**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | *  | ET Docket No. 05-24          |
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| Requirements for Digital         | ** |                              |
| Television Receiving Capability  |    |                              |
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**SECOND REPORT AND ORDER**

**Adopted: November 3, 2005 Released: November 8, 2005**

**By the Commission:**

# INTRODUCTION

1.  By this action, the Commission is modifying its rules to advance the
    date on which new television receivers with screen sizes 13-24" and
    certain other TV receiving devices such as VCRs and digital video
    recorders must include the capability to receive broadcast digital
    television signals from the current date of July 1, 2007 to March
    1, 2007. The Commission is also amending its rules to apply the
    digital television reception capability requirement to new receivers
    with screen sizes smaller than 13" on this same schedule. The DTV
    reception requirement, which also often is termed the "DTV tuner
    requirement," is being implemented under an approach that applies it
    first to large screen receivers and then progressively to smaller
    screen receivers and other devices over a period of several
    years.[^1] The modifications made herein affect the final step of
    this phase-in plan.[^2] With these changes, the scheduled
    implementation plan will provide for all new TV receiver equipment
    to include digital reception capability as of March 1, 2007.

2.  This action follows our previous decision in the *Report and Order
    and Further Notice of Proposed Rulemaking* (*Report and
    Order/Further Notice*) in this proceeding to advance the date on
    which 100 percent of TV receivers with screen sizes 25-36" must
    include digital reception capability to March 1, 2006.[^3] In this
    regard, we continue to believe that it is essential that DTV
    reception capability be provided to consumers in new TV receivers as
    rapidly as possible in order to promote an expeditious completion of
    the transition from analog to digital broadcast television service.
    Consistent with that objective, our goal in this further action is
    to advance the schedule on which all new television receivers must
    comply with the DTV tuner requirement. We conclude that advancing
    the DTV tuner mandate effective date for 13-24" TV sets and other TV
    receiving devices to March 1, 2007 and applying this requirement to
    receivers with screens smaller than 13" will most effectively ensure
    that products in these categories are equipped to receive digital
    television signals as quickly as possible consistent with the
    manufacturing and product distribution capabilities of manufacturers
    and retailers.

# BACKGROUND

3.  The Commission adopted the DTV tuner requirement in the S*econd
    Report and Order and Second Memorandum Opinion and Order* (*DTV
    Review Second Report and Order*) in the DTV review proceeding."[^4]
    In that action, the Commission, *inter alia*, adopted rules
    requiring that all new TV broadcast receivers that are shipped in
    interstate commerce or imported into the United States, for sale or
    resale to the public, be capable of receiving the signals of DTV
    broadcast stations over-the-air no later than July 1, 2007.[^5]
    Under this requirement, TV broadcast receivers must provide useable
    picture and sound commensurate with their video and audio
    capabilities when receiving DTV signals. The DTV tuner requirement
    was intended to facilitate the transition to digital television by
    promoting the availability of DTV reception equipment and to protect
    consumers by ensuring that their TV receivers will provide
    off-the-air TV reception of digital signals when analog TV operation
    ceases.[^6] In order to minimize the impact of this requirement on
    both manufacturers and consumers, the Commission adopted a phase-in
    schedule that applies the requirement first to receivers with large
    screens and then to progressively smaller screen receivers and other
    TV receiver devices that do not include a viewing screen, *e.g.*,
    VCRs and digital video recorders. This phase-in plan was intended to
    allow manufacturers to realize increasing economies of scale with
    production volume so that DTV tuner costs will be lower when they
    are required to be included in smaller sets and other TV receiver
    devices. In the case of large screen receivers, *i.e.*, screen sizes
    36" and larger, and mid-size receivers, *i.e.*, screen sizes 25-36",
    the tuner requirement first applies to 50 percent of a responsible
    party's units and then the following year to 100 percent of its
    units. The 50 percent requirement commenced for large screen
    receivers on July 1, 2004 and for mid-size receivers on July
    1, 2005. The tuner requirement then applies to 100 percent of small
    screen receivers, *i.e.*, those with screen sizes 13-24", and other
    TV receiver devices beginning July 1, 2007.

4.  In the *Report and Order* section of the *Report and Order/Further
    Notice*, the Commission modified the DTV tuner requirement phase-in
    plan by moving the date on which 100 percent of mid-size TV
    receivers must include a DTV tuner from July 1, 2006 to March 1,
    2006.[^7] This change was intended to minimize certain difficulties
    that manufacturers experienced with the 50 percent provisions of the
    phase-in plan and to expedite the provision of DTV reception
    capability to consumers. In that action, the Commission also
    maintained the 50 percent requirement for mid-size receivers during
    the period from July 1, 2005 to February 28, 2006. It concluded that
    maintaining the 50 percent approach for mid-size receivers prior to
    March 1, 2006 will most effectively ensure that DTV tuner equipped
    sets in this size range are available to consumers this year, and
    especially for the 2005 holiday and 2006 Super Bowl seasons. The DTV
    tuner requirement phase-in plan is currently as follows:

    Receivers with screen sizes 36" and above \-- 50% of a responsible
    party's units must include DTV tuners effective July 1, 2004; 100%
    of such units must include DTV tuners effective July 1, 2005;

    Receivers with screen sizes 25-36" \-- 50% of a responsible party's
    units must include DTV tuners effective July 1, 2005; 100% of such
    units must include DTV tuners effective March 1, 2006;

    Receivers with screen sizes 13-24" \-- 100% of all such units must
    include DTV tuners effective July 1, 2007;

    Other devices that receive broadcast television signals (VCRs,
    digital video recorders, etc.) \-- 100% of all such units must
    include DTV tuners effective July 1, 2007.

5.  In the *Further Notice* portion of the *Report and Order/Further
    Notice*, the Commission proposed to advance the date on which new
    television receivers with 13-24" screens and other television
    receiver products must comply with the DTV tuner requirement from
    July 1, 2007 to a date no later than December 31, 2006 and sought
    comment on whether it should extend this requirement to new
    receivers with screen sizes less than 13" inches.[^8] In addition,
    it requested suggestions for alternative approaches for including
    DTV reception capability in all new TV receivers on a schedule
    reflective of the December 31, 2006 statutory target date for the
    end of the DTV transition.[^9] We received 11 comments and 6 reply
    comments in response to these proposals.[^10]

# DISCUSSION

6.  As we have observed previously, consumers must be able to receive
    digital TV signals for the transition to move forward to a
    successful completion.[^11] The DTV tuner requirement is intended to
    provide off-the-air DTV reception capability to the general
    population on a schedule that will promote a rapid completion of the
    DTV transition. Our goal in this matter remains to maximize the
    number of TV receivers with DTV tuners on the market, with a final
    goal that all new television receiver products include a DTV tuner,
    as quickly as possible. We recognize, however, that manufacturers'
    and retailers' product development and distribution resources and
    capabilities will affect their ability to comply with the tuner
    requirement and therefore need to be considered in decisions
    modifying that requirement.

## Receivers 13-24" and Other TV Receiving Devices 

7.  In the *Further Notice*, we proposed to advance the date on which
    new television receivers with 13-24" screens and other new
    television receiver products must be able to receive over-the-air
    broadcast digital television signals from July 1, 2007 to a date no
    later than December 31, 2006. We requested comment on this proposal
    and suggestions for alternative approaches for including digital
    reception capability in all TV receiver devices.

8.  *Comments*. Parties representing the views of broadcasters, new 700
    MHz service providers, and consumers support advancing the date by
    which new television receivers with 13-24" screens and other TV
    receiver products must comply with the DTV tuner requirement to a
    date no later than December 31, 2006, and also recommend making this
    compliance date even earlier.[^12] Consistent with their comments
    with regard to our previous action to advance the deadline for
    inclusion of digital reception capability in the mid-size 25-36"
    receivers, these parties generally submit that advancing the date
    for compliance with the tuner requirement for smaller receivers
    would promote the prompt availability of smaller screen DTV sets and
    thereby protect consumers by ensuring that their television sets in
    this size range will go on working after analog TV service ceases.
    For example, MSTV/NAB argue that it is important that new receivers
    include digital tuners as soon as possible because consumers do not
    benefit from purchasing new analog sets that will become obsolete
    when analog service ceases. They also point to a survey showing that
    nearly one-half of all consumers report their current screen size as
    between 20-29" as an indication that many consumers are using
    smaller sets as their primary TV receiver.[^13] Disney/ABC argues
    that although the smaller sets are undoubtedly lower cost, those
    sets also likely will not be connected to cable and instead will be
    placed in viewers' kitchens or bathrooms, or will be used when
    viewers are traveling and so will need to tune broadcast signals.
    Motorola agrees with our initial assessment that the DTV tuner
    requirements for sets with screen sizes 25" or greater will help
    drive down the cost of integrating digital tuners in to sets smaller
    than 25".

9.  MSTV/NAB, Disney/ABC, and Motorola also submit that each sale of an
    analog-only TV set adds to the number of digital-to-analog converter
    boxes that consumers will need to obtain to preserve service for the
    millions of consumers relying on reception of broadcasters'
    over-the-air signals. Chris Llana, an interested consumer, similarly
    states that the DTV transition is now moving forward on a
    predictable timetable and that if a consumer buys an NTSC-only TV
    set, that set is not going to be able to receive service after
    analog service ends.

10. Motorola also argues that if the Commission does not act and enforce
    aggressive requirements for including DTV tuners in new TV receiver
    products the full availability of the 700 MHz spectrum for public
    safety and commercial services could be delayed. It argues that the
    importance of freeing this spectrum for the use of first responders
    and other users has been noted by Congress, which recently passed
    legislation stating that the Commission should consider all
    regulatory means available to expedite the return of analog
    spectrum.[^14]

11. MSTV/NAB, Disney/ABC, Chris Llana, and Motorola submit that the
    Commission should consider the feasibility of a date earlier than
    December 31, 2006 for small sets and other TV receiver products to
    include DTV tuners. They generally argue that advancing this
    deadline to an earlier date would help ensure that consumers
    shopping for sets smaller than 25" during the 2006/2007 holiday and
    Super Bowl selling seasons are not sold analog-only receivers. Chris
    Llana and Disney argue that in setting a date for requiring all TV
    sets to include a digital tuner, the overriding public policy
    concern should be minimizing the number of new analog-only sets
    purchased by American consumers before the end of the transition.
    MSTV/NAB and Disney/ABC state that in support of efforts to
    establish a fixed date, or "hard date," for terminating analog
    television service, the Commission should encourage the cessation of
    sales of analog-only television receiving equipment as soon as
    possible.[^15] Chris Llana contends that meeting an early deadline
    would not be difficult for manufacturers in that they would not be
    required to produce any particular quantity of sets with digital
    tuners but rather would merely be required not to import or ship in
    interstate commerce any sets without digital tuners after a certain
    date. He argues that while fewer television sets might be sold under
    this approach, every one of the sets not sold would be a set that
    would only have an analog-only tuner and that would be good for
    consumers. Motorola recommends that the Commission advance the date
    for all sets 13" or larger and other devices that receive television
    signals to include a digital tuner from July 1, 2007 to November 1,
    2006, two months prior to the congressionally anticipated date for
    the completion of the DTV transition, while Chris Llana argues for
    moving the date forward to not later than October 1, 2006.

12. ATI Technologies, Inc. (ATI) states that it submits comments to
    provide information regarding the ability of chip manufacturers such
    as itself to assist consumer electronics manufacturers in meeting
    the DTV reception requirement. ATI indicates that it currently
    manufactures a single-chip digital tuner solution known as "Xilleon
    240" that, with associated software and reference designs, allows
    manufacturers to build both set-top converter boxes and television
    receivers that are capable of receiving DTV transmissions. [^16] It
    projects that based on historical price reductions and anticipated
    manufacturing volumes, by the fall of 2006 manufacturers could
    include DTV reception capability in television sets for a cost of
    less than \$40.[^17] ATI also advises that the ability of DTV chip
    manufacturers to provide component parts for DTV reception addresses
    only a portion of the issues that should be analyzed in considering
    an earlier deadline for including DTV tuners in new small screen TV
    sets. It states that the Commission should also consider the time
    and costs involved in the redesign of existing engineering plans and
    manufacturing processes, as well as the logistical, distribution,
    and retail hurdles that an earlier deadline would create.

13. CEA/CERC, several major consumer electronics manufacturers, and the
    Government of China strongly oppose advancing the deadline for
    including digital tuners in small screen and other TV receiving
    devices.[^18] These parties argue that it would be infeasible for
    the general population of TV manufacturers to include digital tuners
    in all of their smaller screen and other TV receiver products by
    December 31, 2006 or earlier. CEA/CERC state that the current date
    has been relied on by manufacturers in their product and resource
    planning and by retailers in their merchandising and marketing
    planning and that it would be infeasible to advance the date in
    accordance with the proposed change. In this regard, CEA/CERC and
    the manufacturers state that while it may seem that success in one
    area could support acceleration in another, this is not the case
    with smaller TV sets. They submit that the resources that have been
    devoted to areas that the tuner mandate requires to be addressed
    first are still being devoted to those areas. They argue that these
    resources cannot now be readily shifted or duplicated to respond to
    a change in schedule for smaller products and that in any case the
    general population of manufacturers does not have sufficient
    resources available to respond to such a change. Panasonic, Philips,
    and TTE state that acceleration of this last DTV tuner deadline from
    July 1, 2007 to no later than December 31, 2006, on top of the four
    month acceleration of the deadline for 25-36" receivers, would tax
    manufacturers capabilities to the breaking point. For example,
    Panasonic states that it does not have unlimited resources and has
    relied on the implementation schedule in the rules to schedule,
    develop, and coordinate its production and distribution plans for
    digital television products. The Government of China argues that
    there has not been sufficient progress towards meeting the 85
    percent threshold for DTV reception capability in the statutory
    standard for ending the transition to provide a basis for advancing
    the schedule for including DTV tuners in new small screen and other
    TV receiver products. [^19]

14. CEA/CERC and the manufacturers submit that advancing the digital
    tuner compliance schedule as proposed would unnecessarily cause
    sharp price increases in the price of smaller sets and set-top boxes
    that otherwise would be avoidable and would threaten to create
    marketplace shortages of certain products that would impede, rather
    than accelerate, the overall digital transition. The Government of
    China similarly argues that the effect of advancing the date by
    which these products must include a DTV tuner would only serve to
    significantly raise the price of those products. TTE states that
    while the cost of including DTV reception capability in TV receivers
    will decline as component manufacturers achieve economies of scale
    and consistent with the estimates of Zoran Corporation, that cost
    will not drop so dramatically as to be anywhere near a "modest"
    increase for smaller screen products. Philips and TTE further argue
    that accelerating the deadline for smaller sets would create
    unacceptable risks to product quality.[^20] Sharp and TiVo argue
    that advancing the tuner mandate in an attempt to meet the 2006
    holiday selling season would have the opposite effect in that it
    would disrupt the market for all television devices in that season.
    In response to arguments that sales of analog sets harm the
    transition, CEA/CERC contend that it would be wrong to assume that
    every television set sold with an analog tuner will in fact need an
    over-the-air converter box as such sets can also be used with cable
    and satellite TV systems, gaming consoles, and similar products.

15. Philips explains the minimum 18-24 month period that it and other
    manufacturers argue is needed between design of television products
    and retail availability. It states that each new product must first
    undergo a development process with milestones as follows: 1) feature
    specification, 2) performance specifications for each function, 3)
    engineering designs for all features, 4) chassis development, 5)
    obtain parts, 6) prototypes construction, and 7) test prototypes to
    ensure that specifications are met and reliability acquired. Philips
    submits that the above process takes a minimum of nine months, and
    more if design difficulties occur. It states that once prototypes
    reach the later stages of the above process, the product is first
    presented to retailers and an additional six month period ensues
    during which the product design is refined, further integration and
    testing occurs, and formal product sales presentations are made to
    retailers, followed by further sales meetings. Philips indicates
    that only then do major retailers make their placement decisions,
    paving the way for production quantity manufacturing to commence. It
    states that at that point the manufacturer proceeds to order the
    parts and subassemblies necessary to construct the products that
    have been ordered. According to Philips, after the production models
    pass testing, shipments begin to the retailers, generally within 4-6
    months of retailer placement decisions. It states that that
    upsetting this process by moving the deadline unreasonably close at
    the last minute would threaten to disrupt marketplace dynamics and
    drive up the price of digital sets.

16. CEA/CERC further state that the DTV tuners integrated into large
    screen sets are not necessarily the same units as those that must be
    designed for smaller products. They submit that the tuners used in
    the large screen sets and most mid-size sets are designed to produce
    HDTV or EDTV outputs, as well as standard definition outputs, from
    HDTV programs. CEA/CERC indicate that this is not the case with
    smaller products, which in many cases will provide outputs at the
    NTSC, or standard definition, level. They state that although the
    resulting product is less capable and potentially cheaper, the fact
    that the component set is different means that the chassis and the
    final product must be engineered and produced differently. In their
    reply comments, Panasonic and TTE similarly argue that producing a
    line of integrated digital TV products requires making fundamental
    changes to the engineering design, electronics implementation, and
    physical structure of products. In this regard, TTE states that
    adding DTV reception capability to an existing television receiver
    model involves more than soldering a single tuner/chip onto a
    circuit board. It states that in fact DTV integration requires a
    re-engineering effort -- and in the case of smaller-sized sets,
    requires a new chassis - beginning with modifications to the chassis
    hardware and software to accept the digital tuner, demodulator, and
    other essential circuitry and related components; followed by
    cabinet modifications to accept the new chassis, all new reliability
    and safety testing, and regulatory approvals. Panasonic states that
    these considerations are especially important as the shift to flat,
    thin and often "panel" TV's has become the norm and as consumers
    seek alternatives to the larger, bulkier, and boxy CRT-based TV sets
    that sometimes offered somewhat easier "packaging" implementation.
    Panasonic submits that this packaging factor is amplified in
    interface products such as VCRs and DVD recorders where consumer
    expect the physical footprint of the device to match or be smaller
    than current models.[^21]

17. While they maintain that it will still be challenging to meet the
    July 1, 2007 date for smaller screen and other TV receiver products,
    CEA/CERC, Panasonic, Philips, and TTE also offer that a somewhat
    earlier compliance date for these products might be feasible so long
    as it is not earlier than March 1, 2007. They indicate this date is
    the earliest possible compliance date for the general population of
    manufacturers, who need a minimum of 18 to 24 months to plan,
    develop, and deploy new products. Philips opposes changing the
    current date for digital television products other than television
    sets, such as DVD recorders and VCRs. It states that with so many
    products to address, the resource burden would be simply too great
    to move the compliance date up for other TV reception products.
    Philips also argues that in considering the difficulties with a
    November 1, 2006 or December 31, 2006 compliance date, the
    Commission should recognize that there is only a 2-4 months, not
    years, difference between these proposals and the date offered by
    itself, CEA/CERC and other manufacturers and that while the 2-4
    months is critical to the reliable design and successful
    introduction of the new smaller digital sets and other products for
    consumers, relatively few analog sets would be sold during the 2-4
    month period as compared to the 290 million analog sets already in
    homes.

18. *Decision*. Consistent with the need to promote a rapid and orderly
    end to the DTV transition, we continue to believe it is desirable
    and appropriate to advance the date by which all new television
    receiving equipment must include the capability to receive
    over-the-air broadcast DTV signals. The rules already require that
    all new large screen receivers and 50 percent of a responsible
    party's mid-size receivers include digital reception capability and
    we recently advanced the date by which all mid-size receivers must
    include that capability by four months, to March 1, 2006. Advancing
    the date by which the remaining 13-24" smaller-size sets and other
    TV receiver devices categories must comply with the DTV tuner
    requirement will serve to ensure that a greater portion of all TV
    receiver products that are in use by consumers at the time analog
    service ceases will be able to receive broadcasters' digital signals
    and thus provide for a smooth and orderly completion of the
    switchover process. As MSTV/NAB and Disney/ABC observe, many
    consumers do, in fact, rely on a smaller-size set as their primary
    device for watching TV service and those consumers will receive only
    limited benefits from purchasing new analog-only sets that will not
    receive broadcast signals when analog service ceases. [^22]

19. As indicated above, our goal in the *Report and Order and Further
    Notice* with respect to the smaller-size sets and other TV receiving
    devices categories was to advance the date by which these products
    must include digital reception capability to December 31, 2006 or
    earlier, if feasible.[^23] In deciding on a new date for applying
    the tuner requirement to these products, we need to consider the
    ability of manufacturers to produce compliant products as well as
    the benefits of including DTV tuners in these products. After
    carefully examining the record herein, we conclude that the action
    which most appropriately balances our concerns on both sides of this
    matter is to advance the date by which new 13-24" television sets
    and other TV receiver devices must include the capability to receive
    broadcast digital television signals to March 1, 2007, in accordance
    with the alternative approach suggested by CEA/CERC and several of
    the consumer electronics manufacturers participating in this
    proceeding. From the information provided by CEA/CERC and the
    participating manufacturers, we conclude that it may not be feasible
    for the general population of receiver manufacturers to produce all
    of their products in these categories with DTV tuners at an earlier
    date. In particular, we recognize the manufacturers' points that the
    DTV tuners that will be included in smaller receivers are not the
    same units as installed in larger screen sets, that the design of
    smaller screen receivers is changing to flat or thin panel formats,
    and that the product development, parts acquisition, manufacturing,
    distribution, and marketing processes for new television receiver
    products are both technically demanding and complex with multiple
    steps that must be completed in succession.[^24] We are not adopting
    Philips' suggestion that we exempt other TV receiver products from
    the accelerated date for compliance with the tuner requirements, as
    other manufacturers appear to be able to include DTV tuners in those
    products by March 1, 2007.[^25]

20. We are concerned that if we were to require DTV reception capability
    in smaller-size and other TV receiver products before the general
    population of manufacturers is able to properly complete the product
    development process, it could prove disruptive to the market for
    those products. Specifically, we are concerned that such disruptions
    could possibly involve deficiencies in the quality of products
    marketed so that they would not be acceptable to consumers,
    manufacturers deciding to simply leave the market for these
    products, or manufacturers just removing broadcast television
    reception capability from these products. We do not find that it
    would be better to accept the removal of product categories from the
    marketplace or the removal of all television reception capability
    from a display device. To do so might pose business costs for
    manufacturers in terms of lost sales or possible shut-down of
    production facilities that we do not believe are necessary.

21. We also note that the March 1, 2007 date when the industry indicates
    that the general population could be ready to produce 13-24" sets
    and other TV receiver products with DTV tuners is only two months
    beyond our December 31, 2006 proposal. We believe that the benefits
    of allowing manufacturers to proceed with the inclusion of DTV
    tuners in these products on a more orderly basis would outweigh the
    adverse effects of the relatively small number of affected products
    (as compared to the hundreds of millions of analog-only receivers
    currently in use) that would be brought into the market in the two
    month period between December 31, 2006 and March 1, 2007. Upon
    balancing the production capabilities of manufacturers and our
    interests in promoting a rapid conclusion to the DTV transition, we
    believe the brief two month period when new analog-only sets can be
    brought onto the market will still allow the return of the 700 MHz
    spectrum in a timely manner without overly burdening
    manufacturers.[^26] Accordingly, for the reasons set forth above we
    are advancing the date by which television receivers with screen
    sizes 13-24" and other TV receiver devices must include the
    capability to receive digital television signals from July 1, 2007
    to March 1, 2007.

## Receivers with Screen Sizes less than 13"

22. In the *Report and Order and Further* Notice, the Commission sought
    comment on whether it should extend the DTV tuner requirement to
    apply to receivers with screen sizes less than 13" inches. It noted
    that if such devices are to provide off-the-air reception of TV
    signals after the transition, they too must be able to receive DTV
    signals and that it is less likely that very small screen receivers,
    and particularly handheld and similar portable devices, would be
    used with a separate device for receiving DTV signals.

23. *Comments*. MSTV/NAB, Chris Llana and Philips support applying the
    digital tuner mandate to receivers smaller than 13". MSTV/NAB state
    that extending the tuner mandate to sets under 13" as soon as
    practicable would ensure that these sets provide service in the
    post-transition environment, and in particular argue that it is
    crucial that they function during power outages in times of
    emergency. They note that portable sets are more likely than larger
    sets to be used solely for over-the-air reception and, because they
    are typically battery powered, are crucial when disasters leave
    viewers without power. MSTV/NAB also submit that unlike larger sets,
    a digital-to-analog converter box could not generally be added to a
    portable, battery-powered set. Chris Llana argues that sets with
    screen sizes smaller than 13" are generally more expensive than the
    typical 13" set and so believes that the added price for a digital
    tuner in these sets would not discourage consumers from purchasing
    them. Philips states that assuming that all analog broadcasts will
    completely cease, it is reasonable to extend the mandate to all
    television sets regardless of size.

24. CEA/CERC and Sharp oppose extending the DTV tuner requirements to
    receivers with screen sizes smaller than 13". They generally argue
    that manufacturers, in their concentration on the existing
    implementation schedule, have neither considered nor assigned
    resources to the project of including DTV reception capability in
    sets with screens smaller than 13". They state that including DTV
    tuners in products of this size will require chipsets that do not
    yet exist. They therefore submit that experience is necessary with
    the small chassis products that currently are subject to the tuner
    requirements before the feasibility of including digital tuners in
    products with screens smaller than 13" can be determined. CEA/CERC
    also submit that the cost of adding a digital tuner to these
    inexpensive sets would dramatically impact the retail price at this
    time. Sharp does not believe that the free market needs any
    assistance in the digital transition for receivers smaller than 13".
    It argues that since hand-held and portable TV receivers are
    typically rather inexpensive, consumers would be better served by
    purchasing a new portable device after the analog cutoff when prices
    decrease from economies of scale. It further argues that mobile
    devices have unique tuner needs that would be better served by more
    advanced chipsets, so that consumers would get a better mobile
    digital tuner later, at a less expensive price, without a tuner
    mandate. Philips and TTE urge that any expansion of the mandate to
    include DTV tuners in receivers with screen sizes below 13" should
    apply only to devices that are intended primarily for receiving
    broadcasts and not other types of over-the-air video reception
    devices such as cellular telephones and personal digital assistants
    (PDAs). They argue that mobile phones and other mobile devices that
    include a capability to receive video programs transmitted in any
    service other than traditional, free over-the-air broadcasting on
    channels 2-51 are not TV receivers and do not have any meaningful
    impact on the DTV transition.

25. *Decision*. We find merit in the concerns of MSTV/NAB and others
    that receivers with screen sizes less than 13" should also be
    required to include DTV reception capability. Unlike larger screen
    receivers, the portable and typically battery-powered products in
    this category are more likely to be used to receive off-the-air
    signals and to not have inputs for connection to a separate DTV
    receiver. Thus, in contrast to larger screen receivers and other TV
    receiving devices, it is reasonable to expect that sets with screen
    sizes less than 13" would generally not be useful to consumers once
    analog television service ceases. We recognize that these very small
    receivers are not typically used as a viewer's primary receiver.
    Nonetheless we also note their particular value for enabling the
    reception of news and public safety information in times of
    emergency. We therefore conclude that it would benefit consumers and
    the purposes of the broadcast television service and its transition
    to digital operation to require that receivers with screens less
    than 13" are able to receive digital signals on the same schedule as
    other TV receiver products. Extending the DTV tuner requirement to
    receivers with screen sizes less than 13" on that schedule will
    maximize the number of receivers in this category that will continue
    to be able to provide service after analog TV operation ceases. We
    are not convinced that it would be overly burdensome for the
    consumer electronics industry to bring these products into
    compliance with the DTV tuner requirement by the date when all other
    TV receiver products must include DTV reception capability. For
    example, Philips supports extending the tuner requirement to sets in
    this category.[^27] Because of the limited usefulness of these
    products for other purposes after analog service ends, we believe it
    would be preferable to restrict the marketing of products than to
    continue to allow non-compliant products to be sold to consumers.
    Accordingly, we will require that responsible parties equip
    television receivers with screens less than 13" that are imported
    into this country or shipped in interstate commerce on and after
    March 1, 2007 with the capability to receive broadcast digital
    television signals.

26. We agree with Philips and TTE that this extension of the DTV tuner
    requirement to very small screen devices should only apply to
    products that receive off-the-air broadcasts and not other types of
    off-the-air reception devices such as cell phones and personal
    digital assistants (PDAs) that do not include the capability to
    receive broadcast TV service on the frequencies allocated for that
    service but may be able to receive broadcast TV programming that is
    re-transmitted over a wireless communications link other than a TV
    channel. To the extent that such devices are able to display
    broadcast TV programming transmitted over a non-broadcast
    communications link, we do not consider a device with that
    capability to be a broadcast TV receiver. Therefore, the DTV tuner
    requirement does not extend to small screen video capable devices
    that do not include the ability to receive broadcast television
    signals off-the-air. However, in cases where a cell phone, PDA or
    similar device does include the capability to receive TV programming
    on the channels allocated for the broadcast television service, that
    device is a TV broadcast receiver under Section 15.3(w) of the rules
    and must comply with the DTV tuner requirement.[^28]

## Other Approaches - Labeling Requirements

27. As indicated above, in the *Report and Order and Further Notice* the
    Commission also requested suggestions for alternative approaches for
    including DTV reception capability in all new TV receivers. Chris
    Llana recommends that as an alternative approach in conjunction with
    the DTV tuner requirement the Commission also require that
    television receiver products be labeled with enough information to
    permit consumers to make a fully informed decision before purchase
    and to alert them to the downsides of buying an analog-only product.
    He submits that any label should be clear and complete and that the
    label should be placed on the screen of TV sets, where it would draw
    attention to itself.

28. CEA/CERC submit that they have testified in Congressional hearings
    that they each support a requirement for a standard informative
    label once a "hard date" for the end of the DTV transition has been
    enacted.[^29] They therefore urge the Commission to wait until the
    enactment of new DTV legislation before proceeding with any labeling
    requirement. They also submit that in terms of timing, manufacturers
    would need 120 to 180 days to include labels on products themselves
    (as opposed to packaging) to incorporate the labeling step into the
    manufacturing cycle. They indicate that a 90 day period would be
    needed if a label were designed as a sticker to be placed on the
    outside of the product packaging. CEA/CERC state that any shorter
    notice period would mean that highly automated production lines
    would have to be stopped and re-organized at great cost, or else the
    labels would have to be added manually at similarly high cost. They
    state that with enough advance notice to automate the labeling
    process, labeling is a much less significant cost. In its reply
    comments, Panasonic supports CEA/CERC's submission regarding
    labeling and pledges to work with the Commission, other
    manufacturers, and retailers to devise the appropriate and uniform
    form for such labels.

29. We believe that consumer awareness of whether a television can
    receive off-the-air DTV signals or only off-the-air analog signals
    is critical to ensuring that consumer expectations are met.  We also
    believe that it would further consumer education if manufacturers
    and retailers would provide point-of-sale and other marketing
    information to consumers and/or clearly label new television sets. 
    We believe that such efforts would result in more informed consumer
    choices about whether to buy DTV tuner equipped sets.  These issues
    have been raised in the Second DTV Periodic Review, MB Docket No.
    03-15, and we intend to address these issues expeditiously. [^30] 
    In the interim, we encourage manufacturers and retailers to clearly
    label and identify the tuning capabilities of new TV sets and/or
    employ other means to disseminate to consumers information regarding
    whether or not specific models are able to receive off-the-air
    digital television signals.

# procedural MATTERS

30. *Accessibility Information*. Accessible formats of this Second
    Report and Order (computer diskettes, large print, audio recording
    and Braille) are available to persons with disabilities by
    contacting Brian Millin, of the Consumer & Governmental Affairs
    Bureau, at (202) 418-7426, TTY (202) 418-0432, or at
    bmillin@fcc.gov.

31. *Paperwork Reduction Act of 1995 Analysis*. This Second Report and
    Order contains no new or modified information collection(s) subject
    to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In
    addition, therefore, it does not contain any new or modified
    "information collection burden for small business concerns with
    fewer than 25 employees," pursuant to the Small Business Paperwork
    Relief Act of 2002, Public Law 107-198, *see* 44 U.S.C. 3506(c)(4).

32. *Final Regulatory Flexibility Analysis*. As required by the
    Regulatory Flexibility Act,[^31] the Commission has prepared a Final
    Regulatory Flexibility Analysis ("FRFA") relating to the Report and
    Order section of this action. The FRFA is set forth in Appendix C.

33. *Additional Information*. For additional information on this
    proceeding, please contact Alan Stillwell, Office of Engineering and
    Technology at (202) 418-2925.

# ordering CLAUSES

34. Accordingly, **IT IS ORDERED** that, pursuant to the authority
    contained in Sections 2(a), 4(i) & (j), 7, 151 and 303 of the
    Communications Act of 1934 as amended, 47 U.S.C. §§ 152(a), 154(i) &
    (j), 151, 157, and 303, this Report and Order and Further Notice of
    Proposed Rulemaking **IS ADOPTED** and the Commission's rules **ARE
    HEREBY AMENDED** as set forth in Appendix B*,* and shall become
    effective 30 days after publication in the Federal Register.

35. **IT IS FURTHER ORDERED** that the Commission's Consumer and
    Governmental Affairs Bureau, Reference Information Center, **SHALL
    SEND** a copy of this Second Report and Order, including the Final
    Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy
    of the Small Business Administration. [^32]

36. **IT IS FURTHER ORDERED** that the Commission **SHALL SEND** a copy
    of this Report and Order and Further Notice of Proposed Rulemaking
    in a report to be sent to Congress and the General Accounting Office
    pursuant to the Congressional Review Act, *see* 5 U.S.C. §
    801(a)(1)(A).

    FEDERAL COMMUNICATIONS COMMISSION

    Marlene H. Dortch

    Secretary

    **APPENDIX A**

    **PARTIES SUBMITTING COMMENTS AND/OR REPLY COMMENTS**

    [Parties Submitting Comments]{.underline}

    1\. Joint Comments of the Association for Maximum Service Television
    and the National Association of Broadcasters

    2 Association of Public Television Stations

    3\. ATI Technologies, Inc.

    4\. Government of China (late filed)

    5\. Joint Comments of the Consumer Electronics Association and the
    Consumer Electronics Retailers Coalition

    6\. The Walt Disney Company

    7\. Chris Llana

    8\. Nicholas E. Leggett

    9\. Motorola, Inc.

    10\. Philips Electronics North America Corporation

    11\. Sharp Electronics Corporation

    12\. TiVo, Inc.

    [Parties Submitting Reply Comments]{.underline}

    1\. Joint Reply Comments of the Association for Maximum Service
    Television and the National Association of Broadcasters

    2\. Chris Llana

    3\. Joint Reply Comments of the Consumer Electronics Association and
    the Consumer Electronics Retailers Coalition

    4\. Panasonic Corporation of North America

    5\. Philips Electronics North America Corporation

    6\. TTE Corporation

    **APPENDIX B**

    **AMENDMENTS TO THE COMMISSION'S RULES**

    Part 15 of Title 47 of the Code of Federal Regulations is amended as
    follows:

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

    Authority: 47 U.S.C. 154, 303, 303, 304, 307, and 554A.

    2\. Section 15.117 of the rules is amended by revising paragraph
    (i)(1) to read as follows:

    § 15.117 TV broadcast receivers.

    \* \* \* \* \*

    \(i\) Digital television reception capability implementation
    schedule. (1) Responsible parties, as defined in Section 2.909 of
    this chapter, are required to equip new TV broadcast receivers that
    are shipped in interstate commerce or imported from any foreign
    country into the United States and for which they are responsible to
    comply with the provisions of this section in accordance with the
    following schedule:

-   Receivers with screen sizes 36" and above - 50% of all of a
    responsible party's units must include DTV tuners effective July 1,
    2004; 100% of such units must include DTV tuners effective July 1,
    2005

-   Receivers with screen sizes 25" to less than 36" - 50% of all of a
    responsible party's units must include DTV tuners effective July 1,
    2005; 100% of such units must include DTV tuners effective March 1,
    2006

-   Receivers with screen sizes less than 25" - 100% of all such units
    must include DTV tuners effective March 1, 2007

-   Other video devices (videocassette recorders (VCRs), digital video
    recorders such as hard drive and DVD recorders, etc.) that receive
    television signals - 100% of all such units must include DTV tuners
    effective March 1, 2007.

    The requirement to include digital television reception capability
    in new TV broadcast receivers does not apply to devices such as
    mobile telephones and personal digital assistants where such devices
    do not include the capability to receive TV service on the
    frequencies allocated for broadcast television service.

    \* \* \* \* \*

    **APPENDIX C**

    **FINAL REGULATORY FLEXIBILITY ANALYSIS**

    As required by the Regulatory Flexibility Act of 1980, as amended
    ("RFA"),[^33] an Initial Regulatory Flexibility Analysis (IRFA) was
    incorporated into the *Report and Order and Further Notice of
    Proposed Rulemaking* in ET Docket No. 05-24 (*Report and Order and
    Further Notice*). The Commission sought written public comment on
    the proposals on the *Notice* concerning modification of the plan
    for applying the DTV tuner requirement to TV receivers with screen
    sizes 25-36", including comment on the IRFA. No comments were
    received in response to the IRFA. This Final Regulatory Flexibility
    Analysis (FRFA) conforms to the RFA.[^34]

A.  **Need for and Objectives of the Rules Adopted in the Second Report
    and Order.** As described in the *Second Report and Order and
    Further Notice*, the changes to the rules adopted in this proceeding
    are intended to ensure a smooth transition of the nation\'s
    television system to digital television. Beginning in 1987, the
    Commission undertook to bring the most up-to-date technology to
    broadcast television.[^35] That effort resulted in several
    Commission decisions, including those adopting a digital television
    (DTV) standard,[^36] DTV service rules,[^37] and a Table of DTV
    Allotments.[^38] The Table of DTV Allotments provides each existing
    television broadcaster with a second channel on which to operate a
    DTV station for a transition period in which stations will operate
    both analog and digital TV service, after which analog service will
    cease and one of each station's two channels will revert to the
    government for use in other services. The transition deadline
    established by Congress was December 31, 2006.

    In 2002, consistent with its efforts to promote the expeditious
    completion of the DTV transition, the Commission adopted a
    requirement that all new television receivers imported or shipped in
    interstate commerce after July 1, 2007 include the capability to
    receive DTV signals off-the-air. In order to minimize the impact of
    the DTV tuner requirement on both manufacturers and consumers, the
    Commission adopted a phase-in schedule that applies the DTV tuner
    requirement first to receivers with the screens and then to
    progressively smaller screen receivers and other TV receiving
    devices. In the *Report and Order and Further Notice*, the
    Commission modified the phase-in schedule for requiring DTV tuners
    in new television receiver products by advancing the date for 100%
    compliance by receivers with 25-36" screens to March 1, 2006 from
    July 1, 2006. In that action, the Commission concluded that
    maintaining the 50 percent requirement for 25-36" receivers for the
    period from July 1, 2005 to February 28, 2005 and advancing the 100
    percent compliance date for mid-size receivers to March 1, 2006 will
    ameliorate the concerns of the consumer electronics manufacturers
    and retailers with respect to the 50 percent approach and further
    its goal of promoting DTV reception availability. In that action,
    the Commission also proposed to advance the compliance date for
    13-24" receivers in order to promote a more rapid conclusion to the
    digital television transition.

    In this Second Report and Order, the Commission revises its rules to
    advance the date on which new television receivers with screen sizes
    13-24" and certain other TV receiving devices such as VCRs and
    digital video recorders must include the capability to receive
    broadcast digital television signals from the current date of July
    1, 2007 to March 1, 2007. The Commission also amends its rules to
    apply the digital television reception capability requirement to new
    receivers with screen sizes smaller than 13" on this same schedule.
    With these changes, the scheduled DTV tuner implementation plan will
    require that all new TV receiver equipment include digital reception
    capability as of March 1, 2007. The Commission is taking these steps
    to ensure that digital television reception capability is provided
    to the general population on a schedule that will promote a rapid
    completion of the DTV transition. In this regard, we observe that
    consumers must be able to receive digital signals for the transition
    to move forward to a successful completion. The Commission's goal in
    taking the actions in the Second Report and Order is to maximize the
    number of TV receivers on the market, with a final goal that all new
    television receiver products include a DTV tuner as quickly as
    possible. In crafting those actions, the Commission recognized that
    manufacturers' product and distribution resources will affect their
    ability to comply with the tuner requirement and balanced those
    considerations with the need to ensure that new TV receiver products
    include DTV tuners.

B.  **Summary of Significant Issues Raised by Public Comments in
    Response to the IRFA:** No comments were filed in response to the
    IRFA.

C.  **Description and Estimate of the Number of Small Entities to Which
    the Proposed Rules Will Apply.** The RFA directs the Commission to
    provide a description of and, where feasible, an estimate of the
    number of small entities that will be affected by the proposed
    rules.[^39] The RFA generally defines the term "small entity" as
    having the same meaning as the terms "small business," "small
    organization," and "small governmental entity."^.^[^40] In addition,
    the term "small business" has the same meaning as the term "small
    business concern" under the Small Business Act.[^41] 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").[^42]

    **Electronics Equipment Manufacturers.** Rules adopted in this
    proceeding will apply to manufacturers of DTV receiving equipment
    and other types of consumer electronics equipment. The SBA has
    developed definitions of small entity for manufacturers of audio and
    video equipment[^43] as well as radio and television broadcasting
    and wireless communications equipment.[^44] These categories include
    the types of equipment affected by the rules adopted herein and both
    include all such companies employing 750 or fewer employees.
    However, these NAICS categories are broad and specific figures are
    not available as to how many of these establishments manufacture
    consumer equipment. According to the SBA's regulations, an audio and
    visual equipment manufacturer must have 750 or fewer employees in
    order to qualify as a small business concern.[^45] Census Bureau
    data indicates that there are 554 U.S. establishments that
    manufacture audio and visual equipment, and that 542 of these
    establishments have fewer than 500 employees and would be classified
    as small entities.[^46] The remaining 12 establishments have 500 or
    more employees; however, we are unable to determine how many of
    those have fewer than 750 employees and therefore, also qualify as
    small entities under the SBA definition. Under the SBA's
    regulations, a radio and television broadcasting and wireless
    communications equipment manufacturer must also have 750 or fewer
    employees in order to qualify as a small business concern.[^47]
    Census Bureau data indicates that there 1,215 U.S. establishments
    that manufacture radio and television broadcasting and wireless
    communications equipment, and that 1,150 of these establishments
    have fewer than 500 employees and would be classified as small
    entities.[^48] The remaining 65 establishments have 500 or more
    employees; however, we are unable to determine how many of those
    have fewer than 750 employees and therefore, also qualify as small
    entities under the SBA definition. We therefore conclude that there
    are no more than 542 small manufacturers of audio and visual
    electronics equipment and no more than 1,150 small manufacturers of
    radio and television broadcasting and wireless communications
    equipment for consumer/household use.

    **Computer Manufacturers**. The Commission has not developed a
    definition of small entities applicable to computer manufacturers.
    Therefore, we will utilize the SBA definition of electronic
    computers manufacturing. According to SBA regulations, a computer
    manufacturer must have 1,000 or fewer employees in order to qualify
    as a small entity.[^49] Census Bureau data indicates that there are
    563 firms that manufacture electronic computers and of those, 544
    have fewer than 1,000 employees and qualify as small entities.[^50]
    The remaining 19 firms have 1,000 or more employees. We conclude
    that there are approximately 544 small computer manufacturers.

D.  **Description of Projected Reporting, Recordkeeping and other
    Compliance Requirements.** The rule changes adopted in the Report
    and Order impose no additional recordkeeping or recordkeeping
    requirements on manufacturers of television receiving equipment,
    large or small. While the modifications adopted therein may have a
    small impact on consumer electronics manufacturers, any such impact
    would be similar for both large and small entities. We do not
    believe that the potential impact on an specified number of small
    entities outweighs the overall public interest benefits conferred by
    of the rule changes adopted in the Second Report and Order.

E.  **Steps Taken to Minimize Significant Impact on Small Entities, and
    Significant Alternatives Considered.** The RFA requires an agency to
    describe any significant alternatives that it has considered in
    reaching its proposed approach, which may include the following four
    alternatives (among others): (1) the establishment of differing
    compliance or reporting requirements or timetables that take into
    account the resources available to small entities; (2) the
    clarification, consolidation, or simplification of compliance or
    reporting requirements under the rule for small entities; (3) the
    use of performance,

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37. rather than design, standards; and (4) an exemption from coverage of
    the rule, or any part thereof, for small entities.[^51]

    The modification of the date for implementing the DTV tuner
    requirement in TV receivers with screen sizes in the 13-24" and
    under 13" size ranges and other television receiver products set
    forth herein is intended to expedite the availability of DTV tuners
    in products in these categories that are offered to consumers. The
    consumer electronics industry has indicated that it prefers the DTV
    tuner requirement to become effective for 13-24" receivers and other
    television receiver products on March 1, 2007 rather than a date of
    December 31, 2006 or earlier as proposed. The Commission also found
    that it was necessary to apply the tuner requirement to receivers
    with screen sizes less than 13" in order to ensure that new products
    in that category remain functional after the cessation of analog TV
    service. Moving the compliance date for these receivers to March 1,
    2007 rather than an earlier date will allow the general population
    of manufacturers sufficient time to include digital reception
    capability in small TV sets and other television receiver products
    and will also serve to promote the availability of digital reception
    capability in these sets for consumers.

    Alternative approaches considered by the Commission, but rejected,
    include various suggestions by broadcasters and others to advance
    the deadline for DTV tuners in 25-36" sets to either October 1, 2006
    or November 1, 2006. We rejected these options on the basis that the
    lead-times available for product development under those scenarios
    would be too short for the general population of manufacturers,
    including smaller manufacturers, to bring new compliant products to
    the market, especially given the times associated with
    specification, design, testing and obtaining parts and components
    from suppliers. While other options that would have extended the
    deadline beyond March 1, 2007 may have posed less potential impact
    on manufacturers, including small business manufacturers, extending
    the date beyond March 1, 2007 would be inconsistent with the need to
    expedite the DTV transition. In its decision, the Commission
    balanced the need to ensure that DTV reception capability is
    included in new TV receivers as soon as possible with its concerns
    for impact on manufacturers, including small manufacturers. Thus,
    the plan adopted minimizes the potential impact on small
    manufacturers consistent with the Commission's goals for the DTV
    reception requirement.

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

[^1]: DTV reception capability in fact involves more circuitry than just
    a tuner. To provide this capability requires a tuner to receive the
    digital signal, an MPEG decoder/formatter, and associated processing
    capability and memory.

[^2]: *See* 47 C.F.R. §§ 15.117(a), (h), and (i).

[^3]: *See* *Report and Order and Further Notice of Proposed Rulemaking*
    in ET Docket No. 05-24, FCC 05-121, released June 9, 2005.

[^4]: *See* S*econd Report and Order and Second Memorandum Opinion and
    Order* in MM Docket No. 00-39, 17 FCC Rcd 15978 (2002) at ¶¶ 8-46.

[^5]: *See* *DTV Review Second Report and Order*, at ¶ 40. For purposes
    of these rules, TV broadcast receivers also include other devices
    such as TV interface devices that do not include a viewing screen,
    *e.g.*, devices that are intended to provide audio-video signals to
    a video monitor with an antenna or antenna terminals that can be
    used for off-the-air TV reception. However, in the case of receivers
    that have display capabilities, the DTV tuner requirement applies
    only to units that have screen sizes 13" or larger.

[^6]: *Id*. at ¶ 44.

[^7]: *See* *Report and Order/Further Notice*, at ¶¶ 16-20.

[^8]: *Id*. at ¶¶ 21-22.

[^9]: *See* 47 U.S.C. § 309(j)(14).

[^10]: A list of the parties submitting comments and reply comments is
    provided in Appendix A. We also received a late filed comment
    submission from the Government of China through the National
    Institute of Standards on September 7, 2005. In the interests of
    relying on a full record, we are accepting that comment and
    considering it in our decision herein.

[^11]: *See* *Report and Order/Further Notice*, at ¶ 6.

[^12]: Parties that support advancing the date for requiring digital
    tuners in small screen and other TV receiving devices include the
    Association for Maximum Television Service and the National
    Association of Broadcasters in joint comments (MSTV/NAB), the
    Association of Public Television Stations (APTS), the Walt Disney
    Company (Disney/ABC), Chris Llana, and Motorola, Inc.

[^13]: MSTV/NAB cite Knowledge Networks/SRI, "Home Technology Monitor,
    2004 Ownership Survey" (Spring 2004) and Steven Hoffenberg, "Why
    Buy? 2005 HDTV Purchase Intent Survey," DTV View, January 2005.

[^14]: *See* Intelligence Reform and Terrorism Prevention Act of 2004,
    Pub. L. 108-458, § 7501.

[^15]: MSTV/NAB reference *Hearing on the Digital Television
    Transition*, Testimony of Edward O. Fritts, President and CEO of NAB
    Before the Senate Committee on Commerce, Science, and
    Transportation, July 12, 2005 ("Broadcasters accept that Congress
    will implement a 2009 hard date for the end of analog broadcast.");
    Anne Veigle, *DTV Bill to be Subsumed in Budget Bill*, Comm. Daily,
    July 8, 2005 ("A scaled-back DTV provision setting a hard transition
    date of January 1, 2009 ... will be part of a budget bill to be
    voted on in mid-Sept., Hill sources say.").

[^16]: ATI states that its Xilleon 240 DTV integrates into one chip all
    of the major functions of a DTV receivers, including VSB
    demodulator, MPEG decoder, video scaler, NTSC encoder, and
    microprocessor. It further states that the VSB demodulator included
    in the Xilleon 240 fully satisfies the ATSC A/74 receiver
    performance standard. It also indicates that it produces a complete
    ATSC software stack for the Xilleon 240 that includes a PSIP parser,
    digital closed captioning, emergency alert, and graphical user
    interface.

[^17]: ATI also states that by the fall of 2006 consumer electronics
    manufacturers should be able to produce DTV set-top converters for
    approximately \$40, allowing for retail prices around \$50. It
    explains that savings in power supply, packaging, and material will
    reduce the cost of adding DTV functionality to a television receiver
    to below the cost of building an external set-top box. It states
    that set-top boxes produced at this price should comply with
    substantially all of the requirements included in the Request for
    Quotes recently issued by MSTV/NAB. ATI predicts that for only a few
    additional dollars that it will be possible to add functions such as
    high definition output, Dolby digital audio output, and digital
    still camera and MP3 playback, making such converter boxes even more
    attractive to consumers.

[^18]: Those opposed to advancing the date for requiring digital tuners
    in smaller TV sets and other TV receiving devices include the
    Consumer Electronics Association and the Consumer Electronics
    Retailers Coalition (CEA/CERC) in joint comments, Panasonic
    Corporation of North America (Panasonic) in reply comments, Philips
    Electronics North America Corporation (Philips), Sharp Electronics
    Corporation (Sharp), Inc., TiVo, Inc., and TTE Corporation in reply
    comments.

[^19]: 47 U.S.C. §309(j)(14) also provides for extending the transition
    in individual markets if certain criteria regarding consumer
    penetration of DTV reception capability are not met.

[^20]: Philips indicates that the quality problems it anticipates would
    show up a higher than normal product failure rates.

[^21]: Panasonic also states that DVD and nascent products such as the
    new high-capacity Blu-Ray Disc need all the time anticipated under
    the current rule, inasmuch as the design for the analog-only
    versions of these products of today is shifting to incorporate
    digital and full HDTV recording. Panasonic states that it makes no
    sense to require a digital tuner in such products if they cannot
    record high definition programming. It submits that with the
    transition to HD-capable disc recorders expected to begin within a
    year, the timing of the existing July 1, 2007 DTV tuner requirement
    would mesh well. It states that the complexity of this product
    provides a good example of why the industry needs all the time that
    the Commission originally provided for "interface devices."

[^22]: *See* discussion of comments in paragraph 8 and footnote 13
    above; *see* also MSTV/NAB comments at 4-6; Disney/ABC comments at
    4.

[^23]: We note that Congress is considering enactment of a new deadline
    for ending the digital television transition and eliminating the
    provisions for extending the deadline.  We believe that the
    underlying rationale of the DTV tuner requirement would fully
    apply to any such change to the extent that the expected useful life
    of new television receivers extends beyond the transition date
    adopted (e.g., a transition end date in 2009 would be well within
    the expected useful life of TV receivers entering the marketplace in
    2007).

[^24]: *See* discussion of comments in paragraphs 15-16; *see also*
    Philips comments at 4-6 ; CEA/CERC comments at 3 and 7-8; Panasonic
    comments at 4-6; and TTE comments at 4-7.

[^25]: *See* discussion of comments in paragraph 17; *see also* CEA/CERC
    comments at 10-12; Philips comments at 10; Panasonic reply comments
    at 7-8; TTE comments at 7.

[^26]: We also observe that if Congress enacts legislation establishing
    a new date for ending the transition and eliminating the provisions
    for extending the deadline, that action would moot Motorola's
    concerns about the impact of the date for requiring DTV tuners in
    smaller size TV sets and other TV receiver products on the
    availability of 700 MHz spectrum for public safety use.

[^27]: *See* Philips comments at 9-10.

[^28]: 47 C.F.R. § 15.3(w).

[^29]: CEA and CERC presentations before the House Energy and Commerce
    Committee, May 26, 2005.

[^30]: *See* *Second Periodic Review of the Commission's Rules &
    Policies Affecting the Conversion To Digital Television, Report &
    Order* in MB Docket No. 03-15, 19 FCC 18280 (2004), ¶¶ 98-106.

[^31]: *See* 5 U.S.C. § 604.

[^32]: *See* 5 U.S.C. § 603(a).

[^33]: *See* 5 U.S.C. § 603. The RFA, *see* 5 U.S.C. §§ 601-612, has
    been amended by the Small Business Regulatory Enforcement Fairness
    Act of 1996 (SBREFA), Pub. L. No. 104-121, Title II, 110 Stat. 857
    (1996).

[^34]: *See* 5 U.S.C. § 604.

[^35]: *See Notice of Inquiry* in MM Docket No. 87-268, 2 FCC Rcd 5125
    (1987); *see also* *Tentative Decision and Further Notice of
    Proposed Rulemaking* in MM Docket No. 87-268, 3 FCC Rcd 6520 (1988).

[^36]: *See* *Fourth Report and Order* in MM Docket No. 87-268, 11 FCC
    Rcd 17771 (1996).

[^37]: *See* *Fifth Report and Order* in MM Docket No. 87-268, 12 FCC
    Rcd 12809 (1997).

[^38]: *See* *Sixth Report and Order* in MM Docket No. 87-268, 12 FCC
    Rcd 14588 (1997).

[^39]: 5 U.S.C. § 603(b)(3).

[^40]: 5 U.S.C. § 601(6).

[^41]: 5 U.S.C. § 601(3) (incorporating by reference the definition of
    "small business concern" in the Small Business Act, 15 U.S.C. §
    632). Pursuant to 5 U.S.C. § 601(3), the statutory definition of a
    small business applies "unless an agency, after consultation with
    the Office of Advocacy of the Small Business Administration and
    after opportunity for public comment, establishes one or more
    definitions of such term which are appropriate to the activities of
    the agency and publishes such definition(s) in the Federal
    Register."

[^42]: 15 U.S.C. § 632.

[^43]: 13 CFR § 121.201 (NAICS Code 334310).

[^44]: 13 CFR § 121.201 (NAICS Code 334220).

[^45]: 13 CFR § 121.201 (NAICS Code 334310).

[^46]: Economics and Statistics Administration, Bureau of Census, U.S.
    Department of Commerce, 1997 Economic Census, Industry Series --
    Manufacturing, Audio and Video Equipment Manufacturing, Table 4 at 9
    (1999). The amount of 500 employees was used to estimate the number
    of small business firms because the relevant Census categories
    stopped at 499 employees and began at 500 employees. No category for
    750 employees existed. Thus, the number is as accurate as it is
    possible to calculate with the available information.

[^47]: 13 C.F.R. § 121.201 (NAICS Code 513220).

[^48]: Economics and Statistics Administration, Bureau of Census, U.S.
    Department of Commerce, 1997 Economic Census, Industry Series --
    Manufacturing, Radio and Television Broadcasting and Wireless
    Communications Equipment Manufacturing, Table 4 at 9 (1999). The
    amount of 500 employees was used to estimate the number of small
    business firms because the relevant Census categories stopped at 499
    employees and began at 500 employees. No category for 750 employees
    existed. Thus, the number is as accurate as it is possible to
    calculate with the available information.

[^49]: 13 C.F.R. § 121.201 (NAICS Code 334111).

[^50]: Economics and Statistics Administration, Bureau of Census, U.S.
    Department of Commerce, 1997 Economic Census, Industry Series --
    Manufacturing, Electronic Computer Manufacturing, Table 4 at 9
    (1999).

[^51]: 5 U.S.C. § 603(c)(1)-(c)(4).