[Federal Register Volume 70, Number 185 (Monday, September 26, 2005)]
[Proposed Rules]
[Pages 56150-56157]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-19161]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 79

[CG Docket No. 05-231; FCC 05-142]


Closed Captioning of Video Programming; Telecommunications for 
the Deaf, Inc. Petition for Rulemaking

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Commission grants a petition for 
rulemaking and initiates a proceeding to examine the Commission's 
closed captioning rules. Specifically, the Commission seeks comment on 
the current status of the Commission's closed captioning rules in 
ensuring that video programming is accessible to deaf and hard of 
hearing Americans and whether any revisions should be made to enhance 
the effectiveness of those rules; and several compliance and quality 
issues relating to closed captioning that were raised in a Petition for 
Rulemaking filed by Telecommunications for the Deaf, Inc., (TDI), the 
National Association of the Deaf, Self Help for Hard of Hearing People, 
Inc., the Association for Late Deafened Adults, and the Deaf and Hard 
of Hearing Consumer Advocacy Network.

DATES: Comments are due on or before November 10, 2005. Reply comments 
are due on or before November 25, 2005. Written comments on the 
Paperwork Reduction Act (PRA) proposed information collection 
requirements must be submitted by the general public, Office of 
Management and Budget (OMB), and other interested parties on or before 
November 25, 2005.

ADDRESSES: You may submit comments, identified by [docket number and/or 
rulemaking number], by any of the following methods:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> Federal Communications Commission's Web Site: http://www.fcc.gov/cgb/ecfs/. Follow the instructions for submitting comments.

[[Page 56151]]

    People with Disabilities: Contact the FCC to request reasonable 
accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by e-mail: <a href="/cdn-cgi/l/email-protection#ca8c8989fffafe8aaca9a9e4ada5bc"><span class="__cf_email__" data-cfemail="04424747313430446267672a636b72">[email protected]</span></a> or phone (202) 418-
0539 or TTY: (202) 418-0432.
    For detailed instructions for submitting comments and additional 
information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document. In addition, a copy of any 
comments on the Paperwork Reduction Act (PRA) information collection 
requirements contained herein should be submitted to Leslie Smith, 
Federal Communications Commission, Room 1-A804, 445 12th Street, SW., 
Washington, DC 20554, or via the Internet to <a href="/cdn-cgi/l/email-protection#7f331a0c13161a512c12160b173f191c1c51181009"><span class="__cf_email__" data-cfemail="eea28b9d82878bc0bd83879a86ae888d8dc0898198">[email protected]</span></a>, and 
to Kristy L. LaLonde, OMB Desk Officer, Room 10234 NEOB, 725 17th 
Street, NW., Washington, DC 20503, via the Internet to <a href="/cdn-cgi/l/email-protection#c883baa1bbbcb19784e69784a984a7a6acad88a7a5aae6ada7b8e6afa7be"><span class="__cf_email__" data-cfemail="1f546d766c6b6640533140537e5370717b7a5f70727d317a706f31787069">[email protected]</span></a>, or via fax at (202) 395-5167.

FOR FURTHER INFORMATION CONTACT: Amelia Brown, Consumer & Governmental 
Affairs Bureau, Disability Rights Office at (202) 418-2799 (voice), 
(202) 418-0597 (TTY), or e-mail at <a href="/cdn-cgi/l/email-protection#17567a727b7e763955657860795771747439707861"><span class="__cf_email__" data-cfemail="31705c545d58501f73435e465f715752521f565e47">[email protected]</span></a>. For additional 
information concerning the Paperwork Reduction Act information 
collection requirements contained in the document, contact Leslie Smith 
at (202) 418-0217, or via the Internet at <a href="/cdn-cgi/l/email-protection#377b52445b5e5219645a5e435f7751545419505841"><span class="__cf_email__" data-cfemail="f2be97819e9b97dca19f9b869ab2949191dc959d84">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: The Notice of Proposed Rulemaking (NPRM), 
Closed Captioning of Video Programming; Telecommunications for the 
Deaf, Inc. Petition for Rulemaking, CG Docket No. 05-231, FCC 05-142, 
contains proposed information collection requirements subject to the 
PRA of 1995, Public Law 104-13. It will be submitted to the Office of 
Management and Budget (OMB) for review under Section 3507 of the PRA. 
OMB, the general public, and other Federal agencies are invited to 
comment on the proposed information collection requirements contained 
in this proceeding. This is a summary of the Commission's NPRM, FCC 05-
142, adopted July 14, 2005, and released July 21, 2005, in CG Docket 
No. 05-231.
    Pursuant to Sec. Sec.  1.415 and 1.419 of the Commission's rules, 
47 CFR 1.415 and 1.419, interested parties may file comments and reply 
comments on or before the dates indicated on the first page of this 
document. Comments may be filed using: (1) The Commission's Electronic 
Comment Filing System (ECFS), (2) the Federal Government's eRulemaking 
Portal, or (3) by filing paper copies. See Electronic Filing of 
Documents in Rulemaking Proceedings, 63 FR 24121, May 1, 1998.
    <bullet> Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: http://www.fcc.gov/cgb/ecfs/ 
or the Federal eRulemaking Portal: http://www.regulations.gov. Filers 
should follow the instructions provided on the website for submitting 
comments.
    <bullet> For ECFS filers, if multiple docket or rulemaking numbers 
appear in the caption of this proceeding, filers must transmit one 
electronic copy of the comments for each docket or rulemaking number 
referenced in the caption. In completing the transmittal screen, filers 
should include their full name, U.S. Postal Service mailing address, 
and the applicable docket or rulemaking number, which in this instance 
is CG Docket No. 05-231. Parties may also submit an electronic comment 
by Internet e-mail. To get filing instructions, filers should send an 
e-mail to <a href="/cdn-cgi/l/email-protection#a1c4c2c7d2e1c7c2c28fc6ced7"><span class="__cf_email__" data-cfemail="a4c1c7c2d7e4c2c7c78ac3cbd2">[email protected]</span></a>, and include the following words in the body of 
the message, ``get form <your e-mail address>.'' A sample form and 
directions will be sent in response.
    <bullet> Paper Filers: Parties who choose to file by paper must 
file an original and four copies of each filing. If more than one 
docket or rulemaking number appears in the caption in this proceeding, 
filers must submit two additional copies of each additional docket or 
rulemaking number.
    Filings can be sent by hand or messenger delivery, by commercial 
overnight courier, or by first-class or overnight U.S. Postal Service 
mail (although we continue to experience delays in receiving U.S. 
Postal Service mail). All filings must be addressed to the Commission's 
Secretary, Office of the Secretary, Federal Communications Commission.
    <bullet> The Commission's contractor will receive hand-delivered or 
messenger-delivered paper filings for the Commission's Secretary at 236 
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing 
hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be 
held together with rubber bands or fasteners. Any envelopes must be 
disposed of before entering the building.
    <bullet> Commercial mail sent by overnight mail (other than U.S. 
Postal Service Express Mail and Priority Mail) must be sent to 9300 
East Hampton Drive, Capitol Heights, MD 20743.
    <bullet> U.S. Postal Service first-class, Express, and Priority 
mail should be addressed to 445 12th Street, SW., Washington, DC 20554.
    Comments and reply comments must include a short and concise 
summary of the substantive discussion and questions raised in the NPRM. 
The Commission further directs all interested parties to include the 
name of the filing party and the date of the filing on each page of 
their comments and reply comments. The Commission strongly encourages 
that parties track the organization set forth in this NPRM in order to 
facilitate the Commission's internal review process. Comments and reply 
comments must otherwise comply with Sec.  1.48 of the Commission's 
rules and all other applicable sections of the Commission's rules. (See 
47 CFR 1.48).
    Pursuant to Sec.  1.1200 of the Commission's rules, 47 CFR 1.1200, 
this matter shall be treated as a ``permit-but-disclose'' proceeding in 
which ex parte communications are subject to disclosure. Persons making 
oral ex parte presentations are reminded that memoranda summarizing the 
presentations must contain summaries 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. Other requirements pertaining to oral 
and written presentations are set forth in Sec.  1.1206 (b) of the 
Commission's rules.
    People with Disabilities: To request materials in accessible 
formats for people with disabilities (Braille, large print, electronic 
files, audio format), send an e-mail to <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="c6a0a5a5f3f6f286a0a5a5e8a1a9b0">[email protected]</a> or call the 
Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 
418-0432 (TTY).

Initial Paperwork Reduction Act of 1995 Analysis

    The NPRM contains proposed information collection requirements. The 
Commission, as part of its continuing effort to reduce paperwork 
burdens, invites the general public and the Office of Management and 
Budget (OMB) to comment on the information collection requirements 
contained in this document, as required by the Paperwork Reduction Act 
of 1995, Public Law 104-13. Public and agency comment are due November 
25, 2005. Comments should address: (a) 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; (b) the accuracy of the Commission's burden 
estimates; (c) ways to enhance the quality, utility, and clarity of the 
information collected; and (d) ways to minimize the burden of the 
collection of information on the

[[Page 56152]]

respondents, including the use of automated collection techniques or 
other forms of information technology. In addition, pursuant to the 
Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 
U.S.C. 3506 (c)(4), the Commission we seeks specific comment on how it 
may ``further reduce the information collection burden for small 
business concerns with fewer than 25 employees.''
    OMB Control Number: 3060-0761.
    Title: Section 79.1 Closed Captioning of Video Programming.
    Form No.: N/A.
    Type of Review: Revision of a currently approved collection.
    Number of Respondents: 12,500 respondents--(11,500 Video 
Programming Providers and 1,000 complainants)
    Number of Responses: 50,950 responses.
    Respondents: Individuals or households; business and other for-
profit entities; and not-for-profit institutions.
    Estimated Time per response: 30 minutes (0.50 hours) to 10 hours.
    Frequency of Response: On occasion reporting requirement; 
recordkeeping; third party disclosure.
    Total Annual Burden: 202,215 hours.
    Total Annual Costs: $500,000.
    Privacy Act Impact Assessment: Yes.
    Needs and Uses: On July 21, 2005, the Commission released a Notice 
of Proposed Rulemaking (NPRM), CG Docket No. 05-231, which initiates a 
rulemaking to examine the current status of the Commission's closed 
captioning rules (47 CFR 79.1) with the goal of ensuring that video 
programming is accessible to deaf and hard of hearing Americans. The 
NPRM seeks to determine whether any revisions should be made to enhance 
the effectiveness of those rules. The NPRM seeks comment on 
establishing standards for the non-technical quality of closed 
captioning, the potential costs of such standards for programmers and 
distributors, the availability of competent captioners to meet a non-
technical quality standard mandate, and establishing different non-
technical quality standards for pre-produced versus live programming. 
In addition, the NPRM seeks comment on whether additional mechanisms 
and procedures, beyond those already in the Commission's rules, are 
necessary to prevent technical problems from occurring and to 
expeditiously remedy any technical problems that do arise. The NPRM 
also seeks comment on video programming distributors' responsibility to 
monitor and maintain their equipment and signal transmissions, and 
whether specific mechanisms should be established for monitoring and 
maintenance. Additionally, the NPRM seeks comment on whether to revise 
the current rule to allow for shorter complaint and response times, 
what those time frames should be, and whether complainants should be 
permitted to complain directly to the Commission without complaining to 
the video programming distributor first. Further, the NPRM seeks 
comment on requiring video programming distributors to file compliance 
reports as to the amount of closed captioning they provide, and any 
alternative methods available to verify compliance. The information 
collection requirements include the proposed requirements contained in 
the NPRM.

Synopsis

    The NPRM grants a Petition for Rulemaking that was filed by TDI and 
several organizations representing deaf and hard of hearing consumers 
and seeks comment on several issues pertaining to closed captioning. 
The Commission first adopted rules for closed captioning of video 
programming in 1997. (See Closed Captioning and Video Description of 
Video Programming, Implementation of Section 305 of the 
Telecommunications Act of 1996, Video Programming Accessibility, MM 
Docket No. 95-176, Report and Order, 13 FCC Rcd 3272 (August 22, 1997), 
published at 62 FR 48487, September 16, 1997), (Closed Captioning 
Report and Order).
    The closed captioning rules are found at 47 CFR 79.1, and apply to 
any television broadcast station licensed by the Commission, any multi-
channel video programming distributor (MVPD), and any other distributor 
of video programming for residential reception that delivers such 
programming directly to the home and is subject to the jurisdiction of 
the Commission. Examples of MVPDs include cable operators, multi-
channel multipoint distribution services, direct broadcast satellite 
services, television receive-only satellite program distributors, and 
satellite master antenna television system operators. We note that 
telephone companies providing video programming to the home are subject 
to Sec.  79.1 of the Commission's rules.
    Non-technical Quality Standards for Closed Captioning. Currently 
there are no standards for non-technical quality aspects of closed 
captioning, such as accuracy of transcription, spelling, grammar, 
punctuation, placement, identification of nonverbal sounds, pop-on or 
roll-up style, verbatim or edited for reading speed, and type font. The 
NPRM seeks comment on certain aspects of non-technical quality issues, 
including whether the Commission should establish standards for the 
non-technical quality of closed captioning; are there non-technical 
quality issues other than those noted above that the Commission should 
consider; are there reasons not to set standards for non-technical 
quality aspects of closed captioning; what would the costs be to 
programmers and distributors of mandating non-technical quality 
standards; and does the captioning pool consist of an adequate number 
of competent captioners to meet a non-technical quality standard 
mandate. The NPRM also seeks comment on whether any non-technical 
quality standards should be different for pre-produced programs versus 
live programs. The NPRM seeks comment on what would constitute an 
``error,'' whether specific allowable error rates should be adopted 
and, if so, what error rates would be appropriate.
    Technical Quality Standards. In the Closed Captioning Report and 
Order, the Commission adopted a ``pass through'' rule to ensure that 
programming with closed captions is delivered in a complete manner with 
the belief that the enforcement of this rule, the captioning 
requirements, and Sec. Sec.  15.119 and 73.682 of the Commission's 
rules would ensure the technical quality of captioning. Section 15.119 
of the Commission's rules sets forth the closed caption decoder 
requirements for analog television receivers, and Sec.  73.682 of the 
Commission's rules sets forth television transmission standards. The 
``pass through'' rule requires video programming providers to ``pass 
through any captioning they receive that is included with the video 
programming they distribute as long as the captions do not need to be 
reformatted.'' The NPRM seeks comment on the need for additional 
mechanisms and procedures in addition to the ``pass through'' rule to 
prevent technical problems from occurring and to expeditiously remedy 
any technical problems that do arise. Are such mechanisms and 
procedures warranted? If so, what form should they take? The NPRM seeks 
comment on the kinds of technical problems experienced by consumers as 
well as distributors.
    Monitoring of Captioning. In the Closed Captioning Report and 
Order, the Commission did not establish specific rules or steps that 
video programming distributors would be required to follow to ensure 
the delivery of captions and to make sure that the equipment used is 
working properly. The NPRM seeks comment on video programming 
distributors' responsibility

[[Page 56153]]

to monitor and maintain their equipment and signal transmissions. 
Should distributors have specific mechanisms in place for monitoring 
and maintenance of captioning? If so, what should these mechanisms 
consist of? What impact would such mechanisms have on distributors? The 
NPRM also seeks comment on alternate ways to ensure that captioning is 
delivered intact to consumers. Lastly, the NPRM seeks comment on 
whether distributors are monitoring their programming and advertising 
materials to ensure that a program advertised to be closed captioned is 
indeed closed captioned.
    Complaint Procedures. The NPRM seeks comment on whether the 
Commission should revise the current rule to allow for shorter 
complaint and complaint response times. The NPRM seeks comment on what 
those time frames should be, and seeks comment on whether complainants 
should be permitted to complain directly to the Commission without 
complaining to the video programming distributor first. If the 
Commission decides to retain the current complaint process, the NPRM 
seeks comment on whether the filing and response deadlines should be 
revised.
    Accessibility of Contact Information. The NPRM seeks comment on 
whether video programming distributors should be required to post 
complete contact information on their Web sites, update this 
information on a routine basis, and provide the information to the FCC 
for posting on its Web site. The NPRM seeks comment on the experiences 
that deaf and hard of hearing people have had when contacting video 
programming distributors to complain or ask questions, and seeks 
comment from distributors regarding their experiences in this area.
    Standardized Captioning Complaint Form. The NPRM seeks comment on 
whether a standardized captioning complaint form would be useful.
    Fines and Penalties for Failure to Caption. The Commission's 
Forfeiture Guidelines do not contain any specific guidelines regarding 
forfeitures for violations of the closed captioning rules. The NPRM 
seeks comment on whether the Commission should establish specific per 
violation forfeiture amounts for non-compliance with the captioning 
rules, and if so, what those amounts should be. The NPRM directs 
commenters to Sec.  1.80(b) of the Commission's rules for guidance on 
existing forfeitures for violations of other Commission rules.
    Compliance Reports. In the Closed Captioning Report and Order, the 
Commission did not adopt reporting requirements for distributors or 
require the filing of periodic reports showing compliance with the 
closed captioning rules. The NPRM seeks comment on requiring video 
programming distributors to file compliance reports as to the amount of 
closed captioning they provide. The NPRM asks if the Commission should 
require such reports to be filed, and if so, how often should they be 
filed; how they should be filed; whether the reports should include 
information relating to new non-exempt programming or only information 
pertaining to pre-rule non-exempt and Spanish-language programming; and 
how a reporting requirement would be implemented. In the event the 
Commission were to impose a reporting requirement for closed 
captioning, we seek comment on whether distributors would be able to 
rely on certifications from programmers that the programming contains 
closed captioning. Are there alternative methods to verify compliance? 
If a reporting requirement is not imposed, the NPRM seeks comment on 
whether the Commission's rules should be amended to place a greater 
burden on video programming distributors to ensure that the programming 
they carry is captioned, regardless of the assurances they receive from 
programmers.
    Use of Electronic Newsroom Technique. The Commission's rules 
prohibit the major national broadcast networks (i.e., ABC, CBS, Fox and 
NBC), affiliates of these networks in the top 25 television markets as 
defined by Nielsen's Designated Market Areas (DMAs), and national 
nonbroadcast networks serving at least 50% of all homes subscribing to 
multi-channel video programming services, from counting electronic 
newsroom-captioned programming towards compliance with the closed 
captioning rules. The NPRM seeks comment on whether to extend the 
prohibition of counting ENT generated captions to markets beyond the 
top 25 DMAs. The NPRM also seeks comment on whether the rationale that 
led to the Commission permitting the use of ENT by some distributors, 
due to ENT's lower cost, is still relevant. Have captioning costs 
decreased such that little hardship would result if the Commission were 
to further limit the circumstances under which captions created using 
electronic newsroom technique would be allowed to count as captioned 
programming?
    Availability of Captioners. The NPRM seeks comment on the supply of 
captioners available for real-time and pre-recorded captioning. The 
NPRM also seeks comment on the number of companies providing closed 
captioning services, and on the impact that imposing a quality 
standard, if adopted, will have on the supply of captioners.
    Electronic Filing of Exemption Requests. Currently, Sec.  79.1 of 
the Commission's rules requires that a petition for a full or partial 
exemption from the closed captioning requirements based on an undue 
burden must be filed with the Commission in writing, placed on public 
notice, and permit interested persons to file comments or oppositions 
to the petition. Due to the nature of this process, the petition itself 
is generally not available electronically, unless a disk containing an 
electronic version of the petition is submitted. The NPRM seeks comment 
on requiring electronic filing for petitions for exemption from the 
Commission's closed captioning rules under the undue burden standard of 
Sec.  79.1(f) of the Commission's rules. What impact would such a 
requirement have on entities filing such petitions, as well as on 
parties, including consumers, wishing to file comments or oppositions 
to the petition? The NPRM seeks comment on whether electronic filing 
should be mandated or merely allowed, and on whether an electronic 
filing requirement would reduce the perceived delay in processing such 
petitions.

Initial Regulatory Flexibility Analysis

    As required by the Regulatory Flexibility Act of 1980, as amended, 
the Commission has prepared this Initial Regulatory Flexibility 
Analysis (IRFA) of the possible significant economic impact on a 
substantial number of small entities by the policies and rules proposed 
in the NPRM. Written public comments are requested on this IRFA. (See 5 
U.S.C. 603). The RFA, see 5 U.S.C. 601-612, has been amended by the 
Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 
Public Law Number 104-121, Title II, 110 Statute 857 (1996). Comments 
must be identified as responses to the IRFA and must be filed by the 
deadlines for comments on the NPRM provided in the item. The Commission 
will send a copy of this entire NPRM, including this IRFA, to the Chief 
Counsel for Advocacy of the Small Business Administration (SBA). See 5 
U.S.C. 603(a)). In addition, the NPRM and the IRFA (or summaries 
thereof) will be published in the Federal Register. (See 5 U.S.C. 
603(a)).

A. Need For, and Objectives of, the Proposed Rules

    We initiate this review relating to closed captioning in response 
to several compliance and quality issues raised in

[[Page 56154]]

a Petition for Rulemaking filed by Telecommunications for the Deaf, 
Inc., the National Association of the Deaf, Self Help for Hard of 
Hearing People, Inc., the Association for Late Deafened Adults, and the 
Deaf and Hard of Hearing Consumer Advocacy Network. This rulemaking 
proceeding will examine the current status of the Commission's closed 
captioning rules with the goal of ensuring that video programming is 
accessible to deaf and hard of hearing Americans. This NPRM also serves 
as a follow-up to the Commission's prior assurances at the time the 
closed captioning rules were adopted that certain captioning provisions 
would be reviewed and evaluated at a future date. As described more 
fully below, this NPRM seeks to determine whether any revisions should 
be made to enhance the effectiveness of those rules. In particular, the 
NPRM seeks comment on establishing standards for the non-technical 
quality of closed captioning, the potential costs of such standards for 
programmers and distributors, the availability of competent captioners 
to meet a non-technical quality standard mandate, and establishing 
different non-technical quality standards for pre-produced versus live 
programming. In addition, the NPRM seeks comment on whether additional 
mechanisms and procedures, beyond those already in the Commission's 
rules, are necessary to prevent technical problems from occurring and 
to expeditiously remedy any technical problems that do arise. The NPRM 
also seeks comment on video programming distributors' responsibility to 
monitor and maintain their equipment and signal transmissions, and 
whether specific mechanisms should be established for monitoring and 
maintenance. Additionally, the NPRM seeks comment on whether to revise 
the current rule to allow for shorter complaint and response times, 
what those time frames should be, and whether complainants should be 
permitted to complain directly to the Commission without complaining to 
the video programming distributor first. Further, the NPRM seeks 
comment on requiring video programming distributors to file compliance 
reports as to the amount of closed captioning they provide, and any 
alternative methods available to verify compliance.

B. Legal Basis

    The authority for this NPRM is contained in sections 4(i), 303(r) 
and 713 of the Communications Act of 1934, as amended, 47 U.S.C. 
154(i), 303(r) and 713.

C. Description and Estimate of the Number of Small Entities Impacted

    The RFA directs agencies to provide a description of, and where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules and policies, if adopted. (5 U.S.C. 
603(b)(3)). The RFA generally defines the term ``small entity'' as 
having the same meaning as the terms ``small business,'' ``small 
organization,'' and ``small governmental jurisdiction.'' (5 U.S.C. 
601(6)). In addition, the term ``small business'' has the same meaning 
as the term ``small business concern'' under the Small Business Act. (5 
U.S.C. 601(3) (incorporating by reference the definition of ``small-
business concern'' in the Small Business Act, 15 U.S.C. 632). 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 Small Business Administration 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''). A ``small business concern'' 
is one which: (1) Is independently owned and operated; (2) is not 
dominant in its field of operation; and (3) satisfies any additional 
criteria established by the SBA. (15 U.S.C. 632).
    Cable and Other Program Distribution. This category includes among 
others, cable systems operators, closed circuit television services, 
direct broadcast satellite services, home satellite dish services, 
multipoint distribution systems, multichannel multipoint distribution 
service, satellite master antenna television systems, and subscription 
television services. The SBA has developed a small business size 
standard for this census category, which includes all such companies 
generating $12.5 million or less in revenue annually. (13 CFR 121.201, 
NAICS code 513220; changed to 517510 in October 2002). According to 
Census Bureau data for 1997, there were a total of 1,311 firms in this 
category that had operated for the entire year. (U.S. Census Bureau, 
1997 Economic Census, Subject Series: Information, ``Establishment and 
Firm Size (Including Legal Form of Organization),'' Table 4, NAICS code 
513220 (issued October 2000)). Of this total, 1,180 firms had annual 
receipts of under $10 million and an additional 52 firms had receipts 
of $10 million or more but less than $25 million. Consequently, the 
Commission estimates that the majority of providers in this service 
category are small businesses that may be affected by the rules and 
policies involved herein.
    Cable and Other Subscription Programming. Entities in this category 
``primarily engag[e] in operating studios and facilities for the 
broadcasting of programs on a subscription or fee basis. The broadcast 
programming is typically narrowcast in nature (e.g., limited format, 
such as news, sports, education, or youth-oriented). These 
establishments produce programming in their own facilities or acquire 
programming from external sources.'' (U.S. Census Bureau, ``2002 NAICS 
Definitions: 515210 Cable and Other Subscription Programming'' (online, 
July 2005, at http://www.census.gov)). The SBA has developed a small 
business size standard for this category; that size standard is $12.5 
million or less in average annual receipts. (13 CFR 121.201, NAICS code 
515210; changed from 513210 in October 2002). According to Census 
Bureau data for 1997, there were 234 firms in this category that 
operated for the entire year. (U.S. Census Bureau, 1997 Economic 
Census, Subject Series: Information, ``Establishment and Firm Size 
(Including Legal Form of Organization),'' Table 4, NAICS code 513210 
(issued October 2000)). Of these, 188 had annual receipts of under $10 
million, and an additional 16 firms had receipts of between $10 million 
and $24,999,999. Consequently, we estimate that the majority of these 
firms are small entities that may be affected by our action. In 
addition, limited preliminary census data for 2002 indicate that the 
total number of Cable and Other Subscription Programming entities 
increased approximately 44.5 percent from 1997 to 2002. See U.S. Census 
Bureau, 2002 Economic Census, Industry Series: ``Information,'' Table 
2, Comparative Statistics for the United States (1997 NAICS Basis): 
2002 and 1997, NAICS code 513210 (issued December 2004). The 
preliminary data indicate that the total number of ``establishments'' 
increased from 494 to 714. Data related to thenumber of ``firms,'' 
which takes into account the concept of common ownership or control, 
and includes employment and receipts numbers, will be issued in late 
2005.
    Cable System Operators (Rate Regulation Standard). The Commission 
has developed its own small business size standard for cable system 
operators, for purposes of rate regulation. Under the Commission's 
rules, a ``small cable company'' is one serving fewer than 400,000 
subscribers nationwide. (47 CFR 76.901(e)). The Commission developed 
this definition based on its

[[Page 56155]]

determination 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, published at 60 FR 10534, 
February 27, 1995. The most recent estimates indicate that there were 
1,439 cable operators who qualified as small cable system operators at 
the end of 1995. (Paul Kagan Associates, Inc., Cable TV Investor, 
February 29, 1996; based on figures for December 30, 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 operators. Consequently, 
the Commission estimates that there are now fewer than 1,439 small 
entity cable system operators that may be affected by the rules and 
policies involved herein.
    Cable System Operators (Telecom Act Standard). The Communications 
Act of 1934, as amended, also contains a size standard for small cable 
system operators, which is ``a cable operator that, directly or through 
an affiliate, serves in the aggregate fewer than 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. (47 U.S.C. 543(m)(2)). The Commission has determined that 
there are 67,700,000 subscribers in the United States. See FCC 
Announces New Subscriber Count for the Definition of Small Cable 
Operator, Public Notice, DA 01-158 (released January 24, 2001). 
Therefore, an operator serving fewer than 677,000 subscribers shall be 
deemed a small operator, if its annual revenues, when combined with the 
total annual revenues of all its affiliates, do not exceed $250 million 
in the aggregate. (47 CFR 76.901(f)). Based on available data, the 
Commission estimates that the number of cable operators serving 677,000 
subscribers or fewer, totals 1,450. See FCC Announces New Subscriber 
Count for the Definition of Small Cable Operator, Public Notice, DA 01-
158 (released January 24, 2001). The Commission neither requests nor 
collects information on whether cable system operators are affiliated 
with entities whose gross annual revenues exceed $250 million, and 
therefore is unable, at this time, to estimate more accurately the 
number of cable system operators that would qualify as small cable 
operators under the size standard contained in the Communications Act 
of 1934. The Commission does receive such information on a case-by-case 
basis if a cable operator appeals a local franchise authority's finding 
that the operator does not qualify as a small cable operator pursuant 
to Sec.  76.901(f) of the Commission's rules. See 47 CFR 909(b).
    Cable Television Relay Service. This service includes transmitters 
generally used to relay cable programming within cable television 
system distribution systems. The SBA has defined a small business size 
standard for Cable and other Program Distribution, consisting of all 
such companies having annual receipts of no more than $12.5 million. 
(13 CFR 121.201, NAICS code 517510). According to Census Bureau data 
for 1997, there were 1,311 firms in the industry category Cable and 
Other Program Distribution, total, that operated for the entire year. 
(U.S. Census Bureau, 1997 Economic Census, Subject Series: Information, 
``Establishment and Firm Size (Including Legal Form of Organization)'', 
Table 4 (issued October 2000)). Of this total, 1,180 firms had annual 
receipts of $10 million or less, and an additional 52 firms had 
receipts of $10 million or more but less than $25 million. (U.S. Census 
Bureau, 1997 Economic Census, Subject Series: Information, 
``Establishment and Firm Size (Including Legal Form of Organization)'', 
Table 4 (issued October 2000)). Thus, under this standard, we estimate 
that the majority of providers in this service category are small 
businesses that may be affected by the rules and policies involved 
herein.
    Direct Broadcast Satellite (DBS) Service. DBS service is a 
nationally distributed subscription service that delivers video and 
audio programming via satellite to a small parabolic ``dish'' antenna 
at the subscriber's location. Because DBS provides subscription 
services, DBS falls within the SBA-recognized definition of Cable and 
Other Program Distribution. (13 CFR 121.201, NAICS code 517510). This 
definition provides that a small entity is one with $12.5 million or 
less in annual receipts. (13 CFR 121.201, NAICS code 517510). 
Currently, only four operators hold licenses to provide DBS service, 
which requires a great investment of capital for operation. All four 
currently offer subscription services. Two of these four DBS operators, 
DirecTV, and EchoStar Communications Corporation (EchoStar), report 
annual revenues that are in excess of the threshold for a small 
business. DirecTV is the largest DBS operator and the second largest 
MVPD, serving an estimated 13.04 million subscribers nationwide. See 
Annual Assessment of Status of Competition in the Market for the 
Delivery of Video Programming, Eleventh Annual Report, FCC 05-13, 
paragraph 55 (released February 4, 2005) (2005 Cable Competition 
Report). EchoStar, which provides service under the brand name Dish 
Network, is the second largest DBS operator and the fourth largest 
MVPD, serving an estimated 10.12 million subscribers nationwide. A 
third operator, Rainbow DBS, is a subsidiary of Cablevision's Rainbow 
Network, which also reports annual revenues in excess of $12.5 million, 
and thus does not qualify as a small business. (Rainbow DBS, which 
provides service under the brand name VOOM, reported an estimated 
25,000 subscribers).
    The fourth DBS operator, Dominion Video Satellite, Inc. (Dominion), 
offers religious (Christian) programming and does not report its annual 
receipts. (Dominion, which provides service under the brand name Sky 
Angel, does not publicly disclose its subscribership numbers on an 
annualized basis). The Commission does not know of any source that 
provides this information and, thus, we the Commission has no way of 
confirming whether Dominion qualifies as a small business. Because DBS 
service requires significant capital, we believe it is unlikely that a 
small entity as defined by the SBA would have the financial wherewithal 
to become a DBS licensee. Nevertheless, given the absence of specific 
data on this point, we acknowledge the possibility that there are 
entrants in this field that may not yet have generated $12.5 million in 
annual receipts, and therefore may be categorized as a small business, 
if independently owned and operated.
    Local Multipoint Distribution Service. Local Multipoint 
Distribution Service (LMDS) is a fixed broadband point-to-multipoint 
microwave service that provides for two-way video telecommunications. 
(See Rulemaking to Amend parts 1, 2, 21, and 25 of the Commission's 
rules to Redesignate the 27.5-29.5 GHz Frequency Band, Reallocate the 
29.5-30.5 Frequency Band, to Establish Rules and Policies for Local 
Multipoint Distribution Service and for Fixed Satellite Services, 
Second Report and Order, Order on Reconsideration, and Fifth Notice of 
Proposed Rule Making, FCC 97-82, 12 FCC Rcd 12545, 12689 through 12690, 
paragraph 348 (1997), published at 62 FR 23148, April 29, 1997). The 
auction of the 986 Local Multipoint Distribution Service (LMDS) 
licenses began on February 18, 1998 and closed on March 25, 1998. The 
Commission established a small business size standard for LMDS licenses 
as an entity that has average gross revenues of less than $40 million

[[Page 56156]]

in the three previous calendar years. An additional small business size 
standard for ``very small business'' was added as an entity that, 
together with its affiliates, has average gross revenues of not more 
than $15 million for the preceding three calendar years.
    The SBA has approved these small business size standards in the 
context of LMDS auctions. (See Letter to Dan Phythyon, Chief, Wireless 
Telecommunications Bureau, FCC, from Aida Alvarez, Administrator, SBA 
(January 6, 1998)). There were 93 winning bidders that qualified as 
small entities in the LMDS auctions. A total of 93 small and very small 
business bidders won approximately 277 A Block licenses and 387 B Block 
licenses. On March 27, 1999, the Commission re-auctioned 161 licenses; 
there were 32 small and very small businesses winning that won 119 
licenses.
    Multipoint Distribution Service, Multichannel Multipoint 
Distribution Service, and Instructional Television Fixed Service. 
Multichannel Multipoint Distribution Service (MMDS) systems, often 
referred to as ``wireless cable,'' transmit video programming to 
subscribers using the microwave frequencies of the Multipoint 
Distribution Service (MDS) and Instructional Television Fixed Service 
(ITFS). (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, Report 
and Order, FCC 95-230, 10 FCC Rcd 9589 and 9593, paragraph 7 (1995), 
published at 60 FR 36524, July 17, 1995 (MDS Auction R&O)). In 
connection with the 1996 MDS auction, the Commission defined ``small 
business'' 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. (47 CFR 21.961(b)(1)). The SBA has 
approved of this standard. (See Letter to Margaret Wiener, Chief, 
Auctions and Industry Analysis Division, Wireless Telecommunications 
Bureau, FCC, from Gary Jackson, Assistant Administrator for Size 
Standards, Small Business Administration, dated March 20, 2003 (noting 
approval of $40 million size standard for MDS auction)). The MDS 
auction resulted in 67 successful bidders obtaining licensing 
opportunities for 493 Basic Trading Areas (BTAs). (Basic Trading Areas 
(BTAs) were designed by Rand McNally and are the geographic areas by 
which MDS was auctioned and authorized. See MDS Auction R&O, 10 FCC Rcd 
9608, paragraph 34). Of the 67 auction winners, 61 claimed status as a 
small business. At this time, the Commission estimates that of the 61 
small business MDS auction winners, 48 remain small business licensees. 
In addition to the 48 small businesses that hold BTA authorizations, 
there are approximately 392 incumbent MDS licensees that have gross 
revenues that are not more than $40 million and are thus considered 
small entities. (47 U.S.C. 309(j)). Hundreds of stations were licensed 
to incumbent MDS licensees prior to implementation of section 309(j) of 
the Communications Act of 1934, 47 U.S.C. 309(j). For these pre-auction 
licenses, the applicable standard is SBA's small business size standard 
for ``other telecommunications'' (annual receipts of $12.5 million or 
less). See 13 CFR 121.201, NAICS code 517910).
    Concerning ITFS, the Commission notes that educational institutions 
are included in this analysis as small entities.
    The term ``small entity'' under SBREFA applies to small 
organizations (nonprofits) and to small governmental jurisdictions 
(cities, counties, towns, townships, villages, school districts, and 
special districts with populations of less than 50,000). 5 U.S.C. 
601(4)-(6). The Commission does not collect annual revenue data on ITFS 
licensees. There are currently 2,032 ITFS licensees, and all but 100 of 
these licenses are held by educational institutions. Thus, the 
Commission tentatively concludes that at least 1,932 ITFS licensees are 
small businesses.
    Open Video Services. Open Video Service (OVS) systems provide 
subscription services. (See 47 U.S.C. 573). The SBA has created a small 
business size standard for Cable and Other Program Distribution. (13 
CFR 121.201, NAICS code 513220 (changed to 517510 in October 2002)). 
This standard provides that a small entity is one with $12.5 million or 
less in annual receipts. The Commission has certified approximately 100 
OVS operators to serve 75 areas, and some of these are currently 
providing service. (See http://www.fcc.gov/csb/ovs/csovscer.html 
(current as of June 2004)). Affiliates of Residential Communications 
Network, Inc. (RCN) received approval to operate OVS systems in New 
York City, Boston, Washington, DC, and other areas. RCN has sufficient 
revenues to assure that they do not qualify as a small business entity. 
Little financial information is available for the other entities that 
are authorized to provide OVS and are not yet operational. Given that 
some entities authorized to provide OVS service have not yet begun to 
generate revenues, the Commission concludes that those OVS operators 
remaining might qualify as small businesses that may be affected by the 
rules and policies proposed herein.
    Television Broadcasting. The SBA defines a television broadcasting 
station as a small business if such station has no more than $12 
million in annual receipts. (See 13 CFR 121.201, NAICS Code 515120 
(adopted October 2002)). Business concerns included in this industry 
are those ``primarily engaged in broadcasting images together with 
sound.'' (NAICS Code 515120). This category description continues, 
``These establishments operate television broadcasting studios and 
facilities for the programming and transmission of programs to the 
public. These establishments also produce or transmit visual 
programming to affiliated broadcast television stations, which in turn 
broadcast the programs to the public on a predetermined schedule. 
Programming may originate in their own studios, from an affiliated 
network, or from external sources.'' Separate census categories pertain 
to businesses primarily engaged in producing programming. (See Motion 
Picture and Video Production, NAICS code 512110; Motion Picture and 
Video Distribution, NAICS Code 512120; Teleproduction and Other Post-
Production Services, NAICS Code 512191; and Other Motion Picture and 
Video Industries, NAICS Code 512199). According to Commission staff 
review of the BIA Publications, Inc. Master Access Television Analyzer 
Database as of June 26, 2004, about 860 of the 1,270 commercial 
television stations in the United States have revenues of $12 million 
or less. The Commission notes, however, that, in assessing whether a 
business concern qualifies as small under the above definition, 
business (control) affiliations must be included. ``[Business concerns] 
are affiliates of each other when one concern controls or has the power 
to control the other or a third party or parties controls or has power 
to control both.'' 13 CFR 121.103(a)(1). The Commission's estimate, 
therefore, likely overstates the number of small entities that might be 
affected by our action, because the revenue figure on which it is based 
does not include or aggregate revenues from affiliated companies. There 
are also 2,127 low power television stations (LPTV). (FCC News Release, 
``Broadcast Station Totals as of September 30, 2002''). Given the 
nature of this service, we will presume that all LPTV licensees qualify 
as small entities under the SBA definition.

[[Page 56157]]

    In addition, an element of the definition of ``small business'' is 
that the entity not be dominant in its field of operation. The 
Commission is unable at this time to define or quantify the criteria 
that would establish whether a specific television station is dominant 
in its field of operation. Accordingly, the estimate of small 
businesses to which rules may apply does not exclude any television 
station from the definition of a small business on this basis and is 
therefore over-inclusive to that extent. Also as noted, an additional 
element of the definition of ``small business'' is that the entity must 
be independently owned and operated. The Commission notes that it is 
difficult at times to assess these criteria in the context of media 
entities and our estimates of small businesses to which they apply may 
be over-inclusive to this extent.

D. Description of Projected Reporting, Recordkeeping and Other 
Compliance Requirements

    The proposed rules may impose additional reporting or recordkeeping 
requirements on a number of different entities. For example, the NPRM 
discusses whether video programming distributors should be required to 
submit reports to the Commission certifying that they are complying 
with monitoring and maintenance of equipment and signal transmissions. 
In addition the NPRM asks whether video programming distributors should 
be required to file compliance reports as to the amount of closed 
captioning they provide. These proposals may impose additional 
reporting or recordkeeping requirements on entities. The Commission 
seeks comment on the possible burden these requirements would place on 
small entities. Also, the Commission seeks comment on whether a special 
approach toward any possible compliance burdens on small entities might 
be appropriate.

E. Steps Taken To Minimize Significant Impact on Small Entities, and 
Significant Alternatives Considered

    The RFA requires an agency to describe any significant alternatives 
that it has considered in reaching its proposed approach, which may 
include the following four alternatives (among others): (1) The 
establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities. (5 U.S.C. 603(b)). The Commission seeks comment on whether it 
should indeed be the responsibility of the video programming 
distributor to monitor and maintain equipment and signal transmissions 
and asks if specific mechanisms should be in place and what would be 
the impact of such mechanisms on distributors. The NPRM notes that, 
alternatively, the National Cable and Telecommunications Association 
(NCTA) points out that a distributor's responsibilities should not be 
unduly burdensome and invites comment on this matter. The NPRM also 
proposes providing a standardized captioning complaint form for 
consumers, which may be a useful tool to those filing complaints. In 
addition, the NPRM discusses allowing consumers to complain to video 
programming distributors via e-mail, phone or fax, which is aimed at 
providing easier options for consumers who have concerns regarding 
captioning problems and seek more immediate redress. The NPRM also 
points out that effective January 1, 2006, all nonexempt new English 
language programming must be captioned. Video programming distributors 
and providers will have to caption their programming. Generally, 100% 
compliance is required; however, particular entities, and under certain 
circumstances small entities, may be exempt from the captioning 
requirements if they qualify for an exemption pursuant to Sec.  79.1(d) 
of the Commission rules, which provides for exempt programs and 
providers meeting the particular qualifications cited in the rule, and/
or if captioning presents an undue burden pursuant to Sec.  79.1(f) of 
the Commission's rule, which allows parties to file a petition with the 
Commission requesting an exemption from captioning upon a sufficient 
showing that captioning would pose significant difficulty or expense.

F. Federal Rules Which Duplicate, Overlap, or Conflict With, the 
Commission's Proposals

    None.

Ordering Clauses

    Pursuant to sections 4(i), 303(r) and 713 of the Communications Act 
of 1934, as amended, 47 U.S.C. 154(i), 303(r) and 713, this Notice of 
Proposed Rulemaking is hereby adopted.
    The Commission's Consumer & Governmental Affairs Bureau, Reference 
Information Center, 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.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 05-19161 Filed 9-23-05; 8:45 am]
BILLING CODE 6712-01-P


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