Federal Register / Vol. 73, No. 22 / Friday, February 1, 2008 / Rules and Regulations 6043 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 76 

[CS Docket No. 98–120; FCC 07–170] 

Carriage of Digital Television 

Broadcast Signals 

AGENCY: Federal Communications 

Commission. 

ACTION: Final rule. 

SUMMARY: This Third Report and Order 

finalizes the material degradation 

requirements adopted by the 

Commission in 2001, and establishes 

two alternative approaches that cable 

operators may use to meet their 

responsibility to ensure that cable 

subscribers with analog television sets 

can continue to view all must-carry 

stations after the end of the DTV 

transition. The Commission adopts rules 

to ensure that cable subscribers will 

continue to be able to view broadcast 

stations after the transition, and that 

they will be able to view those broadcast 

signals at the same level of quality in 

which they are delivered to the cable 

system. The Commission announces 

these rules now to ensure that cable 

operators and broadcasters have 

sufficient time to prepare to comply 

with them. 

DATES: Effective March 3, 2008. 

ADDRESSES: Federal Communications 

Commission, 445 12th Street, SW., 

Washington, DC 20554. In addition to 

filing comments with the Office of the 

Secretary, a copy of any comments on 

the Paperwork Reduction Act 

information collection requirements 

contained herein should be submitted to 

Cathy Williams, Federal 

Communications Commission, 445 12th 

Street, SW., Washington, DC 20554, or 

via the Internet to PRA@fcc.gov. 

FOR FURTHER INFORMATION CONTACT: For 

additional information on this 

proceeding, please contact Lyle Elder, 

Lyle.Elder@fcc.gov, or Eloise Gore, 

Eloise.Gore@fcc.gov, of the Media 

Bureau, Policy Division, (202) 418–

2120. For additional information 

concerning the Paperwork Reduction 

Act information collection requirements 

contained in this document, contact 

Cathy Williams on (202) 418–2918, or 

via the Internet at PRA@fcc.gov. 

SUPPLEMENTARY INFORMATION: This is a 

summary of the Federal 

Communications Commission’s Third 

Report and Order in CS Docket No. 98–

120, FCC 07–170, adopted September 

11, 2007, and released November 30, 

2007. 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. These documents 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). 

Paperwork Reduction Act of 1995 

Analysis: 

This document contains modified 

information collection requirements. 

The Commission, as part of its 

continuing effort to reduce paperwork 

burdens, will invite the general public 

to comment on the information 

collection requirements contained in 

this R&O as required by the Paperwork 

Reduction Act of 1995, Public Law 104–

13. The Commission will publish a 

separate Federal Register Notice at a 

later date seeking these PRA comments 

from the public. In addition, the 

Commission notes that pursuant to the 

Small Business Paperwork Relief Act of 

2002, Public Law 107–198, see 44 U.S.C. 

3506(c)(4), we previously sought 

specific comment on how the 

Commission might ‘‘further reduce the 

information collection burden for small 

business concerns with fewer than 25 

employees.’’

Summary of the Third Report and 

Order 

1. As discussed below, the Act 

requires that cable systems carry 

broadcast signals without material 

degradation and ensure that all 

subscribers can receive and view 

mandatory-carriage signals. This Third 

Report and Order finalizes the material 

degradation requirements adopted by 

the Commission in 2001, and 

establishes two alternative approaches 

that cable operators may use to meet 

their responsibility to ensure that cable 

subscribers with analog television sets 

can continue to view all must-carry 

stations after the end of the DTV 

transition. Cable operators may either 

carry such signals in analog, or, for alldigital systems, carry the signal in 

digital only. 

A. Material Degradation—Sections 

614(b)(4)(A) and 615(g)(2) 

2. In this section, we adopt rules 

requiring that cable operators not 

discriminate in their carriage between 

broadcast and non-broadcast signals, 

and that they not materially degrade 

broadcast signals. As explained below, 

we reaffirm the approach adopted by the 

Commission in 2001 to determining 

whether material degradation has 

occurred, as well as the requirement 

that HD signals be carried in HD. 

3. The Act requires that cable 

operators carry local broadcast signals 

‘‘without material degradation,’’ and 

instructs the Commission to ‘‘adopt 

carriage standards to ensure that, to the 

extent technically feasible, the quality of 

signal processing and carriage provided 

by a cable system for the carriage of 

local commercial television stations will 

be no less than that provided by the 

system for carriage of any other type of 

signal.’’ As noted above, section 

614(b)(4)(B) of the Act directs the 

Commission ‘‘to establish any changes 

in the signal carriage requirements of 

cable television systems necessary to 

ensure cable carriage of such broadcast 

signals of local commercial television 

stations which have been changed’’ as a 

result of the DTV transition. 

4. In the Second Further Notice of 

Proposed Rulemaking (Second FNPRM) 

72 FR 312444, December 31, 2007, we 

sought comment on proposals for 

ensuring that broadcast signals would 

not be materially degraded after the 

digital transition. We proposed that the 

measurement by which we determine 

whether an operator is degrading the 

broadcast signal change from a 

subjective to an objective standard or, in 

the alternative, to maintain the 

comparative standard established in the 

First Report and Order 66 FR 16523, 

March 26, 2001. We asked whether we 

should require cable operators to pass 

through all primary video and programrelated bits (‘‘content bits’’). In addition, 

we proposed a rule that would create a 

framework for negotiations between 

cable operators who wanted to carry 

fewer than all content bits and the 

broadcasters whose signals were at 

issue. Such a rule would require any 

operator that wished to carry fewer than 

all content bits to demonstrate to the 

broadcaster that it could meet the 

picture-quality-nondegradation standard 

without carriage of all content bits. 

Finally, in the Second FNPRM, we 

reminded commenters of the existing 

requirement to carry high definition 

signals in HD to those subscribers who 

have signed up for an HD package, and 


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reiterated that this requirement will 

continue after the transition. 

5. We retain the requirement that HD 

signals be carried in HD, as well as the 

comparative approach to determining 

whether material degradation has 

occurred. In 2001, the First Report and 

Order established two requirements to 

avoid material degradation. First, ‘‘a 

cable operator may not provide a digital 

broadcast signal in a lesser format or 

lower resolution than that afforded to 

any’’ other signal on the system. 

Second, a cable operator must carry 

broadcast stations such that, when 

compared to the broadcast signal, ‘‘the 

difference is not really perceptible to the 

viewer.’’ Thus, ‘‘a broadcast signal 

delivered in HDTV must be carried in 

HDTV.’’ Because we decline to rely on 

measurement of bits to determine 

whether degradation has occurred, we 

do not require carriage of all content 

bits. Additionally, for the reasons 

described below, we decline to adopt 

the proposed negotiation framework. 

6. The Act requires that broadcast 

signals not be ‘‘materially degraded.’’ It 

also requires the Commission to ‘‘adopt 

carriage standards to ensure that, to the 

extent technically feasible, the quality of 

signal processing and carriage provided 

by a cable system for the carriage of 

local commercial television stations will 

be no less than that provided by the 

system for carriage of any other type of 

signal.’’ The Commission stated in 2001 

that ‘‘[f]rom our perspective, the issue of 

material degradation is about the picture 

quality the consumer receives and is 

capable of perceiving.’’ Cable 

commenters argued that this should 

remain the focus of the Commission’s 

decision making, and we agree. 

7. We considered the ‘‘all content 

bits’’ proposal, the main benefit of 

which was a clear means of 

measurement and consequently ease of 

enforcement. Ultimately, we conclude, 

however, that the all content bits 

approach is likely to stifle innovation 

and the very efficiency that digital 

technology offers, and may be more 

exacting a standard than necessary to 

ensure that a given signal will be carried 

without material degradation. We also 

conclude that it is unnecessary at this 

time to impose such a requirement in 

light of the paucity of material 

degradation complaints over the 15 

years since enactment of the Must Carry 

statute. 

8. A number of commenters support 

the existing standard, and most argue 

that a comparative approach remains 

the best method of measuring material 

degradation. As these commenters point 

out, there is little evidence to indicate 

otherwise. We note Comcast’s 

observations that there appear to have 

been no more than two material 

degradation complaints since the 1992 

adoption of the prohibition, and that 

both of those were dismissed. Even if 

there has been limited opportunity to 

‘‘test’’ these rules in a digital context, 

there is every reason to believe that they 

will prove just as robust in an 

environment of greater attention to 

picture quality. 

9. Furthermore, there are 

technological benefits to the current 

comparative standard. Time Warner 

argues that the content bits standard 

proposed in the Second FNPRM would 

require devoting additional bandwidth 

to carriage even when it would not 

improve the quality of the transmitted 

image, hurting consumers by limiting 

other uses of the bandwidth. AT&T 

further argues that an ‘‘all content bits’’

standard could ‘‘dampen[ ] incentives 

to invest in video compression and 

other technologies * * * that would 

allow even greater transmission 

efficiencies and higher quality 

pictures.’’ We recognize these concerns, 

and do not intend to impede 

improvements in technology. Some 

cable operators may, currently or in the 

future, rely on advanced compression 

technologies such as MPEG 4 to provide 

service to subscribers with greater 

efficiency. We particularly recognize the 

value of compression technologies that 

take the broadcast signal back to 

uncompressed baseband and then reencode it in a more efficient manner 

without materially degrading the 

picture. Such advanced compression 

utilizes a minimum bit rate that does 

not reduce the quality of the resolution. 

We agree with commenters that a 

comparative standard is currently the 

best way to encourage and reward 

technological innovations, like MPEG4 

compression, that allow for more 

efficient use of bandwidth without 

diminishing viewer experience. 

10. We decline to adopt the proposal 

of Agape Church Inc., that we require 

carriage of secondary channels. Our 

rules here focus only on the 

broadcaster’s primary video and 

program related content. The 

prohibition on material degradation 

adds no additional requirement to carry 

non-program-related content. 

11. Commenters requested 

clarification that downconversion to 

analog does not constitute material 

degradation. We accordingly clarify that 

it is not material degradation to 

downconvert that signal to comply with 

the ‘‘viewability’’ requirement discussed 

below. 

12. As noted above, we do not adopt 

the negotiation framework proposed in 

the Second FNPRM, and direct parties 

to continue to follow the rules as 

established in section 76.61. Both 

broadcasters and cable operators, the 

parties who would be involved in these 

negotiations, raised serious objections to 

the proposal. The National Association 

of Broadcasters (‘‘NAB’’) and The 

Association for Maximum Service 

Television (‘‘MSTV’’) are highly critical 

of any required negotiations, 

particularly ones which would begin 

and end upon the request of operators. 

They state that the 30 day window for 

carriage complaints is too short, and 

that the proposal as a whole places the 

burden of ensuring compliance on the 

broadcasters, rather than on the 

operators who have the duty by statute. 

Finally, they argue that the 

requirements and penalties for 

noncompliance are insufficiently 

detailed or strict. Cable commenters 

object to the requirement that operators 

make a showing of non materialdegradation to the satisfaction of the 

broadcaster. They express concern about 

what they anticipate would be: (1) A 

major shift in power to must-carry 

broadcasters, who do not have an 

incentive to bargain; and (2) an addition 

of significant transaction costs for 

operators, who currently do not 

negotiate with must carry stations at all. 

They argue that this would add an 

unnecessary complication to mandatory 

carriage. As NAB and MSTV note, the 

goal of these rules is to provide cable 

subscribers with the full benefits of the 

digital transition. Given the broad based 

objections to the proposal, we decline to 

establish a formal procedure by which 

broadcasters would waive the material 

degradation requirements. We note that 

enforcement of the material degradation 

requirements is initiated by a 

broadcaster’s carriage complaint, and 

that the rules provide for the 

broadcaster to complain first to the 

cable operator before filing such a 

complaint. This gives the parties an 

opportunity to informally address 

material degradation disputes, and if the 

station is satisfied with the resultant 

carriage, no complaint will be filed. No 

additional formal process is necessary. 

47 CFR 76.61. 

B. Availability of Signals—Sections 

614(b)(7) and 615(h) 

13. In this section, we adopt rules 

requiring cable systems that are not ‘‘alldigital’’ to provide must-carry signals in 

analog, while ‘‘all-digital’’ systems may 

provide them in digital form only. We 

also require that the cost of any 

downconversion be borne by operators, 

but that downconverted signals may 

count toward the cap on commercial 


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Federal Register / Vol. 73, No. 22 / Friday, February 1, 2008 / Rules and Regulations 6045 

broadcast carriage. Pursuant to sections 

614 and 615 of the Act, cable operators 

must ensure that all cable subscribers 

have the ability to view all local 

broadcast stations carried pursuant to 

mandatory carriage. Specifically, section 

614(b)(7) (for commercial stations) states 

that broadcast signals that are subject to 

mandatory carriage must be ‘‘viewable 

via cable on all television receivers of a 

subscriber which are connected to a 

cable system by a cable operator or for 

which a cable operator provides a 

connection.’’ Similarly, section 615(h) 

for noncommercial stations states that 

‘‘[s]ignals carried in fulfillment of the 

carriage obligations of a cable operator 

under this section shall be available to 

every subscriber as part of the cable 

system’s lowest priced tier that includes 

the retransmission of local commercial 

television broadcast signals.’’ These 

statutory requirements plainly apply to 

cable carriage of digital broadcast 

signals, and, as a consequence, cable 

operators must ensure that all cable 

subscribers—including those with 

analog television sets—continue to be 

able to view all commercial and noncommercial must-carry broadcast 

stations after February 17, 2009. 

14. These rules shall be in force for 

three years from the date of the digital 

transition, subject to review by the 

Commission during the last year of this 

period (i.e., between February 2011 and 

February 2012). In light of the numerous 

issues associated with the transition, it 

is important to retain flexibility as we 

deal with emerging concerns. A threeyear sunset ensures that both analog and 

digital cable subscribers will continue to 

be able to view the signals of must-carry 

stations, and provides the Commission 

with the opportunity after the transition 

to review these rules in light of the 

potential cost and service disruption to 

consumers, and the state of technology 

and the marketplace. To assist the 

Commission in this review, we will 

include questions in our annual Cable 

Price Survey to assess, for example, 

digital cable penetration, cable 

deployment of digital set-top boxes with 

various levels of processing capabilities, 

and cable system capacity constraints. 

15. In the Second FNPRM, we sought 

comment on proposals that would 

ensure the viewability, for all 

subscribers, of signals carried pursuant 

to mandatory carriage. To that end, we 

proposed that 

cable operators must either: (1) Carry the 

signals of commercial and non-commercial 

must-carry stations in analog format to all 

analog cable subscribers, or (2) for all-digital 

systems, carry those signals only in digital 

format, provided that all subscribers with 

analog television sets have the necessary 

equipment to view the broadcast content. 

We also proposed that the cost of any 

down conversion rendered necessary by 

these rules be borne by the cable 

operators. 

16. We adopt these proposals, and 

note that they apply to all operators, 

regardless of their rate-regulated status. 

In sum, cable operators must comply 

with the statutory mandate that mustcarry broadcast signals ‘‘shall be 

viewable via cable on all television 

receivers of a subscriber which are 

connected to a cable system by a cable 

operator or for which a cable operator 

provides a connection,’’ and they have 

two options of doing so. First, to the 

extent that such subscribers do not have 

the capability of viewing digital signals, 

cable systems must carry the signals of 

commercial and non-commercial mustcarry stations in analog format to those 

subscribers, after downconverting the 

signals from their original digital format 

at the headend. This proposal is in line 

with the approach already voluntarily 

planned by many cable operators, as 

described in testimony by Time Warner 

CEO Glenn Britt before the House 

Subcommittee on Telecommunications 

and the Internet. In the alternative, 

operators may choose to operate ‘‘alldigital systems.’’ ‘‘All-digital’’ systems 

are systems that do not carry analog 

signals or provide analog service. Under 

this option, operators will not be 

required to downconvert the signal to 

analog, and may provide these stations 

only in a digital format. In any event, 

any downconversion costs will be borne 

by the operator. 

17. To fulfill its must-carry 

obligations in cases where a cable 

operator uses digital-to-analog converter 

boxes that do not have analog tuners, 

the operator can deliver a standard 

definition digital version of a must-carry 

broadcaster’s high definition digital 

signal, in addition to the analog and 

high definition signal, or use boxes that 

convert high definition signals for 

viewing on an analog television set, or 

use other technical solutions so long as 

cable subscribers have the ability to 

view the signals. 

18. As NCTA notes, the 

congressionally mandated end of the 

Digital Television transition does not 

apply directly to cable operators. We 

thus recognize that there may be two 

different kinds of cable systems for 

some period of time after the DTV 

transition is complete. Some operators 

may choose to deliver programming in 

both digital and analog format. NAB and 

MSTV describe these systems as those 

in which they ‘‘keep an analog tier and 

continue to provide local television 

signals (and perhaps many cable 

channels as well) to analog receivers in 

a format that does not require additional 

equipment.’’ Other operators may 

choose, as many already have, to 

operate or transition to ‘‘all-digital 

systems,’’ and as NAB and MSTV 

further note, ‘‘virtually all cable 

operators ultimately will do so.’’ Game 

Show Network, LLC (‘‘GSN’’) questions 

why there should be any rules 

protecting owners of analog sets, since 

that is ‘‘a format the government itself 

has determined is no longer worthy of 

any spectrum.’’ Congress did decide to 

end analog broadcasting, but declined to 

turn its backs on the millions of 

Americans with analog sets. Thus, they 

established the NTIA converter box 

program to protect the continued 

availability of over-the-air signals to all 

Americans; they accepted the claims of 

the cable industry that subscribers with 

analog sets would continue to be served; 

and we now establish these rules to 

ensure that those subscribers do 

continue to be served. 

19. NAB proposes that cable operators 

carry all broadcasters on their systems 

in the same manner; i.e., if one must 

carry station is carried in analog, all 

broadcasters, whether carried pursuant 

to retransmission consent or must carry, 

would be carried in analog. Cable 

operators object to this proposal, and we 

decline to adopt it. Although a system 

that is not ‘‘all-digital’’ will be required 

to carry analog versions of all mustcarry signals to ensure their viewability, 

retransmission consent stations may be 

carried in any manner that comports 

with the private agreements of the 

parties. 

20. The ‘‘viewability’’ requirement 

that we adopt today is based on a 

straightforward reading of the relevant 

statutory text. While some cable 

commenters dispute our interpretation 

of section 614(b)(7), their arguments are 

at odds with both the plain meaning of 

the statutory text as well as the structure 

of the provision. These commenters 

principally argue that the viewability 

mandate is satisfied whenever cable 

operators transmit broadcast signals and 

‘‘ ‘offer to sell or lease * * * a converter 

box’ to their customers’’ that will allow 

those signals to be viewed on their 

receivers. To the extent that such 

subscribers do not have the necessary 

equipment, however, the broadcast 

signals in question are not ‘‘viewable’’

on their receivers. In addition, it is 

important to note that the relevant 

question under the statute is not 

whether subscribers can view over-theair broadcast signals using their 

receivers. Rather, it is whether 


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6046 Federal Register / Vol. 73, No. 22 / Friday, February 1, 2008 / Rules and Regulations 

subscribers can view the signals of 

broadcast stations that are carried 

through their cable system. See 47 

U.S.C. 534(b)(7). To be sure, ‘‘[i]f a cable 

operator authorizes subscribers to install 

additional receiver connections, but 

does not provide the subscriber with 

such connections, or with the 

equipment and materials for such 

connections, the operator [is only 

required to] notify such subscribers of 

all broadcast stations carried on the 

cable system which cannot be viewed 

without a converter box and * * * offer 

to sell or lease such a converter box to 

such subscribers at rates in accordance 

with section 623(b)(3).’’ But these 

commenters confuse the separate 

mandates set forth in the second and 

third sentences of section 614(b)(7), a 

distinction we clarified as early as 1993. 

As NAB and MSTV observe, ‘‘there is no 

evidence that the third sentence of 

section 614(b)(7) was intended to 

narrow the scope of the viewability 

requirement for sets connected by cable 

operators.’’ For every receiver 

‘‘connected to a cable system by a cable 

operator or for which a cable operator 

provides a connection,’’ that operator 

must ensure that the broadcast signals 

in question are actually viewable on 

their subscribers’ receivers. 

21. As we explained in the Second 

FNPRM, the operators of either alldigital or mixed digital-analog systems 

will be responsible under the statute for 

ensuring that mandatory carriage 

stations are actually viewable by all 

subscribers, ‘‘including those with 

analog television sets.’’ Two 

commenters argued that our proposed 

rules were overbroad, because analogonly televisions will not ‘‘qualify as 

‘television receivers’ after the transition 

for purposes of the viewability 

requirement.’’ These arguments fail to 

recognize, however, that the hard 

deadline set by Congress does not apply 

to Low Power television stations, 

including translators and Class A 

stations. Thus, Low Power broadcasters, 

operating hundreds of channels, will 

still be lawfully transmitting analog 

signals on February 18, 2009, and for 

some period of time afterwards. Those 

consumers who rely on Low Power 

stations and turn on their over-the-air 

analog sets that morning to watch a 

local newscast will be using a device 

‘‘engaged or able to engage in ‘the 

process of * * * radio transmission.’ ’’

More broadly, as NAB and MSTV point 

out, the Commission’s authority over 

these sets is not predicated merely on 

their ability to receive over the air 

signals. Rather, we believe that a device 

that allows subscribers to view signals 

sent by their cable operator is a 

television receiver for purposes of 

section 614(b)(7) of the Act. 

22. NCTA also argues that the 

situation in the early 1990s that spurred 

the creation of these viewability 

requirements was different from the 

situation that will be faced by 

consumers post-transition. Therefore, 

they posit, it is inappropriate to rely on 

sections 614(b)(7) and 615(h) to address 

viewability on analog receivers. To 

begin with, it is our primary task to 

implement the text of the statutory 

provision. While the enactment of a 

statute may be principally aimed at a 

particular set of circumstances present 

at the time, it is often written in general 

language so that it applies to similar sets 

of circumstances in the future. As the 

United States Supreme Court has 

instructed, ‘‘statutory prohibitions often 

go beyond the principal evil to cover 

reasonably comparable evils, and it is 

ultimately the provisions of our laws 

rather than the principal concerns of our 

legislators by which we are governed.’’

In any event, the cable commenters’

own descriptions of the driving force 

behind the statutory provision 

demonstrate that the situation at hand is 

directly analogous. NCTA explains that 

‘‘[a]t the time [of the provision’s 

enactment], certain television sets were 

not ‘cable-ready’ and could not receive 

[some] channels at all,’’ and observes 

that the Commission therefore required 

converter boxes provided by cable 

operators to contain ‘‘the necessary 

channel capacity to permit a subscriber 

to access a UHF must-carry signal 

through the converter.’’ Replace ‘‘cableready’’ with ‘‘digital cable-ready,’’ and 

‘‘UHF’’ with ‘‘digital,’’ and NCTA has 

described the problem at hand, and one 

of the options the Commission has again 

offered to resolve it. The Commission’s 

charge is to implement the statutory 

language enacted by Congress, and this 

language reflects Congress’s 

unambiguous determination that 

broadcast signals must be viewable by 

all cable subscribers. Indeed, as NAB 

and MSTV note, ‘‘the authority that 

Congress gave the Commission under 

section 614(b)(4)(B) to make rules 

regarding advanced television reflects 

Congress’ understanding that broadcast 

technology certainly would change over 

time, and that the Commission was 

expected to modify the carriage rules as 

needed.’’ While the circumstances today 

differ from those present at the time of 

the provision’s enactment, the basic 

issue, ensuring the viewability of 

broadcast signals, is the same. 

23. Time Warner argues that we do 

not have the authority to read section 

614(b)(7) as a ‘‘manner of carriage’’

requirement, even to offer analog 

carriage as one option for complying 

with the statute. They see the 

Commission’s early interpretation of the 

viewability provision as a statement that 

operators must provide converter boxes 

‘‘in a specific and limited context,’’ and 

that the section cannot serve as the basis 

for a carriage requirement. On the 

contrary, the Commission has frequently 

allowed cable operators to meet their 

614(b)(7) obligations by placing must 

carry signals on a channel viewable to 

all subscribers instead of by providing 

boxes. The rules we adopt today are 

firmly grounded in longstanding 

Commission practice, and echo previous 

solutions to similar problems. 

24. Some cable programmer 

commenters, such as the Weather 

Channel, argue that the proposal 

‘‘unquestionably would consume vast 

amounts of cable system bandwidth’’

with duplicative programming. In 

actuality, as Time Warner admits, these 

rules will not have an impact on the 

carriage of most stations; the ‘‘vast 

majority of broadcasters opt for 

retransmission consent.’’ Thus, as NAB 

notes in its reply, any incremental 

increase of bandwidth devoted to mustcarry stations will be ‘‘negligible.’’

Gospel Music Channel, LLC (Gospel) 

articulates a concern that flows from 

Weather Channel’s: That these rules 

could reduce their chances of carriage 

on any given system. While we 

recognize Gospel’s concerns, Congress 

already acknowledged them when it 

mandated that systems with more than 

12 usable activated channels need carry 

local commercial television stations 

only ‘‘up to one-third of the aggregate 

number of usable activated channels of 

such system[s].’’ Furthermore, Gospel 

fails to recognize that to the extent 

operators choose the second option and 

become ‘‘all-digital,’’ these rules could 

contribute to a very positive impact on 

independent programmers’ ability to 

make carriage deals due to the 

concomitant effective increase in 

channel capacity. The Africa Channel, 

et al. (‘‘TAC’’) also argue that the 

potential loss of independent cable 

programmers serving focused audiences 

‘‘are digital transition issues as 

important as a consideration of what 

constitutes viewability or material 

degradation for broadcasters who are the 

least likely television market 

participants to be left behind with or 

without burdensome new must-carry 

rules.’’ In essence, TAC argues that 

independent cable programmers deserve 

protections on par with must-carry 

broadcasters. Congress, however, 

disagrees, and the Supreme Court has 


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upheld the must-carry regime to ensure 

the viewability and prevent the material 

degradation of the signals of those 

broadcasters. 

25. Some commenters have 

incorrectly characterized our rule as 

‘‘dual carriage.’’ Comcast attempts to 

frame this requirement as ‘‘a 

requirement to carry broadcast signals 

in [analog] * * * in perpetuity.’’ Not 

only is this not the Commission’s rule, 

Comcast’s proposal for avoiding ‘‘dual 

carriage’’ would read ‘‘viewability’’

itself out of the Act. Dual carriage, as 

considered and rejected by the 

Commission, would have required cable 

operators ‘‘to carry both the digital and 

analog signals of a station during the 

transition when television stations are 

still broadcasting analog signals’’; that 

is, the mandatory simultaneous carriage 

of two different channels broadcast by 

the same station. The Commission 

ultimately rejected this concept. The 

rule we establish in this Third Report 

and Order is quite distinct. It requires 

carriage only of a single broadcast 

signal, and gives operators the freedom 

to choose how to ensure that signal is 

viewable by all subscribers. It does not 

require carriage of more than one 

broadcast signal from a given must-carry 

broadcaster, and it does not require 

carriage of an analog version of a signal 

unless an operator chooses not to 

operate an all-digital system. 

26. NCTA notes that the Act allows a 

cable operator to decline to carry signals 

from stations whose programming 

substantially duplicates that of a station 

it already carries. The commenter argues 

from this that the statute can not be read 

to require carriage of additional versions 

of a signal under any circumstances. 

The connection, however, is tenuous at 

best. Section 614(b)(5) speaks 

specifically to the issue of the carriage 

of different stations providing 

substantially identical programming, 

and does not address a requirement to 

carry multiple versions of a single 

station’s signals. In the former case, 

subscribers would be receiving multiple 

channels all showing the same programs 

at virtually the same time. In this case, 

however, some subscribers will not be 

able to see any of a station’s 

programming unless a downconverted 

version is carried. From the perspective 

of these subscribers, the actual people 

sections 614 and 615 were designed to 

reach, there need not be more than one 

viewable version of a broadcaster’s 

signal—but there must be at least one. 

27. Comcast argues that enforcement 

of the viewability provisions of the Act 

will force the Commission into conflict 

with other sections of the Act, 

particularly the effective competition 

provisions of section 623(b). Comcast 

misstates the case, however, when it 

says that a deregulated system may 

provide must carry stations ‘‘in any 

format that it wishes.’’ Indeed, as the 

Commission made clear in the 2001 

Order, signals broadcast in HD must be 

carried by cable operators in HD, 

regardless of whether or not the system 

is rate-regulated. While some 

requirements are lifted when an 

operator is deregulated, deregulation is 

not an exemption from the carriage 

requirements of the statute. Stations 

electing mandatory carriage must be 

carried, they must not be materially 

degraded, and they must be made 

viewable. 

28. If an operator chooses not to 

operate an ‘‘all-digital system’’ and 

therefore ensures viewability by 

providing a digital broadcast signal and 

a downconverted version of the signal 

for analog subscribers, it will in some 

cases use more than the 6 MHz of 

bandwidth occupied by an analog mustcarry signal alone. Comcast argues that 

this improperly forecloses the use of the 

bandwidth for other purposes. Congress 

recognized the importance of preserving 

cable bandwidth for non-broadcast 

programmers when it mandated that 

systems with more than 12 usable 

activated channels need carry local 

commercial television stations only ‘‘up 

to one-third of the aggregate number of 

usable activated channels of such 

system[s].’’ This limit has been upheld 

by the courts and will continue to 

ensure that operators have sufficient 

bandwidth for carriage of non-broadcast 

programming and other services. 

Moreover, to the extent that a cable 

operator wishes to free bandwidth for 

other purposes, it may choose to operate 

an ‘‘all-digital’’ system. 

29. We are bound by statute to ensure 

that commercial and non-commercial 

mandatory carriage stations are actually 

viewable by all cable subscribers. The 

Commission also believes, however, that 

it is important to provide cable 

operators flexibility in meeting the 

requirements of sections 614(b)(7) and 

615(h). Therefore, we have declined to 

require a specific approach, instead 

allowing operators to choose whether or 

not to operate ‘‘all-digital systems,’’ and 

therefore whether or not to provide 

mandatory carriage stations in an analog 

format. This is in accord with the 

Commission’s decision, in the First 

Report and Order, not to require 

operators to provide set-top boxes. 

30. Time Warner argues that the 

requirement of section 629, that 

navigation devices be available at retail, 

supersedes the requirements of section 

614(b)(7), which was enacted four years 

earlier. We disagree. Section 629(f) 

provides that ‘‘[n]othing in this section 

shall be construed as expanding or 

limiting any authority that the 

Commission may have under [the] law’’

prior to the 1996 Telecommunications 

Act. This includes the viewability 

provisions of section 614(b)(7). 

Furthermore, Time Warner’s argument 

is premised on an interpretation of 

section 614(b)(7) that we decline to 

adopt, namely that it requires cable 

operators to provide set top boxes. 

Indeed, the retail availability of set-top 

boxes should facilitate subscriber 

purchase of digital equipment and 

lessen the burden on all-digital cable 

operators to provide such boxes. 

However, we adopt the analog 

downconversion option to address these 

very concerns, and provide an option 

which does not even potentially 

implicate set-top boxes. An operator 

may choose not to go ‘‘all-digital,’’ and 

instead satisfy its section 614(b)(7) 

obligations by downconverting must 

carry stations to analog, until the 

operator concludes that the local market 

is ready for an all-digital cable system. 

31. We note that Americans for Tax 

Reform, Ovation, LLC, and other 

commenters appear to misapprehend 

the functionality of the ‘‘converter 

boxes’’ that will be available through the 

NTIA coupon program. These boxes 

will, by design, be limited to use in 

converting over-the-air digital signals 

into analog signals that can be 

interpreted by an analog television. 

Because of differences in the 

modulation used by digital broadcasters 

and digital cable systems, these boxes 

will not be usable by digital cable 

subscribers to connect their analog 

receivers. Such converters will be 

available, but it is important to ensure 

that the public understands that there 

are different functionalities provided by 

different boxes. 

32. Discovery observes that, during 

the transition period, a digital-only 

broadcaster has had the right to request 

carriage in digital only, rendering it 

non-viewable to analog subscribers. As 

the Commission explained in the First 

Report and Order, however, this is an 

interim policy, assisting both 

broadcasters and cable operators to 

adjust to digital broadcasting over a 

limited period of time. Discovery argues 

that the post-transition period will 

‘‘similarly be limited,’’ and indeed, 

eventually analog-only sets will be as 

rare as VHF tuner-only sets are today. 

There are still important differences, 

however. In the post-transition period, 

every channel subject to mandatory 

carriage will be broadcast solely in 

digital, while the use of analog receivers 


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will continue for an indefinite time. 

Furthermore, making stations actually 

viewable to cable subscribers is the most 

fundamental interest expressed in the 

must carry rules that have been upheld 

by the Supreme Court. If we declined to 

enforce the viewability requirement it 

would render the regime almost 

meaningless, contrary to the clearly 

expressed will of the Congress as 

upheld by the Supreme Court. 

33. Because the interim policy 

governing downconversion makes it an 

option exercised by broadcasters, they 

are responsible for any associated costs. 

Cequel argues that post-transition 

analog downconversion would only be 

necessary because the broadcaster itself 

is no longer providing an analog signal, 

and that any costs should therefore be 

borne by the broadcaster. Agape Church 

Inc. and other broadcast commenters 

agree with our proposal that, because 

the decision will shift to cable operators 

after the transition, so should the costs. 

NAB and MSTV further argue that these 

downconversion costs would be modest. 

ACA says that one of its members paid 

as much as $4,390.25 per channel to 

downconvert from HD to analog, and 

argues in an ex parte that these costs 

could approach $16,500 per channel. 

We find this estimate surprisingly high 

and note that $12,000 of this total 

appears to be dedicated to format 

conversion, rather than digital to analog 

conversion. It is also unclear whether or 

not the prices or equipment quoted are 

industry standards, or whether some of 

the equipment costs presented 

cumulatively are actually redundant or 

usable for more than just analog 

downconversion of one broadcast 

signal. Nevertheless, we are taking up 

the issue of flexibility for small cable 

operators in the Third FNPRM, infra. 

Entravision Holdings, LLC (Entravision) 

notes that, while it supports our 

proposal, it would not object to a 

requirement that broadcasters pay the 

cost of downconversion if it became 

necessary in order to ensure the 

continued viewability of must-carry 

stations for analog subscribers. 

However, since the post-transition 

downconversion will be undertaken by 

operators at their discretion, in order to 

comply with the Act, we adopt the 

proposal that any expense necessary for 

an operator’s compliance with the 

requirements of sections 614(b)(7) and 

615(h) shall be borne by the operator, 

and not the broadcaster. Specifically, 

operators of systems that provide analog 

service are responsible for the cost of 

downconverting a digital must-carry 

signal to analog at the headend. To the 

extent that a standard definition digital 

subscriber is unable to view a high 

definition signal via their equipment, 

operators have a similar responsibility 

to ensure that the signal is viewable. 

34. Such downconverted signals will, 

however, count toward the one-third 

carriage cap. Section 614(b)(1)(B) of the 

Act requires that cable systems with 

more than ‘‘12 usable activated 

channels’’ devote ‘‘up to one-third of the 

aggregate number of usable activated 

channels of such system[s]’’ to the 

carriage of local commercial television 

stations. Beyond this requirement, the 

carriage of additional commercial 

television stations is at the discretion of 

the cable operator. The Commission 

determined in the First Report and 

Order that with respect to carriage of 

digital broadcast signals, the channel 

capacity calculation will be made by 

taking the total usable activated channel 

capacity of the system in megahertz and 

dividing it by three to find the limit on 

the amount of system spectrum that a 

cable operator must make available for 

commercial broadcast signal carriage 

purposes. After the transition, when 

calculating whether an operator has 

reached or exceeded the one-third cap, 

we will count the system spectrum 

occupied by all versions of a 

commercial broadcast signal (both 

digital and analog). 

35. We also find that operators of 

systems with an activated channel 

capacity of 552 MHz or less that do not 

have the capacity to carry the additional 

digital must-carry stations may seek a 

waiver from the Commission. Such 

systems must, however, commit to 

continue carrying an analog version 

such that their subscribers are assured 

of being able to view all must-carry 

stations carried on the system. 

36. We observe that a number of cable 

comments imply or state that it is not 

possible to transition from a system that 

provides analog service to an all-digital 

system without the agreement of all 

current subscribers. While each operator 

will choose to transition or not based on 

local market conditions and other 

business considerations, it is clear that 

this choice is fully within their 

discretion. Both of these options are 

available to all operators at any time, a 

fact unaffected by this rule. We do note, 

that as with any change in programming 

service, particularly one which will 

have an impact on the compatibility of 

subscriber equipment, cable operators 

must comply with certain notice 

requirements. We remind operators who 

transition their systems to all-digital 

that they must provide written notice to 

subscribers about the switch, containing 

any information they need or actions 

they will have to take to continue 

receiving service. 

37. Entravision, licensee of a number 

of commercial broadcast stations, argues 

that analog downconversion is the best 

way to ensure continued viewability, 

but does not object to the use of other 

methods by cable operators so long as 

the result is the same. As an alternative 

to the option we proposed for systems 

that continue to carry analog 

programming, Entravision proposes that 

must-carry stations be provided in 

analog, but only until such time as 85% 

of subscribers in each zip code served 

by a given operator have the means to 

view those signals if provided in digital. 

As Entravision acknowledges, however, 

the statute requires that must carry 

broadcast stations be made available to 

all cable subscribers with analog 

television sets. As we have noted before, 

we do not believe we have the authority 

to exempt any class of subscribers from 

this requirement, no matter how few the 

analog subscribers. Therefore, we 

decline to adopt the proposal offered by 

Entravision. 

38. The Consumer Electronics 

Association (CEA) asks that the 

Commission rely on technical solutions 

shaped by earlier rules and developed 

by the market to resolve concerns about 

viewability. CEA suggests that the 

agency can rely on the retail availability 

of sets with digital tuners to ensure 

continued viewability of high quality 

programming. It argues that this can be 

assured by requiring the carriage of 

must carry signals to conform to three 

requirements: (1) Unencrypted, 

unscrambled, and in QAM (i.e., ‘‘in the 

clear’’); (2) modulated using MPEG–2, a 

widely used and accepted codec; and (3) 

not in switched digital. CEA expresses 

concern that the requirement to carry 

must-carry stations ‘‘in the clear’’ is not 

sufficiently articulated outside the 

context of rate-regulated systems. 

Although we decline to reach the 

question of requiring MPEG–2 and 

prohibiting switched digital, as they are 

beyond the scope of this proceeding, we 

do address CEA’s essential concern, 

which is at the heart of our viewability 

proceeding. Like CEA’s proposals, our 

rules are designed to ensure that all 

subscribers to a cable system have ‘‘in 

the clear’’ access to all must carry 

stations. 

C. Constitutional Issues 

1. The Viewability Requirements Are 

Consistent With the First Amendment 

39. A number of commenters assert 

that the rules we adopt herein constitute 

‘‘mandatory dual carriage’’ and are 

unconstitutional. We disagree. The 


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statutory must-carry provisions upheld 

by the Supreme Court in Turner II 

include the requirement that must-carry 

signals ‘‘shall be viewable’’ on all 

television receivers of a subscriber 

which are connected to a cable system 

by a cable operator or for which a cable 

operator provides a connection. The 

rules we adopt in this order do nothing 

more than ensure the continued 

fulfillment of this statutory mandate at 

the conclusion of the digital television 

(‘‘DTV’’) transition in February 2009. 

The must-carry obligation is meaningful 

only if all cable subscribers are able to 

view local broadcasters’ signals, even if 

they have analog televisions. If we fail 

to act, however, analog cable subscribers 

will be unable to view must-carry 

stations after the DTV transition. Rather 

than mandating downconversion to 

prevent this loss of signals after the 

transition, however, we offer cable 

operators a choice: those operators that 

choose not to operate an ‘‘all-digital 

system’’ must down-convert the 

broadcasters’ digital signal for their 

analog subscribers. Cable operators that 

elect to operate ‘‘all-digital’’ systems, on 

the other hand, do not have to downconvert these signals and may provide 

them solely in a digital format. The 

choice rests with the individual cable 

operator. In this way, cable operators 

decide for themselves, taking into 

account their particular circumstances, 

how best to operate following the digital 

transition. 

40. We reject the argument of cable 

commenters that the ‘‘second option is 

effectively no option at all,’’ or that we 

have presented cable operators with a 

‘‘Hobson’s Choice.’’ Rather, we believe 

that the second option represents a 

viable choice for complying with the 

viewability mandate. Cable operators 

complain about the burden of 

transitioning to ‘‘all-digital systems.’’ In 

particular, they object to requiring 

subscribers with analog television sets 

who do not yet have digital-set top 

boxes to use such boxes because, they 

argue, it is not ‘‘feasible’’ to require 

those customers to install set-top boxes, 

because customers do not want set-top 

boxes, or because of the expense 

associated with providing the boxes. 

After the DTV transition, however, some 

sort of set-top or converter box will be 

the rule rather than the exception for 

those Americans with analog television 

sets. Whether consumers currently 

obtain video programming through overthe-air broadcasts, cable, or DBS, they 

generally will need either set-top boxes 

or digital televisions to receive 

programming once the transition is 

complete. Thus, cable operators’ fear 

that they will lose customers to other 

providers of video programming if they 

pursue this option seems misplaced. As 

to cable operators’ concerns about the 

expense of providing set-top boxes, 

nothing in this order precludes them 

from recovering the costs of those boxes 

from subscribers, and cable operators 

offer no evidence to support their claim 

that they will lose a meaningful number 

of customers because of such charges. 

Indeed, such claims are rather ironic in 

light of the cable industry’s recent 

practice of raising its prices at a rate 

significantly in excess of inflation. 

41. Cable operators’ complaints about 

the second option are also belied by 

these same parties’ assurances that they 

have both the incentive and the means 

to ‘‘mak[e] the digital transition as 

seamless as possible for their 

customers.’’ NCTA asserts, for example, 

that cable operators have committed to 

‘‘ensure that cable viewers do not 

experience disruption after February 17, 

2009,’’ and that they ‘‘already have the 

means to ensure continuing service to 

analog television sets with no 

government intervention or subsidy 

required.’’ Cequel Communications 

notes that it has every incentive to 

continue providing must-carry stations 

to all subscribers after the transition, if 

only because it welcomes free 

programming. Comcast similarly assures 

us that ‘‘cable operators have powerful 

incentives to meet their customers’

demands’’ and that ‘‘no cable operator 

will allow its subscribers to become 

‘disenfranchised’ since to do so would 

be economically irrational.’’ If cable 

operators, in fact, ‘‘have every incentive 

to move customers to digital’’ and 

‘‘equipment will be available to enable 

cable customers to view digital 

broadcast signals,’’ then we do not 

understand the cable companies’

complaint that the all-digital option is 

so burdensome that it is merely a 

‘‘fantasy.’’ Indeed, numerous cable 

operators have indicated to the 

Commission their intent to convert to 

all-digital operations prior to February 

2009. The record in this proceeding also 

demonstrates that cable operators are 

already reducing analog programming 

and moving it to digital tiers. For all of 

these reasons, we conclude that the 

second option set forth in this item 

offers cable operators a meaningful 

choice about how to fulfill their mustcarry obligations. 

42. Turning to the First Amendment 

challenge, we do not believe that the 

‘‘all-digital’’ option for complying with 

the statute’s viewability mandate 

implicates any First Amendment 

interest beyond that inherent in the 

must-carry mandate for digital signals 

already adopted by the Commission. We 

note, moreover, that this mandate is 

significantly less burdensome than the 

analog must-carry mandate upheld by 

the Supreme Court in Turner II because 

digital signals occupy much less 

bandwidth on a cable system than do 

analog signals. The ‘‘all-digital’’ option 

does not require cable operators to carry 

any additional signals over its system or 

to displace any additional programming 

beyond that required by the 

Commission’s previously adopted 

digital must-carry mandate. Rather, it 

simply requires cable operators to take 

steps to ensure that all subscribers are 

able to view signals that will already be 

carried on their systems, and we do not 

believe that such a mandate can 

reasonably be described as an 

independent ‘‘infringement’’ of cable 

operators’ free speech rights. 

43. While cable commenters argue 

that the second option triggers 

additional First Amendment scrutiny, 

we do not find their claims to be 

persuasive. We do not agree that the 

second option coerces operators into 

downconverting broadcaster’s digital 

signals or impermissibly penalizes them 

for failing to downconvert. The purpose 

and effect of the second option are 

neither to coerce operators into 

downconverting nor to penalize them 

for failing to do so. Rather, they are to 

provide cable operators with an 

alternative means of fulfilling the 

statutory requirement that the signals of 

must-carry stations must be viewable by 

all subscribers. 

44. However, even if we were to find 

that the second option implicates a First 

Amendment interest beyond that 

inherent in the must-carry mandate for 

digital signals already adopted by the 

Commission or, for that matter, that the 

second option did not represent a 

realistic choice for cable operators, we 

would still conclude that our approach 

here is constitutional because we 

believe that both options for complying 

with the viewability mandate are fully 

and independently consistent with the 

First Amendment. 

45. Content-Neutral Regulation. As 

articulated by the Supreme Court in 

Turner II, ‘‘[a] content-neutral regulation 

will be sustained under the First 

Amendment if it advances important 

governmental interests unrelated to the 

suppression of free speech and does not 

burden substantially more speech than 

necessary to further those interests.’’

There can be little argument that mustcarry obligations are content-neutral 

regulations. The Supreme Court held in 

Turner I that must-carry does not 

‘‘distinguish favored speech from 

disfavored speech on the basis of the 


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ideas or views expressed’’ but is instead 

a content-neutral regulation subject to 

intermediate-level scrutiny under the 

First Amendment. Similarly, with 

respect to the first option provided to 

cable operators today, requiring 

downconversion of digital signals does 

not distinguish speech on the basis of 

content; it merely requires cable 

operators to carry whatever message the 

must-carry stations choose to transmit. 

We thus reject the notion that ensuring 

that cable subscribers with analog 

television sets are able to view mustcarry stations reflects an ‘‘effort to 

exercise content control’’ that triggers 

strict scrutiny. With respect to the ‘‘alldigital’’ option, we do not think that 

permitting cable operators to fulfill their 

must-carry obligations by providing 

digital must-carry signals that are 

viewable by all of their subscribers 

changes the analysis. This option does 

not distinguish speech on the basis of 

content; instead, it simply requires that 

subscribers can view broadcasters’

digital signals—regardless of the content 

those signals contain. 

46. We also reject the argument that, 

in light of ‘‘enormous technological and 

market changes,’’ a First Amendment 

challenge to must-carry regulations 

today would be subject to strict 

scrutiny. This argument is premised on 

the mistaken notion that the Supreme 

Court applied intermediate scrutiny to 

must-carry regulation due to the 

existence of cable market power. The 

Court made clear, however, that the 

applicable level of scrutiny was tied to 

the content-neutral character of mustcarry regulation. Like the regulations 

upheld in the Turner decisions, 

requiring cable operators to downconvert digital must-carry signals or 

make such signals viewable by all 

subscribers is a content-neutral 

regulation that guarantees the carriage of 

broadcast programming regardless of 

content and is not designed to promote 

speech of a particular content. 

47. Moreover, to the extent cable 

operators’ arguments about market 

power are meant to suggest that they no 

longer represent the threat to free, overthe-air broadcasting that drove the 

Turner decisions, the evidence 

convinces us otherwise. Although it 

faces competition by DBS operators and 

others, the cable industry by far remains 

the dominant player in the MVPD 

market, commanding approximately 69 

percent of all MVPD households. By 

contrast, the percentage of households 

that rely on over-the-air broadcast 

signals has declined significantly since 

the Turner decisions. In 1992, 40 

percent of American households 

continued to rely on over-the-air signals 

for television programming. Today, 

however, that figure has shrunk to 14 

percent. The shift in the competitive 

balance between broadcast and cable 

can also be seen in viewership trends. 

Between 1995 and 2006, ad-supported 

cable channels’ total day share of the 

market increased from 28 to 49.5 

percent, whereas the total day share of 

ABC, CBS, and NBC affiliates shrunk 

precipitously from 44 percent to 23.5 

percent. As cable capacity and the 

number of cable programming networks 

have grown, the fragmentation of the 

market for video programming has 

accelerated, further weakening 

broadcast stations. 

48. In addition, cable operators 

continue to ‘‘exercise ‘control over most 

(if not all) of the television programming 

that is channeled into the subscriber’s 

home [and] can thus silence the voice of 

competing speakers with a mere flick of 

the switch.’’’ As in 1992, few consumers 

have the choice of more than one cable 

operator. Cable systems also are more 

clustered than they were in 1992. While 

clustering may have beneficial effects, 

the Supreme Court has recognized that 

it also may increase cable’s threat to 

local broadcasters and the risk of 

anticompetitive carriage denials. 

Furthermore, the share of subscribers 

served by the 10 largest multiple system 

operators (‘‘MSOs’’) has continued to 

accelerate since Congress recognized a 

trend toward horizontal concentration 

of the cable industry, ‘‘giving MSOs 

increasing market power.’’ The figure 

was nearly 54 percent in 1989 and over 

60 percent in 1994. The figure remains 

over 60 percent in 2005. And there 

remains a significant amount of vertical 

integration in the cable industry. In 

2005, approximately 22 percent of the 

531 nonbroadcast video programming 

networks were vertically integrated with 

at least one cable operator. ‘‘Congress 

concluded that vertical integration gives 

cable operators the incentive and ability 

to favor their affiliated programming 

services.’’

49. The incentives that the Turner II 

Court recognized for cable operators to 

drop local broadcasters in favor of other 

programmers less likely to compete with 

them for audience and advertisers also 

have steadily increased. The Court 

explained that: 

Independent local broadcasters tend to be 

the closest substitutes for cable programs, 

because their programming tends to be 

similar, and because both primarily target the 

same type of advertiser: those interested in 

cheaper (and more frequent) ad spots than 

are typically available on network affiliates. 

The ability of broadcast stations to compete 

for advertising is greatly increased by cable 

carriage, which increases viewership 

substantially. With expanded viewership, 

broadcast presents a more competitive 

medium for television advertising. Empirical 

studies indicate that cable-carried 

broadcasters so enhance competition for 

advertising that even modest increases in the 

numbers of broadcast stations carried on 

cable are correlated with significant 

decreases in advertising revenue for cable 

systems. Empirical evidence also indicates 

that demand for premium cable services 

(such as pay-per-view) is reduced when a 

cable system carries more independent 

broadcasters. Thus, operators stand to benefit 

by dropping broadcast stations. 

In addition, the Court observed that 

‘‘[t]he incentive to subscribe to cable is 

lower in markets with many over-the-air 

viewing options.’’

50. Consistent with the Turner II 

Court’s analysis, the evidence confirms 

that local advertising revenue has 

become an increasingly important 

source of revenue for the cable industry, 

‘‘providing a steady, increasing 

incentive to deny carriage to local 

broadcasters in an effort to capture their 

advertising revenue.’’ For example, 

between 1992 and 2003, cable revenue 

from local advertising rose dramatically, 

increasing by approximately 525 

percent. Thus, cable operators have 

even greater incentives today to 

withhold carriage of broadcast stations. 

51. We also cannot conclude that the 

option of switching between cable and 

broadcast input significantly weakens 

cable operators’ ability to harm 

broadcasters. With respect to the A/B 

switch, the Supreme Court found, inter 

alia, that many households lack 

adequate antennas to receive broadcast 

signals and that installation and use of 

such switches with other video 

equipment could be cumbersome or 

impossible. Notwithstanding technical 

improvements since then, moreover, 

there is no evidence of consumer 

acceptance of the switch, or that more 

households have adequate antennas to 

receive broadcast signals. And since the 

percentage of television viewers relying 

solely on broadcast signals has dropped 

from approximately 40 percent to 14 

percent in the years since Turner II, the 

number of households with adequate 

antennas to receive broadcast signals 

through an A/B switch has almost 

certainly dropped. Thus, while A/B 

switches have largely moved from 

mechanical to electronic in the decade 

since the Turner decisions, switching 

signal sources still remains cumbersome 

or impossible for television viewers and 

does not represent an adequate 

alternative to must-carry regulation. In 

sum, we cannot conclude that 

technological and market changes 

dictate that must-carry obligations 


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would now be subject to strict 

constitutional scrutiny. 

52. Important Governmental Interests. 

The Supreme Court has already 

recognized that must-carry regulations 

serve important governmental interests. 

In particular, it held that there was 

substantial evidence to support a 

finding that must-carry requirements 

serve the important, and interrelated, 

governmental interests of (1) preserving 

the benefits of free, over-the-air local 

broadcast television; and (2) promoting 

the widespread dissemination of 

information from a multiplicity of 

sources. Congress found, and the Court 

agreed, that both these interests were 

threatened by cable operators’ refusals 

to carry local broadcast stations. 

Broadcasters denied carriage on cable 

systems lose a substantial portion of 

their audience, which, in turn, 

translates into lost advertising revenues. 

As a result, the stations have less money 

to invest in equipment and 

programming, leading to further 

reductions in audience size. This cycle 

of audience loss followed by revenue 

loss repeats to the point that the stations 

‘‘deteriorate to a substantial degree or 

fail altogether.’’ Thus, the viability of 

local broadcast stations and, 

consequently, the availability of overthe-air broadcasts for non-cable 

households depend to a material extent 

on cable carriage. Furthermore, we note 

that the must-carry mandate found by 

the Court in Turner II to advance these 

governmental interests required that the 

signals of must-carry stations be 

viewable by all cable subscribers; it did 

not merely require cable operators to 

carry such signals and make them 

viewable to a limited class of their 

customers. 

53. The steps we take here to ensure 

that cable operators comply with the 

statutory viewability requirement after 

the DTV transition serve these same 

interests. Cable operators are free to 

choose whether or not to operate as alldigital systems. We require cable 

operators that choose not to operate 

‘‘all-digital systems’’ to down-convert 

the digital broadcast signals; otherwise, 

their analog subscribers will lose access 

to must-carry stations altogether on 

February 17, 2009. This fact 

distinguishes the present circumstances 

from those the Commission addressed 

in 2005 when it decided not to require 

cable operators to carry both the digital 

and analog signals of broadcast stations 

during the DTV transition, while 

television stations continue to broadcast 

analog signals. At that time, the 

Commission concluded that a dual 

carriage requirement was not needed to 

preserve over-the-air broadcasting for 

viewers who lack cable because local 

analog broadcasts were already carried 

on virtually every cable system. 

Therefore, the lack of a dual carriage 

requirement would not have any 

meaningful effect on a station’s 

viewership, and there was thus no 

evidence that the absence of dual 

carriage would diminish the availability 

of broadcast signals to non-cable 

subscribers. In contrast, this order 

addresses the impact of the end of the 

DTV transition, where the signals of 

must-carry stations will be completely 

unavailable to analog cable subscribers, 

absent the actions we take here. This 

obviously poses a much more serious 

challenge for must-carry stations. For 

this reason, we do not agree that this 

order is at odds with the Commission’s 

2005 constitutional analysis. If cable 

operators did not downconvert the 

digital signals, broadcasters would stand 

to lose an audience of millions of 

households that are analog cable 

subscribers and the concomitant 

advertising revenues, thus jeopardizing 

their continued health and viability. 

Should these stations deteriorate or 

cease to exist, the impact of these lost 

programming options would fall most 

heavily on those that most need them: 

the roughly fifteen percent of Americans 

who rely solely on over-the-air 

television, which disproportionately 

consist of low-income and minority 

households. This is precisely the harm 

that Congress sought to prevent when it 

enacted the must-carry provisions 

upheld by the Supreme Court in Turner 

II, and no party has suggested a 

plausible argument that preserving free, 

over-the-air broadcast television no 

longer qualifies as an important 

governmental interest. The Court also 

recognized that ‘‘preserving a 

multiplicity of broadcasters’’ serves the 

related governmental interest of 

‘‘promoting the widespread 

dissemination of information from a 

multiplicity of sources.’’ All cable 

programming other than that carried in 

fulfillment of must-carry obligations is 

under the control of cable operators. 

Unless we act, analog cable subscribers 

and households that rely solely on overthe-air broadcast television may well 

face ‘‘a reduction in the number of 

media voices’’ and the loss of ‘‘the 

widest possible dissemination of 

information from diverse and 

antagonistic sources.’’ Thus, this Order 

clearly advances the important 

governmental interests identified by 

Congress and upheld by the Supreme 

Court. Alternatively, cable operators 

may fulfill their must-carry and 

viewability obligations by providing 

digital signals that are viewable by all of 

their subscribers, thus serving the same 

governmental interests upheld in the 

Turner cases. 

54. In addition, the actions we take 

here advance a separate, but also 

important, governmental interest of 

minimizing adverse consumer impacts 

associated with the DTV transition. The 

DTV transition results in the return of 

analog spectrum that can be allocated 

for other important, indeed critical, 

purposes, but Congress also recognized 

the need to protect consumers by 

ensuring that their television sets 

continue to work at the end of the 

transition just as they do today. To that 

end, Congress created a program to 

make available coupons that consumers 

can use to buy digital-to-analog 

converter boxes for the analog television 

sets in their homes. Just as Congress 

sought to minimize the burden of the 

DTV transition on consumers who rely 

on over-the-air broadcasting, we act here 

to minimize the impact of the DTV 

transition on cable subscribers. Analog 

downconversion minimizes the impact 

of the DTV transition on cable 

subscribers who do not own digital 

television sets. By ensuring that these 

consumers continue to receive local 

broadcast signals, we ensure that they 

experience little or no disruption in 

service due to the DTV transition. We 

do not agree that requiring cable 

systems offering analog programming to 

down-convert digital signals 

undermines, rather than promotes, the 

digital conversion by encouraging 

continued dependence on analog 

televisions. Just as Congress’s set-top 

box program does not undermine but 

merely smoothes the transition for 

certain vulnerable consumers, we act 

here to promote widespread consumer 

acceptance of the DTV transition by 

addressing a major source of potential 

consumer confusion and frustration. 

Similarly, subscribers to cable systems 

that convert to all-digital operations will 

continue to receive local broadcast 

signals without interruption and thus 

will experience minimal disruption due 

to the DTV transition. 

55. For all of these reasons, we 

conclude that both options available to 

cable operators—downconversion of 

digital signals and the operation of alldigital systems—advance numerous 

important governmental interests. 

56. Burden on Speech. The thrust of 

the cable operators’ objections to 

downconversion is the ‘‘severe burden’’

they allege it imposes on protected 

speech. They contend that a 

downconversion obligation imposes a 

greater burden than the must-carry rules 

upheld in Turner II because cable 


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6052 Federal Register / Vol. 73, No. 22 / Friday, February 1, 2008 / Rules and Regulations 

companies will now be required to 

transmit the must-carry stations’ digital 

signal and down-convert it to analog, 

thus displacing additional speech. Even 

assuming that analog downconversion, 

together with digital must-carry, 

requires greater bandwidth than existing 

must-carry requirements, we do not 

agree that it burdens ‘‘substantially 

more speech than necessary’’ to further 

the government’s important interests. 

57. The relative burden that mustcarry regulation places on cable 

operators must be measured in context. 

At the time of the Turner cases, cable 

capacity was significantly more 

constrained than it is today. In the early 

1990s, most cable systems were allanalog and offered far fewer than 100 

channels. In 1995, for example, the 

Commission defined a ‘‘high capacity’’

cable system as a system with 54 or 

more channels. By contrast, analog 

carriage today accounts for only a small 

percentage of the total number of cable 

channels and spectrum capacity. By 

2004, cable operators were providing, 

on average, 70 analog video channels 

and approximately 150 digital video 

channels, with enough additional 

bandwidth to provide high-definition 

television, video-on-demand, Internet 

access services, and both circuitswitched and IP-based voice services. 

As a result, the relative burden of the 

first option set forth above on cable 

operators today would be far less of a 

burden than was the analog mandate 

upheld by the Supreme Court in Turner 

II. 

58. The Supreme Court foresaw in 

1994 that ‘‘rapid advances in fiber 

optics and digital compression 

technology’’ might one day result in ‘‘no 

practical limitation on the numbers of 

speakers that may use the cable 

medium.’’ And today, we have every 

reason to expect that cable capacity will 

continue to expand in future years, thus 

further decreasing the relative burden 

on cable operators. Cable operators 

continue to develop ways to use their 

available capacity more efficiently. For 

example, cable operators, in order to 

keep pace with their competitors, are 

beginning to deploy ‘‘switched digital’’

capability in their networks. In a 

switched digital environment, a channel 

is transmitted via coaxial cable to a 

subscriber’s premises only when the 

subscriber tunes to that channel. Time 

Warner already has deployed switched 

digital in three cities. Time Warner has 

said that switched digital gives cable 

operators the means of adding channels 

and never running out of capacity. 

Moreover, because digital cable systems 

offer so much more capacity, the 

proportion of overall bandwidth 

devoted to must-carry signals is that 

much smaller than was the case at the 

time of the Turner decisions. For 

example, NAB and MSTV explain that 

18 basic analog channels, which 

includes all must-carry stations, 

represent about 4.2 percent of the total 

number of channels and about 6.8 

percent of the total downstream 

spectrum of a typical cable system 

today. In 1993, by contrast, the same 

number of channels represented 33 

percent of the capacity of a ‘‘high 

capacity’’ cable system. We believe that 

the typical cable operator electing to 

down-convert digital signals will devote 

significantly less than one-third of its 

channel capacity to local broadcasters, 

the cap that was upheld in Turner II. 

59. We also conclude that the relative 

burden on speech of downconversion is 

outweighed by the benefits. Unless we 

act, subscribers of cable systems that 

choose not to operate ‘‘all-digital 

systems’’ will suffer both the loss of 

local broadcasts and confusion over that 

loss, and non-MVPD consumers risk 

deterioration, if not loss, of over-the-air 

broadcasting options. Preserving local 

television broadcasting will help these 

consumers more than a downconversion 

obligation will hurt cable operators, 

particularly given that downconversion 

is necessary only until cable operators 

complete the transition to all-digital 

systems. We also reject Time Warner’s 

contention that a downconversion 

requirement burdens more speech than 

is necessary because the governmental 

interests at issue can be promoted in a 

less burdensome manner—namely by 

providing digital set-top boxes to 

subscribers. Time Warner’s objection 

proves too much, of course, for we have 

provided cable operators with precisely 

that choice: they may avoid analog 

downconversion by converting to alldigital systems, including by providing 

their subscribers with set-top boxes. 

Also, to the extent that cable operators 

do not take the necessary steps to ensure 

that the digital signals of must-carry 

stations can be viewed by all 

subscribers, the carriage of analog 

signals is necessary to advance the 

governmental interests identified above. 

Although we conclude that 

downconversion is in fact necessary to 

advance important governmental 

interests, we note that a regulation is not 

invalid under the intermediate scrutiny 

analysis even if the government’s 

interest might be adequately served by 

some less-restrictive alternative. Finally, 

we note that the cable operators’

arguments about the burdens of 

downconversion are undercut by their 

admission that they might down-convert 

on a purely voluntary basis. For all 

these reasons, we find that analog-down 

conversion does not burden 

‘‘substantially more speech’’ than is 

necessary and, therefore, this option 

does not violate the First Amendment. 

60. We also conclude that the ‘‘alldigital’’ option does not burden 

‘‘substantially more speech than 

necessary’’ to further the important 

governmental interests discussed above. 

Indeed, this option imposes less of a 

burden on speech than the must-carry 

regulations upheld in Turner II. The 

transmission of digital signals requires 

far less bandwidth than that required for 

analog signals, so cable companies 

transmitting signals, including mustcarry signals, in digital rather than 

analog will gain bandwidth. In addition, 

while cable operators complain that 

transitioning to ‘‘all-digital systems’’

will impose an onerous burden on them 

and therefore does not represent a 

meaningful choice, we reject those 

arguments for the reasons discussed 

above. 

61. We conclude, therefore, that both 

analog downconversion and the 

‘‘digital-only’’ options are consistent 

with the First Amendment on a standalone basis. By offering cable operators 

the flexibility to choose, based on their 

particular circumstances, either option 

to fulfill their must-carry obligations, 

moreover, we have minimized the 

burden imposed on any particular cable 

operator. 

2. The Viewability Requirements Are 

Consistent With the Fifth Amendment 

62. In addition to the First 

Amendment issue, some parties contend 

that requiring downconversion of digital 

must-carry signals constitutes a taking 

of property without just compensation 

in violation of the Fifth Amendment. To 

begin with, as discussed above, we 

provide cable operators here with two 

options for complying with the statutory 

viewability requirement and do not 

mandate the downconversion of digital 

signals. But in any event, for the reasons 

stated below, we also conclude that 

requiring cable operators to downconvert the digital must-carry signals so 

that they are viewable by their 

subscribers with analog televisions 

would present no problems under the 

Fifth Amendment. 

63. The ‘‘takings’’ clause of the Fifth 

Amendment provides: ‘‘[N]or shall 

private property be taken for public use, 

without just compensation.’’ In general, 

there are two types of Fifth Amendment 

takings: ‘‘per se’’ takings and 

‘‘regulatory’’ takings. Government 

authorization of a permanent physical 

occupation of property constitutes a per 


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Federal Register / Vol. 73, No. 22 / Friday, February 1, 2008 / Rules and Regulations 6053 

se taking. A permanent physical 

occupation of property is a taking 

without regard to the public interest that 

it may serve, the size of the occupation, 

or the economic impact on the property 

owner. NAB has argued elsewhere that 

must carry regulation cannot constitute 

a per se taking because no physical 

property is involved; rather the 

‘‘property’’ taken consists of electronic 

bits. Moreover, we agree that the 

downconversion obligation does not 

affect the takings analysis. As NAB 

states: 

If requiring cable operators to carry channels 

of broadcast signals indeed takes ‘private 

property for public use’ without 

compensation, then the requirement is 

unconstitutional regardless of whether the 

cable companies must accommodate one, 

five, or one hundred channels. 

64. Applying the above framework to 

the issue here, we believe that a court 

would find that a per se takings analysis 

would not apply. The Supreme Court 

has advised that a per se taking is 

‘‘relatively rare and easily identified,’’

and this is not one of those rare and 

easily identifiable instances. Mandatory 

carriage regulation effectuates no 

permanent physical occupation of a 

cable operator’s property, such as the 

installation of physical equipment that 

was at issue in Loretto v. Teleprompter 

Manhattan CATV Corp. Rather, 

multiple programming streams are 

simply transmitted in bits of data over 

cable bandwidth through electrons or 

photons at the speed of light while the 

cable operator retains complete control 

over its physical property (i.e., headend 

equipment). Courts have consistently 

rejected attempts to apply the concept of 

permanent physical occupation to the 

technological realm, and we believe 

these decisions to be consistent with the 

Supreme Court’s admonition that a 

permanent physical occupation of 

property is easily identified and, where 

found, ‘‘presents relatively few 

problems of proof.’’

65. We therefore turn to whether 

requiring downconversion of digital 

must-carry signals would constitute a 

regulatory taking. An allegation that a 

regulation is so onerous as to constitute 

a regulatory taking is analyzed under 

the multi-factor inquiry set forth by the 

Supreme Court in Penn Central 

Transportation Co. v. City of New York. 

A court will examine the following 

factors identified in Penn Central to 

determine whether a regulatory taking 

has occurred: (1) The character of the 

governmental action; (2) its economic 

impact; and (3) its interference with 

reasonable investment-backed 

expectations. Applying this test here, 

we easily conclude that requiring 

downconversion of digital signals does 

not effectuate a regulatory taking. 

66. First, looking at the character of 

the governmental action at issue here, 

we believe it to be a quite modest 

attempt to ‘‘adjust the benefits and 

burdens of economic life to promote the 

common good.’’ As explained above, 

requiring downconversion of digital 

must-carry signals will likely impose 

only a modest burden on a cable 

operator’s system as a whole and will 

materially advance the government’s 

important interests in preserving overthe-air broadcasting, promoting the 

widespread dissemination of 

information from a multiplicity of 

sources, and minimizing any adverse 

consumer impacts associated with the 

DTV transition. Moreover, it is critical 

to recognize that the government action 

here involves what traditionally has 

been and remains a heavily regulated 

industry. 

67. Second, there is no evidence in 

the record that the economic impact on 

cable operators of requiring 

downconversion will cause significant 

harm. As we explain above, mandatory 

carriage of analog signals accounts for 

only a small percentage of the total 

number of cable channels and total 

spectrum capacity. As cable operators 

continue to convert to digital 

programming, must-carry signals will 

impose a decreasing relative capacity 

burden. Given that the cable channels 

devoted to the mandatory carriage of 

commercial broadcast signals is capped 

at one-third of the cable system’s usable 

capacity and in practice is likely to be 

significantly less than one-third, we find 

the economic burden on cable operators 

to be modest. 

68. Third, there is no evidence in the 

record that requiring downconversion 

will interfere with reasonable 

investment-backed expectations. Based 

upon the statutory cap for commercial 

stations and the numerical limit for noncommercial stations, cable operators 

should reasonably expect to devote up 

to one-third of their capacity to carriage 

of local broadcast stations. Requiring 

downconversion of digital must-carry 

signals does not change this limit. 

Finally, cable operators should have 

reasonably expected that they would be 

required to comply with the statutory 

viewability mandate after the digital 

transition. For all of these reasons, we 

conclude that requiring 

downconversion does not interfere with 

reasonable investment-backed 

expectations. 

69. We do not find evidence or 

persuasive argument in the record that 

requiring downconversion transforms 

must-carry regulation into a per se 

taking or a regulatory taking. 

D. Other Issues 

70. In its comments, United 

Communications Corporation made an 

argument for a revision of the Must 

Carry rules generally, to increase the 

carriage rights of low power stations, 

particularly Class A stations that serve 

as local network affiliates. Ensuring the 

continued viability of low power 

broadcasters is a major concern of the 

Commission; these proposals, however, 

are beyond the scope of the current 

proceeding. We will consider whether 

there is some alternative or future 

proceeding in which they could be more 

fully addressed. 

71. Given the statutory directive to 

treat OVS operators like cable operators 

with regard to broadcast signal carriage, 

we find that OVS operators must carry 

digital-only television stations pursuant 

to section 76.1506 of the Commission’s 

Rules. Thus, OVS operators must 

comply with all requirements set forth 

in this Third Report and Order. Section 

653(c)(1) of the Act provides that any 

provision that applies to cable operators 

under sections 614, 615, and 325 shall 

apply to open video system operators 

certified by the Commission. Section 

653(c)(2)(A) provides that, in applying 

these provisions to open video system 

operators, the Commission ‘‘shall, to the 

extent possible, impose obligations that 

are no greater or lesser’’ than the 

obligations imposed on cable operators. 

The Commission, in implementing the 

statutory language, held that there are 

no public policy reasons to justify 

treating an open video system operator 

differently from a cable operator in the 

same local market for purposes of 

broadcast signal carriage. Thus, OVS 

operators generally have the same 

requirements for the carriage of local 

television stations as do cable operators 

except that these entities are under no 

obligation to place television stations on 

a basic service tier. OVS operators are 

also obligated to abide by section 325 

and the Commission’s Rules 

implementing retransmission consent. 

We note that section 76.1506(e) 

specifically emphasizes the mandate to 

make must-carry signals viewable, and 

reiterates that the requirements 

established in this Third Report and 

Order apply equally to cable operators 

and OVS operators. 

E. Conclusion 

For the reasons discussed above, we 

adopt these rules with respect to 

material degradation and viewability. A 

number of detailed issues must be 

addressed now that the broad 


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6054 Federal Register / Vol. 73, No. 22 / Friday, February 1, 2008 / Rules and Regulations 

framework of rules has been established. 

We believe it is appropriate to provide 

stakeholders and the public with an 

opportunity to weigh in on these 

matters; therefore the Third Further 

Notice seeks comment on some specific 

applications of these general rules. 

II. Procedural Matters 

A. Third Report and Order 

1. Final Regulatory Flexibility Analysis 

72. As required by the Regulatory 

Flexibility Act of 1980 (‘‘RFA’’), the 

Commission has prepared a Final 

Regulatory Flexibility Analysis 

(‘‘FRFA’’) relating to this Third Report 

and Order. The FRFA is set forth in 

Appendix A of the order. 

2. Final Paperwork Reduction Act 

Analysis 

73. This Third Report and Order 

contains modified information 

collection requirements subject to the 

Paperwork Reduction Act of 1995 

(‘‘PRA’’), Public Law 104–13. The 

modified information collection 

requirements relate solely to Office of 

Management and Budget (‘‘OMB’’) 

Control No. 3060–0647, the 

Commission’s Annual Cable Price 

Survey. They will be submitted to OMB 

for review under section 3507(d) of the 

PRA. OMB, the general public, and 

other Federal agencies will be invited to 

comment on the modified information 

collection requirements contained in 

this proceeding. The Commission will 

publish a separate Federal Register 

Notice at a later date seeking these PRA 

comments from the public. In addition, 

we note that pursuant to the Small 

Business Paperwork Relief Act of 2002, 

Public Law 107–198, see 44 U.S.C. 

3506(c)(4), we have considered how the 

Commission might ‘‘further reduce the 

information collection burden for small 

business concerns with fewer than 25 

employees.’’ We find that the modified 

requirements must apply fully to small 

entities (as well as to others) to protect 

consumers and further other goals, as 

described in the Order. 

3. Congressional Review Act 

74. The Commission will send a copy 

of this Third Report and Order in a 

report to be sent to Congress and the 

Government Accountability Office, 

pursuant to the Congressional Review 

Act. 

III. Ordering Clauses 

75. It is ordered that, pursuant to the 

authority contained in sections 4, 303, 

614, and 615 of the Communications 

Act of 1934, as amended, 47 U.S.C. 154, 

303, 534, and 535, this Third Report and 

Order and Third Further Notice of 

Proposed Rule Making is adopted and 

the Commission’s Rules are hereby 

amended as set forth in Appendix C of 

the order. 

76. It is further ordered that this Third 

Report and Order and the rules in 

Appendix C are adopted and shall be 

effective March 3, 2008. The modified 

information collection requirements 

concerning the Annual Cable Price 

Survey will become effective upon 

approval by the Office of Management 

and Budget and our publication in the 

Federal Register of a notice announcing 

the effective date of the modified 

requirements. 

77. It is further ordered that the 

Commission’s Consumer and 

Governmental Affairs Bureau, Reference 

Information Center, shall send a copy of 

this Third Report and Order and Third 

Further Notice of Proposed Rule 

Making, including the Initial and Final 

Regulatory Flexibility Analyses, to the 

Chief Counsel for Advocacy of the Small 

Business Administration. 

78. It is further ordered that the 

Commission shall send a copy of this 

Third Report and Order and Third 

Further Notice of Proposed Rule Making 

in a report to be sent to Congress and 

the Government Accountability Office 

pursuant to the Congressional Review 

Act, see 5U.S.C. 801(a)(1)(A). 

List of Subjects in 47 CFR Part 76 

Cable television. 

Federal Communications Commission. 

Marlene H. Dortch, 

Secretary. 

Final Rules 

■ For the reasons discussed in the 

preamble, the Federal Communications 

Commission amends 47 CFR part 76 as 

follows: 

PART 76—MULTICHANNEL VIDEO 

AND CABLE TELEVISION SERVICE 

■ 1. The authority citation for part 76 

continues to read as follows: 

Authority: 47 U.S.C. 151, 152, 153, 154, 

301, 302, 303, 303a, 307, 308, 309, 312, 315, 

317, 325, 336, 338, 339, 503, 521, 522, 531, 

532, 533, 534, 535, 536, 537, 543, 544, 544a, 

545, 548, 549, 552, 554, 556, 558, 560, 561, 

571, 572, 573. 

■ 2. Section 76.56 is amended by adding 

paragraphs (d)(3), (d)(4), (d)(5) and 

paragraph (f) to read as follows: 

§ 76.56 Signal carriage obligations. 

* * * * * 

(d) * * * 

(3) The viewability and availability 

requirements of this section require that, 

after the broadcast television transition 

from analog to digital service for full 

power television stations cable 

operators must either: 

(i) Carry the signals of commercial 

and non-commercial must-carry stations 

in analog format to all analog cable 

subscribers, or 

(ii) For all-digital systems, carry those 

signals in digital format, provided that 

all subscribers, including those with 

analog television sets, that are 

connected to a cable system by a cable 

operator or for which the cable operator 

provides a connection have the 

necessary equipment to view the 

broadcast content. 

(4) Any costs incurred by a cable 

operator in downconverting or carrying 

alternative-format versions of signals 

under § 76.56(d)(3)(i) or (ii) shall be the 

responsibility of the cable operator. 

(5) The requirements set forth in 

paragraph (d)(3) of this section shall 

cease to be effective three years from the 

date on which all full-power television 

stations cease broadcasting analog 

signals, unless the Commission extends 

the requirements in a proceeding to be 

conducted during the year preceding 

such date. 

* * * * * 

(f) Calculation of Broadcast Signals 

Carried. When calculating the portion of 

a cable system devoted to carriage of 

local commercial television stations 

under paragraph (b) of this section, a 

cable operator may count the primary 

video and program-related signals of all 

such stations, and any alternativeformat versions of those signals, that 

they carry. 

■ 3. Section 76.62 is amended by 

revising paragraph (b) and adding 

paragraph (h) to read as follows: 

§ 76.62 Manner of carriage. 

* * * * * 

(b) Each digital television broadcast 

signal carried shall be carried without 

material degradation. Each analog 

television broadcast signal carried shall 

be carried without material degradation 

and in compliance with technical 

standards set forth in subpart K of this 

part. 

* * * * * 

(h) If a digital television broadcast 

signal is carried in accordance with 

§ 76.62(b) and either (c) or (d), the 

carriage of that signal in additional 

formats does not constitute material 

degradation. 

[FR Doc. E8–1915 Filed 1–31–08; 8:45 am] 

BILLING CODE 6712–01–P 


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