Basic Service Tier Encryption Compatibility Between Cable Systems and Consumer Electronics Equipment, 66666-66672 [2011-27743]
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Federal Register / Vol. 76, No. 208 / Thursday, October 27, 2011 / Proposed Rules
in the Unfunded Mandates Reform Act
of 1995 (Pub. L.104–4);
• Does not have Federalism
implications as specified in Executive
Order 13132 (64 FR 43255, August 10,
1999);
• Is not an economically significant
regulatory action based on health or
safety risks subject to Executive Order
13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action
subject to Executive Order 13211 (66 FR
28355, May 22, 2001);
• Is not subject to requirements of
Section 12(d) of the National
Technology Transfer and Advancement
Act of 1995 (15 U.S.C. 272 note) because
application of those requirements would
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and
• Does not provide EPA with the
discretionary authority to address, as
appropriate, disproportionate human
health or environmental effects, using
practicable and legally permissible
methods, under Executive Order 12898
(59 FR 7629, February 16, 1994).
In addition, this rule does not have
tribal implications as specified by
Executive Order 13175 (65 FR 67249,
November 9, 2000), because the SIP is
not approved to apply in Indian country
located in the state, and EPA notes that
it will not impose substantial direct
costs on tribal governments or preempt
tribal law.
List of Subjects in 40 CFR Part 52
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compounds.
Dated: October 18, 2011.
Susan Hedman,
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[FR Doc. 2011–27810 Filed 10–26–11; 8:45 am]
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47 CFR Part 76
[MB Docket No. 11–169; PP Docket No. 00–
67; FCC 11–153]
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Basic Service Tier Encryption
Compatibility Between Cable Systems
and Consumer Electronics Equipment
Federal Communications
Commission.
ACTION: Proposed rule.
AGENCY:
In this document, we propose
a new rule to allow cable operators to
encrypt the basic service tier in alldigital systems, provided that those
cable operators undertake certain
SUMMARY:
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consumer protection measures for a
limited period of time in order to
minimize any potential subscriber
disruption.
DATES: Submit comments on or before
November 28, 2011. Submit reply
comments on or before December 12,
2011.
FOR FURTHER INFORMATION CONTACT: For
additional information on this
proceeding, contact Brendan Murray,
Brendan.Murray@fcc.gov, of the Media
Bureau, Policy Division, (202) 418–
2120.
SUPPLEMENTARY INFORMATION: This is a
summary of the Commission’s Notice of
Proposed Rulemaking, FCC 11–153,
adopted on October 13, 2011 and
released on October 14, 2011. The full
text of this document is available for
public inspection and copying during
regular business hours in the FCC
Reference Center, Federal
Communications Commission, 445 12th
Street, SW., CY–A257, Washington, DC
20554. This document will also be
available via ECFS (https://www.fcc.gov/
cgb/ecfs/). (Documents will be available
electronically in ASCII, Word 97, and/
or Adobe Acrobat.) The complete text
may be purchased from the
Commission’s copy contractor, 445 12th
Street, SW., Room CY–B402,
Washington, DC 20554. To request these
documents in accessible formats
(computer diskettes, large print, audio
recording, and Braille), send an email to
fcc504@fcc.gov or call the Commission’s
Consumer and Governmental Affairs
Bureau at (202) 418–0530 (voice), (202)
418–0432 (TTY).
Summary of the Notice of Proposed
Rulemaking
1. With this Notice of Proposed
Rulemaking (NPRM), we seek comment
on whether to retain the basic service
tier encryption prohibition for all-digital
cable systems. As discussed below, we
tentatively conclude that allowing cable
operators to encrypt the basic service
tier in all-digital systems will not
substantially affect compatibility
between cable service and consumer
electronics equipment for most
subscribers. At the same time, however,
we recognize that some consumers
subscribe only to a cable operator’s
digital basic service tier and currently
are able to do so without using a set-top
box or other equipment. Similarly, there
are consumers that may have a set-top
box on a primary television but access
the unencrypted digital basic service
tier on second or third televisions in
their home without using a set-top box
or other equipment. Although we expect
the number of subscribers in these
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situations to be relatively small, these
consumers may be affected by lifting the
encryption prohibition for all-digital
cable systems. Accordingly, we
tentatively conclude that, any operators
of all-digital cable systems that choose
to encrypt the basic service tier must
comply with certain consumer
protection measures for a limited period
of time in order to minimize any
potential subscriber disruption.
2. In the Cable Television Consumer
Protection and Competition Act of 1992
(1992 Cable Act), Congress recognized
that compatibility problems between
cable service and consumer electronics
equipment were limiting and/or
precluding the operation of premium
features of consumer equipment and
were affecting the ability of consumer
equipment to receive cable
programming. Section 624A of the Act
was added by Section 17 of the 1992
Cable Act to address this issue.
Specifically, section 624A requires the
Commission to issue regulations to
assure compatibility between consumer
electronics equipment and cable
systems. In 1994, the Commission
implemented the requirements of
section 624A. As part of that
implementation, the Commission added
§ 76.630(a) to its rules. Section 76.630(a)
of the Commission’s rules prohibits
cable operators from scrambling or
encrypting signals carried on the basic
tier of service. The Commission
determined that this rule would
significantly advance compatibility by
ensuring that all subscribers would be
able to receive basic tier signals ‘‘in the
clear’’ and that basic-only subscribers
with cable-ready televisions would not
need set-top boxes. The Commission
concluded that ‘‘[t]his rule also will
have minimal impact on the cable
industry in view of the fact that most
cable systems now generally do not
scramble basic tier signals.’’
3. Subsequent to the Commission’s
adoption of the encryption ban, cable
operators began to upgrade their
systems to offer digital cable service.
More recently, cable operators’
transition to more efficient all-digital
systems has freed up spectrum to offer
new or improved products and services
like higher-speed Internet access and
high definition programming. As a
result of this digital transition, most
cable subscribers now have at least one
cable set-top box or CableCARD device
in their homes. As cable operators began
to transition programming on their cable
programming service tier (CPST) to
digital, many program carriage
agreements required cable operators to
encrypt that programming as a
condition of carriage. Encryption refers
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to the method that cable operators use
to make sure that cable service is
available only to subscribers who have
paid for service. Because encryption
serves such an important purpose,
encryption of digital cable service has
become more sophisticated than analog
scrambling techniques. Encryption
methods did not used to be standard
across all cable systems, however. In
2003, therefore, the Commission
adopted the CableCARD standard to
address this incompatibility problem.
The CableCARD, which subscribers
must lease from their cable provider
either as a part of a leased set-top box
or separately for use in a compatible
retail television or set-top box, decrypts
the cable services that the cable operator
encrypts. At present, approximately 77
percent of cable subscribers have at least
one digital cable set-top box or retail
CableCARD device in their home.
4. The fact that most subscribers have
a cable set-top box or retail CableCARD
device limits the impact of encryption
of the basic service tier in all-digital
systems on cable subscribers. Most
television sets, consumer electronics
devices, and leased set-top boxes have
included QAM tuners since at least
2007, meaning that those devices are
capable of tuning unencrypted digital
cable service. As stated above, however,
most cable operators who have
transitioned to all-digital service
encrypt the entire CPST. Therefore,
many cable subscribers currently use
CableCARDs (either in a retail device or
leased set-top box) to decrypt their cable
service. The remainder of digital cable
subscribers use either (i) leased set-top
boxes with integrated security (offered
under waivers of the separated security
requirement or originally deployed
before the requirement became effective)
to decrypt cable service, or (ii)
television sets or devices with QAM
tuners, but without CableCARDs, to
receive any remaining unencrypted
cable signals (typically limited to the
basic service tier). Encryption of the
basic service tier in all-digital systems
would affect this second group, i.e., the
digital cable subscribers who use
television sets or devices with QAM
tuners, but without CableCARDs. We do
not know how many subscribers fall
into this group, but based on the
Cablevision Report discussed below, we
expect it to be small.
5. In the past, the Commission has
waived the basic service tier encryption
prohibition on a demonstration of
extraordinary theft of service. Theft of
service occurs when unauthorized users
physically connect their outlets to the
cable plant; in other words, people
would climb poles and connect the
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cable operator’s coaxial cable to homes
that do not subscribe to cable service.
Recently, the Commission has received
several requests for waiver of the rule
prohibiting encryption of the basic
service tier based on the argument that
the rule imposes more burdens than
benefits as cable operators transition to
all-digital systems. The petitioners argue
that there are very few people who
subscribe only to the basic service tier
in all-digital systems and therefore the
overwhelming majority of subscribers to
all-digital systems already have a set-top
box or CableCARD-equipped retail
device and therefore would be
unaffected by encryption of the basic
service tier. Furthermore, they contend,
encrypting the basic service tier in an
all-digital system will eliminate the
need for many service appointments
because it will allow cable operators to
enable and disable cable service
remotely by activating and deactivating
the encryption capability of set-top
boxes and CableCARDs from the
headend. In order to remotely activate
and deactivate service, cable operators
must leave every home connected to the
cable plant rather than manually
disconnect the cable that runs to a
home, which is how many cable
operators disconnect service today. If
the cable operator is allowed to encrypt
every signal, the operator can keep
every home connected to the cable plant
regardless of whether the home
subscribes to cable service. The operator
can ensure that only paid subscribers
are able to access the service by
authorizing and deauthorizing
CableCARDs as people subscribe or
cancel cable service.
6. In waiver proceedings, certain
commenters have asserted that while
encryption of all service tiers has its
benefits, it also imposes some burdens
on consumers and device
manufacturers. For example, some
commenters explained that they own or
manufacture devices like personal
computer cable tuner cards that cable
subscribers use to view or record
unencrypted programming with their
computers. These commenters
expressed concern that those devices do
not have the ability to decrypt cable
signals and therefore could not display
encrypted cable programming. These
commenters asserted that they
purchased or manufactured these
devices based on the expectation that
unencrypted basic service tier QAM
signals would be available from cable
operators, and that encryption of the
basic service tier would make the
devices useless. In addition, some
commenters objected to the impact that
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encryption of the basic service tier
would have on televisions with clearQAM tuners that currently are attached
to the cable network directly without a
set-top box. Encryption of the basic
service tier would require those
subscribers to lease a set-top box to
access basic service tier channels on
those television sets.
7. In January 2010, the Media Bureau
granted a conditional waiver of the rule
that prohibits encryption of the basic
service tier to Cablevision with respect
to Cablevision’s New York City systems,
which are all-digital. The Bureau based
its decision on the fact that encryption
of the basic service tier on Cablevision’s
all-digital systems would allow
Cablevision to enable and disable cable
service remotely. The Bureau also found
that remote activation and deactivation
of cable service would ‘‘reduce[] costs
for Cablevision, improve[] customer
service, and reduce[] fuel consumption
and CO2 emissions.’’ Remote activation
and deactivation, the Bureau concluded,
would reduce installation costs for
Cablevision’s subscribers and also
benefit these subscribers by reducing
the number of necessary service calls, as
compared to unencrypted cable systems.
The Bureau reasoned that Cablevision
sufficiently addressed the problem of
incompatibility with consumer
electronics ‘‘by providing basic-only
subscribers with set-top boxes or
CableCARDs without charge for
significant periods of time.’’ Finally, the
Bureau also concluded that the waiver
would ‘‘provide an experimental benefit
that could be valuable in the
Commission’s further assessment of the
utility of the encryption rule,’’ and
therefore required Cablevision to file
three reports detailing the effect of
encryption on subscribers. Four cable
operators have filed similar petitions for
waiver with the Commission’s Media
Bureau since the release of the
Cablevision Waiver, and we understand
that additional cable operators plan to
file in the absence of this proceeding.
8. We initiate this proceeding to
determine whether the Commission’s
basic service tier encryption
prohibition, which was adopted over 15
years ago, remains necessary to promote
compatibility between digital cable
service and consumer electronics
equipment in all circumstances. In this
regard, we note, as described above, that
the video marketplace has changed
significantly over this period.
Specifically, most cable operators have
updated their systems to provide
bidirectional, digital signals in addition
to analog service, and some cable
operators, like RCN and
BendBroadband, transmit only digital
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signals and have eliminated analog
service in all of their systems. Other
operators, like Cablevision and Comcast,
have eliminated analog service on
certain systems and plan to eliminate
analog service in all systems over the
coming years. As discussed above, data
from SNL Kagan indicates that over
three-quarters of cable subscribers have
at least one device in their home that
can both demodulate and decrypt digital
cable services. Furthermore, because the
Commission incorporated the
CableCARD standard into our rules in
2003, consumer electronics
manufacturers can build digital cable
ready devices that can access encrypted
cable service without the need for a
converter box. Given these marketplace
and regulatory developments, we
tentatively conclude that it is
appropriate to allow basic service tier
encryption for all-digital cable systems,
subject to certain measures intended to
ameliorate any potential harm to
consumers in the short run. Our
proposal is informed by the information
garnered from Cablevision’s first year of
implementation under the Bureau’s
waiver conditions. Specifically, in its
recently filed final report, Cablevision
stated that basic service tier encryption
led to a reduction of 2,763 truck rolls,
and predicted that it eventually will
perform over 70 percent of all
deactivations remotely. In its waiver
petition, Cablevision asserted that by
reducing service calls it could reduce
the environmental harms associated
with use of gas-consuming, trafficcausing trucks. Furthermore,
Cablevision reports that no subscribers
filed complaints regarding encryption of
the basic service tier, which suggests
that with the appropriate consumer
protection measures, encryption of the
basic service tier in all-digital systems
does not affect subscribers adversely.
We believe that this evidence shows
that, where cable operators undertake
appropriate consumer protection
measures, the costs of retaining this rule
(e.g., the need to schedule service
appointments whenever a consumer
subscribes to or cancels cable service as
well as the expense and effect of cable
operators’ trucks on traffic and the
environment) outweigh the benefits of
retaining it (e.g., ensuring the continued
utility of devices with clear-QAM
tuners). We seek comment on this
tentative conclusion. Specifically, we
seek comment on the costs and benefits
to subscribers and cable operators
associated with the basic service tier
encryption rule as it applies to alldigital cable systems. We also invite
comment on any environmental costs
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and benefits associated with the rule.
Would elimination of the encryption
ban benefit the environment through
reduction in the gas consumption and
traffic associated with truck rolls, and
would those benefits outweigh any
countervailing environmental effects,
such as energy consumption from
additional set-top boxes? To the extent
feasible, commenters should quantify in
dollars any asserted costs or benefits of
the basic service tier encryption
prohibition.
9. We propose to allow encryption of
the basic service tier only with respect
to all-digital systems, as remote
activation and deactivation of cable
service, and its attendant benefits, are
only feasible in all-digital systems. We
seek comment on the specific criteria
that the Commission should use to
determine what constitutes an all-digital
cable system. For example, what if a
system transmits nearly all of its
channels solely in digital, but maintains
a single, unencrypted analog channel to
inform potential subscribers about how
to subscribe to service? We seek
comment also about digital cable
services that are not QAM-based. Is it
appropriate to include IP and other nonQAM digital cable services in the
definition of an all-digital cable system
for the purposes of the proposed rule
revision? We also seek comment on
whether the Commission should revise
the encryption rule with respect to any
hybrid (analog/digital) systems where
basic service tier programming is
provided digitally but the cable operator
also continues to provide some analog
service to its subscribers (which is the
case in many cable systems today).
Would revision of the encryption rule
with respect to those systems have any
attendant benefits given that remote
activation and deactivation of cable
service is not feasible in hybrid
systems?
10. We further seek comment on
whether our proposed rule would
satisfy our regulatory obligations under
section 624A of the Communications
Act. Section 624A directs the
Commission to issue regulations as
necessary to assure compatibility
between televisions and video cassette
recorders and cable systems, consistent
with the need to prevent theft of cable
service, so that cable subscribers will be
able to enjoy the full benefit of both the
programming available on cable systems
and the functions available on their
televisions and video cassette recorders.
Essentially, with section 624A, Congress
sought to develop a ‘‘plug and play’’
compatibility regime. We note that
while Congress specifically cited
scrambling and encryption as an
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impediment to compatibility, it
nonetheless directed the Commission to
‘‘determine whether and, if so, under
what circumstances to permit cable
systems to scramble or encrypt signals
or to restrict cable systems in the
manner in which they encrypt or
scramble signals.’’ Section 624A further
prohibits the Commission from limiting
the use of scrambling or encryption
technology where the use of such
technology does not interfere with the
functions of subscribers’ television
receivers or video cassette recorders.
Based on section 624A, we believe the
Commission has broad authority to
address and regulate encryption
technology within the parameters
established by Congress.
11. We recognize that some
subscribers of only the basic service tier
currently access digital cable service
without a CableCARD or converter box.
We tentatively conclude that if the
Commission allows cable operators to
encrypt the basic service tier in alldigital systems, we should, at the same
time, minimize any instances of
incompatibility due to encryption of the
basic service tier by implementing
transitional measures for the limited
universe of subscribers who currently
access the unencrypted digital basic
service tier without a set-top box. That
is, we recognize that there are some
consumers who currently are able to
access the basic service tier without
using a set-top box because of the
current encryption prohibition.
Accordingly, to mitigate any potential
harm experienced by these consumers,
we believe our rules should implement
transitional measures to prevent
consumers from having to purchase or
lease new equipment immediately in
order to continue accessing the basic
service tier if their cable operators
choose to encrypt this tier.
12. When the Media Bureau granted
the waiver authorizing Cablevision to
encrypt the basic service tier, it
conditioned that waiver to limit the
immediate costs that basic service tier
subscribers would face on account of
the need for additional equipment like
set-top boxes to provide digital
televisions equipped with clear QAM
tuners access to basic service tier
channels. Those conditions require
Cablevision to offer ‘‘(a) current basiconly subscribers up to two set-top boxes
or CableCARDs without charge for up to
two years, (b) digital subscribers who
have an additional television set
currently receiving basic-only service
one set-top box or CableCARD without
charge for one year, and (c) current
qualified low-income basic-only
subscribers up to two set-top boxes or
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CableCARDs without charge for five
years.’’ We believe that similar measures
are appropriate and necessary for
purposes of relaxing the encryption ban
because of the potential harm to basiconly subscribers who have come to rely
on access to unencrypted basic-only
service. A transition period will provide
affected subscribers time to make
informed choices about equipment and/
or other alternatives available in their
service area. We therefore propose that
cable operators that choose to encrypt
the basic service tier in their service
area provide to subscribers, without
charge for a limited time, devices that
can decrypt the basic service tier as
described above. We seek comment on
this proposal.
13. Are the consumer protection
measures we propose to adopt adequate
to protect all subscribers of digital cable
systems in all areas of the country? We
seek comment on the number of
subscribers that this rule change will
affect. We also seek comment on an
appropriate time frame for requiring
cable operators to provide set-top boxes
at no cost to current subscribers, and
particularly with regard to low-income
subscribers. Are the time frames
established in the Cablevision
proceeding appropriate to serve the goal
of minimizing the immediate costs that
basic subscribers and subscribers with
additional sets receiving basic-only
service face through this modification of
the rules? In the context of the
Cablevision waiver, the Media Bureau
used receipt of Medicaid as an indicator
of a current qualified low income basiconly subscriber. Does it make sense to
do so in the context of this NPRM? We
invite commenters to suggest other
indicators to delineate what constitutes
a current qualified low income basiconly subscriber. Are additional
safeguards necessary and appropriate,
and, if so, what are these safeguards?
Would an interim 7-year time period or
longer be more consistent with ensuring
there is not an economic hardship on
low-income subscribers who prior to the
potential relaxing of the encryption ban
would not have needed additional
equipment? We seek comment on any
other measures the Commission should
take to protect subscribers if we decide
to relax the prohibition on encryption of
the basic service tier for all-digital cable
systems.
14. Although we propose to relax the
encryption ban for all-digital systems,
our proposal does not require cable
operators operating those systems to
encrypt the basic service tier. Rather,
our proposed rule permits cable
operators to encrypt this tier provided
that they offer free set-top boxes to
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basic-only subscribers for a limited
period of time. Because cable operators
may decide whether they wish to
encrypt under the requisite regulatory
conditions (i.e., provide set-top boxes at
no cost to affected subscribers for a
limited period), we see no statutory or
constitutional constraints to imposing
such a requirement. In that regard, we
note that the proposed regulatory
conditions would be implemented
pursuant to our authority under sections
624A, not as a rate regulation prescribed
under section 623(b) of the Act.
Accordingly, we do not believe section
623(b)(3)(A)’s requirement to base on
actual cost any price or rate standards
for equipment installation and leasing
would bar the Commission from
imposing the set-top box condition for
relaxing the encryption prohibition. We
seek comment on this analysis.
15. Ex Parte Presentations. The
proceeding this NPRM initiates shall be
treated as a ‘‘permit-but-disclose’’
proceeding in accordance with the
Commission’s ex parte rules. Persons
making ex parte presentations must file
a copy of any written presentation or a
memorandum summarizing any oral
presentation within two business days
after the presentation (unless a different
deadline applicable to the Sunshine
period applies). Persons making oral ex
parte presentations are reminded that
memoranda summarizing the
presentation must (1) list all persons
attending or otherwise participating in
the meeting at which the ex parte
presentation was made, and (2)
summarize all data presented and
arguments made during the
presentation. If the presentation
consisted in whole or in part of the
presentation of data or arguments
already reflected in the presenter’s
written comments, memoranda or other
filings in the proceeding, the presenter
may provide citations to such data or
arguments in his or her prior comments,
memoranda, or other filings (specifying
the relevant page and/or paragraph
numbers where such data or arguments
can be found) in lieu of summarizing
them in the memorandum. Documents
shown or given to Commission staff
during ex parte meetings are deemed to
be written ex parte presentations and
must be filed consistent with § 1.1206(b)
of the Commission’s rules. In
proceedings governed by § 1.49(f) of the
Commission’s rules or for which the
Commission has made available a
method of electronic filing, written ex
parte presentations and memoranda
summarizing oral ex parte
presentations, and all attachments
thereto, must be filed through the
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electronic comment filing system
available for that proceeding, and must
be filed in their native format (e.g., .doc,
.xml, .ppt, searchable .pdf). Participants
in this proceeding should familiarize
themselves with the Commission’s ex
parte rules.
16. Initial Regulatory Flexibility
Analysis. The Regulatory Flexibility Act
of 1980, as amended (RFA), requires
that a regulatory flexibility analysis be
prepared for notice and comment rule
making proceedings, unless the agency
certifies that ‘‘the rule will not, if
promulgated, have a significant
economic impact on a substantial
number of small entities.’’ The RFA
generally defines the term ‘‘small
entity’’ as having the same meaning as
the terms ‘‘small business,’’ ‘‘small
organization,’’ and ‘‘small governmental
jurisdiction.’’ In addition, the term
‘‘small business’’ has the same meaning
as the term ‘‘small business concern’’
under the Small Business Act. A ‘‘small
business concern’’ is one which: (1) Is
independently owned and operated; (2)
is not dominant in its field of operation;
and (3) satisfies any additional criteria
established by the Small Business
Administration (SBA).
17. With respect to this NPRM, an
Initial Regulatory Flexibility Analysis
(IRFA) under the Regulatory Flexibility
Act is contained below. Written public
comments are requested in the IFRA,
and must be filed in accordance with
the same filing deadlines as comments
on the NPRM, with a distinct heading
designating them as responses to the
IRFA. The Commission will send a copy
of this NPRM, including the IRFA, in a
report to Congress pursuant to the
Congressional Review Act. In addition,
a copy of this NPRM and the IRFA will
be sent to the Chief Counsel for
Advocacy of the SBA, and will be
published in the Federal Register.
18. Initial Paperwork Reduction Act of
1995 Analysis Paperwork Reduction Act
Analysis. This document does not
contain proposed information collection
requirements subject to the Paperwork
Reduction Act of 1995, Public Law 104–
13. In addition, therefore, it does not
contain any proposed information
collection burden for small business
concerns with fewer than 25 employees,
pursuant to the Small Business
Paperwork Relief Act of 2002, Public
Law 107–198, see 44 U.S.C. 3506(c)(4).
19. Comment Filing Procedures.
Pursuant to §§ 1.415 and 1.419 of the
Commission’s rules, 47 CFR 1.415 and
1.419, interested parties may file
comments and reply comments on or
before the dates indicated on the first
page of this document. Comments may
be filed using the Commission’s
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Electronic Comment Filing System
(ECFS). See Electronic Filing of
Documents in Rulemaking Proceedings,
63 FR 24121 (1998).
20. Electronic Filers: Comments may
be filed electronically using the Internet
by accessing the ECFS: https://
fjallfoss.fcc.gov/ecfs2/.
21. Paper Filers: Parties who choose
to file by paper must file an original and
one copy of each filing. If more than one
docket or rulemaking number appears in
the caption of this proceeding, filers
must submit two additional copies for
each additional docket or rulemaking
number. Filings can be sent by hand or
messenger delivery, by commercial
overnight courier, or by first-class or
overnight U.S. Postal Service mail. All
filings must be addressed to the
Commission’s Secretary, Office of the
Secretary, Federal Communications
Commission. All hand-delivered or
messenger-delivered paper filings for
the Commission’s Secretary must be
delivered to FCC Headquarters at 445
12th St., SW., Room TW–A325,
Washington, DC 20554. The filing hours
are 8 a.m. to 7 p.m. All hand deliveries
must be held together with rubber bands
or fasteners. Any envelopes and boxes
must be disposed of before entering the
building. Commercial overnight mail
(other than U.S. Postal Service Express
Mail and Priority Mail) must be sent to
9300 East Hampton Drive, Capitol
Heights, MD 20743. U.S. Postal Service
first-class, Express, and Priority mail
must be addressed to 445 12th Street,
SW., Washington DC, 20554.
22. People with Disabilities: To
request materials in accessible formats
for people with disabilities (braille,
large print, electronic files, audio
format), send an email to fcc504@fcc.gov
or call the Consumer & Governmental
Affairs Bureau at (202) 418–0530
(voice), (202) 418–0432 (tty).
23. Additional Information: For
additional information on this
proceeding, please contact Brendan
Murray of the Media Bureau, Policy
Division, Brendan.Murray@fcc.gov,
(202) 418–1573.
24. Accordingly, it is ordered that,
pursuant to the authority contained in
sections 1, 4(i), 4(j), 303(r), 403, and
624A of the Communications Act of
1934, as amended, 47 U.S.C. sections
151, 154(i), 154(j), 303(r), 403, and 544a,
this Notice of Proposed Rulemaking is
adopted.
25. As required by the Regulatory
Flexibility Act of 1980, as amended
(RFA) the Commission has prepared this
Initial Regulatory Flexibility Analysis
(IRFA) of the possible significant
economic impact on small entities by
the policies and rules proposed in this
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NPRM. Written public comments are
requested on this IRFA. Comments must
be identified as responses to the IRFA
and must be filed by the deadlines for
comments on the NPRM provided
above. The Commission will send a
copy of the NPRM, including this IRFA,
to the Chief Counsel for Advocacy of the
Small Business Administration. In
addition, the NPRM and IRFA (or
summaries thereof) will be published in
the Federal Register.
26. Need for, and Objectives of the
Proposed Rules. With this NPRM, the
Commission seeks comment on
elimination of the basic service tier
encryption prohibition for all-digital
cable systems.The need for FCC
regulation in this area derives from
changing technology in the cable
services market. When the Commission
adopted technical rules in the 1990s,
digital cable service was in its infancy,
and therefore the rules were adopted
with analog cable service in mind.
Today, digital cable service is common,
and certain technical rules related to
cable service do not translate well.
Therefore, the Commission proposes to
allow all-digital cable operators to
encrypt the basic service tier.
27. Legal Basis. The authority for the
action proposed in this rulemaking is
contained in sections 1, 4(i) and (j), 303,
403, 601, 624, and 624A of the
Communications Act of 1934, as
amended, 47 U.S.C. 151, 154(i) and (j),
303, 403, 521, 544, and 544a.
28. Description and Estimate of the
Number of Small Entities to Which the
Proposed Rules Will Apply. The RFA
directs the Commission to provide a
description of and, where feasible, an
estimate of the number of small entities
that will be affected by the proposed
rules. The RFA generally defines the
term ‘‘small entity’’ as 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
Small Business Administration
(‘‘SBA’’).
29. Wired Telecommunications
Carriers. The 2007 North American
Industry Classification System (NAICS)
defines ‘‘Wired Telecommunications
Carriers’’ as follows: ‘‘This industry
comprises establishments primarily
engaged in operating and/or providing
access to transmission facilities and
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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 developed a small
business size standard for wireline firms
within the broad economic census
category, ‘‘Wired Telecommunications
Carriers.’’ 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. Of this
total, 2,395 firms had employment of
999 or fewer employees, and 37 firms
had employment of 1,000 employees or
more. Thus, under this category and
associated small business size standard,
the majority of firms can be considered
small.
30. Wired Telecommunications
Carriers—Cable and Other Program
Distribution. This category includes,
among others, cable operators, direct
broadcast satellite (DBS) services, home
satellite dish (HSD) services, satellite
master antenna television (SMATV)
systems, and open video systems (OVS).
The data we have available as a basis for
estimating the number of such entities
were gathered under a superseded SBA
small business size standard formerly
titled Cable and Other Program
Distribution. The former Cable and
Other Program Distribution category is
now included in the category of Wired
Telecommunications Carriers, the
majority of which, as discussed above,
can be considered small. 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. Thus,
we believe that a substantial number of
entities included in the former Cable
and Other Program Distribution category
may have been categorized as small
entities under the now superseded SBA
small business size standard for Cable
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and Other Program Distribution. With
respect to OVS, the Commission has
approved approximately 120 OVS
certifications with some OVS operators
now providing service. Broadband
service providers (BSPs) are currently
the only significant holders of OVS
certifications or local OVS franchises,
even though OVS is one of four
statutorily-recognized options for local
exchange carriers (LECs) to offer video
programming services. As of June 2006,
BSPs served approximately 1.4 million
subscribers, representing 1.46 percent of
all MVPD households. Among BSPs,
however, those operating under the OVS
framework are in the minority. The
Commission does not have financial
information regarding the entities
authorized to provide OVS, some of
which may not yet be operational. We
thus believe that at least some of the
OVS operators may qualify as small
entities.
31. Cable System Operators (Rate
Regulation Standard). 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. As of
2006, 7,916 cable operators qualify as
small cable companies under this
standard. In addition, under the
Commission’s rules, a ‘‘small system’’ is
a cable system serving 15,000 or fewer
subscribers. Industry data indicate that
6,139 systems have under 10,000
subscribers, and an additional 379
systems have 10,000–19,999
subscribers. Thus, under this standard,
most cable systems are small.
32. Cable System Operators (Telecom
Act Standard). 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.’’ There are approximately
65.3 million cable subscribers in the
United States today. Accordingly, an
operator serving fewer than 654,000
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.
Based on available data, we find that the
number of cable operators serving
654,000 subscribers or less totals
approximately 7,916. We note that the
Commission neither requests nor
collects information on whether cable
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system operators are affiliated with
entities whose gross annual revenues
exceed $250 million. Although it seems
certain that some of these cable system
operators are affiliated with entities
whose gross annual revenues exceed
$250,000,000, we are unable at this time
to estimate with greater precision the
number of cable system operators that
would qualify as small cable operators
under the definition in the
Communications Act.
33. Cable and Other Subscription
Programming. The Census Bureau
defines this category as follows: ‘‘This
industry comprises establishments
primarily engaged in operating studios
and facilities for the broadcasting of
programs on a subscription or fee basis
* * * . These establishments produce
programming in their own facilities or
acquire programming from external
sources. The programming material is
usually delivered to a third party, such
as cable systems or direct-to-home
satellite systems, for transmission to
viewers.’’ The SBA has developed a
small business size standard for firms
within this category, which is all firms
with $15 million or less in annual
receipts. According to Census Bureau
data for 2002, there were 270 firms in
this category that operated for the entire
year. Of this total, 217 firms had annual
receipts of under $10 million and 13
firms had annual receipts of $10 million
to $24,999,999. Thus, under this
category and associated small business
size standard, the majority of firms can
be considered small.
34. Computer Terminal
Manufacturing. ‘‘Computer terminals
are input/output devices that connect
with a central computer for processing.’’
The SBA has developed a small
business size standard for this category
of manufacturing; that size standard is
1,000 or fewer employees. According to
Census Bureau data, there were 71
establishments in this category that
operated with payroll during 2002, and
all of the establishments had
employment of under 1,000.
Consequently, we estimate that all of
these establishments are small entities.
35. Other Computer Peripheral
Equipment Manufacturing. Examples of
peripheral equipment in this category
include keyboards, mouse devices,
monitors, and scanners. The SBA has
developed a small business size
standard for this category of
manufacturing; that size standard is
1,000 or fewer employees. According to
Census Bureau data, there were 860
establishments in this category that
operated with payroll during 2002. Of
these, 851 had employment of under
1,000, and an additional five
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66671
establishments had employment of
1,000 to 2,499. Consequently, we
estimate that the majority of these
establishments are small entities.
36. Audio and Video Equipment
Manufacturing. These establishments
manufacture ‘‘electronic audio and
video equipment for home
entertainment, motor vehicle, public
address and musical instrument
amplifications.’’ The SBA has
developed a small business size
standard for this category of
manufacturing; that size standard is 750
or fewer employees. According to
Census Bureau data, there were 571
establishments in this category that
operated with payroll during 2002. Of
these, 560 had employment of under
500, and ten establishments had
employment of 500 to 999.
Consequently, we estimate that the
majority of these establishments are
small entities.
37. Description of Reporting,
Recordkeeping and Other Compliance
Requirements. The rules proposed in
the NPRM will not impose additional
reporting, recordkeeping, and
compliance requirements on cable
operators.
38. Steps Taken To Minimize
Significant Impact on Small Entities,
and Significant Alternatives Considered.
The RFA requires an agency to describe
any significant alternatives that it has
considered in reaching its proposed
approach, which may include the
following four alternatives (among
others): (1) The establishment of
differing compliance or reporting
requirements or timetables that take into
account the resources available to small
entities; (2) the clarification,
consolidation, or simplification of
compliance or reporting requirements
under the rule for small entities; (3) the
use of performance, rather than design,
standards; and (4) an exemption from
coverage of the rule, or any part thereof,
for small entities.
39. As indicated above, the NPRM
seeks comment on elimination of the
basic service tier encryption prohibition
for all-digital cable systems. The
Commission considered leaving the
current rule in place. The Commission
tentatively concludes, however, that an
exemption of the rule for all-digital
cable systems could reduce the service
calls that a cable operator must perform,
and therefore the Commission believes
that this proposed rule change will
reduce burdens on small entities.
40. We welcome comments that
suggest modifications of any proposal if
based on evidence of potential
differential impact on smaller entities.
In addition, the Regulatory Flexibility
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Act requires agencies to seek comment
on possible small entity-related
alternatives, as noted above. We
therefore seek comment on alternatives
to the proposed rules that would assist
small entities while ensuring improved
customer support by cable operators for
digital cable products purchased at
retail.
41. Federal Rules Which Duplicate,
Overlap, or Conflict with the
Commission’s Proposals. None.
List of Subjects in 47 CFR Part 76
Administrative practice and
procedure, Cable television, Equal
employment opportunity, Political
candidates, Reporting and
recordkeeping requirements.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
Rule Changes
For the reasons discussed in the
preamble, the Federal Communications
Commission proposes to amend 47 CFR
Part 76 as follows:
PART 76—MULTICHANNEL VIDEO
AND CABLE TELEVISION SERVICE
1. The authority citation for part 76
continues to read as follows:
Authority: 47 U.S.C. 151, 152, 153, 154,
301, 302, 302a, 303, 303a, 307, 308, 309, 312,
315, 317, 325, 339, 340, 341, 503, 521, 522,
531, 532, 534, 535, 536, 537, 543, 544, 544a,
545, 548, 549, 552, 554, 556, 558, 560, 561,
571, 572, 573.
2. Section 76.630 is amended by
revising paragraph (a) and Note 1 and 2
to read as follows:
wreier-aviles on DSK7SPTVN1PROD with PROPOSALS
§ 76.630 Compatibility with consumer
electronics equipment.
(a) Cable system operators shall not
scramble or otherwise encrypt signals
carried on the basic service tier.
(1) This prohibition shall not apply in
systems in which:
(i) No television signals are provided
using the NTSC system; and
(ii) The cable operator offers to its
existing basic service tier subscribers
(who do not use a set-top box or
CableCARD at the time of encryption)
the equipment necessary to descramble
or decrypt the basic service tier signals
(the subscriber’s choice of a set-top box
or CableCARD) on up to two separate
television sets without charge for two
years from the date of encryption; and
(iii) The cable operator offers to its
existing digital subscribers who have an
additional television set currently
receiving basic-only service without a
set-top box, the equipment necessary to
descramble or decrypt the basic service
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tier signals on one television set without
charge for one year from the date of
encryption; and
(iv) The cable operator offers to all
existing basic-only subscribers who
receive Medicaid the equipment
necessary to descramble or decrypt the
basic service tier signals on up to two
separate television sets without charge
for five years from the date of
encryption.
(2) Requests for waivers of this
prohibition must demonstrate either a
substantial problem with theft of basic
tier service or a strong need to scramble
basic signals for other reasons. As part
of this showing, cable operators are
required to notify subscribers by mail of
waiver requests. The notice to
subscribers must be mailed no later than
thirty calendar days from the date the
request for waiver was filed with the
Commission, and cable operators must
inform the Commission in writing, as
soon as possible, of that notification
date. The notification to subscribers
must state: On (date of waiver request
was filed with the Commission), (cable
operator’s name) filed with the Federal
Communications Commission a request
for waiver of the rule prohibiting
scrambling of channels on the basic tier
of service. 47 CFR 76.630(a). The
request for waiver states (a brief
summary of the waiver request). A copy
of the request for waiver shall be
available for public inspection at (the
address of the cable operator’s local
place of business).
(3) Individuals who wish to comment
on this request for waiver should mail
comments to the Federal
Communications Commission by no
later than 30 days from (the date the
notification was mailed to subscribers).
Those comments should be addressed to
the: Federal Communications
Commission, Media Bureau,
Washington, DC 20554, and should
include the name of the cable operator
to whom the comments are applicable.
Individuals should also send a copy of
their comments to (the cable operator at
its local place of business). Cable
operators may file comments in reply no
later than 7 days from the date
subscriber comments must be filed.
*
*
*
*
*
Note 1 to § 76.630: 47 CFR 76.1621
contains certain requirements pertaining
to a cable operator’s offer to supply
subscribers with special equipment that
will enable the simultaneous reception
of multiple signals.
Note 2 to § 76.630: 47 CFR 76.1622
contains certain requirements pertaining
to the provision of a consumer
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education program on compatibility
matters to subscribers.
*
*
*
*
*
[FR Doc. 2011–27743 Filed 10–26–11; 8:45 am]
BILLING CODE 6712–01–P
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
50 CFR Part 622
RIN 0648–AY56
Fisheries of the Caribbean, Gulf of
Mexico, and South Atlantic; Reef Fish
Fishery of the Gulf of Mexico;
Amendment 32
National Marine Fisheries
Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA),
Commerce.
ACTION: Notice of availability; request
for comments.
AGENCY:
The Gulf of Mexico Fishery
Management Council (Council) has
submitted Amendment 32 to the Fishery
Management Plan for the Reef Fish
Resources of the Gulf of Mexico (FMP)
for review, approval, and
implementation by NMFS. Amendment
32 proposes to implement a 10-year
rebuilding plan for gag; revise the
annual catch limits (ACLs) and
accountability measures (AMs) for gag,
red grouper, and shallow-water grouper
(SWG); revise recreational annual catch
targets (ACTs) for gag and red grouper;
implement a 4-month gag recreational
season; adjust the commercial quota for
gag and SWG for 2012 through 2015 and
subsequent fishing years; adjust multiuse individual fishing quota (IFQ)
shares for gag and red grouper; and
implement a 22-inch (56-cm)
commercial minimum size limit for gag.
The intent of Amendment 32 is to end
overfishing of gag, allow the gag stock
to rebuild, and constrain the harvest of
red grouper consistent with the
requirements of the Magnuson-Stevens
Fishery Conservation and Management
Act (Magnuson-Stevens Act).
DATES: Written comments must be
received on or before December 27,
2011.
SUMMARY:
You may submit comments
on the amendment identified by
‘‘NOAA–NMFS–2011–0135’’ by any of
the following methods:
• Electronic submissions: Submit
electronic comments via the Federal eRulemaking Portal: https://www.
regulations.gov. Follow the instructions
for submitting comments.
ADDRESSES:
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Agencies
[Federal Register Volume 76, Number 208 (Thursday, October 27, 2011)]
[Proposed Rules]
[Pages 66666-66672]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-27743]
=======================================================================
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 76
[MB Docket No. 11-169; PP Docket No. 00-67; FCC 11-153]
Basic Service Tier Encryption Compatibility Between Cable Systems
and Consumer Electronics Equipment
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: In this document, we propose a new rule to allow cable
operators to encrypt the basic service tier in all-digital systems,
provided that those cable operators undertake certain consumer
protection measures for a limited period of time in order to minimize
any potential subscriber disruption.
DATES: Submit comments on or before November 28, 2011. Submit reply
comments on or before December 12, 2011.
FOR FURTHER INFORMATION CONTACT: For additional information on this
proceeding, contact Brendan Murray, Brendan.Murray@fcc.gov, of the
Media Bureau, Policy Division, (202) 418-2120.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Proposed Rulemaking, FCC 11-153, adopted on October 13, 2011 and
released on October 14, 2011. The full text of this document is
available for public inspection and copying during regular business
hours in the FCC Reference Center, Federal Communications Commission,
445 12th Street, SW., CY-A257, Washington, DC 20554. This document will
also be available via ECFS (https://www.fcc.gov/cgb/ecfs/). (Documents
will be available electronically in ASCII, Word 97, and/or Adobe
Acrobat.) The complete text may be purchased from the Commission's copy
contractor, 445 12th Street, SW., Room CY-B402, Washington, DC 20554.
To request these documents in accessible formats (computer diskettes,
large print, audio recording, and Braille), send an email to
fcc504@fcc.gov or call the Commission's Consumer and Governmental
Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).
Summary of the Notice of Proposed Rulemaking
1. With this Notice of Proposed Rulemaking (NPRM), we seek comment
on whether to retain the basic service tier encryption prohibition for
all-digital cable systems. As discussed below, we tentatively conclude
that allowing cable operators to encrypt the basic service tier in all-
digital systems will not substantially affect compatibility between
cable service and consumer electronics equipment for most subscribers.
At the same time, however, we recognize that some consumers subscribe
only to a cable operator's digital basic service tier and currently are
able to do so without using a set-top box or other equipment.
Similarly, there are consumers that may have a set-top box on a primary
television but access the unencrypted digital basic service tier on
second or third televisions in their home without using a set-top box
or other equipment. Although we expect the number of subscribers in
these situations to be relatively small, these consumers may be
affected by lifting the encryption prohibition for all-digital cable
systems. Accordingly, we tentatively conclude that, any operators of
all-digital cable systems that choose to encrypt the basic service tier
must comply with certain consumer protection measures for a limited
period of time in order to minimize any potential subscriber
disruption.
2. In the Cable Television Consumer Protection and Competition Act
of 1992 (1992 Cable Act), Congress recognized that compatibility
problems between cable service and consumer electronics equipment were
limiting and/or precluding the operation of premium features of
consumer equipment and were affecting the ability of consumer equipment
to receive cable programming. Section 624A of the Act was added by
Section 17 of the 1992 Cable Act to address this issue. Specifically,
section 624A requires the Commission to issue regulations to assure
compatibility between consumer electronics equipment and cable systems.
In 1994, the Commission implemented the requirements of section 624A.
As part of that implementation, the Commission added Sec. 76.630(a) to
its rules. Section 76.630(a) of the Commission's rules prohibits cable
operators from scrambling or encrypting signals carried on the basic
tier of service. The Commission determined that this rule would
significantly advance compatibility by ensuring that all subscribers
would be able to receive basic tier signals ``in the clear'' and that
basic-only subscribers with cable-ready televisions would not need set-
top boxes. The Commission concluded that ``[t]his rule also will have
minimal impact on the cable industry in view of the fact that most
cable systems now generally do not scramble basic tier signals.''
3. Subsequent to the Commission's adoption of the encryption ban,
cable operators began to upgrade their systems to offer digital cable
service. More recently, cable operators' transition to more efficient
all-digital systems has freed up spectrum to offer new or improved
products and services like higher-speed Internet access and high
definition programming. As a result of this digital transition, most
cable subscribers now have at least one cable set-top box or CableCARD
device in their homes. As cable operators began to transition
programming on their cable programming service tier (CPST) to digital,
many program carriage agreements required cable operators to encrypt
that programming as a condition of carriage. Encryption refers
[[Page 66667]]
to the method that cable operators use to make sure that cable service
is available only to subscribers who have paid for service. Because
encryption serves such an important purpose, encryption of digital
cable service has become more sophisticated than analog scrambling
techniques. Encryption methods did not used to be standard across all
cable systems, however. In 2003, therefore, the Commission adopted the
CableCARD standard to address this incompatibility problem. The
CableCARD, which subscribers must lease from their cable provider
either as a part of a leased set-top box or separately for use in a
compatible retail television or set-top box, decrypts the cable
services that the cable operator encrypts. At present, approximately 77
percent of cable subscribers have at least one digital cable set-top
box or retail CableCARD device in their home.
4. The fact that most subscribers have a cable set-top box or
retail CableCARD device limits the impact of encryption of the basic
service tier in all-digital systems on cable subscribers. Most
television sets, consumer electronics devices, and leased set-top boxes
have included QAM tuners since at least 2007, meaning that those
devices are capable of tuning unencrypted digital cable service. As
stated above, however, most cable operators who have transitioned to
all-digital service encrypt the entire CPST. Therefore, many cable
subscribers currently use CableCARDs (either in a retail device or
leased set-top box) to decrypt their cable service. The remainder of
digital cable subscribers use either (i) leased set-top boxes with
integrated security (offered under waivers of the separated security
requirement or originally deployed before the requirement became
effective) to decrypt cable service, or (ii) television sets or devices
with QAM tuners, but without CableCARDs, to receive any remaining
unencrypted cable signals (typically limited to the basic service
tier). Encryption of the basic service tier in all-digital systems
would affect this second group, i.e., the digital cable subscribers who
use television sets or devices with QAM tuners, but without CableCARDs.
We do not know how many subscribers fall into this group, but based on
the Cablevision Report discussed below, we expect it to be small.
5. In the past, the Commission has waived the basic service tier
encryption prohibition on a demonstration of extraordinary theft of
service. Theft of service occurs when unauthorized users physically
connect their outlets to the cable plant; in other words, people would
climb poles and connect the cable operator's coaxial cable to homes
that do not subscribe to cable service. Recently, the Commission has
received several requests for waiver of the rule prohibiting encryption
of the basic service tier based on the argument that the rule imposes
more burdens than benefits as cable operators transition to all-digital
systems. The petitioners argue that there are very few people who
subscribe only to the basic service tier in all-digital systems and
therefore the overwhelming majority of subscribers to all-digital
systems already have a set-top box or CableCARD-equipped retail device
and therefore would be unaffected by encryption of the basic service
tier. Furthermore, they contend, encrypting the basic service tier in
an all-digital system will eliminate the need for many service
appointments because it will allow cable operators to enable and
disable cable service remotely by activating and deactivating the
encryption capability of set-top boxes and CableCARDs from the headend.
In order to remotely activate and deactivate service, cable operators
must leave every home connected to the cable plant rather than manually
disconnect the cable that runs to a home, which is how many cable
operators disconnect service today. If the cable operator is allowed to
encrypt every signal, the operator can keep every home connected to the
cable plant regardless of whether the home subscribes to cable service.
The operator can ensure that only paid subscribers are able to access
the service by authorizing and deauthorizing CableCARDs as people
subscribe or cancel cable service.
6. In waiver proceedings, certain commenters have asserted that
while encryption of all service tiers has its benefits, it also imposes
some burdens on consumers and device manufacturers. For example, some
commenters explained that they own or manufacture devices like personal
computer cable tuner cards that cable subscribers use to view or record
unencrypted programming with their computers. These commenters
expressed concern that those devices do not have the ability to decrypt
cable signals and therefore could not display encrypted cable
programming. These commenters asserted that they purchased or
manufactured these devices based on the expectation that unencrypted
basic service tier QAM signals would be available from cable operators,
and that encryption of the basic service tier would make the devices
useless. In addition, some commenters objected to the impact that
encryption of the basic service tier would have on televisions with
clear-QAM tuners that currently are attached to the cable network
directly without a set-top box. Encryption of the basic service tier
would require those subscribers to lease a set-top box to access basic
service tier channels on those television sets.
7. In January 2010, the Media Bureau granted a conditional waiver
of the rule that prohibits encryption of the basic service tier to
Cablevision with respect to Cablevision's New York City systems, which
are all-digital. The Bureau based its decision on the fact that
encryption of the basic service tier on Cablevision's all-digital
systems would allow Cablevision to enable and disable cable service
remotely. The Bureau also found that remote activation and deactivation
of cable service would ``reduce[] costs for Cablevision, improve[]
customer service, and reduce[] fuel consumption and CO2
emissions.'' Remote activation and deactivation, the Bureau concluded,
would reduce installation costs for Cablevision's subscribers and also
benefit these subscribers by reducing the number of necessary service
calls, as compared to unencrypted cable systems. The Bureau reasoned
that Cablevision sufficiently addressed the problem of incompatibility
with consumer electronics ``by providing basic-only subscribers with
set-top boxes or CableCARDs without charge for significant periods of
time.'' Finally, the Bureau also concluded that the waiver would
``provide an experimental benefit that could be valuable in the
Commission's further assessment of the utility of the encryption
rule,'' and therefore required Cablevision to file three reports
detailing the effect of encryption on subscribers. Four cable operators
have filed similar petitions for waiver with the Commission's Media
Bureau since the release of the Cablevision Waiver, and we understand
that additional cable operators plan to file in the absence of this
proceeding.
8. We initiate this proceeding to determine whether the
Commission's basic service tier encryption prohibition, which was
adopted over 15 years ago, remains necessary to promote compatibility
between digital cable service and consumer electronics equipment in all
circumstances. In this regard, we note, as described above, that the
video marketplace has changed significantly over this period.
Specifically, most cable operators have updated their systems to
provide bidirectional, digital signals in addition to analog service,
and some cable operators, like RCN and BendBroadband, transmit only
digital
[[Page 66668]]
signals and have eliminated analog service in all of their systems.
Other operators, like Cablevision and Comcast, have eliminated analog
service on certain systems and plan to eliminate analog service in all
systems over the coming years. As discussed above, data from SNL Kagan
indicates that over three-quarters of cable subscribers have at least
one device in their home that can both demodulate and decrypt digital
cable services. Furthermore, because the Commission incorporated the
CableCARD standard into our rules in 2003, consumer electronics
manufacturers can build digital cable ready devices that can access
encrypted cable service without the need for a converter box. Given
these marketplace and regulatory developments, we tentatively conclude
that it is appropriate to allow basic service tier encryption for all-
digital cable systems, subject to certain measures intended to
ameliorate any potential harm to consumers in the short run. Our
proposal is informed by the information garnered from Cablevision's
first year of implementation under the Bureau's waiver conditions.
Specifically, in its recently filed final report, Cablevision stated
that basic service tier encryption led to a reduction of 2,763 truck
rolls, and predicted that it eventually will perform over 70 percent of
all deactivations remotely. In its waiver petition, Cablevision
asserted that by reducing service calls it could reduce the
environmental harms associated with use of gas-consuming, traffic-
causing trucks. Furthermore, Cablevision reports that no subscribers
filed complaints regarding encryption of the basic service tier, which
suggests that with the appropriate consumer protection measures,
encryption of the basic service tier in all-digital systems does not
affect subscribers adversely. We believe that this evidence shows that,
where cable operators undertake appropriate consumer protection
measures, the costs of retaining this rule (e.g., the need to schedule
service appointments whenever a consumer subscribes to or cancels cable
service as well as the expense and effect of cable operators' trucks on
traffic and the environment) outweigh the benefits of retaining it
(e.g., ensuring the continued utility of devices with clear-QAM
tuners). We seek comment on this tentative conclusion. Specifically, we
seek comment on the costs and benefits to subscribers and cable
operators associated with the basic service tier encryption rule as it
applies to all-digital cable systems. We also invite comment on any
environmental costs and benefits associated with the rule. Would
elimination of the encryption ban benefit the environment through
reduction in the gas consumption and traffic associated with truck
rolls, and would those benefits outweigh any countervailing
environmental effects, such as energy consumption from additional set-
top boxes? To the extent feasible, commenters should quantify in
dollars any asserted costs or benefits of the basic service tier
encryption prohibition.
9. We propose to allow encryption of the basic service tier only
with respect to all-digital systems, as remote activation and
deactivation of cable service, and its attendant benefits, are only
feasible in all-digital systems. We seek comment on the specific
criteria that the Commission should use to determine what constitutes
an all-digital cable system. For example, what if a system transmits
nearly all of its channels solely in digital, but maintains a single,
unencrypted analog channel to inform potential subscribers about how to
subscribe to service? We seek comment also about digital cable services
that are not QAM-based. Is it appropriate to include IP and other non-
QAM digital cable services in the definition of an all-digital cable
system for the purposes of the proposed rule revision? We also seek
comment on whether the Commission should revise the encryption rule
with respect to any hybrid (analog/digital) systems where basic service
tier programming is provided digitally but the cable operator also
continues to provide some analog service to its subscribers (which is
the case in many cable systems today). Would revision of the encryption
rule with respect to those systems have any attendant benefits given
that remote activation and deactivation of cable service is not
feasible in hybrid systems?
10. We further seek comment on whether our proposed rule would
satisfy our regulatory obligations under section 624A of the
Communications Act. Section 624A directs the Commission to issue
regulations as necessary to assure compatibility between televisions
and video cassette recorders and cable systems, consistent with the
need to prevent theft of cable service, so that cable subscribers will
be able to enjoy the full benefit of both the programming available on
cable systems and the functions available on their televisions and
video cassette recorders. Essentially, with section 624A, Congress
sought to develop a ``plug and play'' compatibility regime. We note
that while Congress specifically cited scrambling and encryption as an
impediment to compatibility, it nonetheless directed the Commission to
``determine whether and, if so, under what circumstances to permit
cable systems to scramble or encrypt signals or to restrict cable
systems in the manner in which they encrypt or scramble signals.''
Section 624A further prohibits the Commission from limiting the use of
scrambling or encryption technology where the use of such technology
does not interfere with the functions of subscribers' television
receivers or video cassette recorders. Based on section 624A, we
believe the Commission has broad authority to address and regulate
encryption technology within the parameters established by Congress.
11. We recognize that some subscribers of only the basic service
tier currently access digital cable service without a CableCARD or
converter box. We tentatively conclude that if the Commission allows
cable operators to encrypt the basic service tier in all-digital
systems, we should, at the same time, minimize any instances of
incompatibility due to encryption of the basic service tier by
implementing transitional measures for the limited universe of
subscribers who currently access the unencrypted digital basic service
tier without a set-top box. That is, we recognize that there are some
consumers who currently are able to access the basic service tier
without using a set-top box because of the current encryption
prohibition. Accordingly, to mitigate any potential harm experienced by
these consumers, we believe our rules should implement transitional
measures to prevent consumers from having to purchase or lease new
equipment immediately in order to continue accessing the basic service
tier if their cable operators choose to encrypt this tier.
12. When the Media Bureau granted the waiver authorizing
Cablevision to encrypt the basic service tier, it conditioned that
waiver to limit the immediate costs that basic service tier subscribers
would face on account of the need for additional equipment like set-top
boxes to provide digital televisions equipped with clear QAM tuners
access to basic service tier channels. Those conditions require
Cablevision to offer ``(a) current basic-only subscribers up to two
set-top boxes or CableCARDs without charge for up to two years, (b)
digital subscribers who have an additional television set currently
receiving basic-only service one set-top box or CableCARD without
charge for one year, and (c) current qualified low-income basic-only
subscribers up to two set-top boxes or
[[Page 66669]]
CableCARDs without charge for five years.'' We believe that similar
measures are appropriate and necessary for purposes of relaxing the
encryption ban because of the potential harm to basic-only subscribers
who have come to rely on access to unencrypted basic-only service. A
transition period will provide affected subscribers time to make
informed choices about equipment and/or other alternatives available in
their service area. We therefore propose that cable operators that
choose to encrypt the basic service tier in their service area provide
to subscribers, without charge for a limited time, devices that can
decrypt the basic service tier as described above. We seek comment on
this proposal.
13. Are the consumer protection measures we propose to adopt
adequate to protect all subscribers of digital cable systems in all
areas of the country? We seek comment on the number of subscribers that
this rule change will affect. We also seek comment on an appropriate
time frame for requiring cable operators to provide set-top boxes at no
cost to current subscribers, and particularly with regard to low-income
subscribers. Are the time frames established in the Cablevision
proceeding appropriate to serve the goal of minimizing the immediate
costs that basic subscribers and subscribers with additional sets
receiving basic-only service face through this modification of the
rules? In the context of the Cablevision waiver, the Media Bureau used
receipt of Medicaid as an indicator of a current qualified low income
basic-only subscriber. Does it make sense to do so in the context of
this NPRM? We invite commenters to suggest other indicators to
delineate what constitutes a current qualified low income basic-only
subscriber. Are additional safeguards necessary and appropriate, and,
if so, what are these safeguards? Would an interim 7-year time period
or longer be more consistent with ensuring there is not an economic
hardship on low-income subscribers who prior to the potential relaxing
of the encryption ban would not have needed additional equipment? We
seek comment on any other measures the Commission should take to
protect subscribers if we decide to relax the prohibition on encryption
of the basic service tier for all-digital cable systems.
14. Although we propose to relax the encryption ban for all-digital
systems, our proposal does not require cable operators operating those
systems to encrypt the basic service tier. Rather, our proposed rule
permits cable operators to encrypt this tier provided that they offer
free set-top boxes to basic-only subscribers for a limited period of
time. Because cable operators may decide whether they wish to encrypt
under the requisite regulatory conditions (i.e., provide set-top boxes
at no cost to affected subscribers for a limited period), we see no
statutory or constitutional constraints to imposing such a requirement.
In that regard, we note that the proposed regulatory conditions would
be implemented pursuant to our authority under sections 624A, not as a
rate regulation prescribed under section 623(b) of the Act.
Accordingly, we do not believe section 623(b)(3)(A)'s requirement to
base on actual cost any price or rate standards for equipment
installation and leasing would bar the Commission from imposing the
set-top box condition for relaxing the encryption prohibition. We seek
comment on this analysis.
15. Ex Parte Presentations. The proceeding this NPRM initiates
shall be treated as a ``permit-but-disclose'' proceeding in accordance
with the Commission's ex parte rules. Persons making ex parte
presentations must file a copy of any written presentation or a
memorandum summarizing any oral presentation within two business days
after the presentation (unless a different deadline applicable to the
Sunshine period applies). Persons making oral ex parte presentations
are reminded that memoranda summarizing the presentation must (1) list
all persons attending or otherwise participating in the meeting at
which the ex parte presentation was made, and (2) summarize all data
presented and arguments made during the presentation. If the
presentation consisted in whole or in part of the presentation of data
or arguments already reflected in the presenter's written comments,
memoranda or other filings in the proceeding, the presenter may provide
citations to such data or arguments in his or her prior comments,
memoranda, or other filings (specifying the relevant page and/or
paragraph numbers where such data or arguments can be found) in lieu of
summarizing them in the memorandum. Documents shown or given to
Commission staff during ex parte meetings are deemed to be written ex
parte presentations and must be filed consistent with Sec. 1.1206(b)
of the Commission's rules. In proceedings governed by Sec. 1.49(f) of
the Commission's rules or for which the Commission has made available a
method of electronic filing, written ex parte presentations and
memoranda summarizing oral ex parte presentations, and all attachments
thereto, must be filed through the electronic comment filing system
available for that proceeding, and must be filed in their native format
(e.g., .doc, .xml, .ppt, searchable .pdf). Participants in this
proceeding should familiarize themselves with the Commission's ex parte
rules.
16. Initial Regulatory Flexibility Analysis. The Regulatory
Flexibility Act of 1980, as amended (RFA), requires that a regulatory
flexibility analysis be prepared for notice and comment rule making
proceedings, unless the agency certifies that ``the rule will not, if
promulgated, have a significant economic impact on a substantial number
of small entities.'' The RFA generally defines the term ``small
entity'' as having the same meaning as the terms ``small business,''
``small organization,'' and ``small governmental jurisdiction.'' In
addition, the term ``small business'' has the same meaning as the term
``small business concern'' under the Small Business Act. A ``small
business concern'' is one which: (1) Is independently owned and
operated; (2) is not dominant in its field of operation; and (3)
satisfies any additional criteria established by the Small Business
Administration (SBA).
17. With respect to this NPRM, an Initial Regulatory Flexibility
Analysis (IRFA) under the Regulatory Flexibility Act is contained
below. Written public comments are requested in the IFRA, and must be
filed in accordance with the same filing deadlines as comments on the
NPRM, with a distinct heading designating them as responses to the
IRFA. The Commission will send a copy of this NPRM, including the IRFA,
in a report to Congress pursuant to the Congressional Review Act. In
addition, a copy of this NPRM and the IRFA will be sent to the Chief
Counsel for Advocacy of the SBA, and will be published in the Federal
Register.
18. Initial Paperwork Reduction Act of 1995 Analysis Paperwork
Reduction Act Analysis. This document does not contain proposed
information collection requirements subject to the Paperwork Reduction
Act of 1995, Public Law 104-13. In addition, therefore, it does not
contain any proposed information collection burden for small business
concerns with fewer than 25 employees, pursuant to the Small Business
Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C.
3506(c)(4).
19. Comment Filing Procedures. Pursuant to Sec. Sec. 1.415 and
1.419 of the Commission's rules, 47 CFR 1.415 and 1.419, interested
parties may file comments and reply comments on or before the dates
indicated on the first page of this document. Comments may be filed
using the Commission's
[[Page 66670]]
Electronic Comment Filing System (ECFS). See Electronic Filing of
Documents in Rulemaking Proceedings, 63 FR 24121 (1998).
20. Electronic Filers: Comments may be filed electronically using
the Internet by accessing the ECFS: https://fjallfoss.fcc.gov/ecfs2/.
21. Paper Filers: Parties who choose to file by paper must file an
original and one copy of each filing. If more than one docket or
rulemaking number appears in the caption of this proceeding, filers
must submit two additional copies for each additional docket or
rulemaking number. Filings can be sent by hand or messenger delivery,
by commercial overnight courier, or by first-class or overnight U.S.
Postal Service mail. All filings must be addressed to the Commission's
Secretary, Office of the Secretary, Federal Communications Commission.
All hand-delivered or messenger-delivered paper filings for the
Commission's Secretary must be delivered to FCC Headquarters at 445
12th St., SW., Room TW-A325, Washington, DC 20554. The filing hours are
8 a.m. to 7 p.m. All hand deliveries must be held together with rubber
bands or fasteners. Any envelopes and boxes must be disposed of before
entering the building. Commercial overnight mail (other than U.S.
Postal Service Express Mail and Priority Mail) must be sent to 9300
East Hampton Drive, Capitol Heights, MD 20743. U.S. Postal Service
first-class, Express, and Priority mail must be addressed to 445 12th
Street, SW., Washington DC, 20554.
22. People with Disabilities: To request materials in accessible
formats for people with disabilities (braille, large print, electronic
files, audio format), send an email to fcc504@fcc.gov or call the
Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice), (202)
418-0432 (tty).
23. Additional Information: For additional information on this
proceeding, please contact Brendan Murray of the Media Bureau, Policy
Division, Brendan.Murray@fcc.gov, (202) 418-1573.
24. Accordingly, it is ordered that, pursuant to the authority
contained in sections 1, 4(i), 4(j), 303(r), 403, and 624A of the
Communications Act of 1934, as amended, 47 U.S.C. sections 151, 154(i),
154(j), 303(r), 403, and 544a, this Notice of Proposed Rulemaking is
adopted.
25. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA) the Commission has prepared this Initial Regulatory
Flexibility Analysis (IRFA) of the possible significant economic impact
on small entities by the policies and rules proposed in this NPRM.
Written public comments are requested on this IRFA. Comments must be
identified as responses to the IRFA and must be filed by the deadlines
for comments on the NPRM provided above. The Commission will send a
copy of the NPRM, including this IRFA, to the Chief Counsel for
Advocacy of the Small Business Administration. In addition, the NPRM
and IRFA (or summaries thereof) will be published in the Federal
Register.
26. Need for, and Objectives of the Proposed Rules. With this NPRM,
the Commission seeks comment on elimination of the basic service tier
encryption prohibition for all-digital cable systems.The need for FCC
regulation in this area derives from changing technology in the cable
services market. When the Commission adopted technical rules in the
1990s, digital cable service was in its infancy, and therefore the
rules were adopted with analog cable service in mind. Today, digital
cable service is common, and certain technical rules related to cable
service do not translate well. Therefore, the Commission proposes to
allow all-digital cable operators to encrypt the basic service tier.
27. Legal Basis. The authority for the action proposed in this
rulemaking is contained in sections 1, 4(i) and (j), 303, 403, 601,
624, and 624A of the Communications Act of 1934, as amended, 47 U.S.C.
151, 154(i) and (j), 303, 403, 521, 544, and 544a.
28. Description and Estimate of the Number of Small Entities to
Which the Proposed Rules Will Apply. The RFA directs the Commission to
provide a description of and, where feasible, an estimate of the number
of small entities that will be affected by the proposed rules. The RFA
generally defines the term ``small entity'' as 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 Small Business Administration
(``SBA'').
29. Wired Telecommunications Carriers. The 2007 North American
Industry Classification System (NAICS) defines ``Wired
Telecommunications Carriers'' 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 developed a small
business size standard for wireline firms within the broad economic
census category, ``Wired Telecommunications Carriers.'' 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. Of this
total, 2,395 firms had employment of 999 or fewer employees, and 37
firms had employment of 1,000 employees or more. Thus, under this
category and associated small business size standard, the majority of
firms can be considered small.
30. Wired Telecommunications Carriers--Cable and Other Program
Distribution. This category includes, among others, cable operators,
direct broadcast satellite (DBS) services, home satellite dish (HSD)
services, satellite master antenna television (SMATV) systems, and open
video systems (OVS). The data we have available as a basis for
estimating the number of such entities were gathered under a superseded
SBA small business size standard formerly titled Cable and Other
Program Distribution. The former Cable and Other Program Distribution
category is now included in the category of Wired Telecommunications
Carriers, the majority of which, as discussed above, can be considered
small. 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. Thus, we believe that a substantial number of entities
included in the former Cable and Other Program Distribution category
may have been categorized as small entities under the now superseded
SBA small business size standard for Cable
[[Page 66671]]
and Other Program Distribution. With respect to OVS, the Commission has
approved approximately 120 OVS certifications with some OVS operators
now providing service. Broadband service providers (BSPs) are currently
the only significant holders of OVS certifications or local OVS
franchises, even though OVS is one of four statutorily-recognized
options for local exchange carriers (LECs) to offer video programming
services. As of June 2006, BSPs served approximately 1.4 million
subscribers, representing 1.46 percent of all MVPD households. Among
BSPs, however, those operating under the OVS framework are in the
minority. The Commission does not have financial information regarding
the entities authorized to provide OVS, some of which may not yet be
operational. We thus believe that at least some of the OVS operators
may qualify as small entities.
31. Cable System Operators (Rate Regulation Standard). 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. As of 2006, 7,916 cable operators qualify as small cable
companies under this standard. In addition, under the Commission's
rules, a ``small system'' is a cable system serving 15,000 or fewer
subscribers. Industry data indicate that 6,139 systems have under
10,000 subscribers, and an additional 379 systems have 10,000-19,999
subscribers. Thus, under this standard, most cable systems are small.
32. Cable System Operators (Telecom Act Standard). 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.'' There are approximately 65.3 million
cable subscribers in the United States today. Accordingly, an operator
serving fewer than 654,000 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. Based on available data, we find that the number of cable
operators serving 654,000 subscribers or less totals approximately
7,916. 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. Although it
seems certain that some of these cable system operators are affiliated
with entities whose gross annual revenues exceed $250,000,000, we are
unable at this time to estimate with greater precision the number of
cable system operators that would qualify as small cable operators
under the definition in the Communications Act.
33. Cable and Other Subscription Programming. The Census Bureau
defines this category as follows: ``This industry comprises
establishments primarily engaged in operating studios and facilities
for the broadcasting of programs on a subscription or fee basis * * * .
These establishments produce programming in their own facilities or
acquire programming from external sources. The programming material is
usually delivered to a third party, such as cable systems or direct-to-
home satellite systems, for transmission to viewers.'' The SBA has
developed a small business size standard for firms within this
category, which is all firms with $15 million or less in annual
receipts. According to Census Bureau data for 2002, there were 270
firms in this category that operated for the entire year. Of this
total, 217 firms had annual receipts of under $10 million and 13 firms
had annual receipts of $10 million to $24,999,999. Thus, under this
category and associated small business size standard, the majority of
firms can be considered small.
34. Computer Terminal Manufacturing. ``Computer terminals are
input/output devices that connect with a central computer for
processing.'' The SBA has developed a small business size standard for
this category of manufacturing; that size standard is 1,000 or fewer
employees. According to Census Bureau data, there were 71
establishments in this category that operated with payroll during 2002,
and all of the establishments had employment of under 1,000.
Consequently, we estimate that all of these establishments are small
entities.
35. Other Computer Peripheral Equipment Manufacturing. Examples of
peripheral equipment in this category include keyboards, mouse devices,
monitors, and scanners. The SBA has developed a small business size
standard for this category of manufacturing; that size standard is
1,000 or fewer employees. According to Census Bureau data, there were
860 establishments in this category that operated with payroll during
2002. Of these, 851 had employment of under 1,000, and an additional
five establishments had employment of 1,000 to 2,499. Consequently, we
estimate that the majority of these establishments are small entities.
36. Audio and Video Equipment Manufacturing. These establishments
manufacture ``electronic audio and video equipment for home
entertainment, motor vehicle, public address and musical instrument
amplifications.'' The SBA has developed a small business size standard
for this category of manufacturing; that size standard is 750 or fewer
employees. According to Census Bureau data, there were 571
establishments in this category that operated with payroll during 2002.
Of these, 560 had employment of under 500, and ten establishments had
employment of 500 to 999. Consequently, we estimate that the majority
of these establishments are small entities.
37. Description of Reporting, Recordkeeping and Other Compliance
Requirements. The rules proposed in the NPRM will not impose additional
reporting, recordkeeping, and compliance requirements on cable
operators.
38. Steps Taken To Minimize Significant Impact on Small Entities,
and Significant Alternatives Considered. The RFA requires an agency to
describe any significant alternatives that it has considered in
reaching its proposed approach, which may include the following four
alternatives (among others): (1) The establishment of differing
compliance or reporting requirements or timetables that take into
account the resources available to small entities; (2) the
clarification, consolidation, or simplification of compliance or
reporting requirements under the rule for small entities; (3) the use
of performance, rather than design, standards; and (4) an exemption
from coverage of the rule, or any part thereof, for small entities.
39. As indicated above, the NPRM seeks comment on elimination of
the basic service tier encryption prohibition for all-digital cable
systems. The Commission considered leaving the current rule in place.
The Commission tentatively concludes, however, that an exemption of the
rule for all-digital cable systems could reduce the service calls that
a cable operator must perform, and therefore the Commission believes
that this proposed rule change will reduce burdens on small entities.
40. We welcome comments that suggest modifications of any proposal
if based on evidence of potential differential impact on smaller
entities. In addition, the Regulatory Flexibility
[[Page 66672]]
Act requires agencies to seek comment on possible small entity-related
alternatives, as noted above. We therefore seek comment on alternatives
to the proposed rules that would assist small entities while ensuring
improved customer support by cable operators for digital cable products
purchased at retail.
41. Federal Rules Which Duplicate, Overlap, or Conflict with the
Commission's Proposals. None.
List of Subjects in 47 CFR Part 76
Administrative practice and procedure, Cable television, Equal
employment opportunity, Political candidates, Reporting and
recordkeeping requirements.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
Rule Changes
For the reasons discussed in the preamble, the Federal
Communications Commission proposes to amend 47 CFR Part 76 as follows:
PART 76--MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE
1. The authority citation for part 76 continues to read as follows:
Authority: 47 U.S.C. 151, 152, 153, 154, 301, 302, 302a, 303,
303a, 307, 308, 309, 312, 315, 317, 325, 339, 340, 341, 503, 521,
522, 531, 532, 534, 535, 536, 537, 543, 544, 544a, 545, 548, 549,
552, 554, 556, 558, 560, 561, 571, 572, 573.
2. Section 76.630 is amended by revising paragraph (a) and Note 1
and 2 to read as follows:
Sec. 76.630 Compatibility with consumer electronics equipment.
(a) Cable system operators shall not scramble or otherwise encrypt
signals carried on the basic service tier.
(1) This prohibition shall not apply in systems in which:
(i) No television signals are provided using the NTSC system; and
(ii) The cable operator offers to its existing basic service tier
subscribers (who do not use a set-top box or CableCARD at the time of
encryption) the equipment necessary to descramble or decrypt the basic
service tier signals (the subscriber's choice of a set-top box or
CableCARD) on up to two separate television sets without charge for two
years from the date of encryption; and
(iii) The cable operator offers to its existing digital subscribers
who have an additional television set currently receiving basic-only
service without a set-top box, the equipment necessary to descramble or
decrypt the basic service tier signals on one television set without
charge for one year from the date of encryption; and
(iv) The cable operator offers to all existing basic-only
subscribers who receive Medicaid the equipment necessary to descramble
or decrypt the basic service tier signals on up to two separate
television sets without charge for five years from the date of
encryption.
(2) Requests for waivers of this prohibition must demonstrate
either a substantial problem with theft of basic tier service or a
strong need to scramble basic signals for other reasons. As part of
this showing, cable operators are required to notify subscribers by
mail of waiver requests. The notice to subscribers must be mailed no
later than thirty calendar days from the date the request for waiver
was filed with the Commission, and cable operators must inform the
Commission in writing, as soon as possible, of that notification date.
The notification to subscribers must state: On (date of waiver request
was filed with the Commission), (cable operator's name) filed with the
Federal Communications Commission a request for waiver of the rule
prohibiting scrambling of channels on the basic tier of service. 47 CFR
76.630(a). The request for waiver states (a brief summary of the waiver
request). A copy of the request for waiver shall be available for
public inspection at (the address of the cable operator's local place
of business).
(3) Individuals who wish to comment on this request for waiver
should mail comments to the Federal Communications Commission by no
later than 30 days from (the date the notification was mailed to
subscribers). Those comments should be addressed to the: Federal
Communications Commission, Media Bureau, Washington, DC 20554, and
should include the name of the cable operator to whom the comments are
applicable. Individuals should also send a copy of their comments to
(the cable operator at its local place of business). Cable operators
may file comments in reply no later than 7 days from the date
subscriber comments must be filed.
* * * * *
Note 1 to Sec. 76.630: 47 CFR 76.1621 contains certain
requirements pertaining to a cable operator's offer to supply
subscribers with special equipment that will enable the simultaneous
reception of multiple signals.
Note 2 to Sec. 76.630: 47 CFR 76.1622 contains certain
requirements pertaining to the provision of a consumer education
program on compatibility matters to subscribers.
* * * * *
[FR Doc. 2011-27743 Filed 10-26-11; 8:45 am]
BILLING CODE 6712-01-P