03-18510. Broadcast Services; Television Stations Digital Television (DTV) Construction Deadline

AGENCY:

Federal Communications Commission.

ACTION:

Policy statement.

SUMMARY:

In this document, the Commission adopts a policy to be followed when the staff denies a request to extend a television station's digital television (DTV) construction deadline. The intended effect is to alert stations as to the sanctions that will be applied if they fail to meet their DTV deadline.

FOR FURTHER INFORMATION CONTACT:

Shaun Maher, Media Bureau, Office of Broadcast Licensing, Video Division, [phone].

SUPPLEMENTARY INFORMATION:

This is a synopsis of the Report and Order (“R&O”) in MM Docket No. 02-113, FCC 02-150, adopted April 4, 2003, and released April 16, 2003. The complete text of this R&O is available for inspection and copying during normal business hours in the FCC Reference Center, Room CY-A257, 445 12th Street, SW., Washington, DC and may also be purchased from the Commission's copy contractor, Qualex International, Portals II, 445 12th Street SW., CY-B402, Washington, DC 20554. The R&O is also available on the Internet at the Commission's Web site: http://www.fcc.gov.

Synopsis

1. The Commission has adopted this R&O announcing its policy to be followed when requests to extend digital television (DTV) construction deadlines are denied. The Commission announced a set of graduated sanctions that it will impose. Under the first step of its approach, the Commission will deny the request for an unqualified extension and admonish the station for its failure to comply with its DTV construction obligation. The station will be required to submit a report within thirty (30) days outlining the steps it intends to take to complete construction and the approximate date that it expects to reach each of these construction milestones. Absent extraordinary and compelling circumstances, the construction completion date will be no later than six months from the date of admonishment. Sixty (60) days later, the station will be required to submit a report detailing its progress on meeting its proposed construction milestones and justifying any delays it has encountered. If at any time during this six month period, the station fails to demonstrate that it is taking all reasonable steps to complete construction or fails to justify the further delays it has encountered, or the Commission otherwise find that the licensee has acted in bad faith, the Commission will consider the imposition of additional sanctions including proceeding immediately to the second step.

2. Under the second step in the approach, if the station has not come into compliance with the DTV construction rule within the six month period, then, absent extraordinary and compelling circumstances, the Commission will impose further sanctions against the licensee. The Commission will issue a Notice of Apparent Liability for forfeiture to the licensee. It will require that the station report every thirty (30) days on its proposed construction milestones and its efforts to meet those milestones. Once again, failure to adequately demonstrate that the station was taking all reasonable steps towards construction and to justify any additional delays that were encountered, will result in the imposition of additional sanctions.

3. Under the third and final step in the approach, if the station still had failed to come into compliance with the DTV construction rule within an additional six-month period of time (i.e., one year from the date of the formal admonition), then, absent extraordinary and compelling circumstances, the Commission will consider its construction permit for its DTV facilities to have expired and will rescind the station's DTV authorization. The Commission concluded that no hearing was necessary prior to rescinding the station's DTV authorization. The Commission also concluded that it would not make the station's vacant DTV allotment available. The Commission also announced that the station will be required to surrender its analog authorization at the end of the DTV transition.

Administrative Matters

4. Final Regulatory Flexibility Analysis. As required by the Regulatory Flexibility Act of 1980, as amended (RFA),^[1] and Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the Order and Notice of Proposed Rulemaking, 67 FR 38459, June 4, 2002.^[2] The Commission sought written public comment on the proposals in the Order and Notice of Proposed Rulemaking including comment on the IRFA. The comments received are discussed below. This present Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.^[3]

A. Need for, and Objectives of, the Proposed Rules

5. The Commission adopts these remedial measures to prevent undue delay in the required build out of DTV facilities.

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

6. New Life Evangelistic Center, Inc (NLEC) filed comments on the IRFA. NLEC complains that television stations will have to spend millions of dollars to comply with the DTV construction requirement. However, that matter was previously considered in the DTV rulemaking proceeding wherein the Commission adopted the DTV construction requirement and timetable. In the instant proceeding, the Commission only considered what steps to take when a station fails to meet its construction requirement. Therefore, NLEC's comments were not on point.

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

7. The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted.^[4] The RFA defines the term “small entity” as having the same meaning as “small business,” “small organization,” and “small governmental jurisdiction.”^[5] In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act.^[6] A “small business” concern is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.^[7]

8. The proposals in the R&O will affect only full-power television broadcasters. As of September 30, 2001, the Commission had licensed a total of 1,686 full-power television stations.^[8] SBA defines television broadcasting establishments that have $12 million or less in annual receipts as a small business.^[9] According to Census Bureau data for 1997, there were 906 firms in this category, total, that operated for the entire year.^[10] Of this total, 728 firms had annual receipts of under $10 million, and an additional 71 had receipts of $10 million to $24,999,999. Thus, under this size standard, the majority of the firms are considered small.

D. Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements

9. The R&O contains a new reporting requirement. Stations that fail to construct their DTV stations by the requisite deadline and fail to justify an extension of their DTV construction permit will fall into the remedial measures set forth in the document. Among the remedial measures, is the requirement that the station submit periodic reports detailing their efforts to comply with the extended DTV construction deadline. The reports will be filed in letter form with the Secretary's office.

E. Steps Taken to Minimize Significant Economic Impact on Small Entities, and Significant Alternatives Considered

10. 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 and reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities.^[11]

11. The R&O contains remedial steps for failure of broadcast stations to comply with the DTV construction schedule. These steps are applied only after a station has failed to demonstrate this it qualifies for an extension of its schedule. The Commission's rules and policies already contain flexible measures for allowing stations in smaller markets to seek an extension of their DTV construction deadline. Those measures remain unchanged by the R&O.

12. One of the sanctions that may be used is the issuance of a notice of apparent liability for forfeiture to stations that do not comply with their DTV construction obligation. We already take small entity status, including potential inability to pay, into account when assessing the need for, and amount of, monetary forfeitures.^[12]

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

13. None.

G. Report to Congress

14. The Commission will send a copy of the R&O, including this FRFA, in a report to be sent to Congress pursuant to the Congressional Review Act.^[13] In addition, the Commission will send a copy of the R&O including this FRFA to the Chief Counsel for Advocacy of the SBA. A copy of the R&O and FRFA (or summaries thereof) will also be published in the Federal Register.^[14]

15. Authority. This R&O is issued pursuant to authority contained in sections 4(i), 303, and 307 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 303, and 307, and section 202(h) of the Telecommunications Act of 1996.

16. The Request for Reconsideration filed by Sinclair Broadcast Group, Inc., is denied.

Ordering Clauses

17. Pursuant to the authority contained in sections 1, 2(a), 4(i), 303, 307, 309, and 310 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152(a), 154(i), 303, 307, 309, and 310, and section 202(h) of the Telecommunications Act of 1996, this R&O is adopted.

18. The Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this R&O, including the Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

Federal Communications Commission.

Marlene H. Dortch,

Secretary.

Footnotes

1.  See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601-612, has been amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), Pub. L. No. 104-121, Title II, 110 Stat. 857 (1996).

2.  Remedial Steps For Failure to Comply With Digital Television Construction Schedule, 17 FCC Rcd 9962 (2002) (Order and Notice of Proposed Rulemaking).

3.  See 5 U.S.C. 604.

4.  5 U.S.C. 603(b)(3).

5.  Id. 601(6).

6.  Id. 601(3) (incorporating by reference the definition of “small business concern” in 15 U.S.C. 32). Pursuant to the RFA, the statutory definition of a small business applies “unless an agency, after consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and publishes such definition(s) in the Federal Register.” 5 U.S.C. 601(3).

7.  Id. 632.

8.  News Release, “Broadcast Station Totals as of September 30, 2001” (released October 30, 2001).

9.  NAICS Code 513120.

10.  U.S. Census Bureau, 1997 Economic Census, Subject Series: Information, “Establishment and Firm Size,” Table 4, NAICS code 513120 (issued Oct. 2000).

11.  5 U.S.C. 603(c).

12.  See, e.g., In the Matter of the Commission's Forfeiture Policy Statement and Amendment of Section 1.80 of the Rules to incorporate the Forfeiture Guidelines, CI Docket No. 95-6, Report and Order, 12 FCC Rcd 17087, 17109 (1997).

13.  See 5 U.S.C. 801(a)(1)(A).

14.  See 5 U.S.C. 604(b).