[Federal Register Volume 62, Number 95 (Friday, May 16, 1997)]
[Rules and Regulations]
[Pages 26966-26992]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 97-12527]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 73

[MM Docket No. MM 87-268; FCC 97-116]


Advanced Television Systems

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: This Report and Order amends the Commission's rules by 
adopting service rules to implement digital television. The intended 
effect of this action is to promote rapid conversion to and 
implementation of digital television. This Report & Order contains new 
or modified information collections subject to the Paperwork Reduction 
Act of 1995 (PRA), 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 are 
invited to comment on the new or modified information collections 
contained in this proceeding.

DATES: Effective Dates: The new rules are effective June 16, 1997. 
Written comments by the public on the new and/or modified information 
collections are due July 15, 1997.


[[Page 26967]]


ADDRESSES: In addition to filing comments with the Secretary, a copy of 
any comments on the information collections contained herein should be 
submitted to Judy Boley, Federal Communications Commission, Room 234, 
1919 M Street, N.W., Washington, DC 20554, or via the Internet to 
jboley@fcc.gov.

FOR FURTHER INFORMATION CONTACT: Saul Shapiro, Mass Media Bureau, (202) 
418-2600, Gretchen Rubin, Mass Media Bureau, Policy and Rules Division, 
(202) 418-2120; Mania K. Baghdadi, Mass Media Bureau, Policy and Rules 
Division, Legal Branch, (202) 418-2130; Dan Bring, Mass Media Bureau, 
Policy and Rules Division, Policy Analysis Branch, (202) 418-2170, or 
Gordon Godfrey, Mass Media Bureau, Policy and Rules Division, 
Engineering Policy Branch, (202) 418-2190. For additional information 
concerning the information collections contained in this Report and 
Order contact Judy Boley at 202-418-0214, or via the Internet at 
jboley@fcc.gov.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's Fifth 
Report and Order in MM Docket No. 87-268; FCC 97-116, adopted April 3, 
1997 and released April 21, 1997. The full text of this Commission 
decision is available for inspection and copying during normal business 
hours in the FCC Reference Center (Room 239), 1919 M Street, N.W., 
Washington, D.C., and also may be purchased from the Commission's copy 
contractor, International Transcription Service, Inc., 2100 M Street, 
N.W., Suite 140, Washington, D.C., 20037, (202) 857-3800.

Synopsis of Report and Order

I. Introduction

    1. Television has played a critical role in the United States in 
the second half of the twentieth century. A technological 
breakthrough--digital television--now offers the opportunity for 
broadcast television service to meet the competitive and other 
challenges of the twenty-first century.1
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    \1\ This Fifth Report and Order follows the adoption of a 
standard for the transmission of digital television. Fourth Report 
and Order (62 FR 14006, March 25, 1997) in MM Docket No. 87-268, 11 
FCC Rcd 17771 (1996) (``Fourth Report and Order''). We have 
previously issued the following documents in this proceeding. Notice 
of Inquiry (52 FR 34259, September 10, 1987) in MM Docket No. 87-
268, 2 FCC Rcd 5125, 5127 (1987) (``First Inquiry''); Tentative 
Decision and Further Notice of Inquiry in MM Docket No. 87-268, 3 
FCC Rcd 6520 (1988) (``Second Inquiry''); First Report and Order (55 
FR 39275, September 26, 1990) in MM Docket No. 87-268, 5 FCC Rcd 
5627 (1990) (``First Order''); Notice of Proposed Rule Making (56 FR 
58207, November 18, 1991) in MM Docket No. 87-268, 6 FCC Rcd 7024 
(1991) (``Notice''); Second Report and Order/Further Notice of 
Proposed Rule Making in MM Docket No. 87-268, 7 FCC Rcd 3340 (1992) 
(``Second Report/Further Notice''); Second Further Notice of 
Proposed Rule Making (57 FR 38652, August 26, 1992) in MM Docket No. 
87-268, 7 FCC Rcd 5376 (1992) (``Second Further Notice''); 
Memorandum Opinion and Order/Third Report and Order/Third Further 
Notice of Proposed Rule Making (57 FR 53588, November 12, 1992) in 
MM Docket No. 87-268, 7 FCC Rcd 6924 (1992) (``Third Report/Further 
Notice''); Fourth Further Notice of Proposed Rule Making/Third 
Notice of Inquiry (60 FR 42130, August 15, 1995) in MM Docket No. 
87-268, 10 FCC Rcd 10541 (1995) (``Fourth Further Notice/Third 
Inquiry''); Fifth Further Notice of Proposed Rule Making (61 FR 
26864, May 29, 1996) in MM Docket No. 87-268, 11 FCC Rcd 6235 (1996) 
(``Fifth Further Notice''); Sixth Further Notice of Proposed Rule 
Making (61 FR 43209, August 21, 1996) in MM Docket No. 87-268, 11 
FCC Rcd 10968 (1996) (``Sixth Further Notice''). We note that we 
also adopt today the Sixth Report and Order, MM Docket No. 87-268, 
FCC 97-115, released April 21, 1997 (``Sixth Report and Order'').
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    2. The Telecommunications Act of 1996 (``1996 Act'') provided that 
initial eligibility for any advanced television licenses issued by the 
Commission should be limited to existing broadcasters, conditioned on 
the eventual return of either the current 6 MHz channel or the new 
digital channel. Today we adopt rules to implement the statute. Our 
rules are designed to give digital television the greatest chance to 
meet its potential. We recognize the challenges that will be faced by 
broadcasters in adopting this new technology. Accordingly, we have 
generally refrained from regulation and have sought to maximize 
broadcasters' flexibility to provide a digital service to meet the 
audience's needs and desires. Where appropriate, however, we have 
adopted rules we believe will ensure a smooth transition to digital 
television for broadcasters and viewers. These rules include an 
aggressive but reasonable construction schedule, a requirement that 
broadcasters continue to provide a free, over-the-air television 
service, and a simulcasting requirement phased in at the end of the 
transition period. Further, we recognize that digital broadcasters 
remain public trustees with a responsibility to serve the public 
interest.

II. Issue Analysis

A. Goals

    3. Digital technology holds great promise. It allows delivery of 
brilliant, high-definition, multiple digital-quality programs, and 
ancillary and supplementary services such as data transfer. In recent 
years, competition in the video programming market has dramatically 
intensified. Cable, Direct Broadcast Satellite (DBS), Local Multipoint 
Distribution System (LMDS), wireless cable, Open Video Systems (OVS) 
providers, and others vie, or will soon vie, with broadcast television 
for audience. Many operators in those services are poised to use 
digital. The viability of digital broadcast television will require 
millions of Americans to purchase digital television equipment. Because 
of the advantages to the American public of digital technology--both in 
terms of services and in terms of efficient spectrum management--our 
rules must strengthen, not hamper, the possibilities for broadcast 
DTV's success.
    4. In the Fourth Further Notice/Third Inquiry (60 FR 42130, August 
15, 1995), we outlined the goals of: ``(1) preserving a free, universal 
broadcasting service; (2) fostering an expeditious and orderly 
transition to digital technology that will allow the public to receive 
the benefits of digital television while taking account of consumer 
investment in NTSC television sets; (3) managing the spectrum to permit 
the recovery of contiguous blocks of spectrum, so as to promote 
spectrum efficiency and to allow the public the full benefit of its 
spectrum; and (4) ensuring that the spectrum--both ATV channels and 
recovered channels--will be used in a manner that best serves the 
public interest.'' In the context of the implementation of a DTV 
standard, we also enumerated the goals: ``(1) to ensure that all 
affected parties have sufficient confidence and certainty in order to 
promote the smooth introduction of a free and universally available 
digital broadcast television service; (2) to increase the availability 
of new products and service to consumers through the introduction of 
digital broadcasting; (3) to ensure that our rules encourage 
technological innovation and competition; and (4) to minimize 
regulation and assure that any regulations that we do adopt remain in 
effect no longer than necessary.'' These goals can be distilled into 
the two essential objectives that underlie the decisions we make today.
    5. First, we wish to promote and preserve free, universally 
available, local broadcast television in a digital world. Only if DTV 
achieves broad acceptance can we be assured of the preservation of 
broadcast television's unique benefit: free, widely accessible 
programming that serves the public interest. DTV will also help ensure 
robust competition in the video market that will bring more choices at 
less cost to American consumers. Particularly given the intense 
competition in video programming, and the move by other video 
programming providers to adopt digital technology, it is desirable to 
encourage broadcasters to offer digital

[[Page 26968]]

television as soon as possible. We make decisions today designed to 
promote the viability of digital television services. Digital 
broadcasters must be permitted the freedom to succeed in a competitive 
market, and by doing so, attract consumers to digital. In addition, 
broadcasters' ability to adapt their services to meet consumer demand 
will be critical to a successful initiation of DTV.
    6. Second, we wish to promote spectrum efficiency and rapid 
recovery of spectrum. Decisions that promote the success of digital 
television--our first goal--promote this goal as well. The more quickly 
that broadcasters and consumers move to digital, the more rapidly 
spectrum can be recovered and then be reallocated or reassigned, or 
both. The faster broadcasters roll out digital television, the earlier 
we can recover spectrum.
    7. Our decisions today further these goals. They ensure that 
broadcasters have more flexibility in their business. Broadcasters will 
be able to experiment with innovative offerings and different service 
packages as they continue to provide at least one free program service 
and meet their public-interest obligations. We choose to impose few 
restrictions on broadcasters and to allow them to make decisions that 
will further their ability to respond to the marketplace. We leave to 
broadcasters' business judgment such decisions as whether to provide 
high definition television or whether, initially, to simulcast the NTSC 
stream on DTV, and what and how many ancillary and supplementary 
services to provide. To aid the launch of digital services, we provide 
for a rapid construction of digital facilities by network-affiliated 
stations in the top markets, in order to expose a significant number of 
households, as early as possible, to the benefits of DTV. We require 
those most able to bear the risks of introducing digital television to 
proceed most quickly. Our decisions here will foster the swift 
development of DTV, which should enable us to meet our target of ending 
NTSC service by 2006. To permit careful monitoring of the development 
of digital television and an opportunity to reassess the decisions we 
make today, we intend to conduct a review of DTV every two years until 
the cessation of NTSC service.

B. Channel Bandwidth

    8. Background. In the Fourth Further Notice/Third Inquiry, (60 FR 
42130, August 15, 1995), we noted that we had previously decided that 
DTV would be introduced by assigning existing broadcasters a temporary 
channel on which to operate a DTV station during the transition 
period.2 We also noted that the DTV transmission system was 
designed for a 6 MHz channel and added that ``we continue to believe 
that providing 6 MHz channels for ATV purposes represents the optimum 
balance of broadcast needs and spectrum efficiency.'' 3 
Nonetheless, we invited comment on any means of achieving greater 
spectrum efficiency, and, in this section, we will discuss whether 6 
MHz channels should be allotted.
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    \2\ Fourth Further Notice/Third Inquiry, (60 FR 42130, August 
15, 1995) supra at 10543. We decided to continue use of the 6 MHz 
channel early in this proceeding. Third Report/Further Notice (57 FR 
53588, November 12, 1992), supra at 6926; see also First Order, 
supra at 5627-29.
    \3\ Fourth Further Notice/Third Inquiry (60 FR 42130, August 15, 
1995), supra at 10543. Indeed, the DTV Standard subsequently adopted 
in the Fourth Report and Order (62 FR 14006, March 25, 1997) (``DTV 
Standard'') is predicated upon the use of a 6 MHz channel.
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    9. Comments. All broadcasters filing comments support affording a 
second 6 MHz channel per broadcaster for DTV. Joint Broadcasters, for 
example, state that the entire 6 MHz is required; assigning less would 
deprive the public of HDTV and set back the transition, because the 
Grand Alliance system presupposes 6 MHz channels, and anything 
different would require an entirely new design and testing program. 
Additionally, equipment manufacturers generally support the provision 
of 6 MHz channels for DTV purposes, noting that 6 MHz of spectrum is 
required for HDTV broadcasts.
    10. However, Media Access Project, et al. (``MAP'') argues that the 
Commission should provide broadcasters only enough spectrum to provide 
one ``free'' digital program service, either by allocating less than 6 
MHz channels to broadcasters, by allocating the spectrum to others and 
only affording broadcasters ``must carry'' rights; or by allocating the 
spectrum to broadcasters but requiring them to lease out excess 
capacity to unaffiliated programmers. Further, Home Box Office 
(``HBO'') asserts that if the Commission determines that the public 
interest demands Standard Definition Television (``SDTV'') or other 
auxiliary applications, it must take another look at whether an entire 
6 MHz slice of new spectrum should go to incumbent broadcasters.
    11. Decision. We invited comment in the Fourth Further Notice/Third 
Inquiry (60 FR 42130, August 15, 1995) on any means of achieving 
greater spectrum efficiency. Based on the comments, we continue to 
believe that providing 6 MHz channels for DTV purposes ``represents the 
optimum balance of broadcast needs and spectrum efficiency.'' We do not 
believe that greater spectrum efficiency can be achieved by adopting a 
different channel size. Indeed, use of 6 MHz channels would facilitate 
spectrum efficiency because making the DTV channel the same width as 
the analog channel will afford greater flexibility at the end of the 
transition in terms of the choice of channel the broadcaster retains 
for DTV purposes.
    12. Moreover, contrary to those comments that disagreed with 
allotting 6 MHz channels for DTV, we believe that the use of 6 MHz 
channels is necessary to provide viewers and consumers the full 
benefits of digital television made possible by the DTV Standard, 
including high definition television (``HDTV''), standard definition 
television, and other digital services. The DTV Standard was premised 
on the use of 6 MHz channels. To specify a different channel size at 
this late date would not promote our goals in adopting the DTV Standard 
and would prolong the conversion to DTV. Specifically, we believe that 
failing to specify a 6 MHz channel would undermine our goals, expressed 
in the Fourth Report and Order (62 FR 14006, March 25, 1997), of 
fostering an expeditious and orderly transition to digital technology 
and managing the spectrum to permit the recovery of contiguous blocks 
of spectrum and promote spectrum efficiency. The conversion to DTV 
would undoubtedly be significantly delayed if we set aside the 
longstanding expectations of the parties, on which they have based the 
technology and established their plans, and specified a different 
channel bandwidth. Accordingly, we reaffirm our earlier judgment and 
will allot 6 MHz channels for DTV.

C. Eligibility

    13. Background. We proposed to limit initial eligibility for DTV 
channels to existing broadcasters. Our proposed criteria for existing 
broadcasters included full-service television broadcast station 
licensees, permittees authorized as of October 24, 1991, and parties 
with applications for a construction permit on file as of October 24, 
1991, who are ultimately awarded a full-service broadcast license. 
After release of the Fourth Further Notice/Third Inquiry (60 FR 42130, 
August 15, 1995), Congress statutorily addressed eligibility in the 
1996 Act. Congress instructed the Commission to limit the initial 
eligibility for advanced television licenses to persons that, as of the 
date

[[Page 26969]]

of the issuance of the licenses, are licensed to operate a television 
broadcast station or hold a permit to construct such a station. The 
1996 Act did not change the fact that the Commission lacks statutory 
authority to auction broadcast spectrum.
    14. Comments. We sought comment on the potential impact of the 
eligibility restriction on the Commission's policy of fostering 
programming and ownership diversity. Few commenters address this topic. 
However, some commenters address the basic issue of the eligibility 
restriction. For example, some argue that allowing broadcasters to 
offer subscription services without opening up that opportunity to 
competitors would violate the legal principles enunciated in Ashbacker 
Radio Corporation v. FCC, 326 U.S. 327 (1945), discussed below. Others 
maintain that the Commission faces an Ashbacker problem unless it 
mandates that broadcasters provide HDTV. General Instrument argues that 
``allowing existing broadcasters too much ``flexible use' of the 6 MHz 
ATV allocation raises the Ashbacker problem by changing the primary 
service provided rather than merely modifying existing licenses,'' but 
that the Commission could avoid Ashbacker problems by requiring that 
the predominant use of the DTV spectrum be for HDTV transmission. HBO 
argues that if we were to allow the DTV channel to be put to uses other 
than HDTV, for which broadcasters have no more established interest or 
expertise than potential competing applicants, the public interest 
rationale for granting the spectrum to incumbents without a competitive 
process would evaporate.
    15. Another eligibility issue raised by commenters concerns the 
restriction of initial eligibility to full-service licensees. LPTV 
commenters such as Abacus Television point out the contribution that 
LPTV stations make in providing television service to underserved areas 
as well as the local and specialized nature of the services they 
provide. These comments also contend that the Commission has long found 
that diversification of mass media ownership serves the public interest 
by promoting diversity of program and service viewpoints and by 
preventing undue concentration of economic power. According to Abacus 
Television, excluding LPTV from the analog to digital transition would 
undermine these principles. Further, Abacus argues, it would exclude 
the vast majority of minority television licensees and permittees and 
is antithetical to increasing ownership diversity. Abacus argues that 
the Commission should perform a market-by-market analysis to determine 
which LPTV stations could be accommodated; absent that, it could 
minimize the effect on LPTV stations by adding a second phase to the 
process of creating a Table of Allotments to address the accommodation 
of LPTV service next, after it has begun the conversion process for 
full power television licensees. It offers suggestions on how to carry 
out this phase. WatchTV, Inc. also argues that the Commission should 
make unused digital channels available to existing low power operators 
on the same terms and conditions as it may adopt for small market 
broadcasters and educational licensees before it allows new entrants to 
apply. Additionally, White Eagle Partners believes that LPTV stations 
should be eligible to receive 6 MHz DTV channels.
    16. Still other LPTV commenters argue that neither LPTV stations 
nor full service stations should be afforded a second 6 MHz channel. 
Community Broadcasters Association (``CBA'') believes that a dual 
channel DTV scenario would be an inefficient use of spectrum, requiring 
not only immense private investment, but also leading to a host of 
logistical and other problems that will negate many of the benefits of 
DTV. CBA argues that full power and LPTV stations should be permitted 
to convert to DTV on their present channel at any time.
    17. Decision. In the 1996 Act, Congress specifically addressed the 
eligibility issue. Congress provided that the Commission ``should limit 
the initial eligibility for [DTV] licenses to persons that, as of the 
date of such issuance, are licensed to operate a television broadcast 
station or hold a permit to construct a station (or both) * * *. '' In 
comments filed before passage of the 1996 Act, some parties argue that 
granting incumbent broadcasters the exclusive right to apply for the 
DTV spectrum raises potential problems under Ashbacker Radio 
Corporation v. FCC, 326 U.S. 327 (1945), and its progeny. Other 
commenters argue similarly that Ashbacker concerns are raised unless 
the Commission imposes an HDTV mandate. However, given Congress' 
explicit direction, there is now no statutory basis to question the 
Commission's authority to limit initial eligibility to existing 
broadcasters. Following Congress' direction, we determine that initial 
eligibility should be limited to those broadcasters who, as of the date 
of issuance of the initial licenses, hold a license to operate a 
television broadcast station or a permit to construct such a station, 
or both.4
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    \4\ Our eligibility criteria are consistent with the provisions 
of section 336 of the 1996 Act. 47 U.S.C. Sec. 336. We have made the 
initial assignment of channels in the accompanying Sixth Report and 
Order and adopted criteria for the allotment of additional DTV 
channels. We will give particular consideration for assigning 
temporary DTV channels to new licensees who applied on or before 
October 24, 1991, given the reliance that these parties may have 
placed on rules we adopted before passage of the 1996 Act. Second 
Report/Further Notice (57 FR 21755, May 22, 1992), supra, at 3343, 
clarified, Third Report/Further Notice (57 FR 53588, November 12, 
1992), supra at 6932-33.
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    18. We will continue our previously adopted policy to limit initial 
eligibility for DTV licenses to existing full-power broadcasters. We 
previously determined that there is insufficient spectrum to include 
LPTV stations and translators, which are secondary under our rules and 
policies, to be initially eligible for a DTV channel. As we noted in 
the Sixth Further Notice (61 FR 43209), in order to provide DTV 
allotments for existing full service stations, it will be necessary to 
displace LPTV stations and TV translator stations to some degree, 
especially in major markets. We have not been able to find a means of 
resolving this problem. However, we note that limiting initial 
eligibility to full-power broadcasters does not necessarily exclude 
LPTV stations from the conversion to digital television. Moreover, in 
the Sixth Further Notice (61 FR 43209), we made a number of proposals 
to mitigate the impact on LPTV stations, and, in the Sixth Report and 
Order, we adopt a number of measures intended to minimize the impact of 
DTV implementation on LPTV service.

D. Definition of Service

1. Spectrum Use
    19. Background. The Fourth Further Notice/Third Inquiry (60 FR 
42130, August 15, 1995) reaffirmed our intention to preserve and 
promote universal, free, over-the-air television. We recognized that 
broadcast television has become an important part of American life and 
thus stated ``we envision that the 6 MHz channel earmarked for [DTV] 
will be used for free, over-the-air broadcasting.'' We also recognized 
the increased flexibility that DTV offered broadcasters and noted that 
``allowing at least some level of flexibility would increase the 
ability of broadcasters to compete in an increasingly competitive 
marketplace, and would allow them to serve the public with new and 
innovative services.''
    20. The DTV Standard, adopted by the Commission in the Fourth 
Report and

[[Page 26970]]

Order (62 FR 14006, March 25, 1997), permits broadcasters to offer a 
variety of services. It allows broadcasters to offer free television of 
higher resolution than analog technology. It allows the broadcast of at 
least one, and under some circumstances two, high definition television 
programs; and it allows ``multicasting,'' the simultaneous transmission 
of three, four, five, or more digital programs. The Standard also 
allows for the broadcast of CD-quality audio signals. And it permits 
the rapid delivery of large amounts of data: an entire edition of the 
local newspaper in less than two seconds, sports information, computer 
software, telephone directories, stock market updates, interactive 
educational materials and, indeed, any information that can be 
translated into digital bits. In addition to allowing broadcasters to 
transmit video, voice, and data simultaneously, the DTV Standard allows 
broadcasters to do so dynamically, meaning that they can switch back 
and forth quickly and easily. For example, a broadcaster could transmit 
a news program consisting of four separate SDTV programs for local 
news, national news, weather and sports; while interrupting that 
programming with a single high definition television commercial with 
embedded data about the product; or transmit a motion picture in a high 
definition format, while simultaneously using the excess capacity for 
transmission of data unrelated to the movie.
    21. In light of the flexibility and new capabilities of digital 
television, we asked to what extent we should permit broadcasters to 
use their DTV spectrum for uses other than free, over-the-air 
television. Recognizing that broadcasters are currently allowed to use 
a portion of their broadcast spectrum for ancillary or supplementary 
uses that do not interfere with the primary broadcast signal, we asked 
whether we should permit such uses of the DTV spectrum, and, if so, how 
such uses should be defined and what portion of the DTV system's 
capacity should be allowed for such ancillary and supplementary 
services. Assuming we permitted ancillary and supplementary services, 
we also asked to what extent we should allow broadcasters to use DTV 
spectrum for services that go beyond traditional broadcast television 
or ancillary and supplementary uses analogous to those allowed under 
the current regulatory structure. We also asked whether broadcasters 
should be permitted to provide nonbroadcast and/or subscription 
services, and, if permitted, how such services should be defined, how 
much of the DTV capacity should be allowed for such uses, and what, if 
any, regulation would be appropriate for such services.
    22. Comments. Most commenters support affording flexibility to 
broadcasters to provide ancillary and supplementary services. Joint 
Broadcasters favor the provision of any ancillary and supplementary 
services other than those limited by the Telecommunications legislation 
then pending. Viacom urges that DTV licensees should be authorized to 
explore the full potential of the ATSC DTV system as long as those uses 
do not adversely affect the broadcaster's free video service. AAPTS/PBS 
favors ancillary broadcast and nonbroadcast use of the DTV channel, 
noting that flexible use will serve the public interest by helping to 
spur development of new technologies and to provide greater 
opportunities for noncommercial stations to enhance their public 
service to their respective communities. A noncommercial station could, 
for example, utilize digital transmission to distribute program-related 
course materials, textbooks, student and teacher guides, computer 
software and content areas of the World Wide Web as part of the 
station's instructional programming. Further, noncommercial stations 
could use ancillary and supplementary services, without regard to the 
educational content, as a revenue source to support nonprofit services 
and operations and the transition to DTV.
    23. Microsoft argues that licensees should be given maximum 
flexibility to provide a wide variety of services and any definition of 
free over-the-air broadcasting should be narrowly defined in the DTV 
environment. Texas Instruments, Inc. (``Texas Instruments'') argues 
that it is premature for the Commission to regulate the mix of DTV 
services by requiring a certain amount of capacity to be used for video 
programming; freedom from regulatory restraints will enhance 
television's functionality and appeal beyond entertainment to encompass 
new and unforeseen services.
    24. Equipment manufacturers such as General Instrument, Motorola, 
Thomson, and Zenith, and EIA urge that the Commission should permit 
flexible use of the DTV channel consistent with the preservation of 
free over-the-air television and as long as there is a substantial 
commitment to HDTV. Motorola, however, supports a more restrictive 
definition of ancillary services. The Digital Grand Alliance states 
that, while the predominant use should be for free over-the-air 
television and a minimum number of HDTV hours should be broadcast, the 
Commission should permit flexible uses of the DTV channel. Cohen, 
Dippell and Everist argues that a broadcaster should be permitted to 
provide new and innovative services that do not cause objectionable 
interference to existing users, provided that the primary use is 
broadcasting to the general public.
    25. NYNEX and Personal Communications Industry Association 
(``PCIA'') urge that the primary use of the DTV channel should be free 
over-the-air broadcasting. NYNEX urges that allowing broadcasters to 
provide nonbroadcast and subscription services would threaten free, 
universal broadcasting and should be permitted only as a residual use 
of spectrum capacity. PCIA urges that a DTV licensee should be 
permitted to offer broadcast-related services, such as closed 
captioning, pay programming, broadcast or narrowcast audio service, and 
home shopping, but should not be allowed to offer mobile radio services 
like paging without open competition for DTV licenses by all qualified 
applicants. Golden Orange suggests that the Commission should permit 
all types of broadcast ancillary services that do not cause 
interference to the primary HDTV requirement it urges the Commission to 
adopt, but that the Commission should not permit nonbroadcast services 
or non-TV subscription services. HBO argues that the second channel 
should be used for HDTV and opposes affording broadcasters flexible use 
of the channel, but adds that if the Commission permits flexibility in 
the use of the channel, it should nonetheless require that a 
substantial portion of the day be devoted to HDTV programming. The 
Benton Foundation opposes spectrum flexibility as affording 
broadcasters an unfair competitive advantage over competitors and 
argues that the principal use of the second channel, defined as a 
minimum of 75% of capacity, should be for broadcast.
    26. Broadcasters, as a group, express their staunch support for the 
continuation of our tradition of universal and free broadcast 
television. For example, the comments of the Joint Broadcasters, a 
group constituting a wide cross-section of broadcast television 
stations and networks, emphasize broadcasters' commitment to provision 
of free television service. ALTV, Pacific FM, and Busse argue that 
broadcasters should be required to offer at least one free over-the-air 
channel enhanced by digital technology but should otherwise be 
unfettered as to the

[[Page 26971]]

services they provide. MAP and the Benton Foundation argue that because 
broadcasters will receive free and exclusive use of the broadcast 
spectrum, free, over-the-air broadcasting should comprise no less than 
75% of a broadcaster's capacity.
    27. Decision. As we have noted before, an overarching goal of this 
proceeding is to promote the success of a free, local television 
service using digital technology. Broadcast television's universal 
availability, appeal, and the programs it provides--for example, 
entertainment, sports, local and national news, election results, 
weather advisories, access for candidates and public interest 
programming such as education television for children--have made 
broadcast television a vital service. It is a service available free of 
charge to anyone who owns a television set, currently 98% of the 
population.
    28. We expect that the fundamental use of the 6 MHz DTV license 
will be for the provision of free over-the-air television service. In 
order to ease the transition from our current analog broadcasting 
system to a digital system, we will require broadcasters to provide on 
their digital channel the free over-the-air television service on which 
the public has come to rely. Specifically, broadcasters must provide a 
free digital video programming service the resolution of which is 
comparable to or better than that of today's service and aired during 
the same time periods that their analog channel is broadcasting. 
5
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    \5\ For example, a broadcaster who provides programming on its 
analog channel from 6:00 am until midnight must provide a free over-
the-air digital signal during those hours.
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    29. We wish to preserve for viewers the public good of free 
television that is widely available today. At the same time, we 
recognize the benefit of permitting broadcasters the opportunity to 
develop additional revenue streams from innovative digital services. 
This will help broadcast television to remain a strong presence in the 
video programming market that will, in turn, help support a free 
programming service. Thus, we will allow broadcasters flexibility to 
respond to the demands of their audience by providing ancillary and 
supplementary services that do not derogate the mandated free, over-
the-air program service. Ancillary and supplementary services could 
include, but are not limited to, subscription television programming, 
computer software distribution, data transmissions, teletext, 
interactive services, audio signals, and any other services that do not 
interfere with the required free service.
    30. This decision is supported by the overwhelming weight of the 
record. Consistent with precedent that has treated telecommunications 
services provided by an NTSC station other than the regular television 
program service as ancillary, we will consider as ancillary and 
supplementary any service provided on the digital channel other than 
free, over-the-air services. In addition, we will not impose a 
requirement that the ancillary and supplementary services provided by 
the broadcaster must be broadcast-related.
    31. The approach we take here, of allowing broadcasters flexibility 
to provide ancillary and supplementary services is supported both 
generally and specifically by the 1996 Act, enacted after issuance of 
the Fourth Further Notice/Third Inquiry (60 FR 42130, August 15, 1995). 
In general, the 1996 Act seeks ``[t]o promote competition and reduce 
regulation in order to secure lower prices and higher quality services 
for American telecommunications consumers and encourage the rapid 
deployment of new telecommunications technologies.'' More importantly, 
the 1996 Act specifically gives the Commission discretion to determine, 
in the public interest, whether to permit broadcasters to offer such 
services. section 336(a)(2) of the Communications Act, contained in 
section 201 of the 1996 Act, provides that if the Commission issues 
additional licenses for advanced television services, it ``shall adopt 
regulations that allow the holders of such licenses to offer such 
ancillary or supplementary services on designated frequencies as may be 
consistent with the public interest, convenience, and necessity.''
    32. Section 336(b)(2) sets out the specific parameters of our 
authority to permit ancillary and supplementary services, 6 
and the approach we take here fully complies with those parameters. 
Thus, under section 336(b)(2), the Commission is required to limit 
ancillary and supplementary services to avoid derogation of any 
advanced television services that the Commission may require. The 
Commission has exercised its discretion and is requiring broadcasters 
to continue to provide the free over-the-air service on which the 
public has come to rely. We herein require that any ancillary and 
supplementary services broadcasters provide will not derogate that 
required service. Further, section 336(b)(1) requires that the 
Commission may only permit broadcasters to offer ancillary or 
supplementary services ``if the use of a designated frequency for such 
services is consistent with the technology or method designated by the 
Commission for the provision of advanced television services* * *.''
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    \6\ Section 336(b) of the Communications Act, also added by 
section 201 of the 1996 Act, provides that in prescribing the 
regulations required by Section 336(a), the Commission shall:
    (1) only permit such licensee or permittee to offer ancillary or 
supplementary services if the use of a designated frequency for such 
services is consistent with the technology or method designated by 
the Commission for the provision of advanced television services;
    (2) limit the broadcasting of ancillary or supplementary 
services on designated frequencies so as to avoid derogation of any 
advanced television services, including high definition television 
broadcasts, that the Commission may require using such frequencies;
    (3) apply to any other ancillary or supplementary service such 
of the Commission's regulations as are applicable to the offering of 
analogous services by any other person, except that no ancillary or 
supplementary service shall have any rights to carriage under 
section 614 or 615 or be deemed to be a multichannel video 
programming distributor for purposes of section 628;
    (4) adopt such technical or other requirements as may be 
necessary or appropriate to assure the quality of the signal used to 
provide advanced television services, and may adopt regulations that 
stipulate the minimum number of hours per day that such signal must 
be transmitted; and
    (5) prescribe such other regulations as may be necessary for the 
protection of the public interest, convenience, and necessity.
    (6) 47 U.S.C. Sec. 336(b).
---------------------------------------------------------------------------

    33. Moreover, we believe that the approach we take here will serve 
the public interest by fostering the growth of innovative services to 
the public and by permitting the full possibilities of the DTV system 
to be realized. One of our goals is to promote spectrum efficiency. 
Encouraging an expeditious transition from analog to digital television 
and a quick recovery of spectrum will promote that goal. By permitting 
broadcasters to assemble packages of services that consumers desire, we 
will promote the swift acceptance of DTV and the penetration of DTV 
receivers and converters. That, in turn, will help promote the success 
of the free television service. As discussed above, digital television 
promises a wealth of possibilities in terms of the kinds and numbers of 
enhanced services that could be provided to the public. Indeed, we 
believe that giving broadcasters flexibility to offer whatever 
ancillary and supplementary services they choose may help them attract 
consumers to the service, which will, in turn, hasten the transition. 
In addition, the flexibility we authorize should encourage 
entrepreneurship and innovation. For example, it may encourage the 
development of compression technologies that could allow even more 
digital capacity on a 6 MHz channel, paving the way for multiple high 
definition programs and more free

[[Page 26972]]

programming than would otherwise be offered.
    34. There is no public interest harm in permitting ancillary and 
supplementary services; indeed, to the contrary, allowing such services 
contributes to efficient spectrum use and can expand and enhance use of 
existing spectrum. In this case, technological advancements, i.e., 
digital technology, have made it possible for broadcasters to provide 
continuing free, over-the-air service and still have the capacity to 
provide other innovative services. It would be contrary to the public 
interest to handicap broadcasters in providing these services and to 
deprive consumers of the opportunity to purchase the services they 
desire. We note, however, that we will review our flexible approach to 
permitted ancillary and supplementary services during the periodic 
reviews established herein and make adjustments to our rules as needed.
    35. We note that the 1996 Act requires the Commission to establish 
a fee program for ancillary or supplementary services provided by 
digital licensees if subscription fees are required in order to receive 
such services or if the licensee directly or indirectly receives 
compensation from a third party in return for transmitting material 
furnished by such third party (other than commercial advertisements 
used to support broadcasting for which a subscription fee is not 
required). We will issue a Notice to consider proposals as to how that 
statutory provision should be implemented.
    36. In addition, consistent with the 1996 Act, non-broadcast 
services provided by digital licensees will be regulated in a manner 
consistent with analogous services provided by other persons or 
entities. We already follow such an approach with respect to ancillary 
and supplementary services provided by NTSC licensees, for example, on 
the VBI and the video portion of the analog signal.
2. High Definition
    37. Background. In the Fourth Further Notice/Third Inquiry (60 FR 
42130, August 15, 1995), the Commission noted that the Grand Alliance 
system would provide broadcasters new flexibility and new capabilities 
to provide not only high definition television but also multiple 
program streams, as well as a variety of nonvideo and/or subscription-
based services. After noting that allowing at least some level of 
flexibility would increase the ability of broadcasters to compete in an 
increasingly competitive marketplace, would permit new and innovative 
services to be provided to the public, and would allow for a more rapid 
transition to digital broadcasting, the Commission requested comment as 
to whether it should require broadcasters to provide a minimum amount 
of high definition television and, if so, what minimum amount should be 
required.
    Comments. Many commenters are opposed to a minimum HDTV 
requirement. Commenters urging the Commission not to apply a minimum 
HDTV requirement but rather to leave that determination to the 
marketplace and thus to broadcasters and viewers include the National 
Association of Broadcasters (``NAB''), ALTV, the Benton Foundation, 
Microsoft Corporation, Telemundo Group, Inc. (``Telemundo''), and 
AAPTS/PBS. NAB notes that mandating a certain amount of HDTV could 
impair broadcasters' ability rapidly to fuel development of the DTV 
market with complementary program offerings and could prolong the 
transition to digital television. NAB states: ``By providing maximum 
latitude, the Commission will encourage development of diverse new 
programming services that will facilitate the most rapid acceptance of 
ATV and lead to the most rapid return of NTSC spectrum.'' ALTV states 
that a minimum HDTV requirement would be burdensome and, moreover, 
superfluous because the broadcast industry has maintained its 
commitment to implement HDTV. According to ALTV, independent stations 
rely on syndicated and local programming, which is less likely to be 
produced in an HDTV format, so a minimum HDTV requirement would have a 
disproportionately burdensome impact on independents. ALTV states that 
any minimum HDTV requirement, if and when justified by future 
circumstances, should be adopted later in the transition, as more HDTV 
programming comes on the market. Telemundo notes that a minimum HDTV 
requirement would negatively impact foreign language stations and 
networks, many of which feature programming produced outside the United 
States, where HDTV production is likely to lag domestic HDTV 
production. AAPTS and PBS, in joint comments, oppose a minimum HDTV 
requirement, noting that the Commission can rely on broadcasters and 
public television's commitment to HDTV, and argue that if the 
Commission adopts an HDTV requirement, it should be ``liberally 
waived'' for noncommercial stations (particularly those analog stations 
that may share a DTV channel in the transition). The Benton Foundation 
argues that mandating an HDTV minimum serves no public interest because 
it does not increase the number of voices in the marketplace or 
contribute to the civic discourse of democracy.
    39. Support for a minimum HDTV requirement is expressed by three 
networks, HBO, NYNEX Corporation, receiver manufacturers, Viacom, 
Golden Orange Broadcasting Co., Inc. (``Golden Orange''), and the 
National Consumers League. Supporters of a minimum requirement 
generally argue that a requirement will help promote the early 
availability of HDTV programming, create demand for HDTV receivers, 
stimulate the market, and speed the transition. Golden Orange, for 
example, notes that without HDTV, the public will not be motivated to 
buy receivers. HBO argues that the legal and policy principles that 
justify awarding incumbent broadcasters a second channel for DTV do not 
permit broadcasters to use this second channel for any thing other than 
HDTV programming, and, if the FCC allows other than HDTV programming, 
it should require that a substantial portion of the broadcast day, 
especially during dayparts and prime time, be devoted exclusively to 
HDTV. These commenters vary on the amount of HDTV programming that 
should be required and on how the minimum should be implemented.
    40. While believing that the marketplace is the best determinant of 
the optimum balance between HDTV and other DTV services, Joint 
Broadcasters support a minimum HDTV requirement if necessary to assure 
HDTV a fair chance in the marketplace. Joint Broadcasters also declare 
their support for HDTV as the ``centerpiece'' of the digital television 
system and note the commitment of many broadcast organizations to 
provide HDTV. MAP, which supports allotting only enough capacity to 
broadcasters to provide one free, over-the-air, digital program 
service, argues accordingly that there is little reason for the 
Commission to mandate HDTV. However, MAP notes that the only 
justification for affording broadcasters exclusive use of the entire 6 
MHz of spectrum is that they will deliver significant amounts of HDTV 
programming.
    41. Decision. Our decisions today, and our previous adoption of the 
DTV Standard, give broadcasters the opportunity to provide high 
definition television programming, but we decline to impose a 
requirement that broadcasters provide a minimum amount of such 
programming and, instead, leave this decision to the discretion of 
licensees. The DTV

[[Page 26973]]

Standard will allow broadcasters to offer the public high definition 
television, as well as a broad variety of other innovative services. We 
believe that we should allow broadcasters the freedom to innovate and 
respond to the marketplace in developing the mix of services they will 
offer the public. In this regard, we endeavor to carry out the premises 
of the 1996 Act which, as noted above, seeks ``[t]o promote competition 
and reduce regulation in order to secure lower prices and higher 
quality services for American telecommunications consumers and 
encourage the rapid deployment of new telecommunications 
technologies.'' There is no reason to involve the government in a 
decision that should properly be based on marketplace demand. The 1996 
Act specifically affords the Commission discretion whether or not to 
require minimum high resolution television programming.7
---------------------------------------------------------------------------

    \7\ 47 U.S.C. 336(b)(2), adopted by section 201 of the 1996 Act.
---------------------------------------------------------------------------

    42. Our decisions to adopt the DTV Standard and to use 6 MHz 
channels permit broadcasters to provide high definition television in 
response to viewer demand. If we do not mandate a minimum amount of 
high resolution television, we anticipate that stations may take a 
variety of paths: some may transmit all or mostly high resolution 
television programming, others a smaller amount of high resolution 
television, and yet others may present no HDTV, only SDTV, or SDTV and 
other services. We do not know what consumers may demand and support. 
Since broadcasters have incentives to discover the preferences of 
consumers and adapt their service offerings accordingly, we believe it 
is prudent to leave the choice up to broadcasters so that they may 
respond to the demands of the marketplace. A requirement now could 
stifle innovation as it would rest on a priori assumptions as to what 
services viewers would prefer. Broadcasters can best stimulate 
consumers' interest in digital services if able to offer the most 
attractive programs, whatever form those may take, and it is by 
attracting consumers to digital, away from analog, that the spectrum 
can be freed for additional uses. Further, allowing broadcasters 
flexibility as to the services they provide will allow them to offer a 
mix of services that can promote increased consumer acceptance of 
digital television, which, in turn, will increase broadcasters' 
profits, which, in turn, will increase incentives to proceed faster 
with the transition.
    43. We have also been persuaded by the arguments that a minimum 
high definition television requirement would be burdensome on some 
broadcasters. We note the arguments of ALTV and Telemundo as to the 
difficulties a minimum high resolution television requirement might 
impose on independent stations and foreign language stations, 
respectively. We acknowledge the contributions of such stations and the 
programming they provide to the diversity of our broadcast television 
service and hesitate to impose a requirement that might make it more 
difficult for such stations to convert to digital television, perhaps 
even undermining their ability to do so. We are not convinced that high 
definition television programming should be mandated where to mandate 
it might impose significant burdens on stations, particularly where, as 
will be discussed below, it appears that the marketplace will provide 
high definition television programming even absent a governmental 
requirement to that effect.
    44. We note that some commenters argued that a high definition 
television mandate is necessary to give program producers and equipment 
manufacturers the necessary incentives to support high resolution 
television, and to provide viewers and consumers enough high resolution 
television programming to foster demand for such programming and to 
drive DTV receiver purchases. To the contrary, however, we believe that 
a minimum high definition television requirement is unnecessary to 
achieve these goals. We note in this regard that broadcasters and 
networks have emphasized their commitment to high definition 
television. We find nothing in the record that identifies a market 
failure or other reason to impose a governmental requirement for high 
definition television. High definition television will afford 
broadcasters an important tool in the increasingly competitive video 
programming market. There is no reason to believe that a government 
mandate is necessary to ensure that high definition television gets a 
fair chance in the marketplace.

E. Public Interest Obligations

    45. Background. As we stated in the Fourth Further Notice (60 FR 
42130, August 15, 1995), the rules imposing public interest obligations 
on broadcast licensees originate in the statutory mandate that 
broadcasters serve the ``public interest, convenience, and necessity,'' 
as well as other provisions of the Communications Act. These 
obligations include the requirements that broadcasters must provide 
``reasonable access'' to candidates for federal elective office and 
must afford ``equal opportunities'' to candidates for any public office 
and that weekly they must provide three hours of children's educational 
programming. Licensees must also adhere to restrictions on the airing 
of indecent programming and must comply with the 1996 Act provisions 
relating to the rating of video programming. In the Fourth Further 
Notice/Third Inquiry, the Commission noted that these current public 
interest rules were developed under the analog model and therefore were 
shaped by the limitations inherent in analog technology. The Commission 
sought comment on whether the greater capabilities afforded by digital 
technology should affect licensees' obligations to serve the public 
interest, and if so, how those obligations might be adapted to the 
digital context.
    46. Comments. Commenters generally agree that existing public 
interest obligations should continue to apply, at the very least, to 
free, over-the-air programming on DTV. They differ greatly, however, on 
whether, and if so, how, the public interest obligation should be 
applied and possibly expanded in a DTV world. Joint Broadcasters argue 
that public interest obligations should continue to apply to NTSC 
through the transition, and to all the DTV services, but that there is 
no need to impose additional obligations on the transition channel. 
ALTV comments that on DTV, free broadcast television service should 
continue to be subject to the public interest obligations now applied 
to NTSC, but that no public interest obligations should apply to 
nonbroadcast services. General Instrument argues that public-interest 
obligations should attach to free, over-the-air broadcasting on DTV, 
but that for provision of subscription services, broadcasters should be 
required to pay a fee to compensate the public.
    47. Some commenters offered specific proposals on how the 
broadcasters' public-interest obligations could be reconceptualized and 
adapted in light of the new possibilities offered by digital 
technology. MAP argues that public interest obligations should apply to 
each program service, including subscription services, provided over 
DTV spectrum. MAP proposes that broadcasters be required to provide 
``new and different public service in exchange for the opportunity to 
convert to digital television, including free time for political 
candidates, noncommercial public access, and dedication of 20% of total 
program time to children's educational and informational programming.'' 
Alliance for Community Media suggests that, at a minimum,

[[Page 26974]]

public interest guidelines should contain a quantitative measure of 
programming including: local news and information; educational programs 
for children and adults; material helpful to nonprofit, charitable, 
health, or social-service organizations; and programs to allow elected 
officials and nonprofit organizations to communicate to the community. 
The Benton Foundation urges that broadcasters be required to provide, 
for example, at least six hours of children's educational television, 
free time for candidates, and access to programming time by members of 
the community.
    48. Decision. In this proceeding we seek to promote the successful 
transition of analog broadcast television into a digital broadcast 
television service that serves the public interest. Broadcasters have 
long been subject to the obligation to serve the ``public interest, 
convenience and necessity.'' 8 In the 1996 Act, Congress 
provided that broadcasters' public interest obligations extend into the 
digital environment:

    \8\ 47 U.S.C. sections 307(a), 309(a); En Banc Programming 
Inquiry, 44 FCC 2303, 2312 (1960).
---------------------------------------------------------------------------

    (d) Public Interest Requirement.--Nothing in this section shall 
be construed as relieving a television broadcasting station from its 
obligation to serve the public interest, convenience, and necessity. 
In the Commission's review of any application for renewal of a 
broadcast license for a television station that provides ancillary 
or supplementary services, the television licensee shall establish 
that all of its program services on the existing or advanced 
television spectrum are in the public interest.

In enacting this provision, Congress clearly provided that broadcasters 
have public interest obligations on the program services they offer, 
regardless of whether they are offered using analog or digital 
technology.
    49. In the digital television era, although many aspects of the 
business and technology of broadcasting may be different, broadcasters 
will remain trustees of the public's airwaves. Our current rules were 
developed when technology permitted broadcasters to provide just one 
stream of programming over a 6 MHz channel. We recognize, however, that 
digital technology expands the effective capacity of 6 MHz of spectrum. 
For example, it permits, but does not require, licensees to provide 
several program streams, as well as other digital services, on the 6 
MHz channel of spectrum that we are assigning them. The dynamic and 
flexible nature of digital technology creates the possibility of new 
and creative ways for broadcasters to serve the country and the public 
interest.
    50. Some argue that broadcasters' public interest obligations in 
the digital world should be clearly defined and commensurate with the 
new opportunities provided by the digital channel broadcasters are 
receiving. Others contend that our current public interest rules need 
not change simply because broadcasters will be using digital technology 
to provide the same broadcast service to the public. We are not 
resolving this debate today. Instead, at an appropriate time, we will 
issue a Notice to collect and consider all views. As we authorize 
digital service, however, broadcast licensees and the public are on 
notice that existing public interest requirements continue to apply to 
all broadcast licensees. Broadcasters and the public are also on notice 
that the Commission may adopt new public interest rules for digital 
television. Thus as to the public interest, our action today forecloses 
nothing from our consideration.

F. Transition

1. Simulcast
    51. Background. In our 1992 Second Report/Further Notice (57 FR 
21755, May 22, 1992), we determined that DTV licensees should simulcast 
on their NTSC channel the programming offered on their DTV channel. 
Specifically, we adopted, as a preliminary matter, a 50 percent 
simulcasting requirement, beginning one year after the six-year 
application and construction period, increasing to 100 percent two 
years later.9 Our early simulcast decisions were based on 
the expectation that DTV would primarily consist of the broadcast of a 
single HDTV program service. However, as DTV technology developed, we 
learned that DTV would be able to do much more than we initially 
expected and that it would be possible to transmit multiple 
simultaneous SDTV program services on a single 6 MHz channel. 
Recognizing that a licensee would be unable to simulcast multiple 
program services on its NTSC channel, we stated in the Fourth Further 
Notice (60 FR 42130, August 15, 1995) that our simulcast requirement 
must be revisited and we must consider alternatives. In addition, we 
stated that we still perceived a need for a simulcast requirement, 
albeit different from that first envisioned, and proposed to require 
the simulcast of all material being broadcast on the licensee's NTSC 
channel on a program service of the DTV channel. We requested comment 
on this proposal.
---------------------------------------------------------------------------

    \9\ Additionally, we indicated that we would review this 
schedule at the time of our initial review of the pace of conversion 
at the end of the application/construction period and immediately 
prior to the imposition of 100 percent simulcasting.
---------------------------------------------------------------------------

    52. Comments. Broadcasters are divided on the necessity of a 
simulcast requirement. Numerous comments note that simulcasting is 
certain to occur even in the absence of a mandate. The Joint 
Broadcasters emphasize that they believe that much simulcasting of NTSC 
programming on the DTV channel would happen in the normal course. 
However, because broadcasters have differing views on the need for a 
requirement, the group declined to take a position on that issue. NAB 
and ALTV maintain that a simulcast requirement would be 
counterproductive and may delay development and penetration of DTV, 
especially during the early stages of the transition. However, NAB 
acknowledges that a phase-in of simulcasting near the end of the 
transition could be an effective means of preventing disenfranchisement 
of the remaining NTSC viewers. ABC and CBS argue that a simulcast 
requirement should apply from the outset of the transition. CBS argues 
that a simulcast requirement could spur the sale of DTV equipment and 
ensure that DTV and NTSC broadcast services do not evolve into 
separately programmed services. NBC supports a 50% simulcasting 
requirement to allow for some innovation. Broadcasters and other 
commenters arguing against the advisability of a simulcast requirement 
maintain that rigid requirements would hamper broadcasters' ability to 
promote and provide the programming that was most likely to draw 
viewers to the DTV channel. They argue that transition to DTV would 
occur most rapidly if broadcasters had the maximum flexibility to 
experiment with new services and to put together offerings that would 
best satisfy viewers. Commenters point out that simulcasting would slow 
the transition by preventing broadcasters from enticing viewers to DTV 
by making desirable programming available on DTV that is not available 
on NTSC. ALTV also argues that any requirement would be based on 
speculation about the development of digital service, and therefore 
imposition of any rule, if necessary at all, should be postponed.
    53. Equipment manufacturers recommend that a simulcast requirement 
be tailored to promote a rapid transition to HDTV and DTV and recovery 
of NTSC spectrum. The cable industry supports a simulcast HDTV service, 
that is the broadcast of one program over two channels to the same area 
at the same time. Public-interest groups generally support requiring 
DTV broadcasters to simulcast their NTSC

[[Page 26975]]

service on the DTV channel. Commenters supporting a simulcast 
requirement argue that such a requirement would expedite the transition 
from analog to digital by guaranteeing that popular programming 
services continue to be available, in enhanced technical quality, on 
the DTV channel. They also point out that simulcasting would prevent 
the development of two separately programmed services, which might 
delay the transition. As to the question of phase-in, the Digital Grand 
Alliance suggests that simulcast requirements be minimal in the early 
years of the transition to facilitate innovative HDTV programming, and 
more comprehensive in the later years to avoid perpetuating unique NTSC 
programming that would make it difficult to cease NTSC broadcasts. 
Throughout the transition, one DTV program stream should be identical 
to the program stream carried on the NTSC channel.
    54. Decision. We decline to adopt a simulcast requirement for the 
early years of the transition. In order to help reclaim spectrum at the 
end of the transition period, however, we adopt by the sixth year from 
the date of adoption of this Report and Order a requirement of 50% 
simulcasting of the video programming of the analog channel on the DTV 
channel; by the seventh year, a 75% simulcasting requirement; by the 
eighth year, a 100% simulcasting requirement, until the analog channel 
is terminated and that spectrum returned.
    55. We have previously recognized the need to afford broadcasters 
flexibility to program their DTV channels to attract consumers, 
especially during the critical launch phase of DTV. We do not adopt a 
simulcast requirement during the early years of the transition in order 
to give broadcasters the ability to experiment with program and service 
offerings. We are convinced by commenters who argue that many 
consumers' decisions to invest in DTV receivers will depend on the 
programs, enhanced features, and services that are not available on the 
NTSC service, and a simulcast requirement might limit broadcasters' 
ability to experiment with the full range of digital capabilities. 
Because the DTV channels represent valuable resources with large 
opportunity costs, we believe licensees will have economic incentives 
to provide programming and services that will attract consumers to DTV. 
In any event, a simulcast requirement during this initial transition 
phase appears to be unnecessary because the record suggests that 
marketplace forces will ensure that the best NTSC programming will be 
simulcast on the digital channel and broadcasters have indicated that 
they will simulcast NTSC programs on the DTV channel even in the 
absence of a requirement.
    56. While we believe that a simulcast requirement is not warranted 
during the early years of the transition, there are benefits to a 
simulcast requirement near the end of the transition period. Such a 
requirement will help ensure that consumers will enjoy continuity of 
free over-the-air program service when we reclaim the analog spectrum 
at the conclusion of the transition period. It may be difficult to 
terminate analog broadcast service if broadcasters show programs on 
their analog channels but not on their digital channels. We believe 
that it will be easier to terminate analog services and reclaim the 
spectrum at the end of the transition if most broadcast households are 
capable of receiving DTV signals and these households do not suffer the 
loss of a current program service only offered on analog channels. 
Thus, we will require a phased-in simulcasting requirement as follows: 
By the sixth year from the date of adoption of this Report and Order, 
we adopt a 50% simulcasting requirement; by the seventh year, we adopt 
a 75% simulcasting requirement; by the eighth year, we adopt a 100% 
simulcasting requirement which will continue until the analog channel 
is terminated and the analog spectrum returned. We recognize that we 
will need to define clearly ``simulcasting'' in the context of DTV and 
will do so as part of our two-year reviews or other appropriate 
proceeding.
2. Licensing of DTV and NTSC Stations
    57. Background. The Second Report/Further Notice (57 FR 21755, May 
22, 1992) determined to treat the licensee as having two separate 
licenses. In the Fourth Further Notice/Third Inquiry (60 FR 42130, 
August 15, 1995), however, the Commission tentatively concluded that 
substantial benefits could be obtained if the NTSC and ATV facilities 
were instead authorized under a single, unified license. The Commission 
tentatively decided that such a policy would ease administrative 
burdens on the Commission and broadcasters alike by reducing the number 
of applications that would have to be filled out, filed, and processed, 
and would be consistent with our authority under section 316 of the Act 
to modify an existing license. Licensing the two facilities under a 
single license would also retain the policy announced in the Second 
Report/Further Notice of treating both facilities the same for 
revocation/nonrenewal purposes.
    58. Comments. Those commenters, which include broadcasters, 
networks, and equipment manufacturers, who address this issue largely 
support our revised proposal for a single, paired license. One 
commenter, broadcaster Golden Orange, argues that the DTV and NTSC 
stations should have separate licenses.
    59. Decision. We adopt our tentative conclusion, echoed by nearly 
all those who commented, that the NTSC and DTV facilities should be 
licensed under a single, paired license. As determined earlier, this 
system will help the Commission and broadcasters alike by keeping 
administrative burdens down. It is also consistent with our intention 
to treat the DTV license and the NTSC license together for the purposes 
of revoking or not renewing a license. Once broadcasters have satisfied 
construction and transmission requirements, they will receive a single, 
paired license for the DTV and NTSC facilities.
    60. One of our objectives is to promote broadcasters' ability to 
build digital businesses so that their valuable free programming 
service will continue. We anticipate that some licensees may find it 
beneficial to develop partnerships with others to help make the most 
productive and efficient use of their channels. We intend to give 
broadcasters flexibility in structuring business arrangements and 
attracting capital to build a successful DTV business. One of our 
overarching objectives is to promote the success of digital television. 
We anticipate that some licensees may find it beneficial to develop 
partnerships with others to help make the most productive and efficient 
use of their channel, and we will look with favor on such arrangements. 
Broadcasters may find it useful to work with other broadcasters or 
others who have special expertise in exploiting digital technology. 
Parties could come together for the sharing of facilities, costs, and 
equipment, the development and provision of programming and service 
offerings, access to capital and financing, the establishment of 
business plans, and the like. Such arrangements will aid both 
broadcaster and public, by helping the broadcaster achieve the most 
competitive and beneficial business strategy and by ensuring for the 
public the best use of the digital spectrum, including not only the 
most efficient use of the spectrum but also the greatest array of 
valuable services. Variations on partnerships have arisen in other 
contexts, which indicates that they are efficient and useful. For 
example, in the common network/affiliate relationship,

[[Page 26976]]

a network provides programming and advertising that its affiliates may 
use. Another example is the Commission's authorization of Instructional 
Television Fixed Services (ITFS) licensees to lease, for profit, their 
excess capacity to other service providers. We are receptive to the 
establishment of like arrangements in the DTV context. Whatever the 
arrangement, it is the licensee who remains responsible for ensuring 
the fulfillment of all obligations incumbent upon a broadcast licensee.

G. Application/Construction Period

    61. Background. The Second Report/Further Notice (57 FR 21755, May 
22, 1992) adopted a two year application period and an additional three 
years for construction of a DTV facility. We were concerned that 
without a specific timetable, some parties might delay construction 
while waiting for others to take the lead, to the detriment of our goal 
of expeditious DTV implementation. We clarified that broadcasters who 
did not apply and construct within the established time period (and who 
failed to obtain an extension of time) would lose their initial 
eligibility for a DTV frequency. We noted that existing policies 
regarding extensions of time would afford broadcasters adequate 
flexibility to cope with unforeseen implementation 
problems.10 We defined ``construction'' as the capability of 
emitting DTV signals, regardless of the source of these signals (e.g., 
local origination, pass-through of a network signal, or other signal). 
This definition of construction would allow broadcasters to ``phase-
in'' full DTV implementation as their individual circumstances and 
markets permit.
---------------------------------------------------------------------------

    \10\ For additional clarification of our extension policies, 
see, Second Report/Further Notice (57 FR 21755, May 22, 1992), supra 
at 3347-48.
---------------------------------------------------------------------------

    62. In the Third Report/Further Notice (57 FR 53588, November 12, 
1992), we adjusted the application deadline from a two-year to a three-
year period, and provided for a total six-year application and 
construction period with those applying early having a longer portion 
of the six-year period to devote to construction of DTV facilities. We 
explained that the deadlines for application and construction would 
assist in our reclamation of the reversion channel and our sliding 
scale approach would provide sufficient relief to small-market stations 
which produce less revenue. While we recognized that some stations 
would be market leaders in the implementation of DTV, we remained 
concerned that such leadership may not emerge, at least in certain 
markets, unless we established a clear framework for the DTV 
transition.
    63. The Fourth Further Notice/Third Inquiry (60 FR 42130, August 
15, 1995) proposed a procedure by which broadcasters would have six 
months in which to make an election and confirm to the Commission that 
they want a DTV license. After that, they would have the remainder of 
the three-year period in which to supply any required supporting data, 
and a total of six years to complete construction. If they would elect 
not to construct a DTV facility, or would elect but then fail to 
construct, their NTSC licenses would expire at the end of the DTV 
conversion period, and they would be required to cease broadcasting. We 
sought comment on all aspects of the construction period. We asked 
whether certain classes of stations should be afforded special relief, 
and if so, which classes.
    64. Comments. While most commenters do not specifically address the 
election period, some voice approval of a six-month election 
period.11 The Digital Grand Alliance, however, suggests that 
the six-month election period be accompanied by a mechanism to ensure 
that this election represents real commitment to convert, such as the 
imposition of a non-refundable application fee, a substantial deposit 
refunded at commencement of DTV broadcast, or a fine if the broadcaster 
fails to commence DTV broadcast. On the other hand, Busse and Pacific 
FM argue that the 6-month election period is not a viable choice, 
because those who do not want a DTV license have, in effect, elected to 
go out of business since, under the Commission's proposal, all 
licensees will be required to cease broadcasting in NTSC at the end of 
the transition period.
---------------------------------------------------------------------------

    \11\ See, e.g., Comments of Joint Broadcasters at 12; Comments 
of Thomson at 7; Comments of General Instrument at 16; Comments of 
Golden Orange at 6; Comments of New World Television at 8.
---------------------------------------------------------------------------

    65. Commenters voice many views. Many generally support the 
Commission's suggested timeframe, but suggest that the Commission take 
account of the fact that practical impediments may arise to 
implementation. While in support of the proposal for many stations, 
Joint Broadcasters, joined by ALTV, propose that a less demanding 
schedule and liberal waivers apply to help stations facing difficulty, 
such as noncommercial stations, small stations, those in small or rural 
markets, or in financial distress, as well as for those stations that 
face FAA, zoning, or other similar problems. Busse points out that even 
stations in large markets--such as those with religious or specialty 
formats--may have difficulty making a timely transition. NAB suggests 
that the construction deadline be staggered on a market-by-market 
basis, in which large-market stations have six years, and small-market 
stations have three or six additional years, to complete construction, 
and in addition that waivers for problems such as zoning approvals also 
be available. The Association of Federal Communications Consulting 
Engineers argues that the six-year implementation period is inadequate, 
given the number of stations that will need to acquire transmission 
equipment, input/monitoring equipment, and tower structures during that 
limited timeframe. Christian Communications of Chicagoland proposes 
that the Commission recognize that the application/construction period 
operate as a ``guideline subject to revision'' rather than a set 
deadline.
    66. Others maintain that, at least in some cases, the six-year 
period is too long. Thomson and the Digital Grand Alliance propose that 
the Commission shorten the application and construction periods at 
least in the 25 largest markets, but do not specify what period would 
be appropriate. General Instrument proposes that a three-year 
construction period be considered for major markets, and a six-year 
period for smaller markets. Motorola argues that, given the notice that 
broadcasters have been afforded, the appropriate timetable is a six-
month application period, a six-month processing and grant period, and 
a two-year construction period.
    67. Decision. We will apply a streamlined three-stage application 
process to the group of initially eligible analog permittees and 
licensees allotted a paired channel in the DTV Table of 
Allotments.12 We will soon issue a Public Notice detailing 
the procedures to be followed, but will describe them briefly here.
---------------------------------------------------------------------------

    \12\ We note that under section 553(b)(A), notice and comment 
are not necessary for rules of agency procedure or practice. 5 
U.S.C. 553(b)(A).
---------------------------------------------------------------------------

    68. Stage One--Initial Modification License for DTV. Pursuant to 
the 1996 Act and the eligibility criteria discussed above, we issue, by 
this paragraph and the attached Appendix E, additional DTV licenses to 
those initially eligible to receive them.
    69. The statute directs us to limit initial eligibility for DTV 
licenses to persons that, as of the date of the issuance of the 
licenses, are licensed to operate a television broadcast station or 
hold a permit to construct such a station, or both. As the statute 
contemplates, we hereby issue a license

[[Page 26977]]

to all eligible licensees and permittees, a list of which is attached 
to this Report and Order as Appendix E. We conclude that it more 
effectively effectuates the congressional scheme to implement the 
statute through a three-phased process, with the first phase consisting 
of the initial DTV license, rather than through our conventional 
procedure. Use of the conventional licensing process would prevent us 
from establishing a date certain at which to determine initial 
eligibility, a process that is necessary to allow us to establish the 
Table of Allotments. Thus, we hereby issue a license, conditioned upon 
satisfaction of the additional requirements set out in para. 70-75 
below. This license will modify the analog television permit or 
license; however, licensees may not begin construction or transmission 
until the additional conditions are met.13 The license is 
also conditioned upon the requirement that ``either the additional 
license or the original license held by the licensee be surrendered to 
the Commission for reallocation or reassignment (or both) pursuant to 
Commission regulation.''
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    \13\ As discussed below, we expect that the application or 
certification process will be speedy and will not delay applicants 
as they prepare to implement the build-out.
---------------------------------------------------------------------------

    70. Request for Cancellation. We presume that the recipients will 
welcome receipt of their initial DTV License and will be fully 
committed to the conversion to DTV. Nonetheless, there may be some 
broadcasters who do not wish to receive a second channel to convert to 
DTV. We wish to reclaim these second channels as quickly as possible so 
that the spectrum may be awarded to those who would use it quickly and 
effectively, and we earlier proposed a six-month election period to 
accomplish this result. We now believe that a six-month election period 
is too long. Given the length of this proceeding and the public 
benefits of acting quickly, we believe that broadcasters have already 
had ample time to consider many options, and will shorten the 
``election'' period. In order to achieve the benefits of a rapid 
election and in the interests of spectrum efficiency, we ask that 
licensees who wish to cancel the initial DTV license do so by writing 
the Commission within 90 days from the release date of the DTV Table of 
Allotments adopted in the Sixth Report and Order.
    71. Stage Two--Certification or Application for Construction 
Permit. To receive authorization for commencement of construction, an 
Initial DTV Licensee must file modified Form 301, attached as Appendix 
D, and the appropriate fee to obtain a construction permit. 
Noncommercial stations must file a modified Form 340. The application 
must be filed before the mid-point in a particular applicant's required 
construction period has expired. The Bureau will begin acting upon 
applications as soon as this Report and Order becomes effective.
    72. We will apply a certification procedure for applicants that 
answer ``yes'' to a checklist of requirements contained in the 
construction permit application; these certifications will be 
automatically granted. Given the very rapid review permitted by this 
streamlined procedure, we will be able to grant a construction permit 
to broadcasters within a matter of days of submission of this form. 
Other applicants will be required to furnish additional technical 
information.
    73. In the Fifth Further Notice (61 FR 26864, May 29, 1996), supra 
at para. 59, we sought comment on whether specific TV technical and 
procedural rules should be applied to DTV and whether modification of 
the rules was needed. Among those NTSC TV rules were section 73.685 and 
73.1030. No comments addressed these issues. We herein establish a 
minimum set of technical requirements that will allow us to process 
these DTV construction permit applications. Fundamentally, a DTV 
application must conform to the DTV Table we are creating in the Sixth 
Report and Order, specifying the indicated channel at a transmitter 
site, effective radiated power (``ERP'') and antenna height meeting the 
restrictions imposed in that document. As described in the Sixth Report 
and Order, applications specifying a transmitter site within five 
kilometers of the site assumed in the DTV Table and also specifying an 
ERP and antenna height that do not exceed the values in the DTV Table 
will be accepted and not subject to interference-protection processing. 
Further, in order to avoid exposing the public to dangerous situations, 
we will continue the NTSC TV practice of verifying that the FAA has 
made any necessary determination that the proposed tower does not 
represent a hazard to air navigation, and we will require DTV 
applicants to certify as to no significant environmental impact or to 
include an environmental statement as described in section 1.1307 of 
our rules, including consideration of RF radiation levels. In addition, 
to avoid altering an AM radio station's radiation pattern in a way that 
could cause interference in the AM radio band, we will require DTV 
applications to comply with section 73.658(h). To avoid interference to 
our spectrum monitoring functions and to radio astronomy observations, 
we will also require DTV applications to comply with section 73.1030. 
Additionally, as discussed below, the DTV service contour will be 
required to encompass the community of license.
    74. To speed the process, we will consider the DTV applications or 
certifications as involving a minor change in facilities 14 
and will process them accordingly. Since this application will be for a 
minor change, applicants will not have to supply full legal or 
financial qualifications information.15 We will not 
initially require full-replication of the analog station's coverage 
area by DTV facilities. Accordingly, we will accept initial 
construction permit applications from applicants who demonstrate that 
their DTV coverage encompasses the community of license.16 
In situations where applicants seek a waiver of any of our 
requirements, we will entertain requests to allow them to begin

[[Page 26978]]

construction, at their own risk, prior to the grant of a construction 
permit.
---------------------------------------------------------------------------

    \14\ Pursuant to section 73.3572(a)(1) of the Commission's 
rules, a major change in a television station's facilities is any 
change in frequency or community of license. 47 CFR 
Sec. 73.3572(a)(1). The change involved in constructing and 
operating a DTV facility does not constitute a change in frequency, 
merely the implementation of the initial DTV License on a channel 
assigned in the Sixth Report and Order. The analog site will remain 
on the same frequency. Moreover, the DTV facility will, of course, 
be licensed to the same community, since it will be part of one 
license. We note that in our Notice, supra at 7026, we sought 
comment as to whether, as an alternative to a dual licensing scheme, 
we should treat the addition of a DTV channel as a major 
modification. We now conclude that it should be treated as a minor 
modification for the reasons discussed herein.
    \15\ In the Third Report/Third Further Notice (57 FR 53588, 
November 12, 1992), supra at 6945-46, we noted that we would not 
relax the financial qualifications showing required for a broadcast 
applicant. We were concerned that applicants that were not 
financially qualified could tie up the spectrum without ever 
obtaining the funds necessary to build the facility, thus negating a 
reason for restricting eligibility to existing broadcasters--i.e., 
their ability to implement DTV swiftly. Our decision to treat the 
construction permit as a minor modification, however, eliminates the 
need for a financial qualifications showing. Moreover, Congress has 
determined that we should limit eligibility to existing 
broadcasters, and we have decided to streamline the application 
process so that DTV can be implemented quickly.
    \16\ While the Sixth Report and Order establishes the upper 
limit for DTV facilities, we believe that we should allow 
construction initially of DTV facilities that provide service to a 
smaller area. At the same time, stations should not be able to claim 
that they have completed required construction when they have built 
facilities that are so low in power that they reach no meaningful 
service area. Accordingly, as noted above, we establish the initial 
required coverage area as the community of license. During the first 
two-year review, we will consider whether to modify the build-out 
requirement to require a full-replication facility as well as 
adjustments to the protection of the full-replication facility.
---------------------------------------------------------------------------

    75. Stage Three--Application for License to Cover Construction 
Permit for a DTV Facility. When construction of the DTV facility has 
been completed, the permittee may commence program tests upon 
notification to the FCC, provided that an application for a license to 
cover the construction permit for the DTV facility, on Form 302, is 
filed within ten days, along with the appropriate fee.17
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    \17\ Pursuant to section 1.68(a) of the Commission's rules, 47 
CFR Sec. 1.68(a), the Commission will grant the application where it 
finds that ``all the terms, conditions, and obligations set forth in 
the application and permit have been fully met, and that no cause or 
circumstance arising or first coming to the knowledge of the 
Commission since the granting of the permit would, in the judgment 
of the Commission, make the operation of such station against the 
public interest.''
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    76. Construction Schedule. We have decided to adopt the following 
construction requirements. Stations affiliated with ABC, CBS, Fox and 
NBC must build digital facilities in the ten largest television markets 
by May 1, 1999. Stations affiliated with ABC, CBS, Fox and NBC in the 
top 30 television markets, not included above, must construct DTV 
facilities by November 1, 1999. All other commercial stations must 
construct DTV facilities by May 1, 2002. All noncommercial stations 
must construct their DTV facilities by May 1, 2003. We note that 24 
stations in the top ten markets have voluntarily committed in writing 
to the Commission to building DTV facilities within 18 months. We 
applaud these broadcasters' voluntary commitments to give a great 
number of viewers access to a DTV signal in a very short period. This 
important step means that a significant portion of the public will be 
able to receive multiple signals by the holiday shopping season, when 
nearly 40 percent of all receivers are sold. We ask that those stations 
that have represented to the Commission that they will have completed 
construction of the DTV facility by November 1, 1998, file reports at 
six-month intervals, beginning on November 1, 1997, stating that their 
plans to meet these deadlines are on schedule or specifying any 
difficulties encountered in attempting to meet these deadlines.
    77. We will grant an extension to the applicable deadline where a 
broadcaster has been unable to complete construction due to 
circumstances that are either unforeseeable or beyond the licensee's 
control if the licensee has taken all reasonable steps to resolve the 
problem expeditiously. Such circumstances include, but are not limited 
to, the inability to construct and place in operation a facility 
necessary for transmitting DTV, such as a tower, because of delays in 
obtaining zoning or FAA approvals, or similar constraints, or the lack 
of equipment necessary to transmit a DTV signal. We do not anticipate 
that the circumstance of ``lack of equipment'' would include the cost 
of such equipment. With respect to extensions of the applicable 
construction deadline, the Commission will take into account problems 
encountered that are unique to DTV conversion, and will modify its 
existing policies regarding extensions accordingly. Authority is 
delegated to the Chief of the Mass Media Bureau to grant an extension 
of time of up to six months beyond the applicable construction 
deadline, upon demonstration by the DTV licensee or permittee that the 
standard discussed above is met, but the Bureau may grant no more than 
two extension requests upon delegated authority. Subsequent extension 
requests will be referred to the Commission.
    78. Our decision to adopt different requirements for different 
categories of broadcasters is similar to the market-staggered approach 
favored by most broadcasters and equipment manufacturers. We agree that 
the most viewed stations in the largest television markets can be 
expected to lead the transition to DTV and that these stations are 
better situated to invest the capital necessary to establish the first 
DTV stations. We also agree that smaller market stations will find it 
easier to begin DTV service after learning from the experience gained 
by the larger market stations. In addition, we agree that our staggered 
construction schedule will help keep costs lower for smaller market 
stations, as equipment costs decrease as the market matures. In 
addition, a tiered approach allows us to ensure that DTV quickly 
reaches a large percentage of U.S. television households while placing 
requirements on a relatively small number of stations.
    79. Our earlier preliminary decision to provide for an across-the-
board six-year application/construction schedule is no longer 
appropriate. We now believe that a general six-year construction 
schedule would unnecessarily delay the realization of our goals of 
free, universal DTV service and spectrum recovery. A six-year 
construction schedule for all commercial stations anticipated neither 
the rapid development of digital technologies nor the ability of 
manufacturers and suppliers to provide DTV equipment. In light of these 
changes, we now believe that the six-year construction period is too 
long. Instead, we believe that an aggressive construction schedule 
should be implemented for several reasons.
    80. First, digital broadcast television stands a risk of failing 
unless it is rolled out quickly. Many operators in other media such as 
DBS, cable, and wireless cable use or plan to use digital technology. 
Unless digital television broadcasting is available quickly, other 
digital services may achieve levels of penetration that could preclude 
the success of over-the-air, digital television. Viewers who have 
leased or purchased digital set-top boxes from competing digital media 
may be less likely to purchase DTV receivers or converters. If digital, 
over-the-air television does not succeed, however, viewers will be 
without a free, universally available digital programming service.
    81. Second, a rapid construction period will promote DTV's 
competitive strength internationally, as well as domestically. Other 
countries are moving swiftly to establish their own terrestrial digital 
television services. For example, the United Kingdom is scheduled to 
begin broadcasting terrestrial digital television by 1998 or earlier. 
Japan has recently announced that it will move from analog high 
definition television to digital television. Neither European nor 
Japanese digital standards are compatible with the U.S. standard. In 
the DTV Standard proceeding, equipment manufacturers and labor unions 
argued that quick and decisive action was necessary to permit American 
companies to compete internationally. The National Telecommunications 
and Information Administration and the Office of Science and Technology 
Policy argued that absent quick action, America might relinquish its 
technological lead to international competitors, while rapid adoption 
would spur the American economy in terms of manufacturing, trade, 
technological development, international investment, and job growth. 
Rapid introduction of digital television in the U.S. will help 
facilitate its adoption abroad.
    82. Third, an aggressive construction schedule helps to offset 
possible disincentives that any individual broadcaster may have to 
begin digital transmissions quickly, as well as the possible absence of 
market forces that might themselves ensure rapid construction. We 
recognize that an individual broadcaster may consider implementation of 
DTV to require it to invest funds in order to capture viewers for which 
it is already receiving advertising revenue. Such a broadcaster

[[Page 26979]]

might prefer to wait until others have converted to digital for a 
number of reasons, including lower equipment costs. On the other hand, 
a broadcaster may recognize first-mover advantages, such as being first 
to market with programs in higher definition or with ancillary data 
services. Our schedule ensures rapid construction in major markets.
    83. Fourth, a rapid build-out works to ensure that recovery of 
broadcast spectrum occurs as quickly as possible. As we discuss in the 
Sixth Report and Order, at the end of the transition we plan to recover 
78 MHz of clear spectrum in addition to the 60 MHz of partially 
encumbered spectrum we plan to recover in the near future from channels 
60-69. We will also recover at the end of the transition that spectrum 
within channels 60-69 that is still needed for analog and digital 
television broadcasting during the transition.
    84. By adopting construction requirements, we hope to give the 
various industries involved the certainty to move forward. Penetration 
of color television sets, for example, was limited until the three 
major networks began transmitting prime time programming in color. This 
provides evidence that consumers may not purchase great numbers of DTV 
sets or converters until multiple stations in their market are 
transmitting DTV, and that we therefore should adopt construction 
requirements that ensure that there are multiple digital television 
broadcasters operating. Television manufacturers plan to have the first 
digital television sets ready for purchase by the public by mid-1998. 
The construction schedule set forth here provides that multiple 
stations in most of the top ten markets are operating at roughly that 
time.
    85. Our construction schedule will facilitate our goal of having at 
least 40 facilities affiliated with the four top networks in the top 10 
markets transmitting DTV by May 1, 1999. Within roughly 24 months in 
each of the top 10 markets, which cover approximately 30 percent of 
U.S. television households, viewers will have DTV transmissions 
available from multiple stations. These signals will come from network 
affiliates, which are generally the stations with the highest ratings 
in the market. In the top 30 markets, network-affiliated stations must 
construct digital facilities by November 1, 1999. These markets include 
53 percent of U.S. television households. Stations in the second 
category will benefit from the success of the stations in the first 
category, as word spreads from the largest markets to those medium-
sized markets. The May 1, 1999, requirement applies to only 40 of the 
country's approximately 1200 commercial television stations, and only 
80 additional stations will be affected by the November 1, 1999, 
deadline. Over one thousand commercial stations will have until May 1, 
2002, to plan for and implement their DTV facilities. Noncommercial 
stations will have until May 1, 2003, to construct.
    86. We believe that our construction schedule is reasonable. We 
note that the most aggressive requirements apply to stations that we 
believe are most able to absorb the costs of conversion and are 
otherwise situated to make the transition quickly: stations affiliated 
with the four major networks in the largest markets. We base our 
decision in this regard on several grounds. First, network affiliates 
consistently garner the highest percentage of audience share, and thus 
are likely to have substantial revenues that may be used to fund the 
conversion. Second, network affiliates are in a stronger position than 
independent stations because they obtain programming from their network 
and may also receive economic, technical, and other support that would 
help with respect to the conversion. Affiliates are consistently the 
most highly watched and generally the most financially successful, with 
better ratings and consequent higher advertising revenues. Their 
greater strength should give them a strong position from which to 
launch their digital service. Accordingly, we believe that network 
affiliates in the largest markets will be in the best position to make 
a rapid transition to DTV. We recognize that in some markets, a network 
has two affiliates, one of which is much stronger, with a much larger 
audience share, that the other. We have provided relief to the smaller 
affiliate in such cases, by granting a longer construction deadline. 
Finally, our construction schedule also focuses on network affiliates 
because we believe that the sale of receivers and thus the conversion 
to DTV will be accelerated by the early availability of network 
programming in DTV.18
---------------------------------------------------------------------------

    \18\ We have recognized the value and appeal of network 
programming in a number of previous decisions. See Channel 41, Inc., 
6 FCC Rcd 4109, 4111 (1991) (rule waiver granted in order to 
preserve ABC programming); Herald Publishing Co., 6 FCC 2d 631 
(1967) (waiver granted in part because station proposed to bring NBC 
network programming to a large number of viewers for the first 
time).
---------------------------------------------------------------------------

    87. Thus, the roughly two-year construction requirement that 
applies to these affiliates will both serve the public and be 
nonburdensome to these broadcasters. By May 1, 1999, markets including 
fully 30 percent of television households will have access to multiple 
streams of digital television. The vast majority of commercial 
broadcasters will have five years in which to construct, and 
noncommercial stations will have six years in which to construct their 
digital facilities. We agree with commenters arguing for a shorter 
construction schedule, especially for broadcasters in the largest 
television markets. As these commenters point out, broadcasters have 
been on notice throughout this proceeding of the impending need to 
convert to DTV. With their greater population coverage and scope of 
operations, we agree that broadcasters in the largest markets generally 
will be better able to afford and support a more rapid construction 
schedule.
    88. Moreover, the construction timetable appears to be consistent 
with the announced plans of the large networks. CBS has received an 
experimental authorization from the Commission and plans to transmit a 
DTV signal from the Empire State Building in the spring of 1997. ABC 
plans to have stations experimenting with digital transmission in early 
1998. Fox ordered digital transmitters for its O & O's fully five years 
ago from Harris Corporation, and plans to have digital transmission 
between the network and affiliates in place by third quarter 1998. NBC 
said it would begin broadcasting digital signals 18 months after 
licenses are awarded. NBC already has designed and is building a $55 
million dollar state-of-the-art digital infrastructure at its 
headquarters at 30 Rockefeller Plaza that will be commissioned this 
year. On February 2, 1997, WHD-TV, NBC's owned-and-operated model DTV 
station in Washington, D.C., broadcast ``Meet the Press'' in high 
resolution, using the new DTV standard. NBC has also announced that it 
intends ``to move as aggressively and expeditiously as is technically 
feasible'' to enable all of its owned and operated stations around the 
country to transmit DTV and is ``encouraging and helping'' its NBC 
affiliates across the nation in making the transition to DTV.
    89. Our confidence in the willingness of licensees to move rapidly 
is also supported by a recent survey of broadcasters which shows that 
28 percent of respondents plan to convert to DTV within two years and 
79 percent of respondents plan to convert to DTV within five years. In 
fact, some broadcasters have already completed arrangements for their 
digital transmission facilities. For example, the network affiliates in 
San Francisco have arranged to place their antennae for

[[Page 26980]]

digital transmission on Sutro Tower. Similarly, in New York City, the 
CBS-owned station has already arranged to place an antenna for digital 
transmission atop the Empire State Building.
    90. In addition, two experimental digital television stations are 
already up and running, and were able to begin transmissions just four 
months after announcing their plans to do so: WHD-TV in Washington, DC, 
the model station sponsored by the broadcast and equipment industries, 
and WRAL, in Raleigh, North Carolina. We have also already granted 
eight requests for experimental facilities, at least five of which are 
now operating, and we expect to grant another five experimental 
licenses soon. These efforts reflect the ability of broadcasters to set 
up facilities, and they have given broadcasters experience with digital 
television equipment that should help speed its introduction elsewhere. 
Finally, equipment manufacturers' recent statements that they plan to 
sell digital television sets by Christmas 1998 is a further expression 
of confidence and expectation that DTV will be widely available by that 
time so as to ensure consumer demand.
    91. While we recognize that conversion to digital will impose some 
burden on broadcasters, we have taken steps to ease broadcasters' 
introduction of digital service by requiring them at the outset only to 
emit a DTV signal strong enough to encompass the community of license, 
and not requiring them to begin transmission to achieve full 
replication. Many broadcasters will be able to use existing towers for 
digital transmission and reduce the costs of constructing a DTV 
facility. Many commenters who argued in favor of a longer construction 
schedule did so based on their contention that construction of full-
replication facilities would require more than six years due to 
hardware supply constraints, insufficient personnel resources, or lack 
of adequate new tower sites. However, our construction requirement is 
satisfied by the emission of a DTV signal strong enough to encompass 
the community of license, rather than the more difficult requirement 
that broadcasters replicate their existing service areas. Therefore, 
licensees need not initially construct full-replication facilities. We 
believe that the establishment of a construction requirement that is 
more easily satisfied, as well as our staggered approach, will 
alleviate the difficulties raised by some commenters.
    92. One of the most significant issues in converting to digital 
broadcasting is the construction of new towers or the upgrade of 
existing towers. As explained above, this burden will be eased by our 
limited build-out requirement. In addition, while we recognize that 
there may not be sufficient equipment available in the earliest days to 
allow for a full-fledged DTV operation to be implemented by all 1,600 
television licensees, we are confident that minimal facilities for the 
handful of licensees in the top ten markets can be assembled in a 
timely fashion. These facilities need only meet our requirements of 
serving the community of license, which can be accomplished by the use 
of existing equipment or prototypes certain to be introduced soon.
    93. As for noncommercial stations, we allow them until May 1, 2003, 
to construct DTV facilities. There is strong support in the record for 
giving noncommercial stations greater leeway in the construction of DTV 
facilities. As discussed more fully below, noncommercial stations need 
and warrant special relief to assist them in the transition. And, as 
noted above, there are some noncommercial stations at the forefront of 
DTV. However, we are convinced by the record that noncommercial 
stations, as a group, may have more difficulty with the transition to 
DTV than commercial stations. Therefore, we permit noncommercial 
stations a longer period of time to construct DTV facilities than 
commercial DTV stations.

H. Recovery Date

    94. Background. Earlier in this proceeding, the Commission made the 
preliminary decision to establish a recovery date 15 years from the 
date of the adoption of an ATV system or the date a final Table of ATV 
Allotments is effective, whichever is later. At the end of this period, 
all analog broadcast would cease, and the spectrum used for NTSC would 
be returned to the Commission. The Commission emphasized that, given 
the uncertainties surrounding the conversion process and the possible 
changes in the data on which we relied, setting the recovery date at 15 
years was necessarily preliminary. In order to avoid making a decision 
that would be overtaken by events, the Commission adopted a schedule of 
periodic reviews to make whatever adjustments might be necessary. The 
Commission made clear that broadcasters who do not convert to ATV will 
have to cease broadcasting in NTSC at the end of the 15-year transition 
period. The Commission explained that establishment of a firm date for 
full transition would be in the public interest because it would keep 
administration simple, assure progress toward spectrum recovery on a 
timely basis, and give parties a clearly defined planning horizon. The 
Fourth Further Notice/Third Inquiry (60 FR 42130, August 15, 1995) 
explained that a more rapid conversion to ATV might be possible than 
previously expected. The broadcast industry, including equipment 
manufacturers, have been aggressive in developing digital television 
technology, as have alternative programming providers such as Direct 
Broadcast Satellite (DBS), cable systems, wireless technology, and 
others. Because of the developing competition, and the drop in prices 
resulting from the proliferation of digitally based media, the Fourth 
Further Notice/Third Inquiry anticipated that conversion might occur 
more rapidly than originally anticipated. Commenters were asked to 
address whether some objective benchmark(s) could be used to determine 
when broadcasters should cease NTSC transmission.
    95. Comments. Numerous commenters note that the high degree of 
uncertainty surrounding the successful establishment of DTV makes it 
difficult to set an end-point for NTSC service. Many urge us therefore 
to postpone setting a transition date. Joint Broadcasters argue, for 
instance, that: ``Even the enterprise of setting self-enforcing 
benchmarks at this point is highly speculative in the absence of market 
experience. There are simply too many unknowns that will need to be 
factored into any such decision--the cost and availability of digital 
sets, the cost and availability of converters, and ATV penetration 
levels both in terms of households and sets.'' Some commenters propose 
that the Commission set a nominal target date for the cessation of NTSC 
broadcasts, with periodic reviews to monitor the progress of 
implementation. Others support a settled ``date certain'' approach.
    96. If the Commission were to set objective benchmarks, comments 
suggest several possible benchmarks: a measurement of the total number 
of sets and total number of households capable of displaying DTV; a 
measurement of the number of stations transmitting digital signals and 
the number of households with digital receivers, including set-top 
boxes; a ``sets-sold'' methodology so that once DTV sets reach some 
percentage, e.g., 70%, of current TV households, NTSC transmissions 
would cease three years later; or when a certain percentage, e.g., 80%, 
of television households no longer rely solely on analog broadcasting.

[[Page 26981]]

    97. Decision. One of our overarching goals in this proceeding is 
the rapid establishment of successful digital broadcast services that 
will attract viewers from analog to DTV technology, so that the analog 
spectrum can be recovered. Accomplishment of this goal requires that 
the NTSC service be shut down at the end of the transition period and 
that spectrum be surrendered to the Commission. Indeed, Congress 
required the Commission to condition the grant of a digital license on 
the Commission's recovery of 6 MHz from each licensee. The Act 
provides:

    ``(c) Recovery of License. --If the Commission grants a license 
for advanced television services to a person that, as of the date of 
such issuance, is licensed to operate a television broadcast station 
or holds a permit to construct such a station (or both), the 
Commission shall, as a condition of such license, require that 
either the additional license or the original license held by the 
licensee be surrendered to the Commission for reallocation or 
reassignment (or both) pursuant to Commission regulation.''

The question we face is at what point in time the surrender should 
occur.
    98. We continue to believe that it is desirable to identify a 
target end-date of NTSC service. Doing so will lend certainty to the 
introduction of digital by making clear to the public that analog 
television service will indeed cease on a date certain. A target will 
provide broadcasters and manufacturers with a defined planning horizon 
that will help them gauge their business plans to the introduction of 
DTV.
    99. While the Commission has previously considered a 15-year end-
point for NTSC service, we now believe that broadcasters should be able 
to convert to digital broadcast much more rapidly. Specifically, we 
believe that a target of 2006 for the cessation of analog service is 
reasonable. As the Fourth Further Notice/Third Inquiry (60 FR 42130, 
August 15, 1995) explained, as digital technology has developed, we 
have had reason to expect that DTV may be adopted more quickly than 
originally anticipated. Competitors in the video programming market, 
such as DBS, cable, and wireless cable, have aggressively pursued the 
potential of digital technology. This competitive pressure has lent 
urgency to the need for broadcasters to convert rapidly. Furthermore, 
technological advances have worked to lower the introductory costs to 
broadcasters; for example, new technology may allow many broadcasters 
to use existing towers for digital transmission, thus easing the 
expense of converting to digital equipment. And, due to the 
introduction of other services, broadcasters who need new towers, will 
be able to lease space on their new towers to mobile service providers, 
further lowering the costs of converting. On the viewers' side, 
technological advances in converter-box technology will lower the 
consumer costs of the introduction of digital technology. The dramatic 
drop anticipated in converter-box prices will permit consumers 
inexpensively to continue to use existing equipment, thus easing the 
introduction of digital services. Based on our current information, we 
believe 2006 is a reasonable target.
    100. As we discuss below, we will conduct reviews of the progress 
of DTV every two years. This will allow us to monitor the progress of 
DTV and to make adjustments to the 2006 target, if necessary. In 
evaluating the appropriateness of the 2006 target date, key factors for 
consideration will include viewer acceptance of digital television, 
penetration of digital receivers and digital-to-analog converter set-
top boxes, the availability of digital-to-analog conversion by 
retransmission media such as cable, DBS, and wireless cable, and 
generally the number of television households that continue to rely 
solely on over-the-air analog broadcasting. We emphasize, as we have 
throughout this proceeding, that at the designated date, broadcasters 
who do not receive extensions must return one of their two channels.

I. Noncommercial Stations

    101. Background. In the Fourth Further Notice/Third Inquiry (60 FR 
42130, August 15, 1995), we noted that noncommercial licensees would 
face unique problems in their transition to DTV, particularly in the 
area of funding. Accordingly, we asked for comment on what relief would 
be appropriate for noncommercial broadcasters. We also noted comments 
by noncommercial broadcasters that the six-year application/
construction period was insufficient, but expressed our preference to 
establish a firm transition schedule, dealing with unique problems on a 
case-by-case basis, rather than establishing two sets of broadcasters, 
each with its own schedule. Finally, we asked what other relief could 
be afforded to noncommercial broadcasters to assist them in the 
conversion to DTV, such as by mandating that only the minimum required 
broadcast programming must be ``noncommercial,'' and to minimize 
restrictions on their operations and allow them greater flexibility.
    102. Comments. AAPTS/PBS state that their biggest concern is the 
ability of noncommercial stations to raise sufficient funds to support 
current operations and the transition to DTV. Toward that end, they 
assert that they have worked with Congress to propose legislation that 
would replace the current system of federal funding for public 
television stations with new sources of funding. In their Comments, 
AAPTS/PBS seek flexibility in the application and construction period 
in light of the financial constraints faced by noncommercial 
broadcasters, including relaxation or elimination of the financial 
qualifications requirement and establishment of a less demanding 
construction schedule for noncommercial stations--requiring only that 
they construct and begin operating DTV facilities some time prior to 
the ultimate conversion deadline. Finally, they urge that noncommercial 
stations that share a channel under their legislative proposal be 
afforded flexibility to convert to full-time DTV operation on their 
NTSC channels at any time during the transition period and that the 
Commission should adopt a waiver policy under which noncommercial 
stations that operate their own DTV channels would be permitted, on a 
case-by-case basis to convert to DTV operation on one of the station's 
6 MHz channels and cease NTSC operations earlier than the conversion 
date.
    103. MAP also supports relaxing the construction and transition 
timetables and financial qualifications for public broadcasters. 
General Instrument notes its general support for government action that 
would ``mitigate financial problems faced by noncommercial stations in 
converting to ATV technology, and would lead to conversion as early as 
possible.'' Further, The Digital Grand Alliance agrees with AAPTS/PBS 
that the Commission should modify its approach as necessary to promote 
the conversion of noncommercial stations to DTV. It does not object to 
affording less demanding construction schedules for noncommercial 
broadcasters as long as they are operating their DTV channel by the end 
of the transition period, and it endorses giving them the option to 
convert to full-time DTV on their NTSC channels at any time during the 
transition period.
    104. Decision. At the outset, we note our commitment to 
noncommercial educational television service and our recognition of the 
high quality programming service noncommercial stations have provided 
to American viewers over the years. We also acknowledge the financial 
difficulties faced by noncommercial stations and reiterate our view 
that noncommercial

[[Page 26982]]

stations will need and warrant special relief measures to assist them 
in the transition to DTV. Accordingly, we intend to grant such special 
treatment to noncommercial broadcasters to afford them every 
opportunity to participate in the transition to digital television, and 
we will deal with them in a lenient manner. As discussed above, we will 
not require a financial showing of any broadcaster seeking a 
construction permit to build a DTV station, and, accordingly, no 
special treatment will be required of noncommercial broadcasters in 
this regard. With respect to the construction deadline, discussed 
above, we will apply a six-year construction period timetable to 
noncommercial stations, the longest permitted to any category of DTV 
applicant. We believe, however, that it would be premature to attempt 
to resolve the issue of what additional special treatment, if any, 
should be afforded to noncommercial broadcasters at this early date, 
and we will consider this issue in our periodic reviews. At the same 
time, however, we wish to note that public broadcasting service was the 
first to establish a digital satellite transmission system and that 
public broadcasting licensees are in the forefront of experimenting 
with digital television. Public broadcasters have taken an innovative 
approach in experimenting with the capabilities of digital technology.

J. Must-Carry and Retransmission Consent

    In the Fourth Further Notice/Third Inquiry (60 FR 42130, August 15, 
1995), we requested comment on questions relating to the issues of what 
must-carry obligations and retransmission consent provisions should 
apply to DTV stations, both during the transition and as a consequence 
of DTV having replaced NTSC broadcasting. We received comments on these 
issues from several entities. Subsequent to the issuance of the Fourth 
Further Notice/Third Inquiry, Congress, in the 1996 Act, gave the 
Commission some direction as to the scope of must-carry, indicating 
that no ancillary or supplementary DTV services should have must-carry 
rights.
    106. On March 31, 1997, the Supreme Court upheld the 
constitutionality of the must-carry provisions contained in the Cable 
Television Consumer Protection and Competition Act of 1992, in Turner 
Broadcasting System, Inc. v. FCC (``Turner II''). In upholding the 
constitutionality of must-carry, the Court emphasized that preserving 
the benefits of free, over-the-air broadcast television and promoting 
the widespread dissemination of information from a multiplicity of 
sources were important governmental interests. The Turner II case did 
not expressly address the issue of must-carry of digital television 
signals. In order to obtain a full and updated record on the 
applicability of the must-carry and retransmission consent provisions 
in the digital context, particularly in light of the Turner II 
decision, we intend to issue a Notice to seek additional comments on 
these issues.

K. All-Channel Receiver Issues

    107. Background. Traditionally, we have not regulated broadcast 
receivers except insofar as they incidentally radiate energy. However, 
the All Channel Receiver Act authorizes us to require that television 
receivers ``be capable of adequately receiving all frequencies 
allocated by the Commission to television broadcasting.'' While we 
require that all TV broadcast receivers be capable of adequately 
receiving all channels allocated by the Commission to the television 
broadcast service, we previously determined in this proceeding that the 
All Channel Receiver Act does not mandate the manufacture of dual-mode 
(DTV and NTSC) receivers. We were concerned that such a requirement 
might burden consumers, and sought comment on whether there is any need 
to require that manufacturers produce receivers capable of both NTSC 
and DTV reception during the transition to DTV.
    108. In the Fourth Further Notice of Proposed Rule Making (60 FR 
42130, August 15, 1995), we noted that DTV would have the capability to 
deliver both HDTV and SDTV and sought comment on whether permitting the 
manufacture and sale of receivers that receive and display only NTSC, 
SDTV, or HDTV signals, or some combination, would be consistent with 
the All Channel Receiver Act and in the public interest. We also 
requested comment on whether we should regulate how a signal should be 
displayed, the need for a labeling requirement for television 
receivers, and limiting the sale of NTSC receivers.
    109. Comments. Most broadcasters support a requirement that all DTV 
receivers and set-top converters be able to receive and display NTSC 
signals, and receive all DTV signals included in the DTV transmission 
standard and display them in the highest quality format which the 
particular set is designed to accommodate. Golden Orange argues that 
the Commission should allow market forces to determine receiver design. 
The Digital Grand Alliance and most equipment manufacturers argue that 
manufacturers will build digital receivers that receive all DTV 
formats, including HDTV, along with NTSC broadcasts, without any FCC 
requirement. The Digital Grand Alliance states that it would support a 
requirement that all DTV receivers receive all DTV formats including 
HDTV, if it were coupled with a requirement that broadcasters transmit 
minimum amounts of HDTV programming.
    110. While most broadcasters and Motorola favor regulations 
governing how DTV signals are displayed on DTV receivers, most 
equipment manufacturers and other commenters favor a market-driven 
approach. Comments are also mixed on the need for labeling 
requirements. Joint Broadcasters state that the Commission should 
consider a notice requirement on NTSC-only sets warning consumers that 
NTSC transmissions will end. New World states that the FCC should 
require every NTSC-only set to come with a prominent warning that the 
set will not receive broadcasts after a date certain without 
modifications. MAP argues that the burdens of labeling are far 
outweighed by the need to protect consumers. Equipment manufacturers 
maintain that labeling requirements are unnecessary. EIA states that 
informational programs and consumer education are critical components 
of the manufacturer-consumer relationship, so manufacturers will be 
certain to educate consumers regarding their equipment options during 
the transition to DTV. On the issue of limiting the sale of NTSC 
receivers, New World and the AAPTS/PBS favor a requirement that all 
televisions sold after some date be capable of receiving and displaying 
digital broadcast transmissions. The Digital Grand Alliance and EIA 
argue that the Commission should not ban or limit the sale of NTSC-only 
receivers. During the transition to digital, and perhaps even after, 
the Digital Grand Alliance contends, there is likely to be a demand for 
NTSC-only sets driven by cable services, wireless cable services, 
direct broadcast satellite services, digital video disc players, and 
VCRs.
    111. Decision. The digital broadcast transmission standard which we 
adopted in the Fourth Report and Order (62 FR 14006, March 25, 1997) 
differed from the standard we proposed in the Fifth Further Notice (61 
FR 26864, May 29, 1996). Many of the comments we received in response 
to the Fifth Further Notice assumed that the Commission would adopt a 
DTV transmission standard that included specific video formats. 
However, the standard we

[[Page 26983]]

adopted in the Fourth Report and Order did not specify video formats. 
We chose instead to allow video formats to be determined by the market 
and consumer demand. Because of this important modification, we believe 
that some of the arguments made by the commenters on specific all-
channel receiver issues are no longer applicable.
    112. We have decided that, at this time, equipment manufacturers 
should have maximum latitude to determine which video formats DTV 
equipment will receive. We believe that it is likely that market forces 
will provide incentives for broadcasters and equipment manufacturers to 
work closely together to produce the receiver and converter designs 
most valued by consumers.
    113. We do not believe that our goals would be advanced by 
mandating that all digital receivers receive and display NTSC signals 
and DTV signals, regardless of format, aspect ratio, or progressive or 
interlaced scanning, as broadcasters argue. We expect that equipment 
manufacturers will make available to consumers digital receivers that 
receive both NTSC and DTV signals. However, we will not preclude 
equipment manufacturers from designing digital receivers that do not 
receive NTSC signals. In addition, we believe that equipment 
manufacturers should be allowed to offer lower-cost, digital receivers 
that receive only progressive scan or SDTV formats. Our two-year 
reviews will give us an opportunity to monitor DTV receiver designs and 
address any problems that may arise.
    114. We have decided to postpone any decision concerning a labeling 
requirement. We are providing broadcasters flexibility in their choice 
of video formats and equipment manufacturers flexibility in their 
choice of receiver designs and we are hopeful that this will result in 
products and services that draw consumers to DTV. At this early stage 
of the transition process, we will rely on consumer electronics 
manufacturers and retailers to provide the information necessary for 
consumers to make informed choices. Should problems arise, and 
consumers become confused, as the transition moves forward, we will 
have opportunity to revisit labeling requirement issues through our 
review process. Finally, we recognize that there is an enormous 
embedded base of video cassette recorders, cable decoder boxes, laser 
disc players, and other video equipment that use NTSC receivers for 
non-broadcast purposes. This suggests that there may be a continuing 
market for the sale of NTSC display devices, even after the conversion 
to DTV. Therefore, we decline to limit the sale of NTSC-only display 
devices.

L. Review Issues

    115. In the Third Report/Further Notice (57 FR 53588, November 12, 
1992), the Commission set deadlines for the application and 
construction period, the simulcast requirements, and the transition 
end-date. The Commission also adopted a timetable, with specific years, 
for the review of information relating to these time periods, under the 
assumption that the ATV standard and a table of ATV allotments would be 
adopted by late 1993. The Commission emphasized that the adoption of 
certain dates would give parties a measure of certainty, while a 
schedule for review would permit government and industry to adapt, if 
necessary, to unforeseen circumstances.
    116. While the specific dates established in the Third Report/
Further Notice (57 FR 53588, November 12, 1992) have been overtaken by 
events and are no longer applicable, we continue to believe that 
regular reviews of the progress of DTV are highly desirable. Given the 
importance of digital television's introduction, we conclude that a 
periodic review every two years until the cessation of analog service 
is necessary to allow the Commission the opportunity to ensure that the 
introduction of digital television and the recovery of spectrum at the 
end of the transition fully serves the public interest. During these 
reviews, we will address any new issues raised by technological 
developments, necessary alterations in our rules, or other changes 
necessitated by unforeseen circumstances. The Commission will address 
such issues as the appropriateness of 2006 as a target recovery date, 
the proper application of the simulcast requirement, the special needs 
of noncommercial stations, issues related to DTV receiver designs and 
set labelling, and any other issue that requires examination. Our 
decisions today, at the very outset of the introduction of digital 
television, are in some respects necessarily preliminary. A periodic 
review will permit us to make whatever adjustments will be required.

III. Conclusion

    117. Digital television will enter a highly competitive, 
challenging telecommunications marketplace. Our decisions in this 
Report and Order, designed to foster technological innovation and 
competition, while minimizing government regulation, will, we hope, 
increase the likelihood that we will see a digital television service 
that provides a host of new and beneficial services to the American 
public, while preserving free universal television service that serves 
the ``public interest, convenience, and necessity.''

IV. Administrative Matters

    118. The Commission has submitted to OMB an emergency request for 
approval of: (1) an information collection regarding the cancellation 
of the Initial DTV License and (2) the form attached to this Report and 
Order to be used to apply for a DTV construction permit. The first 
request will be used only once and the Commission will not seek 
extension of the approval for this collection. The second will continue 
to be used by the public. OMB approved this emergency request and 
assigned 3060-0766 as the control number. Additionally, this Report and 
Order contains a requirement that those stations that voluntarily 
committed to building DTV facilities within 18 months are required to 
submit progress reports on construction of facilities. As required by 
the Regulatory Flexibility Act (``RFA''), 5 U.S.C. 603, an Initial 
Regulatory Flexibility Analysis (``IRFA'') was incorporated in the 
Fourth Further Notice of Proposed Rule Making and Third Notice of 
Inquiry (60 FR 42130, August 15, 1995) in this proceeding. The 
Commission sought written public comments on the proposals in the 
Fourth Further Notice, including on the IRFA. The Commission's Final 
Regulatory Flexibility Analysis (``FRFA'') in this Fifth Report and 
Order conforms to the RFA, as amended by the Contract With America 
Advancement Act of 1996, Public Law 104-121, 110 Stat. 847 (1996) 
(``CWAAA'').19
---------------------------------------------------------------------------

    \19\ See generally 5 U.S.C. Sec. 1 et seq. (RFA). Title II of 
CWAAA is The Small Business Regulatory Enforcement Fairness Act of 
1996 (SBREFA).
---------------------------------------------------------------------------

V. Final Paperwork Reduction Act of 1995 Analysis

    119. This Report and Order contains either a new or modified 
information collection. The Commission, as part of its continuing 
effort to reduce paperwork burdens, invites the general public to 
comment on the information collections contained in this R&O as 
required by the Paperwork Reduction Act of 1995, Public Law 104-13. 
Public and agency comments are due 60 days from date of publication of 
this R&O in the Federal Register. Comments should address: (a) Whether 
the new or modified collection of information is necessary for the 
proper performance of the functions of the Commission,

[[Page 26984]]

including whether the information shall 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: 3060-0027.
    Title: Application for Construction Permit for Commercial Broadcast 
Station.
    Form No.: FCC 301.
    Type of Review: Revision of a currently approved collection.
    Respondents: Businesses or other for-profit.
    Number of Respondents: 1,996.
    Estimated time per response: 37 hours--159 hours (This time varies 
depending of the type of application filed. This collection is 
contracted out to communications attorneys and consulting engineers for 
completion of the form.)
    Total annual burden: 8,071.
    Needs and Uses: FCC 301 is used to apply for authority to construct 
a new commercial AM, FM or TV broadcast station, or to make changes in 
the existing facilities of such a station. In addition, FM licensees or 
permittees may request, by application on FCC 301, upgrades on adjacent 
and co-channels, modifications to adjacent channels of the same class 
and downgrades to adjacent channels without first submitting a petition 
for rulemaking. All applicants using this one-step process must 
demonstrate that a suitable site exists which would comply with 
allotment standards with respect to minimum distance separation and 
city-grade coverage and that it would be suitable for tower 
construction.
    120. To receive authorization for commencement of operation, an 
initial DTV licensee must file FCC 301 for a construction permit. This 
application may be filed anytime after receiving the initial DTV 
license but must be filed before the mid-point in a particular 
applicant's required construction period. The Commission has developed 
a new section V-D for DTV engineering which will be added to the FCC 
301. The Commission will consider these applications as minor changes 
in facilities. Applicants will not have to supply full legal or 
financial qualification information.
    121. On 3/7/96, the Commission adopted an Order which amended the 
Commission's rules to eliminate current national multiple radio 
ownership restrictions and to relax local radio ownership restrictions 
(the ``radio contour overlap'' rule). This action was necessary to 
conform the rules to section 202(a) and 202(b)(1) of the 
Telecommunications Act of 1996. This action will revise the FCC 301 by 
removing the Exhibit dealing with market and audience share 
information.
    122. The FCC 301 will also be revised to add the new requirements 
regarding antenna tower registration. This unique antenna registration 
number identifies an antenna structure and must be used on all filings 
related to the antenna structure. Several questions will be added to 
the engineering portions of the this form to collect this information. 
This requirement was approved by OMB under control number 3060-0714.
    123. The data is used by FCC staff to determine whether the 
applicant meets basic statutory requirements to become a Commission 
licensee.
    OMB Approval Number: 3060-0034.
    Title: Application for Construction Permit for Noncommercial 
Educational Broadcast Station.
    Form No.: FCC 340.
    Type of Review: Revision of a currently approved collection.
    Respondents: Not for-profit institutions.
    Number of Respondents: 646.
    Estimated time per response: 37 hours--114 hours (This time varies 
depending of the type of application filed. This collection is 
contracted out to communications attorneys and consulting engineers for 
completion of the form.)
    Total annual burden: 2,736.
    Needs and Uses: FCC 340 is used to apply for authority to construct 
a new noncommercial educational AM, FM and TV broadcast station, or to 
make changes in the existing facilities of such a station.
    124. To receive authorization for commencement of operation, an 
initial DTV licensee must file FCC 340 for a construction permit. This 
application may be filed anytime after receiving the initial DTV 
license but must be filed before the mid-point in a particular 
applicant's required construction period. The Commission has developed 
a new section V-D for DTV engineering which will be added to the FCC 
340. The Commission will consider these applications as minor changes 
in facilities. Applicants will not have to supply full legal or 
financial qualification information.
    125. This form will be revised to add the new requirements 
regarding antenna tower registration. This unique antenna registration 
number identifies an antenna structure and must be used on all filings 
related to the antenna structure. Several questions will be added to 
the engineering portions of the FCC 340 to collect this information. 
This requirement was approved by OMB under control number 3060-0714.
    126. The data is used by FCC staff to determine whether the 
applicant meets basic statutory requirements to become a Commission 
licensee.
    OMB Approval Number: 3060-None.
    Title: DTV Report on Construction Progress.
    Form No.: None.
    Type of Review: New Collection.
    Respondents: Business or other for-profit.
    Number of Respondents: 24.
    Estimated time per response: 0.33 hours (2 times per year).
    Total annual burden: 16 hours.
    Needs and Uses: By letter to the Commission, 24 stations have 
voluntarily committed to building DTV facilities within 18 months. The 
Commission is requesting that these 24 stations file reports at six-
month intervals, beginning on November 1, 1997, stating that their 
plans to meet these deadlines are on schedule or specifying any 
difficulties encountered in attempting to meet these deadlines.
    127. The data will be used by FCC staff to monitor the progress of 
DTV applicants in the construction of their DTV facilities.

VI. Final Regulatory Flexibility Analysis

    128. As required by the Regulatory Flexibility Act (``RFA''), 5 
U.S.C. 603, an Initial Regulatory Flexibility Analysis (``IRFA'') was 
incorporated in the Fourth Further Notice of Proposed Rule Making and 
Third Notice of Inquiry in this proceeding.20 The Commission 
sought written public comments on the proposals in the Fourth Further 
Notice, including on the IRFA. The Commission's Final Regulatory 
Flexibility Analysis (``FRFA'') in this Fifth Report and Order conforms 
to the RFA, as amended by the Contract With America Advancement Act of 
1996, Public Law 104-121, 110 Stat. 847 (1996) 
(``CWAAA'').21
---------------------------------------------------------------------------

    \20\ 10 FCC Rcd 10540, 10555 (1995).
    \21\ See generally 5 U.S.C. 1 et seq. (RFA). Title II of CWAAA 
is The Small Business Regulatory Enforcement Fairness Act of 1996 
(SBREFA).
---------------------------------------------------------------------------

Need for Objectives of Action

    The Fifth Report and Order adopts several rules with the following 
objectives: (1) To promote and preserve free, universally available, 
local broadcast television in a digital world, thereby preserving free, 
widely accessible programming that serves the public interest; and (2) 
to promote

[[Page 26985]]

spectrum efficiency and rapid recovery of spectrum.

Significant Issues Raised by the Public in Response to the Initial 
Analysis

    No comments were received specifically in response to the IRFA 
contained in the Fifth Further Notice. However, some comments 
indirectly addressed small business issues. In addition, most 
commenters agreed that DTV licensees should have the discretion to 
provide a wide variety of ancillary and supplemental services, thereby 
providing an additional revenue stream that would benefit small 
entities. Finally, several low power television (``LPTV'') 
broadcasters, many of which are small entities, want the Commission to 
extend initial eligibility to LPTV licensees.

Discription and Number of Small Entities to Which the Rule Will Apply

    Definition of a ``Small Business''. Under the RFA, small entities 
may include small organizations, small businesses, and small 
governmental jurisdictions. 5 U.S.C. 601(6). The RFA, 5 U.S.C. 601(3), 
generally defines the term ``small business'' as having the same 
meaning as the term ``small business concern'' under the Small Business 
Act, 15 U.S.C. 632. 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''). According to the SBA's 
regulations, entities engaged in television broadcasting Standard 
Industrial Classification (``SIC'') Code 4833--Television Broadcasting 
Stations, may have a maximum of $10.5 million in annual receipts in 
order to qualify as a small business concern. This standard also 
applies in determining whether an entity is a small business for 
purposes of the RFA.
    129. Pursuant to 5 U.S.C. 601(3), the statutory definition of a 
small business applies ``unless an agency after consultation with the 
Office of Advocacy of the SBA and after opportunity for public comment, 
establishes one or more definitions of such term which are appropriate 
to the activities of the agency and publishes such definition(s) in the 
Federal Register.'' While we tentatively believe that the foregoing 
definition of ``small business'' greatly overstates the number of 
television broadcast stations that are small businesses and is not 
suitable for purposes of determining the impact of the new rules on 
small television stations, we did not propose an alternative definition 
in the IRFA.22 Accordingly, for purposes of this Fifth 
Report and Order, we utilize the SBA's definition in determining the 
number of small businesses to which the rules apply, but we reserve the 
right to adopt a more suitable definition of ``small business'' as 
applied to television broadcast stations and to consider further the 
issue of the number of small entities that are television broadcasters 
in the future. Further, in this FRFA, we will identify the different 
classes of small television stations that may be impacted by the rules 
adopted in this Fifth Report and Order.
---------------------------------------------------------------------------

    \22\ We have pending proceedings seeking comment on the 
definition of and data relating to small businesses. In our Notice 
of Inquiry (61 FR 33066, June 26, 1996) in GN Docket No. 96-113 (In 
the Matter of section 257 Proceeding to Identify and Eliminate 
Market Entry Barriers for Small Businesses), FCC 96-216, released 
May 21, 1996, we requested commenters to provide profile data about 
small telecommunications businesses in particular services, 
including television, and the market entry barriers they encounter, 
and we also sought comment as to how to define small businesses for 
purposes of implementing section 257 of the Telecommunications Act 
of 1996, which requires us to identify market entry barriers and to 
prescribe regulations to eliminate those barriers. Additionally, in 
our Order and Notice of Proposed Rule Making (61 FR 09964, March 12, 
1996) in MM Docket No. 96-16 (In the Matter of Streamlining 
Broadcast EEO Rule and Policies, Vacating the EEO Forfeiture Policy 
Statement and Amending section 1.80 of the Commission's Rules to 
Include EEO Forfeiture Guidelines), 11 FCC Rcd 5154 (1996), we 
invited comment as to whether relief should be afforded to stations: 
(1) based on small staff and what size staff would be considered 
sufficient for relief, e.g., 10 or fewer full-time employees; (2) 
based on operation in a small market; or (3) based on operation in a 
market with a small minority work force. We have not concluded the 
foregoing rule makings.
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    130. Issues in Applying the Definition of a ``Small Business''. As 
discussed below, we could not precisely apply the foregoing definition 
of ``small business'' in developing our estimates of the number of 
small entities to which the rules will apply. Our estimates reflect our 
best judgments based on the data available to us.
    131. An element of the definition of ``small business'' is that the 
entity not be dominant in its field of operation. We were 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 following estimates of small businesses to 
which the new rules will apply do not exclude any television station 
from the definition of a small business on this basis and are therefore 
overinclusive to that extent. An additional element of the definition 
of ``small business'' is that the entity must be independently owned 
and operated. As discussed further below, we could not fully apply this 
criterion, and our estimates of small businesses to which the rules may 
apply may be overinclusive to this extent. The SBA's general size 
standards are developed taking into account these two statutory 
criteria. This does not preclude us from taking these factors into 
account in making our estimates of the numbers of small entities.
    132. With respect to applying the revenue cap, the SBA has defined 
``annual receipts'' specifically in 13 CFR 121.104, and its 
calculations include an averaging process. We do not currently require 
submission of financial data from licensees that we could use in 
applying the SBA's definition of a small business. Thus, for purposes 
of estimating the number of small entities to which the rules apply, we 
are limited to considering the revenue data that are publicly 
available, and the revenue data on which we rely may not correspond 
completely with the SBA definition of annual receipts.
    133. Under SBA criteria for determining annual receipts, if a 
concern has acquired an affiliate or been acquired as an affiliate 
during the applicable averaging period for determining annual receipts, 
the annual receipts in determining size status include the receipts of 
both firms. 13 CFR 121.104(d)(1). The SBA defines affiliation in 13 CFR 
121.103. In this context, the SBA's definition of affiliate is 
analogous to our attribution rules. Generally, under the SBA's 
definition, concerns are affiliates of each other when one concern 
controls or has the power to control the other, or a third party or 
parties controls or has the power to control both. 13 CFR 
121.103(a)(1). The SBA considers factors such as ownership, management, 
previous relationships with or ties to another concern, and contractual 
relationships, in determining whether affiliation exists. 13 CFR 
121.103(a)(2). Instead of making an independent determination of 
whether television stations were affiliated based on SBA's definitions, 
we relied on the data bases available to us to provide us with that 
information.
    134. Television Station Estimates Based on Census Data. The rules 
amended by this Fifth Report and Order will apply to all full service 
television stations and may have an effect on TV translator facilities 
and LPTV stations. The Small Business Administration defines a 
television broadcasting station that has no more than $10.5 million in 
annual receipts as a small business. Television broadcasting stations 
consist of establishments primarily engaged in broadcasting visual 
programs by television to the public, except cable

[[Page 26986]]

and other pay television services.23 Included in this 
industry are commercial, religious, educational, and other television 
stations.24 Also included are establishments primarily 
engaged in television broadcasting and which produce taped television 
program materials.25 Separate establishments primarily 
engaged in producing taped television program materials are classified 
under another SIC number.26
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    \23\ Economics and Statistics Administration, Bureau of Census, 
U.S. Department of Commerce, 1992 Census of Transportation, 
Communications and Utilities, Establishment and Firm Size, Series 
UC92-S-1, Appendix A-9 (1995).
    \24\ Id. See Executive Office of the President, Office of 
Management and Budget, Standard Industrial Classification Manual 
(1987), at 283, which describes ``Television Broadcasting Stations 
(SIC Code 4833) as:
    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 here are 
establishments primarily engaged in television broadcasting and 
which produce taped television program materials.
    \25\ Economics and Statistics Administration, Bureau of Census, 
U.S. Department of Commerce, supra note 250.
    \26\ Id.; SIC 7812 (Motion Picture and Video Tape Production); 
SIC 7922 (Theatrical Producers and Miscellaneous Theatrical Services 
(producers of live radio and television programs).
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    135. There were 1,509 television stations operating in the nation 
in 1992.27 That number has remained fairly constant as 
indicated by the approximately 1,551 operating television broadcasting 
stations in the nation as of February 28, 1997.28 For 1992 
29 the number of television stations that produced less than 
$10.0 million in revenue was 1,155 establishments, or 77% of 1,509 
establishments.30 Thus, the proposed rules will affect 
approximately 1,551 television stations; approximately 1,194 of those 
stations are considered small businesses.31 These estimates 
may overstate the number of small entities since the revenue figures on 
which they are based do not include or aggregate revenues from non-
television affiliated companies. We recognize that the proposed rules 
may also impact minority and women owned stations, some of which may be 
small entities. In 1995, minorities owned and controlled 37 (3.0%) of 
1,221 commercial television stations in the United States.32 
According to the U.S. Bureau of the Census, in 1987 women owned and 
controlled 27 (1.9%) of 1,342 commercial and non-commercial television 
stations in the United States.33
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    \27\ FCC News Release No. 31327, Jan. 13, 1993; Economics and 
Statistics Administration, Bureau of Census, U.S. Department of 
Commerce, supra note 250, Appendix A-9.
    \28\ FCC News Release No. 7033, March 6, 1997.
    \29\ Census for Communications' establishments are performed 
every five years ending with a ``2'' or ``7''. See Economics and 
Statistics Administration, Bureau of Census, U.S. Department of 
Commerce, supra note 250, III.
    \30\ The amount of $10 million was used to estimate the number 
of small business establishments because the relevant Census 
categories stopped at $9,999,999 and began at $10,000,000. No 
category for $10.5 million existed. Thus, the number is as accurate 
as it is possible to calculate with the available information.
    \31\ We use the 77 percent figure of TV stations operating at 
less than $10 million for 1992 and apply it to the 1997 total of 
1551 TV stations to arrive at 1,194 stations categorized as small 
businesses.
    \32\ Minority Commercial Broadcast Ownership in the United 
States, U.S. Dep't of Commerce, National Telecommunications and 
Information Administration, The Minority Telecommunications 
Development Program (``MTDP'') (April 1996). MTDP considers minority 
ownership as ownership of more than 50% of a broadcast corporation's 
stock, voting control in a broadcast partnership, or ownership of a 
broadcasting property as an individual proprietor. Id. The minority 
groups included in this report are Black, Hispanic, Asian, and 
Native American.
    \33\ See Comments of American Women in Radio and Television, 
Inc. in MM Docket No. 94-149 and MM Docket No. 91-140, at 4 n.4 
(filed May 17, 1995), citing 1987 Economic Censuses, Women-Owned 
Business, WB87-1, U.S. Dep't of Commerce, Bureau of the Census, 
August 1990 (based on 1987 Census). After the 1987 Census report, 
the Census Bureau did not provide data by particular communications 
services (four-digit Standard Industrial Classification (SIC) Code), 
but rather by the general two-digit SIC Code for communications 
(48). Consequently, since 1987, the U.S. Census 
Bureau has not updated data on ownership of broadcast facilities by 
women, nor does the FCC collect such data. However, we sought 
comment on whether the Annual Ownership Report Form 323 should be 
amended to include information on the gender and race of broadcast 
license owners. Policies and Rules Regarding Minority and Female 
Ownership of Mass Media Facilities, Notice of Proposed Rulemaking, 
10 FCC Rcd 2788, 2797 (1995).
---------------------------------------------------------------------------

    136. It should also be noted that the foregoing estimates do not 
distinguish between network-affiliated 34 stations and 
independent stations. As of April, 1996, the BIA Publications, Inc., 
Master Access Television Analyzer Database indicates that about 73 
percent of all commercial television stations were affiliated with the 
ABC, CBS, NBC, Fox, UPN, or WB networks. Moreover, seven percent of 
those affiliates have secondary affiliations.35
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    \34\ In this context, ``affiliation'' refers to any local 
broadcast television station that has a contractual arrangement with 
a programming network to carry the network's signal. This definition 
of affiliated station includes both stations owned and operated by a 
network and stations owned by other entities.
    \35\ Secondary affiliations are secondary to the primary 
affiliation of the station and generally afford the affiliate 
additional choice of programming.
---------------------------------------------------------------------------

    137. There are currently 4,977 TV translator stations and 1,952 
LPTV stations which would be affected by the new rules, if they decide 
to convert to digital television.36 The Commission does not 
collect financial information of any broadcast facility and the 
Department of Commerce does not collect financial information on these 
broadcast facilities. We will assume for present purposes, however, 
that most of these broadcast facilities, including LPTV stations, could 
be classified as small businesses. As we indicated earlier, 77% of 
television stations are designated as small businesses. Given this 
situation, LPTV and translator stations would not likely have revenues 
that exceed the SBA maximum to be designated as small businesses.
---------------------------------------------------------------------------

    \36\ FCC News Release No. 7033, March 6, 1997.
---------------------------------------------------------------------------

    138. Alternative Classification of Small Television Stations. An 
alternative way to classify small television stations is by the number 
of employees. The Commission currently applies a standard based on the 
number of employees in administering its Equal Employment Opportunity 
(``EEO'') rule for broadcasting.37 Thus, radio or television 
stations with fewer than five full-time employees are exempted from 
certain EEO reporting and recordkeeping requirements.38 We 
estimate that the total number of commercial television stations with 4 
or fewer employees is 132 and that the total number of noncommercial 
educational television stations with 4 or fewer employees is 
136.39
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    \37\ The Commission's definition of a small broadcast station 
for purposes of applying its EEO rule was adopted prior to the 
requirement of approval by the Small Business Administration 
pursuant to section 3(a) of the Small Business Act, 15 U.S.C. 
632(a), as amended by section 222 of the Small Business Credit and 
Business Opportunity Enhancement Act of 1992, Public Law 102-366, 
section 222(b)(1), 106 Stat. 999 (1992), as further amended by the 
Small Business Administration Reauthorization and Amendments Act of 
1994, Public Law 103-403, section 301, 108 Stat. 4187 (1994). 
However, this definition was adopted after public notice and an 
opportunity for comment. See Report and Order in Docket No. 18244, 
23 FCC 2d 430 (1970).
    \38\ See, e.g., 47 CFR 73.3612 (Requirement to file annual 
employment reports on Form 395-B applies to licensees with five or 
more full-time employees); First Report and Order in Docket No. 
21474 (In the Matter of Amendment of Broadcast Equal Employment 
Opportunity Rules and FCC Form 395), 70 FCC 2d 1466 (1979). The 
Commission is currently considering how to decrease the 
administrative burdens imposed by the EEO rule on small stations 
while maintaining the effectiveness of our broadcast EEO 
enforcement. Order and Notice of Proposed Rule Making in MM Docket 
No. 96-16 (In the Matter of Streamlining Broadcast EEO Rule and 
Policies, Vacating the EEO Forfeiture Policy Statement and Amending 
Section 1.80 of the Commission's Rules to Include EEO Forfeiture 
Guidelines), 11 FCC Rcd 5154 (1996). One option under consideration 
is whether to define a small station for purposes of affording such 
relief as one with ten or fewer full-time employees. Id. at para. 
21.
    \39\ We base this estimate on a compilation of 1995 Broadcast 
Station Annual Employment Reports (FCC Form 395-B), performed by 
staff of the Equal Opportunity Employment Branch, Mass Media Bureau, 
FCC.

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[[Page 26987]]

Projected Compliance Requirements of the Rule

    The Fifth Report and Order adopts a number of rules, procedures, 
and policies, most of which are not expected to involve the imposition 
of new compliance requirements upon licensees or other entities. These 
include the rules: (1) Providing 6 MHz channels for each DTV channel; 
(2) limiting the initial eligibility for DTV channels to existing full-
power broadcasters; (3) requiring licensees to provide at least one 
free digital video programming service that is at least comparable in 
resolution to today's service and aired during the same time periods 
that their analog channel is broadcasting; (4) allowing broadcasters 
full flexibility to respond to the demands of their audience by 
providing ancillary and supplementary services that do not derogate the 
mandated free, over-the-air program service; (5) giving broadcasters 
the discretion as to how much, if any, high definition television 
programming they will transmit; (6) refraining from imposing a 
simulcasting requirement upon broadcasters until the final years of the 
transition; (7) licensing NTSC and DTV television facilities under a 
single, paired license; (8) stating the Commission's intent to give 
special relief to noncommercial broadcasters to assist their transition 
to DTV, including providing them six years within which to construct 
DTV facilities; (9) allowing equipment manufacturers at this time 
maximum latitude to determine which video formats DTV equipment will 
receive, since broadcasters will have the latitude to decide which 
video formats they will transmit based on market and consumer demand; 
(10) postponing a decision whether to impose labeling requirements on 
receiver manufacturers; and (11) declining to limit the sale of NTSC-
only display devices in the future.
    139. We do expect that three of the rules we adopt today may 
constitute significant compliance requirements on small entities, as 
well as on others. First, pursuant to the rule setting a timetable for 
applying for and constructing DTV facilities, all licensees will have 
90 days after the release date of the DTV Table of Allotments to inform 
the Commission if they do not want a DTV channel. After that, there 
will be three categories of construction requirements for commercial 
television stations. In the first category, all network-affiliated 
stations in the top ten television markets will have until May 1, 1999, 
to construct their digital facilities. In the second category, all 
network-affiliated stations in the top 30 television markets not 
included above will have until November 1, 1999, to construct their 
digital facilities. In the third category, all other commercial 
stations will have until May 1, 2002, to construct their DTV 
facilities. All noncommercial stations will have until May 1, 2003, to 
construct their DTV facilities. We will ask that those stations that 
have represented to the Commission that they will complete construction 
of the DTV facility by November 1, 1998, file reports at six-month 
intervals, beginning on November 1, 1997, stating that their plans to 
meet these deadlines are on schedule or specifying any difficulties 
encountered in attempting to meet these deadlines. We will grant an 
extension of time where a broadcaster has been unable to complete 
construction due to circumstances that are either unforeseeable or 
beyond the licensee's control where the licensee has taken all possible 
steps to resolve the problem expeditiously.
    140. The second rule with compliance requirements, that setting a 
deadline of 2006 for broadcasters to complete their transition to DTV 
by surrendering their NTSC spectrum, also affects small entities, as 
well as others. However, because stations will have constructed their 
DTV facilities by that time, pursuant to the timetable mentioned above, 
the compliance requirement is simply to cease transmitting NTSC 
signals.
    141. The third rule with compliance requirements, that setting a 
graduated simulcast requirement for the last three years of the 
transition, also affects small entities, as well as others. However, 
because of the gradual nature of the requirement, as well as the 
multichannel capabilities of DTV, small entities are not expected to 
find it difficult to comply.

Significant Alternatives Considered Minimizing the Economic Impact on 
Small Entities and Consistent with the Stated Objectives

    The Fifth Report and Order adopts a rule providing 6 MHz channels 
for each DTV channel. This represents the optimum balance of broadcast 
needs and spectrum efficiency, and it is consistent with the DTV 
Standard adopted in the Fourth Report and Order. To specify a different 
channel size at this late date would not promote the goals we sought to 
achieve in adopting the DTV Standard and would prolong the conversion 
to DTV, thereby putting broadcasters at a competitive disadvantage to 
other digital video program providers.
    142. The Fifth Report and Order also adopts a rule limiting the 
initial eligibility for DTV channels to existing full-power 
broadcasters, consistent with the statutory directive to do so 
contained in the Telecommunications Act of 1996. This minimizes the 
chances that small entities that already have full-service NTSC 
licenses or construction permits will be forced to surrender them. 
However, low power television broadcasters, many of which are small 
entities, would not automatically be eligible for DTV channels.
    143. The Fifth Report and Order also adopts a rule requiring 
licensees to provide at least one free digital video programming 
service that is at least comparable in resolution to today's service 
and aired during the same time periods that their analog channel is 
broadcasting. Accordingly, the provision of this minimum service should 
impose no economic impact beyond that already imposed by the general 
requirement that stations construct and operate digital television 
facilities. At the same time, it ensures that viewers will continue to 
have access to over-the-air broadcast programming. Finally, it does not 
impede broadcasters' opportunities to generate revenue through 
additional advertiser-supported programming or subscription, if they 
choose.
    144. The Fifth Report and Order also adopts a rule stating that 
broadcasters shall have full flexibility to respond to the demands of 
their audience by providing ancillary and supplementary services that 
do not derogate the mandated free, over-the-air program service. Such 
services could include, but are not limited to, subscription television 
programming, computer software distribution, data transmissions, 
teletext, interactive services, audio signals, and any other services 
that do not interfere with the required free service.
    145. The Fifth Report and Order declines to impose a requirement 
that broadcasters provide a minimum amount of high definition 
television programming over the DTV spectrum, and instead leaves this 
decision to the discretion of broadcasters. Such a minimum requirement 
might be particularly burdensome on small broadcasters, including many 
independent and foreign-language stations.
    146. The Fifth Report and Order also refrains from imposing a 
simulcasting requirement on broadcasters until the closing years of the 
transition. However, broadcasters at all times retain the option to 
simulcast, should they so choose. This discretion assures small 
entities, as well as others, the flexibility

[[Page 26988]]

to compete more efficiently in the video marketplace.
    147. However, in order to help reclaim spectrum at the end of the 
transition period, the Fifth Report and Order requires that by the 
sixth year after its adoption, programming that is aired on a 
broadcaster's analog channel must be available on its digital channel. 
This will prevent disenfranchisement of the remaining NTSC viewers when 
the NTSC spectrum is reclaimed. Thus, commencing April 1, 2003, DTV 
licensees and permittees must simulcast at least 50% of the video 
programming transmitted on their analog channel; commencing April 1, 
2004, there will be a 75% simulcasting requirement; commencing April 1, 
2005, there will be a 100% simulcasting requirement until the analog 
channel is terminated and returned.
    148. The Fifth Report and Order also determines that NTSC and DTV 
television facilities should be licensed under a single, paired 
license. This will help small broadcasters, as well as others, minimize 
their administrative burdens and the financial costs associated with 
them.
    149. The Fifth Report and Order also sets a timetable by which 
stations must apply for and construct DTV facilities. It is important 
to foster an expeditious and orderly transition to digital technology 
that will allow the public to receive the benefits of digital 
television, so it is important that viewers in television markets have 
access to DTV programming and other digital services as quickly as 
possible. First, pursuant to the rule setting a timetable for applying 
for and constructing DTV facilities, all licensees will have 90 days 
after the release date of the DTV Table of Allotments to inform the 
Commission if they do not want a DTV channel. After that, there will be 
three categories of construction requirements for commercial television 
stations. In the first category, all network-affiliated stations in the 
top ten television markets will have until May 1, 1999, to construct 
their digital facilities. In the second category, all network-
affiliated stations in the top 30 television markets not included above 
will have until November 1, 1999, to construct their digital 
facilities. In the third category, all other commercial stations will 
have until May 1, 2002, to construct their DTV facilities. All 
noncommercial stations will have until May 1, 2003, to construct their 
DTV facilities. We will require that those stations that have 
represented to the Commission that they will complete construction of 
the DTV facility by November 1, 1998, file reports at six-month 
intervals, beginning on November 1, 1997, stating that their plans to 
meet these deadlines are on schedule or specifying any difficulties 
encountered in attempting to meet these deadlines. We will grant an 
extension of time where a broadcaster has been unable to complete 
construction due to circumstances that are either unforeseeable or 
beyond the licensee's control where the licensee has taken all possible 
steps to resolve the problem expeditiously.
    150. An aggressive construction schedule is necessary for us to 
meet our main objectives in this proceeding. First, digital broadcast 
television stands a risk of failing unless it is rolled out quickly. 
Other media such as DBS, cable, and wireless cable have or soon will 
offer digital programming services. Unless digital television 
broadcasting is available quickly, other digital services may achieve 
levels of penetration that could preclude the success of over-the-air, 
digital television. Second, a rapid construction period is critical to 
DTV's competitive strength internationally, as well as domestically. 
Third, an aggressive construction schedule helps to offset possible 
disincentives that any individual broadcaster may have to begin digital 
transmissions quickly, as well as the absence of many market forces 
that might themselves ensure rapid construction. Fourth, a rapid build-
out works to ensure that recovery of broadcast spectrum and its 
reallocation to other beneficial uses occurs as quickly as possible.
    151. This construction schedule takes the needs and interests of 
small entities into account. The most aggressive requirements apply to 
stations that we believe will be in the best position to make the 
transition quickly: Network-affiliated stations in the top 10 
television markets. These markets include approximately 30 percent of 
U.S. television households. Network-affiliated stations consistently 
have higher ratings, with higher audience numbers, and we assume with 
greater financial and other resources, so that the above construction 
requirement will both serve the public and be reasonably nonburdensome 
to broadcasters. In recognition of the fact that some networks may have 
in some of the larger markets a second affiliate that is not as strong 
as the other affiliate, we have minimized the burden on that weaker 
affiliate by imposing a longer construction deadline. Moreover, we are 
not requiring licensees initially to construct full-replication 
facilities. Instead, we are requiring them at the outset only to emit a 
DTV signal strong enough to encompass the community of license.
    152. The Fifth Report and Order also concludes that broadcasters 
should have sufficient time between now and 2006 to complete their 
transitions to DTV and surrender their NTSC frequencies. It has become 
clear that conversion, both for stations and for viewers, will cost 
significantly less than thought at the time of the Third Report and 
Order, which had set a 15-year termination date. Thus, conversion can 
occur more quickly and NTSC spectrum can be surrendered sooner than 
earlier anticipated. In addition, the interests of small entities are 
served through our decision to conduct thorough reviews of the progress 
of DTV every two years, which will allow us to make adjustments to the 
2006 target, if necessary.
    153. The Fifth Report and Order also states the Commission's intent 
to give special relief to noncommercial broadcasters to assist their 
transition to DTV, including providing them with six years within which 
to construct their DTV facilities. In so doing, the Commission is 
recognizing the unique financial difficulties often faced by these 
entities, which, as noted earlier, are likely to be small entities.
    154. The Fifth Report and Order allows equipment manufacturers at 
this time maximum latitude to determine which video formats DTV 
equipment will receive, since broadcasters will have the latitude to 
decide which video formats they will transmit based on market and 
consumer demand. We believe that it is likely that market forces will 
provide incentives for broadcasters and equipment manufacturers to work 
closely together to produce the receiver and converter designs most 
valued by consumers. The Fifth Report and Order also postpones a 
decision regarding labeling requirements for manufacturers of 
receivers. Finally, the Fifth Report and Order recognizes that there is 
an enormous embedded base of video cassette recorders, cable decoder 
boxes, laser disc players, and other video equipment that use NTSC 
receivers for non-broadcast purposes. Because there may be a continuing 
market for the sale of NTSC display devices, even after the conversion 
to DTV, we decline to limit the sale of NTSC-only display devices. 
These decisions allow small entities the maximum ability to determine 
and meet consumer interests.
    155. As noted, at least two of our decisions may have a significant 
economic impact on a substantial number of small entities. We believe 
that the additional burdens on small entities cannot be diminished, 
however, without compromising the two primary

[[Page 26989]]

goals of this proceeding, as described earlier.

VII. Report to Congress

    156. The Commission shall send a copy of this Final Regulatory 
Flexibility Analysis along with this Fifth Report and Order in a report 
to be sent to Congress pursuant to the Small Business Regulatory 
Enforcement Fairness Act of 1996. See 5 U.S.C. 801(a)(1)(A). A copy of 
this FRFA (or a summary thereof) will also be published in the Federal 
Register.
    157. For additional information concerning the information 
collections contained in this Report and Order contact Dorothy Conway 
at 202-418-0217.

Ordering Clauses

    158. Accordingly, it is ordered That, pursuant to sections 4 (i) & 
(j), 303(r), 307, 309, and 336 of the Communications Act of 1934 as 
amended, 47 U.S.C. 154 (i), (j) 303(r), 307, 309, and 336, Part 73 of 
the Commission's Rules is amended as set forth below.
    159. It is further ordered That, pursuant to the Contract with 
America Advancement Act of 1996, the rule amendments set forth below 
shall be effective June 16, 1997. Written comments by the public on the 
new and/or modified information collections are due July 15, 1997.
    160. It is further ordered That the new or modified paperwork 
requirements contained in this Report and Order (which are subject to 
approval by the Office of Management and Budget) will go into effect 
upon OMB approval.
    161. It is further ordered That, upon release of this Fifth Report 
and Order, concurrently released with the Sixth Report and Order, this 
proceeding is hereby terminated.
    162. For additional information concerning this proceeding, contact 
Saul Shapiro, Mass Media Bureau, (202) 418-2600; Mania K. Baghdadi, 
Mass Media Bureau, Policy and Rules Division, Legal Branch, (202) 418-
2130; Dan Bring, Mass Media Bureau, Policy and Rules Division, Policy 
Analysis Branch, (202) 418-2170; or Gordon Godfrey, Mass Media Bureau, 
Policy and Rules Division, Engineering Policy Branch, (202) 418-2190.

List of Subjects in 47 CFR Part 73

    Television broadcasting.

Federal Communications Commission.
William F. Caton,
Acting Secretary.

Rule Changes

    Part 73 of title 47 is amended as follows:

PART 73--RADIO BROADCAST SERVICES

    1. The authority citation for part 73 is revised to read as 
follows:

    Authority: 47 U.S.C. 154, 303, 334, 336.

    2. Sections 73.624 and 73.625 are added to Subpart E to read as 
follows:


Sec. 73.624  Digital Television Broadcast Stations.

    (a) Digital television (``DTV'') broadcast stations are assigned 
channels 6 MHz wide. Initial eligibility for licenses for DTV broadcast 
stations is limited to persons that, as of April 3, 1997, are licensed 
to operate a full power television broadcast station or hold a permit 
to construct such a station (or both).
    (b) At any time that a DTV broadcast station permittee or licensee 
transmits a video program signal on its analog television channel, it 
must also transmit at least one over-the-air video program signal at no 
direct charge to viewers on the DTV channel that is licensed with the 
analog channel. The DTV program service provided pursuant to this 
paragraph must be at least comparable in resolution to the analog 
television station programming transmitted to viewers on the analog 
channel but, subject to paragraph (f) of this section, DTV broadcast 
stations are not required to simulcast the analog programming.
    (c) Provided that DTV broadcast stations comply with paragraph (b) 
of this section, DTV broadcast stations are permitted to offer 
telecommunications services of any nature, consistent with the public 
interest, convenience, and necessity, on an ancillary or supplementary 
basis. The kinds of services that may be provided include, but are not 
limited to computer software distribution, data transmissions, 
teletext, interactive materials, aural messages, paging services, audio 
signals, subscription video, and any other services that do not 
derogate DTV broadcast stations' obligations under paragraph (b) of 
this section. Such services may be provided on a broadcast, point-to-
point or point-to-multipoint basis, provided, however, that no video 
broadcast signal provided at no direct charge to viewers shall be 
considered ancillary or supplementary.
    (1) DTV licensees that provide ancillary or supplementary services 
that are analogous to other telecommunications services subject to 
regulation by the Commission must comply with the Commission 
regulations that apply to those services, provided, however, that no 
ancillary or supplementary service shall have any rights to carriage 
under sections 614 or 615 of the Communications Act of 1934, as 
amended, or be deemed a multichannel video programming distributor for 
purposes of section 628 of the Communications Act of 1934, as amended.
    (2) In all arrangements entered into with outside parties affecting 
telecommunications service operation, the DTV licensee or permittee 
must retain control over all material transmitted in a broadcast mode 
via the station's facilities, with the right to reject any material 
that it deems inappropriate or undesirable. The license or permittee is 
also responsible for all aspects of technical operation involving such 
telecommunications services.
    (3) In any application for renewal of a broadcast license for a 
television station that provides ancillary or supplementary services, a 
licensee shall establish that all of its program services on the analog 
and the DTV spectrum are in the public interest. Any violation of the 
Commission's rules applicable to ancillary or supplementary services 
will reflect on the licensee's qualifications for renewal of its 
license.
    (d) Digital television broadcast facilities that comply with the 
FCC DTV Standard (section 73.682(d)), shall be constructed in the 
following markets by the following dates:
    (1)(i) May 1, 1999: all network-affiliated television stations in 
the top ten television markets;
    (ii) November 1, 1999: all network-affiliated television stations 
not included in category (1)(i) and in the top 30 television markets;
    (iii) May 1, 2002: all remaining commercial television stations;
    (iv) May 1, 2003: all noncommercial television stations.
    (2) For the purposes of paragraph (d)(1)
    (i) the term, ``network,'' is defined to include the ABC, CBS, NBC, 
and Fox television networks;
    (ii) the term, ``television market,'' is defined as the Designated 
Market Area or DMA as defined by Nielsen Media Research as of April 3, 
1997; and
    (iii) the terms, ``network-affiliated'' or ``network-affiliate,'' 
are defined to include those television stations affiliated with at 
least one of the four networks designated in paragraph (d)(2)(i) as of 
April 3, 1997. In those

[[Page 26990]]

DMAs in which a network has more than one network affiliate, paragraphs 
(d)(1) (i) and (ii) of this section shall apply to its network 
affiliate with the largest audience share for the 9 a.m. to midnight 
time period as measured by Nielsen Media Research in its Nielsen 
Station Index, Viewers in Profile, as of February, 1997.
    (3) Authority delegated. (i) Authority is delegated to the Chief, 
Mass Media Bureau to grant an extension of time of up to six months 
beyond the relevant construction deadline specified in paragraph (d)(1) 
of this section upon demonstration by the DTV licensee or permittee 
that failure to meet that construction deadline is due to circumstances 
that are either unforeseeable or beyond the licensee's control where 
the licensee has taken all reasonable steps to resolve the problem 
expeditiously.
    (ii) Such circumstances shall include, but shall not be limited to: 
(a) inability to construct and place in operation a facility necessary 
for transmitting digital television, such as a tower, because of delays 
in obtaining zoning or FAA approvals, or similar constraints; or (b) 
the lack of equipment necessary to obtain a digital television signal.
    (iii) The Bureau may grant no more than two extension requests upon 
delegated authority. Subsequent extension requests shall be referred to 
the Commission. The Bureau may not on delegated authority deny an 
extension request but must refer recommended denials to the Commission.
    (iv) Applications for extension of time shall be filed at least 30 
days prior to the relevant construction deadline, absent a showing of 
sufficient reasons for filing within less than 30 days of the relevant 
construction deadline.
    (e) The application for construction permit must be filed on Form 
301 (except for noncommercial stations, which must file on Form 340) on 
or before the date on which half of the construction period has 
elapsed. Thus, for example, for applicants in category (d)(1)(i), the 
application for construction period must be filed by May 1, 1998.
    (f)(i) Commencing on April 1, 2003, DTV television licensees and 
permittees must simulcast 50 percent of the video programming of the 
analog channel on the DTV channel.
    (ii) Commencing on April 1, 2004, DTV licensees and permittees must 
simulcast 75% of the video programming of the analog channel on the DTV 
channel.
    (iii) Commencing on April 1, 2005, DTV licensees and permittees 
must simulcast 100% of the video programming of the analog channel on 
the DTV channel.
    (iv) The simulcasting requirements imposed in paragraphs (f) (i)-
(iii) of this section will terminate when the analog channel terminates 
operation and a 6 MHz channel is returned by the DTV licensee or 
permittee to the Commission.


Sec. 73.625   DTV coverage of principal community and antenna system.

    (a) Transmitter location.
    (1) The DTV transmitter location shall be chosen so that, on the 
basis of the effective radiated power and antenna height above average 
terrain employed, the following minimum F (50,90) field strength in dB 
above one uV/m will be provided over the entire principal community to 
be served:

Channels 2-6.....................................................28 dBu
Channels 7-13....................................................36 dBu
Channels 14-69...................................................41 dBu

    (2) The location of the antenna must be so chosen that there is not 
a major obstruction in the path over the principal community to be 
served.
    (3) For the purposes of this section, coverage is to be determined 
in accordance with paragraph (b) of this section. Under actual 
conditions, the true coverage may vary from these estimates because the 
terrain over any specific path is expected to be different from the 
average terrain on which the field strength charts were based. Further, 
the actual extent of service will usually be less than indicated by 
these estimates due to interference from other stations. Because of 
these factors, the predicted field strength contours give no assurance 
of service to any specific percentage of receiver locations within the 
distances indicated.
    (b) Determining coverage. (1) In predicting the distance to the 
field strength contours, the F (50,50) field strength charts (Figures 
9, 10 and 10b of Sec. 73.699 of this part) and the F (50,10) field 
strength charts (Figures 9a, 10a and 10c of Sec. 73.699 of this part) 
shall be used. To use the charts to predict the distance to a given F 
(50,90) contour, the following procedure is used: Convert the effective 
radiated power in kilowatts for the appropriate azimuth into decibel 
value referenced to 1 kW (dBk). Subtract the power value in dBk from 
the contour value in dBu. Note that for power less than 1 kW, the 
difference value will be greater than the contour value because the 
power in dBk is negative. Locate the difference value obtained on the 
vertical scale at the left edge of the appropriate F (50,50) chart for 
the DTV station's channel. Follow the horizontal line for that value 
into the chart to the point of intersection with the vertical line 
above the height of the antenna above average terrain for the 
appropriate azimuth located on the scale at the bottom of the chart. If 
the point of intersection does not fall exactly on a distance curve, 
interpolate between the distance curves below and above the 
intersection point. The distance values for the curves are located 
along the right edge of the chart. Using the appropriate F (50,10) 
chart for the DTV station's channel, locate the point where the 
distance coincides with the vertical line above the height of the 
antenna above average terrain for the appropriate azimuth located on 
the scale at the bottom of the chart. Follow a horizontal line from 
that point to the left edge of the chart to determine the F (50,10) 
difference value. Add the power value in dBk to this difference value 
to determine the F (50,10) contour value in dBu. Subtract the F (50,50) 
contour value in dBu from this F (50,10) contour value in dBu. Subtract 
this difference from the F (50,50) contour value in dBu to determine 
the F (50,90) contour value in dBu at the pertinent distance along the 
pertinent radial.
    (2) The effective radiated power to be used is that radiated at the 
vertical angle corresponding to the depression angle between the 
transmitting antenna center of radiation and the radio horizon as 
determined individually for each azimuthal direction concerned. In 
cases where the relative field strength at this depression angle is 90% 
or more of the maximum field strength developed in the vertical plane 
containing the pertaining radial, the maximum radiation shall be used. 
The depression angle is based on the difference in elevation of the 
antenna center of radiation above the average terrain and the radio 
horizon, assuming a smooth spherical earth with a radius of 8,495.5 
kilometers (5,280 miles) and shall be determined by the following 
equation:

A = 0.0277 square root of H
Where:
A is the depression angle in degrees.
H is the height in meters of the transmitting antenna radiation 
center above average terrain of the 3.2-16.1 kilometers (2-10 miles) 
sector of the pertinent radial.
This formula is empirically derived for the limited purpose 
specified here. Its use for any other purpose may be inappropriate.

    (3) Applicants for new DTV stations or changes in the facilities of 
existing DTV stations must submit to the FCC a showing as to the 
location of their stations' or proposed stations' contour. This showing 
is to include a map showing this contour, except where applicants have 
previously submitted

[[Page 26991]]

material to the FCC containing such information and it is found upon 
careful examination that the contour locations indicated therein would 
not change, on any radial, when the locations are determined under this 
section. In the latter cases, a statement by a qualified engineer to 
this effect will satisfy this requirement and no contour maps need be 
submitted.
    (4) The antenna height to be used with these charts is the height 
of the radiation center of the antenna above the average terrain along 
the radial in question. In determining the average elevation of the 
terrain, the elevations between 3.2-16.1 kilometers (2-10 miles) from 
the antenna site are employed. Profile graphs shall be drawn for 8 
radials beginning at the antenna site and extending 16.1 kilometers (10 
miles) therefrom. The radials should be drawn for each 45 degrees of 
azimuth starting with True North. At least one radial must include the 
principal community to be served even though such community may be more 
than 16.1 kilometers (10 miles) from the antenna site. However, in the 
event none of the evenly spaced radials include the principal community 
to be served and one or more such radials are drawn in addition to the 
8 evenly spaced radials, such additional radials shall not be employed 
in computing the antenna height above average terrain. Where the 3.2-
16.1 kilometers (2-10 mile) portion of a radial extends in whole or in 
part over large bodies of water (such as ocean areas, gulfs, sounds, 
bays, large lakes, etc., but not rivers) or extends over foreign 
territory but the contour encompasses land area within the United 
States beyond the 16.1 kilometers (10 mile) portion of the radial, the 
entire 3.2-16.1 kilometers (2-10 mile) portion of the radial shall be 
included in the computation of antenna height above average terrain. 
However, where the contour does not so encompass United States land 
area and (1) the entire 3.2-16.1 kilometers (2-10 mile) portion of the 
radial extends over large bodies of water or foreign territory, such 
radial shall be completely omitted from the computation of antenna 
height above average terrain, and (2) where a part of the 3.2-16.1 
kilometers (2-10 mile) portion of a radial extends over large bodies of 
water or over foreign territory, only that part of the radial extending 
from the 3.2 kilometer (2 mile) sector to the outermost portion of land 
area within the United States covered by the radial shall be employed 
in the computation of antenna height above average terrain. The profile 
graph for each radial should be plotted by contour intervals of from 
12.2-30.5 meters (40-100 feet) and, where the data permits, at least 50 
points of elevation (generally uniformly spaced) should be used for 
each radial. In instances of very rugged terrain where the use of 
contour intervals of 30.5 meters (100 feet) would result in several 
points in a short distance, 61.0-122.0 meter (200-400 foot) contour 
intervals may be used for such distances. On the other hand, where the 
terrain is uniform or gently sloping the smallest contour interval 
indicated on the topographic map (see paragraph (b)(5) of this section) 
should be used, although only relatively few points may be available. 
The profile graphs should indicate the topography accurately for each 
radial, and the graphs should be plotted with the distance in 
kilometers as the abscissa and the elevation in meters above mean sea 
level as the ordinate. The profile graphs should indicate the source of 
the topographical data employed. The graph should also show the 
elevation of the center of the radiating system. The graph may be 
plotted either on rectangular coordinate paper or on special paper 
which shows the curvature of the earth. It is not necessary to take the 
curvature of the earth into consideration in this procedure, as this 
factor is taken care of in the charts showing signal strengths. The 
average elevation of the 12.9 kilometer (8 miles) distance between 3.2-
16.1 kilometers (2-10 miles) from the antenna site should then be 
determined from the profile graph for each radial. This may be obtained 
by averaging a large number of equally spaced points, by using a 
planimeter, or by obtaining the median elevation (that exceeded for 50% 
of the distance) in sectors and averaging those values. In directions 
where the terrain is such that negative antenna heights or heights 
below 30.5 meters (100 feet) for the 3.2 to 16.1 kilometers (2 to 10 
mile) sector are obtained, an assumed height of 30.5 meters (100 feet) 
shall be used for the prediction of coverage. However, where the actual 
contour distances are critical factors, a supplemental showing of 
expected coverage must be included together with a description of the 
method employed in predicting such coverage. In special cases, the 
Commission may require additional information as to terrain and 
coverage.
    (5) In the preparation of the profile graph previously described, 
and in determining the location and height above sea level of the 
antenna site, the elevation or contour intervals shall be taken from 
the United States Geological Survey Topographic Quadrangle Maps, United 
States Army Corps of Engineers' maps or Tennessee Valley Authority 
maps, whichever is the latest, for all areas for which such maps are 
available. If such maps are not published for the area in question, the 
next best topographic information should be used. Topographic data may 
sometimes be obtained from State and Municipal agencies. Data from 
Sectional Aeronautical Charts (including bench marks) or railroad depot 
elevations and highway elevations from road maps may be used where no 
better information is available. In cases where limited topographic 
data is available, use may be made of an altimeter in a car driven 
along roads extending generally radially from the transmitter site. 
United States Geological Survey Topographic Quadrangle Maps may be 
obtained from the United States Geological Survey, Department of the 
Interior, Washington, D.C. 20240. Sectional Aeronautical Charts are 
available from the United States Coast and Geodetic Survey, Department 
of Commerce, Washington, D.C. 20235. In lieu of maps, the average 
terrain elevation may be computer generated, except in the cases of 
dispute, using elevations from a 30 second point or better topographic 
data file. The file must be identified and the data processed for 
intermediate points along each radial using linear interpolation 
techniques. The height above mean sea level of the antenna site must be 
obtained manually using appropriate topographic maps.
    (c) Antenna system. (1) The antenna system shall be designed so 
that the effective radiated power at any angle above the horizontal 
shall be as low as the state of the art permits, and in the same 
vertical plane may not exceed the effective radiated power in either 
the horizontal direction or below the horizontal, whichever is greater.
    (2) An antenna designed or altered to produce a noncircular 
radiation pattern in the horizontal plane is considered to be a 
directional antenna. Antennas purposely installed in such a manner as 
to result in the mechanical beam tilting of the major vertical 
radiation lobe are included in this category.
    (3) Applications proposing the use of directional antenna systems 
must be accompanied by the following:
    (i) Complete description of the proposed antenna system, including 
the manufacturer and model number of the proposed directional antenna.
    (ii) Relative field horizontal plane pattern (horizontal 
polarization only) of the proposed directional antenna. A value of 1.0 
should be used for the maximum radiation. The plot of the pattern 
should be oriented so that 0 degrees corresponds to true North.

[[Page 26992]]

Where mechanical beam tilt is intended, the amount of tilt in degrees 
of the antenna vertical axis and the orientation of the downward tilt 
with respect to true North must be specified, and the horizontal plane 
pattern must reflect the use of mechanical beam tilt.
    (iii) A tabulation of the relative field pattern required in 
paragraph (c)(3)(ii) of this section. The tabulation should use the 
same zero degree reference as the plotted pattern, and be tabulated at 
least every 10 degrees. In addition, tabulated values of all maxima and 
minima, with their corresponding azimuths, should be submitted.
    (iv) Horizontal and vertical plane radiation patterns showing the 
effective radiated power, in dBk, for each direction. Sufficient 
vertical plane patterns must be included to indicate clearly the 
radiation characteristics of the antenna above and below the horizontal 
plane. In cases where the angles at which the maximum vertical 
radiation varies with azimuth, a separate vertical radiation pattern 
must be provided for each pertinent radial direction.
    (v) All horizontal plane patterns must be plotted to the largest 
scale possible on unglazed letter-size polar coordinate paper (main 
engraving approximately 18 cm x 25 cm (7 inches x 10 inches)) using 
only scale divisions and subdivisions of 1, 2, 2.5. or 5 times 10-nth. 
All vertical plane patterns must be plotted on unglazed letter-size 
rectangular coordinate paper. Values of field strength on any pattern 
less than 10 percent of the maximum field strength plotted on that 
pattern must be shown on an enlarged scale.
    (vi) The horizontal and vertical plane patterns that are required 
are the patterns for the complete directional antenna system. In the 
case of a composite antenna composed of two or more individual 
antennas, this means that the patterns for the composite antenna, not 
the patterns for each of the individual antennas, must be submitted.
    (4) Where simultaneous use of antennas or antenna structures is 
proposed, the following provisions shall apply:
    (i) In cases where it is proposed to use a tower of an AM broadcast 
station as a supporting structure for a DTV broadcast antenna, an 
appropriate application for changes in the radiating system of the AM 
broadcast station must be filed by the licensee thereof. A formal 
application (FCC Form 301, or FCC Form 340 for a noncommercial 
educational station) will be required if the proposal involves 
substantial change in the physical height or radiation characteristics 
of the AM broadcast antennas; otherwise an informal application will be 
acceptable. (In case of doubt, an informal application (letter) 
together with complete engineering data should be submitted.) An 
application may be required for other classes of stations when the 
tower is to be used in connection with a DTV station.
    (ii) When the proposed DTV antenna is to be mounted on a tower in 
the vicinity of an AM station directional antenna system and it appears 
that the operation of the directional antenna system may be affected, 
an engineering study must be filed with the DTV application concerning 
the effect of the DTV antenna on the AM directional radiation pattern. 
Field measurements of the AM stations may be required prior to and 
following construction of the DTV station antenna, and readjustments 
made as necessary.

[FR Doc. 97-12527 Filed 5-15-97; 8:45 am]
BILLING CODE 6712-01-P