[Federal Register Volume 62, Number 43 (Wednesday, March 5, 1997)]
[Proposed Rules]
[Pages 10011-10016]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-5350]


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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 76

[CS Docket No. 97-80; FCC 97-53]


Commercial Availability of Navigation Devices

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Communications Commission seeks comments on 
proposals to implement Section 629 of the Communications Act of 1934, 
as amended, 47 U.S.C. 549, concerning the commercial availability of 
navigation devices. This notice is prompted by Section 304 of the 1996 
Telecommunications Act, which became law on February 5, 1996, adding 
this provision to the Communications Act. This action is intended to 
implement the 1996 Act.


[[Page 10012]]


DATES: Comments are due on or before May 16, 1997 and reply comments 
are due on or before June 16, 1997.

ADDRESSES: Federal Communications Commission, 1919 M Street, NW., 
Washington, DC 20554.

FOR FURTHER INFORMATION, CONTACT: Technical Information: Michael Lance, 
Cable Services Bureau, (202) 418-7014. Legal Information: Barrett L. 
Brick, Cable Services Bureau, (202) 418-1065.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
Notice of Proposed Rulemaking, CS Docket No. 97-80, adopted February 
11, 1997 and released on February 20, 1997. The full text of this 
decision is available for inspection and copying during normal business 
hours in the FCC Reference Center (Room 239), 1919 M Street, NW., 
Washington, DC 20554, and may be purchased from the Commission's copy 
contractor, International Transcription Service, (202) 857-3800, 1919 M 
Street, NW., Washington, DC 20554.

Synopsis of the Notice of Proposed Rule Making

    1. In this notice of proposed rulemaking, the Commission seeks 
comment on proposals to implement Section 629 of the Communications 
Act, added as part of the Telecommunications Act of 1996, Public Law 
104-104, 110 Stat. 56 (1996) (1996 Act). Section 629 instructs the 
Commission to promote the commercial availability to consumers of 
navigation devices: That is, equipment used to access multichannel 
video programming and other services offered over multichannel video 
programming systems. The Commission is also instructed not to 
jeopardize the security of services offered over multichannel video 
programming systems.
    2. The Commission first seeks comment regarding the scope and 
meaning of Section 629. The Commission tentatively concludes that the 
coverage of Section 629 is broad in terms of the multichannel video 
programming distributors (MVPDs) involved, including cable television, 
multichannel broadcast television, DBS, MMDS, and SMATVs. The 
Commission also tentatively concludes that Section 629 is broad in 
terms of the type of equipment covered, including not just equipment 
used to receive video programming, but also equipment used to access 
other services offered by MVPDs over their systems. The Commission 
seeks comments on these conclusions, and also on methods to narrow the 
focus of the rulemaking process and rules adopted in order best to 
accomplish the statutory objectives.
    3. The Commission seeks comment on the meaning of commercial 
availability in the context of Section 629. The Commission proposes to 
incorporate a consumer right to attach equipment into the rules, 
modeled after the telephony right to attach which had its genesis in 
Carterphone, 13 FCC 2d 420, recon. denied, 14 FCC 2d 571 (1968), and 
seeks comment on this proposal. The Commission recognizes that in 
implementing Section 629, there is a need to assure that customer 
premises equipment (CPE) does not cause harm to the network to which 
the CPE is attached, and that the networks technical integrity is 
maintained. The Commission seeks comment on how best to accomplish this 
task. The Commission tentatively concludes that existing Part 15 
certification rules should adequately address signal leakage issues 
surrounding existing navigation devices, and seeks comment on this 
conclusion. The Commission also seeks comment on whether the 
marketplace will sufficiently address signal quality issues involving 
navigation devices.
    4. Section 629 requires that navigation devices be commercially 
available from vendors not affiliated with any MVPD. The Commission 
tentatively concludes that the definition of affiliate in Section 3 of 
the 1996 Act, which establishes a ten percent equity interest 
threshold, is applicable to Section 629 and seeks comment on this 
conclusion.
    5. The Commission seeks comment not only on issues raised by 
current equipment distribution models, but also on whether and what 
degree of standardization might be necessary so that navigation devices 
may be geographically portable or may be interoperable to function with 
different types of MVPDs or both. The Commission seeks comment on the 
incremental cost of additional capabilities in this context. The 
Commission also seeks comment on the process whereby any necessary 
standards might be developed to promote competition. The Commission 
states its desire not to develop standards itself, but rather urges the 
adoption of voluntary standards by those affected. The Commission seeks 
comment on the techniques it should use should standards prove to be 
necessary or desirable toward assuring the commercial availability of 
navigation devices, including alternatives to actual standard setting.
    6. The Commission recognizes that some of the technologies 
implicated by this proceeding may be wholly or partially proprietary in 
nature. The Commission seeks comment on its authority to affect 
proprietary rights, and on what limitations existing proprietary rights 
may place on the Commission's authority to mandate commercial 
availability of navigation devices.
    7. Section 629 instructs the Commission not to jeopardize the 
security of services offered over multichannel video programming 
systems, nor to impede service providers' legal rights to prevent theft 
of service. In order to fashion effective rules that fulfill this 
requirement, the Commission seeks data and information on existing 
security methodologies employed by MVPD industries, and seeks comment 
on what it means to jeopardize security and to impede a programmer's 
rights to prevent theft of service. The Commission recognizes that 
equipment that performs security functions is often combined with 
equipment that performs other functions. The Commission seeks comment 
on the possibility of unbundling security from nonsecurity equipment. 
The Commission tentatively concludes, should such unbundling be 
necessary, that the preferred option for developing the necessary 
framework to accomplish this would be to adopt only a conduct or 
performance rule mandating the separation involved, leaving to the 
industry participants involved the task of developing the necessary 
interface standards. The Commission also seeks comment on whether the 
affected industries could voluntarily adopt and the Commission approve 
a variant of the decoder interface connector discussed in the First 
Report and Order in ET Docket No. 93-7, 9 FCC Rcd 1981, 59 FR 25339 
(May 16, 1994) and in the Memorandum Opinion and Order in ET Docket No. 
93-7, 11 FCC Rcd 4121, 61 FR 18508 (April 26, 1996). The Commission 
also seeks comment on the impact of the 1996 Act's amendments to 
Section 624A of the Communications Act on the Commission's authority 
under Section 629.
    8. Section 629 allows MVPDs to offer navigation devices to 
consumers if the charges are separately stated and not subsidized by 
charges for the service accessed by the devices. The Commission 
tentatively concludes that continuing with existing forms of 
regulations that are broadly intended to constrain the subsidization of 
equipment prices from regulated service revenues is most consistent 
with the 1996 Act, and seeks comment on this conclusion, as well as on 
alternative means of addressing subsidy issues.
    9. Section 629 requires the Commission to waive any implementing

[[Page 10013]]

regulation adopted for a limited period of time upon an appropriate 
showing that such a waiver is necessary to assist the development or 
introduction of new or improved multichannel video programming or other 
service offered over multichannel video programming systems, 
technology, or products. The Commission tentatively concludes that 
where such waivers are required and requested, these requests should be 
looked upon sympathetically and expansively. The Commission seeks 
comment on this analysis. The Commission also seeks comment on whether 
guidelines need to be set to define the limited time contemplated, and 
also on whether the Commission's existing waiver procedures need to be 
modified to comply with the statutory mandate that the Commission act 
on a waiver within 90 days of its filing.
    10. Section 629 provides that implementing regulations which are 
adopted shall cease to apply upon a Commission determination that the 
MVPD market is fully competitive, that the market for navigation 
devices is fully competitive, and that elimination of the regulations 
will promote competition and the public interest. The Commission seeks 
comment on the service category and geographic market analyses 
required, as well as the circumstances in general under which 
regulatory involvement might terminate. The Commission tentatively 
concludes that regulations for certain types of equipment may not need 
to be adopted in the first place if competition is already fully 
robust, and seeks comment on this conclusion.

Initial Regulatory Flexibility Analysis

    11. As required by Section 603 of the Regulatory Flexibility Act 
(``RFA''), <SUP>1 the Commission has prepared the following Initial 
Regulatory Flexibility Analysis (``IRFA'') of the expected significant 
economic impact on small entities by the policies and rules proposed in 
this Notice of Proposed Rulemaking. Written public comments are 
requested on the IRFA. These comments must be filed in accordance with 
the same filing deadlines as comments on the rest of the Notice but 
they must have a separate and distinct heading designating them as 
responses to the IRFA. The Secretary shall send a copy of this Notice 
to be sent to the Chief Counsel for Advocacy of the Small Business 
Administration (``SBA'') in accordance with 5 U.S.C. 603(a).
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    \1\ 5 U.S.C. 603. The RFA has been amended by the Contract With 
America Advancement Act of 1996, Public Law 104-121, 110 Stat. 847 
(1996) (``CWAAA''). Title II of the CWAAA is the ``Small Business 
Regulatory Enforcement Fairness Act of 1996'' (``SBREFA''), codified 
at 5 U.S.C. 601 et seq.
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    12. Need for and Objectives of the Proposed Rules: The 1996 Act 
requires the Commission to promulgate rules designed to promote the 
commercial availability of navigation devices. The Commission is 
issuing this Notice to seek comment on the proposed rules intended to 
implement this provision of the 1996 Act, and to provide a record for a 
Commission decision on issues discussed in the Notice.
    13. Legal Basis: Authority for this proposed rulemaking is 
contained in Sections 4(i), 4(j), 303(r), and 629 of the Communications 
Act of 1934 as amended, 47 U.S.C. 154(i), 154(j), 303(r), and Secs. 304 
and 549 of the Telecommunications Act of 1996, Public Law 104-104, 110 
Stat. 56 (1996).
    14. Description and Estimate of Small Entities to Which the 
Proposed Rules Will Apply: Implementation of Section 304 will have the 
positive result of opening up to small entities the market to supply 
navigation devices directly to cable and other subscribers. In 
addition, small businesses will have the opportunity to become the 
manufacturers of navigation devices. While any policies or rules 
developed in this proceeding could have an impact on small businesses 
that manufacture, distribute, or use 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, this proceeding seeks comment 
on how this burden, if any, could be mitigated for small entities.
    15. The Regulatory Flexibility Act defines the term ``small 
entity'' as having the same meaning as the terms ``small business,'' 
``small organization,'' and ``small business concern'' under Section 3 
of the Small Business Act. <SUP>2 A small 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.
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    \2\ 5 U.S.C. 601(3) (1980).
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    16. Small MVPDs: SBA has developed a definition of small entity for 
cable and other pay television services, which includes all such 
companies generating less than $11 million in revenue annually. This 
definition includes cable systems operators, closed circuit television 
services, direct broadcast satellite services, multipoint distribution 
systems, satellite master antenna systems and subscription television 
services. According to the Census Bureau, there were 1,323 such cable 
and other pay television services generating less than $11 million in 
revenue that were in operation for at least one year at the end of 
1992.<SUP>3
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    \3\ U.S. Census Bureau, 1992 Economic Census, 1992 Census of 
Transportation, Communications and Utilities at Firm Size 1-123.
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    17. Cable Systems: The Commission has developed its own definition 
of a small cable system operator for the purposes of rate regulation. 
Under the Commission's rules, a ``small cable company,'' is one serving 
fewer than 400,000 subscribers nationwide. <SUP>4 Based on our most 
recent information, we estimate that there were 1,439 cable operators 
that qualified as small cable system operators at the end of 
1995.<SUP>5 Since then, some of those companies may have grown to serve 
over 400,000 subscribers, and others may have been involved in 
transactions that caused them to be combined with other cable 
operators. Consequently, we estimate that there are fewer than 1,439 
small entity cable system operators that may be affected by the 
decisions and rules proposed in this Notice.
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    \4\ 47 CFR 76.901(e). The Commission developed this definition 
based on its determinations that a small cable system operator is 
one with annual revenues of $100 million or less. Implementation of 
Sections of the 1992 Cable Act: Rate Regulation, Sixth Report and 
Order and Eleventh Order on Reconsideration, 10 FCC Rcd 7393, 60 FR 
35854 (July 12, 1995).
    \5\ Paul Kagan Associates, Inc., Cable TV Investor, Feb. 29, 
1996 (based on figures for Dec. 30, 1995).
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    18. The Communications Act also contains a definition of a small 
cable system operator, which is ``a cable operator that, directly or 
through an affiliate, serves in the aggregate fewer than 1% of all 
subscribers in the United States and is not affiliated with any entity 
or entities whose gross annual revenues in the aggregate exceed 
$250,000,000.'' <SUP>6 The Commission has determined that there are 
61,700,000 subscribers in the United States. Therefore, we found that 
an operator serving fewer than 617,000 subscribers shall be deemed a 
small operator, if its annual revenues, when combined with the total 
annual revenues of all of its affiliates, do not exceed $250 million in 
the aggregate.<SUP>7 Based on available data, we find that the number 
of cable operators serving 617,000 subscribers or less totals 1,450. 
<SUP>8 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

[[Page 10014]]

number of cable system operators that would qualify as small cable 
operators under the definition in the Communications Act.
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    \6\ 47 U.S.C. 543(m)(2).
    \7\ 47 CFR 76.1403(b).
    \8\ Paul Kagan Associates, Inc., Cable TV Investor, Feb. 29, 
1996 (based on figures for Dec. 30, 1995).
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    19. MMDS: The Commission refined the definition of ``small entity'' 
for the auction of MMDS as an entity that together with its affiliates 
has average gross annual revenues that are not more than $40 million 
for the preceding three calendar years.<SUP>9 This definition of a 
small entity in the context of the Commission's Report and Order 
concerning MMDS auctions that has been approved by the SBA.<SUP>10
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    \9\ 47 CFR 21.961(b)(1).
    \10\ See Amendment of Parts 21 and 74 of the Commission's Rules 
With Regard to Filing Procedures in the Multipoint Distribution 
Service and in the Instructional Television Fixed Service and 
Implementation of Section 309(j) of the Communications Act--
Competitive Bidding, MM Docket No. 94-31 and PP Docket No. 93-253, 
Report and Order, 10 FCC Rcd 9589, 60 FR 36524 (July 17, 1995).
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    20. The Commission completed its MMDS auction in March 1996 for 
authorizations in 493 basic trading areas (``BTAs''). Of 67 winning 
bidders, 61 qualified as small entities. Five bidders indicated that 
they were minority-owned and four winners indicated that they were 
women-owned businesses. MMDS is an especially competitive service, with 
approximately 1573 previously authorized and proposed MMDS facilities. 
Information available to us indicates that no MDS facility generates 
revenue in excess of $11 million annually. We tentatively conclude that 
for purposes of this IRFA, there are approximately 1634 small MMDS 
providers as defined by the SBA and the Commission's auction rules.
    21. ITFS: There are presently 2032 ITFS licensees. All but one 
hundred of these licenses are held by educational institutions. 
Educational institutions are included in the definition of a small 
business.<SUP>11 However, we do not collect annual revenue data for 
ITFS licensees and are not able to ascertain how many of the 100 non-
educational licensees would be categorized as small under the SBA 
definition. Thus, we tentatively conclude that at least 1932 licensees 
are small businesses.
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    \11\ SBREFA also applies to nonprofit organizations and 
governmental organizations such as cities, counties, towns, 
townships, villages, school districts, or special districts, with 
populations of less than 50,000. 5 U.S.C. 601(5).
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    22. DBS: As of December 1996, there were eight DBS licensees. 
However, the Commission 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. Although DBS 
service requires a great investment of capital for operation, we 
acknowledge that there are several new entrants in this field that may 
not yet have generated $11 million in annual receipts, and therefore 
may be categorized as a small business, if independently owned and 
operated.
    23. HSD: The market for HSD service is difficult to quantify. 
Indeed, the service itself bears little resemblance to other MVPDs. HSD 
owners have access to more than 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.<SUP>12 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 
packager. Thus, HSD users include: (1) Viewers who subscribe to a 
packaged programming service, which affords them access to most of the 
same programming provided to subscribers of other MVPDs; (2) viewers 
who receive only non-subscription programming; and (3) viewers who 
receive satellite programming services illegally without subscribing. 
Because scrambled packages of programming are most specifically 
intended for retail consumers, these are the services most relevant to 
this discussion.<SUP>13
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    \12\ Report in CS Docket No. 96-133 (``1996 Competition 
Report''), FCC 96-496 at para. 49, 62 FR 5627 (February 6, 1997).
    \13\ Id.
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    24. According to the most recently available information, there are 
approximately 30 program packagers nationwide offering packages of 
scrambled programming to retail consumers.<SUP>14 These program 
packagers provide subscriptions to approximately 2,314,900 subscribers 
nationwide.<SUP>15 This is an average of about 77,163 subscribers per 
program packager. This is substantially smaller than the 400,000 
subscribers used in the Commission's definition of a small MSO. 
Furthermore, because this an average, it is likely that some program 
packagers may be substantially smaller.
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    \14\ Id.
    \15\ Id.
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    25. SMATVs: Industry sources estimate that approximately 5200 SMATV 
operators were providing service as of December 1995.<SUP>16 Other 
estimates indicate that SMATV operators serve approximately 1.05 
million residential subscribers as of September 1996.<SUP>17 The ten 
largest SMATV operators together pass 815,740 units.<SUP>18 If we 
assume that these SMATV operators serve 50% of the units passed, the 
ten largest SMATV operators serve approximately 40% of the total number 
of SMATV subscribers. 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 tentatively conclude that a substantial number of SMATV 
operators qualify as small entities.
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    \16\ 1996 Competition Report at para.81.
    \17\ Id.
    \18\ Id.
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    26. LMDS: Unlike the above pay television services, LMDS technology 
and spectrum allocation will allow licensees to provide wireless 
telephony, data, and/or video services. A LMDS provider is not limited 
in the number of potential applications that will be available for this 
service. Therefore, the definition of a small LMDS entity may be 
applicable to both cable and other pay television (SIC 4841) and/or 
radiotelephone communications companies (SIC 4812). A small 
radiotelephone entity is one with 1500 employees or less.<SUP>19 
However, for the purposes of this Notice, we include only an estimate 
of LMDS video service providers.
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    \19\ 13 CFR Sec. 121.201.
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    27. LMDS is a service that is expected to be auctioned by the FCC 
in 1997. The vast majority of LMDS entities providing video 
distribution could be small businesses under the SBA's definition of 
cable and pay television (SIC 4841). However, in the Third NPRM, we 
proposed to define a small LMDS provider as an entity that, together 
with affiliates and attributable investors, has average gross revenues 
for the three preceding calendar years of less than $40 million.<SUP>20 
We have not yet received approval by the SBA for this definition.
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    \20\ In the Matter of Rulemaking to Amend Parts 1, 2, 21, and 25 
of the Commission's Rules to Redesignate the 27.5-29.5 GHz Frequency 
Band, to Reallocate the 29.5-30.0 GHz Frequency Band, to Establish 
Rules and Policies for Local Multipoint Distribution Service and for 
Fixed Satellite Services and Suite 12 Group Petition for Pioneer's 
Preference (``Third NPRM''), CC Docket No. 92-297, 11 FCC Rcd 53, at 
]188, 60 FR 43740 (August 23, 1995).
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    28. There is only one company, CellularVision, that is currently 
providing LMDS video services. Although the Commission does not collect 
data on annual receipts, we assume that CellularVision is a small 
business under both the SBA definition

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and our proposed auction rules. We tentatively conclude that a majority 
of the potential LMDS licensees will be small entities, as that term is 
defined by the SBA and the Commission's proposed definition.
    29. Small Manufacturers: The SBA has developed definitions of small 
entity for manufacturers of household audio and video equipment (SIC 
3651) and for radio and television broadcasting and communications 
equipment (SIC 3663). In each case, the definition includes all such 
companies employing 750 or fewer employees.
    30. Electronic Equipment Manufacturers: The Commission has not 
developed a definition of small entities applicable to manufacturers of 
electronic equipment. Therefore, we will utilize the SBA definition of 
manufacturers of Radio and Television Broadcasting and Communications 
Equipment.<SUP>21 According to the SBA's regulations, a TV equipment 
manufacturer must have 750 or fewer employees in order to qualify as a 
small business concern.<SUP>22 Census Bureau data indicates that there 
are 858 U.S. firms that manufacture radio and television broadcasting 
and communications equipment, and that 778 of these firms have fewer 
than 750 employees and would be classified as small entities.<SUP>23 
The Census Bureau category is very broad, and specific figures are not 
available as to how many of these firms are exclusive manufacturers of 
television equipment or how many are independently owned and operated. 
We conclude that there are approximately 778 small manufacturers of 
radio and television equipment.
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    \21\ This category excludes establishments primarily engaged in 
the manufacturing of household audio and visual equipment which is 
categorized as SIC 3651. See infra for SIC 3651 data.
    \22\  13 CFR 121.201, (SIC) Code 3663.
    \23\ U.S. Dept. of Commerce, 1992 Census of Transportation, 
Communications and Utilities, Table 1D, (issued May 1995), SIC 
category 3663.
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    31. Electronic Household/Consumer Equipment: The Commission has not 
developed a definition of small entities applicable to manufacturers of 
electronic equipment used by consumers, as compared to industrial use 
by television licensees and related businesses. Therefore, we will 
utilize the SBA definition applicable to manufacturers of Household 
Audio and Visual Equipment. According to the SBA's regulations, a 
household audio and visual equipment manufacturer must have 750 or 
fewer employees in order to qualify as a small business concern.<SUP>24 
Census Bureau data indicates that there are 410 U.S. firms that 
manufacture radio and television broadcasting and communications 
equipment, and that 386 of these firms have fewer than 500 employees 
and would be classified as small entities.<SUP>25 The remaining 24 
firms have 500 or more employees; however, we are unable to determine 
how many of those have fewer than 750 employees and therefore, also 
qualify as small entities under the SBA definition. Furthermore, the 
Census Bureau category is very broad, and specific figures are not 
available as to how many of these firms are exclusive manufacturers of 
television equipment for consumers or how many are independently owned 
and operated. We conclude that there are approximately 386 small 
manufacturers of television equipment for consumer/household use.
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    \24\ 13 CFR 121.201, (SIC) Code 3651.
    \25\ U.S. Small Business Administration 1995 Economic Census 
Industry and Enterprise Report, Table 3, SIC Code 3651, (Bureau of 
the Census data adapted by the Office of Advocacy of the U.S. Small 
Business Administration).
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    32. Computer Manufacturers: The Commission has not developed a 
definition of small entities applicable to computer manufacturers. 
Therefore, we will utilize the SBA definition of Electronic Computers. 
According to SBA regulations, a computer manufacturer must have 1,000 
or fewer employees in order to qualify as a small entity.<SUP>26 Census 
Bureau data indicates that there are 716 firms that manufacture 
electronic computers and of those, 659 have fewer than 500 employees 
and qualify as small entities.<SUP>27 The remaining 57 firms have 500 
or more employees; however, we are unable to determine how many of 
those have fewer than 1,000 employees and therefore also qualify as 
small entities under the SBA definition. We conclude that there are 
approximately 659 small computer manufacturers.
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    \26\ 13 CFR 121.201, (SIC) Code 3571.
    \27\ U.S. Small Business Administration 1995 Economic Census 
Industry and Enterprise Report, Table 3, SIC Code 3571, (Bureau of 
the Census data adapted by the Office of Advocacy of the U.S. Small 
Business Administration).
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    33. Small Retailers: The Commission has not developed a definition 
of small entities applicable to navigation retail devices. Therefore, 
we will utilize the SBA definition. The 1992 Bureau of the Census data 
indicates: there were 9,663 U.S. firms classified as Radio, TV & 
electronic stores (SIC 5731), and that 9,385 of these firms had $4.999 
million or less in annual receipts and 9,473 of these firms had $7.499 
million or less in annual receipts.<SUP>28 Consequently, we tentatively 
conclude that there are approximately 9,663 small entities that produce 
and distribute radio, television, and electronic stores that may be 
affected by the decisions and rules proposed in this Notice.
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    \28\ U.S. Small Business Administration 1992 Economic Census 
Industry and Enterprise Report, Table 2D, SIC 7812, (Bureau of the 
Census data adapted by the Office of Advocacy of the U.S. Small 
Business Administration) (SBA 1992 Census Report). The Census data 
does not include a category for $6.5 million therefore, we have 
reported the closest increment below and above the $6.5 million 
threshold. There is a difference of 88 firms between the $4.999 and 
$7.499 million annual receipt categories. It is possible that these 
88 firms could have annual receipts of $6.5 million or less and 
therefore, would be classified as small businesses.
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    34. Reporting, Recordkeeping, and Other Compliance Requirements: 
The proposed actions may require MVPDs to obtain security modules for 
sale to subscribers. They may also prohibit MVPDs from providing CPE 
which is not commercially available. In addition, the proposed actions 
may require MVPDs to make available to consumers basic technical 
information concerning the network to which a navigation device is to 
be attached (paragraph 56). This latter proposal, if adopted, would not 
necessitate any additional professional, engineering, or customer 
service skills beyond those already utilized in the ordinary course of 
business by MVPDs. Any costs to the MVPD would be justified by the 
competitive benefits; MVPDs and consumers will benefit from an 
increased, more innovative, and more competitive market for navigation 
devices. We seek comment on this.
    35. Any Significant Alternatives Minimizing the Impact On Small 
Entities Consistent With the Stated Objectives: We believe that our 
proposals will have the positive result of opening up to small entities 
the market to supply navigation devices directly to cable and other 
subscribers (see discussion at paragraph 84). In addition, small 
businesses will have the opportunity to become the manufacturers of 
navigation devices (see discussion at paragraph 84). While small 
businesses would experience costs associated with maintaining for sale 
navigation devices, should we adopt rules that would require such, we 
believe such businesses are capable of doing so. Should commenters 
disagree with this conclusion, we welcome comments suggesting ways in 
which any perceived burden upon small entities could be mitigated.
    36. Federal Rules Which Overlap, Duplicate or Conflict with 
Proposed Rules: None.

Ex Parte

    37. This is a non-restricted notice and comment rule making 
proceeding. Ex

[[Page 10016]]

parte presentations are permitted, provided they are disclosed as 
provided in the Commission's Rules. See generally 47 CFR 1.1202, 1.1203 
and 1.1206(a).

Comment Dates

    38. Pursuant to applicable procedures set forth in Secs. 1.415 and 
1.419 of the Commission's Rules, interested parties may file comments 
on or before May 16, 1997 and reply comments on or before June 16, 
1997. All relevant and timely comments will be considered before final 
action is taken in this proceeding. To file formally in this 
proceeding, participants must file an original and four copies of all 
comments, reply comments, and supporting comments. If participants want 
each Commissioner to receive a personal copy of their comments, an 
original plus nine copies must be filed. Comments and reply comments 
should be sent to the Office of the Secretary, Federal Communications 
Commission, Washington, D.C. 20554. Comments and reply comments will be 
available for public inspection during regular business hours in the 
FCC Reference Center (Room 239) of the Federal Communications 
Commission, 1919 M Street, NW, Washington, DC 20554.

List of Subjects in 47 CFR Part 76

    Cable television.

Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 97-5350 Filed 3-4-97; 8:45 am]
BILLING CODE 6712-01-P