[Federal Register: November 28, 2003 (Volume 68, Number 229)]
[Proposed Rules]
[Page 66776-66781]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28no03-27]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 15 and 76
[CS Docket No. 97-80; PP Docket No. 00-67; FCC 03-225]
Commercial Availability of Navigation Devices and Compatibility
Between Cable Systems and Consumer Electronics Equipment
AGENCY: Federal Communications Commission.
ACTION: Notice of proposed rulemaking.
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SUMMARY: In this document, the Commission seeks comment on the
mechanisms and standards by which new connectors and associated content
protection technologies can be approved for use with unidirectional
digital cable products. The Second Further Notice of Proposed
Rulemaking also seeks comment on: the potential extension of digital
cable system transmission requirements to digital cable systems with an
activated channel capacity of 550 MHz or higher; whether it is
necessary to require consumer electronics manufacturers to provide pre-
sale information to consumers regarding the functionalities of
unidirectional digital cable televisions; and whether the Commission
should ban or permit the down-resolution of non-broadcast MVPD
programming. Potential Commission action in these areas is intended to
further the commercial availability of unidirectional digital cable
products and other navigation devices pursuant to section 629 of the
Communications Act.
DATES: Comments due January 14, 2004; reply comments are due February
13, 2004.
ADDRESSES: Federal Communications Commission, 445 12th Street, SW,
Washington, DC 20554. For further filing information, see SUPPLEMENTARY
INFORMATION.
FOR FURTHER INFORMATION CONTACT: Susan Mort, 202-418-1043 or Susan.Mort@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Second Further
Notice of Proposed Rulemaking portion of the Commission's Second Report
and Order and Second Further Notice of Proposed Rulemaking (``Second
FNPRM''), FCC 03-225, adopted September 10, 2003; released October 9,
2003. The full text of the Commission's Second FNPRM is available for
inspection and copying during normal business hours in the FCC
Reference Center (Room CY-A257) at its headquarters, 445 12th Street,
SW, Washington, DC 20554, or may be purchased from the Commission's
copy contractor, Qualex International, (202) 863-2893, Portals II, Room
CY-B402, 445 12th St., SW, Washington, DC 20554, or may be reviewed via
Internet at http://www.fcc.gov/mb.
Synopsis of the Second Further Notice of Proposed Rulemaking
1. Although the Commission believes that its adoption of the
technical, labeling and encoding rules set forth herein will further
the digital transition and facilitate the wider availability of digital
cable services to consumers, further comment is needed on several
issues. As an initial matter, we seek comment on whether the
transmission standards applicable to digital cable systems with an
activated channel capacity of 750 MHz or greater should be extended to
digital cable systems with an activated channel capacity of 550 MHz or
greater. In particular, we seek comment on the potential cost impact on
such cable systems and whether waivers or other relief mechanisms are
appropriate for cable systems that might experience economic hardship
as a result of these obligations.
2. With respect to the issue of consumer information disclosures,
we seek comment on whether the Commission should require consumer
electronics manufacturers to provide consumers with pre-sale
information regarding the functionalities of unidirectional digital
cable televisions. For example, we seek comment on whether it is
appropriate to require consumer electronics manufacturers to inform
potential purchasers of unidirectional digital cable televisions of:
(1) The need to use a set-top box in order to receive interactive
services, (2) the necessity to obtain a POD from their cable operator,
or (3) any other relevant information disclosing the functionalities or
limitations of these devices. If so, we seek comment on the appropriate
mechanism to communicate this information to consumers, including but
not limited to point of sale marketing materials to be provided to
retailers, more informative labeling
[[Page 66777]]
on device packaging, the use of Internet web sites, or any other
appropriate format designed to reach consumers before they make
purchasing decisions.
3. Another area in which we seek additional comment relates to the
down-resolution of non-broadcast MVPD programming. As discussed above,
content providers assert that down-resolution is a necessary tool to
incite the retirement of component analog outputs. Despite this
assertion, the cable and consumer electronics industries have been
unable to reach agreement on whether down-resolution was an appropriate
content protection tool. We seek comment on whether the Commission
should prohibit the activation by MVPDs of down-resolution for non-
broadcast MVPD programming content. If so, we seek comment on the
potential impact of such a ban on the availability of high value
digital content to consumers. In the alternative, if the Commission
were to permit the use of down-resolution in this manner, we seek
comment on the potential impact on consumers with DTV equipment that
only has component analog outputs. In particular, we seek comment on
the number of consumers that might be affected and on the number of
sets to be produced in the future with only analog outputs. Finally, we
seek comment on the potential impact of down-resolution upon consumers
who own DTV equipment with both digital and analog outputs.
4. As discussed above, we are concerned that because CableLabs is
not a standards-setting body, its proposed role as the sole initial
arbiter of outputs and associated content protection technologies to be
used in unidirectional digital cable products could affect innovation
and interoperability. This Second Further Notice seeks comment on
whether standards and procedures should be adopted for the approval of
new connectors or content protection technologies to be used with
unidirectional digital cable televisions and products. If so, we seek
comment on whether these standards and procedures should encompass
other related consumer electronics equipment, including non-cable
compatible DTV receivers. We also seek comment on the various types of
content protection technologies that should be considered as a part of
this process, including but not limited to digital rights management,
wireless and encryption-based technologies.
5. With respect to the particular standards and procedures to be
employed, we seek comment on whether objective criteria should be used
to evaluate new connectors and content protection technologies and, if
so, what specific criteria should be used. For example, Microsoft
Corporation and Hewlett Packard Corporation have submitted a detailed
proposal suggesting functional requirements that could be used to
evaluate digital rights management technologies for use with digital
cable ready products. We seek comment on this proposal, as well as
other proposals relying on objective criteria, and any new proposals
that commenters may submit to the Commission.
6. We also seek comment on whether CableLabs is the appropriate
entity to make initial approval determinations, or whether another
entity should have decision-making authority. In particular, we seek
comment on whether the Commission, a qualified third party, or an
independent entity representing various industry and consumer interests
should make approval determinations.
7. As to the issue of how approved connectors or content protection
technologies may be revoked should their security be compromised, we
seek comment on the appropriate standard for revocation. Specifically,
we seek comment on whether revocation is appropriate where a connector
or content protection technology is perceived to be insecure, or
whether the appropriate standard is where security has been compromised
in a significant, widespread manner. Once a connector or content
protection technology has been revoked, we seek comment on the
appropriate mechanism by which revocation should be effectuated. For
example, should revoked connectors or content protection technologies
be eliminated on a going-forward basis, while preserving their
functionality for existing devices? We also seek comment on whether
there are technological or other means of revoking connectors or
content protection technologies while preserving the functionality of
consumer electronics devices.
8. Authority. This Second FNPRM is issued pursuant to authority
contained in sections 1, 4(i) and (j), 303, 403, 601, 624A and 629 of
the Communications Act of 1934, as amended.
9. Ex Parte Rules--Non-Restricted Proceeding. This is a non-
restricted notice and comment rulemaking proceeding. Ex parte
presentations are permitted, except during the Sunshine Agenda period,
provided that they are disclosed as provided in the Commission's Rules.
See generally 47 CFR 1.1202, 1.1203, and 1.1206(a).
10. Accessibility Information. Accessible formats of this Second
Further Notice (computer diskettes, large print, audio recording and
Braille) are available to persons with disabilities by contacting Brian
Millin, of the Consumer & Governmental Affairs Bureau, at (202) 418-7426, TTY (202) 418-7365, or at Brian.Millin@fcc.gov.
11. Comment Information. Pursuant to sections 1.415 and 1.419 of
the Commission's rules, 47 CFR 1.415, 1.419, interested parties may
file comments on or before January 14, 2004, and reply comments on or
before February 13, 2004. Comments may be filed using the Commission's
Electronic Comment Filing System (ECFS) or by filing paper copies. See
Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121
(1998).
12. Comments filed through the ECFS can be sent as an electronic
file via the Internet to http://www.fcc.gov/e-file/ecfs.html.
Generally, only one copy of an electronic submission must be filed. If
multiple docket or rulemaking numbers appear in the caption of this
proceeding, however, commenters must transmit one electronic copy of
the comments to each docket or rulemaking number referenced in the
caption. In completing the transmittal screen, commenters should
include their full name, U.S. Postal Service mailing address, and the
applicable docket or rulemaking number. Parties may also submit an
electronic comment by Internet e-mail. To get filing instructions for e-mail comments, commenters should send an e-mail to ecfs@fcc.gov, and
should include the following words in the body of the message, ``get
form .'' A sample form and directions
will be sent in reply. Parties who choose to file by paper must file an
original and four copies of each filing. If more than one docket or
rulemaking number appear in the caption of this proceeding, commenters
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 (although we continue to experience delays in
receiving U.S. Postal Service mail). The Commission's contractor,
Natek, Inc., will receive hand-delivered or messenger-delivered paper
filings for the Commission's Secretary at 236 Massachusetts Avenue,
NE., Suite 110, Washington, DC 20002. The filing hours at this location
are 8 a.m. to 7 p.m. All hand deliveries must be held together with
rubber bands or fasteners. Any envelopes must be disposed of before
entering the building. Commercial overnight mail (other than U.S.
Postal Service Express Mail and Priority Mail)
[[Page 66778]]
must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.
U.S. Postal Service first-class mail, Express Mail, and Priority Mail
should be addressed to 445 12th Street, SW, Washington, DC 20554. All
filings must be addressed to the Commission's Secretary, Office of the
Secretary, Federal Communications Commission.
13. Regulatory Flexibility Act. As required by the Regulatory
Flexibility Act, the Commission has prepared an Initial Regulatory
Flexibility Analysis (``IRFA'') of the possible significant economic
impact on a substantial number of small entities of the proposals
addressed in this Second FNPRM. The IRFA is set forth below. Written
public comments are requested on the IRFA. These comments must be filed
in accordance with the same filing deadlines for comments on the Second
FNPRM, and they should have a separate and distinct heading designating
them as responses to the IRFA.
14. The Commission's Consumer and Governmental Affairs Bureau,
Reference Information Center, shall send a copy of this Second FNPRM,
including the Initial Regulatory Flexibility Analysis, to the Chief
Counsel for Advocacy of the Small Business Administration.
Initial Regulatory Flexibility Analysis
15. As required by the Regulatory Flexibility Act of 1980, as
amended (``RFA'') the Commission has prepared this present Initial
Regulatory Flexibility Analysis (``IRFA'') of the possible significant
economic impact on a substantial number of small entities by the
policies and rules proposed in the Second FNPRM portion of this item.
Written public comments are requested on this IRFA. Comments must be
identified as responses to the IRFA and must be filed by the deadlines
for comments on the Second FNPRM portion of this item provided above.
The Commission will send a copy of this entire Second Order and Second
Further Notice of Proposed Rulemaking, including this IRFA, to the
Chief Counsel for Advocacy of the Small Business Administration
(``SBA''). In addition, the Second FNPRM portion of this item and the
IRFA (or summaries thereof) will be published in the Federal Register.
16. Need for, and Objectives of, the Proposed Rules. In connection
with the Commission's efforts to ensure the commercial availability of
navigation devices pursuant to section 629 of the Communication's Act,
the Second Report and Order part of the Second Report and Order and
Second FNPRM adopts technical, labeling and encoding rules which will
set a one-way specification for digital cable ``plug and play''
compatibility for DTV equipment. The negotiations between the consumer
electronics and cable television industries which led to the agreement
underlying these rules call for the cable television industry to make
initial determinations about which new device connectors and associated
content protection technologies may be used in connection with
unidirectional digital cable products produced under this
specification. Commenters have indicated that the cable industry should
not be the sole arbiter of such decisions, however, the record
currently before the Commission is insufficient on this matter. In
order to ensure the connectivity and interoperability of unidirectional
digital cable products, and to fulfill the Commission's commercial
availability mandate under section 629, we are initiating the Second
FNPRM to seek comment on the mechanisms and standards by which new
connectors and associated content protection technologies can be
approved for use in this context. The Second FNPRM also seeks comment
on: (1) The potential extension of the transmission requirements
applicable to digital cable systems with an activated channel capacity
of 750 MHz or higher to digital cable systems with an activated channel
capacity of 550 MHz or higher; (2) whether it is necessary to require
consumer electronics manufacturers to provide pre-sale information to
consumers regarding the functionalities of unidirectional digital cable
televisions; and (3) whether the Commission should ban or permit the
down-resolution of non-broadcast MVPD programming.
17. Legal Basis. The authority for this proposed rulemaking is
contained in sections 1, 4(i) and (j), 303, 403, 601, 624A and 629 of
the Communications Act of 1934, 47 U.S.C 151, 154(i) and (j), 303, 403,
521, 544a and 549.
18. Description and Estimate of the Number of Small Entities to
Which the Proposed Rules Will Apply. 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 proposed rules. The RFA
generally defines the term ``small entity'' as encompassing the terms
``small business,'' ``small organization,'' and ``small governmental
entity.'' 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 Small Business
Administration (``SBA'').
19. Television Broadcasting. The Small Business Administration
defines a television broadcasting station that has no more than $12
million in annual receipts as a small business. Business concerns
included in this industry are those ``primarily engaged in broadcasting
images together with sound.'' According to Commission staff review of
the BIA Publications, Inc. Master Access Television Analyzer Database
as of May 16, 2003, about 814 of the 1,220 commercial television
stations in the United States have revenues of $12 million or less. 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. There are also 2,127 low power
television stations (LPTV). Given the nature of this service, we will
presume that all LPTV licensees qualify as small entities under the SBA
definition.
20. 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.
21. Cable and Other Program Distribution. The SBA has developed a
small business size standard for cable and other program distribution
services, which includes all such companies generating $12.5 million or
less in revenue annually. This category includes, among others, cable
operators, direct broadcast satellite (``DBS'') services, home
satellite dish (``HSD'') services, multipoint distribution services
(``MDS''), multichannel multipoint distribution service (``MMDS''),
Instructional Television
[[Page 66779]]
Fixed Service (``ITFS''), local multipoint distribution service
(``LMDS''), satellite master antenna television (``SMATV'') systems,
and open video systems (``OVS''). According to the Census Bureau data,
there are 1,311 total cable and other pay television service firms that
operate throughout the year of which 1,180 have less than $10 million
in revenue. We address below each service individually to provide a
more precise estimate of small entities.
22. Cable Operators. The Commission has developed, with SBA's
approval, our own definition of a small cable system operator for the
purposes of rate regulation. Under the Commission's rules, a ``small
cable company'' is one serving fewer than 400,000 subscribers
nationwide. We last estimated that there were 1,439 cable operators
that qualified as small cable companies. Since then, some of those
companies may have grown to serve over 400,000 subscribers, and others
may have been involved in transactions that caused them to be combined
with other cable operators. Consequently, we estimate that there are
fewer than 1,439 small entity cable system operators that may be
affected by the decisions and rules proposed in this Second FNPRM.
23. The Communications Act, as amended, also contains a size
standard for a small cable system operator, which is ``a cable operator
that, directly or through an affiliate, serves in the aggregate fewer
than 1% 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.'' The Commission has determined that
there are 68,500,000 subscribers in the United States. Therefore, an
operator serving fewer than 685,000 subscribers shall be deemed a small
operator if its annual revenues, when combined with the total annual
revenues of all of its affiliates, do not exceed $250 million in the
aggregate. Based on available data, we find that the number of cable
operators serving 685,000 subscribers or less totals approximately
1,450. Although it seems certain that some of these cable system
operators are affiliated with entities whose gross annual revenues
exceed $250,000,000, we are unable at this time to estimate with
greater precision the number of cable system operators that would
qualify as small cable operators under the definition in the
Communications Act.
24. Direct Broadcast Satellite (``DBS'') Service. Because DBS
provides subscription services, DBS falls within the SBA-recognized
definition of cable and other program distribution services. This
definition provides that a small entity is one with $12.5 million or
less in annual receipts. There are four licensees of DBS services under
part 100 of the Commission's rules. Three of those licensees are
currently operational. Two of the licensees that are operational have
annual revenues that may be in excess of the threshold for a small
business. The Commission, however, does not collect annual revenue data
for DBS and, therefore, is unable to ascertain the number of small DBS
licensees that could be impacted by these proposed rules. DBS service
requires a great investment of capital for operation, and we
acknowledge, despite the absence of specific data on this point, that
there are entrants in this field that may not yet have generated $12.5
million in annual receipts, and therefore may be categorized as a small
business, if independently owned and operated.
25. Home Satellite Dish (``HSD'') Service. Because HSD provides
subscription services, HSD falls within the SBA-recognized definition
of cable and other program distribution services. This definition
provides that a small entity is one with $12.5 million or less in
annual receipts. The market for HSD service is difficult to quantify.
Indeed, the service itself bears little resemblance to other MVPDs. HSD
owners have access to more than 265 channels of programming placed on
C-band satellites by programmers for receipt and distribution by MVPDs,
of which 115 channels are scrambled and approximately 150 are
unscrambled. HSD owners can watch unscrambled channels without paying a
subscription fee. To receive scrambled channels, however, an HSD owner
must purchase an integrated receiver-decoder from an equipment dealer
and pay a subscription fee to an HSD programming package. Thus, HSD
users include: (1) Viewers who subscribe to a packaged programming
service, which affords them access to most of the same programming
provided to subscribers of other MVPDs; (2) viewers who receive only
non-subscription programming; and (3) viewers who receive satellite
programming services illegally without subscribing. Because scrambled
packages of programming are most specifically intended for retail
consumers, these are the services most relevant to this discussion.
26. Multipoint Distribution Service (``MDS''), Multichannel
Multipoint Distribution Service (``MMDS'') Instructional Television
Fixed Service (``ITFS'') and Local Multipoint Distribution Service
(``LMDS''). MMDS systems, often referred to as ``wireless cable,''
transmit video programming to subscribers using the microwave
frequencies of the MDS and ITFS. LMDS is a fixed broadband point-to-
multipoint microwave service that provides for two-way video
telecommunications.
27. In connection with the 1996 MDS auction, the Commission defined
small businesses as entities that had annual average gross revenues of
less than $40 million in the previous three calendar years. This
definition of a small entity in the context of MDS auctions has been
approved by the SBA. The MDS auctions resulted in 67 successful bidders
obtaining licensing opportunities for 493 Basic Trading Areas
(``BTAs''). Of the 67 auction winners, 61 met the definition of a small
business. MDS also includes licensees of stations authorized prior to
the auction. As noted, the SBA has developed a definition of small
entities for pay television services, which includes all such companies
generating $12.5 million or less in annual receipts. This definition
includes multipoint distribution services, and thus applies to MDS
licensees and wireless cable operators that did not participate in the
MDS auction. Information available to us indicates that there are
approximately 850 of these licensees and operators that do not generate
revenue in excess of $12.5 million annually. Therefore, for purposes of
the IRFA, we find there are approximately 850 small MDS providers as
defined by the SBA and the Commission's auction rules.
28. The SBA definition of small entities for cable and other
program distribution services, which includes such companies generating
$12.5 million in annual receipts, seems reasonably applicable to ITFS.
There are presently 2,032 ITFS licensees. All but 100 of these licenses
are held by educational institutions. Educational institutions are
included in the definition of a small business. However, we do not
collect annual revenue data for ITFS licensees, and are not able to
ascertain how many of the 100 non-educational licensees would be
categorized as small under the SBA definition. Thus, we tentatively
conclude that at least 1,932 licensees are small businesses.
29. Additionally, the auction of the 1,030 LMDS licenses began on
February 18, 1998, and closed on March 25, 1998. The Commission defined
``small entity'' for LMDS licenses as an entity that has average gross
revenues of less than $40 million in the three previous calendar years.
An additional classification for ``very small business'' was added and
is defined as an entity that, together with its affiliates, has average
gross revenues of not more than $15 million for the
[[Page 66780]]
preceding calendar years. These regulations defining ``small entity''
in the context of LMDS auctions have been approved by the SBA. There
were 93 winning bidders that qualified as small entities in the LMDS
auctions. A total of 93 small and very small business bidders won
approximately 277 A Block licenses and 387 B Block licenses. On March
27, 1999, the Commission re-auctioned 161 licenses; there were 40
winning bidders. Based on this information, we conclude that the number
of small LMDS licenses will include the 93 winning bidders in the first
auction and the 40 winning bidders in the re-auction, for a total of
133 small entity LMDS providers as defined by the SBA and the
Commission's auction rules.
30. In sum, there are approximately a total of 2,000 MDS/MMDS/LMDS
stations currently licensed. Of the approximate total of 2,000
stations, we estimate that there are 1,595 MDS/MMDS/LMDS providers that
are small businesses as deemed by the SBA and the Commission's auction
rules.
31. Satellite Master Antenna Television (``SMATV'') Systems. The
SBA definition of small entities for cable and other program
distribution services includes SMATV services and, thus, small entities
are defined as all such companies generating $12.5 million or less in
annual receipts. Industry sources estimate that approximately 5,200
SMATV operators were providing service as of December 1995. Other
estimates indicate that SMATV operators serve approximately 1.5 million
residential subscribers as of July 2001. The best available estimates
indicate that the largest SMATV operators serve between 15,000 and
55,000 subscribers each. Most SMATV operators serve approximately
3,000-4,000 customers. Because these operators are not rate regulated,
they are not required to file financial data with the Commission.
Furthermore, we are not aware of any privately published financial
information regarding these operators. Based on the estimated number of
operators and the estimated number of units served by the largest ten
SMATVs, we believe that a substantial number of SMATV operators qualify
as small entities.
32. Open Video Systems (``OVS''). Because OVS operators provide
subscription services, OVS falls within the SBA-recognized definition
of cable and other program distribution services. This definition
provides that a small entity is one with $ 12.5 million or less in
annual receipts. The Commission has certified 25 OVS operators with
some now providing service. Affiliates of Residential Communications
Network, Inc. (``RCN'') received approval to operate OVS systems in New
York City, Boston, Washington, DC and other areas. RCN has sufficient
revenues to assure us that they do not qualify as small business
entities. Little financial information is available for the other
entities authorized to provide OVS that are not yet operational. Given
that other entities have been authorized to provide OVS service but
have not yet begun to generate revenues, we conclude that at least some
of the OVS operators qualify as small entities.
33. Electronics Equipment Manufacturers. Rules adopted in this
proceeding could apply to manufacturers of DTV receiving equipment and
other types of consumer electronics equipment. The SBA has developed
definitions of small entity for manufacturers of audio and video
equipment as well as radio and television broadcasting and wireless
communications equipment. These categories both include all such
companies employing 750 or fewer employees. The Commission has not
developed a definition of small entities applicable to manufacturers of
electronic equipment used by consumers, as compared to industrial use
by television licensees and related businesses. Therefore, we will
utilize the SBA definitions applicable to manufacturers of audio and
visual equipment and radio and television broadcasting and wireless
communications equipment, since these are the two closest NAICS Codes
applicable to the consumer electronics equipment manufacturing
industry. However, these NAICS categories are broad and specific
figures are not available as to how many of these establishments
manufacture consumer equipment. According to the SBA's regulations, an
audio and visual equipment manufacturer must have 750 or fewer
employees in order to qualify as a small business concern. Census
Bureau data indicates that there are 554 U.S. establishments that
manufacture audio and visual equipment, and that 542 of these
establishments have fewer than 500 employees and would be classified as
small entities. The remaining 12 establishments have 500 or more
employees; however, we are unable to determine how many of those have
fewer than 750 employees and therefore, also qualify as small entities
under the SBA definition. Under the SBA's regulations, a radio and
television broadcasting and wireless communications equipment
manufacturer must also have 750 or fewer employees in order to qualify
as a small business concern. Census Bureau data indicates that there
1,215 U.S. establishments that manufacture radio and television
broadcasting and wireless communications equipment, and that 1,150 of
these establishments have fewer than 500 employees and would be
classified as small entities. The remaining 65 establishments have 500
or more employees; however, we are unable to determine how many of
those have fewer than 750 employees and therefore, also qualify as
small entities under the SBA definition. We therefore conclude that
there are no more than 542 small manufacturers of audio and visual
electronics equipment and no more than 1,150 small manufacturers of
radio and television broadcasting and wireless communications equipment
for consumer/household use.
34. Computer Manufacturers. The Commission has not developed a
definition of small entities applicable to computer manufacturers.
Therefore, we will utilize the SBA definition of electronic computers
manufacturing. According to SBA regulations, a computer manufacturer
must have 1,000 or fewer employees in order to qualify as a small
entity. Census Bureau data indicates that there are 563 firms that
manufacture electronic computers and of those, 544 have fewer than
1,000 employees and qualify as small entities. The remaining 19 firms
have 1,000 or more employees. We conclude that there are approximately
544 small computer manufacturers.
35. Description of Projected Reporting, Recordkeeping and other
Compliance Requirements. At this time, we do not expect that the
proposed rules would impose any additional reporting or recordkeeping
requirements. However, compliance with the rules, if they are adopted,
may require consumer electronics manufacturers to seek approval for new
device connectors and associated content protection technologies to be
used in conjunction with unidirectional digital cable products. These
requirements could have an impact on consumer electronics
manufacturers, including small entities. We seek comment on the
possible burden these requirements would place on small entities. Also,
we seek comment on whether a special approach toward any possible
compliance burdens on small entities might be appropriate.
36. Steps Taken to Minimize Significant Impact on Small Entities,
and Significant Alternatives Considered. The RFA requires an agency to
describe any significant alternatives that it has
[[Page 66781]]
considered in reaching its proposed approach, which may include the
following four alternatives (among others): (1) The establishment of
differing compliance or reporting requirements or timetables that take
into account the resources available to small entities; (2) the
clarification, consolidation, or simplification of compliance or
reporting requirements under the rule for small entities; (3) the use
of performance, rather than design, standards; and (4) an exemption
from coverage of the rule, or any part thereof, for small entities.
37. As indicated above, the Second FNPRM seeks comment on whether
the Commission should adopt rules establishing an approval mechanism
for new connectors and associated content protection technologies to be
used with unidirectional digital cable products. Consumer electronics
manufacturers may be required to seek such approval prior to
implementing new connectors and associated content protection
technologies in unidirectional digital cable products. We welcome
comment on modifications of this proposal to lessen any potential
impact on small entities, while still remaining consistent with our
policy goals.
38. The Second FNPRM also seeks comment on the potential
applicablity of certain transmission standards for digital cable
systems to systems with an activated channel capacity of 550 MHz or
greater. Since such cable systems are often owned by small cable
operators, we seek comment on the potential impact of this proposed
rule upon small cable operators and whether some relief mechanism, such
as waivers, would help alleviate any potential impact on small
entities.
39. With respect to the proposed requirement for consumer
electronics manufacturers to provide consumers with pre-sale
information regarding the functionalities of unidirectional digital
cable televisions, we seek comment on how this might affect small
manufacturers. We also seek comment on whether the potential economic
burden on small entities might be lessened, while still generally
retaining the requirement or the intended effect of the requirements.
40. Finally, the Second FNPRM seeks comment on whether to permit or
ban the down-resolution by MVPDs of non-broadcast MVPD programming. We
believe this requirement would largely impact the DBS industry, which
is primarily composed of large entities. To the extent that small
entities might be adversely affected by this potential requirement, we
welcome comments on possible small entity-related alternatives.
41. Federal Rules Which Duplicate, Overlap, or Conflict with the
Commission's Proposals. None.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 03-29521 Filed 11-26-03; 8:45 am]
BILLING CODE 6712-01-P