[Federal Register Volume 77, Number 117 (Monday, June 18, 2012)]
[Rules and Regulations]
[Pages 36178-36192]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-14816]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 76
[CS Docket No. 98-120; FCC 12-59]
Carriage of Digital Television Broadcast Signals: Amendment to
the Commission's Rules
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: In this document, the Commission finds it in the public
interest to allow the viewability rule to sunset as scheduled. The
Commission reinterprets the statutory viewability requirement to permit
cable operators to require the use of set-top equipment to view must-
carry signals, provided that such equipment is both available and
affordable (or provided at no cost). The Commission establishes a
transitional period of six months after expiration of the current rule
during which hybrid systems will be required to continue to carry the
signals of must-carry stations in analog format to all analog cable
subscribers. The Commission also concludes that the small-system HD
carriage exemption continues to serve the public interest and extends
the existing exemption for three more years.
DATES: Effective June 18, 2012.
FOR FURTHER INFORMATION CONTACT: For additional information on this
proceeding, contact Steven Broeckaert, Steven.Broeckaert@fcc.gov, or
Evan Baranoff, Evan.Baranoff@fcc.gov, of the Media Bureau, Policy
Division, (202) 418-2120.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Fifth
Report and Order, FCC 12-59, adopted on June 11, 2012, and released on
June 12, 2012. The full text of this document is available
electronically via ECFS at http://fjallfoss.fcc.gov/ecfs/or may be
downloaded at http://transition.fcc.gov/Daily_Releases/Daily_Business/2012/db0612/FCC-12-59A1.doc. (Documents will be available
electronically in ASCII, Word 97, and/or Adobe Acrobat.) The full text
of this document is also available for public inspection and copying
during regular business hours in the FCC Reference Center, Federal
[[Page 36179]]
Communications Commission, 445 12th Street SW., CY-A257, Washington, DC
20554. The complete text may be purchased from the Commission's copy
contractor, 445 12th Street SW., Room CY-B402, Washington, DC 20554.
Alternative formats are available for people with disabilities
(Braille, large print, electronic files, audio format), by sending an
email to fcc504@fcc.gov or calling the Commission's Consumer and
Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432
(TTY).
I. Introduction
1. With this Fifth Report and Order (Fifth R&O) in the DTV cable
carriage docket, we announce the sunset of the Commission's current
``viewability'' rule, which mandates that cable operators with hybrid
systems \1\ carry digital must-carry signals \2\ in an analog format
for the benefit of analog-service customers. As explained below, we
believe the statutory viewability requirement is best read to give the
operator of a hybrid system greater flexibility in deciding how to
comply with the viewability mandate. In particular, while such an
operator may continue to carry a must-carry signal in a format that is
capable of being viewed by analog-service customers without the use of
additional equipment, rapid changes in the marketplace and technology--
in particular the widespread availability of small digital set-top
boxes that cable operators are making available at low cost (or no
cost) to analog customers of hybrid systems--provide alternative means
by which must-carry television signals can be made viewable to all
analog customers who are served by hybrid systems, as required by
statute. Because a cable operator's exercise of this additional
flexibility would involve operational changes that affect must-carry
broadcast stations and viewers, we establish a six-month transitional
period, until December 12, 2012, during which hybrid systems will
continue to carry the signals of must-carry stations in analog format
to all analog cable subscribers. In addition, we find it is in the
public interest to extend for three more years the HD carriage
exemption for eligible small cable system operators.
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\1\ A hybrid system is a cable system that offers both analog
and digital cable service to its subscribers. By contrast, an
analog-only system or all-digital system provides only analog or
digital service, respectively.
\2\ The ``must-carry'' provisions of the Communications Act
entitle local television stations to have qualifying signals carried
on cable systems in the same markets. Section 614(a) of the
Communications Act provides that ``[e]ach cable operator shall
carry, on the cable system of that operator, the signals of local
commercial television stations and qualified low power stations as
provided in this section.'' 47 U.S.C. 534(a). Section 615(a), 47
U.S.C. 535(a), imposes a similar requirement to carry ``the
signals'' of qualifying non-commercial television stations.
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II. Viewability Requirement
A. Background
2. Pursuant to section 614(b)(4)(B) of the Communications Act of
1934, as amended (the ``Act''),\3\ the Commission initiated this
proceeding in 1998 to address the responsibilities of cable television
operators with respect to carriage of digital broadcast stations in
light of the nation's transition to digital television.\4\ After
Congress selected a date certain for the digital transition of full-
power broadcast television stations, the Commission, in 2007, adopted
the Viewability Order which, among other things, established a rule to
ensure that after the DTV transition, cable subscribers would continue
to be able to view broadcast stations, as required by statute.\5\ The
Commission was concerned that there would ``continue to be a large
number of cable subscribers with legacy, analog-only television sets
after the end of the DTV transition.'' \6\ In 2007, the Commission
estimated that about 35 percent of all television homes, or
approximately 40 million households, were analog-only cable
subscribers.\7\ Although all cable systems were expected to eventually
transition to all-digital systems, the Commission recognized that there
may be two different types of cable systems in operation for some
period of time after completion of the DTV transition.\8\ Some
operators may choose to deliver programming in both digital and analog
format (``hybrid systems''), i.e., in addition to a digital tier, the
operator would offer an analog tier and continue to provide local
television signals and, in some cases, a subset of cable channels, to
analog receivers in a format that does not require additional
equipment.\9\ Other operators may choose to operate or transition to
all-digital systems, providing cable service in only digital
format.\10\ Thus, in anticipation of the approaching end of the digital
television transition and in light of the state of technology and the
marketplace, the Commission adopted a rule providing cable operators of
hybrid systems two options to comply with the statutory viewability
requirement for must-carry broadcast television stations: (1) Carry the
digital signal in analog format to all analog cable subscribers in
addition to any digital version carried, or (2) transition to an all-
digital system and carry the signal only in digital format, provided
that all subscribers have the necessary equipment to view the broadcast
content.\11\
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\3\ 47 U.S.C. 534(b)(4)(B).
\4\ Notice of Proposed Rulemaking, FCC 98-153, 63 FR 42330, at
paras. 1-2, August 7, 1998. See also 47 U.S.C. 534(b)(4)(B)
(directing the Commission to ``initiate a proceeding to establish
any changes in signal carriage requirements of cable television
systems necessary to ensure cable carriage of such broadcast signals
of local commercial television stations which have been changed to
conform with such modified standards'').
\5\ See generally Viewability Order, FCC 07-170, 73 FR 6043,
February 1, 2008; Third FNPRM, FCC 07-170, 73 FR 6099, February 1,
2008.
\6\ Id. at para. 1.
\7\ Id. at n. 3.
\8\ Id. at para. 20.
\9\ Id.
\10\ Id.
\11\ 47 CFR 76.56(d)(3).
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3. The Commission did not make the viewability rule permanent.
Instead, the Commission decided to have the rule remain in force for
three years after the date of the digital transition, subject to review
by the Commission during the last year of the three-year period.\12\
With respect to the viewability rule, the Commission stated that ``[i]n
light of the numerous issues associated with the transition, it is
important to retain flexibility as we deal with emerging concerns.''
\13\ The Commission explained that a three-year sunset ``provides the
Commission with the opportunity after the transition to review these
rules in light of the potential cost and service disruption to
consumers, and the state of technology and the marketplace.'' \14\ The
Commission identified certain factors it believed would be relevant to
its later review, including digital cable penetration, cable deployment
of digital set-top boxes with various levels of processing
capabilities, and cable system capacity constraints.\15\
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\12\ Viewability Order, at para. 16.
\13\ Id.
\14\ Id.
\15\ Id. at n. 39.
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4. The full-power digital television transition was successfully
completed on June 12, 2009, after Congress chose to delay it from the
originally scheduled conclusion on February 17, 2009. Accordingly,
under the terms of the 2007 Viewability Order, absent Commission
action, the viewability rule is scheduled to sunset on June 12,
2012.\16\
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\16\ Id. at para. 16.
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5. On February 10, 2012, we initiated the Fourth Further Notice of
Proposed Rulemaking (``Fourth FNPRM'') in this docket to determine
whether it would be in the public interest to retain the viewability
rule, given the current state
[[Page 36180]]
of technology and the marketplace.\17\ We received four comments, five
reply comments, and numerous ex parte submissions in response to our
Fourth FNPRM.\18\ In their comments, broadcasters support retention of
the viewability rule, while cable operators urge us to let it
expire.\19\
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\17\ Fourth FNPRM, FCC 12-18, 77 FR 9187, February 16, 2012.
\18\ All of the filings made in this docket are available to the
public both online via the Commission's Electronic Comment Filing
System (``ECFS'') at http://www.fcc.gov/cgb/ecfs/ and during regular
business hours in the FCC Reference Center, Federal Communications
Commission, 445 12th Street SW., CY-A257, Washington, DC 20554.
\19\ See, e.g., NAB comments at 3; NCTA comments at 5; TWC
comments at 25.
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B. Discussion
6. Based on significant changes in the marketplace and technology
that have occurred over the past five years, and our current
understanding of the statutory viewability requirement as explained
herein, we find it in the public interest to allow the viewability rule
to sunset as scheduled, on June 12, 2012. Because we anticipate that
our revised interpretation of the statutory viewability requirement
will lead to the widespread deployment of small, affordable set-top
boxes, we establish a transitional period of six months after
expiration of the current rule--that is, until December 12, 2012--
during which hybrid systems will continue to carry the signals of must-
carry stations in analog format to all analog cable subscribers. This
transitional period will give consumers, cable operators, and
broadcasters that rely on must-carry access an opportunity to prepare
for that deployment and to take other necessary steps resulting from
changes in cable carriage.
1. Statutory Analysis
7. Section 614(b)(7) of the Communications Act, which covers
commercial stations, states that broadcast signals that are subject to
mandatory carriage ``shall be viewable via cable on all television
receivers of a subscriber which are connected to a cable system by a
cable operator or for which a cable operator provides a connection.''
\20\ Similarly, section 615(h) for noncommercial stations states that
``[s]ignals carried in fulfillment of the carriage obligations of a
cable operator under this section shall be available to every
subscriber as part of the cable system's lowest priced tier that
includes the retransmission of local commercial television broadcast
signals.'' \21\ In the 2007 Viewability Order, the Commission found
that these statutory requirements ``plainly apply'' to cable carriage
of digital broadcast signals, and, ``as a consequence, cable operators
must ensure that all cable subscribers--including those with analog
television sets--continue to be able to view all commercial and non-
commercial must-carry broadcast stations'' after the DTV
transition.\22\ The Commission interpreted the viewability mandate to
require that a cable operator ``ensure that the broadcast signals in
question are actually viewable on their subscribers' receivers.'' \23\
The Commission rejected cable commenters' argument that the viewability
mandate is satisfied when a cable operator transmits broadcast signals
and offers to sell or lease a set-top box to their customers that will
allow those signals to be viewed on their receivers.\24\ The Commission
found that argument ``at odds with both the plain meaning of the
statutory text as well as the structure of the provision,'' explaining
that ``[t]o the extent that such subscribers do not have the necessary
equipment, * * * the broadcast signals in question are not `viewable'
on their receivers.'' \25\ To implement the viewability mandate, the
Commission concluded that cable operators that choose to operate a
hybrid system--i.e., operators that offer both analog and digital
service tiers--were required to carry the must-carry stations' signals
in analog format to their analog cable subscribers, while also ensuring
the signals were viewable to digital subscribers.\26\
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\20\ 47 U.S.C. 534(b)(7).
\21\ 47 U.S.C. 535(h). As the Commission observed in the 2007
Viewability Order, although Sections 614(b)(7) and 615(h) use
different language--(i.e., 614(b)(7) directs that signals shall be
``viewable'' whereas 615(h) directs that signals shall be
``available'')--the Commission consistently has treated them as
imposing identical obligations. Viewability Order, at note 36. See
also Analog Must Carry Order, FCC 93-144, 58 FR 17350, at para. 32,
April 2, 1993 (noting that all must-carry signals must be available
to all subscribers); see also 1996 OVS Order, FCC 96-249, 61 FR
28698, at para. 162, June 5, 1996 (``Pursuant to section 614(b)(7)
and 615(h), the operator of a cable system is required to ensure
that signals carried in fulfillment of the must-carry requirements
are provided to every subscriber of the system''). Cf. U.S. v.
Taylor, 640 F.3d 255, 258 (7th Cir. 2011) (``It would be unrealistic
to suppose that Congress never uses synonyms--that every word or
phrase in a statute has a unique meaning, shared by no other word or
phrase elsewhere in the vast federal code''). We note that no
commenter has suggested that we impose different carriage
obligations for commercial stations and noncommercial stations. But
see Bright House Reply at 9-10, n. 12 (arguing the Commission erred
in adopting an expansive reading of section 614(b)(7) and applying
that reading to noncommercial stations governed by section 615(h)).
For purposes of this proceeding, we will continue to treat 614(b)(7)
and 615(h) as imposing identical obligations.
\22\ Viewability Order, at para. 15.
\23\ Id. at para. 22.
\24\ Id. at para. 22.
\25\ Id.
\26\ Id. at para. 15. See also 47 CFR 76.56(d)(3).
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8. After consideration of the statutory arguments raised by the
parties to this proceeding, and upon further review of the statute, we
find that the language of the Act is less definitive than our earlier
decision suggested. Nothing in the language of the statute plainly
prohibits cable operators from offering equipment to satisfy the
viewability requirement, i.e., the statutory sections at issue do not
state that a signal is not ``viewable'' if the consumer needs to use
additional equipment. (We disagree with NAB's contention that the
Fourth FNPRM did not ask for comment on the Commission's prior
statutory analysis of the viewability requirement in section 614(b)(7)
and that cable commenters, having failed to seek timely review or
reconsideration of the 2007 Viewability Order, are barred from
reopening the issue now.\27\ To the contrary, the Fourth FNPRM
specifically asked for parties to include a statutory analysis with any
proposals for changing the viewability rule.\28\ As requested in the
Fourth FNPRM, cable operators provided a statutory analysis to support
their alternative proposal for satisfying the viewability
requirement.\29\)
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Accordingly, we do not believe that section 614(b)(7) unambiguously
requires that cable subscribers must be capable of viewing must-carry
signals without the use of additional equipment. We instead conclude
that ``viewable'' can reasonably be read to mean that the operator must
make the broadcast signal available or accessible to its subscribers by
an effective means, which may include offering the necessary equipment
for sale or lease, either for free or at an affordable cost that does
not substantially deter use of the equipment.\30\ We believe this
interpretation is reasonable in light of marketplace changes that have
occurred over the past five years. This reading ensures access to must-
carry stations as a practical matter--rather than just a theoretical
option if the customer is willing to incur significant additional
expense.\31\ It is consistent with both the ordinary meaning of the
word ``viewable''--defined as ``capable of being seen or inspected''
\32\--and also prior interpretations of the Communications Act.\33\
Accordingly, we disagree with broadcasters' sweeping arguments that
requiring any sort of equipment use at all by subscribers would be
``contrary to the statute'' and ``flatly inconsistent'' with section
614(b)(7).\34\ Indeed, even NAB suggested that a cable operator could
satisfy the statutory viewability requirement by providing ``free
equipment to subscribers that enables access to digital broadcast
signals for a period of three years,'' which acknowledges that the
statute is not as inflexible as NAB otherwise argued.\35\ We thus agree
with cable commenters that the term ``viewable'' does not unambiguously
require that must-carry stations must be capable of being seen without
the use of additional equipment.\36\ In reaching this conclusion, we
note that agencies may change their interpretation of an ambiguous
statutory provision and that such a revised interpretation is entitled
to deference.\37\
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\27\ See NAB Reply Comments at 2-3.
\28\ See Fourth FNPRM, at para. 16 (``To the extent any parties
find the current rule burdensome, we seek comment on proposals that
will satisfy the statute in a less burdensome manner. Is any rule
necessary to effectuate the statutory intent? If so, any proposals
for an alternative rule to ensure the actual viewability of must-
carry signals should include specific proposed wording, as well as
an analysis of how the proposal is consistent with the statute'').
\29\ See, e.g., TWC Comments at 3-7. We also reject ION's claim
that the Fourth FNPRM did not provide interested parties with an
opportunity to comment on the DTA proposal nor ``consider[]
alternative proposals that would result in eliminating the rule.''
ION Media Networks and Liberman Broadcasting Ex Parte (dated Jun. 1,
2012) at 6-7. To the contrary, the Fourth FNPRM specifically sought
comment on possible alternatives to the viewability rule. See Fourth
FNPRM, at ] 16 (``we seek comment on any other proposals that would
achieve the results necessary to assure the viewability of must
carry signals through an approach different than that of our
existing rule. To the extent any parties find the current rule
burdensome, we seek comment on proposals that will satisfy the
statute in a less burdensome manner.'') In response, cable
commenters generally argued that offering to sell or lease equipment
to consumers would satisfy the statute, and specifically argued that
the availability of DTAs that provided analog customers access to
digital must-carry signals made our rule obsolete. NCTA Comments at
12 (``DTAs could be used to receive digital must-carry signals'').
Indeed, the cable industry has argued the former point since 2007,
so there is nothing new about an approach to satisfy the viewability
requirement by offering to sell or lease equipment to cable
customers. Thus, the public had ample notice and opportunity to
respond during the comment cycle and to file ex parte responses to
any alternative proposals suggested by commenters, as ION itself has
done in this proceeding.
\30\ See, e.g., TWC Comments at 4 (``A station plainly is
capable of being viewed if it can be seen with the purchase or lease
of equipment (such as a set-top box or digital terminal adapter)'').
\31\ In 2001, we determined that section 614(b)(7) did not
require cable operators to sell or lease set top boxes to
subscribers that could not view digital broadcast signals on their
analog television sets. See First Report and Order, FCC 01-22, 66 FR
16533, at paras. 77-79, March 26, 2001; Further Notice of Proposed
Rulemaking, FCC 01-22, 66 FR 16524, March 26, 2001. In 2001, the
Commission's simulcast requirements were about to commence
(requiring television broadcast licensees to simulcast a certain
percentage of their analog channel's programming on their DTV
channel), and the Commission decided that subscribers should not be
forced to pay ``substantial additional costs'' for equipment that
would serve only to convert to analog format digital programming
that could be identical in content to the analog programming
subscribers already could access directly through their analog
televisions. Id. In that context, the Commission sought to avoid
forcing upon customers ``substantial additional costs'' associated
with receiving duplicative programming. Although made in a very
different context, our decision today once again ensures that
compliance with the viewability mandate does not impose
``substantial additional costs'' on consumers.
\32\ See Webster's Third New International Dictionary 2551
(1993); see also TWC Comments at 4 (seeking this definition for
``viewable'').
\33\ See, e.g., Memorandum Opinion and Order, FCC 94-251, 59 FR
62330, at para. 16, December 5, 1994 (``Where a cable operator
chooses to provide subscribers with signals of must-carry stations
through the use of converter boxes supplied by the cable operator,
the converter boxes must be capable of passing through all of the
signals entitled to carriage on the basic service tier of the cable
system, not just some of them. In addition, any converter boxes
provided for this purpose must be provided at rates in accordance
with section 623(b)(3). Therefore, in a situation where the
subscriber's converter is supplied by the cable operator, and is
incapable of receiving all signals as required by section 614(b)(7),
the cable operator must make provision for a converter which is
capable of providing these signals.'' (emphasis added)).
\34\ See NAB Ex Parte (dated April 13, 2012) at 1. See also ION
Media Networks Ex Parte (dated Apr. 27, 2012) at 1; Affiliates
Associations Ex Parte (dated May 9, 2012) at 1; FOX Affiliates
Association Ex Parte (dated May 14, 2012) at 1 (arguing that ``the
viewability rule is dictated by the plain meaning of [section
614(b)(7)]'').
\35\ See NAB Ex Parte (dated May 23, 2012) at 2-3; see also
Consumers Union Ex Parte (dated June 5, 2012) at 1 (noting that if
the Commission ``chooses to revise the [viewability] rule, it should
require the availability of set-top boxes at no cost to the
consumer.''). We note that in an ex parte dated June 8, 2012, NAB
sought to ``withdraw'' its statement that cable operators may
satisfy their viewability obligations through the use of DTAs. See
NAB Ex Parte (dated June 8, 2012).
\36\ See TWC Comments at 4.
\37\ See, e.g., Chevron U.S.A., Inc. v. Natural Res. Def.
Council, 467 U.S. 837, 863 (1984) (``The fact that the agency has
from time to time changed its interpretation of the term `source'
does not, as respondents argue, lead us to conclude that no
deference should be accorded the agency's interpretation of the
statute.''); see also FCC v. Fox Television Stations, Inc., 556 U.S.
502, 515 (2009) (To be sure, the requirement that an agency provide
reasoned explanation for its action would ordinarily demand that it
display awareness that it is changing position * * *. But it need
not demonstrate to a court's satisfaction that the reasons for the
new policy are better than the reasons for the old one; it suffices
that the new policy is permissible under the statute, that there are
good reasons for it, and that the agency believes it to be better,
which the conscious change of course adequately indicates.'')
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9. Broadcasters argue that allowing cable operators to satisfy the
viewability requirement by requiring subscribers to purchase or lease
equipment would ``make the second sentence [in] section 614(b)(7)
surplusage, and remove any meaning from the word `additional' in the
third sentence of section 614(b)(7).'' \38\ We disagree. The first
sentence of section 614(b)(7) requires that each must carry signal
``shall be provided to every subscriber to a cable system.'' \39\ As
the Commission has explained, this provision requires that every class
of subscriber must receive all must carry signals.\40\ Cable operators
have complied with this requirement through the use of a basic service
tier,\41\ i.e., a level of service to which subscription is required in
order to be eligible for access to any other tier of service at
additional charge.\42\ The second sentence of section 614(b)(7) is
concerned with a subscriber's ability actually to ``view'' the must
carry signals that have to be provided under the first sentence. The
second and third sentences of section 614(b)(7) likewise are distinct
mandates, as we observed in the 2007 Viewability Order.\43\ The second
sentence covers ``all television receivers of a subscriber which are
connected to a cable system by a cable operator or for which a cable
operator provides a connection,'' whereas the third sentence covers the
situation where a ``cable operator authorizes subscribers to install
additional receiver connections, but does not provide the subscriber
with such connections, or with the equipment and materials for such
connections.'' \44\ Because of this difference, allowing cable
operators to satisfy the viewability obligation of the second sentence
either without the use of additional equipment or by making equipment
available at no cost or an
[[Page 36182]]
affordable cost does not render the second sentence ``irrelevant'' or
``surplusage'' in light of the third sentence, which requires
operators, in a more limited situation, to offer to sell or lease
converter boxes to subscribers at regulated rates. In short, our
interpretation of the term ``viewable'' in the second sentence is
different in scope and substance from the requirement set forth in the
third sentence, which requires cable operators to offer or sell
converter boxes to certain subscribers ``at rates in accordance with
section 623(b)(3).'' \45\
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\38\ See NAB Ex Parte (dated May 4, 2012) Attachment at 2.
Section 614(b)(7) provides:
SIGNAL AVAILABILITY.--Signals carried in fulfillment of the
requirement of this section shall be provided to every subscriber of
a cable system. Such signals shall be viewable via cable on all
television receivers of a subscriber which are connected to a cable
system by a cable operator or for which a cable operator provides a
connection. If a cable operator authorizes subscribers to install
additional receiver connections, but does not provide the subscriber
with such connections, or with the equipment and materials for such
connections, the operator shall notify such subscribers of all
broadcast stations carried on the cable system which cannot be
viewed via cable without a converter box and shall offer to sell or
lease such a converter box to such subscribers at rates in
accordance with section 623(b)(3).
47 U.S.C. 534(b)(7) (emphasis added).
\39\ Id.
\40\ See, e.g., Analog Must Carry Order, at para. 34 (declining
request for a special exception for commercial subscribers (e.g.,
hotels and hospitals) that receive specially designed channel line-
up; finding the Act is clear in its application of 614(b)(7) to
every subscriber of a cable system and that it grants no authority
to exempt specific classes of cable subscribers from the carriage
requirements).
\41\ See 1996 OVS Order, at para. 163 (recognizing that cable
operators have complied with the must carry rules through the use of
a basic tier, but allowing OVS operators to comply with the must
carry rules without necessarily using a basic tier, reasoning that
OVS operators ``may discover alternate methods to ensure that
subscribers receive all appropriate must carry channels'').
\42\ 47 U.S.C. 543(b)(7)(A).
\43\ See Viewability Order, at para. 22.
\44\ 47 U.S.C. 534(b)(7).
\45\ 47 U.S.C. 534(b)(7). We note that our new statutory
interpretation (i.e., that a hybrid system cable operator may
satisfy the viewability mandate by offering analog subscribers
equipment for free or at an affordable cost) is being implemented
pursuant to sections 614(b)(7) and 615(h) of the Act, not as a rate
regulation prescribed under section 623(b)(3) of the Act. Although
some requirements set forth in section 623(b) are lifted when an
operator is deregulated, deregulation would not be an exemption from
the carriage requirements of the statute. See Viewability Order, at
para. 29.
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10. NAB further argues that allowing cable operators to satisfy the
viewability requirement by providing equipment conflicts with the
``signal quality'' provision set forth in Section 614(b)(4)(A), and in
particular the requirement that ``the quality of signal processing and
carriage provided by a cable system for the carriage of local
commercial television stations will be no less than that provided by
the system for carriage of any other type of signal.'' \46\ NAB argues
that reliance on set-top equipment ``would allow cable operators to
discriminate by, for example, offering non-broadcast programming in a
viewable format but not local broadcast signals,'' or to provide some
local signals to analog subscribers, but not others.\47\ It is not
clear, however, that this provision applies here. Section 614(b)(4)(A)
speaks specifically to the issue of ``nondegradation'' and ``technical
specifications,'' and does not address the issue of viewability. In any
event, even if that provision were to apply, it is not clear that
carrying must-carry signals only in a digital format would violate the
terms of 614(b)(4)(A). From a technical standpoint, a must-carry signal
carried in standard definition (SD) arguably has the same ``quality of
signal processing and carriage'' as a signal carried in analog format
because both versions received at the headend should have the same
resolution--480i--and thus there should be no perceivable difference
between them.\48\ Moreover, there is no evidence in the record to
suggest that cable operators intend to use digital compression or other
bandwidth saving techniques to ``degrade'' must-carry signals in such a
way as to affect the subscriber's viewing experience.
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\46\ 47 U.S.C. 534(b)(4)(A). See also NAB Ex Parte (dated May 4,
2012) Attachment at 2.
\47\ NAB Ex Parte (dated April 13, 2012) at 2.
\48\ Fourth Report and Order, FCC 08-193, 73 FR 61742, at para.
5, October 17, 2008.
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11. Based on the foregoing, we agree with cable commenters that the
statutory viewability requirement is ambiguous, and reasonably can be
read in a manner to permit cable operators to require the use of
equipment to view must-carry signals--although we emphasize that such
equipment must be both available and affordable (or provided at no
cost). We here choose a reasonable interpretation of the statutory text
that best effectuates the statutory purpose in light of current
marketplace conditions.\49\ Moreover, the doctrine of constitutional
avoidance \50\ counsels us to interpret the Act as not imposing a rigid
analog-carriage requirement on cable operators, where the record
establishes a reasonable, less burdensome alternative that meets the
statutory objectives.\51\ Specifically, we are persuaded by cable
commenters' argument that the dramatic changes in technology and the
marketplace over the past five years render less certain the
constitutional foundation for an inflexible rule compelling carriage of
broadcast signals in both digital and analog formats.\52\ (NAB observes
that compliance with the viewability rule remains voluntary as
operators have the option to convert their systems to all-digital
operation, and thereby obviate the need to comply with the rule's
analog carriage requirement.\53\ Cable commenters, on the other hand,
maintain that forcing operators to carry must-carry signals in analog
format unduly hampers the efforts of cable operators to manage their
own gradual transition to all-digital service in a manner that attracts
customers to digital services while retaining value for those customers
who still choose to rely only on analog service.\54\) The current
record lacks evidence that infringing on cable operators' discretion by
requiring both digital and analog carriage of the same broadcast
stations is necessary to protect the viability of over-the-air
broadcasting where an affordable set-top box option, that will achieve
the same viewability, is readily available to customers. Nor is there
evidence showing that allowing the viewability rule to sunset where the
cable operator makes the digital signal available to its analog
subscribers by offering the necessary equipment at an affordable cost
will diminish the availability or quality of broadcast programming. (We
are not persuaded by broadcasters' argument that allowing the rule to
sunset will threaten the viability of local broadcasters because their
analysis assumes that elimination of the viewability rule will
automatically result in the broadcaster's signal being unavailable to
all analog subscribers.\55\ Their analysis fails to take into account
that those analog customers who value must-carry channels may opt for
equipment made available by the cable operator to continue accessing
must-carry channels and other programming offered by the cable operator
in a digital format.) We thus find that the burden placed on cable
operators by the viewability rule is not justified on the current
record, which demonstrates that a less burdensome alternative is
available. Based on our analyses of current technology and marketplace
conditions,\56\ set forth in detail below,
[[Page 36183]]
we now find that the most reasonable interpretation of the statute is
that an operator of a hybrid system may comply with the viewability
mandate by carrying a must-carry signal in a format that is capable of
being viewed by analog customers either without the use of additional
equipment or alternatively with equipment made available by the cable
operator at no cost or at an affordable cost that does not
substantially deter use of the equipment.
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\49\ See, e.g., NCTA v. Brand X Internet Services, 545 U.S. 967,
980 (2005) (``ambiguity in statutes within an agency's jurisdiction
to administer are delegations of authority to the agency to fill the
statutory gap in reasonable fashion'').
\50\ See Frisby v. Schultz, 487 U.S. 474, 483 (1988) (it is a
``well-established principle that statutes will be interpreted to
avoid constitutional difficulties'').
\51\ See TWC Comments at 7-8 (``particularly in light of
significant First Amendment concerns presented by the Commission's
viewability mandate, the Commission should allow that mandate to
sunset as planned''); Bright House Reply at 9 (``The realities of
today's video marketplace render obsolete any logical basis for
burdening the First Amendment rights of cable operators and limiting
the viewing options of cable customers by continuing to insist that
hybrid cable systems not only carry must-carry signals, but carry
them in analog''); but see NAB Reply Comments at 7-9; NAB Ex Parte
(dated April 13, 2012) at 3-4 (``cable operators offer no evidence
that the impact of the viewability rule on their First Amendment
rights has materially changed since 2007; indeed, as more cable
systems increase capacity or convert to digital, the actual impact
of the rule will steadily decrease'').
\52\ See, e.g., TWC Comments at 18.
\53\ See NAB Ex Parte (dated April 13, 2012) at 4-5.
\54\ See NCTA Ex Parte (dated April 5, 2012) at 2; see also
Bright House Reply at 6 (a cable system's digital transition must
continue at a pace that properly balances the needs of its
subscribers with available spectrum and allowing the viewability
rule to sunset would aid the cable industry's digital transition).
\55\ See NAB Ex Parte (dated April 23, 2012) Attachment.
\56\ See American Trucking Assns. v. Atchison, T. & S.F. Ry.,
386 U.S. 397, 416 (1967) (``Regulatory agencies do not establish
rules of conduct to last forever; they are supposed, within the
limits of the law and of fair and prudent administration, to adapt
their rules and practices to the Nation's needs in a volatile,
changing economy. They are neither required nor supposed to regulate
the present and the future within the inflexible limits of
yesterday''); American Civil Liberties Union v. FCC, 823 F.2d 1554,
1565 (DC Cir. 1987) (FCC should ``carefully monitor the effects of
its regulations [of cable television rates] and make adjustments
where circumstances so require * * *. [W]e would not expect the
Commission to adhere blindly to regulations that are cast in doubt
by new developments or better understanding of the relevant
facts''), cert. denied, 485 U.S. 959 (1988); Natural Resources
Defense Council, Inc. v. Herrington, 768 F.2d 1355, 1408 (DC Cir.
1985) (DOE efficiency standards for household appliances ``would be
patently unreasonable'' if ``based on data half a decade old'').
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2. Changes in Technology and the Marketplace
12. Significant changes that have occurred in the marketplace and
technology over the past five years confirm our determination that it
is in the public interest to allow the 2007 viewability rule to sunset.
At the time the rule was adopted, the Nation was preparing for the
digital television transition, and a significant number of television
viewers were unequipped to receive a digital signal.\57\ In 2007, about
58 percent of television households subscribed to cable service and 46
percent of these cable subscribers (40 million households) received
analog service. Moreover, there was no low-functionality and/or low-
cost digital set-top box option available to ensure analog cable
subscribers could access digital must-carry signals.\58\ Consequently,
the Commission faced the very real possibility that a significant
number of cable customers could lose access to must-carry channels if
hybrid cable systems were permitted to carry such signals only in
digital format. Based on the state of the marketplace in 2007, the rule
requiring hybrid cable systems serving analog subscribers to carry
must-carry stations in analog format was a reasonable measure to ensure
that must-carry signals were ``viewable'' and ``available'' to all
subscribers as required by statute.\59\
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\57\ See, e.g., Brighthouse Reply at 4 (``When the Commission
adopted the Viewability Order, it was confronting the broadcast
industry's DTV transition and the fear that this historic event
would trigger major viewer disruption. In that context, the
Commission chose--on a temporary basis -- to broadly apply cable's
must-carry obligations so as to minimize the transitional impact on
cable customers who were accustomed to receiving broadcast channels
in analog. With that same transitional objective in mind, the cable
industry acquiesced'').
\58\ See 2010 CableCARD Order, FCC 10-181, 76 FR 40263, at
paras. 49-50, July 8, 2011 (exempting for the first time HD DTAs
from the Commission's integration ban; see 47 CFR 76.640(b)(4) and
76.1204(a)(1)). In addition, we note that only about 25 percent of
television households had HD television sets. The Nielsen Company,
Nielsen Universe Estimates, Jan. 1, 2007-Jan. 1, 2011, ``Mkt
Breaks''; National Media Related Universe Estimates, Feb. 2011,
``Media UE Trends''; Television Audience Report, 2010-2011, at 4,
http://www.nielsen.com/us/en/insights/reports-downloads/2011/television-audience-report-2010-2011.html (visited Mar. 23, 2012).
\59\ See NCTA Reply at 4 (cable industry's commitment to comply
with federal rules and to carry must-carry stations in analog format
reflected a commitment the cable industry had previously made to
Congress--``a commitment that also was expressly limited to three
years'').
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13. The state of technology and the marketplace is significantly
different now. About 50 percent of television households now subscribe
to cable service (down from 58 percent in 2007), about 20 percent of
these cable subscribers (about 12 million households) receive analog
service (down from 40 million households in 2007), and the latter
number is expected to drop to 16 percent (or fewer than 10 million
households) by the end of 2012.\60\ We continue to expect most cable
operators will eventually transition to all-digital systems.\61\
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\60\ See SNL Kagan, ``Video growth enjoys seasonal lift in Q1;
service providers notch sub gains,'' (May 16, 2012) (``More than 80%
of basic subs are now digital.''); SNL Kagan, ``SNL Kagan's 10-Year
Cable TV Projections,'' (Jul. 28, 2011).
\61\ Id. See also NCTA Ex Parte in MB Docket No. 11-169 (dated
Feb. 7, 2012) at 4 (noting that ``in light of * * * pro-consumer
benefits, cable operators have strong incentives to migrate rapidly
to all-digital networks''); SNL Kagan, ``Cable's all-digital
transition marches on without universal support,'' (Dec. 14, 2011)
(stating that ``the U.S. cable industry's all-digital future is
inevitable''). We note, for example, that BendBroadband and RCN have
completed their transition to all-digital service, and Comcast and
Cablevision are rapidly transitioning to all-digital service. See
BendBroadband Comments in MB Docket No. 11-169 at 1-2; RCN Comments
in MB Docket No. 11-169 at 2; Comcast Comments in MB Docket No. 11-
169 at 4; Cablevision Comments in MB Docket No. 11-169 at 13; SNL
Kagan, ``Video growth enjoys seasonal lift in Q1; service providers
notch sub gains,'' (May 16, 2012) (``Greater than 93% of Comcast
basic subs and more than 97% of Cablevision basic subs are now
digital. Cablevision intends to complete the conversion of its
entire network to digital later this year.'').
---------------------------------------------------------------------------
14. More importantly, unlike in 2007, low-functionality/low cost
digital equipment is now readily available as an option to cable
consumers.\62\ The cable industry has encouraged the development of
small, low-cost set-top boxes, called ``Digital Transport Adapters''
(``DTAs''),\63\ to enable customers to view digital signals, without
having to obtain full-featured digital set-top boxes.\64\ NCTA states
that ``some cable operators * * * are already providing digital
transport adapters (DTAs) to some or all of their customers at minimal
or no cost.'' \65\ According to industry reports, about 27 million DTAs
were already deployed by year-end 2011.\66\ In addition to DTAs, NCTA
explains that ``[o]ther operators * * * are providing other types of
affordable digital set-top boxes, with lesser capabilities and/or at
substantially reduced prices for basic-only customers.'' \67\ Moreover,
NCTA states
[[Page 36184]]
that ``the eight largest incumbent cable operators'' have committed to
``make available to analog-only households, upon request, low-cost set-
top devices capable of displaying basic service tier signals on analog
television sets.'' \68\ Therefore, we expect that DTAs, or similar
devices, will be made broadly available on cable systems throughout the
country.\69\ The low cost set-top box offers reflected in our record
will satisfy our new interpretation of the viewability requirement,
permitting a cable operator to make the must-carry signals available by
offering analog customers the necessary digital equipment at an
affordable cost.\70\ Specifically, the record reflects that Comcast,
for a period of time after migrating a system to all-digital, typically
offers two or three free DTAs to customers at no cost, and charges less
than $2 for additional boxes.\71\ Similarly, Time Warner Cable states
that in transitioning one of its systems to digital it has offered
subscribers ``one or more'' DTAs free of charge for the first two years
and 99 cents per month thereafter.\72\ In addition, Bright House states
that it offers set-top boxes to basic service tier subscribers for $1 a
month.\73\ We find that this range of charges for DTAs and set-top
boxes--i.e., free or a monthly fee of no more than $2--would satisfy
the requirement for affordable equipment because the minimal additional
cost, if any, is unlikely to discourage use of this equipment.\74\
Materially higher leasing fees, however, could deter subscriber
willingness to order the equipment needed to ensure viewability on a
hybrid cable system. \75\ Accordingly, such fees would not meet the
statutory viewability requirement as we interpret it.\76\
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\62\ We note that the number of television households with HD
television sets has increased to about 64 percent for the 2010-2011
TV season (up from 25 percent in 2007). See The Nielsen Company,
Nielsen Universe Estimates, Jan. 1, 2007-Jan. 1, 2011, ``Mkt
Breaks''; National Media Related Universe Estimates, Feb. 2011,
``Media UE Trends''; Television Audience Report, 2010-2011, at 4,
http://www.nielsen.com/us/en/insights/reports-downloads/2011/television-audience-report-2010-2011.html (visited Mar. 23, 2012).
We also note that analog cable subscribers with digital TV sets with
QAM tuners will be able to continue to view must-carry signals in
digital without attaching additional equipment. Most television
sets, consumer electronics devices, and leased set-top boxes have
included QAM tuners since at least 2007, meaning that those devices
are capable of tuning unencrypted digital cable service. See BST
Encryption NPRM, FCC 11-153, 76 FR 66666, at paras. 4-6, October 27,
2011. In the pending BST Encryption NPRM, the Commission sought
comment on whether to retain the basic service tier encryption
prohibition for all-digital cable systems; the Commission did not
propose to allow encryption of basic service tier signals on hybrid
systems, which are at issue here. Id. at para. 9. See also Bright
House Reply at 5 (explaining that many cable customers who have not
yet subscribed to a digital service tier are able to directly access
unencrypted digital signals included in their cable system's basic
service tier through their television sets purchased within the last
five years).
\63\ DTAs are simple one-way digital-to-analog set-top boxes
that can provide cable consumers with access to the basic service
tier and the expanded basic service tier. These devices are small
enough to be attached to the back of a television set. See, e.g.,
``The Comcast Digital Transport Adapter'' at http://www.bocsco.com/comcast_dta.php (BOCS Web site visited May 3, 2012) (link contained
in NCTA Comments at 13); ``All About Digital Adapters'' at http://customer.comcast.com/help-and-support/cable-tv/digital-adapter/
(Comcast Web site visited May 3, 2012); Jeff Baumgartner, ``Digital
Transport Adapters (DTAs),'' Light Reading (Jul. 15, 2009),
available at http://www.lightreading.com/document.asp?doc_id=179245
(visited May 3, 2012). See also Cisco Systems, Inc. Ex Parte (dated
May 23, 2012) Attachments.
\64\ See NCTA Comments at 12. See also TWC Ex Parte (dated May
7, 2012) at 1 (in connection with one of its system's all-digital
transition, the cable operator offered its subscribers the use of
one or more DTAs at no charge for two years, as an alternative to
leasing full-featured set-top boxes or purchasing CableCARD-equipped
retail devices, and offered subscribers the opportunity to lease one
or more DTAs for 99[cent] per month after the initial free offer
expires).
\65\ NCTA Ex Parte (dated April 26, 2012) at 2.
\66\ See SNL Kagan, ``Cable set-top forecast: Industry's move to
IP video impacts projections,'' (Sept. 16, 2011).
\67\ NCTA Ex Parte (dated April 26, 2012) at 2. See also ACA Ex
Parte (dated Jun. 4, 2012) at 3 (stating that ``ACA members who
operate hybrid analog/digital systems make available for lease
digital set-top boxes that permit digital-only signals to be viewed
on analog television sets, and analog-only cable customers that are
served by these hybrid systems can commonly obtain boxes from their
providers at low cost'').
\68\ NCTA Ex Parte (dated May 17, 2012) at 2 (noting that the
eight largest cable operators ``collectively serve more than 70
percent of all analog-only cable customers'').
\69\ We understand that DTAs are widely available to cable
systems using Motorola technology and, according to TWC, ``Cisco
does make DTAs available for use with Cisco headend equipment.'' See
TWC Ex Parte (dated May 7, 2012) at 2 (noting, however, that ``TWC
to date has not deployed DTAs in a Cisco cable system''). See also
Cisco Systems, Inc. Ex Parte (dated May 23, 2012) at 1 (stating it
has ``produced and markets Digital Transport Adaptors for use in
conjunction with multichannel video programming distribution
systems'').
\70\ Our ruling today is not inconsistent with section 629 of
the Act, which was enacted to ensure the commercial availability of
navigation devices. 47 U.S.C. 549. We expect many cable operators
will offer DTAs to analog subscribers to fulfill the viewability
mandate. Therefore, we do not expect that these low-cost limited
functionality devices will have an effect on the development of a
commercial market for navigation devices. See, e.g., 2010 CableCARD
Order, at para. 49 (exempting limited capability HD set-top boxes
from the integration ban); Cable One Waiver, FCC 09-45, at para. 13
(rel. May 28, 2009). As noted previously, for purposes of the retail
market, consumers prefer advanced two-way devices capable of
receiving the electronic programming guide, video on demand, and
other interactive features, which are not made available by DTAs.
See Cable One Waiver, at paras. 13-14. Nevertheless, to the extent
such advanced two-way boxes are offered below the cost reasonably
allocable to such box, we remind operators of their obligations to
offer a comparable discount to CableCARD customers on the same
service plan. 47 CFR 76.1205(b)(5)(ii)(B)(2).
\71\ See NCTA Ex Parte (dated Feb. 21, 2012) in MB Docket No.
11-169 at 4; New Jersey Division of Rate Counsel Comments in MB
Docket No. 11-169 at 6. See also, e.g., SNL Kagan, ``All-digital
migration drives set-top outlook,'' (Sept. 22, 2009); Jeff
Baumgartner, ``Comcast Seeds Digital Shift With Free Boxes,'' Light
Reading (Nov. 4, 2008), available at http://www.lightreading.com/document.asp?doc_id=167256&site=lr_cable (visited May 3, 2012);
Jeff Baumgartner, ``Comcast Starts to Kiss Analog TV Goodbye,''
Light Reading (Jan. 6, 2012), available at http://www.lightreading.com/document.asp?doc_id=216104&site=lr_cable
(visited May 3, 2012).
\72\ TWC Ex Parte (dated May 7, 2012) at 1.
\73\ Bright House Ex Parte (dated May 14, 2012) at 1.
\74\ We note that, to the extent a cable operator of a hybrid
system elects to cease down-converting a must-carry signal and
instead chooses to provide analog customers the necessary digital
equipment to view such signal, such equipment must continue to meet
the affordability requirements described herein until the operator
completes its transition to all-digital service.
\75\ Concerns in the record about the cost of equipment appear
to assume costs comparable to those ordinarily charged for full-
function boxes, while our affordability requirement ensures that if
equipment is used to provide viewability, that equipment will be
available at a nominal cost or no charge. See, e.g., National Black
Religious Broadcasters, Lieberman Broadcasting Inc., Una Vez Mas,
ION Media Networks, NRJ TV LLC (collectively ``Must-Carry
Broadcasters'') Joint Ex Parte (dated Jun. 9, 2012) at 4, n.6.
\76\ We note that, to the extent such equipment is subject to
rate regulation, operators must also comply with those requirements.
See 47 U.S.C. 543(b)(3); 47 CFR 76.923.
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3. Effect on Must-Carry Stations, Cable Operators, and Consumers
15. We are not persuaded by the broadcasters' analysis that
allowing the current viewability rule to expire on schedule will
threaten the viability of must-carry stations.\77\ According to the
broadcasters, approximately 12.6 million households receive only analog
cable service, representing approximately 11 percent of all U.S.
television households, and removing that percentage of a station's
audience ``could well have a profound impact on affected stations.''
\78\ As NCTA points out, however, the broadcasters' analysis overstates
the impact on such stations because it assumes that elimination of the
rule will automatically result in the broadcaster's signal being
unavailable to all analog subscribers.\79\ To the contrary, our new
statutory interpretation--which hinges on a cable operator making
equipment available at no cost or an
[[Page 36185]]
affordable cost \80\--will ensure that subscribers on hybrid systems
may continue to access these signals at little or no additional
expense.\81\ As cable commenters explain, a must-carry signal carried
only in digital format would still be included in the basic service
tier; analog cable subscribers would not be required to subscribe to an
enhanced tier of service to view the digital version of a must-carry
channel.\82\ We also expect this issue to diminish over time given that
the number of analog cable subscribers is expected to continue to
decrease as more cable customers choose to upgrade to full digital
service and as more hybrid cable systems complete their transition to
all-digital systems.\83\
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\77\ See NAB Ex Parte (dated April 23, 2012) Attachment
(providing an economic analysis on the impact of reduced cable
carriage on must-carry stations). See also NAB Ex Parte (dated April
23, 2012) Attachment at 3 (if a must-carry station ``were to lose
access to a number of cable households through the elimination of
the viewability rule, its revenue would certainly decrease''); NAB
Ex Parte (dated April 13, 2012) at 2-3 (if the viewability rule were
allowed to sunset, ``there is a significant potential for must carry
stations to lose audience share'' and to the extent a must carry
station's financial viability is harmed, it ``would harm not only
the cable subscribers that can no longer view must carry stations,
but potentially all of those stations' viewers''). Several must-
carry broadcasters filed ex parte letters to support NAB's analysis.
See, e.g., Liberman Broadcasting, Inc. (``Liberman'') Ex Parte
(dated Apr. 26, 2012); National Religious Broadcasters Ex Parte
(dated Apr. 26, 2012); ION Media Networks (``ION'') Ex Parte (dated
Apr. 27, 2012); Una Vez Mas, LP Ex Parte (dated Apr. 27, 2012);
Francis Wilkinson (Costa De Oro Media, LLC) Ex Parte (dated Apr. 30,
2012); Sunbelt Multimedia Co., Ex Parte (dated May 1, 2012); WTVA,
Inc. Ex Parte (dated May 2, 2012); Named State Broadcaster
Associations Ex Parte (dated May 3, 2012); Mapale LLC Ex Parte
(dated May 7, 2012); The ABC Television Affiliates Association, the
CBS Television Network Affiliates Association, and the NBC
Television Affiliates (the ``Affiliates Associations'') (dated May
9, 2012); The Ohio Association of Broadcasters (OAB), the Virginia
Association of Broadcasters (VAB), and the North Carolina
Association of Broadcasters (NCAB) Ex Parte (dated May 9, 2012);
Daystar Television Network (DTN) Ex Parte (dated May 11, 2012); FOX
Affiliates Association Ex Parte (dated May 14, 2012); Christian
Television Network Ex Parte (dated May 22, 2012); Trinity Christian
Center of Santa Ana, Inc. d/b/a Trinity Broadcasting Network (TBN)
Ex Parte (dated May 24, 2012). ; Regional News Network (WRNN-TV) Ex
Parte (dated May 25, 2012); Bert Ellis Ex Parte (dated Jun. 4,
2012); Entravision Holdings, LLC Ex Parte (dated Jun. 4, 2012); KVMD
Licensee Co., L.L.C. Ex Parte (dated Jun. 4, 2012); NRJ TV LLC
(``NRJ'') Ex Parte (dated Jun. 4, 2012); Rancho Palos Verdes
Broadcasters, Inc. (RPVB) Ex Parte (dated Jun. 4, 2012); Northwest
Broadcasting Inc. Ex Parte (dated Jun. 5, 2012); Ramar
Communications, Inc. Ex Parte (dated Jun. 5, 2012); OTA Broadcasting
Ex Parte (dated Jun. 6, 2012); Must-Carry Broadcasters Joint Ex
Parte (dated Jun. 9, 2012).
\78\ See also NAB Ex Parte (dated April 23, 2012) Attachment at
2. In addition, Affiliate Associations argue that if the viewability
rule was allowed to sunset, stations electing retransmission consent
could also ``face audience and revenue losses because many
retransmission consent agreements reference the requirements of the
viewability rule. If the rule were to go away, cable operators
likely would insist that they have no obligation to ensure
retransmission consent signals are available to all subscribers.''
See Affiliates Associations Ex Parte (dated May 9, 2012) at 2; FOX
Affiliates Association Ex Parte (dated May 14, 2012) at 2. We do not
find this argument to be persuasive or to provide a basis for
extending the viewability rule. As we have said before certain local
broadcast station programming is ``highly valued by consumers'' and
``carriage of local television broadcast station signals is critical
to MVPD offerings.'' Memorandum Opinion and Order, FCC 03-330, para.
202 (rel. Jan. 14, 2004). Given cable subscribers' demand for access
to retransmission consent stations, we do not expect our approach to
the viewability requirement for must-carry stations to significantly
impact carriage of broadcast stations that elect to negotiate terms
for retransmission consent rather than invoking their statutory
must-carry rights.
\79\ See NCTA Ex Parte (dated April 26, 2012) at 2.
\80\ We are not persuaded by broadcasters' argument that
equipment use here should be banned for the same reason the ``A/B
switch'' solution was rejected in the early 1990s. See ION and
Liberman Joint Ex Parte (dated Jun. 1, 2012) at 6. An ``A/B switch''
is a method of manually toggling between cable and broadcast
programming to allow cable subscribers to watch broadcast
programming not carried on cable. The ``A/B switch'' solution was
rejected because of numerous technical problems associated with the
device and considerable evidence (including two empirical studies)
showing a lack of consumer acceptance of the switch. See Turner
Broad. Sys., Inc. v. FCC, 520 U.S. 180, 219-21 (1997). We are
presented with a very different situation here. First, while the
``A/B switch'' required subscribers to access must-carry stations
over-the-air, in the situation here must-carry stations will
continue to be carried on the digital tier of the cable system.
There will be no manual toggling involved to access must-carry
stations. Rather, the available DTA (or similar equipment) will
provide subscribers equivalent access to all cable programming,
including must-carry stations. In addition, the record lacks any
suggestion of technical problems associated with the use of DTAs or
low-cost set-top boxes. Likewise, there is no evidence of any
problem with customer acceptance. As indicated above, for example,
approximately 27 million DTAs had been deployed by year-end 2011.
\81\ We note that subscribers served by analog-only systems
would not be impacted by the sunset of the viewability rule because
those systems would be required to continue to carry must-carry
channels in analog format. See 47 CFR 76.56. According to NCTA, more
than half a million cable customers are served by analog-only
systems as of year-end 2011. See NCTA Ex Parte (dated April 26,
2012) at 2, n.7.
\82\ Id. at 2. See also TWC Ex Parte (dated May 7, 2012) at 2
(explaining that the rates TWC charges for the basic service tier do
not vary depending on whether the subscriber accesses an analog or
digital version of services carried on that tier).
\83\ See SNL Kagan, ``SNL Kagan's 10-Year Cable TV
Projections,'' (Jul. 28, 2011). SNL Kagan projects that the
percentage of cable subscribers subscribing to digital cable service
will reach about 84 percent by year-end 2012, 88 percent by year-end
2013, 91 percent by year-end 2014, and 93 percent by year-end 2015.
Id. See also NCTA Ex Parte dated April 26, 2012, at 2-3 (noting that
the number of digital households increased from 54% to 78% during
the four years between 2007 and 2011, and that the percentage of
digital households had further increased by December 2011 to 79.4%;
and stating that ``there is no reason to believe that the steady
decline in the number of analog-only households will not
continue'').
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16. The record further reflects that eliminating the rule will
result in significant benefits to cable operators in meeting the
increasing demands of the large majority of their customers, i.e.,
those subscribing to digital services.\84\ NCTA explains that ``cable
operators face capacity demands from an increasing proliferation of HD
programming services as well as from broadband video services'' and
need flexibility to ``serve the needs of all their customers while
transitioning from analog to digital service.'' \85\ NCTA explains that
there are currently more than 183 HD cable networks (including basic,
premium, and regional sports channels), up from only 22 in September
2007 when the Commission adopted the viewability rule.\86\ According to
staff review of the 2011 Annual Cable Operator Report data and the 2010
Cable Price Survey data, more than 96 percent of cable systems carry at
least one must-carry station, and, on average, each system carries more
than seven must-carry stations.\87\ Each must-carry station carried in
analog occupies 6 MHz of bandwidth that the cable operator could
otherwise use for 10-12 standard definition (``SD'') digital streams,
2-3 HD video streams, or significant broadband capacity.\88\ Thus, as
cable commenters explain, elimination of the viewability rule will
provide operators the needed flexibility to meet fast-changing consumer
demands for HD cable services and high-speed broadband services.\89\
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\84\ See, e.g., Bright House Reply at 5-6 (arguing that the
viewability rule inefficiently consumes ``precious cable capacity
that could be better deployed for enhanced broadband services'' with
``little to no offsetting public benefit'').
\85\ NCTA Reply at 5; Bright House Reply at 4 (``[a]nalog
carriage of each and every must carry station imposes a heavy burden
on capacity-strained cable systems''). See also Bright House Reply
at 6 (``Data-usage by the average Internet user has increased a
thousand-fold in the last decade. Over the next three years, this
trend will continue and even accelerate, and cable operators will
need flexibility to meet fast-changing consumer demands'').
Broadcasters do not dispute that carriage of analog signals take up
more bandwidth than digital signals, but respond that a cable
operator could avoid the bandwidth issue by transitioning its hybrid
system to an all-digital system. NAB Comments at 5 (``As cable
systems convert, whatever burden the Viewability Rule might have
imposed will disappear.'').
\86\ NCTA Comments at 13.
\87\ See Fourth FNPRM, at para. 10, n.36. In the Fourth FNPRM,
we estimated that almost 40 percent of all broadcast stations
elected or defaulted to must-carry rather than electing
retransmission consent. Id.
\88\ See, e.g., SNL Kagan, ``All-digital footprints make gains
amid uneven commitment by operators,'' (Dec. 13, 2010) (noting
potentially significant efficiencies from reclaiming analog
channels); Communications Technology, ``QAM Modulator: Tactics at
the Edge,'' (Aug. 24, 2009) available at http://www.cable360.net/ct/news/ctreports/QAM-Modulator-Tactics-at-the-Edge_37234.html
(visited May 7, 2012). See also Bright House Reply at 6-7
(``Requiring a cable operator to carry a single must-carry channel
in analog consumes the same cable spectrum as a dozen standard
digital services. This lopsided loss of programming (which will only
grow more extreme as new compression advancements are implemented)
is clearly contrary to the best interests of the vast majority of
cable customers, who can already view must carry programming in
digital'').
\89\ See, e.g., NCTA Comments at 15 (stating that ``greatly
increased demand for capacity to accommodate HD cable services and
broadband video services has made it imperative for cable operators
to use their capacity efficiently.''); NCTA Reply at 5 (explaining
that the rule impedes consumer demands for ``an increasing
proliferation of HD programming services as well as from broadband
video services''); Bright House Reply at 6 (explaining that data-
usage by the average Internet user has increased a thousand-fold in
the last decade and over the next three years this trend will
continue and even accelerate).
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4. Six-Month Transition Period
17. To facilitate a smooth transition, we adopt, for a six-month
transition period following the sunset of our viewability rule,\90\ an
interim requirement that operators of hybrid cable systems must
continue to carry the signals of must-carry stations in analog format
to all analog cable subscribers. Critical to our decision to allow the
viewability rule to sunset is the availability of affordable set-top
boxes to affected cable subscribers. A six-month transition period will
provide cable operators an opportunity to acquire an adequate supply of
equipment for subscribers impacted by any carriage change.\91\ It will
also provide time for
[[Page 36186]]
cable operators to comply with our existing rules requiring
notification to broadcasters and customers about any planned change in
carriage or service and the operator's equipment offerings, as well as
allow consumers sufficient time to make any necessary arrangements.\92\
As part of the cable operators' required notification to their
subscribers of any carriage changes, the cable operators have committed
to inform affected subscribers that equipment is required to continue
viewing the must-carry signal and how to obtain that equipment.\93\ We
believe informing consumers about equipment is a critical part of a
hybrid operator's viewability obligations in these circumstances and
thus rely upon this commitment in rendering our decision today.
Similarly, we rely upon the cable operators' commitment to give
broadcasters a minimum of 90 days notice before undertaking any
carriage changes.\94\ We believe that such advance notice will provide
repositioned must-carry stations sufficient time to communicate with
their viewers. Advance notice about planned carriage changes will allow
must-carry stations to notify their viewers--through on-air messages,
Web site postings, mailings or other forms of communications of their
choosing--about the planned change in carriage, and about the viewers'
options to ensure continued access to the station's programming.\95\ We
believe effective consumer outreach, particularly during the six-month
transition period, will greatly minimize the impact that sunset of our
viewability rule may have on consumers and must-carry stations.
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\90\ I.e., December 12, 2012.
\91\ See TWC Ex Parte (dated May 7, 2012) at 2 (confirming that
``TWC to date has not deployed DTAs in a Cisco cable system, but TWC
understands that Cisco does make DTAs available for use with Cisco
headend equipment''). See also Baja Broadband Operating Company,
LLC, Request for Waiver of Sec. 76.1204(a)(1) of the Commission's
Rules, CSR-8357-Z, DA No. 12-899 (rel. Jun. 7, 2012) (noting that HD
DTAs are expected to be available to the small cable operator by
October 2012). Contrary to the broadcasters' suggestion, the Baja
waiver grant does not suggest an issue with the availability of DTAs
in general. See NAB Ex Parte (dated Jun. 8, 2012) at 2, n.5; Must-
Carry Broadcasters Ex Parte (dated Jun. 9, 2012) at 4. First, the
Bureau Order pertains to a small cable operator's short term need
for HD DTAs. The Bureau Order does not address the availability of
SD DTAs, which would also be sufficient for purposes of accessing
the signals of must-carry stations carried in digital format. See
NCTA Ex Parte (dated Jun. 11, 2012) at 2 (``Analog customers
typically use standard-definition DTAs to access digital cable
services on their analog TVs. There is no shortage of such DTAs in
the marketplace. In fact, cable operators have deployed tens of
millions of such DTAs to date, and these DTAs are in plentiful
supply from a variety of vendors. The types of DTAs referenced in
the Baja Broadband Waiver Order--HD DTAs--are just now coming to
market and are expected to become more widely available in coming
months.''). Second, the Bureau Order observes that the HD DTAs are
expected to be available in October 2012 (i.e., within seven months
of the waiver request date of March 9, 2012), a time frame
consistent with the six-month transition period that we adopt today.
Thus, the transition period should afford small operators the time
needed to acquire any necessary equipment, including HD DTAs.
Moreover, we expect that our Order today will provide an incentive
for DTA manufacturers to ramp up production. Third, we reiterate
that cable operators must have an adequate supply of affordable
boxes to offer their customers in order to satisfy the statutory
viewability requirement. To the extent that DTAs or low cost set-top
boxes are not otherwise available to a particular hybrid cable
operator, that operator could not terminate analog carriage of the
must-carry stations.
\92\ See 47 CFR 76.1601 (requiring cable operators to ``provide
written notice to any broadcast television station at least 30 days
prior to either deleting from carriage or repositioning that
station. Such notification shall also be provided to subscribers of
the cable system.''); 47 CFR 76.1603(b) (requiring cable operators
(i) to notify customers of any changes in rates, programming
services or channel positions ``as soon as possible in writing'';
(ii) to give customers notice at least 30 days in advance of such
changes if the change is within the control of the cable operator;
and (iii) to notify subscribers 30 days in advance of any
significant changes in other information listed in Sec. 76.1602);
47 CFR 76.1602(b) (listing customer service-general information to
include (1) products and services offered and (2) prices and options
for programming services and conditions of subscription to
programming and other services). See also NCTA Ex Parte (dated May
17, 2012) at 2 (stating that the eight largest incumbent cable
operators have committed to ``make available to analog-only
households, upon request, low-cost set-top devices capable of
displaying basic service tier signals on analog television sets''
and to ``provide ample notice to affected subscribers of these set-
top box offers''); TWC Ex Parte (dated May 7, 2012) at 2 (``where
TWC chooses to cease analog transmission of one or more must-carry
stations in a hybrid digital/analog cable system, it will provide
advance notice regarding available equipment that will enable
subscribers with direct connections to analog television sets to
continue viewing such broadcast signals''); Bright House Ex Parte
(dated May 14, 2012) at 1; NCTA Ex Parte (dated May 17, 2012) at 2;
TWC Ex Parte (dated May 7, 2012) at 2 (committing to providing
advance notice when terminating analog carriage).
\93\ See NCTA Ex Parte (dated May 17, 2012) at 2 (stating that
the eight largest incumbent cable operators will ``provide ample
notice to affected subscribers'' of the availability of low-cost
set-top devices capable of displaying basic service tier signals on
analog television set); ACA Ex Parte (dated Jun. 11, 2012) at 1
(stating similar commitment by ACA's 14 largest members serving more
than 50% of all subscribers served by ACA membership).
\94\ See NCTA Ex Parte (dated Jun 8, 2012) at 2 (stating that
where the eight largest incumbent cable operators wish to stop
carrying the analog version of a must-carry station's signal, such
cable systems will provide notice to the affected must-carry station
at least 90 days in advance of the carriage change); ACA Ex Parte
(dated Jun. 11, 2012) at 1-2 (stating similar commitment by ACA's 14
largest members serving more than 50% of all subscribers served by
ACA membership).
\95\ Id.
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18. We remind cable operators that the sunset of our viewability
rule does not otherwise affect the must-carry requirements of Sec.
76.56 of our rules.\96\ Cable operators providing digital cable service
must continue to carry local broadcast stations electing mandatory
carriage, including in HD format when broadcast in such format, and
cable operators providing only analog cable service (no digital
service) must continue to carry local broadcast stations electing
mandatory carriage in analog format.\97\ By allowing our current
viewability rule to sunset, however, we provide hybrid cable system
operators the flexibility to best meet the needs of their subscribers
during their move to an all-digital system. Under our more flexible
statutory interpretation, operators of hybrid systems may choose to
comply with the statutory viewability mandate by continuing to down-
convert digital must-carry stations to analog format in addition to
carrying those stations in digital SD and/or HD format if that best
suits their individual business plans. Alternatively, after December
12, 2012, an operator of a hybrid system may choose to satisfy the
viewability mandate by making must-carry signals available to analog
subscribers by offering the necessary equipment for sale or lease,
either for free or at an affordable cost that does not substantially
deter use of the equipment.\98\ Additionally, sunset of the current
viewability rule allows hybrid cable system operators the flexibility
to benefit from future marketplace and technology developments through
possible methods of compliance not contemplated on the record now
before us. We emphasize that, while we allow our viewability rule to
sunset, the statutory viewability requirement remains in effect.
Therefore, a must-carry station may file a complaint pursuant to Sec.
76.61 of our rules if it believes a cable operator has failed to meet
its statutory carriage obligations.\99\ In addition, we will consider
informal consumer complaints when evaluating compliance with the
statutory viewability requirement.\100\ If we receive a significant
number of well-founded consumer complaints that an operator is not
effectively making affordable set-top boxes available to customers in
lieu of analog carriage of a channel, one of the possible remedies
would be to require the operator to resume analog carriage of the
channel.\101\
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\96\ 47 CFR 76.56.
\97\ See id.
\98\ See para. 14, supra.
\99\ See 47 CFR 76.61. As mentioned above, critical to our
decision to allow the viewability rule to sunset is the availability
of affordable set-top boxes to affected cable subscribers.
\100\ Consumers may file a complaint electronically using the
Commission's online complaint form, Form 2000e--Media (General)
Complaint, available at http://esupport.fcc.gov/complaints.htm.
Consumers may also file complaints by fax to 1-866-418-0232 or by
letter mailed to Federal Communications Commission, Consumer &
Governmental Affairs Bureau, Consumer Inquiries & Complaints
Division, 445 12th Street, SW., Washington, DC 20554. Consumers who
want assistance filing their complaint may contact the Commission's
Consumer Call Center by calling 1-888-CALL-FCC (1-888-225-5322)
(voice) or 1-888-TELL-FCC (1-888-835-5322) (tty). There is no fee
for filing a consumer complaint.
\101\ We recognize that resolving whether an analog carriage
remedy is appropriate could in some cases raise issues that would
appropriately be considered by the full Commission in the first
instance.
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III. HD Carriage Exemption
A. Background
19. The Act requires that cable operators carry broadcast signals
``without material degradation.'' \102\ In
[[Page 36187]]
the context of the carriage of digital signals, the Commission has
interpreted this requirement to contain two parts: First, cable
operators may not discriminate in their carriage between broadcast and
non-broadcast signals, and, second, HD broadcast signals must be
carried to viewers in HD.\103\ In response to concerns from small cable
operators about cost and technical capacity, the Fourth Report & Order
afforded a temporary exemption from the HD carriage requirement for
certain small systems.\104\ Specifically, the Commission exempted small
cable systems with 2,500 or fewer subscribers that are not affiliated
with a cable operator serving more than 10 percent of all MVPD
subscribers, and those with an activated channel capacity of 552 MHz or
less. The exemption from the material degradation rules allows such
systems to carry broadcast signals in standard definition (SD) digital
and/or analog format, even if the signals are broadcast in HD, as long
as all subscribers can receive and view the signal.\105\ The Commission
provided that the exemption would expire three years after the
conclusion of the DTV transition, but said it would consider whether to
extend the exemption in the final year.\106\ The Fourth FNPRM undertook
this review and tentatively concluded to extend the existing exemption
for three more years, given small cable systems' apparent widespread
reliance on it.\107\ In response to the Fourth FNPRM, cable commenters
support extension of the HD carriage exemption, while broadcasters
suggest that the exemption should not apply if a system carries any
signal in HD.\108\
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\102\ See 47 U.S.C. 534(b)(4)(A) (``The signals of local
commercial television stations that a cable operator carries shall
be carried without material degradation. The Commission shall adopt
carriage standards to ensure that, to the extent technically
feasible, the quality of signal processing and carriage provided by
a cable system for the carriage of local commercial television
stations will be no less than that provided by the system for
carriage of any other type of signal.'') and section 535(g)(2) (``A
cable operator shall provide each qualified local noncommercial
educational television station whose signal is carried in accordance
with this section with bandwidth and technical capacity equivalent
to that provided to commercial television broadcast stations carried
on the cable system and shall carry the signal of each qualified
local noncommercial educational television station without material
degradation.'').
\103\ Viewability Order, at para. 7; see also 47 CFR 76.62.
\104\ See generally Fourth Report & Order.
\105\ Fourth Report & Order, at para. 5. We note that our rules
do not require cable operators, irrespective of system size, to
carry an SD digital version of a broadcast station's signal, in
addition to the analog version, to satisfy the material degradation
requirement. This is because both an SD digital version and an
analog version of the digital broadcast signal received at the
headend should have the same resolution--480i--and thus there should
be no perceivable difference between the two versions of the signal.
Id.
\106\ Id. at 13622, para. 11 (stating that ``a three-year sunset
provides the Commission with the opportunity after the transition to
review these rules in light of the potential cost and service
disruption to consumers, and the state of technology and the
marketplace'').
\107\ Fourth FNPRM, at para. 3. Based on the 2010 data from the
Annual Cable Operator Report (FCC Form 325), the Fourth FNPRM
indicated that many small systems were relying on the exemption.
Fourth FNPRM, at para. 20; see also Fourth FNPRM at Appendix B
(discussing our analysis of FCC Form 325 data).
\108\ See, e.g., NAB comments at 8; NCTA comments at 29; ACA
comments at 18-19.
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B. Discussion
20. We find that the small-system HD carriage exemption continues
to serve the public interest and adopt our tentative conclusion to
extend the exemption for three more years.\109\ The record shows that a
significant number of small systems with financial or channel capacity
constraints continue to rely on the HD carriage exemption and require
additional time to come into compliance in a cost-effective way.\110\
For example, ACA reports that at least 52 of its members, representing
more than 385 small systems, still rely on the exemption.\111\
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\109\ We note that we are not changing the existing exemption in
any way and this includes retaining our existing definition of small
systems that are eligible for this exemption.
\110\ See, e.g., ACA Comments at 4-6; NCTA Comments at 22.
\111\ See ACA comments at 5; ACA reply at 7-8 (``Of these 385
small systems, 45 rely on the exemption because they have less than
553 MHz of capacity; 106 systems rely on it because they have fewer
than 2,501 subscribers; and 234 systems rely on the exemption
because they have both less than 553 MHz of capacity and fewer than
2,501 subscribers. These numbers only include the respondents to
ACA's survey, and the total number of ACA members and the total
number of their systems that are currently utilizing the HD carriage
exemption is likely higher.'').
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21. We find that the same financial and capacity constraints that
faced small cable operators when we initially adopted this exemption
continue to exist today. For example, cable commenters persuaded the
Commission in 2008 that, without an exemption from the material
degradation rules, ``small systems [would] be forced to absorb or
impose significant and unsustainable price increases, or in some
instances to shut down altogether.'' \112\ This is because some small
systems did not have the technical capability or system capacity to
carry high definition digital signals, and in some cases had so few
subscribers that per-subscriber costs to upgrade to that capacity would
be so high as to make it not worthwhile to continue operating the
system.\113\ The record shows that the challenges facing small systems
have not diminished since the Commission adopted the exemption and that
requiring small systems to comply with the HD carriage requirement
would result in these systems dropping existing channels or shutting
down.\114\ Thus, as ACA points out, the result for subscribers of these
systems could include ``increased rates, loss of desired channels, loss
of not only video service, but the potential for broadband Internet
access, and the loss of the benefits that flow from competition.''
\115\ NCTA explains that eliminating the HD exemption would also impede
small operators' ``ability to offer new services like video-on-demand,
deploy broadband, or introduce enhanced new speed tiers of broadband to
more rural, smaller market customers.'' \116\ ACA maintains that, for
most capacity-constrained small systems, the unused channel capacity
available has actually decreased over the past three years.\117\ In
addition, ACA reports that, for most financially-constrained small
systems, operation costs have increased more than revenues over the
last three years, leaving these systems without the financial resources
to purchase the necessary equipment to upgrade service.\118\ Notably,
these small systems often serve rural and smaller market consumers,
making the potential loss of such service particularly troubling.\119\
As noted in the Fourth Report & Order, the loss of a small cable system
could mean the effective loss of all MVPD service for some
customers.\120\ Moreover, in some areas, due to poor over-the-air
reception, the loss of a small cable system could mean the loss of any
access to some or all broadcast signals as well. Accordingly, we find
that the exemption remains necessary to protect the viability of small
systems and their service to rural and smaller market consumers.\121\
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\112\ National Cable & Telecommunications Association Comments
at 12 (March 3, 2008).
\113\ Fourth Report & Order, at paras. 6-7.
\114\ See, e.g., ACA Reply at 3.
\115\ Id. at 5-6.
\116\ NCTA Comments at 27.
\117\ ACA Comments at 7.
\118\ ACA Comments at 11.
\119\ NCTA Comments at 23.
\120\ Fourth Report & Order, at para. 7.
\121\ ACA and NCTA also sought a permanent exemption from the HD
carriage obligation to cable systems that offer all of their
programming in analog only. ACA Comments at 17-18; NCTA Comments at
28-29. We received little in the record on this issue, and need not
resolve it here. To the extent these systems are small systems as
defined in this Order, of course, they are exempted for three years
from the HD carriage obligation.
---------------------------------------------------------------------------
22. This exemption will sunset on June 12, 2015, unless the
Commission takes action to extend it in light of the potential cost and
service disruption to consumers and the state of technology and the
market at that time. We note that this exemption is not intended to be
permanent and that its purpose is to provide small systems with
additional time to upgrade and, where necessary, expand their systems
to come into full
[[Page 36188]]
compliance with the material degradation provisions of the carriage
rules by carrying HD versions of all HD broadcast signals without
having to make relatively large expenditures over a short period of
time.
23. We decline, at this time, to further restrict the exemption for
small systems by eliminating it for systems that carry any signal in
HD, as suggested by NAB.\122\ The Commission has already crafted the
exemption quite narrowly to excuse only a limited number of systems
with particularly limited channel capacity or low subscribership.\123\
We agree with ACA that a small system's ability to offer some HD
service does not refute an argument that it may be significantly
burdensome to offer additional HD service.\124\ Further, we do not want
to create a disincentive for these systems to take incremental steps
toward offering more HD programming to their subscribers by using the
carriage of any HD signals as a threshold for applying the HD must-
carry requirement to small cable systems.\125\ Although we understand
NAB's concern that small systems could possibly misuse the exemption of
the HD carriage requirement to unfairly discriminate against must-carry
HD signals in favor of other HD signals,\126\ broadcasters have not
presented any evidence to suggest that this is, or ever has been, an
issue. Moreover, to the extent that cable operators utilizing the
exemption do start to carry a wide range of HD channels, broadcasters
are free to bring such evidence to the Commission's attention, and we
will then be able to evaluate whether the exemption's contours should
be adjusted.
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\122\ See NAB Comments at 8.
\123\ See ACA Comments at 16 (exemption ``is limited to only the
smallest and most at-risk systems'').
\124\ ACA Reply at 6.
\125\ See ACA Reply at 7.
\126\ NAB Comments at 8 (``Congress intended by [Section
614(b)(4)(A) of the Act] to make sure that cable systems did not
provide technically advantageous carriage to favored signals, and
provide lower quality carriage to others, particularly local
television signals.).
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IV. Conclusion
24. For the reasons stated above, we find the viewability rule is
no longer necessary to ensure must-carry signals are viewable to all
subscribers and therefore will allow the rule to sunset. As an interim
measure, we require hybrid systems to continue to carry the signals of
must-carry stations in analog format to all analog cable subscribers
for six months after expiration of the viewability rule, until December
12, 2012. We extend for three more years the existing HD carriage
exemption for eligible small cable system operators.
V. Procedural Matters
A. Final Regulatory Flexibility Act Analysis
25. As required by the Regulatory Flexibility Act of 1980, as
amended (``RFA'') \127\ an Initial Regulatory Flexibility Analysis
(``IRFA'') was incorporated in the Fourth FNPRM in this
proceeding.\128\ The Commission sought written public comment on the
proposals in the Fourth FNPRM, including comment on the IRFA. The
Commission received no comments on the IRFA. This present Final
Regulatory Flexibility Analysis (``FRFA'') conforms to the RFA.\129\
---------------------------------------------------------------------------
\127\ See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601-612, has been
amended by the Small Business Regulatory Enforcement Fairness Act of
1996 (``SBREFA''), Public Law 104-121, Title II, 110 Stat. 847
(1996). The SBREFA was enacted as Title II of the Contract With
America Advancement Act of 1996 (``CWAAA'').
\128\ See, generally, Fourth FNPRM.
\129\ See 5 U.S.C. 604.
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1. Need for, and Objectives of, the Fifth Report & Order
26. Viewability Requirement. Sections 614(b)(7) and 615(h) of the
Communications Act require cable operators to ensure that commercial
and non-commercial must-carry broadcast stations are ``viewable'' or
``available'' to all cable subscribers. 47 U.S.C. 534(b)(7), 535(h). In
the 2007 Viewability Order, in anticipation of the approaching end of
the digital television transition and in light of the state of
technology and the marketplace, the Commission adopted a rule providing
cable operators operating hybrid systems (i.e., cable systems that
provide both digital and analog cable service) two options to comply
with the statutory viewability requirement: (1) Carry the digital
signal in analog format to all analog cable subscribers in addition to
any digital version carried, or (2) transition to an all-digital system
and carry the signal only in digital format, provided that all
subscribers have the necessary equipment to view the broadcast content.
Thus, the ``viewability'' rule required cable operators with hybrid
systems to carry digital must-carry signals in both digital and analog
format. The Commission, however, decided that the rule would remain in
force for three years after the date of the digital transition, subject
to review by the Commission during the last year of the three-year
period. The Commission explained that a three-year sunset ``provides
the Commission with the opportunity after the transition to review
these rules in light of the potential cost and service disruption to
consumers, and the state of technology and the marketplace.''
Therefore, absent Commission action, the viewability rule is scheduled
to sunset on June 12, 2012. The Fourth FNPRM considered whether to
retain the viewability rule or allow it to sunset, given the current
state of technology and the marketplace.
27. The Fifth Report and Order finds it in the public interest to
allow the viewability rule to sunset as scheduled, on June 12, 2012.
The Fifth Report and Order determines that the statutory term
``viewable'' is an ambiguous term. It then chooses a reasonable
interpretation of the statutory text that best effectuates the
statutory purpose in light of current marketplace conditions and
technology developments that have occurred over the past five years
(e.g., 80% of cable customers now subscribe to digital cable service
and the widespread availability of small digital set-top boxes that
cable operators are making available at low cost (or no cost) to analog
customers of hybrid systems). The Fifth Report and Order reinterprets
the statutory viewability requirement to permit cable operators to
require the use of set-top equipment to view must-carry signals,
provided that such equipment is both available and affordable (or
provided at no cost). Therefore, until it completes its transition to
all-digital service, a hybrid system operator may comply with the
statutory viewability requirement in two ways. The operator can carry a
must-carry signal in a format that is capable of being viewed by analog
customers either (1) without the use of additional equipment or (2)
alternatively with equipment made available by the cable operator at no
cost or at an affordable cost that does not substantially deter use of
the equipment. The Fifth Report and Order establishes a transitional
period of six months after expiration of the current rule--that is,
until December 12, 2012--during which hybrid systems will be required
to continue to carry the signals of must-carry stations in analog
format to all analog cable subscribers. This post-sunset transitional
period will give consumers, cable operators, and broadcasters that rely
on must-carry access an opportunity to prepare for the widespread
deployment of small, affordable set-top boxes and to take other
necessary steps resulting from changes in cable carriage.
28. HD Carriage Exemption. Sections 614(b)(4)(A) of the
Communications Act requires that cable operators carry broadcast
signals ``without material degradation.'' Accordingly, at the same time
the Commission adopted the viewability rule, it adopted a related
[[Page 36189]]
rule prohibiting material degradation of broadcast signals when carried
by cable systems. The rule requires that any signal broadcast in HD be
carried by cable operators in HD. In response to concerns from small
cable operators about cost and technical capacity, the 2008 Fourth
Report & Order afforded a temporary exemption from this HD carriage
requirement (``HD carriage exemption'') for certain small systems.
Specifically, the Commission exempted small cable systems with 2,500 or
fewer subscribers that are not affiliated with a cable operator serving
more than 10 percent of all MVPD subscribers, and those with an
activated channel capacity of 552 MHz or less. The exemption from the
material degradation rules allows such systems to carry broadcast
signals in standard definition (SD) digital and/or analog format, even
if the signals are broadcast in HD, as long as all subscribers can
receive and view the signal. The Commission, however, decided that the
HD carriage exemption would remain in force for three years after the
date of the digital transition, subject to review by the Commission
during the last year of the three-year period. Therefore, absent
Commission action, the HD carriage exemption is scheduled to sunset on
June 12, 2012. The Fourth FNPRM considered whether to retain the HD
carriage exemption or allow it to expire.
29. The Fifth Report and Order concludes that the small-system HD
carriage exemption continues to serve the public interest and adopts
the Fourth FNPRM's tentative conclusion to extend the existing
exemption for three more years. The Fifth Report and Order finds that a
significant number of small systems with financial or channel capacity
constraints continue to rely on the HD carriage exemption and require
additional time to come into compliance with the material degradation
rules in a cost-effective way. Accordingly, the HD carriage exemption
will sunset on June 12, 2015, unless the Commission takes action to
extend it in light of the potential cost and service disruption to
consumers and the state of technology and the market at that time.
2. Summary of Significant Issues Raised by Public Comments in Response
to the IRFA
30. The Commission did not receive any comments in response to the
IRFA.
3. Description and Estimate of the Number of Small Entities To Which
Rules Will Apply
31. The RFA directs the Commission to provide a description of and,
where feasible, an estimate of the number of small entities that will
be affected by the rules adopted.\130\ The RFA generally defines the
term ``small entity'' as having the same meaning as the terms ``small
business,'' ``small organization,'' and ``small governmental
jurisdiction'' \131\ In addition, the term ``small business'' has the
same meaning as the term ``small business concern'' under the Small
Business Act.\132\ 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).\133\ The final rules adopted
herein affect small television broadcast stations and small cable
operators. A description of these small entities, as well as an
estimate of the number of such small entities, is provided below.
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\130\ 5 U.S.C. 603(b)(3).
\131\ 5 U.S.C. 601(b).
\132\ 5 U.S.C. 601(3) (incorporating by reference the definition
of ``small-business concern'' in the Small Business Act, 15 U.S.C.
632). 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 Small Business Administration 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.''
\133\ 15 U.S.C. 632.
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32. Television Broadcasting. The SBA defines a television
broadcasting station as a small business if such station has no more
than $14.0 million in annual receipts.\134\ Business concerns included
in this industry are those ``primarily engaged in broadcasting images
together with sound.'' \135\ The Commission has estimated the number of
licensed commercial television stations to be 1,387.\136\ According to
Commission staff review of the BIA Kelsey Inc. Media Access Pro
Television Database (BIA) as of January 31, 2011, 1,006 (or about 78
percent) of an estimated 1,298 commercial television stations \137\ in
the United States have revenues of $14 million or less and, thus,
qualify as small entities under the SBA definition. The Commission has
estimated the number of licensed noncommercial educational (``NCE'')
television stations to be 396.\138\ We note, however, that, in
assessing whether a business concern qualifies as small under the above
definition, business (control) affiliations \139\ must be included. Our
estimate, therefore, likely overstates the number of small entities
that might be affected by our action, because the revenue figure on
which it is based does not include or aggregate revenues from
affiliated companies. The Commission does not compile and otherwise
does not have access to information on the revenue of NCE stations that
would permit it to determine how many such stations would qualify as
small entities.
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\134\ See 13 CFR 121.201, NAICS Code 515120 (2007).
\135\ Id. This category description continues, ``These
establishments operate television broadcasting studios and
facilities for the programming and transmission of programs to the
public. These establishments also produce or transmit visual
programming to affiliated broadcast television stations, which in
turn broadcast the programs to the public on a predetermined
schedule. Programming may originate in their own studios, from an
affiliated network, or from external sources.'' Separate census
categories pertain to businesses primarily engaged in producing
programming. See Motion Picture and Video Production, NAICS code
512110; Motion Picture and Video Distribution, NAICS Code 512120;
Teleproduction and Other Post-Production Services, NAICS Code
512191; and Other Motion Picture and Video Industries, NAICS Code
512199.
\136\ See News Release, ``Broadcast Station Totals as of March
31, 2012,'' 2012 WL 1243354 (F.C.C.) (dated Apr. 12, 2012)
(``Broadcast Station Totals''); also available at http://transition.fcc.gov/Daily_Releases/Daily_Business/2012/db0412/DOC-313533A1.pdf.
\137\ We recognize that this total differs slightly from that
contained in Broadcast Station Totals, supra, note 11; however, we
are using BIA's estimate for purposes of this revenue comparison.
\138\ See Broadcast Station Totals, supra, note 11.
\139\ ``[Business 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 to power to control both.''
13 CFR 121.103(a)(1).
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33. In addition, an element of the definition of ``small business''
is that the entity not be dominant in its field of operation. We are
unable at this time to define or quantify the criteria that would
establish whether a specific television station is dominant in its
field of operation. Accordingly, the estimate of small businesses to
which rules may apply do not exclude any television station from the
definition of a small business on this basis and are therefore over-
inclusive to that extent. Also, as noted, an additional element of the
definition of ``small business'' is that the entity must be
independently owned and operated. We note that it is difficult at times
to assess these criteria in the context of media entities and our
estimates of small businesses to which they apply may be over-inclusive
to this extent.
34. Cable and Other Program Distribution. Since 2007, these
services have been defined within the broad economic census category of
Wired Telecommunications Carriers; that category is defined as follows:
``This industry comprises establishments primarily engaged in operating
and/or providing access to transmission facilities and infrastructure
that they own and/or lease for the transmission of voice, data, text,
sound, and video using
[[Page 36190]]
wired telecommunications networks. Transmission facilities may be based
on a single technology or a combination of technologies.'' \140\ The
SBA has developed a small business size standard for this category,
which is: all such firms having 1,500 or fewer employees.\141\
According to Census Bureau data for 2007, there were a total of 955
firms in the subcategory of Cable and Other Program Distribution that
operated for the entire year.\142\ Of this total, 939 firms had
employment of 999 or fewer employees, and 16 firms had employment of
1,000 employees or more.\143\ Thus, under this size standard, the
Commission believes that a majority of firms operating in this industry
can be considered small.
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\140\ U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired
Telecommunications Carriers'' (partial definition), http://www.census.gov/naics/2007/def/ND517110.HTM#N517110.
\141\ 13 CFR 121.201, NAICS code 517110 (2007).
\142\ U.S. Census Bureau, 2007 Economic Census, Subject Series:
Information, Table 5, Employment Size of Firms for the United
States: 2007, NAICS code 5171102 (located at http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-_skip=600&-ds_name=EC0751SSSZ5&-_lang=en).
\143\ See id.
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35. Cable Companies and Systems (Rate Regulation Standard). The
Commission has also developed its own small business size standards,
for the purpose of cable rate regulation. Under the Commission's rules,
a ``small cable company'' is one serving 400,000 or fewer subscribers,
nationwide.\144\ Industry data indicate that, of 1,076 cable operators
nationwide, all but 11 are small under this size standard.\145\ In
addition, under the Commission's rules, a ``small system'' is a cable
system serving 15,000 or fewer subscribers.\146\ Industry data indicate
that, of 6,635 systems nationwide, 5,802 systems have under 10,000
subscribers, and an additional 302 systems have 10,000-19,999
subscribers.\147\ Thus, under this second size standard, the Commission
believes that most cable systems are small.
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\144\ 47 CFR 76.901(e). The Commission determined that this size
standard equates approximately to a size standard of $100 million or
less in annual revenues. Sixth Report and Order and Eleventh Order
on Reconsideration, FCC 95-196, 60 FR 35854, July 12, 1995.
\145\ These data are derived from: R.R. Bowker, Broadcasting &
Cable Yearbook 2006, ``Top 25 Cable/Satellite Operators,'' pages A-8
and C-2 (data current as of June 30, 2005); Warren Communications
News, Television & Cable Factbook 2006, ``Ownership of Cable Systems
in the United States,'' pages D-1805 to D-1857.
\146\ 47 CFR 76.901(c).
\147\ Warren Communications News, Television & Cable Factbook
2008, ``U.S. Cable Systems by Subscriber Size,'' page F-2 (data
current as of Oct. 2007). The data do not include 851 systems for
which classifying data were not available.
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36. Cable System Operators. The Act also contains a size standard
for small cable system operators, which is ``a cable operator that,
directly or through an affiliate, serves in the aggregate fewer than 1
percent of all subscribers in the United States and is not affiliated
with any entity or entities whose gross annual revenues in the
aggregate exceed $250,000,000.'' \148\ The Commission has determined
that an operator serving fewer than 677,000 subscribers shall be deemed
a small operator, if its annual revenues, when combined with the total
annual revenues of all its affiliates, do not exceed $250 million in
the aggregate.\149\ Industry data indicate that, of 1,076 cable
operators nationwide, all but 10 are small under this size
standard.\150\ We note that the Commission neither requests nor
collects information on whether cable system operators are affiliated
with entities whose gross annual revenues exceed $250 million,\151\ and
therefore we are unable to estimate more accurately the number of cable
system operators that would qualify as small under this size standard.
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\148\ 47 U.S.C. 543(m)(2); see also 47 CFR 76.901(f) and nn.1-3.
\149\ 47 CFR 76.901(f); see FCC Announces New Subscriber Count
for the Definition of Small Cable Operator, Public Notice, DA 01-158
(CSB, rel. Jan. 24, 2001).
\150\ These data are derived from R.R. Bowker, Broadcasting &
Cable Yearbook 2006, ``Top 25 Cable/Satellite Operators,'' pages A-8
and C-2 (data current as of June 30, 2005); Warren Communications
News, Television & Cable Factbook 2006, ``Ownership of Cable Systems
in the United States,'' pages D-1805 to D-1857.
\151\ The Commission does receive such information on a case-by-
case basis if a cable operator appeals a local franchise authority's
finding that the operator does not qualify as a small cable operator
pursuant to Sec. 76.901(f) of the Commission's rules.
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37. Open Video Services. Open Video Service (OVS) systems provide
subscription services.\152\ The open video system (``OVS'') framework
was established in 1996, and is one of four statutorily recognized
options for the provision of video programming services by local
exchange carriers.\153\ The OVS framework provides opportunities for
the distribution of video programming other than through cable systems.
Because OVS operators provide subscription services,\154\ OVS falls
within the SBA small business size standard covering cable services,
which is ``Wired Telecommunications Carriers.'' \155\ The SBA has
developed a small business size standard for this category, which is:
all such firms having 1,500 or fewer employees. According to Census
Bureau data for 2007, there were a total of 3,188 firms in this
previous category that operated for the entire year.\156\ Of this
total, 3,144 firms had employment of 999 or fewer employees, and 44
firms had employment of 1,000 employees or more.\157\ Thus, under this
size standard, most cable systems are small. In addition, we note that
the Commission has certified some OVS operators, with some now
providing service.\158\ Broadband service providers (``BSPs'') are
currently the only significant holders of OVS certifications or local
OVS franchises.\159\ The Commission does not have financial or
employment information regarding the entities authorized to provide
OVS, some of which may not yet be operational. Thus, again, at least
some of the OVS operators may qualify as small entities.
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\152\ See 47 U.S.C. 573.
\153\ 47 U.S.C. 571(a)(3) through (4).
\154\ See 47 U.S.C. 573.
\155\ U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired
Telecommunications Carriers''; http://www.census.gov/naics/2007/def/ND517110.HTM#N517110.
\156\ U.S. Census Bureau, 2007 Economic Census, Subject Series:
Information, Table 5, Employment Size of Firms for the United
States: 2007, NAICS code 5171102 (issued Nov. 2010).
\157\ See id.
\158\ A list of OVS certifications may be found at http://www.fcc.gov/mb/ovs/csovscer.html.
\159\ See Thirteenth Annual Cable Competition Report, FCC 07-
206, at para. 135 (rel. Jan. 16, 2009). BSPs are newer firms that
are building state-of-the-art, facilities-based networks to provide
video, voice, and data services over a single network.
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4. Description of Reporting, Record Keeping, and Other Compliance
Requirements for Small Entities
38. This Fifth Report & Order does not impose any reporting, record
keeping, or other compliance requirements.
5. Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
39. The RFA requires an agency to describe any significant
alternatives that it has considered in reaching its approach, which may
include the following four alternatives (among others): (1) The
establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small
entities; (2) the clarification, consolidation, or simplification of
compliance or reporting requirements under the rule for small entities;
(3) the use of performance, rather than design, standards; and (4) an
exemption from coverage of the rule, or any part thereof, for small
entities.\160\
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\160\ 5 U.S.C. 603(c)(1) through (c)(4).
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40. Viewability Requirement. In this Fifth Report & Order, the
Commission
[[Page 36191]]
allows the viewability rule to expire, subject to a six-month post-
sunset transition period (as described above in Section A of this
FRFA), and revises its interpretation of the statutory viewability
requirement to afford greater flexibility to cable operators, including
small operators, for complying with the statute. Specifically, whereas
hybrid cable operators were previously required to carry both the
digital and analog versions of a must-carry broadcast station, hybrid
operators may, instead, comply with the statute by carrying only the
digital format and making set-top equipment available to their analog
cable customers, at no cost or at an affordable cost that does not
substantially deter use of the equipment, that will enable such
customers to view the digital format. As a result, small hybrid cable
system operators will have a choice for complying with the statutory
viewability requirement. In addition, we do not believe the expiration
of the viewability rule will have a significant impact on small
broadcasters. We believe our new statutory interpretation of the
viewability requirement--which hinges on a cable operator making
equipment available at no cost or an affordable cost--will ensure that
subscribers on hybrid systems may continue to access these signals at
little or no additional expense, thereby mitigating any adverse impact
on broadcasters. We note that a must-carry signal carried only in
digital format will still be included in the basic service tier; analog
cable subscribers would not be required to subscribe to an enhanced
tier of service to view the digital version of a must-carry channel. We
also expect this issue to diminish over time given that the number of
analog cable subscribers is expected to continue to decrease as more
cable customers choose to upgrade to full digital service and as more
hybrid cable systems complete their transition to all-digital systems.
41. HD Carriage Exemption. The HD carriage exemption provides
temporary regulatory relief to small cable systems with 2,500 or fewer
subscribers that are not affiliated with a cable operator serving more
than 10 percent of all MVPD subscribers, and those with an activated
channel capacity of 552 MHz or less). This Fifth Report & Order extends
this exemption for three more years. As noted in the IRFA, the HD
carriage exemption does not impose a negative economic impact on any
small cable operator, and, indeed, provides a positive economic impact
to any operator of a system that chooses to take advantage of the
exemption. In addition, the exemption does not impose any significant
burdens on small television stations.
6. Report to Congress
42. The Commission will send a copy of this Fifth Report & Order,
including this FRFA, in a report to be sent to Congress pursuant to the
SBREFA.\161\ In addition, the Commission will send a copy of this Fifth
Report & Order, including the FRFA, to the Chief Counsel for Advocacy
of the SBA. A copy of this Fifth Report & Order and the FRFA (or
summaries thereof) will also be published in the Federal Register.\162\
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\161\ See id. section 801(a)(1)(A).
\162\ See id. section 604(b).
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B. Final Paperwork Reduction Act of 1995 Analysis
43. This Report and Order has been analyzed with respect to the
Paperwork Reduction Act of 1995 (``PRA''),\163\ and does not contain
any new or modified information collection requirements. In addition,
therefore, it does not contain any new or modified ``information
collection burden for small business concerns with fewer than 25
employees,'' pursuant to the Small Business Paperwork Relief Act of
2002.\164\
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\163\ The Paperwork Reduction Act of 1995 (``PRA''), Pub. L. No.
104-13, 109 Stat 163 (1995) (codified in Chapter 35 of title 44
U.S.C.).
\164\ The Small Business Paperwork Relief Act of 2002
(``SBPRA''), Public Law 107-198, 116 Stat 729 (2002) (codified in
Chapter 35 of title 44 U.S.C.); see 44 U.S.C. 3506(c)(4).
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C. Congressional Review Act
44. The Commission will send a copy of this Report and Order in a
report to be sent to Congress and the Government Accountability Office,
pursuant to the Congressional Review Act.\165\
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\165\ See 5 U.S.C. 801(a)(1)(A).
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D. Additional Information
45. For more information on this proceeding, contact Steven
Broeckaert, Steven.Broeckaert@fcc.gov, or Evan Baranoff,
Evan.Baranoff@fcc.gov, of the Media Bureau, Policy Division, (202) 418-
2120.
Ordering Clauses
46. Accordingly, it is ordered that pursuant to sections 4, 303,
614, and 615 of the Communications Act of 1934, as amended, 47 U.S.C.
154, 303, 534, and 535, the Fifth Report and Order is adopted, and the
Commission's rules are hereby amended by removing Sec. 76.56(d)(3)
through (d)(5), as set forth in the final rule changes in Appendix B of
the Fifth Report and Order.
47. It is further ordered that, pursuant to 5 U.S.C. 553(d)(3) and
47 CFR 1.427(b), the Fifth Report and Order and the attached rule
amendment shall be effective immediately upon publication in the
Federal Register.\166\
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\166\ See 5 U.S.C. 553(d)(3) (``The required publication or
service of a substantive rule shall be made not less than 30 days
before its effective date, except * * * as otherwise provided by the
agency for good cause found and published with the rule.''); see
also 47 CFR 1.103(a), 1.427(b). Section 76.56(d)(5) provides that
the viewability requirements set forth in Sec. 76.56(d)(3) will
expire three years from the date on which all full-power television
stations cease broadcasting analog signals (June 12, 2012) unless
the Commission extends the requirement. See 47 CFR 76.56(d)(5). The
HD exemption for small cable operators will expire on June 12, 2012,
unless the Commission extends the exemption. We thus find good cause
to make these rule changes effective upon publication in the Federal
Register. The sunset of the viewability requirement is contemplated
in the original rule. The transition period adopted herein will
preserve the status quo for six months, and not impose any new
requirements on any entity. Similarly, extension of the HD exemption
provides relief to small cable systems and will not impose any new
requirements on any entity. Accordingly, no entity will be harmed as
a result of our decision to make these rule changes effective upon
publication in the Federal Register.
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48. It is further ordered that, pursuant to the Congressional
Review Act, 5 U.S.C. 801(a)(1)(A), the Commission will send a copy of
the Fifth Report and Order in a report to Congress and the General
Accounting Office.
49. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, will send a
copy of the Fifth Report and Order, including the Final Regulatory
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small
Business Administration.
List of Subjects in 47 CFR Part 76
Cable television.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
For the reasons discussed in the preamble, the Federal
Communications Commission amends 47 CFR part 76 as follows:
PART 76--MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE
0
1. The authority citation for part 76 continues to read as follows:
Authority: 47 U.S.C. 151, 152, 153, 154, 301, 302, 302a, 303,
303a, 307, 308, 309, 312, 315, 317, 325, 339, 340, 341, 503, 521,
522, 531, 532, 534, 535, 536, 537, 543, 544, 544a, 545, 548, 549,
552, 554, 556, 558, 560, 561, 571, 572, 573.
[[Page 36192]]
Sec. 76.56 [Amended]
0
2. In Sec. 76.56, remove paragraphs (d)(3) through (d)(5).
[FR Doc. 2012-14816 Filed 6-15-12; 8:45 am]
BILLING CODE 6712-01-P