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[Federal Register Volume 69, Number 191 (Monday, October 4, 2004)]
[Rules and Regulations]
[Pages 59500-59536]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-22189]

[[Page 59499]]

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Part V

Federal Communications Commission

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47 CFR Part 15, et al.

Second Periodic Review of the Commission's Rules and Policies Affecting 
the Conversion To Digital Television; Final Rule

Federal Register / Vol. 69, No. 191 / Monday, October 4, 2004 / Rules 
and Regulations

[[Page 59500]]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 15, 27, 73 and 90

[MB Docket No. 03-15; FCC 04-192]

Second Periodic Review of the Commission's Rules and Policies 
Affecting the Conversion To Digital Television

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Commission adopts final rules that 
resolve several issues important to the rapid conversion of the 
nation's broadcast television system from analog to digital television. 
The Order adopts a multi-step channel election and repacking process 
through which broadcast licensees and permittees (``licensees'') will 
select their ultimate DTV channel inside the core. The Order also 
adopts deadlines for replication and maximization; provides for flash 
cut transition for satellite stations; eliminates simulcasting 
requirements; mandates broadcaster use of PSIP; clarifies rules 
concerning closed captioning and v-chip functionalities; amends 
interference protection rules; and permits limited use of distributed 
transmission systems.

DATES: Effective November 3, 2004 except for Sec.  73.1201 which 
contains information collection requirements that are not effective 
until approved by the Office of Management and Budget. The FCC will 
publish a document in the Federal Register announcing the effective 
date for those sections. The incorporation by reference of certain 
publications listed in the regulations is approved by the Director of 
the Federal Register, as of November 3, 2004.

FOR FURTHER INFORMATION CONTACT: Evan Baranoff, [email protected], 
(202) 418-7142. For additional information concerning the Paperwork 
Reduction Act information collection requirements contained in this 
document, contact Leslie Smith, Federal Communications Commission, Room 
1-A804, 445 12th Street, SW., Washington, DC 20554, or via the Internet 
to [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Federal 
Communications Commission's Report and Order FCC 04-192, adopted on 
August 4, 2004 and released on September 7, 2004. The full text of this 
document is available for inspection and copying during normal business 
hours in the FCC Reference Center, 445 12th Street, SW., Washington, DC 
20554. The complete text may be purchased from the Commission's copy 
contractor, Qualex International, 445 12th Street, SW., Room CY-B402, 
Washington, DC 20554. The full text may also be downloaded at: 
www.fcc.gov. Alternative formats are available to persons with 
disabilities by contacting Brian Millin at (202) 418-7426 or TTY (202) 
418-7365 or at [email protected].

Paperwork Reduction Act

    This document contains modified information collection requirements 
subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-
13. It will be submitted to the Office of Management and Budget (OMB) 
for review under section 3507(d) of the PRA. OMB, the general public, 
and other Federal agencies will be invited to comment on the modified 
information collection requirements contained in this proceeding.

Summary of the Report and Order

    1. With this Report and Order in our second periodic review, we 
resolve several issues important to the rapid conversion of the 
nation's broadcast television system from analog to digital television 
(``DTV''). The Commission conducts these periodic reviews of the 
progress of the digital conversion to make any adjustments necessary to 
our rules and policies to ``ensure that the introduction of digital 
television and the recovery of spectrum at the end of the transition 
fully serves the public interest.'' In our first DTV periodic review, 
begun in March 2000, we addressed a number of issues important to the 
transition. In the Notice of Proposed Rulemaking (68 FR 7737, February 
18, 2003) in this second periodic review, we revisited several issues 
addressed in the first periodic review and sought comment on additional 
issues that we consider necessary to resolve in order to ensure 
continued progress on the digital transition. We received numerous 
comments in response to our NPRM.
    2. In this Report and Order, we adopt a multi-step channel election 
and repacking process through which broadcast licensees and permittees 
(``licensees'') will select their ultimate DTV channel inside the core 
(i.e., channels 2-51). The process will start in November 2004 with 
licensees filing certain pre-election certifications. In December 2004, 
licensees currently with an in-core channel (whether one or two) will 
make their channel elections in the first round of elections. Licensees 
currently with only out-of-core channels (i.e., channels 52-69), as 
well as licensees electing to be treated like them, will file elections 
in the second round, expected in July 2005. Licensees without confirmed 
elections from the previous two rounds will file elections in the third 
round, expected in January 2006. In a public notice released August 3, 
2004, the Media Bureau implemented a freeze on the filing of certain TV 
and DTV requests for allotment or service area changes to facilitate 
the channel election and repacking process. The freeze includes 
applications to swap channels, but will not apply to proposals for 
negotiated channel election arrangements submitted as part of the 
channel election process. The freeze is described in section IV. A., 
infra.
    3. We adopt the following replication and maximization protection 
deadlines:
     July 1, 2005--Use-it-or-lose-it deadline for DTV licensees 
affiliated with the top-four networks (i.e., ABC, CBS, Fox and NBC) in 
markets 1-100. Those licensees that receive a tentative DTV channel 
designation in the channel election process on their current digital 
channel must construct full, authorized facilities. Those licensees 
that receive a tentative DTV channel designation on a channel that is 
not their current DTV channel must serve at least 100 percent of the 
number of viewers served by the 1997 facility on which their 
replication coverage was based.
     July 1, 2006--Use-it-or-lose-it deadline for all other 
commercial DTV licensees as well as noncommercial DTV licensees. Those 
licensees that receive a tentative DTV channel designation in the 
channel election process on their current digital channel must 
construct full, authorized DTV facilities. Those licensees that receive 
a tentative DTV channel designation on a channel that is not their 
current DTV channel must serve at least 80 percent of the number of 
viewers served by the 1997 facility on which their replication coverage 
was based.
    4. In evaluating service areas we will consider the population 
served within the geographic area reached by a station's service area 
as defined under Sec.  73.622(d) of the Commission's rules less any 
portions of that area that receive interference from other stations. 
Stations failing to meet the replication/maximization requirements on 
their allotted DTV channels by our deadlines will lose interference 
protection to the unserved portions of their current DTV service areas, 
as well as to the equivalent unserved portion of their NTSC Grade B 
contours for stations using those channels for DTV service after the 
transition occurs. Those

[[Page 59501]]

stations wishing to maximize their service area must meet the above 
requirements in order to ``carry over'' their maximized service area to 
their in-core assignment with a priority over Class A stations. We 
adopt limited exceptions for certain stations with out-of-core DTV 
allotments and satellite stations, both of which may turn in their DTV 
allotments and ``flash cut'' to digital by the end of the transition 
without losing their replication/maximization rights. We do not adopt 
an intermediate signal requirement, but retain the 7 dB increase in the 
principal community signal coverage required by December 31, 2004, for 
commercial stations and December 31, 2005, for noncommercial stations.
    5. In this Report and Order, we also eliminate, for the time being, 
the requirement that broadcasters air on their digital channel the 
programming aired on their analog channel (``simulcasting''). We 
retain, however, the minimum digital operating hours requirement 
currently tied to the simulcast rule. We permit satellite stations to 
surrender their paired DTV channels and flash cut to DTV by the end of 
the transition. We are also reviewing the issues raised in the comments 
concerning the need for point-of-sale labeling for digital and analog 
televisions. We are monitoring retailer and manufacturer efforts to 
improve information provided to consumers and will address this issue 
in a future item. We adopt Program and System Information Protocol 
(``PSIP'') and mandate its use by broadcasters. We also adopt new rules 
and clarify existing rules to support the functioning of closed 
captioning and v-chip on digital televisions. We approve in principle 
the use of distributed transmission system (``DTS'') technologies and 
defer to a separate ``fast track'' proceeding the development of rules 
for DTS operation and the examination of several policy issues related 
to its use.
    6. Finally, we sought comment in the NPRM on how we should 
interpret certain portions of section 309(j)(14) of the Communications 
Act, which requires the Commission to reclaim the 6 MHz each 
broadcaster uses for transmission of analog television service by 
December 31, 2006, unless an extension is granted pursuant to the 
criteria established in section 309(j)(14)(B). Commenters made a number 
of suggestions regarding the interpretation of various aspects of 
section 309(j)(14)(B). We are continuing to review these comments and 
to consider the issues raised in the NPRM regarding section 309(j)(14) 
and plan to address these issues in the near future.

Background

    7. In January 2001, we released the First DTV Periodic Report and 
Order in which we made a number of determinations to further the 
transition. Among other things, we established channel election and 
interference protection deadlines. We also imposed a principal 
community coverage requirement that is stronger than the DTV service 
contour requirement adopted as an initial obligation in the Fifth 
Report and Order. This new principal community coverage requirement, 
which becomes effective December 31, 2004, for commercial stations and 
December 31, 2005, for noncommercial stations, was intended to improve 
the availability of service in the community of license and to prevent 
undue migration of stations from their communities of license.
    8. In the First DTV Periodic MO&O, we revised a number of the 
determinations made in the First DTV Periodic Report and Order. To 
address broadcasters' concerns that they could not meet certain 
requirements in the First DTV Periodic Report and Order, we decided to 
allow stations to construct initial DTV facilities designed to serve at 
least their communities of license, while still retaining for the time 
being DTV interference protection to provide full replication at a 
later date. We did not, however, alter our decision to require stations 
to increase their signal strengths within their communities of license 
beyond those adopted as an initial requirement in the Fifth Report and 
Order. This principal community coverage requirement will become 
effective December 31, 2004, for commercial stations and December 31, 
2005, for noncommercial stations. We also determined that we would 
continue to provide DTV interference protection to the maximized 
service area specified in outstanding DTV construction permits for 
facilities in excess of those specified in the DTV Table of Allotments. 
Television broadcast licensees may seek to expand or shift (also 
referred to as ``maximize'') their DTV allotments by filing 
applications to increase power or change the site or height of their 
antenna in such a way that it increases their DTV service area in one 
or more directions beyond the area resulting from the station's DTV 
allotment parameters. The term maximization can be confusing in that it 
does not necessarily entail enlarging the station's service area. 
Rather, it might more accurately be characterized as alteration of a 
station's previously allotted contour. Given that the term maximization 
is commonly used, however, we will continue to use it here. We 
temporarily deferred the replication protection and channel election 
deadlines established in the First DTV Periodic Report and Order. We 
stated, however, that in the second DTV periodic review we would 
establish a firm date by which broadcasters must either replicate their 
NTSC coverage or lose DTV service protection of the unreplicated areas, 
and by which broadcasters with authorizations for maximized digital 
facilities must either provide service to the coverage area specified 
in their maximization authorizations or lose DTV service protection to 
the uncovered portions of those areas. We also stated that we would 
establish a deadline by which broadcasters with two in-core allotments 
must elect which channel they prefer to use at the end of the 
transition. We stated that these replication, maximization, and channel 
election deadlines may be earlier than, but will in no event be later 
than, the latest of either the end of 2006 or the date by which 85 
percent of the television households in a licensee's market are capable 
of receiving the signals of digital broadcast stations.
    The reduced build-out requirements adopted in the First DTV 
Periodic MO&O allowed broadcasters to save both on construction and 
operating costs. In addition, we allowed DTV stations subject to the 
May 1, 2002, or May 1, 2003, construction deadlines to operate 
initially at a reduced schedule by providing, at a minimum, a digital 
signal during prime time hours, consistent with their simulcast 
obligations. Commencing April 1, 2003, DTV licensees and permittees 
were required to simulcast 50 percent of the video programming of the 
analog channel on the DTV channel. NCE stations were granted a six-
month waiver of the simulcasting requirement, but not the minimum hours 
of operation requirement. This requirement stepped up to a 75 percent 
simulcast requirement in April 2004, and was to increase to a 100 
percent requirement in April 2005. 47 CFR 73.624(f). Stations that were 
subject to the earlier construction deadlines (top four network 
affiliates in the top 30 markets) remained subject to the previous 
rule--i.e., they must operate their DTV station at any time that the 
analog station is operating. For broadcasters unable to complete even 
the minimum permitted facilities by the applicable deadline, however, 
we revised our rules to permit applicants to seek an extension of time 
to construct a digital television station based on financial hardship. 
To qualify

[[Page 59502]]

for an extension of time to construct a digital television facility 
under the financial hardship standard, the applicant must demonstrate 
that the cost of meeting the minimum build-out requirements exceeds the 
station's financial resources. The applicant must provide an itemized 
estimate of the costs of construction and a detailed explanation of why 
its financial condition precludes such expenditures.
    9. By permitting stations to elect a more graduated approach to 
providing DTV service, we allowed stations to focus their energies 
initially on providing digital service to their core communities, with 
the expectation that they would increase operating hours and expand 
their coverage area as the transition progresses.
    10. On January 27, 2003, we began this Second Periodic Review of 
the Commission's Rules and Policies Affecting the Conversion to Digital 
Television. Among other things, we sought comment on new channel 
election, replication, and maximization deadlines for broadcast 
television service. We also sought comment on a number of other issues 
concerning the protection that must be provided to incumbent analog and 
digital broadcasters in channels 52-69 (698-806 MHz, also referred to 
as the ``700 MHz band'') during the transition. The Second DTV Periodic 
NPRM raised a number of other issues, including: (1) Whether the 
Commission should retain, revise, or remove the requirement that 
licensees simulcast a certain percentage of their analog channel 
programming on their DTV channel; (2) whether the Commission needs to 
take steps to assist noncommercial television stations in the 
transition; (3) whether labeling requirements for TV-related consumer 
equipment would assist the transition and protect consumers; (4) 
whether and how the Commission should license multiple lower-powered 
transmitters, similar to cellular telephone systems, called distributed 
transmission systems; (5) whether broadcasters should be required to 
include Program System and Information Protocol (``PSIP'') information 
within their digital signals to ensure the availability of certain 
functions; (6) whether the Commission should adopt digital V-chip and 
closed captioning requirements; and (7) what station identification 
requirements should apply to digital stations. In the Second DTV 
Periodic NPRM, we also invited commenters to update the records in the 
DTV Public Interest Form NPRM (MM Docket No. 00-168), Children's DTV 
Public Interest NPRM (MM Docket No. 00-167), and the public interest 
NOI (MM Docket No. 99-360), and directed that such comments be filed in 
those proceedings. We will address any comments on public interest 
issues filed in response to the Second DTV Periodic NPRM when we 
finalize the public interest proceedings in the near future.

Progress Report

    11. The transition to digital television is a massive and complex 
undertaking, affecting virtually every segment of the television 
industry and every American who watches television. The spectrum that 
will be recovered at the end of the transition will bring tremendous 
benefits to consumers and the United States economy. Twenty-four 
megahertz of spectrum currently used for television broadcast channels 
63, 64, 68, and 69 will be returned and used for first responders and 
other critically important public safety needs. The remaining 84 MHz in 
the 700 MHz band (currently television broadcast channels 59-62 and 65-
66) have been or will be auctioned for use by new wireless services. 
The Commission has been continuously involved in the migration to 
digital television by, among other things, adopting a standard for 
digital broadcasting, creating a DTV Table of Allotments, awarding DTV 
licenses, establishing operating rules for the new service, and 
overseeing the physical build-out of digital broadcast stations.

Build-Out Status

    12. In 1997, the Commission set dates for construction and 
operation of broadcasters' allotted digital broadcast facilities. 
Pursuant to the construction schedule set forth in Sec.  73.624(d) of 
the Commission's rules, affiliates of the top four networks in the top 
ten television markets were required to complete construction of their 
digital facilities by May 1, 1999; top four network affiliates in 
markets 11-30 by November 1, 1999; all remaining commercial television 
stations by May 1, 2002; and all noncommercial television stations by 
May 1, 2003.
    13. As of July 28, 2004, 1,658 television stations in all markets 
(representing approximately 96 percent of all stations) have been 
granted a DTV construction permit (``CP'') or license. A total of 1,423 
stations are now broadcasting a digital signal, 634 with licensed 
facilities or program test authority and 789 operating pursuant to 
special temporary authority (``STA'') or experimental DTV authority.
    14. In the top 30 television markets, all 119 network-affiliated 
television stations are on the air in digital, 110 with licensed DTV 
facilities or program test authority and nine with STAs. In markets 1-
10, of the 40 network affiliates due to be on the air by May 1, 1999, 
all are providing digital service, 38 with licensed DTV facilities and 
two with STAs. Two stations that were licensed and on the air prior to 
September 11, 2001, went off the air due to the attack on the World 
Trade Center. WABC-DT and WNBC-DT are now back and operating at STA 
facilities, thereby completing the list of stations once on the air 
that have returned to operations In markets 11-30, all 79 network 
affiliate stations required to be on the air by November 1, 1999 are 
providing digital service. Seventy-two have constructed their licensed 
DTV facilities and seven are on the air with STAs.
    15. Approximately 1,230 commercial television stations were due to 
commence digital broadcasts by May 1, 2002. As of July 28, 2004, 1,018 
of these stations (83 percent) are broadcasting a digital signal. In 
addition, approximately 373 noncommercial educational television 
stations were required to commence digital operations by May 1, 2003. 
As of July 28, 2004, 286 (77 percent) of these stations are 
broadcasting a digital signal.

DTV Equipment Availability

    16. In the NPRM, we asked several questions about the types and 
availability of DTV equipment on the market. We invited commenters to 
provide us with up-to-date information about the pace of DTV receiver 
sales and the price of such units as well as trends in consumer demand 
for digital equipment.
    17. The Consumer Electronics Association (``CEA'') reports that 
manufacturers offer more than 400 models of HDTV monitors and 
integrated sets, which is three times the number from 2000. It reports 
an 11 percent drop in HDTV monitor prices from March 2002 to March 
2003, with a larger drop expected over the duration of 2003. The 
consumer electronics industry invested $15 billion in DTV products from 
1998 through 2003. In addition, CEA reports that DTV products 
represented more than 10 percent of all television sales in 2002. In 
the first quarter of 2003, according to CEA, 766,000 DTV product units 
were sold, which was up 86 percent over the first quarter unit sales of 
2002. CEA projected that manufacturers would sell 3.8 million DTV sets 
and displays in 2003.
    18. According to the CEA's website, 4.1 million DTV products were 
sold in 2003 for about $6.1 billion, a 44 percent increase in dollar 
sales and a 56 percent increase in unit sales from 2002. More

[[Page 59503]]

than 640,000 digital television sets were sold in December 2003 alone. 
CEA predicts that 5.8 million digital sets will be sold in 2004, 8.3 
million in 2005, 11.9 million in 2006 and 16.1 million in 2007. CEA 
defines DTV products as integrated sets and monitors displaying active 
vertical scanning lines of at least 480p and, in the case of integrated 
sets, receiving and decoding ATSC terrestrial digital transmissions.

Ongoing Commission Efforts To Encourage the DTV Transition

    19. Since the First DTV Periodic Report and Order, we have taken a 
number of important steps to encourage the consumer adoption of digital 
television. On August 8, 2002, the Commission adopted the DTV Tuner 
Order requiring that all TV receivers manufactured or shipped in the 
U.S. with screen sizes 13 inches and above be capable of receiving DTV 
signals over the air no later than July 1, 2007. This requirement will 
be phased in beginning with the largest sets in 2004 to minimize the 
cost impact on consumers. Receivers with screen sizes 36 inches and 
above--50 percent of a responsible party's units must include DTV 
tuners effective July 1, 2004; 100 percent of such units must include 
DTV tuners effective July 1, 2005. Receivers with screen sizes 25 to 35 
inches--50 percent of a responsible party's units must include DTV 
tuners effective July 1, 2005; 100 percent of such units must include 
DTV tuners effective July 1, 2006. Receivers with screen sizes 13 to 24 
inches--100 percent of all such units must include DTV tuners effective 
July 1, 2007. TV Interface Devices, VCRs, and DVD players/recorders, 
etc. that receive broadcast television signals--100 percent of all such 
units must include DTV tuners effective July 1, 2007 The DTV tuner 
requirement was designed to facilitate the transition to digital 
television by promoting the availability of reception equipment, as 
well as to protect consumers by ensuring that their television sets go 
on working in the digital world just as they do today.
    20. In addition to the Order mandating DTV tuners, in October 2003, 
the Commission released a Second Report and Order and Second Further 
Notice of Proposed Rulemaking regarding Commercial Availability of 
Navigation Devices and Compatibility Between Cable Systems and Consumer 
Electronics Equipment. This Plug and Play Order was another step 
forward in the transition to digital television. Under the 
specifications developed by the cable and consumer electronics 
industries and adopted in the Plug and Play Order, consumers will be 
able to plug their cable directly into their digital TV set without the 
need of a set-top box. The new rules will ease the transition to 
digital TV by promoting competition, convenience, and simplicity for 
consumers.
    21. In addition, we adopted a redistribution control system, also 
known as the ``broadcast flag,'' for digital broadcast television. The 
goal of the Broadcast Flag Order is to prevent the mass indiscriminate 
redistribution of digital broadcast television in order to foster the 
transition to digital TV and forestall potential harm to the viability 
of free, over-the-air broadcasting in the digital age. We found that 
the current lack of digital broadcast content protection could be a key 
impediment to the DTV transition's progress. Specifically, we found 
that the absence of such content protection could lead to reduced 
availability of high value content on broadcast television and thereby 
harm the viability of free over-the-air television and slow the DTV 
transition. Given our progress on this front, we expect that such 
programming will not be unreasonably withheld from over-the-air 
television.

Issue Analysis

Channel Election

    22. In the DTV Sixth Memorandum Opinion and Order, we determined 
that, after the transition, DTV service would be limited to a ``core 
spectrum'' consisting of current television channels 2 through 51 (54-
698 MHz). Although some licensees received DTV transition channels out 
of the core, and a few have both their NTSC and DTV channels outside 
the core, there will be sufficient spectrum to accommodate all DTV 
stations at the end of the transition. At this stage in the transition 
it is important for licensees with two in-core channels to indicate 
which one of their channels they prefer to use for digital broadcasting 
after the transition. In addition, we will require licensees with one 
in-core channel to make a decision about their in-core channel, and 
will require licensees involved in negotiated channel election 
arrangements with other licensees to inform us of these arrangements. 
This step is critical in determining what channels will be available 
for stations with two out-of-core channels and in clearing the out-of-
core spectrum.
    23. In the First DTV Periodic Report and Order, we established 
December 31, 2003, as the channel election deadline for commercial 
stations. Largely due to reports of difficulties some stations were 
facing in meeting our construction deadlines, we later decided that 
this date might be too early for some stations and suspended the 
channel election deadline, announcing that we would use this second 
periodic review to re-establish the date. We also stated in the First 
DTV Periodic Report and Order that we would resolve in a future DTV 
periodic review whether and when licensees with one or both of their 
channels out of the core will have the opportunity to make a channel 
election as well as the details and procedures for the election 
process. We stated that in all cases, including licensees with both 
channels in-core, we reserve the right to select the final channel of 
operation in order to minimize interference and maximize the efficiency 
of broadcast allotments in the public interest. In the Second DTV 
Periodic NPRM, we stated that our goal was to establish a channel 
election deadline that gives broadcasters with two in-core channels 
enough time to make an informed decision about which of their two core 
channels they preferred to use for digital broadcasting, while at the 
same time providing licensees with two out-of-core assignments the time 
to plan their moves to in-core channels before the end of the 
transition. We proposed that commercial and noncommercial broadcast 
licensees with two in-core assigned channels make their final channel 
election by May 1, 2005. As an alternative, we sought comment on 
whether establishing the same deadline(s) for channel election as for 
replication and maximization protection and allowing broadcasters more 
time to increase to full power before they determine which channel is 
preferable for digital broadcasting would be more effective in speeding 
the transition.
    24. In this Report and Order, we are establishing firm deadlines 
for channel elections and a procedure and time frame for evaluating, 
processing and confirming the elections. These decisions are consistent 
with the majority of the comments received from a wide range of 
participants in this proceeding. Most of the commenters that address 
channel election support establishing a firm deadline for channel 
election.
    25. We initially established December 31, 2003, as the channel 
election deadline for commercial stations, but suspended the date 
pending a date to be established in this Order. We now agree with the 
commenters, such as CEA and KM Companies, which state that the industry 
has had enough time to evaluate DTV operations. Circumstances are 
significantly different from the time we suspended the channel election 
deadline. At the time, less than 400 of the 1,688 full-power stations 
with

[[Page 59504]]

paired DTV channels commenced DTV operations; now more than 1,400 
stations have done so. Stations that chose to begin service at lower 
power have had an opportunity to operate DTV facilities and to test for 
interference or other service problems. DTV stations have had 
significant on-air time to conduct the necessary tests and evaluate 
available data in order to make reasoned channel election decisions. 47 
CFR 73.624(d) required construction to be completed more than two years 
ago for most commercial broadcasters, fourteen months ago for 
noncommercial broadcasters, and more than four years ago for top-four 
network affiliated broadcasters in the top markets.
    26. We therefore conclude that stations are likely to understand 
the performance characteristics of the DTV transmission standard and to 
know which channel they prefer to operate on after the transition, and 
reject the option that the channel election deadline be tied to 
replication requirements or DTV tuner penetration rates. As discussed 
more fully below in section IV.J.2., infra, we are adopting the ATSC A/
65B (``PSIP'') standard and mandating its use by DTV stations. As part 
of PSIP, a broadcaster's ``major channel number'' is its NTSC channel 
number. This major channel number is the station's channel identity 
during and after the transition. Therefore, a station's channel 
election decision will have no effect on the assignment of its NTSC 
channel number as its ``major channel number'' in PSIP. Consequently, 
channel election decisions need not be based on considering stations' 
historic ``branding'' to consumers, but instead may be based more on 
the operating characteristics of a particular frequency and the service 
populations the stations would project for each channel.
    27. We find that the multi-step approach offered by MSTV has merit, 
and we adopt its proposal with modifications. We agree with many of the 
goals set forth by MSTV. First, the channel election process should 
provide the best possible DTV service to the public. Second, the plan 
should move the DTV transition along without undue delay. Third, we 
seek to create an orderly channel election process that produces as 
much clarity and transparency as possible. Fourth, licensees should be 
afforded the best opportunity for informed choice when making their 
channel election decisions. Fifth, we seek to provide every eligible 
station with a channel for operation after the end of the transition. 
Sixth, we seek to recognize industry expectations by protecting 
existing service and respecting investments already made, to the extent 
feasible. Finally, the channel election process should take into 
account overall spectrum efficiency, even as we seek to ensure to the 
extent possible that the final channel allotments accommodate 
replicated and maximized service areas for those stations certifying 
their intent to serve such areas.
    28. To enable us to complete the reallocations necessary to 
accommodate all stations with a channel in the core, we need to know 
each in-core licensee's channel preference as soon as possible. 
Therefore, we adopt December 2004, as the starting date for channel 
elections, by which time commercial and noncommercial broadcast 
licensees with an in-core channel must state their channel preference. 
As of this date, commercial and noncommercial broadcasters will have 
had ample time after their applicable digital construction deadlines to 
make their channel decisions. A December 2004, channel election 
deadline for in-core licensees will also provide out-of-core licensees 
time to plan for their move into the core. We recognize that this date 
is earlier than the election date proposed in the Second DTV Periodic 
NPRM. Given, however, our adoption of a multi-step channel election 
process as proposed by MSTV and other necessary election procedures, 
this deadline is necessary to arrive at a final election for all 
stations in a timely manner. The choice of this election deadline 
strikes an appropriate balance between the need for stations to have a 
sufficient amount of time in which to gain experience in DTV operation 
and allowing stations that will have to move--particularly from out-of-
core to in-core--to plan for the DTV channel conversion.
Channel Election and Repacking Process/New Allotment Process
    29. We adopt a multi-step channel election plan based in 
considerable part on the MSTV proposal, but which also incorporates 
certain modifications and refinements. Specifically, we adopt a seven-
step channel election and repacking process as follows: (1) Step 1 
addresses any preliminary matters to the channel election and repacking 
process, which includes requiring all licensees to certify their intent 
to replicate their allotted facilities or maximize their already-
authorized facilities; (2) Step 2 is the first round of elections in 
which in-core licensees (i.e., those with at least one in-core channel) 
will file their channel election forms; (3) Step 3 analyzes the 
interference conflicts arising out of the first round and gives 
licensees an opportunity to resolve them; (4) Step 4 is the second 
round of elections, at which point the remaining licensees--out-of-core 
only licensees who have not yet filed channel election forms and those 
now being treated like them--will make their elections; (5) Step 5 
analyzes the interference conflicts arising out of the second round 
elections, at which time staff will seek to place as many licensees as 
possible on their election preferences; (6) Step 6 is the third and 
final round of elections, at which point licensees not yet placed will 
file a final election preference; and (7) Step 7 is a Notice of 
Proposed Rulemaking to propose a new DTV Table of Allotments.
a. Step 1: Pre-Channel Election Matters
    30. Database clean up. We agree with MSTV that it is important for 
our database to provide a consistent starting point. To that end, we 
ask that licensees review the accuracy of their database technical 
information and contact staff as quickly as possible with any submitted 
corrections. Any proposed corrections to database information must be 
consistent with station authorizations, as reflected in the 
Commission's records. So that we may consider any proposed corrections 
to our database, licensees should contact staff by October 1, 2004, 
with any concerns. We note that it may not be possible to process and 
consider any proposed corrections to database information offered after 
this date. Database errors that are discovered after this date may be 
corrected at the discretion of Commission staff. To ensure that 
licensees timely review their database information, we will require 
them to certify that they have reviewed their database information on 
file with the Commission and that it is accurate to the best of their 
knowledge. Licensees will make this certification using the Pre-
Election Certification Form, which must be filed by November 2004. The 
Pre-Election Certification Form will also include licensees' 
certifications of their intent to replicate or maximize. While MSTV 
proposes a one-year period devoted to ``database clean up,'' we do not 
believe such an extended period is necessary. Moreover, we do not 
believe that there is a need for a formal process to invite licensees 
to submit information to ``clean up the database'' because we expect 
that licensees have informed us of any discrepancies as they arose. We 
note that MSTV has notified its members about the need to make sure 
their database information is accurate, and invited them to contact the 
Commission and MSTV concerning questions about database inaccuracies or 
discrepancies. MSTV also asked its

[[Page 59505]]

members to share this notice with other stations. As a result of this 
letter dated June 1, 2004, the Commission has received three letters 
from licensees. We remind licensees that they have an ongoing 
obligation to ensure the accuracy of their database information and to 
apprise us of any discrepancies between their authorized facilities and 
their operations.
    31. Filing freeze. On August 3, 2004, the Media Bureau imposed a 
freeze on the filing of certain TV and DTV requests for allotment or 
service area changes to facilitate the channel election and repacking 
process. Included in the freeze are: (i) Petitions for rulemaking to 
change DTV channels within the DTV Table of Allotments, (ii) petitions 
for rulemaking to establish a new DTV channel allotment, (iii) 
petitions for rulemaking to swap in-core DTV and NTSC channels; 
Notwithstanding the freeze, negotiated channel election arrangements 
may be sought during the election process. (iv) applications to change 
DTV channel allotments among two or more licensees; (v) petitions for 
rulemaking by licensees/permittees to change NTSC channels or 
communities of license; (vi) applications to maximize DTV or analog TV 
facilities; and (vii) certain Class A station applications. 
Notwithstanding this freeze, licensees are not prevented from filing 
modification applications that would resolve international coordination 
issues. We do this to alleviate a burden on those licensees who are 
actively working to resolve their international coordination issues, or 
when a broadcast station seeks a new tower site due to the events of 
September 11, 2001. In addition, the Media Bureau will consider 
requests for waiver of the freeze on a case-by-case basis. Such a 
filing freeze is necessary to provide a stable baseline for developing 
a final DTV Table of Allotments. The freeze is discussed more fully in 
section IV.A.2., infra.
    32. Table of station assignment and service information. As a 
preliminary matter to the channel election process, the Media Bureau 
will issue a table of station assignment and service information 
(``table of station information'') for use by TV station licensees and 
other interested parties so they may determine and evaluate the DTV 
service populations to be used by the Commission to process stations' 
channel elections and create the new DTV table of allotments. In 
developing the table of station information, the Commission will 
generally use the DTV and NTSC station locations and facilities 
authorized by license or construction permit (CP). Where station 
records include both a construction permit and license, we will use the 
construction permit given that the changes permitted in the 
construction permit reflect the station's facilities for the future, as 
of October 1, 2004, a month before TV station licensees will be asked 
to file their Pre-Election Certification Forms. The Pre-Election 
Certification Form will require all broadcast licensees and permittees 
to certify to (1) the accuracy of their database information on file 
with the Commission, which will be reflected by the table; and (2) 
their intent to replicate or maximize pursuant to their existing 
authority, as will be defined by the table. We will issue this table of 
station information prior to the filing of the Pre-Election 
Certification Forms. (We note that the Media Bureau imposed a freeze on 
the filing of certain TV and DTV requests for allotment or service area 
changes in anticipation of generating this table of station 
information.) The data provided in the table of station information 
will be based on the technical information on file in the Commission 
database. Licensees should review the table of station information 
before making their pre-election certifications. We will update the 
table of station information to reflect service areas based on 
certifications to build to replication or maximization facilities and 
any other changes to station facilities prior to the first round 
election date.
    33. Station service evaluations based on currently authorized 
operations. As noted above, we will use current authorized station 
operations to determine and evaluate the DTV service populations in 
processing channel elections and creating the new DTV table of 
allotments. We believe that basing station service evaluations on 
current authorized station operations will more accurately reflect the 
current viewer access to station services than the parameters specified 
for the initial DTV Table of Allotments in 1997, and will at the same 
time preserve the service areas of those stations that constructed and 
are operating in accordance with the DTV buildout schedules. Consistent 
with MSTV ex parte submissions and discussions, we will define new 
interference as interference beyond that caused by NTSC and DTV 
operations, as described by the table of station information, in 
evaluating new interference to post-transition TV operations.
    34. On this basis, stations that operate, or plan to operate as 
authorized by a CP, in accordance with the facilities specified in the 
initial DTV Table of Allotments will have the same service as that 
contemplated in the DTV Second MO&O, less any changes in interference 
received from new stations or from stations that changed their 
operations. Stations that have departed from their initial DTV 
allotment facilities (including location and/or channel changes) or 
maximized (or in a few cases reduced) their operations through such 
modifications and new stations, will have service as authorized in 
those changes or new authorizations, again less interference from other 
stations. Stations granted a DTV channel change are generally 
authorized facilities that they requested if such operations do not 
cause new interference to other stations that exceed the de minimis 
interference standards of Sec.  73.623(c)(2) of the rules, 47 CFR 
73.623(c)(2). In some cases the new channel allotment facilities cover 
more area than the stations were authorized on their initial DTV 
channel allotment, while in other cases the stations cover less area. 
In the case of stations whose applications for maximization of DTV 
facilities are delayed in processing due to international negotiations, 
we will consider the service that would be provided based on those 
applications pending the resolution of those coordination issues and 
authorizations of specific facilities. All analyses of service and 
reduction of service due to interference will be based on population 
only. We will use population data from the year 2000 census in 
determining the populations served by stations and the impact of 
interference on stations' service. In this regard, the more up-to-date 
population data from the year 2000 census will provide a more accurate 
indication of the station service and impacts of interference on that 
service than the older year 1990 population data used in computing the 
service data for the initial DTV Table of Allotments.
    35. Border coordination. We agree with commenters that it is 
important to resolve international coordination issues as quickly as 
possible. To that end, we have reduced the number of coordination 
conflicts from several hundred to fewer than 50. We cannot, however, 
delay the implementation of our channel election and repacking process 
pending resolution of every outstanding case of Canadian or Mexican 
coordination. Parties with pending applications that are being delayed 
due to coordination issues are advised that while we will make every 
effort in negotiating on their behalf, we can provide no assurance that 
such issues will be resolved favorably. In nearly all of the remaining 
cases, the licensee can build a checklist facility.

[[Page 59506]]

Only a few stations cannot build checklist facilities because of border 
coordination issues. This list includes: WPXJ-DT, Batavia, NY (allotted 
DTV 53); WNYO-DT, Buffalo, NY (allotted DTV 34); and KAJB-DT, 
Calipatria, CA (allotted DTV 50). In some cases, additional 
coordination actions will be needed to provide in-core channel 
assignments. If an election would require international coordination, 
then that channel may be elected at authorized replicated and maximized 
facilities, subject to the outcome of the international coordination. 
We recognize that maximization may cause coordination issues and that 
successful coordination may require reduction to replication facilities 
We encourage stations in markets or regions that require coordination 
to work together to identify in-core channels that are feasible. Such 
arrangements among stations will be accepted as part of the channel 
election process and will be accorded great weight in determining final 
assignments. The Commission will continue to work with licensees to 
resolve remaining international coordination issues as part of the 
process of developing new DTV allotments and will consider a station's 
border coordination efforts when prioritizing channel assignments. 
Border coordination issues are discussed more fully below in section 
IV.A.3., infra.
    36. We are aware of some stations with a DTV channel outside of the 
core and an analog channel inside the core for which, according to the 
stations, the analog channel is not available for digital transmission 
because of international coordination issues with Canada. These 
stations should indicate this fact on their channel election form and 
attach a brief explanation of why their in-core channel is not 
available for digital use under the U.S.--Canada Letter of 
Understanding, which governs modifications of the initial DTV table of 
allotments within 400 km of the U.S./Canadian border. Stations with an 
out-of-core DTV channel and an in-core analog channel that is not 
available for digital transmission because of international 
coordination issues will be treated like stations with two out-of-core 
channels.
    Certifications for replication and maximization. We adopt a 
requirement, that stations that intend to fully replicate or maximize 
certify this commitment to the Commission by November 2004, subject to 
sanctions if the station fails to meet its commitment. In the Pre-
Election Certification Form, licensees will certify their intent to 
build-out their allotted ``replication'' facilities or already-
authorized ``maximization'' facilities. Licensees are reminded that 
false certifications may result in fines and loss of license. Moreover, 
where stations do not build-out to their certified facilities, we will 
limit their station's interference protection to the service population 
within the noise-limited contour predicted from the station's operating 
facilities, as of the certification date. (In other words, a licensee's 
failure to replicate or maximize to the extent it certified will result 
in the loss of interference protection to those service areas not 
replicated or maximized.) Licensees will be required to replicate and 
maximize by the replication/maximization deadline (i.e., July 1, 2005, 
for affiliates of the top-four networks in markets 1-100; and July 1, 
2006, for all other stations). Further, licensees may only certify to 
maximize pursuant to their existing authority to do so. Channel 
elections will be evaluated at this stage based on the coverage that is 
predicted from the certified authorized maximization or certified 
replication facilities. We anticipate that many licensees will have an 
opportunity to enlarge their final DTV allotment coverage after the 
final table has been adopted, pursuant to the rules for changes and 
applications established then. In developing rules for resolving or 
avoiding conflicts between stations requesting such coverage 
enlargements, we will consider giving priority to stations that can 
demonstrate that they had built-out their full authorized DTV 
facilities and had been unable to maximize on their transition DTV 
channel.
    37. Such certifications must be filed with the Commission in 
advance of the channel election date so that all licensees will be able 
to consider the commitments of other licensees in their channel 
elections. To provide sufficient time for this information to be 
useful, we will require that such certifications be filed in November 
2004. Stations that do not submit certification forms by this date will 
be presumed not to intend to replicate or maximize, and such decision 
will be taken into account in determining final channel assignments. 
More specifically, in establishing the authorized facilities and 
service area for a station not certifying to fully replicate or 
maximize, we will provide for the station to serve the same geographic 
area served by its existing DTV facilities, operating as of the 
certification date. Certifications must be filed electronically and 
will be made accessible to the public.
    38. Election Forms. All broadcast licensees participating in the 
channel election process are required to file a pre-election 
certification form and a channel election form. Stations that do not 
timely submit a pre-election certification form will be presumed both 
(i) to agree that their database technical information on file with the 
Commission is accurate and complete, and (ii) not to intend to 
replicate or maximize, and such decision will be taken into account in 
determining final channel assignments. Stations that do not timely 
submit a channel election form will be assigned a post-transition DTV 
channel by the Commission prior to the end of the channel election 
process. Appendices E and F to this Report and Order illustrate the 
forms to be used in the channel election and repacking process. We have 
developed the following six forms: (1) Pre-Election Certification Form; 
(2) First Round Election Form; (3) First Round Conflict Decision Form; 
(4) Second Round Election Form; (5) Second Round Conflict Decision 
Form; and (6) Third Round Election Form. These forms, which are adopted 
by this Report and Order, must be filed electronically and will be made 
accessible to the public on the Commission's database.
b. Step 2: First Round of Elections; Election Forms Filed
    39. We set December 2004 as the date for the first round of channel 
elections. Although we proposed in the NPRM an election date of May 1, 
2005, we believe that the broadcasters making first round elections are 
able to make an informed statement of their final channel preference at 
this time. Moreover, given that we will be adopting a multi-step and 
multi-round approach that will occur over the course of several months, 
we find that we must begin the process as soon as possible in order to 
effectuate a timely transition.
    40. In this first round, licensees with in-core channels (i.e., 
licensees with two in-core channels and licensees with one in-core 
channel) will make their channel elections by filing a First Round 
Election Form. The First Round Election Form will provide up to three 
options for in-core licensees: (1) Elect one of its currently assigned 
in-core channels; (2) elect a negotiated channel pursuant to an 
agreement with another licensee(s); or, (3) if (i) a one-in-core 
licensee, or (ii) a two-in-core licensee with two low VHF channels 
(i.e., channels 2-6), then such a licensee may choose to make no 
election in the first round and instead elect to participate in the 
second round of elections. Licensees in this round may not elect a 
channel that is not assigned to them, unless rights to that channel are 
being sought through a

[[Page 59507]]

proposed negotiated channel election arrangement. Licensees that have 
negotiated channel election arrangements with other licensees must 
obtain Commission approval for the proposed channel changes in the 
arrangement in order for their election of a negotiated channel to be 
considered valid. Upon completion of the first round and subsequent 
interference conflict analysis, each licensee electing an in-core 
channel will receive an informal tentative channel designation, to the 
extent possible. Licensees with two in-core channels (including those 
with two low VHF channels (i.e., channels 2-6). We will permit two in-
core low VHF licensees to release both of their channels in the first 
round and agree to be treated as two out-of-core licensees and 
participate in the second round of elections. Licensees that choose to 
elect, and which receive a tentative channel designation for, their in-
core low VHF channel will have an opportunity to make an alternate 
election in the third round) will make the first channel elections, 
choosing between their two in-core channels. Licensees with only one 
in-core channel will be required to elect whether to keep their in-core 
channel, or turn it in and be treated like a licensee with two out-of-
core channels. We believe that, by this time, one in-core licensees 
should know whether they intend to keep their in-core channel. This 
will further increase the number of channels available for future 
selection. Moreover, we are including in this one in-core licensee 
category those licensees with only one channel (i.e., in-core 
singletons).
    41. Negotiated Channel Election Arrangements. As an alternative to 
the channel election process, licensees may negotiate channel election 
arrangements with other stations. Such negotiated arrangements are 
subject to Commission approval, including particular consideration of 
the effect on the channel election rights of, and interference impact 
on, any licensee not a party to the negotiated channel election 
agreement. ``Channel swapping'' is an existing practice with beneficial 
results for the marketplace and consumers, and these channel election 
arrangements are similar in nature to them. We do not anticipate that 
channel election arrangements are likely to have anti-competitive 
effects. We will, however, review them for such effects. All licensees 
involved in a negotiated channel election arrangement must file a 
channel election form. Licensees will be asked to indicate their 
negotiated channel elections on their channel election forms. To select 
the channel they would use for digital operations after the transition 
if the negotiated channel election arrangement is approved, as well as 
the channel they would elect if the negotiated arrangement is not 
approved. Stations involved in the negotiated channel election 
arrangement must satisfy our DTV interference rules with regard to 
their relationship to other stations not involved in the negotiated 
arrangement. Evidence of a signed negotiated channel election 
arrangement and technical engineering information demonstrating 
compliance with Sec.  73.623(g) of the Commission's rules must be 
submitted to the Commission to enable us to consider negotiated channel 
election arrangement requests. In order to demonstrate the validity of 
their negotiated channel election arrangements, licensees will be 
required to provide the name(s) and call sign(s) of the other licensees 
involved in the arrangement. Licensees may, upon request, be required 
to provide a copy of the negotiated channel election agreement and/or 
engineering information to the Commission. The Commission may contact 
proponents of these arrangements, as may be necessary. We will review 
all agreements to assure compliance with the public interest and will 
not approve agreements proposing the acceptance of significant levels 
of interference or loss of service.
    42. Election of DTV in-core channel. We conclude that if a two in-
core licensee elects its DTV channel, then its NTSC channel will be 
released. By ``release,'' we mean that the licensee relinquishes its 
post-transition rights to this channel and that the channel now becomes 
available for future selection by another licensee. The DTV channel 
will be ``locked in.'' By ``locked in,'' we mean that the channel 
assignment is confirmed. However, the amount of interference the 
station is subjected to may increase to some extent in the Final Table 
in an effort to provide all licensees with an in-core DTV channel that 
replicates their analog service, to the extent the station has 
certified intent to so replicate. In other words, even though channels 
may be ``locked in,'' licensees may be required at the end of the 
allotment process to accept interference resulting from establishment 
of DTV stations at full replication facilities to accommodate all 
stations with a channel in the DTV core spectrum. This system of 
``locking in'' channels can be viewed as making an informal tentative 
channel designation to that licensee. While informal tentative channel 
designations in themselves cannot confer legal rights to licensees, 
they do come with a heavy presumption that these informal designations 
will be the channel assignments proposed in the new DTV Table of 
Allotments. (i.e., channel will be protected. By ``protected,'' we mean 
that a subsequent election may not cause an interference conflict to a 
``locked in'' channel to the extent the ``locked in'' station's 
coverage is certified, except against interference that may result from 
establishment of DTV stations at the end of the allotment process at 
full replication facilities to accommodate all stations with a channel 
in the DTV core spectrum. An interference conflict would occur where 
interference exists any greater than existing interference plus no more 
than 0.1 percent additional reduction in service population. For 
purposes of this process, we will use this 0.1 percent interference 
protection standard proposed by MSTV. We agree with MSTV that 
``protect'' in this context should mean that a subsequent election may 
not cause interference any greater than existing interference plus no 
more than 0.1 percent additional reduction in service population.) To 
the extent certified against future elections, except against 
interference that may result from establishment of DTV stations at full 
replication facilities to accommodate all stations currently allotted 
an out-of-core DTV channel with a channel in the DTV core spectrum). We 
recognize that a station that ends up keeping its in-core DTV channel 
as its final allotment might not have to incur any additional 
construction expenses. In contrast, a station that ends up operating in 
digital on its analog allotment would need to incur expenses to change 
its DTV operation to another channel. To allow stations to minimize the 
cost of this phase of the DTV transition whenever possible, we will 
afford the highest priority in the allotment process to maintaining 
existing DTV allotments selected on the channel election forms.
    43. Election of NTSC in-core channel. If a two in-core licensee 
elects its NTSC channel, then Commission staff will determine whether 
and to what extent DTV operations on this channel would cause new 
interference to the service populations of other DTV stations. For 
purposes of this analysis, DTV service populations will be those 
resulting from the allotted ``replication'' facilities or authorized 
``maximization'' facilities, as certified. This interference conflict 
analysis will take place in Step 3, when we intend to resolve, to the 
extent possible, the interference conflicts

[[Page 59508]]

resulting from the first round of elections.
    44. We do not expect there to be widespread difficulties in fitting 
replicated DTV service into paired NTSC channels, as paired DTV 
channels were initially designed to be the best approximation of the 
NTSC Grade B contours. However, the interference relationships between 
DTV to DTV and NTSC to DTV operations are such that a DTV station would 
have a 1 dB greater interference impact on another co-channel DTV 
station than a NTSC station and an 8 dB greater impact on adjacent 
channel DTV station than an NTSC station, assuming the same coverage 
and locations for all stations. Thus, it is likely that in some cases 
DTV operation on an associated NTSC channel could result in new 
interference. In such cases, it may be possible to resolve the new 
interference by reducing the DTV station's operating facilities. We 
would allow stations to make such adjustments to address such 
conflicts. For those stations electing their NTSC channel for their 
eventual in-core DTV channel, we will attempt to accommodate the 
broadcasters' authorized maximized facilities into the NTSC 
``destination'' channels. As discussed in section IV.B., infra, except 
for stations with out-of-core DTV channel allotments, stations failing 
to serve their authorized maximized service area by our replication/
maximization deadlines will lose interference protection to any 
unserved areas. In addition, the Community Broadcast Protection Act of 
1999 provides an interference protection priority to Class A TV 
stations with respect to certain maximized DTV facilities. 
Specifically, Class A stations are entitled to a protection priority 
with respect to those maximized DTV facilities, including technically 
necessary adjustments to those facilities, for which an applicant had 
not filed an application for maximization nor a notice of its intent to 
seek such maximization by December 31, 1999, or, if a notice of intent 
was timely filed, did not also file a bona fide application for 
maximization by May 1, 2000. 47 U.S.C. 336(f)(1)(D). See also, 47 CFR 
73.623(c)(5). Thus, DTV broadcasters that did not meet these statutory 
filing deadlines are not entitled to carry over to their NTSC channels 
maximized DTV facilities that would conflict with a Class A TV station. 
See Class A Order, 15 FCC Rcd at 6379, para. 60. However, if a 
broadcaster's maximized DTV service area cannot be carried over to an 
NTSC channel or another DTV channel as part of a channel swap 
arrangement or it is not otherwise willing to reduce its operations, we 
may find it necessary to base its use of the new channel on its 
replication facilities or to assign the broadcaster another channel in 
the market that can accommodate its maximized facilities as part of the 
process of generating a new Table.
    45. Elections by one in-core licensees. Licensees with only one in-
core channel (including singletons Singletons' or ``single-channel 
licensees'' refers to those licensees that do not have a second or 
``paired'' channel to convert to DTV. In 1998, in the ``Service 
Reconsideration Order,'' the Commission decided to afford new NTSC 
permittees, whose applications were not granted on or before April 3, 
1997, and who were therefore not eligible for an initial DTV paired 
license, the choice to immediately construct either an analog or a 
digital station on the channel they were granted. Pursuant to this 
policy, the Commission specified that these new NTSC permittees, which 
we now sometimes refer to as ``singletons'' or ``single-channel 
licensees,'' would not be awarded a second channel to convert to DTV, 
but could, instead, convert on their single 6 MHz channel. It was 
further decided that if they choose initially to build an analog 
station, they may request Commission authorization to convert to DTV at 
any point during the transition, up to the end of that period), 
including those with low VHF channels (2-6), must elect to either (1) 
keep their in-core channel or (2) release their in-core channel in 
favor of being treated like a licensee with two out-of-core channels. 
MSTV proposed that we assume that such stations would decide to remain 
on their in-core channels; however, we find that it is more efficient 
to determine which in-core channels are unacceptable to these stations 
so that those channels can become available for future elections and to 
ensure that those stations are given an opportunity to identify a 
workable channel.
    46. We expect that in most cases stations with only one in-core 
channel, where the channel is a DTV channel, will choose to remain on 
that channel. In such cases, that channel will be ``locked-in,'' as 
defined above. If the one in-core licensee chooses not to elect its in-
core DTV channel, then that channel will be released, and the licensee 
will be treated as a two out-of-core licensee. In being treated like a 
two out-of-core licensee, the licensee will be required to file a new 
election form in the second round of elections. Licensees with only one 
in-core channel (including singletons), where the in-core channel is 
the NTSC channel, must elect to either (1) keep their in-core NTSC 
channel or (2) release their in-core NTSC channel in favor of being 
treated like a two out-of-core licensee. If a one in-core licensee 
elects its NTSC, then Commission staff will determine (in Step 3's 
``interference conflict analysis'') whether and to what extent this 
NTSC channel would cause new interference to the service populations of 
DTV stations. In light of their status, in-core NTSC channels of one 
in-core licensees will be afforded a high priority in permitting their 
conversion to a DTV channel.
    47. Later opportunity to change elections of low VHF channels and 
channels subject to international coordination. Licensees electing, and 
receiving a tentative channel designation for, a low VHF channel or a 
channel subject to a pending international coordination issue will be 
permitted to seek an alternate tentative channel designation in the 
third round of elections. See discussion in section IV.A.1.f., infra.
    48. No first round election for two out-of-core licensees. 
Licensees with two out-of-core channels will not make an election in 
the first round. Requiring two out-of-core licensees to elect at this 
time would be premature and unnecessarily limit the channel choices 
available to these licensees. We disagree with MSTV that it would be 
beneficial for two out-of-core licensees to make elections in the first 
round a month after the two in-core licensees have elected. We note, 
for example, that under MSTV's plan two out-of-core licensees would not 
know at this time whether a two in-core licensee selecting its NTSC 
channel in the first round would ultimately obtain that election. This 
situation would not be resolved until Step 3, through interference 
conflict analysis MSTV would have two out-of-core licensees protect 
both channels of two-in-core licensees electing their NTSC channel, 
effectively denying two out-of-core licensees' the ability to select 
certain otherwise available channels. Accordingly, as will be discussed 
below, two out-of-core licensees will make their elections in the 
second round, at which point two in-core and one in-core licensees may 
already have a channel ``locked in'' (as defined above) and have 
released an in-core channel, making that in-core channel available for 
future selection.

[[Page 59509]]

a. Step 3: First Round Interference Conflict Analysis and Tentative 
Designations;

Conflict Forms Filed

    49. The interference conflict analysis contemplated in our Step 3, 
which we expect to complete by February 2005, will determine whether 
and to what extent an elected in-core NTSC channel would cause 
interference to an existing or proposed in-core DTV channel. Using 
objective computer analysis, we will identify and communicate 
interference conflicts arising from the first round. We agree with MSTV 
that knowing what channels are available for selection in the second 
round is important in order to provide second round electors with an 
informed choice among all channels remaining after completion of the 
first round. Accordingly, through the interference conflict analysis 
process, we will set tentative channel designations for in-core 
licensees with channels that have been elected in the first round and 
``locked in.''
    50. Specifically, through our first round interference conflict 
analysis, Commission staff will determine whether and to what extent an 
elected in-core NTSC channel causes an interference conflict to: (1) An 
in-core DTV channel that was elected in the first round; (2) an in-core 
DTV channel of any licensee that elected its NTSC channel in the first 
round that still may need to revert to its DTV channel; or (3) another 
elected in-core NTSC channel in the first round. We note that the 
nature of the interference conflict differs with respect to an elected 
NTSC channel of a one-in-core station, which enjoys a special status, 
as opposed to an elected NTSC channel of a two-in-core station, which 
has the option to change its election to its currently assigned DTV 
channel.
    51. Upon completion of our first round interference conflict 
analysis, the Media Bureau will issue a letter to each licensee 
determined to cause an interference conflict(s). Licensees with 
interference conflicts will have 60 days from the date of this conflict 
notification letter in which to file their First Round Conflict 
Decision Forms, indicating how they intend to resolve their 
interference conflict. These First Round Conflict Decision Forms, which 
we expect to be filed in April 2005, will provide licensees with the 
opportunity to decide whether to maintain their in-core NTSC election, 
change their election to their in-core DTV channel, or, if a one-in-
core licensee, elect to participate in the second round. Two in-core 
licensees may not release both in-core channels to participate in the 
second round of elections, except for the case of two in-core low VHF 
channels. We note that two in-core licensees already have the advantage 
of having an in-core DTV channel. Licensees can maintain their in-core 
NTSC election if they resolve their interference conflict by (1) 
agreeing to accept interference and reduce facilities; In choosing this 
option, licensees would have to agree to accept interference or reduce 
facilities, as necessary. Licensees must certify that they will resolve 
their interference conflict(s), and will be required to demonstrate 
such by submitting technical engineering data. and/or (2) negotiating 
an agreement (i.e., conflict resolution agreement) with the licensee(s) 
with which they are in conflict. In choosing this option, licensees 
would have to negotiate a settlement with the licensee(s) with which 
they are in conflict. Licensees must certify that they will resolve 
their interference conflict(s), and will be required to demonstrate 
such by submitting evidence of a negotiated conflict resolution 
agreement and supplying engineering information, as may be necessary. 
Licensees' submissions must evidence compliance with 47 CFR 73.623(g).
    52. Licensees currently allotted an out-of-core DTV channel will be 
afforded the opportunity for full replication facilities on an in-core 
DTV channel, unless they choose to accept less. The licensee may agree 
to accept interference as long as it is still able to serve all of its 
community of license. If the conflict is thus resolved, the licensee's 
currently assigned in-core DTV channel is released. After receipt of 
the First Round Conflict Decision Forms, we will announce any 
additional channel elections that have been ``locked in'' as tentative 
channel designations. Based on this information, second round electors 
will be able to determine which channels will be available for 
selection in the second round of elections.
    53. An interference conflict exists when it is determined that more 
than tolerable new interference exists (i.e., in this context, 0.1 
percent in addition to existing interference). If it is determined that 
no interference conflict exists (meaning in this context that the 
elected in-core NTSC station adequately protects stations in each of 
the three categories noted above, to the extent required), then the 
licensee's elected NTSC channel will be ``locked in'' and its DTV 
channel will be released, if applicable. If it is determined that an 
interference conflict does exist, and would therefore prevent granting 
the in-core NTSC channel election with the certified coverage, then the 
licensee must decide whether to reduce its facilities to eliminate the 
interference, Licensees electing to reduce their facilities will be 
required to submit data demonstrating specifying how they will 
eliminate the interference conflict. or change its election to its DTV 
channel, or be treated as a two out-of-core licensee if its paired DTV 
channel is out of core. The licensee will indicate its decision by 
filing a conflict decision form. The licensee may agree to reduce its 
facilities to eliminate interference as long as it is still able to 
serve all of its community of license. With regard to stations with an 
allotted out-of-core DTV channel electing to operate a DTV station on 
their in-core NTSC channel, we will permit the 0.1 percent additional 
interference limit to be exceeded on a limited basis in order to afford 
these stations an improved opportunity to select their NTSC channel. 
Such allowance is justified because these single channel licensees have 
only one in-core channel to select and may need this additional 
accommodation. We are concerned, however, that such operations not 
cause substantial interference to existing DTV service (e.g. 
interfering within the area in which service replication is already 
being achieved by an operating station). Although we do not expect such 
instances will be widespread, where we find it appropriate to do so, we 
may ask a station seeking DTV operation on its in-core NTSC channel to 
operate at a power level that would avoid large amounts of interference 
to existing DTV operations, even if this would preclude that station 
from operating with full replication facilities. Licensees should be 
aware that the burden is on them to ensure that the channel they elect 
can serve their community of license. Consequently, should it be 
determined when proposing a final DTV Table of Allotments that a 
licensee's election does not cover its community of license, we will 
void that election and place the licensee on a more appropriate 
channel.
    54. The interference conflict analysis performed in the first round 
is illustrated through the following examples. In the case of a two-in-
core licensee whose election of its in-core NTSC channel causes an 
interference conflict which prevents granting the in-core NTSC channel 
with the certified coverage, the licensee will file a conflict decision 
form indicating whether it will accept its in-core NTSC channel with 
interference and reduced facilities or if it will revert to its DTV 
channel. The channel selected at this time would be ``locked in'' and 
the other channel

[[Page 59510]]

would be released. In the case of a licensee with only one in-core NTSC 
channel (including singletons) that elected its in-core NTSC channel 
and an interference conflict was found that would prevent granting 
coverage to extent certified, the licensee will file a conflict 
decision form indicating whether it wishes to accept its in-core NTSC 
channel with interference or if it wishes to be treated as a two out-
of-core licensee and file an election in the second round (see Step 4). 
Licensees are cautioned that it is possible that they may obtain a less 
preferable tentative channel designation than had they decided to keep 
their in-core NTSC channel election with interference and reduced 
facilities. We note that these licensees may include their reduced-
facilities NTSC channel on their list of second round election 
preferences. There would be, however, no guarantee that their discarded 
in-core channel would be awarded back to them should their higher 
second round election preferences not be available to them.
d. Step 4: Second Round Election Forms Filed
    55. In our second round of elections, which we expect to occur July 
2005, licensees with two out-of-core channels and those now treated 
like them, This category includes those first round electors that 
indicated in their conflict decision forms that they wanted to be 
treated as two out-of-core licensees, rather than accept their in-core 
NTSC channel with interference and reduced facilities. Also included in 
this category are licensees that do not have an in-core channel (e.g., 
an out-of-core singleton). will be required to file a Second Round 
Election Form.
    56. Two out-of-core licensees. In their Second Round Election Form, 
two out-of-core licensees may submit one channel election preference 
(two out-of-core licensees may negotiate channel election arrangements 
with other licensees) or may request that the Commission determine a 
``best available'' channel (i.e., one that minimizes new interference 
to all protected channels) for them at full replication facilities. Two 
out-of-core licensees wishing to ensure receipt of a tentative channel 
designation in the second round should consider making a Commission-
determined ``best available'' channel their election preference. Thus, 
licensees that request that the Commission determine a ``best 
available'' channel for them at full replication facilities will be 
placed by Commission staff in this round. Second round electors may 
also submit one contingent channel preference which would be available 
for selection only if the licensee rescinds its original second round 
election as part of a negotiated conflict resolution or settlement 
agreement with another licensee. We do this in an effort to encourage 
licensees to resolve conflicting channel preferences through settlement 
negotiations. Licensees may also request that the Commission determine 
a ``best available'' channel for their contingent preference.
e. Step 5: Second Round Interference Conflict Analysis and Tentative 
Designations
    57. We recognize that there may be a sizable number of election 
preferences filed in the second round and that licensees may list 
conflicting channel preferences. Second round electors may also be 
asked to accept a channel with interference and reduced facilities 
because of an interference conflict with a protected channel. In 
anticipation of these issues, our second round interference conflict 
analysis, which we expect to complete by September 2005, offers a 
process of identifying and resolving such interference conflicts. We 
will evaluate election preferences for interference conflicts (as 
defined above), and ``lock in'' second round election preferences as 
tentative channel designations, to the extent possible. We will 
accommodate the election preference of each licensee to the extent 
possible, but cannot guarantee that licensees will receive their 
selected channel. The Second Round Conflict Form will provide second 
round electors with the opportunity to decide whether the interference 
and reduced facilities to which they would have to agree to obtain 
their channel preference would be acceptable to maintain their election 
preference. Second round electors unwilling to accept its election 
preference with interference and reduced facilities or that otherwise 
cannot resolve their interference conflict may participate in the third 
round of elections. We believe that in many cases of conflicting second 
round channel preferences, licensees will be able to reach settlement 
agreements, thereby avoiding the necessity of having the Commission 
resolve their conflict after the third round of elections.
    58. Upon completion of our second round interference conflict 
analysis, the Media Bureau will notify each licensee that is determined 
to cause an interference conflict(s). Licensees will have 60 days from 
the date of this conflict notification letter in which to file their 
Second Round Conflict Decision Forms, indicating how they intend to 
resolve their interference conflict. These Second Round Conflict 
Decision Forms, which we expect to be filed in November 2005, will 
provide licensees with the opportunity to decide whether to maintain 
their second round channel elections or instead participate in the 
third round. Licensees have several options available to them. 
Licensees can maintain their second round channel election if they 
resolve their interference conflict by (1) agreeing to accept 
interference and reduce facilities; Licensees must certify that they 
will resolve their interference conflict(s), and will be required to 
demonstrate such by submitting technical data. and/or (2) negotiating 
an agreement (i.e., conflict resolution agreement) with the licensee(s) 
with which they are in conflict. Licensees must certify that they will 
resolve their interference conflict(s), and will be required to 
demonstrate such by submitting evidence of a negotiated conflict 
resolution agreement and supplying engineering information, as may be 
necessary Licensees can decide to change their election to their 
contingent second round channel by entering into a negotiated channel 
election arrangement with another licensee whereby they surrender 
rights to their original channel preference to that licensee. Licensees 
may use their contingent channel election only in the context of a 
negotiated settlement with another licensee, and may not use their 
contingent channel election at all if such use would result in an 
interference conflict. Finally, licensees can decide that they are not 
willing to accept their election preference with interference and 
reduced facilities or that they cannot otherwise negotiate a resolution 
to their interference conflict and elect to participate in the third 
round of elections. We believe that in many cases of conflicting second 
round channel preferences, licensees will be able to reach settlement 
agreements, thereby avoiding the necessity of having the Commission 
resolve their conflict after the third round of elections. We note that 
where more than one station elects the same channel and those stations 
cannot negotiate a settlement agreement, the subject channel will 
become unavailable for selection in the second round and licensees will 
have the opportunity to select that channel in the third round. The 
Commission will resolve third round conflicts pursuant to certain 
criteria After receipt of the Second Round Conflict Decision Forms, we 
will announce any additional channel elections that have been ``locked 
in'' as tentative channel designations. Upon completion of the

[[Page 59511]]

second interference conflict analysis and tentative channel 
designations, we expect that only a small number of licensees will 
remain with no channel ``locked in.'' These licensees will be afforded 
an opportunity to file one additional election preference in the third 
and final round of elections. Based on this information, third round 
electors will be able to determine which channels are available to them 
for selection.
f. Step 6: Third and Final Round of Elections
    59. We will hold a third round of elections, expected to occur in 
January 2006, to find channels for licensees that were not ``locked 
in'' at tentative channel designations in the previous two rounds. This 
third round provides a subsequent round for two out-of-core licensees 
whose election preferences could not be accommodated in their initial 
round of elections. We agree with MSTV that these licensees, as well as 
any other licensees that remain unplaced at this time, should be 
afforded the opportunity to make one additional channel election 
preference. These licensees will file a Third Round Election Form 
Election preferences made in this round must protect all ``locked in'' 
channels. Participants in the Third Round may elect from available 
channels and may file negotiated channel election arrangements. If a 
licensee is not able to specify a preferred channel on which it can 
operate satisfactorily without conflicting with a protected channel, it 
may ask the Commission to specify a channel for its use at full 
replication facilities. In such cases, the Commission will select a 
channel that minimizes new interference among all affected stations.
    60. In this third round, we will also permit licensees with a low 
VHF channel or a channel subject to international coordination issues 
to seek an alternate tentative channel designation. Although the data 
are incomplete at this time, we are persuaded that low VHF licensees 
should be afforded an additional opportunity to find a channel that may 
better serve the public. For this reason, we will also permit two in-
core low VHF licensees to release both of their channels after the 
first round so that they may be treated as two out-of-core licensee and 
participate in the second round of elections. MSTV proposed an 
additional election round for licensees who found their prior election 
unacceptable and contemplated that licensees which had to choose 
between two low VHF channels would be among those possibly dissatisfied 
licensees. Specifically, to the extent a preferred channel is available 
in this final election round, we will allow such licensees to elect a 
different channel for their final DTV operations, notwithstanding that 
they have an elected and ``locked in'' channel. These licensees may 
also request that the Commission determine a ``best available'' channel 
for them at full replication facilities. We note that it may not be 
possible to accommodate these preferences. Moreover, it is possible 
that the low VHF channel may be the best available channel for the 
licensee. No other licensees with an elected (and ``locked in'') 
channel will be permitted to participate in this third and final round 
of elections.
    61. Conflicts among third round preferences. In deciding among 
third round election preferences, we will determine on a case-by-case 
basis what channel best replicates a station's service area while 
minimizing new interference to other stations. If, for example, the 
channel elected conflicts with a DTV channel tentatively designated for 
post-transition use by another station, the Commission will resolve the 
conflict by determining the best available channel for the licensee, as 
described herein. This analysis includes considerations of service to 
the public `` including service to local communities Considering 
licensees'' ability to reach and provide coverage to local communities 
is consistent with the Commission's statutory obligation to ensure that 
broadcasters are responsive to the needs and interests of local 
communities. `` and overall spectrum efficiency. We will also consider 
in our analysis those factors enumerated by MSTV: (1) Whether the 
station was an early adopter of DTV technology (i.e., the length of 
time the station has been operating on DTV); (2) the impact on the 
public's access to DTV services (i.e., the population served by the 
station's digital signal and the percentage of replication population 
covered); (3) whether one or both of the station's channels is/are in 
the low VHF band (which might weigh in favor of that station receiving 
priority); (4) whether coordination with or interference to or from 
Canada or Mexico is a problem; (5) the existence of any zoning, 
environmental or other such issues; and (6) any other factors that may 
be relevant at the time.
g. Step 7: New DTV Table of Allotments and Authorizations Proposed and 
Adopted Through Rulemaking Process
    62. After completion of our channel election and repacking process, 
expected by August 2006, we will issue a Notice of Proposed Rule Making 
to propose a New DTV Table of Allotments. In creating the new DTV 
allotments proposals, we will provide all eligible stations with 
channels for DTV operations after the transition. In developing the new 
allotments, we will attempt to accommodate the preferences of 
broadcasters to the extent possible. To clarify as requested by Cox 
Broadcasting, the process will account for interference agreements 
among stations under Sec.  73.623(g) of the Commission's rules and will 
generally preserve the protection afforded by those agreements. Our 
proposed Table will be based on the tentative channel designations 
established through our channel election process, as well as on our 
evaluation of overall spectrum efficiency and providing the best 
service to the public, including service to local communities. In the 
NPRM, we will seek comment on our proposed new DTV Table of Allotments.
    63. Only Commission licensees and permittees will participate in 
the channel election process. Applicants for new stations and 
petitioners for new allotments will not make elections. We note that 
there are remaining applications that have been pending since before 
1997 to obtain approximately 50 new NTSC stations. These applications 
will be dismissed if found to be inconsistent with the current 
protection requirements. In developing the post-transition DTV table, 
we will generally protect those NTSC allotments with pending new 
station applications that have ``cut-off'' status (do not face an 
additional opportunity for filing of mutually exclusive applications). 
This is consistent with the protection that must be afforded by DTV 
applications pursuant to Sec.  73.623(h)(2) of the rules. An exception 
to this protection is that we will not protect the existing channel 
allotment where the applications are associated with a rule making 
petition that requests another channel (but may protect the new channel 
proposed in the rule making petition in accordance with the discussion 
that follows). For mutually-exclusive groups of applications where 
there is a settlement, or the tentative selectee is known, we will 
consider the facilities proposed by the prevailing applicant in the 
settlement group or the tentative selectee. We will continue to process 
these protected applications to grant of an NTSC construction permit 
and note that these will be new single-channel stations, allowed to 
choose between NTSC and DTV operation during the transition, but 
required to become DTV

[[Page 59512]]

at the end of the transition. At the conclusion of the channel election 
and repacking process, remaining unprotected new station applications 
will be evaluated and may be accommodated with a post-transition DTV 
allotment or dismissed when we issue the NPRM proposing the new DTV 
Table of Allotments.
    64. Pursuant to opportunities the Commission provided, some of the 
pre-1997 NTSC applicants have continued to pursue a new station 
authorization by filing rule making petitions requesting a different 
NTSC channel or a DTV channel. In addition, some petitions have been 
filed seeking DTV channel allotments for new stations. These pending 
NTSC and DTV rule making proposals will be dismissed if found to be 
inconsistent with the current protection requirements. Each rule making 
request, including those associated with applications and those seeking 
new DTV allotments, falls into one of three groups: (1) Pending 
petitions for rulemaking; (2) outstanding rule makings (Notice of 
Proposed Rule Making issued); or (3) completed rule makings that now 
have pending applications for a construction permit. We will attempt to 
protect allotments and proposed allotments in the second and third 
groups where we have already adopted a Notice of Proposed Rule Making 
or a Report and Order to establish a channel allotment. Protection of 
these rule making proceedings is consistent with the requirements 
placed on DTV applications by Sec.  73.623(h)(2) of the rules. However, 
we advise these petitioners that there may be a few cases where we must 
modify, restrict or eliminate their requested allotment in order to 
accommodate all eligible broadcasters with a post-transition DTV 
allotment. Remaining rule making petitions will be evaluated at the 
conclusion of the channel election and repacking process and may be 
accommodated with a post-transition DTV allotment or dismissed when we 
issue the NPRM proposing the new DTV Table of Allotments.

Freeze of Procedures To Change Allotments

    65. A stable database is not only crucial to the channel election 
process, but is vital to the completion of the technically difficult 
task of developing a new DTV Table of Allotments. To make the channel 
election process and the creation of the new DTV Table of Allotments as 
manageable as possible, the Media Bureau has temporarily suspended 
certain procedures for altering DTV and analog TV service areas and 
channels until after the new DTV Table of Allotments is complete. We 
will continue to process rulemakings in which a Notice of Proposed Rule 
Making has been issued prior to the adoption of this Order. 
Additionally, the Media Bureau staff is directed to dismiss all pending 
petitions to change the NTSC Table of Allotments in which a Notice of 
Proposed Rule Making has not been issued prior to the adoption of this 
Order. We note that the Media Bureau staff previously dismissed or 
denied a number of petitions for new or changed NTSC allotments on 
various grounds, thereby declining to issue a Notice of Proposed Rule 
Making for these petitions. Several petitioners have sought 
reconsideration or review of these actions. In view of our decision to 
dismiss all pending petitions for new NTSC allotments which have not 
been subject to the notice process, all pending petitions for 
reconsideration or review of NTSC allotment requests that have not 
advanced to the notice stage are hereby dismissed. Pursuant to the 
freeze, the Media Bureau we will not accept for filing, until further 
notice, the following:
     Petitions for rulemaking to change DTV channels within the 
DTV Table of Allotments.
     Petitions for rulemaking for new DTV allotment 
proceedings.
     Petitions for rulemaking to swap in-core DTV and NTSC 
channels. In the NPRM, we sought comment on whether we should allow 
stations to use an application process to make these swaps. We proposed 
to require that parties meet the spacing requirements for amending the 
analog Table of Allotments pursuant to 47 CFR 73.610 and to allow 
parties to use Longley-Rice analysis to demonstrate that an analog TV 
station protects DTV stations and for amending the DTV Table of 
Allotments pursuant to 47 CFR 73.623. We invited comment on these 
proposals and on how the Commission should address any loss of analog 
service or cable carriage or other public interest issues that may 
arise in connection with analog/DTV channel swap proposals. Second DTV 
Periodic NPRM, 18 FCC Rcd at 1288, para. 28. Currently, two or more DTV 
licensees/permittees are allowed to request a swap of their DTV channel 
allotments by filing modification applications for each station. Few 
commenters address this issue on the record. Fewer state that they 
support channel swaps by application. See CEA Comments at 16; Thomas 
Smith Comments at 4. See also NYS-OFT Comments at 12-13; NPSTC Reply at 
3-4 (supporting easing Taboo restrictions on early DTV/In-core analog 
swaps); MSTV/NAB Comments at 7; Paxson Reply at 10; Sinclair Comments 
at 8. For the reasons stated above, we have determined that we will 
freeze all NTSC/DTV channel swaps upon adoption of this Order. We 
therefore do not reach the issue of streamlining the NTSC/DTV channel 
swap process.
     Applications to change DTV channel allotments among two or 
more licensees. 47 CFR 73.622(c)(1), 73.623. Stations hoping to 
participate in negotiated channel election arrangements, discussed 
supra, must notify the Commission in the channel election form. If 
these arrangements are approved, the participants will be notified.
     Petitions for rulemaking by licensees/permittees to change 
NTSC channels or communities of license.
     Television modification applications that would increase a 
station's DTV service area in channels 2-51 in one or more directions 
beyond the combined area resulting from the station's parameters as 
defined in the following: (1) The DTV Table of Allotments; (2) 
Commission authorizations (license and/or construction permit); and (3) 
applications on file with the Commission prior to release of this 
Order; and television modification applications that would increase a 
station's analog service area in channels 2-51 in one or more 
directions beyond the combined area resulting from the station's 
parameters as defined in the following: (1) Commission authorizations 
(license and/or construction permit) and (2) applications on file with 
the Commission prior to release of this Order. We froze maximization 
applications for channels 52-59 on June 18, 2002. Public Notice, 17 FCC 
Rcd 11290 (2002). We froze maximization applications for channels 60-69 
on January 24, 2003. Public Notice, 18 FCC Rcd 627 (2003). We will 
continue to process applications on file as of the date this Order is 
adopted. The Media Bureau may consider, on a case by case basis and 
consistent with the public interest, amendments to those applications 
to, for example, resolve interference with other stations or pending 
applications or resolve mutual exclusivity with other pending 
applications.
     Class A station displacement applications and applications 
for coverage changes that would serve any area that is not already 
served by that Class A station's authorized facilities. As an exception 
to this freeze, on-air Class A stations demonstrating that they

[[Page 59513]]

face imminent disruption of service may request an STA to continue 
operations. Displacement applications filed by out-of-core LPTV 
stations that have been deemed Class A-eligible requesting a move to an 
in-core channel where Class A authority could be granted will not be 
acted on during this freeze, but for such stations, immediate non-Class 
A LPTV displacement relief may be requested through an STA.
    66. Notwithstanding the freeze, licensees will not be prevented 
from filing modification applications when the application would help 
resolve international coordination issues or when a broadcast station 
seeks a new tower site due to the events of September 11, 2001. In 
addition, the Media Bureau will consider, on a case-by-case basis, 
requests for waiver of the freeze when the modification application is 
necessary or otherwise in the public interest for technical or other 
reasons, such as when zoning restrictions preclude tower construction 
at a particular site or when unforeseen events, such as extreme weather 
events or other extraordinary circumstances, require relocation to a 
new tower site.

Border Interference Issues

    67. There are approximately 43 stations with DTV applications 
awaiting international coordination. As of August 4, 2004, there are 32 
pending DTV applications/rule making proposals requiring Canadian 
approval and 11 pending DTV applications/rule making proposals 
requiring Mexican approval. (These numbers do not reflect those 
applications which have failed the coordination process or which 
require further action by the applicant.) We recognize that certain 
issues may remain to be completed in connection with the Canadian 
approval process for these stations. We will still require, however, 
broadcasters to make timely channel elections. As noted above, 
broadcasters with an out-of-core DTV channel and an in-core analog 
channel that is not available for digital use under the LOU should 
indicate this fact on their channel election form. Like any one in-core 
licensee, these licensees may release their in-core channel and 
participate in the second round of elections; however, we will also 
afford licensees a later opportunity in the third round to elect 
another channel in the event their elected channel remains subject to, 
or was in the interim adversely affected by, international 
coordination. Those broadcasters remaining on their DTV allotments that 
do not have applications to maximize should not have unusual 
difficulties in the approval process. With respect to post-transition 
DTV replication of stations' current analog service, we must coordinate 
DTV use of NTSC channels in border areas. We will conduct this 
coordination in the course of the new allotment rulemaking. We will 
resolve any remaining international coordination issues as part of the 
process of developing new DTV allotments.

Replication and Maximization

    68. In the creation of the DTV Table of Allotments, each DTV 
channel allotment was chosen to allow DTV service thereon to best match 
the Grade B service contour of the NTSC station with which it was 
paired. We took this approach to ensure that broadcasters have the 
ability to reach the audiences that they have been serving with the 
NTSC analog transmission system and that viewers continue to have 
access to the stations that they are accustomed to receiving over the 
air. Although we have declined to make full signal replication 
mandatory, we continue to believe that most DTV broadcasters eventually 
will replicate their NTSC coverage with DTV service. As an incentive to 
replicate, we stated that DTV licensees must either be on the air 
replicating their April 1997 NTSC Grade B service area as of the 
replication deadline or lose interference protection to the 
unreplicated portion of this service area outside the noise-limited 
signal contour. We stated that other full or low-power stations would 
then have the opportunity to expand their service areas to serve the 
viewers made available as a result of a DTV station's failure to fully 
replicate. We also stated in the First DTV Periodic MO&O that we would 
treat stations seeking to maximize their service areas in a similar 
manner. First DTV Periodic MO&O, 16 FCC Rcd at 20606, paras. 29-30. By 
maximizing, stations make power and antenna height increases above the 
values allotted in the DTV Table, and site changes that extend the 
service area of DTV facilities beyond the NTSC replication facilities. 
Class A Order, 15 FCC Rcd at 6377, para. 52. Congress has recognized 
the importance of preserving the right of DTV stations to maximize and 
has established specific measures to protect coverage areas defined in 
maximization applications. In the Community Broadcasters Protection Act 
of 1999, Congress protected applications for maximization against new 
Class A stations. To be entitled to protection by low power television 
stations applying for primary Class A status, DTV stations were 
required to have filed an application for maximization or a notice of 
intent to seek maximization by December 31, 1999, and to have filed a 
bona fide application for maximization by May 1, 2000. We have 
emphasized DTV service maximization in the digital transition as a 
means by which stations may increase their DTV signal coverage and 
provide DTV service competitively within their respective markets. 
Sixth Report and Order, 12 FCC Rcd at 14605, para. 30. The Media Bureau 
froze maximization applications in the 698-746 MHz band (channels 52-59 
or the ``Lower 700 MHz band'') to assist participants in Auction No. 44 
to determine the areas potentially available in the band for the 
provision of service by auction winners before the channels are 
cleared. Public Notice, 17 FCC Rcd 11,290 (2002). The Media Bureau 
later froze maximization applications in the 746-806 MHz spectrum band 
(channels 60-69 or the ``Upper 700MHz band'') to protect Guard Band and 
Public Safety entities from shifts or expansion in existing broadcast 
service, and to facilitate the eventual clearing of this spectrum and 
the auction of the commercial portions of the spectrum.
    69. In the First DTV Periodic MO&O, our goal in temporarily 
deferring the replication protection deadline established in the First 
DTV Periodic Report and Order was to permit stations to elect a more 
gradual build-out of their DTV facilities, and thereby increase the 
number of stations capable of commencing digital service to at least 
their core communities by the May 2002 and May 2003 construction 
deadlines. We also gave DTV licensees seeking to maximize facilities, 
including analog UHF licensees, the same flexibility to implement 
graduated construction plans as analog VHF licensees.
    70. We stated in the First DTV Periodic MO&O that we would 
establish in this second DTV periodic review a date by which 
broadcasters must either replicate their NTSC coverage or lose DTV 
service protection to the unreplicated areas, and by which broadcasters 
with authorizations for maximized digital facilities must either 
provide service to the associated coverage area or lose DTV service 
protection to the uncovered portions of those areas. For DTV channels 
within the core spectrum, we proposed in the NPRM to set new 
replication and maximization protection dates: July 1, 2005, for 
affiliates of the top-four networks (i.e., ABC, CBS, Fox and NBC) in 
markets 1-100; and July 1, 2006, for all other commercial DTV licensees 
as well as noncommercial DTV licensees. We sought comment on these 
dates, stating our goal to allow stations sufficient time to provide 
full replication and maximization service while also ensuring that 
stations

[[Page 59514]]

continue to progress toward an all-digital broadcast service. We 
requested comment on whether we should adopt the same or different 
replication and maximization interference protection deadlines for 
stations operating in the 700 MHz band. We also sought comment on the 
disposition of construction permits or applications for replication or 
maximization pending after the deadline.
    71. We take seriously our mandate to speed the transition and to 
ensure that the spectrum is used efficiently. At the same time, we have 
attempted to accomplish these objectives without imposing undue cost 
and delay on broadcasters. After careful consideration of the comments, 
we will adopt the following use-it-or-lose-it replication and 
maximization deadlines:
     July 1, 2005--Use-it-or-lose-it deadline for DTV licensees 
affiliated with the top-four networks (i.e., ABC, CBS, Fox and NBC) in 
markets 1-100. Those licensees that receive a tentative DTV channel 
designation in the channel election process on their current digital 
channel must construct full, authorized facilities. Those licensees 
that receive a tentative DTV channel designation on a channel that is 
not their current DTV channel must serve at least 100 percent of the 
number of viewers served by the 1997 facility on which their 
replication coverage was based. The number of viewers served by a 
station's 1997 facility on which its replication is based will be 
determined using population data from the year 2000 census. Thus, the 
population that will be reported as served by a station's 1997 facility 
on the table of station information that we plan to issue soon will 
generally be different (in most cases larger) than the population 
reported as served by that facility.
     July 1, 2006--Use-it-or-lose-it deadline for all other 
commercial DTV licensees as well as noncommercial DTV licensees. Those 
licensees that receive a tentative DTV channel designation in the 
channel election process on their current digital channel must 
construct full, authorized DTV facilities. Those licensees that receive 
a tentative DTV channel designation on a channel that is not their 
current DTV channel must serve at least 80 percent of the number of 
viewers served by the 1997 facility on which their replication coverage 
was based.
    72. We adopt these deadlines for the following reasons. First, we 
believe that the time has come to ensure that consumers have access to 
a full range of digital programming services from their local broadcast 
stations. We note that, even according to MSTV's own study, 
approximately 40 percent of stations operating pursuant to STAs are 
reaching less than 70 percent of their analog population with a digital 
signal. The unserved households are more likely to be in outlying or 
rural areas, since the minimum STA coverage requirement is that a 
station's DTV signal covers its actual community of license. Those 
consumers, like all consumers, reasonably expect that when they buy a 
digital television set they will be able to receive the same broadcast 
stations in digital that they receive in analog.
    73. Second, our temporary deferral of the replication and 
maximization deadlines in 2001 recognized that, given the existing 
marketplace conditions, some broadcasters, particularly those in 
smaller markets, needed to take a more graduated build-out approach. In 
particular, we recognized the existing reality of modest DTV receiver 
penetration, which affected the financial decisions of broadcasters and 
those who fund them. The outlook for DTV receivers has changed 
dramatically since 2001. In August 2002, the Commission adopted a DTV 
tuner mandate. Beginning on July 1, 2004, television receivers shipped 
in the U.S. must include digital broadcast tuners on a phased-in basis; 
by July 2007, all television receivers 13 inches and above must include 
a digital broadcast tuner. In addition, in September 2003, the 
Commission adopted rules to permit the manufacture of cable-ready 
``plug-and-play'' sets for one-way digital programming. By Commission 
mandate, each of these sets will also include an over-the-air digital 
tuner. Between these mandates and the overall increasing pace of the 
DTV transition, we expect that the penetration of digital televisions 
with off-air reception capability will dramatically increase in the 
coming years. Indeed, in testimony before Congress in June 2004, the 
Consumer Electronics Association (``CEA'') forecast that more than 85 
million American homes will have DTV tuners by 2010. This emerging 
reality should alleviate the concerns of commenters stating that they 
do not wish to provide service in advance of widespread DTV set 
penetration. Therefore, we do not believe it is appropriate to further 
postpone replication and maximization deadlines.
    74. Third, we do not believe a replication/maximization deadline 
will impose an undue burden on broadcasters. Approximately 45 percent 
of broadcasters currently on the air have built licensed facilities and 
are operating at full power. Many of these full-power stations are 
located in smaller markets and/or are non-commercial. Not only did they 
incur higher build-out costs than a station building today, but they 
have been incurring higher power costs to operate at full power. It 
would be inequitable to permit broadcasters operating at lower power--
who have already accrued significant benefits from the Commission's STA 
policy--to continue to require the full-power broadcasters continue to 
shoulder a heavier load throughout the transition.
    75. Fourth, we do not believe that the build-out deadlines will 
result in undue ``stranded investment.'' As an initial matter, we are 
not requiring stations to replicate or maximize. The ``use-it-or-lose-
it'' deadline simply means that after a reasonable build-out period has 
passed, if a station fails to provide a signal to serve certain 
viewers, another entity should have the opportunity to do so. After a 
reasonable build-out period, we believe that the objectives of 
providing service to the public and spectrum efficiency militate 
against further protection of the unserved areas. In addition, we have 
made a significant accommodation for those broadcasters moving to a new 
DTV channel at the end of the transition: The top-four network 
affiliates in the top 100 markets need only provide service to the same 
number of viewers as their replicated service area in order to preserve 
their right to maximize/replicate on their ultimate DTV channel; the 
remaining stations need only serve 80 percent of the number of viewers 
in their replicated service area to preserve their right to maximize/
replicate on their ultimate DTV channel. If, as MSTV asserts, a 
significant amount of power (and hence, expense) is needed to ``push'' 
a UHF television signal out the last few miles beyond the station's 
``line of sight'' or ``radio horizon,'' this should help address the 
concern. Moreover, we have made a special accommodation, described 
below, for many of the broadcasters for whom there would certainly be 
stranded investment--those with a DTV allotment outside of the core. We 
also note, according to Harris Corporation, that much of the investment 
in building out will not be stranded even if a station ultimately moves 
to another channel because some of the equipment can be re-used. 
Depending on the station's power level and whether it ultimately moves 
to an in-core VHF or UHF channel, the ``stranded'' investment caused by 
an intermediate power increase on the existing DTV channel could range 
from $345,000 for a higher power station (out of a total investment of 
$1,355,000 to $1,975,000) to $505,000 for a lower

[[Page 59515]]

power station (out of a total investment of $1,145,000 to $1,720,000). 
Finally, for those broadcasters with an in-core DTV allotment that may 
want to consider moving elsewhere at the end of the transition, 
whatever additional costs there are can be factored into that decision 
just like the sunk costs of the initial STA facility. In any event, 
these broadcasters would be in no worse position than the hundreds of 
broadcasters that have already built out to full power and may face a 
similar choice.
    76. Fifth, as with other aspects of the transition such as the 
initial construction deadlines, we recognize the particular needs of 
smaller market and non-commercial broadcasters by setting earlier 
deadlines for the larger market, commercial broadcasters expected to 
lead the transition. In addition, we are adopting a waiver process for 
stations that truly cannot afford to build out to these minimum 
requirements, or that cannot build out for other reasons beyond their 
control.
    77. Stations on any channel that have received construction permits 
with construction deadlines that extend beyond these replication/
maximization interference protection dates must meet their replication/
maximization requirements at the expiration date specified by their 
construction permit. In the First DTV Periodic MO&O, the Commission 
established a process whereby certain commercial stations and all 
noncommercial educational stations operating pursuant to a DTV STA 
would receive automatic DTV CP extensions until a future ``use or 
lose'' date. 16 FCC Rcd at 20608, para. 36. In the Second DTV Periodic 
NPRM, we sought comment on new replication and maximization protection 
dates and on the disposition of construction permits or applications 
for replication or maximization pending at the time of the deadline. In 
conjunction with the replication and maximization protection dates 
adopted herein, we clarify that we will also apply the DTV CP extension 
policy to all stations operating with a licensed DTV facility. 
Therefore, all properly authorized operating DTV stations with 
authorized CPs to make changes to their licensed facilities, including 
the network affiliate stations in the top 30 markets, will have their 
CPs extended until the replication/maximization interference protection 
deadlines established in this order. We believe this change is 
appropriate in order to provide consistency in the treatment of 
stations with outstanding CPs that have already received a DTV license 
and those with an outstanding CP operating pursuant to a DTV STA. They 
must build facilities that meet the minimum requirements by that date 
or lose interference protection.
    78. A station that fails to meet the above replication/maximization 
requirements will lose interference protection to the unused portion of 
the associated area as of the applicable interference protection 
deadline, as described more fully in section IV.D., infra. As a 
practical matter, nearly every station that has fully replicated its 
analog coverage will have maximized its DTV coverage by reaching at 
least some small areas beyond the analog Grade B contour. Where a 
station has maximized its DTV coverage by a coverage shift that leaves 
some of its replication coverage area unserved, then the station's 
protection will shift to its maximized coverage area and it will lose 
interference protection to the unserved replication area. In addition, 
a station failing to meet the above deadlines will lose the ability to 
``carry over'' its interference protection to its unserved DTV service 
area on its post-transition channel (e.g., on its in-core NTSC 
channel), as determined in the channel election process described 
above. Analog service will remain protected throughout the transition, 
but DTV service to the former analog area will not be protected after 
the transition unless replication deadlines are met. Some stations may 
currently have licenses or construction permits to serve areas smaller 
than the service area allotted to them in the DTV table of allotments. 
Unless broadcasters in this situation construct facilities to serve 
these unserved areas within the DTV allotment prior to the replication/
maximization interference protection deadline, they risk not being able 
to expand later to regain that service area. Thus, for example, if a 
station subject to the July 1, 2006 deadline builds out only to 60 
percent of its replicated service population by that date, it will lose 
interference protection on its digital allotment beyond that 60 percent 
service area, and, if it seeks to move to its NTSC allotment at the end 
of the transition, it will not retain the ability to carry over 
interference protection beyond the 60 percent service area.
    79. By contrast, a station that meets its applicable build-out 
requirements will retain interference protection to its authorized 
service area on its DTV channel if it remains on that channel, as well 
as the ability to ``carry over'' its interference protection for its 
authorized DTV service area if it moves to a different DTV channel 
post-transition. This decision modifies our decisions in the Class A 
Order and Class A Recon. Class A Order, 15 FCC Rcd at 6379-80, para. 
58; Class A Recon., 16 FCC Rcd 8269-70, para. 67. In the Class A Order, 
in the context of relative interference protection priorities of Class 
A and DTV stations, we stated that ``[t]o preserve their ability to 
maximize * * * within the core, we will require stations * * * to * * * 
maximize their DTV service area on their * * * DTV channel. These 
stations must have filed a notice of intent to maximize and must file 
an application to maximize within the deadlines mandated by the CBPA. 
[W]e will allow these stations to carry over to their in-core [NTSC] 
channel the maximized digital service area achieved on the [DTV] 
channel, to the extent that the [NTSC] channel facilities for 
maintaining the maximized service area provide required interference 
protection to other DTV stations.'' Class A Order, 15 FCC Rcd at 6379-
80, para. 58. Under today's decision, stations need only meet our 
replication/maximization build-out deadlines to preserve their ability 
to maximize on their ultimate DTV channel. Similarly, stations electing 
to forfeit their current DTV channel and ``flash-cut'' to digital on 
their analog channel under the options described below for stations 
with out-of-core DTV allotments and satellite stations, will be 
entitled to interference protection as if they met the applicable 
replication/maximization build-out deadlines. However, a station moving 
to a different DTV channel at the end of the transition will lose 
interference protection during the transition to any unserved areas on 
its current DTV channel as of the applicable deadlines, notwithstanding 
the fact that it meets the minimum build-out requirements. For example, 
assume a broadcaster subject to the July 1, 2006 deadline will be 
changing DTV channels at the end of the transition and meets the 80 
percent build-out requirement by serving 90 percent of its replicated 
service population by July 1, 2006. Assume further that it was 
authorized to build maximized facilities, serving 120 percent of its 
replicated service population. At the end of the transition, it will be 
entitled to ``carry over'' its full maximization service area, to the 
extent possible under our rules. However, during the transition, the 
station will lose interference protection on its existing DTV channel 
for those areas within its maximized service area that are unserved as 
of the deadline (i.e., those areas containing 90 percent-120 percent of 
its service population).
    80. For those stations that are unable to provide the required 
service by our replication/maximization protection deadlines because of 
severe financial

[[Page 59516]]

constraints or circumstances beyond a station's control, we will 
establish a limited waiver process and grant extensions of the 
applicable replication or maximization interference protection deadline 
on a six-month basis if good cause is shown. Broadcasters seeking a 
waiver on the basis of financial hardship must make a showing similar 
to that required to obtain a waiver of the DTV construction deadlines 
on financial hardship grounds. As with any request for waiver of our 
rules, a request for an extension of the applicable deadline will be 
granted only upon a showing of good cause and where grant of the 
extension will serve the public interest.

Single Channel Broadcasters

    81. KM Companies requests that we specifically address the 
treatment of single channel broadcasters with respect to the 
interference protection deadline. As discussed elsewhere, single 
channel broadcasters will participate in the channel election process. 
Analysis of their channel elections will be based on their authorized 
facilities (construction permit for stations that have both a license 
and a construction permit). Whether their single-channel authority is 
analog or digital, a broadcaster that has not constructed or is not 
operating the appropriate facilities on which its election analysis is 
based will lose protection of the unserved area as of the applicable 
interference protection deadline (except in cases where the DTV 
allotment coverage is based on a construction permit that expires after 
the deadline, in which case they will keep their protection as long as 
the construction permit remains valid).

Early Surrender of DTV Out-of-Core Channels (``Flash Cut'')

    82. The Second DTV Periodic NPRM asked if we should establish 
earlier replication and/or maximization interference protection 
deadline(s) for out-of-core broadcasters (i.e., in the 700 MHz band) 
than broadcasters operating on channels within the core in order to 
allow new services to be provided in portions of replication areas that 
a DTV licensee may never plan to serve in this spectrum.
    83. The Commission permits broadcasters with NTSC stations in the 
Upper 700 MHz (60-69) or the Lower 700 MHz (52-59) to enter into 
voluntary band clearing arrangements consistent with the Commission's 
existing band-clearing rules and Section 6 of the Auction Reform Act of 
2002. Auction Reform Act of 2002, Pubic Law 107-195, 116 Stat. 715 
(``Auction Reform Act'') section 6(a), 47 U.S.C. 337 note. Section 6 of 
the Auction Reform Act restricts the Commission from waiving certain 
broadcast interference standards and the minimum spacing requirements 
for certain proposals to relocate Channel 52-69 analog operations to a 
Channel 2-51 DTV allotment, if such waiver ``will result in any 
degradation in or loss of service, or an increased level of 
interference to any television household except as the Commission's 
rules would otherwise expressly permit, exclusive of any waivers 
previously granted.'' Id. These restrictions do not, however, apply to 
proposals to move Channel 63, 64, 68, or 69 analog operations to in-
core DTV allotments ``in order to make such frequencies available for 
public safety purposes.'' Id., Section 6(b). In furtherance of the 
significant public interest in rapid band clearing, and in recognition 
of the fact that all out-of-core DTV facilities will have to move at 
the end of the transition, we will permit stations with an in-core NTSC 
channel paired with an out-of-core DTV channel, as well as stations 
with two out-of-core channels, to surrender their out-of-core DTV 
channels and operate in analog on their analog channels. We will also 
permit single-channel DTV stations out of the core, upon Commission 
approval, to elect not to construct DTV facilities and instead to give 
up their assigned DTV channel in the 700 MHz band in return for a DTV 
channel inside the core. We will assign these broadcasters an in-core 
DTV channel when we generate a revised DTV Table of Allotments Stations 
have up to their initial channel election deadline to inform the 
Commission that they will use this option. We delegate the authority to 
grant these requests to the Media Bureau. Upon approval from the 
Commission, these stations will then surrender their out-of-core 
digital channel and be treated as single channel stations, allowed to 
``flash cut'' to digital on their in-core channel no later than the end 
of the transition in the stations' markets. These stations will retain 
their ability to replicate and/or maximize on their NTSC allotment as 
if they met the applicable replication/maximization build-out 
requirement. The station will then be responsible for meeting any DTV 
service obligations (e.g. hours of operation, and replication/
maximization requirements), applicable to other like broadcasters on 
the date it commences DTV operations. Because of the greater potential 
for wasted expenditures in DTV facilities built in the 700 MHz band 
(since there will not be an opportunity to remain in that band after 
the transition), and given the potential for earlier use of this 
spectrum by public safety and other 700 MHz licensees, we will presume 
that granting such a request will be in the public interest if the 
station demonstrates that it is assigned a DTV channel out of the core 
and that grant of the request would not result in the loss of a DTV 
channel affiliated with one of the four largest national television 
networks (ABC, CBS, NBC, or Fox). We have consistently relied on 
affiliates of the four largest national television networks to achieve 
the necessary milestones throughout the DTV transition. These stations 
also must remain on the air in order to fulfill Congress' directive 
that stations ``licensed to or affiliated with one of the four largest 
national television networks'' must be ``broadcasting a digital 
television service signal'' in order for the transition to occur. We 
conclude that the presumption we establish is consistent with Congress' 
objectives for this spectrum, should generally increase the 
attractiveness of the spectrum to potential 700 MHz licensees, and will 
not unduly delay the expeditious transition to DTV.
    84. This presumption, however, is neither conclusive nor 
dispositive. We will also consider whether special circumstances raised 
by the resulting loss of digital broadcast service would be sufficient 
to rebut the presumption. We find that the surrender of DTV channels of 
these out-of-core stations will generally not create a loss of 
particular programming to viewers during the transition because, as 
presented in Paxson's comments, the stations will continue analog 
operations until switching to DTV by the end of the transition Also, 
for requests that do not meet the presumption, we would consider all 
the relevant public interest factors regarding opportunities for 
provision of wireless and public safety services, acceleration of the 
DTV transition, and the loss of broadcast service in deciding whether 
or not to approve the request.
    85. Stations that have been denied an extension of the construction 
requirements and admonished because they failed to demonstrate that 
they are meeting the necessary criteria for an extension and have not 
come into compliance are not eligible to surrender their out-of-core 
DTV channel. On April 16, 2003, the Commission released an Order 
establishing remedial measures to be followed when a television station 
fails to meet its DTV construction deadline and fails to adequately 
justify an extension of its DTV construction deadline. Under the three-
step graduated sanction process we will first deny the request for an 
unqualified extension and admonish the station for its failure to 
comply with its DTV

[[Page 59517]]

construction obligation. The station will then have six months to 
complete its construction, subject to reporting requirements and 
possible additional sanctions in the interim. Under the second step, if 
the station has not come into compliance with the DTV construction 
requirement within the six-month period, then, absent extraordinary and 
compelling circumstances, we will issue a Notice of Apparent Liability 
for forfeiture to the licensee and require that the station report 
every 30 days on its proposed construction milestones and its efforts 
to meet those milestones. Under the third and final step, if the 
station has continued to fail in its efforts to come into compliance 
with the DTV construction requirement within the second six-month 
period of time (i.e., one year from the date of the formal admonition), 
then, absent extraordinary and compelling circumstances, we will 
consider its construction permit for its DTV facilities to have expired 
and we will take whatever steps necessary to rescind the station's DTV 
authorization.

Satellite Stations

    86. In the Second DTV Periodic NPRM we sought comment on whether 
the public interest would be served by allowing television satellite 
stations to turn in their digital authorization and ``flash-cut'' to 
DTV transmission at the end of the transition period. TV satellite 
stations are full power terrestrial broadcast stations authorized under 
part 73 of the Commission's rules to retransmit all or part of the 
programming of a parent station that is typically commonly owned. 
Eligible satellite stations were assigned a paired DTV channel in the 
current DTV Table of Allotments. The Commission first authorized TV 
satellite operations in small or sparsely populated areas, which were 
deemed to have economic bases insufficient to support stand-alone, 
full-service operations. The Commission later authorized satellite 
stations in larger markets when the applicant demonstrated that the 
proposed satellite could not operate as a stand-alone, full-service 
station. The Commission has also allowed a full-service station to 
convert to satellite operation upon a showing that the community no 
longer has a sufficient economic base to support a full-service 
operation.
    87. On October 16, 2003, the Commission deferred the digital 
construction deadlines for 30 satellite stations that had requested a 
third extension of time to construct. The Commission noted that the 
issue of whether to permit satellites to turn in their digital 
authorization and ``flash cut'' to DTV transmission at the end of the 
transition period is under consideration in this proceeding.
    88. To ensure that the channel election process described herein 
proceeds smoothly and that the channels being surrendered by satellite 
licensees are included, we will require all satellite stations to 
participate in the channel election process. We will permit satellite 
stations to surrender one of their paired channels (the one not elected 
on their channel-election form for use after the transition) and flash 
cut from analog to digital transmission by the end of the transition 
period. Satellite stations that choose to flash cut must make the flash 
cut decision and notify the Commission by their initial channel 
election deadline. Satellite stations choosing the flash cut option 
will be required to surrender one of their two broadcast channels. 
Except as provided below (for stations with out-of-core analog and in-
core DTV channels), satellite stations that choose not to flash cut and 
instead choose to retain both an analog and a digital channel during 
the transition period must comply with the applicable digital 
construction deadlines, including any extension granted by the 
Commission. As noted above, a satellite station that surrenders one of 
its channels under the ``flash-cut'' option will be treated as if it 
met the applicable replication/maximization build-out requirements.
    89. Satellite stations with an analog channel outside the core and 
that are electing their current in-core DTV channels for post-
transition DTV service will not be required to surrender a channel at 
this time. To do so would require these stations to give up their DTV 
channels unnecessarily or to build DTV facilities now, unlike other 
satellite stations which, under the flash cut policy announced herein, 
may elect to wait to build their digital facilities until closer to the 
end of the transition period. In this instance, we believe the benefits 
of this approach outweigh our interest in rapid clearing of the out-of-
core television spectrum. Satellite stations with an out-of-core analog 
channel and an in-core digital channel may retain their out-of-core 
channel for continued analog service until the end of the transition or 
until they decide to build and transmit only in digital, whichever is 
earlier.
    90. Stations electing to return their DTV channel to the Commission 
will retain interference protection to the areas defined in existing 
DTV replication or maximization applications on file with the 
Commission until the end of the transition when the station must 
commence digital transmissions. This interference protection will apply 
to the digital service area of the channel on which the station flash 
cuts to digital to the extent that the station replicates and maximizes 
at the time of the flash cut and to the extent consistent with our DTV 
interference protection rules. To ensure that satellite stations that 
have already constructed digital facilities or that do so before the 
end of the transition are not disadvantaged, we will also permit these 
stations to retain replication and maximization interference protection 
for their digital stations until the end of the transition in their 
market. Similarly, to provide satellite stations that have constructed 
digital facilities additional flexibility during the transition while 
maintaining an basic level of service to the public, we will also 
permit satellite stations that choose to construct separate digital 
facilities to operate only during prime time hours (at a minimum) until 
the end of the transition.
    91. We believe that this approach will best ensure that satellite 
stations complete the conversion to digital format and continue to 
provide broadcast programming to viewers in their communities. We agree 
with LeSEA, Media General, and MSTV/NAB that many satellite stations 
may not be financially capable of operating both an analog and a 
digital facility concurrently. As these commenters point out, satellite 
stations provide programming to communities that cannot support 
operation of these stations on a full-service basis. Indeed, Media 
General and LeSEA state that their satellite stations continually 
operate at a loss and that, absent some relief from the requirement of 
constructing and operating dual facilities during the transition, they 
may be forced to turn in their satellite licenses and cease all 
operations. Unlike full-service stations, satellite stations have 
chosen to forego or relinquish full-service status and instead 
retransmit the programming of a parent station because full-service 
operation of the satellite facility is not economically viable. We 
believe that the unique status of and circumstances faced by satellite 
stations warrant special treatment of these stations during the 
transition.
    92. We do not believe that granting this special relief to 
satellite stations will unduly hinder the overall transition to digital 
television. Some of the affected viewers may have access to other 
digital signals. According to a study of its satellite stations. 
Moreover, the alternative to the flash-cut option we are adopting 
today, that of requiring

[[Page 59518]]

satellites to operate dual facilities during the transition, could 
result in the cessation of all service, either analog or digital, by 
some satellite stations. The approach we adopt today will ensure that 
satellite stations provide digital service by the end of the transition 
and will help preserve television service in the historically 
underserved communities in which most satellite stations operate.
Disposal of Construction Permits and Applications for Replication/
Maximization
    93. In the NPRM, we asked for comment on how the Commission should 
dispose of a station's construction permit or application for 
replication or maximization facilities if the station fails to 
construct and operate facilities that fully replicate its NTSC service 
or provide signal coverage over an authorized maximized service area by 
the interference protection deadlines established in this proceeding. 
We stated that our inclination was to restrict any station that has 
failed to fully replicate or construct its authorized maximization 
facilities by the applicable deadline from filing an application to 
expand coverage for a certain period of time in order to allow other 
existing or new stations, including Class A eligible LPTV stations on 
out-of-core channels, to apply to use this spectrum.
    94. We will dismiss any applications and cancel any construction 
permits for facilities in excess of those in actual operation by a 
station as of the applicable interference protection date. We will 
require broadcasters to file applications for licenses to cover their 
actual facilities served as of the interference protection deadline. We 
have given broadcasters ample opportunities over the past years to 
expand their service areas, and advance warning that if they elect not 
to provide their viewers with DTV the Commission may ensure the area is 
served in other ways. Therefore, we will permit existing DTV stations 
seeking to expand their coverage area and Class A eligible stations on 
out-of-core channels to apply for unused spectrum within the core. LPTV 
stations may also apply for secondary operation on unused spectrum. We 
will describe the procedures for filling in those unserved areas in a 
future public notice or as part of the periodic review process. 
Broadcasters failing to meet our replication or maximization deadlines 
will be permitted to reapply for authorization to provide service to 
those areas, but their applications will be subject to conflicting 
applications. This will allow other existing stations, including Class 
A eligible LPTV stations on out-of-core channels, the opportunity to 
apply to use this spectrum. The process for resolving conflicting 
applications will be announced in another public notice or proceeding.

Pending DTV Construction Permit Applications

    95. Approximately 65 commercial and noncommercial television 
licensees have not yet been granted an initial DTV CP. Almost all of 
these licensees have filed an application for a digital CP, but grant 
of these applications has been delayed for a variety of reasons, 
including delays in international coordination with Canada and Mexico 
and unresolved interference issues. To date, these applicants have not 
been required to construct DTV facilities pending action on their 
outstanding DTV applications. To ensure that all licensees that have 
been allotted digital spectrum begin to provide digital service, we 
proposed in the Second DTV Periodic NPRM to require that all television 
licensees that have filed an application for a digital CP with the 
Commission that has not yet been granted commence digital service 
pursuant to special temporary authority (``STA'') within one year from 
adoption of the Report and Order in this proceeding.
    96. It is crucial at this stage of the transition that all 
licensees with DTV CP applications that have not yet been granted begin 
to construct digital facilities. We will therefore adopt a proposal 
similar to that advanced in the NPRM. Rather than requiring licensees 
with pending DTV CP applications to construct at least the minimum 
initial facilities required to serve their communities of license 
within a year from the adoption of this Report and Order, as we 
proposed, we will instead require such licensees, within the same time 
frame, to construct and operate ``checklist'' facilities that conform 
with the parameters of the DTV Table of Allotments and other key 
processing requirements. ``Checklist'' facilities have power and 
antenna height equal to or less than those specified in the DTV Table 
of Allotments and are located within a specified minimum distance from 
the reference coordinates specified in the DTV Table of Allotments. 
Because these facilities comply with the interference requirements 
specified in the rules, no further consideration of interference is 
required. In addition, because the DTV Table has been coordinated with 
Canada and Mexico, ``checklist'' facilities generally do not require 
further international coordination. This approach best advances our 
goal of ensuring continued progress in the transition by requiring that 
all licensees begin to provide DTV service. ``Checklist'' applications 
are routinely processed by the Commission staff within three days of 
filing, and most do not require international coordination. Thus, this 
procedure is the most expeditious means of awarding DTV construction 
permits to those licensees who do not yet have them.
    97. Many licensees with pending DTV CP applications are facing 
delays beyond their control. Some are awaiting international 
coordination of pending applications or resolution of interference 
issues. Other licensees have applied for new DTV allotments either to 
replace an initial out-of-core allotment with one in the core or to 
otherwise improve their potential DTV service. Although the Commission 
will continue to work with applicants to resolve outstanding issues and 
to process pending applications for digital facilities as expeditiously 
as possible, we nonetheless agree with those commenters who argue that 
it is critical at this stage in the transition that all licensees begin 
working toward construction of DTV facilities.
    98. We will allow licensees with pending DTV CP applications that 
file checklist applications to continue to pursue their non-checklist 
applications now on file. Thus, while these applicants will receive a 
construction permit for a checklist facility and will be required to 
construct such facilities within one year from adoption of the Report 
and Order in this proceeding, we will permit these applicants to 
continue to attempt to resolve the issues delaying approval of their 
non-checklist application currently on file with the Commission. If the 
non-checklist application is approved before construction of the 
checklist facility is complete, the permittee may request that the 
Commission substitute the non-checklist CP for the checklist CP. The 
Commission will consider requests for waiver of the one year 
construction deadline, on a case-by-case basis, using the criteria for 
extension of DTV construction deadlines. Grounds for an extension must 
relate to the checklist facility, not the pending non-checklist 
application.

Intermediate Signal Level

    99. In the First DTV Periodic MO&O, we allowed stations to commence 
digital operations by constructing and operating facilities that at 
least provide the required level of digital signal strength to their 
communities of license. We predicted that the ``requirement that

[[Page 59519]]

broadcasters serve their community of license will ensure that, for 
most stations, the majority of their analog service populations will 
receive initial digital service.'' We also decided to retain our 
enhanced principal community signal strength standard, which requires a 
7dB increase in community of license coverage that must be met by 
December 31, 2004, for commercial stations and December 31, 2005, for 
noncommercial stations. In the First DTV Periodic Report and Order, we 
imposed a principal community coverage requirement that is stronger 
than the DTV service contour requirement that we adopted as an initial 
obligation in the Fifth Report and Order. The purpose of our revised 
requirement was to improve the availability and reliability of DTV 
service in the community of license and provide an extra measure of 
protection from interference to DTV service in the community. The NPRM 
asked if significant numbers of consumers are not being served by 
stations operating under low-power STAs, and, if so, what actions the 
Commission should take. We asked whether we should establish a deadline 
by which stations must provide DTV service within the entire area of 
their analog ``city-grade'' coverage contour or their Grade A coverage. 
We also asked whether the 7dB increase in community of license coverage 
will likely ensure that the majority of viewers are served without an 
additional coverage requirement.
    100. We conclude that we will not impose an intermediate signal 
level requirement. With the community of license signal strength 
increases set for 2004 and 2005, we expect that more of broadcasters' 
service areas will be covered as these dates approach. Increasing power 
is one way of increasing the signal strength within an area, such as 
the community of license. A 7 dB increase in a station's power will 
result in a 7 dB increase in signal strength. A power increase will 
also increase the station's service area. Increasing antenna height is 
another way to increase a station's signal strength and service area. 
Nonetheless, we will closely monitor reports from consumers and other 
parties regarding broadcasters operating at insufficiently low power 
levels and will act on these reports should a pattern of abuse of our 
signal level requirements become evident. We may also, on our own 
initiative, conduct signal strength tests to ensure that broadcasters 
are operating at power levels that are consistent with the Commission's 
requirements.

Interference Protection of Analog and Digital Television Service in TV 
Channels 51-69

Definition of ``Actual'' Parameters

    101. The Second DTV Periodic NPRM sought comment on an issue raised 
in the Public Safety Spectrum Report and Order. The NPRM explained that 
Sec. Sec.  90.545(c) and 27.60(b) of the Commission's rules describe 
alternative methods for a wireless applicant or licensee in the 700 MHz 
band to move closer to an analog TV or DTV antenna while still 
complying with the interference protection requirements in the rules. 
Pursuant to one of these alternatives, the applicant or licensee may 
submit an engineering study that considers the ``actual,'' rather than 
``hypothetical,'' parameters of the analog TV or DTV station and that 
demonstrates that the station's actual coverage area is smaller than 
its hypothetical operating parameters--because the station is 
operating, for example, with lower power than that presumed in the 
hypothetical parameters or because intervening terrain or other factors 
reduce the station's coverage area--thereby permitting land mobile 
stations and these broadcast facilities to be more closely spaced. 
Reference to the Grade B contour of a ``hypothetical'' station permits 
an applicant or licensee to determine if there is any need to submit 
additional engineering studies or if there is not even a hypothetical 
station within the relevant area. If there is a hypothetical station, 
then the applicant or licensee must demonstrate how it would protect 
the actual (including authorized or applied for) parameters. The Public 
Safety Order allowed applicants to submit engineering studies showing 
how they propose to meet the appropriate desired to undesired (``D/U'') 
signal strength ratio at the existing TV station's ``authorized or 
applied for'' Grade B service contour or equivalent contour for DTV 
stations instead of providing the protection built into the distance 
spacing table, which is based on a standard TV station's hypothetical 
Grade B contour. In the Second DTV Periodic NPRM, we tentatively 
concluded that Sec. Sec.  90.545(c)(1)(ii) and 27.60(b)(1)(iii) of our 
rules should be amended to make clear that the interference protection 
specified in those provisions should be afforded to authorized and/or 
applied for NTSC and DTV facilities, including the facilities specified 
on the broadcast station's license or construction permit or both when 
a station has both a license and a construction permit. We sought 
comment on this tentative conclusion, as well as alternatives.
    102. As proposed, we will amend Sec. Sec.  90.545(c)(1)(ii) and 
27.60(b)(1)(iii) to make clear that the interference protection 
specified in those provisions will be afforded to authorized and/or 
applied for NTSC and DTV facilities, including the facilities specified 
on the broadcast station's license or construction permit or both when 
a station has both a license and a construction permit. In the TV and 
DTV broadcasting services, applicants file separately for a 
construction permit and a license to operate a facility when 
construction is completed. Licensees may also file applications for 
construction permits to modify their stations' facilities. When 
applications are granted, the facilities are authorized by a 
construction permit or license. While some public safety and other 
entities in the 700 MHz band assert that protecting authorized and/or 
applied for NTSC and DTV facilities is unnecessary, this protection is 
necessary to permit broadcasters to increase their service to reach 
their replication and maximization levels without risk of interference 
from new services. Permitting stations to achieve replication and 
maximization coverage serves the transition to DTV by increasing the 
population with access to digital signals. In addition, as discussed in 
section IV.B., supra, replication on out-of-core DTV channels is 
necessary to preserve broadcasters' opportunity to carry over their DTV 
service areas to their eventual in-core channels. As asserted by 
Sinclair, protecting less than the full replicated or maximized 
facilities could create loss of service to wireless or public safety 
providers when DTV stations increase to replicated or maximized 
facilities. Our existing band-clearing policies and newly introduced 
``flash cut'' policy discussed in section IV.B.2, supra, should 
alleviate some of the 700 MHz entities' concerns by more rapidly 
freeing up additional spectrum in channels 52-69. New operations in the 
700 MHz band will essentially need to provide the interference 
protection specified in Sec. Sec.  90.545(c)(1)(ii) and 
27.60(b)(1)(iii) for authorized or applied for but un-built facilities 
only until the July 1, 2005, and July 1, 2006, replication/maximization 
interference protection dates. In limited circumstances we will grant 
interference protection beyond the replication/maximization dates for 
stations granted construction extension waivers. As discussed above, if 
a broadcaster is not serving its fully authorized replication or 
maximization facilities on the

[[Page 59520]]

applicable interference protection deadline, we will require the 
broadcaster to obtain a license to cover its existing facility and will 
only protect that existing facility going forward.

Applications for New Analog TV or DTV Facilities

    103. As we stated in the Second DTV Periodic NPRM, the Commission 
has determined it will not authorize new DTV facilities in channels 60-
69. The Commission has also determined that it will not authorize 
additional new analog full-service television stations on channels 60-
69, and that it would dismiss any application or allotment petition for 
a new analog facility that was not satisfactorily amended to specify a 
channel below channel 60 by the established deadline (referred to 
herein as the ``July 15, 2000 filing window''). Thus, there will be no 
new analog TV or DTV entrants in the 746-806 MHz band, other than those 
acquired through auction, which wireless and other new service 
providers must protect.
    104. In the Lower 700 MHz Band Report and Order, we dismissed 
pending petitions for new NTSC channel allotments in the band 
comprising channels 52-59, stating that adding new analog TV allotments 
or stations at this stage of the transition would be inconsistent with 
the DTV transition process. With respect to pending applications for 
construction permits for new analog TV stations in this band, we 
provided a 45-day opportunity (referred to herein as the ``March 8, 
2002 filing window'') for applicants to request a change in their 
applications to either (1) provide analog or digital service in the 
core television spectrum, i.e., channels 2-51, or (2) provide digital 
service in the 698-740 MHz band, i.e., channels 52-58. Any applications 
or rulemaking proposals and later associated applications filed by 
pending applicants during this 45-day window must be protected by 
wireless and other entities. Because of the adjacent channel 
interference that new stations on channel 59 could cause to new 
licensees in the adjacent Upper 700 MHz band, we concluded that we will 
no longer accept or grant any application for a new analog TV or DTV 
station on channel 59 nor permit an existing DTV station to modify its 
channel to channel 59. We required parties with outstanding 
applications specifying channel 59 to request another channel within 45 
days after release of the Lower 700 MHz Band Report and Order.
    105. In the Second DTV Periodic NPRM we indicated that digital 
service in the Lower 700 MHz band could be proposed after the auction 
of channels in that band by a station with an existing DTV allotment on 
a channel outside the 52-58 band seeking to move to a channel inside 
this band or by a DTV station inside this band seeking to move to 
another channel inside the band. As we indicated in section IV. A. 2, 
supra, we have determined herein that, in order to facilitate the 
channel election process, we will no longer accept, as of the date of 
adoption of this Report and Order, applications for DTV channel changes 
and swaps. Thus, there will be no new analog or DTV entrants in the 
698-740 MHz band other than those acquired through auction.
    106. A few requests for DTV channels in the 52-58 band were filed 
during the July 15, 2000, and March 8, 2002, filing windows. The 
Commission has completed processing all but one of these petitions for 
rulemaking. While these parties may continue to pursue construction of 
their proposed facilities within the 52-58 band, we will permit these 
parties, upon Commission approval, to elect not to construct these 
facilities and instead to give up their assigned DTV channel in the 52-
58 band in return for a DTV channel inside the core. We will assign 
these broadcasters an in-core DTV channel when we generate a revised 
DTV Table of Allotments.

Channel 51

    107. In the Second DTV Periodic NPRM, we sought comment on the 
interference protection that should be afforded by wireless entities 
and other new service providers to future analog TV and DTV facilities 
on channel 51 that are authorized or requested after the auction of the 
spectrum comprising channel 52. Channel 51 will remain allocated to 
broadcast use as part of the core television spectrum (channels 2-51), 
and is available for use by existing and new analog TV and DTV 
stations. However, as we stated in the Second DTV Periodic NPRM, 
because channel 51 is adjacent to channel 52 we are concerned about 
possible interference between new wireless and other licensees on 
channel 52 and operations on channel 51. In the Lower 700 MHz Report 
and Order, we declined to adopt a guard band or other specialized 
mechanism to protect DTV operations on channel 51, and stated that we 
would instead rely on interference protection criteria to ensure that 
new licensees adequately protect core channel TV and DTV operations. We 
noted that the adjacent channel protection for TV and DTV stations on 
channels 52-69 is no different from the protection for those stations 
in the core spectrum; only the duration of that protection differs. 
Because DTV stations on channels 52-69 will eventually relocate to the 
core TV spectrum, the broadcast interference protection standards on 
channels 52-69 will no longer apply after the transition. By contrast, 
the need for protection of broadcast operations on core TV channel 51 
will continue indefinitely. In light of our concern about possible 
adjacent channel interference, we sought comment on whether we should 
provide the same level of adjacent channel protection to future analog 
and digital broadcast facilities on channel 51 as is currently provided 
by wireless or other operators to incumbent analog and digital stations 
on this channel and, if so, how we can accomplish such protection 
without unduly restricting use of the channel 52 spectrum.
    108. We will accord the same level of adjacent channel protection 
to both incumbent and future analog and digital broadcast facilities on 
channel 51. Thus, wireless and other operators on channel 52 must 
provide the interference protection prescribed in the Lower 700 MHz 
Report and Order to all broadcasters on channel 51, including any that 
may commence operation after the auction of the adjacent channels in 
the 52-58 band. We agree with MSTV/NAB that stations on channel 51 
should receive the same level of protection as other stations on in-
core channels, including protection from wireless and other new service 
providers. We disagree with Flarion that any interference protection 
the Commission adopts for channel 51 should be reciprocal. Channel 51 
is part of the core channels reserved for broadcast use, and we do not 
believe use of channel 51 for broadcast purposes should be restricted 
in order to protect operations on channel 52, even if those operations 
predate the commencement of operations on channel 51. We also decline 
to adopt Flarion's proposal that the Commission reduce or eliminate the 
required desired/undesired signal strength ratio for ``distantly 
adjacent'' wireless channels. This proposal to revisit the wireless to 
TV and DTV protection criteria established in the 700 MHz proceedings 
is beyond the scope of this proceeding. The Commission's rules do 
permit wireless and other operators in the 52-58 band to negotiate 
agreements with broadcasters and other operators to accept any 
interference that may be caused by operations on distantly adjacent 
frequencies. Licensees proposing new operations in the 700 MHz bands on 
a frequency ``distantly adjacent'' to an existing

[[Page 59521]]

operation could also file a request for waiver of the interference 
requirements.

Simulcasting

    109. In the DTV Fifth Report and Order, we adopted rules requiring 
DTV licensees to simulcast 50 percent of the video programming of their 
analog channel on their DTV channel by April 1, 2003. This requirement 
increased to a 75 percent simulcasting requirement on April 1, 2004, 
and increases to a 100 percent requirement on April 1, 2005. The 
simulcasting requirement was intended to ensure that consumers enjoy 
continuity of free over-the-air video programming service when analog 
spectrum is reclaimed at the end of the transition. The Commission has 
stated that it may be difficult to terminate analog broadcast service 
if broadcasters show programs on their analog channels that are not 
available on their digital channels.
    110. In the Second DTV Periodic NPRM, the Commission sought comment 
on whether we should retain, revise, or remove the simulcasting 
requirement in 47 CFR 73.624(f), how to define simulcasting, and 
whether the existing dates for implementation of the simulcasting 
requirements are appropriate. We asked in the Second DTV Periodic NPRM 
whether the ultimate requirement of 100 percent simulcasting other than 
at the very end of the transition creates a disincentive for 
broadcasters to innovate. We also asked whether a requirement to 
simulcast is necessary or whether broadcasters have a market-based 
incentive to simulcast and are currently simulcasting 100 percent of 
their analog programming on their digital channel. In addition, we 
sought comment on whether something less than a 100 percent 
simulcasting requirement would be sufficient to protect analog viewers 
while allowing for innovation on the DTV channels.
    111. In an Order adopted April 28, 2003, the Media Bureau granted 
noncommercial educational television stations a six-month waiver of the 
DTV simulcasting requirements, until November 1, 2003. The Bureau noted 
that, in light of the burden faced by NCE stations in complying with 
both the construction and simulcasting requirements at once, and in 
light of our pending re-evaluation of our simulcasting requirements, 
good cause existed to grant NCE stations a six-month waiver of the 
simulcasting requirements in Sec.  73.624(f) of the Commission's rules. 
We also stated that we would consider requests for waiver extensions 
from NCE stations on their individual merits if the Commission had not 
yet acted on the simulcasting issues raised in the Second DTV Periodic 
NPRM by November 1, 2003. The Media Bureau has granted several 
additional requests for waiver of the DTV simulcasting requirements to 
give stations additional time to acquire and install the facilities 
necessary to meet the simulcasting requirement or to permit stations to 
experiment with innovative uses of the digital channel.
    112. We believe that, at this point in the transition, mandating a 
requirement that the programming aired on the analog channel be 
simulcast on the digital channel is not necessary to advance transition 
progress. Simulcasting has been the general practice of broadcasters as 
the transition has progressed. Thus, broadcasters are not now treating 
their digital channel as a separate, unique program stream. We also 
agree with HDNet, Belo, and Disney/ABC that the availability of high-
quality innovative digital content is critical to the advancement of 
the transition. There is evidence in the record that the simulcasting 
rule may impede the distribution of high definition programming to 
broadcasters. We are concerned that broadcasters not be impeded in 
developing, obtaining, or airing high definition and other innovative 
programming that could spur consumer demand for DTV.
    113. Accordingly, we will eliminate, for the time being, the 
requirement that broadcasters air on their digital channel the 
programming aired on their analog channel. We expect broadcasters to 
use this increased flexibility to provide innovative, value-added 
programming to consumers; if this expectation proves misplaced, we will 
take appropriate action. However, as we continue to monitor the 
progress of the transition in future DTV periodic reviews, we will 
continue to consider whether re-imposition of a simulcasting 
requirement is advisable. Our concern is to ensure that, as the end of 
the transition nears, significant numbers of viewers will not be denied 
access to desirable programming aired only on analog channels. We 
believe that eliminating rather than reducing the simulcasting 
requirement is appropriate at this point in the transition. There is no 
evidence of the need for any simulcasting requirement at this time. 
While we recognize that, as NCTA argues, viewers could lose access to 
programs at the end of the transition if programs available on analog 
channels are not available on digital channels, we believe we can 
address this concern if the need arises closer to the end of the 
transition. Because we are eliminating the simulcasting requirement, we 
do not address herein the issue of how to define simulcasting in the 
context of the digital transition.
    114. Minimum hours of operation of digital stations. In the DTV 
Fifth Report and Order, we required DTV licensees and permittees to 
transmit at least one DTV signal at any time the licensee or permittee 
transmits an analog signal. In the First DTV Periodic MO&O, the 
Commission revised this requirement to allow stations subject to the 
May 1, 2002, or May 1, 2003, digital construction deadlines to operate 
initially at a reduced schedule by providing, at a minimum, a digital 
signal during prime time hours, consistent with their simulcasting 
obligations. The top-four network affiliates in the top 30 television 
markets are required to operate their DTV stations whenever their 
analog stations are operating. The reduced digital operating schedule 
tied to the simulcasting requirements applies only to commercial 
stations in the top 30 markets not affiliated with a top-four network, 
commercial stations in markets below the top 30, and noncommercial 
stations. The minimum operating hours for these digital stations 
effectively increases as the simulcasting obligations are phased in. 
For example, beginning April 1, 2003, DTV stations that were required 
to be on the air by May 1, 2002, are required to provide a simulcast 
digital signal at least 50 percent of the time they transmit an analog 
signal and, under the requirements of Sec.  73.624(b)(1) of the 
Commission's rules, are also required to air a digital video program 
signal during prime time. Along with the simulcasting requirements, the 
minimum hours requirements step up to a 75 percent requirement in April 
2004, and a 100 percent requirement in April 2005. Stations that were 
subject to the earlier DTV construction deadlines (May 1, 1999 for top-
four network affiliates in the top 10 television markets and November 
1, 1999 for all remaining top-four network affiliates in the top 30 
television markets) are subject to our original rule requiring that 
they operate their DTV station at any time that the analog station is 
operating.
    115. We proposed in the Second DTV Periodic NPRM that, if we 
eliminate or reduce the simulcasting requirements in Sec.  73.624(f), 
we amend Sec.  73.624(b)(1) of our rules in order to retain the same 
phased-in minimum DTV operating hours for smaller and smaller-market 
stations that were tied to the simulcasting requirements. A number of 
commenters argue that the Commission should postpone the date by which 
smaller-market stations have to expand

[[Page 59522]]

operating hours. For example, MSTV/NAB argues that the Commission 
should maintain the DTV operating hours minimum at 75 percent for 
smaller and smaller-market broadcasters until the end of the 
transition, at which time a full-time operating requirement would 
begin. MSTV/NAB points out that, at 75 percent, a station on the air in 
analog full time would provide digital service 18 hours a day, leaving 
only the station's least demanded hours of operation, such as the 
overnight hours, without DTV service.
    116. As we proposed in the NPRM, we will retain the same minimum 
DTV operating hours for smaller and smaller-market stations as were in 
effect under the simulcasting requirements. Thus, DTV stations subject 
to the May 1, 2002, or May 1, 2003, construction deadlines will 
continue to be subject to the requirement, effective April 1, 2004, 
that they air a digital signal for an amount of time equivalent to 75 
percent of the amount of time they provide an analog signal. Effective 
April 1, 2003 and until the requirement increased on April 1, 2004, 
these stations were required to air a digital signal for 50 percent of 
the time they provided an analog signal The digital signal must be 
aired during prime time hours. The minimum digital operation 
requirement will increase to 100 percent on April 1, 2005 (requiring 
the airing of a digital signal for an amount of time equivalent to at 
least 100 percent of the amount of time the station airs an analog 
signal). We herein amend Sec.  73.624 of our rules to retain the 
minimum operating hours requirements while deleting the simulcasting 
requirements.
    117. We disagree with Paxson that the minimum operating hours 
requirement should be delayed pending the Commission's decision in the 
must-carry proceeding. As we indicated in denying Paxson's earlier 
request for a one-year waiver of the April 1, 2003 operating hours 
requirement, we do not believe that the increase in the hours of 
digital programming offered to viewers needs to await finalization of 
the Commission's separate proceeding regarding mandatory carriage of 
analog and digital signals during the transition.
    118. We also disagree with the other commenters who support a delay 
in the increase in the minimum operating hours of DTV stations. 
Increasing the operating hours of digital stations subject to the May 
1, 2002, and May 1, 2003, digital construction deadlines will help 
further the transition by helping to drive DTV set penetration and 
encouraging content producers and advertisers to invest in DTV. These 
stations have been on notice since the November 2001 adoption of the 
phased-in simulcasting requirement in the First DTV Periodic MO&O that 
their DTV operating hours must be stepped-up on April 1, 2004, and 
April 1, 2005. Postponing the required, gradual increase in the digital 
operating hours of these stations would be inconsistent with the 
ultimate goal of this proceeding of moving to an all digital television 
service.
    119. Finally, MSTV/NAB suggests that the Commission permit DTV 
stations coming on the air later than the April 1, 2003, and April 1, 
2004, minimum operating hour deadlines (i.e., stations that have been 
granted an extension of time to complete construction of their DTV 
facilities and stations that have not yet been granted a DTV 
construction permit) to ramp up their hours of operation gradually. In 
the Second DTV Periodic NPRM, we stated that stations that have been 
granted an extension of time to construct beyond the simulcast 
deadlines must comply with the minimum digital operating requirements 
in effect at the time the station commences digital operations. We 
continue to believe that this approach is appropriate. We disagree with 
MSTV/NAB that these stations should be entitled to postpone increasing 
their digital hours of operation while other similar sized stations are 
required to provide more digital service.

Noncommercial Educational Television Stations

    120. Noncommercial television broadcasters were scheduled to 
complete construction of their digital stations and commence digital 
service by May 1, 2003. Of the 373 noncommercial television stations, 
84 were on the air either on time or ahead of this construction 
deadline and approximately 214 requested extensions of the deadline. 
The Commission has granted all of these extension requests. Other NCE 
stations have construction permits that have not yet expired or have 
filed construction permit applications with the Commission that have 
been processed and are awaiting additional information or international 
coordination, or are mutually exclusive. We invited comment in the 
Second DTV Periodic NPRM on what steps, if any, the Commission should 
take to assist noncommercial stations in the transition to DTV. In 
particular, we sought comment on whether the financial hardship 
standard for grant of an extension of time to construct a digital 
television station should be applied differently to noncommercial 
licensees.
    121. As we have acknowledged before, noncommercial stations face 
unique financial difficulties in constructing digital facilities. 
According to Public Television, 24 percent of the public television 
stations seeking an extension of the May 1, 2003, construction deadline 
cited funding difficulties as a motivating reason for the extension 
request. For those stations facing funding shortfalls we have and will 
continue to consider the unique funding needs of noncommercial 
educational broadcasters in assessing a station's request for an 
extension of time to construct a DTV facility. As the unique 
circumstances of noncommercial stations are being considered under our 
current extension criteria, we do not believe it is necessary at this 
time to revise those criteria for noncommercial stations or to change 
the way we are applying the current criteria to this group.
    122. According to Public Television, NCE stations cite non-
financial impediments to construction more frequently than financial 
impediments as the cause for delay in completing their DTV facilities. 
However, there is no evidence that noncommercial licensees face unique 
non-financial obstacles to completing construction. Thus, we also do 
not believe it is necessary at this time to revise our criteria for 
evaluating non-financial grounds for an extension for noncommercial 
licensees to assist this group to complete the digital transition. We 
will continue to monitor the progress of noncommercial educational 
television stations in their conversion to digital transmissions, 
however, and will continue to assess whether further steps are needed 
to assist these stations in accomplishing the conversion.

DTV Transmission Standard and PSIP

Update of the DTV Transmission Standard
    123. In the DTV Tuner Order, we revised our rules to specify that 
the August 7, 2001, version of the ATSC] DTV standard A/53B should be 
used in place of the September 16, 1995, version originally adopted. We 
revised Sec.  73.682(d) of the rules to specify ATSC Doc. A/53B (ATSC 
Digital Television Standard, 7 Aug. 01), except for Sec.  5.1.2 
(``Compression format constraints'') of Annex A (``Video Systems 
Characteristics'') and the phrase ``see Table 3'' in Section 5.1.1 
Table 2 and Section 5.1.2 Table 4). We also acknowledged the likelihood 
that there will be further improvements made to the DTV standard over 
time, and stated our intention to consider incorporation

[[Page 59523]]

into our rules of proposed changes that reflect the kind of broad 
industry consensus developed through ATSC's standards-making 
procedures. In the NPRM, we sought comment on whether our rules should 
be further changed to reflect any revisions to the ATSC DTV standard A/
53B since the August 7, 2001, version.
    124. We find that it is desirable and appropriate to update our DTV 
rules to recognize Amendment 1 (May 23, 2002) to ATSC DTV Standard A/
53B (August 7, 2001). We decline to mandate that broadcasters use the 
AFD when the active video portion picture does not completely fill the 
coded picture. The revisions in the new version of the ATSC DTV 
Standard were developed through careful consideration and deliberation 
within the technical committees of ATSC and thus reflect a consensus 
agreement based on the input of parties from various segments of the 
industry. While broadcasters will have the option to use AFD, if a 
station includes AFD data it must follow the ATSC DTV standard. As more 
consumers acquire widescreen aspect ratio sets, the problem of 
``postage stamp video'' will become more prevalent if not addressed by 
broadcasters. Broadcasters should have every incentive to make their 
programming attractive to viewers and to avoid disenfranchising those 
viewers as they begin to adopt DTV.
    125. We will update our DTV rules to recognize Amendment 2, as 
released by the ATSC on May 19, 2003. Updating the rules to reflect 
improvements in the standard will benefit both the public and 
broadcasters by allowing broadcasters to make technical improvements in 
their service that will enhance the quality of DTV services they 
provide. Accordingly, we are revising Sec.  73.682(d) of the rules to 
specify ATSC Doc A/53B (ATSC Digital Television Standard, 7 Aug 01), 
Revision B with Amendment 1 and Amendment 2. We also continue to 
encourage further improvements to the DTV standards. Although it will 
be necessary to conduct additional rule making activity to incorporate 
such changes in the rules, we nonetheless will endeavor to pursue such 
rule making as quickly as possible, either through our periodic review 
of the DTV transition or through separate proceedings as may be 
appropriate.
    126. The ATSC also adopted Amendment 2 to A/53B, which revises the 
transport section of the ATSC Digital Television Standard, Annex C, to 
update normative references to avoid conflicts, and to establish a 
common methodology for carriage of private data in the ATSC Transport 
Stream. The amendment defines the ATSC Private Information Descriptor 
for the carriage of private descriptor-based data, and it also 
clarifies rules for use of the MPEG-2 Registration Descriptor mechanism 
for management of private data in the digital multiplex. To be 
consistent with the current version of the ATSC A/52 Digital Audio 
Compression Standard, Amendment 2 revises the way audio language is 
signaled in the ATSC system and specifies the use of ISO-639 language 
encoding to identify written and spoken languages. Amendment 2 also 
specifies some requirements that had been implemented in transmission 
and receiving equipment but not properly specified in A/53B. These 
included the requirement that each service with an audio component must 
include at least one ``complete main'' audio service and the 
requirement that the video Elementary Stream component be identified 
with MPEG-2 stream-type value 2. Upon final approval of the ATSC 
membership, ATSC suggests that the Commission incorporate Amendment 2 
to A/53B into its rules.
PSIP
    127. In the DTV Tuner Order, we stated that we would seek comment 
on whether the Commission should adopt the ATSC Program System and 
Information Protocol (``PSIP'') standard into our rules as part of the 
DTV periodic review process. We stated that in the interim we will 
continue to support and encourage the voluntary use of the PSIP 
specification by broadcasters and cable operators and its inclusion in 
consumer electronics equipment. Section 73.682(d) of our rules includes 
a reference to the ATSC PSIP Standard as a document that licensees may 
consult for guidance PSIP is data that is transmitted along with a 
station's DTV signal that tells DTV receivers information about the 
station and what is being broadcast. PSIP provides a method for DTV 
receivers to identify a DTV station and to determine how a receiver can 
tune to it. PSIP identifies both the DTV channel and the associated 
NTSC channel and enables DTV receivers to associate the two channels, 
thereby making it easy for viewers to tune to the DTV station even if 
they do not know the channel number. Linkages between analog and DTV 
channels are managed through the DTV ``Transport Stream Identifier'' 
and analog ``Transmission Signal ID'' (Both, ``TSID''). The Association 
for Maximum Service Television (``MSTV'') has undertaken the task of 
maintaining a list of TSIDs. In addition to identifying the channel 
number, PSIP tells the receiver whether multiple program channels are 
being broadcast and, if so, how to find them. It also identifies 
whether the programs are closed captioned, and conveys available v-chip 
information, among other things. As will be discussed in sections J. 3 
and K., infra, PSIP enables the proper functioning of v-chip and closed 
captioning. The Commission has recognized the utility that the ATSC 
PSIP Standard offers for both broadcasters and consumers. The channel 
mapping protocols contained in the PSIP identification stream could 
help resolve issues associated with digital channel positioning. In the 
NPRM, we sought comment on whether to require the use of PSIP and which 
aspects of PSIP should be adopted into our rules. We also sought 
comment on, among other things, whether and how broadcasters include 
PSIP information with their digital broadcast signals and also how 
consumer electronics equipment manufacturers build equipment to search 
for information in DTV signals.
    128. We conclude that adoption of ATSC A/65B (PSIP) into our 
broadcast transmission standards will serve the public interest. As 
pointed out by commenters, during the development of PSIP, the ATSC 
carefully considered which elements of PSIP should be mandatory and 
which should be optional. Further, based its experience with the 
deployment of over 180 PSIP systems, Harris states that it is not aware 
of any difficulties that are experienced by either the broadcaster or 
the viewing consumer if the ATSC A/65B PSIP standard is properly 
implemented. We find the cost to broadcasters of implementing PSIP will 
be minor in comparison to the overall costs of converting to DTV and 
will provide many options to expand on the investments they have made 
to convert to DTV. Harris reports that based on its experience as a 
manufacturer of broadcast station PSIP equipment, it currently would 
cost a DTV broadcast station $29,900 for full implementation of PSIP, 
including all Program and System tables. Harris Comments at 9. We 
therefore require that broadcasters fully implement PSIP to the extent 
that ATSC A/65B requires. According to A/65, the PSIP mandatory tables 
are: Master Guide Table (MGT); Terrestrial Virtual Channel Table 
(TVCT); Event Information Tables (EIT-0 to EIT-3); System Time Table 
(STT); Rating Region Table (RRT). According to A/65, the RRT is not 
mandatory for the U.S. region (0x01). Transmission of the RRT is not 
necessary where the content

[[Page 59524]]

advisory ratings table is fixed, as is the case now in the U.S. If the 
ratings system were to change, however, or an addition to the ratings 
system were to be adopted, broadcasters would have to transmit a new 
RRT in order to transmit the new or additional ratings information. See 
section IV.J.3., infra, for discussion of the RRT. In order to give 
broadcasters adequate time to come into compliance, this requirement 
shall take effect 120 days after publication in the Federal Register. 
We expect broadcasters to populate the required tables and descriptors 
with the proper information to help receivers assemble functioning 
guides. All tables and descriptors that require one time setup should 
be set correctly, including TSID, Short Channel Name, Service Type, 
Modulation Mode, Source ID, and Service Location Descriptor. ATSC A/65B 
also requires that broadcasters send populated EITs covering at least a 
12 hour period. These EITs should be populated with the correct 
information, so that the user knows what programs are on for this 12 
hour period. Also, we expect that manufacturers will have every 
incentive to build equipment that looks to PSIP for its basic 
functionality, but we will revisit the issue if necessary. Standardized 
use of the data transmitted through PSIP will ensure that the full 
benefits and innovations of the new digital system will be available to 
the public. PSIP enables improvements to program guides, closed 
captioning, and use of v-chip, and enables channel number navigation 
using the familiar analog channel numbers to tune to new digital 
channel assignments.
    129. Major/Minor Channel Numbers. In the NPRM, we noted that the 
ATSC PSIP standard attaches the assignment of ``major channel number'' 
values to a broadcaster's current NTSC RF channel number regardless of 
the actual RF channel used for DTV transmission, and sought comment on 
whether there was any need to modify this standard. For example, a 
broadcaster who operates an NTSC service on channel 4 and a DTV service 
on channel 27 would use the major channel 4. The PSIP ``minor channel 
number'' is used to identify programs and other services, which are a 
part of the DTV service. For example, channel 4.1 may be an HDTV 
program service and it may be multiplexed with an SDTV service, which 
is channel 4.2. According to ATSC, this allows a viewer to easily 
``surf'' from, for example, 4.0 (NTSC) to 4.1 (HDTV) to 4.2 (SDTV). 
ATSC, MSTV/NAB, and others state that the major/minor channel number 
scheme established in ATSC A/65B will be useful. ATSC states that the 
PSIP Standard defines specific requirements for use of ``major channel 
numbers'' to provide viewers with a uniform methodology to access DTV 
services and to avoid conflict with duplicative numbers in a market. 
The major channel number also allows broadcasters to maintain their 
local brand identification. We see no reason to modify this standard. 
During the development of PSIP, ATSC recognized that in some situations 
broadcasters would need to deviate from the rule that the major channel 
number is the same as the broadcaster's NTSC channel number and created 
certain exceptions. Exceptions are, for example: (1) If a broadcaster 
without an NTSC broadcast license applies and receives a license for a 
digital broadcast channel, the major channel number should be the same 
as the DTV RF channel; (2) if a broadcaster owns or controls broadcast 
licenses for two or more different RF channels having overlapping 
service areas, a common major channel number for all services on all 
channels may be used; (3) if a broadcaster includes in its DTV service 
programming originating from a different licensed broadcaster, the 
major channel number of the original broadcast may be used as long as 
it is coordinated to avoid conflicts; and, (4) for a translated signal, 
the major/minor channel numbers shall remain the same as the original 
broadcast station unless the major channel conflicts with a broadcaster 
operating in the service area of the translator. In that case, the 
translator changes the major number to a non-conflicting number. We 
agree with ATSC and MSTV/NAB that these exceptions should provide 
broadcasters with the necessary flexibility to address most 
circumstances. To the extent broadcasters have a unique situation that 
is not provided for in PSIP, the Commission may grant exceptions on a 
case-by-case basis. The correct TSIDs must be used to ensure that 
receivers link the analog and digital channels properly. Accordingly, 
broadcasters are required to transmit the TSIDs assigned for their 
stations in their digital transmission. During the transition period 
while both analog and digital signals are broadcast, stations are 
required to transmit the NTSC TSID in line 21, field 2 in order for the 
receiver to locate the programs referenced in PSIP.

PSIP and DTV V-Chip

    130. In the NPRM we asked if the Commission needs to do more to 
ensure that v-chip functionality is available in the digital world. 
While the Commission's rules require that digital television receivers 
have the capability to enable viewers to block the display of programs 
with a common rating, the technical standards to achieve this goal are 
not specified. We expressed concern that the lack of a specific 
requirement may lead to confusion among broadcasters and manufacturers 
with regard to where to place program rating information, resulting in 
the failure of the blocking functionality that the v-chip provides. 
Accordingly, we sought comment on whether the Commission should adopt 
the provisions of the ATSC A/65A standard that requires all digital 
television broadcasters to place v-chip rating information in the PSIP. 
We also asked whether it was necessary to require equipment 
manufacturers to develop equipment that accesses program rating 
information in the PSIP. Finally, we requested comment on a Petition 
for Rulemaking filed by CEA which sought to incorporate industry 
standard EIA/CEA--766 into the Commission's rules to facilitate v-chip 
functionality in digital receivers.
    131. As an initial matter, we reiterate that this Order adopts the 
ATSC A/65 PSIP standard in its entirety. This Order also requires that 
broadcasters transmit all mandatory tables and descriptors of PSIP with 
their digital programming. Accordingly, the Event Information Tables 
(``EITs'') defined within PSIP will contain any available Content 
Advisory Descriptors (``CADs'') for broadcast programming. The PSIP 
requirements do not mandate broadcaster use of v-chip but rather 
require that broadcasters that choose to provide v-chip blocking 
information do so by following the PSIP protocols. For terrestrial 
broadcast, if parental advisory information is to be provided, the 
Content Advisory Descriptor is required in the EIT, which is an element 
of the PSIP Standard. This uniform transmission practice will ensure 
that various receiver manufacturers can more readily design products 
which will search for and react to program rating information on a 
consistent basis. Sharp Electronic Corporation states that numerous 
consumer electronics companies are currently designing and/or selling 
digital televisions that utilize the content advisory data as defined 
in the PSIP. While we believe that this is indeed the case, we are 
nonetheless adopting rules to require digital television receivers to 
look for the content advisory descriptors in the EITs. 47 U.S.C 330(c) 
instructs the Commission to oversee ``the adoption of standards by 
industry for blocking technology,'' and to ensure that blocking 
capability continues to be available to consumers as technology 
advances.

[[Page 59525]]

    132. The PSIP carries the Rating Region Table (``RRT''), which 
describes the content advisory rating system being used. Without the 
information in the RRT, the program rating icons (e.g., TV-Y7 or PG-13) 
will be displayed, but the explanations of the icons will not. ATSC in 
their comment states that: ``The PSIP Standard does provide the ability 
to extend or replace the content advisory system in the U.S. by 
assignment of a new, different rating region code. Receivers that are 
built compliant with CEA standards and recommended practices will 
support an additional new system with one or more independent 
categories, each with a series of levels definable by a new RRT.'' Some 
have expressed concern that the current ratings system is ``hard-
wired'' into digital televisions, making modifications impossible on 
existing sets. We generally believe that the ability to modify the 
current content advisory system is beneficial. The suggestion by ATSC 
to use a different U.S. rating region code for any additional new 
rating system ensures that the older RRT remains intact for legacy 
digital receivers that have not been designed to process newer versions 
of the RRT. These legacy digital receivers could continue to be used 
and would not be rendered obsolete. At the same time, newer digital 
receivers would be able to recognize and respond to an additional 
rating system. Accordingly, to ensure the ability to modify the content 
advisory system, receivers must be able to process newer RRT version 
numbers or use new rating region codes as suggested by ATSC.
    133. As requested by CEA, we are adopting by reference CEA-766 CEA-
766 specifies the exact syntax to be used to define the U.S. and 
Canadian RRTs in accordance with A/65, as well as exact syntax to be 
used for the CADs that convey the rating information. U.S. and Canadian 
Rating Region Tables (RRT). We note that the adoption of the standard 
will not preclude manufacturers from incorporating additional blocking 
standards or techniques into receivers. Therefore, additional blocking 
techniques that are dependent only on inputs such as the date, time of 
day, or television channel, may be incorporated into television 
receivers as manufacturers see fit.
    134. Additionally, we are adopting our proposal to apply v-chip 
rules to digital television receivers with displays in the 16:9 aspect 
ratio that are 7.8 inches or greater in height. Furthermore, we are 
requiring that v-chip technology be included in all digital television 
receivers with integrated 4:3 displays measuring at least 13 inches 
diagonally. Similar to our requirements for closed caption capabilities 
in digital television receivers, the rules will also be applicable to 
DTV tuners which are sold without an associated display device.
    135. Finally, we are inclined to provide a transition period for 
manufacturers to begin producing compliant digital television 
receivers. We understand that the design cycle of a television receiver 
model is generally about 18 months. The Commission has previously taken 
into consideration receiver design cycles in proceedings that required 
the introduction of new television technology. We also understand that 
many manufacturers are currently relying on CEA 766 to comply with the 
Commission's v-chip requirements as applied to digital receivers. Our 
existing requirement that digital television receivers react in a 
similar manner as analog televisions when programmed to block specific 
rating categories ensures that digital receivers will continue to 
respond to v-chip information during the phase-in period. Therefore, we 
believe it is reasonable to provide an 18 month transition period. 
After the transition period, all digital television receivers will be 
required to provide v-chip functions following the regulations that we 
adopt in this proceeding.
PSIP and LPTV/TV Translators
    136. We also requested comment on issues concerning the 
implications of PSIP on the operation of TV translator facilities. We 
requested comment on how the proper PSIP information is to be provided 
on TV translator rebroadcasts and who will be responsible for ensuring 
that that information is provided. We also requested comment regarding 
the costs of providing PSIP information on TV translators as well as 
any other concerns that translator operators might have in implementing 
PSIP on their DTV operations. We further note that a similar issue 
arises with cable service when a broadcast DTV signal or its associated 
analog signal is carried on a cable system on a channel that is 
different from its broadcast signal. PSIP in the context of cable 
carriage is a topic in a pending proceeding. We received comments from 
CEA, ATSC, Public Television, and Harris in response to our questions. 
In August 2003, the Commission initiated a proceeding to examine issues 
related to the authorization of digital translators and boosters. 
Because the record will be more specifically tailored to LPTV, 
translators, and boosters, we will address the implications of PSIP on 
those facilities in connection with the Digital LPTV proceeding.
DTV Closed Captioning
    137. The Television Decoder Circuitry Act of 1990 requires 
generally that television receivers contain circuitry that is able to 
decode and display closed captioning. The Act also directs the 
Commission to take such action that it determines appropriate to ensure 
that closed captioning service continues to be available to consumers 
as new technology is developed. In accordance with the Act, in July, 
2000, the Commission adopted regulations with regard to the functioning 
of digital television receivers and closed captioning services. The DTV 
Closed Captioning Order incorporated Section 9 of the EIA/CEA standard 
EIA-708-B with minor modifications into the Commission's rules. This 
industry standard provides guidelines for caption providers as well as 
encoder and decoder manufacturers to implement closed captioning 
services with digital television technology. The DTV Closed Captioning 
Order also amended Sec.  79.1 of the Commission's regulations to 
require an increasing amount of digital programming to be captioned in 
a format that can be recovered and displayed by decoders meeting the 
EIA-708-B standard.
    138. As part of Second DTV Periodic NPRM, the Commission sought 
comment on whether there was additional action that it should take to 
ensure the accessibility and functioning of closed captioning service 
for digital television. Several commenters asserted that some issues 
need to be clarified in order for closed captioning services to be 
consistently and effectively delivered. For example, NCAM contends that 
in some cases broadcasters may not be delivering true DTV caption data 
intended for digital television receivers. Instead, those broadcasters 
are delivering NTSC type data, intended for use when digital 
programming is down-converted for display on analog receivers. NCAM 
states that, without DTV captioning data, digital receivers may not be 
able to function in the manner in which the Commission intended. In 
fact, some of these receivers may not display any captions at all.
    139. We note that the EIA-708 standard provides comprehensive 
instructions for the encoding, delivery, and display of closed caption 
information for digital television systems. The standard provides for a 
larger set of captioning characters than the analog captioning 
standard, EIA-608. However, EIA-708 also supports

[[Page 59526]]

transport of the analog EIA-608 captioning information for use when a 
digital broadcast is being viewed on an analog receiver through a DTV 
converter. The rules adopted in the DTV Closed Captioning Order were 
intended to require that the decoder circuitry in digital tuners 
respond primarily to any digitally formatted caption information. 
Accordingly, consumers who purchase DTV receivers will be confident 
that they will be able to take advantage of the new capabilities of 
captioning in the digital environment. Therefore, we hereby clarify 
that digital television receivers must first search for and respond to 
native EIA-708 closed caption information. Only if that information is 
not available in the DTV datastream should the receiver search for any 
available transcoded analog captioning data conforming to the EIA-608 
standard. Furthermore, broadcasters should be aware that receivers will 
be searching for EIA-708 data in all digital broadcasts. If digital 
programming is to be captioned, it must contain EIA-708 data. This 
applies to all digital broadcast programming, regardless of whether the 
programming is delivered in standard definition or high definition.
    140. In the DTV Closed Captioning Order, the Commission observed 
that viewers will be able to watch digital programming on existing 
analog displays by using a DTV converter. With regard to the 
broadcasters' responsibility to deliver closed caption data, the DTV 
Closed Captioning Order states that, ``[I]n order for programming 
distributors to count captioned digital television programming toward 
their closed captioning requirements in 47 CFR Section 79.1, they must 
also transmit captions than can be decoded by the decoder in that 
analog set.'' Therefore, while all captions supplied with new digital 
programming should conform to the standards for ``native'' EIA-708 
style captions as detailed in the standard, analog captions must also 
be provided if a broadcaster wishes to count the programming towards 
its quarterly captioning requirements.
    141. In the Second DTV Periodic NPRM we noted that at the time the 
DTV Closed Captioning Order was adopted the Commission had not made 
broadcasters' adherence to the ATSC A/65 (PSIP) standard a requirement. 
We stated that the standard requires the caption service descriptor to 
be in the EITs and makes optional the presence of the caption service 
descriptor in the Program Mapping Table (PMT). EIA-708 standard 
requires the caption service descriptor to be in the PMT and, when 
present, in the EITs. We questioned whether a requirement for all 
digital television broadcasters to place the caption service descriptor 
in the EITs alone would eliminate situations in which digital 
television receivers that search for closed captioning information in 
the EITs are not able to find any captioning information although it is 
present in the PMT according to EIA-708. We believe that our decision 
to adopt the PSIP standard in its entirety along with the previous 
adoption of the EIA-708 results in the caption service descriptor being 
present in both EITs and in the PMTs. This proposal to require the 
caption service descriptor to be present in both places will ensure 
that legacy digital receivers that have been designed according to EIA-
708 alone could continue to find the caption service descriptor in the 
PMT and would not be rendered obsolete.
DTV Labeling Requirements and Consumer Awareness
    142. The Second DTV Periodic NPRM requested comment on the need for 
labeling requirements to provide consumers with information on the 
capabilities of digital television equipment at the point of sale. We 
noted that a General Accounting Office (``GAO'') Report to Congress in 
2002 found that at least 40 percent of the public was unfamiliar with 
the digital transition, and 68 percent of those surveyed did not know 
that when the transition ends, consumers with analog-only sets will be 
unable to continue receiving over-the-air broadcast television without 
use of an external digital tuner or converter. Only 14 percent of those 
surveyed by the GAO were ``very familiar'' with the difference between 
analog and digital televisions. GAO speculates that even this number 
may be high because consumers may be confusing current digital 
television services provided by cable or satellite with DTV. In 
addition, we sought comment on whether to require a disclosure label on 
analog-only sets or a digital conversion fact sheet to inform consumers 
that a converter or external DTV tuner will be needed to ensure 
reception of television broadcast signals after stations in the 
consumer's market complete conversion to digital-only broadcasting.
    143. In the first DTV periodic review proceeding, we sought comment 
on whether we should require digital television equipment that cannot 
receive over-the-air digital broadcast signals to carry a label 
informing consumers of this limitation on the receivers' functionality. 
In the DTV Tuner Order, we observed that the reluctance of the public 
to buy digital receivers is the problem with reaching the 2007 target 
date for completing the transition. We required that all TV receivers 
with screen sizes greater than 13 inches manufactured in the U.S. after 
July 1, 2007 be capable of receiving DTV signals over-the-air. As DTV 
tuners reach the market, consumers will only buy them if they 
understand what they are and that the future utility of analog-only 
televisions is limited. We decided not to require in that proceeding 
that television receivers that cannot receive over-the-air digital 
broadcast signals carry a label informing consumers of this limitation 
but we resolved to monitor the marketplace and take steps as necessary 
to protect consumers' interests.
    144. Accurate communication of the impending change from analog to 
digital transmission is a highly material disclosure for consumers 
contemplating the purchase of a television. Retailers sell analog-only 
televisions for over $500 without prominent disclosure that they will 
not receive television signals without additional equipment after the 
analog spectrum is returned. We believe, as retailers and manufacturers 
agree, that communicating product attributes and features spur sales. 
We agree with Thompson that it is important to use the same 
nomenclature and definitions industry-wide. CEA has developed uniform 
nomenclature that appears in its Consumer Guide to HDTV, but the 
labeling recommended has not been adopted by manufacturers and 
retailers on a widespread basis. For example, Best Buy offers ``HD-
Ready'' televisions, which is not a term defined in CEA's consumer 
guide. Best Buy's website defines it as ``Fully capable of high-
definition display when connected to an optional HDTV source. 
Conventional analog TV reception is provided via a built-in NTSC 
tuner.'' The prices for such ``HD-Ready'' televisions range from 
$999.99 (Samsung) to $1999.99 (Toshiba). Recent ex parte filings 
indicate that the relevant industries, manufacturers and some 
retailers, are working on improved sales materials and clear, standard 
terminology and an increasing amount of information available for 
consumers who research on the Internet or in industry publications. 
However, much of the mass advertising and point of sale information 
remains confusing, inconsistent, and lacks explanation of the eventual 
limitations on analog-only equipment. For example, a sign or cling 
label displayed at point of sale could say: ``Analog only--Not digital; 
will need separate converter box for over-air reception.'' We have been 
reluctant to

[[Page 59527]]

require specific labeling and expected that manufacturers and retailers 
would develop consistent, clear and uniform terminology to convey to 
consumers prior to purchase the features and limitations of television 
products, such as a chart of available features with ``Yes'' or ``No'' 
or checkmark indicated for each feature, including whether the 
equipment is analog-only and will require additional equipment to 
receive television signals after the transition. We are working with 
the parties and consumer organizations to develop materials and 
techniques for consumer education. Therefore, at this time, we will not 
determine whether it is necessary for the Commission to require 
labeling. We will reserve that determination for further consideration 
in the Second Report and Order in the Second DTV Periodic Review, which 
will address the interpretation of section 309(j)(14).

DTV Station Identification

    145. Under our current rules, television stations are required to 
make station identification announcements at the beginning and end of 
each time of operation as well as hourly. 47 CFR 73.1201(a). Section 
73.1705 (``Time of Operation'') of the FCC's rules specifies whether 
commercial and noncommercial TV and radio stations may be licensed for 
unlimited time operation, share time operation, and/or specified hours 
operation (such as daytime-only). 47 CFR 73.1705. Official station 
identification may be made visually or aurally, and must consist of the 
station's call letters immediately followed by the community or 
communities specified in the station's license as the station's 
location. 47 CFR 73.1201(b). Digital television stations have been 
assigned the same call letters as their associated analog TV stations, 
except that the digital station is identified with the suffix ``DT.'' 
Either or both the name of the licensee and the station's channel 
number may be inserted between the call letters and the station 
location, but no other insertion is permissible. Television satellite 
stations must include in their station identification announcements the 
number of the channel on which each station is operating. 47 CFR 
73.1201(c)(3)(i).
    146. We will adopt our proposal and require digital television 
stations to follow the same rules for station identification as analog 
television stations. Thus, digital stations will be required to make 
station identification announcements, either visually or aurally, at 
the beginning and end of each time of operation as well as hourly. As 
with analog stations, we will require that the identification consist 
of the station's call letters followed by the community or communities 
specified in the station's license as the station's location. Stations 
may insert between the call letters and the station's community of 
license the station's frequency, channel number, name of the licensee, 
and/or the name of the network, at their discretion. We will not adopt 
the proposal of WDLP to permit stations to omit the station's call 
letters in their identification. Each station's call letters are 
unique; thus, call letters serve as the clearest means of 
distinguishing among stations. As stations transition to digital format 
and provide multicast programming, thereby increasing the number of 
program streams potentially available to the public, clear 
identification of the station providing the programming viewers are 
watching becomes increasingly important, both for viewers and for 
stations themselves.
    147. If a station chooses to include its channel number in its 
station identification, we will require that the station use the major 
(analog) channel number. As discussed above, we have decided to adopt 
the ATSC A/65B standard into our rules. One of the most important 
benefits of PSIP is that it defines specific requirements for use of 
``major'' channel numbers to provide viewers with a uniform methodology 
to access DTV services and avoid conflict with duplicative numbers in a 
market. PSIP will allow viewers to see a broadcaster's major channel 
number regardless of the broadcaster's allocated digital broadcast 
channel. Thus, PSIP allows broadcasters to keep their existing channel 
number in the digital world, thereby assisting viewers who have come to 
identify these numbers with particular broadcasters and preserving the 
investment broadcasters have made in marketing these numbers. We 
believe that it is consistent with our adoption of the PSIP standard 
into our rules to require stations electing to identify themselves by 
channel number to use their major channel number, which is defined in 
the PSIP standard as the broadcaster's current NTSC RF (analog) channel 
number. Thus, a broadcaster who operates an NTSC service on channel 
``26'' and a DTV service on channel ``27'' would use the major channel 
``26'' in station identification announcements. We will permit stations 
that choose to multicast to include additional information in their 
station announcements identifying each program stream. Thus, a station 
with major channel number 26 might have channel 26.0 (NTSC program 
stream), channel 26.1 (HDTV) and 26.2 (SDTV). Stations may also provide 
information in the station announcement identifying the network 
affiliation of the program service (e.g., ``WXXX-DT, channel 26.1, YYY 
(community of license), your WB network channel'').
    148. For stations simulcasting their analog programming on the 
digital channel, we will permit station identification announcements to 
be made simultaneously for both stations as long as the identification 
includes both call signs (e.g., ``WXXX-TV and WXXX-DT'') if it is 
intended to serve as the identification for both stations. Our rules 
currently allow co-owned AM/FM radio stations licensed to the same 
community simultaneously broadcasting the same programming on both 
stations to make joint station identification announcements for both 
stations. 47 CFR 73.1201(c)(2). If they chose to make simultaneous 
identifications for more than one channel, stations should ensure that 
these announcements are adequate to identify both program streams.

Distributed Transmission Technologies

    149. In the Second DTV Periodic NPRM we sought comment on whether 
we should provide for DTV stations using distributed transmission 
technologies. A DTV distributed transmission system would employ 
multiple synchronized transmitters spread around a station's service 
area. Each transmitter would broadcast the station's DTV signal on the 
same channel, relying on the performance of ``adaptive equalizer'' 
circuitry in DTV receivers to cancel or combine the multiple signals 
plus any reflected signals to produce a single signal. Such distributed 
transmitters could be considered to be similar to analog TV booster 
stations, a secondary, low power service used to ``fill in'' holes in 
the parent station's coverage area, but DTV technology has the 
potential to enable this type of operation in a much more efficient 
manner. The Commission's Spectrum Policy Task Force has recommended 
that digital television broadcasters be permitted to operate single 
frequency low power distributed transmission systems within their 
present service areas. For analog TV boosters, in contrast, significant 
self-interference will occur unless there is substantial terrain 
blocking the arrival of multiple signals into the same area (for 
example, one signal from the primary analog station directly and one 
signal from a booster station).

[[Page 59528]]

    150. In addition to the fundamental question of whether to allow 
distributed transmission technology, we sought comment on many related 
issues, such as whether such facilities should have primary or 
secondary regulatory status, whether we should limit the location of or 
area served by distributed transmitters, how interference to and from 
such transmitters should be calculated, and what power, antenna height, 
or other technical standards or limits should be imposed.
    151. We agree with the generally supportive comments that the 
technology has potential benefits to the public and the reported 
testing to date is encouraging. Thus, in principle, we approve of the 
use of DTS technology. As suggested by MSTV/NAB, we will soon open a 
separate ``fast track'' proceeding to propose rules for DTS operation 
and to develop an adequate record on several technical and policy 
issues related to its use. In that proceeding, we will address the 
regulatory status of DTS facilities, limitations on where DTS 
facilities can provide service, and how DTS facilities are treated from 
the standpoint of interference they would be predicted to cause to 
other broadcast stations and interference they would receive from other 
stations. In addition, we will consider policy issues such as how to 
avoid situations where stations could fail to serve significant 
populations within their nominal coverage area and how stations 
employing DTS facilities should be evaluated with respect to meeting 
replication and maximization deadlines.
    152. While that DTS proceeding is conducted, we will allow stations 
to request DTS operation on a case-by-case basis based on conservative 
parameters. Specifically, interim DTS operations will not be allowed if 
they would provide predicted service beyond a station's currently 
authorized area (including its replication area as well as any 
maximization area resulting from facilities granted by a construction 
permit or license). An interim DTS proposal will only be approved if it 
is designed to serve essentially all of its replication coverage area. 
An acceptable application during this interim period must show that all 
viewers within the station's replicated service area who are predicted 
to be served by their current analog transmitter would likewise be 
predicted to receive the minimum signal strength from at least one DTT 
transmitter. A station's desire to explore DTS operation will not be 
acceptable grounds for it requesting an extension of the replication 
and maximization interference protection deadline. Beyond these 
decisions, our staff will determine on a case-by-case basis the 
adequacy of other aspects of proposed operation (including permissible 
power, antenna height, and the acceptability of interference showings). 
We note that the record in this proceeding does not reflect current 
successful and practical operation of DTS technology. We will authorize 
additional experimentation and development work through our Special 
Temporary Authority (STA) process. Operation under such authority will 
be allowed to continue while we conduct the rule making proceeding. 
Depending upon the outcome of that proceeding, we may then convert the 
STAs to regular authorizations.

Procedural Matters

    153. Accessibility Information. Accessible formats of this Report 
and Order (computer diskettes, large print, audio recording and 
Braille) are available to persons with disabilities by contacting Brian 
Millin, of the Consumer & Governmental Affairs Bureau, at (202) 418-
7426, TTY (202) 418-7365, or at [email protected].
    154. Paperwork Reduction Act of 1995 Analysis. This Report and 
Order contains new or modified information collection(s) subject to the 
Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. It will be 
submitted to the Office of Management and Budget (OMB) for review under 
section 3507(d) of the PRA. The Commission is requesting OMB approval 
under the emergency processing provisions of the 1995 Act (5 CFR 
1320.13) of the information collection requirements and forms contained 
in this Report and Order. OMB, the general public, and other Federal 
agencies are invited to comment on the new or modified information 
collection(s) contained in this proceeding.
    155. Written comments by the public on the proposed information 
collection(s) are due 60 days from date of publication of this Report 
and Order in the Federal Register. Written comments must be submitted 
by the public, Office of Management and Budget and other interested 
parties on the proposed information collection(s) on or before 60 days 
from date of publication of this Report and Order 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 Judith F. Herman, Federal Communications Commission, 
Room 1-A804, 445 12th Street, SW., Washington, DC 20554, or via the 
Internet to [email protected], and to Kristy L. LaLonde, OMB Desk 
Officer, Room 10234 NEOB, 725 17th Street, NW., Washington, DC 20503, 
or via the Internet to Kristy L. [email protected], or via fax at 
202-395-5167.
    156. Regulatory Flexibility Act. As required by the Regulatory 
Flexibility Act, the Commission has prepared a Final Regulatory 
Flexibility Analysis (``FRFA'') relating to this Report and Order.

Final Regulatory Flexibility Analysis

    157. As required by the Regulatory Flexibility Act of 1980, as 
amended (``RFA''), an Initial Regulatory Flexibility Analysis 
(``IRFA'') was incorporated in the Notice of Proposed Rule Making 
(``NPRM''). The Commission sought written public comment on the 
proposals in the NPRM, including comment on the IRFA. One comment was 
received on the IRFA and is discussed below. This Final Regulatory 
Flexibility Analysis (``FRFA'') conforms to the RFA.
    158. Need for and Objectives of the Report and Order. The policies 
and rules set forth herein are required to ensure a smooth transition 
of the nation's television system from analog to digital format. In the 
Commission's DTV proceeding (MM Docket No. 87-268), the Commission 
stated its intention to hold periodic reviews of the progress of the 
digital conversion and to make any adjustments necessary to our rules 
and policies to ``ensure that the introduction of digital television 
and the recovery of spectrum at the end of the transition fully serves 
the public interest.'' In this second periodic review, we revisit, as 
we indicated we would, several issues addressed in the first periodic 
review, and address a number of additional issues that we consider 
essential to resolve in order to ensure continued progress on the 
digital transition. The objective of this second periodic review is to 
make adjustments to our rules and policies to facilitate the 
introduction of digital television and the recovery of spectrum at the 
end of the transition.
    159. Foremost among the steps taken in this item, the Report and 
Order establishes the timing and procedures necessary to establish a 
new Table of DTV Allotments that will determine the post-transition 
channels for all digital stations. Specifically, the item commences a 
three-round channel election process in the fall of 2004. Licensees are 
encouraged to ensure accuracy of database technical information on-file 
with the Commission before October 1, 2004. The Commission will issue a 
Table of

[[Page 59529]]

Station Information (based on licensees' on-file database information) 
so that station licensees will know the DTV service populations to be 
used in the channel election process. In November 2004, the channel 
election process begins with all stations certifying their database 
technical information; and certifying intent to replicate or maximize 
on their post-transition channel. In December 2004, round one begins 
and station licensees with two in-core (channels 2-51) channels elect 
the channel they prefer to retain for digital broadcasting, and 
licensees with one in-core and one out-of-core (channels 52-69) channel 
elect whether to use their in-core channel for post-transition digital 
operation. In round two, expected in July 2005, station licensees 
without a current in-core channel assignment elect a channel from those 
available after round one. In round three, expected in January 2006, 
station licensees not yet assigned a channel, or assigned channel 2 
through 6, may elect a channel from those available after round two. 
Between each round, the Commission will announce which channels are 
protected, which are in conflict, and which are available. Station 
licensees with conflicts will decide whether to accept interference and 
remain on elected channels or move to the next election round. After 
round three, the Commission will resolve remaining conflicts based on 
relevant factors. Finally, the Commission will issue a Notice of 
Proposed Rulemaking, expected by August 2006, proposing and seeking 
comment on new DTV Table of Allotments.
    160. To facilitate the election process, the Media Bureau has 
implemented a freeze on certain requests for allotment and service area 
changes by TV and DTV stations. Notwithstanding the freeze, stations 
with international coordination issues or other problems beyond their 
control may amend applications as necessary.
    161. In addition, the Order finds that firm but fair replication 
and maximization dates are necessary to increase DTV service to the 
public and also to advance the clearing of spectrum in the Lower and 
Upper 700 MHz bands (comprising television channels 52-69). The Order 
establishes two replication and maximization deadlines. The first 
deadline is July 1, 2005 and it applies to the top four affiliates in 
the top 100 markets. If they will remain on their digital channel 
assignments after the transition, they must fully replicate and 
maximize by this date. If they will move to another channel post-
transition, they must be serving by July 1, 2005 100% of the number of 
viewers served by the 1997 facility on which their replication was 
based. The second deadline, July 1, 2006, applies to all other 
stations. If they will remain on their current digital channel after 
the transition, they must fully replicate and maximize by this date. If 
they will move to another channel post-transition, they must be serving 
by July 2006 at least 80% of the number of viewers served by the 1997 
facility on which their replication was based. Failure to replicate or 
maximize by these deadlines will result in loss of interference 
protection to the unserved areas. If they have met these deadlines, the 
item would allow stations that are going to move to a different channel 
after the transition to carry-over their authorized maximized area to 
their new channels.
    162. The Order does not adopt an intermediate signal requirement, 
but retains the 7 dB increase required by December 31, 2004, for 
commercial stations and December 31, 2005, for noncommercial stations.
    163. To provide additional flexibility and fairness for many of the 
stations that are currently out-of-core, the Order allows such stations 
to return out-of-core digital channels before the transition and 
``flash cut'' to digital on their in-core channels without losing 
replication or maximization protection on their eventual in-core 
channel assignments.
    164. In addition to resolving the channel election, replication and 
maximization issues, the item encourages creative and value-added 
programming on digital channels by removing the requirement that 
licensees simulcast their analog video programming on their digital 
channel, while retaining the requirements for minimum hours of 
operation. This ``simulcast requirement'' could be reinstituted near 
the end of the transition if warranted.
    165. In addition, the Report and Order permits satellite stations 
to ``flash-cut'' from analog to digital at the end of the transition; 
clarifies the interference protection parameters of broadcast stations 
on channels 51-69; and requires stations to use Program and System 
Information Protocol (``PSIP''), which will facilitate digital 
operations and features, including channel numbering, v-chip, and 
closed captioning, and will establish technical requirements that will 
permit the TV ratings system to be modified in the future.
    166. Finally, the Report and Order approves in principle the use of 
distributed transmission technologies for digital television service. 
Digital Transmission Systems (``DTS'') would employ multiple 
synchronized transmitters spread around a station's service area, 
enabling broadcasters to fill gaps in service coverage. The item states 
the Commission will open a separate ``fast track'' proceeding to 
propose rules for DTS operation and to address related technical and 
policy issues. In the interim, the Order allows stations to request 
authorization for DTS operation on a case-by-case basis based on 
conservative parameters.
    167. The Report and Order defers action on whether to require 
point-of-sale labels describing TV equipment capabilities (such as, 
high definition, digital monitor only, or analog) and on the issue of 
how the Commission should interpret the Section of the Communications 
Act that sets December 31, 2006, as the deadline for return of analog 
spectrum and establishes criteria for extensions of that deadline. The 
Order states that the Commission plans to address these issues in the 
near future.
    168. Summary of Significant Issues Raised by Public Comments in 
Response to the IRFA. The American Cable Association (``ACA'') filed a 
comment in response to the IRFA in this proceeding. ACA states that the 
Commission's DTV transition regulations must accommodate the unique 
circumstances and higher cost structures of smaller cable systems. In 
particular, ACA asks that the Commission address the following issues: 
(1) The disproportionate cost of the DTV transition for smaller cable 
systems due to headend and set-top box costs; (2) the disproportionate 
burden of dual must-carry for smaller cable systems due to more limited 
channel capacity; (3) the unwillingness of some broadcasters to deliver 
an adequate quality DTV signal to outlying areas of their markets; and 
(4) the ``continuing abuse'' of retransmission consent of a handful of 
media conglomerates, which is constraining channel capacity, raising 
costs, and hampering small systems' ability to develop solutions to DTV 
carriage. ACA urges the Commission to consider alternatives to its 
rules that would minimize any significant economic impact on small 
entities, including exemption from coverage of the rule or parts 
thereof for small entities.
    169. The issues raised by ACA regarding the impact of the 
transition on smaller cable systems are more pertinent to the 
Commission's pending must-carry proceeding than to this DTV periodic 
review. The rules and policies addressed herein apply primarily to 
broadcasters and equipment manufacturers, and relate only

[[Page 59530]]

indirectly to cable operators. A copy of ACA's comments have been 
associated with the file in the must-carry proceeding.
    170. Although we decline to address the issues raised by ACA in 
this proceeding, we do adopt herein a number of policies that take into 
consideration the legitimate needs and interests of small businesses. 
For example, the item provides for a later replication and maximization 
interference protection deadline of July 1, 2006 for smaller stations 
(not affiliated with a top-four network) and those in smaller markets. 
Affiliates of the top-four networks (i.e., ABC, CBS, Fox, and NBC) in 
markets 1-100 are given an earlier replication and maximization 
interference protection deadline of July 1, 2005. In addition, smaller 
stations and those in smaller markets that will move to another channel 
post-transition are permitted to serve only 80% (rather than 100%) of 
the number of viewers served by the 1997 replication coverage area by 
the July 2006 deadline to carry-over their authorized maximized service 
area to their new channel. To assist stations facing severe financial 
constraints or obstacles beyond a station's control that are specific 
to the DTV transition process, the item permits these stations to apply 
for a six-month waiver of the interference protection deadline.
    171. The Report and Order also permits certain stations with an in-
core NTSC channel paired with an out-of-core DTV channel, as well as 
stations with two out-of-core channels, to surrender their out-of-core 
DTV channel before the end of the transition and operate in analog on 
their in-core channel. The item also permits single-channel DTV 
stations out of the core, upon Commission approval, to elect not to 
construct DTV facilities and instead give up their out-of-core DTV 
channel in return for a DTV channel inside the core. Upon approval from 
the Commission, these stations will ``flash-cut'' to digital operations 
on their in-core channel no later than the end of the transition in the 
station's market. This ``flash-cut'' policy will assist stations with 
an out-of-core DTV channel that are concerned about the cost of 
constructing DTV facilities outside the core that cannot be operated 
after the transition. In addition, the Report and Order permits 
satellite stations to surrender one of their paired channels and flash 
cut from analog to digital transmissions by the end of the transition 
period. This flash-cut option should provide significant financial 
relief for satellite stations, many of which are small and all of which 
serve communities unable to support a full-service station.
    172. Description and Estimate of the Number of Small Entities to 
Which the Proposed Rules Will Apply. The RFA directs the Commission to 
provide a description of and, where feasible, an estimate of the number 
of small entities that will be affected by the proposed rules. The RFA 
generally defines the term ``small entity'' as having the same meaning 
as the terms ``small business,'' ``small organization,'' and ``small 
government entity.'' 5 U.S.C. 601(3) (incorporating by reference the 
definition of ``small business concern'' in 15 U.S.C. 632. Pursuant to 
the RFA, the statutory definition of a small business applies, ``unless 
an agency, after consultation with the Office of Advocacy of the SBA 
and after opportunity for public comment, establishes one or more 
definitions of such the term which are appropriate to the activities of 
the agency and publishes such definition(s) in the Federal Register. In 
addition, the term ``small business'' has the same meaning as the term 
``small business concern'' under the Small Business Act. 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.'' 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''). 15 U.S.C. 
632. Application of the statutory criteria of dominance in its field of 
operation, and independence are sometime difficult to apply in the 
context of broadcast television. Accordingly, the Commission's 
statistical account of television stations may be over-inclusive.
    173. Television Broadcasting. The Small Business Administration 
defines a television broadcasting station that has no more than $12 
million in annual receipts as a small business. Business concerns 
included in this industry are those ``primarily engaged in broadcasting 
images together with sound.'' NAICS Code 515120. This category 
description continues, ``These establishments operate television 
broadcasting studios and facilities for the programming and 
transmission of programs to the public. These establishments also 
produce or transmit visual programming to affiliated broadcast 
television stations, which in turn broadcast the programs to the public 
on a predetermined schedule. Programming may originate in their own 
studios, from an affiliated network, or from external sources.'' 
Separate census categories pertain to businesses primarily engaged in 
producing programming. See Motion Picture and Video Production, NAICS 
code 512110; Motion Picture and Video Distribution, NAICS Code 512120; 
Teleproduction and Other Post-Production Services, NAICS Code 512191; 
and Other Motion Picture and Video Industries, NAICS Code 512199. 
According to Commission staff review of the BIA Publications, Inc. 
Master Access Television Analyzer Database as of May 16, 2003, about 
814 of the 1,220 commercial television stations in the United States 
have revenues of $12 million or less. We note, however, that, in 
assessing whether a business concern qualifies as small under the above 
definition, business (control) affiliations ``Concerns are affiliates 
of each other when one concern controls or has the power to control the 
other or a third party or parties controls or has to power to control 
both.'' 13 CFR 121.103(a)(1). Must be included. Our estimate, 
therefore, likely overstates the number of small entities that might be 
affected by our action, because the revenue figure on which it is based 
does not include or aggregate revenues from affiliated companies. There 
are also 2,127 low power television stations (LPTV). Given the nature 
of this service, we will presume that all LPTV licensees qualify as 
small entities under the SBA definition.
    174. In addition, an element of the definition of ``small 
business'' is that the entity not be dominant in its field of 
operation. We are unable at this time to define or quantify the 
criteria that would establish whether a specific television station is 
dominant in its field of operation. Accordingly, the estimate of small 
businesses to which rules may apply do not exclude any television 
station from the definition of a small business on this basis and are 
therefore over-inclusive to that extent. Also as noted, an additional 
element of the definition of ``small business'' is that the entity must 
be independently owned and operated. We note that it is difficult at 
times to assess these criteria in the context of media entities and our 
estimates of small businesses to which

[[Page 59531]]

they apply may be over-inclusive to this extent.
    175. Cable and Other Program Distribution. The SBA has developed a 
small business size standard for cable and other program distribution 
services, which includes all such companies generating $12.5 million or 
less in revenue annually. This category includes, among others, cable 
operators, direct broadcast satellite (``DBS'') services, home 
satellite dish (``HSD'') services, multipoint distribution services 
(``MDS''), multichannel multipoint distribution service (``MMDS''), 
Instructional Television Fixed Service (``ITFS''), local multipoint 
distribution service (``LMDS''), satellite master antenna television 
(``SMATV'') systems, and open video systems (``OVS''). According to the 
Census Bureau data, there are 1,311 total cable and other pay 
television service firms that operate throughout the year of which 
1,180 have less than $10 million in revenue. Economics and Statistics 
Administration, Bureau of Census, U.S. Department of Commerce, 1997 
Economic Census, Subject Series--Establishment and Firm Size, 
Information Sector 51, Table 4 at 50 (2000). The amount of $10 million 
was used to estimate the number of small business firms because the 
relevant Census categories stopped at $9,999,999 and began at 
$10,000,000. No category for $12.5 million existed. Thus, the number is 
as accurate as it is possible to calculate with the available 
information. We address below each service individually to provide a 
more precise estimate of small entities.
    176. Cable Operators. The Commission has developed 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. 47 CFR 
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, 10 FCC Rcd. 7393 (1995). We last estimated 
that there were 1,439 cable operators that qualified as small cable 
companies. 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 in this Report and Order.
    177. The Communications Act, as amended, also contains a size 
standard for a small cable system operator, which is ``a cable operator 
that, directly or through an affiliate, serves in the aggregate fewer 
than 1 percent 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.'' The Commission has determined that 
there are 68,500,000 subscribers in the United States. Therefore, an 
operator serving fewer than 685,000 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. Based on available data, we find that the number of cable 
operators serving 685,000 subscribers or less totals approximately 
1,450. 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.
    178. Direct Broadcast Satellite (``DBS'') Service. Because DBS 
provides subscription services, DBS falls within the SBA-recognized 
definition of Cable and Other Program Distribution Services. This 
definition provides that a small entity is one with $12.5 million or 
less in annual receipts. 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. 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, despite the absence of specific data on this point, that 
there are entrants in this field that may not yet have generated $12.5 
million in annual receipts, and therefore may be categorized as a small 
business, if independently owned and operated.
    179. Home Satellite Dish (``HSD'') Service. Because HSD provides 
subscription services, HSD falls within the SBA-recognized definition 
of Cable and Other Program Distribution Services. This definition 
provides that a small entity is one with $12.5 million or less in 
annual receipts. 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 500 channels of programming placed on 
C-band satellites by programmers for receipt and distribution by MVPDs, 
of which 150 channels are scrambled and approximately 350 are 
unscrambled. 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.
    180. Multipoint Distribution Service (``MDS''), Multichannel 
Multipoint Distribution Service (``MMDS'') Instructional Television 
Fixed Service (``ITFS'') 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 MDS and ITFS. LMDS is a fixed broadband point-to-
multipoint microwave service that provides for two-way video 
telecommunications.
    181. 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. 
This definition of a small entity in the context of MDS auctions has 
been approved by the A. 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 $12.5 million or less in annual receipts. 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

[[Page 59532]]

revenue in excess of $12.5 million annually. Therefore, for purposes of 
the FRFA, we find there are approximately 850 small MDS providers as 
defined by the SBA and the Commission's auction rules.
    182. The SBA definition of small entities for Cable and Other 
Program Distribution Services, which includes such companies generating 
$12.5 million in annual receipts, seems reasonably applicable to ITFS. 
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. 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). 
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.
    183. 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. 
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. These regulations defining ``small entity'' in the context of 
LMDS auctions have been approved by the SBA. 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.
    184. 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.
    185. Satellite Master Antenna Television (``SMATV'') Systems. The 
SBA definition of small entities for Cable and Other Program 
Distribution Services includes SMATV services and, thus, small entities 
are defined as all such companies generating $12.5 million or less in 
annual receipts. Currently, there are approximately 250 SMATV operators 
providing service to approximately 1.2 million residential subscribers. 
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.
    186. Open Video Systems (``OVS''). Because OVS operators provide 
subscription services, OVS falls within the SBA-recognized definition 
of Cable and Other Program Distribution Services. This definition 
provides that a small entity is one with $ 12.5 million or less in 
annual receipts. The Commission has certified 25 OVS operators with 
some now providing service. Affiliates of Residential Communications 
Network, Inc. (``RCN'') received approval to operate OVS systems in New 
York City, Boston, Washington, DC, 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.
    187. Electronics Equipment Manufacturers. Rules adopted in this 
proceeding could affect manufacturers of DTV receiving equipment and 
other types of consumer electronics equipment. The SBA has developed 
definitions of small entity for manufacturers of audio and video 
equipment as well as radio and television broadcasting and wireless 
communications equipment. These categories both include all such 
companies employing 750 or fewer employees. The Commission has not 
developed a definition of small entities applicable to manufacturers of 
electronic equipment used by consumers, as compared to industrial use 
by television licensees and related businesses. Therefore, we will 
utilize the SBA definitions applicable to manufacturers of audio and 
visual equipment and radio and television broadcasting and wireless 
communications equipment, since these are the two closest NAICS Codes 
applicable to the consumer electronics equipment manufacturing 
industry. However, these NAICS categories are broad and specific 
figures are not available as to how many of these establishments 
manufacture consumer equipment. According to the SBA's regulations, an 
audio and visual equipment manufacturer must have 750 or fewer 
employees in order to qualify as a small business concern. Census 
Bureau data indicates that there are 554 U.S. establishments that 
manufacture audio and visual equipment, and that 542 of these 
establishments have fewer than 500 employees and would be classified as 
small entities. Economics and Statistics Administration, Bureau of 
Census, U.S. Department of Commerce, 1997 Economic Census, Industry 
Series--Manufacturing, Audio and Video Equipment Manufacturing, Table 4 
at 9 (1999). The amount of 500 employees was used to estimate the 
number of small business firms because the relevant Census categories 
stopped at 499 employees and began at 500 employees. No category for 
750 employees existed. Thus, the number is as accurate as it is 
possible to calculate with the available information. The remaining 12 
establishments have 500 or more employees; however, we are unable to 
determine how many of those have fewer than 750 employees and 
therefore, also qualify as small entities under the SBA definition. 
Under the SBA's regulations, a radio and television broadcasting and 
wireless communications equipment manufacturer must also have 750 or 
fewer employees in order to qualify as a small business concern. Census 
Bureau data indicates that there 1,215 U.S. establishments that 
manufacture radio and television broadcasting and wireless 
communications equipment, and that 1,150 of these establishments have 
fewer than 500 employees and would be classified as small entities. 
Economics and Statistics Administration, Bureau of Census, U.S. 
Department of Commerce, 1997 Economic Census, Industry Series--
Manufacturing, Radio and Television

[[Page 59533]]

Broadcasting and Wireless Communications Equipment Manufacturing, Table 
4 at 9 (1999). The amount of 500 employees was used to estimate the 
number of small business firms because the relevant Census categories 
stopped at 499 employees and began at 500 employees. No category for 
750 employees existed. Thus, the number is as accurate as it is 
possible to calculate with the available information. The remaining 65 
establishments have 500 or more employees; however, we are unable to 
determine how many of those have fewer than 750 employees and 
therefore, also qualify as small entities under the SBA definition. We 
therefore conclude that there are no more than 542 small manufacturers 
of audio and visual electronics equipment and no more than 1,150 small 
manufacturers of radio and television broadcasting and wireless 
communications equipment for consumer/household use.
    188. Electronic Computer Manufacturers. The Commission has not 
developed a definition of small entities applicable to computer 
manufacturers. Therefore, we will utilize the SBA definition of 
electronic computers manufacturing. According to SBA regulations, a 
computer manufacturer must have 1,000 or fewer employees in order to 
qualify as a small entity. Census Bureau data indicates that there are 
563 firms that manufacture electronic computers and of those, 544 have 
fewer than 1,000 employees and qualify as small entities. The remaining 
19 firms have 1,000 or more employees. We conclude that there are 
approximately 544 small computer manufacturers.
    189. Description of Projected Reporting, Recordkeeping and other 
Compliance Requirements. The Report and Order requires all full power 
commercial and noncommercial television broadcast licensees and 
permittees to file a pre-election certification form by November 2004. 
In addition, full power licensees and permittees choosing to 
participate in the channel election process will file channel election 
forms in one or more of the three election rounds, and may file 
conflict decision forms based on the outcome of their election. The 
purpose of these filings is to permit stations to inform the Commission 
of their preference for a final DTV channel. Without these election 
forms, stations could not inform the Commission of their preferred 
channel for post-transition DTV operation. The decision as to which 
channel to elect for post-transition operation may be a difficult and 
time-consuming one for some broadcasters. However, channel election and 
the development of a new DTV Table of Allotments are steps integral to 
the digital transition. Factors that could make the channel election 
decision time consuming are not likely to be related to whether the 
entity is small or large. Licensees may elect not to participate in the 
channel election process and not file these forms and instead have the 
FCC assign them a post-transition channel at the end of the election 
process.
    190. Steps Taken to Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered. The RFA requires an 
agency to describe any significant alternatives that it has considered 
in reaching its proposed approach, which may include the following four 
alternatives (among others): (1) The establishment of differing 
compliance or reporting requirements or timetables that take into 
account the resources available to small entities; (2) the 
clarification, consolidation, or simplification of compliance or 
reporting requirements under the rule for small entities; (3) the use 
of performance, rather than design, standards; and (4) an exemption 
from coverage of the rule, or any part thereof, for small entities.
    191. In a number of instances, while adopting a given rule for 
larger entities, the Report and Order considers and adopts alternative 
requirements for small or smaller market entities to assist these 
entities in completing the digital conversion. For example, the Report 
and Order adopts the following interference protection deadlines for 
DTV channels within the core spectrum: July 1, 2005, for affiliates of 
the top-four networks (i.e., ABC, CBS, Fox, and NBC) in markets 1-100; 
and July 1, 2006, for all other commercial DTV licensees as well as 
noncommercial DTV licensees. Thus, smaller stations and stations in 
smaller markets are given more time to meet the interference protection 
deadline. In addition, smaller stations planning to move to another 
channel post-transition are given lesser requirements than larger 
stations. For top four affiliates in the top 100 markets, if they will 
remain on their digital channel assignments after the transition, they 
must fully replicate and maximize by July 1, 2005. If they will move to 
another channel post-transition, they must be serving by July 1, 2005 
100% of the number of viewers served by the 1997 facility on which 
their replication was based. The second deadline, July 1, 2006, applies 
to all other stations. If they will remain on their current digital 
channel after the transition, they must fully replicate and maximize by 
this date. If they will move to another channel post-transition, they 
must be serving by July 2006 at least 80% of the number of viewers 
served by the 1997 facility on which their replication was based. 
Failure to replicate or maximize by these deadlines will result in loss 
of interference protection to the unserved areas. If they have met 
these deadlines, the item would allow stations that are going to move 
to a different channel after the transition to carry-over their 
authorized maximized area to their new channels.
    192. While the Commission considered applying the same deadline and 
replication and maximization requirements to all stations, it concluded 
that a later deadline and reduced requirement for smaller and smaller 
market stations is warranted. In addition, to assist stations facing 
severe financial constraints or obstacles beyond a station's control 
that are specific to the DTV transition process, the item permits these 
stations to apply for a six-month waiver of the interference protection 
deadline.
    193. In some instances, a rule was adopted applicable to large and 
small entities in the same way conferring the same benefits upon both. 
In furtherance of the significant public interest in rapid band-
clearing and to address the potential for stranded investment in 
facilities outside of core channels, the Report and Order permits 
certain stations with an in-core NTSC channel paired with an out-of-
core DTV channel, stations with two out-of-core channels, and single-
channel DTV stations out-of-the-core, to surrender their out-of-core 
DTV channel before the end of the transition and operate in analog on 
their in-core channel. Upon approval from the Commission, these 
stations will ``flash-cut'' to digital operations on their in-core 
channel no later than the end of the transition in the station's 
market. This ``flash-cut'' policy will assist both smaller and larger 
stations with an out-of-core DTV channel that are concerned about the 
cost of constructing DTV facilities outside the core that cannot be 
operated after the transition. These entities will be permitted to 
surrender early their out-of-core channel and operate only in analog on 
their in-core channel until they flash-cut to digital-only operation on 
that channel no later than the end of the transition. The Commission 
considered not permitting these stations to flash-cut, but finally 
concluded that permitting this flash-cut option would best advance the 
transition and the clearing of the out-of-core spectrum.
    194. In addition, the Report and Order permits satellite stations 
to surrender one of their paired channels and flash

[[Page 59534]]

cut from analog to digital transmissions by the end of the transition 
period. This flash-cut option should provide significant financial 
relief for satellite stations, many of which are small and all of which 
serve communities unable to support a full-service station.
    195. The Report and Order also adopts another waiver that will most 
likely benefit smaller stations as opposed to larger stations. The 
Report and Order requires television licensees that have not yet been 
granted an initial DTV CP to construct, within a year from the adoption 
date of this Report and Order, a ``checklist'' facility that conforms 
with the parameters of the DTV Table of Allotments and other key 
processing requirements. The Commission will consider requests for 
waiver of the one year construction deadline, on a case-by-case basis, 
using the criteria for extension of DTV construction deadlines. Grounds 
for an extension must relate to the checklist facility, not the pending 
non-checklist application. This waiver procedure permits stations 
facing financial hardship as well as other obstacles to construction of 
digital facilities to make a showing why waiver of the construction 
deadline would serve the public interest. The waiver is available to 
all stations regardless of size or income, but it likely to benefit 
smaller stations more as these stations are more likely to encounter 
financial hardships in constructing DTV checklist facilities.
    196. The Report and Order declines to postpone the existing phased-
in minimum operating hours for smaller and smaller-market digital 
television stations. However, these phased-in dates permit these 
stations to step up gradually the number of hours of digital 
programming they offer. In contrast, top-four network affiliates in the 
top 30 television markets are required to operate their DTV station at 
any time that the analog station is operating.
    197. Federal Rules Which Duplicate, Overlap, or Conflict with the 
Commission's Proposals. None.
    198. Report to Congress. The Commission will send a copy of the 
Report and Order, including this FRFA, in a report to be sent to 
Congress pursuant to the Congressional Review Act. In addition, the 
Commission will send a copy of the Report and Order, including this 
FRFA, to the Chief Counsel for Advocacy of the SBA. A copy of the 
Report and Order and FRFA (or summaries thereof) will also be published 
in the Federal Register.

Ordering Clauses

    199. It is ordered that pursuant to the authority contained in 
sections 1, 4(i) and (j), 5(c)(1), 7, 301, 302, 303(f), 303(r), 303(u), 
303(w), 303(x), 307, 308, 309, 316, 319, 324, 336(c), 336(f), 337, 
330(b), 330(c), 332(c) of the Communications Act of 1934, 47 U.S.C 151, 
154(i) and (j), 155(c)(1), 157, 301, 302, 303(f), 303(r), 303(u), 
303(w), 303(x), 307, 308, 309, 316, 319, 324, 336(c), 336(f), 337, 
330(b), 330(c), 332(c) that this Report and Order is adopted and the 
Commission's rules are hereby amended as set forth in Appendix B, and 
shall become effective November 3, 2004 except for Sec.  73.1201 which 
contains information collection requirements under the PRA is not 
effective until approved by OMB. The FCC will publish a document in the 
Federal Register announcing the effective date for this section.
    200. It is further ordered that, pursuant to 47 U.S.C. 155(c), the 
Chief, Media Bureau, is granted delegated authority to implement the 
electronic Channel Election Forms and the specific dates adopted in 
this Order.
    201. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, 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.
    202. It is further ordered that the Commission shall send a copy of 
this Report and Order in a report to be sent to Congress and the 
General Accounting Office pursuant to the Congressional Review Act, see 
5 U.S.C. 801(a)(1)(A).

List of Subjects

47 CFR Part 15

    Communications equipment, Computer technology, Incorporation by 
reference, Labeling, Radio, Reporting and recordkeeping requirements, 
Security measures, Telephone, Wiretapping and electronic surveillance.

47 CFR Part 27

    Communications common carriers, Radio.

47 CFR Part 73

    Civil defense, Communications equipment, Defense communications, 
Education, Equal employment opportunity, Foreign relations, 
Incorporation by reference, Mexico, Political candidates, Radio, 
Reporting and recordkeeping requirements, Television.

47 CFR Part 90

    Administrative practice and procedure, Business and industry, Civil 
defense, Common carriers, Communications equipment, Emergency medical 
services, Individuals with disabilities, Radio, Reporting and 
recordkeeping requirements.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

0
For the reasons discussed in the preamble, the Federal Communications 
Commission amends 47 CFR parts 15, 27, 73 and 90 as follows:

PART 15--RADIO FREQUENCY DEVICES

0
1. The authority for part 15 continues to read as follows:

    Authority: 47 U.S.C. 154, 302, 303, 304, 307, 336, and 544A.

0
2. Section 15.38 is amended by adding paragraph (b)(13) to read as 
follows:

Sec.  15.38  Incorporations by reference.

* * * * *
    (b) * * *
    (13) CEA-766-A: ``U.S. and Canadian Region Rating Tables (RRT) and 
Content Advisory Descriptors for Transport of Content Advisory 
Information using ATSC A/65-A Program and System Information Protocol 
(PSIP),'' April 2001, IBR approved for Sec.  15.120.
* * * * *

0
3. Section 15.120 is amended by revising paragraphs (c)(2) and (d)(2) 
to read as follows:

Sec.  15.120  Program blocking technology requirements for television 
receivers.

* * * * *
    (c) * * *
    (2) Digital television program rating information shall be 
transmitted in digital television signals in accordance with Sec.  
73.682(d) of this chapter.
    (d) * * *
    (2) Digital television receivers shall react in a similar manner as 
analog televisions when programmed to block specific rating categories. 
Effective March 15, 2006, digital television receivers will receive 
program rating descriptors transmitted pursuant to industry standard 
EIA/CEA-766-A ``U.S. and Canadian Region Rating Tables (RRT) and 
Content Advisory Descriptors for Transport of Content Advisory 
Information using ATSC A/65-A Program and System Information Protocol 
(PSIP),'' 2001 (incorporated by reference, see Sec.  15.38). Blocking 
of programs shall occur when a program rating is received that meets 
the pre-determined user requirements. Digital television receivers 
shall be able to respond to changes in the content advisory rating 
system.
* * * * *

[[Page 59535]]

PART 27--MISCELLANEOUS WIRELESS COMMUNICATIONS SERVICES

0
4. The authority citation for part 27 continues to read as follows:

    Authority: 47 U.S.C. 154, 301, 302, 303, 307, 309, 332, 336, and 
337 unless otherwise noted.

0
5. Section 27.60 is amended by revising paragraph (b)(1)(iii) to read 
as follows:

Sec.  27.60  TV/DTV interference protection criteria.

* * * * *
    (b) * * *
    (1) * * *
    (iii) Submit an engineering study justifying the proposed 
separations based on the parameters of the land mobile station and the 
parameters, including authorized and/or applied for facilities, of the 
TV/DTV station(s) it is trying to protect; or,
* * * * *

PART 73--RADIO BROADCAST SERVICES

0
6. The authority for part 73 continues to read as follows:

    Authority: 47 U.S.C. 154, 303, 334 and 336.

0
7. Section 73.624 is amended by revising paragraphs (b) introductory 
text, (b)(1), and paragraph (f) to read as follows:

Sec.  73.624  Digital television broadcast stations.

* * * * *
    (b) DTV broadcast station permittees or licensees must transmit at 
least one over-the-air video program signal at no direct charge to 
viewers on the DTV channel. Until such time as a DTV station permittee 
or licensee ceases analog transmissions and returns that spectrum to 
the Commission, and except as provided in paragraph (b)(1) of this 
section, at any time that a DTV broadcast station permittee or licensee 
transmits a video program signal on its analog television channel, it 
must also transmit at least one over-the-air video program signal on 
the DTV channel. The DTV service that is provided pursuant to this 
paragraph must be at least comparable in resolution to the analog 
television station programming transmitted to viewers on the analog 
channel.
    (1) DTV broadcast station permittees and licensees required to 
construct and operate a DTV station by May 1, 2002, or May 1, 2003, 
pursuant to paragraph (d) of this section must, at a minimum, beginning 
on the date on which the DTV station is required to be constructed, 
provide a digital video program signal, of the quality described in 
paragraph (b) of this section, during prime time hours as defined in 
Sec.  79.3(a)(6) of this chapter. These licensees and permittees must 
also comply with the minimum operating hours requirements in paragraph 
(f) of this section.
* * * * *
    (f)(1) Commencing on April 1, 2003, DTV television licensees and 
permittees required to construct and operate a DTV station by May 1, 
2002, or May 1, 2003, must transmit at least one over-the-air video 
program signal at no direct charge to viewers on their DTV channel at 
least 50 percent of the time they are transmitting a video program 
signal on their analog channel.
    (2) Commencing on April 1, 2004, DTV licensees and permittees 
described in paragraph (f)(1) of this section must transmit a video 
program signal as described in paragraph (f)(1) of this section on the 
DTV channel at least 75 percent of the time they are transmitting a 
video program signal on the analog channel.
    (3) Commencing on April 1, 2005, DTV licensees and permittees 
described in paragraph (f)(1) of this section must transmit a video 
program signal as described in paragraph (f)(1) of this section on the 
DTV channel at least 100 percent of the time they are transmitting a 
video program signal on the analog channel.
    (4) The minimum operating hours requirements imposed in paragraphs 
(f) (1) through (3) of this section will terminate when the analog 
channel terminates operation and a 6 MHz channel is returned by the DTV 
licensee or permittee to the Commission.
* * * * *

0
8. Section 73.682 is amended by revising paragraph (d) to read as 
follows:

Sec.  73.682  TV transmission standards.

* * * * *
    (d) Digital broadcast television transmission standard. Effective 
February 1, 2005, transmission of digital broadcast television (DTV) 
signals shall comply with the standards for such transmissions set 
forth in ATSC A/52: ``ATSC Standard Digital Audio Compression (AC-3)'' 
(incorporated by reference, see Sec.  73.8000), ATSC Doc. A/53B, 
Revision B with Amendment 1 and Amendment 2: ``ATSC Digital Television 
Standard,'' except for Section 5.1.2 (``Compression format 
constraints'') of Annex A (``Video Systems Characteristics'') and the 
phrase ``see Table 3'' in Section 5.1.1. Table 2 and Section 5.1.2 
Table 4 (incorporated by reference, see Sec.  73.8000), and ATSC A/65B: 
``ATSC Program and System Information Protocol for Terrestrial 
Broadcast and Cable,'' (Revision B) 2003 (incorporated by reference, 
see Sec.  73.8000). Although not incorporated by reference, licensees 
may also consult ATSC Doc. A/54, Guide to Use of the ATSC Digital 
Television Standard, (October 4, 1995), and ATSC Doc. A/69, Recommended 
Practice PSIP Implementation Guidelines for Broadcasters (June 25, 
2002) (Secs. 4, 5, 303, 48 Stat., as amended, 1066, 1068, 1082 (47 
U.S.C. 154, 155, 303)).

0
9. Section 73.1201 is amended by revising paragraphs (b)(1) and (c)(1) 
to read as follows:

Sec.  73.1201  Station identification.

* * * * *
    (b) Content. (1) Official station identification shall consist of 
the station's call letters immediately followed by the community or 
communities specified in its license as the station's location; 
Provided, That the name of the licensee, the station's frequency, the 
station's channel number, as stated on the station's license, and/or 
the station's network affiliation may be inserted between the call 
letters and station location. DTV stations choosing to include the 
station's channel number in the station identification must use the 
station's major channel number and may distinguish multicast program 
streams. For example, a station with major channel number 26 may use 
26.1 to identify an HDTV program service and 26.2 to identify an SDTV 
program service. No other insertion between the station's call letters 
and the community or communities specified in its license is 
permissible.
* * * * *
    (c) Channel--(1) General. Except as otherwise provided in this 
paragraph, in making the identification announcement the call letters 
shall be given only on the channel, or channels in the case of a 
broadcaster that is multicasting more than a single channel, identified 
thereby.
* * * * *

0
10. Section 73.8000 is amended by revising paragraphs (b)(2) and (b)(3) 
to read as follows:

Sec.  73.8000  Incorporation by reference.

* * * * *
    (b) * * *
    (2) ATSC A/53B: ``ATSC Digital Television Standard,'' dated August 
7, 2001, Revision B, with Amendment 1 dated May 23, 2002 and Amendment 
2

[[Page 59536]]

dated May 19, 2003, IBR approved for Sec.  73.682, except for section 
5.1.2 of Annex A, and the phrase ``see Table 3'' in section 5.1.1. 
Table 2 and section 5.1.2 Table 4.
    (3) ATSC A/65B: ``ATSC Program and System Information Protocol for 
Terrestrial Broadcast and Cable,'' (Revision B) March 18, 2003, and IBR 
approved for Sec.  73.682, IBR approved for Sec. Sec.  73.9000-73.9001.
* * * * *

PART 90--PRIVATE LAND MOBILE RADIO SERVICES

0
11. The authority citation for part 90 continues to read as follows:

    Authority: Sections 4(i), 11, 303(g), 303(r), and 332(c)(7) of 
the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 161, 
303(g), 303(r), 332(c)(7).

0
12. Section 90.545 is amended by revising paragraph (c)(1)(ii) to read 
as follows:

Sec.  90.545  TV/DTV interference protection criteria.

* * * * *
    (c) * * *
    (1) * * *
    (ii) Submit an engineering study justifying the proposed 
separations based on the parameters of the land mobile station and the 
parameters, including authorized and/or applied for facilities, of the 
TV/DTV station(s) it is trying to protect; or,
* * * * *
[FR Doc. 04-22189 Filed 10-1-04; 8:45 am]
BILLING CODE 6712-01-P
```