[Federal Register: May 5, 2008 (Volume 73, Number 87)]
[Rules and Regulations]               
[Page 24502-24508]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05my08-4]                         

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[CS Docket No. 00-96; FCC 08-86]

 
Carriage of Digital Television Broadcast Signals; Implementation 
of the Satellite Home Viewer Improvement Act of 1999: Local Broadcast 
Signal Carriage Issues and Retransmission Consent Issues

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The actions taken in this document represent another step in 
the Commission's ongoing efforts to complete the transition from analog 
to digital television. In this document, we amend the rules to require 
satellite carriers to carry digital-only stations upon request in 
markets in which they are providing any local-into-local service 
pursuant to the statutory copyright license, and to require carriage of 
all high definition (``HD'') signals in a market in which any station's 
signals are carried in HD.

DATES: Effective June 4, 2008, except the amendments to 47 CFR 
76.66(b)(1) and 47 CFR 76.66(d)(2)(vi), which contain new information 
collection requirements under the PRA and shall not be effective until 
the FCC publishes a document in the Federal Register announcing OMB 
approval of the effective date of these information collections.

ADDRESSES: Federal Communications Commission, 445 12th Street, SW., 
Washington, DC 20554. You may submit comments, identified by CS Docket 
No. 00-96, by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Federal Communications Commission's Web site: http://
www.fcc.gov/cgb/ecfs/. Follow the instructions for submitting comments.
    People with Disabilities: Contact the FCC to request reasonable 
accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by e-mail: FCC504@fcc.gov or phone: 202-418-
0530 or TTY: 202-418-0432. For detailed instructions for submitting 
comments and additional information on the rulemaking process, see the 
SUPPLEMENTARY INFORMATION section of this document.
    In addition to filing comments with the Office of the Secretary, a 
copy of any comments on the Paperwork Reduction Act information 
collection requirements contained herein should be submitted to Cathy 
Williams, Federal Communications Commission, 445 12th Street, SW., 
Washington, DC 20554, or via the Internet to PRA@fcc.gov.

FOR FURTHER INFORMATION CONTACT: For more information on this 
proceeding, please contact Lyle Elder, Lyle.Elder@fcc.gov, or Eloise 
Gore, Eloise.Gore@fcc.gov, of the Media Bureau, Policy Division, (202) 
418-2120. For additional information concerning the Paperwork Reduction 
Act information collection requirements contained in this document, 
contact Cathy Williams on (202) 418-2918, or via the Internet at 
PRA@fcc.gov.

[[Page 24503]]


SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order in CS Docket No. 00-96, FCC 08-86, adopted March 19, 2008 and 
released March 27, 2008. The full text of this document is available 
for public inspection and copying during regular business hours in the 
FCC Reference Center, Federal Communications Commission, 445 12th 
Street, SW., CY-A257, Washington, DC 20554. These documents will also 
be available via ECFS (http://www.fcc.gov/cgb/ecfs/). (Documents will 
be available electronically in ASCII, Word 97, and/or Adobe Acrobat.) 
The complete text may be purchased from the Commission's copy 
contractor, 445 12th Street, SW., Room CY-B402, Washington, DC 20554. 
To request this document in accessible formats (computer diskettes, 
large print, audio recording, and Braille), send an e-mail to 
fcc504@fcc.gov or call the Commission's Consumer and Governmental 
Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

Paperwork Reduction Act of 1995 Analysis

    This document has been analyzed with respect to the Paperwork 
Reduction Act of 1995 (``PRA'') and contains new and/or modified 
information collection requirements subject to the Paperwork Reduction 
Act of 1995, Public Law 104-13. It will be submitted to the Office of 
Management and Budget (``OMB'') for review under Section 3507(d) of the 
PRA. OMB, the general public, and other Federal agencies will be 
invited to comment on the new information collection requirements 
contained in this proceeding. The Commission will publish a separate 
Federal Register at a seeking these comments. In addition, the 
Commission notes that, pursuant to the Small Business Paperwork Relief 
Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we have 
assessed ``the information collection burden for small business 
concerns with fewer than 25 employees.'' The Commission finds that 
there is unlikely to be an increased administrative burden on 
businesses with fewer than 25 employees. Although the Commission 
believes that some small business concerns with fewer than 25 employees 
will be impacted by the rules adopted herein, we do not believe that 
the requirements imposed in this document will create an information 
collection burden for these entities.

Summary of the Report and Order

I. Introduction

    1. The actions taken in this Order represent another step in the 
Commission's ongoing efforts to complete the transition from analog to 
digital television. In this Order, we amend the rules to require 
satellite carriers to carry digital-only stations upon request in 
markets in which they are providing any local-into-local service 
pursuant to the statutory copyright license, and to require carriage of 
all high definition (``HD'') signals in a market in which any station's 
signals are carried in HD. In recognition of the capacity and 
technological constraints faced by satellite carriers, the latter 
requirement will be phased-in over a four-year period. These decisions 
are consistent with section 338 of the Act's instructions that the 
Commission implement comparable, rather than identical, carriage rules 
between cable and direct broadcast satellite (``DBS''), and is 
supported by the record in this proceeding.

II. Background

    2. The Communications Act of 1934, as amended (the ``Act''), 
requires cable systems and satellite carriers to carry the signals of 
local commercial and noncommercial broadcast stations in their local 
markets. Cable systems are presumptively required to carry all local 
television stations in all television markets, while satellite carriers 
are only required to carry all television stations in a local 
television market if they carry one local television signal in that 
market under the compulsory copyright license (``carry-one, carry-
all''). Commercial television stations may however, choose to be 
carried pursuant to voluntary retransmission consent agreements rather 
than by mandatory carriage. Generally, every three years commercial 
television stations must elect to either grant retransmission consent 
or pursue their mandatory carriage rights. Noncommercial (``NCE'') 
television stations may only elect mandatory carriage (NCE stations do 
not have retransmission consent rights), but are nonetheless free to 
negotiate issues related to voluntary carriage with cable operators and 
satellite carriers.

III. Second Report and Order

    3. The Commission's First Report and Order and Further Notice of 
Proposed Rulemaking in this proceeding adopted rules for cable carriage 
of digital broadcast signals pursuant to retransmission consent and 
mandatory carriage when a local television station is broadcasting only 
a digital signal. The Commission concluded that digital-only stations 
are entitled to elect mandatory cable carriage. The First Report and 
Order did not make a similar determination with respect to satellite 
carriage, which had only recently been implemented with respect to 
analog signals. Instead, in the Further Notice, we solicited comment on 
how to implement digital broadcast signal carriage rules for satellite 
carriers.

A. Digital-Only Carriage

    4. We conclude that providing digital-only stations with mandatory 
satellite carriage in local-into-local markets now furthers the 
completion of the digital transition by assuring that any station--
whether a new digital station or a station that is returning its analog 
spectrum--will have satellite carriage rights. Section 338(a) of the 
Act states that satellite carriers must carry, ``upon request the 
signals of all television broadcast stations located within that local 
market.'' This provision makes no distinction between analog and 
digital signals, and we find that any such distinction would be 
inappropriate. Furthermore, section 338(j) of the Act requires that the 
rules applying to satellite carriers be ``comparable'' to those 
governing cable companies in certain areas, including signal carriage. 
The Commission has required carriage of digital-only stations by cable 
operators, and a similar requirement is both appropriate and comparable 
for satellite carriers. This decision ensures that broadcasters and 
satellite subscribers can be confident of uninterrupted satellite 
carriage of local stations after the transition to digital broadcasting 
for all full-power stations that will conclude on midnight, February 
17, 2009. This conclusion is particularly important for the stations 
that are not affiliated with the top four networks and rely on ``must 
carry'' to reach viewers who are satellite subscribers. Congress 
adopted the carry-one, carry-all requirements with these stations 
particularly in mind, and our decision in this Order ensures the 
continued viability of these stations as they make their transition to 
all digital service.

B. HD Carry One, Carry All

    5. We turn next to the manner of carriage, particularly with 
respect to material degradation during carriage of HD signals. For the 
reasons described below, we conclude that satellite carriage of local 
stations' digital signals should conform to the nondiscrimination 
requirement adopted by the Commission in 2000. Therefore,

[[Page 24504]]

with respect to carriage of digital-only signals, we require satellite 
carriers to carry each station in the market in the same manner, 
including carriage of HD signals in HD format if any broadcaster in the 
same market is carried in HD.
    6. The Act requires that the Commission adopt rules for DBS 
``comparable'' to those governing cable in the areas of material 
degradation, signal processing, carriage, and technical capacity. In 
the 2000 DBS Carriage Order, the Commission discussed this requirement 
at length, particularly in regard to the question of material 
degradation. At that time, the Commission noted that satellite 
compression technology was evolving rapidly, and was therefore 
reluctant to adopt specific technical standards for digital carriage. 
The Commission's conclusion at the time was that treating all local 
television stations in a market in the same manner with regard to 
picture quality was the best way to establish regulations comparable to 
cable while still tailored to the unique circumstances of satellite 
operation. Thus, the Commission required that the signal processing, 
compression and encoding techniques a satellite carrier used to carry 
retransmission consent stations would also be used for mandatory 
carriage stations. Id. See also 47 CFR 76.66(k). We note that the 
comparability standard applied to cable carriage compares carriage of 
local stations with any other programming, whether broadcast or non-
broadcast. The comparability standard for satellite compares carriage 
of mandatory carriage local stations to local stations carried pursuant 
to retransmission consent. This comparability standard for satellite 
carriers is also consistent with the Act's requirement for 
nondiscriminatory carriage of local broadcast signals. We find that the 
approach taken by the Commission in 2000 remains appropriate as we 
approach the conclusion of the full-power digital transition. Thus, in 
order to provide for rules comparable to those of cable and consistent 
with the Commission's 2000 approach, we will continue to require 
satellite carriers to carry each digital broadcast station in the 
market in the same manner, including carriage of HD signals in HD 
format if any broadcaster in the same market is carried in HD.

C. HD Carry-One, Carry-All Phase-In

    7. We recognize that satellite carriers face unique capacity, 
uplink, and ground facility construction issues that must be factored 
into the timing of any HD ``carry-one, carry-all'' requirement. In 
recognition of the necessity for additional bandwidth to provide HD 
carry-one, carry-all, DIRECTV and DISH Network have submitted a joint 
proposal detailing a four-year phase-in period, starting in 2009, 
during which markets would be progressively transitioned to HD carry-
one, carry-all. This proposal is designed to provide DIRECTV and DISH 
Network time to address satellite capacity issues inherent in providing 
HD carry-one, carry-all service.
    8. We find the satellite carriers' proposal to be reasonable and 
technically sound. Satellite carriers have documented in the record 
that immediate HD carriage requirements would slow the rollout of HD 
markets and limit the number of markets that can be launched. The 
record is persuasive that subscribers would be harmed by requirements 
that take effect on February 18, 2009, if satellite carriers are forced 
to drop other programming, including broadcast stations now carried in 
HD pursuant to retransmission consent, in order to free capacity or if 
they are inhibited from adding new local-into-local markets. Therefore, 
because of the serious technical difficulties that we find satellite 
carriers face, we will permit them to ``phase-in'' their carriage of 
all HD signals on a market-by-market basis. Specifically, we conclude 
that by February 17, 2010, a satellite carrier must provide carriage of 
HD broadcast stations, in HD, in at least 15% of the markets in which 
they carry any station pursuant to the statutory copyright license in 
HD. This ``HD carry-one, carry-all'' requirement will apply to 30% of a 
satellite carrier's HD markets no later than February 17, 2011, 60% no 
later than February 17, 2012, and 100% by February 17, 2013. Satellite 
carriers are required to carry each digital broadcast station in the 
market in the same manner, including carriage of HD signals in HD 
format if any local station in the same market is carried in HD. In 
addition, satellite carriers will be required to notify all local 
stations in a market at least 60 days prior to their launch of HD 
carry-one, carry-all in that market. Our decision implements the 
statutory requirements in light of the severe technical limitations 
faced by satellite carriers.
    9. Comparability to cable drives the development of DBS rules, but 
we are conscious that comparable is not the same as identical. We 
believe that the comparability standard permits a reasonable phase-in 
period. A significant number of the comments in the record developed in 
response to the FNPRM advocate and emphasize the importance of 
comparability. Other commenters, however, caution that rules based on 
cable ``comparability'' should not ignore the legitimate technical 
challenges faced by satellite carriers, which differ significantly from 
those faced by cable operators. We agree that there are important 
differences between the two services. As cable providers transition 
from providing analog signals to providing digital standard definition 
and high definition signals, they realize significant benefits in 
spectrum efficiency. Where a cable operator previously carried a single 
analog standard stream, post-transition they potentially carry ten 
digital standard definition streams, two high definition streams, or 
some combination of standard and high definition streams. In contrast, 
DBS service has always been transmitted as a digital signal. 
Consequently, satellite carriers realize a net loss in the total number 
of program streams they may carry in a given bandwidth as they 
transition from standard definition to high definition signals. Where a 
satellite carrier previously carried approximately four standard 
definition streams, it is now capable of carrying only one high 
definition stream. Advanced technologies such as 8PSK modulation, DVB-
S2, and advances in digital compression technology, such as MPEG-4 AVC/
H.264 and Windows Media Video 9, could potentially increase satellite 
capacity. However, these likely improvements will be unable to 
compensate for the inherent differences in the nature of the transition 
from standard to high definition programming for satellite carriers.
    10. Due to the time required to design, construct, and place in 
service new satellite capacity, as well as the required ground 
facilities to receive these new digital signals and uplink them to 
their satellites, satellite carriers must plan capacity availability 
many years in advance. Currently, DISH Network is providing service 
using most of its licensed transponders at all of its licensed orbital 
locations. DIRECTV is also facing bandwidth limitations, in part due to 
post launch issues with satellite DIRECTV 10 and the delay of satellite 
DIRECTV 11's launch. In order to meet the requirements of HD carry-one, 
carry-all for all markets, both DIRECTV and DISH Network assert that 
they will be required to launch additional satellites. DISH Network 
February 11, 2008, ex parte at 1. DISH Network asserts that it will 
require three additional satellites to meet its obligations. DIRECTV 
asserts that it will need at least one more satellite, in addition to 
the two already planned, to

[[Page 24505]]

comply with an HD carry-one, carry-all requirement and that operation 
in the ``reverse band'' (17/24 GHz) or more Ka band spectrum will be 
necessary. DIRECTV March 10, 2008, ex parte at 1 and DIRECTV February 
13, 2008, ex parte at 1-2. DIRECTV has recently launched DIRECTV 11, 
which will expand its DBS capacity. DISH Network considers its next two 
satellites as replacements for existing satellites in its fleet, and 
expects little additional capacity as a result. As both parties have 
attested, satellite construction and launch is a lengthy process, 
generally taking approximately four years. Both parties have 
applications for satellites in the new 17/24 GHz BSS service, but these 
applications are currently pending and it is expected that the 
construction of the 17/24 GHz BSS satellites will take three years or 
longer.
    11. Further, for satellite carriers, the capacity used for local 
channels is separate from the capacity used for national channels and 
the two are generally not interchangeable. As a result, even if a local 
station is not presently broadcasting in HD or is only broadcasting a 
minimal amount of HD programming, a satellite carrier must set aside 
capacity when planning new satellite construction to accommodate the 
possibility of future HD programming. This capacity would go unused, or 
lie fallow, until the stations are actually broadcasting in HD. 
Reservation of otherwise unused ``fallow bandwidth'' is particularly 
burdensome because a higher percentage of a satellite carrier's 
capacity is dedicated to local channel carriage relative to the 
percentage necessary for a cable operator. Thus, while the combined 
bandwidth of the satellite carriers' entire fleets are substantially 
larger than that of a cable provider's plant, neither DIRECTV's nor 
EchoStar's current fleet is capable of carrying in HD all the local 
stations of all the local-into-local markets they currently serve.
    12. The record shows that satellite carriers have legitimate 
capacity concerns at this time. A phased-in HD carriage requirement 
would not only give satellite carriers time to increase their capacity, 
but might also alleviate the problem of potential wasted capacity that 
might occur from bandwidth lying fallow. At this time, many stations, 
particularly those not affiliated with the top four networks, are 
broadcasting relatively little or no HD programming. We believe the 
demand for such programming will increase as more consumers purchase HD 
equipment spurred on by falling equipment costs and a broader choice of 
available programming. With increased demand and assurance of future 
satellite carriage, broadcasters will be more likely to invest the 
funds necessary to begin HD broadcasting. A phased-in HD carriage 
requirement with a defined time schedule will encourage broadcasters in 
their HD efforts as well as help satellite carriers avoid having to 
reserve capacity for stations not ready to use it.
    13. We adopt the phase-in schedule for satellite carriage of all HD 
signals in part to afford satellite carriers the time and flexibility 
to launch local-into-local service in more markets. They will be 
working on a wide array of technical issues as they develop HD carry-
one, carry-all for their HD markets, and we strongly encourage them to 
keep nationwide service in mind as they design, develop, and plan the 
use of their capacity.
    14. Although we do not adopt rules in this Order requiring the 
expansion of local-into-local service by satellite carriers, we 
recognize that the availability of local broadcast signals in markets 
unserved by satellite would constitute a significant consumer benefit. 
Currently 182 of 210 United States market areas have local-into-local 
service from at least one of the national satellite carriers. 
Satellite-delivered local-into-local service throughout the nation 
would promote competition, localism, and diversity, particularly where 
broadcast signals cannot be received off-air. In those areas, residents 
are dependent on cable--where available--for the important local news, 
weather, and emergency information provided by local broadcasters. 
Thus, expanded satellite-delivered local-into-local service in all 210 
television markets would serve the public interest.

D. Other Issues

    15. Carriage Election. Pursuant to the Commission's decision in 
this Order, in any market in which a satellite carrier is currently 
offering or in the future offers local-into-local service pursuant to 
the statutory copyright license in 17 U.S.C. 122, it must carry 
digital-only stations in that market upon request. In markets currently 
subject to ``carry-one, carry-all,'' the rules pertaining to new 
stations will govern carriage elections for digital-only stations 
(whether new stations or stations that have returned their analog 
spectrum) and satellite carriers. We do not believe it is necessary to 
amend the rule concerning new stations, but we determine in this Order 
that a station that turns off its analog signal and returns its 
licensed spectrum to the Commission and commences operation in digital-
only prior to January 1, 2009, constitutes a ``new station'' for 
purposes of this rule. For markets in which local-into-local service is 
initiated after the release of this Order, stations and carriers should 
follow the rules for ``new local-into-local service.'' By operation of 
this Order, digital-only stations are entitled to request carriage.
    16. In compliance with the statutory mandate in section 325 of the 
Act, the Commission established a regular schedule for carriage 
elections. In accordance with this schedule, the Act requires 
broadcasters to elect, by October 1, 2008, whether they wish to engage 
in retransmission consent negotiations with satellite carriers or 
request mandatory carriage for the three-year period beginning January 
1, 2009. We conclude here that if a station elects must carry on 
October 1, 2008, for the 2009-2011 carriage cycle, satellite carriers 
must provide carriage of the station's analog signal beginning (or 
continuing) on January 1, 2009, and concluding no earlier than the 
actual termination of analog service by that broadcaster. Once the 
station terminates analog service and begins broadcasting in digital, 
the carrier shall commence carriage of the station's digital signal 
without any gap in carriage. To facilitate carriage and the final 
transition process, beginning January 1, 2009, satellite carriers must 
immediately commence carriage of the digital signal of stations that 
cease analog broadcasting prior to the February 17, 2009, statutory 
deadline; provided, however, that broadcasters must notify the 
satellite carrier(s) on or before October 1, 2008, of the date on which 
they anticipate termination of their analog signal if it will be 
earlier than February 17, 2009.
    17. Program-Related. The Commission's rules for satellite carriage, 
adopted to implement section 338(j) of the Act, include the same 
program-related requirements as apply to cable. We conclude that 
certain over-the-air digital services, such as closed-captioning 
information and V-chip information, are sufficiently and 
incontrovertibly related to the broadcaster's primary digital video 
programming such that satellite carriers will be required to carry them 
when they carry a digital-only station (as we also require in the cable 
context).
    18. Signal Quality. With respect to signal quality, because 
broadcast of digital signals differs from broadcast of analog signals, 
we must adjust the requirement for a good quality signal. In the 
context of cable carriage, the Commission has stated that the signal 
level necessary to provide a good quality digital television signal at 
a

[[Page 24506]]

cable system's principal headend is -61 dBm. Broadcast stations must 
similarly deliver a good quality signal to a satellite carrier's 
designated local receive facility. For purposes of carriage by 
satellite carriers, we determine that -61 dBm is the signal level 
necessary to provide a good quality digital television signal at a 
satellite carrier's local receive facility. This is the same digital 
signal quality standard that our rules require in the cable context, 
and is consistent with our adoption of the same analog signal level for 
satellite as we used for cable carriage of analog signals. The 
technology available to cable carriers for digital television signal 
reception is also available to satellite carriers, and there is nothing 
in the record to suggest that satellite carriers would require a 
different digital television signal level to obtain the reception 
quality necessary to carry the digital television signal. We therefore 
adopt this signal level.

IV. Procedural Matters

A. Final Regulatory Flexibility Act Analysis

    19. As required by the Regulatory Flexibility Act of 1980 
(``RFA''), the Commission has prepared a Final Regulatory Flexibility 
Analysis (``FRFA'') relating to this Second Report and Order. The FRFA, 
which was contained in Appendix A of the Report and Order, is set forth 
below.
    20. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was 
incorporated into the Further Notice of Proposed Rulemaking (Further 
NPRM). The Commission sought written public comment on the proposals in 
the Notice, including comment on the IRFA. This present Final 
Regulatory Flexibility Analysis (FRFA) conforms to the RFA.
1. Need for, and Objectives of, the Report and Order
    21. This Report and Order adopts rules requiring satellite carriers 
to carry digital-only stations upon request in markets in which they 
are providing any local-into-local service pursuant to the statutory 
copyright license, and to require carriage of all high definition 
(``HD'') signals in a market in which any station's signals are carried 
in HD. In recognition of the capacity and technological constraints 
faced by satellite carriers, the latter requirement will be phased-in 
over a four-year period. Our goals in adopting these rules are to 
facilitate the nation's transition to digital broadcast television; to 
ensure that satellite subscribers will be able to experience the 
benefits of the digital transition by continued access to broadcast 
signals after the digital transition; and to ensure consistency with 
section 338's instructions that the Commission implement comparable, 
rather than identical, carriage rules between cable and DBS.
2. Summary of Issues Raised by Public Comments in Response to the IRFA
    22. None.
3. Description and Estimate of the Number of Small Entities to Which 
the Report and Order Will Apply
    23. The RFA directs the Commission to provide a description of and, 
where feasible, an estimate of the number of small entities that will 
be affected by the rules adopted herein. 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 Small Business 
Administration (SBA). The rules adopted herein will directly affect 
small television broadcast stations and small satellite carriers. A 
description of these small entities, as well as an estimate of the 
number of such small entities, is provided below.
    24. Television Broadcasting. The SBA defines a television 
broadcasting station as a small business if such station has no more 
than $13.0 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 commercial television stations to be 1,376. According to 
Commission staff review of the BIA Publications, Inc. Master Access 
Television Analyzer Database (BIA) on March 30, 2007, about 986 of an 
estimated 1,374 commercial television stations (or approximately 72 
percent) have revenues of $13.0 million or less and thus qualify as 
small entities under the SBA definition. We note, however, that, in 
assessing whether a business concern qualifies as small under the above 
definition, business (control) affiliations must be included. Our 
estimate, therefore, likely overstates the number of small entities 
that might be affected by our action, because the revenue figure on 
which it is based does not include or aggregate revenues from 
affiliated companies. The Commission has estimated the number of 
licensed noncommercial educational (NCE) television stations to be 380. 
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.
    25. In addition, an element of the definition of ``small business'' 
is that the entity not be dominant in its field of operation. We are 
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 are 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. We note that it is difficult at times 
to assess these criteria in the context of media entities and our 
estimates of small businesses to which they apply may be over-inclusive 
to this extent.
    26. Satellite Carriers. The term ``satellite carrier'' includes 
entities providing services as described in 17 U.S.C. 119(d)(6) using 
the facilities of a satellite or satellite service licensed under Part 
25 of the Commission's rules to operate in Direct Broadcast Satellite 
(DBS) or Fixed-Satellite Service (FSS) frequencies. As a general 
practice, not mandated by any regulation, DBS licensees usually own and 
operate their own satellite facilities as well as package the 
programming they offer to their subscribers. In contrast, satellite 
carriers using FSS facilities often lease capacity from another entity 
that is licensed to operate the satellite used to provide service to 
subscribers. These entities package their own programming and may or 
may not be Commission licensees themselves. In addition, a third 
situation may include an entity using a non-U.S. licensed satellite to 
provide programming to subscribers in the United States pursuant to a 
blanket earth station license. Since 2007, the SBA has recognized 
satellite television distribution services within the broad economic 
census category of 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. The most current Census 
Bureau data, however, are from the last economic census of 2002, and we 
will use those figures to gauge the prevalence of small businesses in 
this

[[Page 24507]]

category. Those size standards are for the two census categories of 
``Satellite Telecommunications'' and ``Other Telecommunications.'' 
Under both prior categories, such a business was considered small if it 
had $13.5 million or less in average annual receipts.
    27. Direct Broadcast Satellite (DBS) Service. DBS service is a 
nationally distributed subscription service that delivers video and 
audio programming via satellite to a small parabolic ``dish'' antenna 
at the subscriber's location. Because DBS provides subscription 
services, DBS falls within the SBA-recognized definition of Wired 
Telecommunications Carriers. However, as discussed above, we rely on 
the previous size standard, Cable and Other Subscription Programming, 
which provides that a small entity is one with $13.5 million or less in 
annual receipts. Currently, only two operators--DirecTV and EchoStar 
Communications Corporation (``EchoStar'')--hold licenses to provide DBS 
service, which requires a great investment of capital for operation. 
Both currently offer subscription services and report annual revenues 
that are in excess of the threshold for a small business. Because DBS 
service requires significant capital, we believe it is unlikely that a 
small entity as defined by the SBA would have the financial wherewithal 
to become a DBS licensee. Nevertheless, given the absence of specific 
data on this point, we acknowledge the possibility that there are 
entrants in this field that may not yet have generated $13.5 million in 
annual receipts, and therefore may be categorized as a small business, 
if independently owned and operated.
    28. Fixed-Satellite Service (``FSS''). The FSS is a 
radiocommunication service between earth stations at a specified fixed 
point or between any fixed point within specified areas and one or more 
satellites. The FSS, which utilizes many earth stations that 
communicate with one or more space stations, may be used to provide 
subscription video service. Therefore, to the extent FSS frequencies 
are used to provide subscription services, FSS falls within the SBA-
recognized definition of Wired Telecommunications Carriers. However, as 
discussed above, we rely on the previous size standard, Cable and Other 
Subscription Programming, which provides that a small entity is one 
with $13.5 million or less in annual receipts. Although a number of 
entities are licensed in the FSS, not all such licensees use FSS 
frequencies to provide subscription services. Both of the DBS licensees 
(EchoStar and DirecTV) have indicated interest in using FSS frequencies 
to broadcast signals to subscribers. It is possible that other entities 
could similarly use FSS frequencies, although we are not aware of any 
entities that might do so.
4. Description of Projected Reporting, Record Keeping, and Other 
Compliance Requirements for Small Entities
    29. The rules adopted by this Report and Order primarily impose 
requirements on satellite carriers, and as discussed above few if any 
satellite carriers qualify as small entities. They require satellite 
carriers to carry digital-only stations upon request in markets in 
which they are providing any local-into-local service pursuant to the 
statutory copyright license, and require carriage of all HD signals in 
a market in which any station's signals are carried in HD. The carriage 
election rule requires notice to satellite carriers from broadcasters, 
including small broadcasters, but the Report and Order makes no changes 
to the rule. The one-time requirement that broadcasters notify 
satellite carriers of their station's transition date when making their 
carriage election is a de minimis additional burden on small 
broadcasters.
5. Steps Taken To Minimize Significant Impact on Small Entities, and 
Significant Alternatives Considered
    30. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include the following four alternatives (among others): (1) 
The establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities.
    31. As a result of these rules, any small satellite carriers will 
face additional costs if they choose to provide local-into-local 
service, in that these rules impose additional requirements on the 
provision of local-into-local service, compliance with which will 
require the use of more technical capability than would otherwise have 
been the case. We note that these costs will not be any greater for 
small than for large companies, and we find that these rules are 
necessary in order to achieve the Commission's goals, discussed above.
    32. As noted above, any additional costs borne by small 
broadcasters will be de minimis, consisting solely of additional 
information being provided in an existing communication. Furthermore, 
this additional information is designed to benefit broadcasters, by 
ensuring that their signals are carried without interruption after the 
transition. Thus, no alternative rule would be appropriate.
6. Report to Congress
    33. The Commission will send a copy of the Second Report and Order, 
including this FRFA, in a report to be sent to Congress and the 
Government Accountability Office pursuant to the Congressional Review 
Act. In addition, the Commission will send a copy of the Second Report 
and Order, including this FRFA, to the Chief Counsel for Advocacy of 
the SBA. A copy of the Second Report and Order and FRFA (or summaries 
thereof) will also be published in the Federal Register.

B. Paperwork Reduction Act of 1995 Analysis

    34. The Second Report and Order has been analyzed with respect to 
the Paperwork Reduction Act of 1995 (``PRA''). This document contains 
new information collection requirements (section 76.66(b)(1), section 
76.66(d)(2)(vi) and the non-rule requirement at paragraph 16 of this 
document) subject to the Paperwork Reduction Act of 1995, Public Law 
104-13. The information collection requirements contained in this 
document will be submitted to the Office of Management and Budget 
(``OMB'') for review under section 3507(d) of the PRA. OMB, the general 
public, and other Federal agencies will be invited to comment on the 
new information collection requirements contained in this proceeding. 
In addition, we note that, pursuant to the Small Business Paperwork 
Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we 
have assessed ``the information collection burden for small business 
concerns with fewer than 25 employees.'' We find that there is unlikely 
to be an increased administrative burden on businesses with fewer than 
25 employees. Although we believe that some small business concerns 
with fewer than 25 employees will be impacted by the rules adopted 
herein, we do not believe that the requirements imposed in this 
document will create an information collection burden for these 
entities.

[[Page 24508]]

C. Congressional Review Act

    35. The Commission will include a copy of this Second Report and 
Order and Memorandum Opinion and Order in a report to be sent to 
Congress and the Government Accountability Office pursuant to the 
Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

D. Additional Information

    36. For more information on this Second Report and Order, please 
contact Lyle Elder, Lyle.Elder@fcc.gov, or Eloise Gore, 
Eloise.Gore@fcc.gov, of the Media Bureau, Policy Division, (202) 418-
2120.

V. Ordering Clauses

    37. Accordingly, It is ordered, that, pursuant to authority found 
in sections 4(i), 4(j), 303(r), 325, 336, 338, 614, and 615 of the 
Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 
303(r), 325, 336, 338, 534, and 535, this Second Report and Order is 
hereby adopted and the Commission's Rules are hereby amended as set 
forth in Appendix C of this Order. Section 76.66(k) is effective June 
4, 2008. 47 CFR 76.66(b)(1) and 47 CFR 76.66(d)(2)(vi) contain new 
information collection requirements under the PRA and shall not be 
effective until the FCC publishes a document in the Federal Register 
announcing OMB approval of the effective date of these information 
collections.
    38. It is further ordered that a station that commences operation 
as digital-only after this Second Report and Order is effective but 
before January 1, 2009, either because it is licensed to broadcast only 
a digital signal or because it turns off its analog signal and returns 
its licensed spectrum to the Commission and commences operation in 
digital-only, constitutes a ``new station'' for purposes of section 
76.66(d)(3) of the Commission's Rules, 47 CFR 76.66(d)(3), and may 
request carriage as provided in that rule.
    39. It is further ordered that the Consumer and Governmental 
Affairs Bureau, Reference Information Center, shall send a copy of this 
Second Report and Order, Memorandum Opinion and Order, and Second 
Further Notice of Proposed Rulemaking, including the Final and Initial 
Regulatory Flexibility Analyses, to the Chief Counsel for Advocacy of 
the Small Business Administration.
    40. It is further ordered that the Commission shall send a copy of 
this Second Report and Order and Second Further Notice of Proposed 
Rulemaking in a report to be sent to Congress and the General 
Accountability Office pursuant to the Congressional Review Act, see 5 
U.S.C. 801(a)(1)(A).

List of Subjects in 47 CFR Part 76

    Cable television, Digital television, Multichannel video 
programming distributors, Reporting and recordkeeping requirements.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Final Rules

0
For the reasons discussed in the preamble, the Federal Communications 
Commission amends 47 part 76 as follows:

PART 76--MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE

0
1. The authority citation for part 76 continues to read as follows:

    Authority: 47 U.S.C. 151, 152, 153, 154, 301, 302, 303, 303a, 
307, 308, 309, 312, 315, 317, 325, 336, 339, 503, 521, 522, 531, 
532, 533, 534, 535, 536, 537, 543, 544, 544a, 545, 548, 549, 552, 
554, 556, 558, 560, 561, 571, 572, 573.

0
2. Section 76.66 is amended by revising paragraph (b)(1), by adding 
paragraph (d)(2)(vi), and by revising paragraph (k) to read as follows:


Sec.  76.66  Satellite broadcast signal carriage.

* * * * *
    (b) * * *
    (1) Each satellite carrier providing, under section 122 of title 
17, United States Code, secondary transmissions to subscribers located 
within the local market of a television broadcast station of a primary 
transmission made by that station, shall carry upon request the signals 
of all television broadcast stations located within that local market, 
subject to section 325(b) of title 47, United States Code, and other 
paragraphs in this section. Satellite carriers are required to carry 
digital-only stations upon request in markets in which the satellite 
carrier is providing any local-into-local service pursuant to the 
statutory copyright license.
* * * * *
    (d) * * *
    (2) * * *
    (vi) Satellite carriers shall notify all local stations in a market 
of their intent to launch HD carry-one, carry-all in that market at 
least 60 days before commencing such carriage.
* * * * *
    (k) Material degradation. (1) Each local television station whose 
signal is carried under mandatory carriage shall, to the extent 
technically feasible and consistent with good engineering practice, be 
provided with the same quality of signal processing provided to 
television stations electing retransmission consent, including carriage 
of HD signals in HD if any local station in the same market is carried 
in HD. A satellite carrier is permitted to use reasonable digital 
compression techniques in the carriage of local television stations.
    (2) Satellite carriers must provide carriage of local stations' HD 
signals if any local station in the same market is carried in HD, 
pursuant to the following schedule:
    (i) In at least 15% of the markets in which they carry any station 
pursuant to the statutory copyright license in HD by February 17, 2010;
    (ii) In at least 30% of the markets in which they carry any station 
pursuant to the statutory copyright license in HD no later than 
February 17, 2011;
    (iii) In at least 60% of the markets in which they carry any 
station pursuant to the statutory copyright license in HD no later than 
February 17, 2012; and
    (iv) In 100% of the markets in which they carry any station 
pursuant to the statutory copyright license in HD by February 17, 2013.
* * * * *
[FR Doc. E8-9739 Filed 5-2-08; 8:45 am]

BILLING CODE 6712-01-P