[Federal Register Volume 83, Number 155 (Friday, August 10, 2018)]
[Rules and Regulations]
[Pages 39610-39621]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-17096]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 11

[PS Docket Nos. 15-94, 15-91; FCC 18-94]


Emergency Alert System; Wireless Emergency Alerts

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Federal Communications Commission (FCC 
or Commission) adopts changes to its rules governing the Emergency 
Alert System (EAS) to facilitate ``Live Code Tests'' of the EAS; permit 
use of the EAS Attention Signal and EAS Header Code

[[Page 39611]]

tones in Public Service Announcements; implement certain alert 
authentication and validation procedures; and require reporting of 
false alerts.

DATES: Effective September 10, 2018, except for the amendments to 47 
CFR 11.33 and 11.56, which are effective August 12, 2019, and the 
amendments to 47 CFR 11.45(b) and 11.61, which contain modifications to 
information collection requirements that were previously approved by 
the Office of Management and Budget (OMB). Once OMB has approved the 
modifications to these collections, the Commission will publish a 
document in the Federal Register announcing the effective date.

FOR FURTHER INFORMATION CONTACT: Gregory Cooke, Deputy Chief, Policy 
and Licensing Division, Public Safety and Homeland Security Bureau, at 
(202) 418-7452, or by email at <a href="/cdn-cgi/l/email-protection#abecd9ceccc4d9d285e8c4c4c0ceebcdc8c885ccc4dd"><span class="__cf_email__" data-cfemail="ffb88d9a98908d86d1bc9090949abf999c9cd1989089">[email protected]</span></a>. For additional 
information concerning the information collection requirements 
contained in this document, send an email to <a href="/cdn-cgi/l/email-protection#6c3c3e2d2c0a0f0f420b031a"><span class="__cf_email__" data-cfemail="e7b7b5a6a7818484c9808891">[email protected]</span></a> or contact 
Nicole Ongele, Office of Managing Director, Performance Evaluation and 
Records Management, 202-418-2991, or by email to <a href="/cdn-cgi/l/email-protection#59090b18193f3a3a773e362f"><span class="__cf_email__" data-cfemail="1b4b495a5b7d7878357c746d">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order (Order) in PS Docket Nos. 15-94 and 15-91, FCC 18-94, adopted 
on July 12, 2018, and released on July 13, 2018. The full text of this 
document is available for inspection and copying during normal business 
hours in the FCC Reference Center (Room CY-A257), 445 12th Street SW, 
Washington, DC 20554. The full text may also be downloaded at: 
www.fcc.gov.

Synopsis

    1. In the Order, the Commission adopts changes to its Part 11 EAS 
rules to improve the effectiveness and public utility of the EAS by 
facilitating more effective public safety tests and exercises using the 
EAS, implementing measures to help prevent distribution of false alerts 
over the EAS, and requiring reporting of false alerts.

I. Background

    2. The EAS is a national public warning system through which EAS 
Participants deliver alerts to the public to warn them of impending 
emergencies. The primary purpose of the EAS is to provide the President 
of the United States (President) with ``the capability to provide 
immediate communications and information to the general public at the 
National, State and Local Area levels during periods of national 
emergency.'' State and local authorities also use this common 
distribution architecture of the EAS to distribute voluntary weather-
related and other emergency alerts. Further, testing of the system at 
the state and local level increases the proficiency of local emergency 
personnel, provides insight into the system's functionality and 
effectiveness at the federal level, and enhances the public's ability 
to respond to EAS alerts when they occur. The integrity of the EAS is 
maintained through the Commission's EAS rules, which set forth the 
parameters and frequency with which EAS Participants must test the 
system, prohibit the unauthorized use of the EAS Attention Signal and 
codes, and require EAS Participants to keep their EAS equipment in good 
working order.

II. Discussion

A. Building Effective Alerting Exercise Programs

1. Live Code Testing
    3. Section 11.31(e) of the Commission's rules sets forth the event 
header codes that are used for alerts in specific emergency situations 
(e.g., TOR for tornado), as well as the specific test codes to be used 
for national periodic tests (NPT), required monthly tests (RMT), and 
required weekly tests (RWT). Section 11.45 of the EAS rules states that 
``[n]o person may transmit or cause to transmit the EAS codes or 
Attention Signal, or a recording or simulation thereof, in any 
circumstance other than in an actual National, State or Local Area 
emergency or authorized test of the EAS.'' EAS Participants regularly 
have sought waivers of these rules to use the event codes used for 
actual alerts (i.e., ``live'' event header codes) and the EAS Attention 
Signal to conduct local EAS public awareness and proficiency training 
exercises. In the Notice of Proposed Rulemaking (NPRM) in PS Docket 
Nos. 15-94 and 15-91, 81 FR 15792 (March 24, 2016), the Commission 
proposed amending the rules to allow EAS Participants to conduct tests 
that use live EAS header codes and the EAS Attention Signal under 
specific circumstances without submitting a waiver request. The 
Commission also proposed amending section 11.45 to exempt state-
designed EAS live code exercises from the prohibition against false or 
misleading use of the EAS Attention Signal.
    4. The Order amends section 11.45 to exempt EAS live code exercises 
from the prohibition against false or misleading use of the EAS 
Attention Signal. The Order also amends section 11.61 to include ``Live 
Code Tests'' as a separate category of alerting exercise that EAS 
Participants may undertake voluntarily, provided such live code tests 
are conducted in accordance with specific parameters. Specifically, EAS 
Participants may participate in live code tests where the entity 
conducting the test: (1) Notifies the public before the test that live 
event codes will be used, but that no emergency is, in fact, occurring; 
(2) to the extent technically feasible, states in the test message that 
the event is only a test; (3) coordinates the test among EAS 
Participants and with state and local emergency authorities, the 
relevant State Emergency Communication Committee (SECC) (or SECCs, if 
the test could affect multiple states), and first responder 
organizations, such as Public Safety Answering Points (PSAPs), police, 
and fire agencies; and (4) consistent with the Commission's rules, 
provides in widely accessible formats the required notification to the 
public that the test is not, in fact, a warning about an actual 
emergency. The Order requires that live code tests state in the alert 
message that the event is only a test as a further safeguard against 
public confusion, especially among those who are blind, deaf and 
hearing impaired.
    5. The Commission agrees with commenters that EAS Participants such 
as cable operators and broadcasters must be given sufficient notice of 
live code tests to benefit from them and to allow for planning and 
coordination to assess and mitigate the impact on downstream equipment 
and subscribers. Accordingly, the Commission expects test alert 
originators to coordinate with these stakeholders in good faith, and 
encourages them to provide the notice and coordination required by the 
rules adopted in the Order no later than two weeks prior to the test. 
As part of that coordination and outreach, the Commission encourages 
test alert originators to file notice of their intent to conduct a test 
in the EAS docket (PS Docket No. 15-94).
    6. Commenters generally support voluntary live code testing, and 
agree that such testing can yield important public safety benefits. The 
record also indicates that live code testing exercises can be tailored 
to improve public safety at the local or community level.
    7. To avoid customer exhaustion and any dissipation of the value of 
alerting that could come from over-testing the system to the public, 
the Order limits the number of live code tests that an alert originator 
may conduct under the new rules it adopts to two (2) within any 
calendar year. The Commission will continue to monitor the 
implementation of live code tests to determine whether additional 
measures are warranted.

[[Page 39612]]

2. EAS Public Service Announcements (PSAs)
    8. Section 11.46 of the Commission's rules provides that PSAs, 
while permissible, ``may not be a part of alerts or tests, and may not 
simulate or attempt to copy alert tones or codes.'' The Commission has 
granted requests from non-governmental organizations (NGOs) and FEMA 
for waivers of these rules to raise public awareness about the EAS 
through PSAs that use the EAS Attention Signal, and, in one instance, a 
simulation of header code sounds. In 2016, the Commission amended its 
rules to allow authorized entities to use the Attention Signal in PSAs 
about WEA. In the NPRM, the Commission proposed allowing EAS 
Participants to use EAS header codes and the Attention Signal in 
coordination with federal, state, and local government entities without 
a waiver, provided that the PSAs are presented in a non-misleading 
manner that does not cause technical issues for downstream equipment.
    9. The Order amends section 11.46 of the Commission's rules to 
allow, under certain circumstances, EAS Participants to use the 
Attention Signal in EAS PSAs (including commercially-sponsored 
announcements, infomercials, or programs) provided by federal, state, 
and local government entities, and NGOs, to raise public awareness 
about emergency alerting. This usage is only permitted if the PSA is 
presented in a non-misleading and technically harmless manner, 
including with the explicit statement that the Attention Signal is 
being used in the context of a PSA for the purpose of educating the 
viewing or listening public about emergency alerting. The Order also 
makes conforming changes to section 11.45.
    10. The Commission declines to allow live EAS header codes to be 
used in EAS PSAs because, as suggested by some commenters, EAS PSAs 
containing live EAS header codes could have unintended consequences, 
including triggering false alerts. However, the Commission will permit 
the simulation of header code audio tones developed by FEMA in PSAs to 
deliver the familiar sounds of live EAS header codes that the public 
associates with the EAS in a manner that would not trigger an actual 
alert. Entities that want to simulate the EAS header codes in their 
PSAs must do so using FEMA's simulation. The Commission observes that 
FEMA's simulation of the header code audio tones is subject to the 
restrictions of section 11.45 and therefore should not be used for 
purposes other than the EAS PSAs described in the Order. In adopting 
these PSA rules, the Commission notes agreement with commenters that 
EAS PSAs can be effective tools to raise public awareness of the EAS, 
particularly those that may be new to this country or have limited 
English proficiency, who do not recognize EAS tones and could benefit 
from learning about the EAS's benefits.
3. Effective Dates
    11. The Commission proposed that these rules would become effective 
30 days from the date of their publication in the Federal Register. No 
commenters opposed this time frame. Accordingly, the rule amendments 
for sections 11.45(a) and 11.46, both of which relate to PSAs, will 
become effective 30 days after publication of the Order in the Federal 
Register.
    12. The rule amendments for section 11.61, which cover ``Live Code 
Tests,'' will become effective on the date specified in a Commission 
notice published in the Federal Register announcing their approval 
under the Paperwork Reduction Act by the Office of Management and 
Budget, which date will be at least 30 days after the date that this 
Order and rules adopted herein are published in the Federal Register.

B. Ensuring EAS Readiness and Reliability

1. False Alert Reporting
    13. The Commission agrees with commenters that false alert 
reporting would benefit ongoing EAS reliability, and that having timely 
information about false alerts could help identify and mitigate 
problems with the EAS. Accordingly, the Commission revises its rules to 
require that no later than twenty-four (24) hours of an EAS 
Participant's discovery that it has transmitted or otherwise sent a 
false alert to the public, the EAS Participant send an email to the FCC 
Ops Center (at <a href="/cdn-cgi/l/email-protection#94d2d7d7dbc4c7d4f2f7f7baf3fbe2"><span class="__cf_email__" data-cfemail="165055555946455670757538717960">[email protected]</span></a>), informing the Commission of the event 
and of any details that the EAS Participant may have concerning the 
event. If an EAS Participant has no actual knowledge that it has issued 
a false alert, then it would not be required to take any action.
2. Alert Authentication
    14. The Order revises section 11.56(c) to require that EAS 
Participants configure their systems to reject all CAP-formatted EAS 
messages that contain an invalid digital signature, thus helping to 
prevent the transmission of a false alert. All commenters addressing 
this issue supported the Commission's proposal and generally 
acknowledged the benefits of digitally signing CAP alerts. Although the 
Order requires EAS Participants to configure their systems in such a 
way as to reject alerts with invalid digital signatures, the Commission 
does not mandate the use of digital signatures at this time. With 
respect to broadcast-based, legacy alerts, the Commission believes it 
would be premature to adopt rules pertaining to specific authentication 
mechanisms for such alerts at this time. Based on the lack of consensus 
on an approach forward in the record, the Commission believes it would 
be prudent to await the recommendation from the Communications 
Security, Reliability and Interoperability Council VI on this issue 
rather than moving ahead with one of the originally proposed 
mechanisms.
3. Alert Validation
    15. Section 11.33(a)(10) specifies certain error detection and 
validation requirements for decoders. Currently, the Commission's rules 
do not require validation of alerts based upon the time period or year 
parameter in the ``time stamp'' portion of the header code, i.e., the 
portion that determines the correct date and time for the alert. 
Further, the Commission's rules do not require that valid alerts have 
an expiration time in the future. Thus, an alert's time stamp does not 
consistently serve as a filter through which officials can ensure an 
alert is confined to its relevant time frame.
    16. Alert time validation. The alert message validation 
requirements in the EAS rules require that EAS decoders validate alert 
messages by comparing the three EAS header tone bursts that commence 
all EAS alerts to ensure that at least two out of three match--the 
content of those header tones is not reviewed for incoming alert 
message validity. The Order amends section 11.33(a)(10) so that alert 
message validation confirms that the alert's expiration time is set to 
take place in the future, and that its origination time takes place no 
more than 15 minutes in the future.
    17. The Commission observes that commenters generally support 
proposals that reduce the potential for repeat broadcasts of outdated 
alerts by validation based on specific origination and expiration 
times, and support a 15-minute timeframe, and believe that such 
requirement will require minimal software updates. Based on the record, 
most EAS equipment already validates the time of EAS messages, blocking 
alerts that have expired. Remaining equipment can achieve this 
capability

[[Page 39613]]

by installing the necessary software as part of a regularly scheduled 
in-version equipment software update.
    18. Year Parameter. The Commission declines to require a year 
parameter in the time stamp section of the EAS Protocol. The record 
indicates that adding a year parameter requirement is not technically 
feasible without significant modification to the current EAS Protocol, 
as well as all associated equipment, which would be extremely expensive 
and burdensome, and would cause significant disruption to the NOAA 
Weather Radio infrastructure.
4. Compliance Timeline
    19. The Order adopts a one-year compliance timeframe from 
publication in the Federal Register. The record indicates that most EAS 
Participants already have EAS equipment capable of complying with these 
requirements. The Commission also observes that a one-year time frame 
would allow equipment manufacturers to develop and make available 
software updates to implement these requirements in deployed equipment 
that do not already meet these requirements.
    20. The rule amendments for section 11.45(b), which address the 
filing of false alert reports will become effective on the date 
specified in a Commission notice published in the Federal Register 
announcing their approval under the Paperwork Reduction Act by the 
Office of Management and Budget, which date will be at least 30 days 
after the date that this Order and rules adopted herein are published 
in the Federal Register.

C. Benefit-Cost Analysis

    21. The rule changes adopted in the Order reduce burdens by 
eliminating waiver filing time and costs. To the extent the Commission 
adopts new requirements, it does so in a minimally burdensome way that 
either imposes no additional costs or imposes only minimal costs. Other 
than the alert validation and authentication requirements, for which a 
one-year compliance timeframe is provided, only the new false alert 
reporting rule will involve new costs to EAS Participants. As discussed 
below, the Commission concludes that the benefits of these rule changes 
exceed their costs.
1. Benefits
    22. The rule changes adopted in the Order will reduce regulatory 
burden on EAS stakeholders. Waivers will no longer be needed for live 
code testing. The rule changes also reduce the regulatory burden on EAS 
Participants by allowing them to produce PSAs using EAS header codes 
and a simulated Attention Signal without requesting a waiver. This 
change will make the process of producing a PSA less costly, and 
promote greater proficiency in the use of EAS, both by EAS alert 
initiators and EAS Participants.
    23. These rule changes will also help prevent incidents of misuse 
and abuse of the EAS. The authentication and validation rule changes 
will require the use of EAS equipment's existing capabilities to help 
prevent misuse and abuse of the EAS, thus protecting its integrity and 
maintaining its credibility with the public and alerting officials. To 
provide an estimate of the value of the benefits of the rules adopted 
in the Order, the Commission turns to the overall value of the EAS. 
Scholars agree that public safety in the United States has improved 
over the years because its early warning systems for recurring hazards, 
such as lightning, floods, storms and heat waves, are continually 
improving. By reducing the frequency of false alerts, the rule changes 
adopted in the Order strengthen public confidence in the EAS, thus 
avoiding erosion in its overall value.
2. Costs
    24. The rule changes to section 11.61 for live code testing and to 
sections 11.45 and 11.46 for public service announcements do not impose 
any new costs. Rather, they codify requirements that were previously 
imposed on waivers granted by the Commission. Removing the requirement 
to file a waiver removes the need for legal and other staff time 
associated with filing a waiver. The new rules therefore eliminate any 
legal or administrative costs that were associated with filing waiver 
requests.
    25. The Commission estimates that compliance with the alert 
authentication and validation rule changes will involve only minimal 
costs to EAS Participants. Current EAS rules require that EAS 
Participants must have EAS equipment that is capable of being updated 
via software. According to the record, most EAS equipment deployed in 
the field is already configured to support the validation and 
authentication rule changes adopted in the Order. The one-year 
compliance period adopted for these rule changes will provide 
sufficient time for any necessary update to be deployed within a 
previously scheduled in-version equipment software update. In 
combination, these factors result in no incremental cost to EAS 
Participants for installing the update.
    26. With respect to the new false alert reporting requirement, the 
Commission concludes that the cost of reporting false alerts will be 
$11,600 per year, based upon an average of 290 EAS participants each 
spending 15 minutes to file one report.
    27. Therefore, based on the foregoing analysis, the Commission 
finds it reasonable to conclude that the benefits of the rules adopted 
in the Order will exceed the costs of their implementation. The rule 
changes will support greater testing and awareness of the EAS and 
promote the security of the EAS. They will also likely result in fewer 
false alerts, and thus fewer unnecessary 911 calls. The benefits of 
these rule changes will continue to accrue to the public each year, 
while the imposed costs are low.

III. Procedural Matters

A. Accessible Formats

    28. To request materials in accessible formats for people with 
disabilities (Braille, large print, electronic files, audio format), 
send an email to <a href="/cdn-cgi/l/email-protection#791f1a1a4c494d391f1a1a571e160f"><span class="__cf_email__" data-cfemail="3e585d5d0b0e0a7e585d5d10595148">[email protected]</span></a> or call the Consumer & Governmental 
Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).

B. Regulatory Flexibility Analysis

    29. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was 
incorporated in the Notice of Proposed Rulemaking (NPRM) in PS Docket 
Nos. 15-94 and 15-91, 81 FR 15792 (March 24, 2016). The Commission 
sought written public comment on the proposals in the NPRM, including 
comment on the IRFA. No comments were filed addressing the IRFA. This 
present Final Regulatory Flexibility Analysis (FRFA) conforms to the 
RFA.
1. Need for, and Objectives of, the Report and Order
    30. In today's Report and Order (Order), the Commission adopts 
rules that fall into two categories: (1) Building stronger alerting 
exercise programs and greater awareness of the EAS; and (2) taking 
steps to ensure the readiness and reliability of the EAS to protect it 
against accidental misuse and malicious intrusion.
    31. With respect to building effective public safety exercises and 
supporting greater testing and awareness of the EAS, the Commission 
permits the use of ``live code'' EAS public safety exercises to empower 
communities to meet their emergency preparedness needs and to provide 
opportunities for system verification and proficiency training. The 
Commission also allows EAS Participants to use the EAS Attention Signal 
and simulation of the header

[[Page 39614]]

codes in Public Service Announcements (PSAs) provided by federal, 
state, and local government entities, as well as non-governmental 
organizations (NGOs) to raise public awareness about emergency 
alerting.
    32. With respect to taking steps to ensure the readiness and 
reliability of the EAS, the Commission requires EAS Participants, upon 
discovery (i.e., actual knowledge) that they have transmitted or 
otherwise sent a false alert to the public, to provide minimal reports 
to the Commission. The Commission also requires EAS Participants to 
reject any CAP-formatted EAS messages that contain an invalid digital 
signature, and require EAS Participants to reject all EAS alerts that 
they receive with header code date/time data inconsistent with the 
current date and time.
2. Summary of Significant Issues Raised by Public Comments in Response 
to the IRFA
    33. There were no comments filed that specifically addressed the 
proposed rules and policies presented in the IRFA.
3. Response To Comments by the Chief Counsel for Advocacy of the Small 
Business Administration
    34. 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.
    35. The Chief Counsel did not file any comments in response to the 
proposed rules in this proceeding.
4. Description and Estimate of the Number of Small Entities to Which 
Rules Will Apply
    36. 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 rules adopted, herein. 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.
    37. Small Businesses, Small Organizations, and Small Governmental 
Jurisdictions. The Commission's actions, over time, may affect small 
entities that are not easily categorized at present. The Commission 
therefore describes here, at the outset, three broad groups of small 
entities that could be directly affected herein. First, while there are 
industry specific size standards for small businesses that are used in 
the regulatory flexibility analysis, according to data from the SBA's 
Office of Advocacy, in general a small business is an independent 
business having fewer than 500 employees. These types of small 
businesses represent 99.9% of all businesses in the United States which 
translates to 28.8 million businesses.
    38. Next, the type of small entity described as a ``small 
organization'' is generally ``any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.'' 
Nationwide, as of Aug. 2016, there were approximately 356,494 small 
organizations based on registration and tax data filed by nonprofits 
with the Internal Revenue Service (IRS).
    39. Finally, the small entity described as a ``small governmental 
jurisdiction'' is defined generally as ``governments of cities, 
counties, towns, townships, villages, school districts, or special 
districts, with a population of less than fifty thousand.'' U.S. Census 
Bureau data from the 2012 Census of Governments indicates that there 
were 90,056 local governmental jurisdictions consisting of general 
purpose governments and special purpose governments in the United 
States. Of this number there were 37,132 General purpose governments 
(county, municipal and town or township) with populations of less than 
50,000 and 12,184 Special purpose governments (independent school 
districts and special districts) with populations of less than 50,000. 
The 2012 U.S. Census Bureau data for most types of governments in the 
local government category shows that the majority of these governments 
have populations of less than 50,000. Based on this data the Commission 
estimates that at least 49,316 local government jurisdictions fall in 
the category of ``small governmental jurisdictions.''
    40. Radio Stations. This Economic Census category ``comprises 
establishments primarily engaged in broadcasting aural programs by 
radio to the public. Programming may originate in their own studio, 
from an affiliated network, or from external sources.'' The SBA has 
established a small business size standard for this category as firms 
having $38.5 million or less in annual receipts. Economic Census data 
for 2012 shows that 2,849 radio station firms operated during that 
year. Of that number, 2,806 operated with annual receipts of less than 
$25 million per year, 17 with annual receipts between $25 million and 
$49,999,999 million and 26 with annual receipts of $50 million or more. 
Therefore, based on the SBA's size standard the majority of such 
entities are small entities.
    41. According to Commission staff review of the BIA/Kelsey, LLC's 
Media Access Pro Radio Database as of January 2018, about 11,261 (or 
about 99.9 percent) of 11,383 commercial radio stations had revenues of 
$38.5 million or less and thus qualify as small entities under the SBA 
definition. The Commission has estimated the number of licensed 
commercial AM radio stations to be 4,639 stations and the number of 
commercial FM radio stations to be 6,744, for a total number of 11,383. 
The Commission notes that the Commission has also estimated the number 
of licensed NCE radio stations to be 4,120. Nevertheless, the 
Commission does not compile and otherwise 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.
    42. The Commission also notes, that in assessing whether a business 
entity qualifies as small under the above definition, business control 
affiliations must be included. The Commission's estimate therefore 
likely overstates the number of small entities that might be affected 
by its action, because the revenue figure on which it is based does not 
include or aggregate revenues from affiliated companies. In addition, 
to be determined a ``small business,'' an entity may not be dominant in 
its field of operation. The Commission further notes, that it is 
difficult at times to assess these criteria in the context of media 
entities, and the estimate of small businesses to which these rules may 
apply does not exclude any radio station from the definition of a small 
business on this basis, thus the Commission's estimate of small 
businesses may therefore be over-inclusive. Also, as noted above, an 
additional element of the definition of ``small business'' is that the 
entity must be independently owned and operated. The Commission notes 
that it is difficult at times to assess these criteria in the context 
of media entities and the estimates of small businesses to which they 
apply may be over-inclusive to this extent.
    43. Low-Power FM Stations. Low Power FM Stations are classified in 
the category of Radio Stations and are assigned the same NAICs Code as 
licensees of radio stations. This U.S.

[[Page 39615]]

industry, Radio Stations, comprises establishments primarily engaged in 
broadcasting aural programs by radio to the public. Programming may 
originate in their own studio, from an affiliated network, or from 
external sources. The SBA has established a small business size 
standard which consists of all radio stations whose annual receipts are 
$38.5 million dollars or less. U.S. Census data for 2012 indicates that 
2,849 radio station firms operated during that year. Of that number, 
2,806 operated with annual receipts of less than $25 million per year, 
17 with annual receipts between $25 million and $49,999,999 million and 
26 with annual receipts of $50 million or more. Based on U.S. Census 
data, the Commission concludes that the majority of Low Power FM 
Stations are small.
    44. 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 $38.5 million or less in annual receipts. The 2012 
Economic Census reports that 751 firms in this category operated in 
that year. Of that number, 656 had annual receipts of $25,000,000 or 
less, 25 had annual receipts between $25,000,000 and $49,999,999 and 70 
had annual receipts of $50,000,000 or more. Based on this data the 
Commission therefore estimates that the majority of commercial 
television broadcasters are small entities under the applicable SBA 
size standard.
    45. The Commission has estimated the number of licensed commercial 
television stations to be 1,378. Of this total, 1,258 stations (or 
about 91 percent) had revenues of $38.5 million or less, according to 
Commission staff review of the BIA Kelsey Inc. Media Access Pro 
Television Database (BIA) on November 16, 2017, and therefore these 
licensees qualify as small entities under the SBA definition. In 
addition, the Commission has estimated the number of licensed 
noncommercial educational (NCE) television stations to be 395. 
Notwithstanding, the Commission does not compile and otherwise 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. There are also 2,367 low power television stations, including 
Class A stations (LPTV) and 3,750 TV translator stations. Given the 
nature of these services, the Commission will presume that all of these 
entities qualify as small entities under the above SBA small business 
size standard.
    46. The Commission notes, however, that in assessing whether a 
business concern qualifies as ``small'' under the above definition, 
business (control) affiliations must be included. The Commission's 
estimate, therefore likely overstates the number of small entities that 
might be affected by the Commission's 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. The Commission is 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. Also, 
as noted above, an additional element of the definition of ``small 
business'' is that the entity must be independently owned and operated. 
The Commission notes that it is difficult at times to assess these 
criteria in the context of media entities and its estimates of small 
businesses to which they apply may be over-inclusive to this extent.
    47. Wired Telecommunications Carriers. The U.S. Census Bureau 
defines this industry as ``establishments primarily engaged in 
operating and/or providing access to transmission facilities and 
infrastructure that they own and/or lease for the transmission of 
voice, data, text, sound, and video using wired communications 
networks. Transmission facilities may be based on a single technology 
or a combination of technologies. Establishments in this industry use 
the wired telecommunications network facilities that they operate to 
provide a variety of services, such as wired telephony services, 
including VoIP services, wired (cable) audio and video programming 
distribution, and wired broadband internet services. By exception, 
establishments providing satellite television distribution services 
using facilities and infrastructure that they operate are included in 
this industry.'' The SBA has developed a small business size standard 
for Wired Telecommunications Carriers, which consists of all such 
companies having 1,500 or fewer employees. U.S. Census Bureau data for 
2012 shows that there were 3,117 firms that operated that year. Of this 
total, 3,083 operated with fewer than 1,000 employees. Thus, under this 
size standard, the majority of firms in this industry can be considered 
small.
    48. Cable and Other Subscription Programming. This industry 
comprises establishments primarily engaged in operating studios and 
facilities for the broadcasting of programs on a subscription or fee 
basis. The broadcast programming is typically narrowcast in nature 
(e.g., limited format, such as news, sports, education, or youth-
oriented). These establishments produce programming in their own 
facilities or acquire programming from external sources. The 
programming material is usually delivered to a third party, such as 
cable systems or direct-to-home satellite systems, for transmission to 
viewers. The SBA size standard for this industry establishes as small, 
any company in this category which has annual receipts of $38.5 million 
or less. According to 2012 U.S. Census Bureau data, 367 firms operated 
for that entire year. Of that number, 319 operated with annual receipts 
of less than $25 million a year and 48 firms operated with annual 
receipts of $25 million or more. Based on this data, the Commission 
estimates that the majority of firms operating in this industry are 
small.
    49. Cable Companies and Systems (Rate Regulation). The Commission 
has developed its own small business size standards for the purpose of 
cable rate regulation. Under the Commission's rules, a ``small cable 
company'' is one serving 400,000 or fewer subscribers nationwide. 
Industry data indicate that there are currently 4,600 active cable 
systems in the United States. Of this total, all but nine cable 
operators nationwide are small under the 400,000-subscriber size 
standard. In addition, under the Commission's rate regulation rules, a 
``small system'' is a cable system serving 15,000 or fewer subscribers. 
Current Commission records show 4,600 cable systems nationwide. Of this 
total, 3,900 cable systems have fewer than 15,000 subscribers, and 700 
systems have 15,000 or more subscribers, based on the same records. 
Thus, under this standard as well, the Commission estimates that most 
cable systems are small entities.
    50. Cable System Operators (Telecom Act Standard). The 
Communications Act of 1934, as amended, also contains

[[Page 39616]]

a size standard for small cable system operators, which is ``a cable 
operator that, directly or through an affiliate, serves in the 
aggregate fewer than one percent of all subscribers in the United 
States and is not affiliated with any entity or entities whose gross 
annual revenues in the aggregate exceed $250,000,000.'' There are 
approximately 52,403,705 cable video subscribers in the United States 
today. Accordingly, an operator serving fewer than 524,037 subscribers 
shall be deemed a small operator if its annual revenues, when combined 
with the total annual revenues of all its affiliates, do not exceed 
$250 million in the aggregate. Based on available data, the Commission 
finds that all but nine incumbent cable operators are small entities 
under this size standard. The Commission notes that it neither requests 
nor collects information on whether cable system operators are 
affiliated with entities whose gross annual revenues exceed $250 
million. Although it seems certain that some of these cable system 
operators are affiliated with entities whose gross annual revenues 
exceed $250,000,000, the Commission is 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.
    51. Satellite Telecommunications. This category comprises firms 
``primarily engaged in providing telecommunications services to other 
establishments in the telecommunications and broadcasting industries by 
forwarding and receiving communications signals via a system of 
satellites or reselling satellite telecommunications.'' Satellite 
telecommunications service providers include satellite and earth 
station operators. The category has a small business size standard of 
$32.5 million or less in average annual receipts under SBA rules. For 
this category, U.S. Census Bureau data for 2012 shows that there were a 
total of 333 firms that operated for the entire year. Of this total, 
299 firms had annual receipts of less than $25 million. Consequently, 
the Commission estimates that the majority of satellite 
telecommunications providers are small entities.
    52. All Other Telecommunications. The ``All Other 
Telecommunications'' category is comprised of establishments primarily 
engaged in providing specialized telecommunications services, such as 
satellite tracking, communications telemetry, and radar station 
operation. This industry also includes establishments primarily engaged 
in providing satellite terminal stations and associated facilities 
connected with one or more terrestrial systems and capable of 
transmitting telecommunications to, and receiving telecommunications 
from, satellite systems. Establishments providing internet services or 
voice over internet protocol (VoIP) services via client-supplied 
telecommunications connections are also included in this industry. The 
SBA has developed a small business size standard for All Other 
Telecommunications, which consists of all such firms with annual 
receipts of $32.5 million or less. For this category, U.S. Census 
Bureau data for 2012 shows that there were 1,442 firms that operated 
for the entire year. Of those firms, a total of 1,400 had annual 
receipts less than $25 million and 42 firms had annual receipts of $25 
million to $49,999,999. Thus, the Commission estimates that the 
majority of ``All Other Telecommunications'' firms potentially affected 
by the Commission's action can be considered small.
    53. The Educational Broadcasting Services. Cable-based Educational 
Broadcasting Services have been included in the broad economic census 
category and Small Business Administration (SBA) size standard for 
Wired Telecommunications Carriers since 2007. Wired Telecommunications 
Carriers, which was developed for small wireline businesses is defined 
as follows: ``This industry comprises establishments primarily engaged 
in operating and/or providing access to transmission facilities and 
infrastructure that they own and/or lease for the transmission of 
voice, data, text, sound, and video using wired telecommunications 
networks. Transmission facilities may be based on a single technology 
or a combination of technologies. Establishments in this industry use 
the wired telecommunications network facilities that they operate to 
provide a variety of services, such as wired telephony services, 
including VoIP services; wired (cable) audio and video programming 
distribution; and wired broadband internet services.'' The SBA has 
developed a small business size standard for this category, which is 
all such businesses having 1,500 or fewer employees. U.S. Census data 
for 2012 shows that there were 3,117 firms that operated that year. Of 
this total, 3,083 operated with fewer than 1,000 employees. Thus, under 
this size standard, the majority of firms in this industry can be 
considered small. In addition to Census Bureau data, the Commission's 
internal records indicate that, as of October 2014, there were 2,206 
active EBS licenses. The Commission estimates that of these 2,206 
licenses, the majority are held by non-profit educational institutions 
and school districts, which are defined by statute as small businesses.
    54. Direct Broadcast Satellite (DBS) Service. DBS Service is a 
nationally distributed subscription service that delivers video and 
audio programming via satellite to a small parabolic ``dish'' antenna 
at the subscriber's location. DBS is included in the SBA's economic 
census category ``Wired Telecommunications Carriers.'' The Wired 
Telecommunications Carriers industry comprises establishments primarily 
engaged in operating and/or providing access to transmission facilities 
and infrastructure that they own and/or lease for the transmission of 
voice, data, text, sound, and video using wired telecommunications 
networks. Transmission facilities may be based on a single technology 
or combination of technologies. Establishments in this industry use the 
wired telecommunications network facilities that they operate to 
provide a variety of services, such as wired telephone services, 
including VoIP services, wired (cable) audio, and video programming 
distribution, and wired broadband internet services. By exception, 
establishments providing satellite television distribution services 
using facilities and infrastructure that they operate are included in 
this industry. The SBA determines that a wireline business is small if 
it has fewer than 1,500 employees. U.S. Census Bureau data for 2012 
indicates that 3,117 wireline companies were operational during that 
year. Of that number, 3,083 operated with fewer than 1,000 employees. 
Based on that data, the Commission concludes that the majority of 
wireline firms are small under the applicable standard. However, 
currently, only two entities provide DBS service, which requires a 
great deal of capital for operation: DIRECTV (owned by AT&T) and DISH 
Network. DIRECTV and DISH Network each report annual revenues that are 
in excess of the threshold for a small business. Accordingly, the 
Commission must conclude that internally developed FCC data are 
persuasive, that, in general, DBS service is provided only by large 
firms.
    55. Wireless Telecommunications Carriers (Except Satellite). This 
industry comprises establishments engaged in operating and maintaining 
switching and transmission facilities to provide communications via the 
airwaves. Establishments in this industry have

[[Page 39617]]

spectrum licenses and provide services using that spectrum, such as 
cellular services, paging services, wireless internet access, and 
wireless video services. The appropriate size standard under SBA rules 
is that such a business is small if it has 1,500 or fewer employees. 
For this industry, U.S. Census data for 2012 shows that there were 967 
firms that operated for the entire year. Of this total, 955 firms had 
fewer than 1,000 employees. Thus, under this category and the 
associated size standard, the Commission estimates that the majority of 
wireless telecommunications carriers (except satellite) are small 
entities.
    56. The Commission's own data--available in its Universal Licensing 
System--indicate that, as of October 25, 2016, there are 280 Cellular 
licensees that will be affected by the Commission's actions today. The 
Commission does not know how many of these licensees are small, as the 
Commission does not collect that information for these types of 
entities. Similarly, according to internally developed Commission data, 
413 carriers reported that they were engaged in the provision of 
wireless telephony, including cellular service, Personal Communications 
Service (PCS), and Specialized Mobile Radio (SMR) services. Of this 
total, an estimated 261 have 1,500 or fewer employees and 152 have more 
than 1,500 employees. Thus, using available data, the Commission 
estimates that the majority of wireless firms can be considered small.
    57. Broadband Personal Communications Service. The broadband 
personal communications service (PCS) spectrum is divided into six 
frequency blocks designated A through F, and the Commission has held 
auctions for each block. The Commission initially defined a ``small 
business'' for C- and F-Block licenses as an entity that has average 
gross revenues of $40 million or less in the three previous calendar 
years. For F-Block licenses, an additional small business size standard 
for ``very small business'' was added and is defined as an entity that, 
together with its affiliates, has average gross revenues of not more 
than $15 million for the preceding three calendar years. These 
standards defining ``small entity'', in the context of broadband PCS 
auctions, have been approved by the SBA. No small businesses within the 
SBA-approved small business size standards bid successfully for 
licenses in Blocks A and B. There were 90 winning bidders that claimed 
small business status in the first two C-Block auctions. A total of 93 
bidders that claimed small business status won approximately 40 percent 
of the 1,479 licenses in the first auction for the D-, E-, and F-
Blocks. On April 15, 1999, the Commission completed the reauction of 
347 C-, D-, E-, and F-Block licenses in Auction No. 22. Of the 57 
winning bidders in that auction, 48 claimed small business status and 
won 277 licenses.
    58. On January 26, 2001, the Commission completed the auction of 
422 C- and F-Block Broadband PCS licenses in Auction No. 35. Of the 35 
winning bidders in that auction, 29 claimed small business status. 
Subsequent events concerning Auction No. 35, including judicial and 
agency determinations, resulted in a total of 163 C- and F-Block 
licenses being available for grant. On February 15, 2005, the 
Commission completed an auction of 242 C-, D-, E-, and F-Block licenses 
in Auction No. 58. Of the 24 winning bidders in that auction, 16 
claimed small business status and won 156 licenses. On May 21, 2007, 
the Commission completed an auction of 33 licenses in the A-, C-, and 
F-Blocks in Auction No. 71. Of the 12 winning bidders in that auction, 
five claimed small business status and won 18 licenses. On August 20, 
2008, the Commission completed the auction of 20 C-, D-, E-, and F-
Block Broadband PCS licenses in Auction No. 78. Of the eight winning 
bidders for Broadband PCS licenses in that auction, six claimed small 
business status and won 14 licenses.
    59. Narrowband Personal Communications Services. Two auctions of 
narrowband personal communications services (PCS) licenses have been 
conducted. To ensure meaningful participation of small business 
entities in future auctions, the Commission has adopted a two-tiered 
small business size standard in the Narrowband PCS Second Report and 
Order. Through these auctions, the Commission has awarded a total of 41 
licenses, 11 of which were obtained by small businesses. A ``small 
business'' is an entity that, together with affiliates and controlling 
interests, has average gross revenues for the three preceding years of 
not more than $40 million. A ``very small business'' is an entity that, 
together with affiliates and controlling interests, has average gross 
revenues for the three preceding years of not more than $15 million. 
The SBA has approved these small business size standards.
    60. 700 MHz Guard Band Licensees. In 2000, in the 700 MHz Guard 
Band Order, the Commission adopted size standards for ``small 
businesses'' and ``very small businesses'' for purposes of determining 
their eligibility for special provisions such as bidding credits and 
installment payments. A small business in this service is an entity 
that, together with its affiliates and controlling principals, has 
average gross revenues not exceeding $40 million for the preceding 
three years. Additionally, a very small business is an entity that, 
together with its affiliates and controlling principals, has average 
gross revenues that are not more than $15 million for the preceding 
three years. SBA approval of these definitions is not required. An 
auction of 52 Major Economic Area (``MEA'') licenses commenced on 
September 6, 2000, and closed on September 21, 2000. Of the 104 
licenses auctioned, 96 licenses were sold to nine bidders. Five of 
these bidders were small businesses that won a total of 26 licenses. A 
second auction of 700 MHz Guard Band licenses commenced on February 13, 
2001, and closed on February 21, 2001. All eight of the licenses 
auctioned were sold to three bidders. One of these bidders was a small 
business that won a total of two licenses.
    61. Lower 700 MHz Band Licenses. The Commission previously adopted 
criteria for defining three groups of small businesses for purposes of 
determining their eligibility for special provisions such as bidding 
credits. The Commission defined a ``small business'' as an entity that, 
together with its affiliates and controlling principals, has average 
gross revenues not exceeding $40 million for the preceding three years. 
A ``very small business'' is defined as an entity that, together with 
its affiliates and controlling principals, has average gross revenues 
that are not more than $15 million for the preceding three years. 
Additionally, the lower 700 MHz Service had a third category of small 
business status for Metropolitan/Rural Service Area (MSA/RSA) 
licenses--``entrepreneur''--which is defined as an entity that, 
together with its affiliates and controlling principals, has average 
gross revenues that are not more than $3 million for the preceding 
three years. The SBA approved these small size standards. An auction of 
740 licenses (one license in each of the 734 MSAs/RSAs and one license 
in each of the six Economic Area Groupings (EAGs)) commenced on August 
27, 2002, and closed on September 18, 2002. Of the 740 licenses 
available for auction, 484 licenses were won by 102 winning bidders. 
Seventy-two of the winning bidders claimed small business, very small 
business or entrepreneur status and won a total of 329 licenses. A 
second auction

[[Page 39618]]

commenced on May 28, 2003, closed on June 13, 2003, and included 256 
licenses: 5 EAG licenses and 476 Cellular Market Area licenses. 
Seventeen winning bidders claimed small or very small business status 
and won 60 licenses, and nine winning bidders claimed entrepreneur 
status and won 154 licenses. On July 26, 2005, the Commission completed 
an auction of five licenses in the Lower 700 MHz band (Auction No. 60). 
There were three winning bidders for five licenses. All three winning 
bidders claimed small business status.
    62. In 2007, the Commission reexamined its rules governing the 700 
MHz band in the 700 MHz Second Report and Order. An auction of 700 MHz 
licenses commenced January 24, 2008, and closed on March 18, 2008, 
which included: 176 Economic Area licenses in the A-Block, 734 Cellular 
Market Area licenses in the B-Block, and 176 EA licenses in the E-
Block. Twenty winning bidders, claiming small business status (those 
with attributable average annual gross revenues that exceed $15 million 
and do not exceed $40 million for the preceding three years) won 49 
licenses. Thirty-three winning bidders claiming very small business 
status (those with attributable average annual gross revenues that do 
not exceed $15 million for the preceding three years) won 325 licenses.
    63. Upper 700 MHz Band Licenses. In the 700 MHz Second Report and 
Order, the Commission revised its rules regarding Upper 700 MHz 
licenses. On January 24, 2008, the Commission commenced Auction No. 73, 
in which several licenses in the Upper 700 MHz band were available for 
licensing: 12 Regional Economic Area Grouping licenses in the C-Block, 
and one nationwide license in the D-Block. The auction concluded on 
March 18, 2008, with three winning bidders claiming very small business 
status (those with attributable average annual gross revenues that do 
not exceed $15 million for the preceding three years) and winning five 
licenses.
    64. Advanced Wireless Services. AWS Services (1710-1755 MHz and 
2110-2155 MHz bands (AWS-1); 1915-1920 MHz, 1995-2000 MHz, 2020-2025 
MHz and 2175-2180 MHz bands (AWS-2); 2155-2175 MHz band (AWS-3)). For 
the AWS-1 bands, the Commission has defined a ``small business'' as an 
entity with average annual gross revenues for the preceding three years 
not exceeding $40 million, and a ``very small business'' as an entity 
with average annual gross revenues for the preceding three years not 
exceeding $15 million. For AWS-2 and AWS-3, although the Commission 
does not know for certain which entities are likely to apply for these 
frequencies, the Commission notes that the AWS-1 bands are comparable 
to those used for cellular service and personal communications service. 
The Commission has not yet adopted size standards for the AWS-2 or AWS-
3 bands, but proposes to treat both AWS-2 and AWS-3 similarly to 
broadband PCS service and AWS-1 service due to the comparable capital 
requirements and other factors, such as issues involved in relocating 
incumbents and developing markets, technologies, and services.
    65. Broadband Radio Service and Educational Broadband Service. 
Broadband Radio Service systems, previously referred to as Multipoint 
Distribution Service (MDS) and Multichannel Multipoint Distribution 
Service (MMDS) systems, and ``wireless cable,'' transmit video 
programming to subscribers and provide two-way high-speed data 
operations using the microwave frequencies of the Broadband Radio 
Service (BRS) and Educational Broadband Service (EBS) (previously 
referred to as the Instructional Television Fixed Service (ITFS)).
    66. BRS--In connection with the 1996 BRS auction, the Commission 
established a small business size standard as an entity that had annual 
average gross revenues of no more than $40 million in the previous 
three calendar years. The BRS auctions resulted in 67 successful 
bidders obtaining licensing opportunities for 493 Basic Trading Areas 
(BTAs). Of the 67 auction winners, 61 met the definition of a small 
business. BRS also includes licensees of stations authorized prior to 
the auction. At this time, the Commission estimates that of the 61 
small business BRS auction winners, 48 remain small business licensees. 
In addition to the 48 small businesses that hold BTA authorizations, 
there are approximately 392 incumbent BRS licensees that are considered 
small entities. After adding the number of small business auction 
licensees to the number of incumbent licensees not already counted, the 
Commission finds that there are currently approximately 440 BRS 
licensees that are defined as small businesses under either the SBA or 
the Commission's rules.
    67. In 2009, the Commission conducted Auction No. 86, the sale of 
78 licenses in the BRS areas. The Commission offered three levels of 
bidding credits: (i) A bidder with attributed average annual gross 
revenues that exceed $15 million and do not exceed $40 million for the 
preceding three years (small business) received a 15 percent discount 
on its winning bid; (ii) a bidder with attributed average annual gross 
revenues that exceed $3 million and do not exceed $15 million for the 
preceding three years (very small business) received a 25 percent 
discount on its winning bid; and (iii) a bidder with attributed average 
annual gross revenues that do not exceed $3 million for the preceding 
three years (entrepreneur) received a 35 percent discount on its 
winning bid. Auction No. 86 concluded in 2009 with the sale of 61 
licenses. Of the ten winning bidders, two bidders that claimed small 
business status won four licenses; one bidder that claimed very small 
business status won three licenses; and two bidders that claimed 
entrepreneur status won six licenses.
    68. EBS--Educational Broadband Service has been included within the 
broad economic census category and the SBA size standard for Wired 
Telecommunications Carriers since 2007. Wired Telecommunications 
Carriers are comprised of establishments primarily engaged in operating 
and/or providing access to transmission facilities and infrastructure 
that they own and/or lease for the transmission of voice, data, text, 
sound, and video using wired telecommunications networks. Transmission 
facilities may be based on a single technology or a combination of 
technologies. The SBA's small business size standard for this category 
is all such firms having 1,500 or fewer employees. U.S. Census data for 
2012 shows that there were 3,117 firms that operated that year. Of this 
total, 3,083 operated with fewer than 1,000 employees. Thus, under this 
size standard, the majority of firms in this industry can be considered 
small. In addition to Census Bureau data, the Commission's Universal 
Licensing System indicates that as of October 2014, there are 2,206 
active EBS licenses. The Commission estimates that of these 2,206 
licenses, the majority are held by non-profit educational institutions 
and school districts, which are by statute defined as small businesses.
    69. Wireless Communications Service. This service can be used for 
fixed, mobile, radiolocation, and digital audio broadcasting satellite 
uses. The Commission defined ``small business'' for the wireless 
communications services (WCS) auction as an entity with average gross 
revenues of $40 million for each of the three preceding years, and a 
``very small business'' as an entity with average gross revenues of $15 
million for each of the three preceding years. The SBA has approved 
these small business size standards. In the

[[Page 39619]]

Commission's auction for geographic area licenses in the WCS service 
there were seven winning bidders that qualified as ``very small 
business'' entities, and one that qualified as a ``small business'' 
entity.
    70. Radio and Television Broadcasting and Wireless Communications 
Equipment Manufacturing. This industry comprises establishments 
primarily engaged in manufacturing radio and television broadcast and 
wireless communications equipment. Examples of products made by these 
establishments are: Transmitting and receiving antennas, cable 
television equipment, GPS equipment, pagers, cellular phones, mobile 
communications equipment, and radio and television studio and 
broadcasting equipment. The SBA has established a small business size 
standard for this industry of 1,250 employees or less. U.S. Census data 
for 2012 shows that 841 establishments operated in this industry in 
that year. Of that number, 819 establishments operated with less than 
500 employees. Based on this data, the Commission concludes that a 
majority of manufacturers in this industry are small.
    71. Software Publishers. This industry comprises establishments 
primarily engaged in computer software publishing or publishing and 
reproduction. Establishments in this industry carry out operations 
necessary for producing and distributing computer software, such as 
designing, providing documentation, assisting in installation, and 
providing support services to software purchasers. These establishments 
may design, develop, and publish, or publish only. The SBA has 
established a size standard for this industry of annual receipts of 
$38.5 million per year. U.S. Census data for 2012 indicates that 5,079 
firms operated in that year. Of that number, 4,697 firms had annual 
receipts of $25 million or less. Based on that data, the Commission 
concludes that a majority of firms in this industry are small.
    72. NCE and Public Broadcast Stations. Non-commercial educational 
and public broadcast television stations fall within the U.S. Census 
Bureau's definition for Television Broadcasting. This industry 
comprises establishments primarily engaged in broadcasting images 
together with sound and operating television broadcasting studios and 
facilities for the programming and transmission of programs to the 
public. The SBA has created a small business size standard for 
Television Broadcasting entities, which is such firms having $38.5 
million or less in annual receipts. The 2012 Economic Census reports 
that 751 firms in this category operated in that year. Of that number, 
656 had annual receipts of $25,000,000 or less, 25 had annual receipts 
between $25,000,000 and $49,999,999 and 70 had annual receipts of 
$50,000,000 or more. Based on this data the Commission concludes that 
the majority of NCEs and Public Broadcast Stations are small entities 
under the applicable SBA size standard.
    73. According to Commission staff review of the BIA Kelsey Inc. 
Media Access Pro Television Database (BIA) as of November 16, 2017, 
approximately 1,258 of the 1,378 licensed commercial television 
stations (or about 91 percent) had revenues of $38.5 million or less, 
and therefore these licensees qualify as small entities under the SBA 
definition. The Commission also estimates that there are 395 licensed 
noncommercial educational NCE television stations. Notwithstanding, the 
Commission does not compile and otherwise 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. In 
addition to licensed commercial television stations and NCEs, there are 
also an estimated 2,367 low power television stations (LPTV), including 
Class A stations and 3,750 TV translator stations. Given the nature of 
these services, the Commission will presume that all of these entities 
qualify as small entities under the above SBA small business size 
standard.
    74. The Commission notes, however, that in assessing whether a 
business concern qualifies as small under the above definition, 
business (control) affiliations must be included. The Commission's 
estimate, therefore, likely overstates the number of small entities 
that might be affected by the Commission's action, because the revenue 
figure on which it is based does not include or aggregate revenues from 
affiliated companies. Moreover, the definition of ``small business'' 
also requires that an entity not be dominant in its field of operation 
and that the entity be independently owned and operated. The estimate 
of small businesses to which rules may apply does not exclude any 
television station from the definition of a small business on these 
bases and is therefore over-inclusive to that extent. Further, the 
Commission is unable at this time to define or quantify the criteria 
that would establish whether a specific television station is dominant 
in its field of operation. The Commission further notes that it is 
difficult at times to assess these criteria in the context of media 
entities, and therefore the Commission's estimates of small businesses 
to which they apply may be over-inclusive to this extent.
5. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities
    75. The Order allows EAS Participants to take part in live code EAS 
public safety exercises, provided that the entity conducting the test 
provides notification during the test to the extent technically 
feasible that there is no actual emergency and provides notice to the 
public and coordinates with EAS Participants, state and local emergency 
authorities, the SECC, and other entities before the test to inform the 
public and other affected entities that live event codes will be used 
and that no emergency is occurring. In addition, the Order allows EAS 
Participants to use the EAS Attention Signal and a harmless simulation 
of EAS header codes in PSAs provided by federal, state, and local 
government entities, as well as NGOs. These measures will obviate 
recurring costs associated with the filing of live code waiver requests 
(e.g., legal, administrative, printing, and mailing costs) and will not 
create any cost burdens for EAS Participants. The Order also requires 
that no later than twenty-four (24) hours of an EAS Participant's 
discovery (i.e., actual knowledge) that it has transmitted or otherwise 
sent a false alert to the public that the it send an email to the FCC 
Ops Center (at <a href="/cdn-cgi/l/email-protection#3d7b7e7e726d6e7d5b5e5e135a524b"><span class="__cf_email__" data-cfemail="135550505c4340537570703d747c65">[email protected]</span></a>) informing the Commission of the event 
and of any details that the EAS Participant may have concerning the 
event. This measure will help ensure that all alerting stakeholder have 
sufficient situational awareness of a false alert to quickly respond to 
and remediate the situation.
    76. The Order requires EAS Participants to reject all digitally-
signed CAP-formatted EAS alerts that are invalidly signed. It further 
requires EAS Participants to reject all EAS alerts that are received 
with header code date/time data inconsistent with the current date and 
time. Most EAS equipment deployed in the field already supports these 
authentication and validation rules, but the Commission anticipates 
that a small minority of EAS Participants may need to update software 
to comply with these rules. Such an update should result in minimal 
costs to EAS Participants, as it can be performed during a scheduled 
in-version equipment software update.

[[Page 39620]]

6. Steps Taken To Minimize the Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered
    77. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching 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 or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) and 
exemption from coverage of the rule, or any part thereof, for small 
entities.''
    78. The Commission does not expect its actions in the Order to have 
a significant economic impact on small entities. The rule changes to 
section 11.61 with respect to live code tests do not impose any new 
requirements or new costs for small entities or other EAS Participants. 
The steps taken by the Commission eliminating the waiver filing 
requirement will benefit small entities by reducing the need for legal 
and other staff time associated with filing a waiver, which will 
translate into cost reductions and have a positive economic impact. 
Thus, as an alternative to the existing process, the record supports 
the Commission's conclusion that removing the need for entities to 
request a waiver of the Commission's rules to conduct live code tests 
will reduce costs and remove regulatory burdens for small entities as 
well as other entities subject to these rules.
    79. The false alert reporting rules the Commission adopts today 
similarly impose minimal burdens on small entities. The reporting 
requirement is triggered only upon discovery of the false alert, allows 
twenty-four hours for the submission of the report and imposes no 
obligation to and investigate the false report. Further, the Commission 
recognizes that smaller entities often face particular challenges in 
achieving authentication and validation of EAS messages due to limited 
human, financial, or technical resources. Due, in part, to the 
potentially significant burdens that the originally-proposed 
requirements would pose, the Commission declines, at this time, to 
adopt certain of the proposals and defer consideration of others. Those 
the Commission adopts are unlikely to pose burdens that are not already 
incurred in the normal course of business.
    80. Finally, the Commission adopts implementation timeframes for 
each of the Commission's rules that are intended to allow EAS 
Participants to come into compliance with the Commission's rules in a 
manner that balances the need for improving EAS organization and 
effectiveness as soon as possible with any potential burdens that may 
be imposed by adoption of the Commission's proposals.
    81. The Commission concludes that the adopted mandates provide 
small entities as well as other EAS Participants with a sufficient 
measure of flexibility to account for technical and cost-related 
concerns. The Commission has determined that implementing these 
improvements to the EAS is technically feasible. In the event that 
small entities face unique circumstances that restrict their ability to 
comply with the Commission's rules, the Commission can address them 
through the waiver process.

C. Paperwork Reduction Act Analysis

    82. This document contains modified information collection 
requirements subject to the Paperwork Reduction Act of 1995 (PRA), 
Public Law 104-13. It will be submitted to the Office of Management and 
Budget (OMB) for review under section 3507(d) of the PRA. OMB, the 
general public, and other Federal agencies will be invited to comment 
on the new or modified information collection requirements contained in 
this proceeding. In addition, the Commission notes that pursuant to the 
Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 
U.S.C. 3506(c)(4), the Commission previously sought specific comment on 
how the Commission might further reduce the information collection 
burden for small business concerns with fewer than 25 employees.

D. Congressional Review Act

    83. The Commission will send a copy of this Order in a report to be 
sent to Congress and the Government Accountability Office pursuant to 
the Congressional Review Act, see U.S.C. 801(a)(1)(A).

IV. Ordering Clauses

    84. Accordingly, it is ordered, pursuant to sections 1, 2, 4(i), 
4(o), 301, 303(r), 303(v), 307, 309, 335, 403, 624(g), 706, and 713 of 
the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 
154(o), 301, 303(r), 303(v), 307, 309, 335, 403, 544(g), 606, and 613, 
as well as by sections 602(a),(b),(c), (f), 603, 604 and 606 of the 
WARN Act, 47 U.S.C. 1202(a), (b), (c), (f), 1203, 1204 and 1206, and 
the Twenty-First Century Communications and Video Accessibility Act of 
2010, Public Law 111-260 and Public Law 111-265, that this Report and 
Order is adopted.
    85. It is further ordered that the rule amendments adopted herein 
will become effective September 10, 2018, except that the amendments to 
sections 11.33 and 11.56 will become effective August 12, 2019, and the 
amendments to sections 11.45(b) and 11.61, which contain modifications 
to information collection requirements that are currently approved by 
the Office of Management and Budget (OMB), will become effective on the 
date specified in a Commission notice published in the Federal Register 
announcing their approval (which date shall not be less than 30 days 
after publication of this Report and Order in the Federal Register).
    86. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Report and Order, including the Final Regulatory 
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small 
Business Administration.

List of Subjects in 47 CFR Part 11

    Radio, Television.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Final Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR part 11 as follows:

PART 11--EMERGENCY ALERT SYSTEM (EAS)

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

    Authority:  47 U.S.C. 151, 154(i) and (o), 303(r), 544(g) and 
606.


0
2. Amend Sec.  11.33 by revising paragraph (a)(10) to read as follows:


Sec.  11.33  EAS Decoder.

    (a) * * *
    (10) Message Validity. An EAS Decoder must provide error detection 
and validation of the header codes of each message to ascertain if the 
message is valid. Header code comparisons may be accomplished through 
the use of a bit-by-bit compare or any other error detection and 
validation protocol. A header code must only be considered

[[Page 39621]]

valid when two of the three headers match exactly; the Origination 
Date/Time field (JJJHHMM) is not more than 15 minutes in the future and 
the expiration time (Origination Date/Time plus Valid Time TTTT) is in 
the future (i.e., current time at the EAS equipment when the alert is 
received is between origination time minus 15 minutes and expiration 
time). Duplicate messages must not be relayed automatically.
* * * * *

0
3. Revise Sec.  11.45 to read as follows:


Sec.  11.45  Prohibition of false or deceptive EAS transmissions.

    (a) No person may transmit or cause to transmit the EAS codes or 
Attention Signal, or a recording or simulation thereof, in any 
circumstance other than in an actual National, State or Local Area 
emergency or authorized test of the EAS; or as specified in Sec. Sec.  
10.520(d), 11.46, and 11.61 of this chapter.
    (b) No later than twenty-four (24) hours of an EAS Participant's 
discovery (i.e., actual knowledge) that it has transmitted or otherwise 
sent a false alert to the public, the EAS Participant send an email to 
the Commission at the FCC Ops Center at <a href="/cdn-cgi/l/email-protection#0a4c4949455a594a6c6969246d657c"><span class="__cf_email__" data-cfemail="317772727e6162715752521f565e47">[email protected]</span></a>, informing the 
Commission of the event and of any details that the EAS Participant may 
have concerning the event.

0
4. Revise Sec.  11.46 to read as follows:


Sec.  11.46  EAS public service announcements.

    EAS Participants may use the EAS Attention Signal and a simulation 
of the EAS codes as provided by FEMA in EAS Public Service 
Announcements (PSAs) (including commercially-sponsored announcements, 
infomercials, or programs) provided by federal, state, and local 
government entities, or non-governmental organizations, to raise public 
awareness about emergency alerting. This usage is only permitted if the 
PSA is presented in a non-misleading and technically harmless manner, 
including with the explicit statement that the Attention Signal and EAS 
code simulation are being used in the context of a PSA for the purpose 
of educating the viewing or listening public about emergency alerting.

0
5. Amend Sec.  11.56 by redesignating paragraph (c) as paragraph (d) 
and adding new paragraph (c) to read as follows:


Sec.  11.56  Obligation to process CAP-formatted EAS messages.

* * * * *
    (c) EAS Participants shall configure their systems to reject all 
CAP-formatted EAS messages that include an invalid digital signature.
* * * * *

0
6. Amend Sec.  11.61 by adding paragraph (a)(5) to read as follows:


Sec.  11.61  Tests of EAS procedures.

    (a) * * *
    (5) Live Code Tests. EAS Participants may participate in no more 
than two (2) ``Live Code'' EAS Tests per calendar year that are 
conducted to exercise the EAS and raise public awareness for it, 
provided that the entity conducting the test:
    (i) Notifies the public before the test that live event codes will 
be used, but that no emergency is, in fact, occurring;
    (ii) To the extent technically feasible, states in the test message 
that the event is only a test;
    (iii) Coordinates the test among EAS Participants and with state 
and local emergency authorities, the relevant SECC (or SECCs, if the 
test could affect multiple states), and first responder organizations, 
such as PSAPs, police, and fire agencies); and,
    (iv) Consistent with Sec.  11.51, provides in widely accessible 
formats the notification to the public required by this subsection that 
the test is only a test, and is not a warning about an actual 
emergency.
* * * * *
[FR Doc. 2018-17096 Filed 8-9-18; 8:45 am]
 BILLING CODE 6712-01-P


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