Satellite Delivery of Broadcast Network Signals Under the Satellite Home Viewer Act

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 73

[CS Docket No. 98-201; FCC 98-302]

Satellite Delivery of Broadcast Network Signals Under the

Satellite Home Viewer Act

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document requests comment on the Commission's authority

to modify the Grade B construct in response to petitions for rulemaking

filed by the National Rural Telecommunications Cooperative (NRTC) and

EchoStar Communications Corporation (Echostar) in connection with the

Satellite Home Viewer Act. The intended effect is to better identify

those households that are ``unserved,'' for purposes of the SHVA, by

their local broadcast stations using conventional rooftop antennas.

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DATES: Comments are due on or before December 11, 1998 and reply

comments are due on or before December 21, 1998. Comments by the public

on the modified information collection requirements are due on or

before January 6, 1999. Comments by the Office of Management and Budget

(``OMB'') on the modified information collection requirements are due

on or before February 5, 1999.

ADDRESSES: Federal Communications Commission, Office of the Secretary,

445 12th Street, SW, Room TW-A325, Washington, DC 20554. Comments may

be filed using the Commission's Electronic Comment Filing System (ECFS)

or by filing paper copies. See Electronic Filing of Documents in

Rulemaking Proceedings, 63 FR 24, 121 (Friday, January 2, 1998).

Comments filed through the ECFS can be sent as an electronic file via

the Internet to http://www.fcc.gov/e-file/ecfs.html>. Generally, only

one copy of an electronic submission must be filed. In completing the

transmittal screen, commenters should include their full name, Postal

Service mailing address, and the applicable docket or rulemaking

number. Parties may also submit an electronic comment by Internet e-

mail. To get filing instructions for e-mail comments, commenters should

send an e-mail to [email protected], and should include the following words

in the body of the message, ``get form .'' A

sample form and directions will be sent in reply. A copy of any

comments on the new and modified information collection requirements

contained herein should be submitted to Judy Boley, Federal

Communications, Room C1804, 445 12th Street, SW, Washington, DC 20554,

or via the Internet to [email protected], and to Timothy Fain, OMB Desk

Officer, 10236 NEOB, 725--17th Street, N.W., Washington, DC 20503 or

via the Internet to [email protected].

FOR FURTHER INFORMATION CONTACT: Donnie Fowler at (202) 418-7200 or via

internet at [email protected]. For additional information concerning the

modified information collection requirements contact Judy Boley at

(202) 418-0214 or via internet at [email protected].

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's

Notice of Proposed Rulemaking, FCC 98-302, CS Docket No. 98-201,

adopted November 17, 1998 and released November 17, 1998. The full text

of this Notice is available for inspection and copying during normal

business hours in the FCC Reference Center (Room 239), 1919 M Street,

NW, Washington, DC 20554, or may be purchased from the Commission's

copy contractor, International Transcription Service (``ITS''), (202)

857-3800, 1231 20th Street, NW, Washington, DC 20036, or may be

reviewed via internet at http://www.fcc.gov/Bureaus/Cable/

News__Releases/1998/nrcb8022.html>. For copies in alternative formats,

such as braille, audio cassette or large print, please contact Sheila

Ray at ITS.

Ex Parte Rules

This proceeding will be treated as a ``permit-but-disclose''

proceeding subject to the ``permit-but-disclose'' requirements under

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

parte presentations are permissible if disclosed in accordance with

Commission rules, except during the Sunshine Agenda period when

presentations, ex parte or otherwise, are generally prohibited. Persons

making oral ex parte presentations are reminded that a memorandum

summarizing a presentation must contain a summary of the substance of

the presentation and not merely a listing of the subjects discussed.

More than a one or two sentence description of the views and arguments

presented is generally required. (See 47 CFR 1.1206(b)(2), as revised.)

Additional rules pertaining to oral and written presentations are set

forth in 47 CFR 1.1206(b).

Synopsis of Notice of Proposed Rulemaking

I. Introductory Background

1. In this proceeding we respond to petitions for rulemaking filed

by the National Rural Telecommunications Cooperative (NRTC) and

EchoStar Communications Corporation (EchoStar). The petitions address

the methods for determining whether a household is ``unserved'' by

local network affiliated television broadcast stations for purposes of

the 1988 Satellite Home Viewer Act (SHVA) (17 CFR 119 (1998). The NRTC

petition was filed July 8, 1998 and placed on public notice on August

5, 1998. The EchoStar petition was filed August 18, 1998 and placed on

public notice on August 26, 1998. The Commission has received comments

on both petitions.

A. The Satellite Home Viewer Act

2. In the Satellite Home Viewer Act, Congress granted a limited

exception to the exclusive programming copyrights enjoyed by television

networks and their affiliates because it recognized that some

households are unable to receive network station signals over the air.

The exception is a narrow compulsory copyright license that direct-to-

home (DTH) satellite video providers may use for retransmitting signals

of a defined class of television network stations ``to persons who

reside in unserved households.'' The term ``unserved household,'' with

respect to a particular television network station is defined by SHVA

to mean a household that--

``(A) cannot receive, through the use of a conventional outdoor

rooftop receiving antenna, an over-the-air signal of grade B intensity

(as defined by the Federal Communications Commission) of a primary

network station affiliated with that network, and

(B) has not, within 90 days before the date on which that household

subscribes, either initially or on renewal, to receive secondary

transmissions by a satellite carrier of a network station affiliated

with that network, subscribed to a cable system that provides the

signal of a primary network station affiliated with that network.'' 17

CFR 119(d)(10).

In any action brought under the SHVA, the law specifies that ``the

satellite carrier shall have the burden of proving that its secondary

transmission of a primary transmission by a network station is for

private home viewing to an unserved household.''

3. The network station compulsory copyright licenses created by the

Satellite Home Viewer Act are limited because Congress recognized the

importance that the network-affiliate relationship plays in delivering

free, over-the-air broadcasts to American families, and because of the

value of localism in broadcasting. Localism, a principle underlying the

broadcast service since the Radio Act of 1927, serves the public

interest by making available to local citizens information of interest

to the local community (e.g., local news, information on local weather,

and information on community events). Congress was concerned that

without copyright protection, the economic viability of local stations,

specifically those affiliated with national broadcast networks, might

be jeopardized, thus undermining one important source of local

information.

B. Grade B Contours and Signal Intensity

4. The Grade B intensity standard is a Commission-defined measure

of the strength of a television station's broadcast signal. (See 47 CFR

73.683 and 73.685.) Developed in the 1950s, the Commission has used the

Grade B standard for a variety of purposes, many of which were not

envisioned at the time it was adopted. Significantly, while the

Commission anticipated that the Grade B standard might be used

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generally to determine the service area, or contour, of a television

station, use of the standard to identify individual unserved households

under SHVA was not then at issue. Grade B represents the field strength

of a signal 30 feet above ground that is strong enough, in the absence

of man-made noise or interference from other stations, to provide a

television picture that the median observer would classify as

``acceptable'' using a receiving installation (antenna, transmission

line, and receiver) typical of outlying or near-fringe areas. (See

O'Connor, Robert A., ``Understanding Television's Grade A and Grade B

Service Contours,'' IEEE Transactions on Broadcasting, 139 (December

1968).) The Grade B contour is defined as the set of points along which

the best 50% of the locations should get an acceptable picture at least

90% of the time. The ``time variability'' planning factor used in the

determination of the Grade B standard may create some confusion. In the

TV & Cable Factbook, TV Stations Volume (1998 edition page A-15), the

Grade B is described as providing service to 50% of locations 90% of

the time. The Commission's Sixth Report and Order in Dockets 8736 et

al. 41 FCC 148, 177 (1952), which adopted the initial television

station allocation rules, states, ``In the case of Grade B service the

figures are 90 percent of the time and 50 percent of the locations.''

Both the broadcast and satellite parties state the time variability

factor differently than stated. They describe the field strength at the

Grade B contour as being available to at least 50% of the locations at

least 50% of the time. This apparent inconsistency arises from an

adjustment the Commission adopted for the Grade B signal strength

values when it originally established them. This adjustment results in

a Grade B value that predicts reception of an acceptable picture 90% of

the time. For example, on channels 2-6, a signal strength of 41 dBu is

needed for an acceptable picture. In order for this signal strength to

be available 90% of the time, the median or F(50,50) field strength is

set at 47 dBu.

5. The Grade B contour values (which represent the required field

strength in dB above one micro-volt per meter) are defined for each

television channel in section 73.683 of the Commission's rules:

Channels 2-6--47 dBu

Channels 7-13--56 dBu

Channels 14-69--64 dBu

Section 73.684 contains the Commission's ``traditional''

methodology for predicting station service coverage and section 73.686

describes a procedure for making field strength measurements.

C. The PrimeTime 24 Lawsuits

6. This proceeding was precipitated by petitions for rulemaking

filed following the decisions of the United States District Court for

the Southern District of Florida in CBS, Inc. et al. v. PrimeTime 24

Joint Venture, 9 F.Supp.2d 1333 (S.D. FL., May 13, 1998). In that

litigation, the plaintiffs--CBS Inc.; Fox Broadcasting Co.; CBS

Television Affiliates Association; Post-Newsweek Stations Florida,

Inc.; KPAX Communications, Inc.; LWWI Broadcasting, Inc.; and Retlaw

Enterprises--brought a copyright infringement action against PrimeTime

24, a satellite carrier, for retransmitting distant network programming

to satellite dish owners in violation of the SHVA. The plaintiffs

alleged that PrimeTime 24 distributed the signals of distant network-

affiliated television broadcast stations by satellite to subscribers

that were not ``unserved households'' within the meaning of the SHVA.

Finding evidence that violations of the Act had taken place, the court

issued a preliminary, nationwide injunction ordering PrimeTime 24 not

to deliver CBS or Fox television network programming to any customer

that does not live in an unserved household. It was specifically

enjoined from providing CBS or Fox network programming:

to any customer within an area shown on Longley-Rice propagation maps,

created using Longley-Rice Version 1.2.2 in the manner specified by the

Federal Communications Commission (``FCC''), as receiving a signal of

at least grade B intensity of a CBS or Fox primary network station,

without first either (i) obtaining the written consent of the CBS or

Fox station affiliated or the relevant network, or (ii) after giving 15

business days written advance notice to the stations of its intention

to conduct a test and of the time and place at which the test will be

conducted, providing the station with a signal strength test at the

customer's household showing that the household cannot receive a signal

of grade B intensity.

The court ruled that the signal strength test at individual

households within a station's predicted Longley-Rice contour should be

``conducted in accordance with the procedures outlined in the

Declaration of Jules Cohen, filed on March 11, 1997.''

7. The court initially provided PrimeTime 24 with 90 days to comply

with the preliminary injunction, which applies only to subscribers who

signed up with PrimeTime 24 after March 11, 1997 (the day the

plaintiffs filed their lawsuit). The parties subsequently and jointly

agreed to an extension of the compliance date to February 28, 1999, and

the court approved the parties' agreement on October 6, 1998. If

enforced, the preliminary injunction could result in the termination of

network signals to an estimated 700,000 to one million subscribers. A

permanent injunction could end satellite network service to as many as

2.2 million subscribers. If the court issues a permanent injunction,

the 700,000 to one million subscribers affected by the preliminary

injunction will increase to include PrimeTime 24's subscribers before

March 11, 1997. This would be an additional 1.5 million subscribers,

thus raising the total subscribers affected by the Miami court orders

to 2.2 million.

8. On July 16, 1998, a Raleigh, North Carolina, federal district

court ruled against PrimeTime 24 in a similar lawsuit brought by the

local ABC affiliate, ABC, Inc. v. PrimeTime 24, Joint Venture, 1998 WL

544286 (M.D. N.C., July 16, 1998) (Case No. Civ. A. 1:97CV00090). A

permanent injunction followed on August 19, 1998 (1998 WL 544297 (M.D.

N.C., Aug. 19, 1998) (Case No. Civ. A. 1:97CV00090)). Similar to the

Miami ruling, the court found that the SHVA defines unserved household

and Grade B using strictly objective standards. The court stated,

``PrimeTime's screening procedures have systematically substituted a

subjective inquiry into the quality of the picture on a potential

subscriber's television set for any signal strength showing. PrimeTime

has ignored or turned a blind eye to the necessity of objective signal

strength testing and thus willfully or repeatedly provides network

programming to subscribers under SHVA.'' In contrast to the Miami

ruling, the Raleigh court did not use the Longley-Rice predictive model

to identify the affected subscribers, but applied the injunction to all

subscribers living within 75 miles of the affiliate's transmitting

tower. PrimeTime 24 has provided network services to as many as 35,000

households in the ABC affiliate's Raleigh/Durham market. At the time of

the court's decision, PrimeTime 24 continued to serve more than 9,000

subscribers within the affiliate's Grade B contour. A third lawsuit was

brought by an NBC affiliate in Amarillo, Texas, and awaits judgment by

a federal court. Kannan Communications, Inc. v. Primetime 24 Joint

Venture, No. 2-96-CV-086 (N.D. Tex.). A fourth lawsuit was filed by

EchoStar against CBS, Fox,

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NBC, and ABC on October 19, 1998. EchoStar asks the court to find that

the Commission has never endorsed a particular model for predicting or

measuring Grade B intensity for the purposes of the SHVA. EchoStar

wants the court to declare that a viewer's own opinion of the quality

of his or her signal quality is adequate for determining whether that

home is unserved under the SHVA, and asks the court to endorse a

predictive model for identifying served households such that 95% of

households receive a Grade B signal 95% of the time with a 50% degree

of confidence. (EchoStar's 95 / 95 / 50 court request contrasts with

the request in its petition before the Commission, in which it asks for

a 99 / 99 / 99 model.

D. The NRTC and EchoStar Petitions

9. In response to the Miami court case, the NRTC and EchoStar filed

their petitions.

We address both Petitions in this rulemaking because the issues are

similar and for reasons of administrative efficiency. The NRTC, a

distributor of DirecTV DBS service, has asked the Commission to adopt,

exclusively for purposes of interpreting the SHVA, a new definition of

``unserved'' that includes all households located outside a Grade B

contour encompassing a geographic area in which 100 percent of the

population receives over-the-air coverage by network affiliates 100

percent of the time using readily available, affordable receiving

equipment. EchoStar, which is a provider of DBS service, urges the

Commission to adopt a prediction model to locate unserved households.

EchoStar endorses a model that predicts an area where 99 percent of

households receive a Grade B signal 99 percent of the time with a 99

percent confidence level. EchoStar also urges adoption of a methodology

for measuring signal strength that more closely reflects the signal

that a viewer's television set actually receives. It argues that a

number of flaws exist in the current measurement and prediction

processes when they are used for SHVA purposes.

10. Several parties filed comments either opposing or supporting

the petitions. Those opposing the petitions generally represented

broadcast interests, while those supporting the petitions generally

included DTH satellite interests. Broadcasters generally argue that

Congress did not grant the Commission the authority to amend the

definition of Grade B for purposes of the SHVA.

Specifically, they contend that Congress chose the Grade B

definition that existed at the time of the SHVA's adoption because it

wanted to balance the viability of network/affiliate relationships with

consumers' interest in receiving broadcast network service. If the

Commission alters the Grade B definition, the petitioners' opponents

argue, the number of households entitled to receive distant network

signals may inappropriately rise and the number of people watching the

local stations will fall as the stations' viewing area shrinks. Fewer

viewers could mean lower ratings and less advertising revenue. Further,

the petitioners' opponents argue that a reduced viewing area might

impact a network station's ability to enforce its exclusivity rights

within that area.

11. Opponents to the petitions also contend that Congress did not

craft the SHVA with competition in mind, and, although competition is

an important goal, it carries little weight in this context.

Furthermore, broadcasters challenge the DTH industry's concerns about

subscribers who will lose their network signals under the Miami court's

injunction by declaring that many of those subscribers are receiving

that service illegally. The broadcasters advocate a local-into-local

approach for satellite-delivery of network signals, whereby all local

network signals would be retransmitted into a local area (e.g., Boston

network affiliates would be retransmitted to Boston subscribers). Until

that time, broadcasters urge the Commission to refrain from acting on a

copyright issue that falls outside of its purview.

12. The DTH industry, on the other hand, contends that Congress did

not freeze the definition of Grade B when it enacted the SHVA, and

asserts that the Commission has legal authority to change that

definition. The supporters of the petitions argue that the Commission

can and should conduct a rulemaking to make the definition of Grade B

more applicable to the SHVA. Some commenters contend that the current

Grade B standard makes it more difficult for DTH providers to compete

with cable companies, because DTH providers cannot offer network

programming to subscribers while cable can. These commenters argue that

subscribers are therefore less likely to consider DTH as a true

alternative to cable. The DTH industry states that the Commission has

not adopted a definition of Grade B for purposes of SHVA and urges

adoption of a standard that reflects actual reception of an adequate

television signal at a household's television set. Moreover, instead of

an actual testing regime for determining a household's eligibility for

retransmission of a network television station's signal, they argue,

the Commission should adopt a predictive testing methodology that will

be accurate and cost-effective. The DTH industry suggests a predictive

testing methodology that will return results that reveal, with 99 to

100% confidence, that 99 to 100% of households within a given area can

receive a network television station's signal 99 to 100% of the time.

The DTH industry requests that the Commission act now to further

consumer choice, foster competition, and respond to congressional

support for action.

13. Members of Congress and the Executive Branch have expressed

their concern about the issues raised in the petitions. On July 8,

1998, Senator McCain, Chairman of the Senate Commerce Committee, and

Representative Bliley, Chairman of the House Commerce Committee, wrote

the Commission, indicating that the Miami injunction ``threatens to

undermine the progress the Congress has made in promoting

competition.'' On August 7, 1998, Representative Boucher and 22 other

members of Congress stated in a letter to the Commission that the

court's preliminary injunction ``raises serious consumer and

competitive issues that require immediate review and action by the

Commission.'' The letter continued, ``As the expert regulatory agency

in telecommunications matters, the Commission was specifically

authorized by Congress to define `Grade B' for purposes of the SHVA. .

. . [W]e believe the Commission should expeditiously act to prevent the

imminent disenfranchisement of more than a million satellite

customers.''

14. Larry Irving, director of the National Telecommunications

Information Administration (NTIA) at the Department of Commerce, stated

that, depending upon which predictive methodology is used, as many as

nine million households (10 percent of American television households)

could change from served to unserved households. He reiterated the

Administration's support for ``robust competition'' in the MVPD

industry and noted that the definition of Grade B intensity could have

a ``marked effect'' on satellite companies'' competitive position in

the market.

II. Analysis and Request for Comments

15. These rulemaking petitions address issues that are significant

to consumers and the promotion of competition, as well as to the

affected industry parties, and we believe that an expedited rulemaking

is necessary to protect satellite subscribers who are

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truly unserved from losing network service. We seek to ensure that as

many consumers as possible can receive a broadcast network signal

consistent with the intent of the SHVA. We also seek to promote

competition among multichannel video programming distributors, where

that is possible under the SHVA, and we recognize the important role

that local broadcast stations play in their communities. We acknowledge

that the SHVA limits the proposals we can make to further these goals

and address the petitions. Further, we do not appear to have the

statutory authority to prevent most of PrimeTime 24's subscribers from

losing their network service under the Miami preliminary injunction

(and under a possible permanent injunction). The evidence in the Miami

and Raleigh court cases strongly suggests that many, if not most, of

those subscribers do not live in ``unserved households'' under any

interpretation of that term.

16. Two courts have noted that Congress used the Grade B standard

when it defined ``unserved households'' because it wanted an objective

measure of a television signal's strength. The Commission has sought in

its own regulations to advance this approach by establishing discrete

field strength values (measured in dBu's) when it defined Grade B and

when it created a detailed methodology for determining Grade B

contours. (See 47 CFR 73.683 and 73.684.) Consequently, a satellite

company may not deliver network signals to a viewer simply because the

viewer is subjectively unhappy with his or her television picture. The

Miami and Raleigh district courts both concluded that PrimeTime 24 has

chosen not to abide by the SHVA's and the Commission's objective

standard.

17. We will explore four issues in this NPRM. First, we seek

comment on the Commission's authority to address the issues raised in

the court decisions and the NRTC and EchoStar petitions. Second, we

seek comment on changing the definition of Grade B intensity so that

truly unserved households can be better identified. Third, we seek

comment on endorsing or developing a methodology for accurately

predicting whether an individual household is able to receive a signal

of Grade B intensity. Fourth, we seek comment on developing an easy-to-

use and inexpensive method for testing the strength of a broadcast

network signal at an individual household.

A. Commission's Authority to Proceed

18. Several broadcasters contend that the Commission lacks the

authority to grant the relief requested in the NRTC and EchoStar

petitions. They state that Congress incorporated by reference the

Commission's Grade B definitions and measurement procedures--

effectively freezing them in place--when the SHVA was adopted in 1988.

Accordingly, the broadcasters conclude that the Commission may not

change its rules now. Some commenters cite legislative history

purporting to show that section 73.683 was specifically included as

part of an early draft of the unserved household definition, thus

demonstrating Congress' intention to incorporate the definition as it

existed at passage. Commenters argue that Congress did not explicitly

direct the Commission to conduct a rulemaking on the definition, so the

Commission has no authority to change it. They note that the SHVA is a

copyright statute, not a communications law to be administered by the

Commission. The National Association of Broadcasters cites a number of

cases, including the Supreme Court's decision in Hassett v. Welch, for

the ``well settled canon'' that ``[w]here one statute adopts the

particular provisions of another by a specific and descriptive

reference to the statute or provisions adopted * * * [s]uch adoption

takes the statute as it exists at the time of adoption and does not

include subsequent additions or modifications by the statute so taken

unless it does so by express intent.'' (303 U.S. 303, 314 (1938).)

19. Parties supporting the petitions respond that Grade B intensity

is an ambiguous and open-ended term in the SHVA, evidenced by Congress'

failure to explicitly incorporate a rule section into the SHVA's

definition of unserved households. These commenters conclude that

Congress intentionally left the definition in the Commission's hands.

EchoStar cites the Supreme Court's holding in Lukhard v. Reed that

``[i]t is of course not true that whenever Congress enacts legislation

using a word that has a given administrative interpretation it means to

freeze that administrative interpretation in place.'' (481 U.S. 368,

379 (1989).)

20. There are four matters relating to the Commission's authority

to proceed on particular issues in this rulemaking. First, we seek

comment on whether Congress ``froze'' the definition of a signal of

Grade B intensity for purposes of the SHVA when it adopted the Act in

1988. That is, if the Commission were to revise the definition as a

general matter, would the definition nevertheless remain unchanged for

the purposes of the SHVA? We tentatively conclude that Congress did not

``freeze'' the definition of a signal of Grade B intensity for SHVA

purposes in 1988 and seek comment on this tentative conclusion. When

Congress incorporated Grade B into the definition of ``unserved

households'' it did not incorporate specific values, such as the dBu

levels the Commission uses in section 73.683. Further, nothing in the

SHVA or legislative history indicates that Congress intended to freeze

the value of Grade B when it passed the law in 1988 or when it renewed

it in 1994. Where Congress intended to incorporate regulations as they

existed on a certain date, it has expressly done so. For example, in

section 111(f) of the Copyright Act, Congress' definition of ``local

service area of a primary transmitter'' explicitly references

Commission regulations ``in effect on April 15, 1976, or such station's

television market as defined in section 76.55(e) of title 47, Code of

Federal Regulations (as in effect on September 18, 1993) * * * ``The

federal courts and the Copyright Office of the Library of Congress are

primarily responsible for enforcing and administering the copyright

laws, but Congress unquestionably turned to the Commission's expertise

when it defined unserved household in reference to a ``signal of Grade

B intensity (as defined by the Federal Communications Commission).''

21. With respect to the cases cited by commenters, we note that in

reaching its conclusion in Lukhard v. Reed, the Court followed

Helvering v. Wilshire, in which it held that ``a regulation

interpreting a provision of one act [does not become] frozen into

another act merely by reenactment of that provision.'' (308 US 90, 100-

101 (1939).) Indeed, the Supreme Court reasoned that if legislation so

constrained an agency's ability to conduct rulemaking under its

enabling legislation, then ``the result would be to read into the grant

of express administrative powers an implied condition that they were

not to be exercised unless, in effect, the Congress had consented. We

do not believe that such impairment of the administrative process is

consistent with the statutory scheme which the Congress has designed.''

Both Helvering and Lukhard suggest that the meaning of ``signal of

Grade B intensity'' in SHVA was not frozen for purposes of that Act

when SHVA was enacted, but rather can be modified over time by the

Commission.

22. Second, we seek comment on whether the Commission has the

authority to revise its Grade B construct specifically for the purposes

of the SHVA. The Grade B construct includes (1) the signal intensity

levels assigned to Grade B, 47 CFR 73.683; (2) models for

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predicting where a Grade B signal exists in an area or at an individual

point (or household), e.g., 47 CFR 73.684 and 73.686 predictive models;

and (3) the methodologies for testing signal strength in an area or at

an individual point. Initially, we note that it is indisputable that

the Commission has the authority, as a general matter, to revise any of

its rules, as long as we explain our reasons for doing so. But may we

create special provisions that would apply only to SHVA? Does the

statute permit the Commission to promulgate a special definition of

Grade B intensity for the exclusive purposes of the SHVA? What was the

Congress' intent? Some commenters argue that we ought to make a

specific definition for the SHVA because the Grade B construct is most

often used for determining signal intensity over broad areas, not for

individual households as the SHVA contemplates. The Commission has

tailored its rules for specific purposes in the past. For example, the

Commission determines television stations' service areas using two

different, but related, methods, depending on the purpose. For

exceptions to the cable syndicated exclusivity rules and for cross-

ownership purposes, the Commission uses its traditional Grade B contour

scheme, but for digital television stations, the Commission uses the

Longley-Rice predictive model.

23. Third, we seek comment on whether the Commission has the

authority to develop a model for predicting whether an individual

household can receive a signal of Grade B intensity for purposes of the

SHVA. The Commission has developed and used predictive models for

determining signal intensity in other contexts--for example, the

traditional Grade B contour and the Longley-Rice models. Broadcasters

argue that the Commission does not have the authority to develop a

predictive model for SHVA purposes, because the definition of

``unserved households'' depends on a household's actual ability to

receive a signal of Grade B intensity as measured at the household

itself. While satellite providers and broadcasters may negotiate the

use of a predictive model, the argument continues, the SHVA does not

provide the Commission with jurisdiction to interfere with or to

endorse a particular predictive methodology. The satellite providers

respond by citing the Commission's current use of predictive

methodologies for other purposes. They argue that the Commission may

therefore develop a predictive model specifically for the SHVA.

24. A predictive model need not replace actual measurement, but

could serve as a presumption of service or lack of service for purposes

of the SHVA. We note that some broadcasters have entered into

agreements with Primestar and Netlink (satellite television providers)

to resolve disputes arising from the SHVA requirements. These

settlements assign five-digit zip codes to each station and classify

each zip code as ``red light'' if more than 50% of the zip code's

population is served--based on Longley-Rice propagation data--and as

``green light'' of 50% or less of the population in the zip code is

served. A presumption could make administration of the unserved

household rule easier and more cost-effective for consumers and the

industry. Broadcasters and satellite providers would be able to rely on

a Commission-endorsed model when deciding whether individual consumers

are presumed to be eligible to receive satellite-delivered network

signals. Moreover, a predictive process might be a judicially

acceptable means for a satellite service provider to carry its burden

of showing ``that its secondary transmission of a primary transmission

by a network station is for private home viewing to an unserved

household.'' Such an approach is consistent with the federal court's

use of a variation of the Commission's Longley-Rice predictive

methodology in its preliminary injunction in the PrimeTime 24

proceeding in Miami.

25. Fourth, we seek comment on our conclusion that the Commission's

authority to define a signal of Grade B intensity reasonably includes

the authority to adopt a method of measuring signal intensity at an

individual household. The Commission has already established a method

of measuring service within an area or for propagation analysis, but

has not established a method specifically for measuring signal

intensity at an individual household. The SHVA is concerned with

adequate television signals at individual households. Importantly, it

does not matter to consumers that other households (a next-door

neighbor or a family across town) can actually receive network signals

when they cannot.

B. Definition, Prediction, and Measurement Proposals

26. The measurement and prediction techniques included in part 73

of the Commission's rules and as developed in other contexts constitute

a set of tools relating to signal propagation and reception that are

useful for a variety of purposes. Although this proceeding focuses on

concerns that are specific to SHVA, we recognize that refinements in

the rules and in our knowledge about the in-home viewing environment

(antennas, transmission lines, and receivers) and prediction

methodologies have potential carryover into some other aspects of the

Commission's rules. In some respects, however, the matters are unique

to the SHVA context. Thus, for example, the Commission's rules do not

typically focus on signal availability measurement techniques relating

to service to a single discrete location or household. Standardization

of a single household measurement process would thus not necessarily

have broad implications for other parts of the Commission's rules.

Although our focus is on changes specifically relevant for SHVA

purposes, we seek comment on the general question of what other non-

SHVA rules or policies might be implicated by the changes that are

discussed below. We note, for example, that our DTV service replication

models are also based upon duplicating the Grade B service area of

existing analog broadcast stations. Certain interference criteria also

incorporate the Grade B service area of television broadcast stations.

We also note that the Commission has a history of using different tools

in different contexts depending on the degree of precision desired, the

expense of the process used, and the economic and technical tradeoffs

involved in any specific issue. We invite comment on this issue and

request that parties provide specific rationales for any differences

between SHVA and non-SHVA definitions, prediction models, and

measurement methods that they advocate.

1. Defining a Signal of Grade B Intensity

27. A signal of Grade B intensity is an objective standard that, as

currently defined in section 73.683, may not distinguish adequately

between served and unserved households. The Grade B signal intensity

values specified in our rules were designed to enable reception of a

television picture that is acceptable to the median observer,

``assuming a receiving installation (antenna, transmission line, and

receiver) considered to be typical of outlying or near-fringe areas.''

Grade B service also assumes the absence of man-made noise or

interference from other stations. There was little specific comment in

the NRTC and EchoStar petitions or in the responsive pleadings

addressing possible changes in the field strength levels specified in

the rules. Has what constitutes a ``conventional outdoor rooftop

receiving antenna'' and the concept of the quality of service that

viewers consider acceptable changed

[[Page 67445]]

since the Commission adopted the Grade B signal strength levels in the

1950s? Would these standards need modification so that the median

observer would continue to find the service acceptable? For example,

receivers may have improved, or the assumptions regarding interference

in outlying areas may no longer be valid. (See, e.g., Gary S. Kalagian,

``A review of the Technical Planning Factors for the VHF Television

Service,'' FCC, Office of Chief Engineer, Bulletin RS77-01 (March 1,

1977), p. 11.) Changing the standard of an acceptable signal could have

detrimental effects on the viability of local television stations and,

potentially, on the goal of localism. We have no evidence that the

underlying technical planning factors have changed in a way that would

justify revising the current Grade B signal intensity levels. We

welcome comments, supported by evidence, regarding any claimed changes

to the assumptions made in deriving the Grade B signal intensity.

28. In soliciting comments on this issue, we recognize that our

flexibility to change the Grade B intensity values is naturally

constrained by the existence of the Grade A standard. The Grade A

intensity values are based on 70% of the locations receiving an

acceptable picture 90% of the time. Therefore, we believe that we

cannot modify Grade B intensity so much that it effectively equals or

exceeds Grade A signal intensity. We invite comments on all the factors

that determine the Grade B signal intensity. We also seek comment on

whether changes to the current intensity values would have a

detrimental effect on network-affiliate relationships and localism, as

well as other Commission rules that involve the current Grade B

standard.

2. Predicting a Signal of Grade B Intensity

29. The definition of an unserved household as a household that

``cannot receive * * * a signal of Grade B intensity'' most logically

refers to signal measurement at an individual household to determine if

an adequate signal is actually received. Because of the costs and

difficulties of individual measurements, however, for many purposes a

predictive model is used in lieu of actual measurements. Consistent

with this notion, the EchoStar petition asks the Commission to adopt or

endorse an accurate model for predicting whether an individual

household receives a Grade B intensity signal.

30. We believe that predictive models can be effective proxies for

individual household measurements. The satellite and broadcast industry

currently make use of predictive models such as the Longley-Rice

methodology. However, different parties do not always agree on which

model is most appropriate for identifying unserved households. Even

when parties use the same model, they may disagree on the factors that

are considered in that model. For example, different variations of the

Longley-Rice model may or may not account for vegetation or buildings.

In addition, studies using the Longley-Rice model, such as our DTV

analyses, may account for interference. If the Commission endorses a

predictive model in this rulemaking, parties will not need to spend

future resources and time debating methodology. However, consistent

with the SHVA, no Commission-endorsed model will preclude a party from

using actual measurements at individual households.

31. The difference in taking actual measurements at individual

households and using predictive models is significant, because

measurement requires time, money, and other resources that often

outweigh the benefits. For example, it may cost more for a satellite

company to take a measurement than it can recover through subscriber

fees. To avoid these costs, satellite providers, broadcasters, and

consumers have often turned to predictive models that erroneously

permit some served households to receive satellite network service, or,

conversely, that prevent some unserved households from being eligible

to receive network stations via satellite.

32. Even though Grade B signal intensity is defined as discrete

values measured in dBu's, the intensity of broadcast signals at

particular locations and at particular times cannot be precisely

determined, regardless of the predictive method used. Signal strength

varies randomly over location and time, so signal propagation must be

considered on a statistical basis. This is true whether the signal

intensity is predicted at a fixed location (such as an individual

household) or over an area. Some prediction methods, including the

Commission's propagation curves, predict the occurrence of median

signal strengths (i.e., signal strengths expected to be exceeded at 50%

of the locations in a particular area at least 50% of the time). Under

this approach, ``location'' and ``time'' variability factors are added

to the signal level for an acceptable picture so that the desired

statistical reliability is achieved. The values chosen for the Grade B

signal intensity account for this variability, and therefore, predict

that the best 50% of the locations along the Grade B contour will

receive an acceptable picture 90% of the time. In other predictive

models, including the Longley-Rice point-to-point model, this

variability is built into the model, rather than into the signal

intensity value. We seek comment on whether it would be appropriate to

consider changing the location and time variability percentages. For

example, should more than 50% of viewers receive an acceptable picture

more than 90% of the time? We also seek comment on whether such changes

should be incorporated into the signal intensity values or the

predictive model.

33. As previously noted, the Commission has used predictive models

for determining signal intensity in the past. We seek comment on the

application of these models in the SHVA context. We tentatively

conclude that the Commission's traditional predictive methodology for

determining a Grade B contour, outlined in section 73.684 of the

Commission's rules, is insufficient for predicting signal strength at

individual households. We seek comment on this tentative conclusion.

The traditional Grade B methodology predicts a signal's strength by

using radial lines extending ten miles from a television station's

transmitter. (See 47 CFR 73.684(d) and 73.686(b).) This methodology

does not accurately reflect topographic differences in a station's

transmission area, and explicitly does not account for interference

from other signals. These omissions result in an imperfect methodology

for predicting whether an individual household can receive an adequate

signal. For example, terrain features beyond 10 miles from a station's

transmitter site may block a house's reception or a house that sits at

the edge of two different television markets may suffer from

interfering signals.

34. While our traditional Grade B contour methodology is inadequate

for predicting the signal level at a single location, we have recently

adopted rules in the DTV proceeding for analyzing TV service using a

point-to-point prediction method based on the Longley-Rice propagation

model. Our implementation of the Longley-Rice model for analysis of DTV

and analog TV service in the DTV proceeding is described in ``Longley-

Rice Methodology for Evaluating TV Coverage and Interference,'' OET

Bulletin 69, Federal Communications Commission (July 2, 1997) http://

www.fcc.gov/oet/info/documents/bulletins/#69>. Longley-Rice is the

Commission's designated methodology for determining where service is

provided by a DTV station. (See 47 CFR 73.622(e).) We propose that

[[Page 67446]]

the Longley-Rice propagation model, as implemented for DTV, be used to

refine the Grade B service prediction for the purpose of SHVA

determinations. The Longley-Rice propagation model is the most widely-

used private means of predicting a Grade B coverage area for SHVA

purposes. It provides an estimate of signal strength, similar to the

traditional Grade B contour method. However, the Longley-Rice model

adjusts the predictions for changes in terrain (e.g., hills and

valleys) along the entire path from the transmitter site to the

specified receive site. Thus, while the traditional method often

results in smooth concentric circles surrounding a transmission tower,

the Longley-Rice method more precisely describes actual areas of

coverage. While the broadcasters support the use of the Longley-Rice

model in the SHVA context, the satellite interests claim it is

insufficient. The detractors agree that a Longley-Rice analysis has

advantages over a traditional Grade B contour, but note that it fails

to account for several important factors that affect signal

availability, including interference from other signals, vegetation,

and buildings. We seek comment generally on this proposal, as well as

specifically on the following questions. Should consideration of co-

channel and adjacent-channel interference as implemented for DTV be

part of the methodology used for SHVA purposes? Is it necessary to

prescribe how accurately receive location coordinates are specified?

Can Longley-Rice be modified to increase the probability of identifying

served and unserved households more accurately? How? What are the

predictive factors that are missing in the current Longley-Rice model?

Can Longley-Rice reasonably be modified to account for all these

factors? What effect would incorporation of these additional factors

have on the cost and practicality of the Longley-Rice methodology? Can

Longley-Rice or a modified version of Longley-Rice be used in

conjunction with a commercially available geocoding process to provide

a workable predictive model for satellite providers, broadcasters, and

consumers to use for determining whether a given subscriber is presumed

to be unserved? We seek comment on whether such currently-available

approaches are working well for the industries and consumers. For

example, Decisionmark Corporation is currently working with

broadcasters and satellite providers to provide mapping information

about signal areas. They sponsor web sites, http://www.shva.com/maps>

and http://getawaiver.com>, that provide information about served and

unserved areas to consumers, broadcasters and participating satellite

providers.

35. We also invite parties to submit any other methodology that

they believe will more accurately and cost-effectively predict whether

an individual household is able to receive a signal of Grade B

intensity. We seek to identify a predictive model that more accurately

determines whether a household is unserved for purposes of the SHVA. Is

there a predictive methodology that will increase the probability that

unserved households will be more accurately identified (e.g., by taking

into account interference)? What is that methodology? For either a

version of the Longley-Rice model or another alternative methodology,

how might parties use a new predictive model? Can and should the

Commission endorse or develop a predictive model? Should we endorse a

model that already exists or endorse such a model with modifications?

What are the costs associated with any of the suggested methodologies?

36. We acknowledge and reiterate Congress' decision in the SHVA to

protect network-affiliate relationships and to foster localism in

broadcasting. If we change the number of viewers predicted to receive a

local station, we may substantially affect these policies. As we have

noted, localism is central to our policies governing broadcasting and

the obligation of broadcasters to serve the public interest. In

proposing a new or modified predictive model for purposes of the SHVA,

we seek comment on what, if any, effects different predictive models

will have on these policies, and what, if any, steps we can take to

further such policies.

3. Testing for Signal Intensity at Individual Households

37. For the SHVA to function properly, a relatively low cost,

accurate, and reproducible methodology for measuring the presence of a

Grade B intensity signal in a household is of particular importance.

Although, because of the costs and delays involved, it would be

desirable to minimize the need for individual testing to the extent

possible, individual testing is the key safety net mechanism under the

SHVA for proving that a specific household is unserved and thus

eligible under the law to receive satellite delivery of network

affiliated television stations. We therefore propose to explore a

method of measuring signal intensity at individual households that is

accurate, easier, and less expensive than the current method.

38. The Commission's current method of measuring the field strength

of over-the-air signals in a station service area requires a so-called

100-foot mobile run. The run typically involves a truck with a 30-foot

antenna that takes continuous measurements while being driven a

distance of 100 feet. The antenna must be rotated to the best receiving

position, and engineers record factors that might affect signals, such

as topography, height and type of vegetation, buildings, obstacles, and

weather. If overhead obstacles get in the way, a cluster of

measurements must be taken at locations within 200 feet of each other.

This elaborate procedure can cost several hundred dollars each time it

is performed. This is an expensive proposition for a satellite company

or a consumer who wants to prove that a household is unserved by over-

the-air signals. When multiplied over hundreds of households at the

outer edges of a station's service area, the cost may become

prohibitive and may prevent many truly unserved consumers from

receiving broadcast network service.

39. In addition to the difficulties inherent in this test, many of

its assumptions may not hold in individual situations. For example,

many homes do not have antennas 30 feet above the ground, especially if

they are one-story homes. The definition of unserved household only

describes reception over a conventional outdoor rooftop receiving

antenna, so requiring measurements on a 30-foot antenna may not reflect

what is ``conventional.'' Requiring the truck's antenna to face the

direction of the station's tower ignores the reality that consumers'

antennas receive several stations, and many do not rotate to the best

position for each station. Finally, requiring clusters of tests and a

100-foot mobile run ignores the fact that homes are stationary and that

reception may vary considerably over a mobile run on a nearby street.

The purpose of the procedure specified in the rules is not to determine

the receivability of a signal at a single spot, but to determine,

through measurements at a series of grid intersections over a

community, the nature of service to the community. The Miami court

ruled that the signal strength test should be ``conducted in accordance

with the procedures outlined in the Declaration of Jules Cohen, filed

on March 11, 1997,'' which ``was based on that prescribed by the FCC in

47 CFR 73.686.'' At an accessible road closest to a household, a 100-

foot mobile run is made with a conventional rooftop antenna elevated to

30 feet. During the run, a station's field intensity is

[[Page 67447]]

recorded and the data is stored in a computer. Analysis of the data,

made with the aid of a computer program, permits the extraction of the

maximum, minimum, and median field intensity found, together with the

standard deviation. Median field intensity minus standard deviation is

a measure of the least signal intensity likely to be found at the

specific location of the household. In contrast, EchoStar proposed a

signal strength test that focuses more directly on a single point at a

household, involving placement of a conventional outdoor rooftop

antenna within three feet of the home and raised to the height of the

roof. The antenna is oriented to maximize signal strength for the one

local station that the consumer watches most often. A length of

standard household cable is attached to the antenna, and a number of

splitters are attached to duplicate the number of splitters the

consumer uses to service multiple televisions. A signal measurement is

then conducted. If the signal strength is not stable, the antenna is

relocated and the same procedure utilized until a stable signal

strength is achieved. Readings are taken approximately every thirty

seconds for a period of five minutes. If any of the signal strength

readings register less than the Grade B signal strength threshold as

established by Congress and the FCC, the consumer will be deemed an

``unserved household'' eligible to receive distant network signals.

40. We seek comment on the modification of the current testing

methodology or the creation of a new methodology for measuring signal

strength. Any recommendations should lead to a test that is relatively

easy to use and inexpensive enough to make it economically practical

for the industry and for consumers. We seek comment on what qualifies

as ``a conventional outdoor rooftop receiving antenna.'' Are different

antennas required for different parts of the country, or as one moves

farther from a television transmitter? What special problems do viewers

in multiple dwelling unit buildings (``MDUs'') face in gaining access

to a conventional outdoor rooftop television antenna? Should the

testing methodology be different for high-rise MDUs? Does

``conventional outdoor rooftop receiving antenna'' include a rotor?

How, if at all, should the Grade B criterion of typical of outlying or

near-fringe areas influence the concept of ``conventional'' antenna? On

another note, how do we ensure the objectivity and accuracy of any

signal strength test? How do we do so without making the test more

difficult, impractical, or expensive? How should antenna height be

measured? Should antenna height be set at 30 feet, should it be five

feet above the roof, or something else? Should the measurement be

related to the placement of the satellite receiver in situations where

the satellite and local signal antennas are integrated? If antenna

designs are improved over those historically available so that the

definition of ``conventional'' changes, how should that be accommodated

in the measurement process? How should we account for the challenges of

raising a rooftop antenna in multiple dwelling units? How should the

test account for rotation, or lack of rotation, of antennas that

receive the signals of several stations? What type and calibration of

measurement equipment is needed? How can the process account for the

variations of signal level over the course of a day or with seasonal

changes?

C. Other Issues

41. We seek comment on whether the lack of an established

methodology for measuring Grade B signal intensity at individual

households has hampered the effective functioning of the SHVA. In

particular, we note that the SHVA contains a ``loser pays'' mechanism

that allows recovery, in any civil action, of signal measurement costs

at a subscriber's household. (17 CFR 119(a)(9).) Under the SHVA, if a

network station questions whether a particular subscriber is unserved,

an actual measurement at the subscriber's household may result. If the

household is unserved, the broadcast station must pay for the

measurement; if the household is served, the satellite carrier must

pay. We believe that the loser pays mechanism, if used even in the

absence of a civil action, would substantially alleviate the cost

burden of actual signal measurements by giving both parties an economic

incentive to avoid actual measurements in most circumstances. We seek

comment on whether parties are making use of the ``loser pays''

mechanism. If they are not, why not? Can and should we establish rules

or policies that will facilitate their ability to do so? We also seek

comment on whether the loser pays mechanism, combined with a predictive

model that would minimize the need for individual testing in most

cases, would facilitate the effective functioning of the Act.

42. We also seek comment on whether we can and should adopt a

procedure similar to the SHVA's expired transitional ``loser pays''

mechanism. (17 CFR 119(a)(8)(B)(ii) and (C)(ii).) Does that provision

represent a workable system for allocating burdens of proof, and

appropriate incentives to challenge a presumptive rule, in determining

who is and who is not an unserved household? Establishing a system

based on an initial presumption would help create certainty and provide

a good starting point for managing this issue on a large scale. Are

there other mechanisms that can better serve the purposes of the SHVA?

One alternative might be the agreement reached between broadcasters and

two satellite carriers, Primestar Partners and Netlink USA, that

created presumptive zones of served and unserved households based on

zip codes. Yet another alternative might be the methodology developed

by Decisionmark Corporation of Cedar Rapids, Iowa, that is used by both

PrimeTime 24 and broadcasters in the Miami federal court case. This

methodology uses a variation of the Longley-Rice methodology to

determine whether individual homes are unserved. We seek comment on

these approaches. Are there additional actions the Commission can and

should take to make enforcement of the SHVA more effective?

43. Finally, we seek comment on the prospect that the industry will

develop ``local-into-local'' technology to serve every community. The

local-into-local concept means that satellite carriers would provide

subscribers with the signals of their local broadcast network

affiliates instead of signals from distant stations. If satellite

carriers were allowed to retransmit a broadcast network station's

signal into that station's local market, then the risks of damaging the

goals of broadcast localism could be mitigated. Some satellite carriers

have already developed limited plans for accomplishing local-into-local

service. For example, EchoStar has a local-into-local option for

unserved households in more than a dozen television markets, and

Capitol Broadcasting Inc. of Raleigh, North Carolina, has reportedly

developed the technology to deliver local-into-local service for most,

if not all, television markets. We note that some interested parties

have argued that a local-into-local extension of the compulsory license

in the current copyright laws might obviate the need for Commission

action in this area. The Commission, of course, lacks the statutory

authority to create such an extension. However, section 335(a) of the

Communications Act of 1934 instructs the Commission to ``examine the

opportunities that the establishment of direct broadcast satellite

service provides for the principle of localism under this Act, and the

methods by which such

[[Page 67448]]

principle may be served through technological and other developments

in, or regulation of, such service.'' If Congress adopted a local-into-

local extension of the compulsory license, how would such a change

affect the need for, and viability of, the proposals in this

rulemaking? We seek comment on the feasibility--particularly the

technical feasibility--of a local-into-local option and on a time frame

for implementing this possible solution to the demands for satellite

delivery of network station signals.

III. Paperwork Reduction Act

The requirements proposed in this Notice have been analyzed with

respect to the Paperwork Reduction Act of 1995 (the ``1995 Act'') and

would impose new and modified information collection requirements on

the public. The Commission, as part of its continuing effort to reduce

paperwork burdens, invites the general public and the Office of

Management and Budget (``OMB'') to take this opportunity to comment on

the proposed information collection requirements contained in this

Notice, as required by the 1995 Act. Public comments are due on or

before 30 days from date of publication of this Notice in the Federal

Register. OMB comments are due on or before 60 days from date of

publication of this Notice in the Federal Register. Comments should

address: (a) whether the proposed collection of information is

necessary for the proper performance of the functions of the

Commission, including whether the information would have practical

utility; (b) the accuracy of the Commission's burden estimates; (c)

ways to enhance the quality, utility, and clarity of the information

collected; and (d) ways to minimize the burden of the collection of

information on the respondents, including the use of automated

collection techniques or other forms of information technology.

OMB Approval Number: None. This is a new collection.

Title: Satellite Delivery of Network Signals to Unserved Households

for Purposes of the Satellite Home Viewer Act.

Type of Review: New collection.

Respondents: Business or other for-profit entities.

Number of Respondents: 848. The proposed action in this NPRM

applies to entities providing DBS service. According to Census Bureau

data, there are 848 firms that fall under the category of

Communications Services, Not Elsewhere Classified that could

potentially fall into the DBS category.

Estimated Time Per Response: Two hours.

Frequency of Response: On occasion.

Total Annual Burden to Respondents: 2,000,000 hours. At this time

the Commission provides broad estimates of the annual paperwork burden

resulting from the proposed new and modified information collection

requirements contained in this Notice. Based on comments received in

this proceeding, the Commission will be in a position to provide more

accurate paperwork burden estimates upon adoption of final rules. In

our current estimates, we define a response to the proposed information

collection requirements as including the burden to conduct signal

strength measurements at individual households or by using predictive

models; to report measurement findings to appropriate parties; and to

keep records of such findings. We estimate that as many as one million

responses will be typically be initiated in the course of a year. Each

response is estimated to entail a burden of two hours.

1,000,000 responses x 2 hours each = 2,000,000 hours.

Total Annual Cost to Respondents: $500,000. Cost to respondents is

defined as capital, start-up, operation and maintenance costs pursuant

to the Paperwork Reduction Act of 1995. The DBS industry has conducted

signal strength measurements and has reported the findings of such

measurements for several years pursuant to requirements set forth by

the Satellite Home Viewer Act; therefore the Commission foresees no

additional capital or start-up costs as a result of proposals contained

in this Notice. However, here we account for postage and stationery

costs incurred by entities at an estimated 50 cents per response.

1,000,000 responses x 50 cents = $500,000.

Needs and Uses: The information gathered as part of Grade B signal

strength tests, as proposed, will be used to indicate whether a

consumers are ``unserved'' by over-the-air network signals. Parties

using this information will include consumers, the Commission, and the

satellite and broadcasting industries.

IV. Initial Regulatory Flexibility Analysis

As required by the Regulatory Flexibility Act (``RFA'') (5 CFR

603), the Commission has prepared this Initial Regulatory Flexibility

Analysis (``IRFA'') of the possible significant economic impact on

small entities by the policies and proposed action in this NPRM.

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 the NPRM provided above. The Commission will send a

copy of this NPRM, including this IRFA, to the Chief Counsel for

Advocacy of the Small Business Administration (``SBA'') and to

Congress.

A. Need for, and Objective of, the NPRM

In this NPRM, the Commission responds to Petitions for Rulemaking

filed by the National Rural Telecommunications Cooperative and EchoStar

Communications Corporation requesting that the Commission address the

methods for determining whether a household is ``unserved'' by network

television stations for purposes of the 1988 Satellite Home Viewer Act

(17 CFR 119).

B. Legal Basis

This NPRM is authorized under sections 1, 4(i), 4(j) of the

Communications Act of 1934, as amended, 47 CFR 151, 154(i), and 154(j)

and section 119(d)(10)(a) of the Copyright Act, 17 CFR 119(d)(10)(a).

C. Description and Estimate of the Number of Small Entities To Which

the NPRM Will Apply

The RFA directs the Commission to provide a description of and,

where feasible, and estimate of the number of small entities that will

be affected by the proposed action. The RFA defines the term ``small

entity'' as having the same meaning as the terms ``small business,''

``small organization,'' and ``small business concern'' under section 3

of the Small Business Act. 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. The proposed action in this

NPRM will affect television broadcasting licensees and DBS operators.

Television Stations

The policies and proposed action in this NPRM will apply to

television broadcasting licensees, and potential licensees of

television service. The SBA defines a television broadcasting station

that has no more than $10.5 million in annual receipts as a small

business (Standard Industrial Code (``SIC'') 4833 (1996)). Television

broadcasting stations consist of establishments primarily engaged in

broadcasting visual programs by television to the public, except cable

and other pay television services. Included in this industry are

commercial, religious, educational, and other television stations. Also

included

[[Page 67449]]

are establishments primarily engaged in television broadcasting and

that produce taped television program materials. Separate

establishments primarily engaged in producing taped television program

materials are classified under SIC 7812 (Motion Picture and Video Tape

Production) and SIC 7922 (Theatrical Producers and Miscellaneous

Theatrical Services (producers of live radio and television programs).

There were 1,509 television broadcasting stations operating in the

nation in 1992. That number has remained fairly constant as indicated

by the approximately 1,579 operating full power television broadcasting

stations in the nation as of May 31, 1998. In addition, as of October

31, 1997, there were 1,880 low power television broadcasting (``LPTV'')

broadcasting stations that may also be affected by our proposed rule

changes. Given the nature of LPTV stations, we will presume that all

LPTV's qualify as small entities. For 1992 the number of television

broadcasting stations that produced less than $10.0 million in revenue

was 1,155 establishments.

Thus, the proposed action will affect many of the approximately

1,574 television broadcasting stations; approximately 1,200 of those

stations are considered small businesses. Given the nature of LPTV

stations, we will presume that all LPTV's qualify as small entities.

These estimates may overstate the number of small entities because the

revenue figures on which they are based do not include or aggregate

revenues from non-television affiliated companies.

In addition to owners of operating television broadcasting

stations, any entity who seeks or desires to obtain a television

broadcasting license may be affected by the proposed action contained

in this item. The number of entities that may seek to obtain a

television broadcasting license is unknown. We invite comment as to

such number.

DBS

The Commission has not developed a definition of small entities

applicable to geostationary or non-geostationary orbit fixed-satellite

or DBS service applicants or licensees. Therefore, the applicable

definition of small entity is the definition under the SBA rules

applicable to Communications Services, Not Elsewhere Classified. This

definition provides that a small entity is one with $11.0 million or

less in annual receipts (SIC Code 4899). According to Census Bureau

data, there are 848 firms that fall under the category of

Communications Services, Not Elsewhere Classified that could

potentially fall into the DBS category. Of those, approximately 775

reported annual receipts of $11 million or less and qualify as small

entities. The proposed action in this NPRM applies to entities

providing DBS service. Small businesses do not have the financial

ability to become DBS licensees because of the high implementation

costs associated with satellite services. Because this is an

established service, however, with limited spectrum and orbital

resources for assignment, we estimate that no more than fifteen

entities will be Commission licensees providing these services.

Therefore, because of the high implementation costs and the limited

spectrum resources, we do not believe that small entities will be

impacted by proposed action in this NPRM.

D. Description of Projected Reporting, Record-keeping, and Other

Compliance Requirements

There may be reporting, record-keeping, and compliance requirements

for television broadcasting stations and DBS operators in the form of

testing, record-keeping, and reporting, if the Commission adopts any

rule changes as a result of this NPRM. We solicit comments on how these

projected requirements may be eliminated, reduced, or streamlined.

E. Steps Taken to Minimize Significant Economic Impact on Small

Entities, and Significant Alternatives Considered

In discussing the proposed action contained in this NPRM, we have

attempted to minimize the burdens on all entities. We seek comment on

the impact of our proposed action on small entities and on any possible

alternatives that would minimize its impact on small entities.

F. Federal Rules that May Duplicate, Overlap, or Conflict with the

Proposed Rule Changes

None.

Ordering Clauses

It is ordered that, pursuant to sections 1, 4(i), 4(j) of the

Communications Act of 1934, as amended, 47 CFR 151, 154(i), and 154(j);

and section 119(d)(10)(a) of the Copyright Act, 17 CFR 119(d)(10)(a),

notice is hereby given of proposed amendments to Part 73, in accordance

with the proposals, discussions and statements of issues in this Notice

of Proposed Rulemaking, and that comment is sought regarding such

proposals, discussions and statements of issues. It is further ordered

that the Commission's Office of Public Affairs, Reference Operations

Division, shall send a copy of this Notice of Proposed Rulemaking,

including the Initial Regulatory Flexibility Analysis, to the Chief

Counsel for Advocacy of the Small Business Administration in accordance

with paragraph 603(a) of the Regulatory Flexibility Act, Pub. L. 96-

354, 94 Stat. 1164, 5 U.S.C. 601 et seq. (1981).

Federal Communications Commission.

Magalie Roman Salas,

Secretary.

[FR Doc. 98-32397 Filed 12-2-98; 12:21 pm]

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