2010-11387. Implementation of Section 304 of the Telecommunications Act of 1996: Commercial Availability of Navigation Devices; Compatibility Between Cable Systems and Consumer Electronics Equipment

AGENCY:

Federal Communications Commission.

ACTION:

Proposed Rule.

SUMMARY:

In this document, we propose new rules designed to improve the operation of the CableCARD regime in the interim until the successor solution becomes effective. As discussed in a companion Notice of Inquiry, the Commission has not been fully successful in implementing the command of Section 629 of the Communications Act to ensure the commercial availability of navigation devices used by consumers to access the services of multichannel video programming distributors (“MVPDs”). The Notice of Inquiry begins the process of instituting a successor to the CableCARD regime that has been the centerpiece of the Commission's efforts to implement Section 629 to date.

DATES:

Comments for this proceeding are due on or before June 14, 2010; reply comments are due on or before June 28, 2010. Written PRA comments on the proposed information collection requirements contained herein must be submitted by the public, Office of Management and Budget (OMB), and other interested parties on or before July 13, 2010.

ADDRESSES:

You may submit comments, identified by CS Docket No. 97-80; and PP Docket No. 00-67, by any of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.
• Federal Communications Commission's Web Site: http://www.fcc.gov/​cgb/​ecfs/​. Follow the instructions for submitting comments.
• People with Disabilities: Contact the FCC to request reasonable accommodations (accessible format documents, sign language interpreters, CART, etc.) by e-mail: [e-mail] or phone: [phone] 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.

In addition to filing comments with the Secretary, a copy of any PRA comments on the proposed collection requirements contained herein should be submitted to the Federal Communications Commission via e-mail to [e-mail] and to Nicholas A. Fraser, Office of Management and Budget, via e-mail to [e-mail] or via fax at 202-395-5167.

FOR FURTHER INFORMATION CONTACT:

For additional information on this proceeding, contact Brendan Murray, [e-mail], of the Media Bureau, Policy Division, [phone] or Alison Neplokh, [e-mail], of the Media Bureau, Engineering Division, [phone].

For additional information concerning the information collection requirements contained in this document, send an e-mail to [e-mail] or contact Cathy Williams on [phone].

To view or obtain a copy of this information collection request (ICR) submitted to OMB: (1) Go to this OMB/GSA Web page: http://www.reginfo.gov/​public/​do/​PRAMain,, (2) look for the section of the Web page called “Currently Under Review,” (3) click on the downward-pointing arrow in the “Select Agency” box below the “Currently Under Review” heading, (4) select “Federal Communications Commission” from the list of agencies presented in the “Select Agency” box, (5) click the “Submit” button to the right of the “Select Agency” box, and (6) when the list of FCC ICRs currently under review appears, look for the OMB control number of this ICR as shown in the SUPPLEMENTARY INFORMATION section below (or its title if there is no OMB control number) and then click on the ICR Reference Number. A copy of the FCC submission to OMB will be displayed.

SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's Fourth Further Notice of Proposed Rulemaking (FNPRM), FCC 10-61, adopted and released on April 21, 2010. The full text of this document is available for public inspection and copying during regular business hours in the FCC Reference Center, Federal Communications Commission, 445 12th Street, SW., CY-A257, Washington, DC, 20554. These documents will also be available via ECFS (http://www.fcc.gov/​cgb/​ecfs/​). (Documents will be available electronically in ASCII, Word 97, and/or Adobe Acrobat.) The complete text may be purchased from the Commission's copy contractor, 445 12th Street, SW., Room CY-B402, Washington, DC 20554. To request this document in accessible formats (computer diskettes, large print, audio recording, and Braille), send an e-mail to [e-mail] or call the Commission's Consumer and Governmental Affairs Bureau at [phone] (voice), [phone] (TTY).

This document contains proposed revised information collection requirements. As part of its continuing effort to reduce paperwork burden and as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3520), the Federal Communications Commission invites the general public and other Federal agencies to comment on the following information collection(s). Public and agency comments are due July 13, 2010.

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 shall 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. In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we seek specific comment on how we might “further reduce the information collection burden for small business concerns with fewer than 25 employees.”

OMB Control Number: 3060-0849.

Title: Commercial Availability of Navigation Devices.

Form Number: Not applicable.

Type of Review: Revision of a currently approved collection.

Respondents: Business or other for-profit entities.

Number of Respondents and Responses: 958 respondents; 511,729,510 responses.

Estimated Time per Response: 0.000278—40 hours.

Frequency of Response: On occasion, quarterly, monthly and semi-annual reporting requirements; Recordkeeping and third party disclosure requirements.

Obligation to Respond: Required to obtain or retain benefits. Statutory authority for this collection of information is contained in Sections 4(i), 303(r), and 629 of the Communications Act of 1934, as amended.

Total Annual Burden: 186,287 hours.

Total Annual Cost: $137,550.

Privacy Act Impact Assessment: No impact(s).

Nature and Extent of Confidentiality: There is no need for confidentiality with this collection of information.

Needs and Uses: On April 21, 2010, the FCC released a Fourth Further Notice of Proposed Rulemaking, FCC 10-61, which proposes new rules to improve the CableCARD regime. One proposed rule would require cable operators to bill their subscribers separately for CableCARDs. This proposed rule is intended to ensure that consumers are charged equal and transparent prices for CableCARDs, in furtherance of Section 629 of the Communications Act.

Summary of the Notice of Inquiry

I. Introduction

1. As discussed in the companion Notice of Inquiry, FCC 10-61, the Commission has not been fully successful in implementing the command of Section 629 of the Communications Act to ensure the commercial availability of navigation devices used by consumers to access the services of multichannel video programming distributors (“MVPDs”). The Notice of Inquiry begins the process of instituting a successor to the CableCARD regime that has been the centerpiece of the Commission's efforts to implement Section 629 to date. In this Fourth Further Notice of Proposed Rulemaking, we propose new rules designed to improve the operation of the CableCARD regime in the interim until the successor solution becomes effective.

2. To implement the mandate of Section 629, the FCC adopted rules in its First Report and Order, 63 FR 38089, that required MVPDs to make available a conditional access element separate from the basic navigation or “host” device, to enable unaffiliated entities to manufacture and market host devices while allowing MVPDs to protect their networks from harm or theft of service. The Commission later adopted standards in its Second Report and Order, 68 FR 66728, that largely reflected the terms of a Memorandum of Understanding between cable operators and the consumer electronics industry to establish the technical details of the conditional access element, resulting in the creation of the CableCARD. The CableCARD is a security device provided by the cable provider and inserted into a retail navigation device (including digital cable ready televisions) bought by a consumer in the retail market or a set-top box leased from the cable provider.

3. Unfortunately, in practice, cable customers who purchase retail navigation devices and connect these devices to their cable service using CableCARDs for conditional access typically experience additional installation and support costs and pay higher prices than those who lease set-top boxes from their cable company. Accordingly, in this Fourth Further Notice of Proposed Rulemaking, we seek comment on proposed rules designed to remove this disparity in the subscriber experience for those customers who choose to utilize a navigation device purchased at retail as opposed to leasing the cable providers' set-top box.

4. Additionally, the Second Report and Order included rules requiring a specific interface on leased set-top boxes to allow recording on digital recording devices. Multiple parties have raised concerns about whether the rule is specific enough to be effective and whether other interfaces could equally achieve this purpose. Therefore, we seek comment on proposed rules to more fully specify the functionality of this interface and to enable other interfaces as well.

5. Finally, we seek comment on proposed changes to our rules that are intended to encourage cable operators to use their capacity more efficiently by transitioning the systems to all-digital. All of these proposed rules are intended to further the goals of Section 629.

II. Background

6. In the Telecommunications Act of 1996, Congress added Section 629 to the Communications Act. That section directs the Commission to adopt regulations to ensure the commercial availability of navigation devices used by consumers to access services from MVPDs. Section 629 covers “equipment used by consumers to access multichannel video programming and other services offered over multichannel video programming systems.” Congress, in enacting the section, pointed to the vigorous retail market for customer premises equipment (“CPE”) used with the telephone network and sought to create a similarly vigorous market for devices used with MVPD services.

7. In 1998, the Commission adopted the First Report and Order to implement Section 629. The order required MVPDs to make available a conditional access element separate from the basic navigation or host device, in order to permit unaffiliated manufacturers and retailers to manufacture and market host devices while allowing MVPDs to retain control over their system security. The technical details of this conditional access element were to be worked out in industry negotiations. In 2003, the Commission adopted, with certain modifications, standards on which the National Cable and Telecommunications Association and the Consumer Electronics Association had agreed in a Memorandum of Understanding (“MOU”). The MOU prescribed the technical standards for one-way (from cable system to customer device) CableCARD compatibility. The CableCARD is a security device provided by an MVPD, which can be inserted into a retail navigation device bought by a consumer in the retail market to allow the consumer's television to display MVPD-encrypted video programming. To ensure adequate support by MVPDs for CableCARDs, the Commission prohibited MVPDs from integrating the security function into set-top boxes they lease to consumers, thus forcing MVPDs to rely on CableCARDs as well. This “integration ban” was initially set to go into effect on January 1, 2005, but that date was later extended to July 1, 2007.

8. Unfortunately, the Commission's efforts to date have not developed a competitive retail market for retail navigation devices that connect to subscription video services. Most cable subscribers continue to use the traditional set-top boxes leased from their cable operator. Although following adoption of the CableCARD rules some television manufacturers sold unidirectional digital cable-ready products (“UDPCs”), most manufacturers have abandoned the technology. Indeed, since July 1, 2007, cable operators have deployed more than 18.5 million leased devices pre-equipped with CableCARDs, compared to only 489,000 CableCARDs installed in retail devices connected to their networks. Furthermore, while 605 UDCP models have been certified or verified for use with CableCARDs, only 37 of those certifications have occurred since the integration ban took effect in July 2007. This indicates that many retail device manufacturers abandoned CableCARD as a solution to develop a retail market before any substantial benefits of the integration ban could be realized.

9. Not only were there very few retail devices manufactured and subsequently purchased in the retail market, but there was an additional complication with the installation process that depressed the retail market. The cable-operator-leased devices come pre-equipped with a CableCARD, so that no subscriber premises installation of the card is required. But this is not the case with devices purchased at retail. CableCARDs must be professionally installed in those devices by the cable operator. Unfortunately, the record reflects poor performance with regard to subscriber premise installations of CableCARDs in retail devices. This could be a consequence of the fact that only 1% of the total navigation devices deployed are purchased at retail and require an actual CableCARD installation, which may have made it difficult to properly train the cable installers. It could also reflect either an indifference or a reluctance by cable operators to support navigation devices purchased at retail in competition with their own set-top boxes. Regardless of the cause, these serious installation problems further undermined the development of a retail market.

10. The Commission anticipated that the parties to the one-way MOU would negotiate a further MOU to achieve bidirectional compatibility, using either a software-based or hardware-based solution. When the Commission realized in June 2007 that negotiations were not leading to an agreement for bidirectional compatibility between consumer electronics devices and cable systems, it released a Third Further Notice of Proposed Rulemaking, seeking comment on competing proposals for bidirectional compatibility and other related issues. In the wake of the Two-way FNPRM, the six largest cable operators and numerous consumer electronics manufacturers negotiated an agreement for bidirectional compatibility that continues to rely and builds on CableCARDs by using a middleware-based solution called “tru2way.”

III. Discussion

11. In this Fourth FNPRM, we seek comment on proposed rules designed to improve the CableCARD regime during the time in which it will remain in effect. Specifically, we seek comment on whether market-based solutions serve consumers adequately with respect to switched-digital video and we propose rules that would (i) require that equivalent prices be charged for CableCARDs for use in cable-operator-provided set-top boxes and in retail devices, and require billing of the CableCARD to be more transparent; (ii) simplify the CableCARD installation process; (iii) require cable operators to offer their subscribers CableCARDs that can tune multiple streams; and (iv) streamline the CableCARD device certification process. As noted, we also propose a change to our existing output requirement rules to ensure set-top box compatibility with retail consumer devices, and we propose changes to our rules that are intended to encourage cable operators to use their capacity more efficiently by transitioning the systems to all-digital.

12. Reforming the CableCARD System. NCTA suggests that the Commission seek comment on whether the CableCARD has become outdated. NCTA explains that physical dimensions and components of the CableCARD are based on a standard that is more than a decade old and that new technologies, such as IPTV, are moving away from the CableCARD's traditional hardware-based security model. Accordingly, we seek comment on whether technical developments over the last decade have overtaken the CableCARD model. While we recognize that CableCARD is an aging technology with certain limitations, we also understand that the cable and consumer electronics industries have invested heavily in the technology as both an unidirectional and bidirectional solution, and we do not believe that it needs to be abandoned in the near-term. To the contrary, we hope to build on this technology with relatively minor adjustments to our existing CableCARD rules to extend the viability of the CableCARD while the Commission works to establish a successor solution for retail navigation device compatibility with MVPD services. We seek comment on the Commission's tentative conclusion that CableCARD is not a viable long-term solution for the current lack of compatibility between MVPD services and retail navigation devices, and on the Commission's proposal to reform the CableCARD system as an interim solution as we work toward a new model that will provide for that compatibility. Given the Commission's predictive judgment regarding the CableCARD regime, we also seek comment on a reporting requirement that we imposed in 2005, directing NCTA and the Consumer Electronics Association to file quarterly status reports on the status of their two-way negotiations. Should we continue that requirement? If so, should we make any changes to it? In a similar vein, we encourage commenters to update the record on petitions seeking reconsideration of the Commission's Second Report and Order in this proceeding. Have there been technological or marketplace developments since 2004 that the Commission should consider or developments that render any of the issues in those petitions for reconsideration moot?

13. The Commission's National Broadband Plan made certain recommendations designed to provide benefits to consumers who use retail CableCARD devices without imposing unfair regulatory burdens on the cable industry. The plan suggested that these changes could serve as an interim solution that will benefit consumers while the Commission considers broader changes to develop a retail market for navigation devices. We view these interim steps as an important bridge to the implementation of a successor technology, and we believe that these reforms will address problems immediately with relatively little cost. Specifically, the Plan recommended that the Commission take five steps to solve problems associated with the Commission's current CableCARD rules: (i) Ensure equal access to linear channels for retail and operator-leased CableCARD devices; (ii) mandate equivalent and transparent prices for CableCARDs; (iii) ensure that CableCARD installations provide a substantially similar consumer experience to operator-leased set-top box installations; (iv) require operators to offer multi-stream CableCARDs to their subscribers; and (v) streamline and accelerate the certification process for retail CableCARD devices. We seek comment on proposed rules to implement these recommendations as discussed below.

14. Switched Digital Video. UDCPs with a CableCARD today cannot access linear channels delivered by cable operators using switched-digital technology. Private industry negotiations have led to a market-based solution to allow certain types of UDCPs to access switched-digital programming through operator-provided tuning adapters. We seek comment on whether this market-based solution is working and whether UDCP manufacturers and cable operators are meeting their obligations under that agreement. We seek comment on the cost of the tuning adapters to consumers and cable operators, and any provisioning challenges with the tuning adapters. We also seek comment on whether any Commission action is necessary to ensure consumers with UDCPs have access to linear channels delivered through switched-digital technology. TiVo has suggested that an alternative solution would be to require cable operators to allow retail CableCARD devices to receive out-of-band communications from the cable head-end and transmit out-of-band communications to the headend over IP. TiVo states that this would allow subscribers with compatible UDCPs to access all linear content without the need for any equipment beyond a CableCARD. We seek comment on this alternative proposal, including the cost and feasibility of this solution for cable operators, and whether such a network solution would discourage investment by cable operators in switched digital technology.

15. CableCARD Pricing and Billing. We propose rules requiring cable operators to charge equivalent and transparent prices for CableCARDs both for customers who purchase a navigation device at retail and those who lease a set-top box from their cable operator. This proposal is intended to ensure that subscribers are aware of the retail options that are available and associated costs, and to ensure that cable operators are allocating equipment costs fairly. We seek comment on how cable operators should determine charges for a CableCARD. Regardless of the method cable operators use to determine the lease fee, under our proposed rule, cable operators would be required to list the fee for their CableCARDs as a line item on subscribers' bills separate from their host devices. We believe that this would better inform customers about their options and enable them to compare retail options to leasing a set-top box from their cable operator. This proposed rule also will ensure that subscribers who choose to use CableCARDs in retail devices will be leasing their CableCARDs at a rate equivalent to those who use CableCARDs in leased devices. We seek comment on this proposal. We also seek comment on the Commission's legal authority to impose such a requirement.

16. CableCARD Installations. In a similar vein, we are concerned that CableCARD installation costs for retail devices and installation costs for leased boxes may be disparate. To address this situation, we propose requiring cable operators to allow subscribers to install CableCARDs in retail devices if the cable operator allows its subscribers to self-install leased set-top boxes. CableCARD installation fees are significant, and we seek specific comment on why many operators require professional CableCARD installation. Furthermore, for professional installations, our proposed rule would require that technicians arrive with at least the number of CableCARDs requested by the customer. We seek comment on whether and how the Commission could enforce this rule. We believe that these simple rule changes will bolster CableCARD support significantly and remove obstacles that discourage customers from purchasing navigation devices at retail.

17. Multi-stream CableCARDs. According to the National Cable and Telecommunications Association (“NCTA”), major cable operators have offered multi-stream CableCARDs since 2007, and at least one UDCP manufacturer offers devices that are compatible only with multi-stream CableCARDs. Multi-stream CableCARDs benefit consumers because they allow devices to tune multiple channels, thereby allowing consumers to record one channel while watching another, with a single card. With the monthly lease rate for a CableCARD exceeding $2.00 per CableCARD in some instances, multi-stream CableCARDs can reduce the equipment fees paid by subscribers by enabling them to use only one CableCARD per device rather than two or more. Accordingly, our proposed rule would require operators to offer multi-stream CableCARDs to their subscribers. Multi-stream CableCARDs are readily available, and we tentatively conclude that providing cable subscribers with the option to use them will save those subscribers lease fees and serve the public interest. We seek comment on this tentative conclusion.

18. CableCARD Device Certification. Our final proposed rule with respect to CableCARD is intended to streamline the process of CableCARD device certification. Commenters have criticized the cost and complexity of the CableCARD certification process. In reply comments filed in response to NBP PN #27, SageTV described the CableCARD certification process as having limited the capabilities of the SiliconDust HDHomeRun CableCARD tuner, a device that can send cable content throughout the home using Ethernet:

19. The major issue with this device is its requirement of CableLabs certification for anything it communicates with; which limits it exclusively to Microsoft's Windows Media Center PC software use. Removal of the CableLabs certification for allowing communication with this device is another short-term solution which the Commission could adopt in order to immediately begin to open up the market for retail navigation devices.

20. We intend to clarify that CableLabs or other qualified testing facilities may refuse to certify digital cable ready products only based on a failure to comply with the procedures we adopted for unidirectional digital cable products. Accordingly, we propose to modify our rules to clarify that the certification process may require only such testing; conformance tests outside of our adopted procedures would be at the UDCP manufacturer's discretion. We believe that adoption of this rule will streamline the device certification process while allowing the cable industry to continue to control its system security and prevent theft of service. We seek comment on this proposed rule and will consider any other proposed solution to streamline the CableCARD certification process to facilitate the introduction of retail navigation devices.

21. Interface Requirements. In recent months, the Commission has received three requests for waiver of the requirement that cable operators include IEEE 1394 interfaces on all high-definition set-top boxes that they deploy. Comments we received in response to those requests made compelling cases that IP connectivity will provide consumers with the functionality that the IEEE 1394 interface requirement was intended to provide, such as home networking. We also received comments that suggested that the Commission should require cable operators to activate the bi-directional capabilities of these interfaces to allow devices equipped with these interfaces to send basic command functions to the leased set-top box.

22. We tentatively conclude that allowing manufacturers greater choice in the specific interface they include in their set-top boxes will serve the public interest by enabling connectivity with the multitude of IP devices in consumers' homes. Accordingly, we propose to modify our interface requirement to require cable operators to include any of (i) an IEEE 1394 interface, (ii) an Ethernet interface, (iii) Wi-Fi connectivity, or (iv) USB 3.0 on all high-definition set-top boxes acquired for distribution to customers. We seek comment on this proposal and encourage commenters to propose other interfaces that could further home networking goals.

23. We also tentatively conclude that we should require cable operators to enable bi-directional communication over these interfaces. We propose that, at a minimum, these interfaces should be able to receive remote-control commands from a connected device. We also propose to require that these outputs deliver video in any industry standard format to ensure that video made available over these interfaces can be received and displayed by devices manufactured by unaffiliated manufacturers. We believe that these proposals will improve the functionality of retail consumer electronics devices significantly. We seek comment on this proposed rule and tentative conclusions. We also seek specific comment on whether cable operators could implement these changes inexpensively with firmware upgrades, and if so, whether January 1, 2011 would be a reasonable effective date for such a rule change. If not, we encourage commenters to propose an effective date for this proposed rule change based on how complex it would be to execute.

24. Promote Cable Digital Transition. The integration ban went into effect on July 1, 2007, and since that time the Commission's Media Bureau has acted on hundreds of requests for waiver of the integration ban rule. The Media Bureau's basis for many of those waivers was to provide cable operators with economic incentives to transition their systems to all-digital, which is a more effective use of system capacity. We propose to further encourage digital transitions, which will make it easier for operators to increase broadband speeds and introduce other new services. Specifically, we propose that operators be allowed to place into service new, one-way navigation devices (including devices capable of processing a high-definition signal) that perform both conditional access and other functions in a single integrated device but do not perform recording functions. Operators would still be required to offer CableCARDs to any subscribers that request them and to commonly rely on CableCARDs in any digital video recorder and bidirectional devices that they offer for lease or sale. This limited modification to our rules will allow operators to offer increased broadband speeds and more high definition programming without substantially affecting the retail market for CableCARD devices. We seek comment on this proposed rule, including whether this limited modification would affect the retail market for retail CableCARD devices substantially, and whether the potential effect on the retail market supports limiting any relief to smaller cable systems with activated capacity of 552 MHz or less.

IV. Conclusion

25. The rules we propose are designed to build on and bolster the existing CableCARD regime to remove the disparity in the customer experience for those customers who choose to utilize a navigation device purchased at retail as opposed to leasing the cable providers' set-top box. We believe that these new rules will improve the CableCARD regime and will further the goals of Section 629 by providing potential consumers of retail cable navigation devices with more information about those options and eliminating barriers that companies face in developing such devices while the Commission takes action to establish a new solution to ensure the commercial availability of video navigation devices as proposed in the accompanying Notice of Inquiry.

V. Procedural Matters

26. Initial Regulatory Flexibility Analysis. With respect to the Fourth Further Notice of Proposed Rulemaking, an Initial Regulatory Flexibility Analysis (“IRFA”), see generally 5 U.S.C. 603, is contained in Appendix A. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments on the Fourth Further Notice of Proposed Rulemaking specified infra. The Commission will send a copy of the Fourth Further Notice of Proposed Rulemaking, including the IRFA, to the Chief Counsel for Advocacy of the Small Business Administration.

27. Initial Paperwork Reduction Act of 1995 Analysis. This document contains proposed new information collection requirements. 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 comment on the information collection requirements contained in this document, as required by the Paperwork Reduction Act of 1995. In addition, pursuant to the Small Business Paperwork Relief Act of 2002, we seek specific comment on how we might “further reduce the information collection burden for small business concerns with fewer than 25 employees.”

28. Ex Parte Rules. Permit-But-Disclose. 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 Commission's rules. 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. Additional rules pertaining to oral and written presentations are set forth in section 1.1206(b).

29. Filing Requirements. Pursuant to sections 1.415 and 1.419 of the Commission's rules, 47 CFR 1.415, 1.419, 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: (1) The Commission's Electronic Comment Filing System (ECFS), (2) the Federal Government's eRulemaking Portal, or (3) by filing paper copies. See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998).

30. Electronic Filers: Comments may be filed electronically using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/​ecfs2/​ or the Federal eRulemaking Portal: http://www.regulations.gov.

31. Paper Filers: Parties who choose to file by paper must file an original and four copies of each filing. If more than one docket or rulemaking number appears in the caption of this proceeding, filers must submit two additional copies for each additional docket or rulemaking number.

32. Filings can be sent by hand or messenger delivery, 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.

33. Effective December 28, 2009, all hand-delivered or messenger-delivered paper filings for the Commission's Secretary must be delivered to FCC Headquarters at 445 12th St., SW, Room TW-A325, Washington, DC 20554. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes must be disposed of before entering the building. The filing hours are 8 a.m. to 7 p.m.

34. Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.

35. U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street, SW., Washington, DC 20554.

36. People with Disabilities: To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an e-mail to [e-mail] or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).

37. Availability of Documents. Comments, reply comments, and ex parte submissions will be available for public inspection during regular business hours in the FCC Reference Center, Federal Communications Commission, 445 12th Street, SW., CY-A257, Washington, DC 20554. These documents will also be available via ECFS. Documents will be available electronically in ASCII, Microsoft Word, and/or Adobe Acrobat.

38. Accessibility Information. To request information in accessible formats (computer diskettes, large print, audio recording, and Braille), send an e-mail to [e-mail] or call the FCC's Consumer and Governmental Affairs Bureau at [phone] (voice), [phone] (TTY). This document can also be downloaded in Word and Portable Document Format (PDF) at: http://www.fcc.gov.

39. Additional Information. For additional information on this proceeding, contact Steven Broeckaert, [e-mail], or Brendan Murray, [e-mail], of the Media Bureau, Policy Division, [phone], or Alison Neplokh, [e-mail], of the Engineering Division, [phone].

Initial Regulatory Flexibility Analysis

40. As required by the Regulatory Flexibility Act of 1980, as amended (“RFA”) the Commission has prepared this Initial Regulatory Flexibility Analysis (“IRFA”) of the possible significant economic impact on small entities by the policies and rules proposed in this Fourth Further Notice of Proposed Rulemaking and Order on Review (“Further Notice”). 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 Further Notice provided above. The Commission will send a copy of the Further Notice, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration. In addition, the Further Notice and IRFA (or summaries thereof) will be published in the Federal Register.

41. Need for, and Objectives of the Proposed Rules. The need for FCC regulation in this area derives from deficiencies in our rules that prevent consumer electronics manufacturers from developing video navigation devices (such as televisions and set-top boxes) that can be connected directly to cable systems and access cable services without the need for a cable-operator provided navigation device. The objectives of the rules we propose to adopt are to support a competitive market for navigation devices by increasing customer service and by improving audio-visual output functionality on cable operator leased devices.

42. Specifically, we propose rules that would (i) require that equivalent prices be charged for CableCARDs for use in cable-operator-provided set-top boxes and in retail devices, and require billing of the CableCARD to be more transparent; (ii) simplify the CableCARD installation process; (iii) require cable operators to offer their subscribers CableCARDs that can tune multiple streams; and (iv) streamline the CableCARD device certification process. The proposed billing rule would increase customer service by ensuring that cable subscribers are billed fairly for the equipment that they lease, regardless of whether it is a CableCARD for use in a retail device or for use in a device leased from the cable operator. The proposed installation rule would require cable technicians to arrive with the number of CableCARDs that a consumer requests, and allow for self-installation of CableCARDs if the operator allows for self-installation of leased set-top boxes. This is intended to reduce the difficulties that consumers face when having CableCARDs installed in retail devices and to reduce the number of service calls that cable operators and subscribers need to schedule. The proposed rule regarding multistream CableCARDs would require cable operators to offer subscribers multi-stream CableCARDs; this rule is intended to reduce the cost consumers face to use the picture-in-picture and “watch one, record one” functions of their video navigation devices. Finally, the proposed rule that would streamline the CableCARD device certification process is intended to reduce the cost of the certification process and limit the influence that testing facilities have in the development of consumer electronics equipment.

43. We also seek comment on whether market-based solutions serve consumers adequately with respect to switched-digital video. Private industry negotiations have led to a market-based solution to allow certain types of unidirectional digital cable products (“UDCPs”) to access switched-digital programming through operator-provided tuning adapters. We seek comment on whether this market-based solution is sufficient, and seek comment on whether the Commission should consider a proposal filed by TiVo that would require cable operators to use broadband signaling for upstream communication to ensure that certain UDCPs can access switched digital cable channels.

44. Legal Basis. The authority for the action proposed in this rulemaking is contained in Sections 1, 4(i) and (j), 303, 403, 601, 624A, and 629 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i) and (j), 303, 403, 521, 544a, and 549.

45. Description and Estimate of the Number of Small Entities to Which the Proposed Rules Will Apply. The RFA directs the Commission to provide a description of and, where feasible, an estimate of the number of small entities that will be affected by the proposed rules. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental entity” under Section 3 of the Small Business Act. In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A small business concern is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (“SBA”).

46. Wired Telecommunications Carriers. The 2007 North American Industry Classification System (“NAICS”) defines “Wired Telecommunications Carriers” as follows: “This industry 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 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.” The SBA has developed a small business size standard for wireline firms within the broad economic census category, “Wired Telecommunications Carriers.” Under this category, the SBA deems a wireline business to be small if it has 1,500 or fewer employees. Census Bureau data for 2002 show that there were 2,432 firms in this category that operated for the entire year. Of this total, 2,395 firms had employment of 999 or fewer employees, and 37 firms had employment of 1,000 employees or more. Thus, under this category and associated small business size standard, the majority of firms can be considered small.

47. Wired Telecommunications Carriers—Cable and Other Program Distribution. This category includes, among others, cable operators, direct broadcast satellite (“DBS”) services, home satellite dish (“HSD”) services, satellite master antenna television (“SMATV”) systems, and open video systems (“OVS”). The data we have available as a basis for estimating the number of such entities were gathered under a superseded SBA small business size standard formerly titled Cable and Other Program Distribution. The former Cable and Other Program Distribution category is now included in the category of Wired Telecommunications Carriers, the majority of which, as discussed above, can be considered small. According to Census Bureau data for 2002, there were a total of 1,191 firms in this previous category that operated for the entire year. Of this total, 1,087 firms had annual receipts of under $10 million, and 43 firms had receipts of $10 million or more but less than $25 million. Thus, we believe that a substantial number of entities included in the former Cable and Other Program Distribution category may have been categorized as small entities under the now superseded SBA small business size standard for Cable and Other Program Distribution. With respect to OVS, the Commission has approved approximately 120 OVS certifications with some OVS operators now providing service. Broadband service providers (BSPs) are currently the only significant holders of OVS certifications or local OVS franchises, even though OVS is one of four statutorily-recognized options for local exchange carriers (LECs) to offer video programming services. As of June 2006, BSPs served approximately 1.4 million subscribers, representing 1.46 percent of all MVPD households. Among BSPs, however, those operating under the OVS framework are in the minority. The Commission does not have financial information regarding the entities authorized to provide OVS, some of which may not yet be operational. We thus believe that at least some of the OVS operators may qualify as small entities.

48. Cable System Operators (Rate Regulation Standard). The Commission has also developed its own small business size standards for the purpose of cable rate regulation. Under the Commission's rules, a “small cable company” is one serving 400,000 or fewer subscribers nationwide. As of 2006, 7,916 cable operators qualify as small cable companies under this standard. In addition, under the Commission's rules, a “small system” is a cable system serving 15,000 or fewer subscribers. Industry data indicate that 6,139 systems have under 10,000 subscribers, and an additional 379 systems have 10,000-19,999 subscribers. Thus, under this standard, most cable systems are small.

49. Cable System Operators (Telecom Act Standard). The Communications Act of 1934, as amended, also contains a size standard for small cable system operators, which is “a cable operator that, directly or through an affiliate, serves in the aggregate fewer than 1 percent of all subscribers in the United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000.” There are approximately 65.3 million cable subscribers in the United States today. Accordingly, an operator serving fewer than 654,000 subscribers shall be deemed a small operator, if its annual revenues, when combined with the total annual revenues of all its affiliates, do not exceed $250 million in the aggregate. Based on available data, we find that the number of cable operators serving 654,000 subscribers or less totals approximately 7,916. We note that the Commission neither requests nor collects information on whether cable system operators are affiliated with entities whose gross annual revenues exceed $250 million. Although it seems certain that some of these cable system operators are affiliated with entities whose gross annual revenues exceed $250,000,000, 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.

50. Cable and Other Subscription Programming. The Census Bureau defines this category as follows: “This industry comprises establishments primarily engaged in operating studios and facilities for the broadcasting of programs on a subscription or fee basis * * * . These establishments produce programming in their own facilities or acquire programming from external sources. The programming material is usually delivered to a third party, such as cable systems or direct-to-home satellite systems, for transmission to viewers.” The SBA has developed a small business size standard for firms within this category, which is all firms with $15 million or less in annual receipts. According to Census Bureau data for 2002, there were 270 firms in this category that operated for the entire year. Of this total, 217 firms had annual receipts of under $10 million and 13 firms had annual receipts of $10 million to $24,999,999. Thus, under this category and associated small business size standard, the majority of firms can be considered small.

51. Small Incumbent Local Exchange Carriers. We have included small incumbent local exchange carriers in this present RFA analysis. A “small business” under the RFA is one that, inter alia, meets the pertinent small business size standard (e.g., a telephone communications business having 1,500 or fewer employees), and “is not dominant in its field of operation.” The SBA's Office of Advocacy contends that, for RFA purposes, small incumbent local exchange carriers are not dominant in their field of operation because any such dominance is not “national” in scope. We have therefore included small incumbent local exchange carriers in this RFA, although we emphasize that this RFA action has no effect on Commission analyses and determinations in other, non-RFA contexts.

52. Incumbent Local Exchange Carriers (“LECs”). Neither the Commission nor the SBA has developed a small business size standard specifically for incumbent local exchange services. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees. According to Commission data, 1,307 carriers have reported that they are engaged in the provision of incumbent local exchange services. Of these 1,307 carriers, an estimated 1,019 have 1,500 or fewer employees and 288 have more than 1,500 employees. Consequently, the Commission estimates that most providers of incumbent local exchange service are small businesses.

53. Computer Terminal Manufacturing. “Computer terminals are input/output devices that connect with a central computer for processing.” The SBA has developed a small business size standard for this category of manufacturing; that size standard is 1,000 or fewer employees. According to Census Bureau data, there were 71 establishments in this category that operated with payroll during 2002, and all of the establishments had employment of under 1,000. Consequently, we estimate that all of these establishments are small entities.

54. Other Computer Peripheral Equipment Manufacturing. Examples of peripheral equipment in this category include keyboards, mouse devices, monitors, and scanners. The SBA has developed a small business size standard for this category of manufacturing; that size standard is 1,000 or fewer employees. According to Census Bureau data, there were 860 establishments in this category that operated with payroll during 2002. Of these, 851 had employment of under 1,000, and an additional five establishments had employment of 1,000 to 2,499. Consequently, we estimate that the majority of these establishments are small entities.

55. Audio and Video Equipment Manufacturing. These establishments manufacture “electronic audio and video equipment for home entertainment, motor vehicle, public address and musical instrument amplifications.” The SBA has developed a small business size standard for this category of manufacturing; that size standard is 750 or fewer employees. According to Census Bureau data, there were 571 establishments in this category that operated with payroll during 2002. Of these, 560 had employment of under 500, and ten establishments had employment of 500 to 999. Consequently, we estimate that the majority of these establishments are small entities.

56. Description of Reporting, Recordkeeping and Other Compliance Requirements. The rules proposed in the Further Notice of Proposed Rulemaking will impose additional reporting, recordkeeping, and compliance requirements on cable operators. The Further Notice of Proposed Rulemaking proposes a rule that would require cable operators to charge equivalent and transparent prices for CableCARDs. This rule change may require certain cable operators to change their billing practices.

57. Steps Taken to Minimize Significant Impact on Small Entities, and Significant Alternatives Considered. The RFA requires an agency to describe any significant alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance 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.

58. As indicated above, the Further Notice of Proposed Rulemaking seeks comment on whether the Commission should adopt or revise rules relating to compatibility between digital cable television systems and consumer electronics equipment. The proposed billing rule and the proposed multistream CableCARD requirement will present a burden on small entities. The countervailing public interest benefits will outweigh those burdens, however, as subscribers to small cable systems will see reduced costs and have a better understanding of the specific equipment for which their cable operators are charging them. We do not expect that the proposed rule regarding CableCARD device certification or CableCARD installation will have anything beyond a de minimis effect on small entities.

59. Due to the overwhelming consumer benefits that will derive from the proposed modifications to the Commission's rules, the Commission did not consider alternatives to those proposed rules. As described above, the proposed rule changes should reduce the number of service calls that consumers will need to schedule, reduce the costs associated with using a video navigation device purchased at retail, and encourage more competition in the retail video navigation device market.

60. With respect to the questions regarding whether marketplace solutions are providing adequate access to channels that are offered over switched-digital video, the Commission chose to seek comment on a proposal by TiVo, rather than proposing adoption of that proposal as recommended by the National Broadband Plan. Our decision to allow such comment will allow the Commission to consider the effect the proposal could have on small entities.

61. We welcome comments that suggest modifications of any proposal if based on evidence of potential differential impact on smaller entities. In addition, the Regulatory Flexibility Act requires agencies to seek comment on possible small entity-related alternatives, as noted above. We therefore seek comment on alternatives to the proposed rules that would assist small entities while ensuring improved customer support by cable operators for digital cable products purchased at retail.

62. Federal Rules Which Duplicate, Overlap, or Conflict with the Commission's Proposals. None.

List of Subjects

47 CFR Part 15

• Communications equipment
• Computer technology
• Labeling
• Radio
• Reporting and recordkeeping requirements
• Security measures
• Telephone
• Wiretapping and electronic surveillance

47 CFR Part 76

• Administrative practice and procedure
• Cable television
• Equal employment opportunity
• Political candidates
• Reporting and recordkeeping requirements

Marlene H. Dortch,

Secretary, Federal Communications Commission.

Rule Changes

For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR Parts 15 and 76 as follows:

PART 15—RADIO FREQUENCY DEVICES

1. The authority citation for part 15 continues to read as follows:

Authority: 47 U.S.C. 154, 302a, 303, 304, 307, 336, and 544a. 2. Amend § 15.123 by revising paragraph (c)(1) to read as follows:

§ 15.123

Labeling of digital cable ready products.

* * * * *

(c) * * *

(1) The manufacturer or importer shall have a sample of its first model of a unidirectional digital cable product tested to show compliance with the procedures set forth in Uni-Dir-PICS-I01-030903: Uni-Directional Receiving Device: Conformance Checklist: PICS Proforma (incorporated by reference, see 15.38) at a qualified test facility. The manufacturer or importer shall have any modifications to the product to correct failures of the procedures in Uni-Dir-PICS-I01-030903: Uni-Directional Receiving Device: Conformance Checklist: PICS Proforma (incorporated by reference, see 15.38) retested at a qualified test facility. A qualified test facility may only require compliance with the procedures set forth in Uni-Dir-PICS-I01-030903: Uni-Directional Receiving Device: Conformance Checklist: PICS Proforma (incorporated by reference, see 15.38). Compliance testing beyond those procedures shall be at the discretion of the manufacturer or importer.

* * * * *

PART 76—MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE

3. The authority citation for part 76 continues to read as follows:

Authority: 47 U.S.C. 151, 152, 153, 154, 301, 302, 302a, 303, 303a, 307, 308, 309, 312, 315, 317, 325, 339, 340, 341, 503, 521, 522, 531, 532, 534, 535, 536, 537, 543, 544, 544a, 545, 548, 549, 552, 554, 556, 558, 560, 561, 571, 572, 573.

4. Amend § 76.640 by revising paragraph (b)(4)(ii) to read as follows:

§ 76.640

Support for unidirectional digital cable products on digital cable systems.

* * * * *

(b) * * *

(4) * * *

(ii) Include both:

(A) A DVI or HDMI interface and

(B) An IEEE 1394, Ethernet, or USB 3.0 interface, or WiFi connectivity on all high definition set-top boxes acquired by a cable operator for distribution to customers. Effective [Date to be determined in the final rule], this interface must, at a minimum:

(1) Allow another device to transmit remote control commands via the same interface and

(2) Deliver video in an industry standard format.

* * * * *

5. Amend § 76.1204 by revising paragraph (a)(2) to read as follows:

§ 76.1204

Availability of equipment performing conditional access or security functions.

(a) * * *

(2) The foregoing requirement shall not apply

(i) With respect to unidirectional set-top boxes without recording functionality; or

(ii) To a multichannel video programming distributor that supports the active use by subscribers of navigation devices that:

(A) Operate throughout the continental United States, and

(B) Are available from retail outlets and other vendors throughout the United States that are not affiliated with the owner or operator of the multichannel video programming system.

* * * * *

6. Revise § 76.1205 to read as follows:

§ 76.1205

CableCARD support.

(a) Technical information concerning interface parameters that are needed to permit navigation devices to operate with multichannel video programming systems shall be provided by the system operator upon request in a timely manner.

(b) A multichannel video programming provider that is subject to the requirements of § 76.1204(a)(1) must:

(1) Include the charge for the CableCARD as a separate line item in the subscriber's bill;

(2) Provide the means to allow subscribers to self-install the CableCARD if the MVPD allows its subscribers to self-install operator-leased set-top boxes;

(3) Provide a multi-stream CableCARD to any subscriber who requests one; and

(4) With respect to professional installations, ensure that the technician arrives with no fewer than the number of CableCARDS requested by the customer.