[Federal Register Volume 63, Number 234 (Monday, December 7, 1998)]
[Proposed Rules]
[Pages 67439-67449]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-32397]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 73
[CS Docket No. 98-201; FCC 98-302]
Satellite Delivery of Broadcast Network Signals Under the
Satellite Home Viewer Act
AGENCY: Federal Communications Commission.
ACTION: Notice of proposed rulemaking.
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SUMMARY: This document requests comment on the Commission's authority
to modify the Grade B construct in response to petitions for rulemaking
filed by the National Rural Telecommunications Cooperative (NRTC) and
EchoStar Communications Corporation (Echostar) in connection with the
Satellite Home Viewer Act. The intended effect is to better identify
those households that are ``unserved,'' for purposes of the SHVA, by
their local broadcast stations using conventional rooftop antennas.
[[Page 67440]]
DATES: Comments are due on or before December 11, 1998 and reply
comments are due on or before December 21, 1998. Comments by the public
on the modified information collection requirements are due on or
before January 6, 1999. Comments by the Office of Management and Budget
(``OMB'') on the modified information collection requirements are due
on or before February 5, 1999.
ADDRESSES: Federal Communications Commission, Office of the Secretary,
445 12th Street, SW, Room TW-A325, Washington, DC 20554. Comments may
be filed using the Commission's Electronic Comment Filing System (ECFS)
or by filing paper copies. See Electronic Filing of Documents in
Rulemaking Proceedings, 63 FR 24, 121 (Friday, January 2, 1998).
Comments filed through the ECFS can be sent as an electronic file via
the Internet to http://www.fcc.gov/e-file/ecfs.html>. Generally, only
one copy of an electronic submission must be filed. In completing the
transmittal screen, commenters should include their full name, Postal
Service mailing address, and the applicable docket or rulemaking
number. Parties may also submit an electronic comment by Internet e-
mail. To get filing instructions for e-mail comments, commenters should
send an e-mail to ecfs@fcc.gov, and should include the following words
in the body of the message, ``get form .'' A
sample form and directions will be sent in reply. A copy of any
comments on the new and modified information collection requirements
contained herein should be submitted to Judy Boley, Federal
Communications, Room C1804, 445 12th Street, SW, Washington, DC 20554,
or via the Internet to jboley@fcc.gov, and to Timothy Fain, OMB Desk
Officer, 10236 NEOB, 725--17th Street, N.W., Washington, DC 20503 or
via the Internet to fain__t@al.eop.gov.
FOR FURTHER INFORMATION CONTACT: Donnie Fowler at (202) 418-7200 or via
internet at dfowler@fcc.gov. For additional information concerning the
modified information collection requirements contact Judy Boley at
(202) 418-0214 or via internet at jboley@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's
Notice of Proposed Rulemaking, FCC 98-302, CS Docket No. 98-201,
adopted November 17, 1998 and released November 17, 1998. The full text
of this Notice is available for inspection and copying during normal
business hours in the FCC Reference Center (Room 239), 1919 M Street,
NW, Washington, DC 20554, or may be purchased from the Commission's
copy contractor, International Transcription Service (``ITS''), (202)
857-3800, 1231 20th Street, NW, Washington, DC 20036, or may be
reviewed via internet at http://www.fcc.gov/Bureaus/Cable/
News__Releases/1998/nrcb8022.html>. For copies in alternative formats,
such as braille, audio cassette or large print, please contact Sheila
Ray at ITS.
Ex Parte Rules
This proceeding will be treated as a ``permit-but-disclose''
proceeding subject to the ``permit-but-disclose'' requirements under
section 1.1206(b) of the rules. (47 CFR 1.1206(b), as revised). Ex
parte presentations are permissible if disclosed in accordance with
Commission rules, except during the Sunshine Agenda period when
presentations, ex parte or otherwise, are generally prohibited. Persons
making oral ex parte presentations are reminded that a memorandum
summarizing a presentation must contain a summary of the substance of
the presentation and not merely a listing of the subjects discussed.
More than a one or two sentence description of the views and arguments
presented is generally required. (See 47 CFR 1.1206(b)(2), as revised.)
Additional rules pertaining to oral and written presentations are set
forth in 47 CFR 1.1206(b).
Synopsis of Notice of Proposed Rulemaking
I. Introductory Background
1. In this proceeding we respond to petitions for rulemaking filed
by the National Rural Telecommunications Cooperative (NRTC) and
EchoStar Communications Corporation (EchoStar). The petitions address
the methods for determining whether a household is ``unserved'' by
local network affiliated television broadcast stations for purposes of
the 1988 Satellite Home Viewer Act (SHVA) (17 CFR 119 (1998). The NRTC
petition was filed July 8, 1998 and placed on public notice on August
5, 1998. The EchoStar petition was filed August 18, 1998 and placed on
public notice on August 26, 1998. The Commission has received comments
on both petitions.
A. The Satellite Home Viewer Act
2. In the Satellite Home Viewer Act, Congress granted a limited
exception to the exclusive programming copyrights enjoyed by television
networks and their affiliates because it recognized that some
households are unable to receive network station signals over the air.
The exception is a narrow compulsory copyright license that direct-to-
home (DTH) satellite video providers may use for retransmitting signals
of a defined class of television network stations ``to persons who
reside in unserved households.'' The term ``unserved household,'' with
respect to a particular television network station is defined by SHVA
to mean a household that--
``(A) cannot receive, through the use of a conventional outdoor
rooftop receiving antenna, an over-the-air signal of grade B intensity
(as defined by the Federal Communications Commission) of a primary
network station affiliated with that network, and
(B) has not, within 90 days before the date on which that household
subscribes, either initially or on renewal, to receive secondary
transmissions by a satellite carrier of a network station affiliated
with that network, subscribed to a cable system that provides the
signal of a primary network station affiliated with that network.'' 17
CFR 119(d)(10).
In any action brought under the SHVA, the law specifies that ``the
satellite carrier shall have the burden of proving that its secondary
transmission of a primary transmission by a network station is for
private home viewing to an unserved household.''
3. The network station compulsory copyright licenses created by the
Satellite Home Viewer Act are limited because Congress recognized the
importance that the network-affiliate relationship plays in delivering
free, over-the-air broadcasts to American families, and because of the
value of localism in broadcasting. Localism, a principle underlying the
broadcast service since the Radio Act of 1927, serves the public
interest by making available to local citizens information of interest
to the local community (e.g., local news, information on local weather,
and information on community events). Congress was concerned that
without copyright protection, the economic viability of local stations,
specifically those affiliated with national broadcast networks, might
be jeopardized, thus undermining one important source of local
information.
B. Grade B Contours and Signal Intensity
4. The Grade B intensity standard is a Commission-defined measure
of the strength of a television station's broadcast signal. (See 47 CFR
73.683 and 73.685.) Developed in the 1950s, the Commission has used the
Grade B standard for a variety of purposes, many of which were not
envisioned at the time it was adopted. Significantly, while the
Commission anticipated that the Grade B standard might be used
[[Page 67441]]
generally to determine the service area, or contour, of a television
station, use of the standard to identify individual unserved households
under SHVA was not then at issue. Grade B represents the field strength
of a signal 30 feet above ground that is strong enough, in the absence
of man-made noise or interference from other stations, to provide a
television picture that the median observer would classify as
``acceptable'' using a receiving installation (antenna, transmission
line, and receiver) typical of outlying or near-fringe areas. (See
O'Connor, Robert A., ``Understanding Television's Grade A and Grade B
Service Contours,'' IEEE Transactions on Broadcasting, 139 (December
1968).) The Grade B contour is defined as the set of points along which
the best 50% of the locations should get an acceptable picture at least
90% of the time. The ``time variability'' planning factor used in the
determination of the Grade B standard may create some confusion. In the
TV & Cable Factbook, TV Stations Volume (1998 edition page A-15), the
Grade B is described as providing service to 50% of locations 90% of
the time. The Commission's Sixth Report and Order in Dockets 8736 et
al. 41 FCC 148, 177 (1952), which adopted the initial television
station allocation rules, states, ``In the case of Grade B service the
figures are 90 percent of the time and 50 percent of the locations.''
Both the broadcast and satellite parties state the time variability
factor differently than stated. They describe the field strength at the
Grade B contour as being available to at least 50% of the locations at
least 50% of the time. This apparent inconsistency arises from an
adjustment the Commission adopted for the Grade B signal strength
values when it originally established them. This adjustment results in
a Grade B value that predicts reception of an acceptable picture 90% of
the time. For example, on channels 2-6, a signal strength of 41 dBu is
needed for an acceptable picture. In order for this signal strength to
be available 90% of the time, the median or F(50,50) field strength is
set at 47 dBu.
5. The Grade B contour values (which represent the required field
strength in dB above one micro-volt per meter) are defined for each
television channel in section 73.683 of the Commission's rules:
Channels 2-6--47 dBu
Channels 7-13--56 dBu
Channels 14-69--64 dBu
Section 73.684 contains the Commission's ``traditional''
methodology for predicting station service coverage and section 73.686
describes a procedure for making field strength measurements.
C. The PrimeTime 24 Lawsuits
6. This proceeding was precipitated by petitions for rulemaking
filed following the decisions of the United States District Court for
the Southern District of Florida in CBS, Inc. et al. v. PrimeTime 24
Joint Venture, 9 F.Supp.2d 1333 (S.D. FL., May 13, 1998). In that
litigation, the plaintiffs--CBS Inc.; Fox Broadcasting Co.; CBS
Television Affiliates Association; Post-Newsweek Stations Florida,
Inc.; KPAX Communications, Inc.; LWWI Broadcasting, Inc.; and Retlaw
Enterprises--brought a copyright infringement action against PrimeTime
24, a satellite carrier, for retransmitting distant network programming
to satellite dish owners in violation of the SHVA. The plaintiffs
alleged that PrimeTime 24 distributed the signals of distant network-
affiliated television broadcast stations by satellite to subscribers
that were not ``unserved households'' within the meaning of the SHVA.
Finding evidence that violations of the Act had taken place, the court
issued a preliminary, nationwide injunction ordering PrimeTime 24 not
to deliver CBS or Fox television network programming to any customer
that does not live in an unserved household. It was specifically
enjoined from providing CBS or Fox network programming:
to any customer within an area shown on Longley-Rice propagation maps,
created using Longley-Rice Version 1.2.2 in the manner specified by the
Federal Communications Commission (``FCC''), as receiving a signal of
at least grade B intensity of a CBS or Fox primary network station,
without first either (i) obtaining the written consent of the CBS or
Fox station affiliated or the relevant network, or (ii) after giving 15
business days written advance notice to the stations of its intention
to conduct a test and of the time and place at which the test will be
conducted, providing the station with a signal strength test at the
customer's household showing that the household cannot receive a signal
of grade B intensity.
The court ruled that the signal strength test at individual
households within a station's predicted Longley-Rice contour should be
``conducted in accordance with the procedures outlined in the
Declaration of Jules Cohen, filed on March 11, 1997.''
7. The court initially provided PrimeTime 24 with 90 days to comply
with the preliminary injunction, which applies only to subscribers who
signed up with PrimeTime 24 after March 11, 1997 (the day the
plaintiffs filed their lawsuit). The parties subsequently and jointly
agreed to an extension of the compliance date to February 28, 1999, and
the court approved the parties' agreement on October 6, 1998. If
enforced, the preliminary injunction could result in the termination of
network signals to an estimated 700,000 to one million subscribers. A
permanent injunction could end satellite network service to as many as
2.2 million subscribers. If the court issues a permanent injunction,
the 700,000 to one million subscribers affected by the preliminary
injunction will increase to include PrimeTime 24's subscribers before
March 11, 1997. This would be an additional 1.5 million subscribers,
thus raising the total subscribers affected by the Miami court orders
to 2.2 million.
8. On July 16, 1998, a Raleigh, North Carolina, federal district
court ruled against PrimeTime 24 in a similar lawsuit brought by the
local ABC affiliate, ABC, Inc. v. PrimeTime 24, Joint Venture, 1998 WL
544286 (M.D. N.C., July 16, 1998) (Case No. Civ. A. 1:97CV00090). A
permanent injunction followed on August 19, 1998 (1998 WL 544297 (M.D.
N.C., Aug. 19, 1998) (Case No. Civ. A. 1:97CV00090)). Similar to the
Miami ruling, the court found that the SHVA defines unserved household
and Grade B using strictly objective standards. The court stated,
``PrimeTime's screening procedures have systematically substituted a
subjective inquiry into the quality of the picture on a potential
subscriber's television set for any signal strength showing. PrimeTime
has ignored or turned a blind eye to the necessity of objective signal
strength testing and thus willfully or repeatedly provides network
programming to subscribers under SHVA.'' In contrast to the Miami
ruling, the Raleigh court did not use the Longley-Rice predictive model
to identify the affected subscribers, but applied the injunction to all
subscribers living within 75 miles of the affiliate's transmitting
tower. PrimeTime 24 has provided network services to as many as 35,000
households in the ABC affiliate's Raleigh/Durham market. At the time of
the court's decision, PrimeTime 24 continued to serve more than 9,000
subscribers within the affiliate's Grade B contour. A third lawsuit was
brought by an NBC affiliate in Amarillo, Texas, and awaits judgment by
a federal court. Kannan Communications, Inc. v. Primetime 24 Joint
Venture, No. 2-96-CV-086 (N.D. Tex.). A fourth lawsuit was filed by
EchoStar against CBS, Fox,
[[Page 67442]]
NBC, and ABC on October 19, 1998. EchoStar asks the court to find that
the Commission has never endorsed a particular model for predicting or
measuring Grade B intensity for the purposes of the SHVA. EchoStar
wants the court to declare that a viewer's own opinion of the quality
of his or her signal quality is adequate for determining whether that
home is unserved under the SHVA, and asks the court to endorse a
predictive model for identifying served households such that 95% of
households receive a Grade B signal 95% of the time with a 50% degree
of confidence. (EchoStar's 95 / 95 / 50 court request contrasts with
the request in its petition before the Commission, in which it asks for
a 99 / 99 / 99 model.
D. The NRTC and EchoStar Petitions
9. In response to the Miami court case, the NRTC and EchoStar filed
their petitions.
We address both Petitions in this rulemaking because the issues are
similar and for reasons of administrative efficiency. The NRTC, a
distributor of DirecTV DBS service, has asked the Commission to adopt,
exclusively for purposes of interpreting the SHVA, a new definition of
``unserved'' that includes all households located outside a Grade B
contour encompassing a geographic area in which 100 percent of the
population receives over-the-air coverage by network affiliates 100
percent of the time using readily available, affordable receiving
equipment. EchoStar, which is a provider of DBS service, urges the
Commission to adopt a prediction model to locate unserved households.
EchoStar endorses a model that predicts an area where 99 percent of
households receive a Grade B signal 99 percent of the time with a 99
percent confidence level. EchoStar also urges adoption of a methodology
for measuring signal strength that more closely reflects the signal
that a viewer's television set actually receives. It argues that a
number of flaws exist in the current measurement and prediction
processes when they are used for SHVA purposes.
10. Several parties filed comments either opposing or supporting
the petitions. Those opposing the petitions generally represented
broadcast interests, while those supporting the petitions generally
included DTH satellite interests. Broadcasters generally argue that
Congress did not grant the Commission the authority to amend the
definition of Grade B for purposes of the SHVA.
Specifically, they contend that Congress chose the Grade B
definition that existed at the time of the SHVA's adoption because it
wanted to balance the viability of network/affiliate relationships with
consumers' interest in receiving broadcast network service. If the
Commission alters the Grade B definition, the petitioners' opponents
argue, the number of households entitled to receive distant network
signals may inappropriately rise and the number of people watching the
local stations will fall as the stations' viewing area shrinks. Fewer
viewers could mean lower ratings and less advertising revenue. Further,
the petitioners' opponents argue that a reduced viewing area might
impact a network station's ability to enforce its exclusivity rights
within that area.
11. Opponents to the petitions also contend that Congress did not
craft the SHVA with competition in mind, and, although competition is
an important goal, it carries little weight in this context.
Furthermore, broadcasters challenge the DTH industry's concerns about
subscribers who will lose their network signals under the Miami court's
injunction by declaring that many of those subscribers are receiving
that service illegally. The broadcasters advocate a local-into-local
approach for satellite-delivery of network signals, whereby all local
network signals would be retransmitted into a local area (e.g., Boston
network affiliates would be retransmitted to Boston subscribers). Until
that time, broadcasters urge the Commission to refrain from acting on a
copyright issue that falls outside of its purview.
12. The DTH industry, on the other hand, contends that Congress did
not freeze the definition of Grade B when it enacted the SHVA, and
asserts that the Commission has legal authority to change that
definition. The supporters of the petitions argue that the Commission
can and should conduct a rulemaking to make the definition of Grade B
more applicable to the SHVA. Some commenters contend that the current
Grade B standard makes it more difficult for DTH providers to compete
with cable companies, because DTH providers cannot offer network
programming to subscribers while cable can. These commenters argue that
subscribers are therefore less likely to consider DTH as a true
alternative to cable. The DTH industry states that the Commission has
not adopted a definition of Grade B for purposes of SHVA and urges
adoption of a standard that reflects actual reception of an adequate
television signal at a household's television set. Moreover, instead of
an actual testing regime for determining a household's eligibility for
retransmission of a network television station's signal, they argue,
the Commission should adopt a predictive testing methodology that will
be accurate and cost-effective. The DTH industry suggests a predictive
testing methodology that will return results that reveal, with 99 to
100% confidence, that 99 to 100% of households within a given area can
receive a network television station's signal 99 to 100% of the time.
The DTH industry requests that the Commission act now to further
consumer choice, foster competition, and respond to congressional
support for action.
13. Members of Congress and the Executive Branch have expressed
their concern about the issues raised in the petitions. On July 8,
1998, Senator McCain, Chairman of the Senate Commerce Committee, and
Representative Bliley, Chairman of the House Commerce Committee, wrote
the Commission, indicating that the Miami injunction ``threatens to
undermine the progress the Congress has made in promoting
competition.'' On August 7, 1998, Representative Boucher and 22 other
members of Congress stated in a letter to the Commission that the
court's preliminary injunction ``raises serious consumer and
competitive issues that require immediate review and action by the
Commission.'' The letter continued, ``As the expert regulatory agency
in telecommunications matters, the Commission was specifically
authorized by Congress to define `Grade B' for purposes of the SHVA. .
. . [W]e believe the Commission should expeditiously act to prevent the
imminent disenfranchisement of more than a million satellite
customers.''
14. Larry Irving, director of the National Telecommunications
Information Administration (NTIA) at the Department of Commerce, stated
that, depending upon which predictive methodology is used, as many as
nine million households (10 percent of American television households)
could change from served to unserved households. He reiterated the
Administration's support for ``robust competition'' in the MVPD
industry and noted that the definition of Grade B intensity could have
a ``marked effect'' on satellite companies'' competitive position in
the market.
II. Analysis and Request for Comments
15. These rulemaking petitions address issues that are significant
to consumers and the promotion of competition, as well as to the
affected industry parties, and we believe that an expedited rulemaking
is necessary to protect satellite subscribers who are
[[Page 67443]]
truly unserved from losing network service. We seek to ensure that as
many consumers as possible can receive a broadcast network signal
consistent with the intent of the SHVA. We also seek to promote
competition among multichannel video programming distributors, where
that is possible under the SHVA, and we recognize the important role
that local broadcast stations play in their communities. We acknowledge
that the SHVA limits the proposals we can make to further these goals
and address the petitions. Further, we do not appear to have the
statutory authority to prevent most of PrimeTime 24's subscribers from
losing their network service under the Miami preliminary injunction
(and under a possible permanent injunction). The evidence in the Miami
and Raleigh court cases strongly suggests that many, if not most, of
those subscribers do not live in ``unserved households'' under any
interpretation of that term.
16. Two courts have noted that Congress used the Grade B standard
when it defined ``unserved households'' because it wanted an objective
measure of a television signal's strength. The Commission has sought in
its own regulations to advance this approach by establishing discrete
field strength values (measured in dBu's) when it defined Grade B and
when it created a detailed methodology for determining Grade B
contours. (See 47 CFR 73.683 and 73.684.) Consequently, a satellite
company may not deliver network signals to a viewer simply because the
viewer is subjectively unhappy with his or her television picture. The
Miami and Raleigh district courts both concluded that PrimeTime 24 has
chosen not to abide by the SHVA's and the Commission's objective
standard.
17. We will explore four issues in this NPRM. First, we seek
comment on the Commission's authority to address the issues raised in
the court decisions and the NRTC and EchoStar petitions. Second, we
seek comment on changing the definition of Grade B intensity so that
truly unserved households can be better identified. Third, we seek
comment on endorsing or developing a methodology for accurately
predicting whether an individual household is able to receive a signal
of Grade B intensity. Fourth, we seek comment on developing an easy-to-
use and inexpensive method for testing the strength of a broadcast
network signal at an individual household.
A. Commission's Authority to Proceed
18. Several broadcasters contend that the Commission lacks the
authority to grant the relief requested in the NRTC and EchoStar
petitions. They state that Congress incorporated by reference the
Commission's Grade B definitions and measurement procedures--
effectively freezing them in place--when the SHVA was adopted in 1988.
Accordingly, the broadcasters conclude that the Commission may not
change its rules now. Some commenters cite legislative history
purporting to show that section 73.683 was specifically included as
part of an early draft of the unserved household definition, thus
demonstrating Congress' intention to incorporate the definition as it
existed at passage. Commenters argue that Congress did not explicitly
direct the Commission to conduct a rulemaking on the definition, so the
Commission has no authority to change it. They note that the SHVA is a
copyright statute, not a communications law to be administered by the
Commission. The National Association of Broadcasters cites a number of
cases, including the Supreme Court's decision in Hassett v. Welch, for
the ``well settled canon'' that ``[w]here one statute adopts the
particular provisions of another by a specific and descriptive
reference to the statute or provisions adopted * * * [s]uch adoption
takes the statute as it exists at the time of adoption and does not
include subsequent additions or modifications by the statute so taken
unless it does so by express intent.'' (303 U.S. 303, 314 (1938).)
19. Parties supporting the petitions respond that Grade B intensity
is an ambiguous and open-ended term in the SHVA, evidenced by Congress'
failure to explicitly incorporate a rule section into the SHVA's
definition of unserved households. These commenters conclude that
Congress intentionally left the definition in the Commission's hands.
EchoStar cites the Supreme Court's holding in Lukhard v. Reed that
``[i]t is of course not true that whenever Congress enacts legislation
using a word that has a given administrative interpretation it means to
freeze that administrative interpretation in place.'' (481 U.S. 368,
379 (1989).)
20. There are four matters relating to the Commission's authority
to proceed on particular issues in this rulemaking. First, we seek
comment on whether Congress ``froze'' the definition of a signal of
Grade B intensity for purposes of the SHVA when it adopted the Act in
1988. That is, if the Commission were to revise the definition as a
general matter, would the definition nevertheless remain unchanged for
the purposes of the SHVA? We tentatively conclude that Congress did not
``freeze'' the definition of a signal of Grade B intensity for SHVA
purposes in 1988 and seek comment on this tentative conclusion. When
Congress incorporated Grade B into the definition of ``unserved
households'' it did not incorporate specific values, such as the dBu
levels the Commission uses in section 73.683. Further, nothing in the
SHVA or legislative history indicates that Congress intended to freeze
the value of Grade B when it passed the law in 1988 or when it renewed
it in 1994. Where Congress intended to incorporate regulations as they
existed on a certain date, it has expressly done so. For example, in
section 111(f) of the Copyright Act, Congress' definition of ``local
service area of a primary transmitter'' explicitly references
Commission regulations ``in effect on April 15, 1976, or such station's
television market as defined in section 76.55(e) of title 47, Code of
Federal Regulations (as in effect on September 18, 1993) * * * ``The
federal courts and the Copyright Office of the Library of Congress are
primarily responsible for enforcing and administering the copyright
laws, but Congress unquestionably turned to the Commission's expertise
when it defined unserved household in reference to a ``signal of Grade
B intensity (as defined by the Federal Communications Commission).''
21. With respect to the cases cited by commenters, we note that in
reaching its conclusion in Lukhard v. Reed, the Court followed
Helvering v. Wilshire, in which it held that ``a regulation
interpreting a provision of one act [does not become] frozen into
another act merely by reenactment of that provision.'' (308 US 90, 100-
101 (1939).) Indeed, the Supreme Court reasoned that if legislation so
constrained an agency's ability to conduct rulemaking under its
enabling legislation, then ``the result would be to read into the grant
of express administrative powers an implied condition that they were
not to be exercised unless, in effect, the Congress had consented. We
do not believe that such impairment of the administrative process is
consistent with the statutory scheme which the Congress has designed.''
Both Helvering and Lukhard suggest that the meaning of ``signal of
Grade B intensity'' in SHVA was not frozen for purposes of that Act
when SHVA was enacted, but rather can be modified over time by the
Commission.
22. Second, we seek comment on whether the Commission has the
authority to revise its Grade B construct specifically for the purposes
of the SHVA. The Grade B construct includes (1) the signal intensity
levels assigned to Grade B, 47 CFR 73.683; (2) models for
[[Page 67444]]
predicting where a Grade B signal exists in an area or at an individual
point (or household), e.g., 47 CFR 73.684 and 73.686 predictive models;
and (3) the methodologies for testing signal strength in an area or at
an individual point. Initially, we note that it is indisputable that
the Commission has the authority, as a general matter, to revise any of
its rules, as long as we explain our reasons for doing so. But may we
create special provisions that would apply only to SHVA? Does the
statute permit the Commission to promulgate a special definition of
Grade B intensity for the exclusive purposes of the SHVA? What was the
Congress' intent? Some commenters argue that we ought to make a
specific definition for the SHVA because the Grade B construct is most
often used for determining signal intensity over broad areas, not for
individual households as the SHVA contemplates. The Commission has
tailored its rules for specific purposes in the past. For example, the
Commission determines television stations' service areas using two
different, but related, methods, depending on the purpose. For
exceptions to the cable syndicated exclusivity rules and for cross-
ownership purposes, the Commission uses its traditional Grade B contour
scheme, but for digital television stations, the Commission uses the
Longley-Rice predictive model.
23. Third, we seek comment on whether the Commission has the
authority to develop a model for predicting whether an individual
household can receive a signal of Grade B intensity for purposes of the
SHVA. The Commission has developed and used predictive models for
determining signal intensity in other contexts--for example, the
traditional Grade B contour and the Longley-Rice models. Broadcasters
argue that the Commission does not have the authority to develop a
predictive model for SHVA purposes, because the definition of
``unserved households'' depends on a household's actual ability to
receive a signal of Grade B intensity as measured at the household
itself. While satellite providers and broadcasters may negotiate the
use of a predictive model, the argument continues, the SHVA does not
provide the Commission with jurisdiction to interfere with or to
endorse a particular predictive methodology. The satellite providers
respond by citing the Commission's current use of predictive
methodologies for other purposes. They argue that the Commission may
therefore develop a predictive model specifically for the SHVA.
24. A predictive model need not replace actual measurement, but
could serve as a presumption of service or lack of service for purposes
of the SHVA. We note that some broadcasters have entered into
agreements with Primestar and Netlink (satellite television providers)
to resolve disputes arising from the SHVA requirements. These
settlements assign five-digit zip codes to each station and classify
each zip code as ``red light'' if more than 50% of the zip code's
population is served--based on Longley-Rice propagation data--and as
``green light'' of 50% or less of the population in the zip code is
served. A presumption could make administration of the unserved
household rule easier and more cost-effective for consumers and the
industry. Broadcasters and satellite providers would be able to rely on
a Commission-endorsed model when deciding whether individual consumers
are presumed to be eligible to receive satellite-delivered network
signals. Moreover, a predictive process might be a judicially
acceptable means for a satellite service provider to carry its burden
of showing ``that its secondary transmission of a primary transmission
by a network station is for private home viewing to an unserved
household.'' Such an approach is consistent with the federal court's
use of a variation of the Commission's Longley-Rice predictive
methodology in its preliminary injunction in the PrimeTime 24
proceeding in Miami.
25. Fourth, we seek comment on our conclusion that the Commission's
authority to define a signal of Grade B intensity reasonably includes
the authority to adopt a method of measuring signal intensity at an
individual household. The Commission has already established a method
of measuring service within an area or for propagation analysis, but
has not established a method specifically for measuring signal
intensity at an individual household. The SHVA is concerned with
adequate television signals at individual households. Importantly, it
does not matter to consumers that other households (a next-door
neighbor or a family across town) can actually receive network signals
when they cannot.
B. Definition, Prediction, and Measurement Proposals
26. The measurement and prediction techniques included in part 73
of the Commission's rules and as developed in other contexts constitute
a set of tools relating to signal propagation and reception that are
useful for a variety of purposes. Although this proceeding focuses on
concerns that are specific to SHVA, we recognize that refinements in
the rules and in our knowledge about the in-home viewing environment
(antennas, transmission lines, and receivers) and prediction
methodologies have potential carryover into some other aspects of the
Commission's rules. In some respects, however, the matters are unique
to the SHVA context. Thus, for example, the Commission's rules do not
typically focus on signal availability measurement techniques relating
to service to a single discrete location or household. Standardization
of a single household measurement process would thus not necessarily
have broad implications for other parts of the Commission's rules.
Although our focus is on changes specifically relevant for SHVA
purposes, we seek comment on the general question of what other non-
SHVA rules or policies might be implicated by the changes that are
discussed below. We note, for example, that our DTV service replication
models are also based upon duplicating the Grade B service area of
existing analog broadcast stations. Certain interference criteria also
incorporate the Grade B service area of television broadcast stations.
We also note that the Commission has a history of using different tools
in different contexts depending on the degree of precision desired, the
expense of the process used, and the economic and technical tradeoffs
involved in any specific issue. We invite comment on this issue and
request that parties provide specific rationales for any differences
between SHVA and non-SHVA definitions, prediction models, and
measurement methods that they advocate.
1. Defining a Signal of Grade B Intensity
27. A signal of Grade B intensity is an objective standard that, as
currently defined in section 73.683, may not distinguish adequately
between served and unserved households. The Grade B signal intensity
values specified in our rules were designed to enable reception of a
television picture that is acceptable to the median observer,
``assuming a receiving installation (antenna, transmission line, and
receiver) considered to be typical of outlying or near-fringe areas.''
Grade B service also assumes the absence of man-made noise or
interference from other stations. There was little specific comment in
the NRTC and EchoStar petitions or in the responsive pleadings
addressing possible changes in the field strength levels specified in
the rules. Has what constitutes a ``conventional outdoor rooftop
receiving antenna'' and the concept of the quality of service that
viewers consider acceptable changed
[[Page 67445]]
since the Commission adopted the Grade B signal strength levels in the
1950s? Would these standards need modification so that the median
observer would continue to find the service acceptable? For example,
receivers may have improved, or the assumptions regarding interference
in outlying areas may no longer be valid. (See, e.g., Gary S. Kalagian,
``A review of the Technical Planning Factors for the VHF Television
Service,'' FCC, Office of Chief Engineer, Bulletin RS77-01 (March 1,
1977), p. 11.) Changing the standard of an acceptable signal could have
detrimental effects on the viability of local television stations and,
potentially, on the goal of localism. We have no evidence that the
underlying technical planning factors have changed in a way that would
justify revising the current Grade B signal intensity levels. We
welcome comments, supported by evidence, regarding any claimed changes
to the assumptions made in deriving the Grade B signal intensity.
28. In soliciting comments on this issue, we recognize that our
flexibility to change the Grade B intensity values is naturally
constrained by the existence of the Grade A standard. The Grade A
intensity values are based on 70% of the locations receiving an
acceptable picture 90% of the time. Therefore, we believe that we
cannot modify Grade B intensity so much that it effectively equals or
exceeds Grade A signal intensity. We invite comments on all the factors
that determine the Grade B signal intensity. We also seek comment on
whether changes to the current intensity values would have a
detrimental effect on network-affiliate relationships and localism, as
well as other Commission rules that involve the current Grade B
standard.
2. Predicting a Signal of Grade B Intensity
29. The definition of an unserved household as a household that
``cannot receive * * * a signal of Grade B intensity'' most logically
refers to signal measurement at an individual household to determine if
an adequate signal is actually received. Because of the costs and
difficulties of individual measurements, however, for many purposes a
predictive model is used in lieu of actual measurements. Consistent
with this notion, the EchoStar petition asks the Commission to adopt or
endorse an accurate model for predicting whether an individual
household receives a Grade B intensity signal.
30. We believe that predictive models can be effective proxies for
individual household measurements. The satellite and broadcast industry
currently make use of predictive models such as the Longley-Rice
methodology. However, different parties do not always agree on which
model is most appropriate for identifying unserved households. Even
when parties use the same model, they may disagree on the factors that
are considered in that model. For example, different variations of the
Longley-Rice model may or may not account for vegetation or buildings.
In addition, studies using the Longley-Rice model, such as our DTV
analyses, may account for interference. If the Commission endorses a
predictive model in this rulemaking, parties will not need to spend
future resources and time debating methodology. However, consistent
with the SHVA, no Commission-endorsed model will preclude a party from
using actual measurements at individual households.
31. The difference in taking actual measurements at individual
households and using predictive models is significant, because
measurement requires time, money, and other resources that often
outweigh the benefits. For example, it may cost more for a satellite
company to take a measurement than it can recover through subscriber
fees. To avoid these costs, satellite providers, broadcasters, and
consumers have often turned to predictive models that erroneously
permit some served households to receive satellite network service, or,
conversely, that prevent some unserved households from being eligible
to receive network stations via satellite.
32. Even though Grade B signal intensity is defined as discrete
values measured in dBu's, the intensity of broadcast signals at
particular locations and at particular times cannot be precisely
determined, regardless of the predictive method used. Signal strength
varies randomly over location and time, so signal propagation must be
considered on a statistical basis. This is true whether the signal
intensity is predicted at a fixed location (such as an individual
household) or over an area. Some prediction methods, including the
Commission's propagation curves, predict the occurrence of median
signal strengths (i.e., signal strengths expected to be exceeded at 50%
of the locations in a particular area at least 50% of the time). Under
this approach, ``location'' and ``time'' variability factors are added
to the signal level for an acceptable picture so that the desired
statistical reliability is achieved. The values chosen for the Grade B
signal intensity account for this variability, and therefore, predict
that the best 50% of the locations along the Grade B contour will
receive an acceptable picture 90% of the time. In other predictive
models, including the Longley-Rice point-to-point model, this
variability is built into the model, rather than into the signal
intensity value. We seek comment on whether it would be appropriate to
consider changing the location and time variability percentages. For
example, should more than 50% of viewers receive an acceptable picture
more than 90% of the time? We also seek comment on whether such changes
should be incorporated into the signal intensity values or the
predictive model.
33. As previously noted, the Commission has used predictive models
for determining signal intensity in the past. We seek comment on the
application of these models in the SHVA context. We tentatively
conclude that the Commission's traditional predictive methodology for
determining a Grade B contour, outlined in section 73.684 of the
Commission's rules, is insufficient for predicting signal strength at
individual households. We seek comment on this tentative conclusion.
The traditional Grade B methodology predicts a signal's strength by
using radial lines extending ten miles from a television station's
transmitter. (See 47 CFR 73.684(d) and 73.686(b).) This methodology
does not accurately reflect topographic differences in a station's
transmission area, and explicitly does not account for interference
from other signals. These omissions result in an imperfect methodology
for predicting whether an individual household can receive an adequate
signal. For example, terrain features beyond 10 miles from a station's
transmitter site may block a house's reception or a house that sits at
the edge of two different television markets may suffer from
interfering signals.
34. While our traditional Grade B contour methodology is inadequate
for predicting the signal level at a single location, we have recently
adopted rules in the DTV proceeding for analyzing TV service using a
point-to-point prediction method based on the Longley-Rice propagation
model. Our implementation of the Longley-Rice model for analysis of DTV
and analog TV service in the DTV proceeding is described in ``Longley-
Rice Methodology for Evaluating TV Coverage and Interference,'' OET
Bulletin 69, Federal Communications Commission (July 2, 1997) http://
www.fcc.gov/oet/info/documents/bulletins/#69>. Longley-Rice is the
Commission's designated methodology for determining where service is
provided by a DTV station. (See 47 CFR 73.622(e).) We propose that
[[Page 67446]]
the Longley-Rice propagation model, as implemented for DTV, be used to
refine the Grade B service prediction for the purpose of SHVA
determinations. The Longley-Rice propagation model is the most widely-
used private means of predicting a Grade B coverage area for SHVA
purposes. It provides an estimate of signal strength, similar to the
traditional Grade B contour method. However, the Longley-Rice model
adjusts the predictions for changes in terrain (e.g., hills and
valleys) along the entire path from the transmitter site to the
specified receive site. Thus, while the traditional method often
results in smooth concentric circles surrounding a transmission tower,
the Longley-Rice method more precisely describes actual areas of
coverage. While the broadcasters support the use of the Longley-Rice
model in the SHVA context, the satellite interests claim it is
insufficient. The detractors agree that a Longley-Rice analysis has
advantages over a traditional Grade B contour, but note that it fails
to account for several important factors that affect signal
availability, including interference from other signals, vegetation,
and buildings. We seek comment generally on this proposal, as well as
specifically on the following questions. Should consideration of co-
channel and adjacent-channel interference as implemented for DTV be
part of the methodology used for SHVA purposes? Is it necessary to
prescribe how accurately receive location coordinates are specified?
Can Longley-Rice be modified to increase the probability of identifying
served and unserved households more accurately? How? What are the
predictive factors that are missing in the current Longley-Rice model?
Can Longley-Rice reasonably be modified to account for all these
factors? What effect would incorporation of these additional factors
have on the cost and practicality of the Longley-Rice methodology? Can
Longley-Rice or a modified version of Longley-Rice be used in
conjunction with a commercially available geocoding process to provide
a workable predictive model for satellite providers, broadcasters, and
consumers to use for determining whether a given subscriber is presumed
to be unserved? We seek comment on whether such currently-available
approaches are working well for the industries and consumers. For
example, Decisionmark Corporation is currently working with
broadcasters and satellite providers to provide mapping information
about signal areas. They sponsor web sites, http://www.shva.com/maps>
and http://getawaiver.com>, that provide information about served and
unserved areas to consumers, broadcasters and participating satellite
providers.
35. We also invite parties to submit any other methodology that
they believe will more accurately and cost-effectively predict whether
an individual household is able to receive a signal of Grade B
intensity. We seek to identify a predictive model that more accurately
determines whether a household is unserved for purposes of the SHVA. Is
there a predictive methodology that will increase the probability that
unserved households will be more accurately identified (e.g., by taking
into account interference)? What is that methodology? For either a
version of the Longley-Rice model or another alternative methodology,
how might parties use a new predictive model? Can and should the
Commission endorse or develop a predictive model? Should we endorse a
model that already exists or endorse such a model with modifications?
What are the costs associated with any of the suggested methodologies?
36. We acknowledge and reiterate Congress' decision in the SHVA to
protect network-affiliate relationships and to foster localism in
broadcasting. If we change the number of viewers predicted to receive a
local station, we may substantially affect these policies. As we have
noted, localism is central to our policies governing broadcasting and
the obligation of broadcasters to serve the public interest. In
proposing a new or modified predictive model for purposes of the SHVA,
we seek comment on what, if any, effects different predictive models
will have on these policies, and what, if any, steps we can take to
further such policies.
3. Testing for Signal Intensity at Individual Households
37. For the SHVA to function properly, a relatively low cost,
accurate, and reproducible methodology for measuring the presence of a
Grade B intensity signal in a household is of particular importance.
Although, because of the costs and delays involved, it would be
desirable to minimize the need for individual testing to the extent
possible, individual testing is the key safety net mechanism under the
SHVA for proving that a specific household is unserved and thus
eligible under the law to receive satellite delivery of network
affiliated television stations. We therefore propose to explore a
method of measuring signal intensity at individual households that is
accurate, easier, and less expensive than the current method.
38. The Commission's current method of measuring the field strength
of over-the-air signals in a station service area requires a so-called
100-foot mobile run. The run typically involves a truck with a 30-foot
antenna that takes continuous measurements while being driven a
distance of 100 feet. The antenna must be rotated to the best receiving
position, and engineers record factors that might affect signals, such
as topography, height and type of vegetation, buildings, obstacles, and
weather. If overhead obstacles get in the way, a cluster of
measurements must be taken at locations within 200 feet of each other.
This elaborate procedure can cost several hundred dollars each time it
is performed. This is an expensive proposition for a satellite company
or a consumer who wants to prove that a household is unserved by over-
the-air signals. When multiplied over hundreds of households at the
outer edges of a station's service area, the cost may become
prohibitive and may prevent many truly unserved consumers from
receiving broadcast network service.
39. In addition to the difficulties inherent in this test, many of
its assumptions may not hold in individual situations. For example,
many homes do not have antennas 30 feet above the ground, especially if
they are one-story homes. The definition of unserved household only
describes reception over a conventional outdoor rooftop receiving
antenna, so requiring measurements on a 30-foot antenna may not reflect
what is ``conventional.'' Requiring the truck's antenna to face the
direction of the station's tower ignores the reality that consumers'
antennas receive several stations, and many do not rotate to the best
position for each station. Finally, requiring clusters of tests and a
100-foot mobile run ignores the fact that homes are stationary and that
reception may vary considerably over a mobile run on a nearby street.
The purpose of the procedure specified in the rules is not to determine
the receivability of a signal at a single spot, but to determine,
through measurements at a series of grid intersections over a
community, the nature of service to the community. The Miami court
ruled that the signal strength test should be ``conducted in accordance
with the procedures outlined in the Declaration of Jules Cohen, filed
on March 11, 1997,'' which ``was based on that prescribed by the FCC in
47 CFR 73.686.'' At an accessible road closest to a household, a 100-
foot mobile run is made with a conventional rooftop antenna elevated to
30 feet. During the run, a station's field intensity is
[[Page 67447]]
recorded and the data is stored in a computer. Analysis of the data,
made with the aid of a computer program, permits the extraction of the
maximum, minimum, and median field intensity found, together with the
standard deviation. Median field intensity minus standard deviation is
a measure of the least signal intensity likely to be found at the
specific location of the household. In contrast, EchoStar proposed a
signal strength test that focuses more directly on a single point at a
household, involving placement of a conventional outdoor rooftop
antenna within three feet of the home and raised to the height of the
roof. The antenna is oriented to maximize signal strength for the one
local station that the consumer watches most often. A length of
standard household cable is attached to the antenna, and a number of
splitters are attached to duplicate the number of splitters the
consumer uses to service multiple televisions. A signal measurement is
then conducted. If the signal strength is not stable, the antenna is
relocated and the same procedure utilized until a stable signal
strength is achieved. Readings are taken approximately every thirty
seconds for a period of five minutes. If any of the signal strength
readings register less than the Grade B signal strength threshold as
established by Congress and the FCC, the consumer will be deemed an
``unserved household'' eligible to receive distant network signals.
40. We seek comment on the modification of the current testing
methodology or the creation of a new methodology for measuring signal
strength. Any recommendations should lead to a test that is relatively
easy to use and inexpensive enough to make it economically practical
for the industry and for consumers. We seek comment on what qualifies
as ``a conventional outdoor rooftop receiving antenna.'' Are different
antennas required for different parts of the country, or as one moves
farther from a television transmitter? What special problems do viewers
in multiple dwelling unit buildings (``MDUs'') face in gaining access
to a conventional outdoor rooftop television antenna? Should the
testing methodology be different for high-rise MDUs? Does
``conventional outdoor rooftop receiving antenna'' include a rotor?
How, if at all, should the Grade B criterion of typical of outlying or
near-fringe areas influence the concept of ``conventional'' antenna? On
another note, how do we ensure the objectivity and accuracy of any
signal strength test? How do we do so without making the test more
difficult, impractical, or expensive? How should antenna height be
measured? Should antenna height be set at 30 feet, should it be five
feet above the roof, or something else? Should the measurement be
related to the placement of the satellite receiver in situations where
the satellite and local signal antennas are integrated? If antenna
designs are improved over those historically available so that the
definition of ``conventional'' changes, how should that be accommodated
in the measurement process? How should we account for the challenges of
raising a rooftop antenna in multiple dwelling units? How should the
test account for rotation, or lack of rotation, of antennas that
receive the signals of several stations? What type and calibration of
measurement equipment is needed? How can the process account for the
variations of signal level over the course of a day or with seasonal
changes?
C. Other Issues
41. We seek comment on whether the lack of an established
methodology for measuring Grade B signal intensity at individual
households has hampered the effective functioning of the SHVA. In
particular, we note that the SHVA contains a ``loser pays'' mechanism
that allows recovery, in any civil action, of signal measurement costs
at a subscriber's household. (17 CFR 119(a)(9).) Under the SHVA, if a
network station questions whether a particular subscriber is unserved,
an actual measurement at the subscriber's household may result. If the
household is unserved, the broadcast station must pay for the
measurement; if the household is served, the satellite carrier must
pay. We believe that the loser pays mechanism, if used even in the
absence of a civil action, would substantially alleviate the cost
burden of actual signal measurements by giving both parties an economic
incentive to avoid actual measurements in most circumstances. We seek
comment on whether parties are making use of the ``loser pays''
mechanism. If they are not, why not? Can and should we establish rules
or policies that will facilitate their ability to do so? We also seek
comment on whether the loser pays mechanism, combined with a predictive
model that would minimize the need for individual testing in most
cases, would facilitate the effective functioning of the Act.
42. We also seek comment on whether we can and should adopt a
procedure similar to the SHVA's expired transitional ``loser pays''
mechanism. (17 CFR 119(a)(8)(B)(ii) and (C)(ii).) Does that provision
represent a workable system for allocating burdens of proof, and
appropriate incentives to challenge a presumptive rule, in determining
who is and who is not an unserved household? Establishing a system
based on an initial presumption would help create certainty and provide
a good starting point for managing this issue on a large scale. Are
there other mechanisms that can better serve the purposes of the SHVA?
One alternative might be the agreement reached between broadcasters and
two satellite carriers, Primestar Partners and Netlink USA, that
created presumptive zones of served and unserved households based on
zip codes. Yet another alternative might be the methodology developed
by Decisionmark Corporation of Cedar Rapids, Iowa, that is used by both
PrimeTime 24 and broadcasters in the Miami federal court case. This
methodology uses a variation of the Longley-Rice methodology to
determine whether individual homes are unserved. We seek comment on
these approaches. Are there additional actions the Commission can and
should take to make enforcement of the SHVA more effective?
43. Finally, we seek comment on the prospect that the industry will
develop ``local-into-local'' technology to serve every community. The
local-into-local concept means that satellite carriers would provide
subscribers with the signals of their local broadcast network
affiliates instead of signals from distant stations. If satellite
carriers were allowed to retransmit a broadcast network station's
signal into that station's local market, then the risks of damaging the
goals of broadcast localism could be mitigated. Some satellite carriers
have already developed limited plans for accomplishing local-into-local
service. For example, EchoStar has a local-into-local option for
unserved households in more than a dozen television markets, and
Capitol Broadcasting Inc. of Raleigh, North Carolina, has reportedly
developed the technology to deliver local-into-local service for most,
if not all, television markets. We note that some interested parties
have argued that a local-into-local extension of the compulsory license
in the current copyright laws might obviate the need for Commission
action in this area. The Commission, of course, lacks the statutory
authority to create such an extension. However, section 335(a) of the
Communications Act of 1934 instructs the Commission to ``examine the
opportunities that the establishment of direct broadcast satellite
service provides for the principle of localism under this Act, and the
methods by which such
[[Page 67448]]
principle may be served through technological and other developments
in, or regulation of, such service.'' If Congress adopted a local-into-
local extension of the compulsory license, how would such a change
affect the need for, and viability of, the proposals in this
rulemaking? We seek comment on the feasibility--particularly the
technical feasibility--of a local-into-local option and on a time frame
for implementing this possible solution to the demands for satellite
delivery of network station signals.
III. Paperwork Reduction Act
The requirements proposed in this Notice have been analyzed with
respect to the Paperwork Reduction Act of 1995 (the ``1995 Act'') and
would impose new and modified information collection requirements on
the public. The Commission, as part of its continuing effort to reduce
paperwork burdens, invites the general public and the Office of
Management and Budget (``OMB'') to take this opportunity to comment on
the proposed information collection requirements contained in this
Notice, as required by the 1995 Act. Public comments are due on or
before 30 days from date of publication of this Notice in the Federal
Register. OMB comments are due on or before 60 days from date of
publication of this Notice in the Federal Register. Comments should
address: (a) whether the proposed collection of information is
necessary for the proper performance of the functions of the
Commission, including whether the information would have practical
utility; (b) the accuracy of the Commission's burden estimates; (c)
ways to enhance the quality, utility, and clarity of the information
collected; and (d) ways to minimize the burden of the collection of
information on the respondents, including the use of automated
collection techniques or other forms of information technology.
OMB Approval Number: None. This is a new collection.
Title: Satellite Delivery of Network Signals to Unserved Households
for Purposes of the Satellite Home Viewer Act.
Type of Review: New collection.
Respondents: Business or other for-profit entities.
Number of Respondents: 848. The proposed action in this NPRM
applies to entities providing DBS service. According to Census Bureau
data, there are 848 firms that fall under the category of
Communications Services, Not Elsewhere Classified that could
potentially fall into the DBS category.
Estimated Time Per Response: Two hours.
Frequency of Response: On occasion.
Total Annual Burden to Respondents: 2,000,000 hours. At this time
the Commission provides broad estimates of the annual paperwork burden
resulting from the proposed new and modified information collection
requirements contained in this Notice. Based on comments received in
this proceeding, the Commission will be in a position to provide more
accurate paperwork burden estimates upon adoption of final rules. In
our current estimates, we define a response to the proposed information
collection requirements as including the burden to conduct signal
strength measurements at individual households or by using predictive
models; to report measurement findings to appropriate parties; and to
keep records of such findings. We estimate that as many as one million
responses will be typically be initiated in the course of a year. Each
response is estimated to entail a burden of two hours.
1,000,000 responses x 2 hours each = 2,000,000 hours.
Total Annual Cost to Respondents: $500,000. Cost to respondents is
defined as capital, start-up, operation and maintenance costs pursuant
to the Paperwork Reduction Act of 1995. The DBS industry has conducted
signal strength measurements and has reported the findings of such
measurements for several years pursuant to requirements set forth by
the Satellite Home Viewer Act; therefore the Commission foresees no
additional capital or start-up costs as a result of proposals contained
in this Notice. However, here we account for postage and stationery
costs incurred by entities at an estimated 50 cents per response.
1,000,000 responses x 50 cents = $500,000.
Needs and Uses: The information gathered as part of Grade B signal
strength tests, as proposed, will be used to indicate whether a
consumers are ``unserved'' by over-the-air network signals. Parties
using this information will include consumers, the Commission, and the
satellite and broadcasting industries.
IV. Initial Regulatory Flexibility Analysis
As required by the Regulatory Flexibility Act (``RFA'') (5 CFR
603), the Commission has prepared this Initial Regulatory Flexibility
Analysis (``IRFA'') of the possible significant economic impact on
small entities by the policies and proposed action in this NPRM.
Written public comments are requested on this IRFA. Comments must be
identified as responses to the IRFA and must be filed by the deadlines
for comments on the NPRM provided above. The Commission will send a
copy of this NPRM, including this IRFA, to the Chief Counsel for
Advocacy of the Small Business Administration (``SBA'') and to
Congress.
A. Need for, and Objective of, the NPRM
In this NPRM, the Commission responds to Petitions for Rulemaking
filed by the National Rural Telecommunications Cooperative and EchoStar
Communications Corporation requesting that the Commission address the
methods for determining whether a household is ``unserved'' by network
television stations for purposes of the 1988 Satellite Home Viewer Act
(17 CFR 119).
B. Legal Basis
This NPRM is authorized under sections 1, 4(i), 4(j) of the
Communications Act of 1934, as amended, 47 CFR 151, 154(i), and 154(j)
and section 119(d)(10)(a) of the Copyright Act, 17 CFR 119(d)(10)(a).
C. Description and Estimate of the Number of Small Entities To Which
the NPRM Will Apply
The RFA directs the Commission to provide a description of and,
where feasible, and estimate of the number of small entities that will
be affected by the proposed action. The RFA defines the term ``small
entity'' as having the same meaning as the terms ``small business,''
``small organization,'' and ``small business concern'' under section 3
of the Small Business Act. Under the Small Business Act, a small
business concern is one which: (1) is independently owned and operated;
(2) is not dominant in its field of operation; and (3) satisfies any
additional criteria established by the SBA. The proposed action in this
NPRM will affect television broadcasting licensees and DBS operators.
Television Stations
The policies and proposed action in this NPRM will apply to
television broadcasting licensees, and potential licensees of
television service. The SBA defines a television broadcasting station
that has no more than $10.5 million in annual receipts as a small
business (Standard Industrial Code (``SIC'') 4833 (1996)). Television
broadcasting stations consist of establishments primarily engaged in
broadcasting visual programs by television to the public, except cable
and other pay television services. Included in this industry are
commercial, religious, educational, and other television stations. Also
included
[[Page 67449]]
are establishments primarily engaged in television broadcasting and
that produce taped television program materials. Separate
establishments primarily engaged in producing taped television program
materials are classified under SIC 7812 (Motion Picture and Video Tape
Production) and SIC 7922 (Theatrical Producers and Miscellaneous
Theatrical Services (producers of live radio and television programs).
There were 1,509 television broadcasting stations operating in the
nation in 1992. That number has remained fairly constant as indicated
by the approximately 1,579 operating full power television broadcasting
stations in the nation as of May 31, 1998. In addition, as of October
31, 1997, there were 1,880 low power television broadcasting (``LPTV'')
broadcasting stations that may also be affected by our proposed rule
changes. Given the nature of LPTV stations, we will presume that all
LPTV's qualify as small entities. For 1992 the number of television
broadcasting stations that produced less than $10.0 million in revenue
was 1,155 establishments.
Thus, the proposed action will affect many of the approximately
1,574 television broadcasting stations; approximately 1,200 of those
stations are considered small businesses. Given the nature of LPTV
stations, we will presume that all LPTV's qualify as small entities.
These estimates may overstate the number of small entities because the
revenue figures on which they are based do not include or aggregate
revenues from non-television affiliated companies.
In addition to owners of operating television broadcasting
stations, any entity who seeks or desires to obtain a television
broadcasting license may be affected by the proposed action contained
in this item. The number of entities that may seek to obtain a
television broadcasting license is unknown. We invite comment as to
such number.
DBS
The Commission has not developed a definition of small entities
applicable to geostationary or non-geostationary orbit fixed-satellite
or DBS service applicants or licensees. Therefore, the applicable
definition of small entity is the definition under the SBA rules
applicable to Communications Services, Not Elsewhere Classified. This
definition provides that a small entity is one with $11.0 million or
less in annual receipts (SIC Code 4899). According to Census Bureau
data, there are 848 firms that fall under the category of
Communications Services, Not Elsewhere Classified that could
potentially fall into the DBS category. Of those, approximately 775
reported annual receipts of $11 million or less and qualify as small
entities. The proposed action in this NPRM applies to entities
providing DBS service. Small businesses do not have the financial
ability to become DBS licensees because of the high implementation
costs associated with satellite services. Because this is an
established service, however, with limited spectrum and orbital
resources for assignment, we estimate that no more than fifteen
entities will be Commission licensees providing these services.
Therefore, because of the high implementation costs and the limited
spectrum resources, we do not believe that small entities will be
impacted by proposed action in this NPRM.
D. Description of Projected Reporting, Record-keeping, and Other
Compliance Requirements
There may be reporting, record-keeping, and compliance requirements
for television broadcasting stations and DBS operators in the form of
testing, record-keeping, and reporting, if the Commission adopts any
rule changes as a result of this NPRM. We solicit comments on how these
projected requirements may be eliminated, reduced, or streamlined.
E. Steps Taken to Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
In discussing the proposed action contained in this NPRM, we have
attempted to minimize the burdens on all entities. We seek comment on
the impact of our proposed action on small entities and on any possible
alternatives that would minimize its impact on small entities.
F. Federal Rules that May Duplicate, Overlap, or Conflict with the
Proposed Rule Changes
None.
Ordering Clauses
It is ordered that, pursuant to sections 1, 4(i), 4(j) of the
Communications Act of 1934, as amended, 47 CFR 151, 154(i), and 154(j);
and section 119(d)(10)(a) of the Copyright Act, 17 CFR 119(d)(10)(a),
notice is hereby given of proposed amendments to Part 73, in accordance
with the proposals, discussions and statements of issues in this Notice
of Proposed Rulemaking, and that comment is sought regarding such
proposals, discussions and statements of issues. It is further ordered
that the Commission's Office of Public Affairs, Reference Operations
Division, shall send a copy of this Notice of Proposed Rulemaking,
including the Initial Regulatory Flexibility Analysis, to the Chief
Counsel for Advocacy of the Small Business Administration in accordance
with paragraph 603(a) of the Regulatory Flexibility Act, Pub. L. 96-
354, 94 Stat. 1164, 5 U.S.C. 601 et seq. (1981).
Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 98-32397 Filed 12-2-98; 12:21 pm]
BILLING CODE 6712-01-P
