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/ Tuesday, January 13, 2009
[Federal Register: January 13, 2009 (Volume 74, Number 8)]
[Rules and Regulations]
[Page 1594-1605]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13ja09-6]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 79
[CG Docket No. 05-231 and ET Docket No. 99-254; FCC 08-255]
Closed Captioning of Video Programming; Closed Captioning
Requirements for Digital Television Receivers
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: In this document, the Commission clarifies several points
regarding video programming distributors' obligations to close caption
digital programming in light of technological changes inherent in the
digital television transition for full-power broadcasting. The
Commission also amends the closed captioning rules to provide for more
efficient complaint processes and methods for consumers to contact
distributors with concerns about closed captioning.
DATES: Effective: February 12, 2009, except 47 CFR 79.1(g)(1) through
(5) and 47 CFR 79.1(i) which contain information collection
requirements subject to the Paperwork Reduction Act (PRA) of 1995,
Public Law 104-13, that have not been approved by the Office of
Management and Budget (OMB). The Commission will publish a separate
document in the Federal Register announcing the effective date for the
new and revised information collection requirements. Interested parties
(including the general public, OMB, and other Federal agencies) that
wish to submit written comments on the PRA information collection
requirements must do so on or before March 16, 2009.
ADDRESSES: Interested parties may submit PRA comments identified by OMB
Control Number 3060-0761, by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Federal Communications Commission's Web site: http://
www.fcc.gov/cgb/ecfs/. Follow the instructions for submitting comments.
E-mail: Parties who choose to file by e-mail should submit
their comments to PRA@fcc.gov. Please include CG Docket Number 05-231,
ET Docket Number 99-254, and OMB Control Number 3060-0761 in the
subject line of the message.
Mail: Parties who choose to file by paper should submit
their comments to Cathy Williams, Federal Communications Commission,
Room 1-C823, 445 12th Street, SW., Washington, DC 20554.
FOR FURTHER INFORMATION CONTACT: Amelia Brown, Consumer and
Governmental Affairs Bureau, Disability Rights Office at (202) 418-2799
(voice), (202) 418-7804 (TTY), or e-mail at Amelia.Brown@fcc.gov. For
additional information concerning the PRA information collection
requirements contained in this document, contact Cathy Williams at
(202) 418-2918, or via the Internet at PRA@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Closed
Captioning of Video Programming; Closed Captioning Requirements for
Digital Television Receivers, Declaratory Ruling and Order (2008
Digital Closed Captioning Declaratory Ruling and Order), document FCC
08-255, adopted November 3, 2008, and released November 7, 2008, in CG
Docket No. 05-231 and ET Docket No. 99-254. Document FCC 08-255
addresses issues arising from the Commission's Report and Order, Closed
Captioning and Video Description of Video Programming, Implementation
of Section 305 of the Telecommunications Act of 1996, Video Programming
Accessibility (Closed Captioning Report and Order), MM Docket No. 95-
176, FCC 97-279, published at 62 FR 48487, September 16, 1997; the
Commission's Order on Reconsideration, Closed Captioning and Video
Description of Video Programming, Implementation of Section 305 of the
Telecommunications Act of 1996, Video Programming Accessibility (Closed
Captioning Reconsideration Order), MM Docket No. 95-176, FCC 98-236,
published at 63 FR 55959, October, 20, 1998; the Commission's Report
and Order, Closed Caption Decoder Requirements for Digital Television
Receivers, Closed Captioning and Video Description of Video
Programming, Implementation of Section 305 of the Telecommunications
Act of 1996, Video Programming Accessibility (DTV Closed Captioning
Order), ET Docket No. 99-254, FCC 00-259, published at 65 FR 58467,
September 29, 2000; and the Commission's Notice of Proposed Rulemaking,
Closed Captioning of Video Programming, Telecommunications for the
Deaf, Inc., Petition for Rulemaking, (2005 Closed Captioning NPRM), CG
Docket No. 05-231, FCC 05-142, published at 70 FR 56150, November 25,
2005. The full text of document FCC 08-255 and copies of any
subsequently filed documents in this matter will be available for
public inspection and copying during regular business hours at the FCC
Reference Information Center, Portals II, 445 12th Street, SW., Room
CY-A257, Washington, DC 20554. Document FCC 08-255 and copies of
subsequently filed documents in this matter also may be purchased from
the Commission's duplicating contractor at Portals II, 445 12th Street,
SW., Room CY-B402, Washington, DC 20554. Customers may contact the
Commission's duplicating contractor at its Web site www.bcpiweb.com or
by calling 1-800-378-3160. To request materials in accessible formats
for people with disabilities (Braille, large print, electronic files,
audio format), send an e-mail to fcc504@fcc.gov or call the Consumer
and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-
0432 (TTY). Document FCC 08-255 can also be downloaded in Word or
Portable Document Format (PDF) at: http://www.fcc.gov/cgb/dro/
caption.html.
[[Page 1595]]
Paperwork Reduction Act of 1995 Analysis
Document FCC 08-255 contains new and modified information
collection requirements subject to the PRA of 1995. It will be
submitted to OMB for review under section 3507 of the PRA. OMB, the
general public, and other Federal agencies are invited to comment on
the modified information collection requirements contained in this
proceeding. Public and agency comments are due March 16, 2009. In
addition, the Commission notes pursuant to the Small Business Paperwork
Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), that
the Commission previously sought specific comment on how it may
``further reduce the information collection burden for small business
concerns with fewer than 25 employees.'' In this document, the
Commission assessed the effects of requiring that video programming
distributors provide contact information on their Web sites (if they
have a Web site) and in bills and phone directories so that consumers
can more easily complain about closed captioning concerns. The
Commission also assessed the effects of providing this information to
the FCC for posting on the FCC's Web site. The Commission has also
considered the impact of requiring that distributors forward complaints
to the appropriate entity for response, where applicable, and notifying
the FCC and the complainant that the complaint has been forwarded. The
Commission finds that none of these requirements will pose a
substantial burden for businesses with fewer than 25 employees.
Synopsis
1. Closed captioning is an assistive technology that provides
persons with hearing disabilities access to television programs. Closed
captioning displays the audio portion of a television signal as printed
words on the television screen. The Television Decoder Circuitry Act of
1990 (TDCA) requires closed captioning capability for all television
receivers with screen sizes of 13 inches or larger, manufactured or
sold in the United States. As part of the Telecommunications Act of
1996, Congress added a section entitled ``Video Programming
Accessibility,'' to the Communications Act. Section 713 requires closed
captioning of video programming to ensure access for persons with
hearing disabilities. In 1997, the Commission adopted rules and
implementation schedules for closed captioning that became effective on
January 1, 1998. The implementation schedules for captioning differ,
based on whether the programming is analog or digital, Spanish or
English, and whether it is pre-rule (i.e., older) or new programming.
The dates that determine whether digital programming is pre-rule or new
differ from the dates used to determine whether analog programming is
pre-rule or new because, when the Commission established the closed
captioning rules in 1997, final standards for digital television (DTV)
receivers did not yet exist, making it difficult to format captions for
such receivers. In July 2000, the Commission adopted technical
standards for the display of closed captions on DTV receivers. At the
same time, the Commission established July 1, 2002, as the date that
determines whether digital programming constitutes new or pre-rule
programming, and adopted the same benchmark transition periods for new
and pre-rule digital programming that exists for analog programming.
2. In the Declaratory Ruling, the Commission clarifies programming
distributors' obligations to close caption digital programming. First,
although a particular digital channel may be exempt for other reasons
pursuant to Sec. 79.1(d) of the Commission's rules, no digital
channel, including an HD channel, is automatically exempt from the
captioning rules simply because it is being transmitted in digital.
Where a digital channel is exempt from the closed captioning rules, the
distributor is still obligated to pass through any captioning it
receives, but is not obligated to create new digital captions where
only analog captions are provided.
3. Second, where an existing broadcaster ceases operations on its
current analog channel after the completion of the digital transition
for full power television, and commences or continues to air
programming on its main digital channel, that broadcaster is required
to close caption its main digital channel pursuant to the relevant
captioning benchmarks, as if there had been no change. With regard to
broadcasters that are currently simulcasting their programming on their
analog channel and main digital channel, they must caption the digital
channel as well as the analog channel.
4. Third, the ``new network'' exemption under Sec. 79.1(d)(9) of
the Commission's rules does not apply to a channel that merely
transitions from analog to digital.
5. Fourth, in order for program distributors to count captioned
digital programming toward their closed captioning requirements, they
must transmit captions that can be decoded by the decoders in analog
television sets even after the digital transition on February, 17,
2009.
6. Finally, the Commission reminds MVPDs that provide customer
premises equipment (CPE), such as set-top boxes, to their subscribers,
that they are responsible for ensuring that this equipment transmits
all available captions to the television set, for both analog and
digital formatted programs. Failure of the equipment to pass through
captions would cause the distributor to be in violation of the pass-
through requirement.
7. In the Order, the Commission amends the closed captioning rules
to provide for more efficient complaint processes and methods for
consumers to contact distributors with concerns about closed
captioning. The Order addresses certain issues raised in the July 21,
2005, Notice of Proposed Rulemaking (2005 Closed Captioning NPRM),
which initiated a proceeding to examine the Commission's closed
captioning rules.
8. The Order revises the closed captioning rules to permit the
filing of closed captioning complaints with either the video
programming distributor or the Commission. The Commission will still
require closed captioning complaints to be in writing, and filed by e-
mail, fax, or letter. Consumers may file their complaint using the FCC
Form 2000-C, which will be amended to delete the requirement that
closed captioning complaints must first be filed with the distributor,
and to add questions eliciting information about the name and type of
MVPD, if any, to whom a complainant subscribes.
9. The Order amends the time frames associated with filing closed
captioning complaints. Regardless of whether the consumer files a
complaint with the Commission or a video programming distributor, the
consumer must file the complaint within sixty (60) days of the
captioning problem. If the complaint is first filed with the
Commission, the Commission shall promptly forward complaints that
satisfy the complaint criteria to the appropriate video programming
distributor. For a complaint forwarded by the Commission, video
programming distributors must respond to the complainant in writing
within thirty (30) days of receipt of the complaint from the
Commission. For a complaint first filed with the video programming
distributor, the video programming distributor must respond in writing
to the complainant within thirty (30) days after receipt of a closed
captioning complaint. If a video programming distributor fails to
respond to the
[[Page 1596]]
complainant within thirty (30) days, or the response does not satisfy
the consumer, the complainant may file the complaint with the
Commission within thirty (30) days after the time allotted for the
video programming distributor to respond. If a consumer re-files his or
her complaint with the Commission (after filing with the distributor),
the Commission will forward the complaint to the distributor, and the
distributor shall respond to the Commission and the complainant within
thirty (30) days of receipt of the complaint from the Commission.
10. A video programming distributor receiving a complaint regarding
programming of a broadcast television licensee, or programming over
which the video programming distributor does not exercise editorial
control, must forward the complaint within seven (7) days to the
appropriate party and inform the complainant that it has forwarded the
complaint. The video programming distributor also must notify the
Commission that it forwarded the complaint. Similar to the time period
established for responding to complaints sent to the correct video
programming distributor, the entity receiving the forwarded complaint
shall respond to the complainant within 30 days of the forwarding date
of the complaint.
11. In order to assist consumers in filing closed captioning
complaints, and to expedite further the handling of complaints, the
Commission encourages consumers to include the following information in
their filing: (1) The complainant's contact information, including
name, mailing address, daytime phone number, and e-mail address if
available; (2) the name of the broadcast station and, if applicable,
the name and type of MVPD against whom the complaint is directed; (3)
the name of the television program; (4) the date and time the closed
captioning problem occurred; and (5) a description of the closed
captioning problem. Where it appears from the video programming
distributor's response to a complaint, or from other communications
with the parties, that an informal complaint has been satisfied, the
Commission may, in its discretion, consider the matter resolved, and
will so notify the complainant. In all other cases, the Commission
shall inform the parties of its review and disposition of the informal
complaint. Complaints may also be referred to the Enforcement Bureau.
12. The Order also adopts new rules requiring video programming
distributors to make their contact information available to consumers.
Specifically, the Commission requires video programming distributors to
make available two different kinds of contact information--contact
information for the receipt and handling of immediate closed captioning
concerns by consumers, and contact information for written closed
captioning complaints.
13. First, the Commission requires video programming distributors
to make available contact information for the receipt and handling of
immediate closed captioning concerns raised by consumers (e.g., the
captions suddenly disappear or become garbled). To this end,
programming distributors must designate a telephone number, fax number,
and e-mail address for purposes of receiving and responding immediately
to any closed captioning concerns. To the extent that a distributor has
personnel available, either onsite or remotely, to address any
technical problems that may arise, consumers using this dedicated
contact information must be able to reach someone, either directly or
indirectly, who can address the consumer's captioning concerns. The
Commission is not requiring distributors to alter their hours of
operation or the hours during which they have staffing available; at
the same time, however, where staff is available to address technical
issues that may arise during the course of transmitting programming,
they also must be knowledgeable about and able to address closed
captioning concerns. In situations where a distributor is not
immediately available, any calls or inquiries received, using this
dedicated contact information, should be returned or otherwise
addressed within 24 hours.
14. Second, the Commission requires video programming distributors
to make contact information available for the receipt and handling of
written closed captioning complaints filed pursuant to Sec. 79.1(g) of
the Commission's rules that do not raise the type of immediate issues
that are addressed above. This contact information shall include the
name of a person with primary responsibility for captioning issues and
who can ensure compliance with the Commission's rules, as well as the
person's title or office, telephone number, fax number, postal mailing
address, and e-mail address. Distributors shall include the required
contact information on their Web sites (assuming the distributor has a
Web site), in telephone directories, and in billing statements (to the
extent billing statements are issued). Distributors shall keep their
contact information current, and when there are changes they must
update this information as promptly as possible, and in any event
within 10 business days for Web sites, by the next billing cycle for
billing statements, and by the next publication of directories.
15. To assist consumers in locating contact information, the
Commission shall provide a list of video programming distributors'
contact information (i.e., the name of the appropriate person and/or
office to contact, telephone numbers, e-mail addresses) on its Web
site. To establish this listing, video programming distributors and
broadcast services must file the required contact information, for both
immediate concerns and written captioning complaints, with the Chief of
the Disability Rights Office, Consumer and Governmental Affairs Bureau,
or by sending the information to CLOSEDCAPTIONING_POC@fcc.gov, within
30 days of the publication in the Federal Register of a notice
announcing approval by the Office of Management and Budget. After
compiling and posting the list on the FCC's Web site, Commission staff
shall prepare a Public Notice advising consumers and other interested
parties how to obtain access to the contact information. This
information shall also be available by telephone inquiry to the
Commission's Consumer Center. Distributors shall promptly notify the
Commission each time there is a change in any of this required
information, and in any event within 10 business days.
Final Regulatory Flexibility Certification
16. 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 (2005 Closed
Captioning NPRM) in this proceeding. 2005 Closed Captioning NPRM, 20
FCC Rcd at 13234, published at 70 FR 56150, November 25, 2005. The
Commission sought written public comment on the proposals in the 2005
Closed Captioning NPRM, including comment on the IRFA. The Commission
received one comment on the IRFA, and it is discussed below. This
present Final Regulatory Flexibility Analysis (FRFA) conforms to the
RFA. See 5 U.S.C. 604.
Need for, and Objectives of, the Order
17. The purpose of this proceeding was to consider the current
status of the Commission's closed captioning rules. The rulemaking that
was initiated in 2005 followed up on the Commission's prior assurances,
made at the time the closed captioning rules were adopted in 1997, that
certain captioning provisions would be reviewed and evaluated at a
future date. The 2005 rulemaking sought to determine whether any
revisions
[[Page 1597]]
should be made to enhance the effectiveness of the closed captioning
rules.
18. The closed captioning rules that were adopted in 1997 require
that all video programming distributors, including over-the-air
broadcast television services and all multichannel video programming
distributors (``MVPDs'') (including cable television, direct-to-home
satellite services, wireless cable systems, satellite master antenna
television, and open video systems) increase gradually the amount of
captioned programming offered and, generally require that 100 percent
of new English language programming be closed captioned as of January
1, 2006, subject to certain exceptions. ``Video programming
distributor'' is defined in 47 CFR 79.1(a)(2) as any television
broadcast station licensed by the Commission and any multichannel video
programming distributor as defined in Sec. 76.1000(e) of the
Commission's rules, and any other distributor of video programming for
residential reception that delivers such programming directly to the
home and is subject to the jurisdiction of the Commission. New analog
programming is defined as analog programs first published or exhibited
on or after January 1, 1998. 47 CFR 79.1(a)(5) of the Commission's
rules. New digital programming is defined as digital programming first
aired after June 30, 2002. Closed Caption Decoder Requirements for
Digital Television Receivers and Converter Boxes, Closed Captioning and
Video Description of Video Programming , Implementation of Section 305
of the Telecommunications Act of 1996, Video Programming Accessibility,
ET Docket No. 99-254, MM Docket No. 95-176, Report and Order, 15 FCC
Rcd 16788, 16790-91, paragraph 5 (July 31, 2000) (DTV Closed Captioning
Order), published at 65 FR 58467, September 29, 2000. Additionally,
these rules established a transition period for captioning of pre-rule
programming, and required that 75 percent of all pre-rule nonexempt
English language programming delivered to consumers during the first
quarter of 2008 and thereafter must be captioned. 47 CFR 79.1(b)(2)(ii)
of the Commission's rules. Pre-rule analog programming is defined as
programs first published or exhibited before January 1, 1998. 47 CFR
79.1(a)(6) of the Commission's rules. Pre-rule digital programming is
defined as digital programming first aired before July 1, 2002. DTV
Closed Captioning Order, 15 FCC Rcd at 16790-91, paragraph 5. The rules
also require that, pursuant to an established phase-in schedule, as of
January 1, 2010, 100 percent of nonexempt new Spanish language
programming be closed captioned, and, as of January 1, 2012, and
thereafter, 75 percent of nonexempt Spanish language pre-rule
programming be closed captioned. 47 CFR 79.1(b)(3)(iv) and 47 CFR
79.1(b)(4)(ii) of the Commission's rules. The existing rules contain
several exemptions, pursuant to which entities or programming that meet
the prescribed criteria are exempt from the rules without having to
seek Commission approval. 47 CFR 79.1(d) of the Commission's rules. In
addition, the existing rules provide a process whereby video
programming providers may petition the Commission for an exemption from
the rules where it would be an undue burden to require captioning. 47
CFR 79.1(f) of the Commission's rules.
19. The 2005 Closed Captioning NPRM sought comment on several
aspects of the rules. It also sought comment on a Petition for
Rulemaking that was filed by Telecommunications for the Deaf, Inc. and
several other consumer advocacy groups. It sought comment on, inter
alia, the possibility that the existing rule would allow for shorter
complaint filing and response times, what those time frames should be,
and on the possibility that complainants should be permitted to
complain directly to the Commission without complaining to the video
programming distributor first. Further, the 2005 Closed Captioning NPRM
sought comment on the possibility that video programming distributors
would be required to provide contact information to viewers and to give
this information to the Commission for posting on the Commission's Web
site, in order to assist consumers in having their closed captioning
concerns addressed more quickly.
20. The Order responds to the proposals made in the 2005 Closed
Captioning NPRM and the Comments submitted thereto. Specifically, the
Order amends the existing closed captioning rules to shorten the
complaint processing times and allows complaints to be filed directly
with the FCC. The Order also adopts a new requirement that video
programming distributors make information available on their Web sites
(if they have a Web site) in bills and in directories to make it easier
for closed captioning consumers to contact them with closed captioning
concerns and complaints. The Order also adds a requirement to the rules
to ensure that any staff reachable through the above-noted contact
information has the capability to immediately respond to and address
consumers' concerns.
Summary of Significant Issues Raised by Public Comments in Response to
the IRFA
21. Media Captioning Services (MCS) filed the only comment in this
proceeding responding to the IRFA. See Comments of Media Captioning
Services (MCS) to Marlene H. Dortch, Secretary, FCC, November 9, 2005.
As stated, MCS' comments were the only comments we received regarding
the regulatory flexibility analysis. Several other commenters raised
concerns regarding the impact of the proposals on small entities, but
not in the regulatory flexibility context. Some of these commenters
would be considered small businesses. In general, these commenters
stated that the proposals set forth in the 2005 Closed Captioning NPRM
could result in increased costs and decreased local programming. For
example, Hubbard Broadcasting commented that real-time captioning
services are ``disproportionately burdensome'' to smaller broadcasters,
and that the suggestions proposed in the 2005 Closed Captioning NPRM
would ``vastly increase the costs of local news production.'' Reply
Comments of Hubbard Broadcasting, Inc. at 4-5. MCS commented on many
issues raised in the 2005 Closed Captioning NPRM, as well.
Specifically, with regard to the issues raised in the 2005 Closed
Captioning NPRM, MCS commented that, in order to encourage high quality
captioning, the FCC should promote tax incentives for video programmers
who use very small captioning concerns to meet captioning requirements;
should utilize the antitrust laws (presumably to penalize entities that
engage in anticompetitive behavior resulting in higher captioning
prices); should use the Telecommunications Relay Service fund to
compensate very small captioning companies; and should establish a fund
from the sale of analog spectrum to compensate very small captioning
companies that provide captioning services to video programmers in the
DMAs between 26 and 100. MCS also suggested that the Commission require
a functional equivalence guideline for real-time captioning and for
pre-produced programming. MCS offered specific suggestions for these
standards, and MCS also suggested that complaints regarding closed
captioning should be directed to the video programming distributor and
the FCC, simultaneously.
22. In its comments pertaining to the regulatory flexibility
analysis, MCS
[[Page 1598]]
noted that the IRFA does not include any discussion of the impact that
proposed regulations would have on closed captioning companies. MCS
noted that SBA considers companies providing real-time captioning
services with annual gross receipts of $6 million or less to be small
entities, and considers companies earning $25 million or less from pre-
production business to be small entities. MCS asserted that virtually
all companies in the closed captioning industry would be classified as
small businesses. In its comments, MCS referred to Standard Industry
Classification (SIC) codes. However, SIC codes were replaced on August
26, 2008, by North American Industry Classification System (NAICS)
codes; accordingly, the FCC must use the NAICS codes. MCS stated that
the definitions are deficient since an ``element of the definition of
`small business' is that the entity would not be dominant in its field
of operations.'' However, according to MCS, three dominant companies in
the industry would be classified as small entities based on the annual
gross receipts standards noted above.
23. The Commission appreciates the comments filed by MCS in this
regard. The Commission notes that video programming distributors (VPDs)
are the entities directly responsible for compliance with closed
captioning rules, and may only air programming that is not captioned if
the programming is not subject to a captioning benchmark or is exempt
from the rules pursuant to Sec. Sec. 79.1(d) or 79.1(f) of the
Commission's rules. Even with regard to programming that is not
produced by a video programming distributor, the VPD is responsible for
ensuring that the program owner has certified that it or its
programming is exempt from the closed captioning rules. Although closed
captioning companies play a vital role in the closed captioning regime,
they are not the entities that are directly affected by the
Commission's requirements that video programming be captioned, because
they are not the entities ultimately responsible for compliance with
the closed captioning rules. The 2005 IRFA included all multi-channel
video programming distributors and broadcasters--these are the entities
that are ultimately responsible for closed captioning. In addition to
captioners, program owners and producers that are not the video
programming distributors were also omitted from the 2005 IRFA, for the
same reason--they are merely indirectly affected by the rules and are
not ultimately responsible for compliance with the rules. However, in
order to better inform the public about our actions and to create a
more complete record in this FRFA, the Commission is including
captioners as entities affected by the modifications adopted in the
Order (see paragraphs 28-30, infra).
Description and Estimate of the Number of Small Entities Impacted
24. The RFA directs the Commission to provide a description of and,
where feasible, an estimate of the number of small entities that will
be affected by the rules. 5 U.S.C. 604(a)(3). The RFA generally defines
the term ``small entity'' as having the same meaning as the terms
``small business,'' ``small organization,'' and ``small business
concern'' under section 3 of the Small Business Act. 5 U.S.C 601(6).
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. 5 U.S.C. 632.
25. Nationwide, there are a total of approximately 22.4 million
small businesses, according to SBA data. See SBA, Programs and
Services, SBA Pamphlet No. CO-0028, at page 40 (July 2002). A ``small
organization'' is generally ``any not-for-profit enterprise which is
independently owned and operated and is not dominant in its field.'' 5
U.S.C. 601(4). Nationwide, as of 2002, there were approximately 1.6
million small organizations. Independent Sector, The New Nonprofit
Almanac & Desk Reference (2002). The term ``small governmental
jurisdiction'' is defined generally as ``governments of cities, towns,
townships, villages, school districts, or special districts, with a
population of less than fifty thousand.'' 5 U.S.C. 601(5). Census
Bureau data for 2002 indicate that there were 87,525 local governmental
jurisdictions in the United States. U.S. Census Bureau, Statistical
Abstract of the United States: 2006, Sec. 8, page 272, Table 415. The
Commission estimates that, of this total, 84,377 entities were ``small
governmental jurisdictions.'' The Commission assumes that the villages,
school districts, and special districts are small, and total 48,558.
See U.S. Census Bureau, Statistical Abstract of the United States:
2006, Sec. 8, page 273, Table 417. For 2002, Census Bureau data
indicate that the total number of county, municipal, and township
governments nationwide was 38,967, of which 35,819 were small. Thus,
the Commission estimates that most governmental jurisdictions are
small.
26. Wired Telecommunications Carriers. The Census Bureau defines
this category as follows: ``This industry comprises establishments
primarily engaged as third-party distribution systems for broadcast
programming. The establishments of this industry deliver visual, aural,
or textual programming received from cable networks, local television
stations, or radio networks to consumers via cable or direct-to-home
satellite systems on a subscription or fee basis. These establishments
do not generally originate programming material.'' U.S. Census Bureau,
2002 NAICS Definitions, ``517110 Wired Telecommunications Carriers'';
http://www.census.gov/epcd/naics02/def/NDEF517.HTM. The SBA has
developed a small business size standard for wireline firms within the
broad economic census category, ``Wired Telecommunications Carriers.''
13 CFR 121.201, NAICS code 517110. Under this category, the SBA deems a
wireline business to be small if it has 1,500 or fewer employees.
Census Bureau data for 2002 show that there were 2,432 firms in this
category that operated for the entire year. U.S. Census Bureau, 2002
Economic Census, Subject Series: Information, ``Establishment and Firm
Size: 2002 (Including Legal Form of Organization),'' Table 5, NAICS
code 517110 (issued Nov. 2005). Of this total, 2,395 firms had
employment of 999 or fewer employees, and 37 firms had employment of
1,000 employees or more. The census data do not provide a more precise
estimate of the number of firms that have employment of 1,500 or fewer
employees; the largest category provided is for firms with ``1000
employees or more.'' Thus, under this category and associated small
business size standard, the majority of firms can be considered small.
27. Cable Television Distribution Services. Since 2007, these
services have been defined within the broad economic census category of
Wired Telecommunications Carriers; that category is defined as follows:
``This industry comprises establishments primarily engaged in operating
and/or providing access to transmission facilities and infrastructure
that they own and/or lease for the transmission of voice, data, text,
sound, and video using wired telecommunications networks. Transmission
facilities may be based on a single technology or a combination of
technologies.'' U.S. Census Bureau, 2007 NAICS Definitions, ``517110
Wired Telecommunications Carriers'' (partial definition); http://
www.census.gov/naics/2007/def/ND517110.HTM#N517110. The SBA has
developed a small business size standard for this category, which is:
All
[[Page 1599]]
such firms having 1,500 or fewer employees. The NAICS Code associated
with this size standard is 517110. To gauge small business prevalence
for these cable services, we must, however, use current census data
that are based on the previous category of Cable and Other Program
Distribution and its associated size standard; that size standard was:
All such firms having $13.5 million or less in annual receipts. 13 CFR
121.201, NAICS code 517110. According to Census Bureau data for 2002,
there were a total of 1,191 firms in this previous category that
operated for the entire year. Of this total, 1,087 firms had annual
receipts of under $10 million, and 43 firms had receipts of $10 million
or more but less than $25 million. U.S. Census Bureau, 2002 Economic
Census, Subject Series: Information, Table 4, Receipts Size of Firms
for the United States: 2002, NAICS code 517510 (issued November 2005).
Thus, the majority of these firms can be considered small.
28. Cable Companies and Systems. The Commission has also developed
its own small business size standards, for the purpose of cable rate
regulation. Under the Commission's rules, a ``small cable company'' is
one serving 400,000 or fewer subscribers, nationwide. 47 CFR 76.901(e)
of the Commission's rules. The Commission determined that this size
standard equates approximately to a size standard of $100 million or
less in annual revenues. Implementation of Sections of the 1992 Cable
Act: Rate Regulation, Sixth Report and Order and Eleventh Order on
Reconsideration, 10 FCC Rcd 7393, 7408 (1995), published at 60 FR
35854, July 12, 1995. Industry data indicate that, of 1,076 cable
operators nationwide, all but eleven are small under this size
standard. These data are derived from: R.R. Bowker, Broadcasting &
Cable Yearbook 2006, ``Top 25 Cable/Satellite Operators,'' pages A-8 &
C-2 (data current as of June 30, 2005); Warren Communications News,
Television & Cable Factbook 2006, ``Ownership of Cable Systems in the
United States,'' pages D-1805 to D-1857. In addition, under the
Commission's rules, a ``small system'' is a cable system serving 15,000
or fewer subscribers. 47 CFR 76.901(c) of the Commission's rules.
Industry data indicate that, of 7,208 systems nationwide, 6,139 systems
have fewer than 10,000 subscribers, and an additional 379 systems have
10,000-19,999 subscribers. Warren Communications News, Television &
Cable Factbook 2006, ``U.S. Cable Systems by Subscriber Size,'' page F-
2 (data current as of October 2005). The data do not include 718
systems for which classifying data were not available. Thus, under this
second size standard, most cable systems are small. Wired
Telecommunications Carriers with fewer than 1500 employees are
considered to be small. See 13 CFR 121.201, NAICS code 517110.
29. Cable System Operators. The Communications Act of 1934, as
amended, also contains a size standard for small cable system
operators, which is ``a cable operator that, directly or through an
affiliate, serves in the aggregate fewer than 1 percent of all
subscribers in the United States and is not affiliated with any entity
or entities whose gross annual revenues in the aggregate exceed
$250,000,000.'' 47 U.S.C. 43(m)(2); see 47 CFR 76.901(f) of the
Commission's rules and nn. 1-3. The Commission has determined that an
operator serving fewer than 677,000 subscribers shall be deemed a small
operator, if its annual revenues, when combined with the total annual
revenues of all its affiliates, do not exceed $250 million in the
aggregate. 47 CFR 76.901(f); Industry data indicate that, of 1,076
cable operators nationwide, all but ten are small under this size
standard. These data are derived from: R.R. Bowker, Broadcasting &
Cable Yearbook 2006, ``Top 25 Cable/Satellite Operators,'' pages A-8 &
C-2 (data current as of June 30, 2005); Warren Communications News,
Television & Cable Factbook 2006, ``Ownership of Cable Systems in the
United States,'' pages D-1805 to D-1857. We note that the Commission
neither requests nor collects information on whether cable system
operators are affiliated with entities whose gross annual revenues
exceed $250 million, and therefore the Commission is unable to estimate
more accurately the number of cable system operators that would qualify
as small under this size standard. The Commission does receive such
information on a case-by-case basis if a cable operator appeals a local
franchise authority's finding that the operator does not qualify as a
small cable operator pursuant to Sec. 76.901(f) of the Commission's
rules.
30. Cable Television Relay Service. This service includes
transmitters generally used to relay cable programming within cable
television system distribution systems. As noted, Wired
Telecommunications Carriers with fewer than 1500 employees are
considered to be small, under the currently applicable SBA
classification. NAICS Code 517110. The data presented were acquired
when the applicable SBA small business size standard was called Cable
and Other Program Distribution, and which referred to all such firms
having $13.5 million or less in annual receipts. 13 CFR 121.201, NAICS
code 517110. According to Census Bureau data for 2002, there were a
total of 1,191 firms in this category that operated for the entire
year. U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, Table 4, Receipts Size of Firms for the United States:
2002, NAICS code 517510 (issued November 2005). Of this total, 1,087
firms had annual receipts of under $10 million, and 43 firms had
receipts of $10 million or more but less than $25 million. U.S. Census
Bureau, 2002 Economic Census, Subject Series: Information, Table 4,
Receipts Size of Firms for the United States: 2002, NAICS code 517510
(issued November 2005). Thus, under this size standard, the majority of
firms can be considered small.
31. Direct Broadcast Satellite (``DBS'') Service. DBS service is a
nationally distributed subscription service that delivers video and
audio programming via satellite to a small parabolic ``dish'' antenna
at the subscriber's location. DBS falls under the SBA definition of
``Wireless Telecommunications Carriers (except satellite)'', which
establishes as a small DBS company any DBS company which has less then
1500 employees. 13 CFR 121.201, NAICS Code 517210. The data presented
were acquired when the applicable SBA small business size standard was
called Cable and Other Program Distribution, and which referred to all
such firms having $13.5 million or less in annual receipts. 13 CFR
121.201, NAICS code 517110. According to Census Bureau data for 2002,
there were a total of 1,191 firms in this category that operated for
the entire year. U.S. Census Bureau, 2002 Economic Census, Subject
Series: Information, Table 4, Receipts Size of Firms for the United
States: 2002, NAICS code 517510 (issued November 2005). Of this total,
1,087 firms had annual receipts of under $10 million, and 43 firms had
receipts of $10 million or more but less than $25 million. Currently,
only four operators hold licenses to provide DBS service, which
requires a great investment of capital for operation. All four
currently offer subscription services. Two of these four DBS operators,
DirecTV and EchoStar Communications Corporation (``EchoStar''), report
annual revenues that are in excess of the threshold for a small
business. DirecTV is the largest DBS operator and the second largest
MVPD, serving an estimated 13.04 million subscribers nationwide. See
Annual Assessment of Status of
[[Page 1600]]
Competition in the Market for the Delivery of Video Programming,
Eleventh Annual Report, FCC 05-13, paragraph 55 (released February 4,
2005) (``2005 Cable Competition Report''), published at 60 FR 35854,
July 12, 1995. EchoStar, which provides service under the brand name
Dish Network, is the second largest DBS operator and the fourth largest
MVPD, serving an estimated 10.12 million subscribers nationwide. See
2005 Cable Competition Report, paragraph 55. A third operator, Rainbow
DBS, is a subsidiary of Cablevision's Rainbow Network, which also
reports annual revenues in excess of $13.5 million, and thus does not
qualify as a small business. Rainbow DBS, which provides service under
the brand name VOOM, reported an estimated 25,000 subscribers. See 2005
Cable Competition Report, paragraph 55. The fourth DBS operator,
Dominion Video Satellite, Inc. (``Dominion''), offers religious
(Christian) programming and does not report its annual receipts.
Dominion, which provides service under the brand name Sky Angel, does
not publicly disclose its subscribership numbers on an annualized
basis. The Commission does not know of any source which provides this
information and, thus, the Commission has no way of confirming whether
Dominion qualifies as a small business. Because DBS service requires
significant capital, the Commission believes it is unlikely that a
small entity as defined by the SBA would have the financial wherewithal
to become a DBS licensee. Nevertheless, given the absence of specific
data on this point, the Commission acknowledges the possibility that
there are entrants in this field that may not yet have generated $13.5
million in annual receipts, and therefore may be categorized as a small
business, if independently owned and operated.
32. Television Broadcasting. This Economic Census category
``comprises establishments primarily engaged in broadcasting images
together with sound. These establishments operate television
broadcasting studios and facilities for the programming and
transmission of programs to the public.'' U.S. Census Bureau, 2007
NAICS Definitions, ``515120 Television Broadcasting'' (partial
definition); http://www.census.gov/naics/2007/def/ND515120.HTM#N515120.
The SBA has created the following small business size standard for
Television Broadcasting firms: Those having $14 million or less in
annual receipts. 13 CFR 121.201, NAICS code 515120 (updated for
inflation in 2008). The Commission has estimated the number of licensed
commercial television stations to be 1,379. See FCC News Release,
``Broadcast Station Totals as of December 31, 2007,'' dated March 18,
2008; http://www.fcc.gov/Daily_Releases/Daily_Business/2008/db0318/
DOC-280836A1.pdf. In addition, according to Commission staff review of
the BIA Publications, Inc., Master Access Television Analyzer Database
(BIA) on March 30, 2007, about 986 of an estimated 1,374 commercial
television stations (or approximately 72 percent) had revenues of $13
million or less. The Commission recognizes that BIA's estimate differs
slightly from the FCC total given supra. The Commission therefore
estimates that the majority of commercial television broadcasters are
small entities.
33. The Commission notes, however, that in assessing whether a
business concern qualifies as small under the above definition,
business (control) affiliations must be included. ``[Business concerns]
are affiliates of each other when one concern controls or has the power
to control the other or a third party or parties controls or has to
power to control both.'' 13 CFR 21.103(a)(1). The Commission's
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. The Commission is unable at this time to define or quantify
the criteria that would establish whether a specific television station
is dominant in its field of operation. Accordingly, the estimate of
small businesses to which rules may apply does not exclude any
television station from the definition of a small business on this
basis and is therefore possibly over-inclusive to that extent.
34. In addition, the Commission has estimated the number of
licensed noncommercial educational (NCE) television stations to be 380.
See FCC News Release, ``Broadcast Station Totals as of December 31,
2007,'' dated March 18, 2008; http://www.fcc.gov/Daily_Releases/
Daily_Business/2008/db0318/DOC-280836A1.pdf. These stations are non-
profit, and therefore considered to be small entities. See generally 5
U.S.C. 601(4), (6). In addition, there are also 2,295 low power
television stations (LPTV). See FCC News Release, ``Broadcast Station
Totals as of December 31, 2007,'' dated March 18, 2008; http://
www.fcc.gov/Daily_Releases/Daily_Business/2008/db0318/DOC-
280836A1.pdf.
Given the nature of this service, the Commission will presume that
all LPTV licensees qualify as small entities under the above SBA small
business size standard.
35. Local Multipoint Distribution Service. Local Multipoint
Distribution Service (LMDS) is a fixed broadband point-to-multipoint
microwave service that provides for two-way video telecommunications.
See Rulemaking to Amend Parts 1, 2, 21, 25, of the Commission's Rules
to Redesignate the 27.5-29.5 GHz Frequency Band, Reallocate the 29.5-
30.5 Frequency Band, to Establish Rules and Policies for Local
Multipoint Distribution Service and for Fixed Satellite Services,
Second Report and Order, Order on Reconsideration, and Fifth Notice of
Proposed Rule Making, 12 FCC Rcd 12545, 12689-90, paragraph 348 (1997),
published at 62 FR 16514, April 7, 1997. The auction of the 986 Local
Multipoint Distribution Service (LMDS) licenses began on February 18,
1998 and closed on March 25, 1998. The Commission established a small
business size standard for LMDS licenses as an entity that has average
gross revenues of less than $40 million in the three previous calendar
years. See Rulemaking to Amend Parts 1, 2, 21, 25, of the Commission's
Rules to Redesignate the 27.5-29.5 GHz Frequency Band, Reallocate the
29.5-30.5 Frequency Band, to Establish Rules and Policies for Local
Multipoint Distribution Service and for Fixed Satellite Services,
Second Report and Order, Order on Reconsideration, and Fifth Notice of
Proposed Rule Making, 12 FCC Rcd 12545, 12689-90, paragraph 348 (1997).
An additional small business size standard for ``very small business''
was added as an entity that, together with its affiliates, has average
gross revenues of not more than $15 million for the preceding three
calendar years. See Rulemaking to Amend Parts 1, 2, 21, 25, of the
Commission's Rules to Redesignate the 27.5-29.5 GHz Frequency Band,
Reallocate the 29.5-30.5 Frequency Band, to Establish Rules and
Policies for Local Multipoint Distribution Service and for Fixed
Satellite Services, Second Report and Order, Order on Reconsideration,
and Fifth Notice of Proposed Rule Making, 12 FCC Rcd 12545, 12689-90,
paragraph 348 (1997). The SBA has approved these small business size
standards in the context of LMDS auctions. See Letter to Dan Phythyon,
Chief, Wireless Telecommunications Bureau, FCC, from Aida Alvarez,
Administrator, SBA (Jan. 6, 1998). There were 93 winning bidders
[[Page 1601]]
that qualified as small entities in the LMDS auctions. A total of 93
small and very small business bidders won approximately 277 A Block
licenses and 387 B Block licenses. On March 27, 1999, the Commission
re-auctioned 161 licenses; there were 32 small and very small
businesses winning that won 119 licenses. Because some LMDS services
may not have been auctioned, the SBA standard which applies to such
services is Wireless Telecommunications Carriers (except satellite),
pursuant to which a service is small if it has fewer than 1500
employees. The NAICS Code for this SBA classification is 517110.
36. Wireless Telecommunications Carriers (except satellite). NAICS
code 517210. Standard for small business is 1500 employees or fewer.
Wireless Telecommunications Carriers, except satellite, is a NAICS
standard which has a size standard of fewer than 1500 employees. NAICS
Code 517210. Wireless cable systems use 2 GHz band frequencies of the
Broadband Radio Service (``BRS''), formerly Multipoint Distribution
Service (``MDS''), and the Educational Broadband Service (``EBS''),
formerly Instructional Television Fixed Service (``ITFS''), to transmit
video programming and provide broadband services to residential
subscribers. These services were originally designed for the delivery
of multichannel video programming, similar to that of traditional cable
systems, but over the past several years licensees have focused their
operations instead on providing two-way high-speed Internet access
services. The Commission estimates that the number of wireless cable
subscribers is approximately 100,000, as of March 2005. As noted,
within the category of Wireless Telecommunications Carriers, except
satellite, such firms with fewer than 1500 employees are considered to
be small. 13 CFR 121.201, NAICS Code 517210. The data presented were
acquired when the applicable SBA small business size standard was
called Cable and Other Program Distribution, and which referred to all
such firms having $13.5 million or less in annual receipts. 13 CFR
121.201, NAICS Code 517110. According to Census Bureau data for 2002,
there were a total of 1,191 firms in this category that operated for
the entire year. U.S. Census Bureau, 2002 Economic Census, Subject
Series: Information, Table 4, Receipts Size of Firms for the United
States: 2002, NAICS code 517510 (issued November 2005). Of this total,
1,087 firms had annual receipts of under $10 million, and 43 firms had
receipts of $10 million or more but less than $25 million. U.S. Census
Bureau, 2002 Economic Census, Subject Series: Information, Table 4,
Receipts Size of Firms for the United States: 2002, NAICS code 517510
(issued November 2005). The SBA small business size standard for the
broad census category of Wireless Telecommunications Carriers, which
consists of such entities with fewer than 1,500 employees, appears
applicable to MDS and ITFS. Other standards also apply, as described.
37. The Commission has defined small MDS (now BRS) entities in the
context of Commission license auctions. In the 1996 MDS auction, the
Commission defined a small business as an entity that had annual
average gross revenues of less than $40 million in the previous three
calendar years. This definition of a small entity in the context of MDS
auctions has been approved by the SBA. In the MDS auction, 67 bidders
won 493 licenses. Of the 67 auction winners, 61 claimed status as a
small business. At this time, the Commission estimates that of the 61
small business MDS auction winners, 48 remain small business licensees.
In addition to the 48 small businesses that hold BTA authorizations,
there are approximately 392 incumbent MDS licensees that have gross
revenues that are not more than $40 million and are thus considered
small entities. MDS licensees and wireless cable operators that did not
receive their licenses as a result of the MDS auction fall under the
SBA small business size standard for Wireless Telecommunications
Carriers (except satellite). 13 CFR 121.201, NAICS Code 517210. As
noted, within the category of Wireless Telecommunications Carriers,
such firms with fewer than 1500 employees are considered to be small.
13 CFR 121.201, NAICS Code 517210. The data presented were acquired
when the applicable SBA small business size standard was called Cable
and Other Program Distribution, and which referred to all such firms
having $13.5 million or less in annual receipts. 13 CFR 121.201, NAICS
Code 517110. According to Census Bureau data for 2002, there were a
total of 1,191 firms in this category that operated for the entire
year. U.S. Census Bureau, 2002 Economic Census, Subject Series:
Information, Table 4, Receipts Size of Firms for the United States:
2002, NAICS code 517510 (issued November 2005). Of this total, 1,087
firms had annual receipts of under $10 million, and 43 firms had
receipts of $10 million or more but less than $25 million. U.S. Census
Bureau, 2002 Economic Census, Subject Series: Information, Table 4,
Receipts Size of Firms for the United States: 2002, NAICS code 517510
(issued November 2005). Information available indicates that there are
approximately 850 of these licensees and operators that do not generate
revenue in excess of $13.5 million annually. Therefore, the Commission
estimates that there are approximately 850 small entity MDS (or BRS)
providers, as defined by the SBA and the Commission's auction rules.
38. Educational institutions are included in this analysis as small
entities; however, the Commission has not created a specific small
business size standard for ITFS (now EBS). The Commission estimates
that there are currently 2,032 ITFS (or EBS) licensees, and all but 100
of the licenses are held by educational institutions. Thus, the
Commission estimates that at least 1,932 ITFS licensees are small
entities.
39. Open Video Services. Open Video Service (OVS) systems provide
subscription services. See 47 U.S.C. section 573. The data presented
were acquired when the applicable SBA small business size standard was
called Cable and Other Program Distribution, and which referred to all
such firms having $13.5 million or less in annual receipts. 13 CFR
121.201, NAICS Code 517110. According to Census Bureau data for 2002,
there were a total of 1,191 firms in this category that operated for
the entire year. U.S. Census Bureau, 2002 Economic Census, Subject
Series: Information, Table 4, Receipts Size of Firms for the United
States: 2002, NAICS code 517510 (issued November 2005). Of this total,
1,087 firms had annual receipts of under $10 million, and 43 firms had
receipts of $10 million or more but less than $25 million. U.S. Census
Bureau, 2002 Economic Census, Subject Series: Information, Table 4,
Receipts Size of Firms for the United States: 2002, NAICS code 517510
(issued November 2005). This standard has been replaced by the Wireless
Telecommunications Carriers (except satellite) standard, which
considers firms with fewer than 1,500 employees to be small. NAICS Code
517210. The Commission has certified approximately 100 OVS operators to
serve 75 areas, and some of these are currently providing service. See
http://www.fcc.gov/csb/ovs/csovscer.html (current as of June 2004).
This data was collected when ``Cable and Other Program Distribution''
was the operative distribution technology. Affiliates of Residential
Communications Network, Inc. (RCN) received approval to operate OVS
systems in New York City, Boston, Washington, DC, and other areas. RCN
has sufficient revenues to assure that
[[Page 1602]]
they do not qualify as a small business entity. Little financial
information is available for the other entities that are authorized to
provide OVS and are not yet operational. Given that some entities
authorized to provide OVS service have not yet begun to generate
revenues, the Commission concludes that those OVS operators remaining
might qualify as small businesses that may be affected by the rules and
policies adopted herein.
40. In addition, an element of the definition of ``small business''
is that the entity not be dominant in its field of operation. The
Commission is unable at this time to define or quantify the criteria
that would establish whether a specific television station is dominant
in its field of operation. Accordingly, the estimate of small
businesses to which rules may apply does not exclude any television
station from the definition of a small business on this basis and is
therefore 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. The Commission notes 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.
41. Telephone Companies. Neither the Commission nor the SBA has
developed a small business size standard specifically for incumbent
local exchange services. The appropriate size standard under SBA rules
is for the category Wired Telecommunications Carriers. Under that size
standard, such a business is small if it has 1,500 or fewer employees.
13 CFR 121.201, NAICS code 517110. According to Commission data, 1,307
carriers have reported that they are engaged in the provision of
incumbent local exchange services. FCC, Wireline Competition Bureau,
Industry Analysis and Technology Division, ``Trends in Telephone
Service'' at Table 5.3, Page 5-5 (Feb. 2007). This source uses data
that are current as of October 20, 2005.
Of these 1,307 carriers, an estimated 1,019 have 1,500 or fewer
employees and 288 have more than 1,500 employees. Consequently, the
Commission estimates that most providers of incumbent local exchange
service are small businesses that may be affected by our action. The
Commission estimates that ten LECs currently provide video programming,
and several smaller telephone companies provide the service.
42. Incumbent Local Exchange Carriers (LECs). Neither the
Commission nor the SBA has developed a small business size standard
specifically for incumbent local exchange services. The appropriate
size standard under NCAIS rules is for the category Wired
Telecommunications Carriers. Under that size standard, such a business
is small if it has 1,500 or fewer employees. 13 CFR 121.201, NAICS code
517110. According to Commission data, 1,307 carriers have reported that
they are engaged in the provision of incumbent local exchange services.
FCC, Wireline Competition Bureau, Industry Analysis and Technology
Division, ``Trends in Telephone Service'' at Table 5.3, Page 5-5 (Feb.
2007). This source uses data that are current as of October 20, 2005.
Of these 1,307 carriers, an estimated 1,019 have 1,500 or fewer
employees and 288 have more than 1,500 employees. Consequently, the
Commission estimates that most providers of incumbent local exchange
service are small businesses that may be affected by our action. The
Commission estimates that ten LECs currently provide video programming,
and several smaller telephone companies provide the service.
43. Closed Captioning Services. These entities are indirectly
affected by our action. The SBA has developed two small business size
standards that may be used for closed captioning services. The two size
standards track the economic census categories, ``Teleproduction and
Other Postproduction Services'' and ``Court Reporting and Stenotype
Services.''
44. The first category of Teleproduction and Other Postproduction
Services ``comprises establishments primarily engaged in providing
specialized motion picture or video postproduction services, such as
editing, film/tape transfers, subtitling, credits, closed captioning,
and animation and special effects.'' The relevant size standard for
small businesses in these services is an annual revenue of less than
$29.5 million. U.S. Census Bureau, 2002 NAICS Definitions, ``512191
Teleproduction and Other Postproduction Services''; http://
www.census.gov/epcd/naics02/def/NDEF512.HTM. The size standard is $29.5
million. For this category, Census Bureau data for 2002 show that there
were 1,316 firms that operated for the entire year. U.S. Census Bureau,
2002 Economic Census, Subject Series: Information, ``Establishment and
Firm Size (Including Legal Form of Organization),'' Table 4, NAICS code
512191 (issued Nov. 2005). Of this total, 1,301 firms had annual
receipts of under $25 million, and 10 firms had receipts of $25 million
to $49,999,999. An additional 5 firms had annual receipts of $50
million or more. Consequently, we estimate that the majority of
Teleproduction and Other Postproduction Services firms are small
entities that might be affected by our action.
45. The second category of Court Reporting and Stenotype Services
``comprises establishments primarily engaged in providing verbatim
reporting and stenotype recording of live legal proceedings and
transcribing subsequent recorded materials.'' The size standard for
small businesses in these services is an annual revenue of less than $7
million. U.S. Census Bureau, 2002 NAICS Definitions, ``561492 Court
Reporting and Stenotype Services''; http://www.census.gov/epcd/naics02/
def/NDEF561.HTM. The size standard is $7 million. For this category,
Census Bureau data for 2002 show that there were 2,487 firms that
operated for the entire year. U.S. Census Bureau, 2002 Economic Census,
Subject Series: Administrative and Support and Waste Management and
Remediation Services, ``Establishment and Firm Size (Including Legal
Form of Organization),'' Table 4, NAICS code 561492 (issued Nov. 2005).
Of this total, 2,461 firms had annual receipts of under $5 million, and
16 firms had receipts of $5 million to $9,999,999. An additional 10
firms had annual receipts of $10 million or more. Consequently, we
estimate that the majority of Court Reporting and Stenotype Services
firms are small entities that might be affected by our action.
Description of Projected Reporting, Recordkeeping and Other Compliance
Requirements
46. The Order revises the Commission's rules to allow complaints
concerning an alleged violation of the closed captioning requirements
to be filed with the Commission or with the video programming
distributor responsible for delivery and exhibition of the video
programming within sixty (60) days of the problem with captioning. The
Order requires that complaints that are filed first with the Commission
will be forwarded to the appropriate video programming distributor, and
the video programming distributor must respond in writing to the
Commission and the complainant within 30 days of the receipt of the
complaint from the Commission. The Order also requires that, when a
complaint is sent to a video programming distributor regarding
programming by a television broadcast station or other programming for
which the video programming distributor is exempt from closed
captioning
[[Page 1603]]
responsibility pursuant to Sec. 79.1(e)(9) of the Commission's rules,
the video programming distributor shall forward such complaint within
seven (7) days of receipt to the entity responsible for closed
captioning of the programming at issue. The Order requires that the
video programming distributor must also notify the complainant and the
Commission that it has forwarded the complaint. The Order requires that
entities receiving forwarded complaints must respond in writing to the
complainant within 30 days of the forwarding date of the complaint. The
Order requires that, if the complaint is filed first with the video
programming distributor, and the video programming distributor fails to
respond to it within 30 days or a dispute remains following the initial
complaint resolution procedures, a complaint may be filed with the
Commission within 30 days after the time allotted for the video
programming distributor to respond has ended. The Order requires that
video programming distributors shall respond to the Commission and the
complainant within 30 days of receipt of a complaint from the
Commission.
47. The Order also adopts provisions requiring that video
programming distributors make available contact information for the
receipt and handling of immediate closed captioning concerns raised by
consumers while they are watching a program, as well as contact
information for the receipt and handling of written closed captioning
complaints that do not raise immediate issues. The Order requires that
programming distributors must designate a telephone number, fax number,
and e-mail address for purposes of receiving and responding immediately
to any closed captioning concerns. Video programming distributors
should ensure that any staff reachable through this contact information
has the capability to immediately respond to and address consumers'
concerns. The Order requires that, to the extent that a distributor has
personnel available, either on site or remotely, to address any
technical problems that may arise, consumers using this dedicated
contact information must be able to reach someone, either directly or
indirectly, who can address the consumer's captioning concerns. This
provision does not require that distributors alter their hours of
operation or the hours during which they have staffing available; at
the same time, however, the Order requires that, where staff is
available to address technical issues that may arise during the course
of transmitting programming, they also must be knowledgeable about and
be able to address closed captioning concerns. The Order requires that,
in situations where a distributor is not immediately available, any
calls or inquiries received, using this dedicated contact information,
should be returned or otherwise addressed within 24 hours. The Order
requires that, in those situations where the captioning problem does
not reside with the distributor, the staff person receiving the inquiry
should refer the matter appropriately for resolution.
48. As noted, the Order requires video programming distributors to
make contact information available for the receipt and handling of
written closed captioning complaints, and this information shall
include the name of a person with primary responsibility for captioning
issues and who can ensure compliance with the rules, as well as the
person's title or office, telephone number, fax number, postal mailing
address, and e-mail address. The Order requires that distributors
include this information on their Web sites (if they have a Web site),
in telephone directories, and in billing statements (to the extent the
distributor issues billing statements), and that distributors keep this
information current and update it within 10 business days for Web
sites, by the next billing cycle for billing statements, and by the
next publication of directories.
49. The Order requires video programming distributors to file the
contact information noted above with the Chief of the Disability Rights
Office, Consumer and Governmental Affairs Bureau, or by sending the
information to CLOSEDCAPTIONING_POC@fcc.gov. The Order requires the
Commission staff to prepare a Public Notice advising consumers and
other interested parties how to obtain access to the contact
information, once it has been compiled and posted on the FCC's Web
site. The Order requires that this information also be available by
telephone inquiry to the Commission's Consumer Center. Distributors
shall notify the Commission each time there is a change in any of this
required information within 10 business days.
Steps Taken To Minimize Significant Impact on Small Entities, and
Significant Alternatives Considered
50. The RFA requires an agency to describe any significant,
specifically small business, alternatives that it has considered in
reaching its proposed approach, which may include the following four
alternatives (among others): ``(1) The establishment of differing
compliance or reporting requirements or timetables that take into
account the resources available to small entities; (2) the
clarification, consolidation, or simplification of compliance and
reporting requirements under the rule for such small entities; (3) the
use of performance rather than design standards; and (4) an exemption
from coverage of the rule, or any part thereof, for such small
entities.'' 5 U.S.C. 603(c)(1)-(4).
51. In amending the closed captioning rules, the Commission
believes that it has minimized the effect on small entities while
making video programming more accessible to persons with hearing
disabilities. These efforts are consistent with the Congressional goal
of increasing the availability of captioned programming while
preserving the diversity of available programming. For instance, in
revising the complaint process, the Commission has decreased the
timeframes for filing complaints and responding to complaints. This
change in filing time periods reasonably accommodates concerns by
viewers that the current complaint process allows too much time to pass
before a complaint must be addressed and concerns by distributors that
they be allowed sufficient time to address captioning problems.
Although the Commission considered retaining the former rule, pursuant
to which complaints were filed first with the distributor, the dual
approach adopted by the Order will enhance the complaint process. In
addition, the Order contains an optional complaint form (FCC Form 2000-
C) to assist consumers in the filing of complaints. Order at Appendix
B. The information requested on the form will facilitate a more
efficient complaint process for both complainants and distributors.
52. By requiring that video programming distributors provide
contact information in bills, directories, on Web sites (if they have
Web sites) and by sending this information to the Commission for
placement on the Commission's Web site, the Order seeks to remedy
concerns by consumers who report confusion about whom to contact about
closed captioning concerns and dissatisfaction with the responsiveness
of the video programming distributors. The Order does not require that
distributors create Web sites specifically for the purpose of providing
contact information.
53. The Order does not require that distributors alter their hours
of operation or the hours during which they have staffing available.
The Order only requires that, where staff is available to address
technical issues that
[[Page 1604]]
may arise during the course of transmitting programming, the staff must
be knowledgeable about and be able to address closed captioning
concerns. The Order also reminds video programming distributors of the
importance of making their organizations accessible to persons with
hearing disabilities seeking information about the entity's closed
captioning or other matters. As such the Order expresses the
Commission's expectation that all video programming distributors take
measures to readily accommodate incoming calls placed through
Telecommunications Relay Service (TRS). In situations where a
distributor is not immediately available, any calls or inquiries
received, using the dedicated contact information described in the
Order, should be returned or otherwise addressed within 24 hours.
54. The economic burdens associated with the changes to the closed
captioning rules adopted in the Order are minimal. The benefits of
revising the complaint process, requiring that contact information be
available to consumers and requiring that distributors have personnel
able to address captioning problems when they are available to address
other technical problems outweigh any slight burdens these requirements
may impose. Furthermore, there are several provisions of the closed
captioning rules that were adopted in 1997 that are intended to address
concerns of small businesses. These 1997 provisions are not affected by
the Order, nor were they addressed in the 2005 Closed Captioning NPRM.
These provisions are intended to provide relief to small businesses who
may find closed captioning to be unduly burdensome, and bear mentioning
in this FRFA. For instance, the existing closed captioning rules
contain several self-implementing exemptions that factor the costs of
captioning and/or the financial status of distributors into a
determination of whether the entity is exempt from the captioning
requirements. The Order does not alter the existing exemption that
excuses a video programming provider from spending more than 2 percent
of its annual gross revenues received from a channel on closed
captioning (Sec. 79.1(d)(11) of the Commission's rules), nor does the
Order alter the current provision in the rules that exempts video
programming providers from closed captioning where the distributor's
annual gross revenues for the channel did not exceed $3 million for the
previous calendar year (Sec. 79.1(d)(12) of the Commission's rules).
Both of these previously adopted provisions were intended to address
the problems of small video programming providers that are not in a
position to devote significant resources toward closed captioning.
These exemptions relieve small entities of any burdensome obligation to
provide closed captioning without significantly reducing the
availability of captioning.
55. In addition, another provision in the current rules allows the
Commission to grant exemptions to the rules where a petitioner has
shown it would be an undue burden (i.e., significant difficulty or
hardship) to close caption (Sec. 79.1(f) of the Commission's rules).
This mechanism allows the Commission to address the impact of these
rules on individual entities and modify the rules to accommodate
individual circumstances. The procedures in Sec. 79.1(f) of the
Commission's rules were specifically designed to ameliorate the impact
of the closed captioning rules in a manner consistent with the
objective of increasing the availability of captioned programming.
Congressional Review Act
The Commission will send a copy of the Declaratory Ruling and Order
and, including this FRFA, in a report to be sent to Congress and the
U.S. Government Accountability Office 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 Declaratory Ruling and Order, including this FRFA,
to the Chief Counsel for Advocacy of the Small Business Administration.
Ordering Clauses
Pursuant to sections 4(i), 303(r) and 713 of the Communications Act
of 1934, as amended, 47 U.S.C. 154(i), 303(r) and 613, the 2008 Digital
Closed Captioning Declaratory Ruling and Order is adopted and the
Commission's Rules are hereby amended as set forth herein.
The 2008 Digital Closed Captioning Declaratory Ruling and Order
shall be effective February 12, 2009, except with regard to the
information collection requirements contained in new rule Sec. 79.1(i)
and Sec. 79.1(g)(1) through (5), which will become effective upon
publication in the Federal Register of notice of approval by the Office
of Management and Budget of the information collections, and, with
respect to Sec. 79.1(i), with which distributors must comply within 30
days thereafter.
The Commission's Consumer and Governmental Affairs Bureau,
Reference Information Center, shall send a copy of the 2008 Digital
Closed Captioning Declaratory Ruling and Order, including the Final
Regulatory Flexibility Certification, to the Chief Counsel for Advocacy
of the Small Business Administration.
List of Subjects in 47 CFR Part 79
Cable television operators, Multichannel video programming
distributors (MVPDs), Satellite television service providers,
Television broadcasters.
Federal Communications Commission.
William F. Caton,
Deputy Secretary.
Rule Changes
0
For the reasons discussed in the Preamble, the Federal Communications
Commission amends 47 CFR Part 79 to read as follows:
PART 79--CLOSED CAPTIONING OF VIDEO PROGRAMMING
0
1. The authority citation for Part 79 continues to read as follows:
Authority: 47 U.S.C. 151, 152(a), 154(i), 303, 307, 309, 310,
613.
0
2. Section 79.1 is amended by adding paragraphs (a)(5)(i) and (ii), by
revising paragraphs (a)(6)(i) and (ii), and (g)(1) through (5) and by
adding paragraph (i) to read as follows:
Sec. 79.1 Closed captioning of video programming.
(a) * * *
(5) * * *
(i) Analog video programming that is first published or exhibited
on or after January 1, 1998.
(ii) Digital video programming that is first published or exhibited
on or after July 1, 2002.
(6) * * *
(i) Analog video programming that was first published or exhibited
before January 1, 1998.
(ii) Digital video programming that was first published or
exhibited before July 1, 2002.
* * * * *
(g) * * *
(1) Complaints concerning an alleged violation of the closed
captioning requirements of this section shall be filed with the
Commission or with the video programming distributor responsible for
delivery and exhibition of the video programming within sixty (60) days
of the problem with captioning. A complaint must be in writing, must
state with specificity the alleged Commission rule violated and must
include some evidence of the alleged rule violation.
(2) Complaints filed first with the Commission will be forwarded to
the
[[Page 1605]]
appropriate video programming distributor. The video programming
distributor must respond in writing to the Commission and the
complainant within 30 days of the receipt of the complaint from the
Commission.
(3) Complaints sent to a video programming distributor regarding
programming by a television broadcast station or other programming for
which the video programming distributor is exempt from closed
captioning responsibility pursuant to paragraph (e)(9) of this section,
shall be forwarded by the video programming distributor within seven
(7) days of receipt to the entity responsible for closed captioning of
the programming at issue. The video programming distributor must also
notify the complainant and the Commission that it has forwarded the
complaint. Entities receiving forwarded complaints must respond in
writing to the complainant within 30 days of the forwarding date of the
complaint.
(4) If a complaint is first filed with the video programming
distributor, the video programming distributor must respond in writing
to the complainant within thirty (30) days after receipt of a closed
captioning complaint. If a video programming distributor fails to
respond to the complainant within thirty (30) days, or the response
does not satisfy the consumer, the complainant may file the complaint
with the Commission within thirty (30) days after the time allotted for
the video programming distributor to respond. If a consumer re-files
the complaint with the Commission (after filing with the distributor),
the Commission will forward the complaint to the distributor, and the
distributor shall respond to the Commission and the complainant within
thirty (30) days of receipt of the complaint from the Commission.
(5) In response to a complaint, a video programming distributor is
obligated to provide the Commission with sufficient records and
documentation to demonstrate that it is in compliance with the
Commission's rules.
* * * * *
(i) Contact information. (1) Video programming distributors shall
make available contact information for the receipt and handling of
immediate closed captioning concerns raised by consumers while they are
watching a program. Programming distributors must designate a telephone
number, fax number, and e-mail address for purposes of receiving and
responding immediately to any closed captioning concerns. Video
programming distributors should ensure that any staff reachable through
this contact information has the capability to immediately respond to
and address consumers' concerns. To the extent that a distributor has
personnel available, either on site or remotely, to address any
technical problems that may arise, consumers using this dedicated
contact information must be able to reach someone, either directly or
indirectly, who can address the consumer's captioning concerns. This
provision does not require that distributors alter their hours of
operation or the hours during which they have staffing available; at
the same time, however, where staff is available to address technical
issues that may arise during the course of transmitting programming,
they also must be knowledgeable about and be able to address closed
captioning concerns. In situations where a distributor is not
immediately available, any calls or inquiries received, using this
dedicated contact information, should be returned or otherwise
addressed within 24 hours. In those situations where the captioning
problem does not reside with the distributor, the staff person
receiving the inquiry should refer the matter appropriately for
resolution.
(2) Video programming distributors shall make contact information
available for the receipt and handling of written closed captioning
complaints that do not raise the type of immediate issues that are
addressed in paragraph (i)(1) of this section. The contact information
required for written complaints shall include the name of a person with
primary responsibility for captioning issues and who can ensure
compliance with our rules. In addition, this contact information shall
include the person's title or office, telephone number, fax number,
postal mailing address, and e-mail address. Distributors shall include
this information on their Web sites (if they have a Web site), in
telephone directories, and in billing statements (to the extent the
distributor issues billing statements). Distributors shall keep this
information current and update it within 10 business days for Web
sites, by the next billing cycle for billing statements, and by the
next publication of directories.
(3) Video programming distributors shall file the contact
information described in this section with the Chief of the Disability
Rights Office, Consumer and Governmental Affairs Bureau, or by sending
the information to CLOSEDCAPTIONING_POC@fcc.gov. After compiling and
posting the list on the FCC's Web site, Commission staff shall prepare
a Public Notice advising consumers and other interested parties how to
obtain access to the contact information. This information shall also
be available by telephone inquiry to the Commission's Consumer Center.
Distributors shall notify the Commission each time there is a change in
any of this required information within 10 business days.
[FR Doc. E8-31447 Filed 1-12-09; 8:45 am]
BILLING CODE 6712-01-P
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