**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of:                | * | MM Docket No. 99-325         |
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**FURTHER NOTICE OF PROPOSED RULEMAKING**

**AND NOTICE OF INQUIRY**

**Adopted: April 15, 2004** **Released: April 20, 2004**

Comment Date: June 16, 2004

Reply Comment Date: July 16, 2004

By the Commission: Chairman Powell, Commissioners Copps and Adelstein
issuing separate statements.

Table of Contents

**[Heading]{.underline}** **[Paragraph No.]{.underline}**

I. INTRODUCTION 1

II\. In-Band on-channel digital audio broadcasting 2

A. In-Band On-Channel Technology 2

B. The Development of Digital Audio Broadcasting 5

C. The Digital Audio Broadcasting Report and Order and Interim Standards
7

III\. The shift to Digital Audio Broadcasting 10

A. The Radio Marketplace 10

B. Conversion Policy 15

IV\. Rule Changes and amendments 18

A. Service Rules 18

B. Programming and Operational Rules 31

C. Technical Rules 41

1\. Rule Amendments for the AM Service. 41

2\. Rule Amendments for the FM Service 47

3\. Standards 56

4\. Patents 57

5\. Equipment Authorization 58

D. Licensing and Forms 59

E. Noncommercial Stations 61

F. Low Power FM 64

V. NOTICE OF INQUIRY 67

A. Digital Audio Content Control 67

B. International Issues 70

VI\. PROCEDURAL MATTERS 72

A. Filing Requirements 72

B. Initial Regulatory Flexibility Certification 77

C. Paperwork Reduction Act Analysis 81

VII\. ORDERING CLAUSES 84

**Initial Regulatory Flexibility Act Analysis Appendix A**

# INTRODUCTION

1.  In the *Digital Audio Broadcasting* Report and Order ("*DAB R&O*"),
    we selected in-band, on-channel ("IBOC") as the technology enabling
    AM and FM radio broadcast stations to commence digital
    operations.[^1] We announced notification procedures that will allow
    operating AM and FM radio stations to begin digital transmissions
    immediately on an interim basis using the IBOC system developed by
    iBiquity Digital Corporation ("iBiquity").[^2] We concluded that the
    adoption of a single IBOC transmission standard will facilitate the
    development of digital services for terrestrial broadcasters. We
    also stated that the dramatic improvement in digital audio quality
    would outweigh any limits on analog operations and those
    broadcasters concerned about the loss of bandwidth may nevertheless
    continue to operate in an analog-only mode. We, however, deferred
    consideration of final operational requirements and related
    broadcast licensing and service rule changes to a future date. In
    this *Further Notice of Proposed Rule Making* ("*FNPRM*"), we seek
    comment on what rule changes are necessary due to the advent of
    digital audio broadcasting ("DAB")*.* Through this proceeding, we
    seek to foster the development of a vibrant terrestrial digital
    radio service for the public and seek to ensure that radio
    broadcasters will successfully implement DAB.[^3] We also issue a
    *Notice of Inquiry* ("*NOI*") on such matters as digital audio
    content control and international issues, matters that are important
    to consider in this context, but are not appropriate subjects for a
    rulemaking at this stage of the DAB conversion process.

# In-Band on-channel digital audio broadcasting

## In-Band On-Channel Technology

2.  iBiquity's IBOC DAB technology provides for enhanced sound fidelity,
    improved reception, and new data services. IBOC is a method of
    transmitting near-CD quality audio signals to radio receivers along
    with new data services such as station, song and artist
    identification, stock and news information, as well as local traffic
    and weather bulletins. This technology allows broadcasters to use
    their current radio spectrum to transmit AM and FM analog signals
    simultaneously with new higher quality digital signals. These
    digital signals eliminate the static, hiss, pops, and fades
    associated with the current analog radio system. IBOC was designed
    to bring the benefits of digital audio broadcasting to analog radio
    while preventing interference to the host analog station and
    stations on the same channel and adjacent channels. IBOC technology
    makes use of the existing AM and FM bands (In-Band) by adding
    digital carriers to a radio station\'s analog signal, allowing
    broadcasters to transmit digitally on their existing channel
    assignments (On-Channel).[^4] iBiquity IBOC technology will also
    allow for radios to be \"backward and forward\" compatible, allowing
    them to receive traditional analog broadcasts from stations that
    have yet to convert and digital broadcasts from stations that have
    converted. Current analog radios will continue to receive the analog
    portions of the broadcast.[^5]

3.  The iBiquity IBOC systems evaluated by the DAB Subcommittee of the
    National Radio Systems Committee ("NRSC")[^6] are "hybrids" in that
    they permit the transmission of both the analog and digital signals
    within the spectral emission mask of a single AM or FM channel. In
    the hybrid mode, the iBiquity system places digital information on
    frequencies immediately adjacent to the analog signal. The digital
    signals are transmitted using orthogonal frequency division
    multiplexing ("OFDM"). The FM IBOC system has an extended hybrid
    mode, with greater digital capacity than the hybrid mode. However,
    neither the extended hybrid FM system nor the all-digital systems
    have been tested by the NRSC.[^7]

4.  The digital system uses perceptual coding to discard information
    that the human ear cannot hear. This reduces the amount of digital
    information, and therefore the frequency bandwidth, required to
    transmit a high-quality digital audio signal. In addition, the
    iBiquity hybrid system is designed to blend to FM analog when
    digital reception fails. This blending feature eliminates a digital
    "cliff effect," that would otherwise result in the complete and
    abrupt loss of reception at locations where the digital signal
    fails.

## The Development of Digital Audio Broadcasting

5.  In 1990, the Commission first considered the feasibility of
    terrestrial and satellite digital radio services.[^8] As to the
    former, the Commission concluded that the digital terrestrial
    systems then under consideration were undeveloped and that it was
    premature to engage in discussions regarding DAB standards, testing,
    licensing, and policy issues. In 1999, the Commission, recognizing
    that the appropriate technology had matured, commenced this
    proceeding to foster the further development of IBOC systems and
    develop a record regarding the issues raised by the introduction of
    DAB.[^9] In the *DAB NPRM*, the Commission, *inter alia*, proposed
    criteria for the evaluation of DAB models and systems and considered
    certain DAB system testing, evaluation, and standard selection
    issues.[^10]

6.  Meanwhile, the DAB Subcommittee of the NRSC conducted extensive
    laboratory tests of several DAB systems. The report of the DAB
    subcommittee of the NRSC, released on December 3, 2001, evaluated
    comprehensive field and laboratory tests of the FM IBOC system.[^11]
    The NRSC FM report concluded "that the iBiquity FM IBOC system as
    tested by the NRSC should be authorized by the FCC as an enhancement
    to FM broadcasting in the U.S., charting the course for an efficient
    transition to digital broadcasting with minimal impact on existing
    analog FM reception and no new spectrum requirements."[^12] The
    Commission sought comment on the NRSC FM report and its conclusions
    with respect to the Commission's stated DAB policy goals and
    selection criteria.[^13] Thereafter, on April 16, 2002, the NRSC
    filed its evaluation of iBiquity's AM hybrid system,[^14] on which
    the Commission sought comment in a subsequent public notice.[^15]
    The NRSC AM report concluded that iBiquity "has developed an
    attractive solution to improve AM listening based on the best of
    today's available technology."[^16] NRSC recommended that iBiquity
    IBOC should be authorized as a daytime-only enhancement to AM
    broadcasting, pending further study of AM IBOC performance under
    nighttime propagation conditions. Based on the record developed in
    this proceeding at that time, iBiquity and others urged the
    Commission to permit broadcasters to initiate IBOC transmission on
    an interim basis prior to the adoption of new licensing rules and
    procedures.

## The Digital Audio Broadcasting Report and Order and Interim Standards 

7.  In the *DAB R&O*, we selected the hybrid AM and FM IBOC systems
    tested by the NRSC as *de facto* standards for interim digital
    operation. As of the effective date of the *DAB R&O*, we stated we
    would no longer entertain any proposal for digital radio
    broadcasting other than IBOC.[^17] We stated that IBOC was the best
    way to advance our DAB policy goals. We found that this technology
    was supported in the broadcast industry and was the only approach
    that could be implemented in the near future. We also found that the
    iBiquity IBOC system was spectrum-efficient in that it can
    accommodate digital operations for all existing AM and FM radio
    stations with no additional allocation of spectrum. The NRSC tests,
    as explained in the *DAB R&O*, showed that both AM and FM IBOC
    systems offer enhanced audio fidelity and increased robustness to
    interference and other signal impairments. The tests also indicated
    that coverage for both systems would be at least comparable to
    analog coverage. We stated that audio fidelity and robustness will
    greatly improve when radio stations move to digital operations.

8.  AM radio has presented certain challenges and concerns in this
    proceeding. In the *DAB R&O*, we held that AM stations must transmit
    IBOC signals during daytime hours only, pending a favorable
    evaluation of AM IBOC under nighttime propagation conditions.
    Moreover, AM stations implementing IBOC digital transmissions may
    not simultaneously transmit analog C-QUAM AM stereo. We stated that
    while we were concerned about the loss of the "legacy" AM analog
    service, each broadcaster had the voluntary option of implementing
    IBOC. We found that the technical limitations of the analog
    technology, including narrow bandwidth and susceptibility to manmade
    and natural noise, continued to undermine its viability.
    Additionally, we found that the record in this proceeding presented
    compelling evidence that AM IBOC had the potential to revitalize AM
    broadcasting and substantially enhance radio service for the
    listening public.

9.  We established other interim requirements for hybrid IBOC facilities
    in the *DAB R&O:*[^18]

-   During interim IBOC operations, stations must broadcast the same
    main channel program material in both analog and digital modes.

-   Interim IBOC facilities must use the station's authorized antenna
    system. Second antennas for transmitting the digital portion of the
    hybrid IBOC signal were not permitted.[^19]

-   Due to interference concerns, stations implementing IBOC must
    indicate to the Commission the transmitter power output (for both
    analog and digital transmitters, if applicable) and must certify
    that the analog effective radiated power remains consistent with the
    station's authorization.  Calculations used to determine the
    transmitter power shall be retained and made available to the
    Commission upon request.  

-   Pending adoption of final rules, a licensee's authorization to
    transmit IBOC signals may be modified or cancelled by the Commission
    without prior notice or a right to a hearing.

    In the sections to follow, we consider digital audio broadcasting
    service and operational requirements. We also seek comment on the
    rule revisions and amendments necessary to establish a permanent
    regulatory framework for IBOC DAB operations.

# The shift to Digital Audio Broadcasting

## The Radio Marketplace

10. As of December 31, 2003, there were 11,011 commercial radio
    stations, as well as 2,552 FM educational radio stations in the
    United States.[^20] Of the commercial stations, 6,217 were FM
    stations and 4,794 were AM stations. There were also 3,834 FM
    translator and booster stations. As of March 2004, there were 3,285
    owners of commercial radio stations across the nation.[^21] Also on
    that date, there were 56 radio station owners with 20 or more
    stations.[^22]

11. Currently, 108 million U.S. households,[^23] or 98% of all U.S.
    households, have a radio device.[^24]  We estimate that there are,
    on average, 5 radios per household or about 500 million
    receivers.[^25] We also estimate that by the end of 2003, there were
    about 225 million motor vehicles on the road with radios.[^26] There
    are also millions of radios in use in other vehicles, such as
    commercial trucks and watercraft, as well as commercial
    establishments such as restaurants and hotels. All in all, we
    estimate that there are nearly 800 million radio sets in use in the
    United States.[^27]

12. Terrestrial radio broadcast service competes against new digital
    audio technologies offering consumers enhanced sound fidelity and
    other services, including satellite digital audio radio
    service.[^28] For example, Sirius Satellite Radio Inc. ("Sirius")
    and XM Satellite Radio Holdings ("XM") have built subscription radio
    services that provide national programming, delivering up to 100
    channels of digital music, news, and entertainment directly from
    satellites to vehicles, homes, and portable radios in the United
    States. Each company holds one of the two licenses issued by the
    Commission to build, launch, and operate a national satellite radio
    system. Both companies launched their services in 2001. XM has about
    1,680,000 subscribers and Sirius has over 260,000 subscribers.[^29]

13. As of October 1, 2003, over 280 radio stations encompassing more
    than 100 markets have licensed iBiquity's technology and have begun
    digital audio broadcasting or are in the process of converting.[^30]
    Cumulatively, these markets include over 145 million listeners or
    nearly two-thirds of the Arbitron-ranked, listening public. Within
    each of the six cities -- New York, Los Angeles, Chicago, San
    Francisco, Miami and Seattle -- previously identified by iBiquity as
    launch markets for DAB, a minimum of ten stations and up to 18
    stations have already licensed iBiquity's technology. Stations in 35
    states as well as the District of Columbia and Puerto Rico have
    demonstrated their commitment to digital audio broadcasting as well.
    Radio manufacturers have slowly begun selling digital radio
    receivers directly to the public this year.[^31]

14. According to iBiquity, the estimated costs for a station to
    implement its hybrid IBOC system range from \$30,000 to \$200,000,
    with an average cost of \$75,000.[^32] Conversion costs vary
    depending on the age and other characteristics of a station's
    transmitter plant and studio equipment.[^33] For example, most new
    broadcast transmitters are IBOC-compatible. In contrast, some
    stations may need to replace older transmitters, studio-transmitter
    links, or studio equipment in order to transmit IBOC. Radio
    broadcasters can implement IBOC using their existing towers,
    antennas, and transmission lines, making the technology inherently
    less costly than, for example, the digital television conversion. In
    addition, broadcasters may begin interim IBOC operations on a
    voluntary basis, deferring costs as they deem appropriate.

## Conversion Policy

15. iBiquity submitted test results for both AM and FM all-digital
    modes. The all-digital tests were not performed under the auspices
    of the NRSC, unlike the tests on iBiquity's hybrid IBOC systems.
    iBiquity requested that the Commission endorse its all-digital
    systems as well as the hybrid systems. In the *DAB R&O*, we
    recognized that although a fully digital terrestrial radio service
    is the ultimate goal, it was premature to endorse systems that have
    not been subject to comprehensive and impartial testing.[^34] We
    also stated that the adoption of an all-digital standard requires
    the consideration of novel and complex technical and policy issues
    that arise only when the constraints of "designing around" the
    legacy analog transmission standard are eliminated, and we therefore
    deferred any action on these matters. We recognize that the standard
    setting bodies have much work to do on an all-digital radio system
    and we have no standard to evaluate or seek comment upon. Instead,
    we seek comment on the pace of the analog to hybrid radio conversion
    and the possibility of an all-digital terrestrial radio system in
    the future.

16. Congress codified December 31, 2006, as the analog television
    termination date, but also adopted certain exceptions to that
    deadline.[^35] There is no analogous Congressional mandate for the
    termination of analog radio broadcasting. We have not considered a
    date certain when radio stations should commence digital broadcast
    operations because radio stations are not using additional spectrum
    to provide digital service, as is the case with digital television,
    and band-clearing is not required by statute. Based on these
    factors, we see no immediate need to consider mandatory transition
    policies of the type contemplated with respect to DTV. However, we
    recognize the spectrum efficiencies and related new service
    opportunities inherent in the IBOC system.[^36] We also want to
    enable terrestrial radio broadcasters to better compete with
    satellite radio services now in operation.[^37] As such, we seek
    comment on what changes in our rules would likely encourage radio
    stations to convert to a hybrid or an all-digital format.

17. We ask whether the government, the marketplace, or both, should
    determine the speed of conversion from analog to hybrid, and
    eventually, to digital radio service, at this time.[^38] We
    understand that the interests of radio listeners are paramount and
    we do not want to disadvantage any member of the public by forcing
    the purchase of new radios. In many ways, the move to DAB is similar
    to the transition from black and white to color television in the
    1950s and 1960s, where consumers could continue to receive local
    television signals even though they may not have had a color
    television to receive programming in color. In the color television
    transition, marketplace forces stimulated the introduction of color
    sets. As a result, television producers eventually ended program
    production in a black and white format. Here, we anticipate that the
    more DAB receivers sold, the more radio stations will have an
    incentive to convert to DAB, and the cycle will repeat itself until
    all consumers have DAB receivers. We intend to rely on the
    marketplace to the greatest extent feasible. However, if the
    marketplace falters, we seek comment on other means to advance the
    introduction of DAB. In this context, we ask whether we should
    conduct periodic reviews, in terms of DAB receivers on the market
    and the number of DAB stations on-the-air, to help us decide what is
    in the best interests of the public and the broadcasting industry.
    If so, how frequently should we initiate such reviews?

# Rule Changes and amendments

## Service Rules

18. The DAB system provides broadcasters with new flexibility and new
    capabilities. For example, DAB allows a radio station to scale the
    digital portion of its hybrid FM broadcast from 96 kbps[^39] to
    lower rates in order to set aside capacity for other associated
    services. The FM system can be scaled from 96 kbps to 84 kbps or 64
    kbps to obtain 12 to 32 kbps for other services. The system also
    allows broadcasters to use the "extended hybrid modes" whereby the
    digital sidebands are extended closer to the analog signal. This
    allows the broadcaster to obtain 12.5 to 50 kbps of capacity for
    other services. Broadcasters will be capable of providing through
    DAB not only a vastly improved high definition audio signal,[^40]
    but also multiple streams of digital audio programming. In addition,
    the system is capable of non-broadcast uses that are non-audio
    and/or subscription‑based in nature. A flexible DAB service policy
    would likely increase the ability of broadcasters to compete in an
    increasingly competitive marketplace, and would allow them to serve
    the public with new and innovative services.[^41] Flexibility could
    also allow for a more rapid conversion to digital radio. While we
    tentatively find that a flexible service policy is in the public
    interest, we seek comment on the following issues before making a
    final determination.

19. *High Definition Digital Audio Broadcasting.* We seek comment on
    whether or not we should require broadcasters to provide a minimum
    amount of high definition audio and, if so, what minimum amount
    should be required. The public may be served by such a policy
    because radio stations would provide a free programming alternative
    to satellite radio and compact discs. We also seek comment on the
    amount of capacity necessary to allow radio stations to broadcast a
    high quality digital signal *and* permit the introduction of new
    datacasting and supplemental audio services. If we adopt a high
    definition service requirement, should we have separate rules for AM
    and FM stations?

20. *Digital Audio Multicasting.* The DAB system permits a radio station
    to broadcast multiple audio programming services within its assigned
    channel. National Public Radio in fact, is now testing such a
    broadcasting model under the auspices of its "Tomorrow Radio
    Project."[^42] DAB makes it possible for hybrid and digital radio
    stations to air not only more music programming, but also public
    safety services (*e.g.*, national security announcements), assisted
    living services (*e.g*., radio reading services), non-English
    language programming, and news services to underserved
    populations.[^43] We seek comment on how many audio streams a radio
    station can transmit using IBOC without causing interference or
    degrading audio quality. Will the availability of additional audio
    streams spur public demand for digital audio receivers? We seek
    comment on the ways broadcasters can use this technology to provide
    greater access to radio for all people. How can the availability of
    additional audio streams further our diversity goals, particularly
    for people with disabilities and minority or underserved segments of
    the community? We tentatively conclude that adopting DAB service
    rules that encourage more audio streams would promote program
    diversity, and that, once the Commission adopts a policy in this
    area, radio stations will no longer need to obtain experimental
    authority to broadcast multiplexed digital programming.

21. We seek comment on to what extent we should permit radio stations to
    lease unused or excess airtime to unaffiliated audio programmers. In
    this context, an unaffiliated entity would schedule the programming
    output of a particular digital audio stream for a period of time
    under a contract with the licensee. Radio stations may benefit from
    leasing unused or excess air-time because they would have additional
    funds to invest into new programming, which in turn, would benefit
    the public. We seek comment on whether our diversity goals will be
    furthered if we allow independent programmers to lease excess
    capacity from broadcast licensees? How should current regulations,
    such as our sponsorship identification rules, be applied in this
    situation?[^44] Should the licensee be responsible for ensuring the
    fulfillment of all regulatory obligations, as is the case for
    digital television stations?[^45] How does Section 310(d) of the
    Act, regarding transfers of control, apply in this situation?[^46]
    Moreover, how would the Commission's broadcast ownership limits and
    attribution rules be affected if an unaffiliated programmer, that is
    also the licensee of another station in the same market, leases one
    of the additional audio streams? Should there be an overall limit to
    the amount of programming time a particular radio station can lease
    to others?

22. Section 73.277 of the Commission's rules pertains to the permissible
    transmissions of an FM licensee. Under our rules, an FM broadcast
    licensee or permittee cannot enter into any agreement to supply on
    its main channel background music or other subscription service
    (including storecasting) for reception in the place of business of
    any subscriber.[^47] We seek comment on how this rule should apply
    to digital audio multicasting. Specifically, should this rule be
    applied to any additional audio services that may be broadcast or
    should such additional audio channels be exempt from the rule?

23. *Datacasting.* All FM analog stations are authorized to transmit
    secondary services via an automatic subsidiary communications
    authorization ("SCA") under Section 73.295 of the Commission's
    rules. Subsidiary communication services are those transmitted on a
    subcarrier within the FM baseband signal, not including services
    that enhance the main program broadcast service or exclusively
    relate to station operations. Subsidiary communications include, but
    are not limited to, services such as functional music, specialized
    language programs, radio reading services, utility load management,
    market and financial data and news, paging and calling, traffic
    control signal switching, bilingual television audio, and point to
    point or multipoint messages.[^48] Some FM broadcasters currently
    provide emergency alert system notifications and paging functions.

24. Section 73.593 of the Commission's rules pertains to subsidiary
    communications services broadcast by noncommercial educational FM
    radio stations. Under our rules, the licensee of a noncommercial
    educational FM station is not required to use its subcarrier
    capacity, but if it chooses to do so, it is governed by the SCA
    rules for commercial FM stations regarding the types of permissible
    subcarrier uses and the manner in which subcarrier operations are
    conducted. A significant difference from the commercial FM SCA
    rules, however, is the requirement that the remunerative use of a
    noncommercial educational station\'s subcarrier capacity not be
    detrimental to the provision of existing or potential radio reading
    services for the blind or otherwise inconsistent with its public
    broadcasting responsibilities.[^49]

25. Section 73.127 of the Commission's rules is analogous to Sections
    73.295 and 73.593 and discusses the use of multiplex transmissions
    by AM stations. Specifically, the licensee of an AM broadcast
    station may use its AM carrier to transmit signals not audible on
    ordinary consumer receivers for both broadcast and non-broadcast
    purposes.[^50] AM carrier services are of a secondary nature under
    the authority of the AM station authorization, and the authority to
    provide such communications services may not be retained or
    transferred in any manner separate from the station\'s
    authorization. The grant or renewal of an AM station permit or
    license is not furthered or promoted by proposed or past multiplexed
    transmission service. The licensee must establish that the broadcast
    operation is in the public interest wholly apart from the subsidiary
    communications services provided.[^51] For both AM and FM services,
    the licensee must retain control over all material transmitted in a
    broadcast mode via the station\'s facilities and has the right to
    reject any material that it deems inappropriate or undesirable.[^52]

26. iBiquity, in association with broadcasters and equipment
    manufacturers, has developed first generation IBOC data services.
    Using an established standard ID3 format,[^53] information services
    will provide listeners more information on the song, CD title, and
    artist. In addition, information and host profiles will complement
    audio commercials and talk radio formats. In the future,
    Synchronized Multimedia Integration Language ('SMIL"), a protocol
    used by iBiquity as the foundation for Advanced Application Services
    ("AAS"), will provide the foundation for the creation and delivery
    of innovative DAB services.[^54] Such advanced services will include
    commercial applications like: (1) enhanced information services such
    as breaking news, sports, weather, and traffic alerts delivered to
    DAB receivers as a text and/or audio format; (2) listener controlled
    main audio services providing the ability to pause, store,
    fast-forward, index, and replay audio programming via an integrated
    program guide with simplified and standard user interface options;
    and (3) supplementary data delivery that will spur the introduction
    of in-vehicle telematics, navigation and rear-seat entertainment
    programming.

27. We seek comment on whether we should adopt a flexible policy
    permitting radio stations to produce and distribute any and all
    types of datacasting services. Alternatively, are there certain
    types of services that a radio station must provide, such as
    enhanced emergency alerts, before it is permitted to offer other
    data services? Are there certain services that should be prohibited?
    How should Sections 73.127, 73.295, and 73.593 of our rules be
    amended? How should our sponsorship identification rules apply? As
    for noncommercial radio stations, we seek comment on what SCA
    services would be inconsistent with the public broadcasting
    responsibilities of hybrid or all-digital noncommercial educational
    stations.

28. DAB interference with analog SCA services has been an issue in this
    proceeding. iBiquity performed field tests which showed that, in
    some circumstances, analog SCA receivers may receive significant new
    interference from IBOC stations operating on second-adjacent
    channels. Following the tests, NPR commissioned a study using
    average receiver performance to estimate the number of listeners
    potentially affected by additional interference from IBOC in the top
    16 radio markets. The results show that, on average, additional
    interference from IBOC could affect 2.6 percent of eligible
    receivers within an FM station's service area.[^55] In the *DAB
    R&O*, we raised concerns about this level of interference and its
    potential impact on radio reading services.[^56] We now seek comment
    on measures to protect established SCA services from interference.

29. *Subscription Services.* Radio stations may wish to offer certain
    digital audio or data content under a subscription model.[^57] In
    this context, subscription services may be available for a fee or
    the listener may simply need a code to access the service. We seek
    comment on whether to permit such a use of the broadcast spectrum.
    Should we allow for subscription services as long as the licensee
    provides at least one free digital audio stream, as we do for
    digital television? One proposal would be to permit subscription
    services as long as they do not derogate the free services a radio
    station broadcasts. Section 336 of the Act requires the Commission
    to collect fees from digital television stations if they use their
    spectrum to offer subscription ancillary and supplementary
    services.[^58] However, there is no analogous requirement for
    digital audio broadcasting. We seek comment on whether we should
    impose spectrum fees for that portion of the spectrum used by
    broadcasters to provide subscription services. Does the Commission
    have the authority to impose such fees? Under what provisions? What
    interest would such a fee serve?[^59] What factors should the
    Commission consider in setting the fee level?[^60]

30. *Equipment issues*. According to iBiquity, its systems provide
    extensibility in that the first-generation receivers are designed to
    operate both in the interim hybrid and in all-digital modes.[^61]
    *In the DAB R&O*, we stated that this is an area in which definitive
    evaluations can only be undertaken after we resolve a number of
    all-digital issues, such as issues relating to signal
    architecture.[^62] Recognizing the flexibility of the IBOC model,
    and the possibility of new auxiliary services, we stated that we
    will address receiver issues in more detail when a formal standard
    is considered. We seek comment on whether the issues raised, and the
    policies proposed, in this *FNPRM* require us to address receiver
    issues at this stage of DAB development. For example, how would the
    adoption of a high definition audio requirement affect receiver
    manufacturers? Would current receiver specs need to be changed if we
    permit multicasting or subscription services?

## Programming and Operational Rules

31. It is incumbent upon the Commission to ensure that broadcasters
    serve the \"public interest, convenience and necessity."[^63]
    Broadcasters are required to air programming responsive to community
    needs and interests and have other service obligations.[^64] We
    remain committed to enforcing our statutory mandate to ensure that
    broadcasters serve the public interest. Our current public interest
    rules, including those implementing specific statutory requirements,
    were developed for broadcasters essentially limited by technology to
    a single, analog audio programming service and minor ancillary
    services. The potential for more flexible and dynamic use of the
    radio spectrum, as a result of IBOC, gives rise to important
    questions about the nature of public interest obligations in digital
    broadcasting.

32. As stated above, our future rules may allow broadcasters to use
    their radio frequencies to provide a high definition audio service,
    multiple standard definition audio services and perhaps other
    services, some of which may be on a subscription basis. Digital
    broadcast licensees have public interest obligations.[^65] We seek
    comment on how to apply such obligations to DAB. For example, if a
    broadcaster chooses to provide multiple digital audio streams, how
    should public interest obligations apply? We also seek comment on
    how certain public interest obligations may be applied to
    subscription-based DAB services.

33. *Community Needs.* One of a broadcaster's fundamental public
    interest obligations is to air programming responsive to the needs
    and interests of its community of license. Another well recognized
    obligation is for a broadcast licensee to respond to the public's
    need for emergency information. Digital technology may allow a
    broadcaster to better fulfill these obligations. We seek comment on
    ways that a broadcaster can implement digital technology to better
    and more fully meet the needs of its community of license. How does
    the ability to multicast affect a broadcaster's ability to fulfill
    these public interest obligations?

34. *Local Programming*. Localism has been a core requirement of
    broadcast licensees since the inception of the Act 70 years
    ago.[^66] We seek comment on how digital technology can be used to
    promote localism in the terrestrial radio service. For example, we
    seek comment on whether to impose a minimum local origination
    requirement on digital radio transmissions. If a radio station
    multiplexes its signal, should each audio stream have a local
    component? If so, how much? Should that local component include some
    news or other public affairs programming? In the alternative, should
    we allow a radio station to carry national programming on one or
    more of its streams if it devotes one of its streams to local
    programming?

35. We seek comment on how DAB, and future digital audio services, mesh
    with current statutory requirements, obligations, and prohibitions.
    We ask whether the change to digital audio broadcasting justifies
    changes in the Commission's rules and regulations that implement the
    following provisions and regulations. We also seek comment on any
    other specific statutory provisions or regulations, not listed
    below, that may be affected.

36. *Political Broadcasting.* Sections 312 and 315 of the Act contain
    the political advertising rules for broadcast stations. Section
    312(a)(7) of the Act, as amended, requires broadcasters to allow
    legally qualified candidates for federal office reasonable access to
    their facilities.[^67] Section 315(a) of the Act, as amended,
    provides candidates with equal opportunities for broadcast
    time.[^68] We seek comment on how each of these political
    broadcasting rules should be applied in the DAB context. We also
    seek comment more generally on whether DAB can enhance political
    discourse and candidate access to radio in other ways.

37. *Emergency Alert System.* Section 73.1250 of the Commission's rules
    addresses the broadcasting of emergency information. Under our
    rules, and if requested by government officials, a station may, at
    its discretion, and without further FCC authority, transmit
    emergency point-to-point messages for the purpose of requesting or
    dispatching aid and assisting in rescue operations. If the Emergency
    Alert System ("EAS") is activated for a national emergency while a
    local area or state emergency operation is in progress, the national
    level EAS operation must take precedence.[^69] AM stations may,
    without further FCC authority, use their full daytime facilities
    during nighttime hours to broadcast emergency information when
    necessary to the safety of life and property, in dangerous
    conditions of a general nature, and when adequate advance warning
    cannot be given with the facilities authorized.[^70] All emergency
    alerts must be conducted on a noncommercial basis, but recorded
    music may be used to the extent necessary to provide program
    continuity. We tentatively conclude that it is in the public
    interest to apply the rules provided in Section 73.1250 to all audio
    streams broadcast by a radio station. The purpose of the rule is to
    fully inform the public of major emergencies and this mandate can
    only be fulfilled if it is broadly applied.

38. We realize that by requiring AM and FM radio broadcast stations to
    comply with Section 73.1250 of our rules for all audio streams (both
    analog and DAB), such stations may have to update and/or replace
    their EAS decoders to accommodate the digital portion of the stream.
    Nevertheless, we believe that access to emergency information is
    critical. We seek comment on the costs and timing involved in such
    compliance. Comments should specifically address the costs to the
    broadcasters relevant to ensuring that the DAB portion of the audio
    stream is compliant with Section 73.1250 simultaneous with a
    station\'s rollout of DAB. Comments should also address the costs to
    equipment vendors relevant to ensuring that all product development
    and related certification by the FCC would be complete in time to
    allow broadcasters to roll out DAB that is compliant with our
    emergency alert rules.

39. *Station Identification.* Under Section 73.1201 of the Commission's
    rules, broadcast station identification announcements must be made
    at the beginning and end of each time of operation, and as close to
    the hour as feasible, at a natural break in program offerings.
    Official station identification consists of the station\'s call
    letters immediately followed by the community or communities
    specified in its license as the station\'s location. The name of the
    licensee or the station\'s frequency or channel number, or both, as
    stated on the station\'s license may be inserted between the call
    letters and station location.[^71] We seek comment on whether the
    station identification rules would apply to all digital audio
    content of a radio station.[^72] How should a station identify audio
    channels other than the main channel?[^73] Should there be separate
    call letters for separate streams? There are special rules for
    simultaneous AM (535-1605 kHz) and (1605-1705 kHz) broadcasts. If
    the same licensee operates an AM broadcast station in the 535-1605
    kHz band and an AM broadcast station in the 1605-1705 kHz band with
    both stations licensed to the same community and simultaneously
    broadcasts the same programs over the facilities of both such
    stations, station identification announcements may be made jointly
    for both stations for periods of such simultaneous operations.[^74]
    We seek comment on how any proposed rule should differ, if at all,
    for AM radio stations.

40. There are a host of other programming and operational rules that are
    relevant here. These include: (1) Sections 73.132 and 73.232
    --territorial exclusivity for AM and FM stations; [^75] (2) Section
    76.1208---broadcast of taped or recorded material;[^76] (3) Section
    73.1740---minimum hours of operation;[^77] (4) Section
    76.1212\--sponsorship identification;[^78] (5) Section
    76.4180---payment disclosure;[^79] (6) Section 73.4055---cigarette
    advertising;[^80] and (7) Section 508 of the Act---prohibited
    contest practices. [^81] We tentatively conclude that the conversion
    to DAB will not require changes to the content of these regulations.
    However, we seek comment on how the rules should be applied to
    multicast services and whether the requirements apply to
    subscription services.

## Technical Rules 

### Rule Amendments for the AM Service

41. *AM Definitions.* Section 73.14 of the Commission's rules contains
    the AM broadcast definitions. For example, the definition of AM
    broadcast channel is "the band of frequencies occupied by the
    carrier and the upper and lower sidebands of an AM broadcast signal
    with the carrier frequency at the center. Channels are designated by
    their assigned carrier frequencies. The 117 carrier frequencies
    assigned to AM broadcast stations begin at 540 kHz and progress in
    10 kHz steps to 1700 kHz."[^82] Numerous references are also made to
    amplitude modulation in Section 73.14. We seek comment on what
    changes in this section are necessary to accommodate the
    introduction of digital AM service.

42. *AM Nighttime Operations.* Two characteristics of the AM service
    have posed challenges to the development of AM IBOC. First, the
    nominal audio bandwidth of AM radio is insufficient to pass a
    full-fidelity monaural audio signal. Second, AM propagation
    characteristics vary drastically between day and night, resulting in
    two completely different allocation schemes (and, consequently,
    different daytime and nighttime facilities for most AM stations).
    During daytime hours, AM signals propagate principally via currents
    conducted through the earth, called groundwave propagation. Useful
    groundwave signals have a range of only about 200 miles for the most
    powerful AM stations, and less than 50 miles for many stations.
    After sunset, changes in the upper atmosphere cause the reflection
    of AM signals back to earth, resulting in the transmission of
    skywave signals over paths that may extend thousands of miles.
    Nighttime skywave propagation results in a much greater potential
    for inter-station interference. With the exception of powerful clear
    channel stations and relatively low-power local stations, many AM
    stations are required to cease operation at sunset. Most of those
    that remain on the air at night must reduce power or use directional
    antenna systems, or both.

43. In the *DAB R&O*, we noted NRSC's finding that \"\[t\]he design of
    the AM IBOC system is such that its addition to an AM broadcast
    signal will cause a reduction in the host analog signal-to-noise
    performance \[*i.e.*, an increase in background noise, perceived as
    degradation in audio quality\] at the receiver.\"[^83] The NRSC
    stated that if the passband of the receiver extends beyond 5
    kHz,[^84] the receiver will detect the secondary digital carriers,
    which extend from approximately 5 kHz to 10 kHz above and below the
    AM carrier frequency.[^85] The test results indicated, however, that
    audio quality should not be degraded sufficiently to impact
    listening.[^86] With regard to the effect on other stations, the
    NRSC concluded that introduction of hybrid AM IBOC should not cause
    additional co-channel interference. Because the IBOC digital signal
    shares spectrum with the analog signal of a first adjacent AM
    station, however, the NRSC concluded that first adjacent channel
    compatibility is a significant issue for AM IBOC. [^87] We found
    that the hybrid AM IBOC system proposed by iBiquity had the
    potential to provide the benefits of digital broadcasting within the
    framework of the existing AM allocation scheme. We nevertheless
    agreed with NRSC that significant uncertainty remains with respect
    to the potential for first adjacent channel interference under
    nighttime skywave propagation conditions. We therefore deferred
    authorizing nighttime use of AM IBOC until further testing has been
    completed.[^88]

44. NAB, through its Radio Board, recently submitted recommendations to
    the Commission concerning nighttime operation of AM IBOC.[^89] NAB
    suggests several steps the Commission should take regarding AM
    digital service: (1) the current interim authorization for IBOC
    service should be extended to allow AM IBOC nighttime
    broadcasts; (2) nighttime authorization should extend to all AM
    stations currently authorized for nighttime broadcasts; (3)
    nighttime authorization should be established on a blanket basis for
    all digital AM stations rather than requiring broadcasters to seek a
    separate nighttime authorization; and (4) the Commission should
    address instances of unexpected levels of interference on a
    case-by-case basis.[^90] NAB also suggested that, in the event that
    there are reductions in stations' primary nighttime analog service
    areas, the Commission should take steps to address those problems.
    NAB states that its suggested measures will allow AM stations to
    "better understand the opportunities and challenges of IBOC" and
    will provide incentives for receiver manufacturers to market IBOC
    equipment.[^91] The staff has issued a Public Notice seeking comment
    on NAB's recommendations and proposing that AM stations who wish to
    implement nighttime IBOC service immediately do so under the
    Commission's STA procedures.[^92] We request comment here on
    expansion of interim IBOC procedures to allow all AM stations to
    implement IBOC service at night without prior authority, as NAB
    proposes. How else can we help facilitate improvement in the IBOC
    standard so that AM digital radio service can be received throughout
    the day and night?

45. *Interference.* In the interest of striking a balance between
    interference concerns and the strong interest of maximizing
    coverage, we adopted in the *DAB R&O*, a three-pronged approach to
    the issue of primary sideband power levels for AM. This approach was
    designed to provide a streamlined process to safeguard current
    reception of analog signals. First, we authorized AM stations to
    commence operation with the hybrid AM IBOC system tested by the
    NRSC, in accordance with the special temporary authorization and
    notification procedures specified in the *DAB R&O*.[^93] Second,
    when interference problems are anticipated prior to commencement of
    interim IBOC operations, or when actual interference occurs, we
    permit licensees to adjust the power level of the primary digital
    subcarriers downward by as much as 6 dB. Licensees are required to
    notify the Commission of any such power adjustments.[^94] Third, in
    cases in which the hybrid AM IBOC operation of one station results
    in complaints of actual interference within another station's
    protected service contour and the respective licensees are unable to
    reach agreement on a voluntary power reduction, we may order power
    reductions for the primary digital carriers or, in extreme cases,
    termination of interim IBOC operation. In such cases, an affected
    station may file an interference complaint with the Commission. This
    complaint must describe any test measures used to identify
    IBOC-related interference and fully document the extent of such
    interference. The Media Bureau is charged with resolving each
    complaint within ninety days. In the event the Bureau fails to issue
    a decision within ninety days of the date on which a complaint is
    filed, we held that the interfering station shall reduce immediately
    its primary digital subcarrier power level by 6 dB.[^95] We seek
    comment on whether this complaint process is working, and, if so,
    whether we should make the process permanent when final IBOC
    standards are adopted. Are there any related instances where the
    Commission may delegate authority to the Media Bureau to resolve
    matters in an expeditious manner?

46. *AM Stereo.* Section 73.128 of the Commission's rules sets forth the
    parameters for AM stereophonic broadcasting. Under this rule, an AM
    broadcast station may, without specific authority from the
    Commission, transmit stereophonic programs upon installation of
    type-accepted stereophonic transmitting equipment and the necessary
    measuring equipment to determine that the stereophonic transmissions
    conform to specific modulation characteristics.[^96] The
    Commission's existing rules favor stations providing AM stereo. For
    example, stations in the expanded AM band are required to adopt
    stereo broadcasts for various reasons.[^97] Because the DAB system
    is not designed to work with AM stereo broadcasts, stations
    converting to digital must discontinue stereo for their analog
    broadcasts. We seek comment on what rule changes are necessary in
    this context.

### Rule Amendments for the FM Service

47. *FM Definitions.* Section 73.310 of the Commission's rules contains
    the technical definitions specific to the FM service. For example,
    an FM broadcast channel is defined as a band of frequencies 200 kHz
    wide and designated by its center frequency.[^98] Channels for FM
    broadcast stations begin at 88.1 MHz and continue in successive
    steps of 200 kHz to and including 107.9 MHz. We seek comment on
    which definitions, including the definition of FM broadcast channel,
    need to be changed or modified because of the introduction of
    DAB.[^99]

48. *FM Operating Power.* Section 73.211 of the Commission's rules
    addresses power and antenna height requirements for FM stations.
    Generally, analog FM stations must operate with a minimum effective
    radiated power ("ERP") as follows: (1) the minimum ERP for Class A
    stations is 0.1 kW; (2) the ERP for Class B1 stations must exceed 6
    kW; (3) the ERP for Class B stations must exceed 25 kW; (4) the ERP
    for Class C3 stations must exceed 6 kW; (5) the ERP for Class C2
    stations must exceed 25 kW; (6) the ERP for Class C1 stations must
    exceed 50 kW; and (7) the minimum ERP for Class C and C0 stations is
    100 kW. Class C0 stations must have an antenna height above average
    terrain ("HAAT") of at least 300 meters (984 feet). Class C stations
    must have an antenna height above average terrain of at least 451
    meters (1480 feet). Stations of any class except Class A may have an
    ERP less than that specified in Section 73.211, provided that the
    reference distance exceeds the distance to the class contour for the
    next lower class. Class A stations may have an ERP less than 100
    watts provided that the reference distance equals or exceeds 6
    kilometers.[^100]

49. Outside of their assigned channels, the emissions of analog FM radio
    signals must be attenuated below the level of the unmodulated
    carrier frequency: (1) by at least 25 dB at any frequency removed
    from the center frequency by 120 kHz up to 240 kHz; (2) by at least
    35 dB at any frequency removed from the center frequency by 240 kHz
    up to and including 600 kHz; and (3) by at least 43 dB + 10 log
    (Power, in watts) dB on any frequency removed by more than 600 kHz
    from the center frequency.[^101] This emission mask ensures that FM
    broadcast emissions are reasonably confined within the 200 kHz
    channel width. The digital component of the FM IBOC system operates
    20 dB below the level of the analog carrier. When there is no analog
    carrier (*i.e.* all digital operations), it is not possible to set
    the digital power relative to the analog power level. Rather than
    specifying digital as 20 dB below analog, it may be preferable to
    set an absolute level for digital carriers that could be calculated
    without reference to analog. We seek comment on the appropriate
    means to measure and calculate power levels. We also seek comment on
    the appropriate measurement instruments for this exercise. How
    should any new rule take into account combiner and filter loss?

50. Radio stations with antennas at high elevations operate at
    relatively low power. Because the IBOC signal is transmitted at a
    fraction of analog power (1% in the FM case), the digital signals
    can be extremely low power in certain cases. In some cases, these
    digital signals may fall below the noise floor and become
    unlistenable. We seek comment on how to address this matter.
    Specifically, should the Commission establish a minimum digital
    power level, even if that would exceed 20 dB below the analog
    signal? Commenters should submit evidence to substantiate
    recommended power levels.

51. *TV Channel 6.* Section 73.525 of the Commission's rules addresses
    interference protection for TV Channel 6. An affected TV Channel 6
    station is a TV broadcast station authorized to operate on Channel 6
    that is located within certain distances of a noncommercial
    educational FM station operating on Channels 201-220.[^102] We seek
    comment on what, if any, rule changes are necessary to protect TV
    Channel 6 from interference caused by digital radio operations. We
    also ask whether new rules need to be developed to protect
    television station licensees that have converted to digital
    operations and are assigned to Channel 6 under our DTV Table of
    Allotments.

52. *Antennas.* The initial grant of interim IBOC authority restricted
    stations to use of facilities similar to those evaluated by the
    NRSC. As a result, stations were restricted to transmission systems
    that combine the digital and analog signals into one antenna. When a
    single antenna is used for IBOC, the analog and digital FM signals
    may be combined after amplification (high-level combining), a method
    which results in substantial power losses for the digital signal.
    Stations with lower effective radiated power may combine the analog
    and digital signals before amplification (low-level combining), in
    which case the transmitter efficiency is reduced. Many broadcasters
    have expressed interest in using separate antennas for the analog
    and digital signals. Consequently, the NAB convened an *ad hoc*
    technical group to determine whether broadcasters could use this
    approach without causing interference to the host station's analog
    signal or to other FM stations. Based on the completed field tests,
    the NAB report proposed that the Commission permit FM stations
    implementing IBOC operations to use separate antennas for digital
    transmissions provided that certain criteria are met. On December 9,
    2003, the Media Bureau released a Public Notice seeking comments on
    the test results, conclusions, and recommendations in the report of
    the NAB *ad hoc* technical committee.[^103] The Media Bureau
    authorized the use of a dual antenna system under certain conditions
    earlier this year.[^104] While this issue has previously been
    addressed by the staff, we seek further comment on this matter and
    ask what other policies we may adopt that would provide broadcasters
    with the flexibility to make changes in their antenna
    configurations. For example, should we grant delegated authority to
    the Media Bureau to approve certain types of antenna modifications?
    Should we adopt a presumptive approach to antenna modifications by
    which a station can make any changes as long as it clears the change
    with adjacent stations?

53. *Predicted Coverage.* Section 73.313 of the Commission's rules
    concerns FM predicted coverage. With the analog FM system, all
    predictions of coverage are made without regard to interference and
    only on the basis of estimated field strengths.[^105] We seek
    comment on whether this rule needs to be modified to encompass the
    different nature of digital audio transmissions. If so, what should
    the rule require?

54. *FM Booster and Translator Stations.* FM booster and FM translator
    stations provide important service to many mountainous and rural
    areas of the country, where few other radio signals are
    available.[^106] By their nature, the translator and booster
    services present unique challenges for IBOC operation. An FM
    translator station receives a signal from its primary FM station and
    converts the signal for re-broadcasting on a different FM frequency.
    An FM booster station relays the primary station's programming on
    the same FM frequency. The implementation of IBOC should not affect
    the ability of translator and booster stations to continue the
    analog service they now provide. The record in this proceeding does
    not yet clearly establish, however, whether booster and translator
    stations will be able to relay the digital portion of IBOC signals.
    Tests performed by iBiquity indicate that an FM booster station will
    be able to relay the primary station's hybrid IBOC signal provided
    the booster is within 14 miles of the primary station. We received
    no test results or comments regarding use of IBOC by FM translator
    stations. Although some translator stations may be able to
    retransmit the digital component of an IBOC signal, we expect that
    many translator stations will need equipment modifications to do so.
    For these reasons, we solicit comment on issues relating to FM
    translator and booster stations. For example, should our rules
    facilitate the establishment of additional digital boosters to fill
    in areas with poor analog coverage? Will stations converting their
    main signal be required to simultaneously convert their boosters
    and/or translators?

55. Section 74.1231(b) currently restricts commercial FM translators not
    providing "fill-in" service from using alternate means of signal
    delivery; that is, such translators must rely on direct,
    over-the-air reception of the primary FM station.[^107] However,
    this may not be feasible for IBOC transmission. We seek comment on
    whether this rule should be modified for IBOC operation. How will
    this affect broadcast localism? If translators are allowed to use
    alternate delivery means, should there be some geographic or other
    limits to the delivery of the digital signal to the translator?

### Standards 

56. In the *DAB R&O*, we stated that the adoption of a standard will
    facilitate the rollout of digital audio broadcasting.[^108] We
    further stated that the Commission's support of a standard-setting
    process was designed to provide regulatory clarity and to compress
    the timeframe for finalizing the rules and policies that will affect
    the ultimate success of DAB. We solicited the assistance of a broad
    cross-section of interested parties in developing a formal AM and FM
    IBOC standard through a public and open standard-setting process. We
    stated that we were encouraged by the action of the NRSC to form an
    IBOC standards development working group, formally initiating a
    process designed to establish AM and FM IBOC standards. We encourage
    this group to provide us with significant input at this stage of the
    proceeding and seek comment from other parties on any such
    submissions.

### Patents

57. In earlier stages of this proceeding, many parties stated that
    adoption of iBiquity's IBOC system would require the use of certain
    patented technologies. They expressed concern that the Commission's
    endorsement of the iBiquity system will create an opportunity for
    these patent holders to impose excessive licensing fees on
    broadcasters and listeners who have no alternative source for the
    technology.[^109] In response, iBiquity agreed to abide by the
    guidelines common to open standards, which require that licenses be
    available to all parties on fair terms. iBiquity also stated that it
    would adhere to the Commission's patent policy.[^110] The Commission
    stated that its decision to permit interim operations during the
    pendency of this proceeding provided an opportunity to assess
    whether iBiquity and other patent holders were entering into
    licensing agreements under reasonable terms and conditions that are
    demonstrably free of unfair discrimination. The Commission stated
    that it would monitor this situation and seek additional comment as
    warranted.[^111] We seek comment on iBiquity's conduct during the
    interim period. We also seek comment on whether this matter needs to
    be further addressed now or whether we should wait until radio
    station conversion has progressed to a point at which digital
    receivers have substantially penetrated the market.

### Equipment Authorization

58. Section 2.907 of the Commission's rules concerns the certification
    of electronic equipment. Certification is an equipment authorization
    issued by the Commission, based on representations and test data
    submitted by the applicant. Certification attaches to all units
    subsequently marketed by the grantee which are identical to the
    sample tested except for permissive changes or other variations
    authorized by the Commission.[^112] We seek comment on what, if any,
    rules in Part 2 of our regulations must be modified to allow
    manufacturers to obtain certification of digital exciters and
    digital-compatible transmitters. How should these rule changes be
    coordinated with other service rule changes possible in this
    proceeding?

## Licensing and Forms

59. Under Section 73.1695 of the Commission's rules, the Commission
    considers the question of whether a proposed change or modification
    of a transmission standard for a broadcast station would be in the
    public interest.[^113] Sections 73.3571 and 73.3573 of the
    Commission's rules discuss the processing of AM and FM broadcast
    station applications, respectively.[^114] We seek comment on what,
    if anything, the Commission should do to amend or replace these
    rules in the context of DAB.

60. Section 73.3500 of the Commission's rules lists the applications and
    report forms that must be filed by an actual or potential broadcast
    licensee in certain circumstances.[^115] We seek comment on which
    forms and applications must be modified because of DAB. The
    following forms may be at issue: (1) Form 301---Application for
    Authority to Construct or Make Changes in a Commercial Broadcast
    Station; (2) Form 302-AM\--Application for AM Broadcast Station
    License; (3) Form 302-FM---Application for FM Broadcast Station
    License; (4) Form 313---Application for Authorization in the
    Auxiliary Broadcast Services; (5) Form 340---Application for
    Authority to Construct or Make Changes in a Noncommercial
    Educational Broadcast Station; (6) Form 349-Application for
    Authority to Construct or Make Change in an FM Translator or FM
    Booster Station; and (7) Form 350---Application for an FM Translator
    or FM Booster Station License. We seek comment on any specific
    changes to these forms.

## Noncommercial Stations

61. Noncommercial radio broadcasters face unique opportunities and
    challenges as they move to implement DAB. The Act defines a
    \"noncommercial educational broadcast station\" and \"public
    broadcast station\" as a television or radio broadcast station that
    is eligible under the Commission's rules to be licensed as \"a
    noncommercial educational radio or television broadcast station
    which is owned and operated by a public agency or nonprofit private
    foundation, cooperation, or association\" or \"is owned and operated
    by a municipality and which transmits only noncommercial programs
    for educational purposes.\"[^116] In 1981, Congress amended the Act
    to give public broadcasters more flexibility to generate funds for
    their operations.[^117] As amended, Section 399B of the Act permits
    public stations to provide facilities and services in exchange for
    remuneration as long as those uses do not interfere with the
    stations\' provision of public telecommunications services.[^118]
    Section 399B, however, does not permit public broadcast stations to
    make their facilities \"available to any person for the broadcasting
    of any advertisement.\"[^119] In addition, under Section 73.621 of
    the Commission\'s rules, public television stations are required to
    furnish primarily an educational as well as a nonprofit and
    noncommercial broadcast service.[^120]

62. In 2001, the Commission concluded that noncommercial educational
    television licensees ("NCEs") must use their entire digital
    television capacity primarily for nonprofit, noncommercial,
    educational broadcast services.[^121] In addition, the Commission
    held that the statutory prohibition against broadcasting of
    advertising on NCE television stations applies only to broadcast
    programming streams provided by NCE licensees, but does not apply to
    any ancillary or supplementary services presented on their excess
    DTV channels that do not constitute broadcasting.[^122] Like
    commercial DTV stations, NCE licensees must pay a fee of five
    percent of gross revenues generated by ancillary or supplementary
    services provided on their DTV service. In *[Office of
    Communication, Inc. of United Church of Christ v.
    F.C.C.](http://pacer.cadc.uscourts.gov/docs/common/opinions/200305/02-1039a.pdf),*
    the U.S. Court of Appeals for the District of Columbia Circuit
    upheld our *DTV NCE A&S Order*.[^123]

63. We seek comment on what, if any, special rules or considerations
    should apply to noncommercial radio stations in light of our DTV NCE
    A&S policy and the D.C. Circuit's *UCC* decision. Should we adopt
    the same approach for noncommercial radio stations as we adopted for
    NCE television licensees? Are there any differences between DTV and
    DAB that require special consideration in deciding this issue?
    Specifically, we ask whether a noncommercial radio station should be
    able to use excess digital audio spectrum capacity to generate
    revenue through the provision of supplementary services, such as
    fee-based services. Are there other ways of allowing a noncommercial
    radio station to exercise greater flexibility with its digital
    capacity? We also seek comment on how we can ensure noncommercial
    radio stations remain noncommercial in nature as the radio industry
    converts to DAB.

## Low Power FM

64. In 2000, the Commission authorized the licensing of two new classes
    of FM radio stations, one operating at a maximum power of 100 watts
    and one operating at a maximum power of 10 watts.[^124] Both types
    of stations, known as low power FM stations ("LPFM"), were
    authorized in a manner that protects existing FM service. A 100 watt
    LPFM station can serve an area with a radius of approximately 3.5
    miles. The Commission stated that LPFM stations would be operated on
    a noncommercial educational basis by entities that do not hold an
    attributable interest in any other broadcast station or other media
    subject to our ownership rules. The Commission established the new
    LPFM service to create new broadcasting opportunities for
    locally-based organizations to serve their communities.

65. In December 2000, Congress passed the Government of the District of
    Columbia Appropriations Act, FY 2001 (the \"DCAA\"). That
    legislation required the Commission to prescribe third-adjacent
    channel spacing requirements for LPFM stations, and invalidate any
    existing licenses that did not comply with the new separation
    criteria.[^125] Congress instructed the Commission to conduct an
    experimental program to test whether LPFM stations would interfere
    with existing FM stations, if LPFM stations were not subject to
    third-adjacent channel spacing requirements. Congress also
    instructed that such tests determine whether LPFM will interfere
    with full power stations' digital audio broadcasting efforts.[^126]
    The DCAA directed the Commission to select an independent entity to
    conduct field tests and to \"publish the results of the experimental
    program and field tests and afford an opportunity for the public to
    comment on such results.\" The Commission selected the MITRE
    Corporation as the independent entity that would conduct the
    testing. On June 30, 2003, MITRE submitted its Final Report (\"LPFM
    Report\") to the Commission. The Report describes the field
    measurement data collected and analyzes it with regard to the levels
    of harmful interference experienced. The LPFM Report also contains
    theoretical analysis, conclusions, and recommendations to the
    Commission. Pertinent to the discussion here, the Report found that
    LPFM will not interfere with DAB service provided by full power
    radio stations.[^127] On July 11, 2003, the Media Bureau issued a
    Public Notice seeking comment on the LPFM Report. On February 19,
    2004, a Report to Congress on the LPFM interference testing program
    was issued in accordance with the DCAA. That Report reiterated the
    finding that third-adjacent channel LPFM stations will have little
    or no effect on terrestrial digital radio since third-adjacent
    channel LPFM interference to digital receivers is unlikely to occur
    beyond 130 meters from the LPFM transmitter.[^128]

66. We do not seek further comment on the LPFM Report in this
    proceeding. Instead, we seek comment on the conversion of LPFM
    stations to digital operation, and the potential impact of such a
    conversion on other stations.

# NOTICE OF INQUIRY

## Digital Audio Content Control

67. An issue that has been raised as a potential concern involves the
    possibility of indiscriminate recording and Internet redistribution
    of musical recordings that are part of digital audio broadcasts. The
    Recording Industry Association of America ("RIAA"), more
    specifically, has recently raised this concern with the Commission.
    [^129] It appears likely that future digital audio broadcast
    receivers will include advanced features such as digital recorders
    capable of storing audio content and that digital audio broadcast
    transmissions are likely to include specific song identifications in
    the "metadata" within the digital data stream Using this data, it
    may be possible to have a recording device automatically search for
    and record a large amount of the music of an individual artist or
    group or find and record particular specified song titles to the
    extent the songs are broadcast locally. RIAA has stated that
    "digital audio receivers will be able to parse digital broadcasts on
    a song by song basis, thereby enabling listeners to copy the entire
    repertoire of individual artists with the push of a button and
    without even listening to a radio station's broadcast programming."
    It further states that "these devices could also permit listeners to
    transfer songs to other devices for serial copying and distribution
    over the Internet." [^130] RIAA expresses concern that the launch of
    digital audio broadcasting, in an unencrypted manner, will permit
    consumers to "exploit" recorded music in ways that "ignore the
    intellectual property interests" of the recording labels and artists
    and deprive them of legitimate compensation. [^131]

68. Although no specific proposal for action has been submitted to the
    Commission, we are mindful that certain available options may be
    extremely difficult to implement later after a significant base of
    equipment has been deployed and consumer expectations have
    developed. Accordingly, we believe these issues warrant exploration
    at this time. We ask whether the concerns raised by RIAA warrant
    Commission action either in terms of the technical standards that
    govern the service or the rules that govern the conduct of digital
    audio broadcasters.

69. We seek specific comment on two central issues: (1) does a problem
    exist that requires governmental intervention; and (2) to what
    extent can, and should, the Commission involve itself in this
    matter. As to the former, we seek comment on the extent of the
    alleged harms raised by RIAA. Specifically, is the copying of DAB
    content for noncommercial use by consumers a threat to recording
    artists and copyright holders? What evidence is there that injury
    has been, or will be, incurred? For example, what economic injuries
    have recording artists suffered in countries, such as Great Britain,
    where DAB is now commonplace?[^132] Is the problem of home copying
    limited to DAB or does the alleged threat extend to SDARS and analog
    audio content converted to a digital format? What are the possible
    solutions to the matters raised by RIAA? We note that Congress has
    addressed certain issues relating to the recording of broadcast
    music through adoption of the Audio Home Recording Act of
    1992.[^133] We seek comment on the relationship between this Act and
    any action the Commission might be requested to take. In what ways
    does the solution RIAA seeks go beyond the protections we put in
    place against indiscriminate Internet redistribution for digital
    television transmissions?[^134] What other issues are implicated by
    potential restrictions on storage, recording, or home copying? We
    also seek comment on the source of our authority to act on RIAA\'s
    concerns if there is substantial evidence of harm on the record.
    Could we reasonably conclude that free over-the-air radio
    broadcasting would be threatened by digital audio copying to an
    extent sufficient to invoke our public interest authority under
    Section 4(i) of the Act?

## International Issues

70. Section 73.207 discusses international agreements relating to FM
    broadcasting. The rule states that under the Canada-United States FM
    Broadcasting Agreement, domestic U.S. allotments and assignments
    within 320 kilometers (199 miles) of the common border must be
    separated from Canadian allotments and assignments by not less than
    the distances provided in the Commission's rules. It also states
    that under the 1992 Mexico-United States FM Broadcasting Agreement,
    domestic U.S. assignments or allotments within 320 kilometers (199
    miles) of the common border must be separated from Mexican
    assignments or allotments by not less than the distances in Section
    73.207.[^135]

71. Test results have indicated that hybrid IBOC operation is consistent
    with the Commission's allocation rules. It is anticipated that
    hybrid operation would also conform to the allocation standards
    contained in our international agreements governing AM and FM
    stations. In the *DAB R&O*, the Commission stated that during the
    period of interim IBOC operation, all relevant international
    agreements will be reviewed and any necessary modifications will be
    addressed at a later date.[^136] These matters are being informally
    addressed by the Commission's International Bureau at this time.
    What matters should the International Bureau focus on to expedite
    the rollout of DAB in the United States?

# PROCEDURAL MATTERS

## Filing Requirements

72. *Ex Parte Rules*. This proceeding will be treated as a
    \"permit‑but‑disclose\" proceeding subject to the
    \"permit‑but‑disclose\" requirements under Section 1.1206(b) of the
    Commission's rules.[^137] *Ex parte* presentations are permissible
    if disclosed in accordance with Commission rules, except during the
    Sunshine Agenda period when presentations, *ex parte* or otherwise,
    are generally prohibited. Persons making oral *ex parte*
    presentations are reminded that a memorandum summarizing a
    presentation must contain a summary of the substance of the
    presentation and not merely a listing of the subjects discussed.
    More than a one- or two-sentence description of the views and
    arguments presented is generally required.[^138] Additional rules
    pertaining to oral and written presentations are set forth in
    Section 1.1206(b).

73. *Comments and Reply Comments*. Pursuant to sections 1.415 and 1.419
    of the Commission's rules, 47 C.F.R. §§ 1.415, 1.419, interested
    parties must file comments on or before June 16, 2004 and reply
    comments on or before July 16, 2004. Comments may be filed using the
    Commission's Electronic Comment Filing System ("ECFS") or by filing
    paper copies. *See Electronic Filing of Documents in Rulemaking
    Proceedings*, 63 Fed. Reg. 24121 (1998). Accessible formats
    (computer diskettes, large print, audio recording, and Braille) are
    available to persons with disabilities by contacting Brian Millin,
    of the Consumer & Governmental Affairs Bureau, at (202) 418-7426,
    TTY (202) 418-7365, or at <brian.millin@fcc.gov>.

74. Comments filed through the ECFS can be sent as an electronic file
    via the Internet to <http://www.fcc.gov/e-file/ecfs.html>.
    Generally, only one copy of an electronic submission must be filed.
    In completing the transmittal screen, commenters should include
    their full name, U.S. Postal Service mailing address, and the
    applicable docket or rulemaking number. Parties may also submit an
    electronic comment by Internet e-mail. To get filing instructions
    for e-mail comments, commenters should send an e-mail to
    <ecfs@fcc.gov>, and should include the following words in the body
    of the message, "get form \<your e-mail address\>." A sample form
    and directions will be sent in reply.

75. Parties who choose to file by paper must file an original and four
    copies of each filing. Filings can be sent by hand or messenger
    delivery, by commercial overnight courier, or by first-class or
    overnight U.S. Postal Service (although we continue to experience
    delays in receiving U.S. Postal Service mail). The Commission's
    contractor, Natek, Inc., will receive hand-delivered or
    messenger-delivered paper filings for the Commission's Secretary at
    236 Massachusetts Avenue, NE, Suite 110, Washington, DC 20002. The
    filing hours at this location are 8:00 a.m. to 7:00 p.m. All hand
    deliveries must be held together with rubber bands or fasteners. Any
    envelopes must be disposed of before entering the building.
    Commercial overnight mail (other than U.S. Postal Service Express
    Mail and Priority Mail) must be sent to 9300 East Hampton Drive,
    Capitol Heights, MD 20743. U.S. Postal Service first-class mail,
    Express Mail, and Priority Mail, should be addressed to 445 12^th^
    Street, SW, Washington, DC 20554. All filings must be addressed to
    the Commission's Secretary, Office of the Secretary, Federal
    Communications Commission.

76. *Additional Information*. For additional information on this
    proceeding, contact Ben Golant,
    [ben.golant@fcc.gov](mailto:eric.bash@fcc.gov), of the Media Bureau,
    Policy Division, (202) 418-7111.

## Initial Regulatory Flexibility Certification

77. The Regulatory Flexibility Act of 1980, as amended ("RFA"),[^139]
    requires that 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."[^140] The RFA generally defines the term "small entity"
    as having the same meaning as the terms "small business," "small
    organization," and "small governmental jurisdiction."[^141] In
    addition, the term "small business" has the same meaning as the term
    "small business concern" under the Small Business Act.[^142] 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).[^143]

78. As required by the RFA, an Initial Regulatory Flexibility Analysis
    ("IRFA") was incorporated in the *NPRM* in MM Docket No. 99-325. The
    Commission sought written public comments on the proposals in the
    *NPRM* including comments on the IRFA. The Office of Advocacy, U.S.
    Small Business Administration (SBA) filed comments asserting that
    the Commission, in the IRFA, failed to adequately consider the
    potential impact of DAB on small businesses and did not discuss
    alternatives designed to minimize regulatory burdens on small
    entities.[^144] In the *DAB R&O*, the Commission promised to issue a
    *FNPRM* proposing final rules for digital audio broadcasting and
    stated it would consider the impact of any final rules on small
    entities in connection with that further proceeding. By the issuance
    of this *FNPRM*, we seek comment on the impact our suggested
    proposals would have on small business entities.

79. The Commission will send a copy of the *FNPRM/NOI*, including a copy
    of the Initial Regulatory Flexibility Act analysis, in a report to
    Congress pursuant to the Congressional Review Act.[^145] In
    addition, a copy of the *FNPRM/NOI* will be sent to the Chief
    Counsel for Advocacy of the SBA, and will be published in the
    Federal Register.[^146]

80. This document is available in alternative formats (computer
    diskette, large print, audio record, and Braille). Persons with
    disabilities who need documents in these formats may contact Brian
    Millin at (202) 418-7426 (voice), (202) 418-7365 (TTY), or via
    e-mail at bmillin@fcc.gov.

## Paperwork Reduction Act Analysis

81. This *FNPRM* may lead to a Report and Order that would contain
    information collection(s) subject to the Paperwork Reduction Act of
    1995 ("PRA"), Public Law 104-13. This *FNPRM* will be submitted to
    the Office of Management and Budget ("OMB") for review under the
    PRA. OMB, the general public and other Federal agencies are invited
    to comment on the possible information collections, such as FCC form
    revisions, contained in this proceeding. Comments should
    address: (a) whether the proposed collection of information is
    necessary for the proper performance of the functions of the
    Commission, including whether the information shall have practical
    utility; (b) the accuracy of the Commission's burden estimates; (c)
    ways to enhance the quality, utility, and clarity of the information
    collected; and (d) ways to minimize the burden of the collection of
    information on the respondents, including the use of automated
    collection techniques or other forms of information technology.

82. Written comments on possible new and modified information
    collections must be submitted on or before 60 days after date of
    publication the Federal Register. In addition to filing comments
    with the Secretary, a copy of any Paperwork Reduction Act comments
    on the information collection(s) contained herein should be
    submitted to Leslie Smith, Federal Communications Commission, Room
    1-A804, 445 12th Street, SW, Washington, DC 20554, or via the
    Internet to Leslie Smith@fcc.gov, and to Kristy L. LaLonde, OMB Desk
    Officer, Room 10234 NEOB, 725 17th Street, N.W., Washington, DC
    20503 via the Internet to
    [KristyL.LaLonde@omb.eop.gov](mailto:Kristy_L._LaLonde@omb.eop.gov)
    or by fax to 202-395-5167.

83. For additional information concerning the information collection(s)
    contained in this document, contact Leslie Smith at 202-418-0217, or
    via the Internet at Leslie.Smith@fcc.gov.

# ORDERING CLAUSES

84. Accordingly, **IT IS ORDERED**, pursuant to the authority contained
    in Sections 1, 2, 4(i), 303, 307, 312(a)(7), 315, 317, 507, and 508
    of the Communications Act of 1934, 47 U.S.C §§ 151, 152, 154(i),
    303, 307, 312(a)(7), 315, 317, 508, and 509, this *Further Notice of
    Proposed Rulemaking/Notice of Inquiry* **IS ADOPTED**.

85. **IT IS FURTHER ORDERED** that the Consumer and Governmental Affairs
    Bureau, Reference Information Center, **SHALL SEND** a copy of this
    *Further Notice of Proposed Rulemaking/Notice of Inquiry*, including
    the Initial Regulatory Flexibility Certification, to the Chief
    Counsel for Advocacy of the Small Business Administration.

FEDERAL COMMUNICATIONS COMMISSION

Marlene H. Dortch

Secretary

**APPENDIX A**

**INITIAL REGULATORY FLEXIBILITY ANALYSIS**

86. As required by the Regulatory Flexibility Act of 1980, as
    amended,[^147] the Commission has prepared this Initial Regulatory
    Flexibility Analysis of the possible significant economic impact on
    a substantial number of small entities by the policies and rules
    proposed in the *Further Notice of Proposed Rulemaking*. Written
    public comments are requested on this IRFA. Comments must be
    identified as responses to the IRFA and must be filed by the
    deadlines for comments on the *Further Notice of Proposed
    Rulemaking* provided in paragraph 73. The Commission will send a
    copy of this entire *Further Notice of Proposed Rulemaking*
    ("*FNPRM*"), including this IRFA, to the Chief Counsel for Advocacy
    of the Small Business Administration ("SBA").[^148] In addition, the
    *Further Notice of Proposed Rulemaking* and the IRFA (or summaries
    thereof) will be published in the Federal Register.[^149]

87. **Need For, and Objectives of, the Proposed Rules.** This rulemaking
    proceeding is initiated to obtain comments concerning the
    Commission's proposals to foster the development and implementation
    of terrestrial digital audio broadcasting. In the *FNPRM* the
    Commission (1) reaffirms its commitment to providing radio
    broadcasters with the opportunity to take advantage of DAB
    technology; (2) identifies Commission public policy objectives
    resulting from the introduction of DAB service, such as more diverse
    programming serving local and community needs; (3) explores avenues
    for encouraging the adoption of DAB by providing radio stations with
    the ability to offer datacasting and subscription services; and (4)
    proposes technical service rules for DAB, such as the authority to
    commence AM nighttime service and permitting efficient equipment
    authorization.

88. **Legal Basis.** The authority for this proposed rulemaking is
    contained in Sections 1, 2, 4(i), 303, 307, 312(a)(7), 315, 317,
    507, and 508 of the Communications Act of 1934, 47 U.S.C §§ 151,
    152, 154(i), 303, 307, 312(a)(7), 315, 317, 508, and 509.

89. **Description and Estimate of the Number of Small Entities to Which
    the Proposed Rules Will Apply.** The RFA directs the Commission to
    provide a description of and, where feasible, an estimate of the
    number of small entities that will be affected by the proposed
    rules.[^150] The RFA generally defines the term \"small entity\" as
    encompassing the terms \"small business,\" \"small organization,\"
    and \"small governmental entity.^\"^[^151] In addition, the term
    "small business" has the same meaning as the term "small business
    concern" under the Small Business Act.[^152] 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\").[^153]

90. **Radio Stations.** The proposed rules and policies potentially will
    apply to all AM and FM radio broadcasting licensees and potential
    licensees. The SBA defines a radio broadcasting station that has no
    more than \$6 million in annual receipts as a small business.[^154]
    A radio broadcasting station is an establishment primarily engaged
    in broadcasting aural programs by radio to the public. Included in
    this industry are commercial, religious, educational, and other
    radio stations. Radio broadcasting stations which primarily are
    engaged in radio broadcasting and which produce radio program
    materials are similarly included. However, radio stations which are
    separate establishments and are primarily engaged in producing radio
    program material are classified under another SIC number. As of
    December 31 2003, official Commission records indicate that
    11,011adio stations were operating, of which 4,794 were AM
    stations.[^155] Thus, the proposed rules will affect over 11,000
    radio stations.

91. **Electronics Equipment Manufacturers.** Rules adopted in this
    proceeding could apply to manufacturers of DAB receiving equipment
    and other types of consumer electronics equipment. The SBA has
    developed definitions of small entity for manufacturers of audio and
    video equipment[^156] as well as radio and television broadcasting
    and wireless communications equipment.[^157] The former category
    includes companies employing 750 or fewer employees, the latter
    category includes companies employing 1000 or fewer employees. The
    Commission has not developed a definition of small entities
    applicable to manufacturers of electronic equipment used by
    consumers, as compared to industrial use by television licensees and
    related businesses. Therefore, we will use the SBA definitions
    applicable to manufacturers of audio and visual equipment and radio
    and television broadcasting and wireless communications equipment,
    since these are the two closest NAICS Codes applicable to the
    consumer electronics equipment manufacturing industry. However,
    these NAICS categories are broad and specific figures are not
    available as to how many of these establishments manufacture
    consumer equipment. According to the SBA's regulations, an audio and
    visual equipment manufacturer must have 750 or fewer employees in
    order to qualify as a small business concern.[^158] Census Bureau
    data indicates that there are 554 U.S. establishments that
    manufacture audio and visual equipment, and that 542 of these
    establishments have fewer than 500 employees and would be classified
    as small entities.[^159] The remaining 12 establishments have 500 or
    more employees; however, we are unable to determine how many of
    those have fewer than 750 employees and therefore, also qualify as
    small entities under the SBA definition. Under the SBA's
    regulations, a radio and television broadcasting and wireless
    communications equipment manufacturer must also have 750 or fewer
    employees in order to qualify as a small business concern.[^160]
    Census Bureau data indicates that there 1,215 U.S. establishments
    that manufacture radio and television broadcasting and wireless
    communications equipment, and that 1,150 of these establishments
    have fewer than 500 employees and would be classified as small
    entities.[^161] The remaining 65 establishments have 500 or more
    employees; however, we are unable to determine how many of those
    have fewer than 750 employees and therefore, also qualify as small
    entities under the SBA definition. We therefore conclude that there
    are no more than 542 small manufacturers of audio and visual
    electronics equipment and no more than 1,150 small manufacturers of
    radio and television broadcasting and wireless communications
    equipment for consumer/household use.

92. **Description of Projected Reporting, Recordkeeping and Other
    Compliance Requirements.** The proposed rules may impose additional
    reporting or recordkeeping requirements on existing radio stations,
    depending upon how the Commission chooses to update its forms in
    response to comments filed in this proceeding. We seek comment on
    the possible burden these requirements would place on small
    entities. Also, we seek comment on whether a special approach toward
    any possible compliance burdens on small entities might be
    appropriate.

93. **Steps Taken to Minimize Significant Impact on Small Entities, and
    Significant Alternatives Considered.** The RFA requires an agency to
    describe any significant alternatives that it has considered in
    reaching its proposed approach, which may include the following four
    alternatives (among others): (1) the establishment of differing
    compliance or reporting requirements or timetables that take into
    account the resources available to small entities; (2) the
    clarification, consolidation, or simplification of compliance or
    reporting requirements under the rule for small entities; (3) the
    use of performance, rather than design, standards; and (4) an
    exemption from coverage of the rule, or any part thereof, for small
    entities.[^162]

94. In the *First &O* in this proceeding, the Commission considered
    alternative standards for digital audio broadcasting. The
    Commission, after careful study and consideration, chose iBiquity's
    in-band on-channel technology over the competing Eureka 147
    standard. In this *FNPRM*, the Commission seeks comment on what
    rules changes are in the public interest to reflect the advent of
    digital audio broadcasting using iBiquity's standard. The Commission
    proposes a flexible use policy for DAB, allowing radio stations to
    transmit high quality digital audio, multiplexed digital audio
    streams, and datacasting. At the same time, the Commission proposes
    to apply existing public interest requirements and operational rules
    to DAB. The Commission seeks comment on how to apply such
    requirements, understanding the burdens such regulation may impose
    on small as well as large entities affected by the rules we will
    adopt. In addition, rather than require all radio stations to
    convert to a digital format by a date certain, the Commission
    proposes to allow marketplace forces to dictate the conversion
    process.

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

**SEPARATE STATEMENT OF**

**CHAIRMAN MICHAEL K. POWELL**

*Re: Digital Audio Broadcasting Systems and Their Impact on Terrestrial
Radio Broadcast Service*

Today's item represents broadcast radio's version of the digital
migration. Like the transition from analog to digital television, the
conversion to digital radio will bring exciting new services and choices
to the American people. As the digital audio conversion continues,
consumers will have the ability to hear surround sound, CD-quality music
over the air and will have access to new radio services, such as
multi-casting, data services and subscription based services.

These new services and capabilities will provide more opportunities to
promote localism and diversity on our nation's airwaves and will give
broadcasters a greater ability to compete with emerging satellite and
Internet radio services. With nearly 300 stations in over 100 markets
already licensed to broadcast in digital, today's item demonstrates the
Commission's commitment to developing the necessary framework to ensure
a successful digital audio conversion for the public and broadcasters
alike.

**SEPARATE STATEMENT OF**

**COMMISSIONER MICHAEL J. COPPS**

*Re: In the Matter of Digital Audio Broadcasting Systems and Their
Impact on the Terrestrial Radio Broadcast Service, Further Notice of
Proposed Rulemaking and Notice of Inquiry*

Like my colleagues, I am enthused about the potential of digital radio
to give consumers new and valuable services and to give terrestrial
radio broadcasters new and valuable business opportunities. Partly this
is about better quality sound but it's also about a host of new
services, such as multiple audio programming channels, datacasting, and
interactive features. All these, and I'll bet even more, will enhance
audio broadcasting and advance the public interest.

But important questions remain to be settled. I am pleased that today we
seek comment on many of these issues. For example, we seek comment on
how to promote the digital transition and about ways that the
availability of additional audio streams can further diversity goals for
minorities and other underserved segments of the community. We also seek
comment on measures to protect existing subcarrier services such as
radio reading services for the blind and visually impaired.

I am also pleased that we raise some questions in this Further Notice
about the public interest obligations of broadcasters in a digital
environment, and I appreciate my colleagues engaging with me on these
issues. We seek comment, for example, on how the statutory political
broadcasting rules apply and how digital audio broadcasting can enhance
political discourse. We ask about local programming requirements and the
extent to which they should include news or public affairs programming.
We address the obligation to provide emergency information to the public
and how digital radio can provide greater access to critical
information. And we seek comment generally on ways that broadcasters can
use digital technology to better and more fully meet the needs of their
communities.

All that being said, I would have preferred an even broader discussion
of the public interest in this item rather than deferring some important
issues to future proceedings. As just one example, an issue that we
raised in the context of digital television but which is not addressed
here is how broadcasters can identify community needs and enhance
disclosure to their communities of how they are meeting their
obligations.

I don't want to see us go down the same road here as we are going on
digital TV. Over the past few years, we have made great progress on the
mechanics of the digital transition, but there exists a great big
digital gap on how digital television is going to serve the public
interest. We actually started having a discussion, and a pretty good one
at that, on digital television and the public interest a few years ago.
The Commission issued a formal Notice of Inquiry in December 1999,
followed by two Notices of Proposed Rulemaking the following year. But
since that time, these proceedings have languished. We now have over
1000 digital stations broadcasting across this country and over 200
stations that are multicasting. And yet, these broadcasters still don't
know what they must do to discharge their public interest obligations.
And consumers don't know what to expect from digital radio either.

So I would hope we could find a way to get these critically important
public interest questions out on the table now, early in the transition,
so that consumers and people in the radio business alike would know what
to expect. Then we can truly realize the full benefits of the digital
transition.

I also believe that multicasting raises questions about our ownership
rules. As the Further Notice recognizes, digital radio and multicasting
hold out the promise of new opportunities to enhance diversity and to
promote localism. But there may also be some risks involved here,
particularly as regards changes in the local competitive landscape.
Might not the ability to multicast several streams in a community
instead of just one have at least some effects on the competitive
landscape in that particular media market? What does it mean for
competition if a company that would be permitted to own eight radio
stations in a market also obtains the ability to multicast many more
programming streams? Does that really promote competition, localism and
diversity in the digital era? We need to be looking at such questions
before we leap.

I look forward to a good record on the issues and to working with both
consumers and industry to develop digital audio broadcasting standards
and rules so that the full promise of digital radio will come to pass as
expeditiously as possible.

**SEPARATE STATEMENT OF**

**COMMISSIONER JONATHAN S. ADELSTEIN**

> *Re: Digital Audio Broadcasting Systems and Their Impact on the
> Terrestrial Radio Broadcast Service, Further Notice of Proposed
> Rulemaking and Notice of Inquiry*

Today, we begin the important process of ensuring that our rules are
ready for tomorrow's digital radio. Digital radio is the natural
evolution of radio, bringing CD quality sound to FM and FM quality to
AM. It promises many new service offerings to eager listeners. In
January, I was honored to participate in the first commercial launch of
HD Radio here in Washington, D.C. at Howard University's WHUR-FM. We
literally flipped the switch on digital radio, and it was a major hit.

Digital radio is an opportunity for broadcasters to build on their
spectrum to serve the public even better. It's a clear example of doing
more with the same spectrum. Broadcasters can now offer consumers more
programming services including non-English language programming,
on-demand interactive experiences, enhanced auxiliary services, and new
data services including local traffic and weather, song and artist
information, even sports scores and local news. Through NPR's
leadership, the technology offers the possibility of transmitting more
than one programming stream through supplemental audio channels.

I look forward to developing a full record on how broadcasters can use
this opportunity to better serve their local communities. I welcome our
examination of rule changes needed to ensure that broadcasters are
meeting their public interest obligations in this new digital age,
particularly with respect to supplemental audio channel capability. With
this capability, a broadcaster could use each stream to enhance a local
community's listening experience with local programming, including local
civic and political discourse. These new horizons in radio broadcasting
should correspond to new horizons in serving the public interest.

I am particularly pleased that we are seeking comment on how this
technology can further our diversity goals and provide greater access
for minorities, people with disabilities, or underserved segments of our
local communities. I appreciate the willingness of my colleagues to seek
comment on how digital radio can enhance political discourse and
candidate access to the radio. We also appropriately ask about ways to
enhance the broadcast of emergency information and generally how digital
technology can enable a broadcaster to better respond to the needs of
the community. Of course, there is much more we need to do to advance
the public interest, but this is a good start.

The development of digital radio has been a careful and methodical
exercise by iBiquity and others, with widespread industry participation
and extensive testing to tackle problems as they arise. The Commission
now must step up and do its part to ensure that this significant
advancement in radio broadcasting fully advances the public interest in
broadcasting.

[^1]: *Digital Audio Broadcasting Systems and Their Impact on the
    Terrestrial Radio Broadcast Service*, 17 FCC Rcd 19990 (2002). There
    are Petitions for Reconsideration of the *DAB R&O* currently pending
    before the Commission.

[^2]: In ­August 2000, two IBOC proponents, Lucent Digital Radio, Inc.
    and USA Digital Radio, Inc., merged to create iBiquity Digital
    Corporation. iBiquity is now the only active IBOC system developer.
    Among its strategic partners, iBiquity lists most of the largest
    broadcast group owners, as well as manufacturers of broadcast
    equipment, consumer electronics, and semiconductors. Consumer
    Electronics Association ("CEA"), National Association of
    Broadcasters ("NAB"), and National Public Radio ("NPR") support
    iBiquity's IBOC system.

[^3]: Our statutory authority for implementing these goals is derived
    from, *inter alia*, sections 1, 4, 303, and 307 of the
    Communications Act. *See* 47 U.S.C. §§ 151, 154, 303, and 307.

[^4]: The digital signal is compressed before it is transmitted along
    with the analog signal. Information about IBOC was obtained from
    iBiquity's web site. *See*
    <http://www.ibiquity.com/hdradio/hdradio_how.htm>.

[^5]: *Id.*

[^6]: The NRSC is an industry group jointly sponsored by the NAB and
    CEA.

[^7]: The iBiquity system also includes all-digital AM and FM modes,
    which stations could implement if the analog systems are
    discontinued in the future.

[^8]: *Amendment of the Rules with Regard to the Establishment and
    Regulation of New Digital Audio Radio Services,* 5 FCC Rcd 5237
    (1990).

[^9]: *In the Matter of Digital Audio Broadcasting Systems And Their
    Impact On the Terrestrial Radio Service,* 15 FCC Rcd 1722, 1726-27
    (1999) ("*DAB* *NPRM*").

[^10]: *Id*. at 1723.

[^11]: National Radio Systems Committee DAB Subcommittee Report,
    "*Evaluation of the iBiquity Digital Corporation IBOC System: Part 1
    -- FM IBOC,*" submitted in the December 4, 2001, comments of
    iBiquity Digital Corporation ("NRSC FM report").

[^12]: NRSC FM Report at 9.

[^13]: *See Public Notice:* MM Docket No. 99-325; Comment Sought on
    National Radio Systems Committee DAB Subcommittee's "Evaluation of
    the iBiquity Digital Corporation IBOC System," DA 01-2932 (Dec. 19,
    2001) ("December 2001 Public Notice").

[^14]: National Radio Systems Committee DAB Subcommittee Report,
    "*Evaluation of the iBiquity Digital Corporation IBOC System: Part 2
    -- AM IBOC*," submitted in April 16, 2002, comments of NRSC ("NRSC
    AM Report").

[^15]: *See Public Notice:* MM Docket No. 99-325; Comment Sought on
    National Radio Systems Committee DAB Subcommittee's "Evaluation of
    the iBiquity Digital Corporation IBOC System," DA 02-899 (Apr. 19,
    2002) ("April 2002 Public Notice").

[^16]: NRSC AM Report at 9.

[^17]: *See DAB R&O*, 17 FCC Rcd at 20006.

[^18]: *See id.* at 20004-05.

[^19]: A public notice seeking comment on the use of a dual antenna
    system was issued by the Media Bureau after the *DAB R&O* was
    released. The Media Bureau approved the use of separate antennas on
    March 17, 2004. *See* *infra*.

[^20]: FCC Public Notice\--Broadcast Station Totals as of December 31,
    2003 (totals released Feb. 24, 2004).

[^21]: *See* BIA Research Inc., Media Access Pro Database, March 2004.

[^22]: *See id.* The top ten radio groups in the United States are: (1)
    Clear Channel; (2) Infinity; (3) Cox Radio; (4) Entercom; (5) ABC
    Radio; (6) Citadel; (7) Radio One; (8) Emmis; (9) Cumulus; and (10)
    Univision. *See* Jean Grillo, *Top 25 Radio Groups*, BROADCASTING &
    CABLE, September 29, 2003.

[^23]: There are about 110.4 million households in the U.S.  *See*
    Nielsen Media Research, U.S. Television Household Estimates,
    September 2003, at 1.

[^24]: [www.ce.org/publications/books&references/Digital_America/audio/Overview](http://www.ce.org/publications/books&references/Digital_America/audio/Overview)
    p.1.

[^25]: In 1999, the Commission recognized that any digital audio
    conversion requirements must respect listeners' investment in over
    one-half billion radio receivers. *See DAB NPRM*, 15 FCC Rcd at
    1731, n.59.

[^26]: Virtually all automobiles and trucks in the U.S. have radio
    receivers and there are over 200 million cars on the road.  *See*
    National Automobile Dealers Association website at nada.com.

[^27]: According to media reports, there are an estimated 800 million
    radios in the United States. *See* Patrick Seitz, *Digital Radio
    Making Some Noise*, INVESTOR'S BUSINESS DAILY, January 7, 2004.

[^28]: *See* *Establishment of Rules and Policies for the Digital Audio
    Radio Satellite Service in the 2310-2360 MHz Frequency Band*, 12 FCC
    Rcd 5754, 5756 (1997) ("*SDARS Report and Order*"); *Notice of
    Proposed Rule Making and Further Notice of Inquiry* in GEN Docket
    No. 90-357, 7 FCC Rcd 7776, 7778 (1992) ("*Docket No. 90-357
    NPRM*").

[^29]: *See* <http://www.xmradio.com/newsroom> and
    [http://siriusradio.com](http://siriusradio.com/) (accessed on April
    5, 2004). We note that Sirius has not updated its subscriber figures
    as recently as XM has.

[^30]: *See* <http://www.ibiquity.com/press/pr/100103Stations.htm>.
    ibiquity predicts that 600-650 stations will broadcast in a digital
    mode by the end of 2004. *See* COMMUNICATIONS DAILY, January 7,
    2004.

[^31]: Kenwood, Phillips, JVC, Panasonic, and Texas Instruments recently
    showcased DAB receivers at the 2004 Consumer Electronics Show in Las
    Vegas. *See* WIRELESS NEWS, January 3, 2004. *See also* Leslie
    Stimson, RADIO WORLD, October 3, 2003 (as reported in NAB Daily
    Radio News) (Delphi plans to have in-dash DAB radios available for
    2005 model year automobiles). We note that while DAB is still in its
    nascent stage in the United States, over 300 million people in other
    countries can now receive up to 600 different DAB services. *See*
    http://www.worlddab.org/benefits.aspx.

[^32]: *See* February 19, 2002, comments of iBiquity at 14.

[^33]: iBiquity's website offers broadcasters a free assessment of the
    compatibility of their existing equipment with IBOC as part of
    iBiquity's EASE program to encourage broadcasters to convert to
    digital operation. *See* http://www.iBiquity.com.

[^34]: *See DAB R&O*, 17 FCC Rcd at 20003.

[^35]: *See* Balanced Budget Act of 1997, Pub. L. No. 105-33, 111 Stat.
    251, § 3003 (codified at 47 U.S.C. § 309(j)(14)(B)).

[^36]: According to some accounts, digital radio station coverage areas
    would extend farther in an all-digital environment because there
    would be no self-interference between the analog signal and the
    digital signal. *See* Glen Clark, *'Tricks' of HD Radio Revealed*,
    RADIO WORLD, March 1, 2004.

[^37]: Some have argued that there is no need to implement a mandatory
    conversion policy because, unlike the DTV conversion, IBOC uses
    existing spectrum for both analog and digital services and does not
    render existing receivers obsolete in its hybrid analog/digital
    mode. *See*, *e.g*., National Public Radio March 21, 2002 reply
    comments at 3.

[^38]: We note that British regulators are now discussing a termination
    date for the United Kingdom's analog radio broadcasting system.
    *See* Dugie Standeford, *Government Should Plan To End Analog Radio,
    U.K. Digital Radio Group Says*, COMMUNICATIONS DAILY, January 26,
    2004, at p. 8.

[^39]: KBPS is the acronym for kilobits per second (1000 bits per
    second).

[^40]: By high definition signal, we mean compact disc-like quality
    audio, at least for FM stations. DAB also permits radio stations to
    broadcast in surround sound.

[^41]: Section 303 of the Act compels the Commission to "study new uses
    for radio, provide for experimental uses of frequencies, and
    generally encourage the larger and more effective uses of radio in
    the public interest." 47 U.S.C. § 303(g).

[^42]: National Public Radio, in conjunction with the engineering firm
    of Hammett & Edison, recently released results of its supplemental
    audio programming tests. *See Tomorrow Radio Field Testing in the
    Washington, D.C., New York City, San Francisco, and Los Angeles
    (Long Beach) Radio Markets* (rel. Jan. 6, 2004). In these tests, the
    public radio station's signal in the test markets divided the 96
    kbps digital data stream into two channels, 64 kbps and 32 kbps. The
    tests indicated that mobile reception and service area coverage for
    the split digital signals was nearly as good as that for the
    counterpart analog signal. NPR states that the 64 kbps channel
    sounds "almost as good as a 96 kbps channel and a 32 kbps channel
    sounds similar to an analog FM broadcast." *See* Mike Janssen,
    *Two-channel Digital FM 'Works Great*,' Current Magazine, January
    19, 2004. We note that if the supplementary 32 kbps digital signal
    of a multiplexed station fails, it does not blend back into the
    analog channel; instead, the receiver mutes that channel. *See*
    Leslie Stimson, *Is Radio Heading for a Split?* RADIO WORLD, March
    1, 2004.

[^43]: *See* NPR February 19, 2002 Comments at 5-6.

[^44]: 47 C.F.R. § 73.1212.

[^45]: *See Advanced Television Systems and Their Impact on the Existing
    Television Broadcast Service*, 12 FCC Rcd 12809, 12835 (1997).

[^46]: *See* 47 U.S.C. § 310(d) ("No construction permit or station
    license, or any rights thereunder, shall be transferred, assigned,
    or disposed of in any manner, voluntarily or involuntarily, directly
    or indirectly, or by transfer of control of any corporation holding
    such permit or license, to any person except upon application to the
    Commission and upon finding by the Commission that the public
    interest, convenience, and necessity will be served thereby.").

[^47]: *See* 47 C.F.R. § 73.277.

[^48]: *See* 47 C.F.R. § 73.295.

[^49]: *See* 47 C.F.R. § 73.593.

[^50]: *See* 47 C.F.R. § 73.127.

[^51]: The station identification, delayed recording, and sponsor
    identification announcements required by Sections 73.1201, 73.1208,
    and 73.1212 are not applicable to leased communications services
    transmitted via services that are not of a general broadcast program
    nature. *See id.*; 47 C.F.R. §§ 73.1201, 73.1208, and 73.1212.

[^52]: *See* 47 C.F.R. §§ 73.127(e) and 73.295(e).

[^53]: ID3 is a file tagging software used to provide text information
    such as artist name and song title. ID3 also supports text
    descriptions with ads, such as phone numbers and Web addresses.

[^54]: *See* <http://www.ibiquity.com/technology/standards.htm>, for a
    general discussion of new datacasting opportunities.

[^55]: *See* "Further Report on Analog SCA Compatibility with iBiquity
    Digital's FM-IBOC System," filed May 24, 2002, in Comments of NPR
    and IAAIS.

[^56]: *See DAB R&O*, 17 FCC Rcd at 19996.

[^57]: Robert Struble, CEO of iBiquity, stated that the company will
    continue to develop new applications for DAB including store and
    replay, on-demand services, and a "buy button." *See* RADIO WORLD,
    January 7, 2004.

[^58]: 47 U.S.C. § 336(e).

[^59]: *See* *id.*

[^60]: We note that Section 336(e) of the Act sets forth factors for the
    Commission to consider in establishing fees for ancillary DTV
    services. *Id.*

[^61]: *See* February 19, 2002, Comments of iBiquity at 11.

[^62]: *See DAB R&O*, 17 FCC Rcd at 20003.

[^63]: 47 U.S.C. § 303.

[^64]: *See*, *e.g*., 47 C.F.R. § 73.3526(e)(12) (commercial stations)
    and 47 C.F.R. § 73.3527(e)(8) (noncommercial stations).

[^65]: In the *SDARS Report and Order*, the Commission held that
    satellite radio companies should comply with Sections 312 and 315 of
    the Act because the political broadcast provisions \"make a
    significant contribution to freedom of expression by enhancing the
    ability of candidates to present, and the public to receive,
    information necessary for the effective operation of the democratic
    process.\" *See SDARS Report and Order*, 12 FCC Rcd 5754, 5792
    (1997)(citation omitted). However, the Commission did not adopt
    additional public interest programming obligations at that time.
    Instead, the Commission stated that it reserved the right to do so
    at a later date. *Id.* *See also*, *Direct Broadcast Satellite
    Public Interest Obligations,* 13 FCC Rcd 23254 (1998); *Direct
    Broadcast Satellite Public Interest Obligations*, *Sua Sponte*
    Reconsideration, FCC 04-44 (rel. Mar. 25, 2004). In this proceeding,
    we are not seeking comment on public interest obligations for SDARS
    licensees.

[^66]: *See, e.g., Deregulation of Radio*, 84 F.C.C. 2d 968, 994 ¶ 58
    (1981) ("The concept of localism was part and parcel of broadcast
    regulation virtually from its inception.").

[^67]: Specifically, Section 312(a)(7) provides that "\[t\]he Commission
    may revoke any station license or construction permit for willful or
    repeated failure to allow reasonable access to or permit purchase of
    reasonable amounts of time for the use of a broadcasting station by
    a legally qualified candidate for Federal elective office on behalf
    of his candidacy." 47 U.S.C. § 312(a)(7); *see* 47 C.F.R. § 73.1944.
    This right of access does not apply to candidates for state or local
    offices.

[^68]: Section 315(a) of the Act, as amended, provides that "if any
    licensee shall permit any person who is a legally qualified
    candidate for any public office to use a broadcasting station, he
    shall afford equal opportunities to all other such candidates for
    that office in the use of such broadcasting station." 47 U.S.C. §
    315(a); *see* 47 C.F.R. § 73.1941. Section 73.1940 of the
    Commission's rules defines "legally qualified candidate" as any
    person who has publicly announced his or her intention to run for
    nomination or office, is qualified under the applicable local,
    state, or federal law to hold office for which he or she is a
    candidate, and has qualified for ballot placement or has otherwise
    met all the qualifications set forth in the Commission's rules. 47
    C.F.R. § 73.1940. In addition, both the Act and the rules narrowly
    define the term "use" and exclude from the definition candidates'
    appearances in *bona fide* newscasts, interviews, documentaries, and
    the on-the-spot coverage of news events. 47 U.S.C. § 315(a)(1)-(4);
    *see* 47 C.F.R. § 73.1941(a)(1)-(4). Licensees have no power of
    censorship over the material broadcast under the equal opportunity
    provisions of Section 315(a). 47 U.S.C. § 315(a); *see* 47 C.F.R. §
    73.1941. Congress recently amended the lowest unit charge provision
    of Section 315, codified the Commission's existing political file
    rule, and expanded that rule to require that a broadcast's station's
    public file contain information regarding certain issue advertising.
    *See* *Bipartisan Campaign Reform Act of 2002*, P. Law 107-155, 116
    Stat. 81, 2002 ("BCRA"). The Supreme Court upheld these amendments
    to the Communications Act in *McConnell v. FEC*, 124 S.Ct. 619
    (2003).

[^69]: *See* 47 C.F.R. § 73.1250. Emergency situations in which the
    broadcasting of information is considered as furthering the safety
    of life and property include, but are not limited to the following:
    tornadoes, hurricanes, floods, tidal waves, earthquakes, icing
    conditions, heavy snows, widespread fires, discharge of toxic
    gasses, widespread power failures, industrial explosions, civil
    disorders and school closing and changes in school bus schedules
    resulting from such conditions. *Id.* § 73.1250(a).

[^70]: *Id.* § 73.1250(f). Because of skywave interference impact on
    other stations assigned to the same channel, such operation may be
    undertaken only if regular, unlimited-time service, is non-existent,
    inadequate from the standpoint of coverage, or not serving the
    public need.

[^71]: *See* 47 C.F.R. § 73.1201.

[^72]: In the Second DTV Periodic Notice of Proposed Rulemaking*,* we
    proposed to require digital television stations to follow the same
    rules for station identification as analog television stations. *See
    Second Periodic Review of the Commission's Rules and Policies
    Affecting the Conversion to Digital Television*, 18 FCC Rcd 1279,
    1325 (2003). This proceeding is pending before the Commission.

[^73]: WOR in New York City identifies its digital signal on digital
    radio receivers as "710 WOR-HD: New York's FIRST Digital AM Radio
    Station." *See* Thomas R. Ray III, *HD Radio Receivers Reach
    Stations*, RADIO WORLD, January 2, 2004.

[^74]: *See* 47 C.F.R. § 73.1201(c)(2).

[^75]: *See* 47 C.F.R. §§ 73.132, 73.232. Under these rules, no licensee
    of an AM or FM broadcast station shall have any arrangement with a
    network organization that prevents or hinders another station
    serving substantially the same area from broadcasting the network\'s
    programs not taken by the former station, or which prevents or
    hinders another station serving a substantially different area from
    broadcasting any program of the network organization. This section
    does not prohibit arrangements under which the station is granted
    first call within its primary service area upon the network\'s
    programs.

[^76]: *See* 47 C.F.R. § 73.1208. Under this rule, any taped, filmed or
    recorded program material in which time is of special significance,
    or by which an affirmative attempt is made to create the impression
    that it is occurring simultaneously with the broadcast, must be
    announced at the beginning as taped, filmed or recorded. The
    language of the announcement shall be clear and in terms commonly
    understood by the public.

[^77]: *See* 47 C.F.R. § 73.1740. Under this rule, AM and FM commercial
    stations are to operate two-thirds of the total hours they are
    authorized to operate between 6 a.m. and 6 p.m. local time and
    two-thirds of the total hours they are authorized to operate between
    6 p.m. and midnight, local time, each day of the week except Sunday.
    Noncommercial educational AM stations are not required to operate on
    a regular schedule and no minimum hours of operation are specified,
    but the hours of actual operation during a license period shall be
    taken into consideration in the renewal of noncommercial educational
    AM broadcast licenses. Noncommercial educational FM stations are
    subject to the operating schedule requirements set forth in Section
    73.561 of the Commission's rules.

[^78]: *See* 47 C.F.R. § 73.1212. This rule implements Section 317 of
    the Act. 47 U.S.C. § 317(a)(1) ("All matter broadcast by any radio
    station for which any money, service or other valuable consideration
    is directly or indirectly paid, or promised to or charged or
    accepted by, the station so broadcasting, from any person, shall, at
    the time the same is so broadcast, be announced as paid for or
    furnished, as the case may be, by such person."). We note that
    questions regarding this requirement are raised in other parts of
    this *FNPRM*.

[^79]: *See* 47 C.F.R. § 73.4180. This rule implements Section 507 of
    the Act. 47 U.S.C. § 508 ("Any employee of a radio station who
    accepts or agrees to accept from any person (other than such
    station), or any person (other than such station) who pays or agrees
    to pay such employee, any money, service or other valuable
    consideration for the broadcast of any matter over such station
    must, in advance of such broadcast, disclose the fact of such
    acceptance or agreement to such station.") This statutory section,
    in industry parlance, addresses "payola" and "plugola." Payola
    occurs when a station fails to announce the receipt of something
    valuable in return for the inclusion of material in a broadcast.
    Plugola describes a situation in which a station fails to identify
    an outside business interest of the licensee, its parent, its
    affiliates, or an employee in the broadcast of particular materials.

[^80]: *See* 47 C.F.R. § 73.4055. This rule implements Section 1335 of
    Title 15 of the U.S. Code, which makes it illegal to advertise
    cigarettes and little cigars on any medium of electronic
    communication subject to the Commission's jurisdiction.

[^81]: 47 U.S.C. § 509. Section 508 of the Act addresses prohibited
    practices in contests of knowledge, skill, or chance. Under the Act,
    it is unlawful for any person, with intent to deceive the listening
    or viewing public, to supply to any contestant in a purportedly bona
    fide contest of intellectual knowledge or intellectual skill any
    special and secret assistance whereby the outcome of such contest
    will be in whole or in part prearranged or predetermined.

[^82]: *See* 47 C.F.R. § 73.14.

[^83]: *DAB R&O*, 17 FCC Rcd at 19998, *citing* NRSC AM Report at 50.

[^84]: The radio frequency bandwidth of an analog AM signal is twice the
    audio bandwidth. For example, modulation of a carrier with a 10-kHz
    audio tone generates sidebands at +10 kHz and -10 kHz of the carrier
    frequency, for a total radio frequency bandwidth of 20 kHz. *See* 47
    C.F.R. § 73.44.

[^85]: NRSC AM Report at 50.

[^86]: *Id.* at 51.

[^87]: *Id.* at 54.

[^88]: *See DAB R&O*, 17 FCC Rcd at 19998. The Commission has long
    recognized the need for AM station operation between the hours of
    6:00 a.m. and local sunrise (the "pre-sunrise" hours) and between
    local sunset and 6:00 p.m. (the "post-sunset" hours). Section 73.99
    of the rules provides for reduced-power pre-sunrise and post-sunset
    operation by AM stations where such operation will not cause
    impermissible interference to other stations. In view of the
    relatively low power to be employed for IBOC AM signals, the
    Commission permitted AM stations currently authorized to operate
    during the pre-sunrise and/or post-sunset periods to transmit IBOC
    signals during those times. Stations transmitting IBOC signals
    during pre-sunrise or post-sunset hours shall operate with the power
    and antenna pattern authorized for the time period. The Commission
    stated that the potential for skywave interference during the
    pre-sunrise and post-sunset hours is small, and that the benefit to
    the public by permitting broadcasters to implement IBOC operations
    between 6:00 a.m. and 6:00 p.m. during the winter months outweighs
    any potential interference impact. *See id.*

[^89]: *See* Letter to Marlene H. Dortch, Secretary, FCC, from Jack N.
    Goodman, Senior Vice President & General Counsel, NAB (March 5,
    2004).

[^90]: *Id.*

[^91]: *Id.*

[^92]: *See* Public Notice\--*Comment Sought on Use of Digital AM
    Transmissions During Nighttime Hours*, DA 04-1007 (rel. Apr. 14,
    2004).

[^93]: *See DAB R&O*, 17 FCC Rcd at 20005.

[^94]: In order to preserve the integrity of the hybrid AM IBOC system,
    power reductions greater than 6 dB are not permitted without prior
    authority from the Commission. A licensee desiring such a reduction
    must file an informal letter request, setting forth its
    justification for the nonstandard operation.

[^95]: *See DAB R&O*, 17 FCC Rcd at 20000. This automatic power
    reduction requirement is without prejudice to any subsequent Bureau
    action on the pending complaint.

[^96]: *See* 47 C.F.R. § 73.128.

[^97]: *See Review of the Technical Assignment Criteria for the AM
    Broadcast Service*, 6 FCC Rcd 6273, 6331-32 (1991) (noting that "AM
    stereo is a valuable asset" and "The use of AM stereo will enhance
    the competitiveness of stations in the expanded band by providing
    the highest audio fidelity available through use of state-of-the-art
    AM equipment.").

[^98]: The center frequency of each channel is 100 kHz from the upper
    and lower edges of the channel, and the frequency modulated signal
    in each channel swings in frequency from the center frequency toward
    the channel edges, and has its radiated power envelope shaped such
    that virtually all of the energy of the signal is contained within
    the channel.

[^99]: *See* 47 C.F.R. § 73.310.

[^100]: *See* 47 C.F.R. § 73.211.

[^101]: *See* 47 C.F.R. § 73.317.

[^102]: Section 73.525 applies to all applications for construction
    permits for new or modified facilities for an NCE-FM station on
    Channels 200-220 unless the application is accompanied by a written
    agreement between the NCE-FM applicant and each affected TV Channel
    6 broadcast station concurring with the proposed NCE-FM facilities.
    *See* 47 C.F.R. § 73.525.

[^103]: FCC Public Notice, *Comment Sought on Use of Separate Antennas
    to Initiate Digital FM Transmissions* (rel. Dec. 9, 2003).

[^104]: FCC Public Notice, *Use of Separate Antennas to Initiate Digital
    FM Transmissions Approved* (rel. March 17, 2004). The Media Bureau
    permitted conforming dual antenna FM IBOC transmissions pursuant to
    routine special temporary authorization ("STA") procedures under
    Section 73.1635 of the Commission's rules. Stations must request STA
    at least 10 days prior to the planned date of commencement of IBOC
    transmissions. The STA request shall contain, *inter alia*, the date
    that interim operation is planned to commence and a certification
    that the IBOC facilities conform to the iBiquity hybrid
    specification. *See id.* The Media Bureau noted that the matter of
    expanded notification procedures, as recommended by the NAB test
    report, would be deferred for consideration at a future date.

[^105]: *See* 47 C.F.R. § 73.313.

[^106]: *See generally* 47 C.F.R. § 74.1231.

[^107]: *Id*. at 74.1231(b).

[^108]: *Id*. at 20006.

[^109]: *See DAB R&O*, 17 FCC Rcd at 20002. Noncommercial radio stations
    are exempt from iBiquity royalties for any data services they offer,
    but commercial broadcasters may have to pay royalties for data
    services under existing licensing agreements. *See* Leslie Stimson,
    *Fee or No Fee for a Secondary Channel*, RADIO WORLD, March 1, 2004.

[^110]: *See* Revised Patent Procedures of the Federal Communications
    Commission, 3 FCC 2d 26 (1966).

[^111]: *See DAB R&O*, 17 FCC Rcd at 20002.

[^112]: *See* 47 C.F.R. § 2.907.

[^113]: *See* 47 C.F.R. § 73.1695.

[^114]: *See* 47 C.F.R. §§ 73.3571, 73.3573.

[^115]: *See* 47 C.F.R. § 73.3500.

[^116]: 47 U.S.C. § 397(6).

[^117]: Omnibus Budget Reconciliation Act of 1981, Pub. Law No. 97-35, §
    1231, 95 Stat. 357, 731 (codified at 47 U.S.C. § 399B). *See also*
    H.R. Rep. No. 97-82, at 13-14.

[^118]: Section 399B also requires that public stations engaged in
    revenue generating activities comply with

    accounting procedures designed to separately identify these
    commercial revenues and costs, and it prohibits

    Corporation for Public Broadcasting funds from being used to defray
    any costs associated with these activities. 47 U.S.C. § 399B.

[^119]: 47 U.S.C. § 399B(a)(2).

[^120]: Section 73.621 of the Commission\'s Rules, 47 C.F.R. § 73.621,
    provides that "noncommercial educational broadcast stations will be
    licensed only to nonprofit educational organizations upon a showing
    that the proposed stations will be used primarily to serve the
    educational needs of the community; for the advancement of
    educational programs; and to furnish a nonprofit and noncommercial
    television broadcast service." Section 73.503 of the Commission's
    rules addresses the licensing requirements and service of
    noncommercial educational FM stations. Under our rules, a
    noncommercial educational FM broadcast station will be licensed only
    to a nonprofit educational organization and upon showing that the
    station will be used for the advancement of an educational program.
    *See* 47 C.F.R. § 73.503(a)(2). Although the Commission does not
    reserve frequencies for NCE use in the AM service, and thus has not
    codified noncommercial eligibility rules for this service, the
    Commission has treated AM stations that satisfy the noncommercial FM
    eligibility rules as noncommercial AM stations. *See Reexamination
    of the Comparative Standard for Noncommercial Educational
    Applicants*, 18 FCC Rcd 6691, 6695 n.28 (2003).

[^121]: *See Ancillary or Supplementary Use of Digital Television
    Capacity by Noncommercial Licensees*, 16 FCC Rcd 19042 (2001) ("*DTV
    NCE A&S Orde*r")*.*

[^122]: *Id.*

[^123]: [*Office of Communication, Inc. of United Church of Christ v.
    F.C.C.*](http://pacer.cadc.uscourts.gov/docs/common/opinions/200305/02-1039a.pdf),
    327 F.3d 1222 (D.C. Cir., 2003) ("*UCC*" decision).

[^124]: *See* *generally Creation of Low Power Radio Service*, 15 FCC
    Rcd 2205 (2000).

[^125]: In response to the DCAA, the Commission codified two rule
    changes. Section 73.807, as modified, now requires that LPFM
    stations meet prescribed minimum distance separations to full
    service FM and FM translator stations operating on third adjacent
    channels. Section 73.854 now prohibits an applicant from obtaining
    an LPFM license if that applicant, or any party to the application,
    has engaged in any manner in the unlicensed operation of any station
    in violation of Section 301 of the Act. *See* 47 C.F.R. §§ 73.807
    and 73.854.

[^126]: *See* Section 632(b)(3)(B)(iii) of the Commerce, Justice, and
    State, the Judiciary, and Related Agencies Appropriations Act, 2001.

[^127]: *See* MITRE Report, Vol. 1: Section 3 and Vol. 1: Section 5.1.6.

[^128]: *See* Report to the Congress on the Low Power FM Interference
    Testing Program, Pub. L. No. 106-553, at 3.

[^129]: *See* Letter to Mary Beth Murphy, Chief, Policy Division, Media
    Bureau, FCC, from Theodore Frank, Counsel for the Recording Industry
    Association of America, dated October 2, 2003.

[^130]: *Id.*

[^131]: *Id.* at 2.

[^132]: *See* Dugie Standeford, *Government Should Plan To End Analog
    Radio, U.K. Digital Radio Group Says*, COMMUNICATIONS DAILY, January
    26, 2004, at 9 (Eureka-based digital audio receivers have been
    selling at a rate of 100,000 per month in Great Britain and other
    European countries).

[^133]: *See* Pub. L. No. 102-563, 106 Stat. 4237 (1992); 17 U.S.C.
    §§1001-1010.

[^134]: *Digital Broadcast Copy Protection*, 17 FCC Rcd 16027 (2002)
    ("*NPRM*"); *Digital Broadcast Copy Protection*, 18 FCC Rcd 23550
    (2003) ("*Report and Order*").

[^135]: *See* 47 C.F.R. § 73.207.

[^136]: *See DAB R&O*, 17 FCC Rcd at 20006 n.73.

[^137]: 47 C.F.R. § 1.1206(b), as revised.

[^138]: *See* *id.* at § 1.1206(b)(2).

[^139]: 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).

[^140]: 5 U.S.C. § 605(b).

[^141]: 5 U.S.C. § 601(6).

[^142]: 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."

[^143]: 15 U.S.C. § 632.

[^144]: SBA comments at 2.

[^145]: *See* 5 U.S.C. § 801(a)(1)(A).

[^146]: *See* 5 U.S.C. § 605(b).

[^147]: *See* 5 U.S.C. § 603. The RFA, *see* 5 U.S.C. §§ 601-612, has
    been amended by the Small Business Regulatory Enforcement Fairness
    Act of 1996 ("SBREFA"), Pub. L. No. 104-121, Title II, 110 Stat. 857
    (1996).

[^148]: *See* 5 U.S.C. § 603(a).

[^149]: *See* 5 U.S.C. § 603(a).

[^150]: 5 U.S.C. § 603(b)(3).

[^151]: 5 U.S.C. § 601(6).

[^152]: 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."

[^153]: 15 U.S.C. § 632.

[^154]: 13 C.F.R. § 121.201, NAICS Code 515112.

[^155]: FCC Public Notice\--Broadcast Station Totals as of December 31,
    2003 (totals released Feb. 24, 2004).

[^156]: 13 CFR § 121.201, NAICS code 334310.

[^157]: 13 CFR § 121.201, NAICS code 334220.

[^158]: 13 CFR § 121.201, NAICS code 334310.

[^159]: Economics and Statistics Administration, Bureau of Census, U.S.
    Department of Commerce, 1997 Economic Census, Industry Series --
    Manufacturing, Audio and Video Equipment Manufacturing, Table 4 at 9
    (1999). The amount of 500 employees was used to estimate the number
    of small business firms because the relevant Census categories
    stopped at 499 employees and began at 500 employees. No category for
    750 employees existed. Thus, the number is as accurate as it is
    possible to calculate with the available information.

[^160]: 13 C.F.R. § 121.201, NAICS code 334220.

[^161]: Economics and Statistics Administration, Bureau of Census, U.S.
    Department of Commerce, 1997 Economic Census, Industry Series --
    Manufacturing, Radio and Television Broadcasting and Wireless
    Communications Equipment Manufacturing, Table 4 at 9 (1999). The
    amount of 500 employees was used to estimate the number of small
    business firms because the relevant Census categories stopped at 499
    employees and began at 500 employees. No category for 750 employees
    existed. Thus, the number is as accurate as it is possible to
    calculate with the available information.

[^162]: 5 U.S.C. § 603(b).