In the Matter of Promoting Diversification of Ownership in the Broadcasting Services, 28400-28407 [E8-11043]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 73, Number 96 (Friday, May 16, 2008)]
[Proposed Rules]
[Pages 28400-28407]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-11043]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 73

[MB Docket Nos. 07-294; 06-121; 02-277; 04-228, MM Docket Nos. 01-235; 
01-317; 00-244; FCC 07-217]


In the Matter of Promoting Diversification of Ownership in the 
Broadcasting Services

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: This document seeks comment on various proposals to increase 
participation in the broadcasting industry by new entrants and small 
businesses, especially minority- and women-owned businesses, with the 
goal of promoting innovation, diversity of ownership and viewpoints, 
spectrum efficiency, and competition in media markets.

DATES: Comments for this proceeding are due on or before July 15, 2008. 
Reply comments are due on or before August 14, 2008.

ADDRESSES: You may submit comments, identified by MB Docket No. 07-294; 
FCC 07-217, by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Federal Communications Commission's Web Site: https://
www.fcc.gov/cgb/ecfs/. Follow the instructions for submitting comments.
     Mail: 445 12th Street, SW., Washington, DC 20554, with a 
copy to the Commission's duplicating contractor, Best Copy and 
Printing, Inc., Portals II, 445 12th Street, SW., Room CY-B402, 
Washington, DC 20554.
     People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by e-mail: FCC504@fcc.gov or phone: 202-418-
0530 or TTY: 202-418-0432.
    For detailed instructions for submitting comments and additional 
information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT: Mania Baghdadi, 202-418-2133.

SUPPLEMENTARY INFORMATION: This is a summary of the Federal 
Communications Commission's Report and Order and Third Further Notice 
of Proposed Rulemaking (the ``Notice'') in MB Docket Nos. 07-294; 06-
121; 02-277; 04-228, MM Docket Nos. 01-235; 01-317; 00-244; FCC 07-217, 
adopted December 18, 2007, and released March 5, 2008. The full text of 
this document is available for public inspection and

[[Page 28401]]

copying during regular business hours in the FCC Reference Center, 
Federal Communications Commission, 445 12th Street, SW., CY-A257, 
Washington, DC 20554. These documents will also be available via ECFS 
(https://www.fcc.gov/cgb/ecfs). The complete text may be purchased from 
the Commission's copy contractor, 445 12th Street, SW., Room CY-B402, 
Washington, DC 20554. To request this document in accessible formats 
(computer diskettes, large print, audio recording and Braille), send an 
e-mail to fcc504@fcc.gov or call the FCC's Consumer and Governmental 
Affairs Bureau at (202) 418-0530 (voice) (202) 418-0432 (TTY).

Summary of the Notice of Proposed Rulemaking

    1. It has long been a basic tenet of national communications policy 
that the widest dissemination of information from diverse and 
antagonistic sources is essential to the welfare of the public. By 
broadening participation in the broadcast industry, the Commission 
seeks to strengthen the diverse and robust marketplace of ideas that is 
essential to our democracy. As the Supreme Court has recognized, 
``Safeguarding the public's right to receive a diversity of views and 
information over the airwaves is * * * an integral component of the 
FCC's mission.'' Metro Broadcasting, Inc. v. FCC, 497 U.S. 547, 567 
(1990), overruled in part on other grounds in Adarand Constructors Inc. 
v. Pena, 515 U.S. 200, 227 (1995) (''Adarand''). Beyond fostering 
viewpoint diversity, the Commission also believes that taking steps to 
facilitate the entry of new participants into the broadcasting industry 
may promote innovation in the field because in many cases, the most 
potent sources of innovation often arise not from incumbents but from 
new entrants. The Commission believes that this may be particularly 
true with respect to small businesses, including those owned by 
minorities and women. Expanding the pool of potential competitors in 
media markets to include such businesses should bring new competitive 
strategies and approaches by broadcast station owners in ways that 
benefit consumers in those markets.
    2. The Notice invites comment on several ways to increase 
participation in the broadcasting industry by new entrants and small 
businesses, especially minority- and women-owned businesses, with the 
goal of promoting innovation, diversity of ownership and viewpoints, 
spectrum efficiency, and competition in media markets. Specifically, 
the Notice invites comment on the following proposals:
    3. Definition of Socially and Economically Disadvantaged 
Businesses. The Commission's Report and Order and Third Further Notice 
of Proposed Rulemaking (the ``Order'') in MB Docket Nos. 07-294; 06-
121; 02-277; 04-228; MM Docket Nos. 01-235; 01-317; 00-244; FCC 07-217, 
adopted December 18, 2007, and released March 5, 2008 defines the class 
of entities benefiting from the rule and policy changes set forth in 
the Order as ``eligible entities,'' using the SBA definition of small 
businesses. The Commission seeks comment on whether it can or should 
expand that definition. Specifically, the Notice invites comment on 
whether to use a race-conscious definition of socially and economically 
disadvantaged business (SDB) to define the relevant class of companies. 
For example, to qualify for participation in Small Business 
Administration's Small Disadvantaged Business program, a small business 
must be at least 51 percent owned and controlled by a socially and 
economically disadvantaged individual or individuals. Under the 
program, African Americans, Hispanic Americans, Asian Pacific 
Americans, Subcontinent Pacific Americans, and Native Americans are 
presumed to qualify, and other individuals can qualify if they can show 
by a preponderance of the evidence that they are disadvantaged. Because 
any race conscious measure the Commission might adopt to promote 
minority ownership would be subject to strict scrutiny under the equal 
protection component of the Due Process Clause of the Fifth Amendment, 
parties who contend that a race-conscious classification would be the 
best approach, or indeed even a permissible approach, to encourage 
ownership diversity and new entry must explain specifically, using 
empirical data and legal analysis, how such a classification would not 
just be tailored, but narrowly tailored, to advance a governmental 
interest that is not simply important, but compelling.
    4. Other Definitions. The Notice likewise seeks comment on a 
proposal for ``full file'' review, i.e., a race-neutral, individualized 
review, similar to that used by Michigan, California, and Texas state 
university admission departments following the passage of state 
initiatives and court decisions banning affirmative action. Under this 
proposal, each applicant would demonstrate (to the satisfaction of an 
independent, politically insulated professional entity, perhaps modeled 
after the Universal Service Board) that it has overcome significant 
social and economic disadvantages, the overcoming of which would be 
predictive of success in a challenging industry and of the promotion of 
diversity of information and perspectives and satisfaction of unmet 
needs in the industry. This disadvantage often, but not necessarily, 
would be related to race or gender discrimination or their present 
effects. Hypothetical applicants who might benefit from ``full file'' 
review include an applicant injured in military service in Iraq who 
later completed a leadership training program; a rural applicant who 
put herself through college and successfully ran a previously-bankrupt 
AM station; and a Spanish language radio company owner who succeeded 
despite advertiser resistance to program language and format.
    5. The Notice seeks comment on the ``full file'' proposal generally 
and poses a number of specific questions regarding the proposal. Would 
the grant of broadcast licenses to applicants who have overcome social 
and economic disadvantages likely result in greater diversity of 
broadcast information and viewpoints? How should ``full file review'' 
be structured so that it is race-neutral and does not trigger strict 
scrutiny? Can the ``full file review'' framework applied and upheld in 
the context of university admissions be applied to the media industry 
in an effective manner to foster diversity of viewpoints without 
involving the Commission in content-based decisions that could raise 
First Amendment concerns? How should the Commission or an 
``independent, politically insulated professional entity'' assess 
whether an applicant has overcome social and economic disadvantage and 
whether granting the application would increase diversity of 
viewpoints? How could the concept of ``full file'' review, which in the 
higher education context is used to compare candidates competing for a 
limited number of admissions slots, be applied in an administratively 
feasible manner to a situation where applicants will not be compared to 
each other (because mutually exclusive license applications are 
resolved through an auction) but instead will be evaluated to see if 
they meet a specified standard? Should an applicant bear the burden of 
proving specifically that it would contribute to diversity of 
viewpoints as a result of having overcome these disadvantages? When the 
applicant is a company, which individuals would the Commission evaluate 
to determine if the company meets the relevant standard under ``full 
file review''? Would a determination by an independent board be 
advisory to the

[[Page 28402]]

Commission? Would an affirmative determination qualify the entity as an 
eligible entity for all future transactions or for a specified period 
of time or would it have to seek a new determination for each 
transaction? How would ``full file'' review or a similar standard 
compare to an ``eligible entity'' or SDB standard in promoting 
viewpoint and/or ownership diversity? Should the Commission substitute 
the ``full file review'' approach for the ``eligible entity'' approach 
until it can adopt an SDB standard or should the Commission adopt it in 
lieu of an SDB standard? The Commission also invites commenters to 
propose any alternative definition of ``eligible entity'' that they 
believe would better advance our goals of promoting ownership diversity 
and new entry. With respect to any proposed definition that is race 
conscious, commenters should address the constitutionality of such 
definition.
    6. Share-Time Proposals. The Notice also invites comment on a 
proposal that the Commission afford FM licensees that broadcast in HD 
using IBOC technology the voluntary option of assigning the right to 
operate an HD radio stream to an SDB. As proposed by a commenter, the 
SDB operating the HD radio stream would receive a license under the 
Commission's share-time rules. The commenter further proposes that the 
Commission use its share-time procedures to permit the bifurcation of a 
single-channel, analog FM station into an ``Entertainment Station'' and 
a ``Free Speech Station.'' Such a ``Free Speech Station'' would be 
independently owned by an SDB, have at least 20 non-nighttime hours per 
week of airtime, and be primarily devoted to non-entertainment 
programming. The Commission seeks specific comment on these proposals. 
In particular, the Commission seeks comment on the extent to which, if 
the SDB (or eligible entity) becomes a Commission licensee, these 
proposals may provide the non-SDB entity a way to circumvent FCC 
ownership restrictions.
    7. Retention On Air of AM Expanded Band Owners' Stations if One of 
the Stations Is Sold to an Eligible Entity. In 1987, the Commission 
began a comprehensive review of numerous technical, legal, and policy 
issues relating to AM broadcasting in an effort to identify and address 
its most pressing problems. The allotment of additional spectrum (1605-
1705 kHz) for broadcasting provided the Commission with a ``unique 
opportunity'' to address these problems, most importantly the channel 
congestion and interference that had significantly degraded the 
technical quality of the service. Accordingly, the Commission limited 
initial applications for expanded band authorizations to existing AM 
broadcasters in the standard band and gave the highest priority to 
those fulltime stations that would most reduce congestion and 
interference by moving their operations to one of the new channels. To 
ensure that this process achieved its intended goals, the Commission 
further provided that the license for an expanded band station would 
issue conditioned upon the surrender of one of the paired frequencies, 
preferably the standard band frequency, following a five-year 
transition period during which dual operations would be permissible. On 
reconsideration, the Commission reordered its priorities in light of 
Congress's recent amendment of the Act to add section 331(b) and gave 
first priority to a special class of four AM stations--those daytime-
only stations licensed to serve communities with populations of more 
than 100,000 persons that lacked a fulltime aural service. A total of 
54 expanded band stations were licensed through this process. Two 
construction permit applications and one license application remain 
pending. To date, 19 licensees have surrendered their lower band 
licenses, and one licensee has surrendered its expanded band license at 
the end of each of these licensees' five-year dual-operating authority 
period. In March 2006, eleven licensees and four public interest groups 
petitioned the Commission to waive the surrender requirement in order 
to allow the transfer of one of the stations to a recognized small 
business, or its retention by the licensee if the licensee is a small 
business.
    8. The Commission has received comments arguing that the technical 
benefits that the Commission anticipated from the surrender of lower 
band AM licenses are now outweighed by continued service to the 
listening public. Commenters claim that ``numerous'' AM licensees have 
specifically targeted the programming on the lower band paired station 
to serve the needs of minorities and niche audiences. They propose that 
the Commission extend the dual operating period authorization and the 
temporary exemption of the expanded band authorization for multiple 
ownership purposes. As proposed, licensees would be permitted, prior to 
a specified disposition date, to assign or transfer control of one the 
paired AM stations to a qualifying ``small business'' as that term 
applies to radio broadcasters in the Small Business Administration's 
Regulations. Under the proposal, the consideration that a licensee 
could receive for one of its paired AM stations could not exceed 75 
percent of the station's fair market value. Further, in the event that 
the licensee is itself a small business, it would be permitted to 
retain permanently both authorizations. The Commission seeks comment on 
this proposal. In particular, the Commission seeks comment on how to 
properly balance the competing goals of improving the technical 
viability of the AM service and promoting ownership diversity. In the 
event that the Commission adopts this proposal, the Commission also 
seeks comment on the length of time licensees operating paired stations 
should be given to dispose of one station to a qualifying small 
business. The Commission tentatively concludes that any licensee, that 
itself is not a qualifying small business and that fails to consummate 
the sale of one station by the disposition date must surrender one of 
the two licenses by the disposition date. Moreover, the Commission 
tentatively concludes that in the event that a licensee fails to take 
any action by the disposition date, the lower band station shall 
automatically expire on that date. The Commission seeks comment on 
these procedures.
    9. In a related matter, the Commission seeks comment on a proposal 
to reinstate 20 licenses that were unconditionally surrendered by 
licensees in accordance with the terms of their authorizations. The 
Commission notes that subsequent licensing activity may preclude 
reinstatement and that certain circumstances, such as the sale of a 
former transmitter site and station equipment, may make resumption of 
operations by a formerly paired station infeasible or impossible. The 
Commission seeks comment on whether the Commission should accept 
construction permit applications from these licensees and the technical 
standards that the Commission should use to process these applications. 
The Commission seeks comment on whether the acceptance of such 
applications without providing an opportunity for competing 
applications complies with Ashbacker principles, Ashbacker Radio Corp. 
v. FCC, 326 U.S. 327 (1945). Lastly, the Commission seeks comment on 
whether a successor licensee should be permitted to seek reinstatement 
of a surrendered license.
    10. Modifications to FCC Form 323. As part of the Commission's 
quadrennial media ownership review, several commenters and FCC study 
authors expressed concern about the Commission's data collection 
process and have proposed revisions to FCC

[[Page 28403]]

Form 323 to enhance its utility in measuring current levels of minority 
and female broadcast ownership. FCC Form 323 is filed by commercial AM, 
FM and television stations at two-year intervals on the anniversary 
date of the station's renewal application filing date. Partnerships 
composed entirely of natural persons and sole proprietorships are not 
required to file the FCC Form 323 on a biennial basis. In addition to 
gender information, the racial/ethnic origin categories include 
American or Alaska Native, Asian, Black or African American, Hispanic 
or Latino, Native Hawaiian or Other Pacific Islander. The Commission 
periodically posts its compilation of data derived from these forms on 
its website. Commenters have criticized the form as an inadequate basis 
upon which to develop effective minority ownership policies, regardless 
of whether such policies are race conscious, and note that the authors 
of several media ownership studies indicated that the Commission's most 
recent research study on minority ownership is ``not sufficient'' to 
validate a race conscious initiative. Other commenters state that 
problems with the Form 323 derive from the process the Commission uses 
to automate and cull the data from the forms. Areas of concern include 
the filing of multiple forms for a single station; the practice of some 
filers of providing racial/gender information in a separate attachment 
to the form; the lack of questions regarding gender/racial 
classifications on the Form 323-E, which is used by noncommercial 
educational stations; and filers who write ``no change--info on file'' 
as opposed to electronically validating or completing the information 
previously submitted, including race, gender, and ethnicity data. The 
Notice seeks initial comment on issues related to the Commission's 
collection of information on the racial and gender identity of radio 
and television licensees. The Commission tentatively concludes that it 
should make changes to Form 323 to increase the accuracy of the data 
collected and the potential uses for the form. Sole proprietorships and 
partnerships composed entirely of natural persons have not routinely 
been required to complete Form 323. The Commission solicits input from 
the public on whether expansion of the scope of parties required to 
file the biennial ownership report would enhance the race, gender, and 
ethnicity data collection. Further, the Commission seeks comment on 
whether it should establish a uniform filing date for all radio and 
television station licensees and eliminate the current practice of 
permitting licensees to file on the anniversary of their renewal date. 
Would a single filing date pose a burden on licensees? What are the 
benefits of a single filing date requirement? Would the data collection 
be improved with such a change? Under current procedures, if the 
licensee or permittee is directly or indirectly controlled by another 
entity, or if another entity has an attributable interest in such 
licensee or permittee, a separate Form 323 must be submitted for such 
entity. Does this practice make the race, gender and ethnicity data 
more, or less, reliable? What other changes to Form 323 would make use 
of the data more reliable? Are there reasons that justify maintaining 
the current collection process, such as streamlining, paperwork 
burdens, or administrative efficiencies? The Commission is likewise 
concerned about the accuracy of data submitted by licensees, as this 
information may form the basis for Commission policy and rulemaking. 
Should the Commission adopt a new form to more accurately collect 
information from licensees on race, gender, and ethnicity, and delete 
these questions from the Form 323? The Commission requests comments 
addressing whether the Commission should conduct audits to assess the 
accuracy of the information filed in the annual ownership report. Would 
the data collection be enhanced if the Commission imposed an audit 
process? If so, what type of audit should the Commission conduct? 
Should the Commission periodically audit a random sample of filers? How 
often should the audit be conducted? What penalties should be imposed 
for licensees that file inaccurate information on Form 323?
    11. Structural Rule Waivers for Creating Incubator Programs. The 
Notice seeks comment on a proposal advanced by one of the commenting 
parties advocating the grant of a structural rule waiver for parties 
that create and maintain an incubator program for SDBs. The proposed 
``Trial Incubation Plan'' would operate for two years, at which point 
the Commission would analyze its effects before renewing or expanding 
it. The Trial Incubation Plan would apply only to the local radio 
ownership rule in large markets and would permit the incubating party 
to acquire only one additional station beyond the applicable local cap, 
including any same-service subcap. That additional station must be in 
the same service (AM or FM) and in the same market, or a market of 
approximately the same size, as the newly SDB-controlled station. 
Furthermore, the proposal would require that the two transactions be 
contingent, such that the SDB transaction would close prior to or 
simultaneously with the incubating party's transaction. The Commission 
seeks comment on the proposal.
    12. Opening FM Spectrum for New Entrants. The Notice seeks comment 
on a proposal that FM stations be permitted to change their community 
of license to any community located in the same radio market, provided 
that ``if the community of license being vacated (the ``Original 
Community'') has no other full power AM or FM or LPFM station licensed 
to it and which originates local programming for at least 15% of its 
airtime (a ``Local Service LPFM''), the licensee vacating the Original 
Community must underwrite the cost of licensing, construction and one 
full year of operation of a new Local Service LPFM to be licensed to 
the Original Community.'' The Commission seeks comment on this 
proposal.
    13. Must-Carry for Class A Television Stations. Commenters propose 
that the Commission actively support cable must-carry legislation for 
Class A stations. The Commission agrees that cable carriage of Class A 
television stations could promote both programming diversity and 
localism, given that all such stations are required to originate local 
content, and seeks comment on whether the FCC has authority under the 
Act to adopt rules requiring such carriage.
    14. Re-allocation of TV Channels 5 and 6 for FM Service. Certain 
commenters have urged the Commission to give a ``hard look'' to a 
proposal that the Commission re-allocate TV Channels 5 and 6 for FM 
broadcasting, thereby substantially expanding the existing FM band. The 
Commission agrees that the proposal could yield tremendous 
opportunities for new entrants, and the Notice seeks comment on it.
    15. Other Proposals. The Notice further invites comment on a number 
of proposals advanced by the National Association of Black Owned 
Broadcasters (``NABOB'') and Rainbow/PUSH in their comments submitted 
January 2, 2003 in the course of the 2002 Biennial Review proceeding. 
The Commission believes that the record with respect to these proposals 
should be refreshed. Specifically, NABOB and Rainbow/PUSH propose that 
the Commission: (1) Examine assignment and transfer applications to 
discern the potential impact of the proposed transaction on minority 
ownership; (2) decline to grant temporary waivers of

[[Page 28404]]

the local ownership rules to parties proposing a transaction that would 
create station combinations exceeding the ownership caps; (3) treat 
local marketing agreements as attributable interests; and (4) allow 
minorities to own station combinations equal to the largest combination 
in a market to counterbalance the economic impact of grandfathered 
holdings. The Notice seeks comment on these proposals. In particular, 
the Commission asks parties to address the Commission's authority to 
enact the proposals, the extent to which the proposals would apply, and 
whether the proposals contradict any of the proposals the FCC adopted 
in the Order.

Notice of Proposed Rulemaking

Initial Regulatory Flexibility Act Analysis

    16. As required by the Regulatory Flexibility Act of 1980 (RFA), 
the Commission has prepared an Initial Regulatory Flexibility Analysis 
(``IRFA''), set forth in an Appendix to the Notice, concerning the 
possible significant economic impact on small entities by the policies 
and rules proposed in the Notice. Written public comments are requested 
on the IRFA. These comments must be filed in accordance with the same 
filing procedures and deadlines for comments and reply comments in 
response to the Notice, and should have a distinct heading designating 
them as responses to the IRFA. The Commission will send a copy of the 
Notice, including the IRFA, to the Chief Counsel for Advocacy of the 
Small Business Administration (SBA). 5 U.S.C. 603(a). In addition, the 
Notice and IRFA (or summaries thereof) are here published in the 
Federal Register.
A. Need for, and Objective of, the Proposed Rules
    17. The Notice invites comment on several ways to increase 
participation in the broadcasting industry by new entrants and small 
businesses, especially minority- and women-owned businesses, with the 
goal of promoting innovation, diversity of ownership and viewpoints, 
spectrum efficiency, and competition in media markets. The Notice first 
invites comment on how to define the class of eligible entities that 
will be entitled to benefit from the Commission's proposals. The Notice 
then invites comment on a range of proposals to stimulate ownership 
diversity, including permitting share-time arrangements between FM 
licensees and SDBs; extension of the dual-operating period 
authorization and temporary exemption of expanded-band authorization in 
the AM radio context; and reinstatement of 20 AM licenses that were 
voluntarily surrendered. In addition, the Commission seeks comment on 
proposed revisions to FCC Form 323 to enhance the ability of the 
Commission to collect information on the racial and gender identity of 
radio and television licensees. The Notice further requests comment on 
a proposal to grant structural rule waivers for parties that create and 
maintain incubator programs for SDBs and on a proposal that the FCC 
permit FM licensees to change their station community of license to any 
community located in the same radio market under certain conditions, 
and the Commission seeks input on whether the Commission has authority 
to require cable operators to carry Class A television stations and 
whether the Commission should reallocate TV Channels 5 and 6 for FM 
broadcasting. Finally, the Commission requests refreshed comments on 
certain proposals advanced by NABOB and the Rainbow/PUSH Coalition 
during the 2002 Biennial Review of the Commission's media ownership 
rules.
B. Legal Basis
    18. This Notice is adopted pursuant to sections 1, 2(a), 3, 4(i, 
j), 257, 301, 303(r), 307-10, and 614-15 of the Communications Act of 
1934, as amended, 47 U.S.C. 151, 152(a), 153, 154(i, j), 257, 301, 
303(r), 307-10, 534-35.
C. Description and Estimate of the Number of Small Entities To Which 
the Proposed Rules Will Apply
    19. The RFA directs agencies to provide a description of, and, 
where feasible, an estimate of the number of small entities that may be 
affected by the proposed rules, if adopted. The RFA defines the term 
``small entity'' as having the same meaning as the terms ``small 
business,'' ``small organization,'' and ``small governmental entity'' 
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.
    20. Television Broadcasting. In this context, the application of 
the statutory definition to television stations is of concern. The 
Small Business Administration defines a television broadcasting station 
that has no more than $13 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 Financial Network, Inc. 
Media Access Pro Television Database as of December 7, 2007, about 825 
(66 percent) of the 1,250 commercial television stations in the United 
States have revenues of $13 million or less. However, in assessing 
whether a business entity 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 any changes to the attribution rules, because 
the revenue figures on which this estimate is based do not include or 
aggregate revenues from affiliated companies.
    21. 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 and in this context to define or quantify the 
criteria that would establish whether a specific television station is 
dominant in its market of operation. Accordingly, the foregoing 
estimate of small businesses to which the rules may apply does not 
exclude any television stations from the definition of a small business 
on this basis and is therefore over-inclusive to that extent. An 
additional element of the definition of ``small business'' is that the 
entity must be independently owned and operated. 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.
    22. Radio Broadcasting. The Small Business Administration defines a 
radio broadcasting entity that has $6.5 million or less in annual 
receipts as a small business. Business concerns included in this 
industry are those ``primarily engaged in broadcasting aural programs 
by radio to the public.'' According to Commission staff review of the 
BIA Financial Network, Inc. Media Access Radio Analyzer Database as of 
December 7, 2007, about 10,500 (95 percent) of 11,050 commercial radio 
stations in the United States have revenues of $6.5 million or less. We 
note, however, that in assessing whether a business entity 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 any changes to the ownership 
rules, because the revenue figures on which this estimate is based do 
not include or aggregate revenues from affiliated companies.

[[Page 28405]]

    23. In this context, the application of the statutory definition to 
radio stations is of concern. 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 and in this context to define or 
quantify the criteria that would establish whether a specific radio 
station is dominant in its field of operation. Accordingly, the 
foregoing estimate of small businesses to which the rules may apply 
does not exclude any radio station from the definition of a small 
business on this basis and is therefore over-inclusive to that extent. 
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.
    24. Class A TV, LPTV, and TV translator stations. The rules and 
policies adopted herein may also apply to licensees of Class A TV 
stations, low power television (``LPTV'') stations, and TV translator 
stations, as well as to potential licensees in these television 
services. The same SBA definition that applies to television broadcast 
licensees would apply to these stations. The SBA defines a television 
broadcast station as a small business if such station has no more than 
$13.0 million in annual receipts. Currently, there are approximately 
567 licensed Class A stations, 2,227 licensed LPTV stations, and 4,518 
licensed TV translators. Given the nature of these services, we will 
presume that all of these licensees qualify as small entities under the 
SBA definition. We note, however, that under the SBA's definition, 
revenue of affiliates that are not LPTV stations should be aggregated 
with the LPTV station revenues in determining whether a concern is 
small. Our estimate may thus overstate the number of small entities, 
since the revenue figure on which it is based does not include or 
aggregate revenues from non-LPTV affiliated companies. We do not have 
data on revenues of TV translator or TV booster stations, but virtually 
all of these entities are also likely to have revenues of less than 
$13.0 million and thus may be categorized as small, except to the 
extent that revenues of affiliated non-translator or booster entities 
should be considered.
    25. FM Translator Stations and Low Power FM Stations. The proposed 
rules and policies could affect licensees of FM translator and booster 
stations and low power FM (LPFM) stations, as well as potential 
licensees in these radio services. The same SBA definition that applies 
to radio broadcast licensees would apply to these stations. The SBA 
defines a radio broadcast station as a small business if such station 
has no more than $6.5 million in annual receipts. Currently, there are 
approximately 5,540 licensed FM translator and 262 booster stations and 
820 licensed LPFM stations. Given the nature of these services, we will 
presume that all of these licensees qualify as small entities under the 
SBA definition.
    26. Cable and Other Subscription Programming. The Census Bureau 
recently updated the NAICS so that these firms are included in the 
Wired Telecommunications Carriers category, which is described 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. Establishments in this industry use 
the wired telecommunications network facilities that they operate to 
provide a variety of services, such as wired telephony services, 
including VoIP services; wired (cable) audio and video programming 
distribution; and wired broadband Internet services. By exception, 
establishments providing satellite television distribution services 
using facilities and infrastructure that they operate are included in 
this industry.'' The SBA has updated the small business size standards 
to accord with the revised NAICS. The size standard for Wired 
Telecommunications Carriers is all firms having an average of 1,500 or 
fewer employees. The Census Bureau has not collected information on the 
size distribution of firms in the revised classification of Wired 
Telecommunications Carriers. Accordingly, we will apply the new size 
standard to Census Bureau data for 2002 regarding the size distribution 
of Cable and Other Program Distribution. There were a total of 1,191 
firms in this category that operated for the entire year. Of this 
total, 1,178 firms had fewer than 1,000 employees. Thus, under this 
size standard, the majority of firms can be considered small.
    27. 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.'' The Commission has determined that an operator serving 
fewer than 653,000 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. Industry 
data indicate that, of 994 cable operators nationwide, all but thirteen 
are small under this size standard. 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 we are unable to estimate more accurately the 
number of cable system operators that would qualify as small under this 
size standard.
    28. Open Video Systems. Open Video Systems (``OVS'') provide 
subscription services, including cable services. In 2007, the SBA 
created a small business size standard for Cable and Other Subscription 
Programming. The Census Bureau has not collected information on the 
size distribution of firms in the new standard. Accordingly, we will 
apply the new size standard to Census Bureau data for 2002 regarding 
the size distribution of Cable and Other Program Distribution. This 
standard provides that a small entity is one with $13.5 million or less 
in annual receipts. The Commission has certified a large number of OVS 
operators, and some of these are currently providing service. 
Affiliates of RCN Corporation (RCN) received approval to operate OVS 
systems in New York City, Boston, Washington, DC, and other areas. RCN 
has sufficient revenues to assure that it does not qualify as a small 
business entity. Little financial information is available for the 
other entities that are authorized to provide OVS. Given this fact, the 
Commission concludes that those entities might qualify as small 
businesses, and therefore may be affected by the rules and policies 
adopted herein.
D. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements
    29. Depending on the rules adopted as a result of this Notice, the 
Report and Order (R&O) ultimately adopted in this proceeding may 
contain new information collections for eligible entities and/or 
modified ones for incumbent broadcasters. Any changes in recording or 
recordkeeping would result from changes in the Commission's forms 
necessary to implement any rules

[[Page 28406]]

adopted to promote new entry of small businesses and eligible entities. 
As noted above, we invite small entities to comment on any such 
recordkeeping issues in response to the Notice.
E. Steps Taken To Minimize Significant Impact on Small Entities, and 
Significant Alternatives Considered
    30. The Commission is required by law to describe any significant 
alternatives that might minimize any significant economic impact on 
small entities. Such alternatives may include the following four 
alternatives (among others): (1) The establishment of differing 
compliance or reporting requirements or timetables that take into 
account the resources available to small entities; (2) the 
clarification, consolidation, or simplification of compliance or 
reporting requirements under the rule for small entities; (3) the use 
of performance, rather than design, standards; and (4) an exemption 
from coverage of the rule, or any part thereof, for small entities.
    31. As noted, we are directed under law to describe any such 
alternatives we consider, including alternatives not explicitly listed 
above. The Notice describes and seeks comment on several possible ways 
to ease entry into the broadcasting business by small entities that 
have traditionally faced significant difficulties in entering 
broadcasting. The Notice seeks comment on how the proposals herein will 
achieve that goal. The Commission especially encourages small entities 
to comment on the proposals in the Notice in this proceeding. The 
Commission welcomes comment on how to minimize any burdens on small 
cable system operators that might result from eligible entities being 
entitled to carriage on such systems under the must carry statute and 
rules.
F. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules
    32. None.

Ex Parte Restrictions

    33. This proceeding has been designated ``permit but disclose'' for 
purposes of the Commission's ex parte rules, 47 CFR 1.1200-1.1216. Ex 
parte presentations will be governed by the procedures set forth in 47 
CFR 1.1206 applicable to non-restricted proceedings.

Filing Requirements

    34. Comments and Replies. Pursuant to Sec. Sec.  1.415 and 1.419 of 
the Commission's rules, interested parties may file comments and reply 
comments on or before the dates indicated on the first page of this 
document. Comments may be filed: (1) By using the Commission's 
Electronic Comment Filing System (ECFS), (2) by using the Federal 
Government's eRulemaking Portal, or (3) by filing paper copies.
     Electronic Filers: Comments may be filed electronically 
using the Internet by accessing ECFS: https://www.fcc.gov/cgb/ecfs/ or 
the Federal eRulemaking Portal: https://www.regulations.gov. Filers 
should follow the instructions provided on the Web site for submitting 
comments.
     For ECFS filers, if multiple docket or rulemaking numbers 
appear in the caption of this proceeding, filers must transmit one 
electronic copy of the comments for each docket or rulemaking number 
referenced in the caption. In completing the transmittal screen, filers 
should include their full name, U.S. Postal Service mailing address, 
and the applicable docket or rulemaking number. Parties may also submit 
an electronic comment by Internet e-mail. To get filing instructions, 
filers should send an e-mail to ecfs@fcc.gov, and include the following 
words in the body of the message, ``get form.'' A sample form and 
directions will be sent in response.
     Paper Filers: Parties who choose to file by paper must 
file an original and four copies of each filing. If more than one 
docket or rulemaking number appears in the caption of this proceeding, 
filers must submit two additional copies for each additional docket or 
rulemaking number.
    Filings can be sent by hand or messenger delivery, by commercial 
overnight courier, or by first-class or overnight U.S. Postal Service 
mail (although we continue to experience delays in receiving U.S. 
Postal Service mail). All filings must be addressed to the Commission's 
Secretary, Office of the Secretary, Federal Communications Commission.
     The Commission's contractor will receive hand-delivered or 
messenger-delivered paper filings for the Commission's Secretary at 236 
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing 
hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be 
held together with rubber bands or fasteners. Any envelopes must be 
disposed of before entering the building.
     Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743.
     U.S. Postal Service first-class, Express, and Priority 
mail must be addressed to 445 12th Street, SW., Washington DC 20554.
    35. Availability of Documents. Comments, reply comments, and ex 
parte submissions will be available for public inspection during 
regular business hours in the FCC Reference Center, Federal 
Communications Commission, 445 12th Street, SW., CY-A257, Washington DC 
20554. These documents will also be available via ECFS. Documents will 
be available electronically in ASCII, Word 97 and/or Adobe Acrobat.
    36. Accessibility Information. 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 
FCC's Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 
202-418-0432 (TTY).

Paperwork Reduction Act Analysis

    37. The Notice seeks comment on potential information collection 
requirements. The Commission will invite the general public to comment 
at a later date on any rules developed as a result of this proceeding 
that require the collection of information, as required by the 
Paperwork Reduction Act of 1995, Public Law 104.13. The Commission will 
publish a separate notice seeking these comments from the public. In 
addition, pursuant to the Small Business Paperwork Relief Act of 2002, 
Public Law 107-198, see 44 U.S.C. 3506(c)(4), we will seek specific 
comment on how we might ``further reduce the information collection 
burden for small business concerns with fewer than 25 employees.''

Ordering Clauses

    It is ordered, that pursuant to the authority contained in sections 
1, 2(a), 4(i, j), 257, 303(r), 307-10, 336, and 614-15 of the 
Communications Act of 1934, as amended, 47 U.S.C. 151, 152(a), 154(i, 
j), 257, 303(r), 307-310, 336, 534-35, notice is hereby given of the 
proposals described in this Third Further Notice of Proposed Rule 
Making.
    It is further ordered that the Reference Information Center, 
Consumer Information Bureau, shall send a copy of this Notice of 
Proposed Rule Making, including the Initial Regulatory Flexibility 
Analysis, to the Chief Counsel for Advocacy of the Small Business 
Administration.

List of Subjects in 47 CFR Part 73

    Radio, Television.


[[Page 28407]]


Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. E8-11043 Filed 5-15-08; 8:45 am]
BILLING CODE 6712-01-P