,
Public Knowledge/Open Technology Institute (PK) goes further, proposing
that the Commission should immediately adopt enforceable RAND
requirements for SEPs. PK argues that reliance on third party
enforcement of the ATSC RAND requirement is insufficient. They note
that the standard leaves resolution of patent disputes to the courts
but contend that third party enforcement may not always be possible or
effective, as courts must find that a disclosure and licensing
commitment like ATSC's was actually intended to bind members against
third parties. Furthermore, courts would look to the intent of the
contracting parties, not broader case law, when interpreting the
relevant terms in ATSC's policy, meaning the very definition of
``reasonable and non-discriminatory'' could be up for debate. PK
therefore proposes that the Commission adopt rules of its own.
4. On the other hand, several other commenters oppose Commission
involvement in what they describe as a still-nascent market showing no
signs of market failure. Other commenters contend that adoption of RAND
requirements by the Commission is unnecessary at best and potentially
even harmful to the consumer market for ATSC 3.0 devices. We seek
additional comment on the state of this market, particularly from the
perspective of parties, or the representatives of parties, that do not
hold SEPs but have licensed or attempted to license them. Are SEP
holders complying with the ATSC RAND requirements? If not, how are
disputes currently resolved? Are the
[[Page 45379]]
existing ATSC RAND requirements imposing any adverse economic impacts?
Why or why not? Patent pool operator MPEG LA states that it is unaware
of any SEP outside of its ATSC 3.0 patent pool, and the Commission is
not aware of any similar alternative patent pool. AAI claims that MPEG
LA is focused exclusively on ``downstream'' users of SEPs, which
``inhibits upstream suppliers from securing the license rights
necessary to develop products, offer them for sale, or even determine
whether to enter the market without the ability to know what a
license's cost would be.'' Is MPEG LA or any other party in a position
to refute or address these concerns raised by AAI?
5. Some commenters also assert that, regardless of the state of the
market, the Commission does not have authority to impose RAND
requirements on ATSC 3.0 patent licenses. For example, ONE Media and
MPEG LA contend that the Commission may not have jurisdiction over all
SEP holders. Other commenters emphasize the lack of explicit statutory
authority for the imposition of RAND requirements, while acknowledging
that the Commission has taken action in the past to prevent the abuse
of patent rights. We invite comment on the specific arguments raised by
commenters regarding jurisdiction.
6. If the Commission were to find problems in the SEP marketplace
that--consistent with the Commission's existing authority--could be
ameliorated by the application of RAND requirements, how could those
requirements be crafted to minimize any potential adverse economic
impact while maximizing the opportunity for participation in the ATSC
market? PK proposes that the Commission adopt RAND rules in line with
the policy established by the Institute of Electrical and Electronics
Engineers (IEEE), which PK argues provide sufficient detail to minimize
costly disputes. Other commenters emphasize that in 2019 the Department
of Justice expressed concern that the IEEE policy had ``dampened
enthusiasm for the IEEE process'' causing delays in standards
adoption,'' though PK points out that the Fair Standards Alliance
praised the IEEE policy as recently as last year. Commenters also note
that the Departments of Justice and Commerce recently endorsed a
``case-by-case'' approach to addressing patent disputes. Were the
Commission to adopt regulations, would the IEEE approach, a case by
case approach, or another approach be best suited to administration by
the Commission? What are the competitive impacts of these different
approaches? If the Commission were to establish specific standards, are
there sources instead of or in addition to the IEEE policy to which the
Commission should look? Regardless of the approach adopted, if any, how
could the Commission ensure speedy resolution of complaints? For
example, should resolution of such complaints be delegated to a bureau,
office, or administrative judge? Should complaints be deemed denied if
not acted upon within a certain time frame? To what extent should any
Commission rules consider the non-price terms and conditions of
licensing agreements?
7. Are there other issues the Commission should consider with
respect to the possible application of RAND rules to the licensing of
SEPs? We invite comment on the questions above and any others related
to the current SEP marketplace and possible Commission rules relating
to the RAND licensing of SEPs.
8. Digital Equity and Inclusion. The Commission, as part of its
continuing effort to advance digital equity for all,\1\ including
people of color, people with disabilities, people who live in rural or
Tribal areas, and others who are or have been historically underserved,
marginalized, or adversely affected by persistent poverty or
inequality, invites comment on any equity-related considerations \2\
and benefits (if any) that may be associated with the proposals and
issues discussed herein. Specifically, we seek comment on how our
proposals may promote or inhibit advances in diversity, equity,
inclusion, and accessibility, as well the scope of the Commission's
relevant legal authority.
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\1\ Section 1 of the Communications Act of 1934 as amended
provides that the FCC ``regulat[es] interstate and foreign commerce
in communication by wire and radio so as to make [such service]
available, so far as possible, to all the people of the United
States, without discrimination on the basis of race, color,
religion, national origin, or sex.'' 47 U.S.C. 151.
\2\ The term ``equity'' is used here consistent with Executive
Order 13985 as the consistent and systematic fair, just, and
impartial treatment of all individuals, including individuals who
belong to underserved communities that have been denied such
treatment, such as Black, Latino, and Indigenous and Native American
persons, Asian Americans and Pacific Islanders and other persons of
color; members of religious minorities; lesbian, gay, bisexual,
transgender, and queer (LGBTQ+) persons; persons with disabilities;
persons who live in rural areas; and persons otherwise adversely
affected by persistent poverty or inequality. See Exec. Order No.
13985, 86 FR 7009, Executive Order on Advancing Racial Equity and
Support for Underserved Communities Through the Federal Government
(January 20, 2021).
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III. Procedural Matters
A. Initial Regulatory Flexibility Analysis.
1. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA),\3\ the Commission has prepared this Initial Regulatory
Flexibility Analysis (IRFA) of the possible significant economic impact
on a substantial number of small entities by the policies proposed in
this Fourth Further Notice of Proposed Rulemaking (FNPRM or Fourth
FNPRM). 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 FNPRM provided on the first page of the
FNPRM. The Commission will send a copy of this entire FNPRM, including
this IRFA, to the Chief Counsel for Advocacy of the Small Business
Administration (SBA).\4\ In addition, the FNPRM and the IRFA (or
summaries thereof) will be published in the Federal Register.\5\
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\3\ 5 U.S.C. 603. The RFA, see 5 U.S.C. 601 through 612, was
amended by the Small Business Regulatory Enforcement Fairness Act of
1996 (SBREFA), Public Law 104 through 121, Title II, 110 Stat. 857
(1996).
\4\ 5 U.S.C. 603(a).
\5\ Id.
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1. Need for, and Objectives of, the Proposed Rules
2. In this Fourth Further Notice of Proposed Rulemaking (FNPRM),
the Commission seeks to further its understanding of the current
marketplace for ATSC 3.0 Standard Essential Patents (SEPs) and the
ability of third parties to develop products that rely upon them. As
the Commission has previously observed in this proceeding, the Advanced
Television Systems Committee (ATSC), which developed the ATSC 3.0
standard, requires patent owners to disclose that they hold essential
patents and to commit to licensing them on reasonable and non-
discriminatory (RAND) terms. The record developed in response to the
Sunsets FNPRM, however, raises questions both about whether patentees
are respecting these commitments and about the challenges faced in
court by third parties seeking their enforcement. In light of these
concerns and the limits of the existing record, the Commission seeks
additional comments about the general state of the market, particularly
from parties that do not hold SEPs but have licensed or attempted to
license them. This will inform the Commission's consideration of the
need for, appropriateness of, and potential
[[Page 45380]]
benefits of Commission rules governing the RAND licensing of SEPs.
2. Legal Basis
3. The proposed action is authorized pursuant to sections 1, 4, 7,
301, 303, 307, 308, 309, 316, 319, 325(b), 336, 338, 399b, 403, 534,
and 535 of the Communications Act of 1934, as amended, 47 U.S.C. 151,
154, 157, 301, 303, 307, 308, 309, 316, 319, 325(b), 336, 338, 399b,
403, 534, and 535.
3. Description and Estimate of the Number of Small Entities to Which
the Proposed Rules Will Apply
4. 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 rules adopted herein.\6\ The RFA generally defines the
term ``small entity'' as having the same meaning as the terms ``small
business,'' ``small organization,'' and ``small governmental
jurisdiction.'' \7\ In addition, the term ``small business'' has the
same meaning as the term ``small business concern'' under the Small
Business Act.\8\ 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.\9\ Below, we provide a description of such small entities, as well
as an estimate of the number of such small entities, where feasible.
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\6\ 5 U.S.C. 603(b)(3).
\7\ Id. 601(6).
\8\ Id. 601(3) (incorporating by reference the definition of
``small-business concern'' in 15 U.S.C. 632). Pursuant to 5 U.S.C.
601(3), 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).
\9\ 15 U.S.C. 632.
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5. Television Broadcasting. This industry is comprised of
``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 small business size standard
for this industry classifies businesses having $41.5 million or less in
annual receipts as small. 2017 U.S. Census Bureau data indicate that
744 firms in this industry operated for the entire year. Of that
number, 657 firms had revenue of less than $25,000,000.\10\ Based on
this data we estimate that the majority of television broadcasters are
small entities under the SBA small business size standard.
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\10\ The available U.S. Census Bureau data does not provide a
more precise estimate of the number of firms that meet the SBA size
standard. We also note that according to the U.S. Census Bureau
glossary, the terms receipts and revenues are used interchangeably,
see https://www.census.gov/glossary/#term_ReceiptsRevenueServices.
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6. As of December 31, 2022, there were 1,375 licensed commercial
television stations. Of this total, 1,282 stations (or 93.2%) had
revenues of $41.5 million or less in 2021, according to Commission
staff review of the BIAKelsey Media Access Pro Online Television
Database (MAPro) on January 13, 2023, and therefore these licensees
qualify as small entities under the SBA definition. In addition, the
Commission estimates as of December 31, 2022, there were 383 licensed
noncommercial educational (NCE) television stations, 383 Class A TV
stations, 1,912 LPTV stations and 3,122 TV translator stations. The
Commission, however, does not compile and otherwise does not have
access to financial information for these television broadcast stations
that would permit it to determine how many of these stations qualify as
small entities under the SBA small business size standard.
Nevertheless, given the SBA's large annual receipts threshold for this
industry and the nature of these television station licensees, we
presume that all of these entities qualify as small entities under the
above SBA small business size standard.
7. Wired Telecommunications Carriers. The U.S. Census Bureau
defines this industry as 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 communications networks. Transmission
facilities may be based on a single technology or a combination of
technologies. Establishments in this industry use the wired
telecommunications network facilities that they operate to provide a
variety of services, such as wired telephony services, including VoIP
services, wired (cable) audio and video programming distribution, and
wired broadband internet services. By exception, establishments
providing satellite television distribution services using facilities
and infrastructure that they operate are included in this industry.
Wired Telecommunications Carriers are also referred to as wireline
carriers or fixed local service providers.\11\
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\11\ Fixed Local Service Providers include the following types
of providers: Incumbent Local Exchange Carriers (ILECs), Competitive
Access Providers (CAPs) and Competitive Local Exchange Carriers
(CLECs), Cable/Coax CLECs, Interconnected VOIP Providers, Non-
Interconnected VOIP Providers, Shared-Tenant Service Providers,
Audio Bridge Service Providers, and Other Local Service Providers.
Local Resellers fall into another U.S. Census Bureau industry group
and therefore data for these providers is not included in this
industry.
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8. The SBA small business size standard for Wired
Telecommunications Carriers classifies firms having 1,500 or fewer
employees as small. U.S. Census Bureau data for 2017 show that there
were 3,054 firms that operated in this industry for the entire year. Of
this number, 2,964 firms operated with fewer than 250 employees.\12\
Additionally, based on Commission data in the 2021 Universal Service
Monitoring Report, as of December 31, 2020, there were 5,183 providers
that reported they were engaged in the provision of fixed local
services. Of these providers, the Commission estimates that 4,737
providers have 1,500 or fewer employees. Consequently, using the SBA's
small business size standard, most of these providers can be considered
small entities.
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\12\ The available U.S. Census Bureau data does not provide a
more precise estimate of the number of firms that meet the SBA size
standard.
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9. Cable Companies and Systems (Rate Regulation). The Commission
has developed its own small business size standard 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. Based
on industry data, there are about 420 cable companies in the U.S. Of
these, only seven have more than 400,000 subscribers. In addition,
under the Commission's rules, a ``small system'' is a cable system
serving 15,000 or fewer subscribers. Based on industry data, there are
about 4,139 cable systems (headends) in the U.S. Of these, about 639
have more than 15,000 subscribers. Accordingly, the Commission
estimates that the majority of cable companies and cable systems are
small.
10. Cable System Operators (Telecom Act Standard). The
Communications Act of 1934, as amended, contains a size standard for a
``small cable operator,'' which is ``a cable operator that, directly or
through an affiliate, serves in the aggregate fewer than one percent of
all subscribers in the United States and is
[[Page 45381]]
not affiliated with any entity or entities whose gross annual revenues
in the aggregate exceed $250,000,000.'' For purposes of the Telecom Act
Standard, the Commission determined that a cable system operator that
serves fewer than 677,000 subscribers, either directly or through
affiliates, will meet the definition of a small cable operator based on
the cable subscriber count established in a 2001 Public Notice. Based
on industry data, only six cable system operators have more than
677,000 subscribers. Accordingly, the Commission estimates that the
majority of cable system operators are small under this size standard.
We note however, that the Commission neither requests nor collects
information on whether cable system operators are affiliated with
entities whose gross annual revenues exceed $250 million.\13\
Therefore, we are unable at this time to estimate with greater
precision the number of cable system operators that would qualify as
small cable operators under the definition in the Communications Act.
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\13\ 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.
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11. 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. DBS is included in the Wired
Telecommunications Carriers industry which 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 combination of technologies. Establishments in
this industry use the wired telecommunications network facilities that
they operate to provide a variety of services, such as wired telephony
services, including VoIP services, wired (cable) audio and video
programming distribution; and wired broadband internet services.\14\ By
exception, establishments providing satellite television distribution
services using facilities and infrastructure that they operate are
included in this industry.
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\14\ Included in this industry are: broadband internet service
providers (e.g., cable, DSL); local telephone carriers (wired);
cable television distribution services; long-distance telephone
carriers (wired); closed-circuit television (CCTV) services; VoIP
service providers, using own operated wired telecommunications
infrastructure; direct-to-home satellite system (DTH) services;
telecommunications carriers (wired); satellite television
distribution systems; and multichannel multipoint distribution
services (MMDS).
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12. The SBA small business size standard for Wired
Telecommunications Carriers classifies firms having 1,500 or fewer
employees as small. U.S. Census Bureau data for 2017 show that 3,054
firms operated in this industry for the entire year. Of this number,
2,964 firms operated with fewer than 250 employees.\15\ Based on this
data, the majority of firms in this industry can be considered small
under the SBA small business size standard. According to Commission
data however, only two entities provide DBS service--DIRECTV (owned by
AT&T) and DISH Network, which require a great deal of capital for
operation. DIRECTV and DISH Network both exceed the SBA size standard
for classification as a small business. Therefore, we must conclude
based on internally developed Commission data, in general DBS service
is provided only by large firms.
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\15\ The available U.S. Census Bureau data does not provide a
more precise estimate of the number of firms that meet the SBA size
standard.
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13. 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 included in the Wired Telecommunications Carriers'
industry which includes wireline telecommunications businesses. The SBA
small business size standard for Wired Telecommunications Carriers
classifies firms having 1,500 or fewer employees as small. U.S. Census
Bureau data for 2017 show that there were 3,054 firms in this industry
that operated for the entire year. Of this total, 2,964 firms operated
with fewer than 250 employees.\16\ Thus under the SBA size standard,
the majority of firms in this industry can be considered small.
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\16\ The available U.S. Census Bureau data does not provide a
more precise estimate of the number of firms that meet the SBA size
standard.
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14. Home Satellite Dish (HSD) Service. 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. Because HSD provides subscription services, HSD falls
within the industry category of Wired Telecommunications Carriers. The
SBA small business size standard for Wired Telecommunications Carriers
classifies firms having 1,500 or fewer employees as small. U.S. Census
Bureau data for 2017 show that there were 3,054 firms that operated for
the entire year. Of this total, 2,964 firms operated with fewer than
250 employees.\17\ Thus, under the SBA size standard, the majority of
firms in this industry can be considered small.
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\17\ The available U.S. Census Bureau data does not provide a
more precise estimate of the number of firms that meet the SBA size
standard.
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15. Open Video Systems. The open video system (OVS) 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. OVS operators
provide subscription services and therefore fall within the SBA small
business size standard for the cable services industry, which is
``Wired Telecommunications Carriers.'' The SBA small business size
standard for this industry classifies firms having 1,500 or fewer
employees as small. U.S. Census Bureau data for 2017 show that there
were 3,054 firms in this industry that operated for the entire year. Of
this total, 2,964 firms operated with fewer than 250 employees.\18\
Thus, under the SBA size standard the majority of firms in this
industry can be considered small. Additionally, we note that the
Commission has certified some OVS operators who are now providing
service and 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 for the
entities authorized to provide OVS however, the Commission believes
some of the OVS operators may qualify as small entities.
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\18\ The available U.S. Census Bureau data does not provide a
more precise estimate of the number of firms that meet the SBA size
standard.
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16. Broadband Radio Service and Educational Broadband Service.
Broadband Radio Service systems, previously referred to as Multipoint
Distribution Service (MDS) and
[[Page 45382]]
Multichannel Multipoint Distribution Service (MMDS) systems, and
``wireless cable,'' \19\ transmit video programming to subscribers and
provide two-way high speed data operations using the microwave
frequencies of the Broadband Radio Service (BRS) and Educational
Broadband Service (EBS) (previously referred to as the Instructional
Television Fixed Service (ITFS)). Wireless cable operators that use
spectrum in the BRS often supplemented with leased channels from the
EBS, provide a competitive alternative to wired cable and other
multichannel video programming distributors. Wireless cable programming
to subscribers resembles cable television, but instead of coaxial
cable, wireless cable uses microwave channels.\20\
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\19\ The use of the term ``wireless cable'' does not imply that
it constitutes cable television for statutory or regulatory
purposes.
\20\ Generally, a wireless cable system may be described as a
microwave station transmitting on a combination of BRS and EBS
channels to numerous receivers with antennas, such as single-family
residences, apartment complexes, hotels, educational institutions,
business entities and governmental offices. The range of the
transmission depends upon the transmitter power, the type of
receiving antenna and the existence of a line-of-sight path between
the transmitter or signal booster and the receiving antenna.
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17. In light of the use of wireless frequencies by BRS and EBS
services, the closest industry with a SBA small business size standard
applicable to these services is Wireless Telecommunications Carriers
(except Satellite). The SBA small business size standard for this
industry classifies a business as small if it has 1,500 or fewer
employees. U.S. Census Bureau data for 2017 show that there were 2,893
firms that operated in this industry for the entire year. Of this
number, 2,837 firms employed fewer than 250 employees.\21\ Thus under
the SBA size standard, the Commission estimates that a majority of
licensees in this industry can be considered small.
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\21\ The available U.S. Census Bureau data does not provide a
more precise estimate of the number of firms that meet the SBA size
standard.
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18. According to Commission data as December 2021, there were
approximately 5,869 active BRS and EBS licenses. The Commission's small
business size standards with respect to BRS involves eligibility for
bidding credits and installment payments in the auction of licenses for
these services. For the auction of BRS licenses, the Commission adopted
criteria for three groups of small businesses. A very small business is
an entity that, together with its affiliates and controlling interests,
has average annual gross revenues exceed $3 million and did not exceed
$15 million for the preceding three years, a small business is an
entity that, together with its affiliates and controlling interests,
has average gross revenues exceed $15 million and did not exceed $40
million for the preceding three years, and an entrepreneur is an entity
that, together with its affiliates and controlling interests, has
average gross revenues not exceeding $3 million for the preceding three
years. Of the ten winning bidders for BRS licenses, two bidders
claiming the small business status won 4 licenses, one bidder claiming
the very small business status won three licenses and two bidders
claiming entrepreneur status won six licenses. One of the winning
bidders claiming a small business status classification in the BRS
license auction has an active licenses as of December 2021.
19. The Commission's small business size standards for EBS define a
small business as an entity that, together with its affiliates, its
controlling interests and the affiliates of its controlling interests,
has average gross revenues that are not more than $55 million for the
preceding five (5) years, and a very small business is an entity that,
together with its affiliates, its controlling interests and the
affiliates of its controlling interests, has average gross revenues
that are not more than $20 million for the preceding five (5) years. In
frequency bands where licenses were subject to auction, the Commission
notes that as a general matter, the number of winning bidders that
qualify as small businesses at the close of an auction does not
necessarily represent the number of small businesses currently in
service. Further, the Commission does not generally track subsequent
business size unless, in the context of assignments or transfers,
unjust enrichment issues are implicated. Additionally, since the
Commission does not collect data on the number of employees for
licensees providing these services, at this time we are not able to
estimate the number of licensees with active licenses that would
qualify as small under the SBA's small business size standard.
20. Incumbent Local Exchange Carriers (Incumbent LECs). Neither the
Commission nor the SBA have developed a small business size standard
specifically for incumbent local exchange carriers. Wired
Telecommunications Carriers is the closest industry with an SBA small
business size standard. The SBA small business size standard for Wired
Telecommunications Carriers classifies firms having 1,500 or fewer
employees as small. U.S. Census Bureau data for 2017 show that there
were 3,054 firms in this industry that operated for the entire year. Of
this number, 2,964 firms operated with fewer than 250 employees.\22\
Additionally, based on Commission data in the 2021 Universal Service
Monitoring Report, as of December 31, 2020, there were 1,227 providers
that reported they were incumbent local exchange service providers. Of
these providers, the Commission estimates that 929 providers have 1,500
or fewer employees. Consequently, using the SBA's small business size
standard, the Commission estimates that the majority of incumbent local
exchange carriers can be considered small entities.
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\22\ The available U.S. Census Bureau data does not provide a
more precise estimate of the number of firms that meet the SBA size
standard.
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21. Competitive Local Exchange Carriers (LECs). Neither the
Commission nor the SBA has developed a size standard for small
businesses specifically applicable to local exchange services.
Providers of these services include several types of competitive local
exchange service providers.\23\ Wired Telecommunications Carriers is
the closest industry with a SBA small business size standard. The SBA
small business size standard for Wired Telecommunications Carriers
classifies firms having 1,500 or fewer employees as small. U.S. Census
Bureau data for 2017 show that there were 3,054 firms that operated in
this industry for the entire year. Of this number, 2,964 firms operated
with fewer than 250 employees.\24\ Additionally, based on Commission
data in the 2021 Universal Service Monitoring Report, as of December
31, 2020, there were 3,956 providers that reported they were
competitive local exchange service providers. Of these providers, the
Commission estimates that 3,808 providers have 1,500 or fewer
employees. Consequently, using the SBA's small business size standard,
most of these providers can be considered small entities.
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\23\ Competitive Local Exchange Service Providers include the
following types of providers: Competitive Access Providers (CAPs)
and Competitive Local Exchange Carriers (CLECs), Cable/Coax CLECs,
Interconnected VOIP Providers, Non-Interconnected VOIP Providers,
Shared-Tenant Service Providers, Audio Bridge Service Providers,
Local Resellers, and Other Local Service Providers.
\24\ The available U.S. Census Bureau data does not provide a
more precise estimate of the number of firms that meet the SBA size
standard.
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22. Radio and Television Broadcasting and Wireless Communications
Equipment Manufacturing. This industry comprises establishments
primarily engaged in manufacturing radio and television broadcast and
wireless communications
[[Page 45383]]
equipment. Examples of products made by these establishments are:
transmitting and receiving antennas, cable television equipment, GPS
equipment, pagers, cellular phones, mobile communications equipment,
and radio and television studio and broadcasting equipment. The SBA
small business size standard for this industry classifies businesses
having 1,250 employees or less as small. U.S. Census Bureau data for
2017 show that there were 656 firms in this industry that operated for
the entire year. Of this number, 624 firms had fewer than 250
employees.\25\ Thus, under the SBA size standard, the majority of firms
in this industry can be considered small.
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\25\ The available U.S. Census Bureau data does not provide a
more precise estimate of the number of firms that meet the SBA size
standard.
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23. Audio and Video Equipment Manufacturing. This industry
comprises establishments primarily engaged in electronic audio and
video equipment for home entertainment, motor vehicles, and public
address and musical instrument amplification. Examples of products made
by these establishments are video cassette recorders, televisions,
stereo equipment, speaker systems, household-type video cameras,
jukeboxes, and amplifiers for musical instruments and public address
systems. The SBA small business size standard for this industry
classifies firms with 750 employees or less as small. According to 2017
U.S. Census Bureau data, 464 firms in this industry operated that year.
Of this number, 399 firms operated with less than 250 employees.\26\
Based on this data and the associated SBA size standard, we conclude
that the majority of firms in this industry are small.
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\26\ The available U.S. Census Bureau data does not provide a
more precise estimate of the number of firms that meet the SBA size
standard. We also note that the U.S. Census Bureau withheld
publication of the number of firms that operated for the entire year
and the number of firms that operated with 5 to 9 employees, to
avoid disclosing data for individual companies (see Cell Notes for
``Firms operated for the entire year'' and ``Firms operated for the
entire year with 5 to 9 employees''). Therefore, the number of firms
with employees that meet the SBA size standard would be higher that
noted herein.
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4. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements.
24. The Fourth FNPRM considers whether to adopt rules governing the
RAND licensing of SEPs. The Fourth FNPRM does not propose any new
reporting or recordkeeping requirements. In assessing the cost of
compliance for small entities, at this time the Commission cannot
quantify the cost of compliance with any of the potential rule changes
that may be adopted. Further, the Commission is not in a position to
determine whether, if adopted, the proposals and matters upon which we
seek comment in the Fourth FNPRM will require small entities to hire
professionals to comply. We expect the information we receive in
comments including where requested, cost information, to help the
Commission identify and evaluate relevant compliance matters for small
entities, including compliance costs and other burdens that may result
from potential changes discussed in the Fourth FNPRM.
5. Steps Taken To Minimize Significant Impact on Small Entities and
Significant Alternatives Considered
25. 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 such small
entities; (3) the use of performance, rather than design, standards;
and (4) and exemption from coverage of the rule, or any part thereof,
for such small entities.'' \27\
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\27\ 5 U.S.C. 603(c)(1) through (4).
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26. The Commission has authorized television broadcasters,
including small entities, to use the Next Gen TV (ATSC 3.0) standard on
a voluntary, market-driven basis, allowing them to decide whether (and
if so when) to deploy ATSC 3.0 service and bear the costs associated
with such deployment. All stakeholders, including small entities, will
need to undertake any costs or burdens associated with ATSC 3.0 service
should they choose to do so. The Advanced Television Systems Committee
(ATSC), which developed the ATSC 3.0 standard, requires patent owners
to disclose that they hold essential patents and to commit to licensing
them on RAND terms. In furthering our understanding of the current
marketplace for ATSC 3.0 SEPs, we consider whether patentees, including
small entities, are respecting these commitments and the challenges
faced in court by the third parties seeking their enforcement. Among
the alternatives we seek to consider is the degree to which the
Commission should simply monitor the market or actively respond to
license abuse and formalize RAND requirements for those who hold SEPs,
including small entities. Where there are problems in the SEP
marketplace that could be improved, we consider if the Commission were
to adopt rules requiring RAND licensing of SEPs, where such rules would
facilitate licensing by equipment manufacturers. We further consider
how to minimize any adverse economic impact on the market, including
small entities.
6. Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules
27. None.
B. Initial PRA Analysis
9. This FNPRM may result in new or modified information collection
requirements. If the Commission adopts any new or modified information
collection requirements, the Commission will publish a notice in the
Federal Register inviting the public to comment on such requirements,
as required by the Paperwork Reduction Act of 1995 (PRA).\28\ In
addition, pursuant to the Small Business Paperwork Relief Act of
2002,\29\ the Commission will seek specific comment on how it might
``further reduce the information collection burden for small business
concerns with fewer than 25 employees.''
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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.).
\29\ The Small Business Paperwork Relief Act of 2002 (SBPRA),
Public Law 107-198, 116 Stat. 729 (2002) (codified in Chapter 35 of
title 44 U.S.C.); see 44 U.S.C. 3506(c)(4).
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C. Ex Parte Rules--Permit-But-Disclose
10. The proceeding this Notice initiates shall be treated as a
``permit-but-disclose'' proceeding in accordance with the Commission's
ex parte rules.\30\ Persons making ex parte presentations must file a
copy of any written presentation or a memorandum summarizing any oral
presentation within two business days after the presentation (unless a
different deadline applicable to the Sunshine period applies). Persons
making oral ex parte presentations are reminded that memoranda
summarizing the presentation must (1) list all persons attending or
otherwise participating in the meeting at which the ex parte
presentation was made, and (2) summarize all data presented and
arguments made during the presentation. If the presentation consisted
in whole or in part of the presentation of data or arguments already
reflected in the presenter's
[[Page 45384]]
written comments, memoranda, or other filings in the proceeding, the
presenter may provide citations to such data or arguments in his or her
prior comments, memoranda, or other filings (specifying the relevant
page and/or paragraph numbers where such data or arguments can be
found) in lieu of summarizing them in the memorandum. Documents shown
or given to Commission staff during ex parte meetings are deemed to be
written ex parte presentations and must be filed consistent with rule
1.1206(b). In proceedings governed by rule 1.49(f) or for which the
Commission has made available a method of electronic filing, written ex
parte presentations and memoranda summarizing oral ex parte
presentations, and all attachments thereto, must be filed through the
electronic comment filing system available for that proceeding, and
must be filed in their native format (e.g., .doc, .xml, .ppt,
searchable .pdf). Participants in this proceeding should familiarize
themselves with the Commission's ex parte rules.
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\30\ 47 CFR 1.1200 et seq.
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D. Filing Requirements--Comments and Replies
11. Pursuant to sections 1.415 and 1.419 of the Commission's
rules,\31\ interested parties may file comments and reply comments on
or before the dates indicated on the first page of this document.
Comments may be filed using the Commission's Electronic Comment Filing
System (ECFS).\32\
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\31\ Id. 1.415, 1419.
\32\ Electronic Filing of Documents in Rulemaking Proceedings,
63 FR 24121 (1998).
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Electronic Filers: Comments may be filed electronically
using the internet by accessing the ECFS: https://apps.fcc.gov/ecfs/.
Paper Filers: Parties who choose to file by paper must
file an original and one copy of each filing.
Filings can be sent by commercial overnight courier or by
first-class or overnight U.S. Postal Service mail. All filings must be
addressed to the Commission's Secretary, Office of the Secretary,
Federal Communications Commission.
[cir] 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.
[cir] U.S. Postal Service first-class, Express, and Priority mail
must be addressed to 45 L Street NE, Washington, DC 20554.
Effective March 19, 2020, and until further notice, the
Commission no longer accepts any hand or messenger delivered filings.
This is a temporary measure taken to help protect the health and safety
of individuals, and to mitigate the transmission of COVID-19.\33\
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\33\ FCC Announces Closure of FCC Headquarters Open Window and
Change in Hand-Delivery Policy, Public Notice, 35 FCC Rcd 2788 (OMD
2020). See https://www.fcc.gov/document/fcc-closes-headquarters-open-window-and-changes-hand-delivery-policy.
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12. 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).
IV. Ordering Clauses
13. It is ordered, pursuant to the authority found in sections 1,
4, 7, 301, 303, 307, 308, 309, 316, 319, 325(b), 336, 338, 399b, 403,
534, and 535 of the Communications Act of 1934, as amended, 47 U.S.C.
151, 154, 157, 301, 303, 307, 308, 309, 316, 319, 325(b), 336, 338,
399b, 403, 534, and 535, this Fourth Further Notice of Proposed
Rulemaking is hereby adopted, effective thirty (30) days after the date
of publication in the Federal Register.
14. It is further ordered that, pursuant to 47 U.S.C. 155(c), the
Chief, Media Bureau, is granted delegated authority for the purpose of
amending FCC Form 2100 as necessary to implement the licensing process
adopted herein.
15. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Fourth Further Notice of Proposed Rulemaking, including
the Initial and Final Regulatory Flexibility Analyses, to the Chief
Counsel for Advocacy of the Small Business Administration.
Federal Communications Commission.
Marlene Dortch,
Secretary.
[FR Doc. 2023-14409 Filed 7-14-23; 8:45 am]
BILLING CODE 6712-01-P