National Television Multiple Ownership Rule, 68384-68390 [2013-26004]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 78, Number 220 (Thursday, November 14, 2013)]
[Proposed Rules]
[Pages 68384-68390]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-26004]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 73

[MB Docket No. 13-236; FCC 13-123]


National Television Multiple Ownership Rule

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: This Notice commences a proceeding to consider elimination of 
the so-called UHF discount in the Commission's national television 
multiple ownership rule. Currently, the national television ownership 
rule prohibits a single entity from owning television stations that, in 
the aggregate, reach more than 39 percent of the total television 
households in the nation. It thus appears that the DTV transition has 
rendered the UHF discount obsolete and it should be eliminated. This 
Notice seeks comment on that tentative conclusion. It also tentatively 
decides, in the event that the UHF discount is eliminated, to 
grandfather existing television station combinations that would exceed 
the 39 percent national audience reach cap in the absence of the UHF 
discount and seeks comment on that proposal. Finally, it seeks comment 
on whether a VHF discount should be adopted, as it appears that under 
current conditions VHF channels may be technically inferior to UHF 
channels for the propagation of digital television signals.

DATES: The Commission must receive written comments on or before 
December 16, 2013 and reply comments on or before January 13, 2014.

ADDRESSES: You may submit comments, identified by MB Docket No. 13-236; 
FCC 13-123, by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Federal Communications Commission's Web site: https://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting 
comments.
     Mail: U.S. Postal Service first-class, Express, and 
Priority mail must be addressed to 445 12th Street SW., Washington, DC 
20554. Commercial overnight mail (other than U.S. Postal Service 
Express Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, 
MD 20743.
     Hand or Messenger Delivery: 445 12th St. SW., Room TW-
A325, Washington, DC 20554.
     People With Disabilities: Contact the FCC to request 
reasonable

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accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by email: FCC504@fcc.gov or phone: (202)-418-
0530 or TTY: (202)-418-0432.
    For detailed instructions for submitting comments, additional 
information on the rulemaking process, and where to find materials 
available for inspection, see the SUPPLEMENTARY INFORMATION section of 
this document.

FOR FURTHER INFORMATION CONTACT: Brendan Holland, Industry Analysis 
Division, Media Bureau, Brendan.Holland@fcc.gov, (202) 418-2757, or 
Johanna Thomas, Industry Analysis Division, Media Bureau, 
Johanna.Thomas@fcc.gov, (202) 418-7551.

SUPPLEMENTARY INFORMATION: This Notice of Proposed Rulemaking, (NPRM) 
in MB Docket No. 13-236; FCC 13-123, was adopted and released on 
September 26, 2013. The complete text of the document is available for 
inspection and copying during normal business hours in the FCC 
Reference Center, 445 12th Street SW., Washington, DC 20554. This 
document may also be purchased from the Commission's duplicating 
contractor, Best Copy and Printing, Inc., in person at 445 12th Street 
SW., Room CY-B402, Washington, DC 20554, via telephone at (202) 488-
5300, via facsimile at (202) 488-5563, or via email at FCC@BCPIWEB.com. 
Alternative formats (computer diskette, large print, audio cassette, 
and Braille) are available to persons with disabilities or by sending 
an email to FCC504@fcc.gov or calling the Consumer and Governmental 
Affairs Bureau at (202) 418-0530, TTY (202) 418-0432. This document is 
also available on the Commission's Web site at https://fcc.gov.

I. Introduction

    1. This NPRM commences a proceeding to consider elimination of the 
so-called UHF discount in the Commission's national television multiple 
ownership rule. Currently, the national television ownership rule 
prohibits a single entity from owning television stations that, in the 
aggregate, reach more than 39 percent of the total television 
households in the nation. In determining compliance with the 39 percent 
national audience reach cap, the rule provides that television stations 
broadcasting in the UHF spectrum will be attributed with only 50 
percent of the television households in their Designated Market Areas 
(DMAs); this is termed the UHF discount. The discount was adopted in 
1985, in recognition of the technical inferiority of UHF signals as 
compared with VHF signals in analog television broadcasting and was 
intended to mitigate the competitive disadvantage that UHF stations 
experienced in comparison to VHF stations because of their weaker 
signals and smaller audience reach. However, there is a serious 
question whether this justification for the UHF discount continues to 
exist in light of the transition of full-power television stations to 
digital broadcasting (the DTV transition) completed in June 2009. While 
UHF channels were technically inferior to VHF channels for purposes of 
transmitting analog television signals, experience since the DTV 
transition suggests that, far from being inferior, they may actually be 
superior to VHF when it comes to the transmission of digital television 
signals, as discussed below.
    2. It thus appears that the DTV transition has rendered the UHF 
discount obsolete and it should be eliminated. We seek comment on that 
tentative conclusion. We also tentatively decide, in the event that we 
eliminate the UHF discount, to grandfather existing television station 
combinations that would exceed the 39 percent national audience reach 
cap in the absence of the UHF discount and seek comment on that 
proposal. Finally, we seek comment on whether a VHF discount should be 
adopted, as it appears that under current conditions VHF channels may 
be technically inferior to UHF channels for the propagation of digital 
television signals.

II. Background

    3. In 1985, the Commission imposed the national audience 
restriction together with the UHF discount. To protect localism, 
diversity, and competition, the Commission determined that both a 
station limit, restricting the total number of broadcast stations a 
single entity could own, and a nationwide audience reach limit were 
necessary. Thus, in addition to reaffirming its prior decision to limit 
the number of AM, FM, and television broadcast stations that a single 
entity could own, operate, or control to twelve stations in each 
service, the Commission revised the national television multiple 
ownership rule to prohibit a single entity from owning television 
stations that collectively exceeded 25 percent of the total nationwide 
audience.
    4. At that time, the Commission recognized the ``inherent physical 
limitations'' of the UHF band. It concluded that the technical 
limitations of UHF stations should be reflected in the implementation 
of the national audience cap. The Commission specifically found that 
the delivery of television signals was more difficult in the UHF band 
because the strength of UHF television signals decreased more rapidly 
with distance in comparison to the signals of stations broadcasting in 
the VHF band, resulting in significantly smaller coverage area and 
audience reach. To reflect the coverage limitations of the UHF band, 
the Commission determined that the licensee of a UHF station should be 
attributed with only 50 percent of the television households in its 
market area for purposes of the national audience restriction. The 
Commission concluded that this UHF discount reflected the historical 
concern for the viability of UHF television and provided a measure of 
the actual handicap of UHF voices, which was consistent with 
traditional diversity objectives.
    5. In the Telecommunications Act of 1996 (1996 Act), Congress 
directed the Commission to increase the national audience reach cap 
from 25 percent to 35 percent and to eliminate the rule restricting an 
entity to owning no more than twelve television stations nationwide. 
The 1996 Act did not direct the Commission to amend the UHF discount.
    6. The Commission subsequently reaffirmed the 35 percent national 
audience reach cap in its 1998 Biennial Review Order. The Commission 
reasoned that it was premature to revise the audience cap because it 
had not had sufficient time to fully observe the effects of raising the 
cap from 25 to 35 percent. The Commission retained the UHF discount, 
finding that it remained in the public interest. But the Commission 
indicated that the UHF discount would not likely be necessary after the 
anticipated transition to digital television and stated that a NPRM 
would be issued in the future to propose phasing out the discount once 
the digital transition was complete.
    7. The Commission reexamined the issue in its 2002 Biennial Review 
Order. At that time, the Commission found that the national audience 
reach cap, while not necessary to promote competition and diversity, 
nonetheless remained necessary to promote localism. Further, the 
Commission decided that an increase in the cap to 45 percent was 
justified. The Commission concluded that a 45 percent cap would strike 
an appropriate balance, by permitting some growth for the big four 
network owners and allowing them to achieve greater economies of scale, 
while at the same time ensuring that the networks could not reach a 
larger national audience than their affiliates collectively. The 
Commission also found that setting the

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cap at 45 percent was consistent with past congressional action to 
increase the ownership limit by 10 percentage points.
    8. At the same time, the Commission upheld the UHF discount once 
again, finding that there continued to be a disparity between the 
household reach of UHF and VHF signals, which diminished the ability of 
UHF stations to compete effectively. The Commission surmised, however, 
that the digital [television] transition [would] largely eliminate the 
technical basis for the UHF discount because UHF and VHF signals 
[would] be substantially equalized. Accordingly, the Commission decided 
to sunset application of the UHF discount for stations owned by the top 
four broadcast networks (i.e., ABC, CBS, NBC, and Fox) as the digital 
transition was completed on a market-by-market basis. The Commission 
noted that the sunset would apply unless it made an affirmative 
determination that the UHF discount continued to serve the public 
interest beyond the digital transition. The Commission indicated 
further that it would review the status of the UHF discount in a 
subsequent biennial review and decide at that time whether to extend 
the sunset to all other networks and station group owners.
    9. Subsequently, Congress superseded the Commission's modification 
of the national audience reach cap in the 2002 Biennial Review Order, 
including the increased 45 percent limit and the sunset of the UHF 
discount. The 2004 Consolidated Appropriations Act directed the 
Commission to modify its ownership rules to revise the national 
audience reach cap from 35 percent to 39 percent. Further, it amended 
section 202(h) of the 1996 Act to require a quadrennial review of the 
Commission's broadcast ownership rules rather than a biennial review, 
but specifically excluded any rules relating to the 39 percent national 
audience reach limitation from the quadrennial review.
    10. Prior to the enactment of the 2004 Consolidated Appropriations 
Act, several parties had appealed the Commission's 2002 Biennial Review 
Order to the U.S. Court of Appeals for the Third Circuit (Third 
Circuit). In June 2004, the Third Circuit issued a decision in which it 
found that the challenges to the Commission's actions with respect to 
the national audience reach cap and the UHF discount were moot as a 
result of Congress's action. The court determined that the Commission 
was under a statutory directive, following the 2004 Consolidated 
Appropriations Act, to modify the national audience reach cap to 39 
percent, and that challenges to the Commission's decision to raise the 
cap to 45 percent therefore were no longer justiciable. The court found 
that challenges to the Commission's decision to retain the UHF discount 
were likewise eliminated from the litigation by the language in the 
2004 Consolidated Appropriations Act, which insulated the UHF discount 
rule from the Commission's quadrennial (previously biennial) review of 
its media ownership rules. At the same time, the court indicated that 
its decision did not foreclose the Commission's consideration of its 
regulation defining the UHF discount in a rulemaking outside the 
context of section 202(h). The court concluded that, barring 
congressional intervention, the Commission may decide, in the first 
instance, the scope of its authority to modify or eliminate the UHF 
discount outside the context of section 202(h).
    11. In July 2006, the Commission issued a Further Notice of 
Proposed Rule Making as part of its 2006 quadrennial review of the 
media ownership rules. Among other things, the Further Notice sought 
comment on the Third Circuit's holding with respect to the UHF discount 
rule and whether the Commission should retain, modify, or eliminate the 
UHF discount. In February 2008, the Commission concluded in the 2006 
Quadrennial Review Order that the UHF discount is insulated from review 
under section 202(h) as a result of the 2004 Consolidated 
Appropriations Act. But the Commission noted the Third Circuit's 2004 
decision had left it to the Commission to decide the scope of its 
authority to modify or eliminate the UHF discount outside the context 
of section 202(h). Accordingly, the Commission indicated that it would 
address the petitions, comments, and replies filed with respect to the 
alteration, retention, or elimination of the UHF discount in a separate 
proceeding.
    12. Since June 13, 2009, all full-power television stations have 
broadcast their over-the-air signals using only digital technology. The 
DTV transition has enabled broadcasters to provide multiple programming 
choices and enhanced capabilities to consumers. Yet the transition has 
posed more challenges for VHF channels than UHF channels, because VHF 
spectrum has proven to have characteristics that make it less desirable 
for providing digital television service. For instance, nearby 
electrical devices tend to emit noise that can cause interference to 
DTV signals within the VHF band, creating reception difficulties in 
urban areas even a short distance from the TV transmitter. The 
reception of VHF signals also requires physically larger antennas 
compared to UHF signals, making VHF signals less well suited for mobile 
applications. For these reasons among others, television broadcasters 
generally have faced greater challenges providing consistent reception 
on VHF signals than UHF signals in the digital environment.

III. Discussion

A. Authority To Modify the UHF Discount

    13. We tentatively conclude that the Commission has the authority 
to modify the national television ownership rule, including the 
authority to revise or eliminate the UHF discount. Specifically, we 
tentatively conclude that the 2004 Consolidated Appropriations Act does 
not preclude the Commission from revisiting the national television 
ownership rule or the UHF discount contained therein, in a proceeding 
separate from the quadrennial reviews of the broadcast ownership rules 
pursuant to section 202(h) of the 1996 Act. Notably, in the 2004 
Consolidated Appropriations Act, Congress directed the Commission to 
revise its rules to reflect a 39 percent audience reach cap. Congress 
did not directly establish that limitation by statute or amend the 
Communications Act of 1934 (the Communications Act or Act) to address 
the subject of national television ownership. Further, as the court in 
Prometheus I recognized, while Congress excluded the national 
television ownership rule from the quadrennial review requirement under 
section 202(h), it did not foreclose Commission action to review or 
modify the rule in a separate context.
    14. In addition, the Communications Act provides the Commission 
with the statutory authority to revisit its rules and revise or 
eliminate them if it concludes such action is appropriate. Section 4(i) 
of the Act authorizes the agency to ``perform any and all acts, make 
such rules and regulations, and issue such orders, not inconsistent 
with this Act, as may be necessary in the execution of its functions.'' 
Similarly, section 303(r) provides that the FCC may ``[m]ake such rules 
and regulations . . . not inconsistent with this law, as may be 
necessary to carry out the provisions of this Act . . .''. Indeed, the 
courts have held that the Commission has an affirmative obligation to 
reexamine its rules over time. For instance, in Bechtel v. FCC, the 
court observed that changes in factual and legal circumstances may 
impose upon the agency an obligation to reconsider a settled policy or 
explain its failure to do

[[Page 68387]]

so. In the rulemaking context, for example, it is settled law that an 
agency may be forced to reexamine its approach if a significant factual 
predicate of a prior decision has been removed, which is precisely the 
case here.
    15. For these reasons, we believe the Commission retains the 
authority to modify both the national audience reach restriction and 
the UHF discount, provided such action is undertaken in a rulemaking 
proceeding separate from the Commission's quadrennial review of the 
broadcast ownership rules pursuant to section 202(h). We seek comment 
on our tentative conclusion and analysis. Does our tentative conclusion 
appropriately interpret the 2004 Consolidated Appropriations Act and 
the Third Circuit's guidance in its 2004 decision? Is there additional 
statutory guidance or case law that supports or undermines our 
conclusion?

B. Elimination of the UHF Discount

    16. The Commission has recognized for more than a decade that the 
underlying basis for the UHF discount would likely disappear following 
the transition to digital television. As discussed above, even as the 
Commission determined in both the 1998 Biennial Review Order and the 
2002 Biennial Review Order that the UHF discount was still necessary, 
it anticipated that the DTV transition would largely eliminate the 
technical basis for the UHF discount. The Commission found that the 
digital transition would substantially equalize UHF and VHF signals, 
and, thus, it decided to sunset the discount for UHF stations owned by 
the top four broadcast networks (i.e., CBS, NBC, ABC, and Fox). As 
discussed above, the sunset provisions adopted by the Commission were 
superseded by Congress's action in the 2004 Consolidated Appropriations 
Act. Nevertheless, the DTV transition has borne out the Commission's 
expectation. Digital UHF stations do not suffer from the same 
comparative technical deficiencies vis-[agrave]-vis VHF facilities that 
characterized analog UHF stations.
    17. The Commission has acknowledged that UHF spectrum is now highly 
desirable in light of its superior propagation characteristics for 
digital television, and that the disparity between UHF and VHF channels 
has if anything been reversed. In fact, following the DTV transition, 
some stations that initially elected to operate on a VHF channel have 
sought to relocate to a UHF channel to resolve technical difficulties 
encountered in broadcasting on VHF. The Commission has explored 
engineering options to increase the utility of VHF spectrum for digital 
television purposes. Furthermore, the Commission recently determined 
that annual regulatory fees for UHF and VHF stations will be combined 
into one fee category beginning in Fiscal Year 2014, eliminating a 
distinction based on the historical disadvantages of UHF. Today, rather 
than offsetting an actual service limitation or reflecting a disparity 
in signal coverage, the UHF discount appears only to confer a factually 
unwarranted benefit on owners of UHF television stations. If left in 
place, the UHF discount could undermine the 39 percent national 
audience reach cap on the false predicate that UHF stations do not 
reach equivalent audiences to VHF stations.
    18. Based on these findings, we tentatively conclude that the 
historical justification for the UHF discount no longer exists and the 
rule is therefore obsolete. We accordingly propose that the UHF 
discount should be eliminated from the national television multiple 
ownership rule.
    19. We seek comment on this proposal. In particular, does the UHF 
discount still serve the public interest? Does the discount promote 
market entry? Does it promote competition among broadcast networks? Are 
we correct in concluding that the technical limitations for UHF 
spectrum that existed for analog operations are not present in a 
digital environment? If so, are there other public policy 
justifications for maintaining the UHF discount despite the fact that 
the historical technical inferiority of UHF spectrum for television 
broadcasting no longer exists? Is any disparity between the broadcast 
coverage of UHF and VHF channels less important today than in 1985 
given that many consumers receive local broadcast stations via a 
multichannel video programming distributor (MVPD) and not over-the-air? 
Are there any other market conditions that merit our consideration with 
regard to the UHF discount? Is there any factual basis to maintain the 
UHF discount in the current environment? What are the costs and 
benefits of eliminating the UHF discount?

C. Existing Broadcast Station Combinations

    20. We recognize that the elimination of the UHF discount would 
impact the calculation of nationwide audience reach for broadcast 
station groups with UHF stations. We believe, however, that only a 
small number of broadcast station ownership groups have combinations 
that approach the current 39 percent ownership nationwide cap and that 
might exceed the cap if the UHF discount were eliminated. We therefore 
propose, in the event that we eliminate the UHF discount, to 
grandfather broadcast station ownership groups to the extent that they 
exceed the 39 percent national audience cap solely as a result of the 
termination of the UHF discount rule as of the date of the release of 
this NPRM. We also propose to grandfather proposed station combinations 
that would exceed the 39 percent cap as a result of the elimination of 
the UHF discount for which an application is pending with the 
Commission or which have received Commission approval, but are not yet 
consummated, at that the time this NPRM is released. Further, we 
propose that any grandfathered ownership combination subsequently sold 
or transferred would be required to comply with the national ownership 
cap in existence at the time of the transfer.
    21. We seek comment on these issues. Do our proposals serve the 
public interest? What is the potential impact of our grandfathering 
proposals on broadcast ownership groups, the broadcast industry, local 
markets, and consumers? Do our proposals adequately address any 
potential impact on existing broadcast station ownership groups? Should 
we consider any specific circumstances in evaluating applications for 
waiver of the national ownership cap received from grandfathered 
station groups that enter into subsequent transactions, such as whether 
the application for waiver seeks to allow a corporate transformation of 
an existing station group--including a refinancing or restructuring--
versus action that would circumvent the proposed rule change? Are there 
other strategies we should consider or employ to address existing 
broadcast station ownership groups that would exceed the 39 percent 
limit if the UHF discount were eliminated? Are there other alternatives 
we should consider with regard to pending applications? What are the 
costs and benefits of our grandfathering proposal and any other 
proposals offered by commenters?

D. VHF Discount

    22. As noted above, the Commission has acknowledged that the DTV 
transition has made UHF spectrum, if anything, more desirable than VHF 
spectrum for purposes of digital television broadcasting. While the 
Commission has proposed solutions to VHF reception challenges, it has 
acknowledged that the options for improving digital television service 
on VHF channels are limited, especially in the low-VHF band. 
Unfortunately, it is

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often consumers using indoor antennas who tend to face reception 
difficulties most frequently. For these reasons, some television 
stations, as previously indicated, have sought to relocate to UHF 
channels in order to resolve the technical difficulties experienced 
with their VHF channels.
    23. Given the challenges that VHF stations face in delivering 
digital television signals, we seek comment on whether it would be 
appropriate at this time to adopt a VHF discount. Could a VHF discount 
function similarly to the current UHF discount in that only a certain 
percentage of the television households in a DMA would be attributed to 
a VHF television station for purposes of calculating a station group's 
national audience reach? We seek comment on whether a VHF discount is 
either warranted or advisable at this time. If a VHF discount is 
advisable, would it be appropriate to attribute to VHF stations only 50 
percent of the TV households in their DMA? Would a different percentage 
be more appropriate? Is a discount more or less important than it was 
when the UHF discount was adopted in 1985, because many television 
consumers today receive local broadcast stations via an MVPD rather 
than over-the-air? Would a VHF discount run the risk of becoming 
obsolete as a result of market developments, as in the case of the UHF 
discount? Are there any other market conditions that merit our 
consideration with regard to a possible VHF discount? In the event that 
the Commission adopts a VHF discount, should we distinguish between 
high and low VHF channels? Are there options other than a discount to 
address the current inferiority of VHF signal propagation for purposes 
of the national audience reach cap? What are the costs and benefits of 
imposing a VHF discount and any other proposal offered by commenters?

IV. Procedural Matters

A. Ex Parte Presentations

    24. The proceeding this Notice 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 rule Sec.  1.1206(b). In proceedings governed 
by rule Sec.  1.49(f) 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.

B. Paperwork Reduction Act Analysis

    25. This document does not contain proposed information 
collection(s) subject to the Paperwork Reduction Act of 1995 (PRA), 
Public Law 104-13. In addition, therefore, it does not contain any new 
or modified 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).

C. Comment Filing Procedures

    26. Pursuant to Sec. Sec.  1.415 and 1.419 of the Commission's 
rules, 47 CFR 1.415, 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 Electronic 
Comment Filing System (ECFS). See Electronic Filing of Documents in 
Rulemaking Proceedings, 63 FR 24121 (1998).
     Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: https://fjallfoss.fcc.gov/ecfs2/.
     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 Street SW., Room TW-A325, Washington, DC 20554. The filing 
hours are 8:00 a.m. to 7:00 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.
     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).
    27. Additional Information: For additional information on this 
proceeding, please contact Brendan Holland of the Media Bureau, 
Industry Analysis Division, Brendan.Holland@fcc.gov, (202) 418-2757, or 
Johanna Thomas of the Media Bureau, Industry Analysis Division, 
Johanna.Thomas@fcc.gov, (202) 418-7551.
Initial Regulatory Flexibility Act Analysis
    28. As required by the Regulatory Flexibility Act of 1980, as 
amended (``RFA''), the Federal Communications Commission (Commission) 
has prepared this present Initial Regulatory Flexibility Analysis 
(``IRFA'') concerning the possible significant economic impact on small 
entities by the policies and rules proposed in this Notice of Proposed 
Rulemaking (``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 provided on the first page of the 
NPRM. The Commission will

[[Page 68389]]

send a copy of the NPRM, including this IRFA, to the Chief Counsel for 
Advocacy of the Small Business Administration (``SBA''). In addition, 
the NPRM and IRFA (or summaries thereof) will be published in the 
Federal Register.

A. Need for, and Objectives of, the Proposed Rule Changes

    29. The Commission seeks comment in this NPRM to consider 
elimination of the so-called ``UHF discount'' in the Commission's 
national television multiple ownership rule. The national television 
ownership rule currently prohibits a single entity from owning 
television stations that, in the aggregate, reach more than 39 percent 
of the total television households in the nation. The rule provides 
television stations broadcasting in the UHF spectrum with a discount by 
attributing those stations with only 50 percent of the television 
households in their Designated Market Areas (DMAs); this is termed the 
UHF discount. The UHF discount was adopted in recognition of the 
technical inferiority of UHF signals in analog television broadcasting 
and was intended to mitigate the competitive disadvantages that UHF 
stations experienced in comparison to VHF stations because of their 
weaker signals and smaller audience reach. However, there is serious 
question whether this justification for the UHF discount continues to 
exist in light of the transition of full-power television stations to 
digital broadcasting (the DTV transition) completed on June 12, 2009. 
Our experience since the DTV transition suggests that UHF channels may 
actually be superior to VHF channels when it comes to the transmission 
of digital television.
    30. This NPRM tentatively concludes that the UHF discount is 
obsolete since the DTV transition and should be eliminated. The 
Commission seeks comment on this tentative conclusion, as well as on 
our tentative decision to grandfather existing television station 
combinations that would exceed the 39 percent national audience reach 
cap in the absence of the UHF discount. Finally, we seek comment on 
whether a ``VHF discount'' should be adopted, as it appears that under 
current conditions VHF channels may be technically inferior to UHF 
channels for the propagation of digital television signals.
    31. Legal Basis
    32. The proposed action is authorized under sections 1, 2(a), 4(i), 
303(r), 307, 309, and 310 of the Communications Act of 1934, as 
amended, 47 U.S.C. 151, 152(a), 154(i), 303(r), 307, 309, and 310.
    33. Description and Estimate of the Number of Small Entities to 
Which the Proposed Rules Will Apply
    34. The RFA directs agencies to provide a description of and, where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules, if adopted. The RFA 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 SBA.
    35. Television Broadcasting. The SBA designates television 
broadcasting stations with $35.5 million or less in annual receipts as 
small businesses. Television broadcasting includes establishments 
primarily engaged in broadcasting images together with sound. These 
establishments operate television broadcasting studios and facilities 
for the programming and transmission of programs to the public. These 
establishments also produce or transmit visual programming to 
affiliated broadcast television stations, which in turn broadcast the 
programs to the public on a predetermined schedule. Programming may 
originate in their own studio, from an affiliated network, or from 
external sources. The Commission estimates that there are 1,386 
licensed commercial television stations in the United States. In 
addition, according to Commission staff review of the BIA Kelsey Inc. 
Media Access Pro Television Database as of June 10, 2013, 1,245 (or 
about 90 percent) of the estimated 1,386 commercial television stations 
have revenues of $35.5 million or less and, thus, qualify as small 
entities under the SBA definition. We therefore estimate that the 
majority of commercial television broadcasters are small entities. The 
Commission has also estimated the number of licensed noncommercial 
educational (NCE) television stations to be 396. These stations are 
non-profit, and therefore considered to be small entities.
    36. We note, however, that in assessing whether a business concern 
qualifies as small under the above definition, business (control) 
affiliations must be included. Our estimate, therefore, likely 
overstates the number of small entities that might be affected by our 
action because the revenue figure on which it is based does not include 
or aggregate revenues from affiliated companies. In addition, an 
element of the definition of ``small business'' is that the entity not 
be dominant in its field of operation. We are unable at this time to 
define or quantify the criteria that would establish whether a specific 
television station is dominant in its field of operation. Accordingly, 
the estimate of small businesses to which rules may apply does not 
exclude any television station from the definition of a small business 
on this basis and is therefore possibly over-inclusive to that extent.

B. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements

    37. The NPRM tentatively concludes to modify the national 
television multiple ownership rule as set forth in paragraph 3 above, 
which would affect reporting, recordkeeping, or other compliance 
requirements. The conclusion, if ultimately adopted, would modify 
several FCC forms and their instructions: (1) FCC Form 301, Application 
for Construction Permit For Commercial Broadcast Station; (2) FCC Form 
314, Application for Consent to Assignment of Broadcast Station 
Construction Permit or License; and (3) FCC Form 315, Application for 
Consent to Transfer Control of Corporation Holding Broadcast Station 
Construction Permit or License. The Commission may have to modify other 
forms that include in their instructions the media ownership rules or 
citations to media ownership proceedings, including Form 303-s and Form 
323. The impact of these changes will be the same on all entities, and 
we do not anticipate that compliance will require the expenditure of 
any additional resources as the proposed modification to the national 
television multiple ownership rule will not place any additional 
obligations on small businesses.

C. Steps Taken To Minimize Significant Impact on Small Entities and 
Significant Alternatives Considered

    38. 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 and 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.

[[Page 68390]]

    39. The tentative conclusions and specific proposals on which the 
NPRM seeks comments, as set forth in paragraph 3 above, are intended to 
achieve our public interest goal of competition. By recognizing the 
technical advancements of the UHF band after the DTV transition, this 
NPRM seeks to create a regulatory landscape that reflects the current 
value of UHF spectrum in order to better assess national television 
ownership figures. Further, this NPRM complies with the President's 
directive for independent agencies to review their existing regulation 
to determine whether such regulations should be modified, streamlined, 
expanded, or repealed so as to make the agency's regulatory program 
more effective or less burdensome in achieving the regulatory 
objectives. As such, our proposed rule seeks to reduce costs on firms 
generally, including small business entities, by removing outdated 
regulations. In addition, the grandfathering and VHF discount proposals 
seek to create a more effective regulatory landscape by addressing 
current market realities. The NPRM also requests comment on whether any 
alternatives to the Commission's tentative conclusions or specific 
proposals exist, which provides small entities with the opportunity to 
indicate any disagreement with our findings and conclusions.

D. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rule

    40. None.

V. Ordering Clause

    41. Accordingly, it is ordered that, pursuant to the authority 
contained in sections 1, 2(a), 4(i), 303(r), 307, 309, and 310 of the 
Communications Act of 1934, as amended, 47 U.S.C. 151, 152(a), 154(i), 
303(r), 307, 309, and 310, this Notice of Proposed rulemaking is 
adopted.
    42. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Notice, including the Initial Regulatory Flexibility 
Analysis, to the Chief Counsel for Advocacy of the Small Business 
Administration.

List of Subjects in 47 CFR Part 73

    Television; Radio.

Federal Communication Commission.
Marlene H. Dortch,
Secretary.
    For the reasons discussed in the preamble, the Federal 
Communication Commission proposes to amend 47 CFR Part 73 as follows:

PART 73--RADIO BROADCAST SERVICES

0
1. The authority citation for part 73 continues to read as follows:

    Authority: 47 U.S.C. 154, 303, 334, 336 and 339.

0
2. Amend Sec.  73.3555 by revising paragraph (e)(2)(i) to read as 
follows:


Sec.  73.3555  Multiple ownership.

* * * * *
    (e) * * *
    (2) * * *
    (i) National audience reach means the total number of television 
households in the Nielsen Designated Market Areas (DMAs) in which the 
relevant stations are located divided by the total national television 
households as measured by DMA data at the time of a grant, transfer, or 
assignment of a license.
* * * * *
[FR Doc. 2013-26004 Filed 11-13-13; 8:45 am]
BILLING CODE 6712-01-P