**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

In the Matter of )

)

1998 Biennial Regulatory Review\-- ) CS Docket No. 98-61

)

\"Annual Report of Cable Television )

Systems,\" Form 325, filed pursuant to )

Section 76.403 of the Commission\'s Rules )

**REPORT AND ORDER**

**Adopted: February 1, 1999 Released: March 31, 1999**

By the Commission: Commissioners Furchtgott-Roth and Powell dissenting
and issuing separate

statements.

**I. INTRODUCTION**

1\. In this *Report and Order* (\"*Order*\") we revise and streamline
the Form 325, \"Annual Report of Cable Television Systems,\"[^1] which
is provided for in Section 76.403 of the Commission\'s rules.[^2] Form
325 solicits basic operational information from all cable television
systems nationwide, including: the operator\'s name and address;
system-wide capacity and frequency information; channel usage; and
number of subscribers.[^3]

2\. In *1998 Biennial Regulatory Review \-- \"Annual Report of Cable
Television Systems,\" Form 325, filed pursuant to Section 76.403 of the
Commission\'s Rules, Notice of Proposed Rulemaking* (\"*Notice*\"),[^4]
we sought comment on whether to modify or eliminate the requirement that
all cable systems annually file Form 325. We issued the *Notice* in
connection with Section 11 of the 1996 Telecommunications Act which
instructs the Commission \"to conduct a biennial review of regulations
that apply to operations and activities of any provider of
telecommunications service and to repeal or modify any regulation it
determines to be no longer in the public interest.\"[^5] Although
Section 11 does not specifically refer to cable operators, the
Commission has determined that it is in the public interest to review
and streamline the cable television rules in the spirit of Section
11.[^6] In this regard, we assess the relevance of Form 325 for the
purposes of our policymaking and enforcement activities. We conclude
that it is possible to significantly streamline the existing information
collection process in ways that will both reduce the administrative
burden placed upon both the cable industry and the Commission, and yet
will permit the Commission to meet its responsibilities in regulating
the cable television industry.

**II. BACKGROUND**

3\. Form 325 serves as the Commission\'s basic annual reporting
requirement for the cable television industry. The form was first
developed for use in 1966[^7] and was subsequently adopted as an annual
filing requirement in 1971.[^8] The form was intended to provide the
Commission with information that would be of value in the development of
policies and rules applicable to the cable television industry.[^9] In
addition, Form 325 has been used by the Commission to obtain
subscribership data from which to calculate or review cable operators\'
annual federal regulatory fee payments[^10] and to assist in the
Commission\'s signal leakage and interference elimination program by
collecting information on the frequencies used within systems.[^11]

4\. In the *Notice*, we explained that the processing and compilation of
Form 325 data has been a labor intensive process for the
Commission.[^12] In addition, we were concerned that the filing of the
form not be burdensome to the cable industry. Consequently, we
questioned the form\'s overall utility given the resources necessary to
maintain its collection. In the past, in accordance with Section 76.403
of the Commission\'s rules,[^13] Form 325 was mailed to every cable
system in the country \-- at present nearly 11,000 systems. Information
collected by the form was then entered into the Commission\'s computer
database by the staff. In order to reduce the filing burden on cable
operators and to increase the accuracy of the database, preprinted forms
reflecting the information collected from the previous year\'s filing
were sent to system operators. The system operator was then only
required to correct information that had changed since the last filing.
Although this process was intended to ease the burden on system
operators and to be administratively efficient, its review proved to be
labor intensive for the Commission because the returned forms, many of
which were deficient in some manner, had to be reviewed on an individual
basis for accuracy by the staff before being entered into the
database.[^14] Because of the pressing demands of rate regulation and
the implementation of the Telecommunications Act of 1996, Commission
resources were deployed to focus on those areas and it became
increasingly difficult to complete the data input process. Thus, Form
325 has not been mailed out since 1994.

**III. DISCUSSION**

5\. In response to the *Notice* in this proceeding we received 4
comments and 3 reply comments. Comments supporting the retention of the
current Form 325 were filed by two parties: the Institute for Public
Representation, *et. al.* (\"IPR\")[^15] and the National Association of
Broadcasters (\"NAB\"). Comments advocating the elimination of Form 325
were filed by the National Cable Television Association (\"NCTA\"),
Ameritech New Media, Inc. (\"Ameritech\"), and Adelphia Communications
Corporation, *et. al.* (\"Adelphia\").[^16] In arguing for the
elimination of Form 325, commenters contend that the form serves no
identifiable regulatory or policy purpose.[^17] Commenters further claim
that the Form 325 process imposes a significant burden on the cable
industry.[^18]

6\. NCTA describes the form as a \"relic of a bygone era.\"[^19]
Ameritech argues that the form has outlived its usefulness and asserts
that the collection process is \"a classic example of a regulatory
requirement in search of a reason.\"[^20] NCTA and other commenters
argue that the initial purpose for which the form was developed \-- to
provide the Commission with basic information on the cable industry that
would be valuable in the development of regulations and policies \--
largely has been served as the Commission has created a viable
regulatory structure for the cable industry.[^21] With respect to
individual system waiver and enforcement proceedings, NCTA notes that
the use of Form 325 data is not necessary because relevant information
may be obtained directly from the parties involved in such
proceedings.[^22] Thus, commenters argue that it is inefficient to
collect information from every cable system in the country in order to
resolve waiver and enforcement cases that affect only some systems.[^23]

7\. Some commenters also believe that the information contained in the
form is available from alternative sources.[^24] NCTA asserts that
Warren Publishing, Inc. (\"Warren\"), the publisher of the *Television &
Cable Factbook*, collects cable system-specific data and includes in its
publications much of the same information that is contained in Form
325.[^25] NCTA notes that Warren also has an online database that
contains system-specific information which is updated on a continuing
basis.[^26] NCTA claims that Warren\'s materials, not the Commission\'s
Form 325 data, are relied upon by businesses and researchers for
system-specific information about the cable industry.[^27] NCTA and
Adelphia state that A.C. Nielsen also collects information required by
Form 325.[^28] IPR and NAB, who support the retention of the reporting
requirement, argue that information compiled by commercial sources may
not be as accurate and reliable as data provided directly by cable
operators.[^29]

8\. NCTA and Adelphia also contend that information contained in Form
325 duplicates information that is available through other governmental
filings.[^30] Adelphia states, for example, that Form 325 data is
available through filings made pursuant to other Commission rules as
well as filings made with the Securities and Exchange Commission.[^31]
NCTA asserts that every cable system is required to file with the
Copyright Office, on a semi-annual basis, information concerning the
total number of activated channels as well as the number of activated
channels on which the cable system carries television broadcast
stations.[^32] Moreover, the Commission has ample authority to require
parties to provide information when needed for specific purposes.[^33]
Thus, in the event that both governmental and commercial sources fail to
provide the necessary information or the information proves to be
unreliable, the Commission, it is argued, can always seek the
information on an as needed basis.[^34]

9\. In arguing for the retention of Form 325, IPR contends that
information contained in the form is critical to the Commission\'s
assessment of cable operators\' compliance with horizontal integration,
must-carry, and leased access rules.[^35] Specifically, IPR asserts that
without reliable information on leased access usage, the Commission
cannot assess the efficacy of its leased access rules.[^36] IPR further
argues that the public plays a significant role in monitoring the cable
industry and that the Commission\'s collection of relevant industry data
is important to that role.[^37] In response to IPR\'s claims that Form
325 is critical to the Commission\'s regulatory oversight, Adelphia
states that the form \"does not provide *any* information which would
enable even the most experienced regulator to determine whether a
particular cable system was in compliance with the rather detailed and
fact specific application of those \[leased access, must carry, and
horizontal ownership\] rules.\"[^38]

10\. NAB believes that the continued collection of Form 325 may be
necessary to ensure the availability of critical cable information for
purposes of the upcoming digital television (\"DTV\") must carry
proceeding.[^39] However, NAB states that its concerns over the form
will be allayed so long as the Commission is satisfied that adequate,
accurate, and up-to-date information on specific cable system capacity
and channel usage will be available to the Commission and to private
parties for purposes of that proceeding.[^40] NAB argues that
information about cable usage and capacity will be vital to the
Commission\'s decision-making process as well as to the comments
provided by the parties involved in the DTV must carry rulemaking.[^41]
NAB is concerned that A.C. Nielsen does not elicit specific information
on physical channel capacity, such as cable system capacity in megahertz
and systems\' compression of signals, which will be important in
determining cable capacity to carry DTV signals.[^42] IPR also asserts
that the Commission is statutorily obligated to collect Form 325 data
from cable operators under Section 628(g) of the Communications Act of
1934, as amended. This Section requires the Commission to report
annually to Congress on the status of competition in the market for the
delivery of video programming.[^43]

11\. As explained more fully below, we seek in this proceeding to strike
a balance to reduce the burdens placed upon the industry and on
Commission resources in the Form 325 information collection process
while still retaining access to core information that is needed by the
Commission in order to perform its regulatory functions. We believe
these objectives can best be achieved by drastically reducing the
universe of system operators required to file the Form 325 while, at the
same time, modifying and clarifying the form so that the information
obtained from those operators reporting can be filed by them and
utilized by the Commission with minimal burden. As explained below, we
believe there is sufficient value in the information collected, with
appropriate modifications and deletions, that the information collection
process should not be altogether eliminated.

12\. We believe that sufficient information could be collected to
monitor the cable industry by sending out approximately 1,100 forms, an
overall reduction of over 9,000 forms. This amount of forms will
substantially reduce the burden on the cable industry without
undermining the form\'s utility. By sending out forms to the
approximately 700 systems with 20,000 or more subscribers, we will be
able to gather information covering 70 percent of America\'s cable
subscribers. With regard to cable systems with less than 20,000
subscribers, approximately 9,800 cable systems,[^44] we believe that a
mandatory requirement to have all of these systems file Form 325 would
be costly and burdensome for the industry as well as for the Commission.
A less costly and less burdensome approach to gather information about
cable systems with less than 20,000 subscribers would be to adopt a
sampling methodology.[^45] Sampling is a way of providing accurate
information while at the same time reducing the burden of compliance for
the industry and processing costs for the Commission. In this regard,
the Commission has chosen to use a stratified sampling technique to
collect the required information from systems serving less than 20,000
subscribers.[^46] We believe that the information collected based on
this sampling of subscribers, along with the information gathered from
100% of systems with over 20,000 subscribers, will provide the
Commission with an adequate profile of how cable systems operate today
and how they impact the general population.

13\. Moreover, we believe the burden on those filing information will
not be onerous. The burden on these systems will be substantially
reduced because the modified form will collect information on a
system-wide basis rather than on a community-by-community basis which
was done by the old form. This alone will substantially reduce the
burden on many operators who may serve ten or more communities on one
system.[^47] Additionally, the modified form will be reduced in size
with many questions on the old form being deleted. We anticipate that in
the future this information will be filed electronically, but we will
retain the paper filing requirement until the electronic filing system
is developed. We are also eliminating the process whereby pre-printed
forms containing information previously filed at the Commission are sent
out for correction each year.[^48] Although this method of data
collection was designed to make the process more efficient for both the
Commission and filing parties, in practice, it has not proven to be of
assistance and has in fact tended to impede the entire process. We will,
however, be investigating methods to reduce the burden on those filing
the form. We may consider using our internet web site to distribute the
form. This may prove to be a more efficient and convenient method of
distribution of the form for cable operators and will reduce the
administrative burden on the Commission.

14\. In making our decision to retain a streamlined information
collection process, we have carefully reviewed the arguments of those
who contend that the information collected is available from other
governmental or nongovernmental sources, or that the information
collected is not needed for legitimate regulatory purposes. We are not
persuaded, however, that either of these arguments is correct. With
respect to the question of whether this information is available from
other sources, we are well aware that there are commercial resources
available that contain considerable amounts of information regarding the
cable industry. The Commission has relied on such alternative sources in
the past, including, for example, in connection with its *Annual
Assessment of the Status of Competition in Markets for the Delivery of
Video Programming* (\"*Cable Competition Report*\").[^49] The
information collected by these alternative sources, however, does not
specifically answer the questions to be posed by Form 325 (e.g., digital
capacity, leased access, must carry and retransmission consent). Nor is
there any assurance that the questions that are asked by the commercial
entities collecting information are answered consistently or that the
information provided is current. We note, for example, a recent filing
in a rulemaking proceeding by a cable system operator that refers to the
data contained in the *Television Factbook* as being, in some instances,
\"years old\" so that the operator had to limit its analysis to only
those systems reporting more recently.[^50]

15\. Further, in making policy decisions in matters relating to such
issues as digital television broadcast signal carriage, having available
current and accurate information collected with only minimal cost and
burden will be of considerable importance to the Commission. Although we
appreciate the suggestion that such information could be collected more
efficiently on an *ad hoc* basis, there are considerable delays
associated with such a process and the information is likely to be
needed on an ongoing basis for a variety of policy issues.

16\. Moreover, we believe that the streamlining and modification of the
form we adopt today will greatly increase its relevance in these
transitional times while at the same time dramatically reducing the
burden it imposes. In order to improve the overall usefulness of the
form and its data, we have made a number of modifications to the form
itself and its accompanying instructions. Our initiative accomplishes a
number of goals, including soliciting information most directly
responsive to our regulatory needs, removing certain ambiguities in the
instructions, and modifying or eliminating outdated questions. We
believe that the information collected in the form is needed for current
legitimate regulatory purposes, as well as for future regulatory
purposes. The Form 325 modifications will assist us in collecting
information regarding the conversion of cable service from the analog to
the digital medium as well as information regarding the cable
industries\' provision of advanced services. The information collected
in this regard will allow the Commission to monitor the scope of the
conversion process and ensure that the American public is well served.

17\. The current four part Form 325 will be replaced with a streamlined,
user-friendly Form 325 containing a reduced number of questions. In
addition, information, as noted above, will no longer be collected on
both a Community Unit Identification Number (\"CUID\") basis and a
Physical System Identification Number (\"PSID\") basis, but will be
collected solely on a PSID basis. This method of reporting information
on a system basis will eliminate a previously cumbersome and excessively
detailed procedure designed to elicit information regarding cable
operators and the communities they serve on an individual community unit
basis. We also modify Section 76.615 of the Commission\'s rules which
requires cable operators to notify the Commission annually of all
signals carried in the aeronautical radio frequency bands, a requirement
previously fulfilled by the filing of a Form 325.[^51] Since all cable
operators will no longer be required to file Form 325, this requirement
will now be satisfied by a cable operator filing Commission Form 320,
\"Basic Signal Leakage Performance Report.\"[^52]

18\. The following modifications will be made to the revised Form 325:
(See Appendix A).

**General Information**

19\. In this portion of the form, we will solicit information from cable
operators regarding the number of subscribers served by their systems as
well as the number of potential subscribers (homes passed) that cable
operators can access from their systems. This will provide the
Commission with general information about the size of systems and
structural changes that are taking place such as consolidation and
clustering. We will also seek information regarding miles of cable plant
and how much of the plant is devoted to coaxial cable or fiber optic
cable, including the number and average nodal sizes in terms of
subscribers served. Additionally, we will also ask whether the cable
system uses microwave facilities as part of its cable plant.

20\. In order to better assess the technical capabilities of cable
systems and the future of the industry, we are interested in
ascertaining general information regarding the provision of digital
services. In that regard, the form will ask for information such as:
number of cable modems deployed and the number of cable modem
subscribers; number of subscribers requiring set-top boxes and the
number of set-top boxes in inventory and deployed \--
analog/digital/hybrid \-- and total amount of analog spectrum versus
digital spectrum. This information will enable the Commission to analyze
cable operators\' technical capabilities and the systems\' technical
potential for offering sophisticated services, including cable modem, IP
telephony, and internet services as well as general telephony. This will
aid the Commission in evaluating how, where, and how soon advanced
digital services can be introduced.

**Frequency and Signal Distribution Information:**

21\. In this part of the form, we will seek information pertaining to
areas such as transmitted spectrum and channel capacity. Specifically,
we will solicit information regarding upstream channel usage (i.e.,
two-way capability) in order to ascertain the capabilities of cable
operators to transmit information from their subscribers\' premises back
to the cable headend. We will also seek information regarding downstream
channel usage in order to ascertain the total number of video channels,
both analog and digital, capable of being carried on a system, including
the number of digital channels per 6 MHz of spectrum. Of that number, we
will ask for information regarding the total number of channels,
including all non-video channels, activated and delivered on the system.
We will also ask operators to provide information about aggregate totals
for addressable converters, modems deployed, and the number of telephony
subscribers that use their systems. We will also continue to require
operators to submit their channel lineups. We will ask operators to
identify which channels are devoted to leased access, government access,
public and educational access, and which stations are carried pursuant
to must carry or retransmission consent provisions. We will also ask
operators to provide information regarding the number of tiers carried
on their systems and how many channels may be carried on each of those
tiers.

22\. We believe that the information solicited in this section of the
form will enable us to assess industry compliance with our rules and to
monitor industry trends in various regulated areas. For instance, in
light of the statutory requirements set forth in Section 612 of the
Communications Act of 1934, as amended, the Commission has an obligation
to set and monitor the rules for the price, terms and conditions of
leased access use pursuant to Congressional direction to promote
competition and diversity in the video marketplace consistent with the
growth and development of cable systems.[^53] Because the number of
leased access channels being used by leased access programmers on a
cable system is not available from commercial sources, we believe that
our ability to have access to this information as reported on the Form
325 will be useful in monitoring leased access use by the industry and
will assist us in soliciting general information, if deemed necessary,
from those cable operators we know to be utilizing leased access
channels. [^54] Similarly, in order to determine the impact of our must
carry and retransmission consent rules and for purposes of future
policymaking, it would be helpful for cable operators to identify which
local broadcast channels are carried under our must carry rules versus
retransmission consent. Moreover, by requiring cable operators to
identify what kind of programming is carried on which tiers, we will be
able to determine how many, and what kind of service options are
provided to subscribers.

23\. The modifications to the Form 325 and its collection process will
accomplish the goals of reducing the administrative burdens imposed upon
both the cable industry and the Commission, while still allowing the
Commission access to a consolidated source of information that will
serve to better assist it in regulating the cable television industry.
The modified form, by providing consistent, industry-wide data, will
also assist the Commission in preparing its annual cable competition
report. By changing the universe of cable systems reporting to systems
with more than 20,000 subscribers, in addition to a sampling of cable
systems with less than 20,000 subscribers, we will drastically reduce
the number of Form 325 filings made at the Commission from nearly 11,000
to approximately 1,100. However, we believe that the information
collected from this group of systems will give us an accurate picture of
the entire cable industry at large. We also believe that the new Form
325 will still provide a mechanism that will enable the Commission to
oversee and audit overall compliance with its regulatory fee
requirements. In this regard, we note that systems serving more than 70%
of the nation\'s cable subscribers will be reporting information. In
addition, the revised form, while limited in scope and distribution,
will nevertheless allow the Commission to monitor the vast changes which
are occurring in the cable industry.

24\. Moreover, the burden imposed upon those operators subject to the
filing requirement is reduced because only a limited amount of
information will be required to be reported and the information will be
collected on a system-wide basis rather than on a community-by-community
basis. In the past, the collection of data on a community basis proved
to be a difficult and time consuming task for the operator because of
the sheer volume of communities served by individual cable systems.
Thus, while the administrative burdens imposed on the industry and the
Commission will be significantly reduced, we believe that the new and
improved form will prove useful to the Commission in its enforcement and
policymaking functions.

**IV. REGULATORY FLEXIBILITY ANALYSIS**

25\. The regulatory flexibility analysis is attached to this Order as
Appendix B.

**V. PAPERWORK REDUCTION ACT OF 1995 ANALYSIS**

26\. The requirements adopted in this Report and Order have been
analyzed with respect to the Paperwork Reduction Act of 1995 (the \"1995
Act\") and found to contain new or modified information collection
requirements on the public. The Commission, as part of its continuing
effort to reduce paperwork burdens, invites the general public and the
Office of Management and Budget (\"OMB\") to take this opportunity to
comment on the information collection requirements contained in this
Order, as required by the 1995 Act. Public comments are due 30 days from
date of publication of this Order in the Federal Register; OMB comments
are due 60 days from date of publication of this Order in the Federal
Register. Comments should address: (a) whether the 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.

27\. Written comments by the public on the new or modified information
collection requirements are due 30 days after date of publication of
this Order in the Federal Register. Written comments by OMB on the new
or modified information collection requirements are due 60 days after
date of publication of this Order in the Federal Register. Comments on
the information collection requirements contained herein should be
submitted to Judy Boley, Federal Communications Commission, Room 1-C804,
445 12th Street, S.W., Washington, DC 20554, or via the Internet to
jboley@fcc.gov and to Timothy Fain, OMB Desk Officer, 10236 NEOB, 725 -
17th Street, N.W., Washington, DC 20503 or via the Internet to
fain_t@al.eop.gov.

**VI. PROCEDURAL PROVISIONS**

28\. Effective Date. Upon approval by the Office of Management and
Budget (\"OMB\"), the rules adopted in this Report and Order shall
become effective. The Commission will publish a notice in the Federal
Register announcing the effective date.

**VII. ORDERING CLAUSES**

29\. **IT IS ORDERED** that, pursuant to authority found in Sections
4(i), 303(r) and 628 of the Communications Act of 1934, as amended, 47
U.S.C. §§ 154(i), 303(r) and 548 that Section 76.403 of the
Commission\'s rules, 47 C.F.R. § 76.403, **IS AMENDED** as set forth in
Appendix C. In view of our action today which limits the number of cable
operators filing Form 325, we also modify Section 76.615 of the
Commission\'s rules, 47 C.F.R. § 76.615. Section 76.615 requires cable
operators to notify the Commission annually of all signals carried in
the aeronautical radio frequency bands and was a requirement previously
fulfilled by the filing of a Form 325. Since all cable operators will no
longer be required to file Form 325, the Section 76.615 requirement will
now be satisfied by a cable operator filing Commission Form 320.

30\. **IT IS FURTHER ORDERED** that the rules as amended in Appendix C
shall become effective 30 days after publication in the Federal
Register. The information collections contained in these rules shall
become effective 70 days after publication in the Federal Register,
following OMB approval, unless a notice is published in the Federal
Register stating otherwise.

31\. **IT IS FURTHER ORDERED** that the Commission\'s Office of Public
Affairs, Reference Operations Division, shall send a copy of this
*Report and Order*, including the Final Regulatory Flexibility Analysis,
to the Chief Counsel for Advocacy of the Small Business Administration
in accordance with paragraph 603(a) of the Regulatory Flexibility Act,
Pub. L. No. 96-354, 94 Stat. 1164, 5 U.S.C. §§ 601 *et seq*. (1981).

FEDERAL COMMUNICATIONS COMMISSION

Magalie Roman Salas

Secretary

**APPENDIX A - FORM 325 (NOT YET APPROVED BY OMB).**

**APPENDIX B**

**FINAL REGULATORY FLEXIBILITY ANALYSIS**

A. Background

1\. As required by the Regulatory Flexibility Act (RFA),[^55] an Initial
Regulatory Flexibility Analysis (\"IRFA\") was incorporated into the
Notice of Proposed Rule Making (\"NPRM\") in this proceeding.[^56] The
Commission sought written public comment on the possible impact of the
proposed policies and rules on small entities in the NPRM, including
comments on the IRFA. This Final Regulatory Flexibility Analysis
(\"FRFA\") in this Report and Order (\"Order\") conforms to the
RFA.[^57]

B. Need for Action and Objectives of the Rules

2\. Section 11 of the 1996 Telecommunications Act requires the
Commission to conduct a biennial review of regulations that apply to
operations and activities of any provider of telecommunications service
and to repeal or modify any regulation it determines to be no longer in
the public interest.[^58] Although Section 11 does not specifically
refer to cable operators, the Commission has determined that the first
biennial review presents an excellent opportunity for a thorough
examination of all of the Commission\'s regulations.

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

3\. While no commenter has specifically responded to the IRFA, several
commenters allege that the current requirement to file a Form 325 is
unnecessarily burdensome. Commenters generally contend that the current
Form 325 has out lived its usefulness and the information contained
therein is available from other sources.

D. Description and Estimate of the Number of Small Entities to Which the
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 might
be affected by the rules here adopted. The RFA defines the term \"small
entity\" as having the same meaning as the terms \"small business,\"
\"small organization,\" and \"small governmental jurisdiction.\"[^59] In
addition, the term \"small business\" has the same meaning as the term
\"small business concern\" under the Small Business Act.[^60] Under the
Small Business Act, a small business concern is one which: (a) is
independently owned and operated; (b) is not dominant in its field of
operation; and (c) satisfies any additional criteria established by the
SBA.[^61] The rule implementing a streamlined Form 325 that we adopt in
this Report and Order will only affect cable systems.

5\. SBA Definitions for Cable. The 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.[^62] According to the Census Bureau data from 1992, there were
approximately 1,758 cable systems with less than \$11 million in
revenue.[^63]

6\. Additional Cable System Definitions: In addition, 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 no more
than 400,000 subscribers nationwide.[^64] Based on recent information,
we estimate that there were 1439 cable operators that qualified as small
cable companies at the end of 1995.[^65] 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.

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.\"[^66] The Commission has determined that there are
61,700,000 cable subscribers in the United States. Therefore, we found
that an operator serving fewer than 617,000 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.[^67] Based on available data, we find that the number of
cable operators serving 617,000 subscribers or less totals 1450.[^68]
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.

Description of Reporting, Record keeping and Other Compliance
Requirements

8\. This analysis examines the costs and administrative burdens
associated with our rules and requirements. The rule we adopt today
significantly reduces the burden on the cable industry. The rule
requires that all cable systems having 20,000 or more subscribers, and a
sampling of cable operators having less than 20,000 subscribers, must
file a streamlined Form 325. This will result in reducing the filing
burden from nearly 11,000 to approximately 1,100 forms filed by cable
operators. In addition the form itself has been modified to be less
burdensome. We estimate that it will take operators approximately 2
hours to fill out each newly revised Form 325. No other compliance
requirements are imposed.

F. Steps Taken to Minimize Significant Economic Impact On Small Entities
and Significant Alternatives Considered

9\. We believe that our amended rule will alleviate Form 325 filings for
some small cable operators under the SBA\'s definition of small
businesses. In addition, by our action of streamlining Form 325, the
burden on all cable operators will be substantially reduced.

G. Report to Congress

10\. The Commission will send a copy of the Report and Order, including
this FRFA, in a report to Congress pursuant to the Small Business
Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. § 801(a)(1)(A).
The Report and Order and this FRFA (or summaries thereof) will also be
published in the Federal Register, see 5 U.S.C. § 604(b), and will be
sent to the Chief Counsel for Advocacy of the Small Business
Administration.

**APPENDIX C**

**Rules**

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

**PART 76 \-- MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE**

1\. Section 76.403 is amended to read as follows:

**§76.403 Cable television system reports.**

The operator of every operational cable television system that serves
20,000 or more subscribers shall annually file with the Commission a
Form 325 soliciting general information and frequency and signal
distribution information on a Physical System Identification Number
(\"PSID\") basis.

These forms shall be completed and returned to the Commission within 60
days after the date of receipt by the operator.

NOTE: The Commission retains its authority to require Form 325 to be
filed by a sampling of cable operators with less than 20,000
subscribers.

2\. Section 76.615 is amended to read as follows:

**§76.615 Notification requirements.**

All cable television operators shall comply with each of the following
notification requirements:

\(a\) The operator of the cable system shall notify the Commission
annually of all signals carried in the aeronautical radio frequency
bands, noting the type of information carried by the signal (television
picture, aural, pilot carrier, or system control, etc.) The timely
filing of the FCC Form 320 will meet this requirement.

**Dissenting Statement of Commissioner Harold Furchtgott-Roth**

**1998 Biennial Regulatory Review: \"Annual Report of Cable Television
Systems, Form 325,**

**Filed Pursuant to Section 76.403 of the Commission\'s Rules, CS Docket
No. 98-61**

For the following reasons, I would have eliminated altogether the rule
requiring cable operators to file Form 325.[^69]

*First*, the collection of this information is not statutorily required,
nor does the item identify any specific, statutorily-based purpose for
this information once collected. As I have said in other contexts, we
should not compile data for its own sake. *See 1998 Biennial Regulatory
Review ‑‑ Streamlining of Mass Media Applications, Rules, and Processes;
Policies and Rules Regarding Minority and Female Ownership of Mass Media
Facilities*; MM Docket Nos. 98‑43, 91‑140, 94‑149 (released Dec. 3,
1998). As Commissioner Powell points out, the fact that we have not
collected this information for the last four years undermines the
assertion of actual need for it.

*Second*, any information that we need in order to make regulations
governing cable operators can be obtained in the context of specific
rulemakings. Those interests whose business operations will be affected
by proposed regulations have every incentive to provide the Commission
with information on relevant topics. Moreover, general industry
information can be readily obtained from private groups, such as the
National Cable Television Association, or from industry publications.

*Third*, any rationale for the collection of this information loses
force when the filing requirement is not applied evenly to all cable
operators. The usefulness of information gleaned from only a small
segment of the industry is limited. I also question the fairness of a
sampling system as an alternative, since, at the end of the day,
responding to these inquiries is costly to operators and sampling
imposes those costs on operators on an arbitrary basis.

**DISSENTING STATEMENT OF**

**COMMISSIONER MICHAEL POWELL**

*Re: 1998 Biennial Regulatory Review: \"Annual Report of Cable
Television Systems, Form 325, Filed Pursuant to Section 76.403 of the
Commission\'s Rules, CS Docket No. 98-61*

I respectfully dissent from the Commission's decision not to eliminate
altogether the rule requiring cable operators to file Form 325. Although
the decision purports to revise and streamline the form, I believe that
it would be truer to the deregulatory objectives of the
Telecommunications Act of 1996 to have simply dispensed with the form
altogether. As Commissioner Furchtgott-Roth has noted in his dissent,
there is no statutory requirement that the Commission collect the
information required by this form. Indeed, as the item notes, the
Commission has not collected the information since 1994. *Order,* para.
4. Under these circumstances, I find it hard to accept the assertions of
the order, that there is an actual need for the Commission to reimpose
this regulatory burden on any cable operators.

There is no reason to assume, as this *Order* does, that general
information about cable operators is not available from private sources
or industry groups such as the National Cable Television Association.
Nor is there any reason to assume that private parties will lack the
information they need to file leased access or program access
complaints. Parties have continued to file complaints and the Commission
has acted on them even though it was not collecting Form 325
information. Similarly, the contention of the *Order* that the
information "will also assist the Commission in preparing its annual
cable competition report" rings hollow in light of the fact that the
Commission conducts a separate proceeding to collect information for
that report. This proposition is even more questionable since the
information collected will only be obtained from select cable systems.

In sum, I am not persuaded that there is a need to reimpose the
requirement that cable operators file Form 325, therefore, I
respectfully dissent.

[^1]: FCC Form 325, Annual Report of Cable Television Systems (approved
    by OMB 3060-0061).

[^2]: 47 C.F.R. § 76.403 provides:

    The operator of every operational cable television system shall
    correct and/or furnish information in response to forms,
    encompassing each community unit, mailed to said operator by the
    Commission. These include:

    Community unit data - \"Annual Report of Cable Television System,\"
    Form 325, Schedule 1

    Physical system data - \"Annual Report of Cable Television System,\"
    Form 325, Schedule 2

    Operator ownership data - \"Annual Report of Cable Television
    System,\" Form 325, Schedules 3 and 4

    These forms shall be completed and returned to the Commission within
    60 days after the date of mailing by the Commission.

    NOTE: The operator of a cable television system having fewer than
    1000 subscribers shall only be required to file Schedules 1 and 2 of
    Form 325 for each community unit.

[^3]: The current version of Form 325 is divided into four substantive
    parts. Part 1 requests the operator\'s name, address, and tax
    identification number for each franchised community served by the
    cable system. Part 2 solicits specific information related to each
    franchised community, including the type of area served, population,
    subscribers, potential subscribers, cable plant length, and initial
    date of service. Part 3 requests frequency and signal distribution
    information. Part 4 asks for information regarding local
    programming, ancillary services offered by the system, users (i.e.,
    government, educational, advertisers), and capabilities of the
    system (i.e., public access, leased access).

[^4]: 13 FCC Rcd 12266 (1998) (*\"Notice\"*).

[^5]: Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56
    (1996); 47 U.S.C. § 161.

[^6]: *See* FCC News Release, *1998 Biennial Review Begun Early*
    (November 18, 1997).

[^7]: *In the Matter of: Amendment of Subpart L, Part 91 et al.,*
    *Second Report and Order* in Docket Nos. 14895, 15233, 15971, 2 FCC
    2d 725, 765 (1966).

[^8]: *In the Matter of: Amendment of Part 74, Third Report and Order*
    in Docket 18397, 32 FCC 2d 13 (1971).

[^9]: *Id.*

[^10]: *In the Matter of Assessment and Collection of Regulatory Fees
    for Fiscal Year 1995, Report & Order,* Docket 95-3, 10 FCC Rcd 13512
    (1995). Section 9(a) of the Communications Act of 1934, as amended,
    authorizes the Commission to assess and collect annual regulatory
    fees to recover the costs, as determined annually by Congress, that
    it incurs in carrying out enforcement, policy, rulemaking, and user
    information activities. *See* 47 U.S.C. § 159(a).

[^11]: 47 C.F.R. § 76.615(a). The signal leakage and interference
    elimination program is designed to locate and repair sources of
    cable system signal leakage in order to minimize the potential for
    such leakage to interfere with aeronautical and public safety
    communications.

[^12]: *Notice* at 3.

[^13]: 47 C.F.R. § 76.403.

[^14]: Approximately 40% of the returned forms had some deficiency.

[^15]: IPR filed its comments jointly with the following groups:
    Association of Independent Video and Filmmakers, Center for Media
    Education, Civil Rights Forum, and OMB Watch.

[^16]: Adelphia filed its comments jointly with the following groups:
    Falcon Cable TV, the Pennsylvania Cable & Telecommunications
    Association, and Tele-Media Corporation of Delaware.

[^17]: NCTA Comments at 3; Ameritech Comments at 3; Adelphia Reply
    Comments at 3-5.

[^18]: Ameritech Comments at 2; NCTA Comments at 2.

[^19]: NCTA Comments at 3.

[^20]: Ameritech Comments at 3.

[^21]: NCTA Comments at 3-4; Ameritech Comments at 3.

[^22]: NCTA Comments at 2 and at 4-5. Commenters point out that the
    Commission has ample authority to request or require parties to
    provide information when needed for specific purposes. Ameritech
    Comments at 4; NCTA Comments at 13; NCTA Reply Comments at 3.

[^23]: NCTA Comments at 2; Adelphia Reply at 4.

[^24]: NCTA Comments at 6-10; Adelphia Reply Comments at 3; Ameritech
    Reply Comments at 1.

[^25]: NCTA Comments at 7; Adelphia Reply Comments at 3.

[^26]: NCTA Comments at 7.

[^27]: *Id.*

[^28]: NCTA Comments at 8; Adelphia Reply Comments at 3. NCTA asserts,
    for example, that A.C. Nielsen\'s cable database (known as the Cable
    Online Data Exchange or \"CODE\") provides system-specific
    information including the number of homes passed, channel capacity,
    number of channels in use and is updated quarterly. NCTA Comments at
    8.

[^29]: IPR Comments at 12; NAB Comments at 2 (noting that commercial
    sources rely on voluntarily submitted data).

[^30]: NCTA Reply Comments at 2; Adelphia Reply Comments at 3.

[^31]: Adelphia Reply Comments at 3. Adelphia identifies filings made
    pursuant to 47 C.F.R §§ 76.12, 76.400, 76.612, and 76.615 as
    examples of filings that duplicate information requested by Form
    325. *Id.*

[^32]: NCTA Reply Comments at 2-3 (citing Copyright Office Form SA1-2).

[^33]: Ameritech Comments at 4; NCTA Comments at 13; NCTA Reply Comments
    at 3.

[^34]: NCTA Reply Comments at 3.

[^35]: IPR Comments at ii and 11.

[^36]: IPR Comments at 12.

[^37]: *Id.*

[^38]: Adelphia Reply Comments at 4.

[^39]: NAB Comments at 1-2.

[^40]: *Id.*

[^41]: *Id.*

[^42]: *Id.*

[^43]: Communications Act § 628(g); 47 U.S.C. § 548(g). IPR Comments at
    11.

[^44]: Warren Publishing, Inc., *Television & Cable Factbook,* Services
    Volume No.66, 1998, at I-97.

[^45]: *See, e.g.,* B.J. Mandel, *Statistics for Management,* Dangary
    Publishing Company, 1984, at 174-176 (\"Mandel\"). In summary,
    sampling is used to lower cost, maintain or improve accuracy, and
    improve the feasibility and speed of collecting the information
    desired.

[^46]: Applying standard statistical formula to the 9,800 cable systems
    serving less than 20,000 subscribers results in a sample size of 450
    systems. *See* *Mandel* at 258. These 450 systems are allocated into
    two strata based on system size by subscribers: systems with 5,000
    to 19,999, and systems serving less than 5,000 subscribers. We
    allocate the sample size of 450 to each of these strata according to
    the percentage of subscribers in each strata. Since the systems
    making up the strata serving 5,000 to 19,999 subscribers serve
    approximately 11.8 subscribers or about 62% of cable subscribers
    served by systems with less than 20,000 subscribers, we allocate 62%
    of the sample size (i.e., 62% of 450) to this category. This yields
    a sample size for this category of 279 systems. The second category
    (systems serving less than 4,999 subscribers) contains systems which
    serve approximately 7.3 million subscribers or about 38% of all
    subscribers in both strata. We therefore allocate 38% of the sample
    size, i.e., 171 to this strata.

[^47]: *Cable system or cable television system.* A facility consisting
    of a set of closed transmission paths and associated signal
    generation, reception, and control equipment that is designed to
    provide cable service which includes video programming and which is
    provided to multiple subscribers within a community, but such term
    does not include: (1) A facility that services only to retransmit
    the television signals of one or more television broadcast stations;
    (2) A facility that serves subscribers without using any public
    right-of-way; (3) A facility of a common carrier which is subject,
    in whole or in part, to the provisions of Title II of the
    Communications Act of 1934, as amended . . . ; (4) An open video
    system that complies with Section 653 of the Communications Act; or
    (5) Any facilities of any electric utility used solely for operating
    its electric utility systems. 47 C.F.R § 76.5.

[^48]: At least initially, we will mail out blank forms each year to
    affected cable operators. However, we will continue to examine less
    time consuming methods of distributing the form, such as posting the
    form on the internet.

[^49]: *Fourth Annual Report, Annual Assessment of the Status of
    Competition in Markets for the Delivery of Video Programming*, CS
    Docket No. 97-141, FCC 97-423, rel. Jan. 13, 1998 (\"*Cable
    Competition Report*\"). *See* NCTA Comments at 9; Ameritech Reply
    Comments at 2.

[^50]: Comments of Tele-Communications, Inc., in Docket 92-264 filed
    August 14, 1998, Page A-5, note 2.

[^51]: 47 C.F.R. § 76.615.

[^52]: FCC Form 320, Basic Signal Leakage Performance Report (approved
    by OMB 3060-0433).

[^53]: 47 U.S.C. § 532; *see also* 47 C.F.R. §§ 76.970, 76.971.

[^54]: The Commission\'s 1997 Price Survey provides some information on
    leased access, but only by sampling rather than on a
    system-by-system basis. *Report on Cable Industry Prices,* 12 FCC
    Rcd 22756 (1997). We believe that the new Form 325 will provide a
    more complete picture of leased access use in the cable industry.

[^55]: *See* 5 U.S.C. § 603. The RFA, *see* 5 U.S.C. § 601 *et seq,.*
    has been amended by the Contract With America Advancement Act of
    1996, Pub. L. No. 104-121, 110 Stat. 847 (1996) (\"CWAAA\"). Title
    II of the CWAAA is the Small Business Regulatory Enforcement
    Fairness Act of 1996 (\"SBREFA\").

[^56]: *1998 Biennial Regulatory Review \--Annual Report of Cable
    Television System, Form 325, filed pursuant to Section 76.403 of the
    Commission\'s Rules, 13 FCC Rcd 12266 (1998).*

[^57]: *See* 5 U.S.C. § 604.

[^58]: 47 U.S.C. § 161; News Release, Nov. 18, 1997.

[^59]: 5 U.S.C. § 601(6).

[^60]: 5 U.S.C. § 601(3) (1980) (incorporating by reference the
    definition of \"small business concern\" in 15 U.S.C. § 632).
    Pursuant to 5 U.S.C. § 601(3), the statutory definition of small
    business applies \"unless an agency after consultation with the
    Office of Advocacy of the Small Business Administration and after an
    opportunity for public comment, establishes one or more definitions
    of such term which are appropriate to the activities of the agency
    and publishes such definitions in the Federal Register.\"

[^61]: *Small Business Act*, 15 U.S.C. § 632*.*

[^62]: 13 C.F.R. § 121.201 (SIC 4841).

[^63]: 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).

[^64]: 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. *Implementation
    of Sections of the 1992 Cable Act: Rate Regulation*, *Sixth Report
    and Order and Eleventh Order on Reconsideration*, 10 FCC Rcd 7393
    (1995).

[^65]: Paul Kagan Associates, Inc., *Cable TV Investor*, Feb. 29, 1996
    (based on figures for Dec. 30, 1995).

[^66]: 47 U.S.C. § 543(m)(2).

[^67]: 47 C.F.R. § 76.1403(b) (SIC 4833).

[^68]: Paul Kagan Associates, Inc., *Cable TV Investor*, Feb. 29, 1996
    (based on figures for Dec. 30, 1995).

[^69]: As I have stated in other \"Biennial Review\" items undertaken
    pursuant to section 11(b) of the Communications Act, 47 USC section
    161(b), I do not believe that the 1998 section 11(a) review was as
    thorough as it should have been. *See* *generally* Report on
    Implementation of Section 11 by the Federal Communications
    Commission (Dec. 21, 1998),
    \<www.fcc.gov/commissioners/furchtgott-roth/reports/sect11\>. I look
    forward to working with the Chairman and other Commissioners on the
    2000 Biennial Review, planning for which should begin in mid-1999.