Federal Register / Vol. 65, No. 82 / Thursday, April 27, 2000 / Proposed Rules 24671

TV, Inc. licensee of station WTKR-TV,

NTSC Channel 3, Norfolk, Virginia,

requesting the substitution of DTV

Channel 40 for station WTKR-TV’s

assigned DTV Channel 58. DTV Channel

40 can be allotted to Norfolk, Virginia,

in compliance with the principle

community coverage requirements of

Section 73.625(a) at reference

coordinates 36–48–56 N. and 76–28–00

W. As requested, we propose to allot

DTV Channel 40 to Norfolk with a

power of 1000 (kW) and a height above

average terrain (HAAT) of 313 meters.

DATES: Comments must be filed on or

before June 12, 2000, and reply

comments on or before June 27, 2000.

ADDRESSES: Federal Communications

Commission, 445 12th Street, S.W.,

Room TW-A325, Washington, DC

20554. In addition to filing comments

with the FCC, interested parties should

serve the petitioner, or its counsel or

consultant, as follows: Arthur B

Goodkind, Koteen & Naftalin, L.L.P.,

1150 Connecticut Avenue, NW, Suite

1000, Washington, DC 20036 (Counsel

for WTKR-TV, Inc.).

FOR FURTHER INFORMATION CONTACT: Pam

Blumenthal, Mass Media Bureau, (202)

418–1600.

SUPPLEMENTARY INFORMATION: This is a

synopsis of the Commission’s Notice of

Proposed Rule Making, MM Docket No.

00–68, adopted April 19, 2000, and

released April 21, 2000. The full text of

this Commission decision is available

for inspection and copying during

normal business hours in the FCC

Reference Center 445 12th Street, S.W.,

Washington, DC. The complete text of

this decision may also be purchased

from the Commission’s copy contractor,

International Transcription Services,

Inc., (202) 857–3800, 1231 20th Street,

NW, Washington, DC 20036.

Provisions of the Regulatory

Flexibility Act of 1980 do not apply to

this proceeding.

Members of the public should note

that from the time a Notice of Proposed

Rule Making is issued until the matter

is no longer subject to Commission

consideration or court review, all ex

parte contacts are prohibited in

Commission proceedings, such as this

one, which involve channel allotments.

See 47 CFR 1.1204(b) for rules

governing permissible ex parte contacts.

For information regarding proper

filing procedures for comments, see 47

CFR 1.415 and 1.420.

List of Subjects in 47 CFR Part 73

Digital television broadcasting.

Federal Communications Commission.

Barbara A. Kreisman,

Chief, Video Services Division, Mass Media

Bureau.

[FR Doc. 00–10542 Filed 4–26–00; 8:45 am]

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FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 76

[PP Docket No. 00–67; FCC 00–137]

Compatibility Between Cable Systems

and Consumer Electronics Equipment

AGENCY: Federal Communications

Commission.

ACTION: Proposed rule.

SUMMARY: The Federal Communications

Commission has adopted a Notice of

Proposed Rulemaking (NPRM) on

compatibility between cable television

systems and consumer electronics

equipment. The NPRM is designed to

resolve outstanding compatibility

issues, in particular requirements for

labeling digital television (DTV)

receivers to describe their capabilities to

operate with digital cable television

systems and questions regarding

licensing terms for copy protection

technology. Resolving these issues will

not only insure that consumers make

informed purchasing decisions with

respect to DTV equipment but also

promote the overall transition from

analog to digital television.

DATES: Comments must be received on

or before May 24, 2000, and reply

comments on or before June 8, 2000.

Written comments by the public on the

proposed information collections are

due May 24, 2000. Written comments

must be submitted by the Office of

Management and Budget (OMB) on the

proposed information collection(s) on or

before June 26, 2000.

ADDRESSES: Federal Communications

Commission, 445 12th Street, SW,

Washington, DC 20554. In addition to

filing comments with the Secretary, a

copy of any comments on the

information collections contained

herein should be submitted to Judy

Boley, Federal Communications

Commission, Room 1-C804, 445 12th

Street, SW, Washington, DC 20554, or

via the Internet to jboley@fcc.gov, and to

Edward C. Springer, OMB Desk Officer,

Room 10236 NEOB, 725 17th Street,

NW, Washington, DC 20503 or via the

Internet to

edward.springer@omb.eop.gov.

FOR FURTHER INFORMATION CONTACT:

Jonathan Levy (202–418–2030), Office of

Plans and Policy. For additional

information concerning the information

collection(s) contained in this

document, contact Judy Boley at 202–

418–0214, or via the Internet at

jboley@fcc.gov.

SUPPLEMENTARY INFORMATION: This

Notice of Proposed Rulemaking,

adopted April 13, 2000 and released

April 14, 2000, addresses compatibility

between cable television systems and

digital television receivers, set top

boxes, and other consumer electronics

equipment, in accordance with Section

624A of the Communications Act of

1934, 47 U.S.C. 544A. The NPRM seeks

comment on two issues: How to label

digital television receivers with

different features, including the proper

designation for receivers providing twoway interactive capability; and licensing

terms for copy protection technology.

The NPRM recognizes that DTV

receivers both with and without the

IEEE 1394 two-way connector will be

able to access an array of cable services.

Hence the labeling challenge is to

provide descriptions that are

informative to consumers, rather than to

distinguish among receivers that are and

are not ‘‘cable-ready.’’ The NPRM does

not propose specific nomenclature, but

simply asks for comment on appropriate

equipment labeling terminology, in

accordance with the requirements of

Section 624A. The NPRM also asks for

comment on whether the transition from

analog to digital requires any changes in

Commission requirements for cable

operators to offer supplemental

equipment to subscribers to enable them

to use special features of their television

receivers (e.g., picture-in-picture).

With respect to copy protection

technology licensing, the NPRM asks if

there are unresolved hardware issues

that might prevent consumer electronics

manufacturers from designing DTV

receivers that will operate with cable

systems delivering copy protected

digital content. The NPRM also seeks

comment on an issue related to the

Commission’s navigation devices rules.

Whether the inclusion of copy

protection technology provisions in

question of whether certain proposed

copy protection technology licensing

terms violate the Commission’s

navigation devices rules.

Pursuant to the navigation devices

rules, cable operators are required by

July 1, 2000 to offer separate security

modules for use with commerciallyavailable navigation devices, including

television receivers and set top boxes.

See 47 CFR 76.1200–1210. In order to

build a DTV receiver that can receive

and display encrypted cable

24672 Federal Register / Vol. 65, No. 82 / Thursday, April 27, 2000 / Proposed Rules

1See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601 et

seq., has been amended by the Contract With

America Advancement Act of 1996, Public Law No.

104–121, 110 Stat. 847 (1996) (CWAAA). Title II of

the CWAAA is the Small Business Regulatory

Enforcement Fairness Act of 1996 (SBREFA).

2 5 U.S.C. 603(b)(3).

3 Id. 601(3).

4 Id. 632.

5U.S. Census Bureau, 1992 Economic Census,

1992 Census of Transportation, Communications

and Utilities at Firm Size 1–123.

6 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. Implementation of

Sections of the 1992 Cable Act: Rate Regulation,

Sixth Report and Order and Eleventh Order on

Reconsideration, 10 FCC Rcd 7393 (1995).

7Paul Kagan Associates, Inc., Cable TV Investor,

Feb. 29, 1996 (based on figures for Dec. 30, 1995).

8 47 U.S.C. 543(m)(2).

8 47 U.S.C. 543(m)(2).

programming by means of a cablesupplied security module, consumer

electronics manufacturers need a license

for the security module technology so

they can incorporate it in the interface

that they build into the DTV receiver.

Commission rules in essence forbid

cable operators from imposing

conditions on licensees of their security

technology that prohibit those licensees

from offering navigation devices that do

not perform conditional access or

security functions. It has been argued

that licensing terms for security

modules that impose obligations

relating to copy protection, as opposed

to conditional access, violate

Commission rules. The NPRM seeks

comment on this issue in order to

ascertain whether any revision or

clarification of those rules is needed.

In order to ensure that consumers

have clear information about the

capabilities of DTV receivers on the

market and in order to encourage the

transition from analog to digital video

delivery, it is important that the labeling

and copy protection technology

licensing issues be resolved promptly.

Procedural Matters

As required by the Regulatory

Flexibility Act (RFA),1 the Commission

has prepared this present Initial

Regulatory Flexibility Analysis (IRFA)

of the possible significant economic

impact on small entities by the policies

and rules proposed in this Notice of

Proposed Rulemaking. Written public

comments are requested on this IRFA.

Comments must be identified as

responses to the IRFA and must be filed

in accordance with the same filing

deadlines as comments on the rest of the

Notice. The Commission will send a

copy of the Notice of Proposed

Rulemaking, including this IRFA, to the

Chief Counsel for Advocacy of the Small

Business Administration. See 5 U.S.C.

603(a). In addition, the Notice of

Proposed Rulemaking and IRFA (or

summaries thereof) will be published in

the Federal Register. See id.

Need for and Objectives of the

Proposed Rules: This NPRM is designed

to help ensure that digital television

receivers and cable television systems

will function smoothly together and to

promote the implementation of digital

television (‘‘DTV’’) service. In order to

provide consumers with information

about how digital television receivers

will operate with cable television

systems and thereby avoid consumer

confusion, the NPRM seeks comment on

labeling of digital television receivers.

In order to encourage the provision of

valuable digital content and to ensure

that copy protection technology

licensing issues do not stand in the way

of designing DTV receivers that operate

with cable television systems, the

Notice seeks comment on some

outstanding copy protection technology

licensing issues as well.

Legal Basis: Authority for this

proposed rulemaking is contained in

Sections 4(i), 4(j), 336, and 624A of the

Communications Act of 1934, as

amended, 47 U.S.C. 154(i), 154(j), 336,

and 544a.

Description and Estimate of Small

Entities to Which the Proposed 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.2 The

Regulatory Flexibility Act defines the

term ‘‘small entity’’ as having the same

meaning as the terms ‘‘small business,’’

‘‘small organization,’’ and ‘‘small

business concern’’ under section 3 of

the Small Business Act.3 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.4

Rules adopted in this proceeding

could apply to manufacturers of DTV

equipment, including television

receivers, set-top boxes and ‘‘point of

deployment’’ modules. Distributors of

this equipment, including retailers of

consumer electronics equipment and, in

the case of ‘‘point of deployment’’

modules, cable operators, would also be

affected. Labeling rules would require

all manufacturers, small and large, to

adhere to certain terminology in the

descriptive labels that they attach to the

receivers that they produce. Regulations

relating to copy protection licensing

technology could affect the terms and

conditions under which manufacturers,

small and large, acquire copy protection

technology licenses. However, with or

without Commission regulations, all

those entities would need a license for

proprietary technology that they utilize.

Cable operators will also be affected by

any new requirements to offer

supplementary equipment to

subscribers to enable them to use

special features of their DTV receivers.

This proceeding seeks comment on

whether the burden, if any, of

compliance with rules adopted pursuant

to this NPRM could be mitigated for

small entities.

Cable Systems: SBA has developed a

definition of small entity for cable and

other pay television services, which

includes all such companies generating

less than $11 million in revenue

annually. This definition includes cable

systems operators, closed circuit

television services, direct broadcast

satellite services, multipoint

distribution systems, satellite master

antenna systems and subscription

television services. According to the

Census Bureau, there were 1,323 such

cable and other pay television services

generating less than $11 million in

revenue that were in operation for at

least one year at the end of 1992.5

The Commission has developed its

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.6 Based on our most recent

information, we estimate that there were

1,439 cable operators that qualified as

small cable system operators at the end

of 1995.7 Since then, some of those

companies may have grown to serve

over 400,000 subscribers, and others

may have been involved in transactions

that caused them to be combined with

other cable operators. Consequently, we

estimate that there are fewer than 1,439

small entity cable system operators that

may be affected by the decisions and

rules proposed in this Notice.

The Communications Act also

contains a definition of a small cable

system operator, which is ‘‘a cable

operator that, directly or through an

affiliate, serves in the aggregate fewer

than 1% of all subscribers in the United

States and is not affiliated with any

entity or entities whose gross annual

revenues in the aggregate exceed

$250,000,000.’’ 8 The Commission has

determined that there are 61,700,000

subscribers in the United States.

Therefore, we found that an operator

serving fewer than 617,000 subscribers

shall be deemed a small operator, if its

annual revenues, when combined with

Federal Register / Vol. 65, No. 82 / Thursday, April 27, 2000 / Proposed Rules 24673

9 47 CFR 76.1403(b).

10Paul Kagan Associates, Inc., Cable TV Investor,

Feb. 29, 1996 (based on figures for Dec. 30, 1995).

11This category excludes establishments

primarily engaged in the manufacturing of

household audio and visual equipment which is

categorized as SIC 3651. See infra for SIC 3651 data.

12 13 CFR 121.201, (SIC) Code 3663.

13U.S. Dept. of Commerce, 1992 Census of

Transportation, Communications and Utilities,

Table 1D, (issued May 1995), SIC category 3663.

14 13 CFR 121.201, (SIC) Code 3651. 15U.S. Small Business Administration 1995

Economic Census Industry and Enterprise Report,

Table 3, SIC Code 3651, (Bureau of the Census data

adapted by the Office of Advocacy of the U.S. Small

Business Administration).

16 13 CFR 121.201, (SIC) Code 3571.

17U.S. Small Business Administration 1995

Economic Census Industry and Enterprise Report,

Table 3, SIC Code 3571, (Bureau of the Census data

adapted by the Office of Advocacy of the U.S. Small

Business Administration).

18U.S. Small Business Administration 1992

Economic Census Industry and Enterprise Report,

Table 2D, SIC 7812, (Bureau of the Census data

adapted by the Office of Advocacy of the U.S. Small

Business Administration)(SBA 1992 Census

Report). The Census data does not include a

category for $6.5 million therefore, we have

reported the closest increment below and above the

$6.5 million threshold. There is a difference of 88

firms between the $4.999 and $7.499 million annual

receipt categories. It is possible that these 88 firms

could have annual receipts of $6.5 million or less

and therefore, would be classified as small

businesses.

the total annual revenues of all of its

affiliates, do not exceed $250 million in

the aggregate.9 Based on available data,

we find that the number of cable

operators serving 617,000 subscribers or

less totals 1,450.10 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.

Small Manufacturers: The SBA has

developed definitions of small entity for

manufacturers of household audio and

video equipment (SIC 3651) and for

radio and television broadcasting and

communications equipment (SIC 3663).

In each case, the definition includes all

such companies employing 750 or fewer

employees.

Electronic Equipment Manufacturers:

The Commission has not developed a

definition of small entities applicable to

manufacturers of electronic equipment.

Therefore, we will utilize the SBA

definition of manufacturers of Radio

and Television Broadcasting and

Communications Equipment.11

According to the SBA’s regulations, a

TV equipment manufacturer must have

750 or fewer employees in order to

qualify as a small business concern.12

Census Bureau data indicates that there

are 858 U.S. firms that manufacture

radio and television broadcasting and

communications equipment, and that

778 of these firms have fewer than 750

employees and would be classified as

small entities.13 The Census Bureau

category is very broad, and specific

figures are not available as to how many

of these firms are exclusive

manufacturers of television equipment

or how many are independently owned

and operated. We conclude that there

are approximately 778 small

manufacturers of radio and television

equipment.

Electronic Household/Consumer

Equipment: 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 definition applicable to

manufacturers of Household Audio and

Visual Equipment. According to the

SBA’s regulations, a household audio

and visual equipment manufacturer

must have 750 or fewer employees in

order to qualify as a small business

concern.14 Census Bureau data indicates

that there are 410 U.S. firms that

manufacture radio and television

broadcasting and communications

equipment, and that 386 of these firms

have fewer than 500 employees and

would be classified as small entities.15

The remaining 24 firms 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. Furthermore,

the Census Bureau category is very

broad, and specific figures are not

available as to how many of these firms

are exclusive manufacturers of

television equipment for consumers or

how many are independently owned

and operated. We conclude that there

are approximately 386 small

manufacturers of television equipment

for consumer/household use.

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. According to

SBA regulations, a computer

manufacturer must have 1,000 or fewer

employees in order to qualify as a small

entity.16 Census Bureau data indicates

that there are 716 firms that

manufacture electronic computers and

of those, 659 have fewer than 500

employees and qualify as small

entities.17 The remaining 57 firms have

500 or more employees; however, we

are unable to determine how many of

those have fewer than 1,000 employees

and therefore also qualify as small

entities under the SBA definition. We

conclude that there are approximately

659 small computer manufacturers.

Small Retailers: The Commission has

not developed a definition of small

entities applicable to retail sellers of

navigation devices. Therefore, we will

utilize the SBA definition. The 1992

Bureau of the Census data indicate:

there were 9,663 U.S. firms classified as

Radio, Television, and Consumer

Electronic Stores (SIC 5731), and that

9,385 of these firms had $4.999 million

or less in annual receipts and 9,473 of

these firms had $7.499 million or less in

annual receipts.18 Consequently, we

tentatively conclude that there are

approximately 9,663 such small retailers

that may be affected by the decisions

and rules proposed in this NPRM.

Reporting, Recordkeeping, and Other

Compliance Requirements: The

proposed actions may require

manufacturers of DTV equipment to

adhere to some labeling standards.

Moreover, the proposed actions may

affect the terms under which

manufacturers acquire licenses to utilize

certain copy protection technology in

their products. We believe that the

impact of any rules that might be

adopted pursuant to this NPRM would

be minimal. We seek comment on this.

Steps Taken to Minimize Significant

Economic Impact on Small Entities, and

Significant Alternatives Considered: The

RFA, see 5 U.S.C. 603, requires an

agency to describe any significant

alternatives that it has considered in

reaching its proposed approach, which

may include the following four

alternatives: the establishment of

differing compliance or reporting

requirements or timetables that take into

account the resources available to small

entities; the clarification, consolidation,

or simplification of compliance or

reporting requirements under the rule

for small entities; the use of

performance, rather than design,

standards; and an exemption from

coverage of the rule, or any part thereof,

for small entities.

We believe that our proposals would

have the positive result of providing

consumers with clear information about

the capabilities of DTV equipment and

promote the implementation of DTV

service. We believe that labeling

requirements would have a minimal

impact on manufacturers and retailers

and that not applying requirements

adapted to all manufacturers would

24674 Federal Register / Vol. 65, No. 82 / Thursday, April 27, 2000 / Proposed Rules

19See Notice ar paras. 18–20. 20 Id at paras. 14, 17.

defeat the basic purpose of the

requirements. Given that manufacturers

would need to license copy protection

technology that they incorporate in their

equipment regardless of our rules, the

potential impact of any rules appears to

be minimal.19 We do not believe that

different treatment of small and large

entities with respect to their technology

licensing is warranted. Any

supplementary equipment that cable

operators might be required to offer to

subscribers is likely to be standardized

and manufactured in large enough

quantities that the cost to small cable

operators is unlikely to be substantial.20

Moreover, cable operators are entitled to

recover from subscribers the cost of

supplementary equipment offered.

Should commenters disagree with any

of our conclusions, we welcome

comments suggesting ways in which

any perceived burden upon small

entities could be mitigated.

Federal Rules that May Duplicate,

Overlap, or Conflict With the Proposed

Rules: None.

This NPRM contains proposed

information collection(s) subject to the

Paperwork Reduction Act of 1995

(PRA). It has been submitted to the

Office of Management and Budget

(OMB) for review under the PRA. OMB,

the general public, and other Federal

agencies are invited to comment on the

proposed information collections

contained in this proceeding.

List of Subjects in 47 CFR Part 76

Cable television.

Federal Communications Commission.

William F. Caton,

Deputy Secretary.

[FR Doc. 00–10448 Filed 4–26–00; 8:45 am]

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