80 FR 59635 - Television Market Modification; Statutory Implementation
FEDERAL COMMUNICATIONS COMMISSION Federal Register Volume 80, Issue 191 (October 2, 2015)
Federal Register Volume 80, Issue 191 (October 2, 2015)
| Page Range | 59635-59664 | |
| FR Document | 2015-24999 |
[Federal Register Volume 80, Number 191 (Friday, October 2, 2015)] [Rules and Regulations] [Pages 59635-59664] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-24999] ======================================================================= ----------------------------------------------------------------------- FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 76 [MB Docket No. 15-71; FCC 15-111] Television Market Modification; Statutory Implementation AGENCY: Federal Communications Commission. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: In this document, the Commission adopts satellite television market modification rules to implement section 102 of the Satellite Television Extension and Localism Act Reauthorization (STELAR) Act of 2014. The STELAR gives the Commission authority to modify a commercial television broadcast station's local television market for purposes of satellite carriage rights. In this document, the Commission revises the current cable market modification rule [[Page 59636]] to apply also to satellite carriage, while adding provisions to address the unique nature of satellite television service. The document also makes conforming and other minor changes to the cable market modification rules. DATES: Effective November 2, 2015, except Sec. Sec. 76.59(a) and (b) which contain information collection requirements that have not been approved by OMB. The Commission will publish a document in the Federal Register announcing when OMB approval for this information collection has been received and these rules will take effect. FOR FURTHER INFORMATION CONTACT: Evan Baranoff, [email protected], of the Media Bureau, Policy Division, (202) 418-2120. For additional information concerning the Paperwork Reduction Act information collection requirements contained in this document, send an email to [email protected] or contact Cathy Williams at (202) 418-2918. SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report and Order, FCC 15-111, adopted and released on September 2, 2015. The full text of this document is available electronically via the FCC's Electronic Comment Filing System (ECFS) Web site at http://fjallfoss.fcc.gov/ecfs2/ or via the FCC's Electronic Document Management System (EDOCS) Web site at http://fjallfoss.fcc.gov/edocs_public/. (Documents will be available electronically in ASCII, Microsoft Word, and/or Adobe Acrobat.) This document is also available for public inspection and copying during regular business hours in the FCC Reference Information Center, Federal Communications Commission, 445 12th Street SW., CY-A257, Washington, DC, 20554. The complete text may be purchased from the Commission's copy contractor, 445 12th Street SW., Room CY-B402, Washington, DC 20554. Alternative formats are available for people with disabilities (Braille, large print, electronic files, audio format), by sending an email to [email protected] or calling the Commission's Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY). I. Introduction 1. In this Report and Order, the Commission adopts rules to enable commercial television stations, satellite carriers and cable operators to better serve the interests of their local communities. These rules implement an important provision in the Satellite Television Extension and Localism Act Reauthorization Act of 2014 (``STELAR'') to promote carriage of in-state and other relevant local television programming. Specifically, in the STELAR, Congress recognized that satellite subscribers in some communities across the country are not able to access broadcast stations in their own states via the local television packages offered by satellite carriers. This problem results from the way TV stations are defined as ``local'' for purposes of satellite carriage. In some cases, subscribers may be included in a local television programming market that is served exclusively, or almost exclusively, by television stations in a neighboring state. As a result, these subscribers are not receiving news, politics, sports, emergency information and other television programming relevant to their home state. The STELAR seeks to address this problem by changing the laws to provide for ``market modifications'' that add flexibility to the current definition of a local television programming market. Market modifications allow the Commission, upon request, to modify the local market assignment of a station to include such neighboring communities that are located in the same state as the station. As required by the STELAR, the Commission determines whether to grant a market modification based on consideration of five statutory factors that allow petitioners to demonstrate that they provide local service to the community. Significantly, in the STELAR, Congress included a factor requiring consideration of access to television stations that are located in the same state as the community considered for modification. Congress also added this factor to the existing market modification statutory factors applicable to cable operators. Our rules implement the STELAR to achieve the goal of better service for consumers. Finally, Congress recognized that satellite carriage of additional stations might be technically or economically infeasible in some circumstances. Accordingly, our rules implement this exception to the carriage requirements that would otherwise apply for modified markets. We recognize that the ability of the market modification rules to successfully address the problem of consumer access to in-state stations will depend in large part on broadcasters' willingness to grant retransmission consent to be carried in the new community and satellite carriers' technical ability to provide the in-state stations in the new community. Therefore, we strongly urge broadcasters and satellite carriers to work together to provide relief to consumers and achieve the goals of the STELAR (to promote access to in-state programming) in cases where carriage is technically feasible. 2. In this Report and Order, we adopt satellite television market modification rules to implement section 102 of the STELAR.\1\ The STELAR amended the Communications Act (``Act'') and the Copyright Act to give the Commission authority to modify a commercial television broadcast station's local television market for purposes of satellite carriage rights.\2\ The Commission previously had such authority to modify markets only in the cable carriage context.\3\ With section 102 of the STELAR, Congress provides regulatory parity in this regard in order to promote consumer access to in-state and other relevant television programming.\4\ --------------------------------------------------------------------------- \1\ The STELA Reauthorization Act of 2014 (STELAR), sec. 102, Pub. L. 113-200, 128 Stat. 2059, 2060-62 (2014) (codified at 47 U.S.C. 338(l)). The STELAR was enacted on December 4, 2014 (H. R. 5728, 113th Cong.). This proceeding implements STELAR section 102 (titled ``Modification of television markets to further consumer access to relevant television programming''), 128 Stat. at 2060-62, and the related statutory copyright license provisions in STELAR sec. 204 (titled ``Market determinations''), 128 Stat. at 2067 (codified at 17 U.S.C. 122(j)(2)(E)). \2\ STELAR secs. 102, 204, 128 Stat. at 2060-62, 2067. STELAR section 102(a) amends section 338 of the Act by adding a new paragraph (l), titled ``Market Determinations.'' 47 U.S.C. 338(l). STELAR section 102(b) also makes conforming amendments to the cable market modification provision at 47 U.S.C. 534(h)(1)(C). STELAR sec. 204 amends the statutory copyright license for satellite carriage of ``local'' stations in 17 U.S.C. 122 to cover market modifications in accordance with 47 U.S.C. 338(l). 17 U.S.C. 122(j)(2)(E). We note that, like the existing cable provision, the STELAR provision pertains only to ``commercial'' stations, thus excluding noncommercial stations from seeking market modification. See 47 U.S.C. 338(l)(1). \3\ See 47 U.S.C. 534(h)(1)(C). This section was added to the Act by the Cable Television Consumer Protection and Competition Act of 1992, Pub. L. 102-385, 106 Stat. 1460 (1992), as part of the cable must-carry/retransmission consent regime for carriage of local television stations. See also 47 CFR 76.59. \4\ See title of STELAR section 102, ``Modification of Television Markets to Further Consumer Access to Relevant Television Programming.'' See also 47 U.S.C. 534(h)(1)(C)(ii)(III) (directing the Commission to consider whether a market modification would ``promote consumers' access to television broadcast station signals that originate in their State of residence''). There was no final Report issued to accompany the final version of the STELAR bill (H. R. 5728, 113th Cong.) as it was enacted. Because section 102 of the STELAR was added from the Senate predecessor bill (S. 2799, the Satellite Television Access and Viewer Rights Act (STAVRA)), we therefore look to the Senate Report No. 113-322 (dated December 12, 2014) accompanying this predecessor bill for the relevant legislative history for this provision. See Report from the Senate Committee on Commerce, Science, and Transportation accompanying S. 2799, 113th Cong., S. Rep. No. 113-322 (2014) (``Senate Commerce Committee Report''). --------------------------------------------------------------------------- 3. Section 102 of the STELAR, and the Commission's actions in this Report and [[Page 59637]] Order, seek to establish a market modification process for the satellite carriage context and, to the extent possible, address satellite subscribers' inability to receive in-state programming in certain areas, sometimes called ``orphan counties.'' \5\ In this Report and Order, consistent with Congress' intent that the Commission model the satellite market modification process on the current cable market modification process, we implement section 102 of the STELAR by revising the current cable market modification rule, section 76.59, to apply also to satellite carriage, while adding provisions to the rules to address the unique nature of satellite television service.\6\ In addition to authorizing satellite market modifications, section 102 of the STELAR makes certain conforming amendments to the cable market modification statutory provision \7\ and also directs the Commission to consider whether to make other changes to the cable market modification rules.\8\ Accordingly, as part of our implementation of the STELAR, we make conforming and other minor changes to the cable market modification rules. --------------------------------------------------------------------------- \5\ The Commission has sometimes referred to the situation in which a county in one state is assigned to a neighboring state's local television market and, therefore, satellite subscribers residing in such county cannot receive some or any broadcast stations that originate in-state as the ``orphan county'' problem. See, e.g., Implementation of Section 203 of the Satellite Television Extension and Localism Act of 2010 (STELA), MB Docket No. 10-148, Report and Order and Order on Reconsideration, FCC 10-193, para. 48, 75 FR 72968, Nov. 29, 2010 (STELA Significantly Viewed Report and Order). The inability of satellite subscribers located in ``orphan counties'' to access in-state programming has been the subject of some congressional interest. See, e.g., Orphan County Telecommunications Rights Act, H.R. 4635, 113th Cong. (2014); Colorado News, Emergency, Weather, and Sports Act, S. 2375, 113th Cong. (2014); Four Corners Television Access Act, H.R. 4469, 112th Cong. (2012); Letting Our Communities Access Local Television Act, S. 3894, 111th Cong. (2010); Local Television Freedom Act, H.R. 3216, 111th Cong. (2009). \6\ See 47 CFR 76.59. As discussed herein, we revise section 76.59 of our rules to apply to both cable systems and satellite carriers. See Final Rules. We note Congress' intent that the process established by the Commission under the section 102 of the STELAR be ``modeled'' on the current cable market modification process. See Senate Commerce Committee Report at 10. However, the STELAR recognizes the inherent difference between cable and satellite television service with provisions specific to satellite. See 47 U.S.C. 338(l)(3)(A), (5). \7\ See STELAR sec. 102(b) (amending 47 U.S.C. 534(h)(1)(C)(ii)). \8\ STELAR section 102(d) directs the Commission to consider as part of this rulemaking whether the ``procedures for the filing and consideration of a written request under sections 338(l) and 614(h)(1)(C) of the Communications Act of 1934 (47 U.S.C. 338(l); 534(h)(1)(C)) fully effectuate the purposes of the amendments made by this section, and update what it considers to be a community for purposes of a modification of a market under section 338(l) or 614(h)(1)(C) of the Communications Act of 1934.'' --------------------------------------------------------------------------- 4. The following are among the key conclusions adopted in this Report and Order:We amend the cable market modification rule, section 76.59 of our rules, to apply also to satellite market modifications, and amend the rule to reflect the STELAR provisions that uniquely apply to satellite carriers, such as an exception if the resulting carriage is ``not technically and economically feasible.'' We conclude that the involved commercial broadcast station, satellite carrier, and county government have standing to file a satellite market modification petition. Petitions must be filed in accordance with the procedures for filing Special Relief petitions in section 76.7 of our rules. We conclude that the new in-state factor,\9\ when applicable, favors any market modification that would promote consumers' access to an in-state station. When applicable, this in- state factor serves as an enhancement, the particular weight of which depends on the strength of showing by the petitioner. --------------------------------------------------------------------------- \9\ 47 U.S.C. 338(l)(2)(B)(iii), 534(h)(1)(C)(ii)(III) (``whether modifying the market of the television station would promote consumers' access to television broadcast station signals that originate in their State of residence''). --------------------------------------------------------------------------- We conclude that the evidentiary requirements for cable market modifications will apply to satellite market modifications. In addition, to satisfy the new in-state factor when applicable, we require a petitioner to make a statement in its petition that the station is licensed to a community within the same state as the new community. We conclude that market modifications will be considered separately in the cable and satellite contexts and that, in the satellite context, market modifications will apply only to the specific stations, satellite carriers, and communities addressed in a particular market modification petition. We conclude that prior cable market modification determinations will not automatically apply in the satellite context, nor will such prior decisions be afforded a presumption; however, we note that we are required to consider historic carriage under the first statutory factor. We conclude that a television broadcast station that becomes eligible for mandatory satellite carriage by operation of a market modification may elect retransmission consent or mandatory carriage with respect to a satellite carrier within 30 days after the market determination. We conclude that a satellite carrier must commence carriage within 90 days after receiving the station's request for carriage. We conclude that it is per se not technically and economically feasible for a satellite carrier to provide a station to a new community that is outside of the relevant spot beam on which that station is currently carried. We conclude that, if a satellite carrier can provide the station at issue in a market modification request to only part of a new community, then it must do so. We conclude that the satellite carrier has the burden to demonstrate that the resulting carriage from a market modification is technically and economically infeasible. We will allow satellite carriers to demonstrate spot beam coverage infeasibility by providing a detailed certification under penalty of perjury. We conclude that a satellite carrier must raise any technical or economic impediments either in the market modification proceeding or prior to such proceeding in response to a prospective petitioner's inquiry about feasibility of carriage resulting from a contemplated market modification. We establish a process that will allow a prospective petitioner to obtain a certification from a satellite carrier about whether or not (and to what extent) it is technically and economically feasible for the carrier to provide the station to a new community. We will not grant a market modification petition if such grant could not create a new carriage obligation for the carrier at that time due to a finding of technical or economic infeasibility. We recognize that there may be other bases than spot beam coverage for a carrier to assert that carriage would be technically or economically infeasible and will review these assertions on a case-by- case basis. We define a ``satellite community'' as a county for purposes of a satellite market modification. We retain our existing definition of a ``cable community'' for purposes of a cable market modification. II. Background 5. The STELAR, enacted December 4, 2014, is the latest in a series of statutes that have amended the Communications Act and Copyright Act to set the parameters for the satellite carriage of television broadcast stations. The 1988 Satellite Home Viewer Act (SHVA) first established a ``distant'' statutory copyright license to enable satellite [[Page 59638]] carriers to offer subscribers who could not receive the over-the-air signal of a broadcast station access to broadcast programming via satellite.\10\ The 1999 Satellite Home Viewer Improvement Act (SHVIA) established a ``local'' statutory copyright license and expanded satellite carriers' ability to offer broadcast television signals directly to subscribers by permitting carriers to offer ``local'' broadcast signals.\11\ The 2004 Satellite Home Viewer Extension and Reauthorization Act (SHVERA) reauthorized the distant signal statutory copyright license until December 31, 2009 and expanded that license to allow satellite carriers to carry ``significantly viewed'' stations.\12\ The 2010 Satellite Television Extension and Localism Act (STELA) extended the distant signal statutory copyright license through December 31, 2014,\13\ moved the significantly viewed station copyright provisions to the local statutory copyright license (which does not expire), and revised the ``significantly viewed'' provisions to facilitate satellite carrier use of that option.\14\ With the STELAR, Congress extended the distant signal statutory copyright license for another five years, through December 31, 2019, and, among other things, authorized market modification in the satellite carriage context and revised the market modification provisions for cable to promote parity for satellite and cable subscribers and competition between satellite and cable operators.\15\ --------------------------------------------------------------------------- \10\ Satellite Home Viewer Act of 1988 (SHVA), Public Law 100- 667, 102 Stat. 3935, Title II (1988); 17 U.S.C. 119 (distant statutory copyright license). In addition to allowing satellite carriers to retransmit television signals of distant network stations to ``unserved'' subscriber households, the SHVA also permitted satellite carriers to retransmit distant superstations (non-network stations) to any subscriber household. See 17 U.S.C. 119(d)(2) (defining ``network station''), (d)(9) (defining ``non- network station,'' previously ``superstation'') and (d)(10) (defining ``unserved household''). The 1994 Satellite Home Viewer Act reauthorized the distant statutory copyright license for five years and made other changes to the distant statutory copyright license but did not amend the Communications Act or otherwise alter satellite carriage rights. Satellite Home Viewer Act of 1994, Public Law 103-369, 108 Stat. 3477 (1994). Each successive statute in the SHVA progeny has reauthorized the distant statutory copyright license. \11\ Satellite Home Viewer Improvement Act of 1999 (SHVIA), Public Law 106-113, 113 Stat. 1501 (1999); 17 U.S.C. 122 (local statutory copyright license). The local statutory copyright license makes no distinction between network and non-network signals or served or unserved households. See id. Local stations may elect mandatory carriage or carriage pursuant to retransmission consent. 47 U.S.C. 325, 338. See 47 CFR 76.66(c). Unlike the distant license, the local statutory copyright license does not expire. \12\ Satellite Home Viewer Extension and Reauthorization Act of 2004 (SHVERA), Public Law 108-447, 118 Stat 2809 (2004). Significantly viewed stations are television broadcast stations that the Commission has determined have sufficient over-the-air (i.e., non-cable and non-satellite) viewing to be treated as local stations with respect to a particular satellite community in another market, thus, allowing them to be carried by the satellite carrier in that community in the other market. For copyright purposes, significantly viewed status entitles satellite carriers to carry the out-of-market but significantly viewed station with the reduced copyright payment obligations applicable to local (in-market) stations. See 17 U.S.C. 122(a)(2). Satellite carriers are not required to carry out-of- market significantly viewed stations. If they do carry such significantly viewed stations, retransmission consent is required. See 47 U.S.C. 340(d). \13\ The Satellite Television Extension and Localism Act of 2010 (STELA), Public Law 111-175, 124 Stat. 1218, 1245 (2010). Congress passed four short-term extensions of the distant signal statutory copyright license (on December 19, 2009, March 2, March 26 and April 15, 2010) before passing the STELA to reauthorize the distant signal statutory copyright license for a full five years, until December 31, 2014. STELA sec. 107(a). See Department of Defense Appropriations Act, 2010, sec. 1003(b), Public Law 111-118, 123 Stat 3409, 3469 (2009) (extending distant license until February 28, 2010); Temporary Extension Act of 2010, sec. 10, Public Law 111-144, 124 Stat 42, 47 (2010) (extending license until March 28, 2010); Satellite Television Extension Act of 2010, Public Law 111-151, 124 Stat 1027 (2010) (extending license until April 30, 2010); Continuing Extension Act of 2010, sec. 9, Public Law 111-157, 124 Stat 1116 (2010) (extending license until May 31, 2010). \14\ As noted, the STELA reauthorized the statutory copyright license for satellite carriage of significantly viewed signals and moved that license from the distant signal statutory copyright license provisions in 17 U.S.C. 119(a)(3) to the local signal statutory copyright license provisions in 17 U.S.C. 122(a)(2). STELA sec. 103. By doing so, Congress defined significantly viewed signals as another type of local signal, rather than as an exception to distant signal status. The move to the local license also meant that the significantly viewed signal license would not expire. STELA sec. 107(a). In the STELA Significantly Viewed Report and Order, the Commission revised its satellite television significantly viewed rules to facilitate satellite carriage of significantly viewed stations and thereby provide satellite subscribers with greater choice of programming and to improve parity and competition between satellite and cable carriage of broadcast stations. STELA Significantly Viewed Report and Order, para. 55. \15\ In section 102 of the STELAR, Congress intended to ``create a television market modification process for satellite carriers similar to the one already used for cable operators.'' Senate Commerce Committee Report at 6. The STELAR also makes a variety of reforms to the video programming distribution laws and regulations that are not relevant to our implementation here of this section. --------------------------------------------------------------------------- 6. Section 338 of the Communications Act authorizes satellite carriage of local broadcast stations into their local markets, which is called ``local-into-local'' service.\16\ Specifically, a satellite carrier provides ``local-into-local'' service when it retransmits a local television signal back into the local market of that television station for reception by subscribers.\17\ Generally, a television station's ``local market'' is defined by the Designated Market Area (DMA) in which it is located, as determined by the Nielsen Company (Nielsen).\18\ DMAs describe each television market in terms of a group of counties and are defined by Nielsen based on measured viewing patterns.\19\ The United States is divided into 210 DMAs.\20\ Unlike cable operators, satellite carriers are not required to carry local broadcast television stations. However, if a satellite carrier chooses to carry a local station in a particular DMA in reliance on the statutory copyright license, it generally must carry any qualified local station in the same DMA that makes a timely election for retransmission consent or mandatory carriage.\21\ This is commonly referred to as the ``carry one, carry all'' requirement. If a broadcaster elects retransmission consent, the satellite carrier and broadcaster negotiate the terms of a retransmission consent agreement. With respect to those stations electing mandatory carriage, satellite carriers are generally not required to carry a station if the station's programming ``substantially duplicates'' \22\ that of another station [[Page 59639]] carried by the satellite carrier in the DMA,\23\ and satellite carriers are not required to carry more than one affiliate station of a particular network in a DMA (even if the affiliates do not substantially duplicate their programming), unless the stations are licensed to communities in different states.\24\ Satellite carriers are also not required to carry an otherwise qualified station if the station fails to provide a good quality signal to the satellite carrier's local receive facility.\25\ --------------------------------------------------------------------------- \16\ See 47 U.S.C. 338(a)(1). \17\ 47 CFR 76.66(a)(6). \18\ See 17 U.S.C. 122(j)(2); 47 CFR 76.66(e) (defining a television broadcast station's local market for purposes of satellite carriage as the DMA in which the station is located). We note that a commercial television broadcast station's local market for purposes of cable carriage is also generally defined as the DMA in which the station is located. See 47 U.S.C. 534(h)(1)(C); 47 CFR 76.55(e)(2). \19\ The Nielsen Company delineates television markets by assigning each U.S. county (except for certain counties in Alaska) to one market based on measured viewing patterns both off-air and via MVPD distribution. Generally, each U.S. county is assigned exclusively to the market whose stations receive the preponderance of the audience in that county. However, in a few cases where a county is large and viewing patterns differ significantly between parts of the county, a portion of the county is assigned to one television market and another portion of the county is assigned to another market. Several counties in Alaska are not assigned to any DMA. Retransmission Consent and Exclusivity Rules: Report to Congress Pursuant to Section 208 of the Satellite Home Viewer Extension and Reauthorization Act of 2004, 2005 WL 2206070, at para. 53, n.177 (Sept. 8, 2005) (SHVERA Report); see also Nielsen Media Research, Glossary of Media Terms, at http://www.nielsenmedia.com/glossary/. \20\ DMAs frequently cross state lines and thus may include counties from multiple states. \21\ See 17 U.S.C. 122; 47 U.S.C. 338(a)(1); 47 CFR 76.66(b)(1). DISH Network currently provides local service to all 210 DMAs, and DIRECTV currently provides local service to 198 DMAs, according to the most recent Local Network Channel Broadcast Reports filed by these satellite carriers. 47 U.S.C.A. 338 Note. These annual reports were initially required for five years by section 305 of the STELA and were continued to be required for another five years by section 108 of the STELAR. \22\ ``A commercial television station substantially duplicates the programming of another commercial television station if it simultaneously broadcasts the identical programming of another station for more than 50 percent of the broadcast week.'' 47 CFR 76.66(h)(6). ``A noncommercial television station substantially duplicates the programming of another noncommercial station if it simultaneously broadcasts the same programming as another noncommercial station for more than 50 percent of prime time, as defined by [47 CFR] 76.5(n), and more than 50 percent outside of prime time over a three month period, provided, however, that after three noncommercial television stations are carried, the test of duplication shall be whether more than 50 percent of prime time programming and more than 50 percent outside of prime time programming is duplicative on a non-simultaneous basis.'' 47 CFR 76.66(h)(7). \23\ 47 U.S.C. 338(c)(1); 47 CFR 76.66(h)(1). ``A satellite carrier may select which duplicating signal in a market it shall carry.'' 47 CFR 76.66(h)(2). \24\ 47 U.S.C. 338(c)(1); 47 CFR 76.66(h)(1). ``A satellite carrier may select which network affiliate in a market it shall carry.'' 47 CFR 76.66(h)(3). However, a satellite carrier must carry network affiliated television stations licensed to different states, but located in the same market, even if the stations meet the definition of substantial duplication under the Commission's rules. See Implementation of the Satellite Home Viewer Improvement Act of 1999: Broadcast Signal Carriage Issues, Retransmission Consent Issues, CS Docket Nos. 00-96 and 99-363, Report and Order, FCC 00- 417, para. 80, 66 FR 7410, Jan. 23, 2001 (DBS Broadcast Carriage Report and Order). If two stations located in different states (but within the same local market) duplicate each other, but are not network affiliates, the satellite carrier only has to carry one. Id. \25\ 47 U.S.C. 338(b)(1); 47 CFR 76.66(g)(1). A television station asserting its right to carriage is required to bear the costs associated with delivering a good quality signal to the designated local-receive-facility of the satellite carrier or to another facility that is acceptable to at least one-half the stations asserting the right to carriage in the local market. Id. --------------------------------------------------------------------------- 7. STELAR section 102, which adds section 338(l) of the Act, creates a satellite market modification regime very similar to that in place for cable, while adding provisions to address the unique nature of satellite television service.\26\ Market modification, which has been available in the cable carriage context since 1992,\27\ will allow the Commission to modify the local television market of a commercial television broadcast station to enable those broadcasters and satellite carriers to better serve the interests of local communities.\28\ Market modification provides a means to avoid rigid adherence to DMA designations and to promote consumer access to in-state and other relevant television programming.\29\ To better reflect market realities and effectuate these purposes, section 338(l), like the corresponding cable provision in section 614(h)(1)(C), permits the Commission to add communities to, or delete communities from, a station's local television market following a written request.\30\ Furthermore, as in the cable carriage context, the Commission may determine that particular communities are part of more than one television market.\31\ As in the cable carriage context, when the Commission modifies a station's market to add a community for purposes of carriage rights, the station is considered local and is covered by the local statutory copyright license and may assert mandatory carriage (or pursue retransmission consent) by the applicable satellite carrier in the local market.\32\ Conversely, if the Commission modifies a station's market to delete a community, the station is considered ``distant'' and loses its right to assert mandatory carriage (or retransmission consent) on the applicable satellite carrier in the local market.\33\ We note that, in the cable carriage context, market modifications pertain to individual stations in specific cable communities and apply only to the particular cable system named in the petition.\34\ --------------------------------------------------------------------------- \26\ See 47 U.S.C. 338(l), 534(h)(1)(C). \27\ See 47 CFR 76.59. \28\ See In-State Broadcast Programming: Report to Congress Pursuant to Section 304 of the Satellite Television Extension and Localism Act of 2010, MB Docket No. 10-238, Report, DA 11-1454, paras. 55-59 (MB rel. Aug. 29, 2011) (In-State Programming Report) (stating that ``market modifications could potentially address special situations in underserved areas and facilitate greater access to local information''). See also Broadcast Localism, MB Docket No. 04-233, Report on Broadcast Localism and Notice of Proposed Rulemaking, FCC 07-218, paras. 49-50, 73 FR 8255, Feb. 13, 2008 (Broadcast Localism Report). \29\ Broadcast Localism Report, para. 50. The Commission has observed that, in some cases, general reliance on DMAs to define a station's market may not provide viewers with the most local programming. Id. at paras. 49-50. Certain DMAs cross state borders and, in such cases, current Commission rules sometimes require carriage of the broadcast signal of an out-of-state station rather than that of an in-state station. Id. The Commission has observed that such cases may weaken localism, since viewers are often more likely to receive information of local interest and relevance-- particularly local weather and other emergency information and local news and electoral and public affairs--from a station located in the state in which they live. Id. \30\ 47 U.S.C. 338(l)(1), 534(h)(1)(C). \31\ 47 U.S.C. 338(l)(2)(A). \32\ Section 204 of the STELAR amends the local statutory copyright license in 17 U.S.C. 122 to the effect that when the Commission modifies a station's market for purposes of satellite carriage rights, the station is considered local and is covered by the local statutory copyright license. See 17 U.S.C. 122(j)(2)(E) (as amended by STELAR sec. 204); 47 U.S.C. 338. See also 17 U.S.C.U.S.C. 111(f)(4) (defining ``local service area of a primary transmitter'' for cable carriage copyright purposes); 47 U.S.C. 534(h)(1)(C). \33\ See id. \34\ See Implementation of the Cable Television Consumer Protection and Competition Act of 1992, Broadcast Signal Carriage Issues, MM Docket No. 92-259, Report and Order, FCC 93-144, para. 47, 58 FR 17350, April 2, 1993 (Must Carry Order) (stating that ``the statute is intended to permit the modification of a station's market to reflect its individual situation''); 47 CFR 76.59. --------------------------------------------------------------------------- 8. Section 338(l) states that, in ruling on requests for market modifications for purposes of satellite carriage, the Commission must afford particular attention to the value of localism by taking into account the following five factors: (1) Whether the station, or other stations located in the same area--(a) have been historically carried on the cable system or systems within such community; and (b) have been historically carried on the satellite carrier or carriers serving such community; (2) Whether the television station provides coverage or other local service to such community; (3) Whether modifying the local market of the television station would promote consumers' access to television broadcast station signals that originate in their State of residence; (4) Whether any other television station that is eligible to be carried by a satellite carrier in such community in fulfillment of the requirements of this section provides news coverage of issues of concern to such community or provides carriage or coverage of sporting and other events of interest to the community; and (5) Evidence of viewing patterns in households that subscribe and do not subscribe to the services offered by multichannel video programming distributors within the areas served by such multichannel video programming distributors in such community.\35\ --------------------------------------------------------------------------- \35\ 47 U.S.C. 338(l)(2)(B)(i) through (v) (discussed in section III.B. below). These statutory factors largely mirror those originally set forth for cable in section 614(h)(1)(C)(ii) of the Act. To the extent the factors differ from the previous factors applicable to cable, the STELAR section 102 makes conforming changes to the cable factors.\36\ These include adding a fifth factor (inserted as factor number three) to section 614(h)(1)(C)(ii) to ``promote consumers' access to television broadcast station signals that originate in their State of residence.'' \37\ Thus, STELAR creates parallel factors for satellite and cable.\38\ --------------------------------------------------------------------------- \36\ See 47 U.S.C. 534(h)(1)(C)(ii), as amended by STELAR sec. 102(b). \37\ See 47 U.S.C. 534(h)(1)(C)(ii)(III) (``whether modifying the market of the television station would promote consumers' access to television broadcast station signals that originate in their State of residence''). \38\ Shortly after our final rules are published in the Federal Register, we will implement section 102(c) of the STELAR by creating a consumer guide that will explain the market modification rules and procedures as revised and adopted in this proceeding, and by posting the guide on the Commission's Web site. Section 102(c) requires the Commission to ``make information available to consumers on its Web site that explains the market modification process.'' STELAR 102(c); 47 U.S.C.A. 338 Note. Such information must include: ``(1) who may petition to include additional communities within, or exclude communities from, a--(A) local market (as defined in section 122(j) of title 17, United States Code); or (B) television market (as determined under section 614(h)(1)(C) of the Communications Act of 1934 (47 U.S.C. 534(h)(1)(C))); and (2) the factors that the Commission takes into account when responding to a petition described in paragraph (1).'' See 47 U.S.C. 338(l)(2)(B)(i) through (v); 47 U.S.C. 534(h)(1)(C)(ii)(I) through (V). --------------------------------------------------------------------------- [[Page 59640]] 9. The STELAR, however, provides a unique exception applicable only --------------------------------------------------------------------------- in the satellite context, providing that a market modification: shall not create additional carriage obligations for a satellite carrier if it is not technically and economically feasible for such carrier to accomplish such carriage by means of its satellites in operation at the time of the determination.\39\ --------------------------------------------------------------------------- \39\ 47 U.S.C. 338(l)(3)(A) (discussed in section III.D. below). Also unique to satellite, the STELAR provides that a market modification will not have ``any effect on the eligibility of households in the community affected by such modification to receive distant signals pursuant to section 339 [of the Act].'' \40\ Like the cable provision, section 338(l) gives the Commission 120 days to act on a request for market modification and does not allow a carrier to delete from carriage the signal of a commercial television station during the pendency of any market modification proceeding.\41\ --------------------------------------------------------------------------- \40\ 47 U.S.C. 338(l)(5) (discussed in section III.E. below). Section 339 of the Act provides for the satellite carriage of distant stations under certain conditions. See 47 U.S.C. 339. \41\ 47 U.S.C. 338(l)(3)(B), (4). --------------------------------------------------------------------------- 10. On March 26, 2015, we began this proceeding by issuing a Notice of Proposed Rulemaking (NPRM).\42\ We received 12 comments and five reply comments in response. With this Report and Order, we satisfy the STELAR's mandate that the Commission adopt final rules in this proceeding on or before September 4, 2015.\43\ --------------------------------------------------------------------------- \42\ Amendment to the Commission's Rules Concerning Market Modification; Implementation of Section 102 of the STELA Reauthorization Act of 2014; MB Docket No. 15-71, Notice of Proposed Rulemaking, FCC 15-34, 80 FR 19594, Apr. 13, 2015 (NPRM). \43\ STELAR sec. 102(d)(1). --------------------------------------------------------------------------- III. Discussion 11. Consistent with the STELAR's goal of regulatory parity, we largely model the satellite market modification process on the existing process for cable and adopt our proposal to amend section 76.59 of our rules--the current cable market modification rule--to apply in both the cable and satellite contexts.\44\ We also adopt our proposal to amend section 76.59 to reflect the STELAR provisions that apply uniquely to satellite carriers, such as affording carriers with an exception if the resulting carriage is ``not technically and economically feasible .'' Finally, we define a ``satellite community'' for purposes of market modification and retain our existing definition of a ``cable community.'' --------------------------------------------------------------------------- \44\ See 47 CFR 76.59. --------------------------------------------------------------------------- A. Standing and Procedures To Request Market Modification 12. We conclude that the involved broadcaster, satellite carrier and county government may file a satellite market modification petition.\45\ We choose a slightly modified alternative to the procedure proposed in the NPRM,\46\ and deviate from the cable rule which allows only the involved broadcaster and cable operator to file cable petitions, in order to more fully effectuate the core purpose of this provision of the STELAR to promote consumer access to in-state and other relevant programming. --------------------------------------------------------------------------- \45\ See 47 CFR 76.59(a). \46\ NPRM, para. 8. --------------------------------------------------------------------------- 13. Section 338(l)(1) of the Act permits the Commission to modify a local television market ``following a written request,'' but does not specify the appropriate party to make such requests.\47\ The corresponding cable statutory provision in section 614(h)(1)(C)(i) of the Act contains nearly identical language in this regard.\48\ In interpreting the cable provision, the Commission concluded that the involved broadcaster and cable operator are the only appropriate parties to file market modification requests.\49\ Section 102(d) of the STELAR, however, directs the Commission to ensure in both the cable and satellite contexts that ``procedures for the filing and consideration of a written request . . . fully effectuate the purposes of the amendments made by this section.'' \50\ In the NPRM, consistent with the cable rule, we proposed to allow only the involved commercial broadcast station or the satellite carrier to file a satellite market modification request because only these entities have carriage rights or obligations at stake.\51\ The NPRM sought comment on any alternative approaches and observed that some local governments had previously sought the ability to petition for market modifications on behalf of their citizens.\52\ The NPRM tentatively concluded to limit the participation of local governments and individuals to filing comments in support of, or in opposition to, particular market modification requests and sought comment on this tentative conclusion.\53\ Broadcasters and the satellite carriers supported the NPRM's proposal, asserting that only the involved station or satellite carrier ``have rights or obligations that are directly affected by a market modification'' and therefore only such entities should have standing to file requests to modify these rights or obligations.\54\ Some commenters, however, advocate that county governments should be allowed to [[Page 59641]] petition for market modifications on behalf of their citizens.\55\ --------------------------------------------------------------------------- \47\ 47 U.S.C. 338(l)(1). \48\ 47 U.S.C. 338(l)(1) (``Following a written request, the Commission may, with respect to a particular commercial television broadcast station, include additional communities within its local market or exclude communities from such station's local market to better effectuate the purposes of this section.) See 47 U.S.C. 534(h)(1)(C)(i) (``For purposes of this section, a broadcasting station's market shall be determined by the Commission by regulation or order using, where available, commercial publications which delineate television markets based on viewing patterns, except that, following a written request, the Commission may, with respect to a particular television broadcast station, include additional communities within its television market or exclude communities from such station's television market to better effectuate the purposes of this section. . . .''). \49\ See Must Carry Order, para. 46; John Wiegand v. Post Newsweek Pacifica Cable, Inc., CSR 4179-M, Memorandum Opinion and Order, FCC 01-239 (rel. Aug. 24, 2001) (Wiegand v. Post Newsweek) (limiting standing in the must carry and market modification contexts to the affected broadcaster or cable operator). The Commission reasoned that ``the fact that Congress made must carry an elective choice for broadcasters diminishes the argument that third parties have standing to demand carriage of a broadcast station on a cable system. A subscriber's ability to receive the benefits provided from must carry is predicated upon a station's election to exercise its rights under the statute. No statute or Commission rule requires a broadcaster to allow its signal to be carried on a local cable system because another party wishes to view it. Instead, broadcasters are given a choice whether to demand carriage under must carry, to negotiate carriage under the retransmission consent provisions, or not to be carried on a particular cable system at all.'' See Wiegand v. Post Newsweek, para. 10. \50\ STELAR sec. 102(d)(2) directs the Commission to consider as part of this rulemaking whether the ``procedures for the filing and consideration of a written request under sections 338(l) and 614(h)(1)(C) of the Communications Act of 1934 (47 U.S.C. 338(l); 534(h)(1)(C)) fully effectuate the purposes of the amendments made by this section.'' See 47 U.S.C.A. 338 Note. \51\ NPRM, para. 8. \52\ NPRM, para. 9. See In-State Programming Report, para. 58. \53\ Id. The NPRM also asked ``how else satellite subscribers or their representatives can meaningfully advocate for the receipt of in-state programming via satellite.'' Id. \54\ DIRECTV Comments at 7, n.20; DISH Comments at 3; NAB Comments at 3-4. See NPRM, para. 8. \55\ See Letter from Michael F. Bennet, U.S. Senator, Colo.; Cory Gardner, U.S. Senator, Colo.; and Scott Tipton, U.S. Representative, Colo. to Tom Wheeler, Chairman, FCC, dated April 14, 2015 at (``Sen. Bennet et al. Letter''). See also Letter from Mike D. Rogers, U.S. Representative, Ala.; Robert Aderholt, U.S. Representative, Ala. to Tom Wheeler, Chairman, FCC dated May 12, 2015 at 1 (``Rep. Rogers et al. Letter'') (seeking role in market modification process for Counties, Parishes or the equivalent political subdivisions). Although no local government comments were filed in this docket, commenters in the docket relating to the STELA In-State Programming Report advocated to allow consumer concerns to be addressed more directly by permitting local governments to petition for market modifications on behalf of their citizens. See In-State Programming Report, para. 58. --------------------------------------------------------------------------- 14. Upon further consideration pursuant to section 102(d) of the STELAR, we conclude that we will better effectuate the purposes of the STELAR (to promote consumer access to in-state programming) by also permitting a county governmental entity (such as a county board, council, commission or other equivalent subdivision) to file a satellite market modification petition, as advocated by some commenters.\56\ Allowing a county government to petition for market modification for its community is appropriate given our decision to define a satellite community on a county basis.\57\ We also are mindful of the record in the In-State Programming Report proceeding, which reflects numerous examples of counties in which consumers have little or no access to in-state broadcast stations.\58\ We acknowledge that station carriage relies in part on business decisions involving broadcasters and satellite carriers and that without the willing participation of the affected broadcaster, modifying the market of a particular television station, in itself, would not result in consumer access to that station.\59\ However, by allowing a county government to file a satellite market modification on behalf of its residents, we seek to empower orphan counties to eliminate certain legal barriers which may have deprived local residents of the cultural, sports, political and local news relevant to the state in which they reside.\60\ We recognize that our rules require petitioners to provide specific evidence to demonstrate the five statutory factors and that much of this information may not be easily obtained by county governments.\61\ To avoid dismissal based on a failure to meet our specific evidentiary requirements, we strongly encourage county government petitioners to enlist the aid and cooperation of the station they wish to bring to their county. Moreover, to the extent the involved station opposes carriage in the county, a county government may not want to go through the time and expense of filing a petition to expand such station's market to include its county. --------------------------------------------------------------------------- \56\ See id. \57\ See infra section III.F. (Definition of Community). We note that a county (or its political equivalent) was the only jurisdictional definition for which commenters in this proceeding sought the ability to file market modification petitions. \58\ See In-State Programming Report, at App. F (Case Studies) (discussing 35 counties in 13 DMAs with little or no access to in- state broadcast stations via satellite service). The In-State Programming Report, also described the impact on consumers in these orphan counties. See id. at para. 18 (``Because the DMA may include one or more counties located in a different state from that of the DMA's principal city or cities where most of the local television stations originate, some consumers through their MVPD, may receive only out-of-state stations and thereby lack access to in-state programming, including political and election coverage, public affairs programming, and weather and other emergency information. Consumers from disparate areas throughout the nation comment that they are deprived of vital information that is overwhelmingly available to other households across the country. Consumers in affected areas typically do not have access to programming content from in-state local television stations that cover the issues emanating from their state capitals and, as a result, believe they are less well served by the broadcast programming they are able to receive. Without such state-focused information and programming content, consumers express frustration at their inability to make informed election and other civic decisions. Additionally, some consumers indicate that they would prefer television advertising that supports their state economies rather than the out-of-state advertisements that air on the in-market stations they receive. Commenters opine that their inability to access in-state advertising has a continuing negative impact on their communities through the loss of revenue.''). We also note that consumers have raised similar concerns in the record for the Commission's pending Report to Congress on DMAs required by section 109 of the STELAR. See, e.g., Leroy Axtell Comments (seeking in-state stations for Fairfield County, CT); Spencer Karter Comments (seeking in-state stations for Greenville County, SC); Richard Bolt Comments in MB Docket No. 15-43 (filed May 15, 2015) (seeking in-state stations for Garrett County, MD); Kyle Ramie Comments in MB Docket No. 15-43 (filed May 6, 2015), Timothy Brastow Comments in MB Docket No. 15-43 (filed Mar. 24, 2015) and Jerome Gibbs Comments in MB Docket No. 15-43 (filed Jun. 2, 2015) (each seeking in-state stations for Bristol County, MA). \59\ NPRM, para. 9. See Wiegand v. Post Newsweek, para. 11(``[t]he granting of a request to expand the market of a television station merely allows a broadcaster the option to seek must carry status on cable systems added to its market. A broadcaster is not required to seek carriage of its signal on all of the cable systems in its market.''). Likewise, in the satellite context, the granting of a request to expand the market of a television station merely allows a broadcaster the option to seek mandatory carriage with respect to the new community, but does not require the broadcaster grant retransmission consent for it to be carried in the new community. Thus, our decision here about standing to file a satellite market modification should not be construed as affording a county government a right to demand carriage of a particular station via satellite in its county. Notwithstanding the grant of a petition to modify a market, a local broadcast station that elects retransmission consent with respect to the new community may not be carried without its express written consent. See 47 U.S.C. 325(b)(1) (``No cable system or other multichannel video programming distributor shall retransmit the signal of a broadcasting station, or any part thereof, except (A) with the express authority of the originating station''); 47 CFR 76.66. \60\ See Sen. Bennet et al. Letter at 1 (seeking to ``facilitate the ability of a community to voice its own opinion about the local television content that it would prefer to access''). We also note that local government and consumer comments in a market modification proceeding can help demonstrate a station's nexus to the community at issue. See Sen. Bennet et al. Letter at 1; Rep. Rogers et al. Letter at 1 (seeking to ``allow Counties, Parishes or the equivalent political subdivisions to make public comments about the television content their community prefers.''). For example, the Commission can consider consumer comments pursuant to the second statutory factor relating to a station's local service to a community. See 47 U.S.C. 338(l)(2)(B)(ii), 534(h)(1)(C)(ii)(II); Tennessee Broadcasting Partners, CSR 7596-A, Memorandum Opinion and Order, DA 08-542, paras. 22-37 (MB rel. Mar. 10, 2008) (considering statements made by local officials). \61\ See infra at para. 20 (Evidentiary Requirements). For example, a petitioner must provide contour maps and published audience data for the involved broadcast station. --------------------------------------------------------------------------- 15. We acknowledge that we are implementing a procedural aspect of section 338(l)(1) in a manner that differs from our implementation of section 614(h)(1)(C)(i), despite the nearly identical language of the two provisions.\62\ We find that a different procedure is appropriate to implement STELAR's directive in section 102(d) for purposes of filing a market modification petition in the satellite context. Significantly, the record and case studies in the 2011 In-State Programming Report show that the problem of subscriber access to in- state stations disproportionately affects satellite subscribers.\63\ Notably, the Commission frequently receives satellite consumer calls about this problem and other complaints about not receiving the consumers' desired local station via satellite, while cable consumers rarely complain about this issue.\64\ This may be a product of the localized nature of cable systems as opposed to the national [[Page 59642]] nature of satellite service.\65\ The remote geographic location of orphan counties also contributes to the disproportionate impact on satellite subscribers. In the In-State Programming Report record, DIRECTV observed that ``[b]ecause many orphan counties tend to be isolated, their residents tend to rely more on satellite than on cable for access to television programming.'' \66\ We also observe that the cable market modification process has worked well for more than 20 years and there is nothing in the record to suggest that changing the cable petition process to include local governments is necessary to effectuate the goals of the STELAR (to promote access to in-state programming) at this time. --------------------------------------------------------------------------- \62\ See 47 U.S.C. 338(l)(1); 47 U.S.C. 534(h)(1)(C)(i). \63\ See In-State Programming Report, at App. F (Case Studies) (discussing 35 counties in 13 DMAs with little or no access to in- state broadcast stations via satellite service). The BIA/Kelsey study submitted by NAB in the In-State Programming Report docket also illustrates this point, estimating that 0.1 percent of cable subscribers do not receive at least one in-state television station, while 2.2 percent of DISH subscribers do not receive at least one in-state television station and 6.1 percent of DIRECTV subscribers do not receive at least one in-state TV station. In-State Programming Report, para. 44. \64\ According to staff review, at least 165 consumers have called the Commission's call center in 2015 to complain that their satellite carrier does not carry a particular station. See also, e.g., Leroy Axtell Comments at 1 (Fairfield County, Connecticut resident explaining that ``Comcast and Frontier cable carry New York and Hartford/New Haven television channels,'' while ``Directv and Dish can presently carry only New York channels.'') \65\ See Implementation of the Satellite Home Viewer Extension and Reauthorization Act of 2004, Implementation of Section 340 of the Communications Act, MB Docket No. 05-49, Report and Order, FCC 05-187, para. 44, 70 FR 76504, December 27, 2005 (2005) (SHVERA Significantly Viewed Report and Order). \66\ DIRECTV Comments in MB Docket No. 10-238 (filed Jan. 24, 2011) at 3-4, n.8. --------------------------------------------------------------------------- 16. We adopt our proposal to require petitioners (i.e., broadcast stations, satellite carriers and county governments) to file market modification requests for satellite carriage purposes in accordance with the procedures for filing Special Relief petitions in section 76.7 of the rules.\67\ Commenters on this issue generally support our proposal.\68\ Consistent with section 76.7, a petitioner must serve a copy of its market modification request on any MVPD operator, station licensee, permittee, or applicant, or other interested party who is likely to be directly affected if the relief requested is granted, and we amend section 76.7(a)(3), accordingly, to reference ``any MVPD operator.'' \69\ The NPRM sought comment on whether franchising authorities or certain local government entities (such as cities, counties, or towns) that may represent subscribers and local viewers in affected communities should be considered ``interested parties'' and served with market modification petitions.\70\ Consistent with our decision above to permit a county government to file a petition, we find that the relevant county government is an ``interested party'' that must also be served with a satellite market modification petition.\71\ --------------------------------------------------------------------------- \67\ NPRM, para. 10. See 47 CFR 76.59(b). A fee is generally required for the filing of Special Relief petitions; 47 CFR 1.1104, 1.1117, 76.7. We remind filers that Special Relief petitions must be submitted electronically using the Commission's Electronic Comment Filing System (ECFS). See Media Bureau Announces Commencement of Mandatory Electronic Filing for Cable Special Relief Petitions and Cable Show Cause Petitions Via the Electronic Comment Filing System, Public Notice, DA 11-2095 (MB rel. Dec. 30, 2011). Petitions must be initially filed in MB Docket No. 12-1. Id. \68\ NAB Comments at 3. \69\ See 47 CFR 76.7(a)(3). \70\ See NPRM, para. 10. No parties filed comments advocating that cable franchise authorities be served with satellite market modification requests. We decline to require such notifications, given that cable franchising authorities have no role in satellite regulation. See DIRECTV Comments at 7, n.20; UCC Comments at 8. \71\ If after due diligence, a petitioner is unable to identify the appropriate county government on which to serve its petition, the petitioner should request Commission staff assistance in this regard. --------------------------------------------------------------------------- B. Statutory Factors and Evidentiary Requirements 17. As discussed above, the purpose of market modification is to permit adjustments to a particular station's local television market (which is initially defined by the DMA in which it is located) to better serve the value of localism by ensuring that satellite subscribers receive the broadcast stations most relevant to them.\72\ To this end, the STELAR requires the Commission to consider five statutory factors when evaluating market modification requests.\73\ As noted, the STELAR added a fifth factor (inserted as the new third statutory factor) for both cable and satellite to ``promote consumers' access to television broadcast station signals that originate in their State of residence.'' \74\ In the NPRM, we tentatively concluded that this new third statutory factor is intended to favor a market modification to add a new community \75\ if doing so would increase consumer access to in-state programming.\76\ In the record, NAB and DISH appear to support this general conclusion; however, DISH states that we should consider under this factor whether the new community lacks any (or an adequate number of) in-state stations, while NAB states that the statutory language imposes no such requirement.\77\ In addition, NCTA expresses concerns about how we may evaluate market modification petitions under this new in-state factor, particularly in situations that would grant cable carriage rights to previously uncarried in-state stations.\78\ --------------------------------------------------------------------------- \72\ See 47 U.S.C. 338(l)(2)(B), 534(h)(1)(C)(ii) (requiring the Commission to ``afford particular attention to the value of localism'' by taking into account the five statutory factors). \73\ See supra para. 8. The Commission must also consider other relevant information to develop a result that is designed to ``better effectuate the purposes'' of the law. See 47 U.S.C. 338(l)(1); Definition of Markets for Purposes of the Cable Television Broadcast Signal Carriage Rules, CS Docket No. 95-178, Order on Reconsideration and Second Report and Order, FCC 99-116, para. 53, 64 FR 33788, Jun. 24, 1999 (Cable Market Modification Second Report and Order). \74\ 47 U.S.C. 338(l)(2)(B)(iii), 534(h)(1)(C)(ii)(III). We will refer to this new third statutory factor as the ``in-state factor.'' \75\ For purposes of our discussion, by ``new community'' we refer to a new community to be added to a station's local television market by grant of the prospective market modification. \76\ NPRM, para. 11. The NPRM also asked if we should ``require the petitioner to show that the station at issue is licensed to a community within the state in which the modification is requested and that the DMA at issue lacks any (or an adequate number of) in- state stations?'' NPRM, para. 13. \77\ See DISH Comments at 3-4; NAB Comments at 5. \78\ See NCTA Reply at 2-4. --------------------------------------------------------------------------- 18. We conclude that the in-state factor favors any market modification that would promote consumers' access to an in-state station.\79\ The language of this new statutory factor speaks clearly in this regard.\80\ Therefore, a petitioner will be afforded credit for satisfying this factor simply by showing that the involved station is licensed to a community within the same state as the new community.\81\ We disagree with those commenters that sought a requirement for more substantial showings, such as the lack of in-state stations in the new community, in order to get credit for satisfying this factor.\82\ We find that such additional showings are not necessary to satisfy this factor. We read the statutory language--in requiring the Commission to consider whether the prospective modification would ``promote'' consumers' access to television broadcast station ``signals'' that originate in their state of residence--as applying to any situation that would increase access to in-state stations, regardless of whether there are other in-state stations present in the new community.\83\ However, we find that such additional showings can increase the weight afforded to this factor. For example, this factor may be found to weigh more heavily in favor of modification if the petitioner shows the involved station provides programming specifically related to subscribers' state of residence, and may be given even more weight if such subscribers in the new community had little (or no) access [[Page 59643]] to such in-state programming.\84\ We find that this interpretation of the factor will better effectuate its purpose, observing that the legislative history expresses Congress' concern that ``many consumers, particularly those who reside in DMAs that cross State lines or cover vast geographic distances,'' may ``lack access to local television programming that is relevant to their everyday lives'' and indicates Congress' intent that the Commission ``consider the plight of these consumers when judging the merits of a [market modification] petition . . ., even if granting such modification would pose an economic challenge to various local television broadcast stations.'' \85\ We clarify, however, that this new factor is not universally more important than any of the other factors and its relative importance will vary depending on the circumstances in a given case.\86\ In sum, in market modification petitions involving the addition of an in-state broadcaster, the in-state factor does not serve as a trump card negating the other four statutory factors. Instead, where applicable, we believe the in-state factor serves as an enhancement, the particular weight of which depends on the strength of showing by the petitioner. Ultimately, each petition for market modification will turn on the unique facts of the case.\87\ --------------------------------------------------------------------------- \79\ See 47 U.S.C. 338(l)(2)(B)(iii) (``whether modifying the market of the television station would promote consumers' access to television broadcast station signals that originate in their State of residence''). \80\ See id. See also NAB Comments at 5. \81\ See infra at para. 20 (Evidentiary Requirements). \82\ See DISH Comments at 4 (stating ``a petitioner should have to `show . . . that the DMA at issue lacks any (or an adequate number of) in-state stations'''); NCTA Comments at 3 (stating ``the Commission should assess whether cable customers already receive television stations that provide in-state coverage''). \83\ See NAB Comments at 5 (``The statute does not suggest that the Commission should take into account only those in-state market modification requests that would help to remedy a complete absence-- or some minimum number--of in-state broadcast stations.''). \84\ See NAB at 5 (``Consideration of the `in-state signal' statutory factor also could involve an evaluation of programming or advertising on that station.'') We note that our analysis of the in- state nature of the programming would be similar to our analysis of the local nature of the programming under the second statutory factor and would consider whether the television station provides programming specifically related to the subscribers' state of residence. For example, under factor two, we consider whether the station has aired programming, such as news, politics, sports, weather and other emergency information, specifically targeted to the community at issue (e.g., town council meeting, news or weather event that occurred in the community, local emergencies, etc.). Under factor three, we would consider whether the station has aired programming, such as news, politics, sports, emergency information, specifically related to the state in which the community is located (e.g., coverage of state politics and legislative matters, state sports team coverage, state emergency information, etc.). \85\ Senate Commerce Committee Report at 11. \86\ See Cable Market Modification Second Report and Order, para. 59 (stating that ``it is inappropriate to state that one factor is universally more important than any other, as each is valuable in assessing whether a particular community should be included or excluded from a station's local market, and the relative importance of particular factors will vary depending on the circumstances in a given case''). See also, e.g., NCTA Reply at 2 (stating that ``[w]hile promoting access to in-state programming is one factor in the market modification process, Congress preserved the other four factors as well. In evaluating any market modification petitions going forward, therefore, the Commission must consider all of the factors.''); UCC Comments at 6 (stating that ``the laudable goal of providing satellite subscribers with access to the signals of some television stations licensed to communities within the same state should not trump the value of local coverage provided by stations that happen to be licensed to communities in a different state so as to deprive satellite customers of access to the signals of those stations that are more truly `local' than the more distant same-state stations.''). \87\ For example, we agree with NCTA that we should consider the potential disruption to customers if grant of the modification request would displace service from a long-established network station. See NCTA Comments at 3-4 (stating ``the Commission should consider the potential disruption to cable customers that could be caused by wholesale changes to markets. Market changes that would require operators to delete one group of broadcast stations in favor of another could upset long-established cable customer viewing patterns.''). The Bureau has previously considered, in the cable context, whether grant of the market modification would ``upset the economic marketplace expectations underlying the network-affiliate relationship.'' See, e.g., Broad Street Television, L.P., CSR-3868- A, Memorandum Opinion and Order, DA 95-1106, para. 12 (CSB rel. May 25, 1995); Guy Gannett Communications, Inc., CSR-5289-A, Memorandum Opinion and Order, DA 98-2464, para. 21 (CSB rel. Dec. 4, 1998), aff'd, Order on Reconsideration, DA 00-1325 (CSB rel. Jun. 19, 2000); Pacific & Southern Co., Inc., CSR-5326-A, Memorandum Opinion and Order, DA 99-628, para. 25 (CSB rel. Apr. 2, 1999); Harron Communications Corp., CSR-5325-A, Memorandum Opinion and Order, DA 99-627, para. 26 (CSB rel. Apr. 2, 1999); Free State Communications, LLC, CSR-8121-A, Memorandum Opinion and Order, DA 09-1206, para. 22 (MB rel. May 28, 2009). We note that, for must carry purposes, although cable operators are not required to carry duplicating stations or more than one local station affiliated with a particular network, if a cable system declines to carry duplicating stations, it must carry the station closest to the principal headend of the cable system, even if that station is from another state. See 47 CFR 76.56(b)(5). By contrast, in the satellite carriage context, a satellite carrier must carry two stations affiliated with the same network if they are from different states, see 47 U.S.C. 338(c)(1); 47 CFR 76.66(h)(1), and otherwise may select which duplicating station or network affiliate in a market it will carry. See 47 CFR 76.66(h)(2) through (3). Thus, the potential for market disruption is lower in the satellite context. --------------------------------------------------------------------------- 19. We adopt our tentative conclusion that the new in-state factor is not intended to bar a market modification simply because it would not result in increased consumer access to an in-state station's programming.\88\ In such cases, we find that this new in-state factor would be inapplicable and the modification request would be evaluated based on the other statutory factors.\89\ Commenters on this issue support these tentative conclusions.\90\ We agree with commenters that the statute intended to promote access to in-state programming, but did not intend to disfavor other market modification requests.\91\ --------------------------------------------------------------------------- \88\ NPRM, para. 11. \89\ Id. \90\ See UCC Comments at 6-7; WVIR-TV Comments at 4; Tracy Comments at 1. \91\ See UCC Comments at 6-7 (``STELAR did not intend to forestall market modification requests that would not have the effect of supplying in-state programming to residents of `orphan counties.' ''); WVIR-TV Comments at 4 (asking Commission ``not to confine any new rules to situations where a subscriber's community or county is assigned to an out-of-state DMA by Nielsen''); Tracy Comments at 1. --------------------------------------------------------------------------- 20. Evidentiary Requirements. We adopt our proposal to apply the evidentiary requirements for cable market modifications to satellite market modifications.\92\ Commenters on this issue support this proposal.\93\ We find it appropriate, and that it promotes parity, to apply the same evidentiary requirements in both contexts, particularly given the same language is used in both the cable and satellite statutory factors and the record provides no basis for adopting a different interpretation in the satellite versus cable context.\94\ In addition, to implement our decision (above) that the in-state factor favors any market modification that would promote consumers' access to an in-state station, we require the petitioner to make a statement in its petition whether or not the station is licensed to a community within the same state as the new community.\95\ We find this sufficient evidence to show that a station's petition satisfies this factor. Accordingly, market modification requests for both satellite carriers and cable system operators must include the following evidence: \96\ --------------------------------------------------------------------------- \92\ NPRM, para. 12. \93\ See NAB Comments at 4-5; DISH Comments at 3-4. \94\ 47 U.S.C. 338(l)(2)(B)(i) through (v), 534(h)(1)(C)(ii)(I) through (V). \95\ See 47 CFR 76.59(b)(7). As noted above (see supra para. 18), to better effectuate the purpose of the law, we will consider (but not require) additional evidence showing the relevance of the in-state programming (including advertising) to the new community, as well as the absence of other in-state stations in the new community, to evaluate the strength afforded to this factor. \96\ See 47 CFR 76.59(b)(1) through (7). To make section 76.59(b)(6) consistent with the language of the STELAR, we are also updating the rule to reflect the change from ``evidence of viewing patterns in cable and noncable households . . .'' to ``evidence of viewing patterns in households that subscribe and do not subscribe to the services offered by multichannel video programming distributors'' in the fifth statutory factor (emphasis added). See 47 U.S.C. 338(l)(2)(B)(v), 534(h)(1)(C)(ii)(V). --------------------------------------------------------------------------- (1) A map or maps illustrating the relevant community locations and geographic features, station transmitter sites, cable system headend or satellite carrier local receive facility locations, terrain features that would affect station reception, mileage between the community and the television station transmitter site, transportation routes and any other evidence contributing to the scope of the market; (2) Noise-limited service contour maps (for full-power digital stations) or protected contour maps (for Class A and low power television stations) [[Page 59644]] delineating the station's technical service area and showing the location of the cable system headends or satellite carrier local receive facilities and communities in relation to the service areas. (3) Available data on shopping and labor patterns in the local market. (4) Television station programming information derived from station logs or the local edition of the television guide. (5) Cable system or satellite carrier channel line-up cards or other exhibits establishing historic carriage, such as television guide listings. (6) Published audience data for the relevant station showing its average all day audience (i.e., the reported audience averaged over Sunday-Saturday, 7 a.m.-1 a.m., or an equivalent time period) for both multichannel video programming distributor (MVPD) and non-MVPD households or other specific audience indicia, such as station advertising and sales data or viewer contribution records. (7) If applicable, a statement that the station is licensed to a community within the same state as the relevant community. As discussed above, DISH and NCTA sought additional evidentiary requirements for a petitioner to satisfy the in-state factor.\97\ Because we decide that the in-state factor generally favors any market modification that would promote consumers' access to an in-state station, we reject the suggestions by DISH and NCTA to require more evidence in this regard. As explained above, however, a petitioner may offer evidence concerning whether the television station provides programming specifically related to the subscribers' state of residence, as well as the lack of other in-state stations providing service to subscribers in the new community, to demonstrate that the in-state factor should be afforded even greater weight.\98\ --------------------------------------------------------------------------- \97\ See DISH Comments at 4 (suggesting that petitioners be required to ``submit evidence to demonstrate that a substantial portion of the population in the geographic area covered by the request supports the change''); NCTA Reply at 3 (suggesting that petitioning broadcasters ``should demonstrate a historical pattern of providing significant in-state programming that is not otherwise available on the local DMA broadcast stations (or on any other station already carried on the system)''). WVIR-TV opposed the DISH proposal, stating ``DISH's suggestion that a broadcaster seeking to be added to a market provide evidence of popular demand by viewers goes far beyond what is required in the cable context and should not be adopted.'' WVIR-TV Reply at 5. \98\ See supra para. 18. --------------------------------------------------------------------------- 21. In addition, we adopt our proposal to revise section 76.59(b)(2) of the rules to add a reference to the digital noise- limited service contour (NLSC), which is the relevant service contour for a full-power station's digital signal.\99\ NAB, the only commenter on this issue, supports our proposal.\100\ Section 76.59(b)(2) requires petitioners seeking a market modification to provide Grade B contour maps delineating the station's technical service area;\101\ however the Grade B contour defines an analog television station's service area.\102\ Since the completion of the full power digital television transition on June 12, 2009, there are no longer any full power analog stations and, therefore, the Commission uses the NLSC set forth in 47 CFR 73.622(e),\103\ in place of the analog Grade B contour set forth in 47 CFR 73.683(a), to describe a full power station's technical service area.\104\ Since the DTV transition, the Media Bureau has required full power stations to provide NLSC maps, in place of Grade B contour maps, for purposes of cable market modifications.\105\ Therefore, we adopt our tentative conclusion that section 76.59(b)(2) should be updated for purposes of market modifications in both the cable and satellite contexts. We also delete the reference in the rule to the Grade B contour because that reference has no relevance in the absence of full- power analog stations. We observe that, in the rare situation in which a Class A or LPTV station might seek a market modification, the relevant service contour for such stations would be its ``protected contour.'' \106\ Accordingly, we revise our rule to reflect this contour. --------------------------------------------------------------------------- \99\ NPRM, para. 14; 47 CFR 76.59(b)(2). \100\ NAB Comments at 4. \101\ 47 CFR 76.59(b)(2). \102\ See 47 CFR 73.683(a). \103\ As set forth in section 73.622(e), a full-power station's DTV service area is defined as the area within its noise-limited contour where its signal strength is predicted to exceed the noise- limited service level. See 47 CFR 73.622(e). \104\ See STELA Significantly Viewed Report and Order, para. 51 (stating that the digital NLSC is ``the appropriate service contour relevant for a station's digital signal''); 2010 Quadrennial Regulatory Review--Review of the Commission's Broadcast Ownership Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 1996, MB Docket No. 09-182, Notice of Inquiry, FCC 10-92, para. 103, 75 FR 33227, June 11, 2010 (stating that the Commission developed the digital NLSC to approximate the same probability of service as the Grade B contour and has stated that the two are roughly equivalent); Report To Congress: The Satellite Home Viewer Extension And Reauthorization Act of 2004; Study of Digital Television Field Strength Standards and Testing Procedures; ET Docket No. 05-182, FCC 05-199, para. 111 (rel. Dec. 9, 2005). Since the DTV transition, the Media Bureau has used the digital NLSC in place of the analog Grade B contour in the cable context. See, e.g., KXAN, Inc., CSR-7825-N, Memorandum Opinion and Order, DA 10-589, para. 8 n.32 (MB rel. Apr. 1, 2010) (using the NLSC in place of the Grade B contour for purposes of the cable network non-duplication and syndicated program exclusivity rules). Congress has also acted on the presumption that the two standards are roughly equivalent, by adopting parallel definitions for households that are ``unserved'' by analog (measured by Grade B) or digital (measured by NLSC) broadcasters in the STELA legislation enacted after the DTV transition. See 17 U.S.C.U.S.C. 119(d)(10)(A)(i). \105\ See, e.g., Tennessee Broadcasting Partners, CSR-7596-A, Order on Reconsideration, DA 10-824, para. 6, n.14 (MB rel. May 12, 2010) (stating, in a market modification order, that the Commission has treated a digital station's NLSC as the functional equivalent of an analog station's Grade B contour); Lenfest Broadcasting, LLC, CSR-6278-A, Memorandum Opinion and Order, DA 04-1414, para. 7, n.27 (MB rel. May 20, 2004). \106\ The relevant technical service area for Class A and LPTV stations is defined by their protected contour, as defined in sections 73.6010 (Class A), 74.707 (analog LPTV) and 74.792 (digital LPTV) of the rules; 47 CFR 73.6010, 74.707, 74.792. Although LPTV stations are not entitled to mandatory satellite carriage, see 47 U.S.C. 338(a)(3), LPTV stations may be entitled to mandatory cable carriage, but only in limited circumstances. Both the Communications Act and the Commission's rules mandate that only a minimum number of qualified low power stations must be carried by cable systems, see 47 U.S.C. 534(c)(1); 47 CFR 76.56(b)(3), and, in order to qualify, such stations must meet several criteria. See 47 U.S.C. 534(h)(2)(A) through (F); 47 CFR 76.55(d)(1) through (6). Class A stations have the same limited must carry rights as LPTV stations; in other words, they are ``low power stations'' for mandatory carriage purposes. See Establishment of a Class A Television Service, MM Docket No. 00-10, Memorandum Opinion and Order on Reconsideration, FCC 01-123, paras. 40-42, 66 FR 21681, May 1, 2001. Finally, we note that the Media Bureau recently suspended the September 1, 2015 digital transition deadline for LPTV stations. (The Bureau's action did not affect the September 1, 2015 digital transition deadline for Class A stations.) See Suspension of September 1, 2015 Digital Transition Date for Low Power Television and TV Translator Stations, MB Docket No. 03-185, Public Notice, DA 15-486, 80 FR 27862, May 15, 2015. --------------------------------------------------------------------------- 22. Consistent with the cable carriage rule, we adopt our proposals that satellite market modification requests that do not include the required evidence be dismissed without prejudice and that they may be supplemented and re-filed at a later date with the appropriate filing fee.\107\ In addition, consistent with the cable carriage rule, we adopt our proposal that, during the pendency of a market modification petition before the Commission, satellite carriers will be required to maintain the status quo with regard to signal carriage and must not delete from carriage the signal of an affected commercial television station.\108\ NAB, the only commenter on these issues, supports our proposals.\109\ We adopt our proposals, which create regulatory parity with cable. --------------------------------------------------------------------------- \107\ NPRM, para. 15. See 47 CFR 76.59(c). \108\ NPRM, para. 15. See 47 CFR 76.59(d). See also 47 U.S.C. 338(l)(3)(B), 534(h)(1)(C)(iii); Must Carry Order, para. 46. \109\ NAB Comments at 4. --------------------------------------------------------------------------- C. Market Determinations 23. We adopt our tentative conclusion that market modifications in the satellite [[Page 59645]] carriage context will apply only to the specific stations and communities addressed in a particular market modification petition.\110\ NAB, the only commenter on this issue, supports our conclusion.\111\ Our conclusion is consistent with the cable carriage rules \112\ and is based on the statute's language granting authority to modify markets ``with respect to a particular commercial television broadcast station.'' \113\ It is also reasonable because market modification determinations are highly fact-specific and turn on whether a particular commercial television broadcast station serves the needs of a specific community. --------------------------------------------------------------------------- \110\ NPRM, para. 16. \111\ NAB Comments at 5. \112\ See Must Carry Order, para. 47 n.139 (stating that ``the statute is intended to permit the modification of a station's market to reflect its individual situation''); 47 CFR 76.59. We note that this is also consistent with the Commission's previous determination that stations may make a different retransmission consent/mandatory carriage election in the satellite context from that made in the cable context. See DBS Broadcast Carriage Report and Order, para. 23. \113\ 47 U.S.C. 338(l)(1). --------------------------------------------------------------------------- 24. We also adopt our tentative conclusion that we will consider market modification requests separately in the cable and satellite contexts.\114\ NAB and DISH, the only commenters on this issue, support our conclusion.\115\ We find this preferable given the differences in service area and community sizes between cable systems and satellite carriers.\116\ In contrast to the cable context, we must also consider the technical and economic capability of the satellite carriers at issue to effectuate a satellite market modification.\117\ --------------------------------------------------------------------------- \114\ NPRM, para. 16. This is consistent with our conclusion below that prior cable market modification determinations will not automatically apply in the satellite context; see infra para. 26. \115\ DISH at Comments 4; NAB Comments at 5-6. \116\ See DISH Comments at 4. See also infra section III.F. (deciding that a ``satellite community'' for market modification purposes can be defined by a county). \117\ See DISH Comments at 4-5. --------------------------------------------------------------------------- 25. Finally, we adopt our tentative conclusion that market modification requests will apply only to the satellite carrier or carriers named in the request.\118\ NAB and DISH support our conclusion,\119\ although DIRECTV believes this is unnecessary if we allow each satellite carrier to carry a station based on its respective spot beam coverage.\120\ We disagree with DIRECTV that this is unnecessary. Instead, we find that a modification may not always appropriately apply to both carriers. For example, the carriers' spot beams may be different, even though they are serving the same market, and thus one may have an infeasibility defense while the other may not. --------------------------------------------------------------------------- \118\ NPRM, para. 16. This is also consistent with the satellite carriage election process. See Implementation of the Satellite Home Viewer Improvement Act of 1999: Broadcast Signal Carriage Issues, CS Docket No. 00-96, Order on Reconsideration, FCC 01-249, para. 62, 66 FR 49124, Sept. 26., 2001 (DBS Must Carry Reconsideration Order) (``where there is more than one satellite carrier in a local market area, a television station can elect retransmission consent for one satellite carrier and elect must carry for another satellite carrier''). \119\ DISH at Comments 5; NAB Comments at 5. \120\ DIRECTV Comments at 9. --------------------------------------------------------------------------- 26. Prior Determinations. We adopt our tentative conclusion that prior cable market modification determinations will not automatically apply in the satellite context.\121\ We also decline to establish a presumption that prior cable determinations should apply to satellite markets.\122\ DISH, NAB, and DIRECTV support these conclusions,\123\ while Gray proposes that we establish a presumption that prior cable market modification determinations should apply to satellite markets.\124\ We find the same reasoning that requires us to consider market modification requests separately in the cable and satellite contexts also makes it inadvisable to apply prior cable market determinations to satellite markets. As discussed above, market modifications are specific to the stations, operators/carriers, and communities addressed in a particular market modification petition, as of the time of the petition. Given the differences in service areas and community sizes between cable systems and satellite carriers, and changes that may have occurred since the time of the cable petition, we conclude that it would not be reasonable to automatically apply prior cable market determinations to satellite carriers or establish a rebuttable presumption. We note that Gray's proposal would have us establish a presumption for an entire county based on a finding with respect to a single cable community or several cable communities within a county.\125\ Moreover, we note that satellite carriers did not have the opportunity to participate in these prior market modification proceedings.\126\ We also agree with DIRECTV that establishing a presumption would be inconsistent with our statutory obligation to evaluate modifications based on the statutory factors.\127\ However, as noted in the NPRM, historic carriage is one of the five factors the Commission must consider in evaluating market modification requests and would carry weight in a market modification determination in the satellite context.\128\ We agree with NAB that consideration of this factor will give sufficient weight to prior decisions without the need to establish a presumption.\129\ --------------------------------------------------------------------------- \121\ NPRM, para. 17. \122\ NPRM, para. 17. \123\ See DISH Comments at 4-5; NAB at 5-6; DIRECTV Reply at 9- 10. See also DIRECTV ex parte (dated June 11, 2015) at 2; DISH ex parte (dated June 11, 2015) at 2. \124\ Gray Comments at 4-5 (``When a satellite market modification is requested for a county or counties where a previous cable market modification has been granted, the FCC should require only that a petitioner file a simple request that the station's satellite market be modified to include the counties that include the communities associated with the earlier modification. Any party opposing the modification would have the burden of demonstrating that, notwithstanding the outcome of the earlier proceeding, the statutory factors do not support a market modification in the satellite context.''). \125\ Gray Comments at 4-6 (``If a previous market modification proceeding has resulted in the assignment of additional communities to a television station's cable carriage market, the FCC should presume that the county or counties in which those communities are located should be added to the station's DBS market.''). \126\ DIRECTV correctly observes that there is no official list of previously-granted modifications. DIRECTV ex parte (dated June 11, 2015) at 2. \127\ DIRECTV Reply at 9. \128\ See 47 U.S.C. 338(l)(2)(B)(i)(I) (whether the station, or other stations located in the same area--``have been historically carried on the cable system or systems within such community''). \129\ NAB Comments at 6. --------------------------------------------------------------------------- 27. Carriage after a market modification. We adopt our tentative conclusion that television broadcast stations that become eligible for mandatory carriage with respect to a satellite carrier (pursuant to section 76.66 of the rules) by virtue of a change in the market definition (by operation of a market modification pursuant to section 76.59 of the rules) may, within 30 days of the effective date of the new definition, elect retransmission consent or mandatory carriage with respect to such carrier.\130\ This is consistent with the cable rule.\131\ NAB and Gray support this conclusion,\132\ while DISH expresses concern that, as a result of a market modification (and an existing retransmission consent agreement with the involved station), it could have to carry and pay retransmission consent fees to two stations from different states but that are affiliated with the same network.\133\ DISH proposes that a station's election with respect to the communities added by a market modification should be limited to must-carry for the remainder of the carriage election cycle.\134\ NAB responds that [[Page 59646]] ``[s]atellite carriers cannot lawfully obtain a `free pass' to carry retransmission consent stations without negotiating the prices, terms and conditions of such consent in any geographic area.\135\ Alternatively, DISH asks the Commission to ``clarify that notwithstanding any retransmission consent agreements that would automatically entitle the station to carriage in additional geographic areas due to a market modification, the station must negotiate a new retransmission consent agreement for the new areas.''\136\ NAB responds that ``DISH and other satellite carriers must abide by provisions of the Communications Act and FCC rules governing retransmission consent and must-carry within a station's market, including areas affected by a market modification.'' \137\ --------------------------------------------------------------------------- \130\ NPRM, para. 18. See 47 CFR 76.66(d)(6). \131\ See 47 CFR 76.64(f)(5). \132\ NAB Comments at 6; Gray Comments at 8; NAB Reply at 3. \133\ See DISH Comments at 9-10. \134\ See DISH ex parte (dated June 11, 2015) at 2. We note that DISH initially agreed that a station should elect either retransmission consent or must-carry with the applicable satellite carriers for the new geographic area within 30 days of the market modification order. DISH Comments at 5. \135\ NAB Reply at 2. \136\ DISH ex parte (dated June 11, 2015) at 2. DISH's proposal recognizes that its concern is a short-term problem that would last for the length of any existing retransmission consent agreement. Id. In DISH's scenario, after expiration of the existing agreements with the two same-network affiliates, we expect the marketplace would resolve this concern. \137\ NAB Reply at 1, 3-5. See also 47 U.S.C. 325, 338 and 47 CFR 76.64 through 76.66. --------------------------------------------------------------------------- 28. We reject DISH's proposal to mandate a must-carry election for the remainder of the current election cycle because it directly contravenes section 325 of the Act and would be inconsistent with our satellite carriage rules.\138\ As with any other election for satellite carriage, we find that when a station's market is modified for purposes of satellite carriage, then the station is entitled to elect either retransmission consent pursuant to section 325 or mandatory carriage pursuant to section 338 with respect to the new community or communities added to its market by the modification.\139\ This is also consistent with the cable market modification process \140\ and, moreover, is required by application of sections 325 and 338 of the Act.\141\ Section 338(a)(1) requires that a satellite carrier must carry upon request all local television stations seeking carriage in any market in which the carrier provides local-into-local service, subject to section 325(b) of the Act.\142\ Section 325(b)(1) prohibits an MVPD from retransmitting the signal of a broadcast station except ``with the express authority of the originating station.'' \143\ The statute provides for no exception in the market modification context to the retransmission consent requirement. Thus, we reject DISH's argument that the silence of section 102 of the STELAR with respect to retransmission consent means that Congress could not have intended retransmission consent to apply to the carriage of stations in communities added by market modification.\144\ To the contrary, considering the provisions together in context, we believe the better reading of the statute is that the retransmission consent requirement applies in this context given the absence of an express indication otherwise in either section 102 of STELAR or the retransmission consent provisions.\145\ We note that, while the network programming may be the same, the two stations would likely be providing very different local programming (e.g., different news, sports, advertising and political programming), each of which may be of interest to the new community, because the stations are licensed to different communities and particularly if the stations are located in different states. Finally, with respect to DISH's proposal that we prevent application of an existing retransmission consent agreement containing a provision requiring carriage pursuant to its terms in the event the Commission modifies a given market, DISH provides no reasoning that persuades us to abrogate a bargained-for and agreed-to contractual provision between a broadcaster and a satellite carrier that expressly contemplates the addition of communities through the market modification process.\146\ We note, however, that the very purpose of this provision of the STELAR is to provide consumers with access to news, politics, sports, emergency and other programming specifically related to their home state.\147\ Accordingly, we expect broadcasters and satellite carriers alike will make the needs and expectations of orphan county consumers the priority in negotiating retransmission consent following a successful modification petition.\148\ We will monitor this situation closely and will take further action if such monitoring indicates that the purpose of this provision is not being effectuated. --------------------------------------------------------------------------- \138\ See 47 U.S.C. 325(b) and 47 CFR 76.66. \139\ See 47 CFR 76.66(c) (``In television markets where a satellite carrier is providing local-into-local service, a commercial television broadcast station may elect either retransmission consent, pursuant to section 325 of title 47 United States Code, or mandatory carriage, pursuant to section 338, title 47 United States Code.''). We thus agree with NAB that ``a station electing retransmission consent with regard to a community or communities that become part of its defined market following a modification request is the same as any other station making a retransmission consent election.'' NAB Reply at 3. \140\ See 47 CFR 76.64(f)(5). \141\ See 47 U.S.C. 325, 338. \142\ 47 U.S.C. 338(a)(1). \143\ 47 U.S.C. 325(b)(1). \144\ See DISH Comments at 9-10. DISH also appears to argue that, because STELAR provides that a market modification could operate both to add communities to, and delete communities from, a station's local market, the Commission could delete the community at issue from the existing network affiliate's local market at the same time that it adds the new community to the local market of the same- network station seeking the market modification. Id. at 10. Under current rules, however, to delete the community at issue from the existing network station's local market, DISH would have to file a separate petition to modify that station's local market, based on the statutory factors. There is nothing in the record that persuades us to alter the existing process. \145\ See STELAR section 102. See also 47 U.S.C. 325(b), 338(c)(1). We also disagree with Gray's argument that the ``substantial duplication'' exceptions to the satellite mandatory carriage rules should not apply to stations in communities that have been added to their markets via the market modification process. Gray Comments at 8. Section 338(c)(1) speaks clearly on this point in permitting but not requiring a satellite carrier to carry more than one network affiliate licensed to the same state. 47 U.S.C. 338(c)(1). \146\ See DISH ex parte (dated June 11, 2015) at 2 (stating that ``[m]any retransmission consent contracts require DBS providers to carry a station's signal throughout its local market, even if that local market's boundary is changed by FCC action--meaning the DBS provider could be obligated to pay retransmission consent fees to two network-affiliated stations in a given area pursuant to a market modification, even if these stations duplicate one another.''). See also NAB Reply at 3 (opposing DISH's various proposals to avoid paying retransmission consent fees). \147\ See Senate Commerce Committee Report at 11. \148\ See supra note 59 (describing the impact on consumers of residing in orphan counties) and note 65 (noting Commission receipt of at least 165 consumer complaints in 2015 that their satellite carrier does not carry a particular station). --------------------------------------------------------------------------- 29. We also adopt our tentative conclusion that a satellite carrier must commence carriage within 90 days of receiving the request for carriage from the television broadcast station.\149\ In the record, NAB and Gray support the 90-day deadline,\150\ while DISH asks for 120 days.\151\ The 90-day deadline is consistent with our cable rules,\152\ as well as with existing carriage procedures involving the addition of a new station to a carrier's lineup \153\ and we see no reason to deviate from the 90-day deadlines in these similar contexts.\154\ Thus, we conclude that 90 [[Page 59647]] days is an appropriate amount of, time for satellite carriers to commence carriage. We note that, as is the case in the cable context, the filing of a petition for reconsideration or application for review does not automatically stay the effect of a Bureau order to add a station to a new community; however, based on the directive in section 338(l)(3)(B)--the satellite counterpart to cable's section 614(h)(1)(C)(iii)--a petition for reconsideration or application for review would automatically stay a Bureau order to delete a station in a community.\155\ Finally, we adopt our tentative conclusion that the carriage election must be made in accordance with the procedures set forth in section 76.66(d)(1).\156\ --------------------------------------------------------------------------- \149\ NPRM, para. 18. \150\ NAB Comments at 6; Gray Comments at 8; NAB Reply at 3. \151\ DISH Comments at 5-6. We note that 120 days is inconsistent with DISH's proposal that requests for carriage use the procedures governing carriage of new stations. DISH Comments at 5. \152\ See 47 CFR 76.64(f)(5). \153\ See 47 CFR 76.66(d)(3). We note that DISH's proposal for 120 days to commence carriage is inconsistent with DISH's proposal that requests for carriage use the procedures governing carriage of new stations. See DISH Comments at 5. \154\ DISH speculates that ``there may be time-consuming technical or billing changes, among other things, necessary for the satellite carrier to undertake'' in order to effectuate carriage of a market modification. DISH Comments at 5-6. We see no evidence in the record to suggest that commencement of carriage after a market modification is more difficult or complicated in the satellite context or more difficult or complicated than adding a new station to a carrier's lineup. \155\ See NAB Comments at 6-7 (seeking clarification that ``the filing of a petition for reconsideration or application for review does not relieve a cable or satellite provider of its obligation to commence carriage pursuant to a broadcaster's must carry election or begin retransmission consent negotiations consistent with good faith requirements''). In the Cable Market Modification Second Report and Order, paras. 63-64, the Commission found that section 614(h)(1)(C)(iii)--the cable counterpart to section 338(l)(3)(B)-- ``prohibits cable operators from deleting from carriage commercial broadcast stations during the pendency of a market modification request but does not address maintaining the status quo with respect to additions. Given the absence of a parallel statutory directive with respect to channel additions, we see no reason to depart from the general presumption that a decision is valid and binding until it is stayed or overruled. To the extent the process aids broadcast stations in both retaining and obtaining cable carriage rights, that appears to be the result intended by the statutory framework adopted.'' See Cablevision Systems Corporation, CSR-3873-A, Memorandum Opinion and Order, DA 96-1231, para. 11 (CSB, rel. Aug. 2, 1996) (explaining that ``if we were to accept the general arguments for granting the stay raised by Time Warner and Cablevision, every initial market modification decision adverse to any cable operator would be postponed while either the Bureau or Commission acts on the petition for reconsideration or application for review. Such a result would unduly delay qualified television stations from realizing their statutory cable carriage rights.''). See also Dynamic Cablevision of Florida Ltd., et al., CSR-4722-A, CSR-4707-A, Memorandum Opinion and Order, FCC 97-191, para. 20 (rel. Jul. 1, 1997) (``hold[ing] that a commercial television station may not be deleted from a cable system until the Commission has completed all administrative proceedings pertaining to a particular market redefinition . . . . There can be no question that Commission reconsideration or review of a Bureau market redefinition ruling is a `proceeding' pursuant to the market re-definition section.''). \156\ NPRM, para. 18. Section 76.66(d)(1) requires that an election request made by a television station must be in writing and sent to the satellite carrier's principal place of business, by certified mail, return receipt requested. 47 CFR 76.66(d)(1)(ii). The rule requires that a television station's written notification shall include the following information: (1) Station's call sign; (2) Name of the appropriate station contact person; (3) Station's address for purposes of receiving official correspondence; (4) Station's community of license; (5) Station's DMA assignment; and (6) Station's election of mandatory carriage or retransmission consent. 47 CFR 76.66(d)(1)(iii). The rule also requires that, within 30 days of receiving the request for carriage from the television broadcast station, a satellite carrier must notify the station in writing that it will not carry the station, along with the reasons for such decision, or that it intends to carry the station. 47 CFR 76.66(d)(1)(iv). DISH proposes that requests for carriage follow the procedures outlined in 47 CFR 76.66(d)(3), which governs written requests for carriage by new stations. DISH Comments at 5. However the carriage election procedures outlined in 47 CFR 76.66(d)(3) expressly refer to the procedures set forth in 47 CFR 76.66(d)(1). See 47 CFR 76.66(d)(1)(ii) through (iii) and (d)(3)(ii). The only difference is timing and even DISH agrees with the filing of an election within 30 days of the market modification order which is consistent with the 30 days in 47 CFR 76.66(d)(1). --------------------------------------------------------------------------- D. Technical or Economic Infeasibility Exception for Satellite Carriers 30. We adopt our proposal to codify the language of section 338(l)(3), which provides that ``[a] market determination . . . shall not create additional carriage obligations for a satellite carrier if it is not technically and economically feasible for such carrier to accomplish such carriage by means of its satellites in operation at the time of the determination.'' \157\ In enacting this provision, Congress recognized that the unique nature of satellite television service may make a particular market modification difficult for a satellite carrier to effectuate and, thus, exempted the carrier from the resulting carriage obligation.\158\ According to the record, spot beam coverage and capacity constraints (discussed below) are the primary technical and economic impediments to carriage facing both satellite carriers. Based on the constraints described in the record, we conclude that it is per se not technically and economically feasible for a satellite carrier to provide a station to a new community \159\ that is, or to the extent to which it is,\160\ outside the relevant spot beam \161\ on which that station is currently carried.\162\ We adopt our tentative conclusion that the satellite carrier has the burden to demonstrate that the resulting carriage from a market modification ``is not technically and economically feasible . . . by means of [a carrier's] satellites in operation.'' \163\ In this regard, we will allow satellite carriers to demonstrate spot beam coverage infeasibility by providing a detailed and specialized certification, under penalty of perjury (as described herein).\164\ In addition, with respect to other possible bases for a carrier to assert that carriage would be technically or economically infeasible, such as costs associated with changes to customer satellite dishes to accommodate reception from different orbital locations, we will review these assertions on a case- by-case basis. To avoid unnecessary burdens on broadcasters, satellite carriers, county governments and the Commission, we establish a process for prospective petitioners to obtain information from a satellite carrier regarding feasibility of carriage by the carrier prior to the filing of a market modification petition. We require satellite carriers to respond to broadcaster and county government requests for information about the feasibility of prospective market modifications with certifications and afford prospective petitioners with a process for Commission review of such certifications before filing a market modification petition. The Commission [[Page 59648]] will not proceed to evaluate the five factors for a market modification with respect to a particular satellite carrier where it is shown that the resulting carriage obligation would not be technically and economically feasible at the time of the market determination. --------------------------------------------------------------------------- \157\ 47 U.S.C. 338(l)(3). See 47 CFR 76.59(e). \158\ Senate Commerce Committee Report at 11 (recognizing ``that there are technical and operational differences that may make a particular television market modification difficult for a satellite carrier to effectuate.''). \159\ For purposes of our discussion, by ``new community'' we refer to a new community to be added to a station's local television market by grant of the prospective market modification. As discussed below in section III.F., a ``community'' for purposes of a satellite market modification is defined as a county. \160\ This per se exemption is limited to areas outside the carrier's spot beam. Thus, a satellite carrier will be required to carry the station to those areas inside the relevant spot beam even if part of the new community (i.e., county) is outside the relevant spot beam, in the absence of additional evidence of infeasibility. See infra paras. 34-35 (Partial Spot Beam Coverage). \161\ Satellite carriers use spot beams to offer local broadcast stations. DIRECTV Comments at 2. DIRECTV explains that ``[s]pot-beam technology divides up a portion of the bandwidth available to a satellite into beams that cover limited geographic areas. Doing so allows particular sets of frequencies to be reused many times. This spectral efficiency unlocked the potential for satellite carriers to offer local broadcast signals in the late 1990s, and it enables satellite carriers to offer local service today.'' Id. \162\ See DIRECTV Comments at 9 (asking the Commission to find that ``it is per se technically and economically infeasible for a satellite carrier to provide a station to subscribers who live in an area outside of the spot beam on which that station is currently carried.''). For purposes of our discussion, we will refer to the spot beam on which the station is currently carried as the ``relevant spot beam.'' \163\ NPRM, para. 19. See 47 U.S.C. 338(l)(3). The legislative history also indicates ``that claims of the existence of such difficulties should be well substantiated and carefully examined by the [Commission] as part of the petition consideration process.'' Senate Commerce Committee Report at 11. \164\ We will refer to this as the ``detailed certification.'' See infra at section III.D.2. We base our proposal on DIRECTV's suggested certification, which we find would meet the carrier's burden to demonstrate spot beam coverage infeasibility. See DIRECTV ex parte (dated Jul. 9, 2015) at 3-4. To ensure the ongoing accuracy and veracity of the spot beam coverage infeasibility certification process, we may, in particular cases, require a satellite carrier to provide us with supporting documentation for the certification. 47 U.S.C. 154(i), 154(j), 308(b), 403. --------------------------------------------------------------------------- 1. Technical or Economic Impediments to Carriage 31. The NPRM sought comment on the types of technical or economic impediments contemplated by section 338(l)(3) that would make satellite carriage infeasible in a new community.\165\ The NPRM also sought comment on any objective criteria by which the Commission could determine technical or economic infeasibility, such as spot beam coverage constraints.\166\ In response, we received very few comments on potential impediments except infeasibility due to insufficient spot beam coverage and due to costs of making changes to customer satellite dishes. DIRECTV described spot beam coverage and capacity constraints as being the key technical and economic impediments to carriage.\167\ DIRECTV asserted, and DISH agreed, that carriage should be considered per se infeasible if the new community is outside the coverage of the spot beam that carries the station.\168\ The carriers explain that if the spot beam on which a station is being carried does not cover the new community, a satellite carrier ``has no good [carriage] options available to it.'' \169\ Even if the spot beam on which a station is being carried covers the new community, DISH adds that carriage of the station may be infeasible if the station is carried on a different satellite at a different orbital position than the satellite providing the existing local broadcast stations to the market.\170\ DISH explains that ``it is possible'' that this situation could require DISH to make equipment changes at ``all or most households'' in the new community.\171\ The broadcast comments do not substantively refute spot beam coverage and capacity constraints as legitimate technical or economic impediments, except to say that such constraints must be appropriately demonstrated, consistent with the statute and legislative history.\172\ --------------------------------------------------------------------------- \165\ In particular, the NPRM sought comment on whether spot beam contour diagrams should be required to demonstrate spot beam coverage limitations. NPRM, para. 20 (``Should we require satellite carriers claiming infeasibility due to insufficient spot beam coverage to provide spot beam contour diagrams to show whether a particular spot beam can be used to cover a particular community? ''). \166\ NPRM, para. 20 (asking ``Are there any objective criteria by which the Commission could determine technical or economic infeasibility? For example, the Commission has recognized that spot beam coverage limitations, in the provision of local-into-local service context, may be a legitimate technical impediment. Under what circumstances would the limitations or coverage of a spot beam be a sufficient basis for a satellite carrier to prove that carriage of a station in the community at issue is not technically and economically feasible?''). \167\ See DIRECTV Comments at 3-4, 8-9. In its comments, DISH generally observed that a satellite carrier may be unable as a technical or financial matter to comply with a market modification. DISH Comments at 7. \168\ See DIRECTV Reply at 7; DISH ex parte (dated Jun. 11, 2015) at 3. \169\ DISH ex parte (dated Jun. 11, 2015) at 3. \170\ See DISH ex parte (dated Jun. 11, 2015) at 3; DISH ex parte (dated Jul. 8, 2015) at 1. \171\ DISH ex parte (dated Jun. 11, 2015) at 3; DISH ex parte (dated Jul. 8, 2015) at 1 (explaining that ``DISH offers local broadcast stations on spot beams on several satellites at a variety of different orbital locations. Therefore, it is possible that households in a given local market might be unable to receive a new broadcast station that was assigned by Nielsen to a different market unless the households, among other things, have a second satellite dish installed, have an existing satellite dish replaced, or have an existing satellite dish repositioned. Where this is the case, it is possible that all or most households in the geographic area impacted by a market modification would require a DISH technician to visit their home to make these equipment changes, which would be technically and economically infeasible.''). (DIRECTV does not indicate that it would have this same problem.) \172\ See Gray Comments at 6-7 (``Gray understands and appreciates the technical burdens that satellite operators face in adding signals to their satellite systems, but . . . Satellite operators therefore should be permitted to claim this exemption only in limited circumstances''); NAB Comments at 9 (``NAB urges the Commission to require satellite carriers claiming infeasibility due to insufficient spot beam coverage to provide spot beam contour diagrams to show whether a particular spot beam can be used to cover a particular community''); NAB Reply at 2-3 (saying that claims of infeasibility must be ``well substantiated and carefully examined''); WVIR-TV Reply at 2, para. 2 (asserting that the purpose of STELAR would be defeated if satellite operators do not ``bear the burden of proving the validity of an assertion of infeasibility''); WVIR-TV ex parte (dated Jul. 2, 2015) at 2 (same). --------------------------------------------------------------------------- 32. We are persuaded by the satellite carriers that if the relevant spot beam does not cover the new community, then it is not technically and economically feasible for the carrier to provide the station to such new community.\173\ In such a scenario, the only available options would be to place the station on the satellite carrier's CONUS beam \174\ to reach subscribers in the new community, redirect each and every spot beam on the satellite in order to enable the relevant spot beam to cover the new community,\175\ or place the station on a second, neighboring spot beam that does cover the new community, if such a beam exists and has capacity. DIRECTV argues that it would be an ``inefficient use of resources to devote a CONUS beam, which can be seen throughout the United States, to provide coverage to a single or handful of communities.'' \176\ Next, DIRECTV argues that, if the new community is covered by a different, neighboring spot beam than the one on which the station is carried, it would almost always lack space on such neighboring spot beam.\177\ Moreover, DIRECTV explains that, even if there were space, it ``would have to reserve capacity on the entire `neighboring' spot beam--capacity that could otherwise be used for a new station or a multicast signal carried throughout the neighboring market.'' \178\ Thus, it would be inefficient for the carrier to use that space on the neighboring spot beam for a station that could only be received by subscribers in a small part of the local market served by such spot beam.\179\ [[Page 59649]] Finally, DIRECTV argues that redirecting the entire array of spot beams on the satellite, would cause unacceptable consequences to existing local service.\180\ We agree with these points and conclude that each of these options are per se technically and economically infeasible.\181\ Accordingly, we conclude that ``it is per se technically and economically infeasible for a satellite carrier to provide a station to subscribers who live in an area outside of the spot beam on which that station is currently carried.'' \182\ This conclusion is consistent with the Commission's past recognition and acceptance of the service constraints associated with the use of spot beams.\183\ This means that, if a carrier shows that the relevant spot beam does not provide coverage to the new community, then that is a per se demonstration of infeasibility. Thus, for example, a carrier would not need to show that there is no space on a neighboring spot beam or that it cannot reconfigure a spot beam to effectuate carriage. --------------------------------------------------------------------------- \173\ See DIRECTV Reply at 7; DISH ex parte (dated Jun. 11, 2015) at 3. \174\ DIRECTV carries all of its national programming on satellite beams that cover the entire contiguous United States (``CONUS''). DIRECTV Comments at 2. ``DIRECTV carries New York and Los Angeles stations on CONUS beams, but only because those stations are offered throughout the country as distant signals pursuant to 17 U.S.C. 119 and 47 U.S.C. 339.'' DIRECTV Comments at 2, n.3. \175\ See DIRECTV Comments at 6-7, n.16. \176\ DIRECTV Reply at 7; DIRECTV Comments at 8. The Commission has previously recognized that ``to carry a local channel on a transponder designated for CONUS would be particularly inefficient as that channel could only be permissibly viewed in a single DMA.'' Carriage of Digital Television Broadcast Signals: Amendment to Part 76 of the Commission's Rules; Implementation of the Satellite Home Viewer Improvement Act of 1999: Local Broadcast Signal Carriage Issues and Retransmission Consent Issues, CS Docket No. 00-96, Second Report and Order, Memorandum Opinion and Order, and Second Further Notice of Proposed Rulemaking, FCC 08-86, para. 11, 73 FR 24502, May 5, 2008 (Satellite DTV Carriage Order). We note, however, that if the station seeking the market modification was already being carried on a CONUS satellite (e.g., the New York or Los Angeles stations), then carriage of such station would not be per se infeasible in a new community. \177\ DIRECTV explains that it ``has designed its spot beams to carry only the primary signals of stations within the local markets they cover. The vast majority of its spot beams are now currently full. In most cases, DIRECTV could not add a station to a `neighboring' spot beam without removing one of the stations already on that beam.'' DIRECTV Comments at 8, n.24. \178\ DIRECTV Comments at 9 (explaining that ``[r]eserving spot- beam capacity for a station that could only be received in at most a handful of communities would represent a significant waste of spectral resources.''); DIRECTV Reply at 8 (explaining that devoting capacity to the station on a neighboring spot beam ``could preclude DIRECTV from carrying a new station that later commences service'' and also ``would certainly preclude DIRECTV from using the capacity in question to benefit viewers throughout the [local television market at issue],'' such as by adding a multicast feed from a local station.). \179\ We thus disagree with NAB that a satellite carrier should be required to show that the station could not be added to a spot beam different than the one on which the station is currently carried that does cover the new community. NAB ex parte (dated Jul. 15, 2015) at 3 (arguing that ``the DBS carrier should be required to certify that the spot beam that does serve the affected communities does not have the capacity to carry the station unless another channel is deleted (or other technical or economic reason)''). We find that the financial and opportunity costs associated with requiring a carrier to use scarce capacity on a second spot beam for a station that could only be received by subscribers in a small part of the local market served by such spot beam makes carriage on such spot beam per se infeasible. See DIRECTV Reply at 9. \180\ See DIRECTV Comments at 6-7, n.16 (explaining that it generally cannot ``move'' spot beams on a satellite--except for SPACEWAY satellites which are being replaced--and that it could ``slightly adjust the entire array of spot beams on the satellite simultaneously,'' but this would affect the local service provided by all of the spot beams on the satellite, thus ``disrupt[ing] [local] service across dozens of markets and negat[ing] DIRECTV's efforts to optimize population coverage.''); DIRECTV Reply at 7 (``moving the entire array of spot beams means subscribers in portions of the [local television market at issue] and many other markets would lose all the local stations they now receive.''). \181\ See DIRECTV Reply at 7-9; DISH ex parte (dated Jun. 11, 2015) at 3. \182\ DIRECTV Comments at 9; DISH ex parte (dated Jun. 11, 2015) at 3. \183\ In the DBS Broadcast Carriage Report and Order, the Commission allowed satellite carriers to use spot beam technology to provide local-into-local service, even if the spot beam did not cover the entire market. DBS Broadcast Carriage Report and Order, para. 42. The Commission ``observe[d] that section 338 does not require a satellite carrier to serve each and every county in a television market. Rather, it requires that in the areas it does provide local-into-local service, it must carry all local television stations subject to carriage under the statute.'' Id. The Commission ``recognize[d] that there are some markets, such as the Denver DMA encompassing counties in four states, that are geographically expansive'' and that ``[a] spot beam may not be able to cover the entire DMA in these instances, and to make the satellite carrier reconfigure its spot beam may deprive it of capacity to serve additional markets with local-into-local coverage.'' Id. --------------------------------------------------------------------------- 33. We recognize that there may be other technical or economic impediments to carriage that could qualify for the infeasibility exception. For example, DISH explains that it provides local broadcast stations from spot beams on several satellites at a variety of different orbital locations and that each subscriber's satellite dish must be pointed and configured to receive signals from a particular orbital location.\184\ Therefore, even if the station is on a spot beam that covers the new community, carriage of the station in the new community could still be infeasible if the station is carried on a different satellite at a different orbital location than the satellite providing local service to that community, because such carriage would require DISH to install a second satellite dish, replace an existing satellite dish, or reposition an existing satellite dish, at ``all or most households'' in the new community.\185\ We do not have sufficient information in the record to determine that the costs of customer equipment changes to accommodate reception from different orbital positions should be treated as per se infeasible. We will therefore consider assertions of this and other types of infeasibility on a case- by-case basis. --------------------------------------------------------------------------- \184\ DISH ex parte (dated Jul. 8, 2015) at 1; DISH ex parte (dated Jun. 11, 2015) at 3. \185\ See DISH ex parte (dated Jul. 8, 2015) at 1; DISH ex parte (dated Jun. 11, 2015) at 3 (arguing such situation ``would impose very significant costs'' and should constitute economic infeasibility). In this presumably rare situation, the station at issue is on a spot beam that covers the new community, but this spot beam is different than the spot beam providing local service to the new community. (In other words, there are two spot beams that cover, to some extent, the new community at issue.) In addition, the two spot beams are on different satellites located at different orbital positions and, therefore, subscribers in the new community will need two satellite dishes pointed in different directions to get both the original local stations from one spot beam and the new local station from the second spot beam. --------------------------------------------------------------------------- 34. Partial Spot Beam Coverage. The NPRM sought comment on how to handle a situation in which only part of a community could be served with the relevant spot beam.\186\ The satellite carriers oppose having to serve part of a community if the entire community is not covered by the spot beam, \187\ but DIRECTV says it determines spot-beam coverage based on zip codes and asserts that it would be able to serve a community defined as a county based on those zip codes within the county.\188\ NAB argues, however, that if carriage is viable within portions of a community that is the subject of a market modification request, then satellite carriers should be required to carry the station in those areas.\189\ We conclude that, if a satellite carrier can provide the station to only part of a new community, then it must do so. --------------------------------------------------------------------------- \186\ NPRM, para. 20 (``To the extent that a satellite carrier can provide the station at issue to some, but not all, subscribers in the community, should we allow or require the carrier to deliver the station to subscribers in the community who are capable of receiving the signal?''). \187\ See DISH Comments at 8-9 (arguing that ``any finding of technical or economic infeasibility should excuse a satellite carrier entirely from accommodating a market modification request, even if the satellite carrier can provide the station at issue to some, but not all, relevant subscribers''); DIRECTV Reply at 11, n.36 (agreeing with DISH). \188\ See DIRECTV Reply at 11-12. \189\ See NAB Comments at 9. --------------------------------------------------------------------------- 35. As discussed above, the statute requires a satellite carrier to carry a station pursuant to a market modification, unless it is not technically and economically feasible for the carrier to do so. Given the relatively large size of many counties, we conclude that it would be a disservice to consumers, and would not fully effectuate the mandate of the satellite market modification provisions of the STELAR, to presume that partial carriage to a county-defined community is per se infeasible. We are not persuaded by DISH that requiring such partial coverage of a county would necessarily ``be burdensome and cause customer confusion for a satellite carrier to target the carriage of a station down to such a granular level, for example by providing a different local broadcast station to a subset of subscribers.'' \190\ DISH provides no evidence of the burdens associated with partial carriage. Any ``confusion'' is outweighed by the benefits of providing the added station to the customers who can receive it, consistent with Congressional intent in expanding market modification to satellite carriage. On a case-by-case basis, we will consider whether the area of a new community in which service is feasible is so de minimis that addition of that community to the station's market is effectively infeasible. We also disagree with DIRECTV to the extent that it claims that ``there is no underlying requirement to provide service in any particular area to begin with,'' and therefore ``the Commission need not `excuse' any particular [market modification].'' \191\ Pursuant to the ``carry one, carry all'' statutory requirement, a satellite carrier must carry, on request, all local television broadcast stations' signals in local markets in which the satellite carrier carries at least one local television broadcast signal pursuant to the statutory copyright license.\192\ [[Page 59650]] Furthermore, the statutory language of the infeasibility exception in section 338(l)(3) contemplates that a carriage obligation would result from a market modification.\193\ If carriage were merely discretionary for the carrier, then there would be no need for the infeasibility exception to relieve the carrier of a carriage obligation. Therefore, if the carrier is providing local television broadcast stations to the new community pursuant to the local statutory copyright license, then it must also provide a station that becomes eligible for carriage as a local station in the new community by operation of the market modification.\194\ --------------------------------------------------------------------------- \190\ DISH Comments at 8-9. \191\ DIRECTV Reply at 11, n.36. \192\ See 47 U.S.C. 338. This requirement is subject to exceptions for duplicating stations and lack of good quality signal, as specified by statute and regulation. See 47 U.S.C. 338(b)(1), (c)(1); 47 CFR 76.66(g)(1), (h)(1) through (2). \193\ See 47 U.S.C. 338(l)(3) (``[a] market determination . . . shall not create additional carriage obligations . . .'' if carriage ``is not technically and economically feasible. . .''). \194\ See 47 U.S.C. 338(a). We note that, by operation of the market modification, the station will be afforded ``carry one, carry all'' carriage rights in the area of the new community in which a carrier provides the other local broadcast stations to the extent the spot beam on which it is carried covers such area of the new community. See id. If the spot beam on which the new local station is carried is different than the one providing local-into-local service to the new community, and therefore the spot beam coverage for the two beams will be different, there may be an area in the new community that had not been receiving local-into-local service, but could receive the new local station. In this situation, the new station by operation of the market modification would be eligible for carriage as a local station in such area of the new community, pursuant to 47 U.S.C. 338(a) (``carry one, carry all''). --------------------------------------------------------------------------- 2. Demonstrating Infeasibility 36. Based on the record, we expect the vast majority of satellite carrier claims of infeasibility will be related to insufficient spot beam coverage. Because of the technical complexities involved in demonstrating spot beam coverage infeasibility, including the use of proprietary confidential information, we establish a streamlined process for carriers to demonstrate spot beam coverage infeasibility through the use of detailed certifications under penalty of perjury, based on a proposal by DIRECTV. Because of the limited record with respect to other possible claims of infeasibility, and our expectation that such other claims will be relatively rare, we do not at this time establish a detailed certification process for demonstrating other types of infeasibility. Instead, carriers will be required to demonstrate other types of infeasibility through the submission of evidence specifically demonstrating the technical or economic reason that carriage is infeasible. Although prospective petitioners will have two options for seeking a Commission determination about the carrier's claim of infeasibility (i.e., filing a market modification petition or filing a separate petition beforehand solely with respect to the infeasibility issue), the requirements for demonstrating infeasibility are the same for both options. 37. The NPRM tentatively concluded that the satellite carrier has the burden to demonstrate technical or economic infeasibility and invited comment on the type of evidence needed to prove such infeasibility claims.\195\ Most commenters, including the broadcasters and DISH, agree that the statute places the burden on satellite carriers to demonstrate infeasibility; \196\ however, satellite carriers contend that a certification should be sufficient to meet its burden,\197\ while broadcasters say an ``unverifiable'' certification would be inadequate to meet their burden under the statute and that a carrier should be required to provide documentation that demonstrates infeasibility.\198\ --------------------------------------------------------------------------- \195\ NPRM, paras. 19-20. \196\ DISH Comments at 7; Gray Comments at 6-7; NAB Comments at 7; WVIR-TV Reply at 1. \197\ DIRECTV ex parte (dated Jun. 11, 2015) at 1 (stating that its proposed detailed certification would ``easily satisfy any requirement that satellite carriers `substantiate' and the Commission `examine' the technical and economic infeasibility of spot-beam carriage in these areas, even though no such requirement appears in the statute itself.''); DISH Comments at 7 (``the Commission should limit the required showing to a certification from the satellite carrier that it has analyzed the proposed market modification and has determined that it is not technically and economically feasible for such carrier to accomplish such carriage. A certification should be sufficient, because the types of evidence that the Commission might request could be technically or competitively sensitive, such as spot beam contour maps, cost of equipment upgrades, and subscriber numbers in a given geographic area.''). \198\ See NAB Reply at 2 (quoting legislative history that ``Congress intended satellite carrier claims of technical and economic infeasibility `should be well substantiated and carefully examined by the [Commission] as part of the petition consideration process.' ''); WVIR-TV Reply at 2 (arguing that the purpose of STELAR is frustrated if satellite carriers are not required to actually prove infeasibility). See also NAB Reply at 3 (``an approach that involves only an unverifiable certification would be inadequate''); Gray Comments at 6 (arguing that satellite carrier claims of infeasibility must be ``conclusively demonstrated''). --------------------------------------------------------------------------- 38. We adopt our tentative conclusion that the statute places the burden on satellite carriers to demonstrate infeasibility if they assert that carriage of a station in a new community would be technically or economically infeasible. Our conclusion is consistent with the legislative history that claims of infeasibility be ``well substantiated and carefully examined by the [Commission].'' \199\ Moreover, we agree with commenters that, as a practical matter, only the satellite carriers have the specific information necessary to determine if the carriage contemplated in a market modification would not be technically and economically feasible by operation of their satellites.\200\ --------------------------------------------------------------------------- \199\ Senate Commerce Committee Report at 11. \200\ See DISH Comments at 7; WVIR-TV Reply at 1. --------------------------------------------------------------------------- 39. We adopt a certification process for carriers to demonstrate spot beam coverage infeasibility that should avoid imposing undue expense on, or compromising the confidential business information of, the satellite carriers while also providing the Commission with an appropriate basis for making market modification determinations. We conclude that a detailed certification submitted under penalty of perjury would satisfy the carrier's burden under the statute to substantiate their claims of insufficient spot beam coverage and allow us to carefully examine such claims of infeasibility.\201\ Broadcasters argue that ``the mere `certification' proposed by satellite carriers would not comport with the legislative intent of the technical and economic infeasibility provision'' and that ``an approach that involves only an unverifiable certification would be inadequate.'' \202\ Instead, broadcasters argue that satellite carriers should be required to make detailed technical showings related to spot-beam coverage.\203\ NAB argues that if the Commission chooses to use a certification approach, then we should at least require certain supporting documentation be provided with the certification or in the event of a Commission audit of a certification.\204\ [[Page 59651]] We agree that a simple certification would not be appropriate, but we also agree with DIRECTV that it would be anomalous to require compendious and detailed evidentiary showings for spot beam coverage of modified local markets when such showings are not (and have never been) required for the provision of local service to unmodified local markets.\205\ Therefore, we adopt a certification process that requires satellite carriers to evaluate the feasibility of providing the station to the new community in the same manner that it currently uses to determine where in the relevant DMA it can provide the current local broadcast stations.\206\ These ``detailed certifications'' about spot beam coverage infeasibility must contain sufficient detail to ensure that the analysis performed by the carrier was appropriate and valid, and they will be subject to penalties for perjury to ensure its reliability. The Commission's review of the detailed certification will generally be limited to determining whether it satisfies the procedural and content requirements described herein.\207\ Although we will not require carriers to provide supporting documentation as part of their certification, as an additional check the Commission may decide to look behind any certification and require supporting documentation when we deem it appropriate, such as when there is evidence that the certification may be inaccurate.\208\ --------------------------------------------------------------------------- \201\ DIRECTV ex parte (dated Jun. 11, 2015) at 1. \202\ NAB Reply at 2. See also WVIR-TV Reply at 2 (opposing DISH's proposal to ``self-certify'' without providing supporting documentation). WVIR-TV explains that ``[s]ince information about feasibility is entirely within the possession of the DBS operator, the DBS operator should bear the burden of proving the validity of an assertion of infeasibility. Otherwise, broadcasters will be completely at the mercy of DBS operators who oppose market modifications, largely defeating the purpose of the STELAR statute, if not rendering it a nullity.'' Id. NAB also argues that a certification approach ``would also be inconsistent with the Commission's longstanding approach to market modification requests in the cable context, which involve a substantial evidentiary showing.'' NAB Reply at 2-3. The issue of infeasibility, however, is separate from our analysis of the merits of modifying a market under the statutory factors. \203\ See NAB Comments at 9 (asking the Commission ``to require satellite carriers claiming infeasibility due to insufficient spot beam coverage to provide spot beam contour diagrams to show whether a particular spot beam can be used to cover a particular community'' and ``to document that reconfiguring a spot beam, or adding a station to another spot beam that does cover an affected community would be technically or economically infeasible''); Gray Comments at 6 (arguing that satellite carriers should ``be required to conclusively demonstrate technical infeasibility''). \204\ See NAB ex parte (dated Jul. 15, 2015) at 1-2. \205\ DIRECTV ex parte (dated Jun. 11, 2015) at 1. In other words, because a carrier does not normally have to demonstrate insufficient spot beam coverage with respect to the provision of local service to a local television market (i.e., a carrier provides local service in the areas of the market covered by the relevant spot beam), it would be inconsistent to require a carrier to make a detailed demonstration of insufficient spot beam coverage with respect to the provision of local service to a new community added to such market. See DBS Broadcast Carriage Report and Order, para. 42 (allowing satellite carriers to use spot beam technology to provide local-into-local service, even if the spot beam did not cover the entire market). \206\ We note that this certification process will be explained in the consumer guide that we create to comply with the STELAR section 102(c). \207\ See infra at para. 41 (Content of Spot Beam Coverage Infeasibility Detailed Certification). \208\ 47 U.S.C. 154(i), 154(j), 308(b), 403. If we find that a satellite carrier is claiming infeasibility with respect to a significant number of requests, we may decide to start routinely requiring that carrier to provide supporting documentation with its certification. See infra at para. 40 (Supporting Documentation). See also NAB ex parte (dated Jul. 15, 2015) at 2 (urging the Commission to require carriers to file certain materials supporting certifications). --------------------------------------------------------------------------- 40. Supporting Documentation. In the event that we require supporting documentation, we will require a satellite carrier to provide its ``satellite link budget'' calculations that were created for the new community. DIRECTV explains that a ``satellite link budget is a calculation that accounts for certain factors that affect a radio signal as it travels from an uplink earth station to a space station and back down through the atmosphere to the customer's earth station receiver'' and that this technical document ``generally takes the form of a table, with entries that include (among other things) transmit power from the uplink earth station and from the satellite, antenna gains, system noise, intersystem interference, and atmospheric attenuation including the effects of `rain fade.' '' \209\ DIRECTV states that the net result of this satellite link budget calculation ``is an estimation of end-to-end satellite link performance.'' \210\ DIRECTV pointed out that the supporting materials suggested by NAB are in fact inputs for ``link budgets.'' \211\ We agree with DIRECTV and NAB that it would be appropriate to require a carrier to submit satellite link budget information if the Commission were to determine in a given case that supporting documentation should be provided to support a detailed certification.\212\ Thus, we require satellite carriers to retain such supporting documentation in the event that the Commission determines further review by the Commission is necessary. Satellite carriers must retain such supporting documentation throughout the pendency of Commission or judicial proceedings involving the certification and any related market modification petition.\213\ We find this retention period will provide parties with a reasonable amount of time to challenge certifications. If satellite carriers have concerns about providing proprietary and confidential information underlying their analysis, they may request confidentiality.\214\ --------------------------------------------------------------------------- \209\ DIRECTV ex parte (dated Jul. 23, 2015) at 1. \210\ Id. \211\ Id. NAB stated that detailed certifications provided by the carrier to demonstrate spot beam coverage infeasibility should be supported by the following documentation: ``(1) the latitude and longitude of the calculation point used for each zip code in analyzing (a) the measured performance of the spot beam covering station's local market; (b) the estimated atmospheric effects for reception of the signal; and (c) the estimated levels of interference]; (2) predicted clear-sky signal level based on actual spot beam performance; (3) rain fade statistics and predicted reductions in signal level; (4) predicted levels of inter-system interference; and (5) determination of service or ``no service'' at the calculation point (in map form with county boundaries shown).'' See NAB ex parte (dated Jul. 15, 2015) at 2. \212\ See NAB ex parte (dated Jul. 15, 2015) at 2; DIRECTV ex parte (dated Jul. 23, 2015) at 1 (``if a satellite carrier were to certify that it could not serve some or all of a proposed modified area, and Commission staff were to find a genuine dispute of fact related to such certification, the Commission could require the satellite carrier to submit a representative link budget for the area in question for staff review on a confidential basis.''). \213\ See NAB ex parte (dated Jul. 15, 2015) at 2 (seeking carrier retention of supporting material ``for a period of either: (i) Two years; or (ii) throughout the pendency of Commission or judicial proceedings involving the certification and any related market modification petition, whichever is longer''); DIRECTV ex parte (dated Jul. 23, 2015) at 2. (``Satellite carriers could be required to preserve records sufficient to generate such a representative link budget, presumably during the pendency of any market modification proceeding.''). \214\ See 47 CFR 0.457, 0.459, 76.9. --------------------------------------------------------------------------- 41. Content of Spot Beam Coverage Infeasibility Detailed Certification. Based on DIRECTV's proposed detailed certification,\215\ a satellite carrier's certification of infeasibility due to insufficient spot beam coverage must contain the following elements in order to be used and relied upon as evidence to demonstrate carrier claims of technical and economic infeasibility. First, the detailed certification must explain why carriage is not technically and economically feasible, including a detailed explanation of the ``process by which a satellite carrier has determined whether or not the spot beam in question covers the geographic area at issue.'' \216\ Second, to ensure equal treatment to all stations, the detailed certification must state that the satellite carrier ``has conducted this analysis in substantially the same manner and using substantially the same parameters used to determine the geographic area in which it currently offers stations carried on the spot beam.'' \217\ Finally, the satellite carrier must support its detailed certification with an affidavit or declaration under penalty of perjury, as contemplated under section 1.16 of the Commission's rules and 28 U.S.C. 1746,\218\ signed and dated by an authorized officer of the satellite carrier with personal knowledge of the representations provided in the certification, verifying the truth and accuracy of the information therein.\219\ --------------------------------------------------------------------------- \215\ See DIRECTV ex parte (dated Jul. 9, 2015) at 3-4. We find that DIRECTV's proposed detailed certification would meet a satellite carrier's burden to demonstrate spot beam coverage infeasibility. \216\ DIRECTV ex parte (dated Jun. 23, 2015) at 1. \217\ DIRECTV ex parte (dated Jul. 9, 2015) at 4. \218\ 47 CFR 1.16 (Declarations under penalty of perjury in lieu of affidavits). See 28 U.S.C. 1746. \219\ We further note that willful false statements in a certification are punishable by fine and/or imprisonment pursuant to 18 U.S.C. 1001, may result in loss of a satellite carrier's licenses and authorizations (47 U.S.C. 312), and may subject the satellite carrier to forfeiture (47 U.S.C. 503). See also 47 CFR 1.17. See NAB ex parte (dated Jul. 15, 2015) at 2-3. --------------------------------------------------------------------------- 42. We will consider on a case-by-case basis other claims of technical or economic infeasibility, such as DISH's [[Page 59652]] claim of infeasibility due to the costs associated with changing customer satellite dishes to accommodate reception from different orbital locations. In addition, there may be circumstances of technical and economic infeasibility not yet contemplated. As discussed above, a satellite carrier bears the burden of demonstrating that the carriage contemplated in a market modification would not be technically and economically feasible by operation of its satellites. To demonstrate such infeasibility, a carrier must provide detailed technical or economic information to substantiate its claim of infeasibility. 3. Infeasibility Determinations 43. We will resolve disputes about carrier claims of infeasibility either in the context of a market modification proceeding or, at a prospective petitioner's option, in a separate proceeding before a market modification petition is filed. Thus, a prospective petitioner has two options. First, a prospective petitioner may file its market modification petition. In such cases, a satellite carrier would raise any claim of infeasibility in response to the petition and we would make a determination about the validity of such claim (and would not further process a petition for which the resulting carriage is infeasible). We recognize that prospective petitioners may want to know about carrier's claims of infeasibility, and may want a Commission determination about the validity of such claim, before filing a market modification petition. Therefore, a prospective petitioner's second option is to initiate the pre-filing coordination process (described below). Through this process, a prospective petitioner would request information from a carrier about infeasibility and a carrier would raise any claim of infeasibility in response to this request in the form of a certification. A carrier claiming spot beam coverage infeasibility must provide the detailed certification (described above). For all other claims of infeasibility, the certification provided for here is for the purpose of a carrier to notify the prospective petitioner about the carrier's claim of infeasibility prior to a petition being filed. The prospective petitioner can then decide whether it would like to file a special relief petition to obtain a Commission determination about the validity of the carrier's claim of infeasibility.\220\ --------------------------------------------------------------------------- \220\ As discussed above, in cases other than spot beam coverage infeasibility, a carrier will be required to provide evidence to support its claim of infeasibility. In the case of a claim of spot beam coverage infeasibility, the Commission's review of the certification will generally be limited to determining whether it meets with the requirements for a ``detailed certification.'' See supra section III.D.2. --------------------------------------------------------------------------- 44. The NPRM tentatively concluded that a satellite carrier must raise any technical or economic impediments in the market modification proceeding.\221\ The NPRM sought comment on whether the Commission, in the case of satellite market modifications, should require or encourage stations seeking market modifications to contact a satellite carrier before filing a market modification request in order to get an initial determination of whether the carrier considers the request technically and economically feasible.\222\ The NPRM observed that such an initial inquiry might save some broadcasters the time and expense of compiling the standardized evidence for a modification that is not technically and economically feasible by alerting them to the technical or economic issue, which they could then take into account in deciding whether to file the request.\223\ --------------------------------------------------------------------------- \221\ NPRM, para. 19. The NPRM further considered whether the satellite carrier should be deemed to have waived technical or economic infeasibility arguments if not raised in response to the market modification request (and, thus, be prohibited from raising such a claim after a market determination, such as in response to a station's request for carriage). Id. \222\ NPRM, para. 21. \223\ NPRM, para. 21. --------------------------------------------------------------------------- 45. Most commenters support addressing satellite carrier claims of infeasibility before a broadcaster files a prospective market modification petition; \224\ however, NAB argues that a satellite carrier's claim of infeasibility should not preclude the filing of a market modification petition.\225\ Commenters seem to agree that satellite carriers generally must raise claims of technical and economic infeasibility during, if not before, the market modification proceeding.\226\ Broadcasters, however, argue that a satellite carrier should be deemed to have waived technical and economic infeasibility claims if not raised in or before a market modification proceeding,\227\ while DIRECTV argues that satellite carriers should not be precluded from raising future claims of infeasibility, such as technical infeasibility due to reduced spot beam coverage.\228\ --------------------------------------------------------------------------- \224\ DIRECTV Comments at 11; Gray Comments at 6; WVIR-TV Reply at 2 n.1. \225\ NAB Comments at 9-10. \226\ See NAB Comments at 7 (stating that ``the statute requires satellite carriers to raise any technical or economic impediments in the context of the market modification proceeding''); Gray Comments at 6 (stating ``the rules should require satellite providers to assert technical infeasibility before broadcasters go through the trouble and expense of preparing a market modification petition''); DIRECTV Comments at 11 (stating that it would be willing to provide a certification to broadcasters about ``whether DIRECTV's spot beam covers the communities they would like to add to their local markets'' before a broadcaster seeks a prospective market modification because ``[s]uch information . . . would prove of most value to stations before they undergo the time and effort of filing a market modification petition.''). \227\ NAB Comments at 7 (stating that ``that a satellite carrier be deemed to have waived technical and economic infeasibility arguments if they are not raised during a market modification proceeding''); Gray at 6 (asserting that ``[f]ailure to assert `technical infeasibility' at this stage of the process would foreclose the satellite provider from later claiming technical infeasibility.''). \228\ DIRECTV Comments at 10 n.28 (``The possibility of technical problems reducing spot-beam coverage serves as yet another reason why satellite carriers should not lose `rights' to assert feasibility issues if they do not raise them during a market modification proceeding''). --------------------------------------------------------------------------- 46. We conclude that it is most efficient and practical for stakeholders to consider and resolve satellite carrier claims of technical or economic infeasibility before petitioners go through the time and expense of seeking a prospective market modification and before the Commission uses administrative resources to evaluate the merits of a prospective market modification petition under the five statutory factors. Therefore, we slightly modify our tentative conclusion and proposal.\229\ We conclude that a satellite carrier must raise any technical or economic impediments either in the market modification proceeding or prior to the market modification proceeding in response to a broadcaster or county government inquiry about feasibility of carriage resulting from a prospective market modification.\230\ --------------------------------------------------------------------------- \229\ NPRM, para. 19. \230\ In the event that a previously feasible market modification were to later become infeasible (e.g., due to reduction of spot beam coverage), the satellite carrier must file a petition for market modification to delete the previously added new community from the station's local market and provide evidence of infeasibility (e.g., spot beam infeasibility certification). See DIRECTV Comments at 10 n.28. --------------------------------------------------------------------------- 47. Pre-Filing Coordination Process. We establish a process that will allow a prospective petitioner (broadcaster or county government), at its option, to obtain a certification from a satellite carrier about whether or not (and to what extent) carriage resulting from a contemplated market modification is technically and economically feasible for such carrier before the prospective petitioner undertakes the time and expense of preparing and filing a market modification petition.\231\ To initiate this [[Page 59653]] process, a prospective petitioner may make a request in writing to a satellite carrier for the carrier to provide the certification about the feasibility or infeasibility of carriage. A satellite carrier must respond to this request within a reasonable amount of time by providing a feasibility certification to the prospective petitioner. A satellite carrier must also file a copy of the correspondence \232\ and feasibility certification it provides to the prospective petitioner in this docket electronically via ECFS \233\ so that the Media Bureau can track these certifications and monitor carrier response time. If the carrier is claiming spot beam coverage infeasibility, then the certification provided by the carrier must be the same type of detailed certification that would be required in response to a market modification petition (discussed above).\234\ For any other claim of infeasibility, the carrier's feasibility certification must explain in detail the basis of such infeasibility \235\ and must be prepared to provide documentation in support of its claim, in the event the prospective petitioner decides to seek a Commission determination about the validity of the carrier's claim. If carriage is feasible, a statement to that effect must be provided in the certification. To obtain a Commission determination about the validity of the carrier's claim of infeasibility, a prospective petitioner must either file a (separate) petition for special relief \236\ or its market modification petition.\237\ --------------------------------------------------------------------------- \231\ See Gray Comments at 7 (stating ``there should be a procedure for resolving disputes over technical infeasibility before broadcasters invest in making the necessary market modification showing''); DIRECTV Comments at 11 (``the most efficient process regarding feasibility would be for a station that is considering filing a market modification petition to first ask the two satellite carriers if they can provide the station in the communities proposed''). Although we encourage prospective petitioners to utilize the optional procedure for obtaining information and, if necessary, Commission determinations regarding carrier claims of infeasibility, we decline to require this preliminary procedure in order to provide petitioners with flexibility to decide which procedure is best suited for their situation. \232\ Correspondence would include, for example, a brief cover letter and the prospective petitioner's initiating request for the feasibility certification provided. \233\ A satellite carrier must file the correspondence and feasibility certification electronically into this docket through the Commission's Electronic Comment Filing System (``ECFS'') using the Internet by accessing the ECFS: http://www.fcc.gov/cgb/ecfs/. The filing must be clearly designated as a ``STELAR feasibility certification'' and must clearly reference this proceeding and docket number (MB Docket No. 15-71). \234\ See supra at paras. 39-41. NAB ex parte (dated Jul. 15, 2015) at 2 (with respect to a ``pre-filing process,'' stating that ``the satellite carrier should be required to undertake the same steps and make the same certification that would be involved in connection with an actual petition''). \235\ The carrier must state in its certification that the new community is covered by the relevant spot beam, but carriage is nevertheless infeasible and explain why. \236\ See 47 CFR 76.7. \237\ The Bureau may on its own motion review the adequacy of a certification filed in the docket, but generally a prospective petitioner must request such review by filing a petition for special relief; 47 CFR 76.7. See Gray Comments at 7 (stating ``[i]f a broadcaster wishes to challenge the satellite operator's showing, it should be permitted to do so either before filing a market modification petition or concurrent with a petition as part of the market modification proceeding.''); NAB ex parte (dated Jul. 15, 2015) at 2 (stating that ``the satellite carrier's determination should be reviewable by the FCC and result in a final FCC action that could be the subject of a petition for reconsideration, applications for review (and ultimately, court review''). --------------------------------------------------------------------------- 48. For purposes of determining a reasonable amount of time for a carrier to respond to a request for a feasibility certification, we find a carrier should generally respond within 45 days of receipt of a prospective petitioner's written request; \238\ however, we find that it would be reasonable for the carrier to respond in 90 days if the carrier has to process several requests at the same time.\239\ If the response is after 45 days, the carrier must provide an explanation for the longer time period in its certification (e.g., having to respond to multiple simultaneous requests).\240\ With this process, we are trying to balance the need to provide broadcasters' with as fast a response as possible, while recognizing that satellite carriers may have difficulty responding to numerous requests at once. --------------------------------------------------------------------------- \238\ See Gray Comments at 6 (stating that satellite carriers should be required to respond to requests about spot-beam coverage within a ``specified period'' such as 30 or 45 days). \239\ DIRECTV explains that ``while DIRECTV will endeavor to respond to any and all requests as soon as it can, it should not be required to do so in fewer than 90 days, particularly if required to respond to multiple simultaneous requests.'' DIRECTV Reply at 10. \240\ If the Media Bureau finds that a carrier is routinely taking up to 90 days to respond or is not providing a reasonable explanation for when it takes 90 days to respond, the Bureau may order such carrier to respond to future requests in a shorter time period or may take other enforcement action. --------------------------------------------------------------------------- 49. The NPRM proposed that a meritorious market modification request would be granted even if such grant would not create a new carriage obligation at that time, for example, due to a finding of technical or economic infeasibility.\241\ The NPRM explained that this would ensure that, if there is a change in circumstances such that it later becomes technically and economically feasible for the satellite carrier to carry the station, then the station could assert its carriage rights pursuant to the earlier market modification.\242\ The NPRM also sought comment on whether to impose a reporting requirement on satellite carriers to notify the affected broadcaster if circumstances change at a later time making it technically and economically feasible for the carrier to carry the station.\243\ NAB supports the proposal to grant a meritorious market modification request, even if the grant would not create a new carriage obligation at that time because of a finding of technical or economic infeasibility.\244\ Commenters split regarding whether to require satellite carriers to provide notice if and when carriage later becomes feasible. Broadcasters support such a requirement,\245\ while satellite carriers oppose it.\246\ --------------------------------------------------------------------------- \241\ NPRM, para. 19. The NPRM noted that this is consistent with the cable carriage context, in which the Commission might grant a market modification, even if such grant would not result in a new carriage obligation at that time, for example, due to the station being a duplicating signal. See 47 CFR 76.56(b)(5). \242\ NPRM, para. 19. This concept is similar to the duplicating signals situation, in which a satellite carrier must add a television station to its channel line-up if such station no longer duplicates the programming of another local television station. See 47 CFR 76.66(h)(4). Alternatively, the NPRM sought comment on whether we should deny a market modification request that would not create a new carriage obligation at the time of the determination. NPRM, para. 19. \243\ NPRM, para. 20. The NPRM asked ``Would such changes in circumstances be sufficiently public so as to not necessitate the burden of such a reporting requirement? If not notified by the carrier, how else could a broadcaster find out about such a change in the feasibility of carriage?'' Id. \244\ NAB Comments at 7-8. \245\ See Gray Comments at 7 (``Satellite operators likewise should be required to notify broadcasters and the FCC within sixty days of any change that results in previously infeasible carriage becoming feasible.''); NAB Comments at 8; WVIR-TV Reply at 3. Gray suggests that this requirement include notice to the broadcaster and the Commission within sixty days of feasibility, as well as periodic reports affirming continued infeasibility. Gray Comments at 7. \246\ See DISH Comments at 8 (arguing that ``a [reporting] requirement would be unduly burdensome for the satellite carrier because it would require a carrier to constantly track and reevaluate an unknown number of market modification requests.''); DIRECTV Comments at 10 (``the Commission should not require ongoing monitoring or reporting of spot beam issues. . . . [A]bsent technical problems reducing spot-beam coverage, spot beams remain static for the life of the satellite.''). --------------------------------------------------------------------------- 50. We conclude that we will not grant a market modification petition that could not create a new carriage obligation at that time due to a finding of technical or economic infeasibility. We find that our conclusion is more consistent with the statute's requirement that a market modification ``shall not create additional carriage obligations for a satellite carrier'' if it is infeasible ``at the time of the determination.'' \247\ We also note that [[Page 59654]] claims of infeasibility related to a carrier's satellites are not likely to change for the life of a satellite, which can be as long as 15 years.\248\ Because we will not grant a market modification for which carriage would be infeasible, we find it unnecessary to require satellite carriers to provide notice if and when carriage later becomes feasible. Instead, a petitioner may re-initiate the process if at a later time a satellite carrier has deployed new satellites that could change this feasibility determination. --------------------------------------------------------------------------- \247\ See 47 U.S.C. 338(l)(3). See also Senate Commerce Committee Report at 11 (indicating an expectation that ``a petitioner may refile its petition if at a later time a satellite carrier has deployed new satellites that could change this feasibility determination''). \248\ See DIRECTV Comments at 10 (``absent technical problems reducing spot-beam coverage, spot beams remain static for the life of the satellite''); DIRECTV ex parte (dated Jul. 9, 2015) at 2 (``While the figure varies for individual satellites, 15 years represents a good `rule of thumb' for the life of a direct-to-home geostationary satellite.''). See also Amendment of Commission's Space Station Licensing Rules and Policies, IB Docket No. 00-248, First Report and Order, FCC 02-45, para. 143, 67 FR 12485, Mar. 19, 2002. --------------------------------------------------------------------------- E. No Effect on Eligibility To Receive Distant Signals via Satellite 51. We adopt our proposal to codify the language of section 338(l)(5), which provides that ``[n]o modification of a commercial television broadcast station's local market pursuant to this subsection shall have any effect on the eligibility of households in the community affected by such modification to receive distant signals pursuant to section 339, notwithstanding subsection (h)(1) of this section.'' \249\ We also adopt our interpretation of this provision as an exception to the restrictions on a satellite subscriber's eligibility to receive ``distant'' (out-of-market) signals.\250\ Commenters on this issue supported our proposal.\251\ --------------------------------------------------------------------------- \249\ 47 U.S.C. 338(l)(5); NPRM, para. 22. See 47 CFR 76.59(f). \250\ NPRM, para. 22. \251\ See DIRECTV Comments at 8 n.21; DISH Comments at 6. --------------------------------------------------------------------------- 52. The Communications Act and copyright laws set out two key restrictions on a satellite subscriber's eligibility to receive ``distant'' (out-of-market) signals.\252\ First, subscribers are generally eligible to receive a distant station from a satellite carrier only if the subscriber is ``unserved'' over the air by a local station of the same network.\253\ Second, even if ``unserved,'' a subscriber is not eligible to receive a distant station from a satellite carrier if the carrier is making ``available'' to such subscriber a local station of the same network.\254\ We conclude that section 338(l)(5) is largely intended as an exception to these two subscriber eligibility requirements. In other words, we find that the addition of a new local station to a local television market by operation of a market modification (which might otherwise restrict a subscriber's eligibility to receive a distant station) would not disqualify an otherwise eligible satellite subscriber from receiving a distant station of the same network. For example, a subscriber may be receiving a distant station because the subscriber resides in a ``short market,'' \255\ has obtained a waiver from the relevant network station,\256\ or is otherwise eligible to receive distant signals pursuant to section 339. That subscriber will continue to be eligible to receive the distant station after a market modification that adds a new local station of the same network. --------------------------------------------------------------------------- \252\ See 17 U.S.C. 119; 47 U.S.C. 339. Generally, a station is considered ``distant'' with respect to a subscriber if such station originates from outside of the subscriber's local television market (or DMA). See id. \253\ The Copyright Act defines an ``unserved household,'' with respect to a particular television network, as ``a household that cannot receive, through the use of an antenna, an over-the-air signal containing the primary stream, or, on or after the qualifying date, the multicast stream, originating in that household's local market and affiliated with that network--(i) if the signal originates as an analog signal, Grade B intensity as defined by the Federal Communications Commission in section 73.683(a) of title 47, Code of Federal Regulations, as in effect on January 1, 1999; or (ii) if the signal originates as a digital signal, intensity defined in the values for the digital television noise-limited service contour, as defined in regulations issued by the Federal Communications Commission (section 73.622(e) of title 47, Code of Federal Regulations), as such regulations may be amended from time to time. 17 U.S.C. 119(d)(10)(A). An unserved household can also be one that is subject to one of four statutory waivers or exemptions. See 47 U.S.C. 119(d)(10)(B) through (E). \254\ See 47 U.S.C. 339(a)(2); 17 U.S.C. 119(a)(3). This second restriction on eligibility is commonly referred to as the ``no distant where local'' rule. A satellite carrier makes ``available'' a local signal to a subscriber or person if the satellite carrier offers that local signal to other subscribers who reside in the same zip code as that subscriber or person. 47 U.S.C. 339(a)(2)(H). See also 17 U.S.C. 119(a)(3)(F). \255\ See 47 U.S.C. 339(a)(2)(C); 17 U.S.C. 119(d)(10). By a ``short market,'' we refer to a market in which one of the four major television networks is not offered on the primary stream of a local broadcast station, thus permitting satellite carriers to deliver a distant station affiliated with that missing network to subscribers in that market. \256\ See 47 U.S.C. 339(a)(2)(E). --------------------------------------------------------------------------- 53. The NPRM sought comment on whether section 338(l)(5) also means that the deletion of a local station from a local television market by operation of a market modification would not make otherwise ineligible subscribers now eligible to receive a distant station of the same network.\257\ We agree with DIRECTV that this provision ``was meant to ensure that households would not lose eligibility for distant signals for which they were eligible prior to modification'' and should not ``be interpreted as denying distant signals to subscribers who newly become eligible for them because they have lost their local signals through market modification.'' \258\ Thus, the deletion of a local network station from a community by operation of a market modification may allow a satellite carrier to import a distant station of the same network into such community, provided subscribers in such community would now satisfy the requirements for receipt of distant stations (pursuant to section 339). --------------------------------------------------------------------------- \257\ NPRM, para. 22. \258\ DIRECTV Comments at 7-8, n.21. --------------------------------------------------------------------------- F. Definition of Community 54. For purposes of a satellite market modification, we define a ``satellite community'' as a county, which is supported by all commenters on this issue.\259\ Consistent with the cable context, in a market modification request, the petitioner will define the satellite community (or communities) to be added or deleted from a particular station's local television market. We also retain our existing definition of a ``cable community'' for purposes of a cable market modification, having received no comment on this issue. --------------------------------------------------------------------------- \259\ See 47 CFR 76.5(gg)(2). See DISH Comments at 6; Gray Comments at 3; UCC Comments at 8; Sen. Bennet et al. Letter at 1. See also DIRECTV Reply at 11-12 (stating a county-based definition was acceptable, if certain conditions were met). --------------------------------------------------------------------------- 55. In the NPRM, as directed by the STELAR,\260\ we sought comment on how to define a ``community'' for purposes of market modification in both the cable and satellite contexts.\261\ The concept of a ``community'' is important in the market modification context because the term describes the geographic area that will be added to or deleted from a station's local television market (based on the statutory factors), which in turn determines the stations that must be carried by a cable operator or a satellite carrier to subscribers in [[Page 59655]] that community.\262\ Because of the localized nature of cable systems, cable communities are usually easily defined by the geographic boundaries of a given cable system, which are often, but not always, coincident with a municipal boundary and may vary as determined on a case-by-case basis.\263\ In the cable carriage context, the Commission considers market modification requests on a community-by-community basis \264\ and defines a community unit in terms of a ``distinct community or municipal entity'' where a cable system operates or will operate.\265\ A ``satellite community,'' however, is not as easily defined as a cable community. Unlike cable service, which reaches subscribers in a defined local area via local franchises, satellite carriers offer service on a national basis, with no connection to a particular local community or municipality. Moreover, satellite service is sometimes offered in areas of the country that do not have cable service, and thus cannot be defined by cable communities. --------------------------------------------------------------------------- \260\ Section 102(d)(2) of the STELAR requires the Commission to ``update what it considers to be a community for purposes of a modification of a market'' in both the satellite and cable contexts. See STELAR sec. 102(d)(2); 47 U.S.C.A. 338 Note. The legislative history indicates Congress' intent for the Commission ``to consider alternative definitions for community that could make the market modification process more effective and useful.'' Senate Commerce Committee Report at 12. \261\ See NPRM, para. 23. In considering how to define a ``satellite community'' for purposes of a satellite market modification, the NPRM sought comment on whether to use a cable community-based definition (as was done in the significantly viewed context; see 47 CFR 76.5(gg)), a zip code-based definition, and/or a county-based definition. See NPRM, para. 25. \262\ See NPRM, para. 24. See also 47 U.S.C. 338(a)(1); 47 CFR 76.66(b)(1). \263\ See Amendment of Part 76 of the Commission's Rules and Regulations with Respect to the Definition of a Cable Television System and the Creation of Classes of Cable Systems, Docket No. 20561, First Report and Order, FCC 77-205, para. 20 n.5, 42 FR 19329, Apr. 13, 1977 (1977 Cable Order) (citing Amendment of Parts 21, 74, and 91 to Adopt Rules and Regulations Relating to the Distribution of Television Broadcast Signals By Community Antenna Television Systems, and Related Matters, Docket Nos. 14895, 15233, 15971, Second Report and Order, FCC 66-220, para. 149, 31 FR 4540, Mar. 17, 1966 (``community'' as used in the rules must be determined case-by-case depending on the circumstances involved). \264\ See 1977 Cable Order, para. 22 (explaining that the cable carriage rules apply ``on a community-by-community basis''). See also 47 CFR 76.5(dd), 76.59. \265\ See 47 CFR 76.5(dd). A cable system community is assigned a community unit identifier number (``CUID'') when registered with the Commission, pursuant to section 76.1801 of the rules. 47 CFR 76.1801. --------------------------------------------------------------------------- 56. Satellite Community. We define a ``satellite community'' on a county basis. All commenters on this issue support this definition.\266\ DISH and Gray assert that the use of a county definition will better address the orphan county problem.\267\ In addition, UCC observes that ``[c]ounty-wide data is more easily available than community-specific data.'' \268\ We agree. DIRECTV, who initially supported only zip codes, stated in its reply that it could support a county-based definition, as long as satellite carriers are not required to provide service to the parts of a modified market outside the market's spot beam.\269\ We agree with commenters that a county definition is better suited for the national nature of satellite service and will most effectively promote access to in-state programming for subscribers in orphan counties. In addition, we agree that county-wide data will work effectively and is easily available. We also take note of the support for a county definition from both broadcasters and satellite carriers. Thus, we are persuaded that allowing satellite market modifications on a county basis would best effectuate the satellite market modification provision. --------------------------------------------------------------------------- \266\ See DISH Comments at 6; Gray Comments at 3; UCC Comments at 8; Sen. Bennet et al. Letter at 1. See also DIRECTV Reply at 11- 12 (stating a county-based definition was acceptable, if certain conditions were met). \267\ See DISH Comments at 6 (``a county-based definition will most effectively promote consumer access to in-state programming''); Gray Comments at 3 (``county-by-county approach would best carry out Congress' intent to give the FCC the tools necessary to solve the `orphan county' problem in appropriate cases''). Gray also states that ``a county-by-county approach better suits the way that satellite providers actually provide service.'' Gray Comments at 3- 4. DISH also observes that ``[t]his approach mirrors the existing statutory special exceptions in section 122 designed to address orphan counties, such as the provision allowing a satellite carrier to provide in-state local broadcast stations to two counties in Vermont that are assigned to out-of-state DMAs.'' DISH Comments at 6 (citing 17 U.S.C. 122(a)(4)(B)). \268\ UCC Comments at 8. \269\ DIRECTV Reply at 11-12. DIRECTV initially conditioned its support for a county-based definition on our requiring broadcasters to provide the zip codes corresponding with the county in the market modification petition. Id. DIRECTV later clarified that ``it should be a relatively easy task for either satellite carriers or broadcasters to associate zip codes with particular market modification requests.'' DIRECTV ex parte (dated July 9, 2015) at 2. --------------------------------------------------------------------------- 57. We find this approach preferable to defining a ``satellite community'' on a cable community \270\ or zip code basis. In the NPRM, we considered a cable community and/or a zip code as two possible definitions of a satellite community for purposes of market modification.\271\ No commenters supported the cable community-based definition. We observed the Commission's use of a cable community-based definition in the significantly viewed context.\272\ As noted above, satellite carriers, unlike cable systems, have no connection to a particular local community or municipality. Given this fact, and based on the absence of any support for this definition, we reject a cable community-based definition for the satellite market modification context. DIRECTV supports the use of zip codes, explaining it determines spot-beam coverage based on zip codes, but (as noted above) expressed qualified support for a county-based definition.\273\ DISH opposes the use of zip codes, explaining that its systems recognize DMA boundaries based on counties, and that it would be burdensome to do zip-code-based modifications.\274\ Given DIRECTV's qualified support for a county-based definition and DISH's difficulties associated with the use of zip codes, we reject a zip-code-based definition for the satellite market modification context. --------------------------------------------------------------------------- \270\ The NPRM considered the ``satellite community'' definition in the significantly viewed context, which is based on the definition of a ``cable community.'' NPRM, para. 25. See 47 CFR 76.5(gg) (defining a ``satellite community'' for the significantly viewed context). \271\ See NPRM, para. 25. \272\ See 47 CFR 76.5(gg). \273\ DIRECTV Comments at 12; DIRECTV Reply at 11. \274\ DISH ex parte (dated June 11, 2015) at 3. --------------------------------------------------------------------------- 58. Definition of ``Cable Community'' for Cable Market Modifications. We adopt our tentative conclusion to retain the existing definition of a ``cable community.'' \275\ No comments were filed on this issue. Section 76.5(dd) of the rules defines a ``community unit'' as ``[a] cable television system, or portion of a cable television system, that operates or will operate within a separate and distinct community or municipal entity (including unincorporated communities within unincorporated areas and including single, discrete unincorporated areas).'' \276\ We conclude that this definition has worked well in cable market modifications for more than 20 years and should not be changed. We find that retaining the cable definition best effectuates the cable market modification provision. Although (as discussed herein) we allow a satellite community to be defined on a county basis, we see no reason to change the definition to allow cable modifications on a county basis. Despite our objective of treating satellite market modifications and cable market modifications similarly where feasible, we find that practical differences justify different treatment on this issue. --------------------------------------------------------------------------- \275\ See NPRM, para. 23. \276\ 47 CFR 76.5(dd). --------------------------------------------------------------------------- IV. Procedural Matters A. Final Regulatory Flexibility Act Analysis 59. As required by the Regulatory Flexibility Act of 1980, as amended (RFA),\277\ an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the Notice of Proposed Rulemaking (NPRM) in this [[Page 59656]] proceeding.\278\ The Commission sought written public comment on the proposals in the NPRM, including comment on the IRFA. The Commission received no comments on the IRFA. This present Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.\279\ --------------------------------------------------------------------------- \277\ See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601 et. seq., has been amended by the Contract With America Advancement Act of 1996, Public Law 104-121, 110 Stat. 847 (1996) (CWAAA). Title II of the CWAAA is the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA). \278\ See Amendment to the Commission's Rules Concerning Market Modification; Implementation of Section 102 of the STELA Reauthorization Act of 2014; MB Docket No. 15-71, Notice of Proposed Rulemaking, FCC 15-34, 80 FR 19594, Apr. 13, 2015 (NPRM). \279\ See 5 U.S.C. 604. --------------------------------------------------------------------------- 1. Need for, and Objectives of, the Rules 60. This Report and Order adopts rules to implement section 102 of the Satellite Television Extension and Localism Act (STELA) Reauthorization Act of 2014 (``STELA Reauthorization Act'' or ``STELAR'').\280\ The STELAR amended the Communications Act and the Copyright Act to give the Commission authority to modify a commercial television broadcast station's local television market for purposes of satellite carriage rights.\281\ The Commission previously had the authority to modify markets only in the cable carriage context.\282\ With section 102 of the STELAR, Congress provides regulatory parity in this regard in order to promote consumer access to in-state and other relevant television programming. Significantly, the STELAR added a new factor for the Commission to consider when evaluating a market modification petition--``whether modifying the local market of the television station would promote consumers' access to television broadcast station signals that originate in their State of residence.'' \283\ Section 102 of the STELAR, and the Commission's actions in this Report and Order, seek to establish a market modification process for the satellite carriage context and, to the extent possible, address satellite subscribers' inability to receive in-state programming in certain areas. In this Report and Order, consistent with Congress' intent that the Commission model the satellite market modification process on the current cable market modification process, the Commission adopts rules to implement section 102 of the STELAR by revising the current cable market modification rule, section 76.59, to apply also to satellite carriage, while adding provisions to the rules to address the unique nature of satellite television service.\284\ For example, the STELAR recognizes that satellite carriage of additional stations pursuant to a market modification might be technically and economically infeasible in some circumstances.\285\ In addition to establishing rules for satellite market modifications, section 102 of the STELAR directs the Commission to consider whether it should make changes to the current cable market modification rules,\286\ and it also makes certain conforming amendments to the cable market modification statutory provision.\287\ Accordingly, as part of the implementation of the STELAR, the Commission makes conforming and other minor changes to the cable market modification rules. --------------------------------------------------------------------------- \280\ The STELA Reauthorization Act of 2014 (STELAR), sec. 102, Public Law 113-200, 128 Stat. 2059, 2060-62 (2014) (codified at 47 U.S.C. 338(l)). The STELAR was enacted on December 4, 2014 (H. R. 5728, 113th Cong.). See Report and Order, para. 1. \281\ STELAR secs. 102, 204, 128 Stat. at 2060-62, 2067. \282\ See 47 U.S.C. 534(h)(1)(C). See also 47 CFR 76.59. \283\ See 47 U.S.C. 338(l)(2)(B)(iii), 534(h)(1)(C)(ii)(III). \284\ See 47 CFR 76.59. The Commission revises section 76.59 of the rules to apply to both cable systems and satellite carriers. \285\ 47 U.S.C. 338(l)(3) (stating that ``[a] market determination . . . shall not create additional carriage obligations for a satellite carrier if it is not technically and economically feasible for such carrier to accomplish such carriage by means of its satellites in operation at the time of the determination.''). \286\ STELAR sec. 102(d). \287\ See STELAR sec. 102(b) (amending 47 U.S.C. 534(h)(1)(C)(ii)). --------------------------------------------------------------------------- 2. Summary of Significant Issues Raised by Public Comments in Response to the IRFA 61. No public comments were filed in response to the IRFA. 62. Pursuant to the Small Business Jobs Act of 2010, the Commission is required to respond to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration (SBA), and to provide a detailed statement of any change made to the proposed rules as a result of those comments.\288\ The Chief Counsel did not file any comments in response to the proposed rules in this proceeding. --------------------------------------------------------------------------- \288\ See 5 U.S.C. 604(a)(3). --------------------------------------------------------------------------- 3. Description and Estimate of the Number of Small Entities To Which the Rules Will Apply 63. The RFA directs agencies to provide a description of and an estimate of the number of small entities to which the rules will apply.\289\ The RFA generally defines the term ``small entity'' as having the same meaning as the terms ``small business,'' ``small organization,'' and ``small governmental jurisdiction.'' \290\ In addition, the term ``small business'' has the same meaning as the term ``small business concern'' under the Small Business Act.\291\ 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.\292\ The rule changes adopted herein will directly affect small television broadcast stations, small MVPD systems, which include cable system operators and satellite carriers and small county governmental jurisdictions. Below, we provide a description of such small entities, as well as an estimate of the number of such small entities, where feasible. --------------------------------------------------------------------------- \289\ 5 U.S.C. 604(a)(4). \290\ 5 U.S.C. 601(6). \291\ 5 U.S.C. 601(3) (incorporating by reference the definition of ``small business concern'' in 15 U.S.C. 632). Pursuant to 5 U.S.C. 601(3), the statutory definition of a small business applies ``unless an agency, after consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and publishes such definition(s) in the Federal Register.'' 5 U.S.C. 601(3). \292\ 15 U.S.C. 632. Application of the statutory criteria of dominance in its field of operation and independence are sometimes difficult to apply in the context of broadcast television. Accordingly, the Commission's statistical account of television stations may be over-inclusive. --------------------------------------------------------------------------- 64. Small Governmental Jurisdictions. The term ``small governmental jurisdiction'' is defined generally as ``governments of cities, counties, towns, townships, villages, school districts, or special districts, with a population of less than fifty thousand.'' \293\ Census Bureau data for 2011 indicate that there were 89,476 local governmental jurisdictions in the United States.\294\ We estimate that, of this total, a substantial majority may qualify as ``small governmental jurisdictions.'' \295\ Thus, [[Page 59657]] we estimate that most governmental jurisdictions are small. --------------------------------------------------------------------------- \293\ 5 U.S.C. 601(5). \294\ U.S. Census Bureau, Statistical Abstract of the United States: 2011, Table 427 (2007). \295\ The 2007 U.S Census data for small governmental organizations indicate that there were 89,476 local governments in 2007. U.S. CENSUS BUREAU, STATISTICAL ABSTRACT OF THE UNITED STATES 2011, Table 428. The criterion by which the size of such local governments is determined to be small is a population of fewer than 50,000. 5 U.S.C. 601(5). However, since the Census Bureau, in compiling the cited data, does not state that it applies that criterion, it cannot be determined with precision how many such local governmental organizations are small. Nonetheless, the inference seems reasonable that a substantial number of these governmental organizations have a population of fewer than 50,000. To look at Table 428 in conjunction with a related set of data in Table 429 in the Census's Statistical Abstract of the U.S., that inference is further supported by the fact that in both Tables, many sub-entities that may well be small are included in the 89,476 local governmental organizations, e.g., county, municipal, township and town, school district and special district entities. Measured by a criterion of a population of fewer than 50,000, many of the cited sub-entities in this category seem more likely than larger county- level governmental organizations to have small populations. Accordingly, of the 89,746 small governmental organizations identified in the 2007 Census, the Commission estimates that a substantial majority are small. --------------------------------------------------------------------------- 65. Wired Telecommunications Carriers. The North American Industry Classification System (``NAICS'') defines ``Wired Telecommunications Carriers'' as follows: ``This industry comprises establishments primarily engaged in operating and/or providing access to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using wired telecommunications networks. Transmission facilities may be based on a single technology or a combination of technologies. Establishments in this industry use the wired telecommunications network facilities that they operate to provide a variety of services, such as wired telephony services, including VoIP services; wired (cable) audio and video programming distribution; and wired broadband Internet services. By exception, establishments providing satellite television distribution services using facilities and infrastructure that they operate are included in this industry.'' \296\ The SBA has developed a small business size standard for wireline firms for the broad economic census category of ``Wired Telecommunications Carriers.'' Under this category, a wireline business is small if it has 1,500 or fewer employees.\297\ Census data for 2007 shows that there were 3,188 firms that operated for the entire year.\298\ Of this total, 3,144 firms had fewer than 1,000 employees, and 44 firms had 1,000 or more employees.\299\ Therefore, under this size standard, we estimate that the majority of businesses can be considered small entities. --------------------------------------------------------------------------- \296\ U.S. Census Bureau, 2012 NAICS Definitions, ``517110 Wired Telecommunications Carriers'' at http://www.census.gov/cgi-bin/sssd/naics/naicsrch. Examples of this category are: broadband Internet service providers (e.g., cable, DSL); local telephone carriers (wired); cable television distribution services; long-distance telephone carriers (wired); closed circuit television (``CCTV'') services; VoIP service providers, using own operated wired telecommunications infrastructure; direct-to-home satellite system (``DTH'') services; telecommunications carriers (wired); satellite television distribution systems; and multichannel multipoint distribution services (``MMDS''). \297\ 13 CFRCFR 121.201; NAICS code 517110. \298\ U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, ``Information: Subject Series--Estab and Firm Size: Employment Size of Establishments for the United States: 2007--2007 Economic Census,'' NAICS code 517110, Table EC0751SSSZ5; available at http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml. \299\ Id. With respect to the latter 44 firms, there is no data available that shows how many operated with more than 1,500 employees. --------------------------------------------------------------------------- 66. Cable Television Distribution Services. Since 2007, these services have been defined within the broad economic census category of Wired Telecommunications Carriers, which category is defined above.\300\ The SBA has developed a small business size standard for this category, which is: All such businesses having 1,500 or fewer employees.\301\ Census data for 2007 shows that there were 3,188 firms that operated for the entire year.\302\ Of this total, 3,144 firms had fewer than 1,000 employees, and 44 firms had 1,000 or more employees.\303\ Therefore, under this size standard, we estimate that the majority of businesses can be considered small entities. --------------------------------------------------------------------------- \300\ See also U.S. Census Bureau, 2012 NAICS Definitions, ``517110 Wired Telecommunications Carriers'' at http://www.census.gov/cgi-bin/sssd/naics/naicsrch. \301\ 13 CFR 121.201; NAICS code 517110. \302\ U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, ``Information: Subject Series--Estab and Firm Size: Employment Size of Establishments for the United States: 2007--2007 Economic Census,'' NAICS code 517110, Table EC0751SSSZ5; available at http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml. \303\ Id. With respect to the latter 44 firms, there is no data available that shows how many operated with more than 1,500 employees. --------------------------------------------------------------------------- 67. Cable Companies and Systems. The Commission has also developed its own small business size standards, for the purpose of cable rate regulation. Under the Commission's rate regulation rules, a ``small cable company'' is one serving 400,000 or fewer subscribers, nationwide.\304\ According to the Television and Cable Factbook, there are 856 cable operators.\305\ Of this total, all but 10 incumbent cable companies are small under this size standard.\306\ In addition, under the Commission's rules, a ``small system'' is a cable system serving 15,000 or fewer subscribers.\307\ Current Commission records show 4,562 cable systems nationwide.\308\ Of this total, 4,000 cable systems have fewer than 20,000 subscribers, and 562 systems have 20,000 subscribers or more, based on the same records. Thus, under this standard, we estimate that most cable systems are small. --------------------------------------------------------------------------- \304\ 47 CFR 76.901(e). The Commission determined that this size standard equates approximately to a size standard of $100 million or less in annual revenues. Implementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992: Rate Regulation, MM Docket No. 92-266, MM Docket No. 93-215, Sixth Report and Order and Eleventh Order on Reconsideration, FCC 95-196, 60 FR 35854, July 12, 1995. \305\ See Warren Communications News, ``Television and Cable Factbook 2015'', Cable Volume 2, at D-1073--D-1120. We note that, according to NCTA, there are 660 cable systems. See NCTA, Industry Data, Number of Cable Operators and Systems, http://www.ncta.com/Statistics.aspx (visited Aug. 6, 2015). Depending upon the number of homes and the size of the geographic area served, cable operators use one or more cable systems to provide video service. See Annual Assessment of the Status of Competition in the Market for Delivery of Video Programming, MB Docket No. 12-203, Fifteenth Report, FCC 13-99, para. 24 (rel. July 22, 2013) (15th Annual Competition Report). \306\ SNL Kagan, U.S. Multichannel Top Cable MSOs, http://www.snl.com/interactivex/TopCableMSOs.aspx (visited June 26, 2014). We note that when this size standard (i.e., 400,000 or fewer subscribers) is applied to all MVPD operators, all but 14 MVPD operators would be considered small. 15th Annual Competition Report, paras. 27-28 (subscriber data for DBS and Telephone MVPDs). The Commission applied this size standard to MVPD operators in its implementation of the CALM Act. See Implementation of the Commercial Advertisement Loudness Mitigation (CALM) Act, MB Docket No. 11-93, Report and Order, FCC 11-182, para. 37, 77 FR 40276, July 9, 2012 (CALM Act Report and Order) (defining a smaller MVPD operator as one serving 400,000 or fewer subscribers nationwide, as of December 31, 2011). \307\ 47 CFR 76.901(c). \308\ The number of active, registered cable systems comes from the Commission's Cable Operations and Licensing System (COALS) database on August 6, 2015. A cable system is a physical system integrated to a principal headend. We note that, according to NCTA, there are 5,208 cable systems. See NCTA, Industry Data, Number of Cable Operators and Systems, http://www.ncta.com/Statistics.aspx (visited Aug. 6, 2015). --------------------------------------------------------------------------- 68. Cable System Operators (Telecom Act Standard). The Communications Act of 1934, as amended, also contains a size standard for small cable system operators, which is ``a cable operator that, directly or through an affiliate, serves in the aggregate fewer than 1 percent of all subscribers in the United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000.'' \309\ The Commission has determined that an operator serving fewer than 677,000 subscribers shall be deemed a small operator, if its annual revenues, when combined with the total annual revenues of all its affiliates, do not exceed $250 million in the aggregate.\310\ Based on available data, we find that all but 10 incumbent cable operators are small under this size [[Page 59658]] standard.\311\ We note that the Commission neither requests nor collects information on whether cable system operators are affiliated with entities whose gross annual revenues exceed $250 million.\312\ Although it seems certain that some of these cable system operators are affiliated with entities whose gross annual revenues exceed $250,000,000, we are unable to estimate with greater precision the number of cable system operators that would qualify as small cable operators under this definition. --------------------------------------------------------------------------- \309\ 47 U.S.C. 543(m)(2); see 47 CFR 76.901(f) & nn. 1-3. \310\ 47 CFR 76.901(f); see Public Notice, FCC Announces New Subscriber Count for the Definition of Small Cable Operator, DA 01- 158 (CSB, rel. Jan. 24, 2001) (establishing the threshold for determining whether a cable operator meets the definition of small cable operator at 677,000 subscribers and stating that this threshold will remain in effect for purposes of section 76.901(f) until the Commission issues a superseding public notice). We note that current industry data indicates that there are approximately 54 million incumbent cable video subscribers in the United States today and that this updated number may be considered in developing size standards in a context different than section 76.901(f). NCTA, Industry Data, Cable's Customer Base (June 2014), https://www.ncta.com/industry-data (visited June 25, 2014). \311\ See SNL Kagan, U.S. Multichannel Top Cable MSOs, http://www.snl.com/interactivex/TopCableMSOs.aspx (visited June 26, 2014). \312\ The Commission does receive such information on a case-by- case basis if a cable operator appeals a local franchise authority's finding that the operator does not qualify as a small cable operator pursuant to [47 CFR] 76.901(f) of the Commission's rules. See 47 CFR 76.901(f). --------------------------------------------------------------------------- 69. Satellite Carriers. The term ``satellite carrier'' means an entity that uses the facilities of a satellite or satellite service licensed under Part 25 of the Commission's rules to operate in the Direct Broadcast Satellite (DBS) service or Fixed-Satellite Service (FSS) frequencies.\313\ As a general practice (not mandated by any regulation), DBS licensees usually own and operate their own satellite facilities as well as package the programming they offer to their subscribers. In contrast, satellite carriers using FSS facilities often lease capacity from another entity that is licensed to operate the satellite used to provide service to subscribers. These entities package their own programming and may or may not be Commission licensees themselves. In addition, a third situation may include an entity using a non-U.S. licensed satellite to provide programming to subscribers in the United States pursuant to a blanket earth station license.\314\ The Commission has concluded that the definition of ``satellite carrier'' includes all three of these types of entities.\315\ --------------------------------------------------------------------------- \313\ The Communications Act defines the term ``satellite carrier'' by reference to the definition in the copyright laws in title 17. See 47 U.S.C. 340(i)(1) and 338(k)(3); 17 U.S.C.119(d)(6). Part 100 of the Commission's rules was eliminated in 2002 and now both FSS and DBS satellite facilities are licensed under Part 25 of the rules. Policies and Rules for the Direct Broadcast Satellite Service, FCC 02-110, 67 FR 51110, August 7, 2002; 47 CFR 25.148. \314\ See, e.g., Application Of DIRECTV Enterprises, LLC, Request For Special Temporary Authority for the DIRECTV 5 Satellite; Application Of DIRECTV Enterprises, LLC, Request for Blanket Authorization for 1,000,000 Receive Only Earth Stations to Provide Direct Broadcast Satellite Service in the U.S. using the Canadian Authorized DIRECTV 5 Satellite at the 72.5[deg] W.L. Broadcast Satellite Service Location, Order and Authorization, DA 04-2526 (Sat. Div. rel. Aug. 13, 2004). \315\ SHVERA Significantly Viewed Report and Order, FCC 05-187, paras. 59-60. --------------------------------------------------------------------------- 70. Direct Broadcast Satellite (DBS) Service. DBS service is a nationally distributed subscription service that delivers video and audio programming via satellite to a small parabolic ``dish'' antenna at the subscriber's location. DBS, by exception, is now included in the SBA's broad economic census category, Wired Telecommunications Carriers,\316\ which was developed for small wireline businesses. Under this category, the SBA deems a wireline business to be small if it has 1,500 or fewer employees.\317\ Census data for 2007 shows that there were 3,188 firms that operated for the entire year.\318\ Of this total, 3,144 firms had fewer than 1,000 employees, and 44 firms had 1,000 or more employees.\319\ Therefore, under this size standard, the majority of such businesses can be considered small. However, the data we have available as a basis for estimating the number of such small entities were gathered under a superseded SBA small business size standard formerly titled ``Cable and Other Program Distribution.'' The definition of Cable and Other Program Distribution provided that a small entity is one with $12.5 million or less in annual receipts.\320\ Currently, only two entities provide DBS service, which requires a great investment of capital for operation: DIRECTV and DISH Network.\321\ Each currently offers subscription services. DIRECTV and DISH Network each reports annual revenues that are in excess of the threshold for a small business. Because DBS service requires significant capital, we believe it is unlikely that a small entity as defined by the SBA would have the financial wherewithal to become a DBS service provider. --------------------------------------------------------------------------- \316\ This category of Wired Telecommunications Carriers is defined above (``By exception, establishments providing satellite television distribution services using facilities and infrastructure that they operate are included in this industry.''). U.S. Census Bureau, 2012 NAICS Definitions, ``517110 Wired Telecommunications Carriers'' at http://www.census.gov/cgi-bin/sssd/naics/naicsrch. \317\ 13 CFR 121.201; NAICS code 517110. \318\ U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, ``Information: Subject Series--Estab and Firm Size: Employment Size of Establishments for the United States: 2007--2007 Economic Census,'' NAICS code 517110, Table EC0751SSSZ5; available at http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml. \319\ Id. With respect to the latter 44 firms, there is no data available that shows how many operated with more than 1,500 employees. \320\ 13 CFR 121.201; NAICS code 517510 (2002). \321\ See 15th Annual Competition Report, at para. 27. As of June 2012, DIRECTV is the largest DBS operator and the second largest MVPD in the United States, serving approximately 19.9 million subscribers. DISH Network is the second largest DBS operator and the third largest MVPD, serving approximately 14.1 million subscribers. Id. at paras. 27, 110-11. --------------------------------------------------------------------------- 71. Satellite Master Antenna Television (SMATV) Systems, also known as Private Cable Operators (PCOs). SMATV systems or PCOs are video distribution facilities that use closed transmission paths without using any public right-of-way. They acquire video programming and distribute it via terrestrial wiring in urban and suburban multiple dwelling units such as apartments and condominiums, and commercial multiple tenant units such as hotels and office buildings. SMATV systems or PCOs are now included in the SBA's broad economic census category, Wired Telecommunications Carriers,\322\ which was developed for small wireline businesses. Under this category, the SBA deems a wireline business to be small if it has 1,500 or fewer employees.\323\ Census data for 2007 shows that there were 3,188 firms that operated for the entire year.\324\ Of this total, 3,144 firms had fewer than 1,000 employees, and 44 firms had 1,000 or more employees.\325\ Therefore, under this size standard, the majority of such businesses can be considered small. --------------------------------------------------------------------------- \322\ This category of Wired Telecommunications Carriers is defined above (``By exception, establishments providing satellite television distribution services using facilities and infrastructure that they operate are included in this industry.''). U.S. Census Bureau, 2012 NAICS Definitions, ``517110 Wired Telecommunications Carriers'' at http://www.census.gov/cgi-bin/sssd/naics/naicsrch. \323\ 13 CFR 121.201; NAICS code 517110. \324\ U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, ``Information: Subject Series--Estab and Firm Size: Employment Size of Establishments for the United States: 2007--2007 Economic Census,'' NAICS code 517110, Table EC0751SSSZ5; available at http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml. \325\ Id. With respect to the latter 44 firms, there is no data available that shows how many operated with more than 1,500 employees. --------------------------------------------------------------------------- 72. Home Satellite Dish (HSD) Service. HSD or the large dish segment of the satellite industry is the original satellite-to-home service offered to consumers, and involves the home reception of signals transmitted by satellites operating generally in the C-band frequency. Unlike DBS, which uses small dishes, HSD antennas are between four and eight feet in diameter and can receive a wide range of unscrambled (free) programming and scrambled programming purchased from program packagers that are licensed to facilitate subscribers' receipt of video programming. Because HSD provides subscription services, HSD falls within the SBA-recognized definition of Wired [[Page 59659]] Telecommunications Carriers.\326\ The SBA has developed a small business size standard for this category, which is: all such businesses having 1,500 or fewer employees.\327\ Census data for 2007 shows that there were 3,188 firms that operated for the entire year.\328\ Of this total, 3,144 firms had fewer than 1,000 employees, and 44 firms had 1,000 or more employees.\329\ Therefore, under this size standard, we estimate that the majority of businesses can be considered small entities. --------------------------------------------------------------------------- \326\ This category of Wired Telecommunications Carriers is defined above (``By exception, establishments providing satellite television distribution services using facilities and infrastructure that they operate are included in this industry.''). U.S. Census Bureau, 2012 NAICS Definitions, ``517110 Wired Telecommunications Carriers'' at http://www.census.gov/cgi-bin/sssd/naics/naicsrch. \327\ 13 CFR 121.201; NAICS code 517110. \328\ U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, ``Information: Subject Series--Estab and Firm Size: Employment Size of Establishments for the United States: 2007--2007 Economic Census,'' NAICS code 517110, Table EC0751SSSZ5; available at http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml. \329\ Id. With respect to the latter 44 firms, there is no data available that shows how many operated with more than 1,500 employees. --------------------------------------------------------------------------- 73. Open Video Services. The open video system (OVS) framework was established in 1996, and is one of four statutorily recognized options for the provision of video programming services by local exchange carriers.\330\ The OVS framework provides opportunities for the distribution of video programming other than through cable systems. Because OVS operators provide subscription services,\331\ OVS falls within the SBA small business size standard covering cable services, which is Wired Telecommunications Carriers.\332\ The SBA has developed a small business size standard for this category, which is: all such businesses having 1,500 or fewer employees.\333\ Census data for 2007 shows that there were 3,188 firms that operated for the entire year.\334\ Of this total, 3,144 firms had fewer than 1,000 employees, and 44 firms had 1,000 or more employees.\335\ Therefore, under this size standard, we estimate that the majority of businesses can be considered small entities. In addition, we note that the Commission has certified some OVS operators, with some now providing service.\336\ Broadband service providers (``BSPs'') are currently the only significant holders of OVS certifications or local OVS franchises.\337\ The Commission does not have financial or employment information regarding the entities authorized to provide OVS, some of which may not yet be operational. Thus, again, at least some of the OVS operators may qualify as small entities. --------------------------------------------------------------------------- \330\ 47 U.S.C. 571(a)(3) through (4). See Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming, MB Docket No. 06-189, Thirteenth Annual Report, FCC 07- 206, para. 135, 74 FR 11102, March 16, 2009 (2009) (``Thirteenth Annual Cable Competition Report''). \331\ See 47 U.S.C. 573. \332\ This category of Wired Telecommunications Carriers is defined above. See also U.S. Census Bureau, 2012 NAICS Definitions, ``517110 Wired Telecommunications Carriers'' at http://www.census.gov/cgi-bin/sssd/naics/naicsrch. \333\ 13 CFR 121.201; NAICS code 517110. \334\ U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, ``Information: Subject Series--Estab and Firm Size: Employment Size of Establishments for the United States: 2007--2007 Economic Census,'' NAICS code 517110, Table EC0751SSSZ5; available at http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml. \335\ Id. With respect to the latter 44 firms, there is no data available that shows how many operated with more than 1,500 employees. \336\ A list of OVS certifications may be found at http://www.fcc.gov/mb/ovs/csovscer.html. \337\ See Thirteenth Annual Cable Competition Report, para. 135. BSPs are newer businesses that are building state-of-the-art, facilities-based networks to provide video, voice, and data services over a single network. --------------------------------------------------------------------------- 74. Wireless cable systems--Broadband Radio Service and Educational Broadband Service. Wireless cable systems use the Broadband Radio Service (BRS) \338\ and Educational Broadband Service (EBS) \339\ to transmit video programming to subscribers. In connection with the 1996 BRS auction, the Commission established a small business size standard as an entity that had annual average gross revenues of no more than $40 million in the previous three calendar years.\340\ The BRS auctions resulted in 67 successful bidders obtaining licensing opportunities for 493 Basic Trading Areas (BTAs). Of the 67 auction winners, 61 met the definition of a small business. BRS also includes licensees of stations authorized prior to the auction. At this time, we estimate that of the 61 small business BRS auction winners, 48 remain small business licensees. In addition to the 48 small businesses that hold BTA authorizations, there are approximately 392 incumbent BRS licensees that are considered small entities.\341\ After adding the number of small business auction licensees to the number of incumbent licensees not already counted, we find that there are currently approximately 440 BRS licensees that are defined as small businesses under either the SBA or the Commission's rules. In 2009, the Commission conducted Auction 86, the sale of 78 licenses in the BRS areas.\342\ The Commission offered three levels of bidding credits: (i) A bidder with attributed average annual gross revenues that exceed $15 million and do not exceed $40 million for the preceding three years (small business) received a 15 percent discount on its winning bid; (ii) a bidder with attributed average annual gross revenues that exceed $3 million and do not exceed $15 million for the preceding three years (very small business) received a 25 percent discount on its winning bid; and (iii) a bidder with attributed average annual gross revenues that do not exceed $3 million for the preceding three years (entrepreneur) received a 35 percent discount on its winning bid.\343\ Auction 86 concluded in 2009 with the sale of 61 licenses.\344\ Of the 10 winning bidders, two bidders that claimed small business status won four licenses; one bidder that claimed very small business status won three licenses; and two bidders that claimed entrepreneur status won six licenses. --------------------------------------------------------------------------- \338\ BRS was previously referred to as Multipoint Distribution Service (MDS) and Multichannel Multipoint Distribution Service (MMDS). See Amendment of Parts 21 and 74 of the Commission's Rules with Regard to Filing Procedures in the Multipoint Distribution Service and in the Instructional Television Fixed Service and Implementation of Section 309(j) of the Communications Act-- Competitive Bidding, MM Docket No. 94-131, PP Docket No. 93-253, Report and Order, FCC 95-230, para. 7, 60 FR 36524, Jul. 17, 1995. \339\ EBS was previously referred to as the Instructional Television Fixed Service (ITFS). See id. \340\ 47 CFR 21.961(b)(1). \341\ 47 U.S.C. 309(j). Hundreds of stations were licensed to incumbent MDS licensees prior to implementation of section 309(j) of the Communications Act of 1934, 47 U.S.C. 309(j). For these pre- auction licenses, the applicable standard is SBA's small business size standard of 1,500 or fewer employees. \342\ Auction of Broadband Radio Service (BRS) Licenses, Scheduled for October 27, 2009, Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments, and Other Procedures for Auction 86, AU Docket No. 09-56, Public Notice, DA 09-1376 (WTB rel. Jun. 26, 2009). \343\ Id. \344\ Auction of Broadband Radio Service Licenses Closes, Winning Bidders Announced for Auction 86, Down Payments Due November 23, 2009, Final Payments Due December 8, 2009, Ten-Day Petition to Deny Period, Public Notice, DA 09-2378 (WTB rel. Nov. 6, 2009). --------------------------------------------------------------------------- 75. In addition, the SBA's placement of Cable Television Distribution Services in the category of Wired Telecommunications Carriers is applicable to cable-based Educational Broadcasting Services. Since 2007, these services have been defined within the broad economic census category of Wired Telecommunications Carriers,\345\ [[Page 59660]] which was developed for small wireline businesses. The SBA has developed a small business size standard for this category, which is: All such businesses having 1,500 or fewer employees.\346\ Census data for 2007 shows that there were 3,188 firms that operated for the entire year.\347\ Of this total, 3,144 firms had fewer than 1,000 employees, and 44 firms had 1,000 or more employees.\348\ Therefore, under this size standard, we estimate that the majority of businesses can be considered small entities. In addition to Census data, the Commission's internal records indicate that as of September 2012, there are 2,241 active EBS licenses.\349\ The Commission estimates that of these 2,241 licenses, the majority are held by non-profit educational institutions and school districts, which are by statute defined as small businesses.\350\ --------------------------------------------------------------------------- \345\ This category of Wired Telecommunications Carriers is defined above. See also U.S. Census Bureau, 2012 NAICS Definitions, ``517110 Wired Telecommunications Carriers'' at http://www.census.gov/cgi-bin/sssd/naics/naicsrch. \346\ 13 CFR 121.201; NAICS code 517110. \347\ U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, ``Information: Subject Series--Estab and Firm Size: Employment Size of Establishments for the United States: 2007--2007 Economic Census,'' NAICS code 517110, Table EC0751SSSZ5; available at http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml. \348\ Id. With respect to the latter 44 firms, there is no data available that shows how many operated with more than 1,500 employees. \349\ http://wireless2.fcc.gov/UlsApp/UlsSearch/results.jsp. \350\ The term ``small entity'' within SBREFA applies to small organizations (non-profits) and to small governmental jurisdictions (cities, counties, towns, townships, villages, school districts, and special districts with populations of fewer than 50,000). 5 U.S.C. 601(4) through (6). --------------------------------------------------------------------------- 76. Incumbent Local Exchange Carriers (ILECs). Neither the Commission nor the SBA has developed a small business size standard specifically for incumbent local exchange services. ILECs are included in the SBA's economic census category, Wired Telecommunications Carriers.\351\ Under this category, the SBA deems a wireline business to be small if it has 1,500 or fewer employees.\352\ Census data for 2007 shows that there were 3,188 firms that operated for the entire year.\353\ Of this total, 3,144 firms had fewer than 1,000 employees, and 44 firms had 1,000 or more employees.\354\ Therefore, under this size standard, the majority of such businesses can be considered small. --------------------------------------------------------------------------- \351\ This category of Wired Telecommunications Carriers is defined above. See also U.S. Census Bureau, 2012 NAICS Definitions, ``517110 Wired Telecommunications Carriers'' at http://www.census.gov/cgi-bin/sssd/naics/naicsrch. \352\ 13 CFR 121.201; NAICS code 517110. \353\ U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, ``Information: Subject Series--Estab and Firm Size: Employment Size of Establishments for the United States: 2007--2007 Economic Census,'' NAICS code 517110, Table EC0751SSSZ5; available at http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml. \354\ Id. With respect to the latter 44 firms, there is no data available that shows how many operated with more than 1,500 employees. --------------------------------------------------------------------------- 77. Small Incumbent Local Exchange Carriers. We have included small incumbent local exchange carriers in this present RFA analysis. A ``small business'' under the RFA is one that, inter alia, meets the pertinent small business size standard (e.g., a telephone communications business having 1,500 or fewer employees), and ``is not dominant in its field of operation.'' \355\ The SBA's Office of Advocacy contends that, for RFA purposes, small incumbent local exchange carriers are not dominant in their field of operation because any such dominance is not ``national'' in scope.\356\ We have therefore included small incumbent local exchange carriers in this RFA analysis, although we emphasize that this RFA action has no effect on Commission analyses and determinations in other, non-RFA contexts. --------------------------------------------------------------------------- \355\ 15 U.S.C. 632. \356\ Letter from Jere W. Glover, Chief Counsel for Advocacy, SBA, to William E. Kennard, Chairman, FCC (May 27, 1999). The Small Business Act contains a definition of ``small-business concern,'' which the RFA incorporates into its own definition of ``small business.'' See 15 U.S.C. 632(a) (Small Business Act); 5 U.S.C. 601(3) (RFA). SBA regulations interpret ``small business concern'' to include the concept of dominance on a national basis. See 13 CFR 121.102(b). --------------------------------------------------------------------------- 78. Competitive Local Exchange Carriers (CLECs), Competitive Access Providers (CAPs), Shared-Tenant Service Providers, and Other Local Service Providers. Neither the Commission nor the SBA has developed a small business size standard specifically for these service providers. These entities are included in the SBA's economic census category, Wired Telecommunications Carriers.\357\ Under this category, the SBA deems a wireline business to be small if it has 1,500 or fewer employees.\358\ Census data for 2007 shows that there were 3,188 firms that operated for the entire year.\359\ Of this total, 3,144 firms had fewer than 1,000 employees, and 44 firms had 1,000 or more employees.\360\ Therefore, under this size standard, the majority of such businesses can be considered small. --------------------------------------------------------------------------- \357\ This category of Wired Telecommunications Carriers is defined above. See also U.S. Census Bureau, 2012 NAICS Definitions, ``517110 Wired Telecommunications Carriers'' at http://www.census.gov/cgi-bin/sssd/naics/naicsrch. \358\ 13 CFR 121.201; NAICS code 517110. \359\ U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, ``Information: Subject Series--Estab and Firm Size: Employment Size of Establishments for the United States: 2007--2007 Economic Census,'' NAICS code 517110, Table EC0751SSSZ5; available at http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml. \360\ Id. With respect to the latter 44 firms, there is no data available that shows how many operated with more than 1,500 employees. --------------------------------------------------------------------------- 79. Television Broadcasting. This economic census category ``comprises establishments primarily engaged in broadcasting images together with sound.'' \361\ The SBA has created the following small business size standard for such businesses: Those having $38.5 million or less in annual receipts.\362\ The 2007 U.S. Census indicates that 808 firms in this category operated in that year. Of that number, 709 had annual receipts of $25,000,000 or less, and 99 had annual receipts of more than $25,000,000.\363\ Because the Census has no additional classifications that could serve as a basis for determining the number of stations whose receipts exceeded $38.5 million in that year, we conclude that the majority of television broadcast stations were small under the applicable SBA size standard. --------------------------------------------------------------------------- \361\ U.S. Census Bureau, 2012 NAICS Definitions, ``515120 Television Broadcasting,'' at http://www.census.gov/cgi-bin/sssd/naics/naicsrch. This category description continues, ``These establishments operate television broadcasting studios and facilities for the programming and transmission of programs to the public. These establishments also produce or transmit visual programming to affiliated broadcast television stations, which in turn broadcast the programs to the public on a predetermined schedule. Programming may originate in their own studios, from an affiliated network, or from external sources.'' \362\ 13 CFR 121.201; 2012 NAICS code 515120. \363\ U.S. Census Bureau, Table No. EC0751SSSZ4, Information: Subject Series--Establishment and Firm Size: Receipts Size of Firms for the United States: 2007 (515120), http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2007_US_51SSSZ4&prodType=table. --------------------------------------------------------------------------- 80. Apart from the U.S. Census, the Commission has estimated the number of licensed commercial television stations to be 1,390 stations.\364\ Of this total, 1,221 stations (or about 88 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 July 2, 2014. In addition, the Commission has estimated the number of licensed noncommercial educational (NCE) television stations to be 395.\365\ NCE stations are non-profit, and therefore considered to be small entities.\366\ Therefore, we estimate that [[Page 59661]] the majority of television broadcast stations are small entities. --------------------------------------------------------------------------- \364\ See Broadcast Station Totals as of December 31, 2014, Press Release (MB rel. Jan. 7, 2015) (Broadcast Station Totals) at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-331381A1.pdf. \365\ See Broadcast Station Totals, supra. \366\ See generally 5 U.S.C. 601(4), (6). --------------------------------------------------------------------------- 81. We note, however, that in assessing whether a business concern qualifies as small under the above definition, business (control) affiliations \367\ must be included. Our estimate, therefore, likely overstates the number of small entities that might be affected by our action because the revenue figure on which it is based does not include or aggregate revenues from affiliated companies. In addition, an element of the definition of ``small business'' is that the entity not be dominant in its field of operation. We are unable at this time to define or quantify the criteria that would establish whether a specific television station is dominant in its field of operation. Accordingly, the estimate of small businesses to which rules may apply does not exclude any television station from the definition of a small business on this basis and is therefore possibly over-inclusive to that extent. --------------------------------------------------------------------------- \367\ ``[Business concerns] are affiliates of each other when one concern controls or has the power to control the other or a third party or parties controls or has to power to control both.'' 13 CFR 21.103(a)(1). --------------------------------------------------------------------------- 82. Class A TV and LPTV Stations. The same SBA definition that applies to television broadcast stations would apply to licensees of Class A television stations and low power television (LPTV) stations, as well as to potential licensees in these television services. As noted above, the SBA has created the following small business size standard for this category: those having $38.5 million or less in annual receipts.\368\ The Commission has estimated the number of licensed Class A television stations to be 431.\369\ The Commission has also estimated the number of licensed LPTV stations to be 2,003.\370\ Given the nature of these services, we will presume that these licensees qualify as small entities under the SBA definition. --------------------------------------------------------------------------- \368\ 13 CFR 121.201; NAICS code 515120. \369\ See Broadcast Station Totals, supra. \370\ See Broadcast Station Totals, supra. --------------------------------------------------------------------------- 4. Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements for Small Entities 83. The Report and Order revises section 76.59 of the rules to apply also to the satellite television context. The new satellite rules permit commercial television broadcast stations, satellite carriers and county governments to file petitions seeking to modify a commercial television broadcast station's local television market for purposes of satellite carriage rights.\371\ Under section 76.59 of the rules, commercial TV broadcast stations and cable system operators may already file such requests for market modification for purposes of cable carriage rights. Consistent with the current cable requirements, the adopted rules require petitioners to file market modification requests and/or responsive pleadings in accordance with the procedures for filing Special Relief petitions in section 76.7 of the rules.\372\ Consistent with the current cable requirements, the adopted rules require petitioners to provide specific forms of evidence to support market modification petitions, should they ch0ose to file such petitions.\373\ A television broadcast station that becomes eligible for mandatory satellite carriage by operation of a market modification may elect retransmission consent or mandatory carriage with respect to a satellite carrier within 30 days of the market determination.\374\ A satellite carrier must commence carriage within 90 days of receiving the station's request for carriage.\375\ --------------------------------------------------------------------------- \371\ See Report and Order para. 9. \372\ See Report and Order paras. 12-13. Broadcasters and satellite carriers that want to oppose market modification requests would need to file responsive pleadings in accordance with 47 CFR 76.7. \373\ See Report and Order para. 17 (discussing evidentiary requirements for filing market modification petitions). These requirements are codified in 47 CFR 76.59. \374\ See Report and Order at para. 24. Carriage elections must be made in accordance with the procedures set forth in section 76.66(d)(1). See Report and Order at para. 26. Section 76.66(d)(1) requires that an election request made by a television station must be in writing and sent to the satellite carrier's principal place of business, by certified mail, return receipt requested. 47 CFR 76.66(d)(1)(ii). The rule requires that a television station's written notification shall include the following information: (1) Station's call sign; (2) Name of the appropriate station contact person; (3) Station's address for purposes of receiving official correspondence; (4) Station's community of license; (5) Station's DMA assignment; and (6) Station's election of mandatory carriage or retransmission consent. 47 CFR 76.66(d)(1)(iii). \375\ See Report and Order at para. 25. --------------------------------------------------------------------------- 84. The Report and Order establishes a process that will allow a prospective petitioner (i.e., broadcaster or county government) to obtain a certification from a satellite carrier about whether or not (and to what extent) carriage resulting from a contemplated market modification is technically and economically feasible for such carrier before the prospective petitioner undertakes the time and expense of preparing and filing a market modification petition.\376\ To initiate this process, a prospective petitioner may make a request in writing to a satellite carrier for the carrier to provide the certification about the feasibility or infeasibility of carriage. A satellite carrier must respond to this request within a reasonable amount of time by providing a feasibility certification to the prospective petitioner.\377\ A satellite carrier must also file a copy of the correspondence and feasibility certification it provides to the prospective petitioner in this docket electronically via ECFS so that the Media Bureau can track these certifications and monitor carrier response time. If the carrier is claiming spot beam coverage infeasibility, then the certification provided by the carrier must be the same detailed certification that would be required in response to a market modification petition.\378\ For any other claim of infeasibility, the carrier's feasibility certification must explain in detail the basis of such infeasibility and must be prepared to provide documentation in support of its claim, in the event the prospective petitioner decides to challenge the carrier's claim.\379\ If carriage is feasible, a statement to that effect must be provided in the certification.\380\ If a broadcaster or county government has concerns about the adequacy of the carrier's certification, or has some reason to question the validity of the carrier's certification, the broadcaster or county government may raise such concerns in a (separate) petition for special relief or its market modification petition.\381\ --------------------------------------------------------------------------- \376\ See Report and Order para. 45. \377\ Id. With respect to what would be a reasonable amount of time for a carrier to respond to a request for a feasibility certification, we expect carriers will generally be able to respond within 45 days of receipt of a prospective petitioner's written request; however, we find that it would be reasonable for the satellite carrier to respond in 90 days if the carrier has to process several requests at the same time. If the response is after 45 days, the carrier must provide an explanation for the longer time period in its certification (e.g., having to respond to multiple simultaneous requests). If the Media Bureau finds that a carrier is routinely taking up to 90 days to respond or is not providing a reasonable explanation for when it takes 90 days to respond, the Bureau may order such carrier to respond to future requests in a shorter time period or may take other enforcement action. With this process, we are trying to balance the need to provide broadcasters' with as fast a response as possible, while recognizing that satellite carriers may have problems responding to numerous requests at once. \378\ See Report and Order paras. 37-39. \379\ See Report and Order para. 45. \380\ See Report and Order para. 45. \381\ See Report and Order para. 45. --------------------------------------------------------------------------- 85. The adopted rules require a satellite carrier to provide a detailed and specialized certification to demonstrate its claim that satellite carriage resulting from a market modification would be technically or economically infeasible due to insufficient spot beam coverage.\382\ Satellite carriers will be required to provide supporting [[Page 59662]] documentation upon request by the Commission and must therefore retain such supporting documentation substantiating potential review by the Commission.\383\ As noted in section C of this FRFA, neither one of the satellite carriers, DISH nor DIRECTV, qualify as a small entity and small businesses do not generally have the financial ability to become DBS licensees because of the high implementation costs associated with satellite services. --------------------------------------------------------------------------- \382\ See Report and Order paras. 35-36. \383\ See Report and Order para. 35. --------------------------------------------------------------------------- 5. Steps Taken To Minimize Significant Economic Impact on Small Entities, and Significant Alternatives Considered 86. The RFA requires an agency to describe the steps the agency has taken to minimize the significant economic impact on small entities consistent with the stated objectives of applicable statutes, including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the final rule and why each one of the other significant alternatives to the rule considered by the agency which affect the impact on small entities was rejected.\384\ --------------------------------------------------------------------------- \384\ 5 U.S.C. 604(a)(6). --------------------------------------------------------------------------- 87. Consistent with the statute's goal of promoting regulatory parity between cable and satellite service, the Report and Order applies the existing cable market modification rules to the satellite context, while adding provisions to the rules to address the unique nature of satellite television service. Therefore, the adopted rules for the first time allow a commercial television broadcast station to request a modification of its local television market for purposes of satellite carriage. Small TV stations that choose to file satellite market modification petitions must comply with the associated filing and evidentiary requirements (explained in section D of the FRFA); however, the filing of such petitions is voluntary. In addition, small TV stations may want to respond to a petition to modify its market (or the market of a competitor station) filed by a satellite carrier or a competitor station; however, there are no standardized evidentiary requirements associated with such responsive pleadings. Through a market modification process, a small TV station may gain or lose carriage rights with respect to a particular community, based on the five statutory factors, to better reflect localism.\385\ --------------------------------------------------------------------------- \385\ See Report and Order para. 6. Section 338(l) of the Act provides that, in deciding requests for market modifications, the Commission must afford particular attention to the value of localism by taking into account the following five factors: (1) Whether the station, or other stations located in the same area--(a) have been historically carried on the cable system or systems within such community; and (b) have been historically carried on the satellite carrier or carriers serving such community; (2) whether the television station provides coverage or other local service to such community; (3) whether modifying the local market of the television station would promote consumers' access to television broadcast station signals that originate in their State of residence; (4) whether any other television station that is eligible to be carried by a satellite carrier in such community in fulfillment of the requirements of this section provides news coverage of issues of concern to such community or provides carriage or coverage of sporting and other events of interest to the community; and (5) evidence of viewing patterns in households that subscribe and do not subscribe to the services offered by multichannel video programming distributors within the areas served by such multichannel video programming distributors in such community. 47 U.S.C. 338(l)(2)(B)(i) through (v). See also discussion at Report and Order at section III.B. --------------------------------------------------------------------------- 88. In the IRFA, we invited small TV stations to comment on whether they are more or less likely, on the whole, to benefit from market modifications.\386\ In addition, we invited comment on whether there are any alternatives we should consider to the Commission's proposed implementation of section 102 of the STELAR that would minimize any adverse impact on small TV stations, but which are consistent with the statute and its goals, such as promoting localism and regulatory parity.\387\ We received no comments in direct response to these inquiries. In comments to the NPRM, Gray Television, Inc. (``Gray'') proposed that the Commission should establish a presumption in favor of applying prior cable market modification determinations to satellite markets to lower the burden on television broadcast stations, including small stations.\388\ In the Report and Order, the Commission rejected Gray's proposal, finding it was inconsistent with the statute's requirement to apply the statutory factors to each market modification petition.\389\ The Commission did observe, however, that consideration of historic carriage is one of the five statutory factors that the Commission is required to consider in evaluating market modification requests and explained that consideration under such factor would ``give sufficient weight to prior decisions without the need to establish a presumption.'' \390\ --------------------------------------------------------------------------- \386\ NPRM, para. 25. \387\ Id. \388\ Comments of Gray Television, Inc., MB Docket No. 15-71, at 4-5 (filed May 13, 2015) (Gray Comments). \389\ See Report and Order para. 23 (explaining the reasons for not establishing a presumption that prior cable market determinations should apply to satellite markets). \390\ Id. --------------------------------------------------------------------------- 89. Unique to satellite market modifications, the STELAR provides that a satellite carrier is not required to carry a station pursuant to a market modification if it is not technically and economically feasible for the carrier to do so.\391\ The Report and Order allows satellite carriers to demonstrate spot beam coverage infeasibility by providing a detailed and specialized certification under penalty of perjury.\392\ To avoid unnecessary burdens on broadcasters, satellite carriers, and the Commission, the Report and Order established a process for the parties to exchange information regarding feasibility of carriage prior to the filing of a prospective market modification petition.\393\ The adopted rules allow TV broadcast stations to request a certification regarding claims of technical or economic infeasibility from a satellite carrier before filing a prospective market modification petition, and the station may seek review of such certification by filing a petition for special relief before filing a prospective petition for market modification.\394\ This process will particularly benefit small stations, allowing them to avoid the time and expense of filing a market modification petition that could not result in carriage of the station. In comments to the NPRM, the Virginia Broadcasting Corp. (``WVIR-TV'') expressed concern that a certification approach would not provide broadcasters with sufficient information to challenge the validity of the satellite carrier's claim of infeasibility.\395\ The Report and Order addressed this concern by requiring a detailed and specialized certification that is subject to penalties for perjury and which would contain sufficient detail to ensure that the analysis performed by the satellite carrier was appropriate and valid.\396\ --------------------------------------------------------------------------- \391\ See 47 U.S.C. 338(l)(3) (providing that ``[a] market determination . . . shall not create additional carriage obligations for a satellite carrier if it is not technically and economically feasible for such carrier to accomplish such carriage by means of its satellites in operation at the time of the determination.''). See also discussion in Report and Order at section III.D. \392\ See Report and Order para. 36. \393\ See section D of this FRFA. \394\ See Report and Order paras. 39-40. \395\ Reply Comments of Virginia Broadcasting Corp., MB Docket No. 15-71, at 1 (filed May 28, 2015) (WVIR-TV Reply) (urging the Commission ``to reject suggestions by DBS operators that would impose heavy burdens on broadcasters seeking market modifications-- burdens that would be particularly onerous for small market television stations--by withholding information that is uniquely in their possession regarding technical and economic infeasibility or by requiring broadcasters to provide support for market modification requests that goes well beyond what is required in the cable television context.''). \396\ See Report and Order paras. 35-36. --------------------------------------------------------------------------- [[Page 59663]] 90. The adopted rules, for the first time, allow satellite carriers to request market modifications. The adopted rules also allow satellite carriers to assert claims of infeasibility by certification, which will minimize the burden on them, although the Commission may require satellite carriers to provide documentation upon request.\397\ As previously discussed, only two entities--DIRECTV and DISH Network-- provide direct broadcast satellite (DBS) service, which requires a great investment of capital for operation. As noted in section C of this FRFA, neither one of these two entities qualify as a small entity and small businesses do not generally have the financial ability to become DBS licensees because of the high implementation costs associated with satellite services. --------------------------------------------------------------------------- \397\ See Report and Order para. 35. --------------------------------------------------------------------------- 6. Report to Congress 91. The Commission will send a copy of the Report and Order, including this FRFA, in a report to be sent to Congress pursuant to the Congressional Review Act.\398\ In addition, the Commission will send a copy of the Report and Order, including this FRFA, to the Chief Counsel for Advocacy of the SBA. A copy of the Report and Order and FRFA (or summaries thereof) will also be published in the Federal Register.\399\ --------------------------------------------------------------------------- \398\ See 5 U.S.C. 801(a)(1)(A). \399\ See 5 U.S.C. 604(b). --------------------------------------------------------------------------- B. Final Paperwork Reduction Act Analysis 92. This document contains modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA).\400\ The requirements will be submitted to the Office of Management and Budget (OMB) for review under section 3507(d) of the PRA. OMB, the general public, and other Federal agencies will be invited to comment on the information collection requirements contained in this proceeding. The Commission will publish a separate document in the Federal Register at a later date seeking these comments. In addition, we note that pursuant to the Small Business Paperwork Relief Act of 2002 (SBPRA),\401\ we previously sought specific comment on how the Commission might further reduce the information collection burden for small business concerns with fewer than 25 employees. --------------------------------------------------------------------------- \400\ The Paperwork Reduction Act of 1995 (PRA), Public Law 104- 13, 109 Stat. 163 (1995) (codified in Chapter 35 of title 44 U.S.C.). See OMB Control Number 3060-0546. The Commission received pre-approval for this modified collection on June 17, 2015; however, we are making additional modifications to this collection in this Report and Order. \401\ The Small Business Paperwork Relief Act of 2002 (SBPRA), Publaw Law 107-198, 116 Stat. 729 (2002) (codified in Chapter 35 of title 44 U.S.C.). See 44 U.S.C. 3506(c)(4). --------------------------------------------------------------------------- C. Congressional Review Act 93. The Commission will send a copy of this Report and Order in a report to be sent to Congress and the Government Accountability Office, pursuant to the Congressional Review Act.\402\ --------------------------------------------------------------------------- \402\ See 5 U.S.C. 801(a)(1)(A). --------------------------------------------------------------------------- V. Ordering Clauses 94. Accordingly, it is ordered that, pursuant to section 102 of the STELA Reauthorization Act of 2014 (STELAR), Public Law 113-200, 128 Stat. 2059 (2014), and sections 1, 4(i), 303(r), 325, 338 and 614 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 303(r), 325, 338 and 534, this Report and Order is hereby adopted, effective thirty (30) days after the date of publication in the Federal Register. 95. It is further ordered that the Commission's rules are hereby amended as set forth in Appendix B of the Report and Order and will become effective November 2, 2015, except for 47 CFR 76.59(a) and (b), which contain information collection requirements that have not been approved by OMB. The Federal Communications Commission will publish a document in the Federal Register announcing the effective date. 96. It is further ordered that the Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this Report and Order, including the Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration. List of Subjects in 47 CFR Part 76 Broadcast television, Cable television, Satellite television. Federal Communications Commission. Marlene H. Dortch, Secretary. Final Rules For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 76 as follows: PART 76--MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE 0 1. The authority citation for part 76 continues to read as follows: Authority: 47 U.S.C. 151, 152, 153, 154, 301, 302, 302a, 303, 303a, 307, 308, 309, 312, 315, 317, 325, 338, 339, 340, 341, 503, 521, 522, 531, 532, 534, 535, 536, 537, 543, 544, 544a, 545, 548, 549, 552, 554, 556, 558, 560, 561, 571, 572, 573. 0 2. Section 76.5 is amended by revising paragraph (gg) to read as follows: Sec. 76.5 Definitions. * * * * * (gg) Satellite community. (1) For purposes of the significantly viewed rules (see Sec. 76.54), a separate and distinct community or municipal entity (including unincorporated communities within unincorporated areas and including single, discrete unincorporated areas). The boundaries of any such unincorporated community may be defined by one or more adjacent five-digit zip code areas. Satellite communities apply only in areas in which there is no pre-existing cable community, as defined in paragraph (dd) of this section. (2) For purposes of the market modification rules (see Sec. 76.59), a county. * * * * * 0 3. Section 76.7 is amended by revising paragraph (a)(3) to read as follows: Sec. 76.7 General special relief, waiver, enforcement, complaint, show cause, forfeiture, and declaratory ruling procedures. (a) * * * (3) Certificate of service. Petitions and Complaints shall be accompanied by a certificate of service on any cable television system operator, multichannel video programming distributor, franchising authority, station licensee, permittee, or applicant, or other interested person who is likely to be directly affected if the relief requested is granted. * * * * * 0 4. Section 76.59 is amended by revising paragraphs (a), (b)(1) and (2), and (b)(5) and (6), adding paragraph (b)(7), revising paragraph (d), and adding paragraphs (e) and (f) to read as follows: Sec. 76.59 Modification of television markets. (a) The Commission, following a written request from a broadcast station, cable system, satellite carrier or county government (only with respect to satellite modifications), may deem that the television market, as defined either by Sec. 76.55(e) or Sec. 76.66(e), of a particular commercial television broadcast station should include additional communities within its television market or exclude communities from such station's television market. In this respect, communities may be considered part of more than one television market. (b) * * * (1) A map or maps illustrating the relevant community locations and [[Page 59664]] geographic features, station transmitter sites, cable system headend or satellite carrier local receive facility locations, terrain features that would affect station reception, mileage between the community and the television station transmitter site, transportation routes and any other evidence contributing to the scope of the market. (2) Noise-limited service contour maps (for full-power digital stations) or protected contour maps (for Class A and low power television stations) delineating the station's technical service area and showing the location of the cable system headends or satellite carrier local receive facilities and communities in relation to the service areas. Note to paragraph (b)(2): Service area maps using Longley-Rice (version 1.2.2) propagation curves may also be included to support a technical service exhibit. * * * * * (5) Cable system or satellite carrier channel line-up cards or other exhibits establishing historic carriage, such as television guide listings. (6) Published audience data for the relevant station showing its average all day audience (i.e., the reported audience averaged over Sunday-Saturday, 7 a.m.-1 a.m., or an equivalent time period) for both multichannel video programming distributor (MVPD) and non-MVPD households or other specific audience indicia, such as station advertising and sales data or viewer contribution records. (7) If applicable, a statement that the station is licensed to a community within the same state as the relevant community. * * * * * (d) A cable operator or satellite carrier shall not delete from carriage the signal of a commercial television station during the pendency of any proceeding pursuant to this section. (e) A market determination under this section shall not create additional carriage obligations for a satellite carrier if it is not technically and economically feasible for such carrier to accomplish such carriage by means of its satellites in operation at the time of the determination. (f) No modification of a commercial television broadcast station's local market pursuant to this section shall have any effect on the eligibility of households in the community affected by such modification to receive distant signals from a satellite carrier pursuant to 47 U.S.C. 339. 0 5. Section 76.66 is amended by adding paragraph (d)(6) and revising paragraph (e)(1) introductory text to read as follows: Sec. 76.66 Satellite broadcast signal carriage. * * * * * (d) * * * (6) Carriage after a market modification. Television broadcast stations that become eligible for mandatory carriage with respect to a satellite carrier (pursuant to Sec. 76.66) due to a change in the market definition (by operation of a market modification pursuant to Sec. 76.59) may, within 30 days of the effective date of the new definition, elect retransmission consent or mandatory carriage with respect to such carrier. A satellite carrier shall commence carriage within 90 days of receiving the carriage election from the television broadcast station. The election must be made in accordance with the requirements in paragraph (d)(1) of this section. (e) Market definitions. (1) A local market, in the case of both commercial and noncommercial television broadcast stations, is the designated market area in which a station is located, unless such market is amended pursuant to Sec. 76.59, and * * * * * [FR Doc. 2015-24999 Filed 10-1-15; 8:45 am] BILLING CODE 6712-01-P
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significant individual or cumulative Office. The Department therefore List of Subjects in 43 CFR Part 1820
effect on the human environment and certifies that this final rule does not Administrative practice and
therefore requires neither an represent a governmental action capable procedure, Archives and records, Public
environmental assessment nor an of interference with constitutionally lands.
environmental impact statement. protected property rights.
Dated: September 19, 2015.
Regulatory Flexibility Act Executive Order 13132, Federalism Janice M. Schneider,
Congress enacted the Regulatory Assistant Secretary, Land and Minerals
In accordance with Executive Order
Flexibility Act of 1980 (5 U.S.C. 601, et Management.
13132, the BLM finds that this rule does
seq.) to ensure that Government For the reasons discussed in the
regulations do not unnecessarily or not have sufficient federalism
implications to warrant the preparation preamble, the Bureau of Land
disproportionately burden small Management amends 43 CFR part 1820
entities. This final rule is a purely of a federalism summary impact
statement. as follows:
administrative regulatory action having
no effect upon the public or the This final rule does not have PART 1820—APPLICATION
environment and it has been determined substantial direct effects on the States, PROCEDURES
that the rule will not have a significant on the relationship between the national
effect on the economy or small entities. governments and the States, or the ■ 1. The authority citation for part 1820
distribution of power and the continues to read as follows:
Small Business Regulatory Enforcement
responsibilities among the various Authority: 5 U.S.C. 552, 43 U.S.C. 2, 1201,
Fairness Act
levels of government. This final rule 1733, and 1740.
This final rule is a purely does not preempt State law.
administrative regulatory action having Subpart 1821—General Information
no effects upon the public or the Executive Order 12988, Civil Justice
economy. This is not a major rule under Reform ■ 2. Amend § 1821.10 in paragraph (a)
the Small Business Regulatory by revising the entry for the Eastern
This final rule is a purely
Enforcement Fairness Act (5 U.S.C. States Office to read as follows:
administrative regulatory action having
804(2)). This rule will not have an
no effects upon the public. It will not § 1821.10 Where are BLM offices located?
annual effect on the economy of $100
unduly burden the judicial system, and (a) * * *
million or more. This rule will not cause
meets the requirements of Sections 3(a)
a major increase in costs of prices for State Offices and Areas of Jurisdiction
and 3(b)(2) of the Executive Order.
consumers, individual industries,
Federal, State, or local government Executive Order 13175, Consultation * * * * *
agencies, or geographic regions. This and Coordination With Indian Tribal Eastern States Office, 20 M Street SE.,
rule will not have significant adverse Governments Suite 950, Washington, DC 20003—
effects on competition, employment, Arkansas, Iowa, Louisiana, Minnesota,
investment, productivity, innovation, or In accordance with the Executive Missouri, and all States east of the
the ability of United States-based Order 13175, the BLM finds that this Mississippi River.
enterprises to complete with foreign- rule does not include policies that have * * * * *
based enterprises. tribal implications. This final rule is [FR Doc. 2015–25027 Filed 10–1–15; 8:45 am]
purely an administrative action having BILLING CODE 4310–GJ–P
Unfunded Mandate Reform Act no effects upon the public or the
The BLM has determined that this environment, imposing no costs, and
final rule is not significant under the merely updates the Eastern States Office FEDERAL COMMUNICATIONS
Unfunded Mandates Reform Act of 1995 address included in the Code of Federal COMMISSION
because the rule will not result in the Regulations.
expenditure by State, local, and tribal 47 CFR Part 76
governments, in the aggregate, or by the Executive Order 13211, Actions
Concerning Regulations That [MB Docket No. 15–71; FCC 15–111]
private sector, of $100 million or more
in any one year. Further, this final rule Significantly Affect Energy Supply,
Television Market Modification;
will not significantly or uniquely affect Distribution, or Use
Statutory Implementation
small governments. It does not require
In accordance with Executive Order AGENCY: Federal Communications
action by any non-Federal government
13211, the BLM has determined that Commission.
entity. Therefore, the information
this final rule will not have substantial
required by the Unfunded Mandates ACTION: Final rule.
direct effects on the energy supply,
Reform Act (2 U.S.C. 1531 et seq.), is not
distribution or use, including a shortfall SUMMARY: In this document, the
required.
in supply or price increase. This final Commission adopts satellite television
Executive Order 12630, Government rule is a purely administrative action market modification rules to implement
Action and Interference With and has no implications under section 102 of the Satellite Television
Constitutionally Protected Property Executive Order 13211. Extension and Localism Act
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Rights (Takings) Reauthorization (STELAR) Act of 2014.
Paperwork Reduction Act
As required by Executive Order The STELAR gives the Commission
12630, the Department of the Interior The Paperwork Reduction Act does authority to modify a commercial
has determined that this rule would not not apply because this rule does not television broadcast station’s local
cause a taking of private property. No contain any information collection television market for purposes of
private property rights would be requirements that require the approval satellite carriage rights. In this
affected by a rule that merely reports an of the Office of Management and Budget document, the Commission revises the
address change for the Eastern States under 44 U.S.C. 3501, et seq. current cable market modification rule
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carried by the satellite carrier in the provides a means to avoid rigid 8. Section 338(l) states that, in ruling
DMA,23 and satellite carriers are not adherence to DMA designations and to on requests for market modifications for
required to carry more than one affiliate promote consumer access to in-state and purposes of satellite carriage, the
station of a particular network in a DMA other relevant television Commission must afford particular
(even if the affiliates do not programming.29 To better reflect market attention to the value of localism by
substantially duplicate their realities and effectuate these purposes, taking into account the following five
programming), unless the stations are section 338(l), like the corresponding factors:
licensed to communities in different cable provision in section 614(h)(1)(C), (1) Whether the station, or other
states.24 Satellite carriers are also not permits the Commission to add stations located in the same area—(a)
required to carry an otherwise qualified communities to, or delete communities have been historically carried on the
station if the station fails to provide a from, a station’s local television market cable system or systems within such
good quality signal to the satellite following a written request.30 community; and (b) have been
carrier’s local receive facility.25 Furthermore, as in the cable carriage historically carried on the satellite
7. STELAR section 102, which adds context, the Commission may determine carrier or carriers serving such
section 338(l) of the Act, creates a that particular communities are part of community;
satellite market modification regime more than one television market.31 As in (2) Whether the television station
very similar to that in place for cable, the cable carriage context, when the provides coverage or other local service
while adding provisions to address the Commission modifies a station’s market to such community;
unique nature of satellite television to add a community for purposes of (3) Whether modifying the local
service.26 Market modification, which carriage rights, the station is considered market of the television station would
has been available in the cable carriage local and is covered by the local promote consumers’ access to television
context since 1992,27 will allow the statutory copyright license and may broadcast station signals that originate
Commission to modify the local assert mandatory carriage (or pursue in their State of residence;
television market of a commercial retransmission consent) by the (4) Whether any other television
television broadcast station to enable applicable satellite carrier in the local station that is eligible to be carried by
those broadcasters and satellite carriers market.32 Conversely, if the Commission a satellite carrier in such community in
to better serve the interests of local modifies a station’s market to delete a fulfillment of the requirements of this
communities.28 Market modification community, the station is considered section provides news coverage of
‘‘distant’’ and loses its right to assert issues of concern to such community or
noncommercial station for more than 50 percent of mandatory carriage (or retransmission provides carriage or coverage of sporting
prime time, as defined by [47 CFR] 76.5(n), and consent) on the applicable satellite and other events of interest to the
more than 50 percent outside of prime time over a community; and
three month period, provided, however, that after carrier in the local market.33 We note
three noncommercial television stations are carried, that, in the cable carriage context, (5) Evidence of viewing patterns in
the test of duplication shall be whether more than market modifications pertain to households that subscribe and do not
50 percent of prime time programming and more individual stations in specific cable subscribe to the services offered by
than 50 percent outside of prime time programming multichannel video programming
is duplicative on a non-simultaneous basis.’’ 47 communities and apply only to the
CFR 76.66(h)(7). particular cable system named in the distributors within the areas served by
23 47 U.S.C. 338(c)(1); 47 CFR 76.66(h)(1). ‘‘A petition.34 such multichannel video programming
satellite carrier may select which duplicating signal distributors in such community.35
in a market it shall carry.’’ 47 CFR 76.66(h)(2). local information’’). See also Broadcast Localism, These statutory factors largely mirror
24 47 U.S.C. 338(c)(1); 47 CFR 76.66(h)(1). ‘‘A
MB Docket No. 04–233, Report on Broadcast those originally set forth for cable in
satellite carrier may select which network affiliate Localism and Notice of Proposed Rulemaking, FCC
in a market it shall carry.’’ 47 CFR 76.66(h)(3). section 614(h)(1)(C)(ii) of the Act. To the
07–218, paras. 49–50, 73 FR 8255, Feb. 13, 2008
However, a satellite carrier must carry network (Broadcast Localism Report). extent the factors differ from the
affiliated television stations licensed to different 29 Broadcast Localism Report, para. 50. The previous factors applicable to cable, the
states, but located in the same market, even if the Commission has observed that, in some cases, STELAR section 102 makes conforming
stations meet the definition of substantial general reliance on DMAs to define a station’s
duplication under the Commission’s rules. See changes to the cable factors.36 These
market may not provide viewers with the most local
Implementation of the Satellite Home Viewer programming. Id. at paras. 49–50. Certain DMAs include adding a fifth factor (inserted as
Improvement Act of 1999: Broadcast Signal cross state borders and, in such cases, current factor number three) to section
Carriage Issues, Retransmission Consent Issues, CS Commission rules sometimes require carriage of the 614(h)(1)(C)(ii) to ‘‘promote consumers’
Docket Nos. 00–96 and 99–363, Report and Order, broadcast signal of an out-of-state station rather
FCC 00–417, para. 80, 66 FR 7410, Jan. 23, 2001 than that of an in-state station. Id. The Commission
access to television broadcast station
(DBS Broadcast Carriage Report and Order). If two has observed that such cases may weaken localism, signals that originate in their State of
stations located in different states (but within the since viewers are often more likely to receive residence.’’ 37 Thus, STELAR creates
same local market) duplicate each other, but are not information of local interest and relevance—
network affiliates, the satellite carrier only has to
parallel factors for satellite and cable.38
particularly local weather and other emergency
carry one. Id. information and local news and electoral and
25 47 U.S.C. 338(b)(1); 47 CFR 76.66(g)(1). A public affairs—from a station located in the state in Broadcast Signal Carriage Issues, MM Docket No.
television station asserting its right to carriage is which they live. Id. 92–259, Report and Order, FCC 93–144, para. 47,
required to bear the costs associated with delivering 30 47 U.S.C. 338(l)(1), 534(h)(1)(C). 58 FR 17350, April 2, 1993 (Must Carry Order)
a good quality signal to the designated local- 31 47 U.S.C. 338(l)(2)(A). (stating that ‘‘the statute is intended to permit the
receive-facility of the satellite carrier or to another 32 Section 204 of the STELAR amends the local
modification of a station’s market to reflect its
facility that is acceptable to at least one-half the individual situation’’); 47 CFR 76.59.
statutory copyright license in 17 U.S.C. 122 to the 35 47 U.S.C. 338(l)(2)(B)(i) through (v) (discussed
stations asserting the right to carriage in the local effect that when the Commission modifies a
market. Id. station’s market for purposes of satellite carriage in section III.B. below).
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26 See 47 U.S.C. 338(l), 534(h)(1)(C). 36 See 47 U.S.C. 534(h)(1)(C)(ii), as amended by
rights, the station is considered local and is covered
27 See 47 CFR 76.59.
by the local statutory copyright license. See 17 STELAR sec. 102(b).
28 See In-State Broadcast Programming: Report to U.S.C. 122(j)(2)(E) (as amended by STELAR sec. 37 See 47 U.S.C. 534(h)(1)(C)(ii)(III) (‘‘whether
Congress Pursuant to Section 304 of the Satellite 204); 47 U.S.C. 338. See also 17 U.S.C.U.S.C. modifying the market of the television station
Television Extension and Localism Act of 2010, MB 111(f)(4) (defining ‘‘local service area of a primary would promote consumers’ access to television
Docket No. 10–238, Report, DA 11–1454, paras. 55– transmitter’’ for cable carriage copyright purposes); broadcast station signals that originate in their State
59 (MB rel. Aug. 29, 2011) (In-State Programming 47 U.S.C. 534(h)(1)(C). of residence’’).
33 See id.
Report) (stating that ‘‘market modifications could 38 Shortly after our final rules are published in the
potentially address special situations in 34 See Implementation of the Cable Television Federal Register, we will implement section 102(c)
underserved areas and facilitate greater access to Consumer Protection and Competition Act of 1992, Continued
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![59640 Federal Register / Vol. 80, No. 191 / Friday, October 2, 2015 / Rules and Regulations
9. The STELAR, however, provides a section 76.59 of our rules—the current 102(d) of the STELAR, however, directs
unique exception applicable only in the cable market modification rule—to the Commission to ensure in both the
satellite context, providing that a market apply in both the cable and satellite cable and satellite contexts that
modification: contexts.44 We also adopt our proposal ‘‘procedures for the filing and
shall not create additional carriage to amend section 76.59 to reflect the consideration of a written request . . .
obligations for a satellite carrier if it is not STELAR provisions that apply uniquely fully effectuate the purposes of the
technically and economically feasible for to satellite carriers, such as affording amendments made by this section.’’ 50
such carrier to accomplish such carriage by carriers with an exception if the In the NPRM, consistent with the cable
means of its satellites in operation at the time resulting carriage is ‘‘not technically
of the determination.39 rule, we proposed to allow only the
and economically feasible .’’ Finally, we
involved commercial broadcast station
Also unique to satellite, the STELAR define a ‘‘satellite community’’ for
or the satellite carrier to file a satellite
provides that a market modification will purposes of market modification and
retain our existing definition of a ‘‘cable market modification request because
not have ‘‘any effect on the eligibility of
community.’’ only these entities have carriage rights
households in the community affected
by such modification to receive distant or obligations at stake.51 The NPRM
A. Standing and Procedures To Request sought comment on any alternative
signals pursuant to section 339 [of the Market Modification
Act].’’ 40 Like the cable provision, approaches and observed that some
section 338(l) gives the Commission 120 12. We conclude that the involved local governments had previously
days to act on a request for market broadcaster, satellite carrier and county sought the ability to petition for market
modification and does not allow a government may file a satellite market modifications on behalf of their
carrier to delete from carriage the signal modification petition.45 We choose a citizens.52 The NPRM tentatively
of a commercial television station slightly modified alternative to the concluded to limit the participation of
during the pendency of any market procedure proposed in the NPRM,46 and local governments and individuals to
modification proceeding.41 deviate from the cable rule which filing comments in support of, or in
10. On March 26, 2015, we began this allows only the involved broadcaster opposition to, particular market
proceeding by issuing a Notice of and cable operator to file cable modification requests and sought
Proposed Rulemaking (NPRM).42 We petitions, in order to more fully comment on this tentative conclusion.53
received 12 comments and five reply effectuate the core purpose of this
Broadcasters and the satellite carriers
comments in response. With this Report provision of the STELAR to promote
supported the NPRM’s proposal,
and Order, we satisfy the STELAR’s consumer access to in-state and other
relevant programming. asserting that only the involved station
mandate that the Commission adopt
13. Section 338(l)(1) of the Act or satellite carrier ‘‘have rights or
final rules in this proceeding on or
permits the Commission to modify a obligations that are directly affected by
before September 4, 2015.43
local television market ‘‘following a a market modification’’ and therefore
III. Discussion written request,’’ but does not specify only such entities should have standing
11. Consistent with the STELAR’s the appropriate party to make such to file requests to modify these rights or
goal of regulatory parity, we largely requests.47 The corresponding cable obligations.54 Some commenters,
model the satellite market modification statutory provision in section however, advocate that county
process on the existing process for cable 614(h)(1)(C)(i) of the Act contains nearly governments should be allowed to
and adopt our proposal to amend identical language in this regard.48 In
interpreting the cable provision, the cable operator). The Commission reasoned that ‘‘the
of the STELAR by creating a consumer guide that Commission concluded that the fact that Congress made must carry an elective
will explain the market modification rules and involved broadcaster and cable operator choice for broadcasters diminishes the argument
procedures as revised and adopted in this that third parties have standing to demand carriage
proceeding, and by posting the guide on the
are the only appropriate parties to file of a broadcast station on a cable system. A
Commission’s Web site. Section 102(c) requires the market modification requests.49 Section subscriber’s ability to receive the benefits provided
Commission to ‘‘make information available to from must carry is predicated upon a station’s
consumers on its Web site that explains the market 44 See 47 CFR 76.59. election to exercise its rights under the statute. No
modification process.’’ STELAR 102(c); 47 U.S.C.A. 45 See 47 CFR 76.59(a). statute or Commission rule requires a broadcaster
338 Note. Such information must include: ‘‘(1) who 46 NPRM, para. 8. to allow its signal to be carried on a local cable
may petition to include additional communities 47 47 U.S.C. 338(l)(1).
system because another party wishes to view it.
within, or exclude communities from, a—(A) local 48 47 U.S.C. 338(l)(1) (‘‘Following a written
Instead, broadcasters are given a choice whether to
market (as defined in section 122(j) of title 17, demand carriage under must carry, to negotiate
United States Code); or (B) television market (as request, the Commission may, with respect to a carriage under the retransmission consent
determined under section 614(h)(1)(C) of the particular commercial television broadcast station, provisions, or not to be carried on a particular cable
Communications Act of 1934 (47 U.S.C. include additional communities within its local system at all.’’ See Wiegand v. Post Newsweek, para.
534(h)(1)(C))); and (2) the factors that the market or exclude communities from such station’s 10.
Commission takes into account when responding to local market to better effectuate the purposes of this 50 STELAR sec. 102(d)(2) directs the Commission
a petition described in paragraph (1).’’ See 47 U.S.C. section.) See 47 U.S.C. 534(h)(1)(C)(i) (‘‘For
to consider as part of this rulemaking whether the
338(l)(2)(B)(i) through (v); 47 U.S.C. purposes of this section, a broadcasting station’s
‘‘procedures for the filing and consideration of a
market shall be determined by the Commission by
534(h)(1)(C)(ii)(I) through (V). written request under sections 338(l) and
39 47 U.S.C. 338(l)(3)(A) (discussed in section
regulation or order using, where available,
commercial publications which delineate television 614(h)(1)(C) of the Communications Act of 1934 (47
III.D. below). markets based on viewing patterns, except that, U.S.C. 338(l); 534(h)(1)(C)) fully effectuate the
40 47 U.S.C. 338(l)(5) (discussed in section III.E.
following a written request, the Commission may, purposes of the amendments made by this section.’’
below). Section 339 of the Act provides for the with respect to a particular television broadcast See 47 U.S.C.A. 338 Note.
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satellite carriage of distant stations under certain station, include additional communities within its
51 NPRM, para. 8.
conditions. See 47 U.S.C. 339. television market or exclude communities from 52 NPRM, para. 9. See In-State Programming
41 47 U.S.C. 338(l)(3)(B), (4). Report, para. 58.
such station’s television market to better effectuate
42 Amendment to the Commission’s Rules the purposes of this section. . . .’’). 53 Id. The NPRM also asked ‘‘how else satellite
Concerning Market Modification; Implementation of 49 See Must Carry Order, para. 46; John Wiegand subscribers or their representatives can
Section 102 of the STELA Reauthorization Act of v. Post Newsweek Pacifica Cable, Inc., CSR 4179– meaningfully advocate for the receipt of in-state
2014; MB Docket No. 15–71, Notice of Proposed M, Memorandum Opinion and Order, FCC 01–239 programming via satellite.’’ Id.
Rulemaking, FCC 15–34, 80 FR 19594, Apr. 13, (rel. Aug. 24, 2001) (Wiegand v. Post Newsweek) 54 DIRECTV Comments at 7, n.20; DISH
2015 (NPRM). (limiting standing in the must carry and market Comments at 3; NAB Comments at 3–4. See NPRM,
43 STELAR sec. 102(d)(1). modification contexts to the affected broadcaster or para. 8.
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![Federal Register / Vol. 80, No. 191 / Friday, October 2, 2015 / Rules and Regulations 59641
petition for market modifications on We acknowledge that station carriage our rules require petitioners to provide
behalf of their citizens.55 relies in part on business decisions specific evidence to demonstrate the
14. Upon further consideration involving broadcasters and satellite five statutory factors and that much of
pursuant to section 102(d) of the carriers and that without the willing this information may not be easily
STELAR, we conclude that we will participation of the affected broadcaster, obtained by county governments.61 To
better effectuate the purposes of the modifying the market of a particular avoid dismissal based on a failure to
STELAR (to promote consumer access to television station, in itself, would not meet our specific evidentiary
in-state programming) by also result in consumer access to that requirements, we strongly encourage
permitting a county governmental entity station.59 However, by allowing a county government petitioners to enlist
(such as a county board, council, county government to file a satellite the aid and cooperation of the station
commission or other equivalent market modification on behalf of its they wish to bring to their county.
subdivision) to file a satellite market residents, we seek to empower orphan Moreover, to the extent the involved
modification petition, as advocated by counties to eliminate certain legal station opposes carriage in the county,
some commenters.56 Allowing a county barriers which may have deprived local a county government may not want to
government to petition for market residents of the cultural, sports, political go through the time and expense of
modification for its community is and local news relevant to the state in filing a petition to expand such station’s
appropriate given our decision to define which they reside.60 We recognize that market to include its county.
a satellite community on a county 15. We acknowledge that we are
basis.57 We also are mindful of the economies rather than the out-of-state implementing a procedural aspect of
record in the In-State Programming advertisements that air on the in-market stations section 338(l)(1) in a manner that differs
they receive. Commenters opine that their inability
Report proceeding, which reflects to access in-state advertising has a continuing
from our implementation of section
numerous examples of counties in negative impact on their communities through the 614(h)(1)(C)(i), despite the nearly
which consumers have little or no loss of revenue.’’). We also note that consumers identical language of the two
access to in-state broadcast stations.58 have raised similar concerns in the record for the provisions.62 We find that a different
Commission’s pending Report to Congress on DMAs
required by section 109 of the STELAR. See, e.g.,
procedure is appropriate to implement
55 See Letter from Michael F. Bennet, U.S.
Leroy Axtell Comments (seeking in-state stations for STELAR’s directive in section 102(d) for
Senator, Colo.; Cory Gardner, U.S. Senator, Colo.; Fairfield County, CT); Spencer Karter Comments purposes of filing a market modification
and Scott Tipton, U.S. Representative, Colo. to Tom (seeking in-state stations for Greenville County, SC);
Wheeler, Chairman, FCC, dated April 14, 2015 at
petition in the satellite context.
Richard Bolt Comments in MB Docket No. 15–43
(‘‘Sen. Bennet et al. Letter’’). See also Letter from (filed May 15, 2015) (seeking in-state stations for
Significantly, the record and case
Mike D. Rogers, U.S. Representative, Ala.; Robert Garrett County, MD); Kyle Ramie Comments in MB studies in the 2011 In-State
Aderholt, U.S. Representative, Ala. to Tom Docket No. 15–43 (filed May 6, 2015), Timothy Programming Report show that the
Wheeler, Chairman, FCC dated May 12, 2015 at 1 Brastow Comments in MB Docket No. 15–43 (filed
(‘‘Rep. Rogers et al. Letter’’) (seeking role in market problem of subscriber access to in-state
Mar. 24, 2015) and Jerome Gibbs Comments in MB
modification process for Counties, Parishes or the Docket No. 15–43 (filed Jun. 2, 2015) (each seeking
stations disproportionately affects
equivalent political subdivisions). Although no in-state stations for Bristol County, MA). satellite subscribers.63 Notably, the
local government comments were filed in this 59 NPRM, para. 9. See Wiegand v. Post Newsweek, Commission frequently receives satellite
docket, commenters in the docket relating to the
STELA In-State Programming Report advocated to
para. 11(‘‘[t]he granting of a request to expand the consumer calls about this problem and
market of a television station merely allows a other complaints about not receiving the
allow consumer concerns to be addressed more broadcaster the option to seek must carry status on
directly by permitting local governments to petition cable systems added to its market. A broadcaster is consumers’ desired local station via
for market modifications on behalf of their citizens. not required to seek carriage of its signal on all of satellite, while cable consumers rarely
See In-State Programming Report, para. 58.
56 See id.
the cable systems in its market.’’). Likewise, in the complain about this issue.64 This may
satellite context, the granting of a request to expand be a product of the localized nature of
57 See infra section III.F. (Definition of
the market of a television station merely allows a
Community). We note that a county (or its political broadcaster the option to seek mandatory carriage cable systems as opposed to the national
equivalent) was the only jurisdictional definition with respect to the new community, but does not
for which commenters in this proceeding sought the require the broadcaster grant retransmission Broadcasting Partners, CSR 7596–A, Memorandum
ability to file market modification petitions. consent for it to be carried in the new community. Opinion and Order, DA 08–542, paras. 22–37 (MB
58 See In-State Programming Report, at App. F Thus, our decision here about standing to file a rel. Mar. 10, 2008) (considering statements made by
(Case Studies) (discussing 35 counties in 13 DMAs satellite market modification should not be local officials).
with little or no access to in-state broadcast stations construed as affording a county government a right 61 See infra at para. 20 (Evidentiary
via satellite service). The In-State Programming to demand carriage of a particular station via Requirements). For example, a petitioner must
Report, also described the impact on consumers in satellite in its county. Notwithstanding the grant of provide contour maps and published audience data
these orphan counties. See id. at para. 18 (‘‘Because a petition to modify a market, a local broadcast for the involved broadcast station.
the DMA may include one or more counties located station that elects retransmission consent with 62 See 47 U.S.C. 338(l)(1); 47 U.S.C.
in a different state from that of the DMA’s principal respect to the new community may not be carried 534(h)(1)(C)(i).
city or cities where most of the local television without its express written consent. See 47 U.S.C. 63 See In-State Programming Report, at App. F
stations originate, some consumers through their 325(b)(1) (‘‘No cable system or other multichannel (Case Studies) (discussing 35 counties in 13 DMAs
MVPD, may receive only out-of-state stations and video programming distributor shall retransmit the with little or no access to in-state broadcast stations
thereby lack access to in-state programming, signal of a broadcasting station, or any part thereof, via satellite service). The BIA/Kelsey study
including political and election coverage, public except (A) with the express authority of the submitted by NAB in the In-State Programming
affairs programming, and weather and other originating station’’); 47 CFR 76.66. Report docket also illustrates this point, estimating
emergency information. Consumers from disparate 60 See Sen. Bennet et al. Letter at 1 (seeking to
that 0.1 percent of cable subscribers do not receive
areas throughout the nation comment that they are ‘‘facilitate the ability of a community to voice its at least one in-state television station, while 2.2
deprived of vital information that is own opinion about the local television content that percent of DISH subscribers do not receive at least
overwhelmingly available to other households it would prefer to access’’). We also note that local one in-state television station and 6.1 percent of
across the country. Consumers in affected areas government and consumer comments in a market DIRECTV subscribers do not receive at least one in-
typically do not have access to programming modification proceeding can help demonstrate a state TV station. In-State Programming Report, para.
asabaliauskas on DSK5VPTVN1PROD with RULES
content from in-state local television stations that station’s nexus to the community at issue. See Sen. 44.
cover the issues emanating from their state capitals Bennet et al. Letter at 1; Rep. Rogers et al. Letter 64 According to staff review, at least 165
and, as a result, believe they are less well served at 1 (seeking to ‘‘allow Counties, Parishes or the consumers have called the Commission’s call center
by the broadcast programming they are able to equivalent political subdivisions to make public in 2015 to complain that their satellite carrier does
receive. Without such state-focused information comments about the television content their not carry a particular station. See also, e.g., Leroy
and programming content, consumers express community prefers.’’). For example, the Axtell Comments at 1 (Fairfield County,
frustration at their inability to make informed Commission can consider consumer comments Connecticut resident explaining that ‘‘Comcast and
election and other civic decisions. Additionally, pursuant to the second statutory factor relating to Frontier cable carry New York and Hartford/New
some consumers indicate that they would prefer a station’s local service to a community. See 47 Haven television channels,’’ while ‘‘Directv and
television advertising that supports their state U.S.C. 338(l)(2)(B)(ii), 534(h)(1)(C)(ii)(II); Tennessee Dish can presently carry only New York channels.’’)
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nature of satellite service.65 The remote Consistent with our decision above to stations, while NAB states that the
geographic location of orphan counties permit a county government to file a statutory language imposes no such
also contributes to the disproportionate petition, we find that the relevant requirement.77 In addition, NCTA
impact on satellite subscribers. In the county government is an ‘‘interested expresses concerns about how we may
In-State Programming Report record, party’’ that must also be served with a evaluate market modification petitions
DIRECTV observed that ‘‘[b]ecause satellite market modification petition.71 under this new in-state factor,
many orphan counties tend to be particularly in situations that would
B. Statutory Factors and Evidentiary
isolated, their residents tend to rely grant cable carriage rights to previously
Requirements
more on satellite than on cable for uncarried in-state stations.78
access to television programming.’’ 66 17. As discussed above, the purpose 18. We conclude that the in-state
We also observe that the cable market of market modification is to permit factor favors any market modification
modification process has worked well adjustments to a particular station’s that would promote consumers’ access
for more than 20 years and there is local television market (which is to an in-state station.79 The language of
nothing in the record to suggest that initially defined by the DMA in which this new statutory factor speaks clearly
changing the cable petition process to it is located) to better serve the value of in this regard.80 Therefore, a petitioner
include local governments is necessary localism by ensuring that satellite will be afforded credit for satisfying this
to effectuate the goals of the STELAR (to subscribers receive the broadcast factor simply by showing that the
promote access to in-state programming) stations most relevant to them.72 To this involved station is licensed to a
at this time. end, the STELAR requires the community within the same state as the
16. We adopt our proposal to require Commission to consider five statutory new community.81 We disagree with
petitioners (i.e., broadcast stations, factors when evaluating market those commenters that sought a
satellite carriers and county modification requests.73 As noted, the requirement for more substantial
governments) to file market STELAR added a fifth factor (inserted as showings, such as the lack of in-state
modification requests for satellite the new third statutory factor) for both stations in the new community, in order
carriage purposes in accordance with cable and satellite to ‘‘promote to get credit for satisfying this factor.82
the procedures for filing Special Relief consumers’ access to television We find that such additional showings
petitions in section 76.7 of the rules.67 broadcast station signals that originate are not necessary to satisfy this factor.
Commenters on this issue generally in their State of residence.’’ 74 In the We read the statutory language—in
support our proposal.68 Consistent with NPRM, we tentatively concluded that requiring the Commission to consider
section 76.7, a petitioner must serve a this new third statutory factor is whether the prospective modification
copy of its market modification request intended to favor a market modification would ‘‘promote’’ consumers’ access to
on any MVPD operator, station licensee, to add a new community 75 if doing so television broadcast station ‘‘signals’’
permittee, or applicant, or other would increase consumer access to in- that originate in their state of
interested party who is likely to be state programming.76 In the record, NAB residence—as applying to any situation
directly affected if the relief requested is and DISH appear to support this general that would increase access to in-state
granted, and we amend section conclusion; however, DISH states that stations, regardless of whether there are
76.7(a)(3), accordingly, to reference we should consider under this factor other in-state stations present in the
‘‘any MVPD operator.’’ 69 The NPRM whether the new community lacks any new community.83 However, we find
sought comment on whether franchising (or an adequate number of) in-state that such additional showings can
authorities or certain local government increase the weight afforded to this
entities (such as cities, counties, or We decline to require such notifications, given that factor. For example, this factor may be
cable franchising authorities have no role in found to weigh more heavily in favor of
towns) that may represent subscribers satellite regulation. See DIRECTV Comments at 7,
and local viewers in affected n.20; UCC Comments at 8. modification if the petitioner shows the
communities should be considered 71 If after due diligence, a petitioner is unable to involved station provides programming
‘‘interested parties’’ and served with identify the appropriate county government on specifically related to subscribers’ state
which to serve its petition, the petitioner should of residence, and may be given even
market modification petitions.70 request Commission staff assistance in this regard.
72 See 47 U.S.C. 338(l)(2)(B), 534(h)(1)(C)(ii)
more weight if such subscribers in the
65 See Implementation of the Satellite Home
(requiring the Commission to ‘‘afford particular new community had little (or no) access
Viewer Extension and Reauthorization Act of 2004, attention to the value of localism’’ by taking into
Implementation of Section 340 of the account the five statutory factors). 77 See DISH Comments at 3–4; NAB Comments at
Communications Act, MB Docket No. 05–49, Report 73 See supra para. 8. The Commission must also 5.
and Order, FCC 05–187, para. 44, 70 FR 76504, consider other relevant information to develop a 78 See
NCTA Reply at 2–4.
December 27, 2005 (2005) (SHVERA Significantly result that is designed to ‘‘better effectuate the 79 See
47 U.S.C. 338(l)(2)(B)(iii) (‘‘whether
Viewed Report and Order). purposes’’ of the law. See 47 U.S.C. 338(l)(1); modifying the market of the television station
66 DIRECTV Comments in MB Docket No. 10–238
Definition of Markets for Purposes of the Cable would promote consumers’ access to television
(filed Jan. 24, 2011) at 3–4, n.8. Television Broadcast Signal Carriage Rules, CS broadcast station signals that originate in their State
67 NPRM, para. 10. See 47 CFR 76.59(b). A fee is Docket No. 95–178, Order on Reconsideration and of residence’’).
generally required for the filing of Special Relief Second Report and Order, FCC 99–116, para. 53, 64 80 See id. See also NAB Comments at 5.
petitions; 47 CFR 1.1104, 1.1117, 76.7. We remind FR 33788, Jun. 24, 1999 (Cable Market Modification 81 See infra at para. 20 (Evidentiary
filers that Special Relief petitions must be Second Report and Order). Requirements).
submitted electronically using the Commission’s 74 47 U.S.C. 338(l)(2)(B)(iii), 534(h)(1)(C)(ii)(III). 82 See DISH Comments at 4 (stating ‘‘a petitioner
Electronic Comment Filing System (ECFS). See We will refer to this new third statutory factor as should have to ‘show . . . that the DMA at issue
Media Bureau Announces Commencement of the ‘‘in-state factor.’’ lacks any (or an adequate number of) in-state
asabaliauskas on DSK5VPTVN1PROD with RULES
Mandatory Electronic Filing for Cable Special Relief 75 For purposes of our discussion, by ‘‘new
stations’’’); NCTA Comments at 3 (stating ‘‘the
Petitions and Cable Show Cause Petitions Via the community’’ we refer to a new community to be Commission should assess whether cable customers
Electronic Comment Filing System, Public Notice, added to a station’s local television market by grant already receive television stations that provide in-
DA 11–2095 (MB rel. Dec. 30, 2011). Petitions must of the prospective market modification. state coverage’’).
be initially filed in MB Docket No. 12–1. Id. 76 NPRM, para. 11. The NPRM also asked if we 83 See NAB Comments at 5 (‘‘The statute does not
68 NAB Comments at 3.
should ‘‘require the petitioner to show that the suggest that the Commission should take into
69 See 47 CFR 76.7(a)(3).
station at issue is licensed to a community within account only those in-state market modification
70 See NPRM, para. 10. No parties filed comments the state in which the modification is requested and requests that would help to remedy a complete
advocating that cable franchise authorities be that the DMA at issue lacks any (or an adequate absence—or some minimum number—of in-state
served with satellite market modification requests. number of) in-state stations?’’ NPRM, para. 13. broadcast stations.’’).
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to such in-state programming.84 We find applicable, we believe the in-state factor 20. Evidentiary Requirements. We
that this interpretation of the factor will serves as an enhancement, the particular adopt our proposal to apply the
better effectuate its purpose, observing weight of which depends on the evidentiary requirements for cable
that the legislative history expresses strength of showing by the petitioner. market modifications to satellite market
Congress’ concern that ‘‘many Ultimately, each petition for market modifications.92 Commenters on this
consumers, particularly those who modification will turn on the unique issue support this proposal.93 We find it
reside in DMAs that cross State lines or facts of the case.87 appropriate, and that it promotes parity,
cover vast geographic distances,’’ may 19. We adopt our tentative conclusion to apply the same evidentiary
‘‘lack access to local television that the new in-state factor is not requirements in both contexts,
programming that is relevant to their intended to bar a market modification particularly given the same language is
everyday lives’’ and indicates Congress’ simply because it would not result in used in both the cable and satellite
intent that the Commission ‘‘consider increased consumer access to an in-state statutory factors and the record provides
the plight of these consumers when station’s programming.88 In such cases, no basis for adopting a different
judging the merits of a [market we find that this new in-state factor interpretation in the satellite versus
modification] petition . . ., even if would be inapplicable and the cable context.94 In addition, to
granting such modification would pose modification request would be implement our decision (above) that the
an economic challenge to various local evaluated based on the other statutory in-state factor favors any market
television broadcast stations.’’ 85 We factors.89 Commenters on this issue modification that would promote
clarify, however, that this new factor is support these tentative conclusions.90 consumers’ access to an in-state station,
not universally more important than any We agree with commenters that the we require the petitioner to make a
of the other factors and its relative statute intended to promote access to in- statement in its petition whether or not
importance will vary depending on the state programming, but did not intend to the station is licensed to a community
circumstances in a given case.86 In sum, disfavor other market modification within the same state as the new
in market modification petitions requests.91 community.95 We find this sufficient
involving the addition of an in-state evidence to show that a station’s
broadcaster, the in-state factor does not 87 For example, we agree with NCTA that we
petition satisfies this factor.
serve as a trump card negating the other should consider the potential disruption to Accordingly, market modification
customers if grant of the modification request
four statutory factors. Instead, where would displace service from a long-established requests for both satellite carriers and
network station. See NCTA Comments at 3–4 cable system operators must include the
84 See NAB at 5 (‘‘Consideration of the ‘in-state (stating ‘‘the Commission should consider the following evidence: 96
signal’ statutory factor also could involve an potential disruption to cable customers that could (1) A map or maps illustrating the
evaluation of programming or advertising on that be caused by wholesale changes to markets. Market
station.’’) We note that our analysis of the in-state changes that would require operators to delete one relevant community locations and
nature of the programming would be similar to our group of broadcast stations in favor of another could geographic features, station transmitter
analysis of the local nature of the programming upset long-established cable customer viewing sites, cable system headend or satellite
under the second statutory factor and would patterns.’’). The Bureau has previously considered, carrier local receive facility locations,
consider whether the television station provides in the cable context, whether grant of the market
programming specifically related to the subscribers’ modification would ‘‘upset the economic terrain features that would affect station
state of residence. For example, under factor two, marketplace expectations underlying the network- reception, mileage between the
we consider whether the station has aired affiliate relationship.’’ See, e.g., Broad Street community and the television station
programming, such as news, politics, sports, Television, L.P., CSR–3868–A, Memorandum transmitter site, transportation routes
weather and other emergency information, Opinion and Order, DA 95–1106, para. 12 (CSB rel.
May 25, 1995); Guy Gannett Communications, Inc., and any other evidence contributing to
specifically targeted to the community at issue (e.g.,
town council meeting, news or weather event that CSR–5289–A, Memorandum Opinion and Order, the scope of the market;
occurred in the community, local emergencies, DA 98–2464, para. 21 (CSB rel. Dec. 4, 1998), aff’d, (2) Noise-limited service contour
etc.). Under factor three, we would consider Order on Reconsideration, DA 00–1325 (CSB rel. maps (for full-power digital stations) or
whether the station has aired programming, such as Jun. 19, 2000); Pacific & Southern Co., Inc., CSR–
5326–A, Memorandum Opinion and Order, DA 99–
protected contour maps (for Class A and
news, politics, sports, emergency information,
specifically related to the state in which the 628, para. 25 (CSB rel. Apr. 2, 1999); Harron low power television stations)
community is located (e.g., coverage of state politics Communications Corp., CSR–5325–A,
and legislative matters, state sports team coverage, Memorandum Opinion and Order, DA 99–627, WVIR–TV Comments at 4 (asking Commission ‘‘not
state emergency information, etc.). para. 26 (CSB rel. Apr. 2, 1999); Free State to confine any new rules to situations where a
85 Senate Commerce Committee Report at 11. Communications, LLC, CSR–8121–A, Memorandum subscriber’s community or county is assigned to an
86 See Cable Market Modification Second Report Opinion and Order, DA 09–1206, para. 22 (MB rel. out-of-state DMA by Nielsen’’); Tracy Comments at
May 28, 2009). We note that, for must carry 1.
and Order, para. 59 (stating that ‘‘it is inappropriate
purposes, although cable operators are not required 92 NPRM, para. 12.
to state that one factor is universally more
to carry duplicating stations or more than one local 93 See NAB Comments at 4–5; DISH Comments at
important than any other, as each is valuable in
station affiliated with a particular network, if a 3–4.
assessing whether a particular community should
cable system declines to carry duplicating stations, 94 47 U.S.C. 338(l)(2)(B)(i) through (v),
be included or excluded from a station’s local
it must carry the station closest to the principal
market, and the relative importance of particular 534(h)(1)(C)(ii)(I) through (V).
headend of the cable system, even if that station is
factors will vary depending on the circumstances in 95 See 47 CFR 76.59(b)(7). As noted above (see
from another state. See 47 CFR 76.56(b)(5). By
a given case’’). See also, e.g., NCTA Reply at 2 supra para. 18), to better effectuate the purpose of
contrast, in the satellite carriage context, a satellite
(stating that ‘‘[w]hile promoting access to in-state the law, we will consider (but not require)
carrier must carry two stations affiliated with the
programming is one factor in the market additional evidence showing the relevance of the
same network if they are from different states, see
modification process, Congress preserved the other in-state programming (including advertising) to the
47 U.S.C. 338(c)(1); 47 CFR 76.66(h)(1), and
four factors as well. In evaluating any market new community, as well as the absence of other in-
otherwise may select which duplicating station or
modification petitions going forward, therefore, the state stations in the new community, to evaluate the
network affiliate in a market it will carry. See 47
Commission must consider all of the factors.’’); UCC strength afforded to this factor.
CFR 76.66(h)(2) through (3). Thus, the potential for
asabaliauskas on DSK5VPTVN1PROD with RULES
Comments at 6 (stating that ‘‘the laudable goal of 96 See 47 CFR 76.59(b)(1) through (7). To make
market disruption is lower in the satellite context.
providing satellite subscribers with access to the 88 NPRM, para. 11.
section 76.59(b)(6) consistent with the language of
signals of some television stations licensed to the STELAR, we are also updating the rule to reflect
89 Id.
communities within the same state should not the change from ‘‘evidence of viewing patterns in
90 See UCC Comments at 6–7; WVIR–TV
trump the value of local coverage provided by cable and noncable households . . .’’ to ‘‘evidence
stations that happen to be licensed to communities Comments at 4; Tracy Comments at 1. of viewing patterns in households that subscribe
in a different state so as to deprive satellite 91 See UCC Comments at 6–7 (‘‘STELAR did not and do not subscribe to the services offered by
customers of access to the signals of those stations intend to forestall market modification requests that multichannel video programming distributors’’ in
that are more truly ‘local’ than the more distant would not have the effect of supplying in-state the fifth statutory factor (emphasis added). See 47
same-state stations.’’). programming to residents of ‘orphan counties.’ ’’); U.S.C. 338(l)(2)(B)(v), 534(h)(1)(C)(ii)(V).
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‘‘[s]atellite carriers cannot lawfully request all local television stations market, DISH provides no reasoning that
obtain a ‘free pass’ to carry seeking carriage in any market in which persuades us to abrogate a bargained-for
retransmission consent stations without the carrier provides local-into-local and agreed-to contractual provision
negotiating the prices, terms and service, subject to section 325(b) of the between a broadcaster and a satellite
conditions of such consent in any Act.142 Section 325(b)(1) prohibits an carrier that expressly contemplates the
geographic area.135 Alternatively, DISH MVPD from retransmitting the signal of addition of communities through the
asks the Commission to ‘‘clarify that a broadcast station except ‘‘with the market modification process.146 We
notwithstanding any retransmission express authority of the originating note, however, that the very purpose of
consent agreements that would station.’’ 143 The statute provides for no this provision of the STELAR is to
automatically entitle the station to exception in the market modification provide consumers with access to news,
carriage in additional geographic areas context to the retransmission consent politics, sports, emergency and other
due to a market modification, the station requirement. Thus, we reject DISH’s programming specifically related to
must negotiate a new retransmission argument that the silence of section 102 their home state.147 Accordingly, we
consent agreement for the new of the STELAR with respect to expect broadcasters and satellite carriers
areas.’’136 NAB responds that ‘‘DISH retransmission consent means that alike will make the needs and
and other satellite carriers must abide Congress could not have intended expectations of orphan county
by provisions of the Communications retransmission consent to apply to the consumers the priority in negotiating
Act and FCC rules governing carriage of stations in communities retransmission consent following a
retransmission consent and must-carry added by market modification.144 To the successful modification petition.148 We
within a station’s market, including contrary, considering the provisions will monitor this situation closely and
areas affected by a market together in context, we believe the better will take further action if such
modification.’’ 137 reading of the statute is that the monitoring indicates that the purpose of
28. We reject DISH’s proposal to retransmission consent requirement this provision is not being effectuated.
mandate a must-carry election for the applies in this context given the absence 29. We also adopt our tentative
remainder of the current election cycle of an express indication otherwise in conclusion that a satellite carrier must
because it directly contravenes section either section 102 of STELAR or the commence carriage within 90 days of
325 of the Act and would be retransmission consent provisions.145 receiving the request for carriage from
inconsistent with our satellite carriage We note that, while the network the television broadcast station.149 In
rules.138 As with any other election for programming may be the same, the two the record, NAB and Gray support the
satellite carriage, we find that when a stations would likely be providing very 90-day deadline,150 while DISH asks for
station’s market is modified for different local programming (e.g., 120 days.151 The 90-day deadline is
purposes of satellite carriage, then the different news, sports, advertising and consistent with our cable rules,152 as
station is entitled to elect either political programming), each of which well as with existing carriage
retransmission consent pursuant to may be of interest to the new procedures involving the addition of a
section 325 or mandatory carriage community, because the stations are new station to a carrier’s lineup 153 and
pursuant to section 338 with respect to licensed to different communities and we see no reason to deviate from the 90-
the new community or communities particularly if the stations are located in day deadlines in these similar
added to its market by the different states. Finally, with respect to contexts.154 Thus, we conclude that 90
modification.139 This is also consistent DISH’s proposal that we prevent
with the cable market modification application of an existing 146 See DISH ex parte (dated June 11, 2015) at 2
process 140 and, moreover, is required by retransmission consent agreement (stating that ‘‘[m]any retransmission consent
contracts require DBS providers to carry a station’s
application of sections 325 and 338 of containing a provision requiring signal throughout its local market, even if that local
the Act.141 Section 338(a)(1) requires carriage pursuant to its terms in the market’s boundary is changed by FCC action—
that a satellite carrier must carry upon event the Commission modifies a given meaning the DBS provider could be obligated to pay
retransmission consent fees to two network-
affiliated stations in a given area pursuant to a
carry with the applicable satellite carriers for the 142 47 U.S.C. 338(a)(1). market modification, even if these stations
new geographic area within 30 days of the market 143 47 U.S.C. 325(b)(1). duplicate one another.’’). See also NAB Reply at 3
modification order. DISH Comments at 5. 144 See DISH Comments at 9–10. DISH also
135 NAB Reply at 2.
(opposing DISH’s various proposals to avoid paying
appears to argue that, because STELAR provides retransmission consent fees).
136 DISH ex parte (dated June 11, 2015) at 2.
that a market modification could operate both to 147 See Senate Commerce Committee Report at 11.
DISH’s proposal recognizes that its concern is a add communities to, and delete communities from, 148 See supra note 59 (describing the impact on
short-term problem that would last for the length of a station’s local market, the Commission could
any existing retransmission consent agreement. Id. consumers of residing in orphan counties) and note
delete the community at issue from the existing 65 (noting Commission receipt of at least 165
In DISH’s scenario, after expiration of the existing network affiliate’s local market at the same time
agreements with the two same-network affiliates, consumer complaints in 2015 that their satellite
that it adds the new community to the local market carrier does not carry a particular station).
we expect the marketplace would resolve this of the same-network station seeking the market 149 NPRM, para. 18.
concern. modification. Id. at 10. Under current rules,
137 NAB Reply at 1, 3–5. See also 47 U.S.C. 325, 150 NAB Comments at 6; Gray Comments at 8;
however, to delete the community at issue from the
338 and 47 CFR 76.64 through 76.66. existing network station’s local market, DISH would NAB Reply at 3.
138 See 47 U.S.C. 325(b) and 47 CFR 76.66. 151 DISH Comments at 5–6. We note that 120 days
have to file a separate petition to modify that
139 See 47 CFR 76.66(c) (‘‘In television markets station’s local market, based on the statutory is inconsistent with DISH’s proposal that requests
where a satellite carrier is providing local-into-local factors. There is nothing in the record that for carriage use the procedures governing carriage
service, a commercial television broadcast station persuades us to alter the existing process. of new stations. DISH Comments at 5.
152 See 47 CFR 76.64(f)(5).
may elect either retransmission consent, pursuant 145 See STELAR section 102. See also 47 U.S.C.
asabaliauskas on DSK5VPTVN1PROD with RULES
to section 325 of title 47 United States Code, or 325(b), 338(c)(1). We also disagree with Gray’s 153 See 47 CFR 76.66(d)(3). We note that DISH’s
mandatory carriage, pursuant to section 338, title 47 argument that the ‘‘substantial duplication’’ proposal for 120 days to commence carriage is
United States Code.’’). We thus agree with NAB that exceptions to the satellite mandatory carriage rules inconsistent with DISH’s proposal that requests for
‘‘a station electing retransmission consent with should not apply to stations in communities that carriage use the procedures governing carriage of
regard to a community or communities that become have been added to their markets via the market new stations. See DISH Comments at 5.
part of its defined market following a modification modification process. Gray Comments at 8. Section 154 DISH speculates that ‘‘there may be time-
request is the same as any other station making a 338(c)(1) speaks clearly on this point in permitting consuming technical or billing changes, among
retransmission consent election.’’ NAB Reply at 3. but not requiring a satellite carrier to carry more other things, necessary for the satellite carrier to
140 See 47 CFR 76.64(f)(5).
than one network affiliate licensed to the same undertake’’ in order to effectuate carriage of a
141 See 47 U.S.C. 325, 338. state. 47 U.S.C. 338(c)(1). market modification. DISH Comments at 5–6. We
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days is an appropriate amount of, time D. Technical or Economic Infeasibility currently carried.162 We adopt our
for satellite carriers to commence Exception for Satellite Carriers tentative conclusion that the satellite
carriage. We note that, as is the case in 30. We adopt our proposal to codify carrier has the burden to demonstrate
the cable context, the filing of a petition the language of section 338(l)(3), which that the resulting carriage from a market
for reconsideration or application for provides that ‘‘[a] market determination modification ‘‘is not technically and
review does not automatically stay the . . . shall not create additional carriage economically feasible . . . by means of
effect of a Bureau order to add a station obligations for a satellite carrier if it is [a carrier’s] satellites in operation.’’ 163
to a new community; however, based on not technically and economically In this regard, we will allow satellite
the directive in section 338(l)(3)(B)—the feasible for such carrier to accomplish carriers to demonstrate spot beam
satellite counterpart to cable’s section such carriage by means of its satellites coverage infeasibility by providing a
614(h)(1)(C)(iii)—a petition for in operation at the time of the detailed and specialized certification,
reconsideration or application for determination.’’ 157 In enacting this under penalty of perjury (as described
review would automatically stay a provision, Congress recognized that the herein).164 In addition, with respect to
Bureau order to delete a station in a unique nature of satellite television other possible bases for a carrier to
community.155 Finally, we adopt our service may make a particular market assert that carriage would be technically
tentative conclusion that the carriage modification difficult for a satellite or economically infeasible, such as costs
election must be made in accordance carrier to effectuate and, thus, exempted associated with changes to customer
with the procedures set forth in section the carrier from the resulting carriage satellite dishes to accommodate
76.66(d)(1).156 obligation.158 According to the record, reception from different orbital
spot beam coverage and capacity locations, we will review these
see no evidence in the record to suggest that constraints (discussed below) are the assertions on a case-by-case basis. To
commencement of carriage after a market
modification is more difficult or complicated in the primary technical and economic avoid unnecessary burdens on
satellite context or more difficult or complicated impediments to carriage facing both broadcasters, satellite carriers, county
than adding a new station to a carrier’s lineup. satellite carriers. Based on the governments and the Commission, we
155 See NAB Comments at 6–7 (seeking
constraints described in the record, we establish a process for prospective
clarification that ‘‘the filing of a petition for petitioners to obtain information from a
reconsideration or application for review does not
conclude that it is per se not technically
relieve a cable or satellite provider of its obligation and economically feasible for a satellite satellite carrier regarding feasibility of
to commence carriage pursuant to a broadcaster’s carrier to provide a station to a new carriage by the carrier prior to the filing
must carry election or begin retransmission consent community 159 that is, or to the extent to of a market modification petition. We
negotiations consistent with good faith which it is,160 outside the relevant spot require satellite carriers to respond to
requirements’’). In the Cable Market Modification
Second Report and Order, paras. 63–64, the beam 161 on which that station is broadcaster and county government
Commission found that section 614(h)(1)(C)(iii)— requests for information about the
the cable counterpart to section 338(l)(3)(B)— purposes of receiving official correspondence; (4) feasibility of prospective market
‘‘prohibits cable operators from deleting from Station’s community of license; (5) Station’s DMA modifications with certifications and
carriage commercial broadcast stations during the assignment; and (6) Station’s election of mandatory
pendency of a market modification request but does carriage or retransmission consent. 47 CFR afford prospective petitioners with a
not address maintaining the status quo with respect 76.66(d)(1)(iii). The rule also requires that, within process for Commission review of such
to additions. Given the absence of a parallel 30 days of receiving the request for carriage from certifications before filing a market
statutory directive with respect to channel the television broadcast station, a satellite carrier modification petition. The Commission
additions, we see no reason to depart from the must notify the station in writing that it will not
general presumption that a decision is valid and carry the station, along with the reasons for such
binding until it is stayed or overruled. To the extent decision, or that it intends to carry the station. 47 DIRECTV explains that ‘‘[s]pot-beam technology
the process aids broadcast stations in both retaining CFR 76.66(d)(1)(iv). DISH proposes that requests for divides up a portion of the bandwidth available to
and obtaining cable carriage rights, that appears to carriage follow the procedures outlined in 47 CFR a satellite into beams that cover limited geographic
be the result intended by the statutory framework 76.66(d)(3), which governs written requests for areas. Doing so allows particular sets of frequencies
adopted.’’ See Cablevision Systems Corporation, carriage by new stations. DISH Comments at 5. to be reused many times. This spectral efficiency
CSR–3873–A, Memorandum Opinion and Order, However the carriage election procedures outlined unlocked the potential for satellite carriers to offer
DA 96–1231, para. 11 (CSB, rel. Aug. 2, 1996) in 47 CFR 76.66(d)(3) expressly refer to the local broadcast signals in the late 1990s, and it
(explaining that ‘‘if we were to accept the general procedures set forth in 47 CFR 76.66(d)(1). See 47 enables satellite carriers to offer local service
arguments for granting the stay raised by Time CFR 76.66(d)(1)(ii) through (iii) and (d)(3)(ii). The today.’’ Id.
Warner and Cablevision, every initial market only difference is timing and even DISH agrees with 162 See DIRECTV Comments at 9 (asking the
modification decision adverse to any cable operator the filing of an election within 30 days of the Commission to find that ‘‘it is per se technically
would be postponed while either the Bureau or market modification order which is consistent with and economically infeasible for a satellite carrier to
Commission acts on the petition for reconsideration the 30 days in 47 CFR 76.66(d)(1). provide a station to subscribers who live in an area
or application for review. Such a result would 157 47 U.S.C. 338(l)(3). See 47 CFR 76.59(e). outside of the spot beam on which that station is
unduly delay qualified television stations from 158 Senate Commerce Committee Report at 11 currently carried.’’). For purposes of our discussion,
realizing their statutory cable carriage rights.’’). See (recognizing ‘‘that there are technical and we will refer to the spot beam on which the station
also Dynamic Cablevision of Florida Ltd., et al., operational differences that may make a particular is currently carried as the ‘‘relevant spot beam.’’
CSR–4722–A, CSR–4707–A, Memorandum Opinion television market modification difficult for a 163 NPRM, para. 19. See 47 U.S.C. 338(l)(3). The
and Order, FCC 97–191, para. 20 (rel. Jul. 1, 1997) satellite carrier to effectuate.’’). legislative history also indicates ‘‘that claims of the
(‘‘hold[ing] that a commercial television station may 159 For purposes of our discussion, by ‘‘new existence of such difficulties should be well
not be deleted from a cable system until the community’’ we refer to a new community to be substantiated and carefully examined by the
Commission has completed all administrative added to a station’s local television market by grant [Commission] as part of the petition consideration
proceedings pertaining to a particular market of the prospective market modification. As process.’’ Senate Commerce Committee Report at
redefinition . . . . There can be no question that discussed below in section III.F., a ‘‘community’’ 11.
Commission reconsideration or review of a Bureau for purposes of a satellite market modification is 164 We will refer to this as the ‘‘detailed
market redefinition ruling is a ‘proceeding’ defined as a county. certification.’’ See infra at section III.D.2. We base
asabaliauskas on DSK5VPTVN1PROD with RULES
pursuant to the market re-definition section.’’). 160 This per se exemption is limited to areas our proposal on DIRECTV’s suggested certification,
156 NPRM, para. 18. Section 76.66(d)(1) requires outside the carrier’s spot beam. Thus, a satellite which we find would meet the carrier’s burden to
that an election request made by a television station carrier will be required to carry the station to those demonstrate spot beam coverage infeasibility. See
must be in writing and sent to the satellite carrier’s areas inside the relevant spot beam even if part of DIRECTV ex parte (dated Jul. 9, 2015) at 3–4. To
principal place of business, by certified mail, return the new community (i.e., county) is outside the ensure the ongoing accuracy and veracity of the
receipt requested. 47 CFR 76.66(d)(1)(ii). The rule relevant spot beam, in the absence of additional spot beam coverage infeasibility certification
requires that a television station’s written evidence of infeasibility. See infra paras. 34–35 process, we may, in particular cases, require a
notification shall include the following information: (Partial Spot Beam Coverage). satellite carrier to provide us with supporting
(1) Station’s call sign; (2) Name of the appropriate 161 Satellite carriers use spot beams to offer local documentation for the certification. 47 U.S.C.
station contact person; (3) Station’s address for broadcast stations. DIRECTV Comments at 2. 154(i), 154(j), 308(b), 403.
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will not proceed to evaluate the five broadcast stations to the market.170 the station on a second, neighboring
factors for a market modification with DISH explains that ‘‘it is possible’’ that spot beam that does cover the new
respect to a particular satellite carrier this situation could require DISH to community, if such a beam exists and
where it is shown that the resulting make equipment changes at ‘‘all or most has capacity. DIRECTV argues that it
carriage obligation would not be households’’ in the new community.171 would be an ‘‘inefficient use of
technically and economically feasible at The broadcast comments do not resources to devote a CONUS beam,
the time of the market determination. substantively refute spot beam coverage which can be seen throughout the
and capacity constraints as legitimate United States, to provide coverage to a
1. Technical or Economic Impediments
technical or economic impediments, single or handful of communities.’’ 176
to Carriage
except to say that such constraints must Next, DIRECTV argues that, if the new
31. The NPRM sought comment on be appropriately demonstrated, community is covered by a different,
the types of technical or economic consistent with the statute and neighboring spot beam than the one on
impediments contemplated by section legislative history.172 which the station is carried, it would
338(l)(3) that would make satellite 32. We are persuaded by the satellite almost always lack space on such
carriage infeasible in a new carriers that if the relevant spot beam neighboring spot beam.177 Moreover,
community.165 The NPRM also sought does not cover the new community, DIRECTV explains that, even if there
comment on any objective criteria by then it is not technically and were space, it ‘‘would have to reserve
which the Commission could determine economically feasible for the carrier to capacity on the entire ‘neighboring’ spot
technical or economic infeasibility, such provide the station to such new beam—capacity that could otherwise be
as spot beam coverage constraints.166 In community.173 In such a scenario, the used for a new station or a multicast
response, we received very few only available options would be to place signal carried throughout the
comments on potential impediments the station on the satellite carrier’s neighboring market.’’ 178 Thus, it would
except infeasibility due to insufficient CONUS beam 174 to reach subscribers in be inefficient for the carrier to use that
spot beam coverage and due to costs of the new community, redirect each and space on the neighboring spot beam for
making changes to customer satellite every spot beam on the satellite in order a station that could only be received by
dishes. DIRECTV described spot beam to enable the relevant spot beam to subscribers in a small part of the local
coverage and capacity constraints as cover the new community,175 or place market served by such spot beam.179
being the key technical and economic
impediments to carriage.167 DIRECTV 170 See DISH ex parte (dated Jun. 11, 2015) at 3; 176 DIRECTV Reply at 7; DIRECTV Comments at
asserted, and DISH agreed, that carriage DISH ex parte (dated Jul. 8, 2015) at 1. 8. The Commission has previously recognized that
171 DISH ex parte (dated Jun. 11, 2015) at 3; DISH ‘‘to carry a local channel on a transponder
should be considered per se infeasible if
ex parte (dated Jul. 8, 2015) at 1 (explaining that designated for CONUS would be particularly
the new community is outside the ‘‘DISH offers local broadcast stations on spot beams inefficient as that channel could only be
coverage of the spot beam that carries on several satellites at a variety of different orbital permissibly viewed in a single DMA.’’ Carriage of
the station.168 The carriers explain that locations. Therefore, it is possible that households Digital Television Broadcast Signals: Amendment to
if the spot beam on which a station is in a given local market might be unable to receive Part 76 of the Commission’s Rules; Implementation
a new broadcast station that was assigned by of the Satellite Home Viewer Improvement Act of
being carried does not cover the new Nielsen to a different market unless the households, 1999: Local Broadcast Signal Carriage Issues and
community, a satellite carrier ‘‘has no among other things, have a second satellite dish Retransmission Consent Issues, CS Docket No. 00–
good [carriage] options available to installed, have an existing satellite dish replaced, or 96, Second Report and Order, Memorandum
have an existing satellite dish repositioned. Where Opinion and Order, and Second Further Notice of
it.’’ 169 Even if the spot beam on which this is the case, it is possible that all or most
a station is being carried covers the new Proposed Rulemaking, FCC 08–86, para. 11, 73 FR
households in the geographic area impacted by a 24502, May 5, 2008 (Satellite DTV Carriage Order).
community, DISH adds that carriage of market modification would require a DISH We note, however, that if the station seeking the
the station may be infeasible if the technician to visit their home to make these market modification was already being carried on
equipment changes, which would be technically
station is carried on a different satellite and economically infeasible.’’). (DIRECTV does not
a CONUS satellite (e.g., the New York or Los
at a different orbital position than the Angeles stations), then carriage of such station
indicate that it would have this same problem.)
would not be per se infeasible in a new community.
satellite providing the existing local 172 See Gray Comments at 6–7 (‘‘Gray understands
177 DIRECTV explains that it ‘‘has designed its
and appreciates the technical burdens that satellite
spot beams to carry only the primary signals of
165 In particular, the NPRM sought comment on operators face in adding signals to their satellite
stations within the local markets they cover. The
systems, but . . . Satellite operators therefore
whether spot beam contour diagrams should be vast majority of its spot beams are now currently
should be permitted to claim this exemption only
required to demonstrate spot beam coverage full. In most cases, DIRECTV could not add a
in limited circumstances’’); NAB Comments at 9
limitations. NPRM, para. 20 (‘‘Should we require station to a ‘neighboring’ spot beam without
(‘‘NAB urges the Commission to require satellite
satellite carriers claiming infeasibility due to removing one of the stations already on that beam.’’
carriers claiming infeasibility due to insufficient
insufficient spot beam coverage to provide spot DIRECTV Comments at 8, n.24.
spot beam coverage to provide spot beam contour
beam contour diagrams to show whether a 178 DIRECTV Comments at 9 (explaining that
diagrams to show whether a particular spot beam
particular spot beam can be used to cover a can be used to cover a particular community’’); ‘‘[r]eserving spot-beam capacity for a station that
particular community? ’’). NAB Reply at 2–3 (saying that claims of could only be received in at most a handful of
166 NPRM, para. 20 (asking ‘‘Are there any
infeasibility must be ‘‘well substantiated and communities would represent a significant waste of
objective criteria by which the Commission could carefully examined’’); WVIR–TV Reply at 2, para. 2 spectral resources.’’); DIRECTV Reply at 8
determine technical or economic infeasibility? For (asserting that the purpose of STELAR would be (explaining that devoting capacity to the station on
example, the Commission has recognized that spot defeated if satellite operators do not ‘‘bear the a neighboring spot beam ‘‘could preclude DIRECTV
beam coverage limitations, in the provision of local- burden of proving the validity of an assertion of from carrying a new station that later commences
into-local service context, may be a legitimate infeasibility’’); WVIR–TV ex parte (dated Jul. 2, service’’ and also ‘‘would certainly preclude
technical impediment. Under what circumstances 2015) at 2 (same). DIRECTV from using the capacity in question to
would the limitations or coverage of a spot beam 173 See DIRECTV Reply at 7; DISH ex parte (dated benefit viewers throughout the [local television
be a sufficient basis for a satellite carrier to prove Jun. 11, 2015) at 3. market at issue],’’ such as by adding a multicast
asabaliauskas on DSK5VPTVN1PROD with RULES
that carriage of a station in the community at issue 174 DIRECTV carries all of its national feed from a local station.).
is not technically and economically feasible?’’). programming on satellite beams that cover the 179 We thus disagree with NAB that a satellite
167 See DIRECTV Comments at 3–4, 8–9. In its
entire contiguous United States (‘‘CONUS’’). carrier should be required to show that the station
comments, DISH generally observed that a satellite DIRECTV Comments at 2. ‘‘DIRECTV carries New could not be added to a spot beam different than
carrier may be unable as a technical or financial York and Los Angeles stations on CONUS beams, the one on which the station is currently carried
matter to comply with a market modification. DISH but only because those stations are offered that does cover the new community. NAB ex parte
Comments at 7. throughout the country as distant signals pursuant (dated Jul. 15, 2015) at 3 (arguing that ‘‘the DBS
168 See DIRECTV Reply at 7; DISH ex parte (dated to 17 U.S.C. 119 and 47 U.S.C. 339.’’ DIRECTV carrier should be required to certify that the spot
Jun. 11, 2015) at 3. Comments at 2, n.3. beam that does serve the affected communities does
169 DISH ex parte (dated Jun. 11, 2015) at 3. 175 See DIRECTV Comments at 6–7, n.16. not have the capacity to carry the station unless
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Finally, DIRECTV argues that impediments to carriage that could community defined as a county based
redirecting the entire array of spot qualify for the infeasibility exception. on those zip codes within the county.188
beams on the satellite, would cause For example, DISH explains that it NAB argues, however, that if carriage is
unacceptable consequences to existing provides local broadcast stations from viable within portions of a community
local service.180 We agree with these spot beams on several satellites at a that is the subject of a market
points and conclude that each of these variety of different orbital locations and modification request, then satellite
options are per se technically and that each subscriber’s satellite dish must carriers should be required to carry the
economically infeasible.181 be pointed and configured to receive station in those areas.189 We conclude
Accordingly, we conclude that ‘‘it is per signals from a particular orbital that, if a satellite carrier can provide the
se technically and economically location.184 Therefore, even if the station to only part of a new
infeasible for a satellite carrier to station is on a spot beam that covers the community, then it must do so.
provide a station to subscribers who live new community, carriage of the station 35. As discussed above, the statute
in an area outside of the spot beam on in the new community could still be requires a satellite carrier to carry a
which that station is currently infeasible if the station is carried on a station pursuant to a market
carried.’’ 182 This conclusion is different satellite at a different orbital modification, unless it is not technically
consistent with the Commission’s past location than the satellite providing and economically feasible for the carrier
recognition and acceptance of the local service to that community, because
to do so. Given the relatively large size
service constraints associated with the such carriage would require DISH to
of many counties, we conclude that it
use of spot beams.183 This means that, install a second satellite dish, replace an
would be a disservice to consumers, and
if a carrier shows that the relevant spot existing satellite dish, or reposition an
would not fully effectuate the mandate
beam does not provide coverage to the existing satellite dish, at ‘‘all or most
of the satellite market modification
new community, then that is a per se households’’ in the new community.185
provisions of the STELAR, to presume
demonstration of infeasibility. Thus, for We do not have sufficient information
that partial carriage to a county-defined
example, a carrier would not need to in the record to determine that the costs
community is per se infeasible. We are
show that there is no space on a of customer equipment changes to
not persuaded by DISH that requiring
neighboring spot beam or that it cannot accommodate reception from different
reconfigure a spot beam to effectuate orbital positions should be treated as such partial coverage of a county would
carriage. per se infeasible. We will therefore necessarily ‘‘be burdensome and cause
33. We recognize that there may be consider assertions of this and other customer confusion for a satellite carrier
other technical or economic types of infeasibility on a case-by-case to target the carriage of a station down
basis. to such a granular level, for example by
another channel is deleted (or other technical or 34. Partial Spot Beam Coverage. The providing a different local broadcast
economic reason)’’). We find that the financial and NPRM sought comment on how to station to a subset of subscribers.’’ 190
opportunity costs associated with requiring a carrier DISH provides no evidence of the
to use scarce capacity on a second spot beam for handle a situation in which only part of
a station that could only be received by subscribers a community could be served with the burdens associated with partial carriage.
in a small part of the local market served by such relevant spot beam.186 The satellite Any ‘‘confusion’’ is outweighed by the
spot beam makes carriage on such spot beam per carriers oppose having to serve part of benefits of providing the added station
se infeasible. See DIRECTV Reply at 9. to the customers who can receive it,
180 See DIRECTV Comments at 6–7, n.16 a community if the entire community is
(explaining that it generally cannot ‘‘move’’ spot not covered by the spot beam, 187 but consistent with Congressional intent in
beams on a satellite—except for SPACEWAY DIRECTV says it determines spot-beam expanding market modification to
satellites which are being replaced—and that it coverage based on zip codes and asserts satellite carriage. On a case-by-case
could ‘‘slightly adjust the entire array of spot beams basis, we will consider whether the area
on the satellite simultaneously,’’ but this would that it would be able to serve a
affect the local service provided by all of the spot of a new community in which service is
beams on the satellite, thus ‘‘disrupt[ing] [local] 184 DISH ex parte (dated Jul. 8, 2015) at 1; DISH feasible is so de minimis that addition
service across dozens of markets and negat[ing] ex parte (dated Jun. 11, 2015) at 3. of that community to the station’s
DIRECTV’s efforts to optimize population 185 See DISH ex parte (dated Jul. 8, 2015) at 1;
market is effectively infeasible. We also
coverage.’’); DIRECTV Reply at 7 (‘‘moving the DISH ex parte (dated Jun. 11, 2015) at 3 (arguing
entire array of spot beams means subscribers in such situation ‘‘would impose very significant
disagree with DIRECTV to the extent
portions of the [local television market at issue] and costs’’ and should constitute economic that it claims that ‘‘there is no
many other markets would lose all the local stations infeasibility). In this presumably rare situation, the underlying requirement to provide
they now receive.’’). station at issue is on a spot beam that covers the
181 See DIRECTV Reply at 7–9; DISH ex parte
service in any particular area to begin
new community, but this spot beam is different
(dated Jun. 11, 2015) at 3. than the spot beam providing local service to the with,’’ and therefore ‘‘the Commission
182 DIRECTV Comments at 9; DISH ex parte new community. (In other words, there are two spot need not ‘excuse’ any particular [market
(dated Jun. 11, 2015) at 3. beams that cover, to some extent, the new modification].’’ 191 Pursuant to the
183 In the DBS Broadcast Carriage Report and community at issue.) In addition, the two spot ‘‘carry one, carry all’’ statutory
Order, the Commission allowed satellite carriers to beams are on different satellites located at different
orbital positions and, therefore, subscribers in the requirement, a satellite carrier must
use spot beam technology to provide local-into-
local service, even if the spot beam did not cover new community will need two satellite dishes carry, on request, all local television
the entire market. DBS Broadcast Carriage Report pointed in different directions to get both the broadcast stations’ signals in local
and Order, para. 42. The Commission ‘‘observe[d] original local stations from one spot beam and the
new local station from the second spot beam.
markets in which the satellite carrier
that section 338 does not require a satellite carrier
to serve each and every county in a television 186 NPRM, para. 20 (‘‘To the extent that a satellite carries at least one local television
market. Rather, it requires that in the areas it does carrier can provide the station at issue to some, but broadcast signal pursuant to the
provide local-into-local service, it must carry all not all, subscribers in the community, should we statutory copyright license.192
asabaliauskas on DSK5VPTVN1PROD with RULES
local television stations subject to carriage under allow or require the carrier to deliver the station to
the statute.’’ Id. The Commission ‘‘recognize[d] that subscribers in the community who are capable of 188 See DIRECTV Reply at 11–12.
there are some markets, such as the Denver DMA receiving the signal?’’). 189 See
187 See DISH Comments at 8–9 (arguing that ‘‘any NAB Comments at 9.
encompassing counties in four states, that are
190 DISH Comments at 8–9.
geographically expansive’’ and that ‘‘[a] spot beam finding of technical or economic infeasibility
191 DIRECTV Reply at 11, n.36.
may not be able to cover the entire DMA in these should excuse a satellite carrier entirely from
instances, and to make the satellite carrier accommodating a market modification request, even 192 See 47 U.S.C. 338. This requirement is subject
reconfigure its spot beam may deprive it of capacity if the satellite carrier can provide the station at to exceptions for duplicating stations and lack of
to serve additional markets with local-into-local issue to some, but not all, relevant subscribers’’); good quality signal, as specified by statute and
coverage.’’ Id. DIRECTV Reply at 11, n.36 (agreeing with DISH). Continued
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Furthermore, the statutory language of determination about the carrier’s claim matter, only the satellite carriers have
the infeasibility exception in section of infeasibility (i.e., filing a market the specific information necessary to
338(l)(3) contemplates that a carriage modification petition or filing a separate determine if the carriage contemplated
obligation would result from a market petition beforehand solely with respect in a market modification would not be
modification.193 If carriage were merely to the infeasibility issue), the technically and economically feasible
discretionary for the carrier, then there requirements for demonstrating by operation of their satellites.200
would be no need for the infeasibility infeasibility are the same for both 39. We adopt a certification process
exception to relieve the carrier of a options. for carriers to demonstrate spot beam
carriage obligation. Therefore, if the 37. The NPRM tentatively concluded coverage infeasibility that should avoid
carrier is providing local television that the satellite carrier has the burden imposing undue expense on, or
broadcast stations to the new to demonstrate technical or economic compromising the confidential business
community pursuant to the local infeasibility and invited comment on information of, the satellite carriers
statutory copyright license, then it must the type of evidence needed to prove while also providing the Commission
also provide a station that becomes such infeasibility claims.195 Most with an appropriate basis for making
eligible for carriage as a local station in commenters, including the broadcasters market modification determinations. We
the new community by operation of the and DISH, agree that the statute places conclude that a detailed certification
market modification.194 the burden on satellite carriers to submitted under penalty of perjury
demonstrate infeasibility; 196 however, would satisfy the carrier’s burden under
2. Demonstrating Infeasibility satellite carriers contend that a the statute to substantiate their claims of
36. Based on the record, we expect the certification should be sufficient to meet insufficient spot beam coverage and
vast majority of satellite carrier claims its burden,197 while broadcasters say an allow us to carefully examine such
of infeasibility will be related to ‘‘unverifiable’’ certification would be claims of infeasibility.201 Broadcasters
insufficient spot beam coverage. inadequate to meet their burden under argue that ‘‘the mere ‘certification’
Because of the technical complexities the statute and that a carrier should be proposed by satellite carriers would not
involved in demonstrating spot beam required to provide documentation that comport with the legislative intent of
coverage infeasibility, including the use demonstrates infeasibility.198 the technical and economic infeasibility
of proprietary confidential information, 38. We adopt our tentative conclusion provision’’ and that ‘‘an approach that
we establish a streamlined process for that the statute places the burden on involves only an unverifiable
carriers to demonstrate spot beam satellite carriers to demonstrate certification would be inadequate.’’ 202
coverage infeasibility through the use of infeasibility if they assert that carriage Instead, broadcasters argue that satellite
detailed certifications under penalty of of a station in a new community would carriers should be required to make
perjury, based on a proposal by be technically or economically detailed technical showings related to
DIRECTV. Because of the limited record infeasible. Our conclusion is consistent spot-beam coverage.203 NAB argues that
with respect to other possible claims of with the legislative history that claims if the Commission chooses to use a
infeasibility, and our expectation that of infeasibility be ‘‘well substantiated certification approach, then we should
such other claims will be relatively rare, and carefully examined by the at least require certain supporting
we do not at this time establish a [Commission].’’ 199 Moreover, we agree documentation be provided with the
detailed certification process for with commenters that, as a practical certification or in the event of a
demonstrating other types of Commission audit of a certification.204
infeasibility. Instead, carriers will be 195 NPRM, paras. 19–20.
200 See
196 DISH Comments at 7; Gray Comments at 6–7; DISH Comments at 7; WVIR–TV Reply at
required to demonstrate other types of 1.
NAB Comments at 7; WVIR–TV Reply at 1.
infeasibility through the submission of 197 DIRECTV ex parte (dated Jun. 11, 2015) at 1
201 DIRECTV ex parte (dated Jun. 11, 2015) at 1.
evidence specifically demonstrating the (stating that its proposed detailed certification 202 NAB Reply at 2. See also WVIR–TV Reply at
technical or economic reason that would ‘‘easily satisfy any requirement that satellite 2 (opposing DISH’s proposal to ‘‘self-certify’’
carriage is infeasible. Although carriers ‘substantiate’ and the Commission without providing supporting documentation).
‘examine’ the technical and economic infeasibility WVIR–TV explains that ‘‘[s]ince information about
prospective petitioners will have two feasibility is entirely within the possession of the
of spot-beam carriage in these areas, even though no
options for seeking a Commission such requirement appears in the statute itself.’’); DBS operator, the DBS operator should bear the
DISH Comments at 7 (‘‘the Commission should burden of proving the validity of an assertion of
regulation. See 47 U.S.C. 338(b)(1), (c)(1); 47 CFR limit the required showing to a certification from infeasibility. Otherwise, broadcasters will be
76.66(g)(1), (h)(1) through (2). the satellite carrier that it has analyzed the completely at the mercy of DBS operators who
193 See 47 U.S.C. 338(l)(3) (‘‘[a] market proposed market modification and has determined oppose market modifications, largely defeating the
purpose of the STELAR statute, if not rendering it
determination . . . shall not create additional that it is not technically and economically feasible
a nullity.’’ Id. NAB also argues that a certification
carriage obligations . . .’’ if carriage ‘‘is not for such carrier to accomplish such carriage. A
approach ‘‘would also be inconsistent with the
technically and economically feasible. . .’’). certification should be sufficient, because the types
Commission’s longstanding approach to market
194 See 47 U.S.C. 338(a). We note that, by of evidence that the Commission might request
modification requests in the cable context, which
operation of the market modification, the station could be technically or competitively sensitive, involve a substantial evidentiary showing.’’ NAB
will be afforded ‘‘carry one, carry all’’ carriage such as spot beam contour maps, cost of equipment Reply at 2–3. The issue of infeasibility, however, is
rights in the area of the new community in which upgrades, and subscriber numbers in a given separate from our analysis of the merits of
a carrier provides the other local broadcast stations geographic area.’’). modifying a market under the statutory factors.
198 See NAB Reply at 2 (quoting legislative history
to the extent the spot beam on which it is carried 203 See NAB Comments at 9 (asking the
covers such area of the new community. See id. If that ‘‘Congress intended satellite carrier claims of Commission ‘‘to require satellite carriers claiming
the spot beam on which the new local station is technical and economic infeasibility ‘should be infeasibility due to insufficient spot beam coverage
carried is different than the one providing local- well substantiated and carefully examined by the to provide spot beam contour diagrams to show
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into-local service to the new community, and [Commission] as part of the petition consideration whether a particular spot beam can be used to cover
therefore the spot beam coverage for the two beams process.’ ’’); WVIR–TV Reply at 2 (arguing that the a particular community’’ and ‘‘to document that
will be different, there may be an area in the new purpose of STELAR is frustrated if satellite carriers reconfiguring a spot beam, or adding a station to
community that had not been receiving local-into- are not required to actually prove infeasibility). See another spot beam that does cover an affected
local service, but could receive the new local also NAB Reply at 3 (‘‘an approach that involves community would be technically or economically
station. In this situation, the new station by only an unverifiable certification would be infeasible’’); Gray Comments at 6 (arguing that
operation of the market modification would be inadequate’’); Gray Comments at 6 (arguing that satellite carriers should ‘‘be required to
eligible for carriage as a local station in such area satellite carrier claims of infeasibility must be conclusively demonstrate technical infeasibility’’).
of the new community, pursuant to 47 U.S.C. 338(a) ‘‘conclusively demonstrated’’). 204 See NAB ex parte (dated Jul. 15, 2015) at 1–
(‘‘carry one, carry all’’). 199 Senate Commerce Committee Report at 11. 2.
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We agree that a simple certification link budget’’ calculations that were period will provide parties with a
would not be appropriate, but we also created for the new community. reasonable amount of time to challenge
agree with DIRECTV that it would be DIRECTV explains that a ‘‘satellite link certifications. If satellite carriers have
anomalous to require compendious and budget is a calculation that accounts for concerns about providing proprietary
detailed evidentiary showings for spot certain factors that affect a radio signal and confidential information underlying
beam coverage of modified local markets as it travels from an uplink earth station their analysis, they may request
when such showings are not (and have to a space station and back down confidentiality.214
never been) required for the provision of through the atmosphere to the 41. Content of Spot Beam Coverage
local service to unmodified local customer’s earth station receiver’’ and Infeasibility Detailed Certification.
markets.205 Therefore, we adopt a that this technical document ‘‘generally Based on DIRECTV’s proposed detailed
certification process that requires takes the form of a table, with entries certification,215 a satellite carrier’s
satellite carriers to evaluate the that include (among other things) certification of infeasibility due to
feasibility of providing the station to the transmit power from the uplink earth insufficient spot beam coverage must
new community in the same manner station and from the satellite, antenna contain the following elements in order
that it currently uses to determine gains, system noise, intersystem to be used and relied upon as evidence
where in the relevant DMA it can interference, and atmospheric to demonstrate carrier claims of
provide the current local broadcast attenuation including the effects of ‘rain technical and economic infeasibility.
stations.206 These ‘‘detailed fade.’ ’’ 209 DIRECTV states that the net First, the detailed certification must
certifications’’ about spot beam coverage result of this satellite link budget explain why carriage is not technically
infeasibility must contain sufficient calculation ‘‘is an estimation of end-to- and economically feasible, including a
detail to ensure that the analysis end satellite link performance.’’ 210 detailed explanation of the ‘‘process by
performed by the carrier was DIRECTV pointed out that the which a satellite carrier has determined
appropriate and valid, and they will be supporting materials suggested by NAB whether or not the spot beam in
subject to penalties for perjury to ensure are in fact inputs for ‘‘link budgets.’’ 211 question covers the geographic area at
its reliability. The Commission’s review We agree with DIRECTV and NAB that issue.’’ 216 Second, to ensure equal
of the detailed certification will it would be appropriate to require a treatment to all stations, the detailed
generally be limited to determining carrier to submit satellite link budget certification must state that the satellite
whether it satisfies the procedural and information if the Commission were to carrier ‘‘has conducted this analysis in
content requirements described determine in a given case that substantially the same manner and
herein.207 Although we will not require supporting documentation should be using substantially the same parameters
carriers to provide supporting provided to support a detailed used to determine the geographic area in
documentation as part of their certification.212 Thus, we require which it currently offers stations carried
certification, as an additional check the satellite carriers to retain such on the spot beam.’’ 217 Finally, the
Commission may decide to look behind supporting documentation in the event satellite carrier must support its detailed
any certification and require supporting that the Commission determines further certification with an affidavit or
documentation when we deem it review by the Commission is necessary. declaration under penalty of perjury, as
appropriate, such as when there is Satellite carriers must retain such contemplated under section 1.16 of the
evidence that the certification may be supporting documentation throughout Commission’s rules and 28 U.S.C.
inaccurate.208 the pendency of Commission or judicial 1746,218 signed and dated by an
40. Supporting Documentation. In the proceedings involving the certification authorized officer of the satellite carrier
event that we require supporting and any related market modification with personal knowledge of the
documentation, we will require a petition.213 We find this retention representations provided in the
satellite carrier to provide its ‘‘satellite certification, verifying the truth and
209 DIRECTV ex parte (dated Jul. 23, 2015) at 1. accuracy of the information therein.219
205 DIRECTV ex parte (dated Jun. 11, 2015) at 1. 210 Id. 42. We will consider on a case-by-case
In other words, because a carrier does not normally 211 Id. NAB stated that detailed certifications basis other claims of technical or
have to demonstrate insufficient spot beam provided by the carrier to demonstrate spot beam economic infeasibility, such as DISH’s
coverage with respect to the provision of local coverage infeasibility should be supported by the
service to a local television market (i.e., a carrier following documentation: ‘‘(1) the latitude and
provides local service in the areas of the market throughout the pendency of Commission or judicial
longitude of the calculation point used for each zip
covered by the relevant spot beam), it would be proceedings involving the certification and any
code in analyzing (a) the measured performance of
inconsistent to require a carrier to make a detailed related market modification petition, whichever is
the spot beam covering station’s local market; (b)
demonstration of insufficient spot beam coverage longer’’); DIRECTV ex parte (dated Jul. 23, 2015) at
the estimated atmospheric effects for reception of
with respect to the provision of local service to a 2. (‘‘Satellite carriers could be required to preserve
the signal; and (c) the estimated levels of
new community added to such market. See DBS records sufficient to generate such a representative
interference]; (2) predicted clear-sky signal level
Broadcast Carriage Report and Order, para. 42 link budget, presumably during the pendency of
based on actual spot beam performance; (3) rain
(allowing satellite carriers to use spot beam any market modification proceeding.’’).
fade statistics and predicted reductions in signal 214 See 47 CFR 0.457, 0.459, 76.9.
technology to provide local-into-local service, even level; (4) predicted levels of inter-system
215 See DIRECTV ex parte (dated Jul. 9, 2015) at
if the spot beam did not cover the entire market). interference; and (5) determination of service or ‘‘no
206 We note that this certification process will be service’’ at the calculation point (in map form with 3–4. We find that DIRECTV’s proposed detailed
explained in the consumer guide that we create to county boundaries shown).’’ See NAB ex parte certification would meet a satellite carrier’s burden
comply with the STELAR section 102(c). (dated Jul. 15, 2015) at 2. to demonstrate spot beam coverage infeasibility.
207 See infra at para. 41 (Content of Spot Beam 212 See NAB ex parte (dated Jul. 15, 2015) at 2; 216 DIRECTV ex parte (dated Jun. 23, 2015) at 1.
217 DIRECTV ex parte (dated Jul. 9, 2015) at 4.
Coverage Infeasibility Detailed Certification). DIRECTV ex parte (dated Jul. 23, 2015) at 1 (‘‘if a
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208 47 U.S.C. 154(i), 154(j), 308(b), 403. If we find satellite carrier were to certify that it could not 218 47 CFR 1.16 (Declarations under penalty of
that a satellite carrier is claiming infeasibility with serve some or all of a proposed modified area, and perjury in lieu of affidavits). See 28 U.S.C. 1746.
respect to a significant number of requests, we may Commission staff were to find a genuine dispute of 219 We further note that willful false statements in
decide to start routinely requiring that carrier to fact related to such certification, the Commission a certification are punishable by fine and/or
provide supporting documentation with its could require the satellite carrier to submit a imprisonment pursuant to 18 U.S.C. 1001, may
certification. See infra at para. 40 (Supporting representative link budget for the area in question result in loss of a satellite carrier’s licenses and
Documentation). See also NAB ex parte (dated Jul. for staff review on a confidential basis.’’). authorizations (47 U.S.C. 312), and may subject the
15, 2015) at 2 (urging the Commission to require 213 See NAB ex parte (dated Jul. 15, 2015) at 2 satellite carrier to forfeiture (47 U.S.C. 503). See
carriers to file certain materials supporting (seeking carrier retention of supporting material also 47 CFR 1.17. See NAB ex parte (dated Jul. 15,
certifications). ‘‘for a period of either: (i) Two years; or (ii) 2015) at 2–3.
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claim of infeasibility due to the costs 44. The NPRM tentatively concluded Broadcasters, however, argue that a
associated with changing customer that a satellite carrier must raise any satellite carrier should be deemed to
satellite dishes to accommodate technical or economic impediments in have waived technical and economic
reception from different orbital the market modification proceeding.221 infeasibility claims if not raised in or
locations. In addition, there may be The NPRM sought comment on whether before a market modification
circumstances of technical and the Commission, in the case of satellite proceeding,227 while DIRECTV argues
economic infeasibility not yet market modifications, should require or that satellite carriers should not be
contemplated. As discussed above, a encourage stations seeking market precluded from raising future claims of
satellite carrier bears the burden of modifications to contact a satellite infeasibility, such as technical
demonstrating that the carriage carrier before filing a market infeasibility due to reduced spot beam
contemplated in a market modification modification request in order to get an coverage.228
would not be technically and initial determination of whether the 46. We conclude that it is most
economically feasible by operation of its carrier considers the request technically efficient and practical for stakeholders
satellites. To demonstrate such and economically feasible.222 The to consider and resolve satellite carrier
infeasibility, a carrier must provide NPRM observed that such an initial claims of technical or economic
detailed technical or economic inquiry might save some broadcasters infeasibility before petitioners go
information to substantiate its claim of the time and expense of compiling the through the time and expense of seeking
infeasibility. standardized evidence for a a prospective market modification and
3. Infeasibility Determinations modification that is not technically and before the Commission uses
economically feasible by alerting them administrative resources to evaluate the
43. We will resolve disputes about to the technical or economic issue, merits of a prospective market
carrier claims of infeasibility either in which they could then take into account modification petition under the five
the context of a market modification in deciding whether to file the statutory factors. Therefore, we slightly
proceeding or, at a prospective request.223 modify our tentative conclusion and
petitioner’s option, in a separate 45. Most commenters support proposal.229 We conclude that a satellite
proceeding before a market modification addressing satellite carrier claims of carrier must raise any technical or
petition is filed. Thus, a prospective infeasibility before a broadcaster files a economic impediments either in the
petitioner has two options. First, a prospective market modification market modification proceeding or prior
prospective petitioner may file its petition; 224 however, NAB argues that a to the market modification proceeding
market modification petition. In such satellite carrier’s claim of infeasibility in response to a broadcaster or county
cases, a satellite carrier would raise any should not preclude the filing of a government inquiry about feasibility of
claim of infeasibility in response to the market modification petition.225 carriage resulting from a prospective
petition and we would make a Commenters seem to agree that satellite market modification.230
determination about the validity of such carriers generally must raise claims of 47. Pre-Filing Coordination Process.
claim (and would not further process a technical and economic infeasibility We establish a process that will allow a
petition for which the resulting carriage during, if not before, the market prospective petitioner (broadcaster or
is infeasible). We recognize that modification proceeding.226 county government), at its option, to
prospective petitioners may want to obtain a certification from a satellite
know about carrier’s claims of required to provide evidence to support its claim carrier about whether or not (and to
infeasibility, and may want a of infeasibility. In the case of a claim of spot beam what extent) carriage resulting from a
Commission determination about the coverage infeasibility, the Commission’s review of
contemplated market modification is
validity of such claim, before filing a the certification will generally be limited to
determining whether it meets with the requirements technically and economically feasible
market modification petition. Therefore, for a ‘‘detailed certification.’’ See supra section for such carrier before the prospective
a prospective petitioner’s second option III.D.2. petitioner undertakes the time and
is to initiate the pre-filing coordination 221 NPRM, para. 19. The NPRM further considered
expense of preparing and filing a market
process (described below). Through this whether the satellite carrier should be deemed to
have waived technical or economic infeasibility modification petition.231 To initiate this
process, a prospective petitioner would arguments if not raised in response to the market
request information from a carrier about modification request (and, thus, be prohibited from 227 NAB Comments at 7 (stating that ‘‘that a
infeasibility and a carrier would raise raising such a claim after a market determination, satellite carrier be deemed to have waived technical
any claim of infeasibility in response to such as in response to a station’s request for and economic infeasibility arguments if they are not
carriage). Id. raised during a market modification proceeding’’);
this request in the form of a 222 NPRM, para. 21. Gray at 6 (asserting that ‘‘[f]ailure to assert
certification. A carrier claiming spot 223 NPRM, para. 21. ‘technical infeasibility’ at this stage of the process
beam coverage infeasibility must 224 DIRECTV Comments at 11; Gray Comments at would foreclose the satellite provider from later
provide the detailed certification 6; WVIR–TV Reply at 2 n.1. claiming technical infeasibility.’’).
228 DIRECTV Comments at 10 n.28 (‘‘The
(described above). For all other claims 225 NAB Comments at 9–10.
possibility of technical problems reducing spot-
of infeasibility, the certification 226 See NAB Comments at 7 (stating that ‘‘the
beam coverage serves as yet another reason why
provided for here is for the purpose of statute requires satellite carriers to raise any
technical or economic impediments in the context satellite carriers should not lose ‘rights’ to assert
a carrier to notify the prospective of the market modification proceeding’’); Gray feasibility issues if they do not raise them during
petitioner about the carrier’s claim of Comments at 6 (stating ‘‘the rules should require a market modification proceeding’’).
229 NPRM, para. 19.
infeasibility prior to a petition being satellite providers to assert technical infeasibility
230 In the event that a previously feasible market
filed. The prospective petitioner can before broadcasters go through the trouble and
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expense of preparing a market modification modification were to later become infeasible (e.g.,
then decide whether it would like to file petition’’); DIRECTV Comments at 11 (stating that due to reduction of spot beam coverage), the
a special relief petition to obtain a it would be willing to provide a certification to satellite carrier must file a petition for market
Commission determination about the broadcasters about ‘‘whether DIRECTV’s spot beam modification to delete the previously added new
covers the communities they would like to add to community from the station’s local market and
validity of the carrier’s claim of provide evidence of infeasibility (e.g., spot beam
their local markets’’ before a broadcaster seeks a
infeasibility.220 prospective market modification because ‘‘[s]uch infeasibility certification). See DIRECTV Comments
information . . . would prove of most value to at 10 n.28.
220 As discussed above, in cases other than spot stations before they undergo the time and effort of 231 See Gray Comments at 7 (stating ‘‘there should
beam coverage infeasibility, a carrier will be filing a market modification petition.’’). be a procedure for resolving disputes over technical
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process, a prospective petitioner may must either file a (separate) petition for carrier to carry the station, then the
make a request in writing to a satellite special relief 236 or its market station could assert its carriage rights
carrier for the carrier to provide the modification petition.237 pursuant to the earlier market
certification about the feasibility or 48. For purposes of determining a modification.242 The NPRM also sought
infeasibility of carriage. A satellite reasonable amount of time for a carrier comment on whether to impose a
carrier must respond to this request to respond to a request for a feasibility reporting requirement on satellite
within a reasonable amount of time by certification, we find a carrier should carriers to notify the affected
providing a feasibility certification to generally respond within 45 days of broadcaster if circumstances change at a
the prospective petitioner. A satellite receipt of a prospective petitioner’s later time making it technically and
carrier must also file a copy of the written request; 238 however, we find economically feasible for the carrier to
correspondence 232 and feasibility that it would be reasonable for the carry the station.243 NAB supports the
certification it provides to the carrier to respond in 90 days if the proposal to grant a meritorious market
prospective petitioner in this docket carrier has to process several requests at modification request, even if the grant
electronically via ECFS 233 so that the the same time.239 If the response is after would not create a new carriage
Media Bureau can track these 45 days, the carrier must provide an obligation at that time because of a
certifications and monitor carrier explanation for the longer time period finding of technical or economic
response time. If the carrier is claiming in its certification (e.g., having to infeasibility.244 Commenters split
spot beam coverage infeasibility, then respond to multiple simultaneous regarding whether to require satellite
the certification provided by the carrier requests).240 With this process, we are carriers to provide notice if and when
must be the same type of detailed trying to balance the need to provide carriage later becomes feasible.
certification that would be required in broadcasters’ with as fast a response as Broadcasters support such a
response to a market modification possible, while recognizing that satellite requirement,245 while satellite carriers
petition (discussed above).234 For any carriers may have difficulty responding oppose it.246
other claim of infeasibility, the carrier’s to numerous requests at once. 50. We conclude that we will not
feasibility certification must explain in 49. The NPRM proposed that a grant a market modification petition that
detail the basis of such infeasibility 235 meritorious market modification request could not create a new carriage
and must be prepared to provide would be granted even if such grant obligation at that time due to a finding
documentation in support of its claim, would not create a new carriage of technical or economic infeasibility.
in the event the prospective petitioner obligation at that time, for example, due We find that our conclusion is more
decides to seek a Commission to a finding of technical or economic consistent with the statute’s
determination about the validity of the infeasibility.241 The NPRM explained requirement that a market modification
carrier’s claim. If carriage is feasible, a that this would ensure that, if there is ‘‘shall not create additional carriage
statement to that effect must be a change in circumstances such that it obligations for a satellite carrier’’ if it is
provided in the certification. To obtain later becomes technically and infeasible ‘‘at the time of the
a Commission determination about the economically feasible for the satellite determination.’’ 247 We also note that
validity of the carrier’s claim of
242 NPRM, para. 19. This concept is similar to the
infeasibility, a prospective petitioner 236 See 47 CFR 76.7.
237 The Bureau may on its own motion review the duplicating signals situation, in which a satellite
adequacy of a certification filed in the docket, but carrier must add a television station to its channel
infeasibility before broadcasters invest in making line-up if such station no longer duplicates the
generally a prospective petitioner must request such
the necessary market modification showing’’); programming of another local television station. See
DIRECTV Comments at 11 (‘‘the most efficient review by filing a petition for special relief; 47 CFR
76.7. See Gray Comments at 7 (stating ‘‘[i]f a 47 CFR 76.66(h)(4). Alternatively, the NPRM sought
process regarding feasibility would be for a station comment on whether we should deny a market
that is considering filing a market modification broadcaster wishes to challenge the satellite
operator’s showing, it should be permitted to do so modification request that would not create a new
petition to first ask the two satellite carriers if they carriage obligation at the time of the determination.
can provide the station in the communities either before filing a market modification petition
or concurrent with a petition as part of the market NPRM, para. 19.
proposed’’). Although we encourage prospective 243 NPRM, para. 20. The NPRM asked ‘‘Would
petitioners to utilize the optional procedure for modification proceeding.’’); NAB ex parte (dated
Jul. 15, 2015) at 2 (stating that ‘‘the satellite carrier’s such changes in circumstances be sufficiently
obtaining information and, if necessary, public so as to not necessitate the burden of such
Commission determinations regarding carrier determination should be reviewable by the FCC and
result in a final FCC action that could be the subject a reporting requirement? If not notified by the
claims of infeasibility, we decline to require this carrier, how else could a broadcaster find out about
preliminary procedure in order to provide of a petition for reconsideration, applications for
review (and ultimately, court review’’). such a change in the feasibility of carriage?’’ Id.
petitioners with flexibility to decide which 244 NAB Comments at 7–8.
238 See Gray Comments at 6 (stating that satellite
procedure is best suited for their situation. 245 See Gray Comments at 7 (‘‘Satellite operators
232 Correspondence would include, for example, carriers should be required to respond to requests
about spot-beam coverage within a ‘‘specified likewise should be required to notify broadcasters
a brief cover letter and the prospective petitioner’s and the FCC within sixty days of any change that
initiating request for the feasibility certification period’’ such as 30 or 45 days).
239 DIRECTV explains that ‘‘while DIRECTV will
results in previously infeasible carriage becoming
provided. feasible.’’); NAB Comments at 8; WVIR–TV Reply
233 A satellite carrier must file the correspondence endeavor to respond to any and all requests as soon at 3. Gray suggests that this requirement include
and feasibility certification electronically into this as it can, it should not be required to do so in fewer notice to the broadcaster and the Commission
docket through the Commission’s Electronic than 90 days, particularly if required to respond to within sixty days of feasibility, as well as periodic
Comment Filing System (‘‘ECFS’’) using the Internet multiple simultaneous requests.’’ DIRECTV Reply at reports affirming continued infeasibility. Gray
by accessing the ECFS: http://www.fcc.gov/cgb/ecfs/ 10. Comments at 7.
. The filing must be clearly designated as a 240 If the Media Bureau finds that a carrier is
246 See DISH Comments at 8 (arguing that ‘‘a
‘‘STELAR feasibility certification’’ and must clearly routinely taking up to 90 days to respond or is not [reporting] requirement would be unduly
reference this proceeding and docket number (MB providing a reasonable explanation for when it burdensome for the satellite carrier because it
Docket No. 15–71). takes 90 days to respond, the Bureau may order would require a carrier to constantly track and
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234 See supra at paras. 39–41. NAB ex parte such carrier to respond to future requests in a reevaluate an unknown number of market
(dated Jul. 15, 2015) at 2 (with respect to a ‘‘pre- shorter time period or may take other enforcement modification requests.’’); DIRECTV Comments at 10
filing process,’’ stating that ‘‘the satellite carrier action. (‘‘the Commission should not require ongoing
should be required to undertake the same steps and 241 NPRM, para. 19. The NPRM noted that this is monitoring or reporting of spot beam issues. . . .
make the same certification that would be involved consistent with the cable carriage context, in which [A]bsent technical problems reducing spot-beam
in connection with an actual petition’’). the Commission might grant a market modification, coverage, spot beams remain static for the life of the
235 The carrier must state in its certification that even if such grant would not result in a new satellite.’’).
the new community is covered by the relevant spot carriage obligation at that time, for example, due to 247 See 47 U.S.C. 338(l)(3). See also Senate
beam, but carriage is nevertheless infeasible and the station being a duplicating signal. See 47 CFR Commerce Committee Report at 11 (indicating an
explain why. 76.56(b)(5). Continued
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claims of infeasibility related to a Second, even if ‘‘unserved,’’ a not lose eligibility for distant signals for
carrier’s satellites are not likely to subscriber is not eligible to receive a which they were eligible prior to
change for the life of a satellite, which distant station from a satellite carrier if modification’’ and should not ‘‘be
can be as long as 15 years.248 Because the carrier is making ‘‘available’’ to such interpreted as denying distant signals to
we will not grant a market modification subscriber a local station of the same subscribers who newly become eligible
for which carriage would be infeasible, network.254 We conclude that section for them because they have lost their
we find it unnecessary to require 338(l)(5) is largely intended as an local signals through market
satellite carriers to provide notice if and exception to these two subscriber modification.’’ 258 Thus, the deletion of
when carriage later becomes feasible. eligibility requirements. In other words, a local network station from a
Instead, a petitioner may re-initiate the we find that the addition of a new local community by operation of a market
process if at a later time a satellite station to a local television market by modification may allow a satellite
carrier has deployed new satellites that operation of a market modification carrier to import a distant station of the
could change this feasibility (which might otherwise restrict a same network into such community,
determination. subscriber’s eligibility to receive a provided subscribers in such
distant station) would not disqualify an community would now satisfy the
E. No Effect on Eligibility To Receive
otherwise eligible satellite subscriber requirements for receipt of distant
Distant Signals via Satellite
from receiving a distant station of the stations (pursuant to section 339).
51. We adopt our proposal to codify same network. For example, a
the language of section 338(l)(5), which subscriber may be receiving a distant F. Definition of Community
provides that ‘‘[n]o modification of a station because the subscriber resides in 54. For purposes of a satellite market
commercial television broadcast a ‘‘short market,’’ 255 has obtained a modification, we define a ‘‘satellite
station’s local market pursuant to this waiver from the relevant network community’’ as a county, which is
subsection shall have any effect on the station,256 or is otherwise eligible to supported by all commenters on this
eligibility of households in the receive distant signals pursuant to
community affected by such issue.259 Consistent with the cable
section 339. That subscriber will context, in a market modification
modification to receive distant signals continue to be eligible to receive the
pursuant to section 339, request, the petitioner will define the
distant station after a market satellite community (or communities) to
notwithstanding subsection (h)(1) of this modification that adds a new local
section.’’ 249 We also adopt our be added or deleted from a particular
station of the same network. station’s local television market. We
interpretation of this provision as an 53. The NPRM sought comment on
exception to the restrictions on a also retain our existing definition of a
whether section 338(l)(5) also means
satellite subscriber’s eligibility to ‘‘cable community’’ for purposes of a
that the deletion of a local station from
receive ‘‘distant’’ (out-of-market) cable market modification, having
a local television market by operation of
signals.250 Commenters on this issue received no comment on this issue.
a market modification would not make
supported our proposal.251 otherwise ineligible subscribers now 55. In the NPRM, as directed by the
52. The Communications Act and eligible to receive a distant station of the STELAR,260 we sought comment on
copyright laws set out two key same network.257 We agree with how to define a ‘‘community’’ for
restrictions on a satellite subscriber’s DIRECTV that this provision ‘‘was purposes of market modification in both
eligibility to receive ‘‘distant’’ (out-of- meant to ensure that households would the cable and satellite contexts.261 The
market) signals.252 First, subscribers are concept of a ‘‘community’’ is important
generally eligible to receive a distant containing the primary stream, or, on or after the in the market modification context
station from a satellite carrier only if the qualifying date, the multicast stream, originating in because the term describes the
subscriber is ‘‘unserved’’ over the air by that household’s local market and affiliated with geographic area that will be added to or
a local station of the same network.253 that network—(i) if the signal originates as an
analog signal, Grade B intensity as defined by the
deleted from a station’s local television
Federal Communications Commission in section market (based on the statutory factors),
expectation that ‘‘a petitioner may refile its petition 73.683(a) of title 47, Code of Federal Regulations, which in turn determines the stations
if at a later time a satellite carrier has deployed new as in effect on January 1, 1999; or (ii) if the signal that must be carried by a cable operator
satellites that could change this feasibility originates as a digital signal, intensity defined in
determination’’). the values for the digital television noise-limited
or a satellite carrier to subscribers in
248 See DIRECTV Comments at 10 (‘‘absent
service contour, as defined in regulations issued by
technical problems reducing spot-beam coverage, the Federal Communications Commission (section 258 DIRECTV Comments at 7–8, n.21.
spot beams remain static for the life of the 73.622(e) of title 47, Code of Federal Regulations), 259 See 47 CFR 76.5(gg)(2). See DISH Comments
satellite’’); DIRECTV ex parte (dated Jul. 9, 2015) at as such regulations may be amended from time to at 6; Gray Comments at 3; UCC Comments at 8; Sen.
2 (‘‘While the figure varies for individual satellites, time. 17 U.S.C. 119(d)(10)(A). An unserved Bennet et al. Letter at 1. See also DIRECTV Reply
15 years represents a good ‘rule of thumb’ for the household can also be one that is subject to one of at 11–12 (stating a county-based definition was
life of a direct-to-home geostationary satellite.’’). four statutory waivers or exemptions. See 47 U.S.C. acceptable, if certain conditions were met).
See also Amendment of Commission’s Space 119(d)(10)(B) through (E). 260 Section 102(d)(2) of the STELAR requires the
Station Licensing Rules and Policies, IB Docket No. 254 See 47 U.S.C. 339(a)(2); 17 U.S.C. 119(a)(3).
Commission to ‘‘update what it considers to be a
00–248, First Report and Order, FCC 02–45, para. This second restriction on eligibility is commonly community for purposes of a modification of a
143, 67 FR 12485, Mar. 19, 2002. referred to as the ‘‘no distant where local’’ rule. A
249 47 U.S.C. 338(l)(5); NPRM, para. 22. See 47
market’’ in both the satellite and cable contexts. See
satellite carrier makes ‘‘available’’ a local signal to STELAR sec. 102(d)(2); 47 U.S.C.A. 338 Note. The
CFR 76.59(f). a subscriber or person if the satellite carrier offers legislative history indicates Congress’ intent for the
250 NPRM, para. 22. that local signal to other subscribers who reside in Commission ‘‘to consider alternative definitions for
251 See DIRECTV Comments at 8 n.21; DISH the same zip code as that subscriber or person. 47 community that could make the market
asabaliauskas on DSK5VPTVN1PROD with RULES
Comments at 6. U.S.C. 339(a)(2)(H). See also 17 U.S.C. 119(a)(3)(F). modification process more effective and useful.’’
252 See 17 U.S.C. 119; 47 U.S.C. 339. Generally, 255 See 47 U.S.C. 339(a)(2)(C); 17 U.S.C.
Senate Commerce Committee Report at 12.
a station is considered ‘‘distant’’ with respect to a 119(d)(10). By a ‘‘short market,’’ we refer to a 261 See NPRM, para. 23. In considering how to
subscriber if such station originates from outside of market in which one of the four major television define a ‘‘satellite community’’ for purposes of a
the subscriber’s local television market (or DMA). networks is not offered on the primary stream of a satellite market modification, the NPRM sought
See id. local broadcast station, thus permitting satellite comment on whether to use a cable community-
253 The Copyright Act defines an ‘‘unserved carriers to deliver a distant station affiliated with based definition (as was done in the significantly
household,’’ with respect to a particular television that missing network to subscribers in that market. viewed context; see 47 CFR 76.5(gg)), a zip code-
256 See 47 U.S.C. 339(a)(2)(E).
network, as ‘‘a household that cannot receive, based definition, and/or a county-based definition.
through the use of an antenna, an over-the-air signal 257 NPRM, para. 22. See NPRM, para. 25.
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that community.262 Because of the observes that ‘‘[c]ounty-wide data is supports the use of zip codes,
localized nature of cable systems, cable more easily available than community- explaining it determines spot-beam
communities are usually easily defined specific data.’’ 268 We agree. DIRECTV, coverage based on zip codes, but (as
by the geographic boundaries of a given who initially supported only zip codes, noted above) expressed qualified
cable system, which are often, but not stated in its reply that it could support support for a county-based definition.273
always, coincident with a municipal a county-based definition, as long as DISH opposes the use of zip codes,
boundary and may vary as determined satellite carriers are not required to explaining that its systems recognize
on a case-by-case basis.263 In the cable provide service to the parts of a DMA boundaries based on counties, and
carriage context, the Commission modified market outside the market’s that it would be burdensome to do zip-
considers market modification requests spot beam.269 We agree with code-based modifications.274 Given
on a community-by-community basis 264 commenters that a county definition is DIRECTV’s qualified support for a
and defines a community unit in terms better suited for the national nature of county-based definition and DISH’s
of a ‘‘distinct community or municipal satellite service and will most difficulties associated with the use of
entity’’ where a cable system operates or effectively promote access to in-state zip codes, we reject a zip-code-based
will operate.265 A ‘‘satellite programming for subscribers in orphan definition for the satellite market
community,’’ however, is not as easily counties. In addition, we agree that modification context.
defined as a cable community. Unlike county-wide data will work effectively 58. Definition of ‘‘Cable Community’’
cable service, which reaches subscribers and is easily available. We also take for Cable Market Modifications. We
in a defined local area via local note of the support for a county adopt our tentative conclusion to retain
franchises, satellite carriers offer service definition from both broadcasters and the existing definition of a ‘‘cable
on a national basis, with no connection satellite carriers. Thus, we are community.’’ 275 No comments were
to a particular local community or persuaded that allowing satellite market filed on this issue. Section 76.5(dd) of
municipality. Moreover, satellite service modifications on a county basis would the rules defines a ‘‘community unit’’ as
is sometimes offered in areas of the best effectuate the satellite market ‘‘[a] cable television system, or portion
country that do not have cable service, modification provision. of a cable television system, that
and thus cannot be defined by cable 57. We find this approach preferable operates or will operate within a
communities. to defining a ‘‘satellite community’’ on separate and distinct community or
56. Satellite Community. We define a a cable community 270 or zip code basis. municipal entity (including
‘‘satellite community’’ on a county In the NPRM, we considered a cable unincorporated communities within
basis. All commenters on this issue community and/or a zip code as two unincorporated areas and including
support this definition.266 DISH and possible definitions of a satellite single, discrete unincorporated
Gray assert that the use of a county community for purposes of market areas).’’ 276 We conclude that this
definition will better address the orphan modification.271 No commenters definition has worked well in cable
county problem.267 In addition, UCC supported the cable community-based market modifications for more than 20
definition. We observed the years and should not be changed. We
262 See NPRM, para. 24. See also 47 U.S.C.
Commission’s use of a cable find that retaining the cable definition
338(a)(1); 47 CFR 76.66(b)(1). community-based definition in the best effectuates the cable market
263 See Amendment of Part 76 of the
significantly viewed context.272 As modification provision. Although (as
Commission’s Rules and Regulations with Respect
to the Definition of a Cable Television System and noted above, satellite carriers, unlike discussed herein) we allow a satellite
the Creation of Classes of Cable Systems, Docket cable systems, have no connection to a community to be defined on a county
No. 20561, First Report and Order, FCC 77–205, particular local community or basis, we see no reason to change the
para. 20 n.5, 42 FR 19329, Apr. 13, 1977 (1977 definition to allow cable modifications
Cable Order) (citing Amendment of Parts 21, 74,
municipality. Given this fact, and based
and 91 to Adopt Rules and Regulations Relating to on the absence of any support for this on a county basis. Despite our objective
the Distribution of Television Broadcast Signals By definition, we reject a cable community- of treating satellite market modifications
Community Antenna Television Systems, and based definition for the satellite market and cable market modifications
Related Matters, Docket Nos. 14895, 15233, 15971, similarly where feasible, we find that
Second Report and Order, FCC 66–220, para. 149,
modification context. DIRECTV
31 FR 4540, Mar. 17, 1966 (‘‘community’’ as used
practical differences justify different
in the rules must be determined case-by-case approach mirrors the existing statutory special treatment on this issue.
depending on the circumstances involved). exceptions in section 122 designed to address
264 See 1977 Cable Order, para. 22 (explaining orphan counties, such as the provision allowing a IV. Procedural Matters
that the cable carriage rules apply ‘‘on a satellite carrier to provide in-state local broadcast
stations to two counties in Vermont that are
A. Final Regulatory Flexibility Act
community-by-community basis’’). See also 47 CFR
76.5(dd), 76.59. assigned to out-of-state DMAs.’’ DISH Comments at Analysis
6 (citing 17 U.S.C. 122(a)(4)(B)).
265 See 47 CFR 76.5(dd). A cable system
268 UCC Comments at 8.
59. As required by the Regulatory
community is assigned a community unit identifier Flexibility Act of 1980, as amended
269 DIRECTV Reply at 11–12. DIRECTV initially
number (‘‘CUID’’) when registered with the
Commission, pursuant to section 76.1801 of the conditioned its support for a county-based (RFA),277 an Initial Regulatory
rules. 47 CFR 76.1801. definition on our requiring broadcasters to provide Flexibility Analysis (IRFA) was
266 See DISH Comments at 6; Gray Comments at the zip codes corresponding with the county in the incorporated in the Notice of Proposed
3; UCC Comments at 8; Sen. Bennet et al. Letter at market modification petition. Id. DIRECTV later
clarified that ‘‘it should be a relatively easy task for
Rulemaking (NPRM) in this
1. See also DIRECTV Reply at 11–12 (stating a
county-based definition was acceptable, if certain either satellite carriers or broadcasters to associate
273 DIRECTV Comments at 12; DIRECTV Reply at
conditions were met). zip codes with particular market modification
11.
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267 See DISH Comments at 6 (‘‘a county-based requests.’’ DIRECTV ex parte (dated July 9, 2015)
definition will most effectively promote consumer at 2. 274 DISH ex parte (dated June 11, 2015) at 3.
270 The NPRM considered the ‘‘satellite 275 See NPRM, para. 23.
access to in-state programming’’); Gray Comments
at 3 (‘‘county-by-county approach would best carry community’’ definition in the significantly viewed 276 47 CFR 76.5(dd).
out Congress’ intent to give the FCC the tools context, which is based on the definition of a ‘‘cable 277 See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601
necessary to solve the ‘orphan county’ problem in community.’’ NPRM, para. 25. See 47 CFR 76.5(gg) et. seq., has been amended by the Contract With
appropriate cases’’). Gray also states that ‘‘a county- (defining a ‘‘satellite community’’ for the America Advancement Act of 1996, Public Law
by-county approach better suits the way that significantly viewed context). 104–121, 110 Stat. 847 (1996) (CWAAA). Title II of
271 See NPRM, para. 25.
satellite providers actually provide service.’’ Gray the CWAAA is the Small Business Regulatory
Comments at 3–4. DISH also observes that ‘‘[t]his 272 See 47 CFR 76.5(gg). Enforcement Fairness Act of 1996 (SBREFA).
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![59656 Federal Register / Vol. 80, No. 191 / Friday, October 2, 2015 / Rules and Regulations
proceeding.278 The Commission sought of the STELAR by revising the current ‘‘small business’’ has the same meaning
written public comment on the cable market modification rule, section as the term ‘‘small business concern’’
proposals in the NPRM, including 76.59, to apply also to satellite carriage, under the Small Business Act.291 A
comment on the IRFA. The Commission while adding provisions to the rules to small business concern is one which: (1)
received no comments on the IRFA. address the unique nature of satellite Is independently owned and operated;
This present Final Regulatory Flexibility television service.284 For example, the (2) is not dominant in its field of
Analysis (FRFA) conforms to the STELAR recognizes that satellite operation; and (3) satisfies any
RFA.279 carriage of additional stations pursuant additional criteria established by the
to a market modification might be SBA.292 The rule changes adopted
1. Need for, and Objectives of, the Rules
technically and economically infeasible herein will directly affect small
60. This Report and Order adopts in some circumstances.285 In addition to television broadcast stations, small
rules to implement section 102 of the establishing rules for satellite market MVPD systems, which include cable
Satellite Television Extension and modifications, section 102 of the system operators and satellite carriers
Localism Act (STELA) Reauthorization STELAR directs the Commission to and small county governmental
Act of 2014 (‘‘STELA Reauthorization consider whether it should make jurisdictions. Below, we provide a
Act’’ or ‘‘STELAR’’).280 The STELAR changes to the current cable market description of such small entities, as
amended the Communications Act and modification rules,286 and it also makes well as an estimate of the number of
the Copyright Act to give the certain conforming amendments to the such small entities, where feasible.
Commission authority to modify a cable market modification statutory 64. Small Governmental Jurisdictions.
commercial television broadcast provision.287 Accordingly, as part of the The term ‘‘small governmental
station’s local television market for implementation of the STELAR, the jurisdiction’’ is defined generally as
purposes of satellite carriage rights.281 Commission makes conforming and ‘‘governments of cities, counties, towns,
The Commission previously had the other minor changes to the cable market townships, villages, school districts, or
authority to modify markets only in the modification rules. special districts, with a population of
cable carriage context.282 With section less than fifty thousand.’’ 293 Census
102 of the STELAR, Congress provides 2. Summary of Significant Issues Raised Bureau data for 2011 indicate that there
regulatory parity in this regard in order by Public Comments in Response to the were 89,476 local governmental
to promote consumer access to in-state IRFA jurisdictions in the United States.294 We
and other relevant television 61. No public comments were filed in estimate that, of this total, a substantial
programming. Significantly, the response to the IRFA. majority may qualify as ‘‘small
STELAR added a new factor for the 62. Pursuant to the Small Business governmental jurisdictions.’’ 295 Thus,
Commission to consider when Jobs Act of 2010, the Commission is
evaluating a market modification required to respond to any comments 291 5 U.S.C. 601(3) (incorporating by reference the
petition—‘‘whether modifying the local filed by the Chief Counsel for Advocacy definition of ‘‘small business concern’’ in 15 U.S.C.
market of the television station would 632). Pursuant to 5 U.S.C. 601(3), the statutory
of the Small Business Administration definition of a small business applies ‘‘unless an
promote consumers’ access to television (SBA), and to provide a detailed agency, after consultation with the Office of
broadcast station signals that originate statement of any change made to the Advocacy of the Small Business Administration
in their State of residence.’’ 283 Section proposed rules as a result of those and after opportunity for public comment,
102 of the STELAR, and the establishes one or more definitions of such term
comments.288 The Chief Counsel did not which are appropriate to the activities of the agency
Commission’s actions in this Report and file any comments in response to the and publishes such definition(s) in the Federal
Order, seek to establish a market proposed rules in this proceeding. Register.’’ 5 U.S.C. 601(3).
modification process for the satellite 292 15 U.S.C. 632. Application of the statutory
carriage context and, to the extent 3. Description and Estimate of the criteria of dominance in its field of operation and
possible, address satellite subscribers’ Number of Small Entities To Which the independence are sometimes difficult to apply in
the context of broadcast television. Accordingly, the
inability to receive in-state Rules Will Apply Commission’s statistical account of television
programming in certain areas. In this 63. The RFA directs agencies to stations may be over-inclusive.
Report and Order, consistent with provide a description of and an estimate 293 5 U.S.C. 601(5).
Congress’ intent that the Commission of the number of small entities to which
294 U.S. Census Bureau, Statistical Abstract of the
model the satellite market modification United States: 2011, Table 427 (2007).
the rules will apply.289 The RFA 295 The 2007 U.S Census data for small
process on the current cable market generally defines the term ‘‘small governmental organizations indicate that there were
modification process, the Commission entity’’ as having the same meaning as 89,476 local governments in 2007. U.S. CENSUS
adopts rules to implement section 102 the terms ‘‘small business,’’ ‘‘small BUREAU, STATISTICAL ABSTRACT OF THE
UNITED STATES 2011, Table 428. The criterion by
organization,’’ and ‘‘small governmental which the size of such local governments is
278 See Amendment to the Commission’s Rules
Concerning Market Modification; Implementation of
jurisdiction.’’ 290 In addition, the term determined to be small is a population of fewer
Section 102 of the STELA Reauthorization Act of than 50,000. 5 U.S.C. 601(5). However, since the
2014; MB Docket No. 15–71, Notice of Proposed 284 See 47 CFR 76.59. The Commission revises Census Bureau, in compiling the cited data, does
Rulemaking, FCC 15–34, 80 FR 19594, Apr. 13, section 76.59 of the rules to apply to both cable not state that it applies that criterion, it cannot be
2015 (NPRM). systems and satellite carriers. determined with precision how many such local
279 See 5 U.S.C. 604. 285 47 U.S.C. 338(l)(3) (stating that ‘‘[a] market governmental organizations are small. Nonetheless,
280 The STELA Reauthorization Act of 2014 determination . . . shall not create additional the inference seems reasonable that a substantial
carriage obligations for a satellite carrier if it is not number of these governmental organizations have a
(STELAR), sec. 102, Public Law 113–200, 128 Stat. population of fewer than 50,000. To look at Table
technically and economically feasible for such
asabaliauskas on DSK5VPTVN1PROD with RULES
2059, 2060–62 (2014) (codified at 47 U.S.C. 338(l)). 428 in conjunction with a related set of data in
The STELAR was enacted on December 4, 2014 (H. carrier to accomplish such carriage by means of its
satellites in operation at the time of the Table 429 in the Census’s Statistical Abstract of the
R. 5728, 113th Cong.). See Report and Order, para. U.S., that inference is further supported by the fact
1. determination.’’).
286 STELAR sec. 102(d). that in both Tables, many sub-entities that may well
281 STELAR secs. 102, 204, 128 Stat. at 2060–62,
287 See STELAR sec. 102(b) (amending 47 U.S.C.
be small are included in the 89,476 local
2067. governmental organizations, e.g., county,
282 See 47 U.S.C. 534(h)(1)(C). See also 47 CFR 534(h)(1)(C)(ii)). municipal, township and town, school district and
288 See 5 U.S.C. 604(a)(3).
76.59. special district entities. Measured by a criterion of
283 See 47 U.S.C. 338(l)(2)(B)(iii), 289 5 U.S.C. 604(a)(4).
a population of fewer than 50,000, many of the
534(h)(1)(C)(ii)(III). 290 5 U.S.C. 601(6). cited sub-entities in this category seem more likely
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standard.311 We note that the 70. Direct Broadcast Satellite (DBS) wherewithal to become a DBS service
Commission neither requests nor Service. DBS service is a nationally provider.
collects information on whether cable distributed subscription service that 71. Satellite Master Antenna
system operators are affiliated with delivers video and audio programming Television (SMATV) Systems, also
entities whose gross annual revenues via satellite to a small parabolic ‘‘dish’’ known as Private Cable Operators
exceed $250 million.312 Although it antenna at the subscriber’s location. (PCOs). SMATV systems or PCOs are
seems certain that some of these cable DBS, by exception, is now included in video distribution facilities that use
system operators are affiliated with the SBA’s broad economic census closed transmission paths without using
entities whose gross annual revenues category, Wired Telecommunications
any public right-of-way. They acquire
exceed $250,000,000, we are unable to Carriers,316 which was developed for
video programming and distribute it via
estimate with greater precision the small wireline businesses. Under this
terrestrial wiring in urban and suburban
number of cable system operators that category, the SBA deems a wireline
multiple dwelling units such as
would qualify as small cable operators business to be small if it has 1,500 or
fewer employees.317 Census data for apartments and condominiums, and
under this definition.
69. Satellite Carriers. The term 2007 shows that there were 3,188 firms commercial multiple tenant units such
‘‘satellite carrier’’ means an entity that that operated for the entire year.318 Of as hotels and office buildings. SMATV
uses the facilities of a satellite or this total, 3,144 firms had fewer than systems or PCOs are now included in
satellite service licensed under Part 25 1,000 employees, and 44 firms had the SBA’s broad economic census
of the Commission’s rules to operate in 1,000 or more employees.319 Therefore, category, Wired Telecommunications
the Direct Broadcast Satellite (DBS) under this size standard, the majority of Carriers,322 which was developed for
service or Fixed-Satellite Service (FSS) such businesses can be considered small wireline businesses. Under this
frequencies.313 As a general practice small. However, the data we have category, the SBA deems a wireline
(not mandated by any regulation), DBS available as a basis for estimating the business to be small if it has 1,500 or
licensees usually own and operate their number of such small entities were fewer employees.323 Census data for
own satellite facilities as well as gathered under a superseded SBA small 2007 shows that there were 3,188 firms
package the programming they offer to business size standard formerly titled that operated for the entire year.324 Of
their subscribers. In contrast, satellite ‘‘Cable and Other Program this total, 3,144 firms had fewer than
carriers using FSS facilities often lease Distribution.’’ The definition of Cable 1,000 employees, and 44 firms had
capacity from another entity that is and Other Program Distribution 1,000 or more employees.325 Therefore,
licensed to operate the satellite used to provided that a small entity is one with under this size standard, the majority of
provide service to subscribers. These $12.5 million or less in annual such businesses can be considered
entities package their own programming receipts.320 Currently, only two entities small.
and may or may not be Commission provide DBS service, which requires a 72. Home Satellite Dish (HSD)
licensees themselves. In addition, a great investment of capital for operation: Service. HSD or the large dish segment
third situation may include an entity DIRECTV and DISH Network.321 Each of the satellite industry is the original
using a non-U.S. licensed satellite to currently offers subscription services. satellite-to-home service offered to
provide programming to subscribers in DIRECTV and DISH Network each consumers, and involves the home
the United States pursuant to a blanket reports annual revenues that are in reception of signals transmitted by
earth station license.314 The excess of the threshold for a small satellites operating generally in the C-
Commission has concluded that the business. Because DBS service requires band frequency. Unlike DBS, which
definition of ‘‘satellite carrier’’ includes significant capital, we believe it is uses small dishes, HSD antennas are
all three of these types of entities.315 unlikely that a small entity as defined between four and eight feet in diameter
by the SBA would have the financial and can receive a wide range of
311 See SNL Kagan, U.S. Multichannel Top Cable unscrambled (free) programming and
316 This category of Wired Telecommunications
MSOs, http://www.snl.com/interactivex/ scrambled programming purchased from
TopCableMSOs.aspx (visited June 26, 2014). Carriers is defined above (‘‘By exception,
312 The Commission does receive such establishments providing satellite television program packagers that are licensed to
information on a case-by-case basis if a cable distribution services using facilities and facilitate subscribers’ receipt of video
operator appeals a local franchise authority’s infrastructure that they operate are included in this programming. Because HSD provides
finding that the operator does not qualify as a small industry.’’). U.S. Census Bureau, 2012 NAICS subscription services, HSD falls within
cable operator pursuant to [47 CFR] 76.901(f) of the Definitions, ‘‘517110 Wired Telecommunications
Carriers’’ at http://www.census.gov/cgi-bin/sssd/ the SBA-recognized definition of Wired
Commission’s rules. See 47 CFR 76.901(f).
313 The Communications Act defines the term naics/naicsrch.
317 13 CFR 121.201; NAICS code 517110. 322 This category of Wired Telecommunications
‘‘satellite carrier’’ by reference to the definition in
318 U.S. Census Bureau, 2007 Economic Census. Carriers is defined above (‘‘By exception,
the copyright laws in title 17. See 47 U.S.C.
340(i)(1) and 338(k)(3); 17 U.S.C.119(d)(6). Part 100 See U.S. Census Bureau, American FactFinder, establishments providing satellite television
of the Commission’s rules was eliminated in 2002 ‘‘Information: Subject Series—Estab and Firm Size: distribution services using facilities and
and now both FSS and DBS satellite facilities are Employment Size of Establishments for the United infrastructure that they operate are included in this
licensed under Part 25 of the rules. Policies and States: 2007—2007 Economic Census,’’ NAICS code industry.’’). U.S. Census Bureau, 2012 NAICS
Rules for the Direct Broadcast Satellite Service, FCC 517110, Table EC0751SSSZ5; available at http:// Definitions, ‘‘517110 Wired Telecommunications
02–110, 67 FR 51110, August 7, 2002; 47 CFR factfinder2.census.gov/faces/nav/jsf/pages/ Carriers’’ at http://www.census.gov/cgi-bin/sssd/
25.148. index.xhtml. naics/naicsrch.
314 See, e.g., Application Of DIRECTV Enterprises, 319 Id. With respect to the latter 44 firms, there 323 13 CFR 121.201; NAICS code 517110.
LLC, Request For Special Temporary Authority for is no data available that shows how many operated 324 U.S. Census Bureau, 2007 Economic Census.
asabaliauskas on DSK5VPTVN1PROD with RULES
the DIRECTV 5 Satellite; Application Of DIRECTV with more than 1,500 employees. See U.S. Census Bureau, American FactFinder,
Enterprises, LLC, Request for Blanket Authorization 320 13 CFR 121.201; NAICS code 517510 (2002). ‘‘Information: Subject Series—Estab and Firm Size:
for 1,000,000 Receive Only Earth Stations to 321 See 15th Annual Competition Report, at para. Employment Size of Establishments for the United
Provide Direct Broadcast Satellite Service in the 27. As of June 2012, DIRECTV is the largest DBS States: 2007—2007 Economic Census,’’ NAICS code
U.S. using the Canadian Authorized DIRECTV 5 operator and the second largest MVPD in the United 517110, Table EC0751SSSZ5; available at http://
Satellite at the 72.5° W.L. Broadcast Satellite States, serving approximately 19.9 million factfinder2.census.gov/faces/nav/jsf/pages/
Service Location, Order and Authorization, DA 04– subscribers. DISH Network is the second largest index.xhtml.
2526 (Sat. Div. rel. Aug. 13, 2004). DBS operator and the third largest MVPD, serving 325 Id. With respect to the latter 44 firms, there
315 SHVERA Significantly Viewed Report and approximately 14.1 million subscribers. Id. at paras. is no data available that shows how many operated
Order, FCC 05–187, paras. 59–60. 27, 110–11. with more than 1,500 employees.
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the majority of television broadcast Under section 76.59 of the rules, carrier must respond to this request
stations are small entities. commercial TV broadcast stations and within a reasonable amount of time by
81. We note, however, that in cable system operators may already file providing a feasibility certification to
assessing whether a business concern such requests for market modification the prospective petitioner.377 A satellite
qualifies as small under the above for purposes of cable carriage rights. carrier must also file a copy of the
definition, business (control) Consistent with the current cable correspondence and feasibility
affiliations 367 must be included. Our requirements, the adopted rules require certification it provides to the
estimate, therefore, likely overstates the petitioners to file market modification prospective petitioner in this docket
number of small entities that might be requests and/or responsive pleadings in electronically via ECFS so that the
affected by our action because the accordance with the procedures for Media Bureau can track these
revenue figure on which it is based does filing Special Relief petitions in section certifications and monitor carrier
not include or aggregate revenues from 76.7 of the rules.372 Consistent with the response time. If the carrier is claiming
affiliated companies. In addition, an current cable requirements, the adopted spot beam coverage infeasibility, then
element of the definition of ‘‘small rules require petitioners to provide the certification provided by the carrier
business’’ is that the entity not be specific forms of evidence to support must be the same detailed certification
dominant in its field of operation. We market modification petitions, should that would be required in response to a
are unable at this time to define or they ch0ose to file such petitions.373 A market modification petition.378 For any
quantify the criteria that would television broadcast station that other claim of infeasibility, the carrier’s
establish whether a specific television becomes eligible for mandatory satellite feasibility certification must explain in
station is dominant in its field of carriage by operation of a market detail the basis of such infeasibility and
operation. Accordingly, the estimate of modification may elect retransmission must be prepared to provide
small businesses to which rules may consent or mandatory carriage with documentation in support of its claim,
apply does not exclude any television respect to a satellite carrier within 30 in the event the prospective petitioner
station from the definition of a small days of the market determination.374 A decides to challenge the carrier’s
business on this basis and is therefore satellite carrier must commence carriage claim.379 If carriage is feasible, a
possibly over-inclusive to that extent. within 90 days of receiving the station’s statement to that effect must be
82. Class A TV and LPTV Stations. request for carriage.375 provided in the certification.380 If a
The same SBA definition that applies to 84. The Report and Order establishes broadcaster or county government has
television broadcast stations would a process that will allow a prospective concerns about the adequacy of the
apply to licensees of Class A television petitioner (i.e., broadcaster or county carrier’s certification, or has some
stations and low power television government) to obtain a certification reason to question the validity of the
(LPTV) stations, as well as to potential from a satellite carrier about whether or carrier’s certification, the broadcaster or
licensees in these television services. As not (and to what extent) carriage county government may raise such
noted above, the SBA has created the resulting from a contemplated market concerns in a (separate) petition for
following small business size standard modification is technically and special relief or its market modification
for this category: those having $38.5 economically feasible for such carrier petition.381
million or less in annual receipts.368 before the prospective petitioner 85. The adopted rules require a
The Commission has estimated the undertakes the time and expense of satellite carrier to provide a detailed and
number of licensed Class A television preparing and filing a market specialized certification to demonstrate
stations to be 431.369 The Commission modification petition.376 To initiate this
its claim that satellite carriage resulting
has also estimated the number of process, a prospective petitioner may
from a market modification would be
licensed LPTV stations to be 2,003.370 make a request in writing to a satellite
technically or economically infeasible
Given the nature of these services, we carrier for the carrier to provide the
due to insufficient spot beam
will presume that these licensees certification about the feasibility or
coverage.382 Satellite carriers will be
qualify as small entities under the SBA infeasibility of carriage. A satellite
required to provide supporting
definition.
372 See Report and Order paras. 12–13.
377 Id. With respect to what would be a reasonable
4. Description of Projected Reporting, Broadcasters and satellite carriers that want to
amount of time for a carrier to respond to a request
Recordkeeping, and Other Compliance oppose market modification requests would need to
for a feasibility certification, we expect carriers will
Requirements for Small Entities file responsive pleadings in accordance with 47
CFR 76.7. generally be able to respond within 45 days of
receipt of a prospective petitioner’s written request;
83. The Report and Order revises 373 See Report and Order para. 17 (discussing
however, we find that it would be reasonable for the
section 76.59 of the rules to apply also evidentiary requirements for filing market
satellite carrier to respond in 90 days if the carrier
modification petitions). These requirements are
to the satellite television context. The codified in 47 CFR 76.59.
has to process several requests at the same time. If
new satellite rules permit commercial 374 See Report and Order at para. 24. Carriage
the response is after 45 days, the carrier must
provide an explanation for the longer time period
television broadcast stations, satellite elections must be made in accordance with the
in its certification (e.g., having to respond to
carriers and county governments to file procedures set forth in section 76.66(d)(1). See
multiple simultaneous requests). If the Media
petitions seeking to modify a Report and Order at para. 26. Section 76.66(d)(1)
Bureau finds that a carrier is routinely taking up to
requires that an election request made by a
commercial television broadcast 90 days to respond or is not providing a reasonable
television station must be in writing and sent to the
explanation for when it takes 90 days to respond,
station’s local television market for satellite carrier’s principal place of business, by
the Bureau may order such carrier to respond to
purposes of satellite carriage rights.371 certified mail, return receipt requested. 47 CFR
future requests in a shorter time period or may take
76.66(d)(1)(ii). The rule requires that a television
other enforcement action. With this process, we are
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station’s written notification shall include the
367 ‘‘[Business concerns] are affiliates of each trying to balance the need to provide broadcasters’
following information: (1) Station’s call sign; (2)
other when one concern controls or has the power Name of the appropriate station contact person; (3) with as fast a response as possible, while
to control the other or a third party or parties Station’s address for purposes of receiving official recognizing that satellite carriers may have
controls or has to power to control both.’’ 13 CFR correspondence; (4) Station’s community of license; problems responding to numerous requests at once.
21.103(a)(1). (5) Station’s DMA assignment; and (6) Station’s
378 See Report and Order paras. 37–39.
368 13 CFR 121.201; NAICS code 515120. 379 See Report and Order para. 45.
election of mandatory carriage or retransmission
369 See Broadcast Station Totals, supra. consent. 47 CFR 76.66(d)(1)(iii). 380 See Report and Order para. 45.
370 See Broadcast Station Totals, supra. 375 See Report and Order at para. 25. 381 See Report and Order para. 45.
371 See Report and Order para. 9. 376 See Report and Order para. 45. 382 See Report and Order paras. 35–36.
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![59662 Federal Register / Vol. 80, No. 191 / Friday, October 2, 2015 / Rules and Regulations
documentation upon request by the 88. In the IRFA, we invited small TV that a satellite carrier is not required to
Commission and must therefore retain stations to comment on whether they carry a station pursuant to a market
such supporting documentation are more or less likely, on the whole, to modification if it is not technically and
substantiating potential review by the benefit from market modifications.386 In economically feasible for the carrier to
Commission.383 As noted in section C of addition, we invited comment on do so.391 The Report and Order allows
this FRFA, neither one of the satellite whether there are any alternatives we satellite carriers to demonstrate spot
carriers, DISH nor DIRECTV, qualify as should consider to the Commission’s beam coverage infeasibility by providing
a small entity and small businesses do proposed implementation of section 102 a detailed and specialized certification
not generally have the financial ability of the STELAR that would minimize under penalty of perjury.392 To avoid
to become DBS licensees because of the any adverse impact on small TV unnecessary burdens on broadcasters,
high implementation costs associated stations, but which are consistent with satellite carriers, and the Commission,
with satellite services. the statute and its goals, such as the Report and Order established a
promoting localism and regulatory process for the parties to exchange
5. Steps Taken To Minimize Significant
parity.387 We received no comments in information regarding feasibility of
Economic Impact on Small Entities, and
direct response to these inquiries. In carriage prior to the filing of a
Significant Alternatives Considered
comments to the NPRM, Gray prospective market modification
86. The RFA requires an agency to Television, Inc. (‘‘Gray’’) proposed that petition.393 The adopted rules allow TV
describe the steps the agency has taken the Commission should establish a broadcast stations to request a
to minimize the significant economic presumption in favor of applying prior certification regarding claims of
impact on small entities consistent with cable market modification
the stated objectives of applicable technical or economic infeasibility from
determinations to satellite markets to a satellite carrier before filing a
statutes, including a statement of the lower the burden on television
factual, policy, and legal reasons for prospective market modification
broadcast stations, including small petition, and the station may seek
selecting the alternative adopted in the stations.388 In the Report and Order, the
final rule and why each one of the other review of such certification by filing a
Commission rejected Gray’s proposal,
significant alternatives to the rule petition for special relief before filing a
finding it was inconsistent with the
considered by the agency which affect prospective petition for market
statute’s requirement to apply the
the impact on small entities was modification.394 This process will
statutory factors to each market
rejected.384 particularly benefit small stations,
modification petition.389 The
87. Consistent with the statute’s goal Commission did observe, however, that allowing them to avoid the time and
of promoting regulatory parity between consideration of historic carriage is one expense of filing a market modification
cable and satellite service, the Report of the five statutory factors that the petition that could not result in carriage
and Order applies the existing cable Commission is required to consider in of the station. In comments to the
market modification rules to the satellite evaluating market modification requests NPRM, the Virginia Broadcasting Corp.
context, while adding provisions to the and explained that consideration under (‘‘WVIR–TV’’) expressed concern that a
rules to address the unique nature of such factor would ‘‘give sufficient certification approach would not
satellite television service. Therefore, weight to prior decisions without the provide broadcasters with sufficient
the adopted rules for the first time allow need to establish a presumption.’’ 390 information to challenge the validity of
a commercial television broadcast 89. Unique to satellite market the satellite carrier’s claim of
station to request a modification of its modifications, the STELAR provides infeasibility.395 The Report and Order
local television market for purposes of addressed this concern by requiring a
satellite carriage. Small TV stations that same area—(a) have been historically carried on the detailed and specialized certification
choose to file satellite market cable system or systems within such community; that is subject to penalties for perjury
and (b) have been historically carried on the and which would contain sufficient
modification petitions must comply satellite carrier or carriers serving such community;
with the associated filing and (2) whether the television station provides coverage detail to ensure that the analysis
evidentiary requirements (explained in or other local service to such community; (3) performed by the satellite carrier was
section D of the FRFA); however, the whether modifying the local market of the appropriate and valid.396
television station would promote consumers’ access
filing of such petitions is voluntary. In to television broadcast station signals that originate
addition, small TV stations may want to in their State of residence; (4) whether any other 391 See 47 U.S.C. 338(l)(3) (providing that ‘‘[a]
respond to a petition to modify its television station that is eligible to be carried by a market determination . . . shall not create
satellite carrier in such community in fulfillment of additional carriage obligations for a satellite carrier
market (or the market of a competitor if it is not technically and economically feasible for
the requirements of this section provides news
station) filed by a satellite carrier or a coverage of issues of concern to such community such carrier to accomplish such carriage by means
competitor station; however, there are or provides carriage or coverage of sporting and of its satellites in operation at the time of the
no standardized evidentiary other events of interest to the community; and (5) determination.’’). See also discussion in Report and
evidence of viewing patterns in households that Order at section III.D.
requirements associated with such subscribe and do not subscribe to the services 392 See Report and Order para. 36.
responsive pleadings. Through a market offered by multichannel video programming 393 See section D of this FRFA.
modification process, a small TV station distributors within the areas served by such 394 See Report and Order paras. 39–40.
may gain or lose carriage rights with multichannel video programming distributors in 395 Reply Comments of Virginia Broadcasting
such community. 47 U.S.C. 338(l)(2)(B)(i) through
respect to a particular community, (v). See also discussion at Report and Order at
Corp., MB Docket No. 15–71, at 1 (filed May 28,
based on the five statutory factors, to 2015) (WVIR–TV Reply) (urging the Commission
section III.B.
‘‘to reject suggestions by DBS operators that would
better reflect localism.385 386 NPRM, para. 25.
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impose heavy burdens on broadcasters seeking
387 Id.
market modifications—burdens that would be
383 See Report and Order para. 35. 388 Comments of Gray Television, Inc., MB Docket
particularly onerous for small market television
384 5 U.S.C. 604(a)(6). No. 15–71, at 4–5 (filed May 13, 2015) (Gray stations—by withholding information that is
385 See Report and Order para. 6. Section 338(l) Comments). uniquely in their possession regarding technical
389 See Report and Order para. 23 (explaining the and economic infeasibility or by requiring
of the Act provides that, in deciding requests for
market modifications, the Commission must afford reasons for not establishing a presumption that broadcasters to provide support for market
particular attention to the value of localism by prior cable market determinations should apply to modification requests that goes well beyond what
taking into account the following five factors: (1) satellite markets). is required in the cable television context.’’).
Whether the station, or other stations located in the 390 Id. 396 See Report and Order paras. 35–36.
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![59664 Federal Register / Vol. 80, No. 191 / Friday, October 2, 2015 / Rules and Regulations
geographic features, station transmitter (e)(1) introductory text to read as accept or reject such requests. Driving
sites, cable system headend or satellite follows: time may not be edited except in the
carrier local receive facility locations, case of unidentified or team drivers, and
terrain features that would affect station § 76.66 Satellite broadcast signal carriage. when driving time was assigned to the
reception, mileage between the * * * * * wrong driver or no driver. All prior
community and the television station (d) * * * Agency interpretations and regulatory
transmitter site, transportation routes (6) Carriage after a market guidance on this subject, including
and any other evidence contributing to modification. Television broadcast memoranda and letters, may no longer
the scope of the market. stations that become eligible for be relied upon to the extent they are
(2) Noise-limited service contour mandatory carriage with respect to a inconsistent with this guidance.
maps (for full-power digital stations) or satellite carrier (pursuant to § 76.66) due DATES: This regulatory guidance is
protected contour maps (for Class A and to a change in the market definition (by effective October 2, 2015.
low power television stations) operation of a market modification
FOR FURTHER INFORMATION CONTACT: Mr.
delineating the station’s technical pursuant to § 76.59) may, within 30
Thomas Yager, Chief, Driver and Carrier
service area and showing the location of days of the effective date of the new
Operations Division, Federal Motor
the cable system headends or satellite definition, elect retransmission consent
Carrier Safety Administration, U.S.
carrier local receive facilities and or mandatory carriage with respect to
Department of Transportation, 1200
communities in relation to the service such carrier. A satellite carrier shall
New Jersey Avenue SE., Washington,
areas. commence carriage within 90 days of
DC 20590, phone (202) 366–4325, email
Note to paragraph (b)(2): Service area
receiving the carriage election from the
MCPSD@dot.gov.
maps using Longley-Rice (version 1.2.2) television broadcast station. The
election must be made in accordance SUPPLEMENTARY INFORMATION:
propagation curves may also be included to
support a technical service exhibit. with the requirements in paragraph Legal Basis
(d)(1) of this section.
* * * * * (e) Market definitions. (1) A local The Motor Carrier Safety Act of 1984
(5) Cable system or satellite carrier market, in the case of both commercial (Pub. L. 98–554, Title II, 98 Stat. 2832,
channel line-up cards or other exhibits and noncommercial television broadcast October 30, 1984) (1984 Act), as
establishing historic carriage, such as stations, is the designated market area in amended (codified at 49 U.S.C.
television guide listings. which a station is located, unless such 31136(a)) authorizes the Secretary of
(6) Published audience data for the market is amended pursuant to § 76.59, Transportation to regulate commercial
relevant station showing its average all and motor vehicles (CMVs) and equipment,
day audience (i.e., the reported and the drivers and motor carriers that
audience averaged over Sunday– * * * * * operate them. Section 211 of the 1984
[FR Doc. 2015–24999 Filed 10–1–15; 8:45 am]
Saturday, 7 a.m.–1 a.m., or an Act also gives the Secretary broad power
BILLING CODE 6712–01–P
equivalent time period) for both to ‘‘prescribe recordkeeping and
multichannel video programming reporting requirements’’ and to
distributor (MVPD) and non-MVPD ‘‘perform other acts the Secretary
households or other specific audience DEPARTMENT OF TRANSPORTATION considers appropriate’’ (49 U.S.C.
indicia, such as station advertising and 31133(a)(8) and (10)). The Administrator
Federal Motor Carrier Safety
sales data or viewer contribution of FMCSA has been delegated authority
Administration
records. under 49 CFR 1.87(f) to carry out the
(7) If applicable, a statement that the functions vested in the Secretary by 49
station is licensed to a community 49 CFR Part 395
U.S.C. chapter 311, subchapters I and
within the same state as the relevant Hours of Service for Drivers: III, relating to CMV programs and safety
community. Regulatory Guidance Concerning the regulation.
* * * * * Editing of Automatic On-Board Background
(d) A cable operator or satellite carrier Recording Device (AOBRD)
shall not delete from carriage the signal Information Motor carriers began to use automated
of a commercial television station hours-of-service (HOS) recording
during the pendency of any proceeding AGENCY: Federal Motor Carrier Safety devices in the mid-1980s to replace
pursuant to this section. Administration (FMCSA), DOT. paper records. The Federal Highway
(e) A market determination under this ACTION: Notice of regulatory guidance. Administration, the agency then
section shall not create additional responsible for the motor carrier safety
carriage obligations for a satellite carrier SUMMARY: FMCSA issues regulatory regulations, published a final rule in
if it is not technically and economically guidance concerning the editing of 1988 that defined Automatic On Board
feasible for such carrier to accomplish records created by automatic on-board Recording Devices (AOBRDs) and set
such carriage by means of its satellites recording devices (AOBRDs). The forth performance standards for their
in operation at the time of the guidance makes clear that, within use (53 FR 38670, September 30, 1988,
determination. certain limits, a driver must be allowed codified at 49 CFR 395.15).
(f) No modification of a commercial to review his or her AOBRD records, Question 2 of the regulatory guidance
television broadcast station’s local annotate and correct inaccurate records, for § 395.15 prohibits CMV drivers from
asabaliauskas on DSK5VPTVN1PROD with RULES
market pursuant to this section shall enter any missing information, and ‘‘amending’’ AOBRD records of duty
have any effect on the eligibility of certify the accuracy of the information. status (RODS) during a trip; the
households in the community affected The AOBRD must retain the original guidance was published on April 4,
by such modification to receive distant entries, and reflect the date, time, and 1997 (65 FR 16370, at 16426). The
signals from a satellite carrier pursuant name of the person making edits to the reason for the prohibition—‘‘If drivers,
to 47 U.S.C. 339. information. Drivers’ supervisors may who use automatic on-board recording
■ 5. Section 76.66 is amended by adding request that a driver make edits to devices, were allowed to amend their
paragraph (d)(6) and revising paragraph correct errors, but the driver must record of duty status while in transit,
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Document Created: 2015-12-15 08:45:30
Document Modified: 2015-12-15 08:45:30
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Final rule. | |
| Dates | Effective November 2, 2015, except Sec. Sec. 76.59(a) and (b) which contain information collection requirements that have not been approved by OMB. The Commission will publish a document in the Federal Register announcing when OMB approval for this information collection has been received and these rules will take effect. | |
| Contact | Evan Baranoff, [email protected], of the Media Bureau, Policy Division, (202) 418-2120. For additional information concerning the Paperwork Reduction Act information collection requirements contained in this document, send an email to [email protected] or contact Cathy Williams at (202) 418-2918. | |
| FR Citation | 80 FR 59635 | |
| CFR Associated | Broadcast Television; Cable Television and Satellite Television |
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