[Federal Register: January 3, 2005 (Volume 70, Number 1)]
[Rules and Regulations]
[Page 25-38]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03ja05-9]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 73 and 76
[MM Docket No. 00-167; FCC 04-221]
Broadcast Services; Children's Television; Cable Operators
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: This document resolves a number of issues regarding the
obligation of television broadcasters to protect and serve children in
their audience. The document addresses matters related to two areas:
the obligation of television broadcast licensees to provide educational
and informational programming for children and the requirement that
television broadcast licensees protect children from excessive and
inappropriate commercial messages. The Commission goal is to provide
television broadcasters with guidance regarding their obligation to
serve children as we transition from an analog to a digital television
environment, and to improve our children's programming rules and
policies.
DATES: 47 CFR 73.670(a), (b) and (c) and Note 2, 47 CFR 73.673, and 47
CFR 76.225(b) and (c) are effective February 1, 2005. 47 CFR 73.670,
Note 1; 47 CFR 73.671 (c)(6), (c)(7), (d), (e), and (f) and Note 2; and
47 CFR 76.225 (d) and Note 1 are effective January 1, 2006. 47 CFR
73.671(c)(5) and 47 CFR 73.3526(e)(11)(iii) contain information
collection requirements that have not been approved by the Office of
Management and Budget (OMB). The FCC will publish a document announcing
the effective date for these sections.
ADDRESSES: Federal Communications Commission, Washington, DC 20554.
FOR FURTHER INFORMATION CONTACT: Kim Matthews, Media Bureau, (202) 418-
2120.
[[Page 26]]
SUPPLEMENTARY INFORMATION: This is a summary of the Federal
Communications Commission's Report and Order in MM Docket No. 00-167,
FCC 04-221, adopted September 9, 2004, and released November 23, 2004.
The complete text of this document is available for inspection and
copying during normal business hours in the FCC Reference Center, 445
12th Street, SW., Washington, DC 20554. The complete text may be
purchased from the Commission's copy contractor, Qualex International,
445 12th Street, SW., Room CY-B402, Washington, DC 20554. The full text
may also be downloaded at: http://www.fcc.gov. To request materials in
accessible formats for people with disabilities (braille, large print,
electronic file, audio format), send an e-mail to fcc504@fcc.gov or
call the Consumer & Governmental Affairs Bureau at (202) 418-0530
(voice), (202) 418-0432 (TTY).
Paperwork Reduction Act: This document contains modified
information collections subject to the Paperwork Reduction Act of 1995
(PRA), Public Law 104-13. It will be submitted to the Office of
Management and Budget (OMB) for review under section 3507(d) of the
PRA. OMB, the general public, and other Federal agencies will be
invited to comment on the modified and proposed information collection
requirements contained in this proceeding.
Summary of the Report and Order and Further Notice of Proposed Rule
Making
1. In this Report and Order we resolve a number of issues raised in
the Notice of Proposed Rulemaking (65 FR 66951-01, November 8, 2000)
regarding the obligation of television broadcasters to protect and
serve children in their audience. We address matters related to two
areas: The obligation of television broadcast licensees to provide
educational and informational programming for children and the
requirement that television broadcast licensees protect children from
excessive and inappropriate commercial messages. For purposes of the
Children's Television Act of 1990, which provides the basis for these
limits on children's television commercial content, ``the term
`commercial television broadcast licensee' includes a cable operator,
as defined in section 602 of the Communications Act of 1934 (47 U.S.C.
522).'' While some of the rules and policies we adopt herein apply only
to digital broadcasters, others apply to both analog and digital
broadcasters as well as cable operators. Our goals in resolving these
issues are to provide television broadcasters with guidance regarding
their obligation to serve children as we transition from an analog to a
digital television environment, and to improve our children's
programming rules and policies.
2. First, we address the obligation of digital television (``DTV'')
broadcasters to provide children's educational and informational
programming and, specifically, how that obligation applies to DTV
broadcasters that use the multicast capability of their ATSC digital
service to broadcast multiple program services. We adopt an approach
pursuant to which digital broadcasters that choose to provide streams
or hours of free video programming in addition to their required free
over-the-air video program service will have an increased core
programming benchmark roughly proportional to the additional amount of
free video programming they choose to provide. Second, for both analog
and digital broadcasters, we limit the number of preemptions allowed
under our processing guideline to no more than 10 percent of core
programs in each calendar quarter. A station that fails to meet the
processing guideline because of excessive preemptions may still receive
staff-level approval of its renewal application if it demonstrates that
it has aired a package of educational and informational programming,
including specials, PSAs, short-form programs, and regularly scheduled
non-weekly programs with a significant purpose of educating and
informing children, that demonstrates a commitment to educating and
informing children at least equivalent to airing the amount of core
programming indicated by the processing guideline. Licensees that do
not qualify for staff level approval will have their license renewal
applications referred to the Commission where they will have an
additional opportunity to demonstrate compliance with the CTA. Third,
we amend our rule regarding on-air identification of core programming
to require both analog and digital broadcasters to identify such
programming with the same symbol, E/I, which must be displayed
throughout the program in order for the program to qualify as core
educational programming. Fourth, we clarify that the children's
television commercial limits and policies apply to all digital video
programming directed to children ages 12 and under. Fifth, we interpret
the commercial time limits to require that the display of Internet Web
site addresses during program material is permitted as within the time
limits only if the Web site meets certain requirements, including the
requirement that it offer a substantial amount of bona fide program-
related or other noncommercial content and is not primarily intended
for commercial purposes. Sixth, we revise our definition of
``commercial matter'' to include promotions of television programs or
video programming services other than children's educational and
informational programming. Educational and Informational Programming.
Digital Core Children's Programming Processing Guideline
3. One of the questions posed in the Notice is how the current
three-hour children's core educational programming processing guideline
should apply to a DTV broadcaster that chooses to multicast. We asked
if the processing guideline should apply to only one digital
broadcasting program stream, to more than one program stream, or to all
program streams the broadcaster chooses to provide. We also noted that
DTV broadcasters may choose to devote a portion of their spectrum to
either non-video services, such as datacasting, or to subscription
video services available only to viewers who pay a fee, consistent with
the requirement that they provide at least one free, over-the-air video
program service to viewers. We asked whether the guideline should apply
only to free broadcast services or also to services offered for a fee,
and to video services only or also to non-video services. Finally, we
asked how we should take into account the fact that DTV broadcasters
have the flexibility to vary the amount and quality of broadcast
programming they offer throughout the day. For example, a broadcaster
could air 4 SDTV channels from 8 a.m. to 3 p.m., switch to two higher
definition channels from 3 p.m. to 8 p.m., and finish with one HDTV
channel for prime-time and late-night programming.
4. We have three main goals in crafting children's educational and
informational programming rules for digital broadcasting. First, we
want to ensure that the needs of children continue to be served
``through the licensee's overall programming.'' We agree with
children's television advocates who strongly support the position that
any increase in multicasting channel capacity that broadcasters choose
to implement as a result of digital technology should translate to a
commensurate increase in the amount of educational programming
available to children. Second, we want to provide broadcasters with
flexibility in meeting their children's core
[[Page 27]]
programming obligations to permit them to explore the myriad potential
uses of their broadcast spectrum made possible by digital technology.
Third, we want to address what has been identified by many as a
persistent problem in our rules and policies implementing the CTA: the
continued lack of awareness on the part of parents and others of the
availability of core programming. This concern about lack of public
awareness of core programming applies to both the analog and digital
broadcast environments.
5. The current 3 hours per week processing guideline was adopted
with the one channel per broadcaster analog model in mind. With the
advent of digital broadcasting and the multicasting ability that
technology offers, a new method of quantifying the current core
programming guideline for digital broadcasting is both necessary and
appropriate. We also believe that whatever additional requirements we
impose should be as concrete and quantifiable as possible to remove
uncertainty and facilitate enforcement.
6. We adopt today an approach pursuant to which digital
broadcasters that choose to provide additional channels or hours of
free video programming in addition to their required free over-the-air
video program service will have an increased core programming benchmark
roughly proportional to the additional amount of free video programming
they choose to provide. This approach is similar to that proposed by a
number of commenters in response to the NOI and the Notice. Our revised
guideline will work as follows. Digital broadcasters will continue to
be subject to the existing three hours per week core programming
processing guideline on their main program stream. DTV broadcasters
that choose to provide additional streams or channels of free video
programming will, in addition, have the following guideline applied to
the additional programming: \1/2\ hour per week of additional core
programming for every increment of 1 to 28 hours of free video
programming provided in addition to the main program stream. Thus,
digital broadcasters providing between 1 and 28 hours per week of free
video programming in addition to their main program stream will have a
guideline of \1/2\ hour per week of core programming in addition to the
3 hours per week on the main program stream. Digital broadcasters
providing between 29 and 56 hours per week of free video programming in
addition to their main program stream will have a guideline of 1 hour
per week of core programming in addition to the 3 hours per week on the
main program stream. Digital broadcasters providing between 57 and 84
hours per week of free video programming in addition to their main
program stream will have a guideline of 1\1/2\ hours per week of core
programming in addition to the 3 hours per week on the main program
stream. The guideline will continue to increase in this manner for
additional hours of free video programming. These benchmarks were
derived by dividing the total number of hours in the week (168) by 6
(the number of \1/2\ hour core programming increments required under
our current guideline, as core programs must be at least 30 minutes in
length), which equals 28. Thus, under the revised guideline, for every
increment of 1 to 28 hours of additional free video programming offered
in addition to the main digital program stream, the broadcaster must
air at least an additional \1/2\ hour of core programming. Another way
to look at this is that for each full time stream of additional free
video programming (24 hours day 7 days per week), the licensee must air
an additional 3 hours per week of core programming.
7. Although we encourage stations to air more than an additional
\1/2\ hour per week of core programming for every increment of 28 hours
of additional free video programming, in order to receive staff level
approval of the CTA portion of their license renewal application under
our revised processing guideline digital broadcasters must air at least
\1/2\ hour of core educational children's programming for every
increment of 1 to 28 hours of free video programming provided in
addition to the main program stream. As under our current processing
guideline for the analog channel, a licensee will continue to be
eligible for staff level approval if it demonstrates that it has aired
a package of different types of educational and informational
programming that, while containing somewhat less core programming than
indicated by the revised guideline, demonstrates a level of commitment
to educating and informing children at least equivalent to airing the
amount of programming indicated by the guideline. In this regard,
specials, PSAs, short-form programs, and regularly scheduled non-weekly
programs with a significant purpose of educating and informing children
may be counted toward the processing guideline. Licensees that do not
meet these processing guidelines will be referred to the Commission,
where they will have the opportunity to demonstrate compliance with the
CTA in the same manner as under our current processing guideline.
8. To be considered core, the programming must comply with all of
the requirements for core programming specified in our rules: that is,
it must have serving the educational and informational needs of
children ages 16 and under as a significant purpose; it must be aired
between the hours of 7 a.m. and 10 p.m.; it must be a regularly
scheduled weekly program; it must be at least 30 minutes in length; the
educational and informational objective and the target child audience
must be specified in writing the licensee's Children's Television
Programming Report; and instructions for listing the program as
educational/informational, including an indication of the age group for
which the program is intended, must be provided by the licensee to
publishers of program guides.
9. Our current 3 hours per week core programming processing
benchmark is averaged over a six-month period in order to provide
broadcasters with scheduling flexibility. We will also average the
revised core programming processing benchmark to be applied to DTV
broadcasters over a six-month period, thus providing some flexibility
for digital broadcasters. The revised digital core programming
guideline will become effective one year after release of this Report
and Order.
10. We are concerned that digital broadcasters do not simply replay
the same core programming in order to meet our revised processing
guideline, particularly if broadcasters offer multiple streams of free
video programming and thereby face a higher core programming guideline.
We recognize, however, that to some degree children can benefit from
repeated viewing of the same core program, as the educational lesson or
message is reinforced. Accordingly, we will not prohibit all repeats of
core programming by digital broadcasters under our revised guideline,
but will require that at least 50 percent of core programming not be
repeated during the same week to qualify as core. Under our current 3
hours per week processing guideline that applies to the analog channel,
we allow repeats and reruns of core programming to be counted toward
fulfillment of the guideline. We will exempt from this requirement any
program stream that merely time shifts the entire programming line-up
of another program stream. In addition, during the digital transition,
we will not count as repeated programming core programs that are aired
on both the analog station and a digital program stream.
[[Page 28]]
11. In order to receive staff level approval of their license
renewal application under our revised core programming processing
guideline, digital broadcasters will be required to air at least three
hours per week of core programming on their main program stream. To
provide broadcasters with flexibility in choosing how best to serve
their child audience, however, we will permit digital broadcasters to
air all of their additional digital core programming, beyond the 3 hour
baseline on the main digital program stream, on one free digital video
channel or distribute it across multiple free digital video channels,
at their discretion, as long as the stream/s on which the core
programming is aired has comparable carriage on multichannel video
programming distributors (``MVPDs'') as the stream whose programming
generates the core programming obligation under the revised processing
guideline. Educational and informational programming aired on
subscription channels, however, will not be considered core under our
processing guideline. In addition, the current three hours per week
core programming processing guideline will continue to apply to analog
stations until the analog channel is returned to the Commission at the
end of the digital transition. Core programs aired on digital program
streams will not be considered in evaluating whether a station has
complied with the core programming processing guideline for its analog
channel.
12. We agree with those commenters who argue that, in some cases,
children and parents may be best served by having core programming
available on a channel that is devoted to programming appropriate for
child or family viewing during all or part of the programming day or
week. We also agree that requiring every programming stream to carry
core programming could discourage broadcasters from experimenting with
innovative multicasting services. If, for example, alternative content
streams are used to directly expand the value of the main stream
through the broadcasting of associated information or different camera
angles or the alternative streams are used for low bit rate video
services such as a dedicated weather channel, they may not be
appropriate for the carriage of children's programming. Moreover, we do
not want to discourage broadcasters from providing highly specialized
channels on which content directed to children might depart from the
specialized focus. It is our expectation that broadcasters will develop
such programming services. In the next three years, we intend to
revisit the issues addressed in this Report and Order in another
proceeding. At that time, we will consider, among other things, whether
we should give broadcasters who choose to multicast more flexibility in
terms of placement of core programming.
13. The revised guideline discussed above applies to digital
broadcasters and the digital programming they provide. Up until the
time that analog channels are returned to the Commission, we will
continue to apply our current three hours per week core children's
programming processing guideline to analog channels. Broadcasters will
continue to file, on a quarterly basis, their Children's Television
Programming Report, on FCC Form 398. We will revise current FCC Form
398 to permit broadcasters to report both analog and digital core
programming on that form. Once the new form has been approved for use,
we will issue a Public Notice informing broadcasters of the
availability of the form and the date on which the revised form must
begin to be used in place of the current form. On that date, reports
will also be required to include information about digital core
programming. As we have done in the analog context, we will continue to
exempt noncommercial television licensees from children's programming
reporting requirements with respect to their digital programming.
14. We also decline, at this time, to require high definition,
interactivity, or other features made possible by digital technology to
enhance core programming. We believe it would be premature to impose
any requirement for use of technological advances in children's
programming until broadcasters have had more opportunity to experiment
with these features in other programming. However, we encourage
broadcasters to provide high definition educational and informational
programming for children as well as educational interactive features,
to ensure that children benefit from the capabilities of digital
technology. We agree with those commenters who argue that use of such
features could improve the educational potential of core programming.
15. Finally, we disagree with those commenters that argue that the
Commission lacks legal authority to impose new children's educational
and informational programming requirements. As noted above, digital
broadcasters are subject to the CTA's educational and informational
programming requirements. In the 1996 Children's Programming Report and
Order, we concluded that a safe harbor processing guideline approach to
implementing the CTA is consistent with both the language and the
intent of the statute. The revised quantitative processing guideline we
adopt today for digital broadcasters is also consistent with the CTA
and the First Amendment. In adopting the three hours per week core
programming processing guideline for analog broadcasters, we concluded
that defining what qualifies as programming ``specifically designed''
to serve the educational needs of children and giving broadcasters
clear but nonmandatory guidance on how to guarantee compliance is a
constitutional means of giving effect to the CTA's programming
requirement. The actions we take today extend the current processing
guideline to digital broadcasters and increase the guideline only for
broadcasters who choose to use their digital capacity to air more free
video programming. Broadcasters continue to retain wide discretion in
choosing the ways in which they will meet their CTA obligations. Our
new guideline imposes reasonable parameters on a broadcaster's use of
the public airwaves and is narrowly tailored to advance the
government's substantial, and indeed compelling, interest in the
protection and education of America's children.
Preemption
16. Related to the issue of digital broadcasters' educational and
informational programming obligations under the CTA is the issue of how
we will treat preemptions of core programs by DTV broadcasters. To
qualify as ``core programming'' for purposes of the three-hour-per-week
processing guideline, the Commission requires that a children's program
be ``regularly scheduled''; that is, a core children's program must
``be scheduled to air at least once a week'' and ``must air on a
regular basis.'' In adopting the current educational programming rules,
the Commission stated that television series typically air in the same
time slot for 13 consecutive weeks, although some episodes may be
preempted for programs such as breaking news or live sports events. The
Commission noted that programming that is aired on a regular basis is
more easily anticipated and located by viewers, and can build loyalty
that will improve its chance for commercial success. The Commission
stated that it would leave to the staff to determine, with guidance
from the full Commission as necessary, what constitutes regularly
scheduled
[[Page 29]]
programming and what level of preemption is allowable.
17. We requested comment in the Notice on whether the Commission's
policies regarding preemption of core programs should be revised in
view of the greater programming capacity that will be available to DTV
broadcasters. We noted that the ability of DTV broadcasters to
multicast provides them with the option of airing multiple streams of
programming simultaneously, thus increasing their flexibility to either
avoid preempting core programs or to reschedule such programs to a
regular ``second home.'' Given this capability, we asked if we should
fashion a rule defining clearly the requirement that a ``core'' program
be ``regularly scheduled,'' including the number of times a core
program could be preempted and still count toward the three-hour-per-
week processing guideline, and the efforts that must be made to
reschedule and promote preempted programs in order for these programs
to contribute toward the core programming guideline. If we were to
adopt such a rule, we asked if we should continue to exempt from the
requirement that core programs be rescheduled core programs preempted
for breaking news. We also sought comment on the kind of rescheduling
practices and promotion of rescheduled programs that we could require
from digital broadcasters.
18. For both analog and digital broadcasters, to be considered core
programming we will generally require that a preempted core program be
rescheduled. In addition, we will consider, in determining whether the
rescheduled program counts as a core educational program, the reason
for the preemption, the licensee's efforts to promote the rescheduled
program, the time when the rescheduled program is broadcast, and, as
discussed below, the station's level of preemption of core programming.
We will continue to exempt from the requirement that core programs be
rescheduled core programs preempted for breaking news. Absent clear
evidence that broadcasters are abusing this exemption, we intend to
rely on broadcasters' journalistic judgment regarding the necessity of
interrupting scheduled core programming because of a news alert.
19. As a general matter, for digital broadcasters we will not
consider a core program moved to the same time slot on another of the
station's digital program streams to be preempted as long as the
alternate program stream receives MVPD carriage comparable to the
stream from which the program is being moved and the station provides
adequate on-screen information about the move, including when and where
the program will air, on both the original and the alternate program
stream. This policy applies only to program moves from one digital
stream to another digital stream on the same station. Thus, as long as
viewers are adequately notified of the move and the program is moved to
a program stream that is accessible to a comparable number of viewers,
broadcasters may use their multicasting capability to avoid preempting
core programming.
20. For both analog and digital broadcasters, we will limit the
number of preemptions under our processing guideline to no more than 10
percent of core programs in each calendar quarter. Each preemption
beyond the 10 percent limit will cause that program not to count as
core under the processing guideline, even if the program is
rescheduled. We will exempt from this preemption limit preemptions for
breaking news.
21. We believe that this preemption limit will help parents and
children to locate core programming and to anticipate when it will be
aired. We believe that most stations currently do not preempt more than
10 percent of core programs in each calendar quarter. We also note that
our processing guideline is averaged over a six-month period, which
will provide broadcasters with some scheduling flexibility. In
addition, a station that fails to meet the processing guideline because
of excessive preemptions may still receive staff-level approval of its
renewal application if it demonstrates that it has aired a package of
educational and informational programming, including specials, PSAs,
short-form programs, and regularly scheduled non-weekly programs with a
significant purpose of educating and informing children, that
demonstrates a commitment to educating and informing children at least
equivalent to airing the amount of core programming indicated by the
processing guideline. Licensees that do not qualify for staff level
approval will have their license renewal applications referred to the
Commission where they will have an additional opportunity to
demonstrate compliance with the CTA.
Identification of Core Programming
22. As we stated in the NPRM, studies of the effectiveness of our
educational programming requirements show a continued lack of awareness
on the part of parents regarding the availability of core programming.
As one study observed:
Information about E/I programs remains hard for parents to find.
Although commercial broadcasters are consistently using E/I icons,
the on-air information is often brief and difficult to identify.
Printed listing services do not carry the information. * * * Thus,
there is a serious lack of information for parents about core
educational and informational offerings, mostly because the popular
press does not appear to be interested in or have the capacity to
publish such information. Not surprisingly, only one in seven
parents is able to correctly identify the meaning of the E/I symbol.
23. As we noted when we adopted the current children's educational
programming rules in 1996, parents can increase the audience of an
educational program by encouraging their children to watch the show,
but can only do so if they know in advance when the show will air and
that the show is educational. The public information initiatives
adopted by the Commission in 1996 were designed to maximize public
access to information about core programming while minimizing the cost
to licensees. In adopting the current on-air identification
requirement, the Commission noted that on-air identifiers were likely
to reach a larger audience than information published in program
guides, at minimal cost to stations. We continue to believe that on-air
identification of core programming is a cost-effective means of
ensuring that core programming reaches the child audience, but agree
with those commenters that argue that the use of different identifiers
by different broadcasters is confusing parents and impairing their
ability to choose core programming for their children.
24. Accordingly, we will amend our rules regarding on-air
identification of core programming to require both analog and digital
broadcasters to identify such programming with the same symbol: E/I. We
will also require that this symbol be displayed throughout the program
in order for the program to qualify as core. We believe this change to
our on-air identification requirement will not prove onerous to
broadcasters, who already use on-screen identifiers for core programs,
and could greatly improve the public's ability to recognize and locate
core programs. We note that broadcasters now display icons and other
on-screen information with increasing frequency in many kinds of
programming, and the public is increasingly used to seeing such
information displayed along with program material. Broadcasters'
increasing voluntary use of onscreen identifiers, such as network
logos, presumably reflects their judgment as to the effectiveness of
this technique in communicating information. We believe that
broadcasters can display the E/I
[[Page 30]]
icon in an unobtrusive manner that will help parents and others
identify core programs without deterring potential child viewers.
25. We will apply this revised on-air identification requirement to
both commercial and noncommercial broadcasters. Although we have
previously exempted noncommercial licensees from the requirement that
they identify core programming, we believe that requiring all
broadcasters to use the E/I symbol throughout the program to identify
core programming will help reinforce viewer awareness of the meaning of
this symbol. We will, however, continue to exempt noncommercial
television licensees from the other public information initiatives
adopted in the 1996 Children's Programming Report and Order. Thus,
noncommercial television stations will not be required to prepare and
file quarterly Children's Television Programming Reports or to provide
information identifying programming specifically designed to educate
and inform children to publishers of program guides. As is our current
practice, we will require noncommercial broadcast stations to maintain
documentation sufficient to show compliance with the CTA's programming
obligations at renewal time in response to a challenge or to specific
complaints.
Commercial Limits
Application of Existing Commercial Limits Rules and Policies to DTV
26. We sought comment in the Notice on how the limits on the amount
of commercial matter in children's programming should apply in the
digital environment and how we should interpret with respect to DTV
broadcasters the policies set forth in the 1974 Policy Statement on
children's programming. We asked whether children's advertising limits
and policies should apply only to free over-the-air channels, or to all
digital channels, both fee and pay. We sought comment specifically on
the proposal by CME, et al. that the Commission prohibit all direct
links to commercial Web sites during children's programming. If we were
to permit certain kinds of commercial links during children's programs,
we asked if such links should be permitted to appear during the program
itself, or be limited to appearing during commercials adequately
separated from program material as required by our separations policy.
27. We will apply the commercial limits and policies, as clarified
in today's Order, to all digital video programming directed to children
ages 12 and under, whether that programming is aired on a free or pay
digital stream. We note that the commercial limits and policies
currently apply to cable operators and DBS providers and that cable
operators are defined as ``broadcast licensees'' for purposes of the
commercial matter limitations in the CTA. Therefore, the application of
such limits and policies to pay broadcast channels provides for
consistent treatment of these program delivery systems for purposes of
children's advertising restrictions. We agree with those commenters
that argue that the same concerns that led to adoption of the
advertising restrictions in the 1974 Policy Statement and the CTA--the
unique vulnerability of children as television viewers--apply
regardless of the channel that a child viewer watches. Thus, any
advertising restrictions for children's programming should apply to all
such programming, regardless of the free or pay status of the channel.
This determination is both consistent with and required by Section 336
of the Communications Act, which states that the Commission ``shall
adopt regulations that allow the holders of [DTV] licenses to offer
such ancillary and supplementary services on designated frequencies as
may be consistent with the public interest, convenience and
necessity.'' Providing programs intended for children that do not
comply with the advertising limits or commercial policies is contrary
to the public interest because they could expose children to excessive
and abusive advertising practices.
28. We are aware that some broadcasters are currently displaying
Internet Web site addresses that appear during children's program
material (for example, in a crawl at the bottom of screen) which raises
the issue of how the CTA commercial time limits should apply. We are
concerned that the display of such addresses for Web sites established
solely for commercial purposes in children's programs is inconsistent
with our mandate under the CTA to protect children, who are
particularly vulnerable to commercial messages and incapable of
distinguishing advertising from program material. This is a concern
that arises with respect to all broadcasters, both analog and digital,
and to cable operators. Accordingly, we adopt a proposal similar to
that advanced by Sesame Workshop with respect to this display of
commercial Web site information in children's programs. Specifically,
we will interpret the CTA commercial time limits to require that, with
respect to programs directed to children ages 12 and under, the display
of Internet Web site addresses during program material is permitted as
within the CTA limitations only if the Web site: (1) Offers a
substantial amount of bona fide program-related or other noncommercial
content; (2) is not primarily intended for commercial purposes,
including either e-commerce or advertising; (3) the Web site's home
page and other menu pages are clearly labeled to distinguish the
noncommercial from the commercial sections; and (4) the page of the Web
site to which viewers are directed by the Web site address is not used
for e-commerce, advertising, or other commercial purposes (e.g.,
contains no links labeled ``store'' and no links to another page with
commercial material).
29. For Web sites meeting these requirements, we will not limit the
amount of time that the Web site address may be displayed during
children's programs. In addition, we will permit the commercial
portions of Web sites that comply with these requirements to sell or
advertise products associated with the related television program.
Because we require that permissible Web sites clearly separate the
commercial portions of the site from the site's other content, we
believe that children will be adequately protected from program-related
merchandise sales. Because of the unique vulnerability of young
children to host-selling, however, we will prohibit the display of Web
site addresses in children's programs when the site uses characters
from the program to sell products or services. This restriction on Web
sites that use host-selling applies to Web site addresses displayed
both during program material and during commercial material. We do not
impose other restrictions at this time on the use of Web site addresses
displayed only during commercials aired in children's programs.
30. We believe that this approach to the display of Web site
addresses in programs directed to children ages 12 and under fairly
balances the interest of all broadcasters in exploring the potential
uses of the Internet in connection with their children's programs with
our mandate to protect children from over commercialization. We will
require a broadcaster that chooses to air children's programs
displaying Web site addresses during program material to certify, as
part of its certification in its license renewal application of
compliance with the commercial limits on children's
[[Page 31]]
programming, that it has also complied with the requirements concerning
the display of Web site addresses in such programming. In addition,
these broadcasters will be required to maintain in their public
inspection file, until final action has been taken on the station's
next license renewal application, records sufficient to substantiate
the station's certification of compliance with the restrictions on Web
site addresses in programs directed to children ages 12 and under.
Cable operators airing children's programming must maintain records
sufficient to verify compliance with these new rules and make such
records available to the public. Such records must be maintained by
cable operators for a period sufficient to cover the limitations period
specified in 47 U.S.C. 503(b)(6)(B).
31. With respect to the appearance of direct, interactive, links to
commercial Internet sites in children's programming, we agree with
those commenters that express concern that prohibiting such links at
least at this stage in the digital transition is premature and
unnecessary and could hamper the ability of broadcasters to experiment
with potential uses of interactive capability in children's
programming. There is little if any use of direct Internet connectivity
today in television programming of the type that was contemplated when
the Notice in this proceeding was issued. Accordingly, we find that it
would be premature and unduly speculative to attempt to regulate such
direct connectivity at this time. We agree that direct links to Web
sites with program-related material could provide beneficial
educational and informational content in children's programs and do not
wish to place unnecessary barriers in the way of technical developments
in this area that may take place.
32. We encourage broadcasters to experiment with the capabilities
digital television offers by developing interactive services that can
be used to enhance the educational value of children's programming.
With the benefits of interactivity, however, come potential risks that
children will be exposed to additional commercial influences. We
therefore seek comment in the Further Notice of Proposed Rulemaking
that is part of this Report and Order about what kinds of services
broadcasters and cable operators are developing and what rules would be
appropriate to adopt. During the pendancy of this proceeding, however,
we emphasize that broadcasters and cable operators may not circumvent
our rules on commercial limits through technological developments in
interactivity. We encourage broadcasters and cable operators to
innovate and experiment with new uses of interactive technology that is
educational in nature.
Definition of Commercial Matter
33. The Notice also invited commenters to address a broader
question related to our restriction on the duration of advertising
during children's programming. This issue arises with respect to both
analog and digital programming. We noted that, under our current
policy, the limitation of 10.5 minutes per hour on weekends and 12
minutes per hour on weekdays applies to ``commercial matter.''
``Commercial matter'' is defined to exclude certain types of program
interruptions from counting toward the commercial limits, including
promotions of upcoming programs that do not mention sponsors, public
service messages promoting not-for-profit activities, and air-time sold
for purposes of presenting educational and informational material. We
observed in the Notice that there is a significant amount of time
devoted to these types of announcements in children's programming,
thereby often reducing the amount of time devoted to actual program
material to an amount far less than the limitation on the duration of
commercial matter alone might suggest.
34. Accordingly, we invited comment in the Notice on whether the
Commission should revise its definition of ``commercial matter'' to
include some or all of these types of program interruptions that do not
currently contribute toward the commercial limits. We noted that some
of the types of program interruptions currently excluded from the
commercial limits may contain information valuable to children, such as
promotion of upcoming educational programs or certain types of public
service messages. We asked if we should nonetheless require that the
time devoted to these announcements count toward the commercial limits
to maximize the amount of time devoted to program material and reduce
the time taken by interruptions. We also asked whether, if we were to
revise our definition of ``commercial matter,'' we should apply the new
definition only to digital broadcasting or also to analog broadcasting.
Finally, we asked commenters to address whether our ability to revise
this definition is restricted by the CTA and its legislative history.
35. We will revise our definition of ``commercial matter'' to
include promotions of television programs or video programming services
other than children's educational and informational programming. This
revised definition will apply to analog and digital television stations
and to cable operators. In the Further Notice of Proposed Rulemaking
that is part of this Report and Order, we also propose to apply this
revised definition to Direct Broadcast Satellite service providers. Our
goals in making this revision to the definition of commercial matter
are to reduce the number of commercial interruptions in children's
programming and encourage the promotion of educational and
informational programming for children.
36. We agree with those commenters who argue that program
promotions should fall within the scope of commercial matter because
the station broadcasting the promotion receives significant
consideration for airing these advertisements: specifically, the
increased audiences for the promoted program which presumably leads to
increased advertising rates for the station. Reducing the number of
program promotions will help protect children from
overcommercialization of programming consistent with the overall intent
of Congress in the CTA. At the same time, exempting program promotions
for children's educational and informational programming may encourage
broadcasters to promote this programming, thereby increasing parents'
awareness of the programming and possibly the program's audience, and
thus extending the educational benefit of the programming. As noted
above, there is evidence of a continued lack of awareness on the part
of parents regarding the availability of core programming. Our action
may lead to additional promotion of children's educational and
informational programming, including core programming, thereby helping
to address this problem.
37. This decision is consistent with the CTA and its legislative
history. The term ``commercial matter'' is not defined in the CTA. The
House and Senate Reports state that the definition should be
``consistent'' with the definition used in former Form 303-C, which
defined commercial matter to include, among other things, promotional
announcements by commercial stations for or on behalf of another
commonly owned or controlled broadcast station serving the same
community. Including program promotions in the definition of commercial
matter is consistent with this aspect of the definition of commercial
matter on former Form 303-
[[Page 32]]
C, as in either case the station is receiving indirect consideration
for the program promotion.
Inappropriate Promotions in Children's Programming
38. Another issue raised both in the Notice and in the NOI relates
to the airing, in programs viewed by children, of promotions for other
upcoming programs that may be unsuitable for children to watch because
either the promotions themselves or the programs they refer to contain
sexual or violent content or inappropriate language. This issue arises
with respect to both analog and digital broadcasting and applies not
only to educational and informational children's programming but to any
programming that is viewed by a substantial number of children. We
sought comment in the Notice on steps the Commission could take to
ensure that programs designed for children or families do not contain
promotions that are unsuitable for children to watch. We noted that the
broadcast, cable, and motion picture industries voluntarily rate video
programming that contains sexual, violent, or other indecent material
and broadcast signals containing these ratings so that these programs
can be screened by ``V-Chip'' technology available in television sets.
The ratings identify the age group for which a particular program is
suitable and indicate when the program contains violence, sexual
content, or suggestive or coarse language. We asked in the Notice
whether the ratings of programs promoted by broadcasters should be
consistent with the ratings of the program during which the promotions
run. We also asked whether we should require that promotions themselves
be rated and encoded so they can be screened by V-Chip technology, or
that promotions be rated and that programs with a significant child
audience contain only promotions consistent with the rating of the
program in which they appear.
39. In light of the consensus among commenters that voluntary
efforts rather than Commission action are preferable to ensure that
age-inappropriate promotions are not aired in children's programs, we
will not take action on this issue at this time. Instead, we urge
broadcasters to ensure that industry mechanisms are in place and are
used effectively to prevent the airing of promotions in children's
programs that are inappropriate for child viewing. We also urge the
public to continue to monitor promotions aired in children's
programming and to notify us of instances in which broadcasters air
age-inappropriate promotions. If we receive information suggesting that
age-inappropriate promotions have become a systemic problem, we will
revisit this issue.
40. We agree with those commenters that argue that DTV technical
standards should not foreclose the implementation of changes to or
improvements in the V-Chip system. We also believe that DTV technical
standards should not foreclose the option of using V-Chip technology to
support multiple rating systems. In our Report and Order in the Second
Periodic Review of the Commission's Rules and Policies Affecting the
Conversion to Digital Television, we adopted rules to ensure that V-
Chip functionality is available in the digital world. In that
proceeding, we stated our belief that the ability to modify the content
advisory rating system is beneficial and required that television
receivers be able to process new ratings should they be developed. We
also adopted standards that do not preclude manufacturers from
incorporating additional blocking standards or techniques into
receivers, thereby permitting manufacturers to develop V-Chip
technology that can be used in conjunction with additional ratings
systems.
41. We will not at this time adopt the other V-Chip proposals
advanced by commenters. Nonetheless, we encourage broadcasters to
consider various ways of improving V-Chip utility, including making
available in their programming a link to a Web site where parents and
other viewers can get additional information about program ratings and
the V-Chip, once such technology or functionality is available to
consumers. We also encourage the broadcast, cable, and motion picture
industries to consider whether any revisions to the ratings system
would make it more accurate and easier to understand.
42. In our next periodic review of the status of the digital
transition, we plan to address whether we should require digital
broadcasters to embed E/I information in the core program stream so
that this information can be sought by V-Chip or other technology.
Given the lack of information in the record of this proceeding about
how this information would be used and the potential benefits of this
technology in helping parents locate core programming, and the
potential costs such a requirement would impose, we do not address this
issue today.
Future Proceedings
43. We intend to revisit the issues addressed in this item in the
next three years and consider whether the determinations made herein
should be changed in light of technological developments. In
particular, we will consider whether broadcasters should be given more
flexibility to determine the program stream on which core programming
is placed.
44. In addition, we intend to issue a Public Notice in the near
future seeking comment on whether broadcasters are complying with the
letter and intent of the CTA in terms of, among other things, the
amount and quality of core children's programming being provided and
the extent of preemption of such programming. The Commission staff also
intends to conduct a review of broadcaster compliance with the CTA and
our rules and to issue a report on the results of this review and the
comments filed in response to the Public Notice. The Commission last
issued a report on compliance with the CTA in 2001. The Commission
plans to conduct similar reviews and issue similar reports on a regular
basis roughly every three years.
Effective Dates and Transition Period
45. Our revised policies and rules regarding application of the
commercial limits and policies to digital programming as well as those
regarding the display of Internet addresses in analog and digital
programming and in programming aired by cable operators, will become
effective February 1, 2005. We will begin to evaluate compliance with
these requirements in renewal applications filed after that date. Thus,
the first renewal applications to which these new requirements will be
applied are those required to be filed by April 1, 2005, by television
stations located in the states of Indiana, Kentucky, and Tennessee.
Licensee performance during any portion of the renewal term that
predates February 1, 2005, will be evaluated under the current rules
and policies and performance that post-dates the rules will be judged
under the new provisions.
46. Our rules regarding on-air identification of core programming
will become effective after approval by the Office of Management and
Budget (``OMB'') under the Paperwork Reduction Act of 1995 (``PRA'').
Upon OMB approval, we will issue a Public Notice announcing the
effective date of this rule. The effective date will be no earlier than
February 1, 2005. Similarly, we will issue a Public Notice announcing
when the revised FCC Form 398, also subject to OMB approval under the
PRA, will be available for use by licensees and when licensees must
commence using the revised form to report digital core programming.
[[Page 33]]
47. Our revised definition of commercial matter will become
effective January 1, 2006. This transition period will give programmers
time to produce sufficient children's programming and other material to
include within children's programming that would not be considered
commercial matter. Similarly, our revised safe harbor processing
guideline for digital broadcasters will become effective January 1,
2006. The limit on the number of preemptions for digital broadcasters
under our processing guideline to no more than 10 percent of core
programs in each calendar quarter and the limit for digital
broadcasters on the number of repeats of core programming to no more
than 50 percent of core programming during the same week will also
become effective January 1, 2006. These requirements relate to the
calculation of hours of core programming under our revised guideline
and therefore should become effective at the same time as the revised
guideline. In addition, to give analog broadcasters time to come into
compliance with our rule limiting the number of preemptions under the
current analog processing guideline to no more than 10 percent of core
programs in each calendar quarter, we will also delay the effective
date of that rule as applied to analog broadcasters until January 1,
2006. We believe that this transition period is appropriate to give
licensees time to develop programming or to renegotiate or allow
expiration of existing program contracts as necessary. Renewal
applications filed earlier than January 1, 2006, will be evaluated for
compliance with the CTA based on our current rules and the policies
expressed in the 1996 Children's Programming Report and Order and the
1991 Report and Order, as modified upon reconsideration. License
renewal applications filed after January 1, 2006, will be evaluated to
determine whether broadcasters are providing core programming using the
revised definition of commercial matter and processing guideline
adopted herein and are complying with the revised rules concerning
preemption and repeats of core programming. Thus, the first renewal
applications to which these new requirements will be applied are those
required to be filed by February 1, 2006, by stations located in the
states of Kansas, Nebraska, and Oklahoma. Licensee performance during
any portion of the renewal term that predates January 1, 2006, will be
evaluated under the current rules and policies and performance that
post-dates the new rules will be judged under the new provisions.
Conclusion
48. We adopt this Report and Order and Further Notice of Proposed
Rule Making to address the obligation of DTV broadcasters under the CTA
to air educational programming for children and to protect children
from excessive and inappropriate commercial messages. Our goals are to
ensure that parents and children benefit from broadcasters' use of
digital technology to provide multiple broadcast streams and to permit
broadcasters flexibility to explore the potential uses of the broadcast
spectrum made possible by digital technology, including the use of
direct Web site links in children's programming, consistent with the
mandate of the CTA. We believe that the rules and policies adopted
herein further the mandate of the CTA that broadcast television fulfill
its potential to teach the nation's children and that broadcasters
protect children from over commercialization.
VII. Administrative Matters
49. This Report and Order contains new or modified information
collection(s) subject to the Paperwork Reduction Act of 1995 (PRA),
Public Law 104-13. It will be submitted to the Office of Management and
Budget (OMB) for review under Section 3507(d) of the PRA. OMB, the
general public, and other Federal agencies are invited to comment on
the new or modified information collection(s) contained in this
proceeding. Written comments by the public on the proposed new and
modified information collection(s) are due 60 days from date of
publication of this Report and Order in the Federal Register. In
addition to filing comments with the Secretary, a copy of any comments
on the information collection(s) contained herein should be submitted
to Cathy Williams, Federal Communications Commission, Room 1-C823, 445
12th Street, SW., Washington, DC 20554, or via the Internet to Cathy
Williams@fcc.gov, and to Kristy L. LaLonde, OMB Desk Officer, Room
10234 NEOB, 725 17th Street, NW., Washington, DC 20503, or via the
Internet to KristyL. LaLonde@omb.eop.gov, or via fax at 202-395-5167.
50. As required by the Regulatory Flexibility Act,\1\ the
Commission has prepared a Final Regulatory Flexibility Analysis
(``FRFA'') relating to this Report and Order. The FRFA is set forth
below.
---------------------------------------------------------------------------
\1\ See 5 U.S.C. Sec. 604.
---------------------------------------------------------------------------
51. The Commission will send a copy of the Report and Order in a
report to be sent to Congress and the General Accounting Office
pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).
52. For additional information on this proceeding, please contact
Kim Matthews, Policy Division, Media Bureau at (202) 418-2154.
Final Regulatory Flexability Analysis
53. As required by the Regulatory Flexibility Act of 1980, as
amended (``RFA''), an Initial Regulatory Flexibility Analysis
(``IRFA'') was incorporated in the Notice of Proposed Rule Making
(``NPRM''). The Commission sought written public comment on the
proposals in the Notice, including comment on the IRFA. One comment was
received on the IRFA. This Final Regulatory Flexibility Analysis
(``FRFA'') conforms to the RFA.
I. Need for, and Objectives of, the Report and Order
The purpose of this proceeding is to determine how the existing
children's educational television programming obligations and
limitations on advertising in children's programs should be interpreted
and adapted to apply to digital television broadcasting in light of the
new capabilities made possible by that technology. First, we address
the obligation of digital television (``DTV'') broadcasters to provide
children's educational and informational programming and, specifically,
how that obligation applies to DTV broadcasters that use the multicast
capability of their ATSC digital service to broadcast multiple program
services. We adopt an approach pursuant to which digital broadcasters
that choose to provide streams or hours of free video programming in
addition to their required free over-the-air video program service will
have an increased core programming benchmark roughly proportional to
the additional amount of free video programming they choose to provide.
Second, for both analog and digital broadcasters, we limit the number
of preemptions allowed under our processing guideline to no more than
10 percent of core programs in each calendar quarter. Third, we amend
our rule regarding on-air identification of core programming to require
both analog and digital broadcasters to identify such programming with
the same symbol, E/I, which must be displayed throughout the program in
order for the program to qualify as core
[[Page 34]]
educational programming. Fourth, we clarify that the children's
television commercial limits and policies apply to all digital video
programming directed to children ages 12 and under. Fifth, we interpret
the commercial time limits to require that the display of Internet Web
site addresses during program material is permitted as within the time
limits only if the Web site meets certain requirements, including the
requirement that it offer a substantial amount of bona fide program-
related or other noncommercial content and is not primarily intended
for commercial purposes. Sixth, we revise our definition of
``commercial matter'' to include promotions of television programs or
video programming services other than children's educational and
informational programming. Finally, we seek comment on several
additional proposals concerning the children's programming commercial
limits and indicate our intention to issue a Public Notice in the near
future seeking comment on broadcaster compliance with the Children's
Television Act of 1990 (``CTA''). Our objectives in resolving these
issues are to provide television broadcasters with guidance regarding
their obligation to serve children as we transition from an analog to a
digital television environment and to improve our children's
programming rules and policies.
II. Summary of Significant Issues Raised by Public Comments in Response
to the IRFA
The U.S. Small Business Administration (``SBA'') filed the only
comment in this proceeding responding to the IRFA. According to the
SBA, the IRFA does not satisfy the requirements of the RFA, as it does
not describe many of the ``compliance requirements'' contained in the
NPRM and their impact on small firms. The SBA also argues that the IRFA
does not discuss significant alternatives that would accomplish the
objectives while minimizing the significant economic impact on small
entities. SBA states that it does not question the Commission's goals
in this proceeding, but instead asks that the Commission seek ways to
minimize the burdens on small business while still accomplishing its
goals.
The NPRM described a number of possible ways of applying the
current core programming processing guideline to digital broadcasters.
These proposals were suggested by commenters responding to the NOI in
this docket. It was not possible for the Commission to develop detailed
estimates of the cost of adopting each of these proposals because the
details of how any of the proposals would be implemented were not
known. The NPRM sought comment on these various proposals in large part
to determine, in the view of broadcasters and others, which would be
the preferable means of adapting our current rules. Commenters
responding to the NPRM address, among other issues, the cost of the
various proposals and the advantages, from cost and other perspectives,
of the approach they advocate. In determining what approach to adopt,
the Commission carefully considered all of the comments, particularly
those offering less burdensome means of accomplishing our stated
objectives. The approach adopted in the Report and Order attempts to
balance the need to adapt our current rules to the digital environment
and to improve our children's programming rules and policies with the
need to minimize costs where possible and provide broadcasters with
flexibility to continue to explore different ways of employing digital
technology.
III. Description and Estimate of the Number of Small Entities to Which
the Rules Will Apply
The RFA directs agencies to provide a description of and, where
feasible, an estimate of the number of small entities that will be
affected by the rules. The RFA generally defines the term ``small
entity'' as having the same meaning as the terms ``small business,''
``small organization,'' and ``small governmental jurisdiction'' under
section 3 of the Small Business Act. 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.
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.
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.
There are also 380 non-commercial TV stations in the BIA database.
Since these stations do not receive advertising revenue, there are no
revenue estimates for these stations. We believe that virtually all of
these stations would be considered ``small businesses'' given that they
are generally owned by non-commercial entities including local schools
and governments and, for the most part, rely on public donations and
funding.
Cable Operators. 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. 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 in this Report and Order.
The Communications Act, as amended, also contains a size standard
for a small cable system operator, which
[[Page 35]]
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.
IV. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements
The Order adopts a revised core children's programming processing
guideline for digital television broadcasters. Our revised guideline
will work as follows. Digital broadcasters providing only one stream of
free digital video programming will continue to be subject to the
existing 3 hours per week core programming processing guideline. DTV
broadcasters that choose to provide additional streams or channels of
free video programming will, in addition, have the following guideline
applied to the additional programming: \1/2\ hour per week of
additional core programming for every increment of 1 to 28 hours of
free video programming provided in addition to the main program stream.
Thus, digital broadcasters providing between 1 and 28 hours per week of
free video programming in addition to their main program stream will
have a guideline of \1/2\ hour per week of core programming in addition
to the 3 hours per week on the main program stream. Digital
broadcasters providing between 29 and 56 hours per week of free video
programming in addition to their main program stream will have a
guideline of 1 hour per week of core programming in addition to the 3
hours per week on the main program stream. Digital broadcasters
providing between 57 and 84 hours per week of free video programming in
addition to their main program stream will have a guideline of 1\1/2\
hours per week of core programming in addition to the 3 hours per week
on the main program stream. The guideline will continue to increase in
this manner for additional hours of free video programming. In
addition, for digital broadcasters, we will require that at least 50
percent of core programming not be repeated during the same week to
qualify as core.
The revised guideline discussed above applies to digital
broadcasters and the digital programming they provide. Up until the
time that analog channels are returned to the Commission, we will
continue to apply our current 3 hours per week core children's
programming processing guideline to analog channels. Broadcasters will
continue to file, on a quarterly basis, their Children's Television
Programming Report, on FCC Form 398. We will revise current FCC Form
398 to permit broadcasters to report both analog and digital core
programming on that form. Once the new form has been approved for use,
we will issue a public notice informing broadcasters of the
availability of the form and the date on which the revised form must
begin to be used in place of the current form. On that date, reports
will also be required to include information about digital core
programming. As we have done in the analog context, we will continue to
exempt noncommercial television licensees from children's programming
reporting requirements with respect to their digital programming.
As a general matter, for digital broadcasters we will not consider
a core program moved to the same time slot on another of the station's
digital program streams to be preempted as long as the alternate
program stream receives MVPD carriage comparable to the stream from
which the program is being moved and the station provides adequate on-
screen information about the move, including when and where the program
will air, on both the original and the alternate program stream. Thus,
as long as viewers are adequately notified of the move and the program
is moved to a program stream that is accessible to a comparable number
of viewers, broadcasters may use their multicasting capability to avoid
preempting core programming. For both analog and digital broadcasters,
however, we will limit the number of preemptions under our processing
guideline to no more than 10 percent of core programs in each calendar
quarter. Each preemption beyond the 10 percent limit will cause that
program not to count as core under the processing guideline, even if
the program is rescheduled. We will exempt from this preemption limit
preemptions for breaking news.
In addition, the item amends our rules regarding on-air
identification of core programming to require both analog and digital
broadcasters to identify such programming with the same symbol: E/I. We
will also require that this symbol be displayed throughout the program
in order for the program to qualify as core. We will apply this revised
on-air identification requirement to both commercial and noncommercial
broadcasters.
The item applies the commercial limits and policies to all digital
video programming directed to children ages 12 and under, whether that
programming is aired on a free or pay digital stream. In addition, we
interpret the CTA commercial time limits to require that, for both
analog and digital broadcasters, with respect to programs directed to
children ages 12 and under, the display of Internet Web site addresses
during program material is permitted as within the CTA limitations only
if the Web site: (1) Offers a substantial amount of bona fide program-
related or other noncommercial content; (2) is not primarily intended
for commercial purposes, including either e-commerce or advertising;
(3) the Web site's home page and other menu pages are clearly labeled
to distinguish the noncommercial from the commercial sections; and (4)
the page of the Web site to which viewers are directed by the Web site
address is not used for e-commerce, advertising, or other commercial
purposes (e.g., contains no links labeled ``store'' and no links to
another page with commercial material). Finally, the item also revises
our definition of ``commercial matter'' to include promotions of
television programs or video programming services other than children's
educational and informational programming.
V. Steps Taken To Minimize Significant Economic Impact on Small
Entities and Significant Alternatives Considered
Several steps were taken to minimize significant impact on small
entities. For the many broadcasters simulcasting the core programming
offered on their analog channel on a single digital program stream and
offering no other digital free video programming, compliance with the
new processing guideline should be automatic, as the digital stream
will simulcast the core programming aired on the analog stream and the
current 3 hours/week guideline will apply to both streams. For
broadcasters choosing to provide additional streams of digital free
video
[[Page 36]]
programming, the revised guideline establishes a series of graduated
benchmarks which increase the core programming obligation in relation
to the number of hours of additional free video programming offered by
the licensee. Thus, only those stations choosing to provide additional
free video programming are subject to the revised processing guideline.
We rejected the ``pay or play'' and ``menu'' alternatives to the
revised guideline largely because these approaches were more
administratively burdensome to stations. Under the current and revised
guideline, stations have and will continue to have the option of
sponsoring core programming on other stations in the market.
In addition, for digital broadcasters we require under the new
processing guideline that at least 50 percent of core programming not
be repeated during the same week to qualify as core. However, we exempt
from this requirement any program stream that merely time shifts the
entire programming line-up of another program stream. Also, during the
transition, we will not count as repeated programming core programs
that are aired on both the analog station and a digital program stream.
For both analog and digital broadcasters, however, the item limits
the number of preemptions under our processing guideline to no more
than 10 percent of core programs in each calendar quarter. We exempt
from this preemption limit preemptions for breaking news, however. We
believe that most stations currently do not preempt more than 10
percent of core programs in each calendar quarter. We also note that
our processing guideline is averaged over a six-month period, which
will provide broadcasters with some scheduling flexibility. In
addition, a station that fails to meet the processing guideline because
of excessive preemptions may still receive staff-level approval of its
renewal application if it demonstrates that it has aired a package of
educational and informational programming, including specials, PSAs,
short-form programs, and regularly scheduled non-weekly programs with a
significant purpose of educating and informing children, that
demonstrates a commitment to educating and informing children at least
equivalent to airing the amount of core programming indicated by the
processing guideline. Licensees that do not qualify for staff level
approval will have their license renewal applications referred to the
Commission where they will have an additional opportunity to
demonstrate compliance with the CTA.
Although we have previously exempted noncommercial licensees from
the requirement that they identify core programming, we believe that
requiring all broadcasters to use the E/I symbol throughout the program
to identify core programming will help reinforce viewer awareness of
the meaning of this symbol. We will, however, continue to exempt
noncommercial television licensees from the other public information
initiatives adopted in the 1996 Children's Programming Report and
Order. Thus, noncommercial television stations will not be required to
prepare and file quarterly Children's Television Programming Reports or
to provide information identifying programming specifically designed to
educate and inform children to publishers of program guides. As is our
current practice, we will require noncommercial broadcast stations to
maintain documentation sufficient to show compliance with the CTA's
programming obligations at renewal time in response to a challenge or
to specific complaints. We also decline to require licensees to use
high definition, interactivity, or other features to enhance core
programming.
Although the Order limits the display in children's programming of
Internet Web site addresses to sites established solely for commercial
purposes, it does not prohibit the display of all Web site addresses.
In addition, the item does not prohibit direct Internet links in
children's programs as several commenters advocated. This approach was
adopted in an attempt to balance the interest of digital broadcasters
in exploring the potential uses of interactivity with our mandate to
protect children from over commercialization. The Order also declines
to do more than urge voluntary action on the part of broadcasters to
ensure that age-inappropriate promotions are not aired in children's
programs.
VI. Report to Congress
The Commission will send a copy of the Report and Order, including
this FRFA, in a report to be sent to Congress pursuant to the
Congressional Review Act, see 5 U.S.C. 801(a)(1)(A). In addition, the
Commission will send a copy of the Report and Order, including this
FRFA, to the Chief Counsel for Advocacy of the Small Business
Administration. A copy of the Report and Order and FRFA (or summaries
thereof) will also be published in the Federal Register. See 5 U.S.C.
604(b).
List of Subjects
47 CFR Part 73
Television.
47 CFR Part 76
Cable television.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
Rule Changes
0
For the reasons discussed in the preamble 47 CFR Parts 73 and 76 of the
Code of Federal Regulations are amended 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, and 336.
0
2. Section 73.670 is revised to read as follows:
Sec. 73.670 Commercial limits in children's programs.
(a) No commercial television broadcast station licensee shall air
more than 10.5 minutes of commercial matter per hour during children's
programming on weekends, or more than 12 minutes of commercial matter
per hour on weekdays.
(b) The display of Internet Web site addresses during program
material is permitted only if the Web site:
(1) Offers a substantial amount of bona fide program-related or
other noncommercial content;
(2) Is not primarily intended for commercial purposes, including
either e-commerce or advertising;
(3) The Web site's home page and other menu pages are clearly
labeled to distinguish the noncommercial from the commercial sections;
and
(4) The page of the Web site to which viewers are directed by the
Web site address is not used for e-commerce, advertising, or other
commercial purposes (e.g., contains no links labeled ``store'' and no
links to another page with commercial material).
(c) The display of Web site addresses in children's programs is
prohibited during both program material and commercial material when
the site uses characters from the program to sell products or services.
Note 1: Commercial matter means air time sold for purposes of
selling a product or service and promotions of television programs
or video programming services other than children's educational and
informational programming.
[[Page 37]]
Note 2: For purposes of this section, children's programming
refers to programs originally produced and broadcast primarily for
an audience of children 12 years old and younger.
* * * * *
0
3. Section 73.671 is amended by revising paragraphs (c)(5) and (c)(6),
adding paragraphs (c)(7), (d), (e), and (f), and removing Note 2 to
read as follows:
Sec. 73.671 Educational and informational programming for children.
* * * * *
(c) * * *
(5) The program is identified as specifically designed to educate
and inform children by the display on the television screen throughout
the program of the symbol E/I;
(6) The educational and informational objective and the target
child audience are specified in writing in the licensee's Children's
Television Programming Report, as described in Sec.
73.3526(e)(11)(iii); and
(7) Instructions for listing the program as educational/
informational, including an indication of the age group for which the
program is intended, are provided by the licensee to publishers of
program guides, as described in Sec. 73.673.
(d) Until analog channels are returned to the Commission, the
Commission will apply the following processing guideline to analog
stations in assessing whether a television broadcast licensee has
complied with the Children's Television Act of 1990 (``CTA'') on its
analog channel. A licensee that has aired at least three hours per week
of Core Programming (as defined in paragraph (c) of this section and as
averaged over a six month period) will be deemed to have satisfied its
obligation to air such programming and shall have the CTA portion of
its license renewal application approved by the Commission staff. A
licensee will also be deemed to have satisfied this obligation and be
eligible for such staff approval if the licensee demonstrates that it
has aired a package of different types of educational and informational
programming that, while containing somewhat less than three hours per
week of Core Programming, demonstrates a level of commitment to
educating and informing children that is at least equivalent to airing
three hours per week of Core Programming. In this regard, specials,
PSAs, short-form programs, and regularly scheduled non-weekly programs
with a significant purpose of educating and informing children can
count toward the three hour per week processing guideline. Licensees
that do not meet these processing guidelines will be referred to the
Commission, where they will have full opportunity to demonstrate
compliance with the CTA (e.g., by relying in part on sponsorship of
Core educational/informational programs on other stations in the market
that increases the amount of Core educational and informational
programming on the station airing the sponsored program and/or on
special nonbroadcast efforts which enhance the value of children's
educational and informational television programming).
(e) The Commission will apply the following processing guideline to
digital stations in assessing whether a television broadcast licensee
has complied with the Children's Television Act of 1990 (``CTA'') on
its digital channel(s).
(1) A digital television licensee providing only one stream of free
digital video programming will be subject to the 3 hour/week Core
Programming processing guideline discussed in paragraph (d) of this
section on that channel; i.e., a licensee that has aired at least three
hours per week of Core Programming (as defined in paragraph (c) of this
section and as averaged over a six month period) on its main program
stream will be deemed to have satisfied its obligation to air such
programming and shall have the CTA portion of its license renewal
application approved by the Commission staff. A licensee will also be
deemed to have satisfied this obligation and be eligible for such staff
approval if the licensee demonstrates that it has aired a package of
different types of educational and informational programming that,
while containing somewhat less than three hours per week of Core
Programming, demonstrates a level of commitment to educating and
informing children that is at least equivalent to airing three hours
per week of Core Programming. In this regard, specials, PSAs, short-
form programs, and regularly scheduled non-weekly programs with a
significant purpose of educating and informing children can count
toward the three hour per week processing guideline. Licensees that do
not meet these processing guidelines will be referred to the
Commission, where they will have full opportunity to demonstrate
compliance with the CTA (e.g., by relying in part on sponsorship of
Core educational/informational programs on other stations in the market
that increases the amount of Core educational and informational
programming on the station airing the sponsored program and/or on
special nonbroadcast efforts which enhance the value of children's
educational and informational television programming).
(2)(i) A digital television licensee providing streams of free
digital video programming in addition to its main program stream will
be subject to the processing guideline described in paragraph (e)(1) of
this section on its main program stream and to the following guideline
applied to the additional programming: \1/2\ hour per week of
additional Core Programming (as defined in paragraph (c) of this
section and as averaged over a six month period) for every increment of
1 to 28 hours of free video programming provided in addition to the
main program stream. Thus, digital broadcasters providing between 1 and
28 hours per week of free video programming in addition to their main
program stream will have a guideline of \1/2\ hour per week of core
programming in addition to the 3 hours per week on the main program
stream. Digital broadcasters providing between 29 and 56 hours per week
of free video programming in addition to their main program stream will
have a guideline of 1 hour per week of core programming in addition to
the 3 hours per week on the main program stream. Digital broadcasters
providing between 57 and 84 hours per week of free video programming in
addition to their main program stream will have a guideline of 1\1/2\
hours per week of core programming in addition to the 3 hours per week
on the main program stream. The guideline will continue to increase in
this manner for additional hours of free video programming.
(ii) Broadcasters providing more than one stream of free digital
video programming may air all of their additional core programming,
apart from the 3 hours of core programming that must be aired on the
main program stream, on one free video channel, or distribute it across
multiple free video channels, at their discretion, as long as the
stream on which the core programming is aired has comparable MVPD
carriage as the stream whose programming generates the core programming
obligation under the processing guideline described in paragraph
(e)(2)(i) of this section.
(3) For purposes of the guideline described in paragraphs (e)(1)
and (e)(2) of this section at least 50 percent of core programming
cannot be repeated during the same week to qualify as core. This
requirement does not apply to any program stream that merely time
shifts the entire programming line-up of another program stream and,
during the digital transition, to core programs aired on both the
analog station and a digital program stream.
[[Page 38]]
(f) No more than 10 percent of Core Programs may be preempted in
each calendar quarter to qualify as Core Programming.
* * * * *
Sec. 73.673 [Amended]
0
4. Section 73.673 is amended by removing and reserving paragraph (b).
0
5. Section 73.3526 is amended by revising paragraph (e)(11)(iii) to
read as follows:
Sec. 73.3526 Local public inspection file of commercial stations.
(e) * * *
(11) * * *
(iii) Children's television programming reports. For commercial TV
broadcast stations, both analog and digital, on a quarterly basis, a
completed Children's Television Programming Report (``Report''), on FCC
Form 398, reflecting efforts made by the licensee during the preceding
quarter, and efforts planned for the next quarter, to serve the
educational and informational needs of children. The Report for each
quarter is to be placed in the public inspection file by the tenth day
of the succeeding calendar quarter. By this date, a copy of the Report
for each quarter is also to be filed electronically with the FCC. The
Report shall identify the licensee's educational and informational
programming efforts, including programs aired by the station that are
specifically designed to serve the educational and informational needs
of children, and it shall explain how programs identified as Core
Programming meet the definition set forth in Sec. 73.671(c). The
Report shall include the name of the individual at the station
responsible for collecting comments on the station's compliance with
the Children's Television Act, and it shall be separated from other
materials in the public inspection file. The Report shall also identify
the program guide publishers to which information regarding the
licensee's educational and informational programming was provided as
required in Sec. 73.673, as well as the station's license renewal
date. These Reports shall be retained in the public inspection file
until final action has been taken on the station's next license renewal
application. Licensees shall publicize in an appropriate manner the
existence and location of these Reports.
* * * * *
PART 76--MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE
0
6. The authority citation for part 76 continues to read as follows:
Authority: 47 U.S.C. 151, 152, 153, 154, 301, 302, 303, 303a,
307, 308, 309, 312, 317, 325, 338, 339, 503, 521, 522, 531, 532,
533, 534, 535, 536, 537, 543, 544, 544a, 545, 548, 549, 552, 554,
556, 558, 560, 561, 571, 572, and 573.
0
7. Section 76.225 is amended by revising paragraph (b) and Note 1 and
by adding paragraphs (c) and (d) to read as follows:
Sec. 76.225 Commercial limits in children's programs.
* * * * *
(b) The display of Internet Web site addresses during program
material is permitted only if the Web site:
(1) Offers a substantial amount of bona fide program-related or
other noncommercial content;
(2) Is not primarily intended for commercial purposes, including
either e-commerce or advertising;
(3) The Web site's home page and other menu pages are clearly
labeled to distinguish the noncommercial from the commercial sections;
and
(4) The page of the Web site to which viewers are directed by the
Web site address is not used for e-commerce, advertising, or other
commercial purposes (e.g., contains no links labeled ``store'' and no
links to another page with commercial material).
(c) The display of Web site addresses in children's programs is
prohibited during both program material and commercial material when
the site uses characters from the program to sell products or services.
(d) This rule shall not apply to programs aired on a broadcast
television channel which the cable operator passively carries, or to
access channels over which the cable operator may not exercise
editorial control, pursuant to 47 U.S.C. 531(e) and 532(c)(2).
Note 1 to Sec. 76.225: Commercial matter means air time sold
for purposes of selling a product or service and promotions of
television programs or video programming services other than
children's educational and informational programming.
* * * * *
[FR Doc. 04-28173 Filed 12-30-04; 8:45 am]
BILLING CODE 6712-01-P