40818 Federal Register / Vol. 72, No. 142 / Wednesday, July 25, 2007 / Proposed Rules 

Service Express Mail and Priority Mail) 

must be sent to 9300 East Hampton 

Drive, Capitol Heights, MD 20743. U.S. 

Postal Service first-class mail, Express 

Mail, and Priority Mail should be 

addressed to 445 12th Street, SW., 

Washington, DC 20554. 

5. All filings must be addressed to the 

Commission’s Secretary, Marlene H. 

Dortch, Office of the Secretary, Federal 

Communications Commission, 445 12th 

Street, SW., Washington, DC 20554. 

Parties should also send a copy of their 

filings to Dana Walton-Bradford, 

Telecommunications Access Policy 

Division, Wireline Competition Bureau, 

Federal Communications Commission, 

Room 5–A321, 445 12th Street, SW., 

Washington, DC 20554, or by e-mail to 

Dana.Walton-Bradford@fcc.gov. Parties 

shall also serve one copy with the 

Commission’s copy contractor, Best 

Copy and Printing, Inc. (BCPI), Portals 

II, 445 12th Street, SW., Room CY–B402, 

Washington, DC 20554, (202) 488–5300, 

or via e-mail to fcc@bcpiweb.com. 

6. Documents in WC Docket No. 03–

109 will be available for public 

inspection and copying during business 

hours at the FCC Reference Information 

Center, Portals II, 445 12th St. SW., 

Room CY–A257, Washington, DC 20554. 

The documents may also be purchased 

from BCPI, telephone (202) 488–5300, 

facsimile (202) 488–5563, TTY (202) 

488–5562, e-mail fcc@bcpiweb.com. 

7. To request materials in accessible 

formats for people with disabilities 

(braille, large print, electronic files, 

audio format), send an e-mail to 

fcc504@fcc.gov or call the Consumer & 

Governmental Affairs Bureau at 202–

418–0530 (voice), 202–418–0432 (tty). 

8. This matter shall be treated as a 

‘‘permit-but-disclose’’ proceeding in 

accordance with the Commission’s ex 

parte rules. Persons making oral ex 

parte presentations are reminded that 

memoranda summarizing the 

presentations must contain summaries 

of the substance of the presentations 

and not merely a listing of the subjects 

discussed. More than a one- or twosentence description of the views and 

arguments presented generally is 

required. Other requirements pertaining 

to oral and written presentations are set 

forth in section 1.1206(b) of the 

Commission’s rules. 

Federal Communications Commission. 

Kirk S. Burgee, 

Chief of Staff, Wireline Competition Bureau. 

[FR Doc. E7–14105 Filed 7–24–07; 8:45 am] 

BILLING CODE 6712–01–P 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 73 

[DA 07–3246, MB Docket No. 04–265, RM–

10439] 

Digital Television Broadcast Service; 

Seattle, WA 

AGENCY: Federal Communications 

Commission. 

ACTION: Proposed rule, denial. 

SUMMARY: The Commission, by this 

document, denies a petition for rule 

making filed by KCTS Television, 

requesting the substitution of DTV 

channel *53 for channel *62 on the 

basis that the proposal to add DTV 

channel *53 at Seattle failed to protect 

DTV channel 53 at Chilliwack, British 

Columbia. See 69 FR 46128, August 2, 

2004. With this action, this proceeding 

is terminated. 

FOR FURTHER INFORMATION CONTACT: Pam 

Blumenthal, Media Bureau, (202) 418–

1600. 

SUPPLEMENTARY INFORMATION: This is a 

synopsis of the Commission’s Report 

and Order, MB Docket No. 04–265, 

adopted July 13, 2007, and released July 

18, 2007. The full text of this document 

is available for public inspection and 

copying during regular business hours 

in the FCC Reference Information 

Center, Portals II, 445 12th Street, SW., 

Room CY–A257, Washington, DC. This 

document may also be purchased from 

the Commission’s duplicating 

contractor, Qualex International, Portals 

II, 445 12th Street, SW., CY–B402, 

Washington, DC 20554, telephone 202–

863–2893, facsimile 202–863–2898, or 

via e-mail qualexint@aol.com. This 

document is not subject to the 

Congressional Review Act. (The 

Commission is, therefore, not required 

to submit a copy of this Report and 

Order to GAO, pursuant to the 

Congressional Review Act, see 5 U.S.C. 

801(a)(1)(A), because this proposed rule 

is denied.) 

Federal Communications Commission. 

Barbara A. Kreisman, 

Chief, Video Division, Media Bureau. 

[FR Doc. E7–14378 Filed 7–24–07; 8:45 am] 

BILLING CODE 6712–01–P 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 76 

[CS Docket No. 97–80; PP Docket No. 00–

67; FCC 07–120] 

Commercial Availability of 

Bidirectional Navigation Devices 

(‘‘Two-Way Plug-and-Play’’) 

AGENCY: Federal Communications 

Commission. 

ACTION: Proposed rule. 

SUMMARY: In this document, the 

Commission takes steps to ensure that 

equipment used to access video 

programming and other services offered 

by cable television systems are available 

to consumers at retail. Specifically, the 

Commission seeks comment on 

proposed standards for this 

bidirectional capability, the absence of 

which may discourage some consumers 

from investing in new digital 

equipment. The Commission also seeks 

comment on whether any rules adopted 

in this proceeding should apply to noncable Multichannel Video Programming 

Distributors (‘‘MVPDs’’). 

DATES: Comments for this proceeding 

are due on or before August 24, 2007; 

reply comments are due on or before 

September 10, 2007. 

ADDRESSES: You may submit comments, 

identified by CS Docket No. 97–80, by 

any of the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Federal Communications 

Commission’s Web Site: http:// 

www.fcc.gov/cgb/ecfs/. Follow the 

instructions for submitting comments. 

• People with Disabilities: Contact the 

FCC to request reasonable 

accommodations (accessible format 

documents, sign language interpreters, 

CART, etc.) by e-mail: FCC504@fcc.gov 

or phone: 202–418–0530 or TTY: 202–

418–0432. 

For detailed instructions for 

submitting comments and additional 

information on the rulemaking process, 

see the SUPPLEMENTARY INFORMATION

section of this document. 

FOR FURTHER INFORMATION CONTACT: For 

additional information on this 

proceeding, contact Brendan Murray, 

Brendan.Murray@fcc.gov of the Media 

Bureau, Policy Division, (202) 418–

1573. 

SUPPLEMENTARY INFORMATION: This is a 

summary of the Commission’s Notice of 

Proposed Rulemaking, FCC 07–120, 

adopted on June 27, 2007, and released 

on June 29, 2007. The full text of this 

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Federal Register / Vol. 72, No. 142 / Wednesday, July 25, 2007 / Proposed Rules 40819 

document is available for public 

inspection and copying during regular 

business hours in the FCC Reference 

Center, Federal Communications 

Commission, 445 12th Street, SW., CY–

A257, Washington, DC 20554. These 

documents will also be available via 

ECFS (http://www.fcc.gov/cgb/ecfs/). 

(Documents will be available 

electronically in ASCII, Word 97, and/ 

or Adobe Acrobat.) The complete text 

may be purchased from the 

Commission’s copy contractor, 445 12th 

Street, SW., Room CY–B402, 

Washington, DC 20554. To request this 

document in accessible formats 

(computer diskettes, large print, audio 

recording, and Braille), send an e-mail 

to fcc504@fcc.gov or call the 

Commission’s Consumer and 

Governmental Affairs Bureau at (202) 

418–0530 (voice), (202) 418–0432 

(TTY). 

Initial Paperwork Reduction Act of 

1995 Analysis 

This document does not contain 

proposed information collection 

requirements subject to the Paperwork 

Reduction Act of 1995, Public Law 104–

13. In addition, therefore, it does not 

contain any proposed information 

collection burden ‘‘for small business 

concerns with fewer than 25 

employees,’’ pursuant to the Small 

Business Paperwork Relief Act of 2002, 

Public Law 107–198, see 44 U.S.C. 

3506(c)(4). 

Summary of the Notice of Proposed 

Rulemaking 

I. Introduction 

1. CableCARD-ready devices available 

at retail today are unable to access the 

two-way features available on cable 

systems, including electronic 

programming guides (‘‘EPGs’’), videoon-demand (‘‘VOD’’), pay-per-view 

(‘‘PPV’’), and other interactive television 

(‘‘ITV’’) capabilities. In this Third 

Further Notice of Proposed Rulemaking, 

we solicit comment on proposed 

standards to ensure bidirectional 

compatibility of cable television systems 

and consumer electronics equipment. 

We also seek comment on whether any 

rules we adopt in this proceeding 

should apply to non-cable Multichannel 

Video Programming Distributor 

(‘‘MVPDs’’) and whether there are 

technological solutions that are network 

agnostic and deployable across all 

MVPD platforms (e.g., cable, Direct 

Broadcast Satellite (‘‘DBS’’), Internet 

Protocol (‘‘IP’’) or hybrid Quadrature 

Amplitude Modulation/IP (‘‘QAM/IP’’)). 

II. Background 

2. Section 629 of the Act directs the 

Commission to: 

Adopt regulations to assure the commercial 

availability, to consumers of multichannel 

video programming and other services 

offered over multichannel video 

programming systems, of converter boxes, 

interactive communications equipment, and 

other equipment used by consumers to access 

multichannel video programming and other 

services offered over multichannel video 

programming systems, from manufacturers, 

retailers, and other vendors not affiliated 

with any multichannel video programming 

distributor. 

Through section 629, Congress sought 

to provide consumers with the 

opportunity to purchase competitive 

navigation devices from sources other 

than their MVPD. Congress emphasized 

the importance of such competition, 

stating that ‘‘[c]ompetition in the 

manufacturing and distribution of 

consumer devices has always led to 

innovation, lower prices and higher 

quality.’’ At the same time, Congress 

recognized that MVPDs have ‘‘a valid 

interest, which the Commission should 

continue to protect, in system or signal 

security and in preventing theft of 

service.’’

3. To carry out the directives of 

section 629, the Commission in 1998 

required cable operators to make 

available by July 1, 2000 a security 

element separate from the basic 

navigation device (the ‘‘host device’’). 

Cable operators were permitted to 

continue providing equipment with 

integrated security until January 1, 

2005, so long as modular security 

components, known as point-ofdeployment modules (‘‘PODs’’ or 

‘‘CableCARDs’’), were also made 

available for use with host devices 

obtained through retail outlets. This 

requirement is generally referred to as 

‘‘common reliance,’’ or the ‘‘integration 

ban,’’ is designed to enable unaffiliated 

manufacturers, retailers, and other 

vendors to commercially market host 

devices while allowing cable operators 

to retain control over their system 

security. 

4. In April 2003, in response to a 

request from cable operators, the 

Commission extended the effective date 

of the integration ban until July 1, 2006. 

Then, in 2005, again at the urging of 

cable operators, the Commission further 

extended that date until July 1, 2007. As 

of late 2003, ‘‘non-integrated navigation 

devices [had] yet to gain adoption in the 

marketplace, thereby directly affecting 

subscriber demand for’’ separated 

security elements. This was due to the 

lack of a technical standard for how the 

POD and host device would interface. In 

the Plug and Play Order, the 

Commission adopted an interface 

standard that the National Cable and 

Telecommunications Association and 

the Consumer Electronics Association 

had agreed upon in a Memorandum of 

Understanding (‘‘MOU’’), with certain 

modifications. And less than a year 

later, consumer electronics 

manufacturers brought CableCARDcompatible devices to market. Devices 

made pursuant to this standard have the 

ability to receive encrypted digital cable 

programming, but do not have any 

upstream, or bidirectional, capabilities 

(i.e., consumer electronics 

manufacturers can only make 

unidirectional devices under the 

technical standard adopted in the Plug 

and Play Order). For example, such 

devices cannot support two-way 

services such as EPGs, VOD, PPV, and 

other ITV capabilities. 

5. It is apparent that consumers have 

not shown significant interest in oneway devices, which cannot access 

features such as EPGs, VOD, PPV, and 

other ITV capabilities provided by cable 

operators. Indeed, while over five 

million digital cable ready devices have 

been sold, cable operators have 

deployed fewer than 300,000 

CableCARDs. The cable and consumer 

electronics industries have attempted to 

negotiate an agreement on how to 

achieve bidirectional compatibility, and 

since 2003 the Commission has required 

National Cable and 

Telecommunications Association 

(‘‘NCTA’’) and Consumer Electronics 

Association (‘‘CEA’’) to file status 

reports regarding the status of those 

negotiations. In March 2005, the 

Commission described the progress of 

these negotiations as ‘‘disappointing.’’

Shortly before the Commission made 

that statement, senior executives from 

Microsoft, Time Warner, and Comcast 

committed to ‘‘personally’’ work 

together ‘‘to supervise the efforts to 

reach an agreement amongst the cable, 

CE, IT, and other industries to ensure 

the availability of two-way cable 

products during calendar year 2006.’’

Despite this commitment, the industries 

appear to have made little progress and 

it does not appear that an agreement is 

imminent. 

6. On November 30, 2005, the cable 

industry filed a report that supported 

the OpenCable Application Platform 

(‘‘OCAP’’) as the foundation for two-way 

plug and play products. OCAP is a 

middleware software layer (based on the 

Java Execution Engine), which allows 

software developers to write 

applications and programs that would 

run on any OCAP-enabled device. While 

the cable and consumer electronics 

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40820 Federal Register / Vol. 72, No. 142 / Wednesday, July 25, 2007 / Proposed Rules 

industries agree that OCAP should be 

part of the solution for two-way plug 

and play compatibility, the industries 

appear to disagree on how an OCAP 

solution should be implemented. 

7. When the Commission last 

addressed these issues in 2005 Deferral 

Order, the scheduled conclusion of the 

Digital Television (‘‘DTV’’) transition 

(i.e., December 31, 2006) could be 

extended in any given market if certain 

conditions were not met. Most relevant 

to this discussion, section 

309(j)(14)(B)(iii) at the time stated that 

if more than 15 percent of the television 

households in a given market did not (1) 

subscribe to an MVPD carrying the 

digital signals of the local television 

stations in that market, and (2) have at 

least one television capable of viewing 

the digital signals of broadcasters in that 

market (either directly or through the 

use of a digital-to-analog converter), 

then the Commission was to grant an 

extension of that deadline upon request. 

Since the 2005 Deferral Order was 

adopted, however, the 85-percent test 

has been repealed, and the December 

31, 2006 soft deadline for the end of the 

DTV transition has been replaced with 

a hard deadline of February 17, 2009. 

We believe that the lack of two-way 

functionality on digital cable ready 

devices is deterring consumers from 

purchasing digital televisions, which are 

an essential part of an effective digital 

transition. Therefore, we believe that the 

impending hard deadline increases the 

urgency of examining proposed 

bidirectional standards at this time. 

III. Discussion 

8. On November 7, 2006, the CEA, 

along with twelve consumer electronics 

and information technology companies, 

proposed a two-way plug and play 

solution. That proposal, attached to this 

item as Appendix B, recommends that 

the Commission take the following 

steps: 

(1) Adopt an enhanced CableCARD 

approach for basic interactive services, 

based largely on existing standards; 

(2) Provide oversight with respect to 

OCAP development, or allow consumer 

electronics companies and information 

technology companies to participate 

fully in the OCAP development process; 

(3) Direct CableLabs to approve all 

output technologies that the Digital 

Living Network Alliance (‘‘DLNA’’) 

approves, and require cable providers to 

provide digital set-top boxes that are 

fully compatible with DLNA networks; 

(4) Adopt testing requirements for 

two-way devices that are similar to the 

existing testing requirements for oneway devices (i.e., initial device testing 

and certification with subsequent selfcertification), and require that the cable 

industry provide consumer electronics 

manufacturers any new OCAP 

applications for testing at least sixty 

days before widespread deployment; 

and 

(5) Permit consumer electronics 

devices to use a cable path for software 

upgrades equal to the path that cable 

operators use for their software 

upgrades. 

9. We hereby seek comment on the 

CEA proposal. We seek comment on the 

impact that the proposed solution 

would have on consumers, content 

providers, consumer electronics 

manufacturers, large and small cable 

operators, other MPVDs, and on the 

transition to digital television. We seek 

comment on whether the CEA proposal 

offers a reasonable and quickly 

implementable approach, and what 

specific rule changes would be 

necessary. 

10. As noted above, in November 

2005, NCTA proposed a two-way 

solution based on the use of OCAP as a 

standardized middleware layer. The 

proposal, attached to this item as 

Appendix C, recommends that the 

Commission adopt a regulatory regime 

that includes: 

(1) Technical requirements for cable 

systems; 

(2) ‘‘Limited but necessary’’ content 

protection requirements for navigation 

devices; 

(3) Testing and certification/ 

verification procedures to prevent harm 

to the cable network and services; and 

(4) Consumer education mandates. 

NCTA asserts that if combined with 

voluntary commitments and 

marketplace agreements, its proposal 

would bring consumers the benefits of 

two-way digital cable-ready products as 

quickly as possible. 

11. We hereby seek comment on 

NCTA’s proposal. We seek comment on 

the impact that the proposed solution 

would have on consumers, content 

providers, consumer electronics 

manufacturers, large and small cable 

operators, other MPVDs, and on the 

transition to digital television. We seek 

comment on whether the NCTA 

proposal offers a reasonable and quickly 

implementable approach, and what 

specific rule changes would be 

necessary. 

12. We also seek comment on any 

other proposals or rule changes that we 

should consider in order to permit the 

development of two-way digital cableready devices. 

13. In addition, we seek comment on 

whether all MVPDs—including DBS and 

wireline video providers—should be 

subject to any rules that we adopt to 

promote bidirectional compatibility 

between cable television systems and 

consumer electronics equipment. Could 

non-traditional cable operators and 

other MVPDs conform to the proposed 

solutions above, or would technical 

limitations preclude compliance? If 

technical limitations would preclude 

compliance, we seek comment on other 

approaches by which non-traditional 

cable operators and other MVPDs could 

achieve bidirectional compatibility 

between their systems and consumer 

electronics equipment. For example, 

NCTA notes that there has been 

exploration of an enhanced security 

device for all MVPDs that would permit 

a retail device to interoperate with all 

MVPD networks, whether traditional 

cable, satellite or telephone. We seek 

comment on such a solution, including 

whether such a device should be 

required to comply with specific 

attachment principles such as 

outputting the signal in conformance 

with certain open standards in order to 

permit home networking. 

14. As the digital television transition 

approaches, we do not want to lose the 

potential opportunity for consumers to 

purchase competitive devices before the 

last major holiday season prior to the 

transition. We seek comment on 

whether a competitive market would 

offer further incentive for consumers to 

transition from analog to digital devices. 

Ideally, we would like consumers to be 

able to purchase two-way digital cable 

ready devices at retail by Q4 2008, in 

time for the final holiday season before 

the February 17, 2009 over-the-air 

digital television transition. We seek 

comment on whether that goal is 

feasible and the steps we must adopt in 

order to achieve that goal. We also 

solicit comment on any specific rules 

we should adopt to ensure that we 

achieve a practical bidirectional 

solution that furthers the goals of 

section 629 of the Act. 

IV. Procedural Matters 

A. Initial Regulatory Flexibility Analysis 

15. With respect to the Third Further 

Notice of Proposed Rulemaking, an 

Initial Regulatory Flexibility Analysis 

(‘‘IRFA’’), see generally 5 U.S.C. 603, is 

contained in Appendix A. Comments 

must be identified as responses to the 

IRFA and must be filed by the deadlines 

for comments on the Third Further 

Notice of Proposed Rulemaking 

specified infra. The Commission will 

send a copy of the Third Further Notice 

of Proposed Rulemaking, including the 

IRFA, to the Chief Counsel for Advocacy 

of the Small Business Administration. 

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Federal Register / Vol. 72, No. 142 / Wednesday, July 25, 2007 / Proposed Rules 40821 

B. Initial Paperwork Reduction Act of 

1995 Analysis 

16. This document does not contain 

proposed information collection(s) 

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, 

Public Law 107–198, see 44 U.S.C. 

3506(c)(4). 

C. Ex Parte Rules 

17. Permit-But-Disclose. This 

proceeding will be treated as a ‘‘permitbut-disclose’’ proceeding subject to the 

‘‘permit-but-disclose’’ requirements 

under § 1.1206(b) of the Commission’s 

rules. Ex parte presentations are 

permissible if disclosed in accordance 

with Commission rules, except during 

the Sunshine Agenda period when 

presentations, ex parte or otherwise, are 

generally prohibited. Persons making 

oral ex parte presentations are reminded 

that a memorandum summarizing a 

presentation must contain a summary of 

the substance of the presentation and 

not merely a listing of the subjects 

discussed. More than a one- or twosentence description of the views and 

arguments presented is generally 

required. Additional rules pertaining to 

oral and written presentations are set 

forth in § 1.1206(b). 

D. Filing Requirements 

18. Comments and Replies. Pursuant 

to §§ 1.415 and 1.419 of the 

Commission’s rules, interested parties 

may file comments on or before the 

dates indicated on the first page of this 

document. Comments may be filed 

using: (1) The Commission’s Electronic 

Comment Filing System (‘‘ECFS’’), (2) 

the Federal Government’s eRulemaking 

Portal, or (3) by filing paper copies. 

19. Electronic Filers. Comments may 

be filed electronically using the Internet 

by accessing the ECFS: http:// 

www.fcc.gov/cgb/ecfs/ or the Federal 

eRulemaking Portal: http:// 

www.regulations.gov. Filers should 

follow the instructions provided on the 

Web site for submitting comments. For 

ECFS filers, if multiple docket or 

rulemaking numbers appear in the 

caption of this proceeding, filers must 

transmit one electronic copy of the 

comments for each docket or 

rulemaking number referenced in the 

caption. In completing the transmittal 

screen, filers should include their full 

name, U.S. Postal Service mailing 

address, and the applicable docket or 

rulemaking number. Parties may also 

submit an electronic comment by 

Internet e-mail. To get filing 

instructions, filers should send an email to ecfs@fcc.gov, and include the 

following words in the body of the 

message, ‘‘get form.’’ A sample form and 

directions will be sent in response. 

20. Paper Filers. Parties who choose 

to file by paper must file an original and 

four copies of each filing. If more than 

one docket or rulemaking number 

appears in the caption of this 

proceeding, filers must submit two 

additional copies for each additional 

docket or rulemaking number. Filings 

can be sent by hand or messenger 

delivery, by commercial overnight 

courier, or by first-class or overnight 

U.S. Postal Service mail (although we 

continue to experience delays in 

receiving U.S. Postal Service mail). All 

filings must be addressed to the 

Commission’s Secretary, Office of the 

Secretary, Federal Communications 

Commission. 

• The Commission’s contractor will 

receive hand-delivered or messengerdelivered paper filings for the 

Commission’s Secretary at 236 

Massachusetts Avenue, NE., Suite 110, 

Washington, DC 20002. The filing hours 

at this location are 8 a.m. to 7 p.m. All 

hand deliveries must be held together 

with rubber bands or fasteners. Any 

envelopes must be disposed of before 

entering the building. 

• Commercial overnight mail (other 

than U.S. Postal Service Express Mail 

and Priority Mail) must be sent to 9300 

East Hampton Drive, Capitol Heights, 

MD 20743. 

• U.S. Postal Service first-class, 

Express, and Priority mail should be 

addressed to 445 12th Street, SW., 

Washington, DC 20554. 

21. Availability of Documents. 

Comments, reply comments, and ex 

parte submissions will be available for 

public inspection during regular 

business hours in the FCC Reference 

Center, Federal Communications 

Commission, 445 12th Street, SW., CY–

A257, Washington, DC 20554. These 

documents will also be available via 

ECFS. Documents will be available 

electronically in ASCII, Microsoft Word, 

and/or Adobe Acrobat. 

22. Accessibility Information. To 

request information in accessible 

formats (computer diskettes, large print, 

audio recording, and Braille), send an email to fcc504@fcc.gov or call the FCC’s 

Consumer and Governmental Affairs 

Bureau at (202) 418–0530 (voice), (202) 

418–0432 (TTY). This document can 

also be downloaded in Word and 

Portable Document Format (PDF) at: 

http://www.fcc.gov. 

23. Additional Information. For 

additional information on this 

proceeding, contact Brendan Murray, 

Brendan.Murray@fcc.gov, or, Steven 

Broeckaert, Steven.Broeckaert@fcc.gov, 

of the Media Bureau, Policy Division, 

(202) 418–2120. 

Initial Regulatory Flexibility Analysis 

As required by the Regulatory 

Flexibility Act of 1980, as amended 

(‘‘RFA’’) the Commission has prepared 

this Initial Regulatory Flexibility 

Analysis (‘‘IRFA’’) of the possible 

significant economic impact on small 

entities by the policies and rules 

proposed in this Third Further Notice of 

Proposed Rulemaking and Order on 

Review (‘‘Further Notice’’). Written 

public comments are requested on this 

IRFA. Comments must be identified as 

responses to the IRFA and must be filed 

by the deadlines for comments on the 

Further Notice provided above in 

paragraph 8. The Commission will send 

a copy of the Further Notice, including 

this IRFA, to the Chief Counsel for 

Advocacy of the Small Business 

Administration. In addition, the Further 

Notice and IRFA (or summaries thereof) 

will be published in the Federal 

Register. 

Need for, and Objectives of, the 

Proposed Rules 

24. The need for FCC regulation in 

this area derives from the lack of a twoway plug and play standard for cable 

television systems and consumer 

electronics equipment. The absence of 

such a standard has been identified as 

a possible impediment to the 

approaching deadline for the transition 

to digital television (‘‘DTV’’) and to the 

realization of Congressional goals set 

out in section 629 of the 

Communications Act of 1934. Such a 

standard would allow consumer 

electronics manufacturers to develop 

navigation devices (such as televisions 

and set-top boxes) that could be 

connected directly to cable systems and 

make use of bidirectional cable services 

without the need for a cable-operator 

provided navigation device. Since 

almost 86 percent of television 

households subscribe to a multichannel 

video programming distributor 

(‘‘MVPD’’) service, the availability of 

such bidirectional compatibility would 

encourage more consumers to purchase 

DTV compatible devices, thereby 

furthering the transition. Private 

industry negotiations between the 

Consumer Electronics Association 

(‘‘CEA’’) and twelve consumer 

electronics and information technology 

companies have resulted in a proposal 

for a two-way plug and play standard. 

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40822 Federal Register / Vol. 72, No. 142 / Wednesday, July 25, 2007 / Proposed Rules 

The proposal requires adherence to 

certain technical standards outlined in 

Appendix B. The objectives any rules 

adopted will be to create a competitive 

market for navigation devices and to 

facilitate the DTV transition. 

Legal Basis 

25. The authority for the action 

proposed in this rulemaking is 

contained in sections 1, 4(i) and (j), 303, 

403, 601, and 629 of the 

Communications Act of 1934, as 

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

303, 403, 521, and 549. 

Description and Estimate of the Number 

of Small Entities To Which the 

Proposed Rules Will Apply 

26. The RFA directs the Commission 

to provide a description of and, where 

feasible, an estimate of the number of 

small entities that will be affected by the 

proposed rules. The RFA generally 

defines the term ‘‘small entity’’ as 

having the same meaning as the terms 

‘‘small business,’’ ‘‘small organization,’’

and ‘‘small governmental entity’’ under 

section 3 of the Small Business Act. 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 Small Business 

Administration (‘‘SBA’’). 

27. Television Broadcasting. The 

proposed rules and policies could affect 

television broadcasting licensees, and 

potential licensees of television service. 

The Small Business Administration 

defines a television broadcasting station 

that has no more than $13 million in 

annual receipts as a small business. 

Television broadcasting consists of 

establishments primarily engaged in 

broadcasting images together with 

sound, including the production or 

transmission of visual programming 

which is broadcast to the public on a 

predetermined schedule. Included in 

this industry are commercial, religious, 

educational, and other television 

stations. Also included are 

establishments that are primarily 

engaged in television broadcasting and 

produce programming in their own 

studios. Separate establishments 

primarily engaged in producing 

programming are classified under other 

NAICS numbers. 

28. There were 1,509 television 

stations operating in the nation in 1992. 

That number has remained fairly 

constant as indicated by the 

approximately 1,747 operating 

television broadcasting stations in the 

nation as of June 2005. For 1992, the 

number of television stations that 

produced less than $10.0 million in 

revenue was 1,155 establishments. 

Thus, the new rules could affect 

approximately 1,747 television stations; 

approximately 77%, or 1,345 of those 

stations are considered small 

businesses. These estimates may 

overstate the number of small entities 

since the revenue figures on which they 

are based do not include or aggregate 

revenues from non-television affiliated 

companies. 

29. Cable and Other Program 

Distribution. The SBA has developed a 

small business size standard for cable 

and other program distribution services, 

which includes all such companies 

generating $13.5 million or less in 

revenue annually. This category 

includes, among others, cable operators, 

direct broadcast satellite (‘‘DBS’’) 

services, home satellite dish (‘‘HSD’’) 

services, satellite master antenna 

television (‘‘SMATV’’) systems, and 

open video systems (‘‘OVS’’). According 

to the Census Bureau data, there are 

1,191 total cable and other pay 

television service firms that operate 

throughout the year of which 1,087 have 

less than $10 million in revenue. We 

address below each service individually 

to provide a more precise estimate of 

small entities. 

30. Cable Operators. The Commission 

has developed, with SBA’s approval, 

our own definition of a small cable 

system operator for the purposes of rate 

regulation. Under the Commission’s 

rules, a ‘‘small cable company’’ is one 

serving fewer than 400,000 subscribers 

nationwide. As of 2006, 7,916 cable 

operators qualify as small cable 

companies. 

31. The Communications Act, as 

amended, also contains a size standard 

for a small cable system operator, which 

is ‘‘a cable operator that, directly or 

through an affiliate, serves in the 

aggregate fewer than 1% of all 

subscribers in the United States and is 

not affiliated with any entity or entities 

whose gross annual revenues in the 

aggregate exceed $250,000,000.’’ The 

Commission has determined that there 

are 65,600,000 subscribers in the United 

States. Therefore, an operator serving 

fewer than 656,000 subscribers shall be 

deemed a small operator if its annual 

revenues, when combined with the total 

annual revenues of all of its affiliates, do 

not exceed $250 million in the 

aggregate. Based on available data, we 

find that the number of cable operators 

serving 656,000 subscribers or less totals 

approximately 7,917. 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. 

32. Direct Broadcast Satellite (‘‘DBS’’) 

Service. Because DBS provides 

subscription services, DBS falls within 

the SBA-recognized definition of cable 

and other program distribution services. 

This definition provides that a small 

entity is one with $13.5 million or less 

in annual receipts. There are four 

licensees of DBS services under part 100 

of the Commission’s rules. Three of 

those licensees are currently 

operational. Two of the licensees that 

are operational have annual revenues 

that may be in excess of the threshold 

for a small business. The Commission, 

however, does not collect annual 

revenue data for DBS and, therefore, is 

unable to ascertain the number of small 

DBS licensees that could be impacted by 

these proposed rules. DBS service 

requires a great investment of capital for 

operation, and we acknowledge, despite 

the absence of specific data on this 

point, that there are entrants in this field 

that may not yet have generated $13.5 

million in annual receipts, and therefore 

may be categorized as a small business, 

if independently owned and operated. 

33. Home Satellite Dish (‘‘HSD’’) 

Service. Because HSD provides 

subscription services, HSD falls within 

the SBA-recognized definition of cable 

and other program distribution services. 

This definition provides that a small 

entity is one with $13.5 million or less 

in annual receipts. The market for HSD 

service is difficult to quantify. Indeed, 

the service itself bears little resemblance 

to other MVPDs. As of June 2005, there 

were 206,358 households authorized to 

receive HSD service, a decrease of 38.5 

percent from the 335,766 we reported 

the previous year. HSD owners have 

access to more than 265 channels of 

programming placed on C-band 

satellites by programmers for receipt 

and distribution by MVPDs, of which 

115 channels are scrambled and 

approximately 150 are unscrambled. 

HSD owners can watch unscrambled 

channels without paying a subscription 

fee. To receive scrambled channels, 

however, an HSD owner must purchase 

an integrated receiver-decoder from an 

equipment dealer and pay a 

subscription fee to an HSD 

programming package. Thus, HSD users 

include: (1) Viewers who subscribe to a 

packaged programming service, which 

affords them access to most of the same 

programming provided to subscribers of 

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other MVPDs; (2) viewers who receive 

only non-subscription programming; 

and (3) viewers who receive satellite 

programming services illegally without 

subscribing. Because scrambled 

packages of programming are most 

specifically intended for retail 

consumers, these are the services most 

relevant to this discussion. 

34. Satellite Master Antenna 

Television (‘‘SMATV’’) Systems. The 

SBA definition of small entities for 

cable and other program distribution 

services includes SMATV services and, 

thus, small entities are defined as all 

such companies generating $13.5 

million or less in annual receipts. 

Industry sources estimate that 

approximately 5,200 SMATV operators 

were providing service as of December 

1995. Other estimates indicate that 

SMATV operators serve approximately 

1.5 million residential subscribers as of 

July 2001. The best available estimates 

indicate that the largest SMATV 

operators serve between 15,000 and 

55,000 subscribers each. Most SMATV 

operators serve approximately 3,000–

4,000 customers. Because these 

operators are not rate regulated, they are 

not required to file financial data with 

the Commission. Furthermore, we are 

not aware of any privately published 

financial information regarding these 

operators. Based on the estimated 

number of operators and the estimated 

number of units served by the largest 

ten SMATVs, we believe that a 

substantial number of SMATV operators 

qualify as small entities. 

35. Open Video Systems (‘‘OVS’’). 

Because OVS operators provide 

subscription services, OVS falls within 

the SBA-recognized definition of cable 

and other program distribution services. 

This definition provides that a small 

entity is one with $13.5 million or less 

in annual receipts. The Commission has 

certified 25 OVS operators with some 

now providing service. Affiliates of 

Residential Communications Network, 

Inc. (‘‘RCN’’) received approval to 

operate OVS systems in New York City, 

Boston, Washington, DC and other 

areas. RCN has sufficient revenues to 

assure us that they do not qualify as 

small business entities. Little financial 

information is available for the other 

entities authorized to provide OVS that 

are not yet operational. Given that other 

entities have been authorized to provide 

OVS service but have not yet begun to 

generate revenues, we conclude that at 

least some of the OVS operators qualify 

as small entities. 

36. Electronics Equipment 

Manufacturers. Rules adopted in this 

proceeding could apply to 

manufacturers of DTV receiving 

equipment and other types of consumer 

electronics equipment. The SBA has 

developed definitions of small entities 

for manufacturers of audio and video 

equipment, as well as radio and 

television broadcasting and wireless 

communications equipment. These 

categories both include all such 

companies employing 750 or fewer 

employees. The Commission has not 

developed a definition of small entities 

applicable to manufacturers of 

electronic equipment used by 

consumers, as compared to industrial 

use by television licensees and related 

businesses. Therefore, we will utilize 

the SBA definitions applicable to 

manufacturers of audio and visual 

equipment and radio and television 

broadcasting and wireless 

communications equipment, since these 

are the two closest NAICS Codes 

applicable to the consumer electronics 

equipment manufacturing industry. 

However, these NAICS categories are 

broad and specific figures are not 

available as to how many of these 

establishments manufacture consumer 

equipment. According to the SBA’s 

regulations, an audio and visual 

equipment manufacturer must have 750 

or fewer employees in order to qualify 

as a small business concern. Census 

Bureau data indicates that there are 571 

U.S. establishments that manufacture 

audio and visual equipment, and that 

560 of these establishments have fewer 

than 500 employees and would be 

classified as small entities. The 

remaining 11 establishments have 500 

or more employees; however, we are 

unable to determine how many of those 

have fewer than 750 employees and 

therefore, also qualify as small entities 

under the SBA definition. Under the 

SBA’s regulations, a radio and television 

broadcasting and wireless 

communications equipment 

manufacturer must also have 750 or 

fewer employees in order to qualify as 

a small business concern. Census 

Bureau data indicates that there are 

1,041 U.S. establishments that 

manufacture radio and television 

broadcasting and wireless 

communications equipment, and that 

1,010 of these establishments have 

fewer than 500 employees and would be 

classified as small entities. The 

remaining 31 establishments have 500 

or more employees; however, we are 

unable to determine how many of those 

have fewer than 750 employees and 

therefore, also qualify as small entities 

under the SBA definition. We therefore 

conclude that there are no more than 

560 small manufacturers of audio and 

visual electronics equipment and no 

more than 1,010 small manufacturers of 

radio and television broadcasting and 

wireless communications equipment for 

consumer/household use. 

37. Computer Manufacturers. The 

Commission has not developed a 

definition of small entities applicable to 

computer manufacturers. Therefore, we 

will utilize the SBA definition of 

electronic computers manufacturing. 

According to SBA regulations, a 

computer manufacturer must have 1,000 

or fewer employees in order to qualify 

as a small entity. Census Bureau data 

indicates that there are 485 firms that 

manufacture electronic computers and 

of those, 476 have fewer than 1,000 

employees and qualify as small entities. 

The remaining 9 firms have 1,000 or 

more employees. We conclude that 

there are approximately 476 small 

computer manufacturers. 

Description of Projected Reporting, 

Recordkeeping and Other Compliance 

Requirements 

38. At this time, we do not expect that 

the proposal would impose any 

additional reporting or recordkeeping 

requirements. In the past, however, 

compliance with plug and play rules 

required consumer electronics 

manufacturers to establish a voluntary 

labeling regime for unidirectional digital 

cable television receivers and related 

digital cable products that meet certain 

technical specifications. While these 

requirements could have an impact on 

consumer electronics manufacturers and 

multichannel video programming 

distributors, it remains unclear weather 

there would be a differential impact on 

small entities. We seek comment on 

whether the burden of these 

requirements would fall on large and 

small entities differently. We also seek 

comment on any aspect of the proposal 

or its impact that we may have 

overlooked. 

Steps Taken To Minimize Significant 

Impact on Small Entities, and 

Significant Alternatives Considered 

39. The RFA requires an agency to 

describe any significant alternatives that 

it has considered in reaching its 

proposed approach, which may include 

the following four alternatives (among 

others): (1) The establishment of 

differing compliance or reporting 

requirements or timetables that take into 

account the resources available to small 

entities; (2) the clarification, 

consolidation, or simplification of 

compliance or reporting requirements 

under the rule for small entities; (3) the 

use of performance, rather than design, 

standards; and (4) an exemption from 

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40824 Federal Register / Vol. 72, No. 142 / Wednesday, July 25, 2007 / Proposed Rules 

coverage of the rule, or any part thereof, 

for small entities. 

40. As indicated above, the Further 

Notice seeks comment on whether the 

Commission should adopt or revise 

rules relating to the proposed creation of 

a two-way plug and play standard for 

digital cable television systems and 

other digital cable television consumer 

electronics equipment in order to 

facilitate the DTV transition. Consumer 

electronics manufacturers may be 

required to establish a labeling regime 

for bidirectional digital cable television 

receivers and related digital cable 

products that meet certain technical 

specifications. However, we welcome 

comment on modifications of the 

proposal if based on evidence of 

potential differential impact on smaller 

entities. In addition, the Regulatory 

Flexibility Act requires agencies to seek 

comment on possible small entityrelated alternatives, as noted above. We 

therefore seek comment on alternatives 

to the proposed rules that would assist 

small entities while ensuring 

bidirectional compatibility between 

cable operators and consumer 

electronics manufacturers. 

Federal Rules Which Duplicate, 

Overlap, or Conflict With the 

Commission’s Proposals 

41. None. 

V. Ordering Clauses 

42. It is ordered that, pursuant to 

sections 1, 4(i) and (j), 303, 403, 601, 

and 629 of the Communications Act of 

1934, as amended, 47 U.S.C. 151, 154(i) 

and (j), 303, 403, 521, 549, comment is 

hereby sought on the proposals in this 

Third Further Notice Of Proposed 

Rulemaking. 

Federal Communications Commission. 

Marlene H. Dortch, 

Secretary. 

[FR Doc. 07–3651 Filed 7–24–07; 8:45 am] 

BILLING CODE 6712–01–P 

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