[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

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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