10732 Federal Register / Vol. 73, No. 40 / Thursday, February 28, 2008 / Proposed Rules 

1169. EPA’s policy is that all comments 

received will be included in the public 

docket without change, and may be 

made available online at 

www.regulations.gov, including any 

personal information provided, unless 

the comment includes information 

claimed to be Confidential Business 

Information (CBI) or other information 

whose disclosure is restricted by statute. 

Do not submit information that you 

consider to be CBI or otherwise 

protected through www.regulations.gov 

or e-mail. The www.regulations.gov Web 

site is an ‘‘anonymous access’’ system, 

which means EPA will not know your 

identity or contact information unless 

you provide it in the body of your 

comment. If you send an e-mail 

comment directly to EPA without going 

through www.regulations.gov, your email address will be automatically 

captured and included as part of the 

comment that is placed in the public 

docket and made available on the 

Internet. If you submit an electronic 

comment, EPA recommends that you 

include your name and other contact 

information in the body of your 

comment and with any disk or CD-ROM 

you submit. If EPA cannot read your 

comment due to technical difficulties 

and cannot contact you for clarification, 

EPA may not be able to consider your 

comment. Electronic files should avoid 

the use of special characters, any form 

of encryption, and be free of any defects 

or viruses. 

Docket: All documents in the 

electronic docket are listed in the 

www.regulations.gov index. Although 

listed in the index, some information is 

not publicly available, i.e., CBI or other 

information whose disclosure is 

restricted by statute. Certain other 

material, such as copyrighted material, 

is not placed on the Internet and will be 

publicly available only in hard copy 

form. Publicly available docket 

materials are available either 

electronically in www.regulations.gov or 

in hard copy during normal business 

hours at the Air Protection Division, 

U.S. Environmental Protection Agency, 

Region III, 1650 Arch Street, 

Philadelphia, Pennsylvania 19103. 

Copies of the State submittal are 

available at Virginia Department of 

Environmental Quality, 629 East Main 

Street, Richmond, Virginia 23219. 

FOR FURTHER INFORMATION CONTACT: 

Gregory Becoat, (215) 814–2036, or by email at becoat.gregory@epa.gov. 

SUPPLEMENTARY INFORMATION: For 

further information, please see the 

information provided in the direct final 

action, Approval of Virginia’s 

Amendments to Existing Regulation 

Provisions Concerning Reasonably 

Available Control Technology, that is 

located in the ‘‘Rules and Regulations’’

section of this Federal Register 

publication. Please note that if EPA 

receives adverse comment on an 

amendment, paragraph, or section of 

this rule and if that provision may be 

severed from the remainder of the rule, 

EPA may adopt as final those provisions 

of the rule that are not the subject of an 

adverse comment. 

Dated: February 12, 2008. 

Donald S. Welsh, 

Regional Administrator, Region III. 

[FR Doc. E8–3389 Filed 2–27–08; 8:45 am] 

BILLING CODE 6560–50–P 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 76 

[MB Docket No. 07–42; FCC 07–208] 

Leased Commercial Access 

AGENCY: Federal Communications 

Commission. 

ACTION: Proposed rule. 

SUMMARY: In this document, the 

Commission seeks comment on the 

application of the Commission’s revised 

leased access rate methodology and 

maximum allowable leased access rate 

to programmers that predominantly 

transmit sales presentations or program 

length commercials. 

DATES: Comments for this proceeding 

are due on or before March 31, 2008; 

reply comments are due on or before 

April 14, 2008. 

ADDRESSES: You may submit comments, 

identified by MB Docket No. 07–42, by 

any of the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Federal Communications 

Commission’s Web site: http:// 

www.fcc.gov/cgb/ecfs/. Follow the 

instructions for submitting comments. 

• People with Disabilities: Contact the 

FCC to request reasonable 

accommodations (accessible format 

documents, sign language interpreters, 

CART, etc.) by e-mail: FCC504@fcc.gov 

or phone: 202–418–0530 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. 

FOR FURTHER INFORMATION CONTACT: For 

additional information on this 

proceeding, contact Steven Broeckaert, 

Steven.Broeckaert@fcc.gov; or Katie 

Costello, Katie.Costello@fcc.gov; of the 

Media Bureau, Policy Division, 202–

418–2120. 

SUPPLEMENTARY INFORMATION: This is a 

summary of the Commission’s Notice of 

Proposed Rulemaking (NPRM), 

contained in MB Docket No. 07–42, FCC 

07–208, adopted on November 27, 2007, 

and released on February 1, 2008. The 

full text of this document is available for 

public inspection and copying during 

regular business hours in the FCC 

Reference Center, Federal 

Communications Commission, 445 12th 

Street, SW., CY–A257, Washington, DC 

20554. This document will also be 

available via ECFS (http://www.fcc.gov/ 

cgb/ecfs/). (Documents will be available 

electronically in ASCII, Word 97, and/ 

or Adobe Acrobat.) The complete text 

may be purchased from the 

Commission’s copy contractor, 445 12th 

Street, SW., Room CY–B402, 

Washington, DC 20554. To request this 

document in accessible formats 

(computer diskettes, large print, audio 

recording, and Braille), send an e-mail 

to fcc504@fcc.gov or call the 

Commission’s Consumer and 

Governmental Affairs Bureau at 202–

418–0530 (voice), 202–418–0432 (TTY). 

Initial Paperwork Reduction Act of 

1995 Analysis 

This document has been analyzed 

with respect to the Paperwork 

Reduction Act of 1995 (‘‘PRA’’), Public 

Law No. 104–13, 109 Stat 163 (1995) 

(codified in Chapter 35 of title 44 

U.S.C.), and contains no proposed new 

or modified information collection 

requirements. In addition, therefore, it 

does not contain any new or modified 

‘‘information collection burden for 

small business concerns with fewer than 

25 employees,’’ pursuant to the Small 

Business Paperwork Relief Act of 2002 

(‘‘SBPRA’’), Public Law No. 107–198, 

116 Stat 729 (2002) (codified in Chapter 

35 of title 44 U.S.C.); see 44 U.S.C. 

3506(c)(4). 

Summary of Notice of Proposed 

Rulemaking 

I. Application of Leased Access Rules to 

Certain Programmers 

1. The commercial leased access 

requirements are set forth in Section 612 

of the Communications Act of 1934, as 

amended. The statute and 

corresponding leased access rules 

require a cable operator to set aside 

channel capacity for commercial use by 

unaffiliated video programmers. The 

purposes of Section 612 are ‘‘to promote 

competition in the delivery of diverse 


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Federal Register / Vol. 73, No. 40 / Thursday, February 28, 2008 / Proposed Rules 10733 

sources of video programming and to 

assure that the widest possible diversity 

of information sources are made 

available to the public from cable 

systems in a manner consistent with 

growth and development of cable 

systems.’’ In Report and Order, FCC 07–

208, the Commission modified the 

leased access rate methodology but did 

not apply the changes to rates charged 

to programmers that predominantly 

transmit sales presentations or program 

length commercials. These direct sales 

programmers often ‘‘pay’’ for carriage—

either directly or through some form of 

revenue sharing with the cable operator. 

In this Notice of Proposed Rulemaking 

(NPRM), the Commission seeks 

comment on whether the new 

methodology should be applied to the 

rates charged to programmers that 

predominantly transmit sales 

presentations or program length 

commercials. 

2. In the Report and Order, the 

Commission modified the method for 

determining the leased access rate for 

full-time carriage on a tier and 

harmonized the rate methodology for 

carriage on tiers with more than 50% 

subscriber penetration and carriage on 

tiers with lower levels of penetration by 

calculating the leased access rate based 

upon the characteristics of the tier on 

which the leased access programming 

will be placed. Cable operators will 

calculate a leased access rate for each 

cable system on a tier-by-tier basis 

which will adequately compensate the 

operator for the net revenue that is lost 

when a leased access programmer 

displaces an existing program channel 

on the cable system. The Report and 

Order adopted a methodology to 

determine the ‘‘marginal implicit fee’’

rather than the ‘‘average implicit fee’’ in 

calculating leased access rates. The 

‘‘average implicit fee’’ is calculated 

based on the average value of all of the 

channels in a tier instead of the value 

of the channels most likely to be 

replaced. The revised methodology 

eliminates this excess recovery. In 

addition, the Report and Order set a 

maximum allowable leased access rate 

of $0.10 per subscriber per month to 

ensure that leased access remains a 

viable outlet for programmers. 

3. The Commission concluded not to 

apply the new rate methodology to 

programmers that predominantly 

transmit sales presentations or program 

length commercials. These programmers 

often ‘‘pay’’ for carriage—either directly 

or through some form of revenue 

sharing with the cable operator. 

Previously to the Report and Order, the 

Commission set the leased access rate 

for a la carte programmers at the 

‘‘highest implicit fee’’ partly out of a 

concern that lower rates would simply 

lead these programmers to migrate to 

leased access if it were less expensive 

than what they are currently ‘‘paying’’

for carriage. Such a migration would not 

add to the diversity of voices and would 

potentially financially harm the cable 

system. The a la carte rate remains 

unchanged. Similarly, the Commission 

does not wish to set the leased access 

rates at a point at which programmers 

that predominantly transmit sales 

presentations or program length 

commercials simply migrate to leased 

access because it is less expensive than 

their current commercial arrangements. 

The Commission seeks on whether 

leased access is affordable at current 

rates to programmers that 

predominantly transmit sales 

presentations or program length 

commercials and whether reduced rates 

would simply cause migration of 

existing services to leased access. 

4. The Commission is concerned 

about setting the leased access rates at 

a point at which programmers that 

predominantly transmit sales 

presentations or program length 

commercials simply migrate to leased 

access because it is less expensive than 

their current commercial arrangements. 

Accordingly, the Commission seeks 

comment regarding the use of leased 

access by programmers that 

predominantly transmit sales 

presentations and program length 

commercials. Specifically, is leased 

access affordable to these programmers 

at current rates? Will applying the 

modified rate formula discussed 

previously in this Report and Order 

cause migration of existing services to 

leased access? What would be the effect 

of such a migration? Is a separate 

category for direct sales programmers 

appropriate? 

II. Procedural Matters 

A. Ex Parte Rules 

5. Permit-But-Disclose. The NPRM in 

this proceeding will be treated as 

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

‘‘permit-but-disclose’’ requirements 

under § 1.1206(b) of the Commission’s 

rules. Ex parte presentations are 

permissible if disclosed in accordance 

with Commission rules, except during 

the Sunshine Agenda period when 

presentations, ex parte or otherwise, are 

generally prohibited. Persons making 

oral ex parte presentations are reminded 

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 twosentence description of the views and 

arguments presented is generally 

required. Additional rules pertaining to 

oral and written presentations are set 

forth in § 1.1206(b). 

B. Filing Requirements 

6. Information. For additional 

information on this proceeding, contact 

Katie Costello, Katie.Costello@fcc.gov of 

the Media Bureau, Policy Division, (202) 

418–2120. 

7. Comment Information. Pursuant to 

§§ 1.415 and 1.419 of the Commission’s 

rules, 47 CFR 1.415, 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. 

• 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. 

• 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. Parties may also 

submit an electronic comment by 

Internet e-mail. To get filing 

instructions, filers should send an email to ecfs@fcc.gov, and include the 

following words in the body of the 

message, ‘‘get form.’’ A sample form and 

directions will be sent in response. 

• 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 of this 

proceeding, filers must submit two 

additional copies for 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 


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10734 Federal Register / Vol. 73, No. 40 / Thursday, February 28, 2008 / Proposed Rules 

the Secretary, Federal Communications 

Commission. 

• The Commission’s contractor will 

receive hand-delivered or messengerdelivered 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. 

• Commercial 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. 

• U.S. Postal Service first-class, 

Express, and Priority mail must be 

addressed to 445 12th Street, SW., 

Washington, DC 20554. 

• 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 fcc504@fcc.gov or call 

the Consumer & Governmental Affairs 

Bureau at 202–418–0530 (voice), 202–

418–0432 (tty). 

8. Availability of Documents. 

Comments, reply comments, and ex 

parte submissions will be available for 

public inspection during regular 

business hours in the FCC Reference 

Center, Federal Communications 

Commission, 445 12th Street, SW., CY–

A257, Washington, DC 20554. Persons 

with disabilities who need assistance in 

the FCC Reference Center may contact 

Bill Cline at (202) 418–0267 (voice), 

(202) 418–7365 (TTY), or 

bill.cline@fcc.gov. These documents also 

will be available from the Commission’s 

Electronic Comment Filing System. 

Documents are available electronically 

in ASCII, Word 97, and Adobe Acrobat. 

Copies of filings in this proceeding may 

be obtained from Best Copy and 

Printing, Inc., Portals II, 445 12th Street, 

SW., Room CY–B402, Washington, DC 

20554; they can also be reached by 

telephone, at (202) 488–5300 or (800) 

378–3160; by e-mail at 

fcc@bcpiweb.com; or via their Web site 

at http://www.bcpiweb.com. To request 

materials in accessible formats for 

people with disabilities (Braille, large 

print, electronic files, audio format), 

send an e-mail to fcc504@fcc.gov or call 

the Consumer and Governmental Affairs 

Bureau at (202) 418–0531 (voice), (202) 

418–7365 (TTY). 

C. Initial Paperwork Reduction Act of 

1995 Analysis 

9. The FNPRM has been analyzed 

with respect to the Paperwork 

Reduction Act of 1995 (‘‘PRA’’), Public 

Law No. 104–13, 109 Stat 163 (1995) 

(codified in Chapter 35 of title 44 

U.S.C.) and contains no proposed new 

or modified information collection 

requirements. In addition, therefore, it 

does not contain any new or modified 

‘‘information collection burden for 

small business concerns with fewer than 

25 employees,’’ pursuant to the Small 

Business Paperwork Relief Act of 2002 

(‘‘SBPRA’’), Public Law No. 107–198, 

116 Stat 729 (2002) (codified in Chapter 

35 of title 44 U.S.C.); see 44 U.S.C. 

3506(c)(4). 

III. Initial Regulatory Flexibility 

Analysis 

10. The Regulatory Flexibility Act of 

1980, as amended (‘‘RFA’’), requires that 

a regulatory flexibility analysis be 

prepared for notice and comment rule 

making proceedings, unless the agency 

certifies that ‘‘the rule will not, if 

promulgated, have a significant 

economic impact on a substantial 

number of small entities.’’ The RFA 

generally defines the term ‘‘small 

entity’’ as having the same meaning as 

the terms ‘‘small business,’’ ‘‘small 

organization,’’ and ‘‘small governmental 

jurisdiction.’’ In addition, the term 

‘‘small business’’ has the same meaning 

as the term ‘‘small business concern’’

under the Small Business Act. A ‘‘small 

business concern’’ is one which: (1) Is 

independently owned and operated; (2) 

is not dominant in its field of operation; 

and (3) satisfies any additional criteria 

established by the Small Business 

Administration (SBA). As required by 

the RFA, the Commission has prepared 

an Initial Regulatory Flexibility 

Analysis (‘‘IRFA’’) of the possible 

significant economic impact on a 

substantial number of small entities of 

the proposals addressed in the FNPRM 

Initial Regulatory Flexibility Analysis. 

11. As required by the Regulatory 

Flexibility Act of 1980, as amended (the 

‘‘RFA’’) the Commission has prepared 

this Initial Regulatory Flexibility 

Analysis (‘‘IRFA’’) of the possible 

significant economic impact on small 

entities by the policies and rules 

proposed in the Further Notice of 

Proposed Rulemaking (‘‘FNPRM’’). 

Written public comments are requested 

on this IRFA. Comments must be 

identified as responses to the IRFA and 

must be filed by the deadlines for 

comments provided on the first page of 

the document. The Commission will 

send a copy of the FNPRM, including 

this IRFA, to the Chief Counsel for 

Advocacy of the Small Business 

Administration (‘‘SBA’’). In addition, 

the FNPRM and IRFA (or summaries 

thereof) will be published in the Federal 

Register. 

A. Need for, and Objectives of, the 

Proposed Rules 

12. Overview. The commercial leased 

access requirements set forth in Section 

612 of the Communications Act of 1934 

require a cable operator to set aside 

channel capacity for commercial use by 

video programmers unaffiliated with the 

cable operator. The purposes of Section 

612 are ‘‘to promote competition in the 

delivery of diverse sources of video 

programming and to assure that the 

widest possible diversity of information 

sources are made available to the public 

from cable systems in a manner 

consistent with growth and 

development of cable systems.’’

13. In the Report and Order in MB 

Docket No. 07–42, the Commission 

modified its formula used to calculate 

commercial leased access rates, which 

will result in making leased access 

channels a more viable outlet for leased 

access programming. The Order also 

provides that the maximum leased 

access rate will not exceed $0.10 per 

subscriber per month for any cable 

system. The Order, however, did not 

apply the modified rate formula or the 

maximum allowable leased access rate 

to programmers that predominantly 

transmit sales presentations or program 

length commercials. These direct sales 

programmers often ‘‘pay’’ for carriage—

either directly or through some form of 

revenue sharing with the cable operator. 

14. In the FNPRM, the Commission 

notes its concern about setting the 

leased access rates at a point at which 

programmers that predominantly 

transmit sales presentations or program 

length commercials simply migrate to 

leased access because it is less 

expensive than their current commercial 

arrangements. Accordingly, the FNPRM 

considers whether leased access at 

current rates is affordable to 

programmers that predominantly 

transmit sales presentations and 

program length commercials. The 

FNPRM considers whether applying the 

modified leased access rate formula to 

programmers that predominantly 

transmit sales presentations or program 

length commercials will cause migration 

of these services to leased access. If 

these services do migrate to leased 

access, the FNPRM considers the effect 

of such a migration. The FNPRM also 

considers whether a separate category 

for direct sales programmers is 

appropriate. 

15. In the FNPRM, the Commission 

seeks comment on the foregoing issues. 

In particular, the FNPRM invites 

comment on issues that may impact 

small entities, including cable operators 

and leased access programmers. 


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Federal Register / Vol. 73, No. 40 / Thursday, February 28, 2008 / Proposed Rules 10735 

B. Legal Basis 

16. The authority for the action 

proposed in the rulemaking is contained 

in Section 4(i), 303, and 612 of the 

Communications Act of 1934, as 

amended, 47 U.S.C. 154(i), 303, and 

532. 

C. Description and Estimate of the 

Number of Small Entities to Which the 

Proposed Rules Will Apply 

17. 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, if adopted. The RFA 

generally defines the term ‘‘small 

entity’’ as having the same meaning as 

the terms ‘‘small business,’’ ‘‘small 

organization,’’ and ‘‘small governmental 

jurisdiction.’’ In addition, the term 

‘‘small business’’ has the same meaning 

as the term ‘‘small business concern’’

under the Small Business Act. A ‘‘small 

business concern’’ is one which: (1) Is 

independently owned and operated; (2) 

is not dominant in its field of operation; 

and (3) satisfies any additional criteria 

established by the Small Business 

Administration (‘‘SBA’’). 

18. Wired Telecommunications 

Carriers. The 2007 North American 

Industry Classification System 

(‘‘NAICS’’) defines ‘‘Wired 

Telecommunications Carriers’’ (2007 

NAISC code 517110) to include the 

following three classifications which 

were listed separately in the 2002 

NAICS: Wired Telecommunications 

Carriers (2002 NAICS code 517110), 

Cable and Other Program Distribution 

(2002 NAISC code 517510), and Internet 

Service Providers (2002 NAISC code 

518111). The 2007 NAISC defines this 

category as follows: ‘‘This industry 

comprises establishments primarily 

engaged in operating and/or providing 

access to transmission facilities and 

infrastructure that they own and/or 

lease for the transmission of voice, data, 

text, sound, and video using wired 

telecommunications networks. 

Transmission facilities may be based on 

a single technology or a combination of 

technologies. Establishments in this 

industry use the wired 

telecommunications network facilities 

that they operate to provide a variety of 

services, such as wired telephony 

services, including VoIP services; wired 

(cable) audio and video programming 

distribution; and wired broadband 

Internet services. By exception, 

establishments providing satellite 

television distribution services using 

facilities and infrastructure that they 

operate are included in this industry.’’

The SBA has developed a small 

business size standard for Wired 

Telecommunications Carriers, which is 

all firms having 1,500 employees or less. 

According to Census Bureau data for 

2002, there were a total of 27,148 firms 

in the Wired Telecommunications 

Carriers category (2002 NAISC code 

517110) that operated for the entire 

year; 6,021 firms in the Cable and Other 

Program Distribution category (2002 

NAISC code 517510) that operated for 

the entire year; and 3,408 firms in the 

Internet Service Providers category 

(2002 NAISC code 518111) that 

operated for the entire year. Of these 

totals, 25,374 of 27,148 firms in the 

Wired Telecommunications Carriers 

category (2002 NAISC code 517110) had 

less than 100 employees; 5,496 of 6,021 

firms in the Cable and Other Program 

Distribution category (2002 NAISC code 

517510) had less than 100 employees; 

and 3,303 of the 3,408 firms in the 

Internet Service Providers category 

(2002 NAISC code 518111) had less 

than 100 employees. Thus, under this 

size standard, the majority of firms can 

be considered small. 

19. Cable and Other Program 

Distribution. The 2002 NAICS defines 

this category as follows: ‘‘This industry 

comprises establishments primarily 

engaged as third-party distribution 

systems for broadcast programming. The 

establishments of this industry deliver 

visual, aural, or textual programming 

received from cable networks, local 

television stations, or radio networks to 

consumers via cable or direct-to-home 

satellite systems on a subscription or fee 

basis. These establishments do not 

generally originate programming 

material.’’ This category includes, 

among others, cable operators, direct 

broadcast satellite (‘‘DBS’’) services, 

home satellite dish (‘‘HSD’’) services, 

satellite master antenna television 

(‘‘SMATV’’) systems, and open video 

systems (‘‘OVS’’). The SBA has 

developed a small business size 

standard for Cable and Other Program 

Distribution, which is all such firms 

having $13.5 million or less in annual 

receipts. According to Census Bureau 

data for 2002, there were a total of 1,191 

firms in this category that operated for 

the entire year. Of this total, 1,087 firms 

had annual receipts of under $10 

million, and 43 firms had receipts of 

$10 million or more but less than $25 

million. Thus, under this size standard, 

the majority of firms can be considered 

small. 

20. Cable System Operators (Rate 

Regulation Standard). The Commission 

has also developed its own small 

business size standards for the purpose 

of cable rate regulation. Under the 

Commission’s rules, a ‘‘small cable 

company’’ is one serving 400,000 or 

fewer subscribers nationwide. As of 

2006, 7,916 cable operators qualify as 

small cable companies under this 

standard. In addition, under the 

Commission’s rules, a ‘‘small system’’ is 

a cable system serving 15,000 or fewer 

subscribers. Industry data indicate that 

6,139 systems have under 10,000 

subscribers, and an additional 379 

systems have 10,000–19,999 

subscribers. Thus, under this standard, 

most cable systems are small. 

21. 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.’’ There are approximately 

65.4 million cable subscribers in the 

United States today. Accordingly, an 

operator serving fewer than 654,000 

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. 

Based on available data, we find that the 

number of cable operators serving 

654,000 subscribers or less totals 

approximately 7,916. We note that the 

Commission neither requests nor 

collects information on whether cable 

system operators are affiliated with 

entities whose gross annual revenues 

exceed $250 million. Although it seems 

certain that some of these cable system 

operators are affiliated with entities 

whose gross annual revenues exceed 

$250,000,000, we are 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. 

22. 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 SBArecognized definition of Cable and 

Other Program Distribution. This 

definition provides that a small entity is 

one with $13.5 million or less in annual 

receipts. Currently, three operators 

provide DBS service, which requires a 

great investment of capital for operation: 

DIRECTV, EchoStar (marketed as the 

DISH Network), and Dominion Video 

Satellite, Inc. (‘‘Dominion’’) (marketed 


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as Sky Angel). All three currently offer 

subscription services. Two of these 

three DBS operators, DIRECTV and 

EchoStar Communications Corporation 

(‘‘EchoStar’’), report annual revenues 

that are in excess of the threshold for a 

small business. The third DBS operator, 

Dominion’s Sky Angel service, serves 

fewer than one million subscribers and 

provides 20 family and religion-oriented 

channels. Dominion does not report its 

annual revenues. The Commission does 

not know of any source which provides 

this information and, thus, we have 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 recognize the possibility 

that there are entrants in this field that 

may not yet have generated $13.5 

million in annual receipts, and therefore 

may be categorized as a small business, 

if independently owned and operated. 

23. Private Cable Operators (PCOs) 

also known as Satellite Master Antenna 

Television (SMATV) Systems. PCOs, 

also known as SMATV systems or 

private communication operators, are 

video distribution facilities that use 

closed transmission paths without using 

any public right-of-way. PCOs acquire 

video programming and distribute it via 

terrestrial wiring in urban and suburban 

multiple dwelling units such as 

apartments and condominiums, and 

commercial multiple tenant units such 

as hotels and office buildings. The SBA 

definition of small entities for Cable and 

Other Program Distribution Services 

includes PCOs and, thus, small entities 

are defined as all such companies 

generating $13.5 million or less in 

annual receipts. Currently, there are 

approximately 150 members in the 

Independent Multi-Family 

Communications Council (IMCC), the 

trade association that represents PCOs. 

Individual PCOs often serve 

approximately 3,000–4,000 subscribers, 

but the larger operations serve as many 

as 15,000–55,000 subscribers. In total, 

PCOs currently serve approximately one 

million subscribers. Because these 

operators are not rate regulated, they are 

not required to file financial data with 

the Commission. Furthermore, we are 

not aware of any privately published 

financial information regarding these 

operators. Based on the estimated 

number of operators and the estimated 

number of units served by the largest 

ten PCOs, we believe that a substantial 

number of PCOs may qualify as small 

entities. 

24. Home Satellite Dish (‘‘HSD’’) 

Service. Because HSD provides 

subscription services, HSD falls within 

the SBA-recognized definition of Cable 

and Other Program Distribution, which 

includes all such companies generating 

$13.5 million or less in revenue 

annually. HSD or the large dish segment 

of the satellite industry is the original 

satellite-to-home service offered to 

consumers, and involves the home 

reception of signals transmitted by 

satellites operating generally in the Cband frequency. Unlike DBS, which 

uses small dishes, HSD antennas are 

between four and eight feet in diameter 

and can receive a wide range of 

unscrambled (free) programming and 

scrambled programming purchased from 

program packagers that are licensed to 

facilitate subscribers’ receipt of video 

programming. There are approximately 

30 satellites operating in the C-band, 

which carry over 500 channels of 

programming combined; approximately 

350 channels are available free of charge 

and 150 are scrambled and require a 

subscription. HSD is difficult to 

quantify in terms of annual revenue. 

HSD owners have access to program 

channels placed on C-band satellites by 

programmers for receipt and 

distribution by MVPDs. Commission 

data shows that, between June 2004 and 

June 2005, HSD subscribership fell from 

335,766 subscribers to 206,358 

subscribers, a decline of more than 38 

percent. The Commission has no 

information regarding the annual 

revenue of the four C-Band distributors. 

25. Broadband Radio Service and 

Educational Broadband Service. 

Broadband Radio Service comprises 

Multichannel Multipoint Distribution 

Service (MMDS) systems and 

Multipoint Distribution Service (MDS). 

MMDS systems, often referred to as 

‘‘wireless cable,’’ transmit video 

programming to subscribers using the 

microwave frequencies of MDS and 

Educational Broadband Service (EBS) 

(formerly known as Instructional 

Television Fixed Service (ITFS)). We 

estimate that the number of wireless 

cable subscribers is approximately 

100,000, as of March 2005. The SBA 

definition of small entities for Cable and 

Other Program Distribution, which 

includes such companies generating 

$13.5 million in annual receipts, 

appears applicable to MDS and ITFS. 

26. The Commission has also defined 

small MDS (now BRS) entities in the 

context of Commission license auctions. 

For purposes of the 1996 MDS auction, 

the Commission defined a small 

business as an entity that had annual 

average gross revenues of less than $40 

million in the previous three calendar 

years. This definition of a small entity 

in the context of MDS auctions has been 

approved by the SBA. In the MDS 

auction, 67 bidders won 493 licenses. 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. MDS 

licensees and wireless cable operators 

that did not receive their licenses as a 

result of the MDS auction fall under the 

SBA small business size standard for 

Cable and Other Program Distribution, 

which includes all such entities that do 

not generate revenue in excess of $13.5 

million annually. Information available 

to us indicates that there are 

approximately 850 of these licensees 

and operators that do not generate 

revenue in excess of $13.5 million 

annually. Therefore, we estimate that 

there are approximately 850 small entity 

MDS (or BRS) providers, as defined by 

the SBA and the Commission’s auction 

rules. 

27. Educational institutions are 

included in this analysis as small 

entities; however, the Commission has 

not created a specific small business 

size standard for ITFS (now EBS). We 

estimate that there are currently 2,032 

ITFS (or EBS) licensees, and all but 100 

of the licenses are held by educational 

institutions. Thus, we estimate that at 

least 1,932 ITFS licensees are small 

entities. 

28. 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. The SBA 

definition of small entities for Cable and 

Other Program Distribution, which 

includes such companies generating 

$13.5 million in annual receipts, 

appears applicable to LMDS. The 

Commission has also defined small 

LMDS entities in the context of 

Commission license auctions. In the 

1998 and 1999 LMDS auctions, the 

Commission defined a small business as 

an entity that had annual average gross 

revenues of less than $40 million in the 

previous three calendar years. 

Moreover, the Commission added an 

additional classification for a ‘‘very 

small business,’’ which was defined as 

an entity that had annual average gross 

revenues of less than $15 million in the 


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previous three calendar years. These 

definitions of ‘‘small business’’ and 

‘‘very small business’’ in the context of 

the LMDS auctions have been approved 

by the SBA. In the first LMDS auction, 

104 bidders won 864 licenses. Of the 

104 auction winners, 93 claimed status 

as small or very small businesses. In the 

LMDS re-auction, 40 bidders won 161 

licenses. Based on this information, we 

believe that the number of small LMDS 

licenses will include the 93 winning 

bidders in the first auction and the 40 

winning bidders in the re-auction, for a 

total of 133 small entity LMDS 

providers as defined by the SBA and the 

Commission’s auction rules. 

29. Open Video Systems (‘‘OVS’’). The 

OVS framework provides opportunities 

for the distribution of video 

programming other than through cable 

systems. Because OVS operators provide 

subscription services, OVS falls within 

the SBA-recognized definition of Cable 

and Other Program Distribution 

Services, which provides that a small 

entity is one with $ 13.5 million or less 

in annual receipts. The Commission has 

approved approximately 120 OVS 

certifications with some OVS operators 

now providing service. Broadband 

service providers (BSPs) are currently 

the only significant holders of OVS 

certifications or local OVS franchises, 

even though OVS is one of four 

statutorily-recognized options for local 

exchange carriers (LECs) to offer video 

programming services. As of June 2005, 

BSPs served approximately 1.4 million 

subscribers, representing 1.49 percent of 

all MVPD households. Among BSPs, 

however, those operating under the OVS 

framework are in the minority. As of 

June 2005, RCN Corporation is the 

largest BSP and 14th largest MVPD, 

serving approximately 371,000 

subscribers. RCN received approval to 

operate OVS systems in New York City, 

Boston, Washington, D.C. and other 

areas. The Commission does not have 

financial information regarding the 

entities authorized to provide OVS, 

some of which may not yet be 

operational. We thus believe that at least 

some of the OVS operators may qualify 

as small entities. 

30. Cable and Other Subscription 

Programming. The Census Bureau 

defines this category as follows: ‘‘This 

industry comprises establishments 

primarily engaged in operating studios 

and facilities for the broadcasting of 

programs on a subscription or fee basis 

* *. These establishments produce 

programming in their own facilities or 

acquire programming from external 

sources. The programming material is 

usually delivered to a third party, such 

as cable systems or direct-to-home 

satellite systems, for transmission to 

viewers.’’ The SBA has developed a 

small business size standard for firms 

within this category, which is all firms 

with $13.5 million or less in annual 

receipts. According to Census Bureau 

data for 2002, there were 270 firms in 

this category that operated for the entire 

year. Of this total, 217 firms had annual 

receipts of under $10 million and 13 

firms had annual receipts of $10 million 

to $24,999,999. Thus, under this 

category and associated small business 

size standard, the majority of firms can 

be considered small. 

31. Motion Picture and Video 

Production. The Census Bureau defines 

this category as follows: ‘‘This industry 

comprises establishments primarily 

engaged in producing, or producing and 

distributing motion pictures, videos, 

television programs, or television 

commercials.’’ The SBA has developed 

a small business size standard for firms 

within this category, which is all firms 

with $27 million or less in annual 

receipts. According to Census Bureau 

data for 2002, there were 7,772 firms in 

this category that operated for the entire 

year. Of this total, 7,685 firms had 

annual receipts of under $24,999,999 

and 45 firms had annual receipts of 

between $25,000,000 and $49,999,999. 

Thus, under this category and 

associated small business size standard, 

the majority of firms can be considered 

small. Each of these NAICS categories is 

very broad and includes firms that may 

be engaged in various industries, 

including cable programming. Specific 

figures are not available regarding how 

many of these firms exclusively produce 

and/or distribute programming for cable 

television or how many are 

independently owned and operated. 

32. Motion Picture and Video 

Distribution. The Census Bureau defines 

this category as follows: ‘‘This industry 

comprises establishments primarily 

engaged in acquiring distribution rights 

and distributing film and video 

productions to motion picture theaters, 

television networks and stations, and 

exhibitors.’’ The SBA has developed a 

small business size standard for firms 

within this category, which is all firms 

with $27 million or less in annual 

receipts. According to Census Bureau 

data for 2002, there were 377 firms in 

this category that operated for the entire 

year. Of this total, 365 firms had annual 

receipts of under $24,999,999 and 7 

firms had annual receipts of between 

$25,000,000 and $49,999,999. Thus, 

under this category and associated small 

business size standard, the majority of 

firms can be considered small. Each of 

these NAICS categories is very broad 

and includes firms that may be engaged 

in various industries, including cable 

programming. Specific figures are not 

available regarding how many of these 

firms exclusively produce and/or 

distribute programming for cable 

television or how many are 

independently owned and operated. 

33. Small Incumbent Local Exchange 

Carriers. We have included small 

incumbent local exchange carriers in 

this present RFA analysis. A ‘‘small 

business’’ under the RFA is one that, 

inter alia, meets the pertinent small 

business size standard (e.g., a telephone 

communications business having 1,500 

or fewer employees), and ‘‘is not 

dominant in its field of operation.’’ The 

SBA’s Office of Advocacy contends that, 

for RFA purposes, small incumbent 

local exchange carriers are not dominant 

in their field of operation because any 

such dominance is not ‘‘national’’ in 

scope. We have therefore included small 

incumbent local exchange carriers in 

this RFA, although we emphasize that 

this RFA action has no effect on 

Commission analyses and 

determinations in other, non-RFA 

contexts. 

34. Incumbent Local Exchange 

Carriers (‘‘LECs’’). Neither the 

Commission nor the SBA has developed 

a small business size standard 

specifically for incumbent local 

exchange services. The appropriate size 

standard under SBA rules is for the 

category Wired Telecommunications 

Carriers. Under that size standard, such 

a business is small if it has 1,500 or 

fewer employees. According to 

Commission data, 1,307 carriers have 

reported that they are engaged in the 

provision of incumbent local exchange 

services. Of these 1,307 carriers, an 

estimated 1,019 have 1,500 or fewer 

employees and 288 have more than 

1,500 employees. Consequently, the 

Commission estimates that most 

providers of incumbent local exchange 

service are small businesses. 

35. Competitive Local Exchange 

Carriers, Competitive Access Providers 

(CAPs), Shared-Tenant Service 

Providers,’’ and ‘‘Other Local Service 

Providers.’’ Neither the Commission nor 

the SBA has developed a small business 

size standard specifically for these 

service providers. The appropriate size 

standard under SBA rules is for the 

category Wired Telecommunications 

Carriers. Under that size standard, such 

a business is small if it has 1,500 or 

fewer employees. According to 

Commission data, 859 carriers have 

reported that they are engaged in the 

provision of either competitive access 

provider services or competitive local 

exchange carrier services. Of these 859 

carriers, an estimated 741 have 1,500 or 


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10738 Federal Register / Vol. 73, No. 40 / Thursday, February 28, 2008 / Proposed Rules 

fewer employees and 118 have more 

than 1,500 employees. In addition, 16 

carriers have reported that they are 

‘‘Shared-Tenant Service Providers,’’ and 

all 16 are estimated to have 1,500 or 

fewer employees. In addition, 44 

carriers have reported that they are 

‘‘Other Local Service Providers.’’ Of the 

44, an estimated 43 have 1,500 or fewer 

employees and one has more than 1,500 

employees. Consequently, the 

Commission estimates that most 

providers of competitive local exchange 

service, competitive access providers, 

‘‘Shared-Tenant Service Providers,’’ and 

‘‘Other Local Service Providers’’ are 

small entities. 

36. Electric Power Generation, 

Transmission and Distribution. The 

Census Bureau defines this category as 

follows: ‘‘This industry group comprises 

establishments primarily engaged in 

generating, transmitting, and/or 

distributing electric power. 

Establishments in this industry group 

may perform one or more of the 

following activities: (1) Operate 

generation facilities that produce 

electric energy; (2) operate transmission 

systems that convey the electricity from 

the generation facility to the distribution 

system; and (3) operate distribution 

systems that convey electric power 

received from the generation facility or 

the transmission system to the final 

consumer.’’ The SBA has developed a 

small business size standard for firms in 

this category: ‘‘A firm is small if, 

including its affiliates, it is primarily 

engaged in the generation, transmission, 

and/or distribution of electric energy for 

sale and its total electric output for the 

preceding fiscal year did not exceed 4 

million megawatt hours.’’ According to 

Census Bureau data for 2002, there were 

1,644 firms in this category that 

operated for the entire year. Census data 

do not track electric output and we have 

not determined how many of these firms 

fit the SBA size standard for small, with 

no more than 4 million megawatt hours 

of electric output. Consequently, we 

estimate that 1,644 or fewer firms may 

be considered small under the SBA 

small business size standard. 

D. Description of Proposed Reporting, 

Recordkeeping and Other Compliance 

Requirements 

37. The rules ultimately adopted as a 

result of this FNPRM may contain new 

or modified information collections. We 

anticipate that none of the changes 

would result in an increase to the 

reporting and recordkeeping 

requirements of small entities. We invite 

small entities to comment in response to 

the FNPRM. 

E. Steps Taken To Minimize Significant 

Impact on Small Entities and Significant 

Alternatives Considered 

38. The RFA requires an agency to 

describe any significant alternatives that 

it has considered in proposing 

regulatory approaches, 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. 

39. In response to the FNPRM, the 

Commission may choose to continue to 

apply its current leased access rates to 

programmers that predominantly 

transmit sales presentations or program 

length commercials; it may choose to 

apply the modified rate formula and the 

maximum allowable leased access rate 

of $0.10 per subscriber per month to 

these programmers; or it may adopt an 

alternative approach. We invite 

comment on the options the 

Commission is considering, or 

alternatives thereto as referenced above, 

and on any other alternatives 

commenters may wish to propose for 

the purpose of minimizing any 

significant economic impact on smaller 

entities. 

F. Federal Rules Which Duplicate, 

Overlap, or Conflict With the 

Commission’s Proposals 

40. None. 

IV. Additional Information 

41. For additional information on this 

proceeding, contact Steven Broeckaert, 

Steven.Broeckaert@fcc.gov; or Katie 

Costello, Katie.Costello@fcc.gov; of the 

Media Bureau, Policy Division, (202) 

418–2120. 

V. Ordering Clauses 

42. Accordingly, it is ordered, 

pursuant to the authority found in 

sections 4(i), 303(r), and 628 of the 

Communications Act of 1934, as 

amended, 47 U.S.C. 154(i), 303(r), and 

532, this Notice of Proposed 

Rulemaking Is Adopted. 

43. It is further ordered that the 

Commission’s Consumer and 

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. 08–871 Filed 2–27–08; 8:45 am] 

BILLING CODE 6712–01–P 


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