**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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**REPORT AND ORDER**

**Adopted: November 2, 2005 November 3, 2005**

By the Commission:

Table of Contents

Heading Paragraph \#

I. Introduction 1

II\. Summary 4

III\. Background 5

A. Satellite Home Viewer Act (SHVA) 5

B. Satellite Home Viewer Improvement Act of 1999 (SHVIA) 6

C. Satellite Home Viewer Extension and Reauthorization Act of 2004
(SHVERA) 8

IV\. DISCUSSION 9

A. Station Eligibility For Satellite Carriage As "Significantly Viewed"
10

1\. Significantly Viewed Stations and Related Communities 11

2\. Accuracy of SV List 16

3\. Procedures for Determining or Modifying Significantly Viewed Status
24

4\. Definition of "Network Station" 33

5\. Limitations on Carriage of Significantly Viewed Stations Based on
Network Non-duplication and Syndicated Exclusivity 38

6\. Definition of "Satellite Community" 43

a\. Existing Communities 44

b\. Future Communities 49

c\. Natural growth of communities 54

7\. Significantly Viewed Carriage Not Mandatory; Retransmission Consent
Rights Not Affected 55

8\. Significantly Viewed Signals and the Single Dish Requirement 57

9\. Definition of "Satellite Carrier" 59

B. Subscriber Eligibility to Receive "Significantly Viewed" Signals 61

1\. Definition of "Subscriber" 62

2\. Analog Service Limitations; Receipt of Local Affiliate Required 65

3\. Digital Service Limitations; Receipt of Local Digital Affiliate
Required 75

4\. Exception to Subscriber Eligibility Limitations; Rule Not Applicable
Where No Local Network Affiliates Being Retransmitted 77

5\. Privately Negotiated Waivers 82

6\. Additional Digital Service Limitations; Definitions of "Equivalent
Bandwidth" and "Entire Bandwidth" 90

C. Section 341's Special Rules For Certain Counties and Markets 104

1\. Section 341(a) Confers Significantly Viewed Status To Certain
Counties in Oregon 104

2\. Section 341(b) Precludes Carriage Of Significantly Viewed Signals
Into Palm Springs and Bakersfield DMAs 107

D. Enforcement and Notice Provisions 109

1\. Enforcement of Section 340 109

2\. Notice Concerning Retransmission of Significantly Viewed Stations
117

V. Procedural Matters 122

A. Final Regulatory Flexibility Act Analysis 122

B. Final Paperwork Reduction Act of 1995 Analysis 123

C. Congressional Review Act 125

VI\. Ordering Clauses 126

APPENDICES

> Appendix A: List of Commenters
>
> Appendix B: Final Rules
>
> Appendix C: Significantly Viewed List
>
> Appendix D: Final Regulatory Flexibility Act Analysis

# Introduction

1.  With this Report and Order ("R&O"), we adopt rules to implement
    Section 202 of the Satellite Home Viewer Extension and
    Reauthorization Act of 2004 ("SHVERA").[^1] Section 202 of the
    SHVERA created Section 340 of the Communications Act of 1934, as
    amended ("Communications Act" or "Act"), which provides satellite
    carriers with the authority to offer Commission-determined
    "significantly viewed" signals of out-of-market (or "distant")
    broadcast stations to subscribers. Within 60 days of enactment, the
    SHVERA required the Commission to (1) publish and maintain a list of
    stations eligible for "significantly viewed" status and the related
    communities (as determined by the Commission),[^2] and (2) commence
    a rulemaking proceeding to implement Section 340, thus enabling
    satellite carriage of such "significantly viewed" signals.[^3] These
    mandates were satisfied by the Commission's Notice of Proposed
    Rulemaking ("NPRM") in this proceeding.[^4] We received 49 comments
    (from 46 commenters) and six replies in response to our NPRM.[^5]
    With this R&O, we satisfy the SHVERA's mandate that the Commission
    adopt rules implementing Section 340 within one year of the
    statute's enactment.[^6]

2.  With the SHVERA, Congress took another step toward "moderniz\[ing\]
    satellite television policy and enhanc\[ing\] competition between
    satellite and cable operators."[^7] The SHVERA adopted for satellite
    carriers and subscribers the concept of "significantly viewed"
    signals, which has applied in the cable context for more than 30
    years. In 1972, the Commission adopted the concept of "significantly
    viewed" signals to differentiate between otherwise out-of-market
    television stations "that have sufficient audience to be considered
    local and those that do not."[^8] The Commission concluded at that
    time that it would not be reasonable if choices on cable were more
    limited than choices over the air, and gave cable carriage rights to
    out-of-market stations in communities where they had significant
    over-the-air (non-cable) viewing.[^9]

3.  The copyright provisions that apply to cable systems have recognized
    the Commission's designation of stations as "significantly viewed"
    and treated them, for copyright purposes, as "local," and therefore
    subject to reduced copyright payment obligations.[^10] The copyright
    provisions governing satellite carriers did not, however, provide a
    statutory copyright license for significantly viewed signals, and
    such signals were not, as a practical matter, generally available
    via satellite distribution outside of their Designated Market Areas
    ("DMAs").[^11] Recognizing that the reach of a station's
    over-the-air signal is not constrained by the boundary of a
    DMA,[^12] the SHVERA allowed a satellite carrier to treat a signal
    as "local" in a community where such signal is "significantly
    viewed" by consumers in that community.[^13] In this way, the
    statutory provisions governing satellite carriage of broadcast
    stations move closer to the provisions that have long governed cable
    carriage.

# Summary

4.  The following are the key rule changes and conclusions adopted by
    this R&O.

-   We adopt the Significantly Viewed List ("SV List") published in the
    NPRM as the final SV List, changed only to correct errors
    appropriately demonstrated by commenters. The SV List will be
    published as Appendix C to the Report and Order. Moreover, this SV
    List will be made available to the public on our website, and we
    will update this list within 10 business days if it is modified in
    the future. \[IV.A.1.\]

-   We will apply Section 76.54 of our rules to satellite carriers.
    Revised Section 76.54 will now reference satellite carriers and the
    new SV List, but will not alter the procedures as in effect on April
    15, 1976. Thus, we now require satellite carriers or broadcast
    stations seeking significantly viewed status to follow the same
    petition process in place for cable operators, as required by
    Sections 76.5, 76.7 and 76.54 of our rules. \[IV.A.3.\]

-   With respect to the application of the Commission's network
    non-duplication and syndicated exclusivity rules to the carriage of
    significantly viewed stations, we implement the SHVERA provision to
    create a limited right for a station or distributor to assert
    exclusivity with respect to a station carried by a satellite carrier
    as significantly viewed; allow that significantly viewed station to
    assert the significantly viewed exception, just as a station would
    with respect to cable carriage; and allow the station or distributor
    asserting exclusivity to petition us for a waiver from the
    exception. Under this rule, stations are not removed from the SV
    List, but rather blackout deletions may be imposed. \[IV.A.5.\]

-   A satellite carrier may create a new community for purposes of the
    SV List by reference to an existing community as a separate and
    distinct community or municipal entity (*e.g.*, political
    jurisdiction, incorporated city or town); however, in the absence of
    a separate and distinct community or municipal entity (*e.g.*, an
    unincorporated area), a satellite community may be defined by one or
    more adjacent five-digit zip code areas. \[IV.A.6.\]

-   We find that Sections 340(b)(1) and (2) require that a subscriber
    must receive a specific local network station as part of
    local-into-local service in order to be eligible to receive a
    significantly viewed station that is affiliated with the same
    network as the local station, subject to the statutory exemption in
    markets in which a particular network affiliate does not exist or in
    which the waiver provisions in Section 340(b)(4) apply. \[IV.B.2.
    and IV.B.3.\]

-   As a condition to offering a significantly viewed digital signal,
    satellite carriers must comply with the "equivalent bandwidth" and
    "entire bandwidth" requirements, which permit satellite carriage of
    a significantly viewed station only if the amount of bandwidth used
    to carry such station is equivalent to the amount of bandwidth used
    to carry the signal or signals of the affiliated local network
    station, or the entire amount of bandwidth used by the local
    station. \[IV.B.3.\]

-   We affirm our tentative conclusion that determinations of bad faith
    or frivolousness will be made on a case-by-case basis. We will use
    our existing procedures for Petitions for Special Relief as the
    procedural framework for complaints concerning significantly viewed
    status. \[IV.D.1.\]

# Background

## Satellite Home Viewer Act (SHVA)

5.  In 1988, Congress passed the Satellite Home Viewer Act ("1988
    SHVA"),[^14] which established a statutory copyright license for
    satellite carriers to offer subscribers, who could not receive the
    signal of a broadcast station over the air, access to broadcast
    programming via satellite. The 1988 SHVA reflected Congress' intent
    to protect the role of local broadcasters in providing over-the-air
    television by limiting satellite delivery of network broadcast
    programming to subscribers who were "unserved" by over-the-air
    signals. The 1988 SHVA also permitted satellite carriers to offer
    distant "superstations" to subscribers.[^15]

## Satellite Home Viewer Improvement Act of 1999 (SHVIA)

6.  In 1999, in the Satellite Home Viewer Improvement Act
    ("SHVIA"),[^16] Congress expanded on the 1988 SHVA by amending both
    the copyright laws[^17] and the Communications Act[^18] to permit
    satellite carriers to retransmit local broadcast television signals
    directly to subscribers. The Commission implemented the SHVIA by
    adopting rules for satellite carriers with regard to carriage of
    broadcast signals, retransmission consent, and program exclusivity
    that paralleled the requirements for cable service.[^19]

7.  A key element of the SHVIA was to provide satellite carriers with a
    statutory copyright license to facilitate the retransmission of
    local broadcast programming, or "local-into-local" service, to
    subscribers. A satellite carrier provides "local-into-local" service
    when it retransmits a local television signal back into the local
    market of that television station for reception by subscribers.[^20]
    Generally, a television station's "local market" is the DMA in which
    it is located.[^21] DMAs, which describe each television market in
    terms of a unique geographic area, are established by Nielsen Media
    Research based on measured viewing patterns.[^22] Each satellite
    carrier providing local-into-local service pursuant to the statutory
    copyright license is generally obligated to carry any qualified
    local television station in the particular DMA that has made a
    timely election for mandatory carriage, unless the station's
    programming is duplicative of the programming of another station
    carried by the carrier in the DMA or the station does not provide a
    good quality signal to the carrier's local receive facility.[^23]
    This is commonly referred to as the "carry one, carry all"
    requirement.

## Satellite Home Viewer Extension and Reauthorization Act of 2004 (SHVERA)

8.  In December 2004, Congress passed and the President signed the
    SHVERA,[^24] which again amended the 1988 copyright laws[^25] and
    the Communications Act[^26] to further aid the competitiveness of
    satellite carriers and expand program offerings for satellite
    subscribers. Specifically, SHVERA distinguished between
    out-of-market (*i.e.,* "significantly viewed") signals and truly
    "distant" signals for purposes of the statutory copyright licenses
    in Sections 119 and 122 of title 17.[^27] The SHVERA established a
    copyright license that gives satellite carriers the option to offer
    Commission-determined "significantly viewed" signals to
    subscribers.[^28]

# DISCUSSION

9.  The SHVERA created Section 340 of the Communications Act and
    expanded the statutory copyright license for satellite carriers to
    establish the framework for satellite carriage of
    Commission-determined "significantly viewed" signals.[^29] As
    required by the SHVERA, we opened this proceeding on February 7,
    2005 with the release of the NPRM.[^30] In the NPRM, we published
    the existing list of significantly viewed stations and sought
    comment on implementation of Section 340 and the specific rule
    proposals and tentative conclusions contained in the NPRM.

## Station Eligibility For Satellite Carriage As "Significantly Viewed"

10. In the NPRM, we considered which stations are now eligible for
    "significantly viewed" status in which communities pursuant to the
    statutory copyright license contained in 17 U.S.C. § 119(a). We also
    considered how stations and the related communities can be added to
    the list of significantly viewed stations ("SV List"). We discussed
    the interplay of the Section 340 requirements with the Commission's
    network non-duplication and syndicated exclusivity rules and
    considered how to define a satellite community.

### Significantly Viewed Stations and Related Communities

11. Section 340(a) of the Act requires the Commission to determine which
    stations a satellite carrier can retransmit as significantly viewed,
    as well as which subscribers in which communities can receive these
    stations.[^31] Section 340(a)(1) confers "significantly viewed"
    status in the satellite context to a station, and the communities in
    which the station has been determined by the Commission to be
    "significantly viewed" in the cable television context.[^32] Section
    340(a)(2) provides for future determinations of a station's
    "significantly viewed" status by the Commission, consistent with the
    Commission's existing rules and procedures for cable
    television.[^33] There is no statutory limit on the number of
    significantly viewed signals a satellite carrier may carry.[^34]

12. Section 340(c) of the Act directs the Commission to publish and
    maintain a unified list of stations, and the communities in which
    such stations are considered "significantly viewed," that will apply
    to both cable operators and satellite carriers.[^35] In the NPRM, we
    compiled and published a list of stations that have been determined
    to be significantly viewed in specified counties and communities
    pursuant to the Commission's cable television rules.[^36] This SV
    List, which was attached to the NPRM as Appendix B, identified these
    stations, counties and communities, combining the Commission's
    original 1972 list of significantly viewed stations by county with
    stations added on a county or community-wide basis over the
    intervening years.[^37]

13. We sought comment on the SV List to solicit corrections and have
    changed the list only to correct errors appropriately demonstrated
    by commenters.[^38] The SV List is attached as Appendix C. Pursuant
    to Section 340(c), this SV List will be available to the public on
    our website,[^39] and we will update this list within 10 business
    days if we modify it in the future.[^40]

14. Some stations on the SV List have been the subject of petitions
    resulting in program deletions based on network non-duplication or
    syndicated exclusivity. The SV List indicates by a pound sign (#)
    the stations and related communities subject to programming
    deletions.[^41] Cable operators and satellite carriers must be aware
    of these required programming deletions ("blackouts") and abide by
    them in their carriage of these stations in the communities so
    indicated.[^42] Since releasing the NPRM, we have granted one
    pending request for programming deletion based on the network
    nonduplication and syndicated exclusivity rules[^43] and we have
    updated the SV List accordingly.[^44]

15. In the NPRM, we acknowledged that the SHVERA allowed satellite
    carriers to immediately begin using the SV List to expand their
    carriage offerings so that their subscribers could start
    experiencing the benefits of the SHVERA as soon as possible.[^45] We
    permitted satellite carriers to rely on the SV List's accuracy to
    commence service, consistent with the other requirements set out in
    the SHVERA and this proceeding, prior to the adoption of a final
    list.[^46] This decision was consistent with Congress' intent.[^47]
    To the extent necessary, satellite carriers must now come into
    compliance with our final rules when they become effective.

### Accuracy of SV List 

16. In the NPRM, we asked interested parties to confirm the accuracy of
    the SV List. Our request for comment, however, was limited to
    "whether the SV List accurately reflects such existing significantly
    viewed determinations, and not about whether the SV List should be
    modified because of a change in a station's circumstances subsequent
    to its placement on the SV List." We received numerous comments
    about the accuracy of the SV List; however, only a handful of these
    comments offered evidence of specific errors.[^48]

17. To the extent that commenters are seeking specific additions or
    deletions to the list absent proof that these stations were or were
    not previously determined by the Commission to be significantly
    viewed,[^49] we reject these comments for failing to comply with
    Section 76.54 of our rules. Moreover, we also agree with EchoStar
    that these comments are beyond the scope of this proceeding.[^50]
    The SHVERA created a mechanism for parties to subsequently seek
    modification of the SV List.[^51] Requests to modify the SV List
    based on changed circumstances must follow this process. Therefore,
    requests for modification that fail to demonstrate an existing error
    to the list or fail to offer documentary evidence supporting the
    requested correction are rejected. We note that the only parties
    originally eligible to request that we declare a station
    significantly viewed were the station itself, or the cable
    operator.[^52] Satellite carriers will now be included as eligible
    parties.

18. We will correct the SV List based on comments by DIRECTV, WGAL and
    WHEC-TV. We will also address the corrections proposed by the
    comments of Saga and Saga Quad, although we reject their request.

19. *DIRECTV.* The SV List is corrected, pursuant to DIRECTV's comments,
    to reflect new call letters for certain stations.[^53] Staff review
    of Commission records indicates that, with respect to the stations
    questioned by DIRECTV, all but three of these stations' call letters
    have been changed since the time they were added to the list. The
    new call letters of these stations will now be reflected on the
    list, with a notation of the former call letters for consistency.
    The three stations that were not among this group, WJJY (Channel 14,
    Jacksonville, IL), KVFD (Channel 21, Fort Dodge, IA) and KFIZ
    (Channel 34, Fond du Lac, WI), have apparently gone dark and a
    notation has been made on the list to reflect this. There were 22
    changes in station call letters.

20. In addition, we resolve two questions raised by DIRECTV: (1) whether
    station WTCT, Channel 27, Marion, Illinois should be listed as
    significantly viewed for Marshall County, Kentucky and not Marshall
    County, Illinois; and (2) whether station KSAS-TV, Channel 24,
    Wichita, Kansas should be listed as significantly viewed in Butler
    County, Kentucky as well as Butler County, Kansas.[^54] Staff review
    of Commission records indicates that, by letter dated May 24, 1995,
    the Consumer Protection Division of the former Cable Services Bureau
    granted significantly viewed status to WTCT-TV in Marshall County,
    Illinois. Further, by letters dated February 18, 1998, the Consumer
    Protection Division of the former Cable Services Bureau granted
    significantly viewed status to KSAS-TV in both Butler County, Kansas
    and Butler County, Kentucky. Therefore, our list is correct with
    respect to these questions. Finally, we correct 12 typographical
    errors pointed out by DIRECTV.[^55]

21. *WHEC-TV.* The SV List is corrected, pursuant to WHEC-TV's comments,
    to reflect that stations WCBS-TV, WNBC, WNYW, WABC-TV and WWOR-TV
    are not significantly viewed for the city of Rochester, NY, but
    rather are significantly viewed for the town of Rochester, located
    in Ulster County, New York.[^56] Staff review of Commission records
    indicates that, by letter dated March 8, 1990, the Chief of Video
    Services Division, Mass Media Bureau, granted Simmons Communications
    Company's request to declare the above-listed stations significantly
    viewed for the Villages of Ellenville and Woodridge, NY, and the
    towns of Wawarsing, Rochester, Fallsburg, and Mamakating, NY.

22. *WGAL.* The SV List is also corrected, pursuant to WGAL's comments,
    to delete all references to WKBS-TV, Channel 47, Altoona, PA, as
    being significantly viewed in the counties of Berks, Bucks, Chester,
    Delaware, Montgomery and Philadelphia, PA; the communities of East
    Hempfield Township, East Lampeter Township, East Petersburg,
    Lancaster, Lancaster Township, Manheim Township, Manor Township,
    Millersville, Mountville, West Hempfield Township and West Lampeter
    Township; the counties of Atlantic, Burlington, Camden, Cape May,
    Cumberland, Gloucester, Mercer and Salem, NJ; and New Castle County,
    DE.[^57] Staff review of Commission records confirms that WKBS-TV is
    currently the satellite of station WPCB-TV, Greensburg, PA, and did
    not become operational until 1985. Television broadcast station
    WGTW, Channel 48, Philadelphia, PA is the successor to the station
    that originally had the call sign "WKBS-TV" and that was granted
    significantly viewed status for the named counties on the basis of
    the 1971-1972 surveys and in the named communities based on
    community-specific surveys after 1972. Although WGTW itself went
    dark for a period of time, it nonetheless retains the significantly
    viewed status originally granted to WKBS-TV. Accordingly, we will
    list WGTW as significantly viewed, and delete all references to
    WKBS-TV, for the named counties and communities.

23. *Saga and Saga Quad.* We reject the corrections to the SV List
    proposed by Saga Broadcasting, LLC ("Saga") and Saga Quad States
    Communications, LLC ("Saga Quad"). We disagree with Saga and Saga
    Quad that errors were made in 1972 with respect to the following
    counties: Greenville, MS; Pittsburg, KS/Joplin, MO; and Victoria,
    TX. Staff review of the Commission's records indicates that the
    1971-1972 survey data relied upon in the publication of the 1972
    significantly viewed list was accurately performed in accordance
    with Section 76.54 of the rules. More specifically, the data for
    each station indicated by Saga and Saga Quad was double-checked to
    ensure that the 1971-1972 audience statistics demonstrated that the
    criteria for significantly viewed status were met, that the 1972
    significantly viewed list correctly reflected the survey results,
    that the significant viewing list was consistent with these
    documents and they were found to support the station's inclusion on
    the significantly viewed list. Moreover, we do not find Saga's
    request to use current Nielsen data as a means of deletion to be
    acceptable. We agree with the comments of Mission Broadcasting
    (KOLR),[^58] Meredith Corporation (KCTV) and Media General
    Communications, Inc. (WJTV),[^59] that the Saga submissions do not
    comply with the Section 76.54 petition process and exceed the scope
    of this proceeding. As a result, Saga's and Saga Quad's requests for
    deletion are rejected.

### Procedures for Determining or Modifying Significantly Viewed Status

24. Section 340(c) provides a procedure for modifying the SV List with
    respect to satellite carriers, either to add eligible stations or
    communities, or to restrict carriage of eligible stations through
    application of the Commission's network non-duplication or
    syndicated exclusivity rules.[^60] This provision permits a
    satellite carrier or station to petition the Commission to include a
    particular station and related community on the significantly viewed
    list. Section 119(a)(3) of the copyright provisions in title 17
    requires that the Commission use the same rules in considering such
    petitions that were in effect as of April 15, 1976.[^61] In the
    NPRM, we described the existing rules in place for cable carriage
    and proposed rule amendments to implement the SHVERA's requirements
    for satellite carriage.[^62]

25. As proposed in the NPRM, we amend Section 76.54 to apply the rule to
    satellite carriers.[^63] As intended by Congress,[^64] this
    provision -- essentially unchanged since April 15, 1976[^65] -- will
    now govern the process for qualifying new signals for significantly
    viewed status in both the cable and satellite context. Revised
    Section 76.54 will now reference satellite carriers and the new SV
    List, but will not alter the procedures as in effect on April 15,
    1976.[^66] The rules will operate for satellite carriage in the same
    fashion as they have for cable carriage. Thus, satellite carriers or
    broadcast stations seeking satellite carriage must follow the same
    petition process now in place for cable carriage, as required by
    Sections 76.5, 76.7 and 76.54 of our rules.[^67] We do not need to
    amend Sections 76.5 and 76.7 in order to permit the filing of such
    petitions for significantly viewed status by satellite carriers or
    broadcast stations seeking satellite carriage.[^68] Thus, a station,
    satellite carrier or cable operator that wishes to have a station
    designated significantly viewed would file a petition pursuant to
    the pleading requirements in Section 76.7(a)(1) and use the method
    described in Section 76.54 to demonstrate that the station is
    significantly viewed as defined in Section 76.5(i). Most of the
    comments support this decision.[^69]

26. Section 76.5(i) of the rules provides that a network affiliated
    station is considered to be significantly viewed if it obtains at
    least a three percent share of viewing hours in television homes in
    the community and has a net weekly circulation share of at least 25
    percent.[^70] For independent stations, the test is a share of at
    least two percent viewing hours and a net weekly circulation of at
    least five percent.[^71]

27. Section 76.54 provides that parties may demonstrate that signals are
    significantly viewed either on a county-wide basis or on a community
    basis.[^72] Under Section 76.54(b) of the rules, adopted in
    1972,[^73] parties may demonstrate significantly viewed status based
    on an independent professional audience survey which is conducted by
    a professional organization that is independent from the cable
    systems or television stations ordering the surveys.[^74] The
    surveys must include the results of two weekly periods separated by
    at least 30 days, but no more than one of which shall be a week
    between April and September (*i.e.*, outside the summer viewing
    period). The Commission recognized that the results of sample
    surveys can only be determinative within a given probability.
    Therefore, to assure that the survey errs on the side of excluding
    stations that are not actually significantly viewed, the Commission
    decided to require that the sample results exceed the significantly
    viewed standard, currently specified in Section 76.5(i), by at least
    one standard error.[^75] Initially, the Commission required separate
    surveys for each cable community, but the rule was revised to allow
    a single survey where a cable system served multiple communities.
    Thus, if a cable system serves more than one community, a single
    survey may be taken, provided that the sample includes over-the-air
    television homes from each community that are proportional to the
    population.[^76]

28. Section 76.54(d), adopted in 1975, permits parties to demonstrate
    significantly viewed status for a new station using county-wide
    audience surveys in lieu of the more burdensome
    community-by-community method.[^77] Under Section 76.54(d),
    significantly viewed status may be demonstrated on a county-wide
    basis using independent professional audience surveys which cover
    three separate, consecutive four-week periods and are otherwise
    comparable to the surveys used to compile the 1972 Appendix B list.
    Under this rule, a demonstration that a station is significantly
    viewed must be based on audience survey data from the station's
    first three years of operation. Where surveys are conducted pursuant
    to Section 76.54(d), the Commission concluded that the potential for
    an unrepresentative sample was considerably lessened by the adoption
    of a longer survey period. Accordingly, the Commission decided not
    to require that the results be subject to the standard error
    requirement and the survey results must simply meet the
    significantly viewed standard for the station type specified in
    Section 76.5(i).[^78]

29. We reject the proposals by commenters seeking to substantively
    modify the Section 76.54 process for making significantly viewed
    determinations, including the proposals to add to the SV list those
    stations that could deliver a Grade B or better signal to a
    subscriber's home.[^79] The SHVERA did not authorize any approach
    that would presume that such stations are significantly viewed. Such
    modifications to the Section 76.54 process would be inconsistent
    with the SHVERA's requirement that we use the same rules for making
    significantly viewed determinations that were in effect as of April
    15, 1976. Stations or carriers must demonstrate significantly viewed
    status through the existing Section 76.54 petition process.

30. In the NPRM, we stated that the digital signal of a television
    broadcast station will be accorded the same significantly viewed
    status as that of the analog signal, except that where a station is
    broadcasting only a digital signal, the station must petition for
    significantly viewed status using the analog requirements in Section
    76.54.[^80] EchoStar has requested that we clarify that we will
    continue our "present practice of according the digital signal of a
    broadcast station the same 'significantly viewed' status as the
    analog signal," and that we only meant to require new digital
    stations -- those without a significantly viewed analog predecessor
    -- to make showings pursuant to Section 76.54.[^81] EchoStar is
    correct; we did not mean to suggest that stations would lose their
    significantly viewed status when they begin operating only in
    digital.[^82] Stations that have been listed as significantly viewed
    in a given community based on their analog signal will also be
    accorded significantly viewed status for their digital signal, even
    if their analog signal subsequently goes off the air.[^83] Moreover,
    stations with both analog and digital signals may continue to
    demonstrate significantly viewed status based on their analog
    signal. We recognize, however, that, in the future, stations will be
    operating only in digital. Therefore, new digital stations (without
    an existing analog companion) must demonstrate that their digital
    signals are significantly viewed.[^84]

31. We amend Section 76.54, as proposed,[^85] to update the existing
    reference to "Grade B contour," which applies to analog stations, to
    add "noise limited service contour," the service contour relevant
    for a station's digital signal.[^86] We further amend Section 76.54
    to eliminate an outdated reference and correct a typographical
    error, neither of which change in any way the substance or the
    process of the rule.[^87] The commenters on this issue support these
    rule changes.[^88]

32. Finally, Gulf and NAB and Network Affiliates ("NAB") requested that
    we clarify that the independent professional audience surveys
    required by Section 76.54 must include surveys only from households
    that receive broadcast signals via an over-the-air antenna.[^89] We
    agree, and, thus, we will amend Section 76.54 to reflect the rule's
    true meaning.[^90] Section 76.54 currently uses the term
    "non-cable,"[^91] but such term was meant to indicate over-the-air
    viewing.[^92] In the *1972 Order*, we adopted the concept of
    significant viewing to apply to over-the-air households, which at
    the time essentially meant households without cable (*i.e.*,
    non-cable households).[^93] Thus, amending Section 76.54 to change
    "non-cable" to "over-the-air" reflects the true intent of the rule
    as it was in 1976, and is more consistent with the SHVERA's intent
    to establish parity between cable and satellite. It would also be
    inconsistent with the original intent of the SV process to permit
    satellite carriers to use their own subscribers in audience surveys
    to demonstrate SV status. It would also be largely pointless as
    satellite carriers have had no way to offer such signals to
    subscribers in out-of-market communities except as "distant" signals
    to "unserved" households.

### Definition of "Network Station" 

33. Our rules define network station as one of the "three major national
    television networks."[^94] This definition is expressly relied upon
    to select the correct standard for determining whether a station is
    significantly viewed.[^95] The standard applies only to commercial
    stations.[^96] We mentioned in the NPRM that, for purposes of
    subscriber eligibility, the SHVERA relied on the definition of
    "network station" that is used in the copyright provisions of title
    17,[^97] which provides that a "network station" is:

> \(A\) a television broadcast station, including any translator station
> or terrestrial satellite station that rebroadcasts all or
> substantially all of the programming broadcast by a network station,
> that is owned or operated by, or affiliated with, one or more of the
> television networks in the United States which offer an interconnected
> program service on a regular basis for 15 or more hours per week to at
> least 25 of its affiliated television licensees in 10 or more States;
> or (B) a "noncommercial educational broadcast station (as defined in
> section 397 of the Communications Act of 1934 \[47 U.S.C. §
> 397\]).[^98]

34. In the NPRM, we tentatively concluded that the SHVERA prevented us
    from updating our significantly viewed rules because it requires
    that we retain the standard we have used since April 15, 1976.[^99]
    Therefore, we proposed to harmonize the apparent inconsistencies by
    continuing to use the definition of network and independent station
    in our rules for purposes of determining whether a station is
    significantly viewed for placement on the SV List, which thereby
    excludes noncommercial stations from eligibility for the SV List.
    However, as also required by the SHVERA, we proposed to use the
    copyright definition of network station and superstation for
    purposes of subscriber eligibility and the other applications of the
    significantly viewed provisions.

35. We adopt our proposal in the NPRM to harmonize the conflicting
    definitions of network station. Most commenters on this issue
    support our proposal.[^100] The SHVERA required use of the rules in
    effect as of April 15, 1976, and thus precludes us from applying
    definitions of "full network station," "partial network station" and
    "independent station" different from the April 15, 1976, standard
    incorporated by reference in the statute. Thus, as proposed in the
    NPRM, we will use our rule's definitions for purposes of determining
    whether a station is significantly viewed and use the Copyright
    Act's definitions for purposes of determining subscriber
    eligibility.

36. We reject, at this time, NAB's request to change the definitions of
    "full network station," "partial network station," and "independent
    station" in Section 76.5(j), (k), and (l) to track the Copyright Act
    definitions of "network station" and "superstation" in 47 U.S.C §
    119(d). We recognize that our rules will treat stations owned by Fox
    or affiliated with the Fox Network as "independent stations" under
    the Commission's definitions in Section 76.5, and not as network
    stations, whereas these stations are treated as "network stations"
    under the Copyright Act definition.[^101] (Similarly, other
    networks[^102] that may satisfy the copyright definition of
    "network," will be treated as "independent stations" under our
    rules.) But the statute requires that we use the rules in effect as
    of April 15, 1976, which would include our rule's definition of
    network station.

37. We also take this opportunity to respond to an *ex parte* question
    raised by Capitol Broadcasting Company, Inc. (CBC).[^103] CBC asks,
    with respect to a petition to impose network non-duplication and
    syndicated exclusivity on a station on the SV List, what standard
    applies if the station has subsequently changed its status to or
    from a network station.[^104] In addressing such petitions, we have
    found that petitioners seeking to demonstrate that a station no
    longer meets the significantly viewed criteria (and that therefore a
    waiver of the exemption from network non-duplication and syndicated
    exclusivity is warranted) must use the standard that applies to the
    listed station at the time the survey is conducted. The initial
    determination that a station is significantly viewed is based on a
    comparison of the submitted audience data with the significantly
    viewed standard applicable to the station affiliation status. Thus,
    when challenging whether a station is still entitled to invoke the
    significant viewing exemption under the network non-duplication
    and/or syndicated exclusivity rules, it is appropriate for a
    petitioner to make the determination of whether a waiver is
    warranted based on the criteria applicable to the station's
    affiliation at the time the survey was conducted. So, in CBC's
    example in which a listed station changed from a network station
    when initially listed to an independent station at the time of the
    survey to show the station is no longer significantly viewed, the
    petitioner should apply the independent standard to determine if the
    listed station no longer meets the criteria for significantly viewed
    status.[^105]

### Limitations on Carriage of Significantly Viewed Stations Based on Network Non-duplication and Syndicated Exclusivity

38. Section 340(a)(1) limits satellite carriage of a station included on
    the SV List "to the extent such signal is prevented from being
    carried by a cable system in such community under the Commission's
    network non-duplication and syndicated exclusivity rules."[^106] In
    the NPRM, we noted the complexity of applying the network
    non-duplication and syndicated exclusivity rules to the satellite
    context.[^107] The exclusivity rules do not apply to satellite
    carriage of network stations, but only to carriage of "nationally
    distributed superstations," as provided by Section 339(b)(1)(A),
    which was enacted by the SHVIA in 1999.[^108] Section 340(e)
    maintains the status quo by providing that the exclusivity rules
    shall not apply to distant network stations.[^109] Section
    340(e)(1), however, authorizes the Commission to adopt rules to
    permit assertion of the exclusivity rules by stations and
    distributors with respect to stations carried by satellite carriers
    pursuant to the new significantly viewed provisions.[^110]

39. In the NPRM, we said this provision required us to (1) create a
    limited right for a station or distributor to assert exclusivity
    with respect to a station carried by a satellite carrier as
    significantly viewed; (2) allow that significantly viewed station to
    assert the significantly viewed exception, just as a station would
    with respect to cable carriage; and (3) allow the station or
    distributor asserting exclusivity to petition us for a waiver from
    the exception.[^111] Thus, Congress directs the Commission to ensure
    parity between cable operators and satellite carriers so that a
    station's programming that is subject to blackout deletions with
    respect to a cable system serving a cable community would also be
    subject to deletions for a satellite carrier's subscribers within
    the same cable community or within a satellite community.[^112]

40. In the NPRM, we proposed to implement these SHVERA requirements,
    first, by denoting on the SV List which stations in which
    communities have been subjected to deletions such that duplicating
    programming must be blacked out by cable operators.[^113] Satellite
    carriers using the SV List may carry these stations, but are subject
    to the same programming deletions that apply to cable systems.
    Second, we proposed to amend our rules so that stations and
    distributors may assert exclusivity rights with respect to satellite
    carriage of significantly viewed stations but only insofar as they
    can prove that the conditions supporting a waiver of the
    significantly viewed exception from the exclusivity rules would
    apply.[^114]

41. As proposed, we adopt a rule for satellite carriage that mirrors the
    rules for cable carriage.[^115] Specifically, the new rule allows a
    station or distributor with exclusive rights to network or
    syndicated programming to petition the Commission to require
    satellite carriers to delete such programming from stations that are
    carried because they are on the SV List.[^116] Such SV stations may
    respond to such petitions by claiming the exception to the network
    nonduplication and syndicated exclusivity rules that applies to
    significantly viewed stations ("the significantly viewed
    exception").[^117] The party petitioning for network nonduplication
    or syndicated exclusivity protection may request a waiver of the
    significantly viewed exception by demonstrating that the station is
    no longer significantly viewed in a particular community or
    communities.[^118] If the waiver is granted, the duplicating
    programming must be deleted by a cable operator or satellite carrier
    if the station is carried in a community in which the station has
    been shown to no longer be significantly viewed. The station is not
    removed from the SV List and may continue to be carried, provided
    the necessary programming deletions are made.[^119]

42. Commenters split on this issue, with NAB supporting it and EchoStar
    seeking a simpler de-listing procedure instead. We agree with NAB
    that broadcast stations or program suppliers should be able to
    petition the Commission for waiver of the significantly viewed
    exception to the network non-duplication and syndicated exclusivity
    rules for satellite carriers in the same manner as is permissible in
    the cable context.[^120] We reject EchoStar's proposed de-listing
    procedure[^121] because the network non-duplication and syndicated
    exclusivity deletions only apply to specific programming, and not
    the entire signal. Thus, it would not be appropriate to remove the
    signal from the list. Accordingly, we will revise Sections 76.122
    and 76.123, as proposed.[^122]

### Definition of "Satellite Community" 

43. The SHVERA required the Commission to define "community" in the
    satellite context. Under the SHVERA, a "community" is either (1) a
    county or a cable community under the Commission's rules (applicable
    to significantly viewed signals), or (2) a satellite community as
    defined by the Commission in implementing the statute.[^123] The
    concept of a "community" is important in the SHVERA because the term
    describes the geographic area where a subscriber is permitted to
    receive a significantly viewed signal. In the NPRM, we considered
    both how to apply SV determinations for existing communities to
    satellite, and how to define future communities for both satellite
    and cable.[^124]

#### Existing Communities

44. The first issue concerns how best to apply existing cable
    communities to the satellite context. Existing significantly viewed
    determinations are limited to cable communities because our rules
    have previously applied only to cable carriage of significantly
    viewed signals. In the cable context, the Commission defined a
    community unit in terms of a "distinct community or municipal
    entity" where a cable system operates or will operate.[^125] Due to
    the localized nature of cable systems, cable communities were easily
    defined by the geographic boundaries of a given cable system, which
    were often, but not always, coincident with a municipal boundary and
    varied as determined on a case-by-case basis.[^126]

45. The SHVERA required satellite carriers to use the existing defined
    cable communities on the SV List.[^127] Most of the listings on the
    SV List are by county because the study to establish significantly
    viewed signals was based on a survey of every station existing in
    1972 and its audience on a county-wide basis.[^128] Where a station
    satisfied the requirements to be considered significantly viewed in
    a county, the Commission provided that this status was applicable to
    every community within that county. Following the creation of the
    initial SV List in 1972, significantly viewed determinations
    generally were made based on community listings. In rare
    circumstances, though, a petitioner could show that a county could
    be a community containing a significantly viewed station under
    Section 76.54(b). Further, the Commission's rules (as in effect as
    of April 15, 1976) permit county-wide showings for new stations not
    included in the initial SV List pursuant to Section 76.54(d). Unlike
    community showings, in order to make such a showing on a county-wide
    basis, parties must include audience survey data from the station\'s
    first three years of operation, regardless of when the station,
    cable operator or satellite carrier decide to make the showing.
    Thus, the existing list includes counties, communities, such as
    cities or municipalities, and unincorporated areas. In the NPRM, the
    Commission asked whether satellite carriers would be able to
    determine which of their subscribers are in existing communities
    and, if not, how best to apply existing cable communities to the
    satellite context.[^129]

46. We find that the statute requires satellite carriers to use existing
    listings in offering significantly viewed signals, whether defined
    as a county, a non-county community (*e.g.*, a city or
    municipality), or as an unincorporated area. Thus, satellite
    carriers may provide a station to a subscriber as significantly
    viewed if that station is on the SV List for the community in which
    the subscriber is located. DIRECTV states, however, that it would
    have a problem using existing community listings that are not
    county-wide or that do not follow zip code boundaries.[^130] No
    other commenters express any problems with using such non-county
    listings. Although DIRECTV says it cannot provide service to
    subscribers based on non-county listings, DIRECTV says it can
    determine which zip codes are contained within a non-county boundary
    and provide service to subscribers based on those zip codes.[^131]

47. We recognize that DIRECTV may face a subscriber identification
    issue[^132] in situations where zip codes may cross over community
    lines and may be only partially contained within an existing SV
    community listing. We find, however, that the statute requires that
    only subscribers within existing SV community listings are eligible
    to receive significantly viewed stations associated with these
    communities.[^133] DIRECTV, itself, acknowledges the validity of
    this statutory interpretation.[^134] We recognize that limiting
    significantly viewed carriage to subscribers within an existing
    community listing would mean that DIRECTV would not be able to serve
    some subscribers eligible to receive a SV station because they are
    in a zip code which partially extends beyond the existing community
    boundary. But this result is due to DIRECTV's limitations and
    appears unavoidable in light of the statute. EchoStar does not
    suggest that it is similarly affected by DIRECTV's technical
    limitation, but nevertheless disagrees with this approach. EchoStar
    argues that this statutory interpretation is too conservative and
    suggests that satellite carriers should be able to serve subscribers
    in zip codes that extend beyond an established community or county
    boundary if 10 percent or more of the zip code's population is
    contained within the existing community listing.[^135] We reject
    EchoStar's "10 percent overlap" proposal. We agree with MPAA and
    NAB[^136] that EchoStar's proposal is contrary to the statute's
    limitations on station eligibility for SV carriage.[^137]

48. We will not assign zip codes to each community identified in the SV
    List, as requested by EchoStar, because that would be unnecessarily
    burdensome on Commission resources.[^138] It is much easier for
    satellite carriers to make such determinations on an as-needed
    basis. Thus, it is the satellite carrier's responsibility to
    determine whether a particular subscriber resides within a listed
    community and is eligible for significantly viewed status, whether
    by use of zip code, street address or other means.

#### Future Communities

49. The second issue concerns how best to define communities in the
    future when stations seek carriage by satellite carriers as
    significantly viewed, while satisfying Congress' intent for
    regulatory parity between satellite and cable. In the NPRM, we
    provided that cable operators would continue to define future cable
    communities as they always have. But the statute authorizes the
    Commission to define a "satellite community" in a manner appropriate
    for the nature of satellite service where there is no existing cable
    community.[^139] In the NPRM, we proposed two options for defining
    future satellite communities.[^140] The first option would allow a
    satellite carrier to seek significantly viewed status for a given
    station with respect to one or more specified five-digit zip code
    areas.[^141] The second option proposed to define a satellite
    community based on a separate and distinct community or municipal
    entity.[^142]

50. We adopt our second option. Thus, where there is no pre-existing
    cable community (*i.e.*, no cable system serving the community as
    defined in Section 76.5(dd)[^143]), a satellite carrier may define a
    new community for purposes of the SV List by reference to an
    existing separate and distinct community or municipal entity
    (*e.g.*, political jurisdiction, incorporated city or town). In the
    absence of a separate and distinct community or municipal entity
    (*e.g.*, an unincorporated area), a satellite community may be
    defined by one or more adjacent five-digit zip code areas. In
    addition, satellite carriers (like cable operators) may also
    demonstrate significantly viewed status for a new station on a
    county-wide basis, pursuant to Section 76.54(d).[^144]

51. Our definition of a "satellite community" best balances the
    statutory requirement of regulatory parity with the unique nature of
    satellite service. Unlike cable service, which reaches subscribers
    via local franchises across the country, satellite service is
    generally a national service. Moreover, satellite service is offered
    in areas of the country that do not have cable service, and thus are
    not cable communities. We agree with Gulf and NAB[^145] that
    regulatory parity requires that a satellite community resemble
    existing cable communities as much as possible. We also agree with
    MPAA about the importance of applying consistent rules to both
    satellite and cable.[^146] Our definition will also make it more
    likely that a cable system subsequently built in such an area would
    serve a "community" similar to the satellite community, thus making
    the SV List more easily used by both cable and satellite
    providers.[^147]

52. We reject our first proposal that would allow use of one or more zip
    codes to define a satellite community. Commenters split on this
    issue. While some commenters favored the use of zip codes to offer
    "greater certainty to consumers,"[^148] others expressed concerns
    about regulatory parity and cherry-picking communities.[^149] We are
    persuaded that our first proposal is not the preferred choice. As we
    noted in the NPRM, it would ignore an existing town, village,
    municipality or other geopolitical entity that constitutes a
    "community" in the more traditional sense. As noted by NAB, zip
    codes would unfairly allow satellite carriers to cherry-pick areas
    of traditional communities in a manner cable operators may not
    do.[^150] In contrast to traditional communities, we do not share
    this concern with respect to unincorporated areas that do not track
    a traditional community. We agree with DIRECTV that unincorporated
    areas may not constitute a community in the traditional sense any
    more than would a zip code.[^151] Thus, we find, in this limited
    circumstance, satellite carriers may use one or more adjacent
    five-digit zip code areas to define an unincorporated area. We are
    requiring that, if multiple five-digit zip code areas are to be
    used, then such areas must be adjacent to each other to prevent
    carriers from cherry-picking their service to these areas. It is
    also permissible to demonstrate significant viewing in an individual
    zip code or in several zip codes as long as each one is shown to
    have significant viewing.[^152]

53. We disagree with NAB's contention that an additional demonstration
    is required by satellite carriers to show that the "community"
    satisfies the Section 307(b) concept of community.[^153] Our
    definition ensures that a satellite community will resemble a
    community in a traditional sense, and alleviates concern about the
    creation of "artificial communities." Our definition will also
    adequately prevent local broadcast stations from being subject to
    cherry-picking or so-called "Swiss-cheesing" of their program
    exclusivity rights because it requires carriers to use community
    boundaries and would not allow carriers to use zip codes to exclude
    portions of a traditional community.

#### Natural growth of communities

54. In the NPRM, we recognized that communities may grow or change over
    time, either through annexation or other means, and tentatively
    concluded that these communities should generally be interpreted to
    encompass the area of natural growth of the community.[^154] This
    concept applies to both existing communities now on the SV List, as
    well as both cable and satellite communities that may be created in
    the future. We will affirm our conclusion, which was supported by
    EchoStar, the sole commenter on this issue.[^155] It would be
    unnecessarily burdensome for the Commission to determine community
    boundaries based on when they were accorded SV status. It has been
    our practice to recognize the area of natural growth of communities,
    and we will continue to do so. Thus, we will apply the community
    listing or description on the SV List to the community so
    denominated today, or as it may become in the future.

### Significantly Viewed Carriage Not Mandatory; Retransmission Consent Rights Not Affected 

55. The SHVERA did not require satellite carriers to carry significantly
    viewed stations.[^156] The SHVERA also did not change the
    requirements for retransmission consent.[^157] Based on the
    statutory language, we tentatively concluded in the NPRM that
    carriage of significantly viewed stations will require
    retransmission consent under Section 325(b) of the Act, unless an
    exception to the requirement applies.[^158]

56. Based on the SHVERA's statutory language, we affirm our conclusions
    in the NPRM. Satellite carriers are not required to carry
    significantly viewed stations. The statute is clearly permissive in
    this regard.[^159] The statute is also clear that it does not change
    any retransmission consent requirements.[^160] Thus, it follows
    that, like a cable operator, a satellite carrier must obtain
    retransmission consent to carry a station as a significantly viewed
    signal.[^161]

### Significantly Viewed Signals and the Single Dish Requirement

57. Pursuant to Section 338(g) of the Act, satellite carriers must carry
    all local stations on a single dish by June 8, 2006.[^162] In the
    NPRM, we asked whether the SHVERA required satellite carriers to
    carry both local and significantly viewed stations on a single
    dish.[^163]

58. We find that the SHVERA did not impose a requirement on satellite
    carriers to carry both local and significantly viewed stations on a
    single dish. The only two commenters on this issue, DIRECTV and
    EchoStar, support such a finding. Section 340 does not specify any
    such requirement. Rather, the single dish requirement is found only
    in Section 338(g), amended by Section 203 of the SHVERA, and refers
    to the retransmission of only "local" signals.[^164] We, thus, agree
    with DIRECTV that the single-dish restriction is limited to local --
    and not significantly viewed -- signals.[^165] In this regard, the
    statutory framework is instructive. As noted by DIRECTV, Section 338
    of the Act governs the retransmission of local signals, Section 339
    of the Act governs the retransmission of distant signals, and new
    Section 340 of the Act governs the retransmission of significantly
    viewed signals. In addition, carriage of "local" signals is governed
    by Section 122 of the copyright provisions;[^166] but carriage of
    significantly viewed signals is based on the Section 119 statutory
    copyright license that governs distant signals.[^167]

### Definition of "Satellite Carrier"

59. The SHVERA defined the term "satellite carrier" in new Section
    338(k) by reference to the definition in 17 U.S.C. §119.[^168] This
    definition includes entities providing services as described in 17
    U.S.C. § 119(d)(6) using the facilities of a satellite or satellite
    service licensed under Part 25 of the Commission's rules to operate
    in Direct Broadcast Satellite (DBS) or Fixed-Satellite Service (FSS)
    frequencies.[^169] As a general practice, not mandated by any
    regulation, DBS licensees usually own and operate their own
    satellite facilities as well as package the programming they offer
    to their subscribers. In contrast, satellite carriers using FSS
    facilities often lease capacity from another entity that is licensed
    to operate the satellite used to provide service to subscribers.
    These carriers using FSS facilities package their own programming
    and may or may not be Commission licensees themselves. In addition,
    a third situation may include an entity using a non-U.S. licensed
    satellite to provide programming to subscribers in the United States
    pursuant to a blanket earth station license.[^170] In the NPRM, we
    tentatively concluded that the definition of "satellite carrier"
    would include all three types of entities described above.[^171]

60. We will adopt our proposed interpretation of a satellite carrier.
    Our interpretation flows directly from the statute. The commenters
    on this issue, EchoStar and NAB,[^172] support our conclusion.

## Subscriber Eligibility to Receive "Significantly Viewed" Signals

61. In addition to the statutory requirements concerning station
    eligibility, the SHVERA also limited the subscribers who are
    eligible to receive the signals of significantly viewed stations. In
    general, subscribers are not eligible to receive out-of-market
    significantly viewed signals of a network station unless they are
    already receiving the local signal of an affiliate of the same
    network via satellite.[^173] Application of this general principle
    differs, however, depending on whether the significantly viewed
    signal is analog or digital, with additional restrictions imposed on
    digital signals. The subscriber eligibility limitations also provide
    for an exception where there is no local network station present in
    the relevant market or when a local network station waives the
    subscriber eligibility requirements.

### Definition of "Subscriber" 

62. The SHVERA defined the term "subscriber" in new Section 338(k) by
    reference to the definition in 17 U.S.C. § 122(j)(4), which provides
    that a subscriber is "a person who receives a secondary transmission
    service from a satellite carrier and pays a fee for the service,
    directly or indirectly, to the satellite carrier or to a
    distributor."[^174] The NPRM said the definition in 17 U.S.C. § 122
    differs slightly from the definition of subscriber contained in 17
    U.S.C. § 119, which establishes the significantly viewed compulsory
    copyright license for satellite carriers. We noted that the
    definition in 17 U.S.C. § 119 limits "subscribers" to individuals in
    private homes, [^175] but said that Congress intended to use the
    broader definition in 17 U.S.C. § 122 for significantly viewed
    signals.

63. However, the definition in 17 U.S.C. § 119 was amended by Section
    107 of the SHVERA to strike the reference to "private home
    viewing."[^176] Thus, we agree with DIRECTV and MPAA that the two
    Copyright Act definitions (in 17 U.S.C. §§ 119 and 122) are for
    present purposes largely the same, and there is no need to
    distinguish between them.[^177]

64. In the NPRM, we proposed to amend the definition of subscriber in
    our rules to include subscribers to satellite service.[^178] We will
    adopt our proposed amendment to the definition contained in Section
    76.5(ee) of our rules.[^179] Defining a satellite subscriber for our
    rules is consistent with the SHVERA and furthers regulatory parity.
    We received no comments on this proposal.

### Analog Service Limitations; Receipt of Local Affiliate Required

65. Section 340(b)(1) of the Act explains the nature of subscriber
    eligibility to receive an out-of-market significantly viewed analog
    signal as follows:

> With respect to a signal that originates as an analog signal of a
> network station, this section shall apply only to retransmissions to
> subscribers of a satellite carrier who receive retransmissions of a
> signal that originates as an analog signal of a local network station
> from that satellite carrier pursuant to section 338.[^180]

In the NPRM, we generally interpreted Section 340(b)(1) to mean that
subscribers receiving "local-into-local" service from their satellite
carrier are eligible to also receive significantly viewed signals.[^181]
We tentatively concluded that, as a general rule, a satellite carrier
must be offering local-into-local service and a subscriber must be
receiving this service as a pre-condition to offering an out-of-market
significantly viewed station's signal to that subscriber.[^182]

66. We also tentatively concluded that the SHVERA, as a whole,
    contemplated that subscribers in a market in which
    "local-into-local" service is not being offered are not eligible for
    significantly viewed stations retransmitted by satellite carriers,
    except where there is no affiliate of a given network in the market
    as provided for in Section 340(b)(3).[^183] And we tentatively
    concluded that satellite subscribers would not qualify for
    significantly viewed signals if they obtain local stations via an
    over-the-air TV antenna, including one that is integrated with a
    satellite dish.[^184]

67. Finally, we asked what happens if a local network station fails to
    request local carriage, refuses to grant retransmission consent, or
    is otherwise ineligible for local carriage. If a subscriber
    subscribes to and receives the satellite carrier's local-into-local
    service, but does not receive a particular local network station
    because such station is not carried by the satellite carrier, is
    that subscriber eligible to receive the significantly viewed station
    affiliated with that network? We said the result was not clear, but
    tentatively concluded that, as an exception to the general rule, "a
    subscriber should not be deprived of access to a significantly
    viewed station because the local station refused to grant
    retransmission consent or was otherwise ineligible for local
    carriage."[^185]

68. *Subscription to and receipt of "local-into-local" service generally
    required.* We conclude that Section 340(b)(1) of the Act allows a
    subscriber to receive a significantly viewed signal provided that
    the subscriber receives local-into-local service from its satellite
    carrier. This conclusion flows from the language in the statute,
    which expressly permits the retransmission of significantly viewed
    signals only to subscribers "who receive retransmissions of a signal
    ... of a local network station...."[^186] While the commenters
    disagree on the ultimate meaning and intent of this language, they
    all agree on this initial premise that local-into-local service must
    be offered in a market (DMA[^187]) before significantly viewed
    signals may be offered to subscribers in that market and that
    individual subscribers must receive the local package to be eligible
    for out-of-market significantly viewed signals.[^188]

69. *Subscriber receipt via satellite required.* We find that satellite
    subscribers do not qualify for significantly viewed signals if they
    are receiving local stations via an over-the-air TV antenna,
    including one that is integrated with a satellite dish. Such
    subscribers are not receiving their local service via satellite as
    required by the statute. The statute specifically applies to the
    receipt of local service "pursuant to Section 338." Section 338 of
    the Act applies only to local stations retransmitted by satellite
    and delivered to the subscriber via the satellite antenna.[^189] The
    commenters on this issue support this conclusion.[^190]

70. *Subscriber receipt of local affiliate required.* We find that
    Section 340(b)(1) requires that subscribers receive a specific local
    network station before they may receive a significantly viewed
    station that is affiliated with the same network as the local
    station, subject to the statutory exemption described below.[^191]
    Subscriber receipt of "local-into-local" service is unambiguously
    required by the statute. Subscriber receipt of a specific local
    network affiliate, as a condition precedent for eligibility to
    receive the significantly viewed signal of an out-of-market
    affiliate of that network, is the best reading of Section 340(b)(1)
    in the overall context of Section 340. NAB comments that Section
    340(b)(1) creates a "condition precedent to delivery of a
    duplicating significantly viewed out-of-market station" that a
    subscriber must "receive" the local affiliate before receiving an
    out-of-market significantly viewed signal.[^192] DIRECTV and
    EchoStar disagree and contend that the statute merely requires
    receipt of "*a*" local signal, which they say equates to
    local-into-local service, and that the statute does not require
    receipt of "*the*" local station affiliated with the same network as
    the significantly viewed station.[^193] In explaining this "definite
    article" argument, EchoStar states that "the references to '*a*'
    signal of '*a*' local network station mean that this signal may
    originate from any of the local network stations that the satellite
    carrier carries -- not that that the signal must emanate from a
    particular station, namely the one affiliated with the same network
    as the significantly viewed station."[^194]

71. We believe the better reading of the statute is that receipt of the
    local network station is required before a subscriber may receive
    the significantly viewed station affiliated with the same network.
    The meaning of Section 340(b)(1) becomes clear when considered in
    context with related statutory provisions[^195] and legislative
    history. First, the legislative history repeatedly reflects
    Congressional concern that the amendments permitting carriage of
    out-of-market significantly viewed signals not detract from
    localism.[^196] Specifically, the House Commerce Committee Report
    said "absent section 340(b)(1), a satellite operator could
    retransmit into a market a distant significantly viewed signal of a
    network affiliate without also retransmitting a signal of any local
    affiliate of the network."[^197] Moreover, the satellite carriers'
    "definite article" argument[^198] overlooks the language in Sections
    340(b)(3) and (4).[^199] As described below, Section 340(b)(3)
    permits subscribers to receive a significantly viewed signal of an
    out-of-market network affiliate if there is no local affiliate of
    that network in the subscriber's local market.[^200] It states that
    the limitation in Section 340(b)(1) "shall not prohibit a
    retransmission under this section to a subscriber located in a local
    market in which there are no network stations *affiliated with the
    same television network* as the station whose signal is being
    retransmitted pursuant to this section."[^201] If Section 340(b)(1)
    only required receipt of any local-into-local service as a
    prerequisite to receiving significantly viewed signals, as opposed
    to receiving the local affiliate of the network with which the
    significantly viewed station is affiliated, there would be no need
    for Section 340(b)(3) to apply to Section 340(b)(1). Using similar
    contextual reasoning, we consider Section 340(b)(4), which provides
    authority for the network station in the local market in which the
    subscriber is located, and that is *affiliated with the same
    television network*, to grant station-specific waivers.[^202] If
    Section 340(b)(1) only required receipt of any local-into-local
    service as a prerequisite to receiving significantly viewed signals,
    there would be no reason for Congress to allow for waivers from
    specific network stations. Statutory requirements should be read to
    have meaning and not be superfluous.[^203] The best reading of
    subsection (b)(1), therefore, is to require subscriber receipt of
    the local station affiliated with the same network as the
    significantly viewed signal sought to be carried.

72. In addition, as described below, Section 340(b)(2)(A) plainly
    requires that, as a prerequisite to receiving a significantly viewed
    digital signal, a subscriber must receive "the digital signal of a
    network station in the subscriber's local market *that is affiliated
    with the same television network.*"[^204] The legislative history
    indicates that Congress intended Sections 340(b)(1) and 340(b)(2)(A)
    to achieve similar ends.[^205] The House Commerce Committee Report
    provides: "*Like section 340(b)(1)*, section 340(b)(2)(A) protects
    localism by helping ensure that the satellite operator cannot
    retransmit into a market a significantly viewed digital signal of a
    network broadcast station from a distant market without also
    retransmitting into the market a digital signal of any local
    affiliate *from the same network.*"[^206]

73. In sum, we are persuaded that the statute does not allow a satellite
    carrier to retransmit a significantly viewed signal to a subscriber
    receiving local-into-local service but which local service does not
    include an affiliate of the network with which the significantly
    viewed station is affiliated, unless the exemption in Section
    340(b)(3) or the waiver provision in Section 340(b)(4) applies. We
    thus revise our proposed rule to reflect our conclusion.[^207]

74. NAB, Gulf, DIRECTV, and EchoStar advocated policy considerations to
    influence the interpretation of Section 340(b)(1) based on the
    impact of the interpretation on retransmission consent and on
    smaller market stations.[^208] In light of our reading of the
    statutory requirements, it is not necessary to rely on these policy
    issues. We also note that DIRECTV raised concerns about bad faith
    retransmission consent negotiations,[^209] and remind all parties of
    their obligation to negotiate in good faith.[^210] We decline at
    this time, as sought by DIRECTV, to find that broadcast stations
    would violate their duty to negotiate in good faith if they make
    demands to limit the carriage of other stations. We will consider
    such issues on a case-by-case basis.

### Digital Service Limitations; Receipt of Local Digital Affiliate Required[^211]

75. Similar to Section 340(b)(1), Section 340(b)(2) limits satellite
    delivery of significantly viewed digital signals only to statutorily
    eligible subscribers. Section 340(b)(2) provides:

> With respect to a signal that originates as a digital signal of a
> network station, this section shall apply only if -- (A) the
> subscriber receives from the satellite carrier pursuant to section 338
> the retransmission of the digital signal of a network station in the
> subscriber's local market that is affiliated with the same television
> network ....[^212]

76. In the NPRM, we generally interpreted Section 340(b)(2)(A) to mean
    that a satellite subscriber must be receiving a digital signal from
    a local affiliate of a network via satellite in order to be eligible
    to receive a significantly viewed digital signal from a station
    affiliated with the same network. As we found in the analog context,
    we find that receipt of the local station's digital signal is
    required before a subscriber may receive the digital signal of an
    affiliated significantly viewed station. Unlike the ambiguity in its
    sister analog provision, Section 340(b)(2)(A) is clear in requiring
    a subscriber to receive "the digital signal of a network station in
    the subscriber's local market *that is affiliated with the same
    television network*."

### Exception to Subscriber Eligibility Limitations; Rule Not Applicable Where No Local Network Affiliates Being Retransmitted

77. The SHVERA provided for a statutory exception to the subscriber
    eligibility requirements in Sections 340(b)(1) and (2). Section
    340(b)(3) provides:

    The limitations in paragraphs (1) and (2) shall not prohibit a
    retransmission under this section to a subscriber located in a local
    market in which there are no network stations affiliated with the
    same television network as the station whose signal is being
    retransmitted pursuant to this section.[^213]

    Thus, the subscriber eligibility requirements in Sections 340(b)(1)
    and (2) do not apply to the receipt of the signal of a significantly
    viewed network station for which there is no local network affiliate
    broadcasting in the relevant local market.[^214] This exception
    permits a satellite carrier to retransmit a significantly viewed
    station to a subscriber when there is no local affiliate of the same
    network present in that market.

78. The statutory copyright license for significantly viewed carriage,
    however, does not include language comparable to the exception in
    Section 340(b)(3).[^215] Instead, Section 119(a)(3)(B) of title 17
    provides that the statutory copyright license contained in Section
    119(a)(3)(A):

    shall apply only to secondary transmissions of the primary
    transmissions of network stations and superstations to subscribers
    who receive secondary transmissions from a satellite carrier
    pursuant to the statutory license under section 122.[^216]

79. The NPRM asked whether we should require that local-into-local
    service be offered to subscribers in a market as a pre-condition to
    offering the signal of a significantly viewed station affiliated
    with a network that has no affiliate in the market in
    question.[^217] We sought comment on the effect of the difference
    between the copyright and Communications Act provisions on
    subscriber eligibility for significantly viewed signals. Finally, we
    considered the situation where a local network station is present in
    the market but is not broadcasting in digital format.

80. We find that a satellite carrier may retransmit a significantly
    viewed station to a subscriber when there is no local affiliate of
    the same network present in that market, provided that the
    subscriber subscribes to and receives the carrier's local-into-local
    service. Although Section 340(b)(3) does not require
    local-into-local service, we conclude that we should read this
    provision together with the compulsory license restriction in
    Section 119(a)(3)(B) of title 17, which does require the
    subscriber's receipt of local-into-local service. We agree with NAB
    that the compulsory license restriction compels this finding.[^218]
    EchoStar argues that this finding would deny the effect of Section
    340(b)(3),[^219] but any authority conferred by Section 340(b)(3)
    would mean little without the authority of a compulsory copyright
    license. Instead, we agree with NAB that the better reading of the
    statute requires us to consider both provisions together.[^220]

81. We affirm our conclusion that where a local network station is not
    broadcasting in a digital format, for reasons recognized as
    legitimate by the Commission, then the local network station should
    not be penalized by having an out-of-market significantly viewed
    digital signal imported into its market.[^221] We recognize that, in
    this case, subscribers will not have the opportunity to receive
    local digital service from a significantly viewed network
    station.[^222] Nevertheless, the local station may have a legitimate
    reason for not broadcasting in digital format. Because the station
    is present in the market, we find the statute prohibits subscribers
    from receiving the digital signal of a significantly viewed station
    unless the subscriber is receiving the local station's digital
    signal. We note that the legislative history suggests an intention
    to treat differently stations whose reason for failing to broadcast
    in digital is not excused by the Commission.[^223] We will consider
    carriage of significantly viewed digital signals on a case-by-case
    basis in situations in which the satellite carrier shows that the
    local station has not been excused or has been sanctioned by the
    Commission with respect to its digital build-out.

### Privately Negotiated Waivers

82. The SHVERA permited a satellite carrier to privately negotiate with
    the local network station to obtain a waiver of the subscriber
    eligibility restrictions in Sections 340(b)(1) and 340(b)(2).
    Section 340(b)(4) provides:

    Paragraphs (1) and (2) shall not prohibit a retransmission of a
    network station to a subscriber if and to the extent that the
    network station in the local market in which the subscriber is
    located, and that is affiliated with the same television network,
    has privately negotiated and affirmatively granted a waiver from the
    requirements of paragraph (1) and (2) to such satellite carrier with
    respect to retransmission of the significantly viewed station to
    such subscriber.[^224]

    Thus, if such negotiations are successful, a satellite subscriber
    who is not receiving the local network affiliate via satellite may
    nevertheless receive the signal of a significantly viewed station
    affiliated with that same network. In the NPRM, we tentatively
    concluded that local broadcasters could determine the scope of such
    a waiver.[^225]

83. We affirm our conclusion that a waiver pursuant to this provision
    may be as broad or as narrow as desired by the local network
    affiliate.[^226] As noted by the House Commerce Committee Report,
    Section 340(b)(4) enables a local network affiliate to waive the
    subscriber eligibility restrictions of Sections 340(b)(1) or
    340(b)(2) with respect to one or more consumers in the local market,
    and with respect to one or more specific significantly viewed
    affiliates of the same network. The local network affiliate may do
    so as part of a negotiated agreement and for any reason, including
    common ownership among the stations.[^227]

84. In addition, the statutory copyright provisions contained in 17
    U.S.C. § 119, as amended by the SHVERA, describe the waiver process
    in greater detail. Section 102 of the SHVERA provided:

> \(i\) IN GENERAL. A subscriber who is denied the secondary
> transmission of the primary transmission of a network station under
> subparagraph (B) may request a waiver from such denial by submitting a
> request, through the subscriber's satellite carrier, to the network
> station in the local market affiliated with the same network where the
> subscriber is located. The network station shall accept or reject the
> subscriber's request for a waiver within 30 days after receipt of the
> request. If the network station fails to accept or reject the
> subscriber's request for a waiver within that 30-day period, that
> network station shall be deemed to agree to the waiver request. Unless
> specifically stated by the network station, a waiver that was granted
> before the date of the enactment of the Satellite Home Viewer
> Extension and Reauthorization Act of 2004 under section 339(c)(2) of
> the Communications Act of 1934 shall not constitute a waiver for
> purposes of this subparagraph.[^228]
>
> \(ii\) SUNSET. The authority under clause (i) to grant waivers shall
> terminate on December 31, 2008, and any such waiver in effect shall
> terminate on that date."[^229]

In the NPRM, we sought comment on the effect, if any, of this statutory
copyright license waiver provision, in particular the sunset provision,
on waivers granted pursuant to Section 340(b)(4).[^230] We also
tentatively concluded not to intervene in the Section 340(b)(4) waiver
process, and that such waivers are not subject to the Section 325
good-faith negotiation requirement.[^231]

85. To carry a significantly viewed station via a privately negotiated
    waiver, a satellite carrier must have both the authority under
    Section 340(b)(4) and the statutory copyright license under 17
    U.S.C. § 119(a)(3)(C).[^232] Section 340(b)(4) requires that a local
    station *affirmatively grant* a waiver request to a satellite
    carrier. We agree with NAB that Section 340(b)(4) is clear on this
    point.[^233] The statutory copyright license waiver provision in 17
    U.S.C. § 119 requires that a local station act on such waiver
    requests within 30 days, and will deem that the local station agrees
    to the copyright license waiver request if it does not act within
    that time frame.[^234] EchoStar argues that finding a requirement
    that a local station affirmatively act on a request for a Section
    340(b)(4) waiver would in effect nullify this provision.[^235] While
    this may be true as a practical matter, we believe that the SHVERA
    will require an affirmative grant of authority under Section
    340(b)(4), even though it will grant a statutory copyright license
    through inaction under 17 U.S.C. § 119(a)(3)(C). Both provisions
    must be given effect.

86. In addition, we find that the copyright waiver provision in 17
    U.S.C. § 119 terminates the authority to grant a waiver on December
    31, 2008, and also terminates all existing waivers on that
    date.[^236] We agree with NAB that carriage of a significantly
    viewed station via a waiver granted pursuant to Section 340(b)(4) is
    subject to the sunset provision in 17 U.S.C. § 119 because the right
    to carriage under Section 340(b)(4) would essentially be meaningless
    without the statutory copyright license.[^237]

87. We affirm our decision not to intervene in the waiver process. We
    agree with NAB that the statute is clear that waivers are to be
    "privately negotiated."[^238] Language in the House Commerce
    Committee Report is equally clear: "The Committee does not intend
    the FCC to grant these waivers or preside over the waiver process."
    The decision to grant a waiver is a decision to be made solely by
    the local network station based on its own business judgment.
    Because such waivers are voluntary and expressly outside the
    Commission's purview, we find there is no need for rules or
    procedures concerning waiver arrangements between stations and
    satellite carriers.[^239] Thus, we reject EchoStar's request to
    intervene in the waiver process.[^240] We will not grant waivers
    pursuant to Section 340(b)(4), nor will we preside over the waiver
    process. We note, however, that the presence or absence of a waiver
    may be relevant in an enforcement proceeding concerning
    significantly viewed carriage.

88. We also affirm our conclusion that waivers or agreements pursuant to
    Section 340(b)(4) are not subject to the Section 325 good-faith
    negotiation requirement. Because such privately negotiated waivers
    do not pertain to retransmission consent for the signal of the
    station that would be granting the waiver, we agree with NAB that
    the Section 325 good-faith negotiation requirement does not apply to
    any waiver privately negotiated between a local network station and
    a satellite carrier.[^241] Language in the House Commerce Committee
    Report supports this finding: "Nor does the Committee intend such
    waivers or agreements to be subject to the Section 325 good-faith
    negotiation requirement."[^242]

89. We revise our proposed rule, Section 76.54(g), to add a new Section
    76.54(g)(2) to expressly provide for the exception created by
    Section 340(b)(4)'s waiver provision.[^243]

### Additional Digital Service Limitations; Definitions of "Equivalent Bandwidth" and "Entire Bandwidth"

90. In addition to the digital service limitations in Section
    340(b)(2)(A), the SHVERA specified certain "bandwidth" requirements
    in Section 340(b)(2)(B) for the retransmission of the local network
    station's digital signal when a satellite carrier opts to retransmit
    the digital signal of a significantly viewed affiliate station.
    Section 340(b)(2)(B) provides:

> With respect to a signal that originates as a digital signal of a
> network station, this section shall apply only if -- ... (B) either --
> (i) the retransmission of the local network station occupies at least
> the equivalent bandwidth as the digital signal retransmitted pursuant
> to this section; or (ii) the retransmission of the local network
> station is comprised of the entire bandwidth of the digital signal
> broadcast by such local network station.[^244]

91. The SHVERA directed the Commission to define the terms "equivalent
    bandwidth" and "entire bandwidth,"[^245] and provided that a
    satellite carrier not be: (1) prevented from using compression
    technology; (2) required to use the identical bandwidth or bit rate
    as the local or distant broadcaster whose signal it is
    retransmitting; or (3) required to use the identical bandwidth or
    bit rate for a local network station as it does for a distant
    network station.[^246]

92. In the NPRM, we sought comment generally on these concepts of
    "equivalent bandwidth" and "entire bandwidth." Our proposed rule,
    Section 76.54(h), required only that satellite carriers abide by the
    "equivalent bandwidth" and "entire bandwidth" requirements.[^247] We
    also explained the relationship between the format of the digital
    signal of the significantly viewed network affiliate and the format
    of the digital signal of the local network station.[^248] Finally,
    we asked whether satellite carriers must use the same compression
    techniques for both the local network station and the significantly
    viewed network affiliate. We noted that doing so may result in
    differences in real bandwidth and bit rate, depending on the
    programming content carried in the signals.[^249] We asked whether
    only comparable content that uses a comparable bit rate should be
    afforded equivalent bandwidth. We also asked whether we should
    require only that the same amount of bandwidth be made available to
    the local network station, allowing the local station to choose the
    amount of bandwidth it needs.[^250]

93. We adopt new Section 76.54(h) to require that satellite carriers
    comply with the "equivalent bandwidth" and "entire bandwidth"
    requirements.[^251] DIRECTV and NAB offer the most extensive
    comments on these concepts. Both agree that the Commission should
    not strictly define these concepts, but, instead, should offer
    examples of how these concepts would apply in certain
    circumstances.[^252] We agree. Our definition tracks the language of
    the statute.[^253] In addition, pursuant to the statute,[^254] and
    in response to the comments,[^255] we will offer additional guidance
    concerning how these concepts will apply in certain situations. We
    recognize that we cannot anticipate every possible situation;
    therefore, we will resolve remaining questions about these concepts
    on a case-by-case basis. We also note that the SHVERA significantly
    viewed provisions are distinct from the local signal carriage
    requirements in Section 338.[^256] Thus, our discussion in the
    context of significantly viewed is separate and apart from the
    digital signal carriage requirements that are under consideration in
    a separate proceeding.[^257] Congress' focus in enacting Section 340
    and our focus in its implementation are on the circumstances in
    which a satellite carrier may offer a significantly viewed signal to
    a subscriber. Issues related to material degradation and mandatory
    carriage of local signals are not within the scope of this
    proceeding.[^258]

94. We agree with DIRECTV and NAB that the concepts of "equivalent
    bandwidth" and "entire bandwidth" were created to prohibit satellite
    carriers from using technological means to discriminate against the
    digital signals of local stations in favor of the digital signals of
    significantly viewed stations.[^259] This seems clear given
    Congress' intent to prevent satellite carriage of a local network
    station's digital signal "in a less robust format" than the digital
    signal of the significantly viewed network affiliate.[^260] Certain
    situations are clear, as the commenters agree.[^261] For example: If
    the significantly viewed (SV) station and local station both
    transmit in HD, and a satellite carrier wishes to carry the HD
    signal of the SV station, then the carrier must also carry the local
    station in HD.

95. The SHVERA, however, recognized that not all local network stations
    will be broadcasting in HD or multicast format. Therefore, the
    statute permitted satellite carriage of a significantly viewed
    station's digital signal in HD or multicast format, while only
    carrying the affiliated local network station's digital signal in a
    single SD format, provided the local station only broadcasts in that
    single SD format.[^262] Thus, we conclude that if the SV station
    transmits in HD and the local station transmits only a single SD
    stream, then a satellite carrier may carry the SV station's HD
    signal, while only carrying the local station's single SD stream.
    The comments agree with this result.[^263] Likewise, it follows that
    if a SV station transmits several multicast streams and the local
    station transmits only a single SD stream, then a satellite carrier
    may carry the SV station's multicast streams, while only carrying
    the local station's single SD stream.

96. Comparisons of the significantly viewed station's signal with the
    local station's multiplexed (multicast) signal present a more
    challenging problem for defining equivalent bandwidth. The statute
    expressly measured equivalency in terms of bandwidth,[^264] which
    calls for an objective comparison.[^265] We will base our
    comparisons on each station's use of its 6 MHz of bandwidth and a
    satellite carrier's carriage of the station in terms of megabits per
    second (mbps), or bit rate.[^266] The statute expressly allowed
    satellite carriers to use compression technology, but carriers may
    not use such techniques in a manner that degrades the local
    station's signal more than the SV station's signal. NAB states the
    Commission should define equivalent and entire bandwidth to prevent
    satellite carriers from using technological means, including
    compression techniques, to discriminate against local digital
    signals or otherwise to favor significantly viewed distant digital
    signals.[^267] NAB states this principle of nondiscrimination should
    also encompass material degradation, functionalities such as
    interactivity, and hours of HD programming across dayparts and in
    total. DIRECTV agrees that a satellite carrier may not use
    compression techniques to materially degrade a local station's
    signal compared to that of the SV station.[^268] We will compare the
    appropriate bit rate under the circumstances. For example, we
    recognize that use of a higher compression technique (*e.g.*, MPEG-4
    rather than MPEG-2) will result in a lower bit rate but with the
    same effective result.[^269] To the extent a carrier wishes to use
    different compression techniques for the two stations, it may not do
    so in a way that is inconsistent with the equivalent bandwidth
    requirements described herein. We will consider whether carriers
    follow generally accepted engineering practices as well as any other
    relevant means to compare picture quality.

97. We will generally interpret equivalency to mean that a satellite
    carrier that wishes to carry a significantly viewed station must
    provide the local station with an opportunity to use the same amount
    of bandwidth as the significantly viewed station. Thus, a satellite
    carrier may carry the signal of a significantly viewed station only
    if the amount of bandwidth used to carry such station is
    *equivalent* to the amount of bandwidth used to carry the signal of
    the local station affiliated with the same network, unless of course
    the carrier is carrying the *entire* amount of bandwidth used by the
    local station for free over-the-air video programming. We must also
    consider that "equivalent" is not the same as identical, and that
    Congress has expressly stated that we should not impose a
    requirement for identical bandwidth or bit rate.[^270] We believe
    the statute requires "equivalent" bandwidth and precludes
    "identical" bandwidth in recognition of the fact that bandwidth use
    (or bit rate) will fluctuate from moment to moment. We thus conclude
    that if the SV station transmits in HD and the local station
    transmits multiplexed (multicast) signal, then a satellite carrier
    may carry the SV station's HD signal, provided it also carries as
    many of the local station's multicast channels as necessary to match
    the bandwidth provided to the SV station.[^271] This equivalence
    applies to the local or significantly viewed programming carried at
    the same time.

98. In adopting the comparative bit rate approach, we are aware that
    DIRECTV claims that such comparisons are technically infeasible,
    both because of the difficulties in calculating them and because of
    the number of signals that must be compared by the carrier.[^272]
    DIRECTV argues that we should interpret the concepts of equivalent
    and entire bandwidth only "to prohibit material discrimination as
    measured on an overall carriage (not program-by-program or
    minute-by-minute) basis."[^273] DIRECTV states we should not require
    "equivalence" at any given moment, or require exact equality even
    when measured over a longer period of time.[^274] For example,
    DIRECTV argues that it should be allowed to retransmit a
    significantly viewed station's HD programming even if such
    programming does not occur at the same time or in exactly the same
    number of hours as the local station's HD programming.[^275] We
    disagree. Not only would this be contrary to the statute's language
    and intent,[^276] but we agree with NAB that DIRECTV's proposed
    interpretation would cause the type of material discrimination that
    DIRECTV itself argues the statute prohibits because it would allow
    satellite carriers to carry a significantly viewed station in a more
    favorable format than that of the local station during different
    times of the day.[^277]

99. We rest our conclusion on the statute, which speaks in terms of
    bandwidth, not material discrimination. Therefore, we will require
    satellite carriers to make an objective comparison, rather than a
    subjective one based on material discrimination. For example, if an
    SV station transmits an HD signal with a maximum bit rate of 15 mbps
    and the local station transmits six (multicast) channels each with a
    maximum bit rate of 3 mbps, then a satellite carrier may carry the
    SV station's HD signal, provided it also carries at least five of
    the local station's multicast signals. We will consider issues
    relating to comparisons on a case-by-case basis. If it is feasible
    and facilitates compliance, a satellite carrier may establish a "set
    bit rate" that will apply to the SV station's digital signal to
    ensure that the bandwidth devoted to the SV signal does not exceed
    the bandwidth devoted to the local station's signal, except for the
    normal fluctuations attributable to action or inaction in the
    programming.[^278] For instance, if an SV station transmits an HD
    signal with a maximum bit rate of 15 mbps and the local station
    transmits two (multicast) channels, one in HD with a maximum bit
    rate of 12 mbps and one in SD with a maximum bit rate of 3 mbps, and
    a satellite carrier wishes only to carry one signal for each
    station, then the carrier may not carry the SV station's HD signal,
    unless it caps (or "sets") the bit rate for such signal at a maximum
    of 12 mbps.

100. With respect to timing, if the SV station and local station are
     both multicasting, a satellite carrier may choose to carry only one
     channel for each station provided the signals are equivalent during
     the time they are carried. For example, assuming that the SV
     station and local station are both multicasting an HD and one or
     more SD channels at least sometime during the day, and a satellite
     carrier wants to carry only one channel for each station, if the SV
     station is transmitting its primetime programming in HD, and the
     carrier wants to carry that signal in HD, then it must also carry
     the local station's HD broadcast of primetime programming. However,
     if the local station is multicasting at 4:00 and singlecasting SD
     in primetime, the satellite carrier may carry the SV station's HD
     signal at 8:00, and is not required to carry the local station's
     multiplexed signal at 4:00.

101. EchoStar argues that requiring equivalency in terms of bandwidth
     would create an unconstitutional multicast must carry requirement,
     and that therefore we should only compare the primary feeds of both
     stations.[^279] We disagree with EchoStar's argument, as well as
     its premise. The carriage requirement, as noted above, is separate
     and distinct from the optional carriage of significantly viewed
     stations.[^280] The carrier is not required to carry local stations
     at all unless it chooses to do so.[^281] If it wishes to offer
     significantly viewed stations, carriage of local stations is a
     statutory condition precedent. This statutory requirement is based
     on Congressional intent to make satellite carriage of significantly
     viewed stations comparable to cable carriage of significantly
     viewed stations in light of the "must carry" regime that requires
     cable to carry local stations in every market.[^282] Carriage of
     local stations as a condition to carriage of out-of-market stations
     offers satellite carriers a choice, not a requirement.[^283]
     Further, we agree with NAB that EchoStar's argument is not
     supported by the statute or legislative history.[^284] The statute
     expressly requires a comparison of bandwidth, and not primary
     feeds.

102. We believe we have struck the appropriate balance between
     permitting the satellite delivery of a significantly viewed digital
     signal and protecting a local broadcaster against the delivery of
     its signal in a less favorable format than that of an out-of-market
     station, while adhering to the express language in the statute. We
     amend Section 76.54 accordingly.[^285]

103. We noted in the NPRM that the SHVERA required that the same
     "equivalent bandwidth" definition developed pursuant to new Section
     340(h)(4),[^286] be used for purposes of Section
     339(a)(2)(D)(iii)(II).[^287] We did not receive comments on this
     issue. As required by the SHVERA, our definition in Section
     76.54(h) for purposes of the provisions concerning "distant digital
     signals" of network stations must also be applied to new Section
     339(a)(2)(D)(iii)(II).[^288]

## Section 341's Special Rules For Certain Counties and Markets

### Section 341(a) Confers Significantly Viewed Status To Certain Counties in Oregon

104. Section 211 of the SHVERA created Section 341(a) of the Act, which
     authorizes the retransmission of certain stations deemed to be
     significantly viewed, in accordance with Section 76.54 of our
     rules, "to subscribers in an eligible county."[^289] In the NPRM,
     we tentatively concluded that this provision applies only to
     certain counties in the State of Oregon, and requires that stations
     in these eligible counties be "deemed significantly viewed" and
     added to the SV list.[^290] At the time of the NPRM, we were unable
     to identify which stations might qualify under this provision and
     so we did not include them in the SV List. We did, however, request
     comment to identify and confirm the stations that would qualify
     under this provision.[^291]

105. We find that Section 341(a) applies to four counties in the State
     of Oregon -- Grant, Malheur, Umatilla and Wallowa. Our
     determination, which is supported by the commenters on this
     issue,[^292] is based on the fact that Section 341(a) explicitly
     limits an "eligible county" to "any one of four counties" "in a
     single state" that "as a group had a combined total of 41,340
     television households according to the U.S. Television Household
     Estimates by Nielsen Media Research for 2003-2004."[^293] A staff
     review of the U.S. Television Household Estimates by Nielsen Media
     Research for 2003-2004, as well as the comments on this issue,
     shows these four counties to be Grant (3,040 TV households),
     Malheur (10,350 TV households), Umatilla (25,050 TV households) and
     Wallowa (2,910 TV households), which have a combined total of
     41,340 television households according to the U.S. Television
     Household Estimates by Nielsen Media Research for 2003-2004.[^294]

106. At this time, we are still unable to identify which stations might
     qualify under Section 341(a) and so we will not include them in the
     SV List. No comments have identified any stations that would
     qualify for significantly viewed status pursuant to this provision.
     Thus, there is insufficient information in the record to make such
     determinations.[^295] EchoStar has asked that we require the cable
     systems in the affected counties to provide information about which
     stations were carried on cable systems as of January 1, 2004.[^296]
     We believe EchoStar and other interested parties should contact
     cable operators or stations directly. They may contact the Media
     Bureau on a case-by-case basis if cable systems are not cooperative
     with requests for such information. In terms of adding stations to
     the SV List, we will permit a station that qualifies for carriage
     under Section 341(a), or a cable operator or satellite carrier that
     seeks to carry such a station, to petition the Commission for
     significantly viewed status pursuant to this provision. Such a
     petition must demonstrate that the station qualifies for carriage
     under Section 341(a).[^297]

### Section 341(b) Precludes Carriage Of Significantly Viewed Signals Into Palm Springs and Bakersfield DMAs

107. Section 211 of the SHVERA created Section 341(b) of the Act, which
     prevents a satellite carrier from carrying "the signal of a
     television station into an adjacent local market that is comprised
     of only a portion of a county, other than to unserved households
     located in that county."[^298] In the NPRM, we said this provision
     applies only to the DMAs of Palm Springs and Bakersfield, because
     they are the only DMAs that appear to satisfy the definition.[^299]

108. We find that Section 341(b) prevents a satellite carrier from
     retransmitting a significantly viewed signal into the DMAs of Palm
     Springs and Bakersfield, CA.[^300] These are the only DMAs which
     satisfy the definition in Section 341(b). The commenters on this
     issue support this conclusion.[^301] We thus adopt a new rule to
     implement this provision.[^302]

## Enforcement and Notice Provisions

### Enforcement of Section 340

109. The SHVERA, in Section 340(f), created an enforcement mechanism for
     the new provisions regarding satellite delivery of significantly
     viewed signals.[^303] Section 340(f)(1) states that the Commission
     will respond to a complaint by issuing a "cease and desist order"
     and may provide for damages if requested and proven by the station
     filing the complaint.[^304] The SHVERA provided for monetary
     penalties up to \$50 per subscriber, per station, per day if the
     station establishes that the satellite carrier committed the
     violation in bad faith, and provides that the Commission may impose
     similar damages on the complaining station if the Commission
     determines that the complaint was frivolous.[^305]

110. The statute does not define "bad faith" or "frivolous," but in the
     NPRM we noted some language in a floor statement by Subcommittee
     Chairman Upton to suggest that a Commission finding of damages
     would be warranted if (1) a satellite carrier lacks a good faith
     belief that the carriage of the challenged signal was lawful or (2)
     a broadcaster seeks damages in bad faith.[^306] Chairman Upton
     further states that if the broadcaster filing the complaint does
     not seek damages, then a finding of damages against either party by
     the Commission would not be appropriate.[^307]

111. In the NPRM, we tentatively concluded to address allegations of bad
     faith or frivolousness on a case-by-case basis.[^308] We asked
     whether there were particular circumstances that would generally
     warrant such a finding.[^309] We did, however, tentatively conclude
     that it would not constitute bad faith for a satellite carrier to
     carry a station listed as significantly viewed in a community on
     the SV List during the pendency of this proceeding, even if the
     listing is later shown to be incorrect, provided the carrier
     follows the other statutory and regulatory requirements.[^310]

112. The SHVERA, in Section 340(f)(2), required the Commission to issue
     final determinations within 180 days of the filing of a complaint
     concerning Section 340.[^311] The statute permited but did not
     require the Commission to hold hearings to resolve genuine disputes
     over material facts.[^312] In the NPRM, we tentatively concluded to
     use our existing procedures for Petitions for Special Relief as the
     procedural framework for complaints concerning significantly viewed
     status.[^313] We proposed that parties would follow the pleading
     requirements in Section 76.7(a)(1) and (b)(1) for petitions, which
     would allow us to issue a ruling on complaints.[^314]

113. *Determinations of bad faith or frivolousness.* Because questions
     of bad faith or frivolousness often turn on the specific facts of a
     particular case, we affirm our tentative conclusion in the NPRM and
     will make determinations of bad faith or frivolousness on a
     case-by-case basis. The commenters on this issue support our
     conclusion.[^315] The commenters, however, split as to the amount
     of guidance we should offer at this time. NAB states that it would
     be premature to identify specific circumstances of bad faith or
     frivolousness.[^316] DIRECTV and EchoStar seek confirmation about
     whether certain conduct would constitute bad faith.[^317] DIRECTV
     and EchoStar argue that we should not find bad faith where a
     carrier inadvertently failed to make a required notice.[^318]
     EchoStar also argues that complaints by broadcasters that are filed
     en masse without regard to the merits or that concern a third-party
     broadcaster should be considered frivolous.[^319] In the absence of
     specific facts, we cannot come to definitive conclusions regarding
     what circumstances warrant a finding of bad faith. Nevertheless, in
     response to the comments of DIRECTV and EchoStar, we will note
     that, as a general rule, we will find bad faith where there has
     been some evidence of a dishonest belief or purpose and we will not
     find bad faith where there has been only an honest mistake.[^320]
     Likewise, as a general rule, we will find a complaint to be
     frivolous upon evidence that a complaint was filed without regard
     to the merits or brought for an unreasonable purpose.[^321]

114. We will affirm, however, our tentative conclusion that carriage
     instituted in reliance on the SV List, and otherwise in compliance
     with the SHVERA and the Commission's rules, should not be treated
     as a "bad faith" violation, notwithstanding a subsequent conclusion
     that the SV List was in error. We agree with EchoStar that such use
     of the SV List was contemplated by the SHVERA.[^322]

115. *Enforcement procedures.* We will use our existing procedures for
     Petitions for Special Relief as the procedural framework for
     complaints concerning significantly viewed status, as proposed in
     the NPRM. Because Section 340(f) expressly provides for issuance of
     a cease and desist order to remedy violations of the significantly
     viewed provisions but does not require a hearing, we are not
     required to follow the provisions in Section 312(c) of the
     Communications Act.[^323] The procedures for Petitions for Special
     Relief, which the Commission uses to process cable and satellite
     carriage complaints, as well as complaints concerning the
     exclusivity rules and other cable and satellite regulations, will
     afford the parties ample opportunity to raise and respond to
     allegations while ensuring that the Commission can complete action
     within the 180 day statutory deadline. Parties must follow the
     pleading requirements in Section 76.7(a)(1) and (b)(1) for
     petitions. No commenters addressed this issue.

116. We affirm our finding that Sections 340(f)(3) and (4) provide that
     remedial actions taken by the Commission pursuant to Section 340
     are in addition to and have no effect upon actions taken pursuant
     to the copyright provisions of title 17.[^324] The meaning of these
     provisions is clear that neither action nor inaction by the
     Commission will have any effect on the filing of a copyright
     infringement or other action under title 17, nor on the remedies
     ordered by the appropriate forum thereunder.

### Notice Concerning Retransmission of Significantly Viewed Stations 

117. Section 340(g) requires satellite carriers to provide written
     notice to all television broadcast stations in a market at least 60
     days before retransmitting a significantly viewed signal pursuant
     to Section 340 into that market.[^325] The provision also requires
     satellite carriers to list on their websites all significantly
     viewed signals carried pursuant to Section 340.[^326] In the NPRM,
     we tentatively concluded that these written notices must be sent to
     the station's principal place of business, as listed in the
     Commission's database, by certified mail, return receipt
     requested.[^327] We also tentatively concluded that satellite
     carriers must publish a list on their websites that will identify
     all of the significantly viewed signals they are carrying, by
     market and community.

118. We adopt Section 76.54(e) to require, as proposed, that written
     notices must be sent by satellite carriers to a station's principal
     place of business, as listed in the Commission's database, by
     certified mail, return receipt requested.[^328] Reliance on the
     information in the Commission's database is consistent with other
     provisions of the SHVERA.[^329] Most commenters agree with this
     conclusion.[^330] Licensees are encouraged to update the database
     to show where they want to receive notices.[^331] We find that
     requiring that the notices be sent via certified mail, return
     receipt requested is consistent with our rules,[^332] and ensures
     compliance with the statute.[^333] We disagree with DIRECTV and
     EchoStar that delivery via certified mail, return receipt requested
     is unnecessary.[^334] We find such delivery is necessary to
     evidence delivery of the notice.[^335] Finally, we revise our
     proposed rule to clarify that satellite carriers must also provide
     the carriage election notifications described in Section
     76.66(d)(5)(i).[^336]

119. We will also require satellite carriers to publish a list on their
     websites that will identify all of the significantly viewed signals
     they are carrying, by market and community. EchoStar has asked us
     to consider whether its proposed zip-code look-up function which
     would permit a visitor to type in a zip code to retrieve a list of
     the significantly viewed stations available to viewers in that zip
     code, would satisfy this statutory requirement.[^337] We find that
     it would not, unless this database would allow searchers to view a
     complete listing of all of EchoStar's significantly viewed signals,
     both by market and community. The statutory language clearly
     requires that a carrier post on its website all of its
     significantly viewed signals. We thus agree with NAB that
     EchoStar's proposed zip-code function would not satisfy the
     statute.[^338]

120. EchoStar asks that satellite carriers should have 10 days to update
     their website listing with any changes. We find this is consistent
     with the time afforded the Commission in making updates to its
     website SV List.[^339]

121. The SHVERA stated that notice must be afforded to "any television
     broadcast station in such local market of such proposal."[^340]
     Given the breadth of this language, we tentatively concluded in the
     NPRM that satellite carriers must provide notice to stations in the
     relevant market even if they are not affiliated with the same
     network of the significantly viewed station whose signal is being
     carried, regardless of whether they are carried by the satellite
     carrier as local stations pursuant to Section 338. We recognized
     that stations seemingly unaffected by the significantly viewed
     status of unaffiliated stations would nonetheless be entitled to
     receive such notice under our rules. We affirm this tentative
     conclusion, based on the plain language of the statute. We received
     no comments on this issue.

# Procedural Matters

## Final Regulatory Flexibility Act Analysis

122. The Final Regulatory Flexibility Analysis is attached to this
     Report and Order as Appendix D.

## Final Paperwork Reduction Act of 1995 Analysis

123. This Report and Order contains new and modified information
     collection requirements, which were proposed in the NPRM and are
     subject to the Paperwork Reduction Act of 1995 ("PRA").[^341] These
     information collection requirements were submitted to the Office of
     Management and Budget (OMB) for review under Section 3507(d) of the
     PRA and approved by OMB on May 25, 2005. In addition, the general
     public and other Federal agencies were invited to comment on these
     information collection requirements in the NPRM.[^342] We further
     note that pursuant to the Small Business Paperwork Relief Act of
     2002,[^343] we previously sought specific comment on how the
     Commission might "further reduce the information collection burden
     for small business concerns with fewer than 25 employees." We
     received no comments concerning these information collection
     requirements. On June 16, 2005, the Commission announced that it
     had obtained OMB approval for these information collection
     requirements, encompassed by OMB Control Nos. 3060-0311, 3060-0888,
     and 3060-0960.[^344] This Report and Order adopts the information
     collection requirements, as proposed.

124. *Further Information.* For additional information concerning the
     information collection requirements contained in this Report and
     Order, contact Cathy Williams at 202-418-2918, or via the Internet
     to [Cathy.Williams@fcc.gov](mailto:Cindy.Williams@fcc.gov).

## Congressional Review Act

125. The Commission will send a copy of this Report and Order in a
     report to be sent to Congress and the General Accountability
     Office, pursuant to the Congressional Review Act.[^345]

# Ordering Clauses

126. Accordingly, IT IS ORDERED that pursuant to Sections 202, 204 and
     211 of the Satellite Home Viewer Extension and Reauthorization Act
     of 2004, and Sections 1, 4(i) and (j), 339(a), 340 and 341 of the
     Communications Act of 1934, as amended, 47 U.S.C. §§ 151, 154(i)
     and (j), 339(a), 340 and 341, this Report and Order IS HEREBY
     ADOPTED and the Commission's rules ARE HEREBY AMENDED as set forth
     in Appendix B.

127. IT IS FURTHER ORDERED that the rule amendments set forth in
     Appendix B WILL BECOME EFFECTIVE 30 days after publication in the
     Federal Register.

128. IT IS FURTHER ORDERED that the Commission's Consumer and
     Governmental Affairs Bureau, Reference Information Center, shall
     send a copy of this Report and Order, including the Final
     Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy
     of the Small Business Administration.

FEDERAL COMMUNICATIONS COMMISSION

Marlene H. Dortch

Secretary

**APPENDIX A**

**List of Commenters**

> **A. Commenters**

1.  Adams, Michael

2.  Bacon, Ed

3.  Beauchamp, Matthew

4.  Bellaire, James

5.  Calhoun, Eric

6.  Carson, Tim

7.  Coffey, John

8.  Coleman, Nathan

9.  Crosby, Chris

10. DIRECTV, Inc. ("DIRECTV")

11. EchoStar Satellite L.L.C. ("EchoStar")

12. Elrod, Bobby

13. Elrod, Bobby D.

14. Forbes, Douglas M.

15. Garrison, Richard

16. Goering, Norman

17. Gulf Carolina Broadcasting Company ("Gulf")

18. Hughes, Mike

19. Kimberley, Neil

20. Koralja, Jason

21. Lass, Frederick E.

22. Maddux, Chad

23. Mather, Walt

24. Metzger, John R.

25. Midlick, Paul A.

26. Moore, Ann

27. Motion Picture Association of America ("MPAA")

28. Murdoch, Robert E.

29. National Association of Broadcasters ("NAB") and the ABC, CBS, FBC,
    and NBC Television Affiliate Associations ("Network Affiliates")
    (Joint Comments)

30. NPG of Oregon, Inc. ("NPG")

31. Paszko, Rich

32. Pinkerton, Brent

33. Rutland, Matthew

34. Saga Broadcasting, LLC ("Saga")

35. Saga Quad States Communications, LLC ("Saga Quad")

36. Shaddox, Michael Scott

37. Sinclair Broadcast Group, Inc. ("Sinclair")

38. Smith, Al

39. Snyder, Marcus

40. Stancil, CJ

41. Stevens, Alan

42. Torres, David

43. Tvardy, George

44. WHEC-TV, LLC ("WHEC-TV")

45. WGAL Hearst-Argyle Television, Inc. ("WGAL")

46. Withers Broadcasting Company of West Virginia (a.k.a. WDTV)
    ("Withers")

> **B. Replies**

1.  DIRECTV

2.  EchoStar

3.  Meredith Corporation ("Meredith") and Media General Communications,
    Inc. ("Media General") (Joint Reply Comments)

4.  Mission Broadcasting, Inc. ("Mission")

5.  MPAA

6.  NAB and Network Affiliates(Joint Reply Comments)

> **C. Late-filed commenters**

1.  Brittain, Richard B.

2.  Gassmann, Richard

> **D. Ex Parte Filers**

1.  Capitol Broadcasting Company, Inc. ("CBC")

2.  DIRECTV

3.  EchoStar

4.  NAB

**APPENDIX B**

**Rule Changes**[^346]

Part 76 of Title 47 of the Code of Federal Regulations is amended to
read as follows:

PART 76 -- Multichannel Video and Cable Television Service.

1\. The authority citation for Part 76 is revised to read as follows:

AUTHORITY: 47 U.S.C. 151, 152, 153, 154, 301, 302, 303, 303a, 307, 308,
309, 312, 315, 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.

2\. Amend §76.5 by revising paragraph (ee) and adding paragraph (gg) to
read as follows:

[§76.5 Definitions.]{.underline}

\* \* \* \* \*

(ee) *Subscribers.*

> **(1)** **[As used in the context of cable service, subscriber or
> cable subscriber means a]{.underline}** member of the general public
> who receives broadcast programming distributed by a cable television
> system and does not further distribute it.
>
> **(2) [As used in the context of satellite service, subscriber or
> satellite subscriber means a]{.underline} person who receives a
> secondary transmission service from a satellite carrier and pays a fee
> for the service, directly or indirectly, to the satellite carrier or
> to a distributor.**

\* \* \* \* \*

(gg) ~~\[Reserved\]~~***Satellite community.* A separate and distinct
community or municipal entity (including unincorporated communities
within unincorporated areas and including single, discrete
unincorporated areas). The boundaries of any such unincorporated
community may be defined by one or more adjacent five-digit zip code
areas. Satellite communities apply only in areas in which there is no
pre-existing cable community, as defined in 76.5(dd).**

3\. Amend §76.54 by revising paragraphs (a), (b) and (c), and adding
paragraphs (e), (f), (g), (h), (i), (j) and (k) to read as follows:

[§ 76.54 Significantly viewed signals; method to be followed for special
showings.]{.underline}

\(a\) Signals that are significantly viewed in a county (and thus are
deemed to be significantly viewed within all communities within the
county) are those that are listed in Appendix ~~[A]{.underline}~~**B**
of the memorandum opinion and order on reconsideration of the Cable
Television Report and Order (Docket 18397 et al.), FCC 72-530**, and
those communities listed in the Significantly Viewed List as it appears
on the official website of the Federal Communications Commission**.

\(b\) Significant viewing in a cable television **or satellite**
community for signals not shown as significantly viewed under paragraphs
(a) or (d) of this section may be demonstrated by an independent
professional audience survey of **over-the-air** television homes that
covers at least two weekly periods separated by at least thirty (30)
days but no more than one of which shall be a week between the months of
April and September. If two surveys are taken, they shall include
samples sufficient to assure that the combined surveys result in an
average figure at least one standard error above the required viewing
level. If surveys are taken for more than 2-weekly periods in any 12
months, all such surveys must result in an average figure at least one
standard error above the required viewing level. If a cable television
system serves more than one community, a single survey may be taken,
provided that the sample includes **over-the-air** television homes from
each community that are proportional to the population. **A satellite
carrier may demonstrate significant viewing in more than one community
or satellite community through a single survey, provided that the sample
includes over-the-air television homes from each community that are
proportional to the population.**

\(c\) Notice of a survey to be made pursuant to paragraph (b) of this
section shall be served on all licensees or permittees of television
broadcast stations within whose predicted Grade B contour **(and, with
respect to a survey pertaining to a station broadcasting only a digital
signal, the noise limited service contour, as defined in section
73.622(e))** the cable **or satellite** community or communities are
located, in whole or in part, and on all other system community units,
franchisees, and franchise applicants in the cable community or
communities at least (30) days prior to the initial survey period.
~~Furthermore, if a survey is undertaken pursuant to the provisions of §
76.33(a)(2)(i) of the rules, notice shall also be served on the
franchising authority.~~Such notice shall include the name of the survey
organization and a description of the procedures to be used. Objections
to survey organizations or procedures shall be served on the party
sponsoring the survey within twenty (20) days after receipt of such
notice.

\* \* \* \* \*

**(e) Satellite carriers that intend to retransmit the signal of a
significantly viewed television broadcast station to a subscriber
located outside such station's local market, as defined by section
76.55(e), must provide written notice to all television broadcast
stations that are assigned to the same local market as the intended
subscriber at least 60 days before commencing retransmission of the
significantly viewed station. Such satellite carriers must also provide
the notifications described in section 76.66(d)(5)(i). Such written
notice must be sent via certified mail, return receipt requested, to the
address for such station(s) as listed in the consolidated database
maintained by the Federal Communications Commission.**

**(f) Satellite carriers that retransmit the signal of a significantly
viewed television broadcast station to a subscriber located outside such
station's local market must list all such stations and the communities
to which they are retransmitted on their website.**

**(g) Signals of analog or digital significantly viewed television
broadcast stations may not be retransmitted by satellite carriers to
subscribers who do not receive local-into-local service, including a
station affiliated with the same network as the significantly viewed
station, pursuant to section 76.66; except that a satellite carrier may
retransmit a significantly viewed signal of a television broadcast
station to a subscriber who receives local-into-local service but does
not receive a local station affiliated with the same network as the
significantly viewed station, if**

**(1) there is no station affiliated with the same television network as
the station whose signal is significantly viewed; or**

**(2) the station affiliated with the same television network as the
station whose signal is significantly viewed has granted a waiver in
accordance with 47 U.S.C. § 340(b)(4).**

**(h) Signals of significantly viewed network stations that originate as
digital signals may not be retransmitted to subscribers unless the
satellite carrier retransmits the digital signal of the local network
station, which is affiliated with the same television network as the
network station whose signal is significantly viewed, in either (1) at
least the equivalent bandwidth of the significantly viewed station or
(2) the entire bandwidth of the digital signal broadcast by such local
station.**

**(i) For purposes of subsections (g) and (h), television network and
network station are as defined in 47 U.S.C. § 339(d).**

**(j) Notwithstanding the requirements of this section, the signal of a
television broadcast station will be deemed to be significantly viewed
if such station is shown to qualify for such status pursuant to 47
U.S.C. § 341(a).**

**(k) Notwithstanding the other provisions of this section, a satellite
carrier may not retransmit as significantly viewed the signal of a
television broadcast station into the Designated Market Areas identified
in 47 U.S.C. § 341(b).**

4\. Amend §76.122 by revising paragraphs (a) and (j) to read as follows:

[§ 76.122 Satellite network non-duplication.]{.underline}

\(a\) Upon receiving notification pursuant to paragraph (c) of this
section, a satellite carrier shall not deliver, to subscribers within
zip code areas located in whole or in part within the zone of protection
of a commercial television station licensed by the Commission, a program
carried on a nationally distributed superstation **or on a station
carried pursuant to section 76.54** when the network non-duplication
rights to such program are held by the commercial television station
providing notice, except as provided in paragraphs (j), (k) or (l) of
this section.

\* \* \* \* \*

\(j\) A satellite carrier is not required to delete the duplicating
programming of any nationally distributed superstation that is carried
by the satellite carrier as a local station pursuant to § 76.**66** **or
as a significantly viewed station pursuant to § 76.54**

(~~i~~**1**) Within the station's local market;

(~~ii~~**2**) If the station is "significantly viewed," pursuant to §
76.54, in zip code areas included within the zone of protection **unless
a waiver of the significantly viewed exception is granted pursuant to §
76.7**; or

(~~iii~~**3**) If the zone of protection falls, in whole or in part,
within that signal's grade B contour **or noise limited service
contour**.

5\. Amend §76.123 by revising paragraphs (a) and (k) to read as follows:

[§ 76.123 Satellite syndicated program exclusivity.]{.underline}

\(a\) Upon receiving notification pursuant to paragraph (d) of this
section, a satellite carrier shall not deliver, to subscribers located
within zip code areas in whole or in part within the zone of protection
of a commercial television station licensed by the Commission, a program
carried on a nationally distributed superstation **or on a station
carried pursuant to section 76.54** when the syndicated program
exclusivity rights to such program are held by the commercial television
station providing notice, except as provided in paragraphs (k), (l) and
(m) of this section.

\* \* \* \* \*

\(k\) A satellite carrier is not required to delete the programming of
any nationally distributed superstation that is carried by the satellite
carrier as a local station pursuant to § 76.**66** **or as a
significantly viewed station pursuant to § 76.54**:

\(1\) Within the station's local market;

\(2\) If the station is "significantly viewed," pursuant to § 76.54, in
zip code areas included within the zone of protection **unless a waiver
of the significantly viewed exception is granted pursuant to § 76.7**;
or

\(3\) If the zone of protection falls, in whole or in part, within that
signal's grade B contour **or noise limited service contour**.

**APPENDIX C**[^347]

**Significantly Viewed List**

The stations listed below are "significantly viewed" in the relevant
counties and/or communities as indicated. The stations are listed by
state and subdivided by the county in which they are significantly
viewed. Stations added on a community-by-community basis after 1972 are
listed at the end of each state next to the community in which they
obtained significantly viewed status. The station listing includes the
current (and former) call signs, as well as the analog channel number
and city of license. Stations with a plus sign (+) under individual
counties are those stations added to the list after the publication of
the Commission's original 1972 list. *See Reconsideration of the Cable
Television Report and Order,* 36 FCC 2d 326 (1972). Stations listed with
a pound sign (#) have been the subject of application of the
Commission's exclusivity rules and are subject to programming deletions
in the indicated communities.

\* \* \* \* \*

**\[Note: Appendix C, The Significantly Viewed List ("SV List"),**

**is 444 pages (numbered 56-499) and is attached as a separate
document.\]**

**APPENDIX D**

**Final Regulatory Flexibility Act Analysis**

1.  As required by the Regulatory Flexibility Act of 1980, as amended
    ("RFA")[^348] an Initial Regulatory Flexibility Analysis ("IRFA")
    was incorporated in the *Notice of Proposed Rulemaking* ("*NPRM*")
    to this proceeding.[^349] The Commission sought written public
    comment on the proposals in the NPRM, including comment on the IRFA.
    The Commission received no comments on the IRFA. This present Final
    Regulatory Flexibility Analysis ("FRFA") conforms to the RFA.[^350]

## Need for, and Objectives of, the Report and Order

129. This Report and Order ("R&O") adopts rules to implement Section 202
     of the Satellite Home Viewer Extension and Reauthorization Act of
     2004 ("SHVERA").[^351] Section 202 of the SHVERA created Section
     340 of the Communications Act[^352] and amended the copyright
     laws[^353]to provide satellite carriers with the authority to offer
     Commission-determined "significantly viewed" signals[^354] of
     out-of-market (or "distant") broadcast stations to subscribers.
     This R&O satisfies the SHVERA's mandate that the Commission adopt
     rules implementing Section 340 within one year of the statute's
     enactment.[^355] For specific examples of rules adopted, see the
     Summary in Section III.A.5. of the R&O.

## Summary of Significant Issues Raised by Public Comments in Response to the IRFA

130. There were no comments filed that specifically addressed the rules
     and policies proposed in the IRFA.

## Description and Estimate of the Number of Small Entities to Which the Proposed Rules Will Apply

### Entities Directly Affected By Proposed Rules

131. 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 rules adopted herein.[^356] The RFA
     generally defines the term "small entity" as having the same
     meaning as the terms "small business," small organization," and
     "small government jurisdiction."[^357] In addition, the term "small
     business" has the same meaning as the term "small business concern"
     under the Small Business Act.[^358] 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).[^359]

132. The rules adopted by this R&O, as required by statute, will permit
     the distribution of Commission-determined "significantly viewed"
     signals by statutorily defined "satellite carriers" to
     consumers.[^360] Therefore, "satellite carriers," which includes
     Direct Broadcast Satellite (DBS), will be directly and primarily
     affected by the rules adopted herein. In addition, the rules
     adopted herein will also directly affect television stations, which
     may be carried via satellite under the SHVERA if determined to be
     significantly viewed, and cable operators, which would share some
     of the new and revised rules with satellite carriers. We also
     believe that private cable operators (PCOs), also known as
     satellite master antenna television (SMATV) systems, may be
     directly affected because PCOs often use DBS video programming as
     part of their service package to subscribers. Therefore, in this
     FRFA, we consider the impact of the rules on small television
     broadcast stations, small cable and satellite operators and other
     small entities. A description of such small entities, as well as an
     estimate of the number of such small entities, is provided below.

133. *Satellite Carriers.* The SHVERA defined the term "satellite
     carrier" by reference to the definition in the copyright title
     17.[^361] This definition includes entities providing services as
     described in 17 U.S.C. § 119(d)(6) using the facilities of a
     satellite or satellite service licensed under Part 25 of the
     Commission's rules to operate in Direct Broadcast Satellite (DBS)
     or Fixed-Satellite Service (FSS) frequencies.[^362] As a general
     practice, not mandated by any regulation, DBS licensees usually own
     and operate their own satellite facilities as well as package the
     programming they offer to their subscribers. In contrast, satellite
     carriers using FSS facilities often lease capacity from another
     entity that is licensed to operate the satellite used to provide
     service to subscribers. These entities package their own
     programming and may or may not be Commission licensees themselves.
     In addition, a third situation may include an entity using a
     non-U.S. licensed satellite to provide programming to subscribers
     in the United States pursuant to a blanket earth station
     license.[^363] In the *R&O*, we conclude that the definition of
     "satellite carrier" would include all three types of entities
     described above.

134. *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.[^364] This definition provides that
     a small entity is one with \$12.5 million or less in annual
     receipts.[^365] 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[^366] and EchoStar
     Communications Corporation ("EchoStar"),[^367] report annual
     revenues that are in excess of the threshold for a small business.
     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.[^368] The fourth DBS operator, Dominion Video Satellite,
     Inc. ("Dominion"), offers religious (Christian) programming and
     does not report its annual receipts.[^369] The Commission does not
     know of any source which provides this information and, thus, we
     have 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.

135. *Fixed-Satellite Service ("FSS")*. The FSS is a radiocommunication
     service between earth stations at a specified fixed point or
     between any fixed point within specified areas and one or more
     satellites.[^370] The FSS, which utilizes many earth stations that
     communicate with one or more space stations, may be used to provide
     subscription video service. Therefore, to the extent FSS
     frequencies are used to provide subscription services, FSS falls
     within the SBA-recognized definition of Cable and Other Program
     Distribution, which includes all such companies generating \$12.5
     million or less in revenue annually.[^371] Although a number of
     entities are licensed in the FSS, not all such licensees use FSS
     frequencies to provide subscription services. Two of the DBS
     licensees (EchoStar and DIRECTV) have indicated interest in using
     FSS frequencies to broadcast signals to subscribers. It is possible
     that other entities could similarly use FSS frequencies, although
     we are not aware of any entities that might do so.

136. *Cable and Other Program Distribution.* Cable system operators fall
     within the SBA-recognized definition of Cable and Other Program
     Distribution, which includes all such companies generating \$12.5
     million or less in revenue annually.[^372] According to the Census
     Bureau data for 1997, there were a total of 1,311 firms that
     operated for the entire year in the category of Cable and Other
     Program Distribution. 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.[^373]
     In addition, limited preliminary census data for 2002 indicates
     that the total number of Cable and Other Program Distribution
     entities increased approximately 46 percent between 1997 and
     2002.[^374] The Commission estimates that the majority of providers
     in this category of Cable and Other Program Distribution are small
     businesses.

137. *Cable System Operators (Rate Regulation Standard).* The Commission
     has developed, with SBA's approval, its own definition of a small
     cable system operator for the purposes of rate regulation. Under
     the Commission's rules, a "small cable company" is one serving
     400,000 or fewer subscribers nationwide.[^375] We last estimated
     that there were 1,439 cable operators that qualified as small cable
     companies at the end of 1995.[^376] Since then, some of those
     companies may have grown to serve more than 400,000 subscribers,
     and others may have been involved in transactions that caused them
     to be combined with other cable operators. Consequently, we
     estimate that there are fewer than 1,439 small entity cable system
     operators that may be affected by the rules adopted in this *R&O*.

138. *Cable System Operators (Telecom Act Standard).* The Communications
     Act of 1934, as amended, also contains a size standard for a "small
     cable operator," which is "a cable operator that, directly or
     through an affiliate, serves in the aggregate fewer than one
     percent of all subscribers in the United States and is not
     affiliated with any entity or entities whose gross annual revenues
     in the aggregate exceed \$250,000,000."[^377] The Commission has
     determined that there are 67.7 million subscribers in the United
     States.[^378] 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 of
     its affiliates, do not exceed \$250 million in the aggregate.[^379]
     Based on available data, we estimate that the number of cable
     operators serving 677,000 subscribers or less totals approximately
     1,450. The Commission neither requests nor collects information on
     whether cable system operators are affiliated with entities whose
     gross annual revenues exceed \$250 million,[^380] 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.

139. *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.[^381] Business concerns
     included in this industry are those "primarily engaged in
     broadcasting images together with sound."[^382] According to
     Commission staff review of the BIA Publications, Inc. Master Access
     Television Analyzer Database (BIA) on October 18, 2005, about 873
     of the 1,307 commercial television stations[^383] (or about 67
     percent) have revenues of \$12 million or less and thus qualify as
     small entities under the SBA definition. We note, however, that, in
     assessing whether a business concern qualifies as small under the
     above definition, business (control) affiliations[^384] must be
     included. Our 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 approximately
     2,098 licensed low power television (LPTV) stations, 4,491 licensed
     TV translators, 598 licensed Class A stations, and 11 TV booster
     stations.[^385] Given the nature of these services, we will presume
     that these licensees qualify as small entities under the SBA
     definition.

140. In addition, an element of the definition of "small business" is
     that the entity not be dominant in its field of operation. We are
     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 do not exclude any television station from
     the definition of a small business on this basis and are 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. We note 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.

141. *Private Cable Operators (PCOs) also known as Satellite Master
     Antenna Television (SMATV) Systems*. PCOs, also known as SMATV
     systems or private communication operators, are video distribution
     facilities that use closed transmission paths without using any
     public right-of-way. PCOs acquire video programming and distribute
     it via terrestrial wiring in urban and suburban multiple dwelling
     units such as apartments and condominiums, and commercial multiple
     tenant units such as hotels and office buildings. The SBA
     definition of small entities for Cable and Other Program
     Distribution Services includes PCOs and, thus, small entities are
     defined as all such companies generating \$12.5 million or less in
     annual receipts.[^386] Currently, there are approximately 135
     members in the Independent Multi-Family Communications Council
     (IMCC), the trade association that represents PCOs.[^387]
     Individual PCOs often serve approximately 3,000-4,000 subscribers,
     but the larger operations serve as many as 15,000-55,000
     subscribers. In total, PCOs currently serve approximately 1.1
     million subscribers.[^388] Because these operators are not rate
     regulated, they are not required to file financial data with the
     Commission. Furthermore, we are not aware of any privately
     published financial information regarding these operators. Based on
     the estimated number of operators and the estimated number of units
     served by the largest ten PCOs, we believe that a substantial
     number of PCO qualify as small entities.

### Entities Not Directly Affected By Proposed Rules

142. Because the SHVERA authorized carriage of significantly viewed
     stations only by "satellite carriers," we find that our rules
     implementing the SHVERA will not directly affect other multichannel
     video programming distributors (MVPDs), such as home satellite dish
     (HSD) services, multipoint distribution services (MDS)/multichannel
     multipoint distribution service (MMDS), Instructional Television
     Fixed Service (ITFS), local multipoint distribution service (LMDS)
     and open video systems (OVS). In the NPRM, we invited comment on
     our tentative conclusion.[^389] We received no comments on this
     issue. We confirm our conclusion that these entities fall outside
     the scope of this FRFA. Accordingly, we do not discuss these
     entities, which were listed in the IRFA.[^390]

## Description of Projected Reporting, Record Keeping and other Compliance Requirements

143. The SHVERA was enacted to permit satellite carriage of
     Commission-determined "significantly-viewed" signals of
     out-of-market broadcast stations to consumers. The SHVERA allowed
     satellite carriers and broadcast stations to obtain
     "significantly-viewed" status for satellite carriage pursuant to
     Section 340 of the Act. Therefore, it does not impose any mandatory
     reporting, recordkeeping and other compliance requirements, unless
     a satellite carrier and station choose to take advantage of the
     SHVERA's provisions.

144. The rules adopted which may directly affect reporting,
     recordkeeping and other compliance requirements are described
     below.[^391] This *R&O* requires that satellite carriers and
     broadcast stations seeking a "significantly viewed" designation for
     a station and the community containing such station pursuant to
     Section 340 must follow the same petition process now in place for
     cable operators (and broadcast stations), as required by Sections
     76.5, 76.7 and 76.54 of the Commission's rules.[^392] Therefore,
     entities seeking a "significantly viewed" designation must file a
     petition pursuant to the pleading requirements in Section
     76.7(a)(1) and use the method described in Section 76.54 to
     demonstrate that the station is significantly viewed as defined in
     Section 76.5(i). Parties filing such petitions must also comply
     with the existing notification requirements of Section
     76.54(c).[^393]

145. Furthermore, this *R&O* will (1) create a limited right for a
     station or distributor to assert non-duplication and exclusivity
     rights with respect to a station carried by a satellite carrier as
     significantly viewed; (2) allow that significantly viewed station
     to assert the significantly viewed exception, just as a station
     would with respect to cable carriage; and (3) allow the station or
     distributor asserting exclusivity to petition the Commission for a
     waiver from the exception.[^394] The assertion of these rights will
     require affected parties to file Section 76.7 petitions.

146. This *R&O* also will rely on the Commission's existing Section 76.7
     petition process as the procedural framework for the filing of
     complaints filed pursuant to new Section 340. Thus, interested
     parties that wish to report Section 340 violations must file a
     Petition for Special Relief under Section 76.7.[^395]

147. As required by Section 340(g)(1), this *R&O* adds a new rule,
     Section 76.54(e), to require satellite carriers seeking to
     retransmit significantly viewed signals pursuant to new Section 340
     to provide 60 days written notice to all stations located in the
     local market. As required by Section 340(g)(2), this *R&O* also
     adds a new rule, Section 76.54(f), to require satellite carriers
     retransmitting significantly viewed stations pursuant to new
     Section 340 to publish a list of all such stations on their
     website. These proposed rules do not impose any burden on broadcast
     stations, but rather are intended to protect the rights of
     broadcast stations, including small stations.

## Steps Taken to Minimize Significant Impact on Small Entities, and Significant Alternatives Considered

148. 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.[^396]

149. With respect to the implementation of new Section 340, the SHVERA
     did not offer much flexibility with respect to minimizing its
     impact on small entities. In seeking regulatory parity with cable
     operators, Congress sought to apply to satellite carriers the
     existing regulatory framework concerning the distribution of
     significantly viewed signals.[^397] Accordingly, the SHVERA
     authorized satellite carriage of significantly viewed stations
     using the same framework in place for the cable carriage context
     that has been in effect as of April 15, 1976.[^398] Therefore, the
     Commission does not have discretion to choose an alternate means of
     implementing the SHVERA.

150. The absence of such discretion does not mean, however, that the
     likelihood of differential adverse impact on smaller entities is
     increased. This is because the nature of new Section 340 is
     permissive, meaning only satellite carriers that choose to carry
     significantly viewed stations would be impacted by our proposed
     implementation of the statute. Likewise, only television broadcast
     stations seeking carriage as significantly viewed will be impacted.
     The compliance requirements of cable operators with respect to
     carriage of significantly viewed stations are not changed.

151. The statute's compliance requirements primarily impact satellite
     carriers, such as DBS providers. As previously noted, there are now
     only four DBS licensees, none of which are small entities. Small
     businesses do not generally have the financial ability to become
     DBS licensees because of the high implementation costs associated
     with satellite services. Moreover, the statute confers a benefit to
     satellite carriers, enabling them to carry significantly viewed
     stations.

152. We believe that the SHVERA will benefit some number of small
     broadcast stations by offering them the opportunity to be
     significantly viewed stations that will be delivered to more
     viewers. We recognize, however, that there is also the possibility
     that small in-market stations will face a competitive impact from
     the entry of out-of-market significantly viewed stations. We do not
     believe it is possible to measure whether small stations are more
     or less likely to benefit in this regard.

153. While the statute does not impose any requirements on small cable
     operators, it is possible that such small entities could face a
     competitive impact because of the benefit conferred to satellite
     carriers. In fact, the express intent of the statute was to level
     the competitive playing field between cable operators and satellite
     providers.[^399] Congress, however, recognized that the SHVERA may
     impact the competitiveness of small cable operators, and thus
     directed the Commission to conduct an inquiry in a separate
     proceeding on the impact of specific provisions of the
     Communications Act of 1934, as amended, the SHVERA provisions, and
     Commission rules on competition in the MVPD market.[^400]
     Accordingly, the Commission has issued a Public Notice to initiate
     this inquiry.[^401]

## Report to Congress

154. The Commission will send a copy of the *R&O*, including this FRFA,
     in a report to be sent to Congress pursuant to the Small Business
     Regulatory Enforcement Fairness Act of 1996.[^402] In addition, the
     Commission will send a copy of the *R&O*, including the FRFA, to
     the Chief Counsel for Advocacy of the Small Business
     Administration. A copy of the *R&O* and FRFA (or summaries thereof)
     will also be published in the Federal Register.[^403]

[^1]: The Satellite Home Viewer Extension and Reauthorization Act of
    2004 (SHVERA), Pub. L. No. 108-447, § 202, 118 Stat 2809, 3393
    (2004) (codified at 47 U.S.C. § 340). The SHVERA was enacted on
    December 8, 2004 as title IX of the "Consolidated Appropriations
    Act, 2005." This proceeding to implement Section 202 of the SHVERA
    (entitled "Significantly Viewed Signals Permitted To Be Carried") is
    one of many Commission proceedings required to implement the SHVERA.
    The other proceedings are being undertaken and should be largely
    completed by the end of this year; *see* Sections 202, 204, 205,
    207, 208, 209 and 210 of the SHVERA; s*ee also Implementation of
    Section 207 of the Satellite Home Viewer Extension and
    Reauthorization Act of 2004; Reciprocal Bargaining Obligation*, MB
    Docket No. 05-89, Report and Order, FCC 05-119 (rel. Jun. 7, 2005)
    ("*Reciprocal Bargaining Order"*) (adopting rules to implement
    Section 207 of the SHVERA and impose a reciprocal good faith
    retransmission consent bargaining obligation on multichannel video
    programming distributors); *Implementation of Section 210 of the
    Satellite Home Viewer Extension and Reauthorization Act of 2004 to
    Amend Section 338 of the Communications Act*, MB Docket No. 05-181,
    FCC 05-159 (rel. Aug. 23, 2005) (implementing Section 210 of the
    SHVERA and requiring satellite carriers to carry both the analog and
    digital signals of television broadcast stations in local markets in
    noncontiguous states); *Implementation of the Satellite Home Viewer
    Extension and Reauthorization Act of 2004, Procedural Rules*, 20 FCC
    Rcd 7780 (2005) ("*Procedural Rules Order*") (adopting procedural
    rules required by Sections 202, 205, and 209 of the SHVERA); *Public
    Notice*, "Media Bureau Seeks Comment For Inquiry Required By the on
    Rules Affecting Competition In the Television Marketplace," MB
    Docket No. 05-28, 20 FCC Rcd 1572 (2005) (opening inquiry required
    by Section 208 of the SHVERA concerning the impact of certain rules
    and statutory provisions on competition in the television
    marketplace).

[^2]: *See* 47 U.S.C. § 340(c)(1)(A)(i).

[^3]: *See* 47 U.S.C. § 340(c)(1)(A)(ii).

[^4]: *Implementation of the Satellite Home Viewer Extension and
    Reauthorization Act of 2004*, 20 FCC Rcd 2983 (2005) ("*NPRM*").

[^5]: The list of commenters is identified in Appendix A.

[^6]: *See* 47 U.S.C. § 340(c)(1)(B). We have already adopted some rules
    to implement new Section 340(h). *See Implementation of the
    Satellite Home Viewer Extension and Reauthorization Act of 2004*, 20
    FCC Rcd 7780 (2005) ("*Procedural Rules Order"*) (revising 47 C.F.R.
    § 76.66 to add rules for carriage elections on a county basis,
    unified retransmission consent negotiations, and notifications by
    satellite carriers to local broadcasters concerning carriage of
    significantly viewed signals); 47 U.S.C. § 340(h).

[^7]: *See* House Commerce Committee Report dated July 22, 2004,
    accompanying House Bill, H.R. 4501, 108^th^ Cong. (2004), H.R. Rep.
    No. 108-634, at 2 (2004) ("*House Commerce Committee Report*").
    There was no final Report issued to accompany the bill as it was
    enacted. *See* House Bill, H.R. 4818, 108^th^ Cong. (2004)
    (enacted). Therefore, we look to the House Commerce Committee Report
    accompanying the House Bill, H.R. 4501, for the relevant legislative
    history for Section 202 of the SHVERA. Although certain changes were
    made to H.R. 4501 before it was enacted, the House Commerce
    Committee Report language remains relevant with respect to those
    provisions such as Section 202 that were unchanged. Also relevant in
    terms of the SHVERA legislative history, particularly as it relates
    to the changes in the copyright laws in 17 U.S.C. § 119, is the
    House Judiciary Committee Report dated September 7, 2004,
    accompanying House Bill, H.R. 4518, 108^th^ Cong. (2004), H.R. Rep.
    No. 108-660 (2004) ("*House Judiciary Committee Report*"). Finally,
    also relevant are certain remarks made in "floor statements" by Rep.
    Joe Barton (Chairman, House Energy and Commerce Committee) and Rep.
    Fred Upton, (Chairman, House Subcommittee on Telecommunications and
    the Internet) regarding H.R. 4518, 108^th^ Cong. (2004). H.R. 4518
    was amended to combine its copyright provisions with the
    Communications Act provisions of H.R. 4501 pursuant to a compromise
    between the House Energy and Commerce Committee and the House
    Judiciary Committee. *See* The Honorable Joe Barton, Chairman, House
    Energy and Commerce Committee, "Floor Statement" (dated Oct. 6,
    2004) to H.R. 4518 (The Satellite Home Viewer Extension and
    Reauthorization Act of 2004) ("*Barton Floor Statement*"); The
    Honorable Fred Upton, Chairman, House Subcommittee on
    Telecommunications and the Internet, "Floor Statement" (dated Oct.
    6, 2004) to H.R. 4518 (The Satellite Home Viewer Extension and
    Reauthorization Act of 2004) ("*Upton Floor Statement*").

[^8]: *Cable Television Report and Order*, 36 FCC 2d 143, 174, ¶ 83
    (1972) ("*1972 R&O*").

[^9]: At the time the Commission adopted the significantly viewed rules,
    the cable television carriage rules were generally based on mileage
    zones from the relevant stations. A television station was generally
    considered "local" for cable carriage purposes if the relevant
    community served was within 35 miles of the station's city of
    license or within its Grade B contour but not within the 35 mile
    zone of another market. Cable system carriage of significantly
    viewed stations, however, was based on audience viewership levels in
    the relevant communities rather than by strict mileage zones. This
    afforded significantly viewed stations carriage when they otherwise
    would have been considered distant stations. *See* *1972 R&O*, 36
    FCC 2d 143; *Memorandum Opinion and Order on Reconsideration of the
    Cable Television Report and Order*, 36 FCC 2d 326 (1972) ("*1972
    Recon Order*"); *see also* 47 C.F.R. § 76.5(i) (defining
    "significantly viewed" as "Viewed in other than cable television
    households as follows: (1) For a full or partial network station --
    a share of viewing hours of at least 3 percent (total week hours),
    and a net weekly circulation of at least 25 percent; and (2) for an
    independent station -- a share of viewing hours of at least 2
    percent (total week hours), and a net weekly circulation of at least
    5 percent"); 47 C.F.R. § 76.54.

[^10]: *See* 17 U.S.C. § 111(a), (c), and (f).

[^11]: *See* 17 U.S.C. § 119 (statutory copyright license for satellite
    carriage of "distant" network stations, limited to "unserved
    households") and 17 U.S.C. § 122 (statutory copyright license for
    satellite carriage of "local" stations, defined as stations and
    subscribers in the same Designated Market Area).

[^12]: A DMA generally identifies a television station's "local market."
    Section 340(i)(1), as established by the SHVERA, defined the term
    "local market" using the definition contained in 17 U.S.C.
    §122(j)(2) ("The term 'local market', in the case of both commercial
    and noncommercial television broadcast stations, means the
    designated market area in which a station is located, and -- (i) in
    the case of a commercial television broadcast station, all
    commercial television broadcast stations licensed to a community
    within the same designated market area are within the same local
    market; and (ii) in the case of a noncommercial educational
    television broadcast station, the market includes any station that
    is licensed to a community within the same designated market area as
    the noncommercial educational television broadcast station." 17
    U.S.C. §122(j)(2)(A)); *see* 47 U.S.C. § 340(i)(1).

[^13]: *House Commerce Committee Report* at 10.

[^14]: The Satellite Home Viewer Act of 1988, Pub. L. No. 100-667, 102
    Stat. 3935, Title II (1988) (codified at 17 U.S.C. §§ 111, 119). The
    1988 SHVA was enacted on November 16, 1988, as an amendment to the
    copyright laws. The 1988 SHVA gave satellite carriers a statutory
    copyright license to offer distant signals to "unserved" households.
    17 U.S.C. § 119(a).

[^15]: *See id*. § 119(a)(1). A superstation is defined as a television
    station, other than a network station, licensed by the Commission
    that is retransmitted by a satellite carrier. Thus, superstations
    are not considered "network stations" for copyright purposes. *See*
    17 U.S.C. § 119(d)(9), as amended by Section 105 of the SHVERA.

[^16]: The Satellite Home Viewer Improvement Act of 1999, Pub.L. No
    106-113, 113 Stat. 1501 (1999) (codified in scattered sections of 17
    and 47 U.S.C.). The SHVIA was enacted on November 29, 1999, as Title
    I of the Intellectual Property and Communications Omnibus Reform Act
    of 1999 ("IPACORA") (relating to copyright licensing and carriage of
    broadcast signals by satellite carriers).

[^17]: 17 U.S.C. §§ 119 and 122.

[^18]: *See* 47 U.S.C. §§ 325, 338 and 339.

[^19]: *See* Implementation of the Satellite Home Viewer Improvement Act
    1999: Broadcast Signal Carriage Issues, Retransmission Consent
    Issues, 16 FCC Rcd 1918 (2000) ("*SHVIA Signal Carriage Order*");
    Technical Standards for Determining Eligibility For
    Satellite-Delivered Network Signals Pursuant To the Satellite Home
    Viewer Improvement Act, 15 FCC Rcd 24321 (2000); Implementation of
    the Satellite Home Viewer Improvement Act of 1999: Application of
    Network Non-Duplication, Syndicated Exclusivity, and Sports Blackout
    Rules To Satellite Retransmissions of Broadcast Signals, 15 FCC Rcd
    21688 (2000) ("*Satellite Exclusivity Order*"); Implementation of
    the Satellite Home Viewer Improvement Act of 1999, Enforcement
    Procedures for Retransmission Consent Violations, 15 FCC Rcd 2522
    (2000); Implementation of the Satellite Home Viewer Improvement Act
    of 1999, Retransmission Consent Issues: Good Faith Negotiation and
    Exclusivity, 15 FCC Rcd 5445 (2000).

[^20]: 47 C.F.R. § 76.66(a)(6).

[^21]: *See* 17 U.S.C. §122(j)(2)(A); 47 U.S.C. § 340(i)(1).

[^22]: *See* 17 U.S.C. § 122(j)(2)(A)-(C).

[^23]: *See* 47 U.S.C. § 338.

[^24]: The Satellite Home Viewer Extension and Reauthorization Act of
    2004, Pub. L. No. 108-447, 118 Stat 2809, 3393 (2004) (codified in
    scattered sections of 17 and 47 U.S.C.); *see also, supra*, n. 1.

[^25]: Section 102 of the SHVERA created a new 17 U.S.C. § 119(a)(3) to
    provide satellite carriers with a statutory copyright license to
    offer "significantly viewed" signals as part of their local service
    subscribers. 17 U.S.C. § 119(a)(3).

[^26]: *See* 47 U.S.C. §§ 325, 338, 339 and 340.

[^27]: 17 U.S.C. §§ 119 and 122.

[^28]: Section 102 of the SHVERA extended the statutory copyright
    license contained in 17 U.S.C. § 119(a) to "apply to the secondary
    transmission of the primary transmission of a network station or a
    superstation to a subscriber who resides outside the station's local
    market ... but within a community in which the signal has been
    determined by the Federal Communications Commission, to be
    significantly viewed in such community, pursuant to the rules,
    regulations, and authorizations of the Federal Communications
    Commission in effect on April 15, 1976, applicable to determining
    with respect to a cable system whether signals are significantly
    viewed in a community." 17 U.S.C. § 119(a)(3)(A).

[^29]: Section 102 of the SHVERA amends 17 U.S.C. § 119(a) to create new
    subsection (a)(3), entitled "secondary transmissions of
    significantly viewed signals." 17 U.S.C. § 119(a)(3). Section 202 of
    the SHVERA amends the Communications Act to create a new Section
    340, entitled "Significantly Viewed Signals Permitted To Be
    Carried." 47 U.S.C. § 340.

[^30]: *NPRM*, 20 FCC Rcd 2983.

[^31]: Section 340(a) of the Act, as created by the SHVERA, authorizes a
    satellite carrier "to retransmit to a subscriber located in a
    community the signal of any station located outside the local market
    in which such subscriber is located, to the extent such signal --

    > \(1\) has, before the date of enactment of the Satellite Home
    > Viewer Extension and Reauthorization Act of 2004, been determined
    > by the Federal Communications Commission to be a signal a cable
    > operator may carry as significantly viewed in such community,
    > except to the extent that such signal is prevented from being
    > carried by a cable system in such community under the Commission's
    > network non-duplication and syndicated exclusivity rules; or
    >
    > \(2\) is, after such date of enactment, determined by the
    > Commission to be significantly viewed in such community in
    > accordance with the same standards and procedures concerning
    > shares of viewing hours and audience surveys as are applicable
    > under the rules, regulations, and authorizations of the Commission
    > to determining with respect to a cable system whether signals are
    > significantly viewed in a community." 47 U.S.C. § 340(a).

[^32]: *Id.* § 340(a)(1).

[^33]: *Id.* § 340(a)(2).

[^34]: *See* 47 U.S.C. § 340(a), which states that satellite carriers
    may retransmit such signals "\[i\]n addition to the broadcast
    signals that subscribers may receive under Section 338 \[governing
    carriage of local signals\] and 339 \[governing carriage of distant
    signals\]." The exemption for significantly viewed signals is
    necessary because Section 339 of the Communications Act (47 U.S.C. §
    339) prohibits a satellite carrier from providing a household with
    the signals of more than two distant affiliates of a particular
    network per day. *House Commerce Committee Report* at 10.

[^35]: 47 U.S.C. § 340(c)(1).

[^36]: Section 76.54 of our rules describes the basis for deeming a
    station's signal "significantly viewed." *See* 47 C.F.R. § 76.54;
    *see* *also* 47 C.F.R. 76.5(i).

[^37]: The Commission's initial list of significantly viewed stations
    was released in 1972. S*ee* Appendix B of the *1972 Recon Order*, 36
    FCC 2d 326 (1972 ). The SV List also includes stations granted
    significantly viewed status subsequent to 1972. The SV List
    indicates by a plus sign (+) those that have been added to the 1972
    list after its publication to distinguish them from those stations
    and communities derived from the original 1972 list. Although we do
    not believe that this distinction is meaningful, for informational
    purposes we have retained this designation for the final SV List,
    attached here as Appendix C.

[^38]: *See infra* Section IV.A.2. DIRECTV has requested that the
    Commission convert this list into an MS Excel format. DIRECTV at 20.
    Unfortunately, this is not a simple conversion and would require
    significant time and staff resources that are not justified by the
    arguments put forth by DIRECTV. The current list in MS Word format
    is sufficiently searchable for interested parties to find the
    information they are looking for.

[^39]: *See* <http://www.fcc.gov/mb>.

[^40]: Section 340(c)(2) requires that the Commission "make readily
    available to the public in electronic form, on the Internet website
    of the Commission or other comparable facility, a list of the
    stations that are eligible for retransmission under subsection (a)
    and the communities in which such stations are eligible for such
    retransmission. The Commission shall update such list within 10
    business days after the date on which the Commission issues an order
    making any modification of such stations and communities." 47 U.S.C.
    § 340(c)(2).

[^41]: The exclusivity rules permit a station or syndicator that has
    exclusive rights to network or syndicated programming to prohibit a
    cable operator from carrying such programming on another station.
    The exclusivity rules are subject to an exception if the station in
    question is significantly viewed. This exception is, in turn,
    subject to waiver if the party petitioning for the programming
    deletion shows that the station is no longer significantly viewed.
    *See* 47 C.F.R. §§ 76.92, 76.101 and 76.106; *see also KCST Petition
    for Special Relief,* 103 FCC 2d 407 (1986) ("*KCST*")*.*

[^42]: 47 C.F.R. §§ 76.122 and 123; *see infra* Section IV.A.5.

[^43]: *See* CSR-6383-N (subjecting Station WAVE-TV (NBC, Channel 3),
    Louisville, Kentucky to programming deletions if carried in the
    community of Columbia, Kentucky).

[^44]: *See* updated SV List at Appendix C.

[^45]: *NPRM*, 20 FCC Rcd at 2990-1, ¶ 14.

[^46]: Cable operators have been relying on this SV List for more than
    30 years. We agree with EchoStar that "the significantly viewed
    provision is self executing." EchoStar at 2. NAB, in an *ex parte*,
    expressed concern that DBS operators were providing notices to
    stations of their intent to carry significantly viewed stations. NAB
    *ex parte* dated May 24, 2005. We note that use of the list must be
    consistent with the other requirements set out in the SHVERA and
    this proceeding.

[^47]: We published the SV List with the NPRM in accordance with the
    SHVERA's mandate in new Section 340(c)(1)(A)(i). 47 U.S.C. §
    340(c)(1)(A)(i). The purpose of the SV List is to identify "the
    stations that are eligible" for significantly viewed status, meaning
    those stations already determined to be significantly viewed by the
    Commission. *Id.* The House Commerce Committee intended that the
    Commission publish the SV List within 180 days of enactment, and
    provided for "interim eligibility" for stations on the list. The
    intent was for satellite carriers to "start carrying the signals on
    the list pending adoption of the rules." *House Commerce Committee
    Report* at 13. Although the "interim eligibility" language did not
    survive, the enacted provision required even faster publication of
    the SV List (*i.e.*, within 60 days). This indicates Congress'
    intent to permit immediate use of the SV List upon publication.
    *See* *also* *Barton Floor Statement* at 2 (satellite carriers
    authorized to carry significantly viewed signals "upon enactment").

[^48]: *See, e.g.*, comments of: DIRECTV, WGAL; WHEC-TV; Brittain.

[^49]: *See, e.g.*, the following comments: Adams, Bacon, Beauchamp,
    Calhoun, Carson, Coffey, Coleman, Elrod of Flovilla, GA, Elrod of
    York, PA, Forbes, Garrison, Goering, Hughes, Kimberley, Koralja,
    Maddox, Mather, Metzger, Midlick, Moore, Murdoch, Paszko, Pinkerton,
    Rutland, Shaddox, Smith, Stancil, Stevens, Torres and Tvardy; *see
    also* late-filed comments of Brittain and Gassmann.

[^50]: EchoStar Reply at 12.

[^51]: 47 U.S.C. § 340(c)(3).

[^52]: *See* *1972 R&O*, 36 FCC 2d at 176.

[^53]: DIRECTV at Appendix 1.

[^54]: *Id*.

[^55]: *See id*.

[^56]: WHEC-TV at 1-2.

[^57]: WGAL at 2-3.

[^58]: Mission Reply at 2-3.

[^59]: Meredith and Media General Reply at 2-3.

[^60]: 47 U.S.C. § 340(c)(3) requires that the Commission "permit a
    satellite carrier to petition for decisions and orders -- (A) by
    which stations may be added to those that are eligible for
    retransmission under subsection (a), and by which communities may be
    added in which such stations are eligible for such retransmission;
    and (B) by which network non-duplication or syndicated exclusivity
    regulations are applied to the retransmission in accordance with
    subsection (e)."

[^61]: 17 U.S.C. § 119(a)(3).

[^62]: *NPRM*, 20 FCC Rcd at 2991-95, ¶¶ 16-20.

[^63]: *See* Appendix B, Section 76.54 (revising subsections (a)-(d) and
    adding subsections (e)-(h)).

[^64]: *See* 17 U.S.C. § 119(a)(3); *see also House Commerce Committee
    Report* at 1 (purpose of the SHVERA includes "increasing regulatory
    parity by extending to satellite carriers the same type of authority
    cable operators already have to carry 'significantly viewed' signals
    into a market").

[^65]: No changes were made to the procedures as in effect on April 15,
    1976.

[^66]: *See* Appendix B revised rule Section 76.54(a) (referencing the
    new SV List), (b), and (c) (referencing a satellite community).

[^67]: *See* 47 C.F.R. §§ 76.5, 76.7, 76.54. A fee may be required for
    the filing of certain petitions to change a station's significantly
    viewed status; 47 C.F.R. §§ 1.1104, 1.1117, 76.7.

[^68]: We do, however, amend Section 76.5 in another context. We revise
    our definition of subscriber in Section 76.5(ee) to add a definition
    for a satellite subscriber, *see* *infra* Section IV.B.1. and
    Appendix B revised rule Section 76.5(ee), and add a definition for
    satellite community in Section 76.5(gg), *see* *infra* Section
    IV.A.6. and Appendix B revised rule Section 76.5(gg), 47 C.F.R. §§
    76.5(ee) and (gg). Because Section 76.7 of our rules currently
    provides for the filing of special relief petitions by multichannel
    video programming distributors (MVPDs), such as satellite carriers,
    we need not amend this rule. *see* 47 C.F.R. § 76.7.

[^69]: *See, e.g.*, EchoStar at 3-4; NAB at 3-4.

[^70]: 47 C.F.R. § 76.5(i)(1). Share of weekly viewing hours means the
    total hours that over-the-air television households in the community
    viewed a station during the week, expressed as a percentage of the
    total hours these households viewed all stations during the period
    surveyed. Net weekly circulation means the number of over-the-air
    television households that viewed a station for five minutes or more
    during the week, expressed as a percentage of the total over-the-air
    television households in the survey area; 47 C.F.R. § 76.5(i) note.
    *See 1972 R&O*, 36 FCC 2d at 175-6, ¶ 84, n.43.

[^71]: 47 C.F.R. § 76.5(i)(2).

[^72]: 47 C.F.R. § 76.54(b), (d).

[^73]: *See 1972 R&O,* 36 FCC 2d at 176, ¶ 86.

[^74]: *See* 47 C.F.R. § 76.54(b). Initially, the Commission suggested
    that parties undertaking surveys under this provision inform other
    interested parties regarding the survey and its methodology. On
    reconsideration, the Commission adopted Section 76.54(c) requiring
    such prior notification. *See 1972 R&O,* 36 FCC 2d at 176, ¶ 86;
    *1972 Recon Order,* 36 FCC 2d at 349, ¶ 62.

[^75]: A "standard error" is a statistical measure used to assess, at a
    specified probability, that the sample estimate reflects the actual
    result had the entire universe been surveyed. Using one standard
    error, we can be approximately 70 percent certain that the actual
    audience statistic is the reported statistic plus or minus one
    standard error. The calculation of the standard error takes into
    account the sampling procedure, the sample size and the sample
    result.

[^76]: *See* 47 C.F.R. § 76.54(b).

[^77]: *Amendment of Part 76 of the Commission's Rules and Regulations
    to Permit Showings that Certain Television Broadcast Stations are
    Significantly Viewed Based on County-Wide Surveys*, 56 FCC 2d 265, ¶
    1 (1975) ("*1975 R&O*").

[^78]: *1975 R&O*, 56 FCC 2d at 270, ¶ 12. This was intended to place
    the survey methodology for newer stations on par with the
    methodology used in the original Commission surveys. *See* 47 C.F.R.
    § 76.54(b). Moreover, the rules require that the survey be
    undertaken by an independent professional audience survey
    organization and be subject to Commission review.

[^79]: *See, e.g.*, comments of Adams, Bellaire, Crosby, Lass, Torres
    and Withers.

[^80]: *NPRM*, 20 FCC Rcd at 2993-4, ¶ 20.

[^81]: EchoStar at 4.

[^82]: *See* *Carriage of Digital Television Broadcast Signals*, 16 FCC
    Rcd 2598, 2642, ¶ 100 (2001) ("\[W\]e believe that the public
    interest is best served by according the digital signal of a
    television broadcast station the same significantly viewed status
    accorded the analog signal. We note, however, that DTV-only
    television stations must petition the Commission for significantly
    viewed status under the same requirements for analog stations in
    Section 76.54 of the Commission's rules.").

[^83]: We intend to allow licensees to transfer their significantly
    viewed status from their analog station to their digital station.

[^84]: This is the reason we amend our rule to add "noise limited
    service contour," the service contour relevant for a station's
    digital signal. *See* Appendix B revised rule Section 76.54(c).

[^85]: *NPRM*, 20 FCC Rcd at 2994, ¶ 20.

[^86]: *See* Appendix B revised rule Section 76.54(c).

[^87]: Section 76.54(a) refers to "Appendix A" when it should refer to
    "Appendix B" of the *1972 Recon Order*. Section 76.54(c) contains an
    out-of date reference to Section "76.33(a)(2)(i)" of the rules.
    Revised Section 76.54 corrects these issues; s*ee* Appendix B
    revised rule Section 76.54(a), (c).

[^88]: *See, e.g.*, EchoStar at 3-4; and NAB at 3-4.

[^89]: NAB at 9; Gulf at 8.

[^90]: We replace the term "non-cable" with "over-the-air" -- rather
    than "non-MVPD" as suggested by NAB -- to more accurately reflect
    the rule's true meaning.

[^91]: 47 C.F.R. § 76.54.

[^92]: We have already noted this meaning in another context. *See* 47
    C.F.R. § 76.1506 (television stations are significantly viewed for
    carriage by open video systems "when they are viewed in households
    that do not receive television signals from multichannel video
    programming distributors..."). NAB *ex parte* dated Jul. 26, 2005.

[^93]: *See 1972 R&O,* 36 FCC 2d at 175-6, ¶ 83-6.

[^94]: *See* 47 C.F.R. § 76.5(j) and (k).

[^95]: *See* 47 C.F.R. § 76.5(i) (the "share" required to achieve
    significantly viewed status depends upon whether the station in
    question is a network station or an independent station); *see also*
    47 C.F.R. § 76.5(j) (full network station is: "A commercial
    television broadcast station that generally carries in weekly prime
    time hours 85 percent of the hours of programming offered by one of
    the three major national television networks with which it has a
    primary affiliation (*i.e.*, right of first refusal or first call)";
    47 C.F.R. § 76.5(k) (partial network station is: "A commercial
    television broadcast station that generally carries in prime time
    more than 10 hours of programming per week offered by the three
    major national television networks, but less than the amount
    specified in paragraph (j) of this section"; 47 C.F.R. § 76.5(l)
    (independent station is: "A commercial television broadcast station
    that generally carries in prime time not more than 10 hours of
    programming per week offered by the three major national television
    networks.").

[^96]: *See* 47 C.F.R. §§ 76.5(i)-(l) (definitions of significantly
    viewed stations limited to "commercial"); *1972 R&O*, 36 FCC 2d at
    180; *1972 Recon Order*, 36 FCC 2d at 330 (educational stations were
    given mandatory carriage throughout their Grade B signal contour but
    were not given significantly viewed status because the low ratings
    for NCE stations made it difficult to develop a significantly viewed
    standard for them and to avoid "an unwarranted profusion of
    educational signals" to which the educational stations objected due
    to possible erosion or dilution of local subscriber support); *see
    also* 17 U.S.C. § 119(a)(3)(A) (limits significantly viewed to the
    Commission's rules in effect on April 15, 1976).

[^97]: *NPRM*, 20 FCC Rcd at 2995, ¶ 21; *see also* 47 U.S.C. §
    340(i)(2); 17 U.S.C. §119(d)(2).

[^98]: 17 U.S.C. §119(d)(2). The SHVERA also relies on Section 339(d)
    for the definition of "television network," which is slightly
    different from the "network" definition in title 17. *See* 47 U.S.C.
    § 340(i)(2); 47 U.S.C. § 339(d)(5); *see also* 47 C.F.R. §
    76.66(a)(5) (defining television network in the context of satellite
    broadcast signal carriage). Section 339(d)(5) provides: "a
    television network in the United States which offers an
    interconnected program service on a regular basis for 15 or more
    hours per week to at least 25 affiliated broadcast stations in 10 or
    more States." 47 U.S.C. § 339(d)(5). We note the difference in
    language between "affiliated television licensees" in title 17
    compared with "affiliated broadcast stations" in Section 339 of the
    Communications Act, but we do not find the difference significant.
    *See NPRM*, 20 FCC Rcd at 2995, ¶ 21, n.69.

[^99]: *NPRM*, 20 FCC Rcd at 2996, ¶ 23; 17 U.S.C. § 119(a)(3)(A), as
    amended by Section 102 of the SHVERA (the statutory copyright
    license applies to retransmission of significantly viewed network
    station or superstation to a subscriber in a community on the
    Commission's list and limits significantly viewed to the
    Commission's rules in effect on April 15, 1976).

[^100]: EchoStar and MPAA agree with our proposed harmonization of
    definitions. EchoStar at 5-6; MPAA Reply at 3. NAB asks that we
    update the definition in our rules to track the definitions in the
    Copyright Act; NAB at 4. But NAB says that it would otherwise
    support our proposal. NAB at 7. MPAA opposes NAB's proposed
    definition change. MPAA Reply at 2.

[^101]: As noted, our rule, Section 76.5(j) and (k), defines a major
    network as one of the three major networks.

[^102]: For example, WB, UPN, Telemundo and/or Paxson.

[^103]: CBC *ex parte* dated Jun. 2, 2005.

[^104]: *Id.*

[^105]: CBC *ex parte* dated Jun. 2, 2005.

[^106]: Section 340(a)(1) as enacted by Section 202 of the SHVERA.

[^107]: *NPRM*, 20 FCC Rcd at 2996-8, ¶¶ 24-26.

[^108]: *See* 47 U.S.C. § 339(b)(1)(A); *see also Satellite Exclusivity
    Order,* 15 FCC Rcd 21688 (2000); *Order on Reconsideration*, 17 FCC
    Rcd 27875, (2002). The existing satellite exclusivity rules provide
    for an exception to their application in the event that the
    nationally distributed superstation is also a station that is
    significantly viewed in the area in which the satellite carrier is
    offering them. *See* 47 C.F.R. §§ 76.122(j)(ii) and 76.123(k)(2);
    *see also* *Satellite Exclusivity Order,* 15 FCC Rcd at 21716-7, ¶¶
    56-7.

[^109]: *See* 47 U.S.C. § 340(e)(2), enacted by Section 202 of the
    SHVERA: "(2) LIMITATION. Nothing in this subsection or Commission
    regulations shall permit the application of network non-duplication
    or syndicated exclusivity regulations to the retransmission of
    distant signals of network stations that are carried by a satellite
    carrier pursuant to a statutory license under Section 119(a)(2)(A)
    or (B) of title 17, United States Code, with respect to persons who
    reside in unserved households, under Section 119(a)(4)(A), or under
    Section 119(a)(12), of such title."

[^110]: *See* Section 340(e)(1), enacted by Section 202 of the SHVERA:
    "(1) NOT APPLICABLE EXCEPT AS PROVIDED BY COMMISSION REGULATIONS.
    Signals eligible to be carried under this section are not subject to
    the Commission's regulations concerning network non-duplication or
    syndicated exclusivity unless, pursuant to regulations adopted by
    the Commission, the Commission determines to permit network
    non-duplication or syndicated exclusivity to apply within the
    appropriate zone of protection." 47 U.S.C. § 340(e)(1).

[^111]: *NPRM*, 20 FCC Rcd at 2997-8, ¶ 26.

[^112]: *Id.*

[^113]: *NPRM*, 20 FCC Rcd at 2998, ¶ 27. In Appendix B, SV List, we
    used a pound sign (#) to indicate the stations and communities
    subjected to programming deletions pursuant to the Commission's
    exclusivity rules.

[^114]: *NPRM*, 20 FCC Rcd at Appendix A, proposed Sections 76.122 and
    76.123.

[^115]: *See* 47 C.F.R. § 76.92(f).

[^116]: *See* Appendix B revised rule Sections 76.122(a) and 76.123(a).

[^117]: *See, e.g.*, 47 C.F.R. §§ 76.122(j)(2) and 76.123(k)(2).

[^118]: *See* Appendix B revised rule Sections 76.122(j)(2) and
    76.123(k)(2). *See also generally KCST,* 103 FCC 2d 407.

[^119]: *House Commerce Committee Report* at 14-15 (noting that stations
    are not removed from the SV List but rather that blackout deletions
    are re-imposed).

[^120]: NAB at iii.

[^121]: EchoStar at 6-7. EchoStar would remove a station from the list
    if it is shown to no longer qualify for significantly viewed status.

[^122]: *See* Appendix B revised rule Sections 76.122(a) and (j); and
    Sections 76.123(a) and (k). We also revise these rule provisions to
    refer to Section 76.66, with respect to local station carriage, and
    to add "noise limited service contour" to update the references to
    Grade B contour. See Appendix B revised rule Sections 76.122(j) and
    (j)(3) and 76.123(k) and (k)(3).

[^123]: 47 U.S.C. § 340(i)(3) states that "\[t\]he term 'community'
    means -- (A) a county or a cable community, as determined under the
    rules, regulations, and authorizations of the Commission applicable
    to determining with respect to a cable system whether signals are
    significantly viewed; or (B) a satellite community, as determined
    under such rules, regulations, and authorizations (or revisions
    thereof) as the Commission may prescribe in implementing the
    requirements of this section."

[^124]: *NPRM*, 20 FCC Rcd at 2998-3000, ¶¶ 28-32.

[^125]: 47 C.F.R. § 76.5(dd) defines "community unit" as: "A cable
    television system, or portion of a cable television system, that
    operates or will operate within a separate and distinct community or
    municipal entity (including unincorporated communities within
    unincorporated areas and including single, discrete unincorporated
    areas)." *See also Amendment of Part 76 of the Commission's Rules
    and Regulations with Respect to the Definition of a Cable Television
    System and the Creation of Classes of Cable Systems*, 63 FCC 2d 956,
    966 (1977) (defining "community unit" for, *inter alia*, the
    significantly viewed rules, as that part of a cable system that is
    located within a single community).

[^126]: *See id.* at n. 5, (citing *Amendment of Parts 21, 74, and 91 to
    Adopt Rules and Regulations Relating to the Distribution of
    Television Broadcast Signals By Community Antenna Television
    Systems, and Related Matters, Docket 15971*, 2 FCC 2d 725, 785-6, ¶
    149 (1966)) ("community" as used in the rules must be determined
    case-by-case depending on the circumstances involved); *Telerama,
    Inc.*, 3 FCC 2d 585 (1966), *Mission Cable TV Inc.,* 4 FCC 2d 236
    (1966), *Calvert Telecommunications Corp.*, 49 FCC 2d 200 (1974),
    and *St. Louis Telecast, Inc.*, 12 RR 1289, 1369 (1957).

[^127]: *See* 47 U.S.C. §§ 340(a)(1).

[^128]: *See* *1972 R&O*, 36 FCC 2d at 175-6, ¶ 85; *1972 Recon Order*,
    36 FCC 2d at 162-63, ¶ 53.

[^129]: *NPRM*, 20 FCC Rcd at 2999, ¶ 30.

[^130]: *Id*. at 5. DIRECTV states it can now only authorize service to
    subscribers based on residences in cable communities identified by
    county or zip code.

[^131]: *Id*. at 6.

[^132]: DIRECTV cannot differentiate between subscribers in the same zip
    code but in different communities. *Id*. at 6.

[^133]: 47 U.S.C. § 340(a).

[^134]: DIRECTV at 6-7 (conceding that the "SHVERA does not appear to
    anticipate automatic extension of those \[existing community\]
    boundaries to encompass all split zip codes").

[^135]: EchoStar at 10.

[^136]: MPAA Reply at 1; NAB Reply at 2.

[^137]: 47 U.S.C. § 340(a).

[^138]: EchoStar at 10.

[^139]: 47 U.S.C. § 340(i)(3)(B).

[^140]: *NPRM*, 20 FCC Rcd at 2999-3000, ¶¶ 31-32, Appendix A proposed
    rule Section 76.5(gg) (option one) and (option two).

[^141]: *Id*. (option one).

[^142]: *Id*. (option two).

[^143]: 47 C.F.R. § 76.5(dd).

[^144]: A county showing under Section 76.54(d) is separate from the
    community showing under 76.54(b). Unlike community showings, in
    order to make such a showing on a county-wide basis, parties must
    include audience survey data from the station\'s first three years
    of operation, regardless of when the station or cable operator or
    satellite carrier decides to make the showing. Because the statute
    requires the Commission to use the rules in effect as of April 15,
    1976, application of the county-wide standard in Section 76.54(d)
    must apply to the satellite context as it applies to cable. *See*
    Section IV.A.3., *infra*.

[^145]: *See, e.g.*, Gulf at 7-8; NAB at 12-14.

[^146]: MPAA at 2.

[^147]: In the NPRM, we asked what we should do if a cable operator
    subsequently offers cable service in a community after it has been
    defined as a "satellite community." We believe our definition of
    satellite community avoids the need to redefine the community to the
    extent it overlaps with the franchise area of the new cable
    community.

[^148]: *See, e.g.*, DIRECTV at 7; EchoStar Reply at 6-7; *see also*
    Bellaire at 3.

[^149]: *See, e.g.*, Gulf at 7-8; NAB at 12-14; *see also* MPAA at 2
    (supports "consistently applied definition of community").

[^150]: We note that cable operators are not permitted under Section
    76.54(b) to demonstrate significantly viewed status for only a
    portion of a recognized community.

[^151]: DIRECTV at 7.

[^152]: If a satellite carrier aggregates more than one zip code, a
    single survey may be taken, provided that the sample includes
    over-the-air television homes from each zip code that are
    proportional to the population. *See* Appendix B revised rule
    Section 76.54(b).

[^153]: NAB at 14. *See also* 47 U.S.C. § 307(b).

[^154]: *NPRM*, 20 FCC Rcd at 2991, ¶ 15.

[^155]: EchoStar at 2-3.

[^156]: *See* 47 U.S.C. § 340(d)(1) ("Carriage of a signal under this
    section is not mandatory, and any right of a station licensee to
    have the signal of such station carried under section 338 is not
    affected by the eligibility of such station to be carried under this
    section."). This provision also makes clear that any right of a
    station to have its signal carried in a local market under the
    "carry-one, carry-all" satellite must carry requirement is not
    affected by the significantly viewed status of the signal in another
    market.

[^157]: 47 U.S.C. § 340(d)(2) ("The eligibility of the signal of a
    station to be carried under this section does not affect any right
    of the licensee of such station to grant (or withhold)
    retransmission consent under section 325(b)(1).").

[^158]: *NPRM*, 20 FCC Rcd at 3000-1, ¶ 33.

[^159]: 47 U.S.C. § 340(d)(1).

[^160]: 47 U.S.C. § 340(d)(2).

[^161]: In the NPRM, we noted that a satellite carrier is exempt under
    Section 325(b) from having to obtain retransmission consent when
    providing a distant signal of a network to an unserved subscriber
    who cannot receive an over-the-air signal from an affiliate of the
    same network. *Id*.; 47 U.S.C. § 325(b).

[^162]: *See* 47 U.S.C. § 338(g)(1), as amended by Section 203 of the
    SHVERA (analog local television stations in a market must be carried
    by means of a single reception antenna and associated equipment).

[^163]: *NPRM*, 20 FCC Rcd at 3001, ¶ 34.

[^164]: 47 U.S.C. § 338(g)(1) ("Each satellite carrier that retransmits
    the analog signals of local television broadcast stations in a local
    market shall retransmit such analog signals in such market by means
    of a single reception antenna and associated equipment.").

[^165]: DIRECTV at 13. DIRECTV also argues that carriage of
    significantly viewed signals on one dish would be unduly burdensome
    to satellite carriers. *Id*. at 15.

[^166]: 17 U.S.C. § 122.

[^167]: 17 U.S.C. § 119.

[^168]: *See* 47 U.S.C. § 340(i)(1); 47 U.S.C. § 338(k)(3), as amended
    by the SHVERA, and 17 U.S.C. §119(d)(6).

[^169]: Part 100 of the Commission's rules was eliminated in 2002 and
    now both FSS and DBS satellite facilities are licensed pursuant to
    Part 25 of the rules. *Policies and Rules for the Direct Broadcast
    Satellite Service*, 17 FCC Rcd 11331 (2002); 47 C.F.R. § 25.148.

[^170]: *See, e.g., Application Of DIRECTV Enterprises, LLC, Request For
    Special Temporary Authority for the DIRECTV 5 Satellite; Application
    Of DIRECTV Enterprises, LLC, Request for Blanket Authorization for
    1,000,000 Receive Only Earth Stations to Provide Direct Broadcast
    Satellite Service in the U.S. using the Canadian Authorized DIRECTV
    5 Satellite at the 72.5° W.L. Broadcast Satellite Service Location,*
    19 FCC Rcd. 15529 (Sat. Div. 2004).

[^171]: *NPRM*, 20 FCC Rcd at 3001, ¶ 35.

[^172]: EchoStar at 12; NAB at 15.

[^173]: *See* 47 U.S.C. § 340(b); 17 U.S.C. § 119(a)(3)(B).

[^174]: *See* 47 U.S.C. § 340(i)(1); 47 U.S.C. § 338(k)(3), as amended
    by the SHVERA.

[^175]: 17 U.S.C. § 119(d)(8).

[^176]: Section 107 of the SHVERA amends 17 U.S.C. § 119(d)(8) to define
    a subscriber as "an individual or entity that receives a secondary
    transmission service by means of a secondary transmission from a
    satellite carrier and pays a fee for the service, directly or
    indirectly, to the satellite carrier or to a distributor in
    accordance with the provisions of this section." This definition is
    not identical to the definition in 17 U.S.C. § 122, but is
    essentially the same after the SHVERA's amendment.

[^177]: DIRECTV at 20-21; MPAA at 2-3.

[^178]: *NPRM*, 20 FCC Rcd at 3002, ¶ 37.

[^179]: *See* Appendix B revised rule Section 76.5(ee).

[^180]: 47 U.S.C. § 340(b)(1).

[^181]: *NPRM*, 20 FCC Rcd at 3002-3, ¶ 38.

[^182]: *Id.*

[^183]: *Id.* at 3003, ¶ 40.

[^184]: *Id.* at 3003, ¶ 39.

[^185]: *Id*.

[^186]: 47 U.S.C. § 340(b)(1).

[^187]: We note that Nielsen changes the DMAs to which counties are
    assigned based on viewing patterns that vary from year to year. We
    anticipate that such adjustments would be consistent with
    significant viewing patterns as well. To the extent, however, that
    such changes result in compliance problems, we will address these on
    a case-by-case basis. In the cable context, we permit established
    service to continue in the absence of a complaint. *See Definition
    of Markets for Purposes of the Cable Television Signal Carriage
    Rules*, 14 FCC Rcd 8366, 8381, ¶ 35 (1999); *see also* 47 C.F.R. §
    76.55(e)(5). To the extent permitted by the statutes involved, we
    will follow the same procedures here. *See also SHVIA Signal
    Carriage Order*, 16 FCC Rcd at 1935-36, ¶ 39.

[^188]: *See, e.g.*, NAB at 16.

[^189]: 47 U.S.C. § 338. Coincidental receipt of local signals
    over-the-air does not constitute satellite carriage of local signals
    pursuant to Section 338. *Id*.

[^190]: *See, e.g.*, NAB at 16.

[^191]: *See* Section IV.B.4., *infra*, discussing Section 340(b)(3),
    which applies where there is no affiliate of a given network in the
    market; 47 U.S.C. § 340(b)(3).

[^192]: NAB at 17.

[^193]: DIRECTV Reply at 8; EchoStar at 2-3.

[^194]: EchoStar at 3.

[^195]: *See* 47 U.S.C. §§ 340(b)(2), (3) and (4).

[^196]: *See, e.g., House Commerce Committee Report* at 12.

[^197]: *House Commerce Committee Report* at 12.

[^198]: DirecTV Reply at 8 (asserting that legislative history requires
    receipt of any local-into-local service), citing *House Commerce
    Committee Report* at 12 ("Section 340(b)(1) provides that a
    satellite operator may retransmit a significantly viewed distant
    analog signal to a subscriber in a local market only if the
    subscriber also receives local-into-local service."); and *Barton
    Floor Statement* at 2 ("Section 340(b)(1) provides that a satellite
    operator may retransmit a significantly viewed analog signal of a
    distant network station to a subscriber in a local market only if
    the subscriber also receives local-into-local service under section
    338 of the Communications Act."). *See also* 17 U.S.C. § 119(a)(3);
    *House Judiciary Committee Report* at 17 (stating that Section 102
    of the SHVERA "permits satellite carriers to retransmit
    significantly viewed signals to subscribers who receive
    retransmissions of their local signals from their satellite carrier
    under the § 122 license.").

[^199]: *See* Sections IV.B.4. and IV.B.5., *infra*.

[^200]: *See* 47 U.S.C. § 340(b)(3) and Section IV.B.4., *infra*.

[^201]: 47 U.S.C. § 340(b)(3) (*emphasis in text added*).

[^202]: *Id*. § 340(b)(4) (*emphasis in text added*).

[^203]: *See Zimmerman v. Cambridge Credit Counseling Corp*., 409 F.3d
    473, 476 (1st Cir. 2005) (recognizing principle of statutory
    construction that "all words and provisions of statutes are intended
    to have meaning and are to be given effect, and no construction
    should be adopted which would render statutory words or phrases
    meaningless, redundant, or superfluous"); *see also Preston v.
    State*, 735 N.E.2d 330, 334 (Ind.App. 2000) (noting that "there is a
    strong presumption that the legislature did not enact a useless
    provision").

[^204]: 47 U.S.C. § 340(b)(2) (*emphasis in text added*).

[^205]: *Davaz v. Priest River Glass Co., Inc*., 125 Idaho 333, 870 P.2d
    1292 (1994) ("In construing a statute, not only must we examine the
    literal wording of the statute\...but we also must study the statute
    in harmony with its objective"); *see also Tallman v. Brown*, 7 Vet.
    App. 453, 99 Ed. Law Rep. 467 (1995) ("When the language of a
    statute is ambiguous...the task of interpreting the statute\'s
    meaning may require recourse to the legislative history to decipher
    Congress' intended purpose in enacting the legislation").

[^206]: *House Commerce Committee Report* at 12 (*emphasis in text
    added*). This supports NAB's point that this provision is intended
    to "prevent satellite carriers from by-passing local stations or
    using the threat of delivery of out-of-market stations to extract
    more favorable retransmission consent terms." NAB at 17.

[^207]: *See* Appendix B revised rule Section 76.54(g). Specifically, in
    light of the decision made here, we delete 76.54(g)(2), as proposed.
    *See* NPRM, Appendix A proposed rule Section 76.54(g)(2). *See also*
    discussion in Section IV.B.6., *infra* (adding a new Section
    76.54(g)(2)).

[^208]: *See, e.g.,* NAB at 13, 17 (arguing there is no statutory
    exception for failure to reach retransmission consent agreement and
    that the satellite carriers' proposed interpretation would allow
    carriers to by-pass or threaten local stations); DIRECTV at 17;
    DIRECTV Reply at 7; *see also* EchoStar at 4 (NAB's interpretation
    would "empower broadcasters to completely thwart satellite
    subscribers' access to \[significantly viewed\] signals."). *See
    also* NAB *ex parte* dated Jun. 22, 2005*;* Gulf at 8 (fearing
    impact on Class A and Low Power stations).

[^209]: DIRECTV at 17-18.

[^210]: *See* *Implementation of Section 207 of the Satellite Home
    Viewer Extension and Reauthorization Act of 2004; Reciprocal
    Bargaining Obligation*, FCC 05-119 (rel. Jun. 7, 2005) (*Reciprocal
    Bargaining Order*) (extending the good faith retransmission consent
    bargaining obligation to multichannel video programming
    distributors); *Implementation of the Satellite Home Viewer
    Improvement Act of 1999, Retransmission Consent Issues: Good Faith
    Negotiation and Exclusivity*, 15 FCC Rcd 5445 (2000) (*Good Faith
    Order*).

[^211]: The "bandwidth" limitations on digital service set forth in
    Section 340(b)(2)(B) are discussed later; *see* Section IV.A.6.,
    *infra*.

[^212]: 47 U.S.C. § 340(b)(2); *see House Commerce Committee Report* at
    12; *Barton Floor Statement* at 2 ("\[S\]ection 340(b)(2)(A)
    conditions retransmission to a subscriber of a significantly viewed
    digital signal of a distant network broadcast station on
    retransmission to that subscriber of a digital signal broadcast by a
    local affiliate of the same network.").

[^213]: 47 U.S.C. § 340(b)(3).

[^214]: *Id*.

[^215]: 17 U.S.C. § 119(a)(3)(B).

[^216]: *Id*. § 119(a)(3)(B).

[^217]: *NPRM*, 20 FCC Rcd at 3006, ¶ 48.

[^218]: NAB at 17.

[^219]: EchoStar at 14.

[^220]: NAB at 17.

[^221]: *NPRM*, 20 FCC Rcd at 3007, ¶ 49.

[^222]: We note that most stations are broadcasting a digital signal. As
    of June 2, 2005, 100 percent of the network affiliates in the Top 30
    markets are broadcasting in digital, and 87 percent of all other
    commercial network affiliates are broadcasting in digital. *See*
    <http://www.fcc.gov/mb/video/files/dtvonairsum.html>.

[^223]: Notably, the House Commerce Committee Report: states: "Section
    340(b)(3) does not allow provision of an out-of-market significantly
    viewed digital signal of a network broadcast station if a local
    affiliate from the same network is present in the market but not yet
    broadcasting a digital signal. Section 340(b)(3) operates in this
    fashion to ensure that a satellite carrier may not retransmit the
    out-of-market significantly viewed digital signal of a network
    broadcast station if an affiliate of that network is present in the
    local market but has never begun to offer a digital signal for a
    reason excused by the FCC." *House Commerce Committee Report* at 12.

[^224]: 47 U.S.C. § 340(b)(4).

[^225]: *NPRM*, 20 FCC Rcd at 3007, ¶ 50.

[^226]: *Id.*; *see House Commerce Committee Report* at 13 ("The waiver
    can be as broad or as narrow as the affiliate wants.").

[^227]: *House Commerce Committee Report* at 13.

[^228]: 17 U.S.C. § 119(a)(3)(C)(i). *See House Judiciary Committee
    Report* at 17.

[^229]: 17 U.S.C. § 119(a)(3)(C)(ii). *See House Judiciary Committee
    Report* at 17.

[^230]: *NPRM*, 20 FCC Rcd at 3007-8, ¶ 51.

[^231]: *Id.*at 3008, ¶ 52.

[^232]: As a practical matter, both of these provisions must be
    satisfied, because a significantly viewed station cannot be carried
    without the authority under Section 340(b)(4) and the statutory
    copyright license in 17 U.S.C. § 119.

[^233]: NAB at 23 (arguing that the Section 340 requirement that waivers
    be "affirmatively granted" trumps the Section 119 requirement that
    requires a local network station to respond to the request within 30
    days or the waiver request is deemed granted); 47 U.S.C. §
    340(b)(4).

[^234]: 17 U.S.C. § 119(a)(3)(C), as amended by Section 102 of the
    SHVERA.

[^235]: EchoStar at 10-11 (stating a broadcaster should be "deemed to
    agree" to a waiver request if it fails to respond within 30 days).

[^236]: 17 U.S.C. § 119(a)(3)(C)(ii), as amended by Section 102 of the
    SHVERA.

[^237]: NAB at 24 (arguing that the sunset provision in Section 119
    trumps the lack of a sunset provision in Section 340). EchoStar
    offers no alternative reading on this point. EchoStar Reply at
    10-11.

[^238]: NAB Reply at 18; *see* 47 U.S.C. § 340(b)(4).

[^239]: *House Commerce Committee Report* at 13.

[^240]: EchoStar at 16.

[^241]: NAB at 24.

[^242]: *House Commerce Committee Report* at 13-14.

[^243]: *See* Appendix B revised rule Section 76.54(g)(2). *See also*
    Bellaire at 2 (proposing to add an exception to Section 76.54(g):
    "\[a satellite carrier may retransmit a significantly viewed signal
    of a television broadcast station to a subscriber located in a local
    market in which\] a local network station has granted a waiver in
    accordance with 47 U.S.C. § 340(b)(4) to the extent that such
    waiver(s) apply."). As noted in our discussion, *supra,* in Section
    IV.B.2., our proposed Section 76.54(g)(2) was deleted in accordance
    with our changed tentative conclusion.

[^244]: 47 U.S.C. § 340(b)(2)(B).

[^245]: *See* *id*. § 340(i)(4).

[^246]: *Id*. § 340(i)(4)(A), (B) and (C); *see also* *House Commerce
    Committee Report* at 13 ("The Committee does not intend section
    340(b)(2)(B) to prevent a satellite operator from using compression
    technology; to require a satellite operator to use the exact
    bandwidth or bit rate as the local or distant broadcaster whose
    signal it is retransmitting; or to require a satellite operator to
    use the exact bandwidth or bit rate for a local broadcaster as it
    does for a distant broadcaster.").

[^247]: *NPRM*, 20 FCC Rcd at 3005, ¶ 45 and Appendix A proposed rule
    Section 76.54(h).

[^248]: *Id.*, ¶ 45.

[^249]: *Id.* at 3005-6, ¶ 46. For example, we said that a significantly
    viewed network affiliate broadcasting a sporting event would use
    more bandwidth than a local network station broadcasting an
    interview (*i.e.*, talking head). In this example, we asked whether
    we should apply the same compression standard to both stations,
    thereby precluding the significantly viewed sporting event.

[^250]: *Id*.

[^251]: *See* Appendix B revised rule Section 76.54(h).

[^252]: DIRECTV at 8; NAB at 20; DIRECTV Reply at 3.

[^253]: 47 U.S.C. § 340(b)(2)(B).

[^254]: *Id*. § 340(i)(4) requires the Commission to define these
    concepts.

[^255]: DIRECTV at 8-13; NAB at 18-22; DIRECTV Reply at 3-7.

[^256]: 47 U.S.C. § 338 governs the carriage of local television signals
    whereas 47 U.S.C. § 340 governs the carriage of significantly viewed
    signals.

[^257]: *See* *Carriage of Digital Television Broadcast Signals:
    Amendment to Part 76 of the Commission's Rules*, CS Docket No.
    98-120, Second Report and Order and First Order on Reconsideration,
    20 FCC Rcd 4516 (2005).

[^258]: *See* 47 U.S.C. § 340(d)(1); *House Commerce Committee Report*
    at 12 ("Section 340(d)(1) also makes clear that any right of a
    station to have its signal carried in a local market under the
    carry-one, carry-all provisions of section 338 is not affected by
    the significantly viewed status of the signal in another market.").

[^259]: DIRECTV at 8-9; NAB at 18-19; DIRECTV Reply at 3. DIRECTV,
    however, would only prohibit discrimination deemed "material."

[^260]: *House Commerce Committee Report* at 12.

[^261]: DIRECTV at 8; NAB at 20; DIRECTV Reply at 3-4.

[^262]: *See* 47 U.S.C. § 340(b)(2)(B)(ii) (permits satellite carriage
    where "the retransmission of the local network station is comprised
    of the entire bandwidth of the digital signal broadcast by such
    local network station"); *House Commerce Committee Report* at 12
    ("the local affiliate's choice to multicast does not prevent the
    satellite operator from retransmitting a significantly viewed signal
    of a distant affiliate of the network that chooses to broadcast in
    high-definition").

[^263]: DIRECTV at 8; NAB at 20; DIRECTV Reply at 3-4.

[^264]: *See* 47 U.S.C. § 340(b)(2)(B).

[^265]: NAB favors an objective approach in which the satellite carrier
    compares the average bit rate. NAB Reply at 7.

[^266]: We note that the maximum bit rate DTV broadcasters can use
    over-the-air in 6 MHz of spectrum is 19.4 mbps. *See* Advanced
    Television Systems Committee (ATSC) standard A/53B, ATSC Digital
    Television Standard, Revision B (Annex D) (Aug. 7, 2001).

[^267]: NAB at 18-9.

[^268]: Although the Commission has defined what constitutes "material
    degradation" in the First Report and Order in the digital must carry
    proceeding, several parties have requested reconsideration of that
    decision; the reconsideration proceeding remains pending. *See
    Carriage of Digital Television Broadcast Signals: Amendment to Part
    76 of the Commission's Rules*, 16 FCC Rcd 2598, 2628-29 (2001)
    (petitions for reconsideration pending).

[^269]: In this respect, we agree with DIRECTV that a satellite carrier
    could comply with the rule even if it used different compression
    technology (*e.g.*, MPEG-4 versus MPEG-2) or modulation technology
    (*e.g.*, 8PSK versus QPSK) for the two sets of signals, provided
    there is no greater degradation of the local station's signal.
    DIRECTV at 13.

[^270]: 47 U.S.C. § 340(i)(4)(A), (B) and (C).

[^271]: Until the Commission addresses satellite carriage of digital
    signals in the pending DTV carriage rulemaking, the parties will
    privately determine which streams will be carried, since satellite
    carriage of local stations' digital signals is currently only
    pursuant to retransmission consent.

[^272]: DIRECTV Reply at 5; DIRECTV *ex parte* dated July 28, 2005.

[^273]: DIRECTV at 11.

[^274]: DIRECTV at 8-11 (material discrimination should be measured on
    an overall carriage (not program-by-program or minute-by-minute)
    basis). *See also* DIRECTV Reply at 5. DIRECTV states that it would
    be infeasible for it to monitor and compare "hundreds if not
    thousands" of stations, and "black out significantly viewed signals
    on a rolling basis to achieve absolute equality with the
    corresponding local signal."

[^275]: DIRECTV Reply at 4.

[^276]: *House Commerce Committee Report* at 12 ("Section 340(b)(2)(B)
    prevents the satellite operator from retransmitting a local
    affiliate's digital signal in a less robust format than a
    significantly viewed digital signal of a distant affiliate of the
    same network ...").

[^277]: NAB Reply at 7-9.

[^278]: For example, a situation may occur where a satellite carrier
    "sets" its encoder to 12 mbps knowing that the encoder will deliver
    a stream within a range, such as +/- 5%, which would generate an
    output that would vary from 11.4 to 12.6 mbps. Even if the local and
    SV station were both "set" to 12 mbps, it is possible that the
    actual result would be two streams with different maximums and
    different averages, simply based on the type of programming (*e.g.*,
    sports versus drama). In practice, the SV station may generate a
    stream from 11.4 to 12.6 mbps and the local station may generate a
    stream from 11.7 to 12.1 mbps. In this case, as long as the carrier
    remains equitable in the treatment of both stations, it would meet
    the statutory requirement. We note that this would be consistent
    with the statute's requirement that we not require identical
    bandwidth or bit rate. NAB agrees that "the equivalent bandwidth
    requirement is satisfied if the local station is broadcasting an SD
    stream containing a comedy program and the significantly viewed
    distant station is broadcasting an SD stream containing a drama
    program and, at any given instant, the drama (say, a high-speed
    chase) requires more bits than the comedy, provided that, on
    average, both SD streams are provided equivalent bandwidth.
    Similarly, if the local station is broadcasting its local news in HD
    and the distant significantly viewed station is broadcasting a
    sporting event in HD, the equivalent bandwidth requirement is
    satisfied so long as the multiplexer is 'allocat\[ing\] bandwidth
    rationally as between \[the\] sports and 'talking head'
    programming.'" NAB Reply at 8.

[^279]: EchoStar at 15.

[^280]: 47 U.S.C. § 340(d)(1).

[^281]: Mandatory satellite carriage applies only in Alaska and Hawaii.
    *See* *Implementation of Section 210 of the Satellite Home Viewer
    Extension and Reauthorization Act of 2004 to Amend Section 338 of
    the Communications Act*, MB Docket No. 05-181, FCC 05-159 (rel. Aug.
    23, 2005). Elsewhere in the United States, satellite carriage of
    local stations is pursuant to "carry-one, carry-all," which applies
    if a satellite carrier chooses to use the statutory copyright
    license for carriage of one or more local stations. *See* 47 U.S.C.
    338(a). *See also* *Satellite Broadcasting and Communications Ass\'n
    v. FCC*, 275 F.3d 337 (2001), cert. denied, 536 U.S. 922 (2002)
    ("*SBCA*").

[^282]: *House Commerce Committee Report* at 1 (seeking "regulatory
    parity by extending to satellite operators the same type of
    authority cable operators already have to carry 'significantly
    viewed' signals into a market").

[^283]: *See, e.g., SBCA*, 275 F.3d at 354, 365 (upholding carry-one,
    carry-all due in part to the choice carriers have of when and where
    they will become subject to the carry one, carry all rule by
    choosing to carry local stations in a particular market pursuant to
    the statutory copyright license). "The primary difference between §
    338 and the cable must-carry rules is that § 338's obligations are
    conditioned upon the satellite carrier's voluntary choice to make
    use of the § 122 license in a particular television market, but the
    cable must-carry rules are mandatory in all markets." Id. at 351.

[^284]: *House Commerce Committee Report* at 12.

[^285]: *See* Appendix B revised rule Section 76.54(h).

[^286]: 47 U.S.C. § 340(h)(4).

[^287]: *NPRM*, 20 FCC Rcd at 3006, ¶ 46 n.126.

[^288]: *See* 47 U.S.C. § 339(a)(2)(D)(iii)(II), as amended by Section
    204 of the SHVERA.

[^289]: 47 U.S.C. § 341(a) ("Carriage of television signals to certain
    subscribers") provides:

    > \(1\) In General- A cable operator or satellite carrier may elect
    > to retransmit, to subscribers in an eligible county --
    >
    > \(A\) any television broadcast stations that are located in the
    > State in which the county is located and that any cable operator
    > or satellite carrier was retransmitting to subscribers in the
    > county on January 1, 2004; or
    >
    > \(B\) up to 2 television broadcast stations located in the State
    > in which the county is located, if the number of television
    > broadcast stations that the cable operator or satellite carrier is
    > authorized to carry under paragraph (1) is less than 3.
    >
    > \(2\) Deemed Significantly Viewed. Any station described in
    > subsection (a) is deemed to be significantly viewed in the
    > eligible county within the meaning of section 76.54 of the
    > Commission's regulations (47 C.F.R. 76.54).
    >
    > \(3\) Definition of Eligible County. For purposes of this section,
    > the term \`eligible county' means any 1 of 4 counties that --
    >
    > \(A\) are in a single State;
    >
    > \(B\) on January 1, 2004, were each in designated market areas in
    > which the majority of counties were located in another State or
    > States; and
    >
    > \(C\) as a group had a combined total of 41,340 television
    > households according to the U.S. Television Household Estimates by
    > Nielsen Media Research for 2003-2004.
    >
    > \(4\) Limitation. Carriage of a station under this section shall
    > be at the option of the cable operator or satellite carrier.

[^290]: *NPRM*, 20 FCC Rcd at 3008-9, ¶ 53.

[^291]: *Id*.

[^292]: EchoStar at 16; NAB at 25. NPG of Oregon did not address this
    issue.

[^293]: *See* U.S.C. § 341(a)(3); *see also* 17 USC 119(a)(1)(C)(iii).

[^294]: *See* U.S. Television Household Estimates by Nielsen Media
    Research for 2003-2004; EchoStar at 16, n.31; NAB at 25.

[^295]: NAB agrees with this conclusion; NAB at 25-6.

[^296]: EchoStar at 16-17. EchoStar explains that "the ability to carry
    stations under Section 341(a)(1)(A) depends, in part, upon whether
    "any cable operator ... was retransmitting \[the station\] to
    subscribers in the county on January 1, 2004."

[^297]: *See* Appendix B revised rule Section 76.54(j); 47 U.S.C. §
    341(a).

[^298]: 47 U.S.C. § 341(b) ("Certain Markets") provides:
    "Notwithstanding any other provision of law, a satellite carrier may
    not carry the signal of a television station into an adjacent local
    market that is comprised of only a portion of a county, other than
    to unserved households located in that county."

[^299]: *NPRM*, 20 FCC Rcd 3009 at ¶ 54.

[^300]: This provision does not affect the ability of a satellite
    carrier to retransmit a distant station to unserved households in
    these counties. 47 U.S.C. § 341(b).

[^301]: EchoStar at 16; Gulf at 6; NAB at 25

[^302]: *See* Appendix B revised rule Section 76.54(k); 47 U.S.C. §
    341(b).

[^303]: 47 U.S.C. § 340(f), as added by Section 202 of the SHVERA; *see*
    47 U.S.C. § 339(a)(3), as amended by Section 204 of the SHVERA
    (requires Commission enforcement of the new provisions concerning
    distant digital signal carriage pursuant to the provisions of
    Section 340(f)).

[^304]: 47 U.S.C. § 340(f)(1) provides:

    > "(1) ORDERS AND DAMAGES. Upon complaint, the Commission shall
    > issue a cease and desist order to any satellite carrier found to
    > have violated this section in carrying any television broadcast
    > station. Such order may, if a complaining station requests damages
    > --
    >
    > \(A\) provide for the award of damages to a complaining station
    > that establishes that the violation was committed in bad faith, in
    > an amount up to \$50 per subscriber, per station, per day of the
    > violation; and
    >
    > \(B\) provide for the award of damages to a prevailing satellite
    > carrier if the Commission determines that the complaint was
    > frivolous, in an amount up to \$50 per subscriber alleged to be in
    > violation, per station alleged, per day of the alleged violation.

[^305]: *Id.*

[^306]: *See* *Upton Floor Statement* at 1 ("If a broadcast station
    seeks damages, section 340(f)(1)(A) authorizes the FCC to award the
    station up to \$50 per subscriber illegally served, per station
    illegally carried, per day of the violation if the FCC finds that
    the satellite operator did not have a good-faith belief that
    provision of the signal was lawful. Conversely, if a broadcaster
    seeks damages and the FCC finds that the broadcaster's claims were
    made in bad faith, section 340(f)(1)(B) allows the FCC to award the
    satellite operator up to \$50 per subscriber, per station, per day
    that the broadcaster alleged the satellite operator was serving in
    violation of Section 340.").

[^307]: *Id.*

[^308]: *See NPRM*, 20 FCC Rcd at 3010, ¶ 56.

[^309]: *See id.* ("For example, if the only violation of Section 340
    were the failure to notify all broadcast stations in a market 60
    days prior to commencing carriage of the significantly viewed
    stations, would such conduct constitute bad faith by the satellite
    carrier? Would seeking damages for failure to notify one station
    constitute a frivolous complaint by a broadcaster?")

[^310]: *See id.*

[^311]: 47 U.S.C. 340(f)(2) provides:

    > \(2\) COMMISSION DECISION. The Commission shall issue a final
    > determination resolving a complaint brought under this subsection
    > not later than 180 days after the submission of a complaint under
    > this subsection. The Commission may hear witnesses if it clearly
    > appears, based on written filings by the parties, that there is a
    > genuine dispute about material facts. Except as provided in the
    > preceding sentence, the Commission may issue a final ruling based
    > on written filings by the parties.

[^312]: *Id.*

[^313]: *See NPRM*, 20 FCC Rcd at 3010-11, ¶ 57.

[^314]: 47 C.F.R. § 76.7(a)(1), (b)(1).

[^315]: *See* DIRECTV at 19; EchoStar at 17; NAB at 26.

[^316]: NAB at 26.

[^317]: DIRECTV at 19-20; EchoStar at 17-18.

[^318]: Specifically, DIRECTV and EchoStar assert that a carrier's
    inadvertent failure to notify all broadcast stations in a market 60
    days prior to carrying significantly viewed stations is not bad
    faith absent demonstration of actual bad faith. DIRECTV at 19;
    EchoStar at 17-18.

[^319]: EchoStar at 18.

[^320]: Black's Law Dictionary characterizes bad faith as having a
    dishonest belief or purpose. *See also, e.g.*, 47 C.F.R. § 76.65(d)
    (burden of proof is on the complainant to establish a good faith
    violation); Review of the Section 251 Unbundling Obligations of
    Incumbent Local Exchange Carriers, 18 FCC Rcd 16978, 17406, ¶ 706
    (2003) (stating that a party's gamesmanship, refusal to negotiate,
    or actions causing unnecessary delay may lead to a finding of bad
    faith).

[^321]: Black's Law Dictionary characterizes a frivolous claim as one
    lacking legal basis or legal merit. *See also, e.g.* 47 C.F.R. §
    73.3592 (a)(1) (stating that an application is not filed in good
    faith where its purpose is to delay or hinder grant of another
    application); William P. Johnson & Hollis P. Johnson, d/b/a Radio
    Carrollton, 69 FCC 2d 1139, 1150, ¶ 24 (1978) (explaining that a
    "strike pleading" is one filed in bad faith for the primary purpose
    of blocking, impeding, or delaying the grant of an application).

[^322]: Congress intended for satellite carriers to "start carrying the
    signals on the list pending adoption of the rules." *House Commerce
    Committee Report* at 13.

[^323]: 47 U.S.C. § 312(c) (requires service of an order to show cause
    and a hearing before revoking a license or issuing a cease and
    desist order pursuant to 47 U.S.C. § 312(b)).

[^324]: 47 U.S.C. § 340(f)(3) and (4) provide:

    > \(3\) REMEDIES IN ADDITION. The remedies under this subsection are
    > in addition to any remedies available under title 17, United
    > States Code.
    >
    > \(4\) NO EFFECT ON COPYRIGHT PROCEEDINGS. Any determination,
    > action, or failure to act of the Commission under this subsection
    > shall have no effect on any proceeding under title 17, United
    > States Code, and shall not be introduced in evidence in any
    > proceeding under that title. In no instance shall a Commission
    > enforcement proceeding under this subsection be required as a
    > predicate to the pursuit of a remedy available under title 17.

[^325]: Section 340(g), entitled "Notices Concerning Significantly
    Viewed Stations" states that "\[e\]ach satellite carrier that
    proposes to commence the retransmission of a station pursuant to
    this section in any local market shall -- (1) not less than 60 days
    before commencing such retransmission, provide a written notice to
    any television broadcast station in such local market of such
    proposal; and (2) designate on such carrier's website all
    significantly viewed signals carried pursuant to section 340 and the
    communities in which the signals are carried." 47 U.S.C. § 340(g).

[^326]: 47 U.S.C. § 340(g)(2).

[^327]: *See NPRM*, 20 FCC Rcd at 3011-12, ¶ 60.

[^328]: *See* Appendix B, revised rule Section 76.54(e), (f).

[^329]: *See*, *e.g.*, 47 U.S.C. § 338(h)(2)(c), as amended by SHVERA
    (requires the Commission to amend its rules to specifically require
    use of the Commission's consolidated database system for a
    television station licensee's address) .

[^330]: Bellaire; DIRECTV at 18-19; EchoStar at 18. DIRECTV does not
    disagree with reliance on the database, but says that P.O. box
    addresses in the database may complicate the delivery of notices
    using certified mail. DIRECTV at 19.

[^331]: We agree that licensees should be mindful of their database
    listings; however, we disagree with DIRECTV that delivery of notices
    to P.O. boxes via certified mail may cause difficulties. Staff
    inquiry to the United States Postal Service (USPS) has verified that
    certified mail may be sent to a P.O. box. Because certified mail
    requires a signature, a delivery notice will be left inside the P.O.
    box to make the addressee aware that the item is available to be
    signed for at their Post Office. For more information, visit the
    USPS website at <http://www.usps.com/>.

[^332]: *See*, *e.g.*, 47 C.F.R. § 76.66(d) (Commission rule with
    respect to notices for mandatory carriage requests.).

[^333]: Certified mail will provide the carrier with proof that it
    mailed the notice to the address listed in the database; Return
    Receipt will provide the carrier with proof that the notice was
    delivered to the appropriate address.

[^334]: DIRECTV at 18-19; EchoStar at 18.

[^335]: NAB Reply at 18.

[^336]: 47 C.F.R. § 76.66(d)(5)(i); *see also* 47 U.S.C. § 340(h). In
    the *Procedural Rules Order*, we revised Section 76.66 of our rules
    to provide for carriage elections on a county basis, unified
    retransmission consent negotiations, and notifications by satellite
    carriers to local broadcasters concerning carriage of significantly
    viewed signals; *Procedural Rules Order*, 20 FCC Rcd 7780, 7784-85,
    ¶ 10-11 (2005). *See* Appendix B, revised rule Section 76.54(e).

[^337]: EchoStar at 19.

[^338]: NAB Reply at 19.

[^339]: 47 U.S.C. § 340(c)(2).

[^340]: *Id*. § 340(g)(1).

[^341]: The Paperwork Reduction Act of 1995 ("PRA"), Pub. L. No. 104-13,
    109 Stat 163 (1995) (codified in Chapter 35 of title 44 U.S.C.).

[^342]: *NPRM*, 20 FCC Rcd at 3012-13, ¶¶ 63-65.

[^343]: The Small Business Paperwork Relief Act of 2002 ("SBPRA"), Pub.
    L. No. 107-198, 116 Stat 729 (2002) (codified in Chapter 35 of title
    44 U.S.C.); *see* 44 U.S.C. 3506(c)(4).

[^344]: 70 Fed. Reg. 11314 (2005).

[^345]: *See* 5 U.S.C. § 801(a)(1)(A).

[^346]: Rule changes shown in bold.

[^347]: This list of significantly viewed stations will be published and
    maintained on the Commission's Internet website at
    <http://www.fcc.gov/mb/>. The Commission will update the list posted
    on the Internet within 10 business days after taking an action to
    modify the list.

[^348]: *See* 5 U.S.C. § 603. The RFA, *see* 5 U.S.C. § 601 *et. seq.*,
    has been amended by the Small Business Regulatory Enforcement
    Fairness Act of 1996 ("SBREFA"), Pub. L. No. 104-121, Title II, 110
    Stat. 847 (1996). The SBREFA was enacted as Title II of the Contract
    With America Advancement Act of 1996 ("CWAAA").

[^349]: *Implementation of the Satellite Home Viewer Extension and
    Reauthorization Act of 2004*, 20 FCC Rcd 2983, Appendix C (2005)
    ("*NPRM*").

[^350]: *See* 5 U.S.C. § 604.

[^351]: Section 202 of the Satellite Home Viewer Extension and
    Reauthorization Act of 2004 ("SHVERA"), Pub. L. No. 108-447, § 202,
    118 Stat 2809, 3393 (2004) (to be codified at 47 U.S.C. § 340).

[^352]: 47 U.S.C. § 340.

[^353]: Section 102 of the SHVERA creates a new 17 U.S.C. § 119(a)(3) to
    provide satellite carriers with a statutory copyright license to
    offer out-of-market "significantly viewed" signals to subscribers.
    17 U.S.C. § 119(a)(3).

[^354]: The SHVERA establishes for satellite carriers and subscribers
    the concept of "significantly viewed," which has applied in the
    cable context for more than 30 years. The concept of "significantly
    viewed" signals is used to differentiate between out-of-market
    television broadcast stations that have significant over-the-air
    viewing and those that do not. The designation of "significantly
    viewed" status is important because it will enable a broadcast
    station assigned to one market to be treated as a "local" station
    with respect to a particular cable or satellite community in another
    market, and thus enable its cable or satellite carriage into that
    market.

[^355]: *See* 47 U.S.C. § 340(c)(1)(B). We have already adopted some
    rules to implement new Section 340(h); *see Implementation of the
    Satellite Home Viewer Extension and Reauthorization Act of 2004*, 20
    FCC Rcd 7780 (2005) (*Procedural Rules Order*) (revising 47 C.F.R. §
    76.66 to add rules for carriage elections on a county basis, unified
    retransmission consent negotiations, and notifications by satellite
    carriers to local broadcasters concerning carriage of significantly
    viewed signals). *See* 47 U.S.C. § 340(h).

[^356]: 5 U.S.C. § 603(b)(3).

[^357]: *Id*. § 601(6).

[^358]: *Id*. § 601(3) (incorporating by reference the definition of
    "small business concern" in 15 U.S.C. § 632). Pursuant to 5 U.S.C. §
    601(3), the statutory definition of a small business applies "unless
    an agency, after consultation with the Office of Advocacy of the
    Small Business Administration and after opportunity for public
    comment, establishes one or more definitions of such term which are
    appropriate to the activities of the agency and publishes such
    definition(s) in the Federal Register." 5 U.S.C. § 601(3).

[^359]: 15 U.S.C. § 632. Application of the statutory criteria of
    dominance in its field of operation and independence are sometimes
    difficult to apply in the context of broadcast television.
    Accordingly, the Commission's statistical account of television
    stations may be over-inclusive.

[^360]: *See*, *supra*, Section III.A.8. of the *R&O*; *see also* 47
    U.S.C. § 340(i)(1); 47 U.S.C. § 338(k)(3), as amended by the SHVERA,
    and 17 U.S.C. §119(d)(6).

[^361]: *See* 47 U.S.C. § 340(i)(1); 47 U.S.C. § 338(k)(3), as amended
    by the SHVERA, and 17 U.S.C. §119(d)(6).

[^362]: Part 100 of the Commission's rules was eliminated in 2002 and
    now both FSS and DBS satellite facilities are licensed pursuant to
    Part 25 of the rules. *Policies and Rules for the Direct Broadcast
    Satellite Service*, 17 FCC Rcd 11331 (2002); 47 C.F.R. § 25.148.

[^363]: *See, e.g., Application Of DIRECTV Enterprises, LLC, Request For
    Special Temporary Authority for the DIRECTV 5 Satellite; Application
    Of DIRECTV Enterprises, LLC, Request for Blanket Authorization for
    1,000,000 Receive Only Earth Stations to Provide Direct Broadcast
    Satellite Service in the U.S. using the Canadian Authorized DIRECTV
    5 Satellite at the 72.5° W.L. Broadcast Satellite Service Location,*
    19 FCC Rcd. 15529 (Sat. Div. 2004).

[^364]: 13 C.F.R. § 121.201, NAICS code 517510.

[^365]: *Id.*

[^366]: DIRECTV is the largest DBS operator and the second largest MVPD,
    serving an estimated 13.04 million subscribers nationwide; *see*
    Annual Assessment of the Status of Competition in the Market for the
    Delivery of Video Programming, *Eleventh Annual Report*, 20 FCC Rcd
    2755, 2793, ¶ 55 (2005) ("*2005 Cable Competition Report*").

[^367]: 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.
    *Id*.

[^368]: Rainbow DBS, which provides service under the brand name VOOM,
    reported an estimated 25,000 subscribers. *Id*.

[^369]: Dominion, which provides service under the brand name Sky Angel,
    does not publicly disclose its subscribership numbers on an
    annualized basis. *Id*.

[^370]: *See* 47 C.F.R. § 2.1(c).

[^371]: 13 C.F.R. § 121.201, NAICS code 517510.

[^372]: *Id*.

[^373]: U.S. Census Bureau, 1997. Economics and Statistics
    Administration, Bureau of Census, U.S. Department of Commerce, 1997
    Economic Census, Subject Series -- Establishment and Firm Size,
    Information Sector 51, Table 4 at 50 (2000). The amount of \$10
    million was used to estimate the number of small business firms
    because the relevant Census categories stopped at \$9,999,999 and
    began at \$10,000,000. No category for \$12.5 million existed. Thus,
    the number is as accurate as it is possible to calculate with the
    available information.

[^374]: *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 513220 (issued Nov.
    2004). The preliminary data indicate that the number of total
    "establishments" increased from 4,185 to 6,118. In this context, the
    number of establishments is a less helpful indicator of small
    business prevalence than is the number of "firms," because the
    latter number takes into account the concept of common ownership or
    control. The more helpful 2002 census data on firms, including
    employment and receipts numbers, will be issued in late 2005.

[^375]: 47 C.F.R. § 76.901(e). The Commission developed this definition
    based on its determinations that a small cable system operator is
    one with annual revenues of \$100 million or less. For "regulatory
    simplicity," the Commission established the company size standard in
    terms of subscribers, rather than dollars; in the cable context,
    \$100 million in annual regulated revenues equates to approximately
    400,000 subscribers. *See Implementation of Sections of the Cable
    Television Consumer Protection and Competition Act of 1992: Rate
    Regulation, MM Doc. Nos. 92-266 and 93-215, Sixth Report and Order
    and Eleventh Order on Reconsideration*, 10 FCC Rcd 7393, 7408-7409,
    ¶¶ 28-30 (1995).

[^376]: Paul Kagan Associates, Inc., Cable TV Investor, Feb. 29, 1996
    (based on figures for Dec. 30, 1995).

[^377]: 47 U.S.C. § 543(m)(2).

[^378]: *See* Public Notice, "FCC Announces New Subscriber Count for the
    Definition of Small Cable Operator," 16 FCC Rcd 2225 (2001) ("*2001
    Subscriber Count PN*"). In this Public Notice, the Commission
    established the threshold for determining whether a cable operator
    meets the definition of small cable operator at 677,000 subscribers,
    and determined that this threshold will remain in effect until the
    Commission issues a superceding Public Notice. We recognize that the
    number of cable subscribers was recently estimated by the Commission
    to be almost 66.1 million, as of June 2004; *see* *2005 Cable
    Competition Report*, 20 FCC Rcd at 2759, 2768-69, ¶¶ 9, 21. However,
    because the Commission has not issued a public notice subsequent to
    the *2001 Subscriber Count PN,* we propose to rely on the subscriber
    count threshold established by the *2001 Subscriber Count PN*.

[^379]: 47 C.F.R. § 76.901(f).

[^380]: 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 § 76.901(f) of the Commission's rules. *See* 47 U.S.C. §
    573.

[^381]: *See* 13 C.F.R. § 121.201, NAICS Code 515120.

[^382]: *Id*. 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.

[^383]: Although we are using BIA's estimate for purposes of this
    revenue comparison, the Commission has estimated the number of
    licensed commercial television stations to be 1,368. *See* *News
    Release*, "Broadcast Station Totals as of June 30, 2005" (dated Aug.
    29, 2005); *see* <http://www.fcc.gov/mb/audio/totals/bt050630.html>.

[^384]: "\[Business concerns\] 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 to power to control both." 13
    C.F.R. § 121.103(a)(1).

[^385]: *News Release*, "Broadcast Station Totals as of June 30, 2005"
    (dated Aug. 29, 2005); *see*
    <http://www.fcc.gov/mb/audio/totals/bt050630.html>.

[^386]: 13 C.F.R. § 121.201, NAICS code 517510.

[^387]: *See 2005 Cable Competition Report*, 20 FCC Rcd at 2816, ¶ 110.
    Previously, the Commission reported that IMCC had 250 members; *see*
    Annual Assessment of the Status of Competition in the Market for the
    Delivery of Video Programming, *Tenth Annual Report*, 19 FCC Rcd
    1606, 1666, ¶ 90 (2004) ("*2004 Cable Competition Report*").

[^388]: *See 2005 Cable Competition Report*, 20 FCC Rcd at 2816, ¶ 110.

[^389]: *NPRM,* 20 FCC Rcd 2983, Appendix C, ¶ 15.

[^390]: *Id.,* ¶¶ 16-23.

[^391]: *See* rules contained in Appendix B to this *R&O*.

[^392]: *See* 47 C.F.R. §§ 76.5, 76.7, 76.54; *see also, supra,* Section
    III.A.3. of the *R&O*.

[^393]: *See* 47 C.F.R. § 76.54(c) (requiring notice to certain
    broadcast stations); *see also* revised Section 76.54(c) contained
    in Appendix B to this *R&O*.

[^394]: *See, supra,* Section III.A.5. of the *R&O*.

[^395]: *See* 47 C.F.R. § 76.7; *see also, supra,* Section III.D.1. of
    the *R&O*.

[^396]: 5 U.S.C. § 603(c)(1)-(c)(4)

[^397]: *See* 17 U.S.C. § 119(a)(3); *House Commerce Committee Report*
    at 1 (Purpose of the SHVERA includes "increasing regulatory parity
    by extending to satellite carriers the same type of authority cable
    operators already have to carry 'significantly viewed' signals into
    a market"); *see also, supra,* Section III.A.3. of the *R&O*.

[^398]: 17 U.S.C. § 119(a)(3).

[^399]: *See id*.

[^400]: *See* Section 208 of SHVERA. The Commission is required to
    submit a report to Congress on the results of its inquiry no later
    than nine months after SHVERA's enactment date (*i.e.*, September 8,
    2005).

[^401]: *Public Notice*, "Media Bureau Seeks Comment For Inquiry
    Required By the on Rules Affecting Competition In the Television
    Marketplace," MB Docket No. 05-28, 20 FCC Rcd 1572 (2005) (opening
    inquiry required by Section 208 of the SHVERA concerning the impact
    of certain rules and statutory provisions on competition in the
    television marketplace).

[^402]: *See* 5 U.S.C. § 801(a)(1)(A).

[^403]: *See* *id*. § 604(b).