Before the

Federal Communications Commission

Washington, D.C. 20554

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| In the Matter of:                | * | MB Docket No. 05-181         |
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| Implementation of Section 210 of | ) |                              |
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REPORT AND ORDER

**Adopted: August 22, 2005** **Released: August 23, 2005**

By the Commission: Commissioner Abernathy concurring in part and
dissenting in part.

# INTRODUCTION

1.  In this Report and Order ("Order"), we adopt rules to implement
    Section 210 of the Satellite Home Viewer Extension and
    Reauthorization Act of 2004 ("SHVERA").[^1] Section 210 of the
    SHVERA amends Section 338(a) of the Communications Act of 1934, as
    amended, ("Communications Act" or "Act"). Section 338 governs the
    carriage of local television broadcast stations by satellite
    carriers.[^2] In general, the SHVERA amends this section to require
    satellite carriers to carry the analog and digital signals of
    television broadcast stations in local markets in states that are
    not part of the contiguous United States, and to provide these
    signals to substantially all of their subscribers in each station's
    local market by December 8, 2005 for analog signals and by June 8,
    2007 for digital signals.[^3] Our rules will implement the SHVERA
    requirements for carriage of analog and digital signals in Alaska
    and Hawaii. This Order concludes that such carriage shall include
    high definition and multicast signals as broadcast by local stations
    in these states. We adopt a two-step carriage election process
    beginning with carriage elections for analog signals by October 1,
    2005, and followed by carriage elections for digital signals by
    April 1, 2007.

# BACKGROUND

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

2.  In 1988, Congress passed the Satellite Home Viewer Act ("SHVA"),[^4]
    which established a statutory copyright license for satellite
    carriers to offer subscribers access to broadcast programming via
    satellite when they are unable to receive the signal of a broadcast
    station over the air (that is, an "unserved" household). In 1999,
    Congress enacted the Satellite Home Viewer Improvement Act
    ("SHVIA"),[^5] which expanded the 1988 SHVA by amending both the
    1988 copyright laws,[^6] and the Communications Act[^7] to permit
    satellite carriers to retransmit local broadcast television signals
    directly to subscribers in the station's local market
    ("local-into-local" service) without requiring that they be
    "unserved" households.

3.  A satellite carrier provides "local-into-local" service when it
    retransmits a local television station's signal back into the local
    market of the television station for reception by subscribers.[^8]
    If a carrier carries one or more stations in the market pursuant to
    the statutory copyright license, it is required to carry all of the
    other local stations in that market upon the station's request (that
    is, the "carry-one, carry-all" requirement).[^9] Generally, a
    television station's "local market" is the designated market area
    ("DMA") in which it is located.[^10] DMAs describe each television
    market in terms of a unique geographic area, and are established by
    Nielsen Media Research based on measured viewing patterns.[^11]
    There are 210 DMAs that encompass all counties in the 50 states,
    except for certain areas in Alaska.[^12] A satellite carrier
    choosing to provide such local-into-local service is generally
    obligated to carry any qualified local station in a 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.[^13]

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

4.  In December 2004, Congress passed and the President signed the
    Satellite Home Viewer Extension and Reauthorization Act of
    2004.[^14] SHVERA again amends the 1988 copyright laws[^15] and the
    Communications Act.[^16] This rulemaking is required to implement
    provisions in Section 210 of the SHVERA which establishes new and
    special requirements for satellite carriage of local stations in
    states outside the contiguous United States.

# DISCUSSION

5.  Section 210 of the SHVERA creates a new subsection of the
    Communications Act, 338(a)(4),[^17] that requires satellite carriers
    with more than five million subscribers in the United States to
    carry the analog and digital signals of each television broadcast
    station licensed in local markets "within a State that is not part
    of the contiguous United States." Analog signals are required to be
    carried by December 8, 2005, and digital signals by June 8, 2007. A
    carrier is required to provide these signals to substantially all of
    its subscribers in each station's local market. In addition, a
    satellite carrier is required to make available the stations that it
    carries in at least one local market to substantially all of its
    subscribers located outside of local markets and in the same state.
    The SHVERA also mandates that satellite carriers may not charge
    subscribers for these local signals more than they charge
    subscribers in other States to receive local market television
    stations. Although most of the requirements imposed by the new
    Section 338(a)(4) are self-effectuating, the SHVERA requires the
    Commission to promulgate regulations concerning the timing of
    carriage elections by stations in local markets covered by Section
    338(a)(4).[^18]

6.  We adopted the required Notice of Proposed Rulemaking ("*Notice*")
    on April 29, 2005 and established a short pleading cycle due to the
    need to implement the new rules before the upcoming carriage
    cycle.[^19] We received comments from six parties.[^20] As we stated
    in the *Notice,* the new and amended rules apply only to satellite
    service in the states covered by Section 338(a)(4), which we herein
    conclude are Alaska and Hawaii. The existing signal carriage
    provisions in Section 76.66 also continue to apply to satellite
    service in these states, where relevant and not inconsistent with
    the rules adopted in this proceeding.[^21]

## Satellite Carriers with More Than 5,000,000 Subscribers

7.  Subsection 338(a)(4) expressly applies to a "satellite carrier that
    offers multichannel video programming distribution service in the
    United States to more than 5,000,000 subscribers."[^22] In the
    *Notice,* we proposed that this provision applies to satellite
    carriers that have more than five million subscribers in 2005 and,
    in the future, to any carriers with more than five million
    subscribers. Currently, DIRECTV and EchoStar qualify under this
    definition.[^23] We received no comments relevant to the proposed
    rule, which follows the statutory language and which we adopt as new
    section 76.66(b)(2) without change. [^24] If in the future there are
    new satellite carriers with more than five million subscribers, they
    would be required to comply with this carriage provision and to
    follow the rule provisions that apply to "new local-into-local
    service."[^25]

## Noncontiguous States

8.  Section 338(a)(4) as amended by Section 210 of the SHVERA applies to
    "a State that is not part of the contiguous United States."[^26]
    Because the general definition of "State" in the Communications Act
    includes "the Territories and possessions,"[^27] we sought comment
    on whether "State" as used in the SHVERA should be read to include
    the noncontiguous territories and possessions of the United States,
    including but not limited to Puerto Rico and Guam,[^28] and whether
    considerations such as a satellite carrier's regulatory
    authorizations and/or actual service area are relevant to
    interpreting the obligation under Section 338(a)(4) to serve
    "noncontiguous states." Territories in the Pacific, such as Guam,
    are in a different International Telecommunication Union ("ITU")
    region from the 50 states.[^29] We requested comment on the impact
    of regulatory differences (*e.g.*, use of different frequency bands)
    between ITU regions in providing service to these locations, but we
    noted in the Notice that spot beam technology may allow coverage of
    widely spaced areas if visible from the satellite location.[^30]

9.  We recognize that the phrase \"a State that is not part of the
    contiguous United States\" is susceptible to different
    interpretations.  It is unclear from the statutory text whether the
    intended application of the term \"State\" means the definition of
    \"State\" as it appears in the Communications Act, which includes
    all territories and possessions, or whether it refers to the literal
    or colloquial use of the word \"State,\" meaning one of the fifty
    more or less internally autonomous territorial and political units
    composing the United States of America.[^31] In determining the
    proper interpretation, we bear in mind that Section 3 of the
    Communications Act provides definitions of terms that apply for the
    purposes of this Act, "unless the context otherwise requires."[^32]
    As explained below, we believe the best construction of this phrase,
    based on context and the current record before us, is that \"a State
    that is not part of the contiguous United States\" was intended
    to refer only to Alaska and Hawaii and not to the broader definition
    of the Communications Act which includes territories and
    possessions.  This conclusion is consistent with arguments made by
    satellite carriers EchoStar and DIRECTV, who point out the serious
    technical difficulties of serving all the territories and
    possessions.[^33] Several broadcast stations in Puerto Rico argue
    that "State" should be read to include territories and possessions
    so that stations in Puerto Rico will be entitled to mandatory
    carriage.[^34] In addition to the technical difficulties, EchoStar
    also argues that Congress' intent to limit Section 338(a)(4) to
    Alaska and Hawaii is evidenced by the related copyright provisions
    in the SHVERA.[^35] We agree. As mentioned in the *Notice*, Alaska
    is the only one of the 50 states that is not entirely subsumed
    within one or more DMAs.[^36] Similarly, none of the noncontiguous
    territories and possessions are included in a DMA. However, Section
    122 of title 17, which defines "local market" for the statutory
    copyright license, as well as for Section 338 generally,[^37] was
    amended only to add the areas in the State of Alaska that are
    outside of all DMAs to the definition of "local market." Critically,
    the noncontiguous territories and possessions were not added.[^38]
    Consequently, were we to apply "State" to the noncontiguous
    territories and possessions, satellite carriers would not have a
    statutory copyright license to retransmit the stations in these
    markets because they would not fall within the definition of "local
    market" in Section 122(j).

10. Satellite carriers do not and are not required to reach all
    geographic areas that include the possessions and territories of the
    United States.[^39] The Commission has recognized that contiguous
    United States ("CONUS") antenna beams modified to include Puerto
    Rico and the U.S. Virgin Islands could divert power from other
    regions and potentially adversely affect the services of other
    countries.[^40] We acknowledge that EchoStar and a company
    affiliated with DIRECTV currently provide service to Puerto Rico,
    including some local stations, and to the U.S. Virgin Islands.[^41]
    No one disputes, however, that service to Guam and other islands in
    the far Pacific would be outside the range of these companies and
    that requiring service to islands without television stations and
    without permanent populations would be absurd.[^42] Based on the
    serious technical difficulties of serving the territories and
    possessions, and the fact that the affected satellite carriers have
    never before served any subscribers in much of these areas, we
    believe Congress did not have in mind the definition of \"State\"
    as set forth in the Communications Act.  For all the reasons
    discussed above, we believe the best reading of the statute, and the
    one most consistent with Congressional intent, is that section
    338(a)(4)\'s use of the phrase \"State that is not part of the
    contiguous United States\" was not meant to include the
    noncontiguous territories and possessions, but instead was meant to
    refer only to the states of Alaska and Hawaii.[^43]

## Analog and Digital Signals

11. We explained in the *Notice* that the SHVERA requirements for
    satellite carriage to the noncontiguous states differ significantly
    from the existing satellite broadcast carriage requirements, both in
    scope and timing.[^44] Currently, under the Communications Act and
    Commission rules implementing the Act, satellite carriers choose
    whether to rely on the statutory copyright license in section 122 of
    title 17 to offer "local-into-local service," which in turn triggers
    the carry-one, carry-all obligation.[^45] Satellite carriers are not
    currently required to offer local-into-local service in any
    market.[^46]

12. Section 338(a)(4) supersedes carry-one, carry-all by mandating
    analog and digital carriage in Alaska and Hawaii. A satellite
    carrier with more than five million subscribers is now required to
    retransmit the analog signals of each television station in local
    markets in Alaska and Hawaii to subscribers in those local markets
    by December 8, 2005 (one year after enactment of the SHVERA) and to
    retransmit the digital signals of each station no later than June 8,
    2007 (30 months after enactment of SHVERA). We sought comment in the
    *Notice* on whether the statute unambiguously means that if any or
    all of the local stations in these states are still broadcasting
    analog signals as well as digital signals as of June 8, 2007, the
    SHVERA requirement mandates dual must carry.[^47]

13. DIRECTV contends that section 338(a)(4) does not unambiguously
    require that satellite carriers must continue carrying analog
    signals after they begin carrying digital signals.[^48] DIRECTV
    suggests that there are two plausible readings of the text: that
    satellite carriers must retransmit analog signals either as long as
    Alaska and Hawaii broadcasters transmit in analog, or until
    satellite carriers are required to retransmit digital signals. It
    advocates that latter reading as the wiser policy.[^49] DIRECTV
    therefore reads section 338(a)(4) to require that satellite carriers
    replace the analog signals with digital signals in June 2007.[^50]
    DIRECTV explains that because satellite carriers digitize analog
    broadcast signals, there is little quality difference between an
    analog and SD digital signal to the DBS subscriber.[^51] Microcom, a
    satellite distributor and dealer in Alaska, argues that dual
    carriage is not warranted when a broadcast station is operating both
    its digital and analog service in a standard definition format
    because the law requires the content of those two services to be
    identical.[^52] Microcom, however, is in error as the "simulcasting"
    requirements were eliminated in our Second DTV Periodic Review last
    year.[^53] In contrast, IBC and R y F, representing broadcast
    stations in Puerto Rico, argue that SHVERA requires satellite
    carriers to retransmit both the analog and digital signals by the
    mandated dates.[^54]

14. We find that section 338(a)(4) is ambiguous with respect to the
    question of dual carriage. The statutory provision states that
    satellite carriers "shall (A) within 1 year after December 8, 2004,
    retransmit the signals originating as analog signals of each
    television broadcast station located in any local market within a
    State that is not part of the contiguous United States; and (B)
    within 30 months after December 8, 2004, retransmit the signals
    originating as digital signals of each such station." While this
    language clearly contains two separate carriage requirements, it is
    unclear from the text whether Congress intended the analog carriage
    requirement to continue after commencement of the digital carriage
    requirement (*i.e.*, simultaneous or dual carriage) or whether it
    intended the analog requirement to end when the digital requirement
    takes effect. The statute does not speak directly to the issue,[^55]
    and there is no legislative history to shed light on what Congress
    intended. Where the statutory language is ambiguous, we must
    construe the statute so as to effectuate the legislative purpose and
    intent.[^56] Here, we agree with DIRECTV that the most reasonable
    interpretation of section 338(a)(4) is that the analog carriage
    requirement ends upon commencement of the digital carriage
    requirement. We therefore conclude that satellite carriers must
    carry the signals of local stations in Alaska and Hawaii that
    originate as analog beginning no later than December 8, 2005, and
    the signals that originate as digital beginning no later than June
    8, 2007, but that the analog carriage requirement ends when the
    digital carriage requirement begins. Based on the record in this
    proceeding, requiring carriage of both analog and digital signals
    simultaneously would likely increase the burden on satellite
    carriers without offering subscribers a substantial benefit. Because
    satellite carriers digitize analog broadcast signals, there is
    essentially no difference from a satellite subscriber's perspective
    between the analog signal and the standard definition (SD) digital
    signal broadcast when such signals are carrying the same
    programming, as is currently the general practice in the
    industry.[^57] Thus, a dual carriage requirement would often result
    in a satellite carrier carrying the same programming with
    essentially the same signal quality twice. Moreover, in light of the
    requirement to carry multicast signals described below, satellite
    subscribers will be able to receive multiple digital programming
    streams offered by local stations, and we do not believe that the
    remote likelihood that certain programming transmitted by analog
    signals would not be transmitted by any of a station's digital
    signals justifies the burden that a dual carriage requirement would
    impose on satellite carriers. Therefore, we conclude that
    simultaneous carriage of both analog and digital signals is not
    required and would serve no useful purpose in light of our other
    decisions in this proceeding. We will address other issues related
    to carriage of digital signals in the context of the proceeding
    addressing satellite carriage of local stations pursuant to Section
    338 as it applies throughout the United States during and after the
    transition to digital television.[^58]

## Digital Signal Content and Format

15. Section 338(a)(4) requires carriage of "signals originating as
    analog signals" and "signals originating as digital signals." We
    stated in the *Notice* that there is no reference to "primary video"
    or any other term in section 338(a)(4) that expressly limits or
    describes the nature, format or content of the broadcast signal that
    satellite operators must carry in the noncontiguous states.[^59] The
    *Notice* concluded, therefore, that the amendment requires that
    satellite carriers carry all multicast signals of each station in
    noncontiguous states and carry the high definition digital signals
    of stations in noncontiguous states in high definition format. We
    also referenced the pending proceeding on satellite carriage of
    digital signals, in general, and sought comment on our view of the
    statutory language and any alternative construction of the SHVERA as
    the statute relates to the carriage of multicast and/or high
    definition signals.[^60]

16. As explained in the *Notice*, we continue to believe that the
    statutory language requires that satellite carriers carry all
    multicast signals and high definition (HD) signals of each local
    broadcast station in the noncontiguous states. We find section
    338(a)(4)'s use of the plural term "signals" in requiring carriage
    of "signals originating as digital signals" to unambiguously mean
    carriage of the entire free over-the-air digital broadcast, without
    limitation, being transmitted by a broadcaster. While DIRECTV argues
    that, because Congress also used the plural term "signals" with
    respect to analog signals (and there is no analog multicast or
    analog HD), the phrase "signals of each station" could be
    interpreted to mean the transmission of a single station's signal
    over time,[^61] we do not believe that this constitutes a reasonable
    interpretation of the statute. Section 338(a)(4) contains no
    limitation on the nature of the digital broadcast signal -- such as
    the term "primary video" as used in the cable context -- in
    describing the digital signals the satellite operator must carry in
    the noncontiguous states. At the time the SHVERA was enacted in
    December 2004, the Commission had interpreted, in the cable carriage
    proceeding three years earlier, the term "primary video" in section
    614(b)(3) of the Act[^62] to mean "a single programming stream and
    other program-related content."[^63] Had Congress intended to limit
    digital carriage to only a single standard definition stream, we
    believe Congress would have included similar limiting language in
    the satellite context. Section 338(a)(4), by contrast, contains a
    broad requirement that satellite carriers retransmit "the signals
    originating as digital signals." We also find unconvincing DIRECTV's
    reliance on section 338(j)'s general directive that the Commission
    prescribe requirements on satellite carriers that are "comparable"
    to the must carry requirements imposed on cable operators. [^64]
    According to DIRECTV, because cable operators in Alaska and Hawaii
    are not yet required to carry most digital signals in HD format nor
    are they required to carry multicast signals, the Commission cannot
    impose such requirements on satellite carriers in Alaska and Hawaii
    without running afoul of section 338(j). [^65] We disagree. Under
    principles of statutory construction, section 338(a)(4)'s specific
    mandate requiring carriage of "the signals originating as digital
    signals" in Alaska and Hawaii supercedes the general comparability
    directive set forth in § 338(j).[^66] Where the statute is clear and
    unambiguous, we must implement the express meaning of the statutory
    language.[^67] Requiring carriage of multicast and HD signals most
    accurately reflects the requirement set forth in the statutory
    language itself. We decline to read into the statute a limitation
    where none exists. We believe that section 338(a)(4) requires
    carriage of Alaska and Hawaii broadcasters\' entire free over the
    air broadcast, including multicast and HD signals. This decision,
    however, is limited to section 338(a)(4) and does not interpret any
    other statutory provision that regulates cable or satellite carriage
    obligations.

17. Even if we were to find ambiguity in the statutory language,
    however, we believe, for the reasons given above, that the better
    reading, and the one that most accurately reflects Congress's
    intent, requires satellite carriers to carry all multicast and HD
    signals. We also reject EchoStar and DIRECTV's argument that in
    order to avoid an unconstitutional construction of section
    338(a)(4), the Commission must not construe the statute to impose a
    multicast and HD carriage obligation.[^68] As explained below, we
    find interpreting section 338(a)(4) as mandating multicast and HD
    carriage is consistent with the First Amendment. The Supreme Court
    has held that must carry "is a content-neutral regulation" that must
    be analyzed under the intermediate level of scrutiny.[^69] Under
    this test, a content-neutral regulation will be upheld if: (1) it
    furthers an important or substantial governmental interest; (2) the
    government interest is unrelated to the suppression of free
    expression; and (3) the provisions do not burden substantially more
    speech than is necessary to further those interests.[^70]

18. With regard to the first prong of the analysis, we find that the
    multicast and HD carriage obligation imposed under section 338(a)(4)
    furthers two important governmental interests. First, it ensures
    that the citizens of Alaska have full access to television
    programming. In enacting section 338(a)(4), we believe Congress
    recognized the unique situation in Alaska which makes communications
    services critically important to the public safety, education, and
    economic development of the state.[^71] Alaska has the lowest
    population density in the country, and communities in rural Alaska
    are unique in several ways. Most rural Alaskan communities are quite
    small -- almost 90% of Alaskan communities have fewer than 1,000
    people; 25% of the communities have between 100 and 250 people; and
    29% of the communities have fewer than 100 people.[^72] Most Alaskan
    communities are also very remote and isolated -- most rural
    communities in Alaska do not have access via road systems to the
    relatively urban areas of the State (Anchorage, Fairbanks and
    Juneau), and, indeed, many Alaskan communities can be accessed only
    by air or by water and are frequently inaccessible because of
    weather conditions.[^73] These characteristics taken together
    significantly limit the communications options available to Alaskan
    communities. Indeed, Alaska's unique geography when combined with
    the State's unique population distribution presents many rural
    Alaskans with serious challenges in obtaining a diverse range of
    television programming, particularly through over-the-air
    broadcasting. Moreover, cable service and other forms of
    multichannel video programming distribution services are often not
    available to them.[^74] As the Alaska Broadcasters have reported,
    23% of Alaskan households are unable to access cable television, and
    these rural households on average are able to receive only one
    television station through over-the-air broadcasting.[^75] Service
    transmitted by satellite is one of the few viable means of
    transcending these obstacles, and the ability to receive multiple
    programming streams from local stations through satellite carriers
    would be the only way that many rural Alaskan households would be
    able to access these programming streams. Moreover, given the
    important role that DBS service plays in rural Alaska, unless
    satellite customers are provided with access to multicasting, there
    may not be sufficient incentive for Alaskan television stations to
    develop additional programming streams targeted to the needs and
    interests of rural communities, thus denying these Alaskans the
    benefits of the digital transition. We thus believe Congress
    intended section 338(a)(4) to be interpreted broadly, without
    limitations, in order to further the important governmental interest
    of providing the Alaskan community with full access to digital
    communications.

19. In addition, we find that multicast and HD carriage obligations
    imposed under section 338(a)(4) further a second important
    governmental interest of ensuring Alaska and Hawaii an equitable
    distribution of satellite service. We recognize that section
    338(a)(4) is responsive to a long history of more limited DBS
    service in Alaska and Hawaii than in the lower 48 states. Filings in
    prior Commission proceedings indicate that, with respect to DBS
    service, Alaskans had "far fewer choices than other Americans do,
    often their signal reception is poorer, and the reception equipment
    required is often much larger."[^76] In Hawaii, the DBS subscriber
    packages were not comparable to the subscriber packages available in
    the 48 lower states, particularly in the area of programming.[^77]
    For example, some of the most popular programming channels -- such
    as CNN, ESPN, Headline News, Discovery Channel -- were not offered
    to subscribers in Hawaii.[^78] The State of Hawaii continues to
    maintain today that the level of service provided to Hawaiian
    subscribers remains significantly lower than that provided to
    subscribers in the lower 48 states.[^79] According to the State of
    Hawaii, every television market that is larger than Honolulu already
    receives local-into-local service from DIRECTV and nearly half of
    the 130 markets that receive local-into-local service from DIRECTV
    are smaller than Honolulu.[^80] We believe section 338(a)(4) was
    intended to remedy the situation in the noncontiguous states by
    providing Alaska and Hawaii with access to all of the programming
    offered through free over-the-air broadcasts, including all
    multicast and HD signals. We find that interpreting the statute in
    this manner best achieves the important governmental interest of
    making available "to *all* people of the United States" a "rapid,
    efficient, *Nation-wide*, and world-wide wire and radio
    communication service" and of providing "a fair, efficient, and
    *equitable* distribution of radio services" among the several
    States.[^81]

20. With respect to the second prong of the constitutional analysis, we
    find the Government's interest in ensuring the citizens of Alaska
    full access to television programming and the equitable distribution
    of satellite service are aimed at bringing a more robust
    communications service to the citizens of Alaska and Hawaii, not at
    stemming expression. These governmental interests are thus
    "unrelated to the suppression of free expression." Indeed, they are
    aimed at providing the residents of Alaska and Hawaii with access to
    more information. We therefore find the second prong of the
    intermediate scrutiny test to be easily satisfied.

21. With respect to the third prong of the analysis, we find that this
    multicast and HD carriage requirement will not burden substantially
    more speech than is necessary to further the important governmental
    interests.[^82] Congress took steps to confine the breadth and
    burden of the regulation by directing the multicast and HD carriage
    obligation to apply only in the states of Alaska and Hawaii. The
    carriage requirement is thus narrowly tailored to serve the
    important government interests identified above in a direct and
    effective way. In addition, while DIRECTV makes a number of claims
    as to the burdensomeness of the regulation, the actual effects of a
    multicast and HD requirement in the States of Alaska and Hawaii
    remain unclear. We find speculative DIRECTV's argument that imposing
    an HD and multicast carriage requirement for Alaska and Hawaii would
    place a substantial capacity burden on its system.[^83] The
    requirement for carriage of multicast and HD signals does not begin
    until June 2007. We do not know at this time how many programming
    streams Alaskan and Hawaiian local broadcast stations will be
    multicasting in 2007.  At this point, for example, no station in
    Alaska or Hawaii is broadcasting more than two streams of
    programming.[^84] Moreover, by the time the multicast and HD
    carriage requirement would take effect, many of the capacity issues
    may well be remedied through improvements in satellite technology.

22. In short, we believe that in enacting section 338(a)(4), Congress
    sought to address the specific communications problems and special
    needs that exist in the states of Alaska and Hawaii and intended,
    through expanded satellite carriage, that subscribers in Alaska and
    Hawaii would be ensured full, not limited, access to the benefits of
    the digital transition. The multicast and HD carriage requirement
    furthers these important governmental interests without burdening
    substantially more speech than necessary and thus satisfies the
    requirements under the First Amendment. We note, however, that the
    foregoing analysis interprets Section 338(a)(4) only, and thus does
    not interpret Sections 614 and 615[^85] or Section 338 with respect
    to satellite carriage of digital signals throughout the United
    States.[^86]

## Carriage Elections

23. Section 338(a)(4) leaves implementation of carriage election rules
    expressly to the Commission's discretion.[^87] Consequently, in the
    *Notice* we proposed regulations concerning the timing of the
    carriage elections related to the new carriage requirements in
    Alaska and Hawaii.[^88] The first satellite carriage cycle (pursuant
    to the SHVIA) will end on December 31, 2005. The carriage election
    deadline for the second cycle is October 1, 2005, for carriage
    beginning January 1, 2006.[^89] As described in the *Notice,* the
    analog signal carriage requirement for Alaska and Hawaii commences
    December 8, 2005, which is just a few weeks before the carriage
    cycle that applies to satellite carriers and broadcast stations in
    the contiguous states, which commences January 1, 2006, and
    continues until December 31, 2008.[^90] The carriage election
    process enables stations to choose between carriage pursuant to
    retransmission consent or mandatory carriage.[^91] If a station
    elects must-carry status, it is, in general, entitled to insist
    without other terms that the satellite carrier carry its signal in
    its local market.[^92]

24. To implement the carriage election timing requirements in Section
    210 of the SHVERA, we will track the existing regulations as closely
    as possible so that carriage elections in Alaska and Hawaii will be
    synchronized with carriage elections in the contiguous states.[^93]
    Because the analog carriage requirement in Alaska and Hawaii takes
    effect only 24 days before the carriage cycle in the rest of the
    country, we will use the same carriage election deadline of October
    1, 2005. Thus, commercial television broadcast stations in a local
    market in the noncontiguous states are required to make a
    retransmission consent-mandatory carriage (must carry) election by
    October 1, 2005, which is the same deadline for local stations in
    local-into-local markets in the contiguous states.[^94] No commenter
    disagreed with this proposal and we adopt rules to implement it
    now.[^95]

25. With respect to carriage of the digital signals of stations in
    Alaska and Hawaii, the *Notice* proposed that the retransmission
    consent-must carry election by a station in a local market in Alaska
    or Hawaii should be a two-step process with one election that
    applies to the analog signal carriage, which commences December 8,
    2005, and a second carriage election that would govern carriage of
    the digital signal.[^96] Carriage of signals originating as digital
    must commence by June 8, 2007, but may begin pursuant to
    retransmission consent at any time. We proposed that the deadline
    for the second carriage election, for digital carriage, would be
    April 1, 2007, two months before carriage must commence.[^97] As an
    alternative, we suggested a one-step process in which the station's
    election by October 1, 2005, for its analog signal, would also apply
    to its digital signal, for which mandatory carriage will commence by
    June 8, 2007.

26. Two commenters, EchoStar and Microcom, favored the one-step approach
    on the basis of simplicity for satellite carriers and reduced burden
    for broadcasters.[^98] We believe, however, that the two-step
    approach better tracks Congress' decision to mandate carriage of
    analog and digital signals in two separate steps. Two separate
    elections is also more consistent with the Commission's Cable Must
    Carry decision in 2001, which permits stations broadcasting both
    analog and digital signals to elect must carry for their analog
    signal and retransmission consent for their digital signal.[^99] The
    two-step approach is also consistent with treating carriage of the
    digital signal as sequential rather than concurrent with the analog
    signal. It is important for local stations in Alaska and Hawaii to
    have a second, separate opportunity to elect between must carry and
    retransmission consent for their digital signals. We adopt the rule,
    as proposed in the *Notice*, which establishes the procedures for
    this two-step carriage election.[^100]

27. As further described in the *Notice,* after the initial carriage
    cycle in Alaska and Hawaii (January 1, 2006 through December 31,
    2008), the election cycle and carriage election procedures provided
    in Section 76.66(c) will apply in the future.[^101] For example, the
    next carriage election (after the upcoming 2005 election) is
    required by October 1, 2008, for the carriage cycle beginning
    January 1, 2009.[^102] We received no comments on this point.

28. We also confirm that stations in Alaska and Hawaii should be
    permitted to elect must carry for their analog signals and negotiate
    for carriage of the digital signals via retransmission consent
    before the mandatory digital signal carriage takes effect.[^103] We
    received no comments on this point. Therefore, prior to June 8,
    2007, when the mandatory digital carriage rights for local stations
    in Alaska and Hawaii take effect, such stations may separately
    negotiate for voluntary carriage of their digital signals even if
    they elect mandatory carriage for their analog signals.[^104] This
    flexibility is also consistent with the approach generally taken in
    the digital carriage rulemaking proceeding thus far.[^105]

29. We also described in the *Notice* that new television stations in
    Alaska or Hawaii should follow Section 76.66(d)(3) of the
    Commission's rules to notify the satellite carrier and elect
    carriage.[^106] Based on Section 338(a)(4), a new station in Alaska
    or Hawaii will have a right to mandatory carriage for its analog
    signal if it begins service after December 8, 2005, and for its
    digital signal if it begins service after June 8, 2007. The existing
    rule describes the procedures and timing for requesting and
    obtaining carriage; thus, no rule amendments are needed.[^107] We
    received no comments on this issue, except that EchoStar asked that
    we clarify that stations that commence digital service after March
    1, 2007[^108] be required to comply with the Commission's rules for
    new stations.[^109] We provide that clarification here: new
    television broadcast stations in Alaska and Hawaii should follow the
    new station rule in 76.66(d)(3) to notify satellite carriers and
    elect must carry or retransmission consent for their analog and
    digital signals.

## Procedures for Carriage 

30. The *Notice* provided that in all other respects related to the
    mechanics of carriage, other than the carriage election cycle, we
    would apply the existing rules pertaining to satellite carriage as
    they were adopted to implement Section 338 pursuant to the
    SHVIA.[^110] We received no comments with respect to the mechanics
    for carriage and application of the existing rules. Therefore, our
    amended rules provide that carriage may be requested by television
    broadcast stations in local markets in Alaska and Hawaii effective
    December 8, 2005 for analog signals, and June 7, 2007 for digital
    signals.[^111] The carriage procedures for stations in Alaska and
    Hawaii shall follow the existing requirements, except with respect
    to the carriage election process, as described herein.[^112]

## Availability of Signals

31. Section 338(a)(4) provides that satellite retransmissions of local
    stations in Alaska and Hawaii "shall be made available to
    substantially all of the satellite carrier's subscribers in each
    station's local market."[^113] The provision did not define
    "substantially all" subscribers, and we sought comment on its
    meaning in this context.[^114] Given that the statute refers to
    "subscribers," obviously it is not referring to parts of the state
    that the carrier cannot reach at all. Rather, as the *Notice*
    pointed out, this wording is consistent with the physical
    limitations of some satellite technology that may not be able to
    reach all parts of a state or a DMA where a spot beam is used to
    provide local stations.[^115] EchoStar agrees with our
    interpretation, noting that the existing geographic service rules
    apply to both Alaska and Hawaii and provide well-established
    parameters for service offerings.[^116] Microcom asserts that, at a
    minimum, "substantially all" should be defined as those that could
    be served by a satellite providing primary services within the
    engineering constraints of the primary or spot beams.[^117]

32. We believe that this statutory provision recognizes the existing
    physical limitations on satellite service, particularly in these
    noncontiguous states. With respect to DBS service to Alaska, for
    example, the Commission has stated that although reliable service
    usually requires a minimum elevation angle of ten degrees or more,
    service to Alaska is often offered at elevation angles as low as
    five degrees.[^118] In addition, the Commission determined that in
    some areas of Alaska, from some orbital locations, the elevation
    angle was less than five degrees, or even below the horizon, thereby
    making service to those areas impossible.[^119] Microcom asserts
    that no location in Alaska has an elevation angle less than 10
    degrees to the DBS orbital locations at 148 and 157 degrees West
    Longitude and proposes that carriers that use these orbital
    locations to provide local-into-local service to local markets on
    the west coast could do the same to provide the local stations in
    one or more of the Alaska DMAs, as well as to serve parts of Alaska
    not in a DMA.[^120] We are inclined to agree with Microcom that
    satellite carriers that have these orbital slots and can serve these
    areas should do so, and we note that satellite carriers must abide
    by the geographic service rules that require service where
    technically feasible.[^121]

33. In the *Notice* we said it is not necessary to adopt new rules to
    implement this provision and noted that this provision is similar to
    the Commission interpretation adopted in the implementation of the
    SHVIA, that satellite carriers that offer local-into-local service
    are not required to provide service to every subscriber in a
    DMA.[^122] Only EchoStar commented and agreed that no special rules
    were necessary on this point.[^123]

## Areas Outside Local Markets

34. As described above, Alaska is the only one of the fifty states that
    has areas that are not included within any DMA.[^124] Section
    338(a)(4) requires a satellite carrier in Alaska to make available
    the signals of all the local television stations that it carries in
    at least one local market to substantially all of its subscribers in
    areas outside of local markets who are in the same state.[^125]
    Congress also modified the copyright provisions of title 17 to
    include these areas of Alaska that are outside of all DMAs within
    the definition of "local market" as it pertains to the statutory
    copyright license for carriage of local stations.[^126] In Alaska,
    there are three DMAs covering the main population centers, but most
    of the state, which is sparsely populated, is not included in a
    DMA.[^127] Thus, a satellite carrier in Alaska will be required to
    provide the television stations that it carries in at least one of
    the three DMAs, in which carriage of local stations is required by
    Section 338(a)(4), to areas of the State not included in DMAs. In
    the *Notice* we said that we believe the statute speaks for itself
    and that no special rule is required to implement this statutory
    requirement.[^128]

35. No commenter disputed that the statutory language is largely
    self-effectuating, but Microcom recommended that the Commission
    allow subscribers that are outside all DMAs to subscribe to any
    local package that they are technically capable of receiving.[^129]
    DIRECTV contends that Section 338(a)(4) does not contemplate giving
    subscribers this option and that the SHVERA leaves the choice of
    which package to offer to the satellite carrier.[^130] DIRECTV
    explains that it could not comply with a rule that allowed
    subscribers outside of DMAs to choose which DMA package of local
    signals they want due to limitations in the set top box based upon
    the "market ID" that DIRECTV assigns to each local market. The
    market ID is critical to the operation of DIRECTV's billing and
    customer service system, which cannot function with differing
    choices of local market packages within a given zip code or
    county.[^131] We agree that the statute does not require that the
    choice of local package rest with the individual subscriber, and,
    therefore, it is unnecessary to require a satellite carrier to
    reconfigure its operations to afford this choice. Moreover, the
    statutory copyright license in Section 122 of title 17 specifies
    that: "A satellite carrier may determine which local market in the
    State of Alaska will be deemed to be the relevant local market in
    connection with each subscriber in such census area, borough, or
    other area."[^132] We note, too, that DIRECTV has committed to
    working with local officials in Alaska to identify the appropriate
    local market to offer to Alaska subscribers who are not in a
    DMA.[^133] A satellite carrier that wishes to offer subscribers
    their choice of Alaska DMA package, however, is free to do so, as
    the statutory language neither compels nor forbids this approach.

36. Microcom also raises a separate issue concerning signal
    availability, which is related to the revisions to the distant
    signal statutory copyright license, as revised by the SHVERA in
    conjunction with local signal availability pursuant to Section
    338(a)(4). Section 119(a)(16) of title 17 provides that the
    statutory copyright license for satellite retransmission of distant
    signals shall not apply with respect to satellite retransmission of
    a network station located outside of the State of Alaska to any
    subscriber in Alaska if a television station located in Alaska is
    made available by the satellite carrier pursuant to section
    122.[^134] Microcom asks that we define when a signal is made
    "available" for this purpose and to consider the cost to a
    subscriber to obtain the equipment to access the local signal
    package.[^135] We did not raise this question in the *Notice,* as it
    applies specifically to eligibility for distant signals. We note,
    however, that the statute defines "available," as it pertains to the
    copyright license in Section 119, to mean that the station is
    available if the satellite carrier offers that local station to
    other subscribers who reside in the same zip code as the subscriber
    in question.[^136] Thus, we cannot agree with Microcom's proposal to
    determine availability based on the cost of equipment to receive the
    local station package.[^137]

37. The rules governing satellite carriage of local stations that were
    adopted to implement the SHVIA define "local market" based upon the
    copyright definition cited in Section 338.[^138] Accordingly, we
    amend our rule section to track the revised definition of local
    market in Section 122 of title 17 to reflect the revisions related
    to areas of Alaska outside of all DMAs.[^139]

## Notification by Satellite Carrier

38. In the *Notice* we sought comment on a proposal to require special
    satellite carrier notifications to local stations in connection with
    the new carriage requirements in Alaska and Hawaii, although Section
    338(a)(4) does not require such notification.[^140] We proposed two
    special notifications: the first for the forthcoming carriage
    election for analog signals, and the second for carriage of digital
    signals in 2007.[^141] We received no comments on this
    proposal.[^142] We conclude that it is unnecessary to establish a
    special notification procedure for the upcoming carriage election
    with respect to analog signal carriage. Moreover, there is
    inadequate time to adopt such a provision and make it effective in
    time to be meaningful for the analog carriage election deadline
    adopted in this Order.[^143] We note that EchoStar currently
    provides local-into-local service in the Honolulu and Anchorage
    DMAs, assuring that the stations in those markets are aware that
    they should make carriage elections no later than October 1, 2005 to
    ensure continued carriage. With respect to the other local markets
    in Alaska and Hawaii, if satellite carriers follow the existing rule
    for initiating local service, the notifications, elections, and
    carriage would come too late to satisfy the statutory requirement of
    commencing carriage of analog signals by December 8, 2005.[^144] We
    will instead rely on the publication of this Order and the existing
    carriage election deadline to assure that stations in Alaska and
    Hawaii receive adequate notice for the October 1, 2005 carriage
    election deadline.

39. We will adopt the second notification requirement to ensure that
    local stations in Alaska and Hawaii are reminded of their digital
    carriage rights commencing in June 2007. We will require satellite
    carriers with more than 5 million subscribers to notify all
    television broadcast stations located in local markets in Alaska and
    Hawaii that they are entitled to carriage of their digital signals
    as of June 8, 2007, and that they must elect mandatory carriage or
    retransmission consent by April 1, 2007, to be assured of carriage,
    as provided in Sections 76.66(b)(2) and (c)(6). This notification
    will be required by March 1, 2007, with respect to the carriage
    election for digital signals.[^145]

40. As further described in the *Notice*, a new satellite carrier that
    meets the definition in Section 338(a)(4) in the future will be
    required to comply with Section 76.66(d)(2) of the Commission's
    rules regarding "new local-into-local service" (imposes requirements
    when a new satellite carrier intends to retransmit a local
    television station back into its local market).[^146]

# Procedural matters

41. *Accessibility Information*. To request this *Report and Order* or
    other materials in accessible formats for people with disabilities
    (braille, large print, electronic files, audio format), send an
    e-mail to <fcc504@fcc.gov> or call the Consumer & Governmental
    Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty). This
    document can also be downloaded in Word and Portable Document Format
    (PDF) at: [http://www.fcc.gov](http://www.fcc.gov/).

42. The Commission will send a copy of this Report and Order in a report
    to be sent to Congress and the Government Accountability Office
    (GAO) pursuant to the Congressional Review Act, see U.S.C.
    801(a)(1)(A).

## Final Regulatory Flexibility Certification

43. The Regulatory Flexibility Act of 1980, as amended (RFA),[^147]
    requires a regulatory flexibility analysis be prepared for
    notice-and-comment rule making proceedings, unless the agency
    certifies that "the rule will not, if promulgated, have a
    significant economic impact on a substantial number of small
    entities."[^148] The RFA generally defines the term "small entity"
    as having the same meaning as the terms "small business," "small
    organization," and "small governmental jurisdiction."[^149] In
    addition, the term "small business" has the same meaning as the term
    "small business concern" under the Small Business Act.[^150] 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).[^151]

44. We are amending Section 76.66 of the Commission's rules as required
    by Section 210 of the SHVERA. We expect these rule amendments will
    not have a significant economic impact on a substantial number of
    small entities. The rules are required by statute and will allow for
    local television stations to elect carriage pursuant to
    retransmission consent or mandatory carriage with respect to
    satellite carriers with more than 5 million subscribers in a
    non-contiguous state. "Satellite carriers," including Direct
    Broadcast Satellite (DBS) carriers, will be directly and primarily
    affected by the rules.

45. The satellite carriers covered by these rules are governed by the
    SBA-recognized small business size standard of Cable and Other
    Program Distribution.[^152] This size standard provides that a small
    entity is one with \$12.5 million or less in annual receipts.[^153]
    The two satellite carriers that are subject to these rule amendments
    because they currently have more than five million subscribers,
    DIRECTV[^154] and EchoStar,[^155] report annual revenues that are in
    excess of the threshold for a small business. We anticipate that any
    satellite carrier that, in the future, has more than five million
    subscribers would necessarily have more than \$12.5 million in
    annual receipts. Thus, the entities directly affected by the
    proposed rules are not small entities.

46. We also note that, in addition to satellite carriers, television
    broadcast stations are indirectly affected by the amended rule in
    that they potentially benefit from the satellite carriage required
    by the rule and must elect between mandatory carriage and
    retransmission consent. This carriage election, however, follows the
    existing Commission rules. These existing rules currently permit
    stations in Alaska and Hawaii to elect carriage if and when a
    satellite carrier offers local-into-local service in their market.
    The amended rules affect these election rights by merely providing a
    date certain for carriage in these specified markets, and this
    change does not amount to a significant economic impact.

47. Therefore, we certify that the adopted rules will not have a
    significant economic impact on a substantial number of small
    entities. The Commission will send a copy of this Report and Order,
    including a copy of this Final Regulatory Flexibility Certification,
    to the Chief Counsel for Advocacy of the SBA.[^156] This
    certification will also be published in the Federal Register.[^157]

## Final Paperwork Reduction Act of 1995 Analysis

48. This document does not contain new or modified information
    collection requirements subject to the Paperwork Reduction Act of
    1995 (PRA),[^158] Public Law 104-13.  The Commission received
    approval for the information collection requirements contained in
    this Order from the Office of Management and Budget on June 14,
    2005.  There have been no changes to the information collection
    requirements since receiving OMB approval.  In addition, we note
    that there is no new or modified "information 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* ]{.underline} U.S.C. 3506(c)(4). As described in the
    Final Regulatory Flexibility Certification, *supra*, the businesses
    affected by our action are not small.

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

50. *Additional Information*. For additional information on this
    proceeding, contact Eloise Gore, <Eloise.Gore@fcc.gov>, of the Media
    Bureau, Policy Division, (202) 418-2120.

# ORDERING CLAUSEs 

51. Accordingly, **IT IS ORDERED** that pursuant to Section 210 of the
    Satellite Home Viewer Extension and Reauthorization Act of 2004, and
    Sections 1, 4(i) and (j), and 338(a)(4) of the Communications Act of
    1934, as amended, 47 U.S.C. §§ 151, 154(i) and (j), and 338(a)(4),
    that this Report and Order **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.

52. **IT IS FURTHER ORDERED** that the Consumer and Governmental Affairs
    Bureau, Reference Information Center, **SHALL SEND** a copy of this
    Report and Order, including the Final Regulatory Flexibility
    Certification, to the Chief Counsel for Advocacy of the Small
    Business Administration.

    FEDERAL COMMUNICATIONS COMMISSION

    Marlene H. Dortch

    Secretary

**Appendix A**

[Comments]{.underline}

DIRECTV, Inc.

EchoStar Satellite L.L.C.

Encuentro Christian Network and Eastern Television Corporation

International Broadcasting Corporation and R y F Television, Inc.

Microcom

[Reply Comments]{.underline}

DIRECTV, Inc.

EchoStar Satellite L.L.C.

State of Hawaii

International Broadcasting Corporation and R y F Television, Inc.

Microcom

**APPENDIX B**

**Amended Rules**

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

Revise Part 76, Subpart D, Section 76.66, to replace paragraph
76.66(b)(2), amend paragraphs (c)(4) and (e)(2) and (3), and add new
paragraphs (c)(6) and (d)(2)(iii) as follows:

**Subpart D -- Carriage of Television Broadcast Signals**

**§76.66 Satellite broadcast signal carriage**

\*\*\*\*\*

\(b\) Signal carriage obligations.

\(1\) Each satellite carrier providing, under section 122 of title 17,
United States Code, secondary transmissions to subscribers located
within the local market of a television broadcast station of a primary
transmission made by that station, shall carry upon request the signals
of all television broadcast stations located within that local market,
subject to section 325(b) of title 47, United States Code, and other
paragraphs in this section.

**(2) A satellite carrier that offers multichannel video programming
distribution service in the United States to more than 5,000,000
subscribers shall, no later than December 8, 2005, carry upon request
the signal originating as an analog signal of each television broadcast
station that is located in a local market in Alaska or Hawaii; and
shall, no later than June 8, 2007, carry upon request the signals
originating as digital signals of each television broadcast station that
is located in a local market in Alaska or Hawaii. Such satellite carrier
is not required to carry the signal originating as analog after
commencing carriage of digital signals on June 8, 2007. Carriage of
signals originating as digital signals of each television broadcast
station that is located in a local market in Alaska or Hawaii shall
include the entire free over-the-air signal, including multicast and
high definition digital signals.**

~~No satellite carrier shall be required to carry local television
broadcast stations, pursuant to this section, until January 1, 2002.~~

\*\*\*\*\*

\(c\) Election cycle. In television markets where a satellite carrier is
providing local-into-local service, a commercial television broadcast
station may elect either retransmission consent, pursuant to section 325
of title 47 United States Code, or mandatory carriage, pursuant to
section 338, title 47 United States Code.

\(1\) The first retransmission consent-mandatory carriage election cycle
shall be for a four-year period commencing on January 1, 2002 and ending
December 31, 2005.

\(2\) The second retransmission consent-mandatory carriage election
cycle, and all cycles thereafter, shall be for a period of three years
(e.g. the second election cycle commences on January 1, 2006 and ends at
midnight on December 31, 2008).

\(3\) A commercial television station must notify a satellite carrier,
by July 1, 2001, of its retransmission consent-mandatory carriage
election for the first election cycle commencing January 1, 2002.

\(4\) Except as provided in paragraphs **(c)(6),** (d)(2) and (d)(3) of
this section, local commercial television broadcast stations shall make
their retransmission consent-mandatory carriage election by October 1st
of the year preceding the new cycle for all election cycles after the
first election cycle.

\(5\) A noncommercial television station must request carriage by July
1, 2001 for the first election cycle and must renew its carriage request
at the same time a commercial television station must make its
retransmission consent-mandatory carriage election for all subsequent
cycles.

**(6) A commercial television broadcast station located in a local
market in Alaska or Hawaii shall make its retransmission
consent-mandatory carriage election by October 1, 2005, for carriage of
its signal that originates as an analog signal for carriage commencing
on December 8, 2005, and by April 1, 2007, for its signal that
originates as a digital signal for carriage commencing on June 8, 2007
and ending on December 31, 2008. For analog and digital signal carriage
cycles commencing after December 31, 2008, such stations shall follow
the election cycle in paragraphs (c)(2) and (4). A noncommercial
television broadcast station located in a local market in Alaska or
Hawaii must request carriage by October 1, 2005, for carriage of its
signal that originates as an analog signal for carriage commencing on
December 8, 2005, and by April 1, 2007, for its signal that originates
as a digital signal for carriage commencing on June 8, 2007 and ending
on December 31, 2008.**

\*\*\*\*\*

(d)(2) \[**as previously amended by the SHVERA Procedural Rules
rulemaking\]** *[New local-into-local service]{.underline}*. (i) A new
satellite carrier or a satellite carrier providing local service in a
market for the first time after July 1, 2001, shall inform each
television broadcast station licensee within any local market in which a
satellite carrier proposes to commence carriage of signals of stations
from that market, not later than 60 days prior to the commencement of
such carriage:

\(A\) of the carrier\'s intention to launch local-into-local service
under section 338 of title 47, United States Code, in a local market,
the identity of that local market, and the location of the carrier\'s
proposed local receive facility for that local market;

\(B\) of the right of such licensee to elect carriage under this section
or grant retransmission consent under section 325(b) of title 47, United
States Code;

\(C\) that such licensee has 30 days from the date of the receipt of
such notice to make such election; and

\(D\) that failure to make such election will result in the loss of the
right to demand carriage under section 338 for the remainder of the
3-year cycle of carriage under section 325.

\(ii\) Satellite carriers shall transmit the notices required by
paragraph (d)(2)(i) of this section via certified mail to the address
for such television station licensee listed in the consolidated database
system maintained by the Commission.

**(iii) A satellite carrier with more than five million subscribers
shall provide the notice as required by paragraphs (i) and (ii) to each
television broadcast station located in a local market in Alaska or
Hawaii, not later than March 1, 2007 with respect to carriage of digital
signals; provided, further, that the notice shall also describe the
carriage requirements pursuant to section 338(a)(4) of title 47, United
States Code, and paragraph (b)(2) of this rule section.**

**\* \* \* \* \***

\(e\) *[Market definitions.]{.underline}*

\(1\) A local market, in the case of both commercial and noncommercial
television broadcast stations, is 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 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.

\(2\) A designated market area is the market area, as determined by
Nielsen Media Research and published in the 1999--2000 Nielsen Station
Index Directory and Nielsen Station Index United States Television
Household Estimates or any successor publication. **In the case of areas
outside of any designated market area, any census area, borough, or
other area in the State of Alaska that is outside of a designated market
area, as determined by Nielsen Media Research, shall be deemed to be
part of one of the local markets in the State of Alaska.**

\(3\) A satellite carrier shall use the 1999--2000 Nielsen Station Index
Directory and Nielsen Station Index United States Television Household
Estimates to define television markets for the first retransmission
consent-mandatory carriage election cycle commencing on January 1, 2002
and ending on December 31, 2005. The 2003--2004 Nielsen Station Index
Directory and Nielsen Station Index United States Television Household
Estimates shall be used for the second retransmission consent-mandatory
carriage election cycle commencing January 1, 2006 and ending December
31, 2008, and so forth for each triennial election pursuant to this
section. Provided, however, that a county deleted from a market by
Nielsen need not be subtracted from a market in which a satellite
carrier provides local-into-local service, if that county is assigned to
that market in the 1999--2000 Nielsen Station Index Directory or any
subsequent issue of that publication. **A satellite carrier may
determine which local market in the State of Alaska will be deemed to be
the relevant local market in connection with each subscriber in an area
in the State of Alaska that is outside of a designated market, as
described in section (e)(2).**

\* \* \* \* \*

[^1]: The Satellite Home Viewer Extension and Reauthorization Act of
    2004 (SHVERA), Pub. L. No. 108-447, § 210, 118 Stat 2809 (2004).
    SHVERA was enacted on December 8, 2004, as title IX of the
    "Consolidated Appropriations Act, 2005."

[^2]: 47 U.S.C. § 338.

[^3]: 47 U.S.C. § 338(a)(4) (*as amended by* § 210 of the SHVERA).

[^4]: 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).
    SHVA was enacted on November 16, 1988, as an amendment to the
    copyright laws. SHVA gave satellite carriers a statutory license to
    offer signals to "unserved" households. 17 U.S.C. § 119(a).

[^5]: 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.). 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).

[^6]: 17 U.S.C. §§ 119 and 122.

[^7]: 47 U.S.C. §§ 325, 338 and 339.

[^8]: *See* 17 U.S.C. § 122(j).

[^9]: 47 U.S.C. § 338(a)(1).

[^10]: Section 340(i)(1) (*as amended by* § 202 of the SHVERA) defines
    the term "local market" by using the definition 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."

[^11]: *See* 17 U.S.C. § 122(j)(2)(A)-(C).

[^12]: *See* Nielsen Station Index Directory and Nielsen Station Index
    United States Television Household Estimates (2004-5 ed.); *see
    also* Television and Cable Factbook 2005 (Warren Communications)
    A-73.

[^13]: *See* 47 U.S.C. § 338(a)(1), (b)(1) and (c)(1).

[^14]: SHVERA, *supra* n. 1.

[^15]: 17 U.S.C. §§ 119, 122.

[^16]: 47 U.S.C. §§ 325, 338, 339 and 340.

[^17]: Due to an apparent inconsistency in numbering the provisions
    added by the SHVERA, it is not clear if this provision will
    ultimately be codified as 338(a)(4) or (a)(5). *See* 47 U.S.C.A. §
    338 n.1 (West 2005) ("So in original. Two pars. (3) enacted."). In
    this Order we use the subsection as enacted by Section 210,
    338(a)(4).

[^18]: *See* 47 U.S.C. § 338(a)(4) (*as amended by* the SHVERA), which
    provides:

    \(4\) CARRIAGE OF SIGNALS OF LOCAL STATIONS IN CERTAIN MARKETS- A
    satellite carrier that offers multichannel video programming
    distribution service in the United States to more than 5,000,000
    subscribers shall (A) within 1 year after the date of the enactment
    of the Satellite Home Viewer Extension and Reauthorization Act of
    2004, retransmit the signals originating as analog signals of each
    television broadcast station located in any local market within a
    State that is not part of the contiguous United States, and (B)
    within 30 months after such date of enactment retransmit the signals
    originating as digital signals of each such station. The
    retransmissions of such stations shall be made available to
    substantially all of the satellite carrier\'s subscribers in each
    station\'s local market, and the retransmissions of the stations in
    at least one market in the State shall be made available to
    substantially all of the satellite carrier\'s subscribers in areas
    of the State that are not within a designated market area. The cost
    to subscribers of such retransmissions shall not exceed the cost of
    retransmissions of local television stations in other States. Within
    1 year after the date of enactment of that Act, the Commission shall
    promulgate regulations concerning elections by television stations
    in such State between mandatory carriage pursuant to this section
    and retransmission consent pursuant to section 325(b), which shall
    take into account the schedule on which local television stations
    are made available to viewers in such State.

[^19]: *Implementation of Section 210 of the Satellite Home Viewer
    Extension and Reauthorization Act of 2004 to Amend Section 338 of
    the Communications Act*, 20 FCC Rcd 9319, 9330, ¶ 30 (2005)
    ("*Notice*").

[^20]: *See* List of Comments and Reply Comments in Appendix A. In
    addition, the Alaska Broadcasters Association submitted an ex parte
    letter after the comment period closed.

[^21]: *See* 47 C.F.R. § 76.66; *see also* amended rules in Appendix B.

[^22]: 47 U.S.C. § 338(a)(4) (*as amended by* the SHVERA).

[^23]: *See* *Annual Assessment of the Status of Competition in the
    Market for the Delivery of Video Programming*, Eleventh Annual
    Report, MB Docket No. 04-227, FCC 05-13 at ¶¶ 54-55 (2004).

[^24]: *See* amended Section 76.66(b)(2) in Appendix B. Section
    76.66(a)(1) of the current rules defines "satellite carrier." *See*
    47 C.F.R. § 76.66(a)(1).

[^25]: *See* 47 C.F.R. § 76.66(d)(2).

[^26]: 47 U.S.C. § 338(a)(4) (*as amended by* the SHVERA).

[^27]: 47 U.S.C. § 153(40).

[^28]: *Notice*, 20 FCC Rcd at 9322, ¶ 7.

[^29]: The contiguous United States, Alaska, Hawaii, Puerto Rico and the
    U.S. Virgin Islands are located in ITU Region 2 and have orbital
    assignments in the Region 2 BSS Plan. The "*Region 2 Plans*"
    comprise the Plan for BSS in the band 12.2-12.7 GHz in ITU Region 2
    as contained in Appendix 30 of the ITU Radio Regulations, and the
    associated Plan for the feeder-links in the frequency band 17.3-17.8
    GHz for the broadcasting-satellite service in Region 2 as contained
    in Appendix 30A of the ITU Radio Regulations. Guam, the Northern
    Marianas, Wake Island and Palmyra Island are located in ITU Region 3
    and have orbital assignments in the Region 3 BSS plan at 122.0°
    E.L., 121.80° E.L., 140.0° E.L. and 170.0° E.L. respectively.
    Satellites operating pursuant to the Region 2 BSS plan are subject
    to different technical requirements and use different frequency
    bands than satellites authorized to operate in Region 3. Therefore,
    satellites designed to serve Region 2 areas would not meet the
    technical requirements necessary to serve Region 3 areas.

[^30]: *Notice*, 20 FCC Rcd at 9322, ¶ 7.

[^31]: *See, e.g.,* Webster\'s II New College Dictionary, 1999 edition.

[^32]: 47 U.S.C. § 153.

[^33]: *See* DIRECTV Comments at 3, 10-11 (stating that most of the
    relevant areas in the South Pacific fall over the horizon and
    therefore cannot be served as a matter of physics; some territories
    in the Pacific are in a different region under the ITU where
    completely different frequencies are used for BSS service); EchoStar
    Comments at 2-5 (stating that U.S. satellite operators are not
    currently able to serve many of the areas in the U.S. territories
    and possessions and cannot serve a span of territory that ranges
    from the Atlantic Ocean to the middle of the Pacific).

[^34]: *See* Encuentro Christian Network ("ECN") and Eastern Television
    Corporation ("ETC") Comments at 2; International Broadcasting
    Corporation ("IBC") and R y F Television ("R y F") Comments at 2.
    ECN, ETC, IBC, and R y F argue that the plain language of §
    338(a)(4) includes noncontiguous territories and possessions of the
    United States, including Puerto Rico. *Id*.

[^35]: *See* EchoStar Reply Comments at 2-3; *see also* 17 U.S.C. §
    122(j)(2)(D), *as amended by* Section 111(b) of the SHVERA.

[^36]: *Notice*, 20 FCC Rcd at 9326, ¶ 18.

[^37]: *See* 17 U.S.C. § 122(j)(2) (generally defining local market as
    "the designated market area in which a station is located" and
    further defining "designated market area" by reference to
    determinations by "Nielsen Media Research and published in the
    1999-2000 Nielsen Station Index Directory and Nielsen Station Index
    United States Television Household Estimates or any successor
    publication."); 47 U.S.C. § 338(k) (3).

[^38]: *See* 17 U.S.C. § 122(j)(2)(D), *as amended by* Section 111(b) of
    the SHVERA ("Certain areas outside of any designated market
    area.\--Any census area, borough, or other area in the State of
    Alaska that is outside of a designated market area, as determined by
    Nielsen Media Research, shall be deemed to be part of one of the
    local markets in the State of Alaska. A satellite carrier may
    determine which local market in the State of Alaska will be deemed
    to be the relevant local market in connection with each subscriber
    in such census area, borough, or other area."); 47 U.S.C. §
    338(k)(3).

[^39]: Many areas are not visible to all satellites. For example, Guam
    is below the horizon for United States satellite assignment east of
    148° W.L.

[^40]: *See Policies and Rules for Direct Broadcast Satellite* Service
    *Report and Order*, 17 FCC Rcd 11,368, 11,372 (2002).

[^41]: *See* EchoStar Comments at 4; DIRECTV Puerto Rico and DIRECTV
    Investor Relations General Information, (DIRECTV website showing
    services offered throughout Puerto Rico by DIRECTV Latin America, an
    affiliated company in the DIRECTV Group, which includes DIRECTV U.S.
    and Latin America), *at* <http://69.89.230.95/DDefault.aspx?tid=1>
    and
    [http://phx.corporateir.net/phoenix.zhtml?c=127160&p=irol-homeprofile](http://phx.corporate-ir.net/phoenix.zhtml?c=127160&p=irol-homeprofile).

[^42]: *See* EchoStar Reply Comments at 3-4 (stating that it is
    impossible to serve Pacific territories and that the statute
    contains no proviso to distinguish Puerto Rico from the others);
    DIRECTV Comments at 9, n. 19 (maintaining that drafters surely never
    contemplated requiring satellite operators to commence service in
    places such as Baker Island, Howland Island, Kingman Reef and
    Navassa Island, all of which are uninhabited, or Jarvis Island,
    Johnston Atoll, and Palmyra Island, which have tiny temporary
    populations, although no permanent inhabitants).

[^43]: *See* *Griffin v. Oceanic Contractors, Inc.*, 458 U.S. 564, 575
    (1982) (stating that interpretations of a statute which would
    produce absurd results are to be avoided if alternative
    interpretations consistent with the legislative purpose are
    available); *Lawson v. Suwanee Fruit & S.S. Co.*, 69 S. Ct. 503
    (1949) (Statutory definitions usually control the meaning of
    statutory words, but not where obvious incongruities in language
    would be created and major purpose of statute would be destroyed);
    *Teva Pharm., USA, Inc. v. FDA,* 182 F.3d 1003, 1011 (D.C. Cir.
    1999) (citing *Robinson v. Shell Oil Co*., 519 U.S. 337, 346 (1997))
    (asserting that the FDA must interpret that statute to avoid absurd
    results and further congressional intent).

[^44]: *Notice*, 20 FCC Rcd at 9323, ¶ 8.

[^45]: *See* 47 U.S.C. § 338(a)(1) and 47 C.F.R. § 76.66(b); *see also
    Implementation of the Satellite Home Viewer Improvement Act of
    1999,* 16 FCC Rcd 1918 (2000) *("DBS Must Carry Report and Order"),*
    16 FCC Rcd 16544 (2001) *("DBS Must Carry Reconsideration Order").*
    The U.S. Court of Appeals for the Fourth Circuit upheld the
    constitutional validity of SHVIA and the reasonableness of the
    Commission's rules promulgated thereunder. *See Satellite
    Broadcasting and Communications Ass'n v. FCC,* 275 F.3d 337 (2001)*,
    cert. denied,* 536 U.S. 922 (2002)*.* The Communications Act,
    moreover, prohibits a multichannel video programming distributor
    from retransmitting the signal of a broadcast station unless it has
    "the express authority" of the station. 47 U.S.C. § 325(b)(1)(A).
    *See also* 17 U.S.C. § 122(a) (*as amended by* § 1002 of the SHVIA)
    and 47 U.S.C. § 338(a)(1) (*as amended by* § 1008 of the SHVIA).

[^46]: The question of satellite carriage obligations concerning a
    station's digital signal is currently pending before the Commission.
    *See* MB Docket Nos. 98-120 and 00-96; *see also WHDT v. Echostar*,
    18 FCC Rcd 396 (MB 2003) ("WHDT Order").

[^47]: *Notice*, 20 FCC Rcd at 9323-24, ¶ 9. The Communciations Act
    provides for termination of analog signal licenses as of December
    31, 2006, unless local stations request an extension and demonstrate
    that one or more criteria exist in their markets. *See* 47 U.S.C. §
    309(j)(14) (criteria include the so-called "85% test").

[^48]: DIRECTV Comments at 20.

[^49]: *Id.*

[^50]: *Id*. at 21.

[^51]: *See* DIRECTV Comments at 20-21.

[^52]: Microcom Comments at 1.

[^53]: *See Second Periodic Review of the Commission\'s Rules and
    Policies Affecting the Conversion to Digital Television*, *Report
    and Order*, 19 FCC Rcd 18,279, 18,336-37, ¶ 131 (2004) ("*Second
    Periodic R&O"*).

[^54]: IBC & R y F Comments at 2. *See also* ex parte Letter from Alaska
    Broadcasters Association ("ABA"), MB Docket No. 05-181, at 3 (July
    18, 2005) ("ABA Ex Parte").

[^55]: *See, e.g.,* ex parte Letter from DIRECTV, MB Docket No. 05-181
    (filed July 7, 2005) (asserting that the statute is silent as to
    carriage of the analog signal after carriage of the digital signal
    commences and noting that in many cases the content of the analog
    and digital signals would be identical and requiring dual carriage
    would result in burdening satellite capacity for duplicative
    programming).

[^56]: *See Chevron U.S.A. Inc. v. Natural Resources Defense Council,
    Inc.,* 467 U.S. 837, 843 (1984) (asserting that if a statute is
    silent or ambiguous, the question for the court is whether the
    agency's interpretation is based on a permissible construction of
    the statute). The Supreme Court stated, "If Congress has explicitly
    left a gap for the agency to fill, there is express delegation of
    authority to the agency to elucidate a specific provision of the
    statute by regulation. Such legislative regulations are given
    controlling weight unless they are arbitrary, capricious, or
    manifestly contrary to the statute." *Id*. at 843-44; *see also*
    *Nat'l Cable & Telecomm. Assn. v. Brand X Internet Serv.*, 125 S.
    Ct. 2688, 2699 (2005) (citing *Smiley v. Citibank*, 517 U.S. 735,
    742 (1996)) (clarifying that *Chevron* established the presumption
    that Congress, when it left a statute ambiguous, understood that the
    ambiguity would be resolved by an agency and desired the agency to
    possess whatever degree of discretion the ambiguity allowed). The
    Supreme Court noted that where a statute's plain terms admit two or
    more reasonable ordinary usages, the Commission's choice of one of
    them is entitled to deference. *Id*. at 2704.

[^57]: As DIRECTV explained in its comments, satellite carriers digitize
    analog broadcast signals; thus, there is little quality difference
    between an analog and SD digital signal to the DBS subscriber. *See*
    DIRECTV Comments at 20-21. *See also, e.g.,* *Second Periodic Review
    of the Commission\'s Rules and Policies Affecting the Conversion to
    Digital Television,* 19 FCC Rcd 18279, 18336-37, ¶ 130 (2004)
    ("*Second Periodic R&O*") ("As MSTV/NAB notes, simulcasting has been
    the general practice of broadcasters as the transition has
    progressed.").

[^58]: *See* *Carriage of Digital Television Broadcast Signals: 
    Amendment to Part 76 of the Commission\'s Rules*, CS Docket Nos.
    98-120 and 00-96 (pending rulemaking proceeding to determine
    satellite carriers' obligations with respect to carriage of digital
    signals pursuant to Section 338).

[^59]: *Notice*, 20 FCC Rcd at 9323-24, ¶ 9; *see also* 47 U.S.C. §§
    338(j), 534(b)(3) and 535(g). The Commission recently concluded that
    the statutory term relating to cable mandatory carriage, "primary
    video," was ambiguous with respect to whether it requires cable
    operators to carry broadcasters' multicast signals. Faced with an
    ambiguous statute, the Commission did not require mandatory carriage
    of multicast signals by cable systems. *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, FCC 05-27, at ¶ 33 (rel. Feb.
    23, 2005) (\"*DTV Second Report and Order*\") (declining, based on
    the record, to require cable operators to carry more than one
    programming stream of a digital station that multicasts).

[^60]: Satellite carriage of high definition and multicast local signals
    is also under review in the ongoing broadcast carriage rulemaking
    docket in the context of applying the statutory prohibition on
    material degradation. *See Implementation of the Satellite Home
    Viewer Improvement Act of 1999*,  16 FCC Rcd 1918, 1970-72 , ¶¶
    120-123 (2000)  (\"*Report and Order*\"); *Carriage of Digital
    Television Broadcast Signals:  Amendment to Part 76 of the
    Commission\'s Rules*,  16 FCC Rcd 2598,  2600, 2658, ¶¶ 3 and 136 
    (2001) (\"*First Report and Order*\"). *See also Notice, 20 FCC Rcd
    at 9323-24, ¶* 9.

[^61]: DIRECTV Comments at 14.

[^62]: 47 U.S.C. § 534(b)(3) (describing the content to be carried of
    local commercial television stations); *see also* 47 U.S.C. §
    535(g)(1) (similarly describing the content to be carried of
    noncommercial stations to include the "primary video").

[^63]: *See First Report and Order and Further Notice*, 16 FCC Rcd 2598,
    2622 (Jan. 23, 2001). Shortly after the SHVERA was enacted, the
    Commission released the *Second Report and Order and First Order on
    Reconsideration*, 20 FCC Rcd 4516 (Feb. 10, 2005), which further
    addressed the multicasting and dual carriage issues in the cable
    context.

[^64]: *See* 47 U.S.C. § 338(j).

[^65]: *See* DIRECTV Comments at 18-19; *see also* Echostar Comments at
    1 (arguing that a multicast requirement for satellite carriers in
    the noncontiguous states would be inconsistent with the Commission's
    recent digital must carry decision in the cable context).

[^66]: *See Shawnee Tribe v. U.S.*, 405 F.3d 1121, 1129 (10^th^ Cir.
    2005) (recognizing "fundamental canon of statutory construction
    that, when there is an apparent conflict between a specific
    provision and a more general one, the more specific one governs.").

[^67]: *See Chevron U.S.A. Inc. v. Natural Resources Defense Council,
    Inc.,* 467 U.S. 837, 842-43 (1984).

[^68]: *See* EchoStar Comments at 6; *see also* DIRECTV Comments at
    15-17.

[^69]: *Turner Broadcasting System, Inc. v. FCC*, 520 U.S. 180, 186
    (1997).

[^70]: *Id. See also U.S. v. O'Brien*, 391 U.S. 367, 377 (1968).

[^71]: *See* Ex Parte Letter from Robert Halperin, Counsel for the State
    of Alaska, at 1 (Aug. 24, 2001) ("Halperin Ex Parte in IB Docket No.
    98-21") (entered into MB docket 05-181 on July 26, 2005).

[^72]: *See* ABA Ex Parte at 2-3. *See also* State of Alaska
    Supplemental Reply Comments, IB Docket No. 98-21, at 3 (filed Jan.
    18, 2001) (entered into MB docket 05-181 on July 26, 2005).

[^73]: *Id.* at 4.

[^74]: *See* State of Alaska Comments, CS Docket No. 01-248, at 5 (filed
    Feb. 4, 2002) (entered into MB docket 05-181 on July 26, 2005).

[^75]: *See* ABA Ex Parte at 3 .

[^76]: *See* Ex Parte Letter from Fran Ulmer, Lieutenant Governnor of
    the State of Alaska, IB Docket No. 98-21 (Aug. 13, 1999) ("Ulmer Ex
    Parte in IB Docket No. 98-21") (entered into MB docket 05-181 on
    July 26, 2005).

[^77]: *See* DIRECTV Comments at 4, n. 6 (indicating that currently
    "DIRECTV does not provide Hawaii with several STARZ channels,
    distant network signals originating from the East Cost, most
    pay-per-view channels, and so called 'barker' channels previewing
    other DIRECTV programming" but expecting that each of these channels
    will become available upon commencement of commercial service after
    the launch of a new satellite); *see also* Ex Parte Letter from
    Herbert Marks and Bruce Olcott, Counsel to the State of Hawaii, IB
    Docket No. 98-21 (Jan. 11, 2002) ("Marks/Olcott Ex Parte in IB
    Docket No. 98-21") (entered into MB docket 05-181 on July 26, 2005).

[^78]: *See* Marks/Olcott Ex Parte in IB Docket No. 98-21 (filed Jan.
    11, 2002).

[^79]: *See* State of Hawaii Reply Comments at 3.

[^80]: *See id*. at 2.

[^81]: 47 U.S.C. §§ 151, 307(b) (emphasis added); *see also* State of
    Hawaii Reply Comments at 3.

[^82]: Satellite carriage of local digital broadcast signals pursuant to
    Section 338 as it will apply in the contiguous states, including
    carriage of HD and multicast signals, is under review in the ongoing
    broadcast carriage rulemaking docket. *See Carriage of Digital
    Television Broadcast Signals:  Amendment to Part 76 of the
    Commission\'s Rules*, CS Docket No. 98-120.

[^83]: *See* DIRECTV Comments at 16; *see also* DIRECTV Comments at 17
    (indicating the extent of any problem with respect to multicast
    carriage requirements "would depend on the nature of the programming
    streams then offered by Alaska and Hawaii broadcasters").

[^84]: *See, e.g.,* [www.CheckHD.com](http://www.CheckHD.com/) (showing
    one station, each, in Anchorage, Fairbanks, and North Pole, Alaska
    currently broadcasting two streams and none in Hawaii).

[^85]: *See* 47 U.S.C. §§ 534 and 535. *See also Carriage of Digital
    Television Broadcast Signals:  Amendment to Part 76 of the
    Commission\'s Rules*, CS Docket No. 98-120, 20 FCC Rcd 4516 (2005).
    Petitions for reconsideration of the *Second Report and Order* are
    pending before the Commission, and a related appeal has been filed
    and remains pending with the U.S. Court of Appeals for the District
    of Columbia Circuit.

[^86]: *See* 47 U.S.C. § 338. *See also Carriage of Digital Television
    Broadcast Signals: Amendment to Part 76 of the Commission's Rules,
    Further Notice*, CS Docket No. 00-96, 16 FCC Rcd 2598, 2658 (2001).

[^87]: 47 U.S.C. § 338(a)(4).

[^88]: *Notice*, 20 FCC Rcd at 9324-25, ¶¶ 10-15.

[^89]: 47 C.F.R. § 76.66(c)(4).

[^90]: *Notice*, 20 FCC Rcd at 9324, ¶ 11; *see* 47 C.F.R. § 76.66(c).

[^91]: *See* 47 U.S.C. § 325(b). Retransmission consent is based on an
    agreement between a broadcast station and satellite carrier, and
    includes a station's authorization and terms for allowing its
    broadcast signal to be carried. Broadcast stations and satellite
    carriers are required to negotiate retransmission consent agreements
    in good faith. 47 U.S.C. § 338(b)(3)(c) (*as amended by* Section 207
    of the SHVERA).

[^92]: 47 U.S.C. § 338(a); *see also* 47 C.F.R. § 76.66(c).

[^93]: *See* EchoStar Comments at 7. EchoStar generally agreed it was
    desirable to track the existing election process to minimize
    confusion and burden for satellite operators and affected
    broadcasters. *Id*.

[^94]: *See* amended section 76.66(c)(6) in Appendix B.

[^95]: *See* amended rule section 76.66(c)(6) in Appendix B.

[^96]: *Notice*, 20 FCC Rcd at 9325, ¶ 13.

[^97]: *Id.*

[^98]: *See* EchoStar Comments at 8; Microcom Comments at 2.

[^99]: *See Carriage of Digital Television Broadcast Signals:  Amendment
    to Part 76 of the Commission\'s Rules, etc.,* 16 FCC Rcd 2598, 2610
    (2001) (\"*DTV Carriage First Report and Order*\").

[^100]: *See* amended rule section 76.66(c)(6) in Appendix B.

[^101]: *Notice*, 20 FCC Rcd at 9325, ¶ 14.

[^102]: *See* 47 C.F.R. § 76.66(c)(2) and (4).

[^103]: *Notice*, 20 FCC Rcd at 9325, ¶ 13.

[^104]: *See* amended section 76.66(c)(6) in Appendix B.

[^105]: *See DTV Carriage First Report and Order*, 16 FCC Rcd at 2610.

[^106]: *Notice*, 20 FCC Rcd at 9325, ¶ 15; *see* 47 C.F.R. §
    76.66(d)(3).

[^107]: *See* 47 C.F.R. § 76.66(d)(3)(ii)-(iv).

[^108]: This date was related to the proposed special notification
    rules, which are discussed, *infra.*

[^109]: EchoStar Comments at 8.

[^110]: *Notice*, 20 FCC Rcd at 9324, ¶ 10; *see also* 47 U.S.C. §
    338(a)(1), (b)(1), and (c); 47 C.F.R. § 76.66(g) and (h). As noted
    in the *Notice,* Section 338(a)(4) also refers to the "cost to
    subscribers of such transmissions" but does not require rules for
    implementation. *Notice*, 20 FCC Rcd at 9324, n. 34.

[^111]: *See* amended rule section 76.66(b)(2) in Appendix B.

[^112]: *See* amended rule section 76.66(c)(6) in Appendix B.
    Non-commercial television stations do not elect carriage because
    they cannot elect retransmission consent. *See* 47 U.S.C. §
    325(b)(2)(A). They are entitled to mandatory carriage. *See* 47
    U.S.C. § 338.

[^113]: 47 U.S.C. § 338(a)(4) (*as amended by* § 210 of the SHVERA).

[^114]: *Notice*, 20 FCC Rcd at 9326, ¶ 16.

[^115]: *Id.*

[^116]: EchoStar Comments at 6-7.

[^117]: Microcom Comments at 2.

[^118]: *See Policies and Rules for the Direct Broadcast Satellite
    Service*, 17 FCC Rcd 11,331, 11,358-59 (2002). The Commission
    defined elevation angle "as the upward tilt of an earth station
    antenna measured in degrees relative to the horizontal plane
    (ground), that is required to aim the earth station antenna at the
    satellite. When aimed at the horizon, the elevation angle is zero.
    If the satellite were below the horizon, the elevation angle would
    be less than zero. If the earth station antenna were tilted to a
    point directly overhead, it would have an elevation angle of 90º."
    *Id.*

[^119]: For example, the elevation angle for Attu Island, Alaska is less
    than zero or below the horizon for the 61.5º, 101º, and 110º orbit
    locations and only 4 for the 119º location.

[^120]: Microcom Comments at 2; *see also infra* discussion of areas
    outside local markets.

[^121]: *See* *Policies and Rules for the Direct Broadcast Satellite
    Service*, 17 FCC Rcd at 11,358-62.

[^122]: *Notice*, 20 FCC Rcd at 9326, ¶ 17; *see also Implementation of
    the Satellite Home Viewer Improvement Act of 1999, Report and
    Order*, 16 FCC Rcd 1918, 1937-38 (2000).

[^123]: EchoStar Comments at 7.

[^124]: *See* Nielsen Station Directory and Nielsen Station Index United
    States Television Household Estimates (2004-5 ed.).

[^125]: 47 U.S.C. § 338(a)(4), *as amended* by § 210 of SHVERA.

[^126]: *See* 17 U.S.C. § 122(j)(2)(D) *as amended by* Section 111(b) of
    the SHVERA.

[^127]: *See* Nielsen Station Directory and Nielsen Station Index United
    States Television Household Estimates (2004-5 ed.); Television and
    Cable Factbook 2005 (Warren Communications) A-73.

[^128]: *Notice*, 20 FCC Rcd at 9326-27, ¶ 18.

[^129]: Microcom Comments at 3; *see also* ABA Ex Parte in MB Docket No.
    05-181, at 3 (filed July 18, 2005).

[^130]: DIRECTV Reply Comments at 1-2.

[^131]: *See id*. at 2-3.

[^132]: *See* 17 U.S.C. § 122(j)(2)(D) *as amended by* Section 111(b) of
    the SHVERA.

[^133]: DIRECTV Reply Comments at 1.

[^134]: *See* 17 U.S.C. § 119(a)(16)(A) *as amended by* Section 111 of
    the SHVERA. Section 119(a)(16)(B) limits the restriction in (A) if
    the distant signal is a digital signal and no television station
    licensed to a community in Alaska and affiliated with the same
    network is transmitting a digital signal. *See also*, 17 U.S.C. §
    122(j)(2)(D) *as amended by* Section 111(b) of the SHVERA, which
    amends the definition of "local" and thereby creates the copyright
    license for the areas in Alaska that are outside of a DMA: "Any
    census area, borough, or other area in the State of Alaska that is
    outside of a designated market area, as determined by Nielsen Media
    Research, shall be deemed to be part of one of the local markets in
    the State of Alaska. A satellite carrier may determine which local
    market in the State of Alaska will be deemed to be the relevant
    local market in connection with each subscriber in such census area,
    borough, or other area."

[^135]: Microcom Comments at 2. In ex parte comments, the ABA also
    objects to hardware costs of \$200-300 for dish antennas to receive
    local signals. ABA Ex Parte in MB Docket No. 05-181, at 4 (filed
    July 18, 2005).

[^136]: *See* 17 U.S.C. § 119(a)(4)(G) *as amended by* Section 103 of
    the SHVERA; s*ee also* 47 U.S.C. § 339(a)(2)(H) *as amended by*
    Section 204 of the SHVERA, which is substantially the same
    definition.

[^137]: Microcom Comments at 3. Microcom also asks the Commission to
    address questions pertaining to "commercial retransmission consent"
    for commercial establishments in Alaska that are not within a DMA.
    *Id*. This issue is not within the scope of this proceeding, which
    is limited to implementation of Section 338(a)(4).

[^138]: *See* 47 U.S.C. § 338(k)(3) (formerly (h)(3)); *see also* 47
    C.F.R. § 76.66(e).

[^139]: *See* adopted section 76.66(e)(2) and (3) in Appendix B.

[^140]: *Notice*, 20 FCC Rcd at 9327, ¶ 19.

[^141]: *Id.*

[^142]: EchoStar referred to the notification proposal in connection
    with its request for clarification concerning new stations. *See
    supra ¶* 29 and note 108.

[^143]: The deadline for stations to make carriage elections is October
    1, 2005, for the carriage cycle that commences January 1, 2006, and
    that will govern carriage for local stations' analog signals in
    Alaska and Hawaii beginning December 8, 2005.  Thus, satellite
    carriers would have to send the proposed 30 day notification before
    September 1, which would require Federal Register publication of
    this Order no later than August 1, 2005.

[^144]: *See* 47 C.F.R. § 76.66(d)(2) (Requires 60 day notice prior to
    commencing service in a new market, gives stations 30 days to elect
    carriage, requires carriage to commence 90 days later).

[^145]: *See* adopted section 76.66(d)(2)(iii) in Appendix B. The
    amended rule provides for carriage requests from both commercial and
    noncommercial television broadcast stations.

[^146]: *Notice*, 20 FCC Rcd at 9327, ¶ 19; 47 C.F.R. § 76.66(d)(2).

[^147]: 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).

[^148]: 5 U.S.C. § 605(b).

[^149]: 5 U.S.C. § 601(6).

[^150]: 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."

[^151]: 15 U.S.C. § 632.

[^152]: 13 C.F.R. § 121.201, NAICS code 517510.

[^153]: *Id.*

[^154]: 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*, FCC 05-13,
    ¶ 55 (rel. Feb. 4, 2005) ("*2005 Cable Competition Report*").

[^155]: 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.
    *2005 Cable Competition Report.*

[^156]: 5 U.S.C. § 605(b).

[^157]: 5 U.S.C. § 605(b).

[^158]: 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.).