[Federal Register Volume 79, Number 250 (Wednesday, December 31, 2014)]
[Proposed Rules]
[Pages 78768-78775]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-30576]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 79

[CG Docket No. 05-231; FCC 14-206]


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

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Commission issues a Second Further 
Notice of Proposed Rulemaking seeking additional comment on several 
issues related to matters raised in the Commission's Closed Captioning 
Quality Order. These issues include whether the Commission should 
require video programmers to file contact information and 
certifications of captioning compliance with the Commission and whether 
other means would make programmer contact information and 
certifications more widely available.

DATES: Comments are due January 20, 2015 and reply comments are due 
January 30, 2015.

ADDRESSES: You may submit comments, identified by CG Docket No. 05-231, 
by any of the following methods:
    <bullet> Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the Commission's Electronic Comment 
Filing System (ECFS), through the Commission's Web site http://fjallfoss.fcc.gov/ecfs2/. Filers should follow the instructions 
provided on the Web site for submitting comments. For ECFS filers, in 
completing the

[[Page 78769]]

transmittal screen, filers should include their full name, U.S. Postal 
service mailing address, and CG Docket No. 05-231.
    <bullet> Paper filers: Parties who choose to file by paper must 
file an original and one copy of each filing. Filings can be sent by 
hand or messenger delivery, by commercial overnight courier, or by 
first-class or overnight U.S. Postal Service mail (although the 
Commission continues to experience delays in receiving U.S. Postal 
Service mail). All filings must be addressed to the Commission's 
Secretary, Office of the Secretary, Federal Communications Commission.
    <bullet> All hand-delivered or messenger-delivered paper filings 
for the Commission's Secretary must be delivered to FCC Headquarters at 
445 12th Street SW., Room TW-A325, Washington, DC 20554. All hand 
deliveries must be held together with rubber bands or fasteners. Any 
envelopes must be disposed of before entering the building.
    <bullet> Commercial Mail sent by overnight mail (other than U.S. 
Postal Service Express Mail and Priority Mail) must be sent to 9300 
East Hampton Drive, Capitol Heights, MD 20743.
    <bullet> U.S. Postal Service first-class, Express, and Priority 
mail should be addressed to 445 12th Street SW., Washington, DC 20554.

In addition, parties must serve one copy of each pleading with the 
Commission's duplicating contractor, Best Copy and Printing, Inc., 445 
12th Street SW., Room CY-B402, Washington, DC 20554, or via email to 
<a href="/cdn-cgi/l/email-protection#5d3b3e3e1d3f3e2d342a383f733e3230"><span class="__cf_email__" data-cfemail="dfb9bcbc9fbdbcafb6a8babdf1bcb0b2">[email protected]</span></a>. For detailed instructions for submitting comments and 
additional information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT: Eliot Greenwald, Consumer and 
Governmental Affairs Bureau, Disability Rights Office, (202) 418-2235, 
email: <a href="/cdn-cgi/l/email-protection#e3a68f8a8c97cda49186868d94828f87a3858080cd848c95"><span class="__cf_email__" data-cfemail="b9fcd5d0d6cd97fecbdcdcd7ced8d5ddf9dfdada97ded6cf">[email protected]</span></a>; or Caitlin Vogus, Consumer and 
Governmental Affairs Bureau, Disability Rights Office, (202) 418-1264, 
email: <a href="/cdn-cgi/l/email-protection#9fdcfef6ebf3f6f1b1c9f0f8eaecdff9fcfcb1f8f0e9"><span class="__cf_email__" data-cfemail="da99bbb3aeb6b3b4f48cb5bdafa99abcb9b9f4bdb5ac">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Second 
Further Notice of Proposed Rulemaking, document FCC 14-206, adopted 
December 12, 2014, released December 15, 2014. The full text of 
document FCC 14-206, and any subsequently filed documents in this 
matter will be available for public inspection and copying via ECFS, 
and during regular business hours at the FCC Reference Information 
Center, Portals II, 445 12th Street SW., Room CY-A257, Washington, DC 
20554. It also may be purchased from the Commission's duplicating 
contractor, Best Copy and Printing, Inc., Portals II, 445 12th Street 
SW., Room CY-B402, Washington, DC 20554, telephone: (800) 378-3160, 
fax: (202) 488-5563, or Internet: www.bcpiweb.com. Document FCC 14-206 
can also be downloaded in Word or Portable Document Format (PDF) at 
http://www.fcc.gov/encyclopedia/disability-rights-office-headlines. To 
request materials in accessible formats for people with disabilities 
(Braille, large print, electronic files, audio format), send an email 
to <a href="/cdn-cgi/l/email-protection#593f3a3a6c696d193f3a3a773e362f"><span class="__cf_email__" data-cfemail="deb8bdbdebeeea9eb8bdbdf0b9b1a8">[email protected]</span></a> or call the Consumer and Governmental Affairs Bureau 
at 202-418-0530 (voice), 202-418-0432 (TTY).

Initial Paperwork Reduction Act of 1995 Analysis

    Document FCC 14-206 seeks comment on potential revised information 
collection requirements. If the Commission adopts any revised 
information collection requirements, the Commission will publish 
another notice in the Federal Register inviting the public to comment 
on the requirements, as required by the Paperwork Reduction Act of 
1995, Public Law 104-13 (44 U.S.C. 3501-3520). In addition, pursuant to 
the Small Business Paperwork Relief Act of 2002, the Commission seeks 
comment on how the Commission might ``further reduce the information 
collection burden for small business concerns with fewer than 25 
employees.''

Synopsis

    1. In FCC 14-206, the Commission seeks additional comment on 
several issues related to matter raised in the Commission's February 
24, 2014 Further Notice of Proposed Rulemaking on closed captioning. 
Closed Captioning of Video Programming; Telecommunications for the Deaf 
and Hard of Hearing, Inc., Petition for Rulemaking, CG Docket No. 05-
231, Further Notice of Proposed Rulemaking (Further Notice); published 
at 79 FR 17093, March 27, 2014. The Commission invites comment on 
requiring video programmers to file contact information and 
certifications of captioning compliance with the Commission. The 
Commission also invites comment on whether any other means would make 
programmer contact information and certifications more widely available 
to consumers, video programming distributors (VPDs), and other 
interested parties. Further, the Commission seeks comment on whether 
these potential rule modifications alter previous Commission positions 
and whether there are justifications for the Commission changing course 
at this time.
    2. The Commission invites comment on whether to require video 
programmers to file contact information with the Commission for 
inclusion in the registry of VPD contact information (VPD Registry) or 
a separate database, if the Commission were to decide to extend to 
video programmers some of the responsibilities for compliance with its 
closed captioning rules and for the resolution of captioning 
complaints. The Commission also invites comment on whether such filings 
should utilize a web form, i.e., an interactive form on the 
Commission's Web site designed to receive and transfer information to a 
publicly available Commission database. What are the costs and benefits 
of requiring video programmers to file contact information with the 
Commission? Should the Commission require video programmers to provide 
the same contact information as is currently required of VPDs by its 
existing rules? Do video programmers generally have a designated person 
available to handle immediate closed captioning concerns, and if not, 
what benefits and burdens would result from a requirement that 
programmers designate such a person? Is there additional information 
beyond that required of VPDs that the Commission should require video 
programmers to file? Should video programmers also be required to place 
the contact information on their Web sites, if they have a Web site, or 
to provide the information in some other way for added access by the 
public?
    3. The Commission also seeks comment on whether it should alter its 
requirements regarding certifications by video programmers as to their 
compliance with rules on the provision and quality of closed 
captioning, if the Commission decides to extend some responsibilities 
for compliance with its closed captioning rules to video programmers. 
47 CFR 79.1(j)(1) requires VPDs to exercise best efforts to obtain a 
certification from each video programmer from which the VPD obtains 
programming stating (i) that the video programmer's programming 
satisfies the required caption quality standards; (ii) that in the 
ordinary course of business, the video programmer adopts and follows 
the Best Practices in captioning its programming; or (iii) that the 
video programmer is exempt from the closed captioning rules, under one 
or more properly obtained and specified exemptions. The Commission 
seeks comment on whether it should amend 47 CFR 79.1(j)(1) to

[[Page 78770]]

require video programmers to file their certifications on captioning 
quality with the Commission, or whether the Commission should require 
them to make such certifications widely available through other means. 
Should the Commission additionally modify the Video Programmer Best 
Practices' certification procedures set forth in 47 CFR 79.1(k)(1)(iv) 
to make filing certifications with the Commission part of the video 
programmers' best practices? Why should the Commission change its 
position and require video programmer certifications to be filed with 
the Commission rather than making such certifications widely available 
through other means? What are the benefits and costs of requiring the 
certifications mandated by 47 CFR 79.1(j)(1) and 47 CFR 79.1(k)(1)(iv) 
to be filed with the Commission? What would be the expected volume of 
such video programmer certifications on captioning quality? Would 
requiring video programmers to file these certifications with the 
Commission assist VPDs, consumers and the Commission in locating the 
certifications, in addition to providing video programmers with a 
convenient means of making their certifications widely available?
    4. The Commission further seeks comment on whether it should 
otherwise amend its rules regarding certifications for the provision of 
closed captioning. Currently, 47 CFR 79.1(g)(6) allows VPDs to rely 
upon certifications from ``programming suppliers'' to demonstrate 
compliance with the Commission's rules for the provision of closed 
captioning. According to 47 CFR 79.1(g)(6), ``programming supplier'' 
includes ``programming producers, programming owners, networks, 
syndicators and other distributors'' (emphasis added). If the 
Commission retains 47 CFR 79.1(g)(6) in some form, either as a separate 
rule or incorporated into another rule, should the Commission amend the 
rule to replace the term ``programming supplier'' with the term ``video 
programmer''? The Commission notes that unlike the term ``programming 
supplier,'' the term ``video programmer'' does not include VPDs. 
Rather, the term ``video programmer'' is defined as ``any entity that 
provides video programming that is intended for distribution to 
residential households including, but not limited to, broadcast or 
nonbroadcast television networks and the owners of such programming.'' 
Is this rule amendment necessary to help differentiate the 
responsibilities of regulated entities, if the Commission were to 
decide to impose some obligations directly on video programmers? The 
term ``programming supplier'' also is used in 47 CFR 79.1(e)(6). Should 
the use of the term in 47 CFR 79.1(e)(6) be replaced to be consistent 
with any changes to 47 CFR 79.1(g)(6) or its successor rule? Are there 
other subsections contained within 47 CFR 79.1 in which the term 
``programming supplier'' should be replaced with ``video programmer''?
    5. Further, although 47 CFR 79.1(g)(6) allows VPDs to rely upon 
certifications from programming suppliers, it does not require 
programming suppliers to provide such certifications. Should the 
Commission amend 47 CFR 79.1(g)(6) to require programming suppliers or 
video programmers to file certifications with the Commission certifying 
that they are in compliance with the Commission's rules for the 
provision of closed captioning? The Commission currently does not 
require such certifications from either VPDs or video programmers. Is 
there a reason why the Commission should change its approach? If a 
programming supplier or video programmer claims that it is exempt from 
providing closed captioning, should the Commission require it to 
specify the exemption it claims as part of the certification? As an 
alternative to amending 47 CFR 79.1(g)(6), should the Commission 
include within 47 CFR 79.1(j)(1) or 47 CFR 79.1(k)(1)(iv) certification 
language to the effect that the video programmer is in compliance with 
the Commission's rules for the provision of closed captioning? What are 
the benefits and costs of requiring programming suppliers or video 
programmers to provide such certification? Would such certification 
help to ensure programming supplier or video programmer compliance with 
the Commission's rules requiring the provision of closed captioning? If 
so, how?
    6. If the Commission requires video programmers to file 
certifications regarding the provision and quality of closed captioning 
with the Commission, should the Commission require each VPD, when 
arranging to carry a video programmer's programming, to alert the video 
programmer to the requirement to register with and provide 
certification to the Commission? Once a VPD alerts a video programmer 
of any such requirement and a video programmer fails to provide a 
certification to the Commission, should that video programmer be solely 
responsible for failing to comply with Commission rules? Or, 
alternatively, should the Commission task VPDs with monitoring video 
programmers' compliance with a certification requirement and require 
them to report to the Commission any failure by a video programmer to 
comply? Would placing such an obligation on VPDs be inconsistent with 
the approach of shifting certain responsibilities in the areas of 
closed captioning from VPDs to video programmers? What would be the 
costs and benefits of these requirements? The Commission seeks comment 
on these and any other matters relating to VPDs' obligations pertaining 
to such certifications. Is there any reason that the Commission would 
not have statutory authority to impose the requirements proposed in 
this and other paragraphs of FCC 14-206?

Initial Regulatory Flexibility Analysis

    7. As required by the Regulatory Flexibility Act (RFA) of 1980, as 
amended, this Initial Regulatory Flexibility Analysis (IRFA) of the 
possible significant economic impact on a substantial number of small 
entities by the policies and rules proposed in the Public Notice has 
been prepared. An IRFA was previously included with the Further Notice 
in the Closed Captioning Quality Order. Written public comments are 
requested on this IRFA. Comments must be identified as responses to the 
IRFA and must be filed by the deadlines for comments on document FCC 
14-206. The Commission will send a copy of document FCC 14-206, 
including this IRFA, to the Chief Counsel for Advocacy of the Small 
Business Administration (``SBA'').
    8. In the Further Notice, the Commission sought comment on 
extending some of the responsibilities for complying with its rules 
regarding the provision and quality of closed captioning on television 
beyond VPDs to other entities involved in the production and delivery 
of video programming. The Commission also sought comment on adopting a 
burden-shifting approach for complaint resolution that would require 
both VPDs and video programmers to be involved in the resolution of 
consumer complaints. Further, the Commission asked whether 47 CFR 
79.1(g)(6), which permits VPDs to rely on certifications from 
programming suppliers to demonstrate compliance with the Commission's 
captioning requirements, should be eliminated if the Commission were to 
reapportion responsibility for compliance with the Commission's 
television closed captioning rules, and more generally whether other 
changes to its rules would be appropriate if the Commission decides to 
impose some obligations directly on programming entities other than 
VPDs.
    9. In response to the Further Notice, some commenters have raised 
concerns

[[Page 78771]]

regarding the ability of VPDs and consumers to locate the correct 
contact information for video programmers for the resolution of closed 
captioning complaints, should the Commission decide to extend to video 
programmers some of the responsibilities for compliance with its closed 
captioning rules and for the resolution of captioning complaints. 
Several have proposed requiring video programmers to file contact 
information with the Commission for inclusion in a database. The 
Commission is therefore inviting comment on whether such contact 
information should be filed, and if so, whether such filings should 
utilize a web form.
    10. 47 CFR 79.1(g)(6) allows VPDs to rely on certifications from 
video programming suppliers, including programming producers, 
programming owners, networks, syndicators and other distributors, to 
demonstrate compliance with the Commission's rules for the provision of 
closed captioning. 47 CFR 79.1(j)(1) requires VPDs to exercise best 
efforts to obtain a certification from each video programmer from which 
the VPD obtains programming stating (i) that the video programmers' 
programming satisfies the required caption quality standards, (ii) that 
in the ordinary course of business, the video programmers adopt and 
follow the Best Practices in captioning its programming, or (iii) that 
the video programmers are exempt from the closed captioning rules, 
under one or more properly attained, specified exemptions.
    11. One commenter on the Further Notice suggests that the 
Commission require video programmers to file certifications pursuant to 
47 CFR 79.1(g)(6) and 47 CFR 79.1(j)(1) with the Commission, rather 
than providing them to the VPD (in the case of 47 CFR 79.1(g)(6)) or 
making them widely available (in the case of 47 CFR 79.1(j)(1)). The 
Commission is inviting comment on whether the Commission should amend 
47 CFR 79.1(j)(1) to require video programmers to file certifications 
on captioning quality with the Commission, or whether the Commission 
should require video programmers to make such certifications widely 
available through other means. The Commission specifically asks for 
comment on whether requiring video programmers to file these 
certifications with the Commission would assist VPDs, consumers and the 
Commission in locating the certifications, in addition to providing 
video programmers with a convenient means of making their 
certifications widely available.
    12. The Commission is also inviting comment on whether the 
Commission should amend other Commission rules regarding certifications 
for the provision of closed captioning. Although 47 CFR 79.1(g)(6) 
allows VPDs to rely upon certifications from programming suppliers, it 
does not require programming suppliers to provide such certifications. 
The Commission is therefore asking whether it should amend 47 CFR 
79.1(g)(6) to require video programmers to file certifications with the 
Commission certifying that they are in compliance with the Commission's 
rules for the provision of closed captioning. Alternatively, the 
Commission is asking whether it should include within 47 CFR 79.1(j)(1) 
or 47 CFR 79.1(k)(1)(iv) certification language to the effect that the 
video programmer is in compliance with the Commission's rules for the 
provision of closed captioning. The Commission also seeks comment on 
whether such certification would help to ensure video programmer 
compliance with the Commission's rules requiring the provision of 
closed captioning.
    13. Additionally, the Commission is seeking comment on whether it 
should require each VPD, when arranging to carry a video programmer's 
programming, to alert the video programmer to the requirement to 
register with and provide certification to the Commission, and whether 
the VPD should be required to report to the Commission any video 
programmers that have failed to do so.
    14. The authority for this proposed rulemaking is contained in 
sections 4(i), 303(r) and 713 of the Communications Act of 1934, as 
amended, 47 U.S.C. 154(i), 303(r) and 613.
    15. The RFA directs agencies to provide a description of, and where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules and policies, if adopted. The RFA 
generally defines the term ``small entity'' as having the same meaning 
as the terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' In addition, the term ``small business'' 
has the same meaning as the term ``small business concern'' under the 
Small Business Act. A ``small business concern'' is one which: (1) Is 
independently owned and operated; (2) is not dominant in its field of 
operation; and (3) satisfies any additional criteria established by the 
SBA.
    16. Small Businesses, Small Organizations, and Small Governmental 
Jurisdictions. The Commission's action may, over time, affect small 
entities that are not easily categorized at present. The Commission 
therefore describes here, at the outset, three comprehensive, statutory 
small entity size standards that encompass entities that could be 
directly affected by the proposals under consideration. As of 2009, 
small businesses represented 99.9% of the 27.5 million businesses in 
the United States, according to the SBA. Additionally, a ``small 
organization'' is generally ``any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.'' 
Nationwide, as of 2007, there were approximately 1,621,315 small 
organizations. Finally, the term ``small governmental jurisdiction'' is 
defined generally as ``governments of cities, counties, towns, 
townships, villages, school districts, or special districts, with a 
population of less than fifty thousand.'' Census Bureau data for 2007 
indicate that there were 89,527 governmental jurisdictions in the 
United States. The Commission estimates that, of this total, as many as 
88,761 entities may qualify as ``small governmental jurisdictions.'' 
Thus, the Commission estimates that most governmental jurisdictions are 
small.
    17. Cable Television Distribution Services. These services have 
been included within the broad economic census category of Wired 
Telecommunications Carriers, which is defined as follows: ``This 
industry comprises establishments primarily engaged in operating and/or 
providing access to transmission facilities and infrastructure that 
they own and/or lease for the transmission of voice, data, text, sound, 
and video using wired telecommunications networks. Transmission 
facilities may be based on a single technology or a combination of 
technologies.'' The SBA has developed a small business size standard 
for this category, which is all such firms having 1,500 or fewer 
employees. To gauge small business prevalence for the Cable Television 
Distribution service, the Commission relies on data from the U.S. 
Census Bureau for the year 2007, the most recent year currently 
available. According to that source, there were 3,188 Wired 
Telecommunications Carrier firms that operated for the entire year in 
2007. Of these, 3,144 operated with less than 1,000 employees, and 44 
operated with 1,000 or more employees. However, as to the latter 44 
there is no data available that shows how many operated with more than 
1,500 employees. Thus, under this category and the associated small 
business size standard, the vast majority of firms can be considered 
small.
    18. Cable Companies and Systems. The Commission has also developed 
its own small business size standards, for the purpose of cable rate 
regulation.

[[Page 78772]]

Under the Commission's rules, a ``small cable company'' is one serving 
400,000 or fewer subscribers, nationwide. Industry data shows that 
there are 1,100 cable companies. Of this total, all but 10 incumbent 
cable companies are small under this size standard. In addition, under 
the Commission's rules, a ``small system'' is a cable system serving 
15,000 or fewer subscribers. Current Commission records show 4,945 
cable systems nationwide. Of this total, 4,380 cable systems have less 
than 20,000 subscribers, and 565 systems have 20,000 subscribers or 
more, based on the same records. Thus, under this second size standard, 
most cable systems are small.
    19. Cable System Operators (Telecom Act Standard). The 
Communications Act of 1934, as amended, also contains a size standard 
for small cable system operators, which is ``a cable operator that, 
directly or through an affiliate, serves in the aggregate fewer than 1 
percent of all subscribers in the United States and is not affiliated 
with any entity or entities whose gross annual revenues in the 
aggregate exceed $250,000,000.'' There were approximately 56.4 million 
incumbent cable video subscribers in the United States as of 2012. 
Accordingly, an operator serving fewer than 564,000 subscribers shall 
be deemed a small operator, if its annual revenues, when combined with 
the total annual revenues of all its affiliates, do not exceed $250 
million in the aggregate. Based on available data, the Commission finds 
that all but 10 incumbent cable operators are small under this size 
standard. The Commission notes that the Commission neither requests nor 
collects information on whether cable system operators are affiliated 
with entities whose gross annual revenues exceed $250 million. Although 
it seems certain that some of these cable system operators are 
affiliated with entities whose gross annual revenues exceed $250 
million the Commission is unable at this time to estimate with greater 
precision the number of cable system operators that would qualify as 
small cable operators under the definition in the Communications Act.
    20. Direct Broadcast Satellite (DBS) Service. DBS service is a 
nationally distributed subscription service that delivers video and 
audio programming via satellite to a small parabolic ``dish'' antenna 
at the subscriber's location. DBS, by exception, is now included in the 
SBA's broad economic census category of Wired Telecommunications 
Carriers, which was developed for small wireline firms. Under this 
category, the SBA deems a Wired Telecommunications Carrier to be small 
if it has 1,500 or fewer employees. Currently, only two entities 
provide DBS service, which requires a great investment of capital for 
operation: DIRECTV and DISH Network. Each currently offers subscription 
services. DIRECTV and DISH Network each report annual revenues that are 
in excess of the threshold for a small business. Because DBS service 
requires significant capital, the Commission believes it is unlikely 
that a small entity as defined by the SBA would have the financial 
wherewithal to become a DBS service provider.
    21. Wireless Cable Systems--Broadband Radio Service and Educational 
Broadband Service. Wireless cable systems use the Broadband Radio 
Service (BRS) and Educational Broadband Service (EBS) to transmit video 
programming to subscribers. In connection with the 1996 BRS auction, 
the Commission established a small business size standard as an entity 
that had annual average gross revenues of no more than $40 million in 
the previous three calendar years. The BRS auctions resulted in 67 
successful bidders obtaining licensing opportunities for 493 Basic 
Trading Areas (BTAs). Of the 67 auction winners, 61 met the definition 
of a small business. BRS also includes licensees of stations authorized 
prior to the auction. At this time, the Commission estimates that of 
the 61 small business BRS auction winners, 48 remain small business 
licensees. In addition to the 48 small businesses that hold BTA 
authorizations, there are approximately 392 incumbent BRS licensees 
that are considered small entities. After adding the number of small 
business auction licensees to the number of incumbent licensees not 
already counted, the Commission finds that there are currently 
approximately 440 BRS licensees that are defined as small businesses 
under either the SBA or the Commission's rules. In 2009, the Commission 
conducted Auction 86, the sale of 78 licenses in the BRS areas. The 
Commission offered three levels of bidding credits: (i) A bidder with 
attributed average annual gross revenues that exceed $15 million and do 
not exceed $40 million for the preceding three years (small business) 
received a 15 percent discount on its winning bid; (ii) a bidder with 
attributed average annual gross revenues that exceed $3 million and do 
not exceed $15 million for the preceding three years (very small 
business) received a 25 percent discount on its winning bid; and (iii) 
a bidder with attributed average annual gross revenues that do not 
exceed $3 million for the preceding three years (entrepreneur) received 
a 35 percent discount on its winning bid. Auction 86 concluded in 2009 
with the sale of 61 licenses. Of the 10 winning bidders, two bidders 
that claimed small business status won four licenses; one bidder that 
claimed very small business status won three licenses; and two bidders 
that claimed entrepreneur status won six licenses.
    22. In addition, the SBA's placement of Cable Television 
Distribution Services in the category of Wired Telecommunications 
Carriers is applicable to cable-based Educational Broadcasting 
Services. These services have been defined within the broad economic 
census category of Wired Telecommunications Carriers, which was 
developed for small wireline businesses. This category is defined as 
follows: ``This industry comprises establishments primarily engaged in 
operating and/or providing access to transmission facilities and 
infrastructure that they own and/or lease for the transmission of 
voice, data, text, sound, and video using wired telecommunications 
networks. Transmission facilities may be based on a single technology 
or a combination of technologies. Establishments in this industry use 
the wired telecommunications network facilities that they operate to 
provide a variety of services, such as wired telephony services, 
including VoIP services; wired (cable) audio and video programming 
distribution; and wired broadband Internet services.'' The SBA has 
developed a small business size standard for this category, which is 
all such businesses having 1,500 or fewer employees. Census Bureau data 
for 2007, the most recent year currently available, shows that there 
were 3,188 Wired Telecommunications Carrier firms that operated for the 
entire year in 2007. Of these, 3,144 operated with less than 1,000 
employees, and 44 operated with 1,000 or more employees. However, as to 
the latter 44 there is no data available that shows how many operated 
with more than 1,500 employees. Therefore, under this size standard, 
the Commission estimates that the majority of these businesses can be 
considered small entities. In addition to Census Bureau data, the 
Commission's internal records indicate that as of September 2012, there 
are 2,239 active EBS licenses. The Commission estimates that of these 
2,239 licenses, the majority are held by non-profit educational 
institutions and school

[[Page 78773]]

districts, which are by statute defined as small businesses.
    23. Open Video Services. Open Video Service (OVS) systems provide 
subscription services. The OVS framework was established in 1996, and 
is one of four statutorily recognized options for the provision of 
video programming services by local exchange carriers. The OVS 
framework provides opportunities for the distribution of video 
programming other than through cable systems. Although some entities 
have filed for certifications to operate OVS systems, the Commission 
believes that most OVS subscribers are included in cable multichannel 
video programming distributor (MVPD) subscriber data and the Commission 
does not have a way to count them separately. Because OVS operators 
provide subscription services, OVS falls within the SBA small business 
size standard covering cable services, which is Wired 
Telecommunications Carriers. The SBA has developed a small business 
size standard for this category, which is all such firms having 1,500 
or fewer employees. To gauge small business prevalence for the OVS 
service, the Commission relies on data from the U.S. Census for the 
year 2007, the most recent year currently available. According to that 
source, there were 3,188 firms that in 2007 were Wired 
Telecommunications Carriers. Of these, 3,144 operated with less than 
1,000 employees, and 44 operated with 1,000 or more employees. However, 
as to the latter 44 there is no data available that shows how many 
operated with more than 1,500 employees. Based on this data, the 
majority of these firms can be considered small.
    24. Television Broadcasting. The SBA defines a television 
broadcasting station as a small business if such station has no more 
than $35.5 million in annual receipts. Business concerns included in 
this industry are those ``primarily engaged in broadcasting images 
together with sound.'' The Commission has estimated the number of 
licensed full power commercial television stations to be 1,388. To 
gauge the number of broadcast stations that are owned by small 
businesses, the Commission relies on data from the U.S. Census for the 
year 2007, the most recent year currently available. According to that 
source, there were 2,076 television broadcasting establishments in 
2007. Of these, 1,515 establishments had receipts under $10 million, 
and 561 had receipts of $10 million or more. However, as to the latter 
561 there is no data available that shows how many had receipts in 
excess of $35.5 million. Based on this data, the majority of these 
establishments can be considered small. The Commission notes, however, 
that, in assessing whether a business concern qualifies as small under 
the above definition, business control affiliations must be included. 
Because many of these stations may be held by large group owners, and 
the revenue figures on which the Commission's estimate is based does 
not include or aggregate revenues from control affiliates, the 
Commission's estimate likely overstates the number of small entities 
that might be affected by its action.
    25. The Commission has estimated the number of licensed 
noncommercial educational (NCE) full power television stations to be 
396. The Commission does not compile and otherwise does not have access 
to information on the revenue of NCE stations that would permit it to 
determine how many such stations would qualify as small entities. There 
are also 428 Class A television stations and 1,986 low power television 
stations (LPTV). Given the nature of these services, the Commission 
will presume that all Class A television and LPTV licensees qualify as 
small entities under the SBA definition, even though a number of these 
stations may be owned by entities that do not qualify as small 
entities.
    26. In addition, an element of the definition of ``small business'' 
is that the entity not be dominant in its field of operation. The 
Commission is unable at this time to define or quantify the criteria 
that would establish whether a specific television station is dominant 
in its field of operation. Accordingly, the estimate of small 
businesses to which rules may apply do not exclude any television 
station from the definition of a small business on this basis and is 
therefore over-inclusive to that extent. Also as noted, an additional 
element of the definition of ``small business'' is that the entity must 
be independently owned and operated. The Commission notes that it is 
difficult at times to assess these criteria in the context of media 
entities, and its estimates of small businesses to which they apply may 
be over-inclusive to this extent.
    27. Incumbent Local Exchange Carriers (ILECs). Neither the 
Commission nor the SBA has developed a small business size standard 
specifically for ILECs. The appropriate size standard under SBA rules 
is for the category Wired Telecommunications Carriers. Under that size 
standard, such a business is small if it has 1,500 or fewer employees 
and ``is not dominant in its field of operation.'' The SBA's Office of 
Advocacy contends that, for RFA purposes, small ILECs are not dominant 
in their field of operation because any such dominance is not 
``national'' in scope. The Commission has therefore included small 
ILECs in the RFA analysis, although the Commission emphasizes that this 
RFA action has no effect on Commission analyses and determinations in 
other, non-RFA contexts.
    28. Census Bureau data for 2007, the most recent year currently 
available, show that there were 3,188 firms in this category that 
operated for the entire year. Of this total, 3,144 had employment of 
less than 1000 employees, and 44 firms had had employment of 1,000 or 
more. According to Commission data, 1,307 carriers have reported that 
they are engaged in the provision of ILEC services. Of these 1,307 
carriers, an estimated 1,006 have 1,500 or fewer employees and 301 have 
more than 1,500 employees. Consequently, the Commission estimates that 
most providers of ILEC service are small entities that may be affected 
by the rules and policies adopted. The Commission estimates that three 
large ILECs, each of whom employ more than 1,500 people, currently 
provide video programming.
    29. Competitive Local Exchange Carriers (CLECs), Competitive Access 
Providers (CAPs), Shared-Tenant Service Providers, and Other Local 
Service Providers. Neither the Commission nor the SBA has developed a 
small business size standard specifically for these service providers. 
The appropriate size standard under SBA rules is for the category Wired 
Telecommunications Carriers. Under that size standard, such a business 
is small if it has 1,500 or fewer employees. Census Bureau data for 
2007, the most recent year currently available, show that there were 
3,188 firms in this category that operated for the entire year. Of this 
total, 3,144 had employment of less than 1000 employees, and 44 firms 
had had employment of 1,000 employees or more. According to Commission 
data, 1,442 carriers reported that they were engaged in the provision 
of either CLEC services or CAP services. Of these 1,442 carriers, an 
estimated 1,256 have 1,500 or fewer employees and 186 have more than 
1,500 employees. In addition, 17 carriers have reported that they are 
Shared-Tenant Service Providers, and all 17 are estimated to have 1,500 
or fewer employees. Seventy-two carriers have reported that they are 
Other Local Service Providers, and of the 72, 70 have 1,500 or fewer 
employees and 2 have more than 1,500 employees. Consequently, most 
CLECs, CAPs, Shared-Tenant Service Providers, and

[[Page 78774]]

Other Local Service Providers can be considered small entities.
    30. Electric Power Distribution Companies. These entities can 
provide video services over power lines (BPL). The Census Bureau 
defines Electric Power Distribution companies as ``electric power 
establishments primarily engaged in either (1) operating electric power 
distribution systems (i.e., consisting of lines, poles, meters, and 
wiring) or (2) operating as electric power brokers or agents that 
arrange the sale of electricity via power distribution systems operated 
by others.'' These types of MVPDs serve few subscribers and their 
subscriber base is declining. To gauge small business prevalence in the 
Electric Power Distribution category, the Commission relies on data 
from the U.S. Census Bureau for the year 2007, the most recent year 
currently available. The SBA has developed a small business size 
standard for this category, which is all such firms having 1,000 or 
fewer employees. Census Bureau data for 2007 show that there were 1,174 
firms that operated for the entire year in this category. Of these 
firms, 50 had 1,000 employees or more, and 1,124 had fewer than 1,000 
employees. Based on this data, a majority of these firms can be 
considered small.
    31. Cable and Other Subscription Programming. These entities may be 
directly or indirectly affected by the Commission's action. The Census 
Bureau defines this category as follows: ``This industry comprises 
establishments primarily engaged in operating studios and facilities 
for the broadcasting of programs on a subscription or fee basis. . . . 
These establishments produce programming in their own facilities or 
acquire programming from external sources. The programming material is 
usually delivered to a third party, such as cable systems or direct-to-
home satellite systems, for transmission to viewers.'' To gauge small 
business prevalence in the Cable and Other Subscription Programming 
industries, the Commission relies on data from the U.S. Census Bureau 
for the year 2007, the most recent year currently available. The size 
standard established by the SBA for this business category is that 
annual receipts of $35.5 million or less determine that a business is 
small. According to 2007 Census Bureau data, there were 396 firms that 
were engaged in production of Cable and Other Subscription Programming. 
Of these, 349 had annual receipts below $25 million, 12 had annual 
receipts ranging from $25 million to $49,999,999, and 35 had annual 
receipts of $50 million or more. Thus, under this category and 
associated small business size standard, the majority of firms can be 
considered small.
    32. Motion Picture and Video Production. These entities may be 
directly or indirectly affected by the Commission's action. The Census 
Bureau defines this category as follows: ``This industry comprises 
establishments primarily engaged in producing, or producing and 
distributing motion pictures, videos, television programs, or 
television commercials.'' The Commission notes that firms in this 
category may be engaged in various industries, including cable 
programming. Specific figures are not available regarding how many of 
these firms produce and/or distribute programming for VPDs. To gauge 
small business prevalence in the Motion Picture and Video Production 
industries, the Commission relies on data from the U.S. Census Bureau 
for the year 2007, the most recent year currently available. The size 
standard established by the SBA for this business category is that 
annual receipts of $30 million or less determine that a business is 
small. According to 2007 Census Bureau data, there were 9,095 firms 
that were engaged in Motion Picture and Video Production. Of these, 
8,995 had annual receipts of less than $25 million, 43 had annual 
receipts ranging from $25 million to $49,999,999, and 57 had annual 
receipts of $50 million or more. Thus, under this category and 
associated small business size standard, the majority of firms can be 
considered small.
    33. Internet Publishing and Broadcasting and Web Search Portals. 
These entities may be indirectly affected by the Commission's action. 
The Census Bureau defines this category to include ``establishments 
primarily engaged in (1) publishing and/or broadcasting content on the 
Internet exclusively or (2) operating Web sites that use a search 
engine to generate and maintain extensive databases of Internet 
addresses and content in an easily searchable format (and known as Web 
search portals). The publishing and broadcasting establishments in this 
industry do not provide traditional (non-Internet) versions of the 
content that they publish or broadcast. They provide textual, audio, 
and/or video content of general or specific interest on the Internet 
exclusively. Establishments known as Web search portals often provide 
additional Internet services, such as email, connections to other Web 
sites, auctions, news, and other limited content, and serve as a home 
base for Internet users.''
    34. In this category, the SBA has deemed an Internet publisher or 
Internet broadcaster or the provider of a web search portal on the 
Internet to be small if it has fewer than 500 employees. For this 
category of manufacturers, Census Bureau data for 2007, the most recent 
year currently available, show that there were 2,705 such firms that 
operated that year. Of those 2,705 firms, 2,682 (approximately 99%) had 
fewer than 500 employees, and 23 had 500 or more employees. 
Accordingly, the majority of establishments in this category can be 
considered small under that standard.
    35. Certain rule changes proposed in FCC 14-206, if adopted by the 
Commission, would modify rules or add requirements governing reporting, 
recordkeeping and other compliance obligations.
    36. If the Commission were to adopt rules requiring video 
programmers to register and file contact information with the 
Commission or to make such contact information widely available through 
other means, such regulations would impose new reporting and 
recordkeeping obligations on video programmers, video programming 
owners, and other entities, including small entities.
    37. If the Commission were to adopt rules requiring video 
programmers to file certifications with the Commission regarding 
compliance with the Commission's rules on the provisioning and quality 
of closed captioning, such regulations would impose different reporting 
and recordkeeping obligations than currently required on video 
programmers, video programming owners, and other entities, including 
small entities.
    38. If the Commission were to adopt rules requiring each VPD, when 
arranging to carry a video programmer's programming, to alert the video 
programmer of the requirement to provide certification to the 
Commission and to report to the Commission any video programmers that 
have failed to do so, such regulations would impose different reporting 
and recordkeeping obligations than currently required on VPDs, video 
programmers, video programming owners, and other entities, including 
small entities.
    39. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include the following four alternatives (among others): (1) 
The establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of

[[Page 78775]]

compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities.
    40. If the Commission were to adopt rules requiring video 
programmers to register and file contact information with the 
Commission or to make such contact information widely available through 
other means, such regulations would impose new reporting and 
recordkeeping obligations on video programmers, video programming 
owners, and other entities, including small entities. However, the 
proposed requirement takes into consideration the impact on small 
entities. The filing of contact information is a simple task that 
should take no more than a few minutes. In addition, such requirements 
may benefit other entities, such as VPDs and consumers, who would be 
able to search the registration information for contact information, 
thereby enabling them to more readily contact video programmers who can 
address their closed captioning concerns.
    41. If the Commission were to adopt rules requiring video 
programmers to file certifications with the Commission regarding 
compliance with the Commission's rules on the provisioning and quality 
of closed captioning, such regulations would impose different reporting 
and recordkeeping obligations than currently required on video 
programmers, video programming owners, and other entities, including 
small entities. The proposed rules would not impose additional burdens 
on such entities, because video programmers are already required to 
provide certifications to VPDs and to make such certifications widely 
available under the Commission's rules. See 47 CFR 79.1(j)(1) and 
(k)(1)(iv); see also 47 CFR 79.1(g)(6). The proposed rule may ease the 
burden on video programmers, because video programmers would know to go 
directly to the Commission's Web site to provide certification and 
would not need to determine how to make such certification widely 
available, and the proposed rules would ease the burden on VPDs and 
consumers by having all certifications in one easy to find place.
    42. If the Commission were to adopt rules requiring each VPD, when 
arranging to carry a video programmer's programming, to alert the video 
programmer of the requirement to provide certification to the 
Commission and to report to the Commission any video programmers that 
have failed to do so, such regulations would impose different reporting 
and recordkeeping obligations than currently required on VPDs, video 
programmers, video programming owners, and other entities, including 
small entities. The proposed rules would not impose additional burdens 
on such entities, because VPDs who are unable to locate certifications 
on widely available sources are already required to alert video 
programmers of the requirement and report such noncompliance to the 
Commission. See 47 CFR 79.1(j)(1). The proposed rule may ease the 
burden on VPDs, because VPDs would be able to go directly to the 
Commission's Web site to confirm whether the video programmer has 
registered and certified, which may be easier than having to determine 
on which Web site or other widely available place the information 
appears.
    43. Federal Rules Which Duplicate, Overlap, or Conflict With, the 
Commission's Proposals.
    None.

Ordering Clauses

    44. Pursuant to sections 4(i), 303(r), and 713 of the 
Communications Act of 1934, as amended, 47 U.S.C. 154(i), 303(r) and 
613, document FCC 14-206 IS ADOPTED.
    45. The Commission's Consumer and Governmental Affairs Bureau, 
Reference Information Center, SHALL SEND a copy of document FCC 14-206 
including the Initial Regulatory Flexibility Analysis, to the Chief 
Counsel for Advocacy of the Small Business Administration.

Federal Communications Commission.
Sheryl D. Todd,
Deputy Secretary.
[FR Doc. 2014-30576 Filed 12-30-14; 8:45 am]
BILLING CODE 6712-01-P


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