Federal Register / Vol. 86, No. 34 / Tuesday, February 23, 2021 / Rules and Regulations 10847 

1Promoting Broadcast Internet Innovation 

Through ATSC 3.0, MB Docket No. 20–145, 

Declaratory Ruling and notice of proposed 

rulemaking, 85 FR 43142 and 85 FR 43195 (July 16, 

2020) (Declaratory Ruling and NPRM). The 

Commission referred to these new ancillary 

offerings over broadcast spectrum as ‘‘Broadcast 

internet’’ services to distinguish them from 

traditional over-the-air video services. We note that 

the rule changes we adopt herein will apply equally 

to all ancillary and supplementary services 

provided using either the ATSC 1.0 or 3.0 

transmission standards. 

§ 64.606 internet-based TRS provider and 

TRS program certification. 

(a) * * * (1) Certified state program. 

Any state, through its office of the 

governor or other delegated executive 

office empowered to provide TRS, 

desiring to establish a state program 

under this section shall submit 

documentation to the Commission 

addressed to the Federal 

Communications Commission, Chief, 

Consumer and Governmental Affairs 

Bureau, TRS Certification Program, 

Washington, DC 20554, and captioned 

‘‘TRS State Certification Application.’’ 

All documentation shall be submitted in 

narrative form, shall clearly describe the 

state program for implementing 

intrastate TRS, and the procedures and 

remedies for enforcing any requirements 

imposed by the state program. The 

Commission shall give public notice of 

state applications for certification. 

* * * * * 

[FR Doc. 2021–00792 Filed 2–22–21; 8:45 am] 

BILLING CODE 6712–01–P 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 73 

[MB Docket No. 20–145; FCC 20–181; FRS 

17327] 

Promoting Broadcast Internet 

Innovation Through ATSC 3.0 

AGENCY: Federal Communications 

Commission. 

ACTION: Final rule. 

SUMMARY: Through this final rule, the 

Commission fosters the efficient and 

robust use of broadcast spectrum 

capacity for the provision of Broadcast 

internet services consistent with 

statutory directives. In this document, 

the Commission concludes that 

ancillary and supplementary (A&S) fees 

should be calculated based on the gross 

revenue received by the broadcaster, 

without regard to the gross revenue of 

an unaffiliated third party, such as a 

spectrum lessee; should retain the 

existing standard of derogation of 

broadcast service, but amend the 

wording of the rules to eliminate the 

outdated reference to analog television; 

and should reaffirm that noncommercial 

educational television broadcast stations 

(NCEs) may offer Broadcast internet 

services. The Commission also 

reinterprets the application to permit 

noncommercial educational stations 

(NCEs) to devote the substantial 

majority of their spectrum not just to 

free over-the-air television but also 

ancillary and supplementary services; 

lowers the ancillary and supplementary 

service fee for certain NCE services; and 

clarifies that NCEs may offer limited 

Broadcast internet services to donors 

without transforming those donations 

into feeable ancillary and 

supplementary service revenue. 

DATES: Effective March 25, 2021. 

FOR FURTHER INFORMATION CONTACT: For 

additional information, contact Lyle 

Elder, Lyle.Elder@fcc.gov, of the Media 

Bureau, Policy Division, (202) 418– 

2120. Direct press inquiries to Janice 

Wise at (202) 418–8165. 

SUPPLEMENTARY INFORMATION: This is a 

summary of the Commission’s Report 

and Order, FCC 20–181, adopted and 

released on December 10, 2020. The full 

text of this document is available 

electronically via the FCC’s Electronic 

Document Management System 

(EDOCS) website at https://

www.fcc.gov/edocs or via the FCC’s 

Electronic Comment Filing System 

(ECFS) website at https://www.fcc.gov/ 

ecfs. (Documents will be available 

electronically in ASCII, Microsoft Word, 

and/or Adobe Acrobat.) Alternative 

formats are available for people with 

disabilities (Braille, large print, 

electronic files, audio format), by 

sending an email to fcc504@fcc.gov or 

calling the Commission’s Consumer and 

Governmental Affairs Bureau at (202) 

418–0530 (voice), (202) 418–0432 

(TTY). 

Synopsis 

1. Earlier last year, the Commission 

initiated a proceeding to encourage the 

provision of new and innovative 

Broadcast internet services enabled by 

ATSC 3.0—the ‘‘Next Generation’’ 

broadcast television standard often 

referred to as Next Gen TV—that can 

complement the nation’s 5G wireless 

networks.1 In so doing, the Commission 

sought to eliminate uncertainty cast on 

such services by legacy regulations and 

to consider whether, and if so how, to 

update the Commission’s rules 

regarding ancillary and supplementary 

services, adopted over 20 years ago. 

With this item, we take additional steps 

to clarify and update the regulatory 

landscape in order to foster the efficient 

and robust use of broadcast spectrum 

capacity for the provision of Broadcast 

internet services consistent with 

statutory directives. 

2. In this Report and Order (Order), 

we adopt, with only minor changes, four 

of the tentative conclusions set forth in 

the NPRM. Specifically, we clarify the 

basis on which to calculate ancillary 

and supplementary service fees. We 

retain the existing standard of 

derogation of broadcast service. We also, 

however, amend the derogation rule to 

eliminate an outdated reference to 

analog television. We reaffirm the 

freedom of noncommercial educational 

television stations (NCEs) to provide 

ancillary and supplementary services. 

And while we generally decline at this 

time to adjust the fee imposed on 

ancillary and supplementary services, 

we intend to revisit this issue at a future 

date to determine whether we should 

adjust the fee or the basis of the fee once 

the market for Broadcast internet 

services develops. 

3. Recognizing the unique educational 

public service mission of NCEs seeking 

to provide Broadcast internet services, 

we also adopt a number of additional 

proposals designed to preserve and 

expand this essential mission. Notably, 

we find that an NCE television 

broadcast station may use its 6 MHz 

channel capacity primarily not only for 

its free, over-the-air nonprofit, 

noncommercial, educational, television 

broadcast service, as under our current 

interpretation of the rule, but also for 

any nonprofit, noncommercial, 

educational (‘‘primary’’) ancillary and 

supplementary services. We also adopt 

a reduced fee of 2.5% on gross revenue 

generated by such ‘‘primary’’ ancillary 

and supplementary services, as opposed 

to the 5% fee applied to ancillary and 

supplementary services generally. With 

these actions, this Order continues to 

lay the groundwork for broadcasters, 

and thereby the general public, to 

explore and benefit from the 

possibilities and opportunities that 

Broadcast internet provides. 

4. Background. As the Commission 

explained in the NPRM, the ATSC 3.0 

IP-based standard offers greater effective 

spectral capacity than ATSC 1.0, the 

current digital broadcast television 

standard. The additional capacity will 

allow broadcasters to expand their 

traditional television offerings, 

including by offering higher quality 

video and audio and a wider range of 

programming choices. Broadcasters may 

also provide innovative non-traditional 

services, and the NPRM asked about the 

‘‘types of Broadcast internet services 

that are likely to be provided in the 

future.’’ Commenters describe a wide 

array of exciting possibilities. APTS/ 

10848 Federal Register / Vol. 86, No. 34 / Tuesday, February 23, 2021 / Rules and Regulations 

PBS explain that NCEs might expand 

and roll out offerings in ‘‘a variety of 

areas that further their public service 

missions, especially education, child 

development, public safety, national 

security, job training, and telehealth.’’ 

PMG describes a wide range of possible 

uses, including: (i) Distance learning 

services, such as distributing subjectand classroom-specific lectures and 

reading materials to students, and 

broadcasting content to school buses 

during long rural commutes to make 

that time more enriching for students; 

(ii) trusted, encrypted, and curated 

distribution of health-related content to 

those unserved and underserved by 

high-speed internet; (iii) emergency 

alerting services that allow more homes, 

vehicles, and first responders to gain 

access to life-saving information; (iv) 

expanded distribution of local and 

hyper-local news to audiences across a 

community; and (iv) software and 

cybersecurity updates to power smart 

cities, automobiles, and ‘‘Internet of 

Things’’ (IoT) products and 

applications. ONE Media explains that: 

[i]n addition to enhanced broadcast 

programming, the ATSC 3.0 standard enables 

use of television spectrum to communicate 

with devices over wide areas efficiently, 

expanding opportunities for distance 

learning, advanced emergency alerting and 

information functions, highly secure file 

delivery and authentication, offloading large 

data files (including video) needed by 

carriers to cache programming directly on 

user devices, dramatically improving 

efficient distribution of data to autonomous 

driving vehicles, facilitating nearinstantaneous needs for IoT devices and 

telemedicine or smart agriculture activities, 

and other innovative services yet to be 

conceived. 

5. In June 2020, the Commission 

commenced this proceeding to ensure 

that our rules will help foster the 

development of innovative and efficient 

uses of broadcast spectrum like the ones 

described above. In the Declaratory 

Ruling, the Commission clarified that 

the lease of excess broadcast television 

spectrum to a third party, including 

another broadcaster, for the provision of 

ancillary and supplementary services 

does not result in attribution under our 

broadcast television station ownership 

rules or for any other requirements 

related to television station attribution 

(e.g., filing ownership reports). The 

Commission explained that regulatory 

clarity will help ensure that 

broadcasters and other innovators have 

the flexibility to generate the scale— 

both locally and nationally—that may 

be necessary to support certain 

Broadcast internet services, and that 

regulatory reform can ensure that 

market forces, rather than outdated 

rules, determine the success of the 

nascent Broadcast internet industry. In 

the accompanying NPRM, the 

Commission sought comment on any 

rule changes needed to further promote 

regulatory certainty and greater 

investment in innovative Broadcast 

internet services. 

6. Specifically, the NPRM sought 

comment on a number of general 

matters concerning the potential uses 

and applications of excess broadcast 

spectrum capacity resulting from the 

transition to ATSC 3.0; on whether the 

amount and method of calculating the 

ancillary and supplementary services 

fee should be reconsidered given the 

new potential uses of excess spectrum 

capacity; and on whether the 

Commission should clarify or modify 

the rules prohibiting derogation of 

broadcast service and defining an 

analogous service. The NPRM elicited 

17 comments, 12 replies, and numerous 

ex parte filings from commenters 

representing companies and industry 

groups from the broadcast, cable, 

wireless, and consumer electronics 

industries, as well as non-profit groups 

and groups hoping to explore new 

Broadcast internet opportunities. 

Commenters are largely supportive of 

the Commission’s tentative conclusions, 

although as discussed below there is 

notable opposition to the proposal to 

exclude third party facility 

improvements from revenue 

calculations, a proposal we decline to 

adopt today. There is also disagreement 

regarding the proposal to clarify the 

derogation standard, both from parties 

who support a significant change and 

parties who oppose any change at all to 

the existing text. The record also reflects 

widespread skepticism about any 

Commission action that would go 

beyond the tentative conclusions, with 

two notable exceptions. First, NCEs and 

associated parties make a compelling 

case that substantial public benefits 

could accrue through the widespread 

deployment of Broadcast internet over 

public television spectrum, justifying 

additional steps to encourage that 

deployment. Second, a large number of 

low power television (LPTV) station 

representatives and interested parties 

propose changes to the rules governing 

LPTV service, though the proposals are 

largely unrelated to Broadcast internet 

services. 

7. Discussion. Ancillary and 

Supplementary Service Fee. With one 

exception, discussed below, we decline 

at this time to adjust the fee program 

associated with ancillary and 

supplementary services. Rather, we will 

revisit the size and basis of the fee, as 

well as other relevant issues, when we 

have a better understanding of how the 

transition to ATSC 3.0 is progressing. 

We do, however, adopt our tentative 

conclusion that fees should be 

calculated based on the gross revenue 

received by the broadcaster rather than 

revenue received by a spectrum lessee. 

Finally, we decline at this time to adopt 

the proposal made by Public Knowledge 

et al. that we use the fees we collect for 

ancillary and supplementary services to 

fund a program to offset costs for 

consumers who upgrade their 

equipment as part of the transition to 

ATSC 3.0, and we decline at this time 

to exempt from the ancillary and 

supplementary service fee ‘‘in-kind’’ 

contributions, or otherwise change our 

fee for ancillary and supplementary 

services that fall into certain classes of 

service. 

8. The Telecommunications Act of 

1996 (1996 Act) requires broadcasters to 

pay a fee to the United States Treasury 

to the extent they use their digital 

television (DTV) spectrum to provide 

ancillary and supplementary services 

for which the payment of a subscription 

fee is required in order to receive such 

services, or for which the licensee 

directly or indirectly receives 

compensation from a third party in 

return for transmitting material 

furnished by such a third party (other 

than commercial advertisements used to 

support broadcasting for which a 

subscription fee is not required). The 

1996 Act further provides that the 

ancillary and supplementary services 

fee program shall be designed to recover 

for the public a portion of the value of 

the public spectrum resource made 

available for such commercial use, and 

to avoid unjust enrichment through the 

method employed to permit such uses 

of that resource; and to recover for the 

public an amount that, to the extent 

feasible, equals but does not exceed 

(over the term of the license) the amount 

that would have been recovered had 

such services been licensed at auction. 

In addition, the Commission is required 

by statute to adjust the ancillary and 

supplementary services fee from time to 

time in order to ensure that these 

requirements continue to be met. 

9. As a preliminary matter, we 

reaffirm that section 336 of the 1996 Act 

gives the Commission flexibility to 

determine the appropriate fee for 

ancillary and supplementary services 

within the parameters set forth in the 

statute. Section 336 directs the 

Commission to ‘‘establish a program to 

assess and collect . . . an annual fee or 

other schedule or method of payment 

that promotes the objectives’’ described 

by the statute. Specifically, the statute 

requires that the fee program be 

Federal Register / Vol. 86, No. 34 / Tuesday, February 23, 2021 / Rules and Regulations 10849 

designed to recover for the public some 

portion of the value of the spectrum, 

prevent the unjust enrichment of 

broadcasters providing ancillary and 

supplementary services, and 

approximate the revenues that would 

have been received had the spectrum on 

which the services are provided been 

licensed through an auction. As the 

Commission has observed, ‘‘the 1996 

Act gives the Commission broad 

discretion in setting the amount of the 

fee for ancillary and supplementary 

services,’’ bounded by the criteria set 

forth in section 336(e). Commenters 

who addressed this issue agree with this 

analysis. 

10. Fee for Commercial Television 

Broadcast Stations. We conclude that 

we do not have sufficient information at 

this early stage in the ATSC 3.0 

transition to evaluate fully whether a 

change to, much less elimination of, the 

current fee for feeable ancillary and 

supplementary services offered by 

commercial television stations would 

better reflect the directives of section 

336(e). Accordingly, we retain the 

current fee of 5% for such stations and 

intend to reevaluate the fee once the 

marketplace for Broadcast internet 

services has become more mature. 

11. As the Commission previously has 

recognized, in considering how to 

calculate the appropriate ancillary and 

supplementary fee, we must balance 

potentially competing statutory goals: 

Recover a portion of the value of the 

spectrum used for ancillary and 

supplementary services, avoid unjust 

enrichment, and approximate the 

revenue that would have been received 

had these services been licensed 

through an auction. A fee that is too 

high could dissuade broadcasters from 

providing Broadcast internet services 

and thereby reduce the potential 

benefits to consumers of such services 

and preclude the Commission from 

collecting fees approximating the 

amount that would have been recovered 

for the spectrum at auction. On the 

other hand, a fee that is too low may 

both fail to prevent the unjust 

enrichment of licensees and to recover 

for the public an amount approximating 

the amount that would have been 

recovered at auction. 

12. In considering these statutory 

mandates, we conclude that it would be 

premature at this time to adjust the 

ancillary and supplementary service fee 

without knowing more about the kinds 

of Broadcast internet services that will 

be provided and the economics thereof. 

The conversion to ATSC 3.0 is entirely 

voluntary, and commercial service has 

only recently commenced in a few 

television markets. We cannot yet gauge 

the extent to which ATSC 3.0 will be 

deployed and adopted by consumers or 

which ATSC 3.0-based services and 

features will be offered as feeable 

Broadcast internet services. Indeed, the 

Commission recently reached a similar 

conclusion when it first authorized the 

voluntary transmission to ATSC 3.0. 

Accordingly, we reject commenters’ 

suggestions that we reconsider the 

current 5% fee on broadcast commercial 

stations, at this time. Instead, consistent 

with recommendations in the record, we 

believe it would be better to revisit the 

ancillary and supplementary service fee 

when the ATSC 3.0 marketplace has 

further developed. 

13. Calculation of Gross Revenue. We 

adopt our tentative conclusion that fees 

should be calculated based on the gross 

revenue received by the broadcaster 

rather than revenue received by a 

spectrum lessee. As the Commission 

stated in the NPRM, to hold otherwise 

could subject a broadcaster to a fee 

payment in excess of the gross revenue 

it actually receives. All commenters 

who addressed this issue agree with this 

approach regarding the calculation of 

gross revenue. As proposed in the 

NPRM, we also conclude that to the 

extent the licensee and the lessee are 

affiliated, we will attribute the gross 

revenue of the lessee to the licensee for 

purposes of calculating the ancillary 

and supplementary services fee, based 

on a share of gross revenue that is 

proportional to the licensee’s stake in 

the lessee. Otherwise, as the 

Commission noted in the NPRM, the 

licensee (or its parent company) could 

create a subsidiary for the sole purpose 

of evading the fee while retaining all of 

the financial benefit of the arrangement. 

14. We decline at this time to take up 

the issue of whether to exclude from 

gross revenue the value of ‘‘in-kind’’ 

facility improvements. Although the 

Commission tentatively concluded in 

the NPRM that the value of such 

improvements should be excluded from 

the gross revenue calculation, the record 

on this issue was limited and the 

comments were mixed. We will 

continue to monitor the progress of the 

transition to ATSC 3.0, the provision of 

Broadcast internet services, and the 

status of ‘‘in-kind’’ facility 

improvements in the marketplace, and 

may address this issue in the future if 

warranted. 

15. ATSC 3.0 Consumer Equipment. 

We decline at this time to adopt the 

proposal made by Public Knowledge et 

al. that we use the fees collected from 

ancillary and supplementary services to 

fund a program offsetting costs for 

consumers who upgrade their consumer 

premises equipment as part of the ATSC 

3.0 transition. These commenters note 

that ATSC 3.0 is not compatible with 

current television devices and contend 

that, because consumers will have to 

replace their television sets or purchase 

converter devices to receive ATSC 3.0 

signals, the transition to ATSC 3.0 ‘‘will 

create high consumer costs, similar to 

those faced by consumers during the 

DTV transition.’’ Thus, they maintain 

we should act now, to develop a 

program to offset ATSC 3.0 transition 

costs for consumers. We note that the 

transition to ATSC 3.0 is voluntary and 

still in its early stages; therefore, we find 

it is premature to consider such a 

program at this time. We also note that 

the DTV transition equipment subsidy 

program was explicitly mandated by 

Congress. 

16. Classes of Ancillary and 

Supplementary Service. We decline to 

grant fee exemptions for certain classes 

of Broadband internet service, such as 

telehealth, distance learning, public 

safety, or homeland security-related 

services, or for services that promote 

internet access in rural areas. Although, 

according to the record, such services 

are currently beginning to be provided 

by, or are in development by, NCE 

stations, we believe it is premature to 

take any such action given the nascent 

state of the market for these ATSC 3.0 

services. As discussed further below, we 

take action in this Order to encourage 

the development of ‘‘primary’’ NCE 

ancillary and supplementary services 

(those used for nonprofit, 

noncommercial, educational purposes), 

by reducing the fee associated with such 

services. At the same time, we conclude 

that we do not have a sufficient basis at 

this time to support changing our fee 

approach for any other type of ancillary 

and supplementary service that are not 

considered ‘‘primary.’’ Among other 

things, we lack information regarding 

how such services are likely to be 

provided, whether they will be revenuegenerating, whether there will be 

sufficient demand to support the 

provision of such services, or whether 

our current fee for ancillary and 

supplementary services will dissuade 

broadcasters from offering such services. 

For similar reasons, we also decline at 

this time to exempt from fees, or adopt 

a lower fee for, services that promote 

internet access in rural areas. We will 

continue to monitor the transition to 

ATSC 3.0, including the provision of 

Broadcast internet services such as 

telehealth, public safety, and homeland 

security-related services, as well as 

services that provide internet access in 

rural areas, and may reconsider this 

issue in the future. 

10850 Federal Register / Vol. 86, No. 34 / Tuesday, February 23, 2021 / Rules and Regulations 

2An NCE television licensee may provide 

ancillary and supplementary services that are not 

nonprofit, noncommercial, and educational— 

including commercial services—on the licensee’s 

excess (i.e., non-primary) capacity. Such services 

will be subject to the standard fee of 5% of gross 

revenues. We note that an NCE licensee, like all 

other television broadcasters, must broadcast at 

least one free over-the-air video programming 

stream, and its ancillary and supplementary 

services must not derogate this service. During the 

transition period to ATSC 3.0 service, we are 

affording NCE television broadcasters significant 

flexibility to determine the best mix of services for 

their communities. However, as during the DTV 

transition, our expectation remains that the 

fundamental use of the DTV license will be for the 

provision of free, over-the-air television service. We 

do not decide at this time the separate, broader 

issue of how much spectral capacity a broadcast 

television station (commercial or NCE) must use 

after the ATSC 3.0 transition period for the 

provision of its free over-the-air television service. 

We will consider this issue in a future proceeding, 

such as when we decide it is the appropriate time 

to consider eliminating the ATSC 1.0 simulcasting 

requirement. 

3 66 FR 58973 (Nov. 26, 2001). 

4 In addition, until we address this issue in this 

future proceeding, we will consider waiver requests 

as necessary to allow public safety or other 

ancillary and supplementary uses that are nonprofit 

and noncommercial, but may not be educational in 

nature, to be applied to the ‘‘substantial majority’’ 

portion of an NCE licensee’s spectrum dedicated for 

‘‘primary’’ purposes. 

5APTS/PBS maintain that any ancillary or 

supplementary service that ‘‘ ‘serve[s] the 

educational needs of the community’ or furthers the 

‘advancement of educational programs’ ’’ should be 

considered ‘‘primary.’’ We reject this view because 

it would permit for-profit, commercial educational 

services (or non-educational television broadcasts) 

to be counted among the ‘‘primary’’ uses of an 

NCE’s spectrum. Instead, consistent with the 

requirements in § 73.621(a) that the station qualify 

as ‘‘noncommercial educational’’ and is licensed 

‘‘only to [a] nonprofit educational organization,’’ 

the rule requires that all ‘‘primary’’ uses, whether 

broadcast television or ancillary and 

supplementary, must be nonprofit, noncommercial, 

and educational. We find this reading best 

preserves the nonprofit, noncommercial, and 

educational nature of public broadcasting. We note 

that our decision today applies only to the 

application of § 73.621(a) to the provision of 

ancillary and supplementary services pursuant to 

§ 73.621(j); it does not change an NCE television 

licensee’s broadcast and other obligations under 

§ 73.621(a). 

17. NCE Television Stations. NCE 

television stations play an important 

role in providing nonprofit, 

noncommercial, and education services 

to communities nationwide, and the 

Commission is committed to supporting 

their enthusiastic embrace of the 

possibilities that Next Gen TV provides. 

Accordingly, we adopt, in part, the 

commenter proposal to reinterpret 

§ 73.621 of our rules, which will allow 

NCEs to provide a wider range of 

services that align with their core 

mission. While, as discussed above, we 

generally decline to adjust the fee 

associated with ancillary and 

supplementary services, to the extent 

that NCE television stations offer feeable 

ancillary and supplementary services 

that are nonprofit, noncommercial, and 

educational, we adopt a reduced fee 

based on 2.5% of gross revenues 

generated by such ‘‘primary’’ ancillary 

and supplementary services. We also 

clarify that when an NCE television 

station provides ‘‘donor exclusive’’ 

ancillary and supplementary services 

that are nominal in value in return for 

contributions to the licensee, we will 

not treat such contributions as 

‘‘subscription fees’’ under section 336 of 

the 1996 Act or § 73.621 of our rules. 

18. NCE Ancillary and Supplementary 

Services. We conclude that an NCE 

television licensee may provide 

Broadcast internet services, provided 

that the substantial majority of its 6 

MHz channel capacity is dedicated to a 

combination of free, over-the-air 

nonprofit, noncommercial, educational, 

television broadcast service and any 

nonprofit, noncommercial, educational 

(or ‘‘primary’’) ancillary and 

supplementary services it chooses to 

provide.2 In this regard, we modify the 

2001 NCE Ancillary Services Report and 

Order’s interpretation of § 73.621,3

which held that a substantial majority of 

an NCE television licensee’s digital 

capacity must be dedicated to nonprofit, 

noncommercial, educational broadcast 

service, limiting ancillary and 

supplementary services to an NCE 

television licensee’s excess capacity. In 

so doing, we seek to preserve the 

nonprofit, noncommercial, educational 

nature of an NCE television licensee’s 

service to its community, while 

affording such NCE licensees increased 

flexibility to provide ‘‘primary’’ services 

that are not traditional broadcasting. 

Although we decline to define what 

constitutes a ‘‘substantial majority’’ of 

the NCE’s digital bitstream at this time, 

we expect to seek comment in a future 

proceeding on whether it is appropriate 

to revise § 73.621(j) regarding the 

amount of its 6 MHz channel capacity 

that an NCE television licensee must 

devote to ‘‘primary’’ uses, the scope of 

those primary uses, and any other 

related matters.4

19. As an initial matter, we adopt our 

unopposed tentative conclusion that 

NCE television licensees are allowed to 

provide ancillary and supplementary 

services. Indeed, the 2001 NCE 

Ancillary Services Report and Order 

sought to clarify not whether NCEs 

could offer ancillary and supplementary 

services, but ‘‘the manner in which 

[NCE] television licensees may use their 

excess [DTV] capacity for remunerative 

purposes.’’ The 2001 NCE Ancillary 

Services Report and Order amended 

§ 73.621 of the rules ‘‘to clarify that the 

[s]ection’s requirements apply to the 

entire digital bitstream of NCE 

[television] licensees, including the 

provision of ancillary or supplementary 

services,’’ in order to ‘‘preserve the 

noncommercial educational nature of 

public broadcasting, while allowing 

NCE [television] licensees some 

flexibility in remunerative use of their 

spectrum.’’ The Commission concluded 

at the time that this balance required 

NCE television licensees to ‘‘use their 

entire digital capacity primarily for a 

nonprofit, noncommercial, educational 

broadcast service.’’ The Commission 

‘‘decline[d] to quantify the term 

‘primarily,’ ’’ but ‘‘consider[ed] it to 

mean a ‘substantial majority’ of [the 

NCE television licensee’s] entire digital 

capacity.’’ 

20. In light of the unique educational 

public service mission of 

noncommercial educational television 

stations (NCEs) seeking to provide 

ancillary and supplementary services, 

we clarify that § 73.621 allows NCE 

television licensees to count as part of 

the ‘‘primary’’ use of their spectrum not 

just ‘‘nonprofit, noncommercial, 

educational, broadcast service,’’ but also 

ancillary and supplementary services 

that are nonprofit, noncommercial, and 

educational in nature. Specifically, we 

conclude that § 73.621(j) permits an 

NCE television licensee to count 

nonprofit, noncommercial, and 

educational ancillary and 

supplementary services, together with 

its free, over-the-air nonprofit, 

noncommercial, educational television 

broadcast service, as ‘‘primary’’ services 

that fall within § 73.621(a). Section 

73.621(j) states that § 73.621 ‘‘will apply 

to the entire digital bitstream of 

noncommercial educational television 

stations, including the provision of 

ancillary or supplementary services.’’ 

We recognize that the 2001 NCE 

Ancillary Services Report and Order, 

which adopted § 73.621(j), interpreted 

this provision to mean that NCE 

television licensees are required to use 

their entire digital capacity ‘‘primarily’’ 

for their free, over-the-air television 

nonprofit, noncommercial, educational 

broadcast service and that ancillary and 

supplementary services do not qualify 

as a ‘‘primary’’ use. We reject this 

interpretation of § 73.621(j) of our rules 

as unnecessarily narrow. Rather, we 

agree with APTS/PBS and PMVG that it 

is reasonable to afford greater flexibility 

to NCE television licensees to provide 

ancillary and supplementary services 

that are nonprofit, noncommercial, and 

educational in nature as a ‘‘primary’’ 

use, and that there is a wide potential 

variety of such services.5 We are 

Federal Register / Vol. 86, No. 34 / Tuesday, February 23, 2021 / Rules and Regulations 10851 

6Applying the last-antecedent rule, which 

‘‘provides that ‘a limiting clause or phrase . . . 

should ordinarily be read as modifying only the 

noun or noun phrase that it immediately follows,’ ’’ 

we observe that ‘‘engaged primarily in the 

production, acquisition, distribution, or 

dissemination of educational and cultural television 

or radio programs’’ is defining ‘‘any nonprofit 

institution,’’ and not ‘‘any licensee or permittee of 

a public broadcast station.’’ Furthermore, our 

‘‘primary service’’ decision applies to the use of a 

licensee’s spectrum, not the activities of the 

licensee itself. 

7We note that the Merriam-Webster online 

dictionary defines ‘‘primarily’’ as ‘‘for the most part; 

chiefly.’’ Webster’s New World Dictionary defines 

it as ‘‘mainly; principally.’’ Thus, while ‘‘primarily’’ 

could be used to mean a ‘‘simple majority,’’ that is 

far from the ‘‘common’’ understanding. 

8Public Knowledge’s claims to the contrary 

notwithstanding, nothing in this Order undermines 

the policy of ensuring free, over-the-air, educational 

television programming. As required by existing 

rules, each NCE station must continue to provide 

a free, over-the-air, nonprofit, noncommercial, 

educational television broadcast service. 

9We will also consider waiver requests, as 

necessary, to allow public safety or other ancillary 

and supplementary uses that are nonprofit and 

noncommercial, but may not be educational in 

nature, to be applied to the ‘‘substantial majority’’ 

portion of an NCE licensee’s spectrum committed 

to ‘‘primary’’ purposes. 

10We note that Public Knowledge et al. contend 

that the Commission is prohibited from setting a fee 

of zero for any licensee. Because we will continue 

to collect ancillary and supplementary fees from 

every licensee, both commercial and 

noncommercial, we need not address Public 

Knowledge et al.’s argument. 

unpersuaded by Public Knowledge’s 

contention that ‘‘allowing NCEs to count 

spectrum used for ancillary and 

supplementary services as primary 

service . . . violates 47 U.S.C. 

[397](11).’’ 6 Accordingly, we interpret 

the language of § 73.621(j) providing 

that the requirements of § 73.621 will 

apply to the entire digital bitstream of 

NCE television stations, ‘‘including the 

provision of ancillary or supplementary 

services,’’ to broaden the scope of 

§ 73.621(a) such that NCE television 

stations have the flexibility to make 

‘‘primary’’ use of their ‘‘entire digital 

bitstream’’ through provision of not only 

a nonprofit, noncommercial, 

educational television broadcast service, 

but also any nonprofit, noncommercial, 

and educational ancillary and 

supplementary services it chooses to 

provide. 

21. Although we adopt the NCE 

proposal to reinterpret our rules to 

permit ‘‘primary’’ ancillary and 

supplementary services, we decline to 

‘‘pre-approve’’ specific services that 

could be considered primary. APTS/ 

PBS and PMVG ask us essentially to 

create a ‘‘safe harbor’’ for Broadcast 

internet services by identifying specific 

services that will qualify as ‘‘primary’’ 

uses under § 73.621(a). Given the 

nascent state of the Broadcast internet 

market, we find that it would be 

premature to classify such services in 

this manner. Instead, consistent with 

our precedent in applying § 73.621(a) to 

broadcast programming, we will defer to 

the judgment of the broadcaster when 

evaluating whether a given ancillary 

and supplementary service is 

educational unless such categorization 

appears to be arbitrary or unreasonable. 

22. We also decline, at this time, to 

adopt the NCE television broadcasters’ 

proposal to redefine the term 

‘‘primarily,’’ as used in § 73.621(a), to 

mean a ‘‘simple majority’’ instead of a 

‘‘substantial majority,’’ which is the 

definition adopted by the Commission 

in the 2001 NCE Ancillary Services 

Report and Order. We disagree with 

APTS/PBS that there is a plain or 

common meaning of the term 

‘‘primarily,’’ and instead find that the 

term is ambiguous.7 In light of this 

ambiguity, the Commission previously 

determined in 2001 that ‘‘primarily’’ 

means ‘‘substantial majority.’’ This 

definition was not challenged at the 

time, and we are not persuaded by the 

arguments in the record that present 

circumstances warrant reconsideration 

of this earlier decision. Given the 

retention of our substantial majority 

requirement, Public Knowledge is 

incorrect that our rules ‘‘will allow 

NCEs to sublease or otherwise monetize 

the majority of their spectrum to third 

parties instead of providing free service 

to the public.’’ Moreover, we find that 

our decision to include certain ancillary 

and supplementary services as part of 

the ‘‘primary’’ use of their spectrum 

affords NCE television licensees 

substantial additional flexibility in light 

of the enhanced capabilities made 

possible by the ATSC 3.0 standard.8 As 

these services reach the market, we will 

have additional context upon which to 

evaluate whether any changes to the 

definition of ‘‘primarily’’ are warranted. 

Accordingly, we defer examination of 

this issue and any other related matters 

until the Broadcast internet marketplace 

matures.9

23. Fee for NCE Primary Ancillary 

and Supplementary Services. While we 

generally decline to adjust the fee 

associated with ancillary and 

supplementary services, to the extent 

that NCE television stations offer feeable 

ancillary and supplementary services 

that are nonprofit, noncommercial, and 

educational, we adopt a reduced fee of 

2.5% on gross revenues generated by 

such ‘‘primary’’ services. As discussed 

above, § 73.621 of our rules provides 

that NCE stations must ‘‘be used 

primarily to serve the educational needs 

of the community; for the advancement 

of educational programs; and to furnish 

a nonprofit and noncommercial 

television broadcast service,’’ and 

extends this requirement to all services 

provided via the station’s digital 

bitstream. Given the benefit of the 

‘‘distinctive content of public broadcast 

programming’’ provided by NCEs, and 

the fact that the auction value of 

spectrum that must be ‘‘primarily’’ used 

for such services is likely lower than 

that of spectrum used for services 

without such restrictions, we believe 

this lower fee is appropriate. 

24. Although we decline at this time 

to exempt NCE television stations 

entirely from all fees on ancillary and 

supplementary service revenues 

devoted to the station’s nonprofit 

activities as APTS/PBS suggest, we 

believe that the reduction we adopt is 

an appropriate incremental and 

balanced approach. While some 

commenters suggest that we make no 

change to the 5% fee under any 

circumstances, and others asked us to 

eliminate it entirely, we find that a fee 

of 2.5% for ‘‘primary’’ NCE ancillary 

and supplementary services that are 

feeable under the statute appropriately 

recognizes the public service mission of 

public television stations without 

creating a significant disparity with the 

5% fee applied to other ancillary and 

supplementary services offered by NCE 

and commercial television stations. 

While we decline to adjust the 5% fee 

generally, choosing instead to wait until 

the ATSC 3.0 marketplace further 

develops and after a further review is 

conducted, we believe a different 

approach is warranted for NCE stations. 

We seek to support the ability of public 

television stations to provide and 

expand their nonprofit, noncommercial, 

educational services and engage in new 

and innovative educational efforts using 

ATSC 3.0 technology.10 NCE nonprofit, 

noncommercial, educational services, 

provided by the nonprofit, educationfocused licensees of NCE stations, 

uniquely advance the public interest 

and therefore should be treated 

differently under our fee program than 

other ancillary and supplementary 

services that are provided by NCE and 

commercial broadcast stations. Given 

this, our approach appropriately 

reduces the fees on any revenue 

generated by such ‘‘primary’’ NCE 

ancillary and supplementary services, 

thereby permitting the nonprofit, 

education-focused licensees of NCE 

television stations to retain a larger 

percentage of any such revenue, 

providing more funds to support the 

10852 Federal Register / Vol. 86, No. 34 / Tuesday, February 23, 2021 / Rules and Regulations 

11Our analysis is consistent with the analysis the 

Commission applied to section 336(e)(2)(B) in the 

NCE Ancillary Services Report and Order. 

12We agree with BitPath that, in considering 

among other things the appropriate level of the fee, 

the Commission should consider the auction value 

of the spectrum in the context of the ancillary and 

supplementary services being provided, not merely 

the auction value of the spectrum in the abstract. 

13We dismiss as moot NTCA’s proposal for a 

detailed reporting and audit system, which they 

suggest should apply if we waived all fees for 

certain Broadcast internet services. 

core educational public service missions 

of such stations. 

25. We find that our approach is 

consistent with section 336 of the 1996 

Act. As discussed above, the language of 

section 336 gives the Commission wide 

discretion to select the appropriate fee 

for feeable ancillary and supplementary 

services. Thus, we conclude that we 

have discretion under the statute to 

establish a fee for NCE primary ancillary 

and supplementary services that is 

lower than the fee for other ancillary 

and supplementary services, including 

those provided by commercial stations. 

Section 336(e)(1) directs the 

Commission to establish ‘‘a program to 

assess and collect’’ ancillary and 

supplementary fees that, pursuant to 

section 336(e)(2), recover ‘‘a portion of 

the value of the public spectrum,’’ 

‘‘avoid unjust enrichment,’’ and, 

eventually, recover an amount 

approximately equivalent to the 

spectrum’s value at auction. Section 336 

does not require the Commission to levy 

fees in direct proportion to the amount 

of spectrum held by each licensee. 

Adjusting our program of fees to impose 

a reduced fee of 2.5% for NCE stations’ 

‘‘primary’’ ancillary and supplementary 

services will not undermine the 

Commission’s ability to recover for the 

public a portion of the value of the 

spectrum made available for ancillary 

and supplementary uses. Furthermore, a 

reduced fee on the nonprofit, 

noncommercial, educational ancillary 

and supplementary services offered by 

NCEs will not create a danger of unjust 

enrichment. Any additional ‘‘primary’’ 

NCE ancillary and supplementary 

services offered as a result of these 

lower fees will, by their nature, redound 

to the public’s benefit more than to the 

benefit of the nonprofit educational 

organization licensees of the NCE 

stations. 

26. Finally, we conclude that a 2.5% 

fee is consistent with our directive 

under section 336(e)(2)(B) to recover for 

the public an amount that would have 

been recovered ‘‘had such services been 

licensed’’ pursuant to an auction. The 

reduced fee of 2.5% will apply only to 

feeable ancillary and supplementary 

services that qualify as ‘‘primary’’ NCE 

services under § 73.621 of our rules, 

which means they must be nonprofit, 

noncommercial, and educational in 

nature. If spectrum restricted in this 

manner were offered for auction, we 

expect that bidders would offer a more 

modest amount of money for the right 

to build facilities that are restricted to 

providing services that are ‘‘primarily’’ 

nonprofit, noncommercial, and 

educational as opposed to spectrum 

designated for commercial use.11 In 

other words, the requirements imposed 

on the use of the NCE station spectrum 

make this spectrum inherently less 

valuable at auction than spectrum 

without such use restrictions.12 Given 

the benefits to the public of an 

accelerated rollout of NCE primary 

Broadcast internet services, we find it is 

appropriate to adopt this reduced fee 

even though it may overstate the auction 

value of spectrum so restricted. We are 

directed not only to ‘‘collect an amount 

that . . . equals but does not exceed’’ 

the auction value of the spectrum, but 

also to recover a ‘‘portion of the value 

of the public spectrum resource’’ while 

avoiding unjust enrichment. While we 

find 2.5% to be appropriate at this time, 

we intend to monitor the development 

of the NCE Broadcast internet 

marketplace and may adjust the fee if 

conditions warrant. 

27. In reaching our decision, we are 

not constrained by the Commission’s 

previous decision to apply to NCE 

licensees the same fee for ancillary and 

supplementary services that we apply to 

commercial licensees. Instead, we 

conclude that advances in technology 

and the associated new offerings 

anticipated by NCE stations suggest a 

different approach is currently 

warranted when assessing the 

appropriate fee for NCE ‘‘primary’’ 

ancillary and supplementary services. 

Public television stations are already 

experimenting with ancillary and 

supplementary services that advance the 

public interest. Applying a reduced fee 

for ‘‘primary’’ NCE services will give 

NCE licensees both an additional 

incentive to pursue the expensive 

transition to ATSC 3.0 and additional 

resources to devote to their core 

mission. We find that the 2.5% rate for 

‘‘primary’’ ancillary and supplementary 

services is sufficient to meet our 

obligations under section 336 of the 

1996 Act and will advance our goals of 

promoting Broadcast internet services 

and supporting the mission of NCE 

television stations to provide nonprofit, 

noncommercial, educational services. 

28. We note that this limited change 

does not excuse NCEs from their 

obligation to file an ‘‘Annual DTV 

Ancillary/Supplementary Services 

Report’’ whenever they receive feeable 

ancillary and supplementary services 

revenue. We expect that, in this report, 

NCE filers will clearly identify any 

services that are nonprofit, 

noncommercial, and educational and 

therefore qualify for the reduced fee.13

29. Donor Contributions to NCE 

Television Stations. As requested by 

PMVG and unopposed by other 

commenters, we clarify that, when an 

NCE television station provides ‘‘donor 

exclusive’’ ancillary and supplementary 

services that are nominal in value in 

return for contributions to the licensee, 

we will not treat such contributions as 

‘‘subscription fees’’ under section 336 of 

the 1996 Act or § 73.621 of our rules. 

For example, PMVG notes that stations 

may provide donor households with 

exclusive links to supplemental content, 

such as extended interviews or 

reference materials relevant to public 

affairs programming, or stations could 

offer donor households enhanced 

viewing experiences, such as the 

opportunity to view a local orchestra 

performance in 4K definition with 

immersive sound. We will not treat such 

donor exclusive services as feeable as 

long as the ancillary and supplementary 

service provided in return is comparable 

in terms of value to the kinds of small 

gifts (e.g., coffee mugs, tote bags) that 

NCE stations often give donors in return 

for contributions. We agree with PMVG 

that the type of limited content offerings 

described above are comparable to the 

traditional donor gifts provided by NCE 

stations and should not be treated as 

ancillary and supplementary services 

provided in return for a subscription 

fee. We also agree that, unlike 

programming provided in return for a 

subscription fee, the value of such 

content offerings made in return for a 

donation is likely minimal as compared 

to the value of the donation. In addition, 

unlike a subscription fee, the donation 

is made voluntarily and not pursuant to 

a subscription agreement. We intend to 

monitor the provision of ‘‘donor 

exclusive’’ services, however, and we 

may reconsider our decision in the 

future if such donor services appear to 

be comparable to subscription-based 

services. 

Federal Register / Vol. 86, No. 34 / Tuesday, February 23, 2021 / Rules and Regulations 10853 

14The number ‘‘480’’ identifies a vertical 

resolution of 480 lines, and the ‘‘i’’ signifies an 

interlaced resolution. 

15 In general, the 1996 Act seeks ‘‘[t]o promote 

competition and reduce regulation in order to 

secure lower prices and higher quality services for 

American telecommunications consumers and 

encourage the rapid deployment of new 

telecommunications technologies.’’ More 

specifically, the 1996 Act gives the Commission 

discretion to determine, in the public interest, 

whether to permit broadcasters to offer ancillary 

and supplementary services. 

16 83 FR 4998 (Feb. 2, 2018), 84 FR 60350 (Dec. 

20, 2017). 

17 In the Spring of 2022, the Commission expects 

to open a proceeding to evaluate the sunsetting of 

certain ATSC 3.0 technical provisions. Separately, 

the Commission has stated that it will consider as 

part of a future proceeding the continued necessity 

of the ATSC 1.0 simulcasting requirement, which 

does not sunset. As part of a future proceeding, 

based on the development of the ATSC 3.0 

marketplace, we expect likewise to determine 

whether to reevaluate our derogation standard. 

While we have elected to maintain our current 

derogation standard at this time, we continue to 

‘‘expect that the fundamental use of the 6 MHz DTV 

license will be for the provision of free over-the-air 

television service.’’ 

30. Derogation and Analogous 

Services. We adopt our tentative 

conclusion that whether a broadcast 

station’s signal has been derogated 

should continue to be evaluated by 

whether it provides ‘‘at least one 

standard definition over-the-air video 

program signal at no direct charge to 

viewers that is at least comparable in 

resolution to analog television 

programming.’’ We also adopt our 

tentative conclusion to amend the 

wording of § 73.624(b) to define the 

precise resolution that is considered to 

be ‘‘at least comparable in resolution to 

analog television programming’’ as 480i, 

with a slight modification.14 Based on 

the record, we decline to adopt two 

other proposals on which we sought 

comment in the NPRM—a presumption 

that Broadcast internet services are not 

analogous to any other service regulated 

by the Commission and a de minimis 

service threshold under which ancillary 

and supplementary services might be 

exempted from the need to comply with 

the regulations applicable to an 

analogous service otherwise regulated 

by the Commission. 

31. As discussed in the NPRM, section 

336 of the 1996 Act allows broadcasters 

the flexibility to provide ancillary and 

supplementary services on their DTV 

channels.15 In authorizing such 

services, Congress directed the 

Commission to adopt rules ensuring that 

broadcasters providing ancillary and 

supplementary services: (1) Avoid 

derogating any advanced television 

services that the Commission may 

require; and (2) are subject to 

Commission regulations applicable to 

analogous services. In furtherance of 

these statutory requirements, the 

Commission adopted § 73.624(c) of the 

rules, which permits broadcasters to 

offer ancillary and supplementary 

services provided they ‘‘do not derogate 

the DTV broadcast stations’ obligations 

under paragraph (b) of this section.’’ 

Section 73.624(b) of the rules, in turn, 

requires that each DTV broadcast 

licensee transmit at least one standard 

definition (SD) over-the-air video 

program signal on its digital channel, at 

no charge to viewers, that is at least 

comparable in resolution to analog 

television programming. The 

Commission also adopted rules 

codifying that broadcasters are 

permitted to provide ancillary and 

supplementary services on their 

broadcast spectrum that are analogous 

to other regulated services. If they 

choose to do so, however, they are 

required to adhere to any rules specific 

to such type of service. 

32. Derogation of Service. Derogation 

of Service Standard. We adopt our 

tentative conclusion that whether a 

broadcast station’s signal has been 

derogated should continue to be 

evaluated by whether it provides ‘‘at 

least one standard definition over-theair video program signal at no direct 

charge to viewers that is at least 

comparable in resolution to analog 

television programming.’’ As 

acknowledged both in this proceeding 

and by the Commission in the Next Gen 

TV Report and Order,16 the ATSC 3.0 

standard will provide expanded 

capacity for broadcasters to offer not 

only HD programming, but also other 

enhanced television resolutions such as 

4K and 8K more efficiently. However, as 

noted by NAB and BitPath, in light of 

the ATSC 3.0 local simulcasting 

requirement, requiring broadcasters to 

provide a higher resolution above SD at 

this early stage of ATSC 3.0 deployment 

could jeopardize their ability to preserve 

both primary and secondary ATSC 1.0 

signals as stations convert to ATSC 3.0. 

Moreover, we agree with NAB, Pearl, 

and BitPath that current marketplace 

forces are sufficient to incentivize 

broadcasters to maintain their existing 

standards of service for viewers, which 

notably may include HD programming 

streams. 

33. Next, we deny requests from 

several commenters that we prohibit 

broadcasters from transitioning a signal 

from HD to SD in order to provide an 

ancillary and supplementary service. 

Earlier this year, the Commission 

rejected NCTA’s proposal to require that 

ATSC 1.0 signals be simulcast in HD. 

While we agree with NCTA that 

transitioning an ATSC 1.0 signal from 

HD to SD to facilitate the deployment of 

ancillary and supplementary services is 

different than transitioning a signal from 

HD to SD in order to comply with the 

ATSC 1.0 simulcast requirement, we 

reiterate that there is no obligation that 

broadcasters provide an HD signal, even 

if they have chosen to do so in the past. 

Imposing such a signal quality 

requirement remains inappropriate, for 

the same reasons it did six months 

ago—broadcasters have strong market 

incentives to maintain HD service, and 

a decision not to do so would be in 

response to competitive marketplace 

conditions. We therefore ‘‘decline to 

substitute our own judgment for that of 

local television stations that best know 

their communities’ needs,’’ but will 

continue to monitor broadcasters’ 

deployment of ATSC 3.0 services and 

evaluate the need for changes to our 

derogation standard as part of a planned 

future proceeding.17

34. Definition of a Standard 

Definition Signal. Notwithstanding our 

decision to maintain the existing 

derogation standard, we adopt our 

tentative conclusion to modernize 

§ 73.624(b) so that a standard definition 

signal is defined as one that has a 

resolution of at least 480i (vertical 

resolution of 480 lines, interlaced), as 

supported by multiple broadcast 

commenters. Despite NAB’s suggestion 

to the contrary, the record provides no 

evidence that clarifying and 

modernizing the definition of a 

‘‘standard definition signal’’ will place 

an increased burden on broadcasters. 

Rather, this change will merely remove 

an outdated reference to analog 

television and codify what is 

universally accepted as the digital 

resolution of a standard definition 

broadcast signal. While, as pointed out 

by BitPath, the 480i resolution standard 

was adopted over 20 years ago, it is 

universally utilized by television sets 

today for displaying standard definition 

programming. Continued reliance on an 

obsolete analog broadcasting standard 

would be an outdated method by which 

to determine what is an acceptable 

digital standard definition signal. 

Further, we conclude that this rule 

update is fully consistent with the broad 

initiative the Commission has 

undertaken the past four years to 

modernize its rules by removing 

outdated references that no longer 

reflect the current media marketplace. 

35. Analogous Services Analysis. In 

light of the limited record on this topic 

and the present lack of clarity 

concerning the precise Broadcast 

internet services that broadcasters may 

offer, we find it is premature to adopt 

10854 Federal Register / Vol. 86, No. 34 / Tuesday, February 23, 2021 / Rules and Regulations 

18Pearl also requests that the Commission 

‘‘clarify broadly that broadcast television 

regulations do not apply to broadcast internet 

services.’’ For the same reasons discussed above, we 

are unable to conclude on a blanket basis, as 

requested by Pearl, that all broadcast television 

rules do not apply to Broadcast internet services. 

While as a general matter we envision that many 

broadcast television rules (such as those related to 

children’s television or indecency, and, as 

discussed by Pearl, our rules on attribution) would 

not apply to Broadcast internet services, others 

(such as technical rules governing station 

operations) may still be applicable. We note that 

our analysis in the Declaratory Ruling was 

conducted solely in the context of evaluating our 

media ownership and attribution rules and the 

applicability of those rules to the leasing of excess 

broadcast television spectrum to a third party, 

including another broadcaster, for the provision of 

ancillary and supplementary services. 

19NCTA maintains that the plain language of 

section 336(b) of the 1996 Act does not permit a de 

minimis exemption, and no commenters disagree. 

20We note that the Commission intended that the 

LPTV exemption from the local simulcasting 

requirement would help ensure that analog LPTV/ 

translator stations and stations that have been 

displaced due to the post-incentive auction 

repacking process were not forced to build both an 

ATSC 1.0 and an ATSC 3.0 facility. We also note 

that under section 312(g) of the Communications 

Act of 1934, as amended (the Act), if a station fails 

to transmit a broadcast signal for any consecutive 

12-month period its license automatically expires at 

the end of that period. However, under that section 

a licensee may request an extension of its license 

if doing so would ‘‘promote equity and fairness.’’ 

The Commission has exercised its discretion under 

section 312(g) to extend or reinstate a station’s 

expired license ‘‘to promote equity and fairness’’ 

only in limited circumstances where a station’s 

failure to transmit a broadcast signal is due to 

compelling circumstances that were beyond the 

licensee’s control. The Commission has stated that 

it would consider extensions in cases where 

stations were forced to remain dark for more than 

12 months by the repack process. The Media 

Bureau will continue to consider such relief for 

LPTV stations impacted by the repack. 

21Stations should file requests for waiver as a 

Legal STA in the Commission’s Licensing and 

Management System (LMS). All waiver requests 

will be evaluated on a case-by-case basis and must 

include the following information: (1) An 

explanation describing why the station is unable to 

comply with the existing consumer education 

requirements; (2) an alternative but comparable 

means the station will use to notify viewers of the 

station’s new channel or if the station has 

previously not been operational (i.e., is newly built) 

why notice would not be in the public interest; and 

(3) how grant of the waiver request complies with 

the Commission’s general waiver standard. A 

station may propose to provide alternative 

notification to viewers through, for example, local 

newspaper, radio, other in-market television 

stations, and/or digital and social media. 

22Although we note that NCTA’s request is more 

narrowly focused than NAB suggests, we 

nonetheless agree that retransmission consent 

issues are not relevant to this proceeding. 

a presumption that certain Broadcast 

internet services are or are not 

analogous to any other service regulated 

by the Commission. For the same 

reasons, we decline to adopt a de 

minimis service threshold under which 

ancillary and supplementary services 

might be exempted from the need to 

comply with the regulations of an 

analogous service otherwise regulated 

by the Commission. 

36. In reaching both of these 

conclusions, we agree with NCTA and 

CTIA that, at this initial stage in the 

development of Broadcast internet 

services, the Commission should 

continue to evaluate whether or not a 

service is analogous to other regulated 

services on a case-by-case basis. While 

we do not foreclose adopting specific 

indicia of whether a service is or is not 

likely to be found to be analogous at 

some future point, we must first gain a 

better understanding of how Broadcast 

internet services ultimately evolve in 

the marketplace. While, as argued by 

PMG, it may in fact end up being the 

case that Broadcast internet services 

will be provided only on a one-way, 

one-to-many basis, as is the case with 

traditional video broadcast services, 

without knowing the precise services 

broadcasters will offer we cannot 

universally conclude that such services 

are inherently not analogous to any 

other service regulated by the 

Commission.18 We also agree with 

commenters that it is premature to 

adopt a presumptive or de minimis 

threshold under which ancillary and 

supplementary services otherwise akin 

to other regulated services would be 

found not to be analogous.19

37. Though we decline to adopt 

additional rules at this time, we 

recognize that broadcasters may 

continue to seek clarification from the 

Commission, from time to time, about 

whether a particular service would be 

analogous to another, or whether 

specific broadcast rules would apply. 

Finally, we will continue to monitor the 

marketplace and provide any necessary 

clarification in the future once both 

broadcasters and the Commission know 

the type of Broadcast internet services 

that may be deployed and offered to 

consumers. 

38. Other proposals. Low Power 

Television. We decline to adopt any of 

the proposals by low power television 

and translator (LPTV) station 

representatives and others to change our 

LPTV service rules in this proceeding. 

In addition to seeking comments on the 

ancillary and supplementary service fee 

and derogation of service issues, the 

NPRM generally sought comment on the 

provision of Broadcast internet services 

by LPTV stations and what steps, if any, 

the Commission should take to facilitate 

the provision of such services by LPTV 

stations. In response, LPTV groups and 

interested parties, such as ARK, ATBA, 

Edge Spectrum, Evoca, NRB, NTA, 

Spectrum Evolution, and One 

Ministries, proposed a wide range of 

changes to the rules governing LPTV 

service. Among other things, these 

proposals include: Equalizing LPTV 

interference protection with that of full 

power and Class A TV stations 

(essentially eliminating LPTV’s 

secondary status); creating a path for 

certain LPTV stations to attain primary 

status; lifting certain restrictions on 

LPTV service; granting blanket 

construction permit and license 

extensions for LPTV stations seeking to 

build ATSC 3.0 facilities; abolish the 

ATSC 3.0 consumer education 

requirement for silent and newly built 

LPTV stations, changing aspects of the 

interference rules; and changing aspects 

of the Commission’s distributed 

transmission systems (DTS) rules. 

39. We find that all of these proposals, 

many of which call for sweeping 

changes to the nature of LPTV service or 

translator service specifically, are 

insufficiently related to Broadcast 

internet and are thus beyond the scope 

of this proceeding. We note, however, 

that all LPTV stations transitioning to 

digital service are eligible to request a 

one-time, six-month extension of their 

construction permit, and that we will 

continue to consider requests to extend 

LPTV licenses pursuant to the equity 

and fairness provision of section 312(g) 

of the Act on a case-by-case basis.20

Further, pursuant to our existing rules, 

LPTV stations that are unable to air the 

required ATSC 3.0 consumer education 

notifications because they not 

operational (i.e., silent or newly 

constructed) may seek a waiver of the 

Commission’s notice requirement from 

the Media Bureau.21 Finally, we note 

that the proposals to allow LPTV 

stations to use DTS and to protect LPTV 

stations from full power DTS service are 

presently being considered in the DTS 

proceeding. 

40. Retransmission Consent. MVPD 

Carriage of Broadcast internet Services. 

We likewise decline to interpret our 

retransmission consent rules in the 

context of this proceeding. NCTA asks 

us to clarify that a broadcaster’s use of 

retransmission consent to negotiate for 

carriage of Broadcast internet services 

provided by a consortium of noncommonly owned broadcasters in the 

same market is prohibited by the bar on 

joint or coordinated retransmission 

consent negotiations. NAB opposes this 

proposal as premature, urging us ‘‘to 

reject, now for the third time, NCTA’s 

efforts to impose restraints on 

negotiations in the absence of any 

demonstration of real world market 

failure.’’ 22 We decline to address this 

Federal Register / Vol. 86, No. 34 / Tuesday, February 23, 2021 / Rules and Regulations 10855 

23We note that the NPRM indicated that changes 

to our rules and policies regarding retransmission 

consent agreements are beyond the scope to this 

proceeding. 

issue, finding it beyond the scope of this 

proceeding.23

41. Retransmission Consent 

Agreements Including Ancillary and 

Supplementary Services. We also reject 

NTCA’s proposal that we exempt 

broadcasters from all ancillary and 

supplementary service fees if they 

provide ancillary and supplementary 

services at no additional charge to 

unaffiliated MVPDs with which they 

have an existing retransmission consent 

agreement. No commenters addressed 

this proposal. We note that ancillary 

and supplementary services that are 

solely being offered free of charge do not 

generate revenue and, therefore, are not 

subject to the ancillary and 

supplementary services fee. 

42. Procedural Matters. Final 

Regulatory Flexibility Analysis. As 

required by the Regulatory Flexibility 

Act of 1980, as amended (RFA), an 

Initial Regulatory Flexibility Analysis 

(IRFA) was incorporated in the NPRM in 

this proceeding. The Commission 

sought written public comment on the 

proposals in the NPRM, including 

comment on the IRFA. We received no 

comments specifically directed toward 

the IRFA. This present Final Regulatory 

Flexibility Analysis (FRFA) conforms to 

the RFA. 

43. Need for, and Objective of, the 

Report and Order. The Commission 

seeks to promote and preserve free, 

universally available, local broadcast 

television by providing a clear 

regulatory landscape that permits 

licensees the flexibility to succeed in a 

competitive market and incentivizes the 

most efficient use of prime spectrum. 

We undertook this proceeding to ensure 

that our rules, most over 20 years old, 

will help foster the introduction of new 

Broadcast internet services and the 

efficient use of existing television 

broadcast spectrum under the new 

ATSC 3.0 standard. In this Report and 

Order, we therefore conclude that 

ancillary and supplementary (A&S) fees 

should be calculated based on the gross 

revenue received by the broadcaster, 

without regard to the gross revenue of 

an unaffiliated third party, such as a 

spectrum lessee; should retain the 

existing standard of derogation of 

broadcast service, but amend the 

wording of the rules to eliminate the 

outdated reference to analog television; 

and should reaffirm that noncommercial 

educational television broadcast stations 

(NCEs) may offer Broadcast internet 

services. We also reinterpret the 

application of § 73.621 of our rules to 

permit noncommercial educational 

stations (NCEs) to devote the substantial 

majority of their spectrum not just to 

free over-the-air television but also 

ancillary and supplementary services; 

lower the ancillary and supplementary 

service fee for certain NCE services; and 

clarify that NCEs may offer limited 

Broadcast internet services to donors 

without transforming those donations 

into feeable ancillary and 

supplementary service revenue. With 

these changes, we seek to clarify the 

regulatory landscape in order to foster 

the efficient and robust use of broadcast 

spectrum capacity for the provision of 

Broadcast internet services consistent 

with statutory directives. 

44. Summary of Significant Issues 

Raised by Public Comments in Response 

to the IRFA. There were no comments 

filed in response to the IRFA. 

45. Response to Comments by the 

Chief Counsel for Advocacy of the Small 

Business Administration. Pursuant to 

the Small Business Jobs Act of 2010, 

which amended the RFA, the 

Commission is required to respond to 

any comments filed by the Chief 

Counsel for Advocacy of the Small 

Business Administration (SBA), and to 

provide a detailed statement of any 

change made to the proposed rules as a 

result of those comments. 

46. The Chief Counsel did not 

comment in response to the proposed 

rules in this proceeding. 

47. Description and Estimate of the 

Number of Small Entities to Which 

Rules Will Apply. The RFA directs 

agencies to provide a description of, and 

where feasible, an estimate of the 

number of small entities that may be 

affected by the proposed rules, if 

adopted. The RFA generally defines the 

term ‘‘small entity’’ as having the same 

meaning as the terms ‘‘small business,’’ 

‘‘small organization,’’ and ‘‘small 

governmental jurisdiction.’’ In addition, 

the term ‘‘small business’’ has the same 

meaning as the term ‘‘small business 

concern’’ under the Small Business Act. 

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 

SBA. Below, we provide a description of 

such small entities, as well as an 

estimate of the number of such small 

entities, where feasible. 

48. Television Broadcasting. This 

Economic Census category ‘‘comprises 

establishments primarily engaged in 

broadcasting images together with 

sound.’’ These establishments operate 

television broadcast 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 

studio, from an affiliated network, or 

from external sources. The SBA has 

created the following small business 

size standard for such businesses: Those 

having $41.5 million or less in annual 

receipts. The 2012 Economic Census 

reports that 751 firms in this category 

operated in that year. Of this number, 

656 had annual receipts of less than $25 

million, 25 had annual receipts ranging 

from $25 million to $49,999,999, and 70 

had annual receipts of $50 million or 

more. Based on this data we therefore 

estimate that the majority of commercial 

television broadcasters are small entities 

under the applicable SBA size standard. 

49. Additionally, the Commission has 

estimated the number of licensed 

commercial television stations to be 

1,374. Of this total, 1,282 stations (or 

94.2%) had revenues of $41.5 million or 

less in 2018, according to Commission 

staff review of the BIA Kelsey Inc. 

Media Access Pro Television Database 

(BIA) on April 15, 2019, and therefore 

these licensees qualify as small entities 

under the SBA definition. In addition, 

the Commission estimates the number 

of licensed noncommercial educational 

(NCE) television stations to be 388. The 

Commission does not compile and does 

not have access to information on the 

revenue of NCE stations that would 

permit it to determine how many such 

stations would qualify as small entities. 

50. We note, however, that in 

assessing whether a business concern 

qualifies as ‘‘small’’ under the above 

definition, business (control) affiliations 

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. In addition, 

another element of the definition of 

‘‘small business’’ requires that an 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 

broadcast station is dominant in its field 

of operation. Accordingly, the estimate 

of small businesses to which rules may 

apply does not exclude any television 

station from the definition of a small 

business on this basis and is therefore 

possibly over-inclusive. 

51. There are also 387 Class A 

stations. Given the nature of these 

services, the Commission presumes that 

10856 Federal Register / Vol. 86, No. 34 / Tuesday, February 23, 2021 / Rules and Regulations 

all of these stations qualify as small 

entities under the applicable SBA size 

standard. In addition, there are 1,892 

LPTV stations and 3,621 TV translator 

stations. Given the nature of these 

services as secondary and in some cases 

purely a ‘‘fill-in’’ service, we will 

presume that all of these entities qualify 

as small entities under the above SBA 

small business size standard. 

52. Description of Projected 

Reporting, Recordkeeping, and Other 

Compliance Requirements for Small 

Entities. This Report and Order imposes 

no new reporting, recordkeeping, or 

compliance requirements. 

53. Steps Taken to Minimize the 

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 

developing its 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 an reporting requirements 

under the rule for such 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 such small entities.’’ 

54. Our rules will not impose a 

negative economic impact on any 

parties, because they increase 

opportunities for broadcasters without 

imposing additional obligations. Indeed, 

by clarifying the scope of feeable 

revenue our rule may allow small 

broadcast entities transitioning to ATSC 

3.0 to experience positive economic 

impacts through partnership with 

unaffiliated third parties. NCE television 

stations in particular, both large and 

small, will experience positive benefits 

from the decisions made in this item, 

which will allow them to offer 

nonprofit, noncommercial, educational 

Broadcast internet services alongside 

their television programming as part of 

the primary use of their spectrum, and 

which imposes a reduced two and a half 

percent fee on these services. 

55. 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. 

56. Final Paperwork Reduction Act 

Analysis. This document does not 

contain new or modified information 

collection requirements subject to the 

Paperwork Reduction Act of 1995 

(PRA), Public Law 104–13. In addition, 

therefore, it does not contain any new 

or modified information collection 

burden for small business concerns with 

fewer than 25 employees, pursuant to 

the Small Business Paperwork Relief 

Act of 2002 (SBPRA), Public Law 107– 

198, see 44 U.S.C. 3506(c)(4). 

57. Congressional Review Act. The 

Commission has determined, and the 

Administrator of the Office of 

Information and Regulatory Affairs, 

Office of Management and Budget, 

concurs, that this rule is ‘‘non-major’’ 

under the Congressional Review Act, 5 

U.S.C. 804(2). The Commission will 

send a copy of the Order to Congress 

and the Government Accountability 

Office, pursuant to 5 U.S.C. 801(a)(1)(A). 

58. Accordingly, it is ordered that, 

pursuant to the authority contained in 

sections 1, 4(i), 4(j), 303(r), and 336 of 

the Communications Act of 1934, as 

amended, 47 U.S.C. 151, 154(i), 154(j), 

303(r), and 336, the Report and Order is 

adopted. 

59. It is further ordered that the 

Commission’s rules are hereby amended 

as set forth in the Final Rules, effective 

as of 30 days after the date of 

publication in the Federal Register. 

60. It is further ordered that the 

Commission will send a copy of the 

Report and Order in a report to Congress 

and the Government Accountability 

Office pursuant to the Congressional 

Review Act (CRA). 

61. It is further ordered that should no 

petitions for reconsideration or petitions 

for judicial review be timely filed, MB 

Docket No. 20–145 shall be terminated 

and its docket closed. 

List of Subjects in 47 CFR Part 73 

Communications equipment, 

Television. 

Federal Communications Commission. 

Marlene Dortch, 

Secretary. 

Final Rules 

For the reasons stated in the 

preamble, the Federal Communications 

Commission amends 47 CFR part 73 as 

follows: 

PART 73—RADIO BROADCAST 

SERVICES 

■ 1. The authority citation for part 73 

continues to read as follows: 

Authority: 47 U.S.C. 154, 155, 301, 303, 

307, 309, 310, 334, 336, 339. 

■ 2. Amend § 73.624 by revising 

paragraphs (b) introductory text and (g) 

introductory text to read as follows: 

§ 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 (b) must have a 

resolution of at least 480i (vertical 

resolution of 480 lines, interlaced). 

* * * * * 

(g) Commercial DTV licensees and 

permittees, and low power television, 

TV translator and Class A television 

stations DTV licensees and permittees, 

must annually remit a fee of 5 percent 

of the gross revenues derived from all 

ancillary and supplementary services, as 

defined by paragraph (b) of this section, 

which are feeable, as defined in 

paragraphs (g)(1)(i) and (ii) of this 

section. Noncommercial DTV licensees 

and permittees must annually remit a 

fee of 5 percent of the gross revenues 

derived from all ancillary and 

supplementary services, as defined by 

paragraph (b) of this section, which are 

feeable, as defined in paragraphs 

(g)(1)(i) and (ii) of this section, except 

that such licensees and permittees must 

annually remit a fee of 2.5 percent of the 

gross revenues from such ancillary or 

supplementary services which are 

nonprofit, noncommercial, and 

educational. 

* * * * * 

[FR Doc. 2020–28615 Filed 2–22–21; 8:45 am] 

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