National Television Multiple Ownership Rule, 3661-3667 [2018-01404]
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Federal Register / Vol. 83, No. 18 / Friday, January 26, 2018 / Proposed Rules
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ecfs/. The Commission will not send a
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Subject: Wireless Radio Services, FCC
17–105, published at 82 FR 41530,
September 1, 2017, in WT Docket No.
10–112. This document is being
published pursuant to 47 CFR 1.429(e).
See also 47 CFR 1.4(b)(1) and 1.429(f),
(g).
Number of Petitions Filed: 4.
[FR Doc. 2018–01498 Filed 1–25–18; 8:45 am]
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
BILLING CODE 6560–50–P
[FR Doc. 2018–01407 Filed 1–25–18; 8:45 am]
BILLING CODE 6712–01–P
FEDERAL COMMUNICATIONS
COMMISSION
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Parts 1, 22, 24, 27, 30, 74, 80,
90, 95, and 101
47 CFR Part 73
[MB Docket No. 17–318; FCC 17–169]
[WT Docket No. 10–112; Report No. 3083]
Petitions for Reconsideration of Action
in Rulemaking Proceeding
Federal Communications
Commission.
ACTION: Proposed rule
AGENCY:
Federal Communications
Commission.
ACTION: Petitions for reconsideration.
AGENCY:
Petitions for Reconsideration
& Clarification (Petitions) have been
filed in the Commission’s rulemaking
proceeding by Jeff Chalmers, on behalf
of American Messaging Services, LLC;
David Alban, on behalf of Sensus USA
Inc. and Sensus Spectrum LLC; Kenneth
E. Hardman, on behalf of Critical
Messaging Association and Mark E.
Crosby, on behalf of Enterprise Wireless
Alliance.
DATES: Oppositions to the Petitions
must be filed on or before February 12,
2018. Replies to an opposition must be
filed on or before February 20, 2018.
ADDRESSES: Federal Communications
Commission, 445 12th Street SW,
Washington, DC 20554.
FOR FURTHER INFORMATION CONTACT:
Joyce Jones, email: joyce.jones@fcc.gov;
phone: (202) 418–1327.
SUPPLEMENTARY INFORMATION: This is a
summary of the Commission’s
document, Report No. 3083, released
January 18, 2018. The full texts of the
Petitions are available for viewing and
copying at the FCC Reference
Information Center, 445 12th Street SW,
Room CY–A257, Washington, DC 20554.
It also may be accessed online via the
Commission’s Electronic Comment
Filing System at: https://apps.fcc.gov/
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SUMMARY:
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National Television Multiple Ownership
Rule
This Notice of Proposed
Rulemaking (NPRM) initiates a
comprehensive review of the national
television audience reach cap, including
the UHF discount used by broadcasters
to determine compliance with the cap.
The national cap limits entities from
owning or controlling television stations
that, together, reach more than 39
percent of the television households in
the country. The NPRM asks questions
about whether a cap is still needed and
what public interest goals it would
promote, where the cap should be set if
still needed, and how compliance with
the cap should be calculated, including
the question of whether the UHF
discount should be eliminated. The
Notice also invites comment on the
Commission’s legal authority to take
such actions.
DATES: Comments are due on or before
February 26, 2018. Reply Comments are
due on or before March 27, 2018.
ADDRESSES: Interested parties may
submit comments and replies, identified
by MB Docket No. 17–318, by any of the
following methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• Federal Communications
Commission’s Website: https://
SUMMARY:
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www.fcc.gov/cgb/ecfs/. Follow the
instructions for submitting comments.
• Mail: Filings can be sent by hand or
messenger delivery, by commercial
overnight courier, or by first-class or
overnight U.S. Postal Service mail
(although the Commission continues to
experience delays in receiving U.S.
Postal Service mail). All filings must be
addressed to the Commission’s
Secretary, Office of the Secretary,
Federal Communications Commission.
For more detailed filing instructions,
see the Procedural Matters section
below.
FOR FURTHER INFORMATION CONTACT:
Brendan Holland, Industry Analysis
Division, Media Bureau,
Brendan.Holland@fcc.gov (202) 418–
2757.
SUPPLEMENTARY INFORMATION: This
NPRM in MB Docket No. 17–318, was
adopted December 14, 2017, and
released December 18, 2017. The full
text of this document is available for
public inspection during regular
business hours in the FCC Reference
Center, 445 12th Street SW, Room CY–
A257, Washington, DC 20554, or online
at https://apps.fcc.gov/edoc_putlic/
attachmatch/FCC-17-169A1.pdf. To
request this document in accessible
formats for people with disabilities (e.g.
braille, large print, electronic files,
audio format, etc.) or to request
reasonable accommodations (e.g.
accessible format documents, sign
language interpreters, CART, etc.), send
an email to fcc504@fcc.gov or call the
FCC’s Consumer and Governmental
Affairs Bureau at (202) 418–0530
(voice), (202) 418–0432 (TTY).
Synopsis
1. Background. The national
television audience reach cap and the
related UHF discount are an outgrowth
of television ownership restrictions
dating back to the earliest days of
broadcast television. The Commission
first imposed national ownership
restrictions for television stations in
1941 by limiting the number of stations
that could be commonly owned,
operated, or controlled to three. This
limit was eventually broadened to seven
stations in 1954 and eventually to 12
stations in 1984. In 1985, the
Commission also determined that a 25
percent nationwide audience reach cap,
in addition to the twelve-station limit,
would help prevent a potentially
disruptive industry restructuring. Along
with the national cap, the Commission
also adopted a 50 percent UHF discount
to reflect the fact that, in the analog
television broadcasting era, UHF signals
reached a smaller audience in
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comparison with VHF signals. The UHF
discount provides that, for purposes of
determining compliance with the
national audience reach cap, stations
broadcasting in the VHF spectrum are
attributed with all television households
in their Designated Market Areas
(DMAs), while UHF stations are
attributed with only 50 percent of the
households in their DMAs.
2. In the Telecommunications Act of
1996 (1996 Act), Congress directed the
Commission to amend its rules to
increase the national audience reach cap
from 25 percent to 35 percent and
eliminate the restriction on owning
more than 12 broadcast television
stations nationwide. The Commission
reaffirmed the 35 percent cap in its 1998
Biennial Review Order, but the U.S.
Court of Appeals for the District of
Columbia Circuit (DC Circuit) later
remanded that decision, finding that the
Commission had failed to demonstrate
that the 35 percent national audience
reach cap advanced localism, diversity,
or competition. In the 2002 Biennial
Review Order, the Commission found
that while a national ownership cap was
no longer needed to protect diversity
and competition, the cap remained
necessary to protect localism. The
Commission further concluded that
raising the cap from 35 percent to 45
percent would strike an appropriate
balance between the broadcast networks
and the local affiliates by permitting
some growth for the owners of the Big
Four networks (ABC, CBS, Fox, and
NBC) 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.
3. Following adoption of the 2002
Biennial Review Order, and while an
appeal of that order was pending,
Congress partially rolled back the cap
increase by including a provision in the
2004 Consolidated Appropriations Act
(CAA) directing the Commission ‘‘to
modify its rules to set the national cap
at 39 percent of national television
households.’’ The CAA further amended
Section 202(h) of the 1996 Act to require
a quadrennial review of the
Commission’s broadcast ownership
rules, rather than the previously
mandated biennial review. In doing so,
however, Congress excluded
consideration of ‘‘any rules relating to
the 39 percent national audience reach
limitation’’ from the quadrennial review
requirement. Prior to the enactment of
the CAA, 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
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2004, the Third Circuit 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.
4. In August 2016, the Commission
eliminated the UHF discount, finding
that UHF stations were no longer
technically inferior to VHF stations
following the digital television
transition and that the competitive
disparity between UHF and VHF
stations had disappeared. ThenCommissioner Pai and Commissioner
O’Rielly dissented from this decision. In
April 2017, in response to a Petition for
Reconsideration, the Commission
reinstated the UHF discount, finding
that the Commission’s elimination of
the discount, effectively tightening the
cap without also determining whether
the cap remained in the public interest,
was arbitrary and capricious and unwise
from a public policy perspective.
Because the UHF discount is used to
determine licensees’ compliance with
the national audience reach cap, the
Commission concluded that the UHF
discount and the cap are inextricably
linked, and eliminating the discount
without considering the cap itself was
in error. In reinstating the UHF
discount, the Commission committed to
undertake this comprehensive
rulemaking to determine whether to
modify or eliminate the national cap,
including the UHF discount.
5. Commission Authority To Modify
or Eliminate the National Cap. As an
initial matter, the Commission seeks
comment on its authority to modify or
eliminate the national cap, including
authority to modify or eliminate the
UHF discount. The Commission
previously concluded in the UHF
Discount Elimination Order that the
Commission has authority to modify or
eliminate the 39 percent national
audience reach cap, including the UHF
discount (although it refrained from
adjusting the cap). The Commission
found that it had such authority based
on its broad authority to adopt—and
revise or eliminate—all necessary rules
under the Communications Act. In
contrast, parties opposing reinstatement
of the UHF discount on reconsideration
argued variously that the Commission
lacked authority to modify or eliminate
the national cap, the UHF discount, or
both.
6. In previously concluding that it has
authority to modify or eliminate the
national cap, the Commission rejected
arguments that, when Congress
established the 39 percent national
audience reach cap, it precluded the
Commission from any adjustment of the
cap or the discount. The Commission
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reasoned that the 2004 CAA ‘‘simply
directed the Commission to revise its
rules to reflect a 39 percent national
audience reach cap and removed the
requirement to review the national
ownership cap from the Commission’s
quadrennial review requirement.’’ The
Commission concluded that the CAA
did not impose a statutory national
audience reach cap or prohibit the
Commission from evaluating the
elements of this rule. In addition,
although the Third Circuit ultimately
concluded in its review of the
Commission’s 2002 Biennial Review
Order that questions related to the UHF
discount were moot as a result of the
CAA, it did not foreclose the
Commission’s consideration of its
regulation defining the UHF discount in
a rulemaking outside the context of
section 202(h). Further, Congress
elected to use the same language in the
2004 CAA, instructing the Commission
to ‘‘modify its rules,’’ as it did when it
instructed the Commission to change
the cap from 25 to 35 percent as part of
the 1996 Act. Both the DC Circuit (in
finding it was arbitrary and capricious
for the Commission to retain that cap as
part of the 1998 biennial review) and
the Commission itself (in subsequently
raising the cap from 35 to 45 percent)
interpreted the identical language in the
1996 Act as preserving the
Commission’s authority to modify the
cap in the future.
7. The Commission further based its
finding of authority to modify the cap
and discount on its broad authority to
adopt rules necessary to carry out the
provisions of the Communications Act,
and its authority to revisit its rules and
revise or eliminate them as appropriate.
Given continued questions regarding
authority in this area, the Commission
seeks further comment on its prior
conclusion that it has authority to
modify or eliminate the national
audience reach cap and the UHF
discount. The Commission asks whether
Congress’s exclusion of the national cap
from the quadrennial review provision
merely meant to relieve the Commission
of the obligation to reconsider the cap
every four years (as the Third Circuit
concluded), or was it designed to
withhold the Commission’s authority to
change the cap as set by Congress. The
Commission also asks whether
Congress’s instruction to the
Commission to ‘‘modify its rules’’ in
1996 and 2004, rather than simply
mandating a specific national audience
reach cap, preserves the Commission’s
traditional statutory authority to alter or
eliminate the cap in a future
rulemaking.
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8. Modification of Elimination of the
National Audience Reach Cap. The
Commission seeks comment on whether
there is still a need for a national cap
that prevents ownership of stations that
collectively reach more than a certain
percentage of the television households
in the country. The Commission asks
whether such a cap serves the public
interest. The Commission notes at the
outset that the video marketplace has
changed considerably since it last
considered the national cap in the 2002
Biennial Review Order, and since
Congress instructed the Commission to
set a 39 percent cap in 2004. The
Commission’s most recent annual Video
Competition Report describes, among
other developments, the growth of video
programming options available to
consumers, including online
alternatives to traditional video
distribution, reverse compensation fees
paid by affiliates to broadcast networks,
common ownership of broadcast and
cable networks, consolidation among
both Multichannel Video Programming
Distributors (MVPDs) and non-network
owned station groups, and continuing
MVPD video subscriber losses. The
Commission concluded in the UHF
Order on Reconsideration that the
failure to consider these changes
compounded the error of eliminating
the UHF discount. Accordingly, the
Commission now seeks comment on
how these marketplace changes, as well
as any other changes not previously
mentioned, should be considered in the
context of the possible modification or
elimination of the national audience
reach cap. For instance, the Commission
previously found in its 2002 Biennial
Review Order that a national audience
reach cap set at some level is necessary
in the public interest to promote
localism. Specifically, the Commission
found that a percentage cap maintains
the appropriate balance of power
between broadcast networks and their
local affiliate groups, in part by
preventing the excessive accumulation
of audience reach by network-owned
groups, which are more likely to hold
stations in multiple geographic markets
with large populations. The
Commission reasoned that a national
audience reach cap preserves the
leverage necessary for local affiliates to
collectively negotiate to influence
network programming decisions and
exercise their rights to preempt network
programming in favor of programming
the affiliates feel is better suited to local
community needs. In setting a 45
percent cap, the Commission found that
a national audience reach cap set at that
level would ensure that network-owned
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station groups could not achieve a level
of direct audience reach that exceeds
that of their local affiliates, while at the
same time allowing for limited growth
by each of the Big Four network owners,
allowing them to achieve better
economies of scale and scope and
remain competitive.
9. The Commission now seeks
comment on whether the existing cap is
still necessary to promote localism. The
Commission asks whether its previously
articulated justifications—related to
collective influence and preemption by
local affiliates—still hold true, and
whether localism has increased,
decreased, or remained roughly the
same over time. The Commission asks
whether there are recent examples
where local affiliates have influenced
network programming to better serve
local needs, and how recent affiliate
preemption rates compare to those the
Commission cited in the 2002 Biennial
Review Order. The Commission asks
whether there are other metrics by
which it can assess the effect of the
national audience reach cap on localism
and whether, even if preserving a
national audience reach cap at some
level would promote localism, would
modifying or eliminating the cap
nevertheless have offsetting benefits (for
example, in promoting competition or
diversity).
10. The Commission also asks
whether other changes in the
marketplace have affected the network/
affiliate relationship, such that it would
need to adjust assumptions made in
previous reviews of the cap. The
Commission asks how the growth of
independent station groups over the last
two decades has changed the dynamic
between network-owned station groups
and their affiliates. The Commission
notes that its interest in preserving a
national/local balance between
networks and affiliates is predicated
upon the Commission’s prior
conclusion that networks and their
affiliates have different economic
incentives when it comes to serving
local interests. The Commission
previously has found that broadcast
networks primarily seek to air
programming that will appeal to large
national audiences, while local affiliates
are more attuned to the needs of their
local communities. The Commission
seeks comment on these prior
conclusions, including whether the
conclusion that local affiliates are more
attuned to local needs is still valid and
whether it continues to apply equally to
all local affiliates. The Commission also
asks whether the size of the station
group affects this conclusion.
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11. The Commission also seeks
comment on whether there are other
justifications for a national audience
reach cap besides localism. In the 2002
Biennial Review Order, for example, the
Commission noted in its competition
discussion that the national cap
appeared to encourage innovation in
broadcast television by preserving a
number of separately-owned station
groups and then concluded that a
variety of owners had led to innovative
programming formats and technical
advances. The Commission pointed to
new programming formats developed by
non-network owned affiliates, such as
all-news channels and local news
magazines, and the potential for
experimentation in the use of digital
spectrum as part of the digital television
transition. The Commission now seeks
comment on whether these prior
conclusions have proven true over time
and whether they remain true today.
The Commission asks whether the
variety of owners on a national level
produced by the national audience
reach cap continues to promote
innovation in the marketplace, or
whether there are ways in which the
national audience reach cap hinders
innovation.
12. The Commission previously has
found that a national television
ownership restriction is not necessary to
promote the goals of competition or
diversity. The Commission first reached
this conclusion in 1984 when, regarding
competition, it recognized the relevance
of advertising to measuring competition
in national and local television markets,
and concluded that, for the local spot
advertising market, the local television
ownership rule rather than a national
ownership rule would best address any
risk of competitive harm. Regarding
diversity, the Commission concluded
that national broadcast ownership
limits, as opposed to local ownership
limits, ordinarily are not pertinent to
assuring a diversity of views. The
Commission nonetheless set a national
audience reach cap to avoid any rapid
restructuring of the industry that might
be caused by its decision the previous
year to raise the numerical cap from
seven to twelve stations. The
Commission now asks whether these
previous conclusions are still valid, and
whether any other goals supporting
national ownership limits should be
considered in this proceeding.
13. In addition, the Commission seeks
comment on whether changes in the
marketplace warrant a fresh look at the
national television ownership rule’s
impact on competition or diversity at
either the local or national level. The
Commission asks how marketplace
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changes have affected competition in
the local broadcast television market or
any other relevant markets. The
Commission notes that other video
distributors, including direct broadcast
satellite providers and online video
programmers, are not restricted by
ownership limits. The Commission asks
whether the cap, or the current level of
the cap, have any negative impact on
competition or diversity, and how any
modification of the cap might affect
these goals. The Commission asks
whether marketplace changes have
affected the relationships and business
dealings between local broadcasters and
other video distributors in ways that
would justify retention, modification, or
elimination of the national audience
reach cap. The Commission notes that it
has rules in place related to the
distribution of video programming and
carriage negotiations between broadcast
stations and MVPDs (local exclusivity
and retransmission consent negotiation
rules) and asks whether the existence of
these rules in any way informs the
consideration of whether to retain,
modify, or eliminate the cap. The
Commission asks, for example, whether
the rules have affected the relationships
and business dealings between local
broadcasters and other video
distributors in ways that might affect the
need for and operation of any national
audience reach cap. The Commission
also asks whether the cap serves any
competition or diversity purpose related
to the production or purchase of
programming (e.g., syndicated
programming).
14. If the Commission concludes that
a national audience reach cap remains
in the public interest, it asks at what
level it should be set. The Commission
asks whether a 39 percent cap still
makes sense, or whether the cap should
be set at a different level. The
Commission has not articulated a
justification for the cap in well over a
decade, and the last time it did, it
concluded that the cap should be raised
from 35 to 45 percent. Congress
subsequently scaled back the
Commission’s 45 percent cap to the
current 39 percent level in 2004.
Commenters urging the Commission to
retain the 39 percent cap or to adjust it
either upward or downward should
provide a reasoned basis for any
proposed line-drawing. The
Commission also seeks comment on
whether the national audience reach cap
should apply equally to all ownership
groups (e.g., groups that are networkowned or affiliated with cable networks
versus those that are not). The
Commission asks whether audience
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reach is the proper measurement to use
for the cap (as opposed to some other
measurement of a station group’s size or
influence, such as actual viewership,
market share, or amount of advertising
revenue). The Commission asks whether
it should consider alternatives with
some built-in flexibility; for instance,
alternatives that might employ the use
of a threshold screen that would trigger
a more detailed analysis, such as an
automatic presumption or a safe harbor,
either in lieu of or in addition to a bright
line cap. If the Commission were to
modify the national audience reach cap,
it asks whether this action would affect
any barriers to entry (either positively or
negatively), including entry by women,
minority, or small business owners.
15. Determining Compliance With a
National Cap. Assuming the
Commission retains a national audience
reach cap at some level, it seeks
comment on how to calculate
compliance, including possible
modification or elimination of the UHF
discount. If the Commission determines
that it has authority to adjust the
national cap and that a national cap
remains necessary in the public interest,
it asks what, if any, changes it should
make to the rules for determining
licensees’ compliance with that cap.
16. Initially, the Commission seeks
comment on whether to eliminate the
UHF discount. Notably, no commenter
in the prior UHF discount proceedings
presented evidence that the original
technical justification for the discount is
still valid, and the Commission in the
UHF Discount Order on Reconsideration
did not disturb its earlier conclusion
that the UHF discount no longer has a
sound technical basis following the
digital television transition. The
Commission seeks further comment on
this prior conclusion, as well as on the
importance of any non-technical
justifications for the UHF discount that
remain relevant. For example, the
Commission noted in the UHF Discount
Order on Reconsideration the industry’s
reliance on the UHF discount to develop
long-term business strategies. Parties
seeking reinstatement of the UHF
discount described how they used the
UHF discount to build new networks
that provide innovative, competitive
programming. The Commission seeks
comment on whether eliminating the
UHF discount would, on balance, serve
the public interest and whether the
current UHF discount causes harm to
consumers or presents other drawbacks
to retaining it.
17. The Commission also seeks
comment on whether the UHF discount
should be modified or whether it should
be supplemented or replaced with some
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other weighting method for determining
compliance with any national limit on
ownership of broadcast stations. The
Commission asks whether there are
other station or market characteristics
that would warrant discounting or
weighting a station’s audience reach
when determining compliance with a
national cap. The Commission
previously sought comment on and
declined to adopt a VHF discount,
acknowledging that UHF spectrum is
now generally considered more
desirable than VHF spectrum for digital
television broadcasting, but finding
insufficient evidence to conclude that
VHF operations are universally inferior
to UHF operations or that VHF stations’
economic viability was sufficiently in
jeopardy to warrant a VHF discount.
The Commission seeks comment on
these previous conclusions as well as
whether there are other discounts or
weights it should consider as part of a
national ownership rule. The
Commission asks how, if at all, it should
account for the fact that many
consumers today receive local broadcast
stations via an MVPD, rather than over
the air, in considering any discount or
weight premised on a disparity in overthe-air coverage.
18. The Commission seeks comment
on the impact that elimination of the
UHF discount would have on the
operation or effectiveness of a national
audience reach cap. In the UHF
Discount Order on Reconsideration, the
Commission concluded that the
elimination of the UHF discount
effectively tightened the national cap.
Therefore, if the Commission eliminates
the UHF discount, the Commission asks
whether it should simultaneously raise
the national cap and by how much,
assuming it finds that it has authority to
do so. The Commission asks whether
the UHF discount serves the underlying
purposes of the national cap, namely,
the preservation of a balance of power
between broadcast networks and local
affiliates, and how, if at all, elimination
of the discount would alter that
network/affiliate dynamic. The
Commission asks whether the UHF
discount benefits certain types of station
group owners more than others (e.g.,
non-Big Four networks versus Big Four
networks), and how its elimination
would affect such owners. The
Commission also seeks comment on
how eliminating the UHF discount
would affect not only the local
television market, but the broader video
marketplace as a whole.
19. Benefit-Cost Analysis. In addition,
the Commission seeks comment on how
to compare the benefits and costs
associated with modifying or
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eliminating the national cap, including
the UHF discount. The Commission
asks commenters supporting
modification or elimination of the
current 39 percent audience reach cap
or the UHF discount to explain the
anticipated economic impact of any
proposed action and, where possible, to
quantify benefits and costs of proposed
actions and alternatives. The
Commission asks whether the current
national audience reach cap creates
benefits or costs for any segment of
consumers. The Commission asks
whether the cap creates benefits or costs
for any segment of the industry that
should be counted as social benefits or
costs rather than transfers from one
segment of the industry to another. The
Commission asks how the cap creates
these benefits and costs, and what
evidence supports this explanation. The
Commission asks how the value of these
benefits and costs can be measured for
parties receiving them, what factors
create uncertainty about the existence or
size of these benefits and costs, and how
its economic analysis should take these
uncertainties into account.
20. The Commission asks how
elimination of the national audience
reach cap would alter these benefits and
costs, and the comparative benefits and
costs of modifying the cap upward
rather than eliminating it entirely. The
Commission asks whether allowing
station groups to exceed the current 39
percent cap leads to any consumer
benefits, such as increased competition,
choice, innovation, or investment in
programming, and what amount of
additional scale above the current
ownership limit would be required to
realize such benefits. The Commission
asks the comparative benefits and costs
of lowering the cap. Commenters
making claims about benefits and costs
should support their claims with
relevant economic theory and evidence,
including empirical analysis and data.
21. Comparison of benefits and costs
allows the Commission to identify the
most economically efficient policy—that
is, the policy that maximizes the value
of resources from the perspective of
consumers. The Commission asks
whether it should seek to preserve a
level of localism or other policy
outcomes that do not maximize
economic efficiency or consumer
welfare, what public interest reasons
support such actions, and what
evidence justifies the elevation of these
other public interest considerations over
consumer welfare. The Commission
asks what limiting principle the
Commission should employ to
determine when these alternative public
interest considerations are satisfied, and
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what evidence demonstrates that the
commenter’s preferred policy
alternative is likely to achieve the
appropriate level of localism or other
desired outcome, as determined by
these other public interest
considerations.
22. Relationship to Other Commission
Rules. Prior to 2004, when Congress
expressly excluded review of the
national audience reach cap from the
Commission’s quadrennial review
process, the national cap typically had
been considered in conjunction with the
Commission’s other media ownership
rules. For example, when the
Commission raised the limit on the
number of stations a broadcaster could
own to twelve, it also adopted a limit on
the total national audience reach of
station groups. To ensure a
comprehensive review, the Commission
seeks comment on the interplay
between the national audience reach
cap and other Commission ownership
rules affecting television broadcasters.
First, the Commission seeks comment
on how, if at all, its local television
ownership rule, which limits
consolidation within local markets,
should be taken into account in
analyzing whether to modify or
eliminate the national cap, which limits
consolidation on a national level.
Second, the Commission invites
comment on how, if at all, it should
consider the future decisions of
television broadcasters to adopt the
‘‘Next Generation’’ transmission
standard (or ATSC 3.0) on a voluntary
basis. Finally, the Commission seeks
comment on whether it should consider
the potential impact on any other
Commission rule or action in analyzing
whether to modify or eliminate the
national cap or UHF discount.
23. Grandfathering. To the extent that
any rule the Commission adopts as a
result of this proceeding causes a station
owner to no longer be in compliance
with the national audience reach cap or
to violate any new limit, the
Commission seeks comment on whether
it should grandfather such ownership
combinations as it has in the past. The
Commission further seeks comment as
to whether there should be any
restrictions on the further transferability
of any grandfathered stations. The
Commission notes that, in the UHF
Discount Elimination Order, it
grandfathered station combinations that
would exceed the 39 percent cap as a
result of elimination of the UHF
discount, but would have required any
grandfathered ownership combination
subsequently sold or transferred to
comply with the national ownership cap
in existence at the time of transfer.
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Subsequently, the UHF Discount Order
on Reconsideration reinstated the UHF
discount and dismissed as moot
requests to reconsider and modify
grandfathering provisions.
24. Given this history, and
recognizing broadcaster interest in
maintaining the economies of scale and
scope achieved through station
combinations, if the Commission
modifies the cap and/or the UHF
discount, the Commission seeks
comment on whether it should allow
full, intact transferability without
divestitures of grandfathered station
groups. If the Commission adopts a rule
change as a result of this proceeding
that necessitates the grandfathering of
existing, noncompliant station groups, it
seeks comment on the appropriate date
for triggering such grandfathering. The
Commission also seeks comment on any
other alternatives to grandfathering and
transferability of non-compliant station
groups. Finally, the Commission seeks
comment on any new grandfathering
issues arising from the questions posed
in this NPRM or presented in initial
comments filed in response.
Procedral Matters
25. Ex Parte Presentations. This
proceeding shall be treated as a ‘‘permitbut-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
1.1206(b). In proceedings governed by
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rule 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.
26. Filing Procedures. Pursuant to
Sections 1.415 and 1.419 of the
Commission’s rules, interested parties
may file comments and reply comments
on or before the dates indicated on the
first page of this document. Comments
may be filed using the Commission’s
Electronic Comment Filing System
(ECFS). See Electronic Filing of
Documents in Rulemaking Proceedings,
63 FR 24121 (1998).
D Electronic Filers: Comments may be
filed electronically using the internet by
accessing the ECFS: https://apps.fcc.gov/
ecfs/.
D Paper Filers: Parties who choose to
file by paper must file an original and
one copy of each filing. 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.
D All hand-delivered or messengerdelivered 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 8:00 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.
D Commercial overnight mail (other
than U.S. Postal Service Express Mail
and Priority Mail) must be sent to 9050
Junction Drive, Annapolis Junction, MD
20701.
D U.S. Postal Service first-class,
Express, and Priority mail must be
addressed to 445 12th Street SW,
Washington, DC 20554.
27. Availability of Documents.
Comments, reply comments, and ex
parte submissions will be available for
public inspection during regular
business hours in the FCC Reference
Information Center, Federal
Communications Commission, 445 12th
Street SW, CY–A257, Washington, DC
20554. These documents will also be
available via ECFS. Documents will be
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available electronically in ASCII,
Microsoft Word, and/or Adobe Acrobat.
28. 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.
29. Paperwork Reduction Act Notice.
The Commission seeks comment on
whether, based on this NPRM, it should
adopt any new or modified information
collection requirements. The
Commission, as part of its continuing
effort to reduce paperwork burdens and
pursuant to the Paperwork Reduction
Act of 1995 invites the general public
and the Office of Management and
Budget to comment on any such
information collection requirements. In
addition, pursuant to the Small
Business Paperwork Relief Act of 2002,
the Commission seeks specific comment
on how it might further reduce the
information collection burden for small
business concerns with fewer than 25
employees.
30. Initial Regulatory Flexibility
Analysis. As required by the Regulatory
Flexibility Act of 1980, as amended
(RFA), the Commission has prepared
this Initial Regulatory Flexibility Act
Analysis (IRFA) of the possible
significant economic impact on small
entities of the policies and rules
proposed in this NPRM. The
Commission requests written public
comments on this IRFA. Comments
must be identified as responses to the
IRFA and must be filed by the deadlines
for comments specified above. The
Commission will send a copy of this
NPRM, including this IRFA, to the Chief
Counsel for Advocacy of the Small
Business Administration.
31. Need for, and Objectives of, the
Proposed Rules. This NPRM seeks
comment on the Commission’s national
television audience reach cap, including
the discount afforded to UHF stations.
Earlier this year, the Commission
reinstated the UHF discount, which
provides a 50 percent discount to UHF
stations for purposes of calculating
compliance with the 39 percent
audience reach cap. In reinstating the
discount, the Commission found that
the earlier decision to eliminate the
discount had effectively tightened the
cap without considering whether the
overall cap remained in the public
interest, particularly in light of changes
to the video marketplace. The
Commission found this action to be
arbitrary and capricious and unwise
from a public policy perspective. This
NPRM seeks to rectify the Commission’s
prior error and undertake a broader
assessment of the national audience cap,
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including the UHF discount. This
NPRM asks whether the Commission
should modify or eliminate the current
39 percent national audience reach cap,
and whether to grandfather any newly
non-compliant combinations and if so,
how.
32. Legal Basis. The legal basis for any
action that may be taken pursuant to
this NPRM is contained in Sections 1,
2(a), 4(i), 303(r), 307, 309, and 310 of the
Communications Act of 1934, as
amended.
33. Description and Estimate of the
Number of Small Entities to Which the
Proposed Rules Apply. 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 rule revisions,
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 (SBA). 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. Below, we
provide a description of such small
entities, as well as an estimate of the
number of such small entities, where
feasible.
34. Television Broadcasting. This
Economic Census category ‘‘comprises
establishments primarily engaged in
broadcasting images together with
sound.’’ These establishments operate
television broadcast 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 Small
Business Administration has created the
following small business size standard
for such businesses: those having $38.5
million or less in annual receipts. The
2012 Economic Census reports that 751
firms in this category operated in that
year. Of that number, 656 had annual
receipts of $25,000,000 or less, 25 had
annual receipts between $25,000,000
and $49,999,999 and 70 had annual
receipts of $50,000,000 or more. Based
on this data, the Commission estimates
that the majority of commercial
television broadcasters are small entities
under the applicable size.
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35. Additionally, the Commission has
estimated the number of licensed
commercial television stations to be
1,378. Of this total, 1,263 stations (or
about 91 percent) had revenues of $38.5
million or less, according to
Commission staff review of the BIA
Kelsey Inc. Media Access Pro Television
Database (BIA) on May 9, 2017, and
therefore these licensees qualify as
small entities under the SBA definition.
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.
37. Description of Projected
Reporting, Recordkeeping, and Other
Compliance Requirements. If the
Commission determines that it should
modify or eliminate the current 39
percent national audience reach cap or
permanently eliminate or modify the
UHF discount, this action could require
modification of certain FCC forms and
their instructions, possibly including:
(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 also
have to modify other forms that include
in their instructions the media
ownership rules or citations to media
ownership proceedings, including Form
303–S, Application for Renewal License
for AM, FM, TV, Translator, or LPTV
Station and Form 323, Ownership
Report for Commercial Broadcast
Station. The impact of these changes
will be the same on all entities, and the
Commission does not anticipate that
compliance will require the expenditure
of any additional resources or place
additional burdens on small businesses.
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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. The Commission has previously
concluded that the national audience
reach cap is intended to promote its
public interest goal of localism. We seek
comment on whether this rule or any
modified rule is necessary at this time
to serve localism and, if not, whether
any rule is necessary to serve our goals
of viewpoint diversity and competition
in the video marketplace or other goals
such as innovation. The NPRM seeks
comment on the need for, and efficacy
of, a national audience reach cap and
UHF discount or other type of limit in
light of significant changes in the video
marketplace since the Commission last
reviewed the cap and discount together.
Assuming some limit is necessary, the
NPRM seeks comment on whether the
Commission should retain or modify the
existing audience reach cap and UHF
discount; retain the audience reach cap
but adopt a different weighting
methodology; adopt a limit based on
some other measurement of a station
group’s size or influence, such as actual
viewership, market share, or advertising
revenue; or adopt a more flexible
alternative such as a threshold screen
that would trigger a more detailed
analysis, an automatic presumption or
safe harbor, either in lieu of or in
addition to a bright line cap. The NPRM
invites comment on the effects of any
proposed rule changes on different
types of broadcasters (e.g., independent
or network-affiliated), the costs and
benefits associated with any proposals,
and any potential to have significant
impact on small entities. The
Commission expects to further consider
the economic impact on small entities
following its review of comments filed
in response to the NPRM and this IRFA.
40. Federal Rules that May Duplicate,
Overlap, or Conflict With the Proposed
Rule. None.
41. Ordering Clauses. Accordingly, it
is ordered that, pursuant to the
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3667
authority contained in Sections 1, 2(a),
4(i), 303(r), 307, 309, and 310 of the
Communications Act of 1934, as
amended the NPRM 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 NPRM, including the Initial
Regulatory Flexibility Analysis, to the
Chief Counsel for Advocacy of the Small
Business Administration.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2018–01404 Filed 1–25–18; 8:45 am]
BILLING CODE 6712–01–P
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety
Administration
49 CFR Part 571
Federal Motor Vehicle Safety Standard
No. 108; Lamp, Reflective Devices, and
Associated Equipment; Denial of
Petition for Rulemaking
National Highway Traffic
Safety Administration (NHTSA), U. S.
Department of Transportation (DOT).
ACTION: Denial of petition for
rulemaking.
AGENCY:
This document denies a
petition for rulemaking submitted by
Mr. William H. Thompson III requesting
NHTSA amend Federal Motor Vehicle
Safety Standard (FMVSS) No. 108,
Lamps, reflective devices, and
associated equipment. Specifically, Mr.
Thompson requested we revise the
activation process for red and amber
signal warning lamps on school buses to
require a new intermediate step during
which both colors are activated
simultaneously and flash in an
alternating pattern and that we decouple
the process by which lamps transition to
the red-only configuration from the
opening of the bus entrance door.
NHTSA is denying this petition because
Mr. Thompson has not identified a
safety need to justify making changes he
requested, and Mr. Thompson did not
provide persuasive quantitative data to
show adopting his requested changes
would result in a net benefit to safety.
DATES: The petition is denied as of
January 26, 2018.
FOR FURTHER INFORMATION CONTACT: Mr.
Wayne McKenzie, Office of Crash
Avoidance Standards (Phone: 202–366–
1810; Fax: 202–366–7002) or Mr. Daniel
Koblenz, Office of the Chief Counsel
SUMMARY:
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Agencies
[Federal Register Volume 83, Number 18 (Friday, January 26, 2018)]
[Proposed Rules]
[Pages 3661-3667]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-01404]
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 73
[MB Docket No. 17-318; FCC 17-169]
National Television Multiple Ownership Rule
AGENCY: Federal Communications Commission.
ACTION: Proposed rule
-----------------------------------------------------------------------
SUMMARY: This Notice of Proposed Rulemaking (NPRM) initiates a
comprehensive review of the national television audience reach cap,
including the UHF discount used by broadcasters to determine compliance
with the cap. The national cap limits entities from owning or
controlling television stations that, together, reach more than 39
percent of the television households in the country. The NPRM asks
questions about whether a cap is still needed and what public interest
goals it would promote, where the cap should be set if still needed,
and how compliance with the cap should be calculated, including the
question of whether the UHF discount should be eliminated. The Notice
also invites comment on the Commission's legal authority to take such
actions.
DATES: Comments are due on or before February 26, 2018. Reply Comments
are due on or before March 27, 2018.
ADDRESSES: Interested parties may submit comments and replies,
identified by MB Docket No. 17-318, by any of the following methods:
Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments.
Federal Communications Commission's Website: https://www.fcc.gov/cgb/ecfs/. Follow the instructions for submitting comments.
Mail: Filings can be sent by hand or messenger delivery,
by commercial overnight courier, or by first-class or overnight U.S.
Postal Service mail (although the Commission continues to experience
delays in receiving U.S. Postal Service mail). All filings must be
addressed to the Commission's Secretary, Office of the Secretary,
Federal Communications Commission.
For more detailed filing instructions, see the Procedural Matters
section below.
FOR FURTHER INFORMATION CONTACT: Brendan Holland, Industry Analysis
Division, Media Bureau, [email protected] (202) 418-2757.
SUPPLEMENTARY INFORMATION: This NPRM in MB Docket No. 17-318, was
adopted December 14, 2017, and released December 18, 2017. The full
text of this document is available for public inspection during regular
business hours in the FCC Reference Center, 445 12th Street SW, Room
CY-A257, Washington, DC 20554, or online at https://apps.fcc.gov/edoc_putlic/attachmatch/FCC-17-169A1.pdf. To request this document in
accessible formats for people with disabilities (e.g. braille, large
print, electronic files, audio format, etc.) or to request reasonable
accommodations (e.g. accessible format documents, sign language
interpreters, CART, etc.), send an email to [email protected] or call the
FCC's Consumer and Governmental Affairs Bureau at (202) 418-0530
(voice), (202) 418-0432 (TTY).
Synopsis
1. Background. The national television audience reach cap and the
related UHF discount are an outgrowth of television ownership
restrictions dating back to the earliest days of broadcast television.
The Commission first imposed national ownership restrictions for
television stations in 1941 by limiting the number of stations that
could be commonly owned, operated, or controlled to three. This limit
was eventually broadened to seven stations in 1954 and eventually to 12
stations in 1984. In 1985, the Commission also determined that a 25
percent nationwide audience reach cap, in addition to the twelve-
station limit, would help prevent a potentially disruptive industry
restructuring. Along with the national cap, the Commission also adopted
a 50 percent UHF discount to reflect the fact that, in the analog
television broadcasting era, UHF signals reached a smaller audience in
[[Page 3662]]
comparison with VHF signals. The UHF discount provides that, for
purposes of determining compliance with the national audience reach
cap, stations broadcasting in the VHF spectrum are attributed with all
television households in their Designated Market Areas (DMAs), while
UHF stations are attributed with only 50 percent of the households in
their DMAs.
2. In the Telecommunications Act of 1996 (1996 Act), Congress
directed the Commission to amend its rules to increase the national
audience reach cap from 25 percent to 35 percent and eliminate the
restriction on owning more than 12 broadcast television stations
nationwide. The Commission reaffirmed the 35 percent cap in its 1998
Biennial Review Order, but the U.S. Court of Appeals for the District
of Columbia Circuit (DC Circuit) later remanded that decision, finding
that the Commission had failed to demonstrate that the 35 percent
national audience reach cap advanced localism, diversity, or
competition. In the 2002 Biennial Review Order, the Commission found
that while a national ownership cap was no longer needed to protect
diversity and competition, the cap remained necessary to protect
localism. The Commission further concluded that raising the cap from 35
percent to 45 percent would strike an appropriate balance between the
broadcast networks and the local affiliates by permitting some growth
for the owners of the Big Four networks (ABC, CBS, Fox, and NBC) 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.
3. Following adoption of the 2002 Biennial Review Order, and while
an appeal of that order was pending, Congress partially rolled back the
cap increase by including a provision in the 2004 Consolidated
Appropriations Act (CAA) directing the Commission ``to modify its rules
to set the national cap at 39 percent of national television
households.'' The CAA further amended Section 202(h) of the 1996 Act to
require a quadrennial review of the Commission's broadcast ownership
rules, rather than the previously mandated biennial review. In doing
so, however, Congress excluded consideration of ``any rules relating to
the 39 percent national audience reach limitation'' from the
quadrennial review requirement. Prior to the enactment of the CAA,
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 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.
4. In August 2016, the Commission eliminated the UHF discount,
finding that UHF stations were no longer technically inferior to VHF
stations following the digital television transition and that the
competitive disparity between UHF and VHF stations had disappeared.
Then-Commissioner Pai and Commissioner O'Rielly dissented from this
decision. In April 2017, in response to a Petition for Reconsideration,
the Commission reinstated the UHF discount, finding that the
Commission's elimination of the discount, effectively tightening the
cap without also determining whether the cap remained in the public
interest, was arbitrary and capricious and unwise from a public policy
perspective. Because the UHF discount is used to determine licensees'
compliance with the national audience reach cap, the Commission
concluded that the UHF discount and the cap are inextricably linked,
and eliminating the discount without considering the cap itself was in
error. In reinstating the UHF discount, the Commission committed to
undertake this comprehensive rulemaking to determine whether to modify
or eliminate the national cap, including the UHF discount.
5. Commission Authority To Modify or Eliminate the National Cap. As
an initial matter, the Commission seeks comment on its authority to
modify or eliminate the national cap, including authority to modify or
eliminate the UHF discount. The Commission previously concluded in the
UHF Discount Elimination Order that the Commission has authority to
modify or eliminate the 39 percent national audience reach cap,
including the UHF discount (although it refrained from adjusting the
cap). The Commission found that it had such authority based on its
broad authority to adopt--and revise or eliminate--all necessary rules
under the Communications Act. In contrast, parties opposing
reinstatement of the UHF discount on reconsideration argued variously
that the Commission lacked authority to modify or eliminate the
national cap, the UHF discount, or both.
6. In previously concluding that it has authority to modify or
eliminate the national cap, the Commission rejected arguments that,
when Congress established the 39 percent national audience reach cap,
it precluded the Commission from any adjustment of the cap or the
discount. The Commission reasoned that the 2004 CAA ``simply directed
the Commission to revise its rules to reflect a 39 percent national
audience reach cap and removed the requirement to review the national
ownership cap from the Commission's quadrennial review requirement.''
The Commission concluded that the CAA did not impose a statutory
national audience reach cap or prohibit the Commission from evaluating
the elements of this rule. In addition, although the Third Circuit
ultimately concluded in its review of the Commission's 2002 Biennial
Review Order that questions related to the UHF discount were moot as a
result of the CAA, it did not foreclose the Commission's consideration
of its regulation defining the UHF discount in a rulemaking outside the
context of section 202(h). Further, Congress elected to use the same
language in the 2004 CAA, instructing the Commission to ``modify its
rules,'' as it did when it instructed the Commission to change the cap
from 25 to 35 percent as part of the 1996 Act. Both the DC Circuit (in
finding it was arbitrary and capricious for the Commission to retain
that cap as part of the 1998 biennial review) and the Commission itself
(in subsequently raising the cap from 35 to 45 percent) interpreted the
identical language in the 1996 Act as preserving the Commission's
authority to modify the cap in the future.
7. The Commission further based its finding of authority to modify
the cap and discount on its broad authority to adopt rules necessary to
carry out the provisions of the Communications Act, and its authority
to revisit its rules and revise or eliminate them as appropriate. Given
continued questions regarding authority in this area, the Commission
seeks further comment on its prior conclusion that it has authority to
modify or eliminate the national audience reach cap and the UHF
discount. The Commission asks whether Congress's exclusion of the
national cap from the quadrennial review provision merely meant to
relieve the Commission of the obligation to reconsider the cap every
four years (as the Third Circuit concluded), or was it designed to
withhold the Commission's authority to change the cap as set by
Congress. The Commission also asks whether Congress's instruction to
the Commission to ``modify its rules'' in 1996 and 2004, rather than
simply mandating a specific national audience reach cap, preserves the
Commission's traditional statutory authority to alter or eliminate the
cap in a future rulemaking.
[[Page 3663]]
8. Modification of Elimination of the National Audience Reach Cap.
The Commission seeks comment on whether there is still a need for a
national cap that prevents ownership of stations that collectively
reach more than a certain percentage of the television households in
the country. The Commission asks whether such a cap serves the public
interest. The Commission notes at the outset that the video marketplace
has changed considerably since it last considered the national cap in
the 2002 Biennial Review Order, and since Congress instructed the
Commission to set a 39 percent cap in 2004. The Commission's most
recent annual Video Competition Report describes, among other
developments, the growth of video programming options available to
consumers, including online alternatives to traditional video
distribution, reverse compensation fees paid by affiliates to broadcast
networks, common ownership of broadcast and cable networks,
consolidation among both Multichannel Video Programming Distributors
(MVPDs) and non-network owned station groups, and continuing MVPD video
subscriber losses. The Commission concluded in the UHF Order on
Reconsideration that the failure to consider these changes compounded
the error of eliminating the UHF discount. Accordingly, the Commission
now seeks comment on how these marketplace changes, as well as any
other changes not previously mentioned, should be considered in the
context of the possible modification or elimination of the national
audience reach cap. For instance, the Commission previously found in
its 2002 Biennial Review Order that a national audience reach cap set
at some level is necessary in the public interest to promote localism.
Specifically, the Commission found that a percentage cap maintains the
appropriate balance of power between broadcast networks and their local
affiliate groups, in part by preventing the excessive accumulation of
audience reach by network-owned groups, which are more likely to hold
stations in multiple geographic markets with large populations. The
Commission reasoned that a national audience reach cap preserves the
leverage necessary for local affiliates to collectively negotiate to
influence network programming decisions and exercise their rights to
preempt network programming in favor of programming the affiliates feel
is better suited to local community needs. In setting a 45 percent cap,
the Commission found that a national audience reach cap set at that
level would ensure that network-owned station groups could not achieve
a level of direct audience reach that exceeds that of their local
affiliates, while at the same time allowing for limited growth by each
of the Big Four network owners, allowing them to achieve better
economies of scale and scope and remain competitive.
9. The Commission now seeks comment on whether the existing cap is
still necessary to promote localism. The Commission asks whether its
previously articulated justifications--related to collective influence
and preemption by local affiliates--still hold true, and whether
localism has increased, decreased, or remained roughly the same over
time. The Commission asks whether there are recent examples where local
affiliates have influenced network programming to better serve local
needs, and how recent affiliate preemption rates compare to those the
Commission cited in the 2002 Biennial Review Order. The Commission asks
whether there are other metrics by which it can assess the effect of
the national audience reach cap on localism and whether, even if
preserving a national audience reach cap at some level would promote
localism, would modifying or eliminating the cap nevertheless have
offsetting benefits (for example, in promoting competition or
diversity).
10. The Commission also asks whether other changes in the
marketplace have affected the network/affiliate relationship, such that
it would need to adjust assumptions made in previous reviews of the
cap. The Commission asks how the growth of independent station groups
over the last two decades has changed the dynamic between network-owned
station groups and their affiliates. The Commission notes that its
interest in preserving a national/local balance between networks and
affiliates is predicated upon the Commission's prior conclusion that
networks and their affiliates have different economic incentives when
it comes to serving local interests. The Commission previously has
found that broadcast networks primarily seek to air programming that
will appeal to large national audiences, while local affiliates are
more attuned to the needs of their local communities. The Commission
seeks comment on these prior conclusions, including whether the
conclusion that local affiliates are more attuned to local needs is
still valid and whether it continues to apply equally to all local
affiliates. The Commission also asks whether the size of the station
group affects this conclusion.
11. The Commission also seeks comment on whether there are other
justifications for a national audience reach cap besides localism. In
the 2002 Biennial Review Order, for example, the Commission noted in
its competition discussion that the national cap appeared to encourage
innovation in broadcast television by preserving a number of
separately-owned station groups and then concluded that a variety of
owners had led to innovative programming formats and technical
advances. The Commission pointed to new programming formats developed
by non-network owned affiliates, such as all-news channels and local
news magazines, and the potential for experimentation in the use of
digital spectrum as part of the digital television transition. The
Commission now seeks comment on whether these prior conclusions have
proven true over time and whether they remain true today. The
Commission asks whether the variety of owners on a national level
produced by the national audience reach cap continues to promote
innovation in the marketplace, or whether there are ways in which the
national audience reach cap hinders innovation.
12. The Commission previously has found that a national television
ownership restriction is not necessary to promote the goals of
competition or diversity. The Commission first reached this conclusion
in 1984 when, regarding competition, it recognized the relevance of
advertising to measuring competition in national and local television
markets, and concluded that, for the local spot advertising market, the
local television ownership rule rather than a national ownership rule
would best address any risk of competitive harm. Regarding diversity,
the Commission concluded that national broadcast ownership limits, as
opposed to local ownership limits, ordinarily are not pertinent to
assuring a diversity of views. The Commission nonetheless set a
national audience reach cap to avoid any rapid restructuring of the
industry that might be caused by its decision the previous year to
raise the numerical cap from seven to twelve stations. The Commission
now asks whether these previous conclusions are still valid, and
whether any other goals supporting national ownership limits should be
considered in this proceeding.
13. In addition, the Commission seeks comment on whether changes in
the marketplace warrant a fresh look at the national television
ownership rule's impact on competition or diversity at either the local
or national level. The Commission asks how marketplace
[[Page 3664]]
changes have affected competition in the local broadcast television
market or any other relevant markets. The Commission notes that other
video distributors, including direct broadcast satellite providers and
online video programmers, are not restricted by ownership limits. The
Commission asks whether the cap, or the current level of the cap, have
any negative impact on competition or diversity, and how any
modification of the cap might affect these goals. The Commission asks
whether marketplace changes have affected the relationships and
business dealings between local broadcasters and other video
distributors in ways that would justify retention, modification, or
elimination of the national audience reach cap. The Commission notes
that it has rules in place related to the distribution of video
programming and carriage negotiations between broadcast stations and
MVPDs (local exclusivity and retransmission consent negotiation rules)
and asks whether the existence of these rules in any way informs the
consideration of whether to retain, modify, or eliminate the cap. The
Commission asks, for example, whether the rules have affected the
relationships and business dealings between local broadcasters and
other video distributors in ways that might affect the need for and
operation of any national audience reach cap. The Commission also asks
whether the cap serves any competition or diversity purpose related to
the production or purchase of programming (e.g., syndicated
programming).
14. If the Commission concludes that a national audience reach cap
remains in the public interest, it asks at what level it should be set.
The Commission asks whether a 39 percent cap still makes sense, or
whether the cap should be set at a different level. The Commission has
not articulated a justification for the cap in well over a decade, and
the last time it did, it concluded that the cap should be raised from
35 to 45 percent. Congress subsequently scaled back the Commission's 45
percent cap to the current 39 percent level in 2004. Commenters urging
the Commission to retain the 39 percent cap or to adjust it either
upward or downward should provide a reasoned basis for any proposed
line-drawing. The Commission also seeks comment on whether the national
audience reach cap should apply equally to all ownership groups (e.g.,
groups that are network-owned or affiliated with cable networks versus
those that are not). The Commission asks whether audience reach is the
proper measurement to use for the cap (as opposed to some other
measurement of a station group's size or influence, such as actual
viewership, market share, or amount of advertising revenue). The
Commission asks whether it should consider alternatives with some
built-in flexibility; for instance, alternatives that might employ the
use of a threshold screen that would trigger a more detailed analysis,
such as an automatic presumption or a safe harbor, either in lieu of or
in addition to a bright line cap. If the Commission were to modify the
national audience reach cap, it asks whether this action would affect
any barriers to entry (either positively or negatively), including
entry by women, minority, or small business owners.
15. Determining Compliance With a National Cap. Assuming the
Commission retains a national audience reach cap at some level, it
seeks comment on how to calculate compliance, including possible
modification or elimination of the UHF discount. If the Commission
determines that it has authority to adjust the national cap and that a
national cap remains necessary in the public interest, it asks what, if
any, changes it should make to the rules for determining licensees'
compliance with that cap.
16. Initially, the Commission seeks comment on whether to eliminate
the UHF discount. Notably, no commenter in the prior UHF discount
proceedings presented evidence that the original technical
justification for the discount is still valid, and the Commission in
the UHF Discount Order on Reconsideration did not disturb its earlier
conclusion that the UHF discount no longer has a sound technical basis
following the digital television transition. The Commission seeks
further comment on this prior conclusion, as well as on the importance
of any non-technical justifications for the UHF discount that remain
relevant. For example, the Commission noted in the UHF Discount Order
on Reconsideration the industry's reliance on the UHF discount to
develop long-term business strategies. Parties seeking reinstatement of
the UHF discount described how they used the UHF discount to build new
networks that provide innovative, competitive programming. The
Commission seeks comment on whether eliminating the UHF discount would,
on balance, serve the public interest and whether the current UHF
discount causes harm to consumers or presents other drawbacks to
retaining it.
17. The Commission also seeks comment on whether the UHF discount
should be modified or whether it should be supplemented or replaced
with some other weighting method for determining compliance with any
national limit on ownership of broadcast stations. The Commission asks
whether there are other station or market characteristics that would
warrant discounting or weighting a station's audience reach when
determining compliance with a national cap. The Commission previously
sought comment on and declined to adopt a VHF discount, acknowledging
that UHF spectrum is now generally considered more desirable than VHF
spectrum for digital television broadcasting, but finding insufficient
evidence to conclude that VHF operations are universally inferior to
UHF operations or that VHF stations' economic viability was
sufficiently in jeopardy to warrant a VHF discount. The Commission
seeks comment on these previous conclusions as well as whether there
are other discounts or weights it should consider as part of a national
ownership rule. The Commission asks how, if at all, it should account
for the fact that many consumers today receive local broadcast stations
via an MVPD, rather than over the air, in considering any discount or
weight premised on a disparity in over-the-air coverage.
18. The Commission seeks comment on the impact that elimination of
the UHF discount would have on the operation or effectiveness of a
national audience reach cap. In the UHF Discount Order on
Reconsideration, the Commission concluded that the elimination of the
UHF discount effectively tightened the national cap. Therefore, if the
Commission eliminates the UHF discount, the Commission asks whether it
should simultaneously raise the national cap and by how much, assuming
it finds that it has authority to do so. The Commission asks whether
the UHF discount serves the underlying purposes of the national cap,
namely, the preservation of a balance of power between broadcast
networks and local affiliates, and how, if at all, elimination of the
discount would alter that network/affiliate dynamic. The Commission
asks whether the UHF discount benefits certain types of station group
owners more than others (e.g., non-Big Four networks versus Big Four
networks), and how its elimination would affect such owners. The
Commission also seeks comment on how eliminating the UHF discount would
affect not only the local television market, but the broader video
marketplace as a whole.
19. Benefit-Cost Analysis. In addition, the Commission seeks
comment on how to compare the benefits and costs associated with
modifying or
[[Page 3665]]
eliminating the national cap, including the UHF discount. The
Commission asks commenters supporting modification or elimination of
the current 39 percent audience reach cap or the UHF discount to
explain the anticipated economic impact of any proposed action and,
where possible, to quantify benefits and costs of proposed actions and
alternatives. The Commission asks whether the current national audience
reach cap creates benefits or costs for any segment of consumers. The
Commission asks whether the cap creates benefits or costs for any
segment of the industry that should be counted as social benefits or
costs rather than transfers from one segment of the industry to
another. The Commission asks how the cap creates these benefits and
costs, and what evidence supports this explanation. The Commission asks
how the value of these benefits and costs can be measured for parties
receiving them, what factors create uncertainty about the existence or
size of these benefits and costs, and how its economic analysis should
take these uncertainties into account.
20. The Commission asks how elimination of the national audience
reach cap would alter these benefits and costs, and the comparative
benefits and costs of modifying the cap upward rather than eliminating
it entirely. The Commission asks whether allowing station groups to
exceed the current 39 percent cap leads to any consumer benefits, such
as increased competition, choice, innovation, or investment in
programming, and what amount of additional scale above the current
ownership limit would be required to realize such benefits. The
Commission asks the comparative benefits and costs of lowering the cap.
Commenters making claims about benefits and costs should support their
claims with relevant economic theory and evidence, including empirical
analysis and data.
21. Comparison of benefits and costs allows the Commission to
identify the most economically efficient policy--that is, the policy
that maximizes the value of resources from the perspective of
consumers. The Commission asks whether it should seek to preserve a
level of localism or other policy outcomes that do not maximize
economic efficiency or consumer welfare, what public interest reasons
support such actions, and what evidence justifies the elevation of
these other public interest considerations over consumer welfare. The
Commission asks what limiting principle the Commission should employ to
determine when these alternative public interest considerations are
satisfied, and what evidence demonstrates that the commenter's
preferred policy alternative is likely to achieve the appropriate level
of localism or other desired outcome, as determined by these other
public interest considerations.
22. Relationship to Other Commission Rules. Prior to 2004, when
Congress expressly excluded review of the national audience reach cap
from the Commission's quadrennial review process, the national cap
typically had been considered in conjunction with the Commission's
other media ownership rules. For example, when the Commission raised
the limit on the number of stations a broadcaster could own to twelve,
it also adopted a limit on the total national audience reach of station
groups. To ensure a comprehensive review, the Commission seeks comment
on the interplay between the national audience reach cap and other
Commission ownership rules affecting television broadcasters. First,
the Commission seeks comment on how, if at all, its local television
ownership rule, which limits consolidation within local markets, should
be taken into account in analyzing whether to modify or eliminate the
national cap, which limits consolidation on a national level. Second,
the Commission invites comment on how, if at all, it should consider
the future decisions of television broadcasters to adopt the ``Next
Generation'' transmission standard (or ATSC 3.0) on a voluntary basis.
Finally, the Commission seeks comment on whether it should consider the
potential impact on any other Commission rule or action in analyzing
whether to modify or eliminate the national cap or UHF discount.
23. Grandfathering. To the extent that any rule the Commission
adopts as a result of this proceeding causes a station owner to no
longer be in compliance with the national audience reach cap or to
violate any new limit, the Commission seeks comment on whether it
should grandfather such ownership combinations as it has in the past.
The Commission further seeks comment as to whether there should be any
restrictions on the further transferability of any grandfathered
stations. The Commission notes that, in the UHF Discount Elimination
Order, it grandfathered station combinations that would exceed the 39
percent cap as a result of elimination of the UHF discount, but would
have required any grandfathered ownership combination subsequently sold
or transferred to comply with the national ownership cap in existence
at the time of transfer. Subsequently, the UHF Discount Order on
Reconsideration reinstated the UHF discount and dismissed as moot
requests to reconsider and modify grandfathering provisions.
24. Given this history, and recognizing broadcaster interest in
maintaining the economies of scale and scope achieved through station
combinations, if the Commission modifies the cap and/or the UHF
discount, the Commission seeks comment on whether it should allow full,
intact transferability without divestitures of grandfathered station
groups. If the Commission adopts a rule change as a result of this
proceeding that necessitates the grandfathering of existing,
noncompliant station groups, it seeks comment on the appropriate date
for triggering such grandfathering. The Commission also seeks comment
on any other alternatives to grandfathering and transferability of non-
compliant station groups. Finally, the Commission seeks comment on any
new grandfathering issues arising from the questions posed in this NPRM
or presented in initial comments filed in response.
Procedral Matters
25. Ex Parte Presentations. This proceeding 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 1.1206(b). In proceedings governed by
[[Page 3666]]
rule 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.
26. Filing Procedures. Pursuant to Sections 1.415 and 1.419 of the
Commission's rules, interested parties may file comments and reply
comments on or before the dates indicated on the first page of this
document. Comments may be filed using the Commission's Electronic
Comment Filing System (ECFS). See Electronic Filing of Documents in
Rulemaking Proceedings, 63 FR 24121 (1998).
[ssquf] Electronic Filers: Comments may be filed electronically
using the internet by accessing the ECFS: https://apps.fcc.gov/ecfs/.
[ssquf] Paper Filers: Parties who choose to file by paper must file
an original and one copy of each filing. 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.
[ssquf] 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
8:00 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.
[ssquf] Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9050 Junction Drive,
Annapolis Junction, MD 20701.
[ssquf] U.S. Postal Service first-class, Express, and Priority mail
must be addressed to 445 12th Street SW, Washington, DC 20554.
27. Availability of Documents. Comments, reply comments, and ex
parte submissions will be available for public inspection during
regular business hours in the FCC Reference Information Center, Federal
Communications Commission, 445 12th Street SW, CY-A257, Washington, DC
20554. These documents will also be available via ECFS. Documents will
be available electronically in ASCII, Microsoft Word, and/or Adobe
Acrobat.
28. Additional Information. For additional information on this
proceeding, please contact Brendan Holland of the Media Bureau,
Industry Analysis Division, [email protected], (202) 418-2757.
29. Paperwork Reduction Act Notice. The Commission seeks comment on
whether, based on this NPRM, it should adopt any new or modified
information collection requirements. The Commission, as part of its
continuing effort to reduce paperwork burdens and pursuant to the
Paperwork Reduction Act of 1995 invites the general public and the
Office of Management and Budget to comment on any such information
collection requirements. In addition, pursuant to the Small Business
Paperwork Relief Act of 2002, the Commission seeks specific comment on
how it might further reduce the information collection burden for small
business concerns with fewer than 25 employees.
30. Initial Regulatory Flexibility Analysis. As required by the
Regulatory Flexibility Act of 1980, as amended (RFA), the Commission
has prepared this Initial Regulatory Flexibility Act Analysis (IRFA) of
the possible significant economic impact on small entities of the
policies and rules proposed in this NPRM. The Commission requests
written public comments on this IRFA. Comments must be identified as
responses to the IRFA and must be filed by the deadlines for comments
specified above. The Commission will send a copy of this NPRM,
including this IRFA, to the Chief Counsel for Advocacy of the Small
Business Administration.
31. Need for, and Objectives of, the Proposed Rules. This NPRM
seeks comment on the Commission's national television audience reach
cap, including the discount afforded to UHF stations. Earlier this
year, the Commission reinstated the UHF discount, which provides a 50
percent discount to UHF stations for purposes of calculating compliance
with the 39 percent audience reach cap. In reinstating the discount,
the Commission found that the earlier decision to eliminate the
discount had effectively tightened the cap without considering whether
the overall cap remained in the public interest, particularly in light
of changes to the video marketplace. The Commission found this action
to be arbitrary and capricious and unwise from a public policy
perspective. This NPRM seeks to rectify the Commission's prior error
and undertake a broader assessment of the national audience cap,
including the UHF discount. This NPRM asks whether the Commission
should modify or eliminate the current 39 percent national audience
reach cap, and whether to grandfather any newly non-compliant
combinations and if so, how.
32. Legal Basis. The legal basis for any action that may be taken
pursuant to this NPRM is contained in Sections 1, 2(a), 4(i), 303(r),
307, 309, and 310 of the Communications Act of 1934, as amended.
33. Description and Estimate of the Number of Small Entities to
Which the Proposed Rules Apply. 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 rule revisions, 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 (SBA). 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. Below, we provide a
description of such small entities, as well as an estimate of the
number of such small entities, where feasible.
34. Television Broadcasting. This Economic Census category
``comprises establishments primarily engaged in broadcasting images
together with sound.'' These establishments operate television
broadcast 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 Small
Business Administration has created the following small business size
standard for such businesses: those having $38.5 million or less in
annual receipts. The 2012 Economic Census reports that 751 firms in
this category operated in that year. Of that number, 656 had annual
receipts of $25,000,000 or less, 25 had annual receipts between
$25,000,000 and $49,999,999 and 70 had annual receipts of $50,000,000
or more. Based on this data, the Commission estimates that the majority
of commercial television broadcasters are small entities under the
applicable size.
[[Page 3667]]
35. Additionally, the Commission has estimated the number of
licensed commercial television stations to be 1,378. Of this total,
1,263 stations (or about 91 percent) had revenues of $38.5 million or
less, according to Commission staff review of the BIA Kelsey Inc. Media
Access Pro Television Database (BIA) on May 9, 2017, and therefore
these licensees qualify as small entities under the SBA definition.
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.
37. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements. If the Commission determines that it should
modify or eliminate the current 39 percent national audience reach cap
or permanently eliminate or modify the UHF discount, this action could
require modification of certain FCC forms and their instructions,
possibly including: (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 also have to modify other forms that
include in their instructions the media ownership rules or citations to
media ownership proceedings, including Form 303-S, Application for
Renewal License for AM, FM, TV, Translator, or LPTV Station and Form
323, Ownership Report for Commercial Broadcast Station. The impact of
these changes will be the same on all entities, and the Commission does
not anticipate that compliance will require the expenditure of any
additional resources or place additional burdens on small businesses.
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. The Commission has previously concluded that the national
audience reach cap is intended to promote its public interest goal of
localism. We seek comment on whether this rule or any modified rule is
necessary at this time to serve localism and, if not, whether any rule
is necessary to serve our goals of viewpoint diversity and competition
in the video marketplace or other goals such as innovation. The NPRM
seeks comment on the need for, and efficacy of, a national audience
reach cap and UHF discount or other type of limit in light of
significant changes in the video marketplace since the Commission last
reviewed the cap and discount together. Assuming some limit is
necessary, the NPRM seeks comment on whether the Commission should
retain or modify the existing audience reach cap and UHF discount;
retain the audience reach cap but adopt a different weighting
methodology; adopt a limit based on some other measurement of a station
group's size or influence, such as actual viewership, market share, or
advertising revenue; or adopt a more flexible alternative such as a
threshold screen that would trigger a more detailed analysis, an
automatic presumption or safe harbor, either in lieu of or in addition
to a bright line cap. The NPRM invites comment on the effects of any
proposed rule changes on different types of broadcasters (e.g.,
independent or network-affiliated), the costs and benefits associated
with any proposals, and any potential to have significant impact on
small entities. The Commission expects to further consider the economic
impact on small entities following its review of comments filed in
response to the NPRM and this IRFA.
40. Federal Rules that May Duplicate, Overlap, or Conflict With the
Proposed Rule. None.
41. Ordering Clauses. 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 the NPRM 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 NPRM, including the Initial Regulatory Flexibility
Analysis, to the Chief Counsel for Advocacy of the Small Business
Administration.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2018-01404 Filed 1-25-18; 8:45 am]
BILLING CODE 6712-01-P