Before the

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of:                | * | CS Docket No. 01-290         |
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| Implementation of the Cable      | ) |                              |
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| Television Consumer Protection   | * |                              |
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| and Competition Act of 1992      | * |                              |
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| Development of Competition and   | ) |                              |
| Diversity                        | * |                              |
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| in Video Programming             |   |                              |
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| Section 628(c)(5) of the         | ) |                              |
| Communications Act:              | * |                              |
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| Sunset of Exclusive Contract     |   |                              |
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NOTICE OF PROPOSED RULEMAKING

**Adopted: October 11, 2001** **Released: October 18, 2001**

**Comment Date: December 3, 2001**

**Reply Comment Date: January 7, 2002**

By the Commission:

# INTRODUCTION

1.  We issue this Notice of Proposed Rulemaking ("Notice") in accordance
    with Section 628(c)(5) of the Communications Act of 1934, as amended
    ("Communications Act").[^1] Section 628(c)(2)(D) generally
    prohibits, in areas served by a cable operator, exclusive contracts
    for satellite cable programming or satellite broadcast programming
    between vertically integrated programming vendors and cable
    operators.[^2] Under Section 628(c)(5), the prohibition on exclusive
    programming contracts contained in Section 628(c)(2)(D) will cease
    to be effective on October 5, 2002, unless the Commission finds that
    such prohibition continues to be necessary to preserve competition
    and diversity in the distribution of video programming. This Notice
    initiates a proceeding in order to make that determination.

# BACKGROUND

2.  The program access provisions contained in Section 628 of the
    Communications Act were adopted as part of the Cable Television
    Consumer Protection and Competition Act of 1992 ("1992 Cable Act")
    which was enacted on October 5, 1992.[^3] In enacting the program
    access provisions, Congress was concerned that the majority of cable
    operators enjoyed a monopoly in program distribution at the local
    level,[^4] and concluded that the use of exclusive contracts between
    vertically integrated programming vendors and cable operators served
    to inhibit the development of competition among distributors.[^5]
    Congress concluded that vertically integrated program suppliers have
    the incentive and ability to favor their affiliated cable operators
    over other multichannel programming distributors, such as other
    cable systems, home satellite dish ("HSD") distributors, direct
    broadcast satellite ("DBS") providers, satellite master antenna
    television ("SMATV") systems, and wireless cable operators.[^6] In
    addition, Congress found that increased horizontal concentration of
    cable operators, combined with extensive vertical integration,
    created an imbalance of power, both between cable operators and
    program vendors and between incumbent cable operators and their
    multichannel competitors.[^7] Congress determined that this
    imbalance of power limited the development of competition and
    restricted consumer choice.[^8]

3.  In *Implementation of Sections 12 and 19 of the Cable Television
    Protection and Competition Act of 1992: Development of Competition
    and Diversity in Video Programming Distribution and Carriage*, First
    Report and Order ("*First Report and Order*"), the Commission
    promulgated regulations implementing the program access provisions
    of Section 628.[^9] The purpose of Section 628 is to promote the
    public interest, convenience, and necessity by increasing
    competition and diversity in the multichannel video market, to
    increase the availability of satellite cable programming and
    satellite broadcast programming to persons in rural and other areas
    not currently able to receive such programming, and to spur the
    development of communications technologies.[^10] Section 628(b)
    prohibits cable operators and vertically integrated programming
    vendors from engaging in unfair acts or practices, the purpose or
    effect of which is to hinder significantly or to prevent any
    multichannel video programming distributor ("MVPD") from providing
    satellite cable programming or satellite broadcast programming to
    subscribers or consumers.[^11] Section 628(b) applies only to
    satellite programming. Section 628(c) instructs the Commission to
    adopt regulations to prohibit a number of specific practices.[^12]
    For example, Congress absolutely prohibited exclusive contracts
    between vertically integrated programming vendors and cable
    operators in areas unserved by cable,[^13] and generally prohibited
    exclusive contracts within areas served by cable.[^14] The
    prohibition with regard to served areas, Section 628(c)(2)(D),
    states that:

    with respect to distribution to persons in areas served by a cable
    operator, \[the Commission shall\] prohibit exclusive contracts for
    satellite cable programming or satellite broadcast programming
    between a cable operator and a satellite cable programming vendor in
    which a cable operator has an attributable interest or a satellite
    broadcast programming vendor in which a cable operator has an
    attributable interest, unless the Commission determines . . . that
    such contract is in the public interest.[^15]

4.  Congress recognized, however, in areas served by cable, that some
    exclusive contracts between vertically integrated programming
    vendors and cable operators may serve the public interest by
    providing countervailing benefits to the programming market or to
    the development of competition among distributors.[^16] In
    determining whether an exclusive contract is in the public interest,
    Congress instructed the Commission to consider each of the following
    factors:

> \(i\) The effect of such exclusive contract on the development of
> competition in the local and national multichannel video programming
> distribution markets;
>
> \(ii\) The effect of such exclusive contract on competition from
> multichannel video programming distribution technologies other than
> cable;
>
> \(iii\) The effect of such exclusive contract on the attraction of
> capital investment in the production and distribution of new satellite
> cable programming;
>
> \(iv\) The effect of such exclusive contract on diversity of
> programming in the multichannel video programming distribution market;
> and

\(v\) The duration of the exclusive contract.[^17]

Any party seeking to enforce or enter into an exclusive contract in an
area served by a cable operator must submit a petition for exclusivity
to the Commission for approval.[^18]

5.  The prohibition contained in Section 628(c)(2)(D) sunsets on October
    5, 2002 unless the Commission determines that the prohibition
    continues to be necessary. Section 628(c)(5) of the Communications
    Act provides that:

> The prohibition required by paragraph (2)(D) shall cease to be
> effective 10 years after the date of enactment of this section, unless
> the Commission finds, in a proceeding conducted during the last year
> of such 10-year period, that such prohibition continues to be
> necessary to preserve and protect competition and diversity in the
> distribution of video programming.[^19]

The restrictions on exclusive contracts for this ten-year period were
intended to foster development of emerging competitors to cable,
allowing a transition to a competitive market for the distribution of
programming.[^20]

#  DISCUSSION AND Notice OF PROPOSED RULEMAKING

6.  There are a variety of possible exclusive dealing arrangements. This
    proceeding is concerned with the type of arrangement in which a
    seller provides access to a good or service to one buyer or a group
    of buyers to the exclusion of other interested buyers.[^21] By its
    nature, exclusivity forecloses other buyers from obtaining the
    relevant good or service for the term of the agreement.[^22] Such
    exclusive dealing arrangements may serve legitimate business
    interests or they may be used to foreclose competitive entry or to
    stifle competitive development. Exclusive agreements may have an
    anti-competitive impact when competitors are foreclosed from such a
    large percentage of the market that they cannot compete
    effectively.[^23] In the multichannel video programming marketplace,
    the anti-competitive potential of exclusive arrangements may be
    compounded to the extent that vertical integration exists between
    cable operators and programming producers.[^24]

7.  Congress intended the program access rules to address a competitive
    imbalance involving access to programming between incumbent cable
    operators and new entrants. Congress enacted the prohibition on
    exclusivity in Section 628(c)(2)(D) as one measure to address this
    imbalance. In so doing, however, Congress envisioned a time in which
    that remedial measure would be unnecessary. Thus, in Section
    628(c)(5), Congress directed the Commission to reexamine the need
    for Section 628(c)(2)(D) after ten years. To this end, we seek
    comment on the following issues.

8.  We seek comment on whether Section 628(c)(2)(D) of the
    Communications Act should be retained or whether the provision
    should cease to be effective pursuant to the sunset provision
    contained in Section 628(c)(5).[^25] We ask whether the prohibition
    against exclusive contracts has been effective during the period of
    its existence as a deterrent to anticompetitive behavior and whether
    it has a continuing role in preventing such behavior. Although
    Congress and the Commission have recognized the benefits of
    exclusivity in certain circumstances, the 1992 Cable Act placed a
    higher value on new competitive entry than on the continuation of
    exclusive distribution practices that may impede that entry.[^26] In
    this regard, we note that in 1992, cable operators served 95.5% of
    all MVPD subscribers.[^27] Currently, cable operators serve 80% of
    MVPD subscribers.[^28] We ask what effect Section 628(c)(2)(D) has
    had on the development of competition generally in local and
    national markets and on competition from alternate technologies. We
    seek comment on the general state of competition among MVPD
    operators and, in particular, on the extent to which DBS operators
    impose effective competition on cable operators and the extent to
    which the exclusivity provision impacts this. We also seek comment
    on whether distortions in the marketplace may have developed because
    of the exclusivity prohibition. In this regard, we seek comment on
    whether more affiliations between cable operators and programmers
    would have developed in the absence of the exclusivity prohibition,
    or whether the prohibition had any other negative impact on the
    development of new cable programming networks. We seek comment on
    any other specific developments that have occurred over the last
    decade in the marketplace for multichannel video programming that
    might render the assumptions underlying Section 628(c)(2)(D) no
    longer valid. In the alternative, we seek comment on developments
    over the last decade that impart continuing relevance to the
    prohibition on exclusivity. We request that commenters provide
    specific information on all programming services (both vertically
    integrated and non-vertically integrated, both satellite and
    terrestrially delivered) which are currently sold on an exclusive
    basis, as well as the number of subscribers subject to those
    exclusive arrangements.

9.  The nearly ten-year period during which Section 628(c)(2)(D) has
    been in effect has been a period of consolidation and clustering in
    the cable industry. We seek comment on what impact exclusivity has
    had on trends within the industry. We seek comment on the degree, if
    any, that clustering and the continuing consolidation within the
    communications industry should inform our decision with regard to
    the sunset of the exclusivity prohibition. In this regard, we note
    that the Commission recently has initiated a proceeding to resolve
    the remand of our horizontal ownership rules by the United States
    Court of Appeals for the District of Columbia Circuit.[^29] That
    proceeding will directly address the effect of consolidation and
    vertical integration on the market for video programming production
    and packaging. We seek comment on the impact, if any, that this
    pending proceeding should have on our decision regarding the
    possible sunset of Section 628(c)(2)(D).

10. We also seek comment on the potential beneficial effects of
    exclusivity in the multichannel video programming marketplace. We
    seek comment on whether and how exclusivity has been significant in
    the development, promotion and launch of new programming services.
    We note that DIRECTV's exclusive arrangement with the National
    Football League to make available to subscribers a substantial
    package of NFL games each Sunday has been credited with attracting
    significant numbers of subscribers to DIRECTV's service. We ask how
    important exclusivity has been to the launch of local origination
    programming that may have a more limited geographic appeal. We seek
    comment on whether exclusivity has acted as an investment incentive,
    such that without the incentive the programming service would not be
    launched or become viable. We also ask whether a continued
    prohibition on exclusivity will chill future investments in new
    programming. In addition, we seek comment on whether the existing
    public interest waiver provision set forth in Section 628(c)(4)
    would sufficiently protect instances of beneficial exclusivity
    should the Commission retain the prohibition on exclusivity.

11. We seek comment on what impact the prohibition on exclusivity has
    had on diversity in programming. We ask if the prohibition on
    exclusivity has helped to increase diversity by providing additional
    news, public affairs, informational and children's programming. In
    the alternative, we seek comment on whether the restriction in
    Section 628(c)(2)(D) has impeded programming diversity. We generally
    seek comment on how diversity of programming will be affected if the
    prohibition on exclusivity sunsets.

12. The program access requirements of Section 628 have at their heart
    the objective of making available programming to the existing or
    potential competitors of traditional cable systems so that the
    public may benefit from the development of competitive programming
    distributors.[^30] In this regard, we note that Section 628(c)(5)
    permits the sunset only of the exclusivity prohibition of Section
    628(c)(2)(D) while preserving the overall structure of program
    access and Section 628. We ask how the remaining program access
    provisions will function should the exclusivity prohibition sunset
    and we seek comment on whether the statute will continue to serve
    the purpose for which it was intended.

13. Section 628(c)(2)(C) of the Communications Act prohibits all
    "practices, understandings, arrangements and activities, including
    exclusive contracts" that prevent an MVPD from obtaining vertically
    integrated programming "for distribution to persons in areas
    ***not*** served by a cable operator as of the date of enactment" of
    the 1992 Cable Act (October 5, 1992).[^31] Section 628(c)(2)(C) is
    not subject to potential sunset. By contrast, the prohibition on
    exclusive arrangements of Section 628(c)(2)(D) applies to "areas
    served by a cable operator" and is subject to the sunset provision
    of Section 628(c)(5).[^32] We seek comment on the relationship
    between Section 628(c)(2)(D) and Section 628(c)(2)(C). What impact,
    if any, would the sunset of Section 628(c)(2)(D) have on the
    prohibition set forth in Section 628(c)(2)(C)? Specifically, if the
    prohibition in Section 628(c)(2)(D) were to sunset, would the
    prohibition in Section 628(c)(2)(C) continue to bar exclusive
    agreements in areas that were not served by a cable operator before
    October 5, 1992, but in which cable service has commenced in the
    intervening period? Would such areas be regarded as "areas served by
    a cable operator" under Section 628(c)(2)(D), or would such areas
    continue to be regarded as unserved under Section 628(c)(2)(C)? We
    also seek comment as to how many areas are actually affected by the
    prohibition contained in Section 628(c)(2)(C). We also ask what
    impact has the prohibition contained in Section 628(c)(2)(C) had on
    increasing the availability of satellite cable programming and
    satellite broadcast programming to persons in rural areas?[^33]

14. We also seek comment on whether the Commission should consider an
    approach that narrows the scope of, rather than completely
    eliminates, the exclusivity restriction. The Commission has
    recognized that certain programming services may be more essential
    than others to the viability and success of competing program
    distributors.[^34] Given the proliferation of new programming and
    competing programming services, we seek comment on the extent to
    which this assumption still holds true. To the extent the assumption
    remains valid, we seek comment on whether, and in what manner, the
    prohibition on exclusivity could be limited to cover only essential
    programming services. To what extent would tailoring the rules based
    on the success or popularity of particular services raise First
    Amendment concerns? We also seek comment on any other potential
    alternative approaches. For example, should the limitation of
    exclusivity be tied to the specific geographic or competitive
    circumstances of the area in question? Should the exclusivity
    restriction continue to be applied when the programming service in
    question is vertically integrated with cable television systems in
    some locations but is not vertically integrated with those in the
    area where exclusivity might be sought? Should the restriction
    continue in areas in which the level of MVPD competition reaches a
    certain level? In the latter example, we seek comment on whether the
    prohibition should be lifted as to all MVPD competitors or solely
    for MVPDs of sufficient competitive presence. We seek comment on the
    statutory basis for any of these approaches and what standards and
    analysis the Commission could use to define and implement any such
    approach.

15. If Section 628(c)(2)(D) is retained, we seek comment on future
    procedures necessarily related to the retention of Section
    628(c)(2)(D). We seek comment on whether the provision should be
    retained in perpetuity or for a fixed period of years. If retained
    for a fixed period of years, what is the appropriate period? We note
    that on January 1, 2006, the existing prohibition on exclusive
    retransmission consent agreements between television broadcast
    stations and MVPDs expires.[^35] We seek comment on whether the
    provision, if retained pursuant to this proceeding, should
    automatically sunset at the end of that further period, or whether
    the Commission should undertake the same analysis required by
    Section 628(c)(5) to determine at that time the continuing value of
    and need for Section 628(c)(2)(D). We also seek comment on whether
    Section 628(c)(2)(D) should be eliminated depending on certain
    triggering events, such as a significant change in market
    conditions. Finally, we seek comment on any other issues appropriate
    to our inquiry in accordance with Section 628(c)(5).

# ADMINISTRATIVE MATTERS

**A. INITIAL REGULATORY FLEXIBILITY ACT STATEMENT**

16. The initial regulatory flexibility analysis is attached to this
    Notice as Appendix A.

    **B. INITIAL PAPERWORK REDUCTION ACT OF 1995 ANALYSIS**

17. This NPRM contains either a proposed or modified information
    collection. As part of its continuing effort to reduce paperwork
    burdens, we invite the general public and the Office of Management
    and Budget (OMB) to take this opportunity to comment on the
    information collections contained in this NPRM, as required by the
    Paperwork Reduction Act of 1995, Public Law 104-13. Public and
    agency comments are due at the same time as other comments on this
    NPRM; OMB comments are due 60 days from date of publication of this
    NPRM in the Federal Register. 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.

# c. Procedural provisions {#c.-procedural-provisions .unnumbered}

18. *Comments and Reply Comments.* Pursuant to applicable procedures set
    forth in Sections 1.415 and 1.419 of the Commission\'s rules,[^36]
    interested parties may file comments on or before December 3, 2001
    and reply comments on or before January 7, 2002. Comments may be
    filed using the Commission\'s Electronic Comment Filing System
    (ECFS) or by filing paper copies.[^37] 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. If multiple docket or
    rulemaking numbers appear in the caption of this proceeding,
    however, commenters must transmit one electronic copy of the
    comments to each docket or rulemaking number referenced in the
    caption. In completing the transmittal screen, commenters should
    include their full name, 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.

19. Written comments by the public on the proposed and/or modified
    information collections are due December 3, 2001. Written comments
    must be submitted by the Office of Management and Budget (OMB) on
    the proposed and/or modified information collections on or before
    \[60 days after date of publication in the Federal Register\]. In
    addition to filing comments with the Secretary, a copy of any
    comments on the information collection(s) contained herein should be
    submitted to Judy Boley, Federal Communications Commission, Room
    1-C804, 445 12th Street, SW, Washington, DC 20554, or via the
    Internet to jboley@fcc.gov and to Edward Springer, OMB Desk Officer,
    Room 10236 NEOB, 725 17th Street, N.W., Washington, DC 20503 or via
    the Internet to <edward.springer@omb.eop.gov>.

20. Parties who choose to file by paper must file an original and four
    copies of each filing. If participants want each Commissioner to
    receive a personal copy of their comments, an original plus nine
    copies must be filed. If more than one docket or rulemaking number
    appears in the caption of this proceeding commenters must submit two
    additional copies for each additional docket or rulemaking number.
    All filings must be sent to the Commission\'s Secretary, Magalie
    Roman Salas, Office of the Secretary, Federal Communications
    Commission, 445 12th Street, S.W., Washington D.C. 20554. The Cable
    Services Bureau contact for this proceeding is Karen A. Kosar
    at (202) 418-7200, TTY (202) 418-7172, or at kkosar@fcc.gov.

21. Comments and reply comments will be available for public inspection
    during regular business hours in the FCC Reference Center, Federal
    Communications Commission, 445 12th Street, SW, CY-A257, Washington,
    DC 20554. Persons with disabilities who need assistance in the FCC
    Reference Center may contact Bill Cline at (202) 418-0270, TTY (202)
    418-2555, or bcline@fcc.gov. Comments and reply comments are
    available electronically in ASCII text, Word 97, and Adobe Acrobat.

22. This document is available in alternative formats (computer
    diskette, large print, audio cassette, and Braille). Persons who
    need documents in such formats may contact Brian Millin at (202)
    418-7426, TTY (202) 418-7365, or bmillin@fcc.gov.

23. *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.[^38] 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 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.[^39]
    Additional rules pertaining to oral and written presentations are
    set forth in Section 1.1206(b) of the Commission's rules.

#  Ordering Clauses

24. Accordingly, **IT IS ORDERED** that, pursuant to the authority
    contained in Sections 4(i), 303 and 628 of the Communications Act of
    1934, as amended, 47 U.S.C. §§ 154(i), 303 and 548, **NOTICE IS
    HEREBY GIVEN** of the proposals described in this Notice of Proposed
    Rulemaking.

25. **IT IS FURTHER ORDERED** that the Commission's Consumer Information
    Bureau, Reference Information Center, shall send a copy of this
    Notice of Proposed Rulemaking, including the Initial Regulatory
    Flexibility Analysis, to the Chief Counsel for Advocacy of the Small
    Business Administration.

FEDERAL COMMUNICATIONS COMMISSION

Magalie Roman Salas

Secretary

**Appendix A**

**Initial Regulatory Flexibility Act Analysis**

1.  As required by the Regulatory Flexibility Act of 1980, as amended,
    (\"RFA\"),[^40] the Commission has prepared this Initial Regulatory
    Flexibility Analysis (\"IRFA\") of the possible significant economic
    impact on small entities by the policies and rules referenced in
    this *Notice*. Written public comments are requested on this IRFA.
    Comments must be identified as responses to this IRFA and must be
    filed by the deadlines for comments in the *Notice* provided in
    para. 18. The Commission will send a copy of the *Notice*, including
    this IRFA, to the Chief Counsel for Advocacy of the Small Business
    Administration.[^41] In addition, the IRFA (or summaries thereof)
    will be published in the Federal Register.[^42]

##  Need for, and Objectives of, the Proposed Regulatory Approaches

2\. The purpose of Section 628 of the Communications Act is to promote
the public interest, convenience, and necessity by increasing
competition and diversity in the multichannel video market, to increase
the availability of satellite cable programming and satellite broadcast
programming to persons in rural and other areas not currently able to
receive such programming, and to spur the development of communications
technologies. Specifically, this proceeding involves Section
628(c)(2)(D), which prohibits, in areas served by a cable operator,
exclusive contracts for satellite cable programming or satellite
broadcast programming between vertically integrated programming vendors
and cable operators unless the Commission determines that such
exclusivity is in the public interest. The exclusivity prohibition set
forth in Section 628(c)(2)(D) ceases to be effective after a 10-year
period ending October 5, 2002. Section 628(c)(5) of the Communications
Act requires that restrictions on exclusive contracts, within areas
served by cable, are to sunset unless the Commission finds, in a
proceeding conducted during the last year of such 10-year period, that
such prohibition continues to be necessary to preserve and protect
competition and diversity in the distribution of video programming.
Pursuant to this statutory mandate and by this Notice of Proposed
Rulemaking, we seek comment on whether Section 628(c)(2)(D) should be
retained or eliminated.

## Legal Basis

3\. The authority for the action proposed in this rulemaking is
contained in Section 4(i), 303 and 628 of the Communications Act of
1934, as amended, 47 U.S.C. §§ 154(i), 303 and 548.

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

4\. 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.[^43] The RFA defines the term \"small
entity\" as having the same meaning as the terms \"small business,\"
\"small organization,\" and \"small governmental jurisdiction.[^44] In
addition, the term "small business" has the same meaning as the term
"small business concern" under the Small Business Act.[^45] 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\").[^46]

5\. SBA has developed a definition of small entities for cable and other
pay television services, which includes all such companies generating
\$11 million or less in annual receipts.[^47] This definition includes
cable system operators, closed circuit television services, direct
broadcast satellite services, multipoint distribution systems, satellite
master antenna systems and subscription television services. According
to the Census Bureau data from 1992, there were 1,758 total cable and
other pay television services and 1,423 had less than \$11 million in
revenue.[^48] We address below each service individually to provide a
more precise estimate of small entities.

6\. *Cable Systems*. The Commission has developed, with SBA\'s approval,
our own definition of a small cable system operator for the purposes of
rate regulation. Under the Commission\'s rules, a \"small cable
company\" is one serving fewer than 400,000 subscribers nationwide.[^49]
We last estimated that there were 1,439 cable operators that qualified
as small cable companies.[^50] Since then, some of those companies may
have grown to serve over 400,000 subscribers, and others may have been
involved in transactions that caused them to be combined with other
cable operators. Consequently, we estimate that there are fewer than
1,439 small entity cable system operators that may be affected by the
decisions and rules proposed in this *Notice*.

7\. The Communications Act also contains a definition of a small cable
system operator, which is \"a cable operator that, directly or through
an affiliate, serves in the aggregate fewer than 1% of all subscribers
in the United States and is not affiliated with any entity or entities
whose gross annual revenues in the aggregate exceed
\$250,000,000.\"[^51] The Commission has determined that there are
67,700,000 subscribers in the United States.[^52] Therefore, an operator
serving fewer than 677,000 subscribers shall be deemed a small operator,
if its annual revenues, when combined with the total annual revenues of
all of its affiliates, do not exceed \$250 million in the
aggregate.[^53] Based on available data, we find that the number of
cable operators serving 677,000 subscribers or less totals approximately
1450.[^54] Although it seems certain that some of these cable system
operators are affiliated with entities whose gross annual revenues
exceed \$250,000,000, we are unable at this time to estimate with
greater precision the number of cable system operators that would
qualify as small cable operators under the definition in the
Communications Act.

8\. *Open Video Systems:* Because OVS operators provide subscription
services,[^55] OVS falls within the SBA-recognized definition of "Cable
and Other Pay Television Services."[^56] This definition provides that a
small entity is one with \$11 million or less in annual receipts.[^57]
The Commission has certified approximately 25 OVS operators to serve 75
areas, and some of those are currently providing service.[^58]
Affiliates of Residential Communications Network, Inc. ("RCN") received
approval to operate OVS systems in New York City, Boston, Washington,
D.C. and other areas. RCN has sufficient revenues to assure us that they
do not qualify as small business entities. Little financial information
is available for the other entities authorized to provide OVS that are
not yet operational. Given that other entities have been authorized to
provide OVS service but have not yet begun to generate revenues, we
conclude that at least some of the OVS operators qualify as small
entities.[^59]

9\. *Program Producers and Distributors:* The Commission has not
developed a definition of small entities applicable to producers or
distributors of cable television programs. Therefore, we will use the
SBA classifications of Motion Picture and Video Tape Production (NAICS
Code 51211),[^60] Motion Picture and Video Tape Distribution (NAICS Code
42199),[^61] and Theatrical Producers (Except Motion Pictures) and
Miscellaneous Theatrical Services (NAICS Codes 56131, 71111, 71141,
561599, 71151, 71112, 71132, 51229, 53249).[^62] These SBA definitions
provide that a small entity in the cable television programming industry
is an entity with \$21.5 million or less in annual receipts for NAICS
Codes 51211, 42199 and 51212, and \$5 million or less in annual receipts
for NAICS Codes 56131, 71111, 71141, 561599, 71151, 71112, 51229, and
53249.[^63] Census Bureau data indicate the following: (a) there were
7,265 firms in the United States classified as Motion Picture and Video
Production (NAICS Code 51211), and that 6,987 of these firms had
\$16.999 million or less in annual receipts and 7,002 of these firms had
\$24.999 million or less in annual receipts;[^64] (b) there were 1,139
firms classified as Motion Picture and Video Tape Distribution (NAICS
Codes 42199 and 51212), and 1007 of these firms had \$16.999 million or
less in annual receipts and 1013 of these firms had \$24.999 million or
less in annual receipts; and (c) there were 5,671 firms in the United
States classified as Theatrical Producers and Services (NAICS Codes
56131, 71111, 71141, 561599, 71151, 71121, 51229, and 53249), and 5627
of these firms had \$4.999 million or less in annual receipts.[^65]

10\. Each of these NAICS categories are very broad and include firms
that may be engaged in various industries, including cable programming.
Specific figures are not available regarding how many of these firms
exclusively produce and/or distribute programming for cable television
or how many are independently owned and operated. Thus, we estimate that
our rules may affect approximately 6,987 small entities primarily
engaged in the production and distribution of taped cable television
programs and 5,627 small producers of live programs that may be affected
by the rules adopted in this proceeding.

11\. *Direct Broadcast Satellite Service ("DBS")*: Because DBS provides
subscription services, DBS falls within the SBA-recognized definition of
"Cable and Other Pay Television Services."[^66] This definition provides
that a small entity is one with \$11 million or less in annual
receipts.[^67] There are four licensees of DBS services under Part 100
of the Commission\'s Rules. Three of those licensees are currently
operational. Two of the licensees that are operational have annual
revenues that may be in excess of the threshold for a small
business.[^68] The Commission, however, does not collect annual revenue
data for DBS and, therefore, is unable to ascertain the number of small
DBS licensees that could be impacted by these proposed rules. DBS
service requires a great investment of capital for operation, and we
acknowledge that there are entrants in this field that may not yet have
generated \$11 million in annual receipts, and therefore may be
categorized as a small business, if independently owned and operated.

12\. *Home Satellite Dish Service ("HSD")*: Because HSD provides
subscription services, HSD falls within the SBA-recognized definition of
"Cable and Other Pay Television Services."[^69] This definition provides
that a small entity is one with \$11 million or less in annual
receipts.[^70] The market for HSD service is difficult to quantify.
Indeed, the service itself bears little resemblance to other MVPDs. HSD
owners have access to more than 265 channels of programming placed on
C‑band satellites by programmers for receipt and distribution by MVPDs,
of which 115 channels are scrambled and approximately 150 are
unscrambled.[^71] HSD owners can watch unscrambled channels without
paying a subscription fee. To receive scrambled channels, however, an
HSD owner must purchase an integrated receiver‑decoder from an equipment
dealer and pay a subscription fee to an HSD programming package. Thus,
HSD users include: (1) viewers who subscribe to a packaged programming
service, which affords them access to most of the same programming
provided to subscribers of other MVPDs; (2) viewers who receive only
non‑subscription programming; and (3) viewers who receive satellite
programming services illegally without subscribing. Because scrambled
packages of programming are most specifically intended for retail
consumers, these are the services most relevant to this discussion.[^72]

13\. According to the most recently available information, there are
approximately four program packagers nationwide offering packages of
scrambled programming to retail consumers.[^73] These program packagers
provide subscriptions to approximately 1,476,700 subscribers
nationwide.[^74] This is an average of about 370,000 subscribers per
program package. This is smaller than the 400,000 subscribers used in
the commission\'s definition of a small MSO. Furthermore, because this
is an average, it is likely that some program packagers may be
substantially smaller.

14\. *Multipoint Distribution Service ("MDS"), Multichannel Multipoint
Distribution Service ("MMDS") and Local Multipoint Distribution Service
("LMDS"):* MMDS systems, often referred to as "wireless cable," transmit
video programming to subscribers using the microwave frequencies of the
Multipoint Distribution Service ("MDS") and Instructional Television
Fixed Service ("ITFS").[^75] LMDS is a fixed broadband
point-to-multipoint microwave service that provides for two-way video
telecommunications.[^76]

15\. In connection with the 1996 MDS auction, the Commission defined
small businesses as entities that had annual average gross revenues of
less than \$40 million in the previous three calendar years.[^77] This
definition of a small entity in the context of MDS auctions has been
approved by the SBA.[^78] The MDS auctions resulted in 67 successful
bidders obtaining licensing opportunities for 493 Basic Trading Areas
("BTAs"). Of the 67 auction winners, 61 met the definition of a small
business. MDS also includes licensees of stations authorized prior to
the auction. As noted, the SBA has developed a definition of small
entities for pay television services, which includes all such companies
generating \$11 million or less in annual receipts.[^79] This definition
includes multipoint distribution services, and thus applies to MDS
licensees and wireless cable operators that did not participate in the
MDS auction. Information available to us indicates that there are
approximately 850 of these licensees and operators that do not generate
revenue in excess of \$11 million annually. Therefore, for purposes of
the IRFA, we find there are approximately 850 small MDS providers as
defined by the SBA and the Commission's auction rules.

16 The SBA definition of small entities for pay television services,
which includes such companies generating \$11 million in annual
receipts, appears applicable to ITFS.[^80] There are presently 2,032
ITFS licensees. All but 100 of these licenses are held by educational
institutions. Educational institutions are included in the definition of
a small business.[^81] However, we do not collect annual revenue data
for ITFS licensees, and are not able to ascertain how many of the 100
non-educational licensees would be categorized as small under the SBA
definition. Thus, we tentatively conclude that at least 1,932 licensees
are small businesses.

17\. Additionally, the auction of the 1,030 LMDS licenses began on
February 18, 1998 and closed on March 25, 1998. The Commission defined
"small entity" for LMDS licenses as an entity that has average gross
revenues of less than \$40 million in the three previous calendar
years.[^82] An additional classification for "very small business" was
added and is defined as an entity that, together with its affiliates,
has average gross revenues of not more than \$15 million for the
preceding calendar years.[^83] These regulations defining "small entity"
in the context of LMDS auctions have been approved by the SBA.[^84]
There were 93 winning bidders that qualified as small entities in the
LMDS auctions. A total of 93 small and very small business bidders won
approximately 277 A Block licenses and 387 B Block licenses. On March
27, 1999, the Commission re-auctioned 161 licenses; there were 40
winning bidders. Based on this information, we conclude that the number
of small LMDS licenses will include the 93 winning bidders in the first
auction and the 40 winning bidders in the re-auction, for a total of 133
small entity LMDS providers as defined by the SBA and the Commission's
auction rules.

18\. In sum, there are approximately a total of 2,000 MDS/MMDS/LMDS
stations currently licensed. Of the approximate total of 2,000 stations,
we estimate that there are 1,595 MDS/MMDS/LMDS providers that are small
businesses as deemed by the SBA and the Commission's auction rules.

19\. *Satellite Master Antenna Television (\"SMATV\") Systems.* The SBA
definition of small entities for "Cable and Other Pay Television
Services" specifically includes SMATV services and, thus, small entities
are defined as all such companies generating \$11 million or less in
annual receipts.[^85] Industry sources estimate that approximately 5,200
SMATV operators were providing service as of December 1995.[^86] Other
estimates indicate that SMATV operators serve approximately 1.5 million
residential subscribers as of June 2000.[^87] The best available
estimates indicate that the largest SMATV operators serve between 15,000
and 55,000 subscribers each. Most SMATV operators serve approximately
3,000-4,000 customers. Because these operators are not rate regulated,
they are not required to file financial data with the Commission.
Furthermore, we are not aware of any privately published financial
information regarding these operators. Based on the estimated number of
operators and the estimated number of units served by the largest ten
SMATVs, we believe that a substantial number of SMATV operators qualify
as small entities.

## Description of Projected Reporting, Recordkeeping and other Compliance Requirements

20\. The *Notice* seeks comment on the sunset of Section 628(c)(2)(D) of
the Communications Act. The *Notice* does not propose any specific
reporting, recordkeeping or other compliance requirements.

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

21\. The RFA requires an agency to describe any significant alternatives
that it has considered in proposing regulatory approaches, which may
include the following four alternatives: (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. The NPRM
seeks comment on whether Section 628(c)(2)(D) should cease to be
effective, pursuant to the sunset provision in Section 628(c)(5), or
whether Section 628(c)(2)(D) should be retained. Thus, the NPRM invites
comments on a number of issues that may significantly impact small
entities. Specifically, the NPRM seeks comment in para. 8 on the effect,
if any, Section 628(c)(2)D) has had on competition in local and national
markets. The NPRM also seeks comment in para. 9 on the degree to which,
if at all, clustering and the continuing consolidation within the
communications industry should inform the Commission's decision on the
possible sunset of the exclusivity prohibition. In para. 10, the NPRM
seeks comment on the effects of exclusivity in the multichannel video
programming marketplace. In para. 11, the NPRM seeks comment on the
impact the prohibition on exclusivity has had on diversity of
programming. In para. 12, the NPRM seeks comment on how the program
access provisions would function should the exclusivity prohibition
sunset. In para.13, the NPRM seeks comment relationship of Section
628(c)(2)(D) and Section 628(c)(2)(C) of the Act, which affects areas
not served by a cable operator. In para. 14, the NPRM seeks comment on
how the proliferation of new programming services impacts assumptions
with regard to exclusivity. If Section 628(c)(2)(D) is retained, the
NPRM seeks comment in para. 15 on future procedures necessarily related
to the retention of Section 628(c)(2)(D).

## Federal Rules Which Duplicate, Overlap, or Conflict with the Commission's Proposals 

22\. There are no federal rules that specifically duplicate, overlap or
conflict with the Commission's inquiry with regard to Section
628(c)(2)(D).

## Report to Congress

23\. The Commission will send a copy of the *Notice*, including this
IRFA, in a report to be sent to Congress pursuant to the Small Business
Regulatory Enforcement Fairness Act of 1996.[^88] In addition, the
Commission will send a copy of the *Notice*, including IRFA, to the
Chief Counsel for Advocacy of the Small Business Administration. A copy
of the *Notice* and IRFA (or summaries thereof) will also be published
in the Federal Register.[^89]

[^1]: 47 U.S.C. § 548(c)(5).

[^2]: 47 U.S.C. § 548(c)(2)(D).

[^3]: Cable Television Consumer Protection and Competition Act of 1992,
    Pub. L. No. 102-385, 106 Stat. 1460 (1992).

[^4]: 1992 Cable Act, § 2(a)(4); House Comm. on Energy and Commerce,
    House Rep. No. 102-268, 102d Cong., 2d Sess. (1992) ("House Report")
    at 42.

[^5]: 1992 Cable Act, § 2(a)(5); Senate Comm. on Commerce, Science, and
    Transportation, S. Rep. 102-92, 102d Cong., 1^st^ Sess. (1991)
    ("Senate Report") at 25-26.

[^6]: *Implementation of Sections 12 and 19 of the Cable Television
    Protection and Competition Act of 1992: Development of Competition
    and Diversity in Video Programming Distribution and Carriage*, First
    Report and Order, 8 FCC Rcd 3359, 3366 (1993).

[^7]: *Id.*

[^8]: *Id.*

[^9]: *First Report and Order*, 8 FCC Rcd 3359 (1993), *recon.,* 10 FCC
    Rcd 1902 (1994), *further recon.,* 10 FCC Rcd 3105 (1994). In
    *Implementation of the Cable Television Consumer Protection and
    Competition Act of 1992: Petition for Rulemaking of Ameritech New
    Media, Inc. Regarding Development of Competition and Diversity in
    Video Programming Distribution and Carriage*, 13 FCC Rcd 15822
    (1998), the Commission amended the program access rules.

[^10]: 47 U.S.C. § 548(a).

[^11]: 47 U.S.C. § 548(b).

[^12]: 47 U.S.C. § 548(c).

[^13]: 47 U.S.C. § 548(c)(2)(C).

[^14]: 47 U.S.C. § 548(c)(2)(D).

[^15]: 47 U.S.C. § 548(c)(2)(D); 47 C.F.R. § 76.1002(c)(2).

[^16]: 47 U.S.C. § 548(c)(2)(4).

[^17]:
    > 47 U.S.C. § 548(c)(4); 47 C.F.R. § 76.1002(c)(4); *see e.g., New
    > England Cable News*, 9 FCC Rcd 3231 (1994) (finding public
    > interest factors favored limited 7 year period of exclusivity for
    > startup regional news programmer); *Time Warner Cable*, 9 FCC Rcd
    > 3221 (1994) (finding public interest factors did not favor
    > requested 15 year exclusivity request related to established
    > national programmer, Court TV).

[^18]: *See* 47 C.F.R. § 76.1002(c)(5).

[^19]: 47 U.S.C. § 548(c)(5); *see also* 47 C.F.R. § 76.1002(c)(6). The
    prohibition on exclusive contracts shall cease to be effective on
    October 5, 2002 unless the Commission determines otherwise.

[^20]: *See First Report and Order*, 8 FCC Rcd at 3376, 3378; *see also*
    *Time Warner Cable*, 9 FCC Rcd at 3225 and *New England Cable News*
    at 3234.

[^21]: ABA Antitrust Section, Antitrust Law Developments (3d. ed. 1993)
    at 196.

[^22]: *Id.*

[^23]: *See, e.g.,* *U.S. Healthcare v. Healthsource*, 986 F.2d at 589,
    595 (1^st^ Cir. 1993). There is an extensive line of case law and
    economic analysis concerning the permissibility of exclusive dealing
    arrangements in the motion picture entertainment field. *See, e.g.,
    U.S. v. Paramount,* 334 U.S. 131 (1948); *U.S. v. Griffith,* 334
    U.S. 100 (1948); *Schine Chain Theatres v. U.S.,* 334 U.S. 110
    (1948).

[^24]: *See First Report and Order*, 8 FCC Rcd at 3366.

[^25]: We also note that in the *Annual Assessment of the Status of
    Competition in the Market for the Delivery of Video Programming,*
    Notice of Inquiry, CS Docket No. 01-129, FCC 01-191 (rel. June 25,
    2001), the Commission sought comment on the sunset of Section
    628(c)(2)(D). We received comments on this issue from Carolina
    Broadband, Comcast Corporation, DirecTV, Inc., EchoStar Satellite
    Corporation, the National Cable & Telecommunications Association
    ("NCTA"), the National Rural Telecommunications Cooperative
    ("NRTC"), RCN Corporation, the Satellite Broadcasting and
    Communications Association ("SBCA"), and the Wireless Communications
    Association International ("WCA"). To the extent they address the
    subject matter of our inquiry herein, we incorporate these comments
    into the record of this proceeding.

[^26]: *See First Report and Order,* 8 FCC Rcd at 3384.

[^27]: *See Implementation of Section 19 of the 1992 Cable Act (Annual
    Assessment of the Status of Competition in the Market for the
    Delivery of Video Programming*, Seventh Annual Report, 16 FCC Rcd
    6005 at Appendix C, Table C-1 (2001).

[^28]: *Id.*

[^29]: *See Implementation of Section 11 of the Cable Television
    Consumer Protection and Competition Act of 1992; Implementation of
    Cable Act Reform Provisions of the Telecommunications Act of 1996:
    The Commission's Cable Horizontal and Vertical Ownership Limits and
    Attribution Rules*, Further Notice of Proposed Rulemaking, FCC
    01-263 (rel. Sept. 21, 2001); *Time Warner Entertainment Co. v.
    FCC*, 240 F.3d 1126 (D.C. Cir. 2001).

[^30]: *First Report and Order,* 8 FCC Rcd at 3365.

[^31]: 47 U.S.C. § 548(c)(2)(C); *see* 47 C.F.R. § 76.1002(c)(1)
    (emphasis added).

[^32]: 47 U.S.C. § 548(c)(2)(D); *see* 47 C.F.R. § 76.1002(c)(2).

[^33]: *See* 47 U.S.C. § 548(a).

[^34]: *Competition, Rate Deregulation and the Commission's Policies
    Relating to the Provision of Cable Television Service*, 5 FCC Rcd
    4962, 5027 (1990).

[^35]: 47 U.S.C. § 325(b)(3)(C)(2).

[^36]: 47 C.F.R. §§ 1.415 and 1.419.

[^37]: *See Electronic Filing of Documents in Rulemaking Proceedings,*
    63 Fed. Reg. 24121 (1998).

[^38]: 47 C.F.R. § 1.1206(b).

[^39]: *See* 47 C.F.R. § 1.1206(b)(2).

[^40]: *See* 5 U.S.C. §603. The RFA has been amended by the *Contract
    With America Advancement Act of 1996*, Pub. L. No. 104-121, 110
    Stat. 847 (1996) (CWAAA). *See* 5 U.S.C. §601 et. seq. Title II of
    the CWAAA is the *Small Business Regulatory Enforcement Fairness Act
    of 1996* ("SBREFA").

[^41]: *See* 5 U.S.C. §603(a).

[^42]: *Id.*

[^43]: 5 U.S.C. §603(b)(3).

[^44]: 5 U.S.C. §601(6).

[^45]: 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."

[^46]: 15 U.S.C. §632.

[^47]: 13 C.F.R. §121.201 (SIC 4841).

[^48]: *See U.S. Department of Commerce, Bureau of the Census, Industry
    and Enterprise Receipts Size Report,* Table 2D, SIC 4841 (Bureau of
    the Census data under contract to the Office of Advocacy of the
    SBA).

[^49]: 47 C.F.R. §76.901(e). The Commission developed this definition
    based on its determinations that a small cable system operator is
    one with annual revenues of \$100 million or less. *Sixth Report and
    Order and Eleventh Order on Reconsideration*, MM Doc. Nos. 92-266
    and 93-215, 10 FCC Rcd 7393 (1995).

[^50]: Paul Kagan Associates, Inc., Cable TV Investor, Feb. 29, 1996
    (based on figures for Dec. 30, 1995).

[^51]: 47 U.S.C. §543(m)(2).

[^52]: *See FCC Announces New Subscriber Count for the Definition of
    Small Cable Operator,* Public Notice DA 01-158 (January 24, 2001).

[^53]: 47 C.F.R. §76.1403(b).

[^54]: Paul Kagan Associates, Inc., Cable TV Investor, Feb. 29, 1996
    (based on figures for Dec. 30, 1995).

[^55]: *See* 47 U.S.C. § 573.

[^56]: 13 C.F.R. § 121.201, NAICS Codes 51321 and 51322.

[^57]: *Id.*

[^58]: *See* http://www.fcc.gov/csb/ovs/csovscer.html.

[^59]: 13 C.F.R. § 121.201, NAICS Codes 51321 and 51322.

[^60]: Establishments primarily engaged in the production of theatrical
    and nontheatrical motion pictures and video tapes for exhibition or
    sale, including educational, industrial, and religious films.
    Included in the industry are establishments engaged in both
    production and distribution. Such producers of live radio and
    television programs are classified in NAICS Code 51211.

[^61]: Such establishments primarily engaged in the distribution (rental
    or sale) of theatrical and nontheatrical motion picture films or in
    the distribution of video tapes and disks, except to the general
    public. Motion pictures and video tape distribution are classified
    in NAICS Codes 42199 and 51212.

[^62]: Such establishments primarily engaged in providing live
    theatrical presentations, such as road companies and summer
    theaters, including producers of live television programs. Such
    producers of live theatrical presentation are classified in NAICS
    Codes 56131, 71111, 71141, 561599, 71151, 71112, 71132, 51229, and
    53249.

[^63]: 13 C.F.R. § 121.201, NAICS Codes 51321 and 51322.

[^64]: U.S. Small Business Administration 1992 Economic Census Industry
    and Enterprise Report, Table 2D, SIC 7812, (U.S. Bureau of the
    Census data adapted by the Office of Advocacy of the U.S. Small
    Business Administration) (\"*SBA 1992 Census Report*\"). Because the
    Census data do not include a category for \$21.5 million, we have
    reported the closest increment below and above the \$21.5 million
    threshold. There is a difference of 15 firms between the \$16,999
    and \$24,999 million annual receipt categories. It is possible that
    these 15 firms could have annual receipts of \$21.5 million or less
    and would therefore be classified as small businesses.

[^65]: NAICS Codes 56131, 71111, 71141, 561599, 71151, 71121, 51229, and
    53249.

[^66]: 13 C.F.R. § 121.201, NAICS Codes 51321 and 51322.

[^67]: *Id.*

[^68]: *Id*.

[^69]: 13 C.F.F. § 121.201, NAICS Codes 51321 and 51322.

[^70]: *Id.*

[^71]: Annual Assessment of the Status of Competition in Markets for the
    Delivery of Video Programming, Third Annual Report, CS Docket No.
    96-133, 12 FCC Rcd 4358, 4385 (1996) ("*Third Annual Report").*

[^72]: *Id.* at 4385.

[^73]: *Id.*

[^74]: *See Seventh Annual Report,* 16 FCC Rcd at 6110 Table C-1 (2001).

[^75]: *Amendment of Parts 21 and 74 of the Commission's Rules with
    Regard to Filing Procedures in the Multipoint Distribution Service
    and in the Instructional Television Fixed Service and Implementation
    of Section 309(j) of the Communications Act -- Competitive Bidding*,
    MM Docket No. 94-131 and PP Docket No. 93-253, Report and Order, 10
    FCC Rcd at 9589, 9593 ¶ 7 (1995).

[^76]: *See Local Multipoint Distribution Service,* Second Report and
    Order, 12 FCC Rcd 12545 (1997).

[^77]: 47 C.F.R. § 21.961(b)(1).

[^78]: *See Amendment of Parts 21 and 74 of the Commission's Rules With
    Regard to Filing Procedures in the Multipoint Distribution Service
    and in the Instructional Television fixed Service and Implementation
    of Section 309(j) of the Communications Act -- Competitive Bidding*,
    MM Docket No. 94-131 and PP Docket No. 93-253, Report and Order, 10
    FCC Rcd 9589 (1995).

[^79]: 13 C.F.R. § 121.201, NAICS Codes 52321 and 52322.

[^80]: 13 C.F.R. § 121.201.

[^81]: SBREFA also applies to nonprofit organizations and governmental
    organizations such as cities, counties, towns, townships, villages,
    school districts, or special districts, with populations of less
    than 50,000. 5 U.S.C. § 601(5).

[^82]: *See Local Multipoint Distribution Service,* Second Report and
    Order, 12 FCC Rcd 12545 (1997).

[^83]: *Id.*

[^84]: *See* Letter to Daniel Phythyon, Chief, Wireless
    Telecommunications Bureau (FCC) from A. Alvarez, Administrator, SBA
    (January 6, 1998).

[^85]: 13 C.F.R. § 121.201.

[^86]: *See Third Annual Report*, 12 FCC Rcd at 4403-4.

[^87]: *See Seventh Annual Report*, 16 FCC Rcd at 6048.

[^88]: *See* 5 U.S.C. §801(a)(1)(A).

[^89]: *See* 5 U.S.C. §604(b).