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
37816 Federal Register / Vol. 63, No. 134 /Tuesday, July 14, 1998 / Proposed Rules

interests (including most ‘‘preferred’’

stock classes) are not attributable. There

are several exceptions to the voting

stock threshold, including a ‘‘single

majority shareholder’’ exception, which

provides that minority interests will not

be attributed where a single shareholder

owns more than 50% of the outstanding

voting stock. In addition, the interests of

‘‘insulated’’ limited partners are not

attributed.

3. The Commission adopted a more

restrictive attribution standard for those

rules, such as the program access and

program carriage rules and the cable/

MMDS and cable/SMATV crossownership restrictions, that are

designed not only to promote

competition and diversity, but also to

deter specific discriminatory or

improper conduct by cable operators or

programmers. In contrast to the

broadcast attribution standard, this

more restrictive standard (1) considers a

cable operator to have an attributable

interest if it holds 5% or more of an

entity’s stock, whether voting or nonvoting, (2) does not apply the single

majority shareholder rule, and (3)

attributes limited partnership interests

of 5% or more, regardless of insulation.

4. In addition, the Commission relied

upon the attribution rules in defining

when an entity is considered an

‘‘affiliate’’ for certain purposes under

Title VI. The Commission applied the

more restrictive attribution standard to

the ratemaking context, for purposes of

analyzing asset transfers and the

provision of services between a cable

operator and its affiliate, and for

purposes of limiting the amount of passthroughs permitted for programming

services affiliated with cable operators.

The Commission also applied the more

restrictive attribution standard to the

leased access provisions and the open

video system provisions.

5. In the Cable Act Reform

proceeding, the Commission is

reviewing appropriate definitions of

‘‘affiliate’’ under other provisions of the

1996 Act, including the small operator

provisions, the new prong of the

‘‘effective competition’’ test, and the

cable-telco buy-out provisions. Pending

the adoption of final rules, the

Commission requested comments on the

appropriate definition of ‘‘affiliate’’ for

the cable-telco buyout provisions and

established interim rules for the small

operator and ‘‘effective competition’’

provisions. For the small operator

provisions, the interim rule adopted the

definition of ‘‘affiliate’’ used for

purposes of the Commission’s small

system cost-of-service rules. Thus, an

entity is deemed affiliated with a small

cable operator if that entity has a 20%

or greater equity interest in the operator

(active or passive) or holds de jure or de

facto control over the operator. By

contrast, in the ‘‘effective competition’’

context, the interim rule provided that

an ‘‘affiliate’’ is an entity that (directly

or indirectly) owns or controls, is

owned or controlled by, or is under

common ownership or control with,

another person, where the term ‘‘own’’

means to have an equity interest (or the

equivalent thereof) of more than 10%.

6. The Commission has initiated a

review of the broadcast attribution

standard under the Notice of Proposed

Rule Making, Review of the

Commission’s Regulations Governing

the Attribution of Mass Media Interests,

60 FR 06483, MM Docket Nos. 94–150,

92–51 and 87–154, FCC 94–324, 10 FCC

Rcd 3606 (1995) (‘‘Broadcast Attribution

Notice’’) and the Further Notice of

Proposed Rule Making, Regulations

Governing Attribution of Broadcast and

Cable/MDS Interests, Regulation and

Policies Affecting Investment in the

Broadcast Industry and Reexamination

of the Commission’s Cross-Interest

Policy, 61 FR 67275, MM Docket Nos.

94–150, 92–51 and 87–154, FCC 96–436,

11 FCC Rcd 19895 (1996) (‘‘Broadcast

Attribution Further Notice’’).

7. Among the issues on which the

Commission solicited comment in the

Broadcast Attribution Notice were: (1)

whether to increase the voting stock

ownership benchmark from 5 percent to

10 percent; (2) whether to increase the

passive investor stock ownership

benchmark from 10 percent to 20

percent; (3) whether to restrict or

eliminate our single majority

shareholder exemption and whether to

attribute nonvoting shares in certain

circumstances, such as where the

minority or nonvoting shareholder has

contributed a significant portion of the

equity or debt financing; (4) whether to

revise our insulation criteria for limited

partnership interests, and whether to

adopt an equity benchmark for

noninsulated limited partners; (5)

whether to treat interests in limited

liability companies (‘‘LLCs’’) and

similar new business forms, such as

registered limited liability partnerships

(‘‘RLLPs’’), as we now treat limited

partnerships; (6) whether to eliminate

the remaining aspects of our crossinterest policy that prevent individuals

from having ‘‘meaningful’’ interests—

including key employee relationships,

joint ventures, and nonattributable

equity interests—in two broadcast

stations, or a daily newspaper and a

broadcast station, or a television station

and a cable system, when both outlets

serve ‘‘substantially the same area;’’ and

(7) how to treat non-equity financial

relationships and multiple business

relationships that, although not

individually attributable, could combine

to create sufficient influence to warrant

attribution.

8. In addition to the issues raised in

the Broadcast Attribution Notice, the

Broadcast Attribution Further Notice

explored additional proposals to

increase the precision of the attribution

rules. In the Broadcast Attribution

Further Notice, the Commission invited

comment on whether it should add a

new ‘‘equity or debt plus’’ (‘‘EDP’’)

attribution rule. Under such a rule,

where an interest holder is a program

supplier or same-market media entity,

the Commission will attribute its

otherwise non-attributable equity and/or

debt interests in a licensee or other

media entity subject to the crossownership rules if those aggregated

interests exceed a specified benchmark,

proposed to be set at 33 percent.

Second, the Commission tentatively

concluded that it should treat television

time brokerage agreements or local

marketing agreements (‘‘LMAs’’) the

same as radio LMAs, and also count

radio and television LMAs toward all

applicable ownership limits. Third, the

Commission invited comment as to

whether it should attribute joint sales

agreements (‘‘JSAs’’) in certain

circumstances. Fourth, the Commission

invited comments on its staff study of

attributable ownership interests in

broadcast television stations, appended

to the Broadcast Attribution Further

Notice, and on the implications of this

study regarding the impact of the

proposed attribution rule changes,

particularly as to the voting stock

benchmarks. Fifth, the Commission

sought comments on whether a

transition period or grandfathering of

existing interests is appropriate. The

Commission tentatively concluded that

any grandfathering should apply only to

the current interest holder and that

interests acquired on or after December

15, 1994, the date of adoption of the

Broadcast Attribution Notice, should be

subject to any final rules adopted. The

Commission invited comments as to

whether it should apply broadcast

attribution criteria and add a new EDP

attribution rule for purposes of the

cable/Multipoint Distribution Service

(‘‘MDS’’) cross-ownership restrictions.

9. This NPRM initiates a similar

review of the attribution issues as they

specifically relate to the Commission’s

cable rules. The NPRM seeks comment

on the same issues raised in the

broadcast attribution proceedings as

they pertain to the cable industry, and

on whether and how these issues should

factor into the review of the
Federal Register / Vol. 63, No. 134 /Tuesday, July 14, 1998 / Proposed Rules 37817

Commission’s cable attribution rules. In

particular, the Commission asks

commenters to focus on: (1) the

proposed ‘‘equity or debt plus’’ addition

to the current attribution rules, and

specifically those relationships in the

cable context that may provide

sufficient incentive and ability for an

otherwise nonattributable interest

holder to exert an attributable influence

or control; (2) the attribution of certain

contractual or other business

relationships in the cable context

(including affiliations that allow

different cable entities to purchase

programming, technology or equipment

on common terms, analogous to JSAs

and LMAs in the broadcast context) that

may implicate diversity and

competition concerns, irrespective of

debt or equity; (3) the impact of raising

the stock ownership benchmark for

active and passive investors in the cable

context, particularly seeking empirical

data and analysis similar to the

Commission staff study on the same

subject in the broadcasting context; (4)

whether to retain, modify, or eliminate

the single majority shareholder

exemption; and (5) whether a transition

period or grandfathering of existing

interests is appropriate if we decide to

adopt more restrictive attribution rules.

Because the Broadcast Attribution

Notice and the Broadcast Attribution

Further Notice already address

application of the attribution rules to

the cable/MMDS and the cable/

broadcast cross-ownership restrictions,

the Commission will not revisit and

therefore does not seek comment on

those issues in the NPRM.

10. The NPRM seeks comment on

whether the assumptions underlying the

cable attribution rules are still valid. In

particular, comment is sought on

whether any relevant differences exist

between the cable and broadcasting

industries that would support a distinct

cable attribution standard even for those

cable rules designed, like the

broadcasting ownership rules, to ensure

competition and diversity. In the NPRM,

the Commission notes that the broadcast

attribution rules focus primarily on

those relationships which confer on

their holders influence or control over a

broadcaster’s key business decisions in

the areas of budget, personnel and

programming. Comment is sought on

whether, in the cable context, these are

the appropriate key business areas and

whether the underlying areas of concern

should include cable entities’

technology decisions and practices. The

NPRM seeks comment on whether there

are differences in ownership, financing

or management structures, industry

health, typical stockholdings, informal

business arrangements, or outside

financial claims that render one of the

industries more or less subject to the

types of influence or control that the

attribution rules seek to identify. Also,

because the current cable attribution

rules do not distinguish between types

of cable operators, comment is sought

on whether any relevant differences

exist among cable operators that would

warrant different attribution rules.

11. In the NPRM, the Commission also

solicits comment on whether and how

we should re-evaluate the more

restrictive attribution standard

applicable to certain of the rules

described above, such as the program

access and program carriage rules and

the cable/MMDS and cable/SMATV

cross-ownership restrictions. In

particular, the Commission seeks

comment on: (1) whether the more

restrictive standard serves the purposes

for which it was intended; (2) whether

the more restrictive standard is over- or

under-inclusive; (3) whether the more

restrictive attribution standard should

be revised in relation to the broadcast

attribution standard; (4) whether these

two attribution standards should be

treated as completely separate and

independent formulations; and (5)

whether, in view of the purposes it

serves, we should require a more

compelling showing before modifying

the more restrictive standard.

12. In the NPRM, comment is sought

on whether and how any changes in our

cable attribution rules should affect the

Commission’s various definitions of

‘‘affiliate.’’ In particular, the

Commission seeks comment on whether

and how those affiliation rules that are

expressly based on the cable attribution

rules should change if the underlying

attribution rules are changed.

13. In the NPRM, the Commission

seeks comment as to the business

arrangements involved in recent cable

system partnerships, joint ventures,

swaps, transfers, mergers and

acquisitions, particularly those

transactions announced or

consummated in 1997 or thereafter,

including those discussed in the

Commission’s 1997 annual report on the

status of competition in the delivery of

video programming. Commenters

should identify the entities involved in

each transaction, the projected date of

consummation, details of the new

structure including: the percentage and

nature (e.g., voting or non-voting,

limited or general partnership, insulated

or non-insulated, rights of conversion)

of each entity’s ownership interests, the

number of officers, directors, and other

key personnel appointed by each entity

to a management committee, board or

other governing body, the portion of the

equity or debt financing contributed by

each entity, and any authority or power

held by each entity to review, veto or

otherwise influence the management or

operation of the cable systems, as well

as the ability to purchase programming,

technology, or equipment under

common contract terms. The

Commission seeks information, in

particular, as to any business

arrangements undertaken to insulate

one or more parties to these transactions

from control or influence over key

business aspects of the cable systems at

issue. Comment is also sought as to the

development of the Commission’s cable

attribution rules to avoid inconsistency

with any other statutes or regulations

(e.g., those of the Internal Revenue

Service or the Financial Accounting

Standards Board) that may influence the

structuring of the business arrangements

at issue.

14. With respect to each ownership or

relational interest discussed herein, the

Commission seeks comment on whether

the specified level or degree of

ownership interest in, or relationship to,

an entity would be likely to impart the

ability to influence or control the

operations of that entity, including core

areas such as budget, personnel,

programming, technology, or

competitive practices, such that the

ownership rules should be implicated.

Consistent with the purpose of section

257 of the 1996 Act to reduce market

entry barriers for small businesses,

comment is also sought on the impact

that any changes to the Commission’s

cable ownership attribution or

affiliation standards will have on market

entry barriers for small businesses. In

the NPRM, the Commission asks

interested parties to support their

comments with empirical data and

economic analyses regarding levels of

influence in business organizations and

current market conditions.

Initial Regulatory Flexibility Analysis

15. 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

NPRM. Written public comments

concerning the effect of the proposals in

the NPRM, 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 the NPRM, including the
37818 Federal Register / Vol. 63, No. 134 /Tuesday, July 14, 1998 / Proposed Rules

IRFA, to the Chief Counsel for Advocacy

of the Small Business Administration in

accordance with paragraph 603(a) of the

Regulatory Flexibility Act.

16. Need for, and Objectives of, the

Proposed Rules. This proceeding is

being initiated to obtain comment on

whether the Commission’s cable

attribution and affiliation rules continue

to serve their intended goals, and

whether certain aspects of those rules

should be revised to make them more

effective. The actions proposed in the

NPRM are intended to ensure that the

Commission effectively implements the

various cable rules that include an

attribution or affiliation standard by

identifying those interests that may

result in undue market power by large

entities, such as large cable multiple

systems owners, and undermine a

competitive, diverse and fair

marketplace.

Legal Basis

17. Authority for the actions proposed

in the NPRM is contained in sections 4,

303, 612, 613, 616, 623, 628, 652 and

653 of the Communications Act of 1934,

as amended, 47 U.S.C. §§ 154, 303, 532,

533, 536, 543, 548, 572 & 573.

18. 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

additional criteria established by the

Small Business Administration

(‘‘SBA’’). The Small Business

Enforcement Fairness Act of 1996

(SBREFA) provision of the RFA also

applies to nonprofit organizations and

to governmental organizations such as

governments of cities, counties, towns,

townships, villages, school districts, or

special districts with populations of less

than 50,000. 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.’’

19. Local Franchising Authorities.

There are 85,006 governmental entities

in the United States. This number

includes such entities as states,

counties, cities, utility districts and

school districts. Any official actions

with respect to cable systems will

typically be undertaken by local

franchising authorities (‘‘LFAs’’), which

primarily consist of counties, cities and

towns. Of the 85,006 governmental

entities, 38,978 are counties, cities and

towns. The remainder are primarily

utility districts, school districts, and

states, which typically are not LFAs. Of

the 38,978 counties, cities and towns,

37,566 or 96%, have populations of

fewer than 50,000. Thus, approximately

37,500 ‘‘small governmental

jurisdictions’’ may be affected by the

rules proposed in the NPRM.

20. Cable Services or Systems. 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.

21. 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 NPRM. 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 is unable to

estimate at this time the number of

small cable systems nationwide.

22. 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.

23. Satellite Master Antennae

Television (‘‘SMATV’’) Operators.

Industry sources estimate that

approximately 5200 SMATV operators

were providing service as of December

1995. Other estimates indicate that

SMATV operators serve approximately

1.05 million residential subscribers as of

September 1996. The ten largest

SMATV operators together pass 815,740

units. If it is assumed 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, the

Commission is 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,

the Commission believes that a

substantial number of SMATV operators

qualify as small entities.

24. Local Exchange Carriers (‘‘LECs’’).

Neither the Commission nor the SBA
Federal Register / Vol. 63, No. 134 /Tuesday, July 14, 1998 / Proposed Rules 37819

has developed a definition for small

LECs. The closest applicable definition

under the SBA rules is for telephone

communications companies other than

radiotelephone (wireless) companies.

The most reliable source of information

regarding the number of LECs

nationwide is the data that the

Commission collects annually in

connection with the TRS Worksheet.

According to the Commission’s most

recent data, 1,347 companies reported

that they were engaged in the provision

of local exchange services. The

Commission does not have information

on the number of carriers that are not

independently owned and operated, nor

what carriers have more than 1,500

employees, and thus the Commission is

unable at this time to estimate with

greater precision the number of LECs

that would qualify as small business

concerns under SBA’s definition.

Consequently, the Commission

estimates that there are fewer than 1,347

small incumbent LECs.

25. Cable Programmers. The

Commission has not developed a

definition of small entities applicable to

producers or distributors of cable

television programs. Therefore, the

Commission will utilize the SBA

classifications of Motion Picture and

Video Tape Production (SIC 7812), and

Theatrical Producers (Except Motion

Pictures) and Miscellaneous Theatrical

Services (SIC 7922). These SBA

definitions provide that a small entity in

the cable television programming

industry is an entity with $21.5 million

or less in annual receipts for SIC 7812,

and $5 million or less in annual receipts

for SIC 7922. Census Bureau data

indicate the following: (a) there were

7,265 firms in the United States

classified as Motion Picture and Video

Production (SIC 7812), and that 6,987 of

these firms had $16.999 million or less

in annual receipts and 7,002 of these

firms had $24.999 million or less in

annual receipts; and (b) there were

5,671 firms in the United States

classified as Theatrical Producers and

Services (SIC 7922), and that 5627 of

these firms had $4.999 million or less in

annual receipts.

26. Description of Projected

Recording, Record keeping, and Other

Compliance Requirements. If the

Commission’s cable ownership

attribution or affiliation standards are

changed, the Commission may have to

change certain cable reporting

requirements and cable entities may be

required to observe new recording,

record keeping or other compliance

requirements that would be necessary to

ensure compliance with the new

attribution or affiliation standards.

Cable entities also may have to adjust

the organization of their business

interests in order to comply with any

new attribution or affiliation standards

that the Commission may adopt.

27. Steps Taken to Minimize

Significant Economic Impact on Small

Entities, and Significant Alternatives

Considered. The actions proposed in the

NPRM are intended to ensure that the

Commission effectively implements the

various cable rules that include an

attribution or affiliation standard by

identifying more accurately those

interests that may result in undue

market power by large entities, such as

large cable multiple systems owners,

and undermine a competitive, diverse

and fair marketplace. Accordingly, as

discussed in the above descriptions of

the proposed rule changes, and in the

Broadcast Attribution Notice and

Broadcast Attribution Further Notice,

the approaches proposed in this NPRM

should promote fairness and diversity

for all cable systems and other 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.

28. Federal Rules that Overlap,

Duplicate or Conflict with the Proposed

Rules. None.

Paperwork Reduction Act Analysis

29. The proposals contained herein

have been analyzed with respect to the

Paperwork Reduction Act of 1995 (the

‘‘1995 Act’’). The Commission has

determined that, if we change our cable

ownership attribution or affiliation

standards, the Commission may have to

require cable entities to comply with

new or modified information collection

requirements that would be necessary to

ensure compliance with the new

attribution or affiliation standards. If the

Commission, in a subsequent

rulemaking in this proceeding,

implements new or modified

information collection requirements,

those requirements will first be subject

to approval by the Office of

Management and Budget as prescribed

by the Act.

Procedural Provisions

30. This proceeding will be treated as

a ‘‘permit-but-disclose’’ proceeding

subject to the ‘‘permit-but-disclose’’

requirements under Section 1.1206(b) of

the rules. 47 CFR 1.1206(b), as revised.

Ex parte presentations are permissible if

disclosed in accordance with

Commission rules, except during the

Sunshine Agenda period when

presentations, ex parte or otherwise, are

generally prohibited. Persons making

oral ex parte presentations are reminded

that a memorandum summarizing a

presentation must contain a summary of

the substance of the presentation and

not merely a listing of the subjects

discussed. More than a one or two

sentence description of the views and

arguments presented is generally

required. See 47 CFR 1.1206(b)(2), as

revised. Additional rules pertaining to

oral and written presentations are set

forth in § 1.1206(b).

31. Pursuant to applicable procedures

set forth in §§ 1.415 and 1.419 of the

Commission’s Rules, 47 CFR. 1.415 and

1.419, 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, N.W. 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, Federal

Communications Commission, 1919 M

Street N.W., Washington D.C. 20554.

Ordering Clauses

32. Accordingly, it is hereby ordered

that pursuant to the authority in

sections 4, 303, 612, 613, 616, 623, 628,

and 653 of the Communications Act of

1934, as amended, 47 U.S.C. 154, 303,

532, 533, 536, 543, 548, 572 and 573,

notice is hereby given of proposed

amendments to part 76, in accordance

with the proposals, discussions, and

statement of issues in this Notice of

Proposed Rulemaking, and that

comment is sought regarding such

proposals, discussion, and statement of

issues.

33. It is further ordered that the Office

of Public Affairs Reference Operation

Division shall send a copy of this Notice

of Proposed Rulemaking, including the

Initial Regulatory Flexibility Analysis,

to the Chief Counsel for Advocacy of the

Small Business Administration in

accordance with paragraph 603(a) of the

Regulatory Flexibility Act, Public Law

96–354, 94 Stat. 1164, 5 U.S.C. 601 et

seq. (1981).

List of Subjects in 47 CFR Part 76

Cable television.
37820 Federal Register / Vol. 63, No. 134 /Tuesday, July 14, 1998 / Proposed Rules

Federal Communications Commission.

Magalie Roman Salas,

Secretary.

[FR Doc. 98–18036 Filed 7–13–98; 8:45 am]

BILLING CODE 6712–01–P

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety

Administration

49 CFR Part 571

[Docket No. NHTSA–98–4028: Notice 4]

RIN 2127–AC85

Federal Motor Vehicle Safety

Standards; Glazing Materials

AGENCY: National Highway Traffic

Safety Administration (NHTSA),

Department of Transportation (DOT).

ACTION: Withdrawal of notice of

proposed rulemaking.

SUMMARY: This notice withdraws a

proposal in which the agency

considered amending Federal Motor

Vehicle Safety Standard No. 205,

Glazing materials, to revise its light

transmittance requirements. The

amendments would have specified a

new procedure for testing the light

transmittance of glazing samples.

Instead of specifying that they be tested

at the currently specified 90 degree

angle, the standard would have

specified that they be tested at the acute

angle at which the glazing would be

installed in the vehicle (the rake angle).

The amendments also would have

added light transmittance requirements

for light trucks, vans, sport utility

vehicles, and buses of less than 10,000

pounds gross vehicle weight rating

(GVWR), and specified different

transmissibility requirements for the

various windows.

After reviewing the available

information, NHTSA has decided to

withdraw this proposal. The reasons for

taking this action include the following:

the cost impacts of testing at the

installed angle pursuant to the proposed

new procedure would not be adequately

offset by the potential safety benefits of

increased visibility if glazing continues

to be installed at current rake angles; the

practical limits imposed by concerns

about visual distortion will prevent rake

angles from increasing; the agency does

not want to prohibit the use of the best

present solar windshield glazing in

order to achieve slight differences in

effective light transmittance at current

rake angles; the agency wishes to better

define the relationship between light

transmittance and highway safety before

it establishes transmittance levels for

various vehicle windows; and without

controlling for the installed angle of the

glazing, setting specific transmittance

levels would not consistently and

predictably result in improved light

transmittance. Another reason for

withdrawing this proposal to establish

light transmittance levels for additional

classes of motor vehicles concerned the

fact that the proposed transmittance

levels were premised upon adopting the

proposed new test method. Since the

agency is not adopting the new method,

it can not adopt transmittance levels

selected on the basis of that method.

FOR FURTHER INFORMATION CONTACT: For

technical issues: Richard Van Iderstine,

Office of Crash Avoidance Standards,

National Highway Traffic Safety

Administration, 400 Seventh Street,

S.W., Washington, D.C., 20590.

Telephone: (202) 366–5280.

For legal issues: Paul Atelsek, NCC–

20, Rulemaking Division, Office of Chief

Counsel, National Highway Traffic

Safety Administration, 400 Seventh

Street, SW., Washington, D.C. 20590

(202) 366–2992.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background

A. The current standard

B. Previous events related to this

rulemaking

1. Request for Comments

2. Report to Congress

3. Court case against tint film installers

II. Notice of Proposed Rulemaking (NPRM)

A. Summary of issues analyzed

B. The proposed rule

1. Test procedure

2. Light transmittance levels

3. Vehicles covered

4. Compliance by multi-stage

manufacturers

5. Amendments to the language of FMVSS

No. 205

III. Comments on the NPRM

A. Tint film industry

B. Medical commenters

C. Safety groups

D. Law enforcement community

E. Manufacturers of motor vehicles

F. Glazing manufacturers

IV. Analysis of issues

A. Line-of-sight measurement of glazing

transmittance

B. Proposed transmittance values

V. Agency decision

VI. ‘‘Reissuance’’ of Standard No. 205

I. Background

A. The Current Standard

Federal Motor Vehicle Safety

Standard No. 205, Glazing Materials (49

CFR 571.205), specifies performance

requirements and permissible locations

for the types of glazing that may be

installed in motor vehicles. The

standard incorporates by reference

American National Standards Institute

(ANSI) Standard Z26.1, ‘‘Safety Code for

Safety Glazing Materials for Glazing

Motor Vehicles Operating on Land

Highways,’’ as amended through 1980

(Z26). The requirements in Z26 are

specified in terms of performance tests

that the various types, or ‘‘items,’’ of

glazing must pass.

One of the tests is for luminous, or

light, transmittance. This test measures

the regular (parallel) transmittance of a

sample of the glazing, in terms of the

percentage of incident light that passes

through the glazing. During the test,

light strikes the glazing at a 90 degree

angle. To pass the test, the glazing must

allow 70 percent of the incident light to

pass through.

The amount of light transmitted

through vehicle glazing affects the

ability of the driver to see objects on the

road. Low light transmittance can make

it difficult to detect low contrast objects,

such as pedestrians, whose luminance

and coloring causes them to blend with

the background of the roadside

environment. The effect of low light

transmittance levels on the driver’s

vision is most pronounced at dusk and

night when the ambient light level is

low. This is because the ‘‘contrast

sensitivity’’ of the eye diminishes as the

overall brightness of the scene

decreases. This lower contrast

sensitivity makes it especially difficult

to discern low contrast objects. This

problem is most acute for older drivers

who have poorer contrast sensitivity.

Contrast sensitivity declines by a factor

of two about every 20 years after age 30.

Thus, older drivers have poorer dusk

and night vision.

The light transmittance requirements

must be met by all glazing installed in

windows that are ‘‘requisite for driving

visibility’’ (see Z26, table 1). In a

longstanding interpretation of this term,

NHTSA has determined that all

windows in a passenger car, with

limited exceptions not relevant here, are

considered requisite for driving

visibility.

For buses, trucks, and multipurpose

passenger vehicles (MPV’s), glazing that

meets the 70 percent light transmittance

requirements is required in the

windshield, the windows to the

immediate left and right of the driver,

and any rear or rear side windows that

are requisite for driving visibility. The

agency has not issued an interpretation

specifying which rear or rear side

windows are requisite for driving

visibility. In rear windows in buses,

trucks, and MPV’s that are not requisite

for driving visibility, items of glazing

that are not subject to the 70 percent