37812 Federal Register / Vol. 63, No. 134 /Tuesday, July 14, 1998 / Proposed Rules

State City/town/county Source of flooding Location

# Depth in feet above

ground.

*Elevation in feet.

(NGVD)

Existing Modified

Maps are available for inspection at the Travis County Transportation and Natural Resources Department, Executive Office Building, 411

West 13th Street, Austin, Texas.

Send comments to The Honorable Bill Aleshire, Travis County Judge, P.O. Box 1748, Austin, Texas 78767.

Maps are available for inspection at the City of Austin Watershed Engineering Division, 206 East Ninth Street, Suite No. 17102, Austin,

Texas.

Send comments to The Honorable Kirk Watson, Mayor, City of Austin, P.O. Box 1088, Austin, Texas 78767.

Washington ........... Clark County (Unincorporated

Areas).

East Fork Lewis River ...... Approximately 17,000 feet downstream of

Daybreak Road.

*31 *32

........................................... Approximately 400 feet downstream of

Daybreak Road.

*76 *75

Maps are available for inspection at the Clark County Department of Community Development, Development Services Division, Office of Engineering Review, 1408 Franklin Street, Vancouver, Washington.

Send comments to The Honorable Betty Sue Morris, Chairperson, Clark County Board of Commissioners, P.O. Box 5000, Vancouver, Washington 98666–5000.

(Catalog of Federal Domestic Assistance No.

83.100, ‘‘Flood Insurance’’)

Dated: July 7, 1998.

Michael J. Armstrong,

Associate Director for Mitigation.

[FR Doc. 98–18724 Filed 7–13–98; 8:45 am]

BILLING CODE 6718–04–P

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 76

[MM Docket No. 92–264; FCC 98–138]

Horizontal Ownership Limits

AGENCY: Federal Communications

Commission

ACTION: Proposed rule.

SUMMARY: In the Further Notice of

Proposed Rulemaking (‘‘Further

Notice’’), the Commission seeks

comment on possible revisions of the

cable television horizontal ownership

rules and the method by which

horizontal ownership is calculated. The

Commission seeks comment on

whether, in light of evolving market

conditions, the horizontal ownership

limit should remain at 30% of homes

passed nationwide by cable, and also

seeks comment on the 35% minoritycontrol allowance. The Further Notice

also seeks comment on whether the

Commission should revise the rules to

consider the presence in the market of

all multichannel video programming

providers (‘‘MVPDs’’) rather than cable

operators alone, and whether to base the

limit on actual subscribers rather than

on homes passed. The Further Notice is

part of a companion Memorandum

Opinion and Order on Reconsideration

which is summarized elsewhere in this

issue of the Federal Register.

DATES: Comments are due on or before

August 14, 1998, and reply comments

are due on or before September 3, 1998.

FOR FURTHER INFORMATION CONTACT: John

Norton, Cable Services Bureau, (202)

418–7200.

SUPPLEMENTARY INFORMATION: This is a

synopsis of the Commission’s Further

Notice of Proposed Rulemaking, MM

Docket No. 92–264, FCC 98–138

adopted June 23, 1998, and released

June 26, 1998. 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,

D.C. 20554, and may be purchased from

the Commission’s copy contractor,

International Transcription Service,

(202) 857–3800, 1231 20th Street, NW,

Washington, D.C. 20036.

Synopsis of the Notice of Proposed

Rulemaking

1. In the Second Report and Order in

MM Docket No. 92–264, 58 FR 60135,

November 15, 1993 (‘‘Second Report

and Order’’), the Commission adopted

the horizontal ownership rules, which

provide that no person may hold

attributable interests in cable systems

reaching more than 30% of all homes

passed nationwide by cable. In the

Second Report and Order, the

Commission stated that it planned to

review subscriber limits every five years

to determine whether such limits are

reasonable under the prevailing market

conditions and whether such limits

continue to serve the objectives for

which they were adopted. The rules in

question were adopted in 1993, and the

Commission believes that it is

appropriate to review these rules to

address intervening changes in the

communications marketplace.

2. In the Further Notice, the

Commission seeks comment on whether

30% remains the appropriate horizontal

ownership limit in light of evolving

market conditions. The current rules

further allow ownership of additional

cable systems reaching up to 35% of

cable homes passed, provided such

additional cable systems are minoritycontrolled. The purpose of the 35%

minority-control allowance was to

encourage diversity of viewpoints by

fostering increased minority

participation and ownership in the

cable industry, through increased

multiple systems operator (‘‘MSO’’)

investment in minority-owned cable

systems. The Commission seeks

comment on the constitutionality of the

minority-control allowance in light of

the Supreme Court’s decision in

Adarand Constructors, Inc. v. Pena, 515

U.S. 200 (1995). Recognizing that the

minority-control allowance has never

been utilized by any MSO, the

Commission also seeks comment on the

effectiveness of this rule and on the

development of alternative rules to

promote minority participation

consistent with the standards set forth

in Adarand.

3. The Commission also seeks

comment on two specific issues

concerning the method of ownership

calculation: (1) whether the rules should

consider the presence in the market of

all MVPDs rather than cable operators

alone, and (2) whether the rules should

be based on actual subscriber numbers

rather than on homes passed. The rules

proposed in the Further Notice would
Federal Register / Vol. 63, No. 134 /Tuesday, July 14, 1998 / Proposed Rules 37813

provide that, in calculating a cable

MSO’s market share, the numerator

would consist of the MSO’s cable

subscribers plus its non-cable MVPD

subscribers, and the denominator would

consist of the total number of cable

subscribers plus non-cable MVPD

subscribers nationwide. In addition to

these proposed rule changes, the

Commission seeks comment as to

whether the method of ownership

calculation should be modified in some

way to support cable overbuild

competition.

4. In the Further Notice, the

Commission recognizes that the MVPD

market has continued to evolve since

our adoption of the horizontal

ownership rules. The Commission seeks

comment on a proposal to revise the

rules to include alternative MVPDs in

the measure of horizontal concentration

in order to reflect the emergence of

competitors to cable in the video

marketplace, as well as potential MSO

increases in market power through

acquisition of interests in other MVPDs.

The Further Notice seeks comment on

whether such a rule revision—

recognizing the impact of all purchasers

of video programming, not just cable

operators—would provide a more

accurate measure of MSOs’ market

power.

5. The Commission also seeks

comment on whether the proposed

revision of the horizontal ownership

rules is consistent with the

Commission’s authority under Section

613 of the Communications Act to

‘‘prescribe rules and regulations

establishing reasonable limits on the

number of cable subscribers a person is

authorized to reach through cable

systems * * *.’’ The proposal would

result in a sliding or adjustable cable

horizontal ownership limit, under

which the number of subscribers a cable

operator is authorized to reach through

cable systems would decrease in

proportion with any increase in the

number of subscribers that entity

reaches through other MVPD systems.

Conversely, the cable horizontal

ownership limit would rise for a cable

operator that reaches fewer subscribers

through other MVPD systems. The

proposed rules would impose no limit

on the number of subscribers a cable

operator may reach through alternative

MVPD systems. These rules also would

not apply to persons who have no

attributable ownership interests in cable

systems. The Commission seeks

comment on this proposal and on

whether it is consistent with the terms

of the underlying statute, given Section

613’s focus on the cable industry and

the establishment of a cable

subscribership limit rather than an

MVPD subscribership limit.

6. In the Further Notice, the

Commission also seeks comment on the

possibility of changing the method of

calculating the basis of the horizontal

ownership limits from potential reach,

i.e., number of homes passed, to actual

reach, i.e., number of MVPD subscribers

served, in order to reflect an MVPD’s

actual purchasing power. In revisiting

the horizontal ownership rules, the

Commission seeks comment on whether

the homes passed standard continues to

be an accurate measure of horizontal

concentration and market power in

today’s marketplace, and whether the

easier to measure subscriber standard

can be adapted for use in a fashion that

will not require an abrupt halt to the

addition of new subscribers to

established cable systems. The

Commission asks for comment on the

best method for counting subscribers,

including those residing in multidwelling units and commercial

subscribers such as hotels, bars, etc.

7. The Commission seeks comment on

whether the greater accuracy provided

by a subscriber based standard

outweighs the greater stability provided

by a homes passed standard. With

regard to the argument that a subscriber

based standard may have the effect of

discouraging subscriber growth, the

Commission seeks comment on whether

system operators would have a

sufficient opportunity to anticipate the

approaching limit and to dispose of

systems sufficient to stay under the

limit rather than to simply cease the

addition of new subscribers.

8. The Commission asks commenters

to address whether the proposed

revisions are consistent with the public

interest objectives and the

Commission’s legal authority under

section 613 and 47 U.S.C. §§ 151, 154,

and 303. The Commission seeks

comment on whether the proposed

horizontal ownership rules would

provide a more accurate measure of

horizontal concentration and market

power than the current rules. The

Commission also seeks comment on the

practical impact of the proposed rule

changes on MSO ownership and

operation. In particular, the Commission

asks that commenters address whether

the proposed changes would place any

cable MSO in violation of the 30%

horizontal ownership limit and to

provide specific factual information in

support of any such conclusions. The

Commission seeks comment on whether

it should develop special rules to

address situations where a cable MSO

may exceed the 30% limit as a result of

subscriber growth within an existing

area of homes passed. The Commission

further invites comment on any other

matters relevant to its proposals and

tentative conclusions.

Initial Regulatory Flexibility Analysis

for the Further Notice of Proposed

Rulemaking

9. As required by Section 603 of the

Regulatory Flexibility Act, 5 U.S.C.

§ 603 (‘‘RFA’’), the Commission is

incorporating an Initial Regulatory

Flexibility Analysis (‘‘IRFA’’) of the

expected impact on small entities of any

policies or proposals contained in this

Further Notice. Written public

comments concerning the effect of the

proposals in the Further Notice,

including the IRFA, on small businesses

are requested. Comments must be

identified as responses to the IRFA and

must be filed by the deadlines for the

submission of comments in this

proceeding. The Commission shall send

a copy of this Further Notice, including

the IRFA, to the Chief Counsel for

Advocacy of the Small Business

Administration in accordance with

paragraph 603(a) of the Regulatory

Flexibility Act.

10. Need for, and Objectives of, the

Proposed Rules. The 1992 Cable Act and

subsequent actions to implement it, and

Section 11(c) of the 1992 Cable Act in

particular, are intended to encourage

competition in the cable industry and

prevent the exercise of undue market

power by large cable multiple systems

owners. The Commission issues the

Further Notice to obtain comment on

whether certain aspects of the

Commission’s horizontal ownership

rules should be revised to make them

more effective in serving the public

interest objectives Congress charged the

Commission with protecting in Section

11(c).

11. Legal Basis. Authority for the

actions proposed in this Further Notice

may be found in Sections 1, 4, 303, and

613 of the Communications Act of 1934,

as amended, 47 U.S.C. §§ 151, 154, 303,

533.

12. Description and Estimate of the

Number of Small Entities to Which the

Proposed Rules Will Apply. The RFA

generally defines ‘‘small entity’’ as

having the same meaning as the terms

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

and ‘‘small governmental jurisdiction’’

and ‘‘the same meaning as the term

‘small business concern’ under the

Small Business Act unless the

Commission has developed one or more

definitions that are appropriate for its

activities. 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
37814 Federal Register / Vol. 63, No. 134 /Tuesday, July 14, 1998 / Proposed Rules

additional criteria established by the

Small Business Administration

(‘‘SBA’’). Pursuant to 5 U.S.C. § 601(3),

the statutory definition of a small

business applies ‘‘unless an agency after

consultation with the Office of

Advocacy of the SBA and after

opportunity for public comment,

establishes one or more definitions of

such term which are appropriate to the

activities of the agency and publishes

such definition(s) in the Federal

Register.’’

13. The SBA has developed a

definition of small entities for cable and

other pay television services under

Standard Industrial Classification 4841

(SIC 4841), which covers subscription

television services, which includes all

such companies with annual gross

revenues of $11 million or less. 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.

14. The Commission has developed

its own definition of a ‘‘small cable

company’’ and ‘‘small system’’ for the

purposes of rate regulation. Under the

Commission’s rules, a ‘‘small cable

company,’’ is one serving fewer than

400,000 subscribers nationwide. Based

on our most recent information, the

Commission estimates that there were

1,439 cable companies that qualified as

small cable companies at the end of

1995. 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 companies. Consequently,

the Commission estimates that there are

fewer than 1,439 small entity cable

companies that may be affected by the

proposal adopted in the Notice. The

Commission’s rules also define a ‘‘small

system,’’ for the purposes of cable rate

regulation, as a cable system with

15,000 or fewer subscribers. The

Commission does not request nor does

it collect information concerning cable

systems serving 15,000 or fewer

subscribers and thus the Commission is

unable to estimate at this time the

number of small cable systems

nationwide.

15. The Communications Act also

contains a definition of a ‘‘small cable

operator,’’ which is ‘‘a cable operator

that, directly or through an affiliate,

serves in the aggregate fewer than 1

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.’’ The Commission has

determined that there are 61,700,000

subscribers in the United States.

Therefore, the Commission found that

an operator serving fewer than 617,000

subscribers is deemed a small operator,

if its annual revenues, when combined

with the total annual revenues of all of

its affiliates, do not exceed $250 million

in the aggregate. Based on available

data, the Commission finds that the

number of cable operators serving

617,000 subscribers or less totals 1,450.

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. The Commission

is likewise unable to estimate the

number of these small cable operators

that serve 50,000 or fewer subscribers in

a franchise area.

16. Description of Projected

Recording, Record keeping, and Other

Compliance Requirements. If the

horizontal ownership rules are changed,

the Commission may have to change

certain cable reporting requirements.

Cable entities also may have to adjust

the organization of their business

interests in order to comply with any

new rules that the Commission may

adopt.

17. Steps Taken to Minimize

Significant Economic Impact on Small

Entities, and Significant Alternatives

Considered. The actions proposed in the

Further Notice are intended to ensure

that the Commission’s horizontal

ownership rules are effective in

preventing the exercise of undue market

power by large cable multiple systems

owners and promote a competitive,

diverse and fair marketplace.

Accordingly, as discussed in the above

descriptions of the proposed rule

changes, the approaches proposed in

this Further Notice should promote

fairness and diversity for all cable

systems, including the small entities

listed above. The Commission invites

comments on these approaches,

including comment on whether

alternative approaches will mitigate any

unwarranted expenses incurred by

smaller entities by virtue of their size

alone.

18. Federal Rules that Overlap,

Duplicate or Conflict with the Proposed

Rules. None.

Paperwork Reduction Act

19. The proposals contained herein in

the Further Notice have been analyzed

with respect to the Paperwork

Reduction Act of 1995 (the ‘‘1995 Act’’)

and found to impose modified

information collection requirements.

Implementation of any new or modified

requirements will be subject to approval

by the Office of Management and

Budget (‘‘OMB’’). The Commission, as

part of its continuing effort to reduce

paperwork burdens, invites the general

public to take this opportunity to

comment on the information collection

requirements contained in this Further

Notice, as required by the 1995 Act.

Comments should address: (1) Whether

the proposed collection of information

is necessary for the proper performance

of the functions of the Commission,

including whether the information shall

have practical utility; (2) the accuracy of

the Commission’s burden estimates; (3)

ways to enhance the quality, utility, and

clarity of the information collected; and

(4) ways to minimize the burden of the

collection of information on the

respondents, including the use of

automated collection techniques or

other forms of information technology.

20. Written comments by the public

on the modified information collection

requirements are due August 14, 1998.

OMB comments are due August 31,

1998. Comments on the information

collection requirements contained

herein should be submitted to Judy

Boley, Federal Communications

Commission, Room 234, 1919 M Street,

N.W., Washington, DC 20554, or via the

Internet to jboley@fcc.gov and to

Timothy Fain, OMB Desk Officer, 10236

NEOB, 725—17th Street, N.W.,

Washington, DC 20503 or via the

Internet to fainlt@al.eop.gov. For

additional information on the

information collection requirements,

contact Judy Boley at 202–418–0214 or

via the Internet at the above address.

Procedural Provisions

21. Ex parte Rules—‘‘Permit-butDisclose’’ Proceeding. This proceeding

will be treated as a ‘‘permit-butdisclose’’ proceeding subject to the

‘‘permit-but-disclose’’ requirements

under § 1.1206(b) of the rules. Ex parte

presentations are permissible if

disclosed in accordance with

Commission rules, except during the

Sunshine Agenda period when

presentations, ex parte or otherwise, are

generally prohibited. Persons making

oral ex parte presentations are reminded
Federal Register / Vol. 63, No. 134 /Tuesday, July 14, 1998 / Proposed Rules 37815

that a memorandum summarizing a

presentation must contain a summary of

the substance of the presentation and

not merely a listing of the subjects

discussed. More than a one or two

sentence description of the views and

arguments presented is generally

required. Additional rules pertaining to

oral and written presentations are set

forth in Section 1.1206(b).

22. Filing of Comments and Reply

Comments. Pursuant to applicable

procedures set forth in §§ 1.415 and

1.419 of the Commission’s Rules,

comments are due August 14, 1998, and

reply comments are due September 3,

1998. To file formally in this

proceeding, you must file an original

plus four copies of all comments, reply

comments, and supporting comments. If

you want each Commissioner to receive

a personal copy of your comments and

reply comments, you must file an

original plus nine copies. You should

send comments and reply comments to

Office of the Secretary, Federal

Communications Commission, 1919 M

Street, NW, Washington, DC 20554.

Comments and reply comments will be

available for public inspection during

regular business hours in the FCC

Reference Center, Room 239, Federal

Communications Commission, 1919 M

Street NW, Washington DC 20554.

Ordering Clauses

23. Accordingly, it is ordered that,

pursuant to sections 1, 4, 303 and 613

of the Communications Act of 1934, as

amended, 47 U.S.C. 151, 154, 303 and

533, notice is hereby given of proposed

amendments to the Commission’s rules,

in accordance with the proposals,

discussions and statements of issues in

the Further Notice and comment is

sought regarding such proposals,

discussions and statements of issues.

24. It is further ordered that the Office

of Public Affairs Reference Operation

Division shall send a copy of this

Further Notice, including the Initial

Regulatory Flexibility Analysis, to the

Chief Counsel for Advocacy of the Small

Business Administration.

List of Subject in 47 CFR Part 76

Cable television.

Federal Communications Commission.

Magalie Roman Salas,

Secretary.

[FR Doc. 98–18038 Filed 7–13–98; 8:45 am]

BILLING CODE 67129–01–P

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 76

[CS Docket No. 98–82; FCC 98–112]

Cable Television Ownership

Attribution Rules

AGENCY: Federal Communications

Commission.

ACTION: Proposed rule.

SUMMARY: In the Notice of Proposed

Rulemaking (‘‘NPRM’’), the Commission

initiates a review of its cable attribution

rules. The attribution rules seek to

identify those corporate, financial,

partnership, ownership and other

business relationships that confer on

their holders a degree of ownership or

other economic interest, or influence or

control over an entity engaged in the

provision of communications services

such that the holders should be subject

to the Commission’s regulation. The

Commission is initiating this

rulemaking in light of recent

developments in the cable industry.

DATES: Comments are due on or before

August 14, 1998, and reply comments

are due on or before September 3, 1998.

FOR FURTHER INFORMATION CONTACT: John

Norton, Cable Services Bureau, (202)

418–7200.

SUPPLEMENTARY INFORMATION: This is a

synopsis of the Commission’s Notice of

Proposed Rulemaking (‘‘NPRM’’) CS

Docket No. 98–82, FCC 98–112 adopted

June 4, 1998, and released June 26,

1998. 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, D.C. 20554,

and may be purchased from the

Commission’s copy contractor,

International Transcription Service,

(202) 857–3800, 1231 20th Street, NW,

Washington, D.C. 20036.

Synopsis of the Notice of Proposed

Rulemaking

1. The NPRM initiates a review of the

Commission’s cable television

ownership attribution rules, which seek

to identify those corporate, financial,

partnership, ownership and other

business relationships that confer on

their holders a degree of ownership or

other economic interest, or influence or

control over an entity engaged in the

provision of communications services

such that the holders should be subject

to the Commission’s regulation. The

cable attribution rules are particularly

significant in the context of a number of

statutory provisions enacted as part of

the Cable Television Consumer

Protection and Competition Act of 1992

(the ‘‘1992 Cable Act’’), including: (1)

former section 613(a)(1), which

prohibited the common ownership of

local television stations and cable

systems that serve the same area (the

‘‘cable/broadcast station crossownership restriction’’); (2) section

613(f)(1)(A), which requires the

Commission to establish reasonable

limits on the number of cable

subscribers a person is authorized to

reach through cable systems owned by

such person, or in which such person

has an attributable interest (‘‘horizontal

cable ownership limits’’); (3) section

613(f)(1)(B), which requires the

Commission to establish reasonable

limits on the number of channels on a

cable system that can be occupied by a

video programmer in which a cable

operator has an attributable interest

(‘‘vertical occupancy limits’’); (4)

section 613(a)(2), which prohibits a

cable operator from holding a license to

provide multichannel multipoint

distribution service (‘‘MMDS’’), or from

offering satellite master antennae

television (‘‘SMATV’’) service separate

and apart from any franchised cable

service, in any portion of the franchise

area served by the cable operator’s cable

system (the ‘‘cable/MMDS’’ and ‘‘cable/

SMATV’’ cross-ownership restrictions);

(5) section 628, which, among other

things, requires the Commission to

establish safeguards to prevent a cable

operator with an attributable interest in

a programming vendor from engaging in

unfair or deceptive acts involving the

distribution of programming to an

unaffiliated multichannel video

programming distributor (‘‘program

access’’ rules); and (6) section 616,

which, among other things, restricts the

activities of cable operators and other

multichannel programming distributors

when dealing with programming

vendors, including prohibiting

discrimination in the selection, terms,

or conditions of carriage, on the basis of

a vendor’s affiliation or non-affiliation

(‘‘program carriage’’ rules).

2. For broad structural rules such as

the horizontal cable ownership limits

and vertical channel occupancy limits,

that are designed to ensure competition

and diversity in the video marketplace,

the Commission adopted attribution

rules from the broadcast context where

the goal is the same. The broadcast

attribution standard generally provides

that partnership interests, direct

ownership interests, and voting stock

interests of 5% or more are attributable.

For passive investors, the voting stock

benchmark is 10%. Non-voting stock