[Federal Register Volume 70, Number 185 (Monday, September 26, 2005)]
[Proposed Rules]
[Pages 56150-56157]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-19161]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 79
[CG Docket No. 05-231; FCC 05-142]
Closed Captioning of Video Programming; Telecommunications for
the Deaf, Inc. Petition for Rulemaking
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: In this document, the Commission grants a petition for
rulemaking and initiates a proceeding to examine the Commission's
closed captioning rules. Specifically, the Commission seeks comment on
the current status of the Commission's closed captioning rules in
ensuring that video programming is accessible to deaf and hard of
hearing Americans and whether any revisions should be made to enhance
the effectiveness of those rules; and several compliance and quality
issues relating to closed captioning that were raised in a Petition for
Rulemaking filed by Telecommunications for the Deaf, Inc., (TDI), the
National Association of the Deaf, Self Help for Hard of Hearing People,
Inc., the Association for Late Deafened Adults, and the Deaf and Hard
of Hearing Consumer Advocacy Network.
DATES: Comments are due on or before November 10, 2005. Reply comments
are due on or before November 25, 2005. Written comments on the
Paperwork Reduction Act (PRA) proposed information collection
requirements must be submitted by the general public, Office of
Management and Budget (OMB), and other interested parties on or before
November 25, 2005.
ADDRESSES: You may submit comments, identified by [docket number and/or
rulemaking number], 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.
[[Page 56151]]
People with Disabilities: Contact the FCC to request reasonable
accommodations (accessible format documents, sign language
interpreters, CART, etc.) by e-mail: [email protected] or phone (202) 418-
0539 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, a copy of any
comments on the Paperwork Reduction Act (PRA) information collection
requirements contained herein should be submitted to Leslie Smith,
Federal Communications Commission, Room 1-A804, 445 12th Street, SW.,
Washington, DC 20554, or via the Internet to [email protected], and
to Kristy L. LaLonde, OMB Desk Officer, Room 10234 NEOB, 725 17th
Street, NW., Washington, DC 20503, via the Internet to [email protected], or via fax at (202) 395-5167.
FOR FURTHER INFORMATION CONTACT: Amelia Brown, Consumer & Governmental
Affairs Bureau, Disability Rights Office at (202) 418-2799 (voice),
(202) 418-0597 (TTY), or e-mail at [email protected]. For additional
information concerning the Paperwork Reduction Act information
collection requirements contained in the document, contact Leslie Smith
at (202) 418-0217, or via the Internet at [email protected].
SUPPLEMENTARY INFORMATION: The Notice of Proposed Rulemaking (NPRM),
Closed Captioning of Video Programming; Telecommunications for the
Deaf, Inc. Petition for Rulemaking, CG Docket No. 05-231, FCC 05-142,
contains proposed information collection requirements subject to the
PRA of 1995, Public Law 104-13. It will be submitted to the Office of
Management and Budget (OMB) for review under Section 3507 of the PRA.
OMB, the general public, and other Federal agencies are invited to
comment on the proposed information collection requirements contained
in this proceeding. This is a summary of the Commission's NPRM, FCC 05-
142, adopted July 14, 2005, and released July 21, 2005, in CG Docket
No. 05-231.
Pursuant to Sec. Sec. 1.415 and 1.419 of the Commission's rules,
47 CFR 1.415 and 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, May 1, 1998.
Electronic Filers: Comments may be filed electronically
using the Internet by accessing the ECFS: http://www.fcc.gov/cgb/ecfs/
or the Federal eRulemaking Portal: http://www.regulations.gov. Filers
should follow the instructions provided on the website for submitting
comments.
For ECFS filers, if multiple docket or rulemaking numbers
appear in the caption of this proceeding, filers must transmit one
electronic copy of the comments for each docket or rulemaking number
referenced in the caption. In completing the transmittal screen, filers
should include their full name, U.S. Postal Service mailing address,
and the applicable docket or rulemaking number, which in this instance
is CG Docket No. 05-231. Parties may also submit an electronic comment
by Internet e-mail. To get filing instructions, filers should send an
e-mail to [email protected], and include the following words in the body of
the message, ``get form .'' A sample form and
directions will be sent in response.
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 in this proceeding,
filers must submit two additional copies of each additional docket or
rulemaking number.
Filings can be sent by hand or messenger delivery, by commercial
overnight courier, or by first-class or overnight U.S. Postal Service
mail (although we continue to experience delays in receiving U.S.
Postal Service mail). All filings must be addressed to the Commission's
Secretary, Office of the Secretary, Federal Communications Commission.
The Commission's contractor will receive hand-delivered or
messenger-delivered paper filings for the Commission's Secretary at 236
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing
hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be
held together with rubber bands or fasteners. Any envelopes must be
disposed of before entering the building.
Commercial mail sent by 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.
U.S. Postal Service first-class, Express, and Priority
mail should be addressed to 445 12th Street, SW., Washington, DC 20554.
Comments and reply comments must include a short and concise
summary of the substantive discussion and questions raised in the NPRM.
The Commission further directs all interested parties to include the
name of the filing party and the date of the filing on each page of
their comments and reply comments. The Commission strongly encourages
that parties track the organization set forth in this NPRM in order to
facilitate the Commission's internal review process. Comments and reply
comments must otherwise comply with Sec. 1.48 of the Commission's
rules and all other applicable sections of the Commission's rules. (See
47 CFR 1.48).
Pursuant to Sec. 1.1200 of the Commission's rules, 47 CFR 1.1200,
this matter shall be treated as a ``permit-but-disclose'' proceeding in
which ex parte communications are subject to disclosure. Persons making
oral ex parte presentations are reminded that memoranda summarizing the
presentations must contain summaries 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. Other requirements pertaining to oral
and written presentations are set forth in Sec. 1.1206 (b) of the
Commission's rules.
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 [email protected] or call the
Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice), (202)
418-0432 (TTY).
Initial Paperwork Reduction Act of 1995 Analysis
The NPRM contains proposed 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, Public Law 104-13. Public and agency comment are due November
25, 2005. 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
[[Page 56152]]
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), the Commission we seeks specific comment on how it
may ``further reduce the information collection burden for small
business concerns with fewer than 25 employees.''
OMB Control Number: 3060-0761.
Title: Section 79.1 Closed Captioning of Video Programming.
Form No.: N/A.
Type of Review: Revision of a currently approved collection.
Number of Respondents: 12,500 respondents--(11,500 Video
Programming Providers and 1,000 complainants)
Number of Responses: 50,950 responses.
Respondents: Individuals or households; business and other for-
profit entities; and not-for-profit institutions.
Estimated Time per response: 30 minutes (0.50 hours) to 10 hours.
Frequency of Response: On occasion reporting requirement;
recordkeeping; third party disclosure.
Total Annual Burden: 202,215 hours.
Total Annual Costs: $500,000.
Privacy Act Impact Assessment: Yes.
Needs and Uses: On July 21, 2005, the Commission released a Notice
of Proposed Rulemaking (NPRM), CG Docket No. 05-231, which initiates a
rulemaking to examine the current status of the Commission's closed
captioning rules (47 CFR 79.1) with the goal of ensuring that video
programming is accessible to deaf and hard of hearing Americans. The
NPRM seeks to determine whether any revisions should be made to enhance
the effectiveness of those rules. The NPRM seeks comment on
establishing standards for the non-technical quality of closed
captioning, the potential costs of such standards for programmers and
distributors, the availability of competent captioners to meet a non-
technical quality standard mandate, and establishing different non-
technical quality standards for pre-produced versus live programming.
In addition, the NPRM seeks comment on whether additional mechanisms
and procedures, beyond those already in the Commission's rules, are
necessary to prevent technical problems from occurring and to
expeditiously remedy any technical problems that do arise. The NPRM
also seeks comment on video programming distributors' responsibility to
monitor and maintain their equipment and signal transmissions, and
whether specific mechanisms should be established for monitoring and
maintenance. Additionally, the NPRM seeks comment on whether to revise
the current rule to allow for shorter complaint and response times,
what those time frames should be, and whether complainants should be
permitted to complain directly to the Commission without complaining to
the video programming distributor first. Further, the NPRM seeks
comment on requiring video programming distributors to file compliance
reports as to the amount of closed captioning they provide, and any
alternative methods available to verify compliance. The information
collection requirements include the proposed requirements contained in
the NPRM.
Synopsis
The NPRM grants a Petition for Rulemaking that was filed by TDI and
several organizations representing deaf and hard of hearing consumers
and seeks comment on several issues pertaining to closed captioning.
The Commission first adopted rules for closed captioning of video
programming in 1997. (See Closed Captioning and Video Description of
Video Programming, Implementation of Section 305 of the
Telecommunications Act of 1996, Video Programming Accessibility, MM
Docket No. 95-176, Report and Order, 13 FCC Rcd 3272 (August 22, 1997),
published at 62 FR 48487, September 16, 1997), (Closed Captioning
Report and Order).
The closed captioning rules are found at 47 CFR 79.1, and apply to
any television broadcast station licensed by the Commission, any multi-
channel video programming distributor (MVPD), and any other distributor
of video programming for residential reception that delivers such
programming directly to the home and is subject to the jurisdiction of
the Commission. Examples of MVPDs include cable operators, multi-
channel multipoint distribution services, direct broadcast satellite
services, television receive-only satellite program distributors, and
satellite master antenna television system operators. We note that
telephone companies providing video programming to the home are subject
to Sec. 79.1 of the Commission's rules.
Non-technical Quality Standards for Closed Captioning. Currently
there are no standards for non-technical quality aspects of closed
captioning, such as accuracy of transcription, spelling, grammar,
punctuation, placement, identification of nonverbal sounds, pop-on or
roll-up style, verbatim or edited for reading speed, and type font. The
NPRM seeks comment on certain aspects of non-technical quality issues,
including whether the Commission should establish standards for the
non-technical quality of closed captioning; are there non-technical
quality issues other than those noted above that the Commission should
consider; are there reasons not to set standards for non-technical
quality aspects of closed captioning; what would the costs be to
programmers and distributors of mandating non-technical quality
standards; and does the captioning pool consist of an adequate number
of competent captioners to meet a non-technical quality standard
mandate. The NPRM also seeks comment on whether any non-technical
quality standards should be different for pre-produced programs versus
live programs. The NPRM seeks comment on what would constitute an
``error,'' whether specific allowable error rates should be adopted
and, if so, what error rates would be appropriate.
Technical Quality Standards. In the Closed Captioning Report and
Order, the Commission adopted a ``pass through'' rule to ensure that
programming with closed captions is delivered in a complete manner with
the belief that the enforcement of this rule, the captioning
requirements, and Sec. Sec. 15.119 and 73.682 of the Commission's
rules would ensure the technical quality of captioning. Section 15.119
of the Commission's rules sets forth the closed caption decoder
requirements for analog television receivers, and Sec. 73.682 of the
Commission's rules sets forth television transmission standards. The
``pass through'' rule requires video programming providers to ``pass
through any captioning they receive that is included with the video
programming they distribute as long as the captions do not need to be
reformatted.'' The NPRM seeks comment on the need for additional
mechanisms and procedures in addition to the ``pass through'' rule to
prevent technical problems from occurring and to expeditiously remedy
any technical problems that do arise. Are such mechanisms and
procedures warranted? If so, what form should they take? The NPRM seeks
comment on the kinds of technical problems experienced by consumers as
well as distributors.
Monitoring of Captioning. In the Closed Captioning Report and
Order, the Commission did not establish specific rules or steps that
video programming distributors would be required to follow to ensure
the delivery of captions and to make sure that the equipment used is
working properly. The NPRM seeks comment on video programming
distributors' responsibility
[[Page 56153]]
to monitor and maintain their equipment and signal transmissions.
Should distributors have specific mechanisms in place for monitoring
and maintenance of captioning? If so, what should these mechanisms
consist of? What impact would such mechanisms have on distributors? The
NPRM also seeks comment on alternate ways to ensure that captioning is
delivered intact to consumers. Lastly, the NPRM seeks comment on
whether distributors are monitoring their programming and advertising
materials to ensure that a program advertised to be closed captioned is
indeed closed captioned.
Complaint Procedures. The NPRM seeks comment on whether the
Commission should revise the current rule to allow for shorter
complaint and complaint response times. The NPRM seeks comment on what
those time frames should be, and seeks comment on whether complainants
should be permitted to complain directly to the Commission without
complaining to the video programming distributor first. If the
Commission decides to retain the current complaint process, the NPRM
seeks comment on whether the filing and response deadlines should be
revised.
Accessibility of Contact Information. The NPRM seeks comment on
whether video programming distributors should be required to post
complete contact information on their Web sites, update this
information on a routine basis, and provide the information to the FCC
for posting on its Web site. The NPRM seeks comment on the experiences
that deaf and hard of hearing people have had when contacting video
programming distributors to complain or ask questions, and seeks
comment from distributors regarding their experiences in this area.
Standardized Captioning Complaint Form. The NPRM seeks comment on
whether a standardized captioning complaint form would be useful.
Fines and Penalties for Failure to Caption. The Commission's
Forfeiture Guidelines do not contain any specific guidelines regarding
forfeitures for violations of the closed captioning rules. The NPRM
seeks comment on whether the Commission should establish specific per
violation forfeiture amounts for non-compliance with the captioning
rules, and if so, what those amounts should be. The NPRM directs
commenters to Sec. 1.80(b) of the Commission's rules for guidance on
existing forfeitures for violations of other Commission rules.
Compliance Reports. In the Closed Captioning Report and Order, the
Commission did not adopt reporting requirements for distributors or
require the filing of periodic reports showing compliance with the
closed captioning rules. The NPRM seeks comment on requiring video
programming distributors to file compliance reports as to the amount of
closed captioning they provide. The NPRM asks if the Commission should
require such reports to be filed, and if so, how often should they be
filed; how they should be filed; whether the reports should include
information relating to new non-exempt programming or only information
pertaining to pre-rule non-exempt and Spanish-language programming; and
how a reporting requirement would be implemented. In the event the
Commission were to impose a reporting requirement for closed
captioning, we seek comment on whether distributors would be able to
rely on certifications from programmers that the programming contains
closed captioning. Are there alternative methods to verify compliance?
If a reporting requirement is not imposed, the NPRM seeks comment on
whether the Commission's rules should be amended to place a greater
burden on video programming distributors to ensure that the programming
they carry is captioned, regardless of the assurances they receive from
programmers.
Use of Electronic Newsroom Technique. The Commission's rules
prohibit the major national broadcast networks (i.e., ABC, CBS, Fox and
NBC), affiliates of these networks in the top 25 television markets as
defined by Nielsen's Designated Market Areas (DMAs), and national
nonbroadcast networks serving at least 50% of all homes subscribing to
multi-channel video programming services, from counting electronic
newsroom-captioned programming towards compliance with the closed
captioning rules. The NPRM seeks comment on whether to extend the
prohibition of counting ENT generated captions to markets beyond the
top 25 DMAs. The NPRM also seeks comment on whether the rationale that
led to the Commission permitting the use of ENT by some distributors,
due to ENT's lower cost, is still relevant. Have captioning costs
decreased such that little hardship would result if the Commission were
to further limit the circumstances under which captions created using
electronic newsroom technique would be allowed to count as captioned
programming?
Availability of Captioners. The NPRM seeks comment on the supply of
captioners available for real-time and pre-recorded captioning. The
NPRM also seeks comment on the number of companies providing closed
captioning services, and on the impact that imposing a quality
standard, if adopted, will have on the supply of captioners.
Electronic Filing of Exemption Requests. Currently, Sec. 79.1 of
the Commission's rules requires that a petition for a full or partial
exemption from the closed captioning requirements based on an undue
burden must be filed with the Commission in writing, placed on public
notice, and permit interested persons to file comments or oppositions
to the petition. Due to the nature of this process, the petition itself
is generally not available electronically, unless a disk containing an
electronic version of the petition is submitted. The NPRM seeks comment
on requiring electronic filing for petitions for exemption from the
Commission's closed captioning rules under the undue burden standard of
Sec. 79.1(f) of the Commission's rules. What impact would such a
requirement have on entities filing such petitions, as well as on
parties, including consumers, wishing to file comments or oppositions
to the petition? The NPRM seeks comment on whether electronic filing
should be mandated or merely allowed, and on whether an electronic
filing requirement would reduce the perceived delay in processing such
petitions.
Initial Regulatory Flexibility Analysis
As required by the Regulatory Flexibility Act of 1980, as amended,
the Commission has prepared this Initial Regulatory Flexibility
Analysis (IRFA) of the possible significant economic impact on a
substantial number of small entities by the policies and rules proposed
in the NPRM. Written public comments are requested on this IRFA. (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),
Public Law Number 104-121, Title II, 110 Statute 857 (1996). Comments
must be identified as responses to the IRFA and must be filed by the
deadlines for comments on the NPRM provided in the item. The Commission
will send a copy of this entire NPRM, including this IRFA, to the Chief
Counsel for Advocacy of the Small Business Administration (SBA). See 5
U.S.C. 603(a)). In addition, the NPRM and the IRFA (or summaries
thereof) will be published in the Federal Register. (See 5 U.S.C.
603(a)).
A. Need For, and Objectives of, the Proposed Rules
We initiate this review relating to closed captioning in response
to several compliance and quality issues raised in
[[Page 56154]]
a Petition for Rulemaking filed by Telecommunications for the Deaf,
Inc., the National Association of the Deaf, Self Help for Hard of
Hearing People, Inc., the Association for Late Deafened Adults, and the
Deaf and Hard of Hearing Consumer Advocacy Network. This rulemaking
proceeding will examine the current status of the Commission's closed
captioning rules with the goal of ensuring that video programming is
accessible to deaf and hard of hearing Americans. This NPRM also serves
as a follow-up to the Commission's prior assurances at the time the
closed captioning rules were adopted that certain captioning provisions
would be reviewed and evaluated at a future date. As described more
fully below, this NPRM seeks to determine whether any revisions should
be made to enhance the effectiveness of those rules. In particular, the
NPRM seeks comment on establishing standards for the non-technical
quality of closed captioning, the potential costs of such standards for
programmers and distributors, the availability of competent captioners
to meet a non-technical quality standard mandate, and establishing
different non-technical quality standards for pre-produced versus live
programming. In addition, the NPRM seeks comment on whether additional
mechanisms and procedures, beyond those already in the Commission's
rules, are necessary to prevent technical problems from occurring and
to expeditiously remedy any technical problems that do arise. The NPRM
also seeks comment on video programming distributors' responsibility to
monitor and maintain their equipment and signal transmissions, and
whether specific mechanisms should be established for monitoring and
maintenance. Additionally, the NPRM seeks comment on whether to revise
the current rule to allow for shorter complaint and response times,
what those time frames should be, and whether complainants should be
permitted to complain directly to the Commission without complaining to
the video programming distributor first. Further, the NPRM seeks
comment on requiring video programming distributors to file compliance
reports as to the amount of closed captioning they provide, and any
alternative methods available to verify compliance.
B. Legal Basis
The authority for this NPRM is contained in sections 4(i), 303(r)
and 713 of the Communications Act of 1934, as amended, 47 U.S.C.
154(i), 303(r) and 713.
C. Description and Estimate of the Number of Small Entities Impacted
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 and policies, if adopted. (5 U.S.C.
603(b)(3)). The RFA generally defines the term ``small entity'' as
having the same meaning as the terms ``small business,'' ``small
organization,'' and ``small governmental jurisdiction.'' (5 U.S.C.
601(6)). In addition, the term ``small business'' has the same meaning
as the term ``small business concern'' under the Small Business Act. (5
U.S.C. 601(3) (incorporating by reference the definition of ``small-
business concern'' in the Small Business Act, 15 U.S.C. 632). Pursuant
to 5 U.S.C. 601(3), the statutory definition of a small business
applies ``unless an agency, after consultation with the Office of
Advocacy of the Small Business Administration and after opportunity for
public comment, establishes one or more definitions of such term which
are appropriate to the activities of the agency and publishes such
definition(s) in the Federal Register''). 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. (15 U.S.C. 632).
Cable and Other Program Distribution. This category includes among
others, cable systems operators, closed circuit television services,
direct broadcast satellite services, home satellite dish services,
multipoint distribution systems, multichannel multipoint distribution
service, satellite master antenna television systems, and subscription
television services. The SBA has developed a small business size
standard for this census category, which includes all such companies
generating $12.5 million or less in revenue annually. (13 CFR 121.201,
NAICS code 513220; changed to 517510 in October 2002). According to
Census Bureau data for 1997, there were a total of 1,311 firms in this
category that had operated for the entire year. (U.S. Census Bureau,
1997 Economic Census, Subject Series: Information, ``Establishment and
Firm Size (Including Legal Form of Organization),'' Table 4, NAICS code
513220 (issued October 2000)). Of this total, 1,180 firms had annual
receipts of under $10 million and an additional 52 firms had receipts
of $10 million or more but less than $25 million. Consequently, the
Commission estimates that the majority of providers in this service
category are small businesses that may be affected by the rules and
policies involved herein.
Cable and Other Subscription Programming. Entities in this category
``primarily engag[e] in operating studios and facilities for the
broadcasting of programs on a subscription or fee basis. The broadcast
programming is typically narrowcast in nature (e.g., limited format,
such as news, sports, education, or youth-oriented). These
establishments produce programming in their own facilities or acquire
programming from external sources.'' (U.S. Census Bureau, ``2002 NAICS
Definitions: 515210 Cable and Other Subscription Programming'' (online,
July 2005, at http://www.census.gov)). The SBA has developed a small
business size standard for this category; that size standard is $12.5
million or less in average annual receipts. (13 CFR 121.201, NAICS code
515210; changed from 513210 in October 2002). According to Census
Bureau data for 1997, there were 234 firms in this category that
operated for the entire year. (U.S. Census Bureau, 1997 Economic
Census, Subject Series: Information, ``Establishment and Firm Size
(Including Legal Form of Organization),'' Table 4, NAICS code 513210
(issued October 2000)). Of these, 188 had annual receipts of under $10
million, and an additional 16 firms had receipts of between $10 million
and $24,999,999. Consequently, we estimate that the majority of these
firms are small entities that may be affected by our action. In
addition, limited preliminary census data for 2002 indicate that the
total number of Cable and Other Subscription Programming entities
increased approximately 44.5 percent from 1997 to 2002. See U.S. Census
Bureau, 2002 Economic Census, Industry Series: ``Information,'' Table
2, Comparative Statistics for the United States (1997 NAICS Basis):
2002 and 1997, NAICS code 513210 (issued December 2004). The
preliminary data indicate that the total number of ``establishments''
increased from 494 to 714. Data related to thenumber of ``firms,''
which takes into account the concept of common ownership or control,
and includes employment and receipts numbers, will be issued in late
2005.
Cable System Operators (Rate Regulation Standard). The Commission
has developed its own small business size standard for cable system
operators, for purposes of rate regulation. Under the Commission's
rules, a ``small cable company'' is one serving fewer than 400,000
subscribers nationwide. (47 CFR 76.901(e)). The Commission developed
this definition based on its
[[Page 56155]]
determination that a small cable system operator is one with annual
revenues of $100 million or less. Implementation of Sections of the
1992 Cable Act: Rate Regulation, Sixth Report and Order and Eleventh
Order on Reconsideration, 10 FCC Rcd 7393, published at 60 FR 10534,
February 27, 1995. The most recent estimates indicate that there were
1,439 cable operators who qualified as small cable system operators at
the end of 1995. (Paul Kagan Associates, Inc., Cable TV Investor,
February 29, 1996; based on figures for December 30, 1995). Since then,
some of those companies may have grown to serve over 400,000
subscribers, and others may have been involved in transactions that
caused them to be combined with other cable operators. Consequently,
the Commission estimates that there are now fewer than 1,439 small
entity cable system operators that may be affected by the rules and
policies involved herein.
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. (47 U.S.C. 543(m)(2)). The Commission has determined that
there are 67,700,000 subscribers in the United States. See FCC
Announces New Subscriber Count for the Definition of Small Cable
Operator, Public Notice, DA 01-158 (released January 24, 2001).
Therefore, an operator serving fewer than 677,000 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. (47 CFR 76.901(f)). Based on available data, the
Commission estimates that the number of cable operators serving 677,000
subscribers or fewer, totals 1,450. See FCC Announces New Subscriber
Count for the Definition of Small Cable Operator, Public Notice, DA 01-
158 (released January 24, 2001). The Commission neither requests nor
collects information on whether cable system operators are affiliated
with entities whose gross annual revenues exceed $250 million, and
therefore is unable, at this time, to estimate more accurately the
number of cable system operators that would qualify as small cable
operators under the size standard contained in the Communications Act
of 1934. The Commission does receive such information on a case-by-case
basis if a cable operator appeals a local franchise authority's finding
that the operator does not qualify as a small cable operator pursuant
to Sec. 76.901(f) of the Commission's rules. See 47 CFR 909(b).
Cable Television Relay Service. This service includes transmitters
generally used to relay cable programming within cable television
system distribution systems. The SBA has defined a small business size
standard for Cable and other Program Distribution, consisting of all
such companies having annual receipts of no more than $12.5 million.
(13 CFR 121.201, NAICS code 517510). According to Census Bureau data
for 1997, there were 1,311 firms in the industry category Cable and
Other Program Distribution, total, that operated for the entire year.
(U.S. Census Bureau, 1997 Economic Census, Subject Series: Information,
``Establishment and Firm Size (Including Legal Form of Organization)'',
Table 4 (issued October 2000)). Of this total, 1,180 firms had annual
receipts of $10 million or less, and an additional 52 firms had
receipts of $10 million or more but less than $25 million. (U.S. Census
Bureau, 1997 Economic Census, Subject Series: Information,
``Establishment and Firm Size (Including Legal Form of Organization)'',
Table 4 (issued October 2000)). Thus, under this standard, we estimate
that the majority of providers in this service category are small
businesses that may be affected by the rules and policies involved
herein.
Direct Broadcast Satellite (DBS) Service. DBS service is a
nationally distributed subscription service that delivers video and
audio programming via satellite to a small parabolic ``dish'' antenna
at the subscriber's location. Because DBS provides subscription
services, DBS falls within the SBA-recognized definition of Cable and
Other Program Distribution. (13 CFR 121.201, NAICS code 517510). This
definition provides that a small entity is one with $12.5 million or
less in annual receipts. (13 CFR 121.201, NAICS code 517510).
Currently, only four operators hold licenses to provide DBS service,
which requires a great investment of capital for operation. All four
currently offer subscription services. Two of these four DBS operators,
DirecTV, and EchoStar Communications Corporation (EchoStar), report
annual revenues that are in excess of the threshold for a small
business. DirecTV is the largest DBS operator and the second largest
MVPD, serving an estimated 13.04 million subscribers nationwide. See
Annual Assessment of Status of Competition in the Market for the
Delivery of Video Programming, Eleventh Annual Report, FCC 05-13,
paragraph 55 (released February 4, 2005) (2005 Cable Competition
Report). EchoStar, which provides service under the brand name Dish
Network, is the second largest DBS operator and the fourth largest
MVPD, serving an estimated 10.12 million subscribers nationwide. A
third operator, Rainbow DBS, is a subsidiary of Cablevision's Rainbow
Network, which also reports annual revenues in excess of $12.5 million,
and thus does not qualify as a small business. (Rainbow DBS, which
provides service under the brand name VOOM, reported an estimated
25,000 subscribers).
The fourth DBS operator, Dominion Video Satellite, Inc. (Dominion),
offers religious (Christian) programming and does not report its annual
receipts. (Dominion, which provides service under the brand name Sky
Angel, does not publicly disclose its subscribership numbers on an
annualized basis). The Commission does not know of any source that
provides this information and, thus, we the Commission has no way of
confirming whether Dominion qualifies as a small business. Because DBS
service requires significant capital, we believe it is unlikely that a
small entity as defined by the SBA would have the financial wherewithal
to become a DBS licensee. Nevertheless, given the absence of specific
data on this point, we acknowledge the possibility that there are
entrants in this field that may not yet have generated $12.5 million in
annual receipts, and therefore may be categorized as a small business,
if independently owned and operated.
Local Multipoint Distribution Service. Local Multipoint
Distribution Service (LMDS) is a fixed broadband point-to-multipoint
microwave service that provides for two-way video telecommunications.
(See Rulemaking to Amend parts 1, 2, 21, and 25 of the Commission's
rules to Redesignate the 27.5-29.5 GHz Frequency Band, Reallocate the
29.5-30.5 Frequency Band, to Establish Rules and Policies for Local
Multipoint Distribution Service and for Fixed Satellite Services,
Second Report and Order, Order on Reconsideration, and Fifth Notice of
Proposed Rule Making, FCC 97-82, 12 FCC Rcd 12545, 12689 through 12690,
paragraph 348 (1997), published at 62 FR 23148, April 29, 1997). The
auction of the 986 Local Multipoint Distribution Service (LMDS)
licenses began on February 18, 1998 and closed on March 25, 1998. The
Commission established a small business size standard for LMDS licenses
as an entity that has average gross revenues of less than $40 million
[[Page 56156]]
in the three previous calendar years. An additional small business size
standard for ``very small business'' was added as an entity that,
together with its affiliates, has average gross revenues of not more
than $15 million for the preceding three calendar years.
The SBA has approved these small business size standards in the
context of LMDS auctions. (See Letter to Dan Phythyon, Chief, Wireless
Telecommunications Bureau, FCC, from Aida Alvarez, Administrator, SBA
(January 6, 1998)). There were 93 winning bidders that qualified as
small entities in the LMDS auctions. A total of 93 small and very small
business bidders won approximately 277 A Block licenses and 387 B Block
licenses. On March 27, 1999, the Commission re-auctioned 161 licenses;
there were 32 small and very small businesses winning that won 119
licenses.
Multipoint Distribution Service, Multichannel Multipoint
Distribution Service, and Instructional Television Fixed Service.
Multichannel Multipoint Distribution Service (MMDS) systems, often
referred to as ``wireless cable,'' transmit video programming to
subscribers using the microwave frequencies of the Multipoint
Distribution Service (MDS) and Instructional Television Fixed Service
(ITFS). (Amendment of parts 21 and 74 of the Commission's rules with
Regard to Filing Procedures in the Multipoint Distribution Service and
in the Instructional Television Fixed Service and Implementation of
Section 309(j) of the Communications Act--Competitive Bidding, Report
and Order, FCC 95-230, 10 FCC Rcd 9589 and 9593, paragraph 7 (1995),
published at 60 FR 36524, July 17, 1995 (MDS Auction R&O)). In
connection with the 1996 MDS auction, the Commission defined ``small
business'' as an entity that, together with its affiliates, has average
gross annual revenues that are not more than $40 million for the
preceding three calendar years. (47 CFR 21.961(b)(1)). The SBA has
approved of this standard. (See Letter to Margaret Wiener, Chief,
Auctions and Industry Analysis Division, Wireless Telecommunications
Bureau, FCC, from Gary Jackson, Assistant Administrator for Size
Standards, Small Business Administration, dated March 20, 2003 (noting
approval of $40 million size standard for MDS auction)). The MDS
auction resulted in 67 successful bidders obtaining licensing
opportunities for 493 Basic Trading Areas (BTAs). (Basic Trading Areas
(BTAs) were designed by Rand McNally and are the geographic areas by
which MDS was auctioned and authorized. See MDS Auction R&O, 10 FCC Rcd
9608, paragraph 34). Of the 67 auction winners, 61 claimed status as a
small business. At this time, the Commission estimates that of the 61
small business MDS auction winners, 48 remain small business licensees.
In addition to the 48 small businesses that hold BTA authorizations,
there are approximately 392 incumbent MDS licensees that have gross
revenues that are not more than $40 million and are thus considered
small entities. (47 U.S.C. 309(j)). Hundreds of stations were licensed
to incumbent MDS licensees prior to implementation of section 309(j) of
the Communications Act of 1934, 47 U.S.C. 309(j). For these pre-auction
licenses, the applicable standard is SBA's small business size standard
for ``other telecommunications'' (annual receipts of $12.5 million or
less). See 13 CFR 121.201, NAICS code 517910).
Concerning ITFS, the Commission notes that educational institutions
are included in this analysis as small entities.
The term ``small entity'' under SBREFA applies to small
organizations (nonprofits) and to small governmental jurisdictions
(cities, counties, towns, townships, villages, school districts, and
special districts with populations of less than 50,000). 5 U.S.C.
601(4)-(6). The Commission does not collect annual revenue data on ITFS
licensees. There are currently 2,032 ITFS licensees, and all but 100 of
these licenses are held by educational institutions. Thus, the
Commission tentatively concludes that at least 1,932 ITFS licensees are
small businesses.
Open Video Services. Open Video Service (OVS) systems provide
subscription services. (See 47 U.S.C. 573). The SBA has created a small
business size standard for Cable and Other Program Distribution. (13
CFR 121.201, NAICS code 513220 (changed to 517510 in October 2002)).
This standard provides that a small entity is one with $12.5 million or
less in annual receipts. The Commission has certified approximately 100
OVS operators to serve 75 areas, and some of these are currently
providing service. (See http://www.fcc.gov/csb/ovs/csovscer.html
(current as of June 2004)). Affiliates of Residential Communications
Network, Inc. (RCN) received approval to operate OVS systems in New
York City, Boston, Washington, DC, and other areas. RCN has sufficient
revenues to assure that they do not qualify as a small business entity.
Little financial information is available for the other entities that
are authorized to provide OVS and are not yet operational. Given that
some entities authorized to provide OVS service have not yet begun to
generate revenues, the Commission concludes that those OVS operators
remaining might qualify as small businesses that may be affected by the
rules and policies proposed herein.
Television Broadcasting. The SBA defines a television broadcasting
station as a small business if such station has no more than $12
million in annual receipts. (See 13 CFR 121.201, NAICS Code 515120
(adopted October 2002)). Business concerns included in this industry
are those ``primarily engaged in broadcasting images together with
sound.'' (NAICS Code 515120). This category description continues,
``These establishments operate television broadcasting studios and
facilities for the programming and transmission of programs to the
public. These establishments also produce or transmit visual
programming to affiliated broadcast television stations, which in turn
broadcast the programs to the public on a predetermined schedule.
Programming may originate in their own studios, from an affiliated
network, or from external sources.'' Separate census categories pertain
to businesses primarily engaged in producing programming. (See Motion
Picture and Video Production, NAICS code 512110; Motion Picture and
Video Distribution, NAICS Code 512120; Teleproduction and Other Post-
Production Services, NAICS Code 512191; and Other Motion Picture and
Video Industries, NAICS Code 512199). According to Commission staff
review of the BIA Publications, Inc. Master Access Television Analyzer
Database as of June 26, 2004, about 860 of the 1,270 commercial
television stations in the United States have revenues of $12 million
or less. The Commission notes, however, that, in assessing whether a
business concern qualifies as small under the above definition,
business (control) affiliations must be included. ``[Business concerns]
are affiliates of each other when one concern controls or has the power
to control the other or a third party or parties controls or has power
to control both.'' 13 CFR 121.103(a)(1). The Commission's estimate,
therefore, likely overstates the number of small entities that might be
affected by our action, because the revenue figure on which it is based
does not include or aggregate revenues from affiliated companies. There
are also 2,127 low power television stations (LPTV). (FCC News Release,
``Broadcast Station Totals as of September 30, 2002''). Given the
nature of this service, we will presume that all LPTV licensees qualify
as small entities under the SBA definition.
[[Page 56157]]
In addition, an element of the definition of ``small business'' is
that the entity not be dominant in its field of operation. The
Commission is unable at this time to define or quantify the criteria
that would establish whether a specific television station is dominant
in its field of operation. Accordingly, the estimate of small
businesses to which rules may apply does not exclude any television
station from the definition of a small business on this basis and is
therefore over-inclusive to that extent. Also as noted, an additional
element of the definition of ``small business'' is that the entity must
be independently owned and operated. The Commission notes that it is
difficult at times to assess these criteria in the context of media
entities and our estimates of small businesses to which they apply may
be over-inclusive to this extent.
D. Description of Projected Reporting, Recordkeeping and Other
Compliance Requirements
The proposed rules may impose additional reporting or recordkeeping
requirements on a number of different entities. For example, the NPRM
discusses whether video programming distributors should be required to
submit reports to the Commission certifying that they are complying
with monitoring and maintenance of equipment and signal transmissions.
In addition the NPRM asks whether video programming distributors should
be required to file compliance reports as to the amount of closed
captioning they provide. These proposals may impose additional
reporting or recordkeeping requirements on entities. The Commission
seeks comment on the possible burden these requirements would place on
small entities. Also, the Commission seeks comment on whether a special
approach toward any possible compliance burdens on small entities might
be appropriate.
E. 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. (5 U.S.C. 603(b)). The Commission seeks comment on whether it
should indeed be the responsibility of the video programming
distributor to monitor and maintain equipment and signal transmissions
and asks if specific mechanisms should be in place and what would be
the impact of such mechanisms on distributors. The NPRM notes that,
alternatively, the National Cable and Telecommunications Association
(NCTA) points out that a distributor's responsibilities should not be
unduly burdensome and invites comment on this matter. The NPRM also
proposes providing a standardized captioning complaint form for
consumers, which may be a useful tool to those filing complaints. In
addition, the NPRM discusses allowing consumers to complain to video
programming distributors via e-mail, phone or fax, which is aimed at
providing easier options for consumers who have concerns regarding
captioning problems and seek more immediate redress. The NPRM also
points out that effective January 1, 2006, all nonexempt new English
language programming must be captioned. Video programming distributors
and providers will have to caption their programming. Generally, 100%
compliance is required; however, particular entities, and under certain
circumstances small entities, may be exempt from the captioning
requirements if they qualify for an exemption pursuant to Sec. 79.1(d)
of the Commission rules, which provides for exempt programs and
providers meeting the particular qualifications cited in the rule, and/
or if captioning presents an undue burden pursuant to Sec. 79.1(f) of
the Commission's rule, which allows parties to file a petition with the
Commission requesting an exemption from captioning upon a sufficient
showing that captioning would pose significant difficulty or expense.
F. Federal Rules Which Duplicate, Overlap, or Conflict With, the
Commission's Proposals
None.
Ordering Clauses
Pursuant to sections 4(i), 303(r) and 713 of the Communications Act
of 1934, as amended, 47 U.S.C. 154(i), 303(r) and 713, this Notice of
Proposed Rulemaking is hereby adopted.
The Commission's Consumer & Governmental Affairs Bureau, Reference
Information Center, 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.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 05-19161 Filed 9-23-05; 8:45 am]
BILLING CODE 6712-01-P