[Federal Register Volume 78, Number 220 (Thursday, November 14, 2013)]
[Proposed Rules]
[Pages 68384-68390]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-26004]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 73
[MB Docket No. 13-236; FCC 13-123]
National Television Multiple Ownership Rule
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: This Notice commences a proceeding to consider elimination of
the so-called UHF discount in the Commission's national television
multiple ownership rule. Currently, the national television ownership
rule prohibits a single entity from owning television stations that, in
the aggregate, reach more than 39 percent of the total television
households in the nation. It thus appears that the DTV transition has
rendered the UHF discount obsolete and it should be eliminated. This
Notice seeks comment on that tentative conclusion. It also tentatively
decides, in the event that the UHF discount is eliminated, to
grandfather existing television station combinations that would exceed
the 39 percent national audience reach cap in the absence of the UHF
discount and seeks comment on that proposal. Finally, it seeks comment
on whether a VHF discount should be adopted, as it appears that under
current conditions VHF channels may be technically inferior to UHF
channels for the propagation of digital television signals.
DATES: The Commission must receive written comments on or before
December 16, 2013 and reply comments on or before January 13, 2014.
ADDRESSES: You may submit comments, identified by MB Docket No. 13-236;
FCC 13-123, by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Federal Communications Commission's Web site: http://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting
comments.
Mail: U.S. Postal Service first-class, Express, and
Priority mail must be addressed to 445 12th Street SW., Washington, DC
20554. Commercial overnight mail (other than U.S. Postal Service
Express Mail) must be sent to 9300 East Hampton Drive, Capitol Heights,
MD 20743.
Hand or Messenger Delivery: 445 12th St. SW., Room TW-
A325, Washington, DC 20554.
People With Disabilities: Contact the FCC to request
reasonable
[[Page 68385]]
accommodations (accessible format documents, sign language
interpreters, CART, etc.) by email: [email protected] or phone: (202)-418-
0530 or TTY: (202)-418-0432.
For detailed instructions for submitting comments, additional
information on the rulemaking process, and where to find materials
available for inspection, see the SUPPLEMENTARY INFORMATION section of
this document.
FOR FURTHER INFORMATION CONTACT: Brendan Holland, Industry Analysis
Division, Media Bureau, [email protected], (202) 418-2757, or
Johanna Thomas, Industry Analysis Division, Media Bureau,
[email protected], (202) 418-7551.
SUPPLEMENTARY INFORMATION: This Notice of Proposed Rulemaking, (NPRM)
in MB Docket No. 13-236; FCC 13-123, was adopted and released on
September 26, 2013. The complete text of the document is available for
inspection and copying during normal business hours in the FCC
Reference Center, 445 12th Street SW., Washington, DC 20554. This
document may also be purchased from the Commission's duplicating
contractor, Best Copy and Printing, Inc., in person at 445 12th Street
SW., Room CY-B402, Washington, DC 20554, via telephone at (202) 488-
5300, via facsimile at (202) 488-5563, or via email at [email protected].
Alternative formats (computer diskette, large print, audio cassette,
and Braille) are available to persons with disabilities or by sending
an email to [email protected] or calling the Consumer and Governmental
Affairs Bureau at (202) 418-0530, TTY (202) 418-0432. This document is
also available on the Commission's Web site at http://fcc.gov.
I. Introduction
1. This NPRM commences a proceeding to consider elimination of the
so-called UHF discount in the Commission's national television multiple
ownership rule. Currently, the national television ownership rule
prohibits a single entity from owning television stations that, in the
aggregate, reach more than 39 percent of the total television
households in the nation. In determining compliance with the 39 percent
national audience reach cap, the rule provides that television stations
broadcasting in the UHF spectrum will be attributed with only 50
percent of the television households in their Designated Market Areas
(DMAs); this is termed the UHF discount. The discount was adopted in
1985, in recognition of the technical inferiority of UHF signals as
compared with VHF signals in analog television broadcasting and was
intended to mitigate the competitive disadvantage that UHF stations
experienced in comparison to VHF stations because of their weaker
signals and smaller audience reach. However, there is a serious
question whether this justification for the UHF discount continues to
exist in light of the transition of full-power television stations to
digital broadcasting (the DTV transition) completed in June 2009. While
UHF channels were technically inferior to VHF channels for purposes of
transmitting analog television signals, experience since the DTV
transition suggests that, far from being inferior, they may actually be
superior to VHF when it comes to the transmission of digital television
signals, as discussed below.
2. It thus appears that the DTV transition has rendered the UHF
discount obsolete and it should be eliminated. We seek comment on that
tentative conclusion. We also tentatively decide, in the event that we
eliminate the UHF discount, to grandfather existing television station
combinations that would exceed the 39 percent national audience reach
cap in the absence of the UHF discount and seek comment on that
proposal. Finally, we seek comment on whether a VHF discount should be
adopted, as it appears that under current conditions VHF channels may
be technically inferior to UHF channels for the propagation of digital
television signals.
II. Background
3. In 1985, the Commission imposed the national audience
restriction together with the UHF discount. To protect localism,
diversity, and competition, the Commission determined that both a
station limit, restricting the total number of broadcast stations a
single entity could own, and a nationwide audience reach limit were
necessary. Thus, in addition to reaffirming its prior decision to limit
the number of AM, FM, and television broadcast stations that a single
entity could own, operate, or control to twelve stations in each
service, the Commission revised the national television multiple
ownership rule to prohibit a single entity from owning television
stations that collectively exceeded 25 percent of the total nationwide
audience.
4. At that time, the Commission recognized the ``inherent physical
limitations'' of the UHF band. It concluded that the technical
limitations of UHF stations should be reflected in the implementation
of the national audience cap. The Commission specifically found that
the delivery of television signals was more difficult in the UHF band
because the strength of UHF television signals decreased more rapidly
with distance in comparison to the signals of stations broadcasting in
the VHF band, resulting in significantly smaller coverage area and
audience reach. To reflect the coverage limitations of the UHF band,
the Commission determined that the licensee of a UHF station should be
attributed with only 50 percent of the television households in its
market area for purposes of the national audience restriction. The
Commission concluded that this UHF discount reflected the historical
concern for the viability of UHF television and provided a measure of
the actual handicap of UHF voices, which was consistent with
traditional diversity objectives.
5. In the Telecommunications Act of 1996 (1996 Act), Congress
directed the Commission to increase the national audience reach cap
from 25 percent to 35 percent and to eliminate the rule restricting an
entity to owning no more than twelve television stations nationwide.
The 1996 Act did not direct the Commission to amend the UHF discount.
6. The Commission subsequently reaffirmed the 35 percent national
audience reach cap in its 1998 Biennial Review Order. The Commission
reasoned that it was premature to revise the audience cap because it
had not had sufficient time to fully observe the effects of raising the
cap from 25 to 35 percent. The Commission retained the UHF discount,
finding that it remained in the public interest. But the Commission
indicated that the UHF discount would not likely be necessary after the
anticipated transition to digital television and stated that a NPRM
would be issued in the future to propose phasing out the discount once
the digital transition was complete.
7. The Commission reexamined the issue in its 2002 Biennial Review
Order. At that time, the Commission found that the national audience
reach cap, while not necessary to promote competition and diversity,
nonetheless remained necessary to promote localism. Further, the
Commission decided that an increase in the cap to 45 percent was
justified. The Commission concluded that a 45 percent cap would strike
an appropriate balance, by permitting some growth for the big four
network owners and allowing them to achieve greater economies of scale,
while at the same time ensuring that the networks could not reach a
larger national audience than their affiliates collectively. The
Commission also found that setting the
[[Page 68386]]
cap at 45 percent was consistent with past congressional action to
increase the ownership limit by 10 percentage points.
8. At the same time, the Commission upheld the UHF discount once
again, finding that there continued to be a disparity between the
household reach of UHF and VHF signals, which diminished the ability of
UHF stations to compete effectively. The Commission surmised, however,
that the digital [television] transition [would] largely eliminate the
technical basis for the UHF discount because UHF and VHF signals
[would] be substantially equalized. Accordingly, the Commission decided
to sunset application of the UHF discount for stations owned by the top
four broadcast networks (i.e., ABC, CBS, NBC, and Fox) as the digital
transition was completed on a market-by-market basis. The Commission
noted that the sunset would apply unless it made an affirmative
determination that the UHF discount continued to serve the public
interest beyond the digital transition. The Commission indicated
further that it would review the status of the UHF discount in a
subsequent biennial review and decide at that time whether to extend
the sunset to all other networks and station group owners.
9. Subsequently, Congress superseded the Commission's modification
of the national audience reach cap in the 2002 Biennial Review Order,
including the increased 45 percent limit and the sunset of the UHF
discount. The 2004 Consolidated Appropriations Act directed the
Commission to modify its ownership rules to revise the national
audience reach cap from 35 percent to 39 percent. Further, it amended
section 202(h) of the 1996 Act to require a quadrennial review of the
Commission's broadcast ownership rules rather than a biennial review,
but specifically excluded any rules relating to the 39 percent national
audience reach limitation from the quadrennial review.
10. Prior to the enactment of the 2004 Consolidated Appropriations
Act, several parties had appealed the Commission's 2002 Biennial Review
Order to the U.S. Court of Appeals for the Third Circuit (Third
Circuit). In June 2004, the Third Circuit issued a decision in which it
found that the challenges to the Commission's actions with respect to
the national audience reach cap and the UHF discount were moot as a
result of Congress's action. The court determined that the Commission
was under a statutory directive, following the 2004 Consolidated
Appropriations Act, to modify the national audience reach cap to 39
percent, and that challenges to the Commission's decision to raise the
cap to 45 percent therefore were no longer justiciable. The court found
that challenges to the Commission's decision to retain the UHF discount
were likewise eliminated from the litigation by the language in the
2004 Consolidated Appropriations Act, which insulated the UHF discount
rule from the Commission's quadrennial (previously biennial) review of
its media ownership rules. At the same time, the court indicated that
its decision did not foreclose the Commission's consideration of its
regulation defining the UHF discount in a rulemaking outside the
context of section 202(h). The court concluded that, barring
congressional intervention, the Commission may decide, in the first
instance, the scope of its authority to modify or eliminate the UHF
discount outside the context of section 202(h).
11. In July 2006, the Commission issued a Further Notice of
Proposed Rule Making as part of its 2006 quadrennial review of the
media ownership rules. Among other things, the Further Notice sought
comment on the Third Circuit's holding with respect to the UHF discount
rule and whether the Commission should retain, modify, or eliminate the
UHF discount. In February 2008, the Commission concluded in the 2006
Quadrennial Review Order that the UHF discount is insulated from review
under section 202(h) as a result of the 2004 Consolidated
Appropriations Act. But the Commission noted the Third Circuit's 2004
decision had left it to the Commission to decide the scope of its
authority to modify or eliminate the UHF discount outside the context
of section 202(h). Accordingly, the Commission indicated that it would
address the petitions, comments, and replies filed with respect to the
alteration, retention, or elimination of the UHF discount in a separate
proceeding.
12. Since June 13, 2009, all full-power television stations have
broadcast their over-the-air signals using only digital technology. The
DTV transition has enabled broadcasters to provide multiple programming
choices and enhanced capabilities to consumers. Yet the transition has
posed more challenges for VHF channels than UHF channels, because VHF
spectrum has proven to have characteristics that make it less desirable
for providing digital television service. For instance, nearby
electrical devices tend to emit noise that can cause interference to
DTV signals within the VHF band, creating reception difficulties in
urban areas even a short distance from the TV transmitter. The
reception of VHF signals also requires physically larger antennas
compared to UHF signals, making VHF signals less well suited for mobile
applications. For these reasons among others, television broadcasters
generally have faced greater challenges providing consistent reception
on VHF signals than UHF signals in the digital environment.
III. Discussion
A. Authority To Modify the UHF Discount
13. We tentatively conclude that the Commission has the authority
to modify the national television ownership rule, including the
authority to revise or eliminate the UHF discount. Specifically, we
tentatively conclude that the 2004 Consolidated Appropriations Act does
not preclude the Commission from revisiting the national television
ownership rule or the UHF discount contained therein, in a proceeding
separate from the quadrennial reviews of the broadcast ownership rules
pursuant to section 202(h) of the 1996 Act. Notably, in the 2004
Consolidated Appropriations Act, Congress directed the Commission to
revise its rules to reflect a 39 percent audience reach cap. Congress
did not directly establish that limitation by statute or amend the
Communications Act of 1934 (the Communications Act or Act) to address
the subject of national television ownership. Further, as the court in
Prometheus I recognized, while Congress excluded the national
television ownership rule from the quadrennial review requirement under
section 202(h), it did not foreclose Commission action to review or
modify the rule in a separate context.
14. In addition, the Communications Act provides the Commission
with the statutory authority to revisit its rules and revise or
eliminate them if it concludes such action is appropriate. Section 4(i)
of the Act authorizes the agency to ``perform any and all acts, make
such rules and regulations, and issue such orders, not inconsistent
with this Act, as may be necessary in the execution of its functions.''
Similarly, section 303(r) provides that the FCC may ``[m]ake such rules
and regulations . . . not inconsistent with this law, as may be
necessary to carry out the provisions of this Act . . .''. Indeed, the
courts have held that the Commission has an affirmative obligation to
reexamine its rules over time. For instance, in Bechtel v. FCC, the
court observed that changes in factual and legal circumstances may
impose upon the agency an obligation to reconsider a settled policy or
explain its failure to do
[[Page 68387]]
so. In the rulemaking context, for example, it is settled law that an
agency may be forced to reexamine its approach if a significant factual
predicate of a prior decision has been removed, which is precisely the
case here.
15. For these reasons, we believe the Commission retains the
authority to modify both the national audience reach restriction and
the UHF discount, provided such action is undertaken in a rulemaking
proceeding separate from the Commission's quadrennial review of the
broadcast ownership rules pursuant to section 202(h). We seek comment
on our tentative conclusion and analysis. Does our tentative conclusion
appropriately interpret the 2004 Consolidated Appropriations Act and
the Third Circuit's guidance in its 2004 decision? Is there additional
statutory guidance or case law that supports or undermines our
conclusion?
B. Elimination of the UHF Discount
16. The Commission has recognized for more than a decade that the
underlying basis for the UHF discount would likely disappear following
the transition to digital television. As discussed above, even as the
Commission determined in both the 1998 Biennial Review Order and the
2002 Biennial Review Order that the UHF discount was still necessary,
it anticipated that the DTV transition would largely eliminate the
technical basis for the UHF discount. The Commission found that the
digital transition would substantially equalize UHF and VHF signals,
and, thus, it decided to sunset the discount for UHF stations owned by
the top four broadcast networks (i.e., CBS, NBC, ABC, and Fox). As
discussed above, the sunset provisions adopted by the Commission were
superseded by Congress's action in the 2004 Consolidated Appropriations
Act. Nevertheless, the DTV transition has borne out the Commission's
expectation. Digital UHF stations do not suffer from the same
comparative technical deficiencies vis-[agrave]-vis VHF facilities that
characterized analog UHF stations.
17. The Commission has acknowledged that UHF spectrum is now highly
desirable in light of its superior propagation characteristics for
digital television, and that the disparity between UHF and VHF channels
has if anything been reversed. In fact, following the DTV transition,
some stations that initially elected to operate on a VHF channel have
sought to relocate to a UHF channel to resolve technical difficulties
encountered in broadcasting on VHF. The Commission has explored
engineering options to increase the utility of VHF spectrum for digital
television purposes. Furthermore, the Commission recently determined
that annual regulatory fees for UHF and VHF stations will be combined
into one fee category beginning in Fiscal Year 2014, eliminating a
distinction based on the historical disadvantages of UHF. Today, rather
than offsetting an actual service limitation or reflecting a disparity
in signal coverage, the UHF discount appears only to confer a factually
unwarranted benefit on owners of UHF television stations. If left in
place, the UHF discount could undermine the 39 percent national
audience reach cap on the false predicate that UHF stations do not
reach equivalent audiences to VHF stations.
18. Based on these findings, we tentatively conclude that the
historical justification for the UHF discount no longer exists and the
rule is therefore obsolete. We accordingly propose that the UHF
discount should be eliminated from the national television multiple
ownership rule.
19. We seek comment on this proposal. In particular, does the UHF
discount still serve the public interest? Does the discount promote
market entry? Does it promote competition among broadcast networks? Are
we correct in concluding that the technical limitations for UHF
spectrum that existed for analog operations are not present in a
digital environment? If so, are there other public policy
justifications for maintaining the UHF discount despite the fact that
the historical technical inferiority of UHF spectrum for television
broadcasting no longer exists? Is any disparity between the broadcast
coverage of UHF and VHF channels less important today than in 1985
given that many consumers receive local broadcast stations via a
multichannel video programming distributor (MVPD) and not over-the-air?
Are there any other market conditions that merit our consideration with
regard to the UHF discount? Is there any factual basis to maintain the
UHF discount in the current environment? What are the costs and
benefits of eliminating the UHF discount?
C. Existing Broadcast Station Combinations
20. We recognize that the elimination of the UHF discount would
impact the calculation of nationwide audience reach for broadcast
station groups with UHF stations. We believe, however, that only a
small number of broadcast station ownership groups have combinations
that approach the current 39 percent ownership nationwide cap and that
might exceed the cap if the UHF discount were eliminated. We therefore
propose, in the event that we eliminate the UHF discount, to
grandfather broadcast station ownership groups to the extent that they
exceed the 39 percent national audience cap solely as a result of the
termination of the UHF discount rule as of the date of the release of
this NPRM. We also propose to grandfather proposed station combinations
that would exceed the 39 percent cap as a result of the elimination of
the UHF discount for which an application is pending with the
Commission or which have received Commission approval, but are not yet
consummated, at that the time this NPRM is released. Further, we
propose that any grandfathered ownership combination subsequently sold
or transferred would be required to comply with the national ownership
cap in existence at the time of the transfer.
21. We seek comment on these issues. Do our proposals serve the
public interest? What is the potential impact of our grandfathering
proposals on broadcast ownership groups, the broadcast industry, local
markets, and consumers? Do our proposals adequately address any
potential impact on existing broadcast station ownership groups? Should
we consider any specific circumstances in evaluating applications for
waiver of the national ownership cap received from grandfathered
station groups that enter into subsequent transactions, such as whether
the application for waiver seeks to allow a corporate transformation of
an existing station group--including a refinancing or restructuring--
versus action that would circumvent the proposed rule change? Are there
other strategies we should consider or employ to address existing
broadcast station ownership groups that would exceed the 39 percent
limit if the UHF discount were eliminated? Are there other alternatives
we should consider with regard to pending applications? What are the
costs and benefits of our grandfathering proposal and any other
proposals offered by commenters?
D. VHF Discount
22. As noted above, the Commission has acknowledged that the DTV
transition has made UHF spectrum, if anything, more desirable than VHF
spectrum for purposes of digital television broadcasting. While the
Commission has proposed solutions to VHF reception challenges, it has
acknowledged that the options for improving digital television service
on VHF channels are limited, especially in the low-VHF band.
Unfortunately, it is
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often consumers using indoor antennas who tend to face reception
difficulties most frequently. For these reasons, some television
stations, as previously indicated, have sought to relocate to UHF
channels in order to resolve the technical difficulties experienced
with their VHF channels.
23. Given the challenges that VHF stations face in delivering
digital television signals, we seek comment on whether it would be
appropriate at this time to adopt a VHF discount. Could a VHF discount
function similarly to the current UHF discount in that only a certain
percentage of the television households in a DMA would be attributed to
a VHF television station for purposes of calculating a station group's
national audience reach? We seek comment on whether a VHF discount is
either warranted or advisable at this time. If a VHF discount is
advisable, would it be appropriate to attribute to VHF stations only 50
percent of the TV households in their DMA? Would a different percentage
be more appropriate? Is a discount more or less important than it was
when the UHF discount was adopted in 1985, because many television
consumers today receive local broadcast stations via an MVPD rather
than over-the-air? Would a VHF discount run the risk of becoming
obsolete as a result of market developments, as in the case of the UHF
discount? Are there any other market conditions that merit our
consideration with regard to a possible VHF discount? In the event that
the Commission adopts a VHF discount, should we distinguish between
high and low VHF channels? Are there options other than a discount to
address the current inferiority of VHF signal propagation for purposes
of the national audience reach cap? What are the costs and benefits of
imposing a VHF discount and any other proposal offered by commenters?
IV. Procedural Matters
A. Ex Parte Presentations
24. The proceeding this Notice initiates shall be treated as a
``permit-but-disclose'' proceeding in accordance with the Commission's
ex parte rules. Persons making ex parte presentations must file a copy
of any written presentation or a memorandum summarizing any oral
presentation within two business days after the presentation (unless a
different deadline applicable to the Sunshine period applies). Persons
making oral ex parte presentations are reminded that memoranda
summarizing the presentation must (1) list all persons attending or
otherwise participating in the meeting at which the ex parte
presentation was made, and (2) summarize all data presented and
arguments made during the presentation. If the presentation consisted
in whole or in part of the presentation of data or arguments already
reflected in the presenter's written comments, memoranda or other
filings in the proceeding, the presenter may provide citations to such
data or arguments in his or her prior comments, memoranda, or other
filings (specifying the relevant page and/or paragraph numbers where
such data or arguments can be found) in lieu of summarizing them in the
memorandum. Documents shown or given to Commission staff during ex
parte meetings are deemed to be written ex parte presentations and must
be filed consistent with rule Sec. 1.1206(b). In proceedings governed
by rule Sec. 1.49(f) or for which the Commission has made available a
method of electronic filing, written ex parte presentations and
memoranda summarizing oral ex parte presentations, and all attachments
thereto, must be filed through the electronic comment filing system
available for that proceeding, and must be filed in their native format
(e.g., .doc, .xml, .ppt, searchable .pdf). Participants in this
proceeding should familiarize themselves with the Commission's ex parte
rules.
B. Paperwork Reduction Act Analysis
25. This document does not contain proposed information
collection(s) subject to the Paperwork Reduction Act of 1995 (PRA),
Public Law 104-13. 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, Public Law 107-198, see 44 U.S.C. 3506(c)(4).
C. Comment Filing Procedures
26. Pursuant to Sec. Sec. 1.415 and 1.419 of the Commission's
rules, 47 CFR 1.415, 1.419, interested parties may file comments and
reply comments on or before the dates indicated on the first page of
this document. Comments may be filed using the Commission's Electronic
Comment Filing System (ECFS). See Electronic Filing of Documents in
Rulemaking Proceedings, 63 FR 24121 (1998).
Electronic Filers: Comments may be filed electronically
using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/.
Paper Filers: Parties who choose to file by paper must
file an original and one copy of each filing. If more than one docket
or rulemaking number appears in the caption of this proceeding, filers
must submit two additional copies for each additional docket or
rulemaking number.
Filings can be sent by hand or messenger delivery, by
commercial overnight courier, or by first-class or overnight U.S.
Postal Service mail. All filings must be addressed to the Commission's
Secretary, Office of the Secretary, Federal Communications Commission.
All hand-delivered or messenger-delivered paper filings
for the Commission's Secretary must be delivered to FCC Headquarters at
445 12th Street SW., Room TW-A325, Washington, DC 20554. The filing
hours are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held
together with rubber bands or fasteners. Any envelopes and boxes must
be disposed of before entering the building.
Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9300 East Hampton
Drive, Capitol Heights, MD 20743.
U.S. Postal Service first-class, Express, and Priority
mail must be addressed to 445 12th Street SW., Washington DC 20554.
People with Disabilities: To request materials in
accessible formats for people with disabilities (braille, large print,
electronic files, audio format), send an email to [email protected] or
call the Consumer & Governmental Affairs Bureau at 202-418-0530
(voice), 202-418-0432 (tty).
27. Additional Information: For additional information on this
proceeding, please contact Brendan Holland of the Media Bureau,
Industry Analysis Division, [email protected], (202) 418-2757, or
Johanna Thomas of the Media Bureau, Industry Analysis Division,
[email protected], (202) 418-7551.
Initial Regulatory Flexibility Act Analysis
28. As required by the Regulatory Flexibility Act of 1980, as
amended (``RFA''), the Federal Communications Commission (Commission)
has prepared this present Initial Regulatory Flexibility Analysis
(``IRFA'') concerning the possible significant economic impact on small
entities by the policies and rules proposed in this Notice of Proposed
Rulemaking (``NPRM''). Written public comments are requested on this
IRFA. Comments must be identified as responses to the IRFA and must be
filed by the deadlines for comments provided on the first page of the
NPRM. The Commission will
[[Page 68389]]
send a copy of the NPRM, including this IRFA, to the Chief Counsel for
Advocacy of the Small Business Administration (``SBA''). In addition,
the NPRM and IRFA (or summaries thereof) will be published in the
Federal Register.
A. Need for, and Objectives of, the Proposed Rule Changes
29. The Commission seeks comment in this NPRM to consider
elimination of the so-called ``UHF discount'' in the Commission's
national television multiple ownership rule. The national television
ownership rule currently prohibits a single entity from owning
television stations that, in the aggregate, reach more than 39 percent
of the total television households in the nation. The rule provides
television stations broadcasting in the UHF spectrum with a discount by
attributing those stations with only 50 percent of the television
households in their Designated Market Areas (DMAs); this is termed the
UHF discount. The UHF discount was adopted in recognition of the
technical inferiority of UHF signals in analog television broadcasting
and was intended to mitigate the competitive disadvantages that UHF
stations experienced in comparison to VHF stations because of their
weaker signals and smaller audience reach. However, there is serious
question whether this justification for the UHF discount continues to
exist in light of the transition of full-power television stations to
digital broadcasting (the DTV transition) completed on June 12, 2009.
Our experience since the DTV transition suggests that UHF channels may
actually be superior to VHF channels when it comes to the transmission
of digital television.
30. This NPRM tentatively concludes that the UHF discount is
obsolete since the DTV transition and should be eliminated. The
Commission seeks comment on this tentative conclusion, as well as on
our tentative decision to grandfather existing television station
combinations that would exceed the 39 percent national audience reach
cap in the absence of the UHF discount. Finally, we seek comment on
whether a ``VHF discount'' should be adopted, as it appears that under
current conditions VHF channels may be technically inferior to UHF
channels for the propagation of digital television signals.
31. Legal Basis
32. The proposed action is authorized under sections 1, 2(a), 4(i),
303(r), 307, 309, and 310 of the Communications Act of 1934, as
amended, 47 U.S.C. 151, 152(a), 154(i), 303(r), 307, 309, and 310.
33. Description and Estimate of the Number of Small Entities to
Which the Proposed Rules Will Apply
34. The RFA directs agencies to provide a description of and, where
feasible, an estimate of the number of small entities that may be
affected by the proposed rules, if adopted. The RFA generally defines
the term small entity as having the same meaning as the terms small
business, small organization, and small governmental jurisdiction. In
addition, the term small business has the same meaning as the term
small business concern under the Small Business Act. A small business
concern is one which: (1) Is independently owned and operated; (2) is
not dominant in its field of operation; and (3) satisfies any
additional criteria established by the SBA.
35. Television Broadcasting. The SBA designates television
broadcasting stations with $35.5 million or less in annual receipts as
small businesses. Television broadcasting includes establishments
primarily engaged in broadcasting images together with sound. 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 studio, from an affiliated network, or from
external sources. The Commission estimates that there are 1,386
licensed commercial television stations in the United States. In
addition, according to Commission staff review of the BIA Kelsey Inc.
Media Access Pro Television Database as of June 10, 2013, 1,245 (or
about 90 percent) of the estimated 1,386 commercial television stations
have revenues of $35.5 million or less and, thus, qualify as small
entities under the SBA definition. We therefore estimate that the
majority of commercial television broadcasters are small entities. The
Commission has also estimated the number of licensed noncommercial
educational (NCE) television stations to be 396. These stations are
non-profit, and therefore considered to be small entities.
36. We note, however, that in assessing whether a business concern
qualifies as small under the above definition, business (control)
affiliations must be included. Our estimate, therefore, likely
overstates the number of small entities that might be affected by our
action because the revenue figure on which it is based does not include
or aggregate revenues from affiliated companies. 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 does not
exclude any television station from the definition of a small business
on this basis and is therefore possibly over-inclusive to that extent.
B. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements
37. The NPRM tentatively concludes to modify the national
television multiple ownership rule as set forth in paragraph 3 above,
which would affect reporting, recordkeeping, or other compliance
requirements. The conclusion, if ultimately adopted, would modify
several FCC forms and their instructions: (1) FCC Form 301, Application
for Construction Permit For Commercial Broadcast Station; (2) FCC Form
314, Application for Consent to Assignment of Broadcast Station
Construction Permit or License; and (3) FCC Form 315, Application for
Consent to Transfer Control of Corporation Holding Broadcast Station
Construction Permit or License. The Commission may have to modify other
forms that include in their instructions the media ownership rules or
citations to media ownership proceedings, including Form 303-s and Form
323. The impact of these changes will be the same on all entities, and
we do not anticipate that compliance will require the expenditure of
any additional resources as the proposed modification to the national
television multiple ownership rule will not place any additional
obligations on small businesses.
C. Steps Taken To Minimize Significant Impact on Small Entities and
Significant Alternatives Considered
38. The RFA requires an agency to describe any significant
alternatives that it has considered in reaching its proposed approach,
which may include the following four alternatives (among others): (1)
The establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small
entities; (2) the clarification, consolidation, or simplification of
compliance and 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.
[[Page 68390]]
39. The tentative conclusions and specific proposals on which the
NPRM seeks comments, as set forth in paragraph 3 above, are intended to
achieve our public interest goal of competition. By recognizing the
technical advancements of the UHF band after the DTV transition, this
NPRM seeks to create a regulatory landscape that reflects the current
value of UHF spectrum in order to better assess national television
ownership figures. Further, this NPRM complies with the President's
directive for independent agencies to review their existing regulation
to determine whether such regulations should be modified, streamlined,
expanded, or repealed so as to make the agency's regulatory program
more effective or less burdensome in achieving the regulatory
objectives. As such, our proposed rule seeks to reduce costs on firms
generally, including small business entities, by removing outdated
regulations. In addition, the grandfathering and VHF discount proposals
seek to create a more effective regulatory landscape by addressing
current market realities. The NPRM also requests comment on whether any
alternatives to the Commission's tentative conclusions or specific
proposals exist, which provides small entities with the opportunity to
indicate any disagreement with our findings and conclusions.
D. Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rule
40. None.
V. Ordering Clause
41. Accordingly, it is ordered that, pursuant to the authority
contained in sections 1, 2(a), 4(i), 303(r), 307, 309, and 310 of the
Communications Act of 1934, as amended, 47 U.S.C. 151, 152(a), 154(i),
303(r), 307, 309, and 310, this Notice of Proposed rulemaking is
adopted.
42. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Notice, including the Initial Regulatory Flexibility
Analysis, to the Chief Counsel for Advocacy of the Small Business
Administration.
List of Subjects in 47 CFR Part 73
Television; Radio.
Federal Communication Commission.
Marlene H. Dortch,
Secretary.
For the reasons discussed in the preamble, the Federal
Communication Commission proposes to amend 47 CFR Part 73 as follows:
PART 73--RADIO BROADCAST SERVICES
0
1. The authority citation for part 73 continues to read as follows:
Authority: 47 U.S.C. 154, 303, 334, 336 and 339.
0
2. Amend Sec. 73.3555 by revising paragraph (e)(2)(i) to read as
follows:
Sec. 73.3555 Multiple ownership.
* * * * *
(e) * * *
(2) * * *
(i) National audience reach means the total number of television
households in the Nielsen Designated Market Areas (DMAs) in which the
relevant stations are located divided by the total national television
households as measured by DMA data at the time of a grant, transfer, or
assignment of a license.
* * * * *
[FR Doc. 2013-26004 Filed 11-13-13; 8:45 am]
BILLING CODE 6712-01-P