Federal Register Vol. 81, No.51,

This proposed rule is issued under Marketing Order No. 915, as amended (7 CFR part 915), regulating the handling of avocados grown in South Florida, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

The Department of Agriculture (USDA) is issuing this proposed rule in conformance with Executive Orders 12866, 13563, and 13175.

This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the marketing order now in effect, Florida avocado handlers are subject to assessments. Funds to administer the order are derived from such assessments. It is intended that the assessment rate as proposed herein would be applicable to all assessable Florida avocados beginning on April 1, 2016, and continue until amended, suspended, or terminated.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. Such handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.

This proposed rule would increase the assessment rate established for the Committee for the 2016-17 and subsequent fiscal periods from $0.30 to $0.35 per 55-pound bushel container of avocados.

The Florida avocado marketing order provides authority for the Committee, with the approval of USDA, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. The members of the Committee are producers and handlers of Florida avocados. They are familiar with the Committee's needs and with the costs for goods and services in their local area, and are thus in a position to formulate an appropriate budget and assessment rate. The assessment rate is formulated and discussed in a public meeting. Thus, all directly affected persons have an opportunity to participate and provide input.

For the 2013-14 and subsequent fiscal periods, the Committee recommended, and USDA approved, an assessment rate that would continue in effect from fiscal period to fiscal period unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the Committee or other information available to USDA.

The Committee met on December 9, 2015, and recommended 2016-17 expenditures of $302,553 and an assessment rate of $0.35 per 55-pound bushel container of avocados. In comparison, last year's budgeted expenditures were $602,553. The assessment rate of $0.35 is $0.05 higher than the rate currently in effect. During the 2015-16 season, the Committee used its authorized reserves to fund several large research projects to address the Laurel Wilt fungus, which can infect and kill avocado trees. This substantially reduced the funds in the Committee's reserves to $214,733. Further, at the current assessment rate, assessment income would equal only $300,000, an amount insufficient to cover the Committee's anticipated expenditures of $302,553. By increasing the assessment rate by $0.05, assessment income would be approximately $350,000. This amount should provide sufficient funds to meet 2016-2017 anticipated expenses and add money back into the Committee's authorized reserves.

The major expenditures recommended by the Committee for the 2016-17 year include $119,483 for salaries, $51,500 for employee benefits, and $25,500 for insurance and bonds. Budgeted expenses for these items in 2015-16 were $119,483, $51,500, and $25,500, respectively.

The assessment rate recommended by the Committee was derived by reviewing anticipated expenses, expected shipments of Florida avocados, and the level of funds in reserve. As mentioned earlier, avocado shipments for the year are estimated at one million 55-pound bushel containers which should provide $350,000 in assessment income. Income derived from handler assessments at the proposed rate, along with interest income, would be adequate to cover budgeted expenses. Funds in the reserve (currently $214,733) would be kept within the maximum permitted by the order (approximately three fiscal periods' expenses as authorized in § 915.42).

The proposed assessment rate would continue in effect indefinitely unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the Committee or other available information.

Although this assessment rate would be in effect for an indefinite period, the Committee would continue to meet prior to or during each fiscal period to recommend a budget of expenses and consider recommendations for modification of the assessment rate. The dates and times of Committee meetings are available from the Committee or USDA. Committee meetings are open to the public and interested persons may express their views at these meetings. USDA would evaluate Committee recommendations and other available information to determine whether modification of the assessment rate is needed. Further rulemaking would be undertaken as necessary. The Committee's 2016-17 budget and those for subsequent fiscal periods would be reviewed and, as appropriate, approved by USDA.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) has considered the economic impact of this proposed rule on small entities. Accordingly, AMS has prepared this initial regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf.

There are approximately 400 producers of Florida avocados in the production area and approximately 25 handlers subject to regulation under the marketing order. Small agricultural producers are defined by the Small Business Administration (SBA) as those having annual receipts less than $750,000, and small agricultural service firms are defined as those whose annual receipts are less than $7,500,000 (13 CFR 121.201).

According to the National Agricultural Statistical Service (NASS), the average grower price paid for Florida avocados during the 2014-15 season was approximately $18.00 per 55-pound bushel container and total shipments were slightly higher than 1.2 million 55-pound bushels. Based on this information, the majority of avocado producers would have annual receipts less than $750,000. In addition, based on Committee information, the majority of Florida avocado handlers could be considered small business under SBA's definition. Thus, the majority of Florida avocado producers and handlers may be classified as small entities.

This proposal would increase the assessment rate established for the Committee and collected from handlers for the 2016-17 and subsequent fiscal periods from $0.30 to $0.35 per 55-pound bushel container of avocados. The Committee recommended 2016-17 expenditures of $302,553 and an assessment rate of $0.35 per 55-pound bushel container. The proposed assessment rate of $0.35 is $0.05 higher than the previous rate. The quantity of assessable avocados for the 2016-17 season is estimated at one million 55-pound bushel containers. Thus, the $0.35 rate should provide $350,000 in assessment income and be adequate to meet this year's expenses.

The major expenditures recommended by the Committee for the 2016-17 fiscal period include $119,483 for salaries, $51,500 for employee benefits, and $25,500 for insurance and bonds. Budgeted expenses for these items in 2015-16 were $119,483, $51,500, and $25,500, respectively.

During the 2015-16 season, the Committee used its authorized reserves to fund several large research projects to address the Laurel Wilt fungus. This substantially reduced the funds in the Committee's reserves. Further, at the current assessment rate and with the 2016-17 crop estimated to be one million 55-pound bushel containers, assessment income would equal only $300,000, an amount insufficient to cover the Committee's anticipated expenditures of $302,553. By increasing the assessment rate by $0.05, assessment income would be approximately $350,000. This amount should provide sufficient funds to meet 2016-2017 anticipated expenses and add money back into the Committee's authorized reserves. Consequently, the Committee recommended increasing the assessment rate.

Prior to arriving at this budget and assessment rate, the Committee considered information from various sources, such as the Committee's Budget and Personnel Committee. Alternative expenditure levels were discussed by this group, based upon the relative value of various activities to the South Florida avocado industry. The Committee ultimately determined that 2016-17 expenditures of $302,553 were appropriate, and the recommended assessment rate, along with interest income, would generate sufficient revenue to meet its expenses.

A review of historical information and preliminary information pertaining to the upcoming season indicates that the grower price for the 2016-17 season should be around $18 per 55-pound bushel container of avocados. Therefore, the estimated assessment revenue for the 2016-17 fiscal period as a percentage of total grower revenue would be approximately two percent.

This action would increase the assessment obligation imposed on handlers. While assessments impose some additional costs on handlers, the costs are minimal and uniform on all handlers. Additionally, these costs would be offset by the benefits derived by the operation of the marketing order. In addition, the Committee's meeting was widely publicized throughout the Florida avocado industry and all interested persons were invited to attend the meeting and participate in Committee deliberations on all issues. Like all Committee meetings, the December 9, 2015, meeting was a public meeting and all entities, both large and small, were able to express views on this issue. Finally, interested persons are invited to submit comments on this proposed rule, including the regulatory and informational impacts of this action on small businesses.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the order's information collection requirements have been previously approved by the Office of Management and Budget (OMB) and assigned OMB No. 0581-0189 (Generic Fruit Crops). No changes in those requirements as a result of this action are necessary. Should any changes become necessary, they would be submitted to OMB for approval.

This proposed rule would impose no additional reporting or recordkeeping requirements on either small or large Florida avocado handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

AMS is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this action.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/rules-regulations/moa/small-businesses. Any questions about the compliance guide should be sent to Antoinette Carter at the previously-mentioned address in the FOR FURTHER INFORMATION CONTACT section.

A 30-day comment period is provided to allow interested persons to respond to this proposed rule. Thirty days is deemed appropriate because: (1) The 2016-17 fiscal period begins on April 1, 2016, and the marketing order requires that the rate of assessment for each fiscal period apply to all assessable avocados handled during such fiscal period; (2) the Committee needs to have sufficient funds to pay its expenses which are incurred on a continuous basis; and (3) handlers are aware of this action which was recommended by the Committee at a public meeting and is similar to other assessment rate actions issued in past years.

For the reasons set forth in the preamble, 7 CFR part 915 is proposed to be amended as follows:

The Office of Management and Budget (OMB) has waived the review process required by Executive Order 12866 for this action.

This proposed rule was reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have a retroactive effect. This action would not preempt any State or local laws, regulations, or policies unless they present an irreconcilable conflict with this proposed rule. The Egg Research and Consumer Information Act (Act), 7 U.S.C. 2701 et seq., provides that administrative proceedings be filed before parties may consider suit in court. Under section 14 of the Act, 7 U.S.C. 2713, a person subject to the Egg Promotion and Research Order (Order) may file a petition with the U.S. Department of Agriculture (USDA) stating that the Order, any provision of the Order, or any obligation imposed in connection with the Order, is not in accordance with the law and request a modification of the Order or an exemption from the Order. The petitioner is afforded the opportunity for a hearing on the petition. After a hearing, USDA would rule on the petition. The Act provides that district courts of the United States in any district in which such person is an inhabitant, or has their principal place of business, has jurisdiction to review USDA's ruling on the petition, if a complaint for this purpose is filed within 20 days after the date of the entry of the ruling.

In accordance with the Regulatory Flexibility Act (RFA) [5 U.S.C. 601-612], the Agricultural Marketing Service (AMS) has determined that this rule will not have a significant economic impact on a substantial number of small entities as defined by RFA. The purpose of RFA is to fit regulatory action to scale on businesses subject to such action so that small businesses will not be disproportionately burdened. As such, these changes will not impose a significant impact on persons subject to the program.

According to the American Egg Board (Board), around 181 producers are subject to the provisions of the Order, including paying assessments. Under the current Order, producers in the 48 contiguous United States and the District of Columbia who own more than 75,000 laying hens each currently pay a mandatory assessment of 10 cents per 30-dozen case of eggs. Handlers are responsible for collecting and remitting assessments to the Board. There are approximately 138 egg handlers who collect assessments. Assessments under the program are used by the Board to finance promotion, research, and consumer information programs designed to increase consumer demand for eggs in domestic and international markets.

In 13 CFR part 121, the Small Business Administration (SBA) defines small agricultural producers as those having annual receipts of no more than $750,000 and small agricultural service firms as those having annual receipts of no more than $7 million. Under this definition, the vast majority of the egg producers that would be affected by this rulemaking would not be considered small entities. Producers owning 75,000 or fewer laying hens are eligible to be exempt from this program. This rulemaking does not impose additional recordkeeping requirements on egg producers or collecting handlers. There are no federal rules that duplicate, overlap, or conflict with this proposed rule.

In accordance with OMB regulation 5 CFR part 1320, which implements the Paperwork Reduction Act of 1995 [44 U.S.C. Chapter 35], the information collection and recordkeeping requirements that are imposed by the Order and Rules and Regulations have been approved previously under OMB control number 0581-0093. This proposed rule does not result in a change to those information collection and recordkeeping requirements.

The Act established a national egg research and promotion program—administered by the Board—that is financed through industry assessments and subject to oversight by USDA's Agricultural Marketing Service. This program of promotion, research, and consumer information is designed to strengthen the position of eggs in the marketplace and to establish, maintain, and expand markets for eggs.

Under the current Regulations initially established in 1976, any IP financed by assessment funds or other revenues of the Board shall become property of the U.S. Government as represented by the Board. The language does not allow for alternative ownership arrangements. In addition, there is no explicit allowance for alternative ownership arrangements in cases where the Board is not providing all of the funding for a project. The current language in the Regulation has made negotiating contracts for shared ownership of IP rights with research entities difficult and in some cases impossible. Specifically, a majority of university policies typically reflect a requirement for the university to own any IP created under research projects they conduct, even if the project is funded with outside money. These university policies have made it difficult for the Board to contract with universities for research due to the IP ownership requirements contained in the Regulation. As a result, USDA is proposing to amend § 1250.542 of the Regulations to incorporate language utilized by research and promotion boards created under the Commodity Promotion, Research, and Information Act of 1996, 7 U.S.C. 7411 et seq., that would provide the Board with some flexibility in negotiating the ownership of IP rights.

The research and promotion boards created under the Commodity Promotion, Research and Information Act of 1996 have utilized the language proposed herein to negotiate IP ownership rights to effectively expend assessment funds to promote agricultural commodities. Currently, the Regulations state that IP accruing from work funded by the Board shall become property of the U.S Government as represented by the Board and that IP may be licensed subject to approval by the Secretary of Agriculture (Secretary). This proposed rule would change the language to allow that ownership of any IP developed during a project funded by the Board to be determined by agreement between the Board and another party, which will provide the Board with the flexibility it needs to negotiate contracts for projects that may involve IP rights.

For the reasons set forth in the preamble, it is proposed that 7 CFR part 1250 be amended as follows:

The Office of Management and Budget (OMB) has waived the review process required by Executive Order 12866 for this action.

This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is not intended to have a retroactive effect.

Section 11 of the Act provides that nothing in the Act may be construed to preempt or supersede any other program relating to beef promotion organized and operated under the laws of the U.S. or any State. There are no administrative proceedings that must be exhausted prior to any judicial challenge to the provisions of this rule.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.), the Acting Administrator of AMS has considered the economic effect of this action on small entities and has determined that this proposed rule will not have a significant economic impact on a substantial number of small business entities. The effect of the Beef Order upon small entities was discussed in the July 18, 1986, Federal Register [51 FR 26132]. The purpose of RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly burdened.

There are approximately 270 importers who import beef or edible beef products into the U.S. and 198 importers who import live cattle into the U.S. The majority of these operations subject to the Beef Order are considered small businesses under the criteria established by the Small Business Administration (SBA)[13 CFR 121.201]. SBA defines small agricultural service firms as those having annual receipts of $7.5 million or less.

The proposed rule will impose no significant burden on the industry. It will merely update and expand the HTS numbers and categories for veal and veal products to conform to recent updates in the numbers and categories used by Customs. This proposed rule will adjust the live animal equivalencies used to determine the amount of assessments collected on imported veal and veal products. This adjustment reflects an increase in the assessment of imported veal product so that it coincides with the assessment on domestic veal product. Accordingly, the Acting Administrator of AMS has determined that this action will not have a significant impact on a substantial number of small entities.

In accordance with the Office of Management and Budget (OMB) regulations [5 CFR part 1320] that implement the Paperwork Reduction Act of 1995 [44 U.S.C. Chapter 35], the information collection and recordkeeping requirements contained in the Beef Order and Rules and Regulations have previously been approved by OMB under OMB control number 0581-0093.

The Act authorized the establishment of a national beef promotion and research program. The final Beef Order was published in the Federal Register on July 18, 1986, (51 FR 21632), and the collection of assessments began on October 1, 1986. The program is administered by the Cattlemen's Beef Promotion and Research Board (Board), appointed by the Secretary of Agriculture (Secretary) from industry nominations, and composed of 100 cattle producers and importers. The program is funded by a $1-per-head assessment on producer marketing of cattle in the U.S. and on imported cattle as well as an equivalent amount on imported beef and beef products.

Importers pay assessments on imported cattle, beef, and beef products. Customs collects and remits the assessment to the Board. The term “importer” is defined as “any person who imports cattle, beef, or beef products from outside the United States.” Imported beef or beef products is defined as “products which are imported into the United States which the Secretary determines contain a substantial amount of beef including those products which have been assigned one or more of the following numbers in the Tariff Schedule of the United States.”

The purpose of this proposed rule is to update, expand, and revise the table found under § 1260.172 (7 CFR 1260.172) to reflect the current HTS numbers and assessments on veal and veal products.

As a result of these changes to HTS, there are 6 new categories that cover imported veal and veal products subject to assessment. The 30 categories identifying imported beef and beef products have been expanded to 66 categories.

This proposed rule updates and expands the chart published in the 2006 final rule to conform with recent changes to the HTS numbering system and revises the live weight equivalents used to calculate import veal assessments. Importers are currently paying a lower assessment level for imported veal and veal products than what is being paid for domestic veal and veal products. At that time, the average dressed weight of veal slaughtered under Federal inspection was determined to be 154 pounds. USDA determined that using the average dressed weight of domestic veal slaughtered under Federal inspection would be most suitable because most of the imported veal and veal products were similar to domestic veal.

The Act requires that assessments on imported beef and beef products be determined by converting such imports into live animal equivalents to ascertain the corresponding number of head of cattle. Carcass weight is the principle factor in calculating live animal equivalents.

Prior to publishing the proposed rule, USDA received information from the Board regarding imported veal assessments on April 7, 2015. The Board requested to expand the number of HTS codes for imported veal and veal products in order to capture product that is not currently being assessed and to update the live animal equivalency rate on imported veal to reflect the same assessment as domestic veal and veal products. The Board also suggested that AMS update the dressed veal weight to better reflect current dressed veal weights. The Board recommends using an average dressed veal weight from 2010 to the most current data. The Board states that “establishing an average over this period of time takes into account short term highs and lows due to the cattle cycle, weather effects, and feed prices.” This average would be 154 pounds.

For the reasons set forth in the preamble, title 7 of the CFR part 1260 is proposed to be amended as follows:

On January 20, 2016, ASRAC met and unanimously passed the recommendation to form a circulator pumps working group. The purpose of the working group is to discuss and, if possible, reach consensus on a proposed rule regarding definitions, test procedures, and energy conservation standards, as authorized by the Energy Policy and Conservation Act (EPCA) of 1975, as amended. The working group consists of representatives of parties having a defined stake in the outcome of the proposed standards, and will consult as appropriate with a range of experts on technical issues. Per the ASRAC Charter, the working group is expected to make a concerted effort to negotiate a final term sheet by September 30, 2016. This notice announces the next series of meetings for this working group.

DOE will host public meetings and webinars on the below dates.

• Tuesday, March 29, 2016 at 12 p.m. to 4 p.m. EST Webinar only.

• Thursday, March 31, 2016 from 9 a.m. to 5 p.m. EST at 950 L'Enfant Plaza, 6th Floor SW., Washington, DC.

• Friday, April 1, 2016 from 8 a.m. to 3 p.m. EST at 950 L'Enfant Plaza, 6th Floor SW., Washington, DC.

Members of the public are welcome to observe the business of the meeting and, if time allows, may make oral statements during the specified period for public comment. To attend the meeting and/or to make oral statements regarding any of the items on the agenda, email [email protected] . In the email, please indicate your name, organization (if appropriate), citizenship, and contact information. Please note that foreign nationals participating in the public meeting are subject to advance security screening procedures which require advance notice prior to attendance at the public meeting. If you are a foreign national, and wish to participate in the public meeting, please inform DOE as soon as possible by contacting Ms. Regina Washington at (202) 586-1214 or by email: [email protected] so that the necessary procedures can be completed. Anyone attending the meeting will be required to present a government photo identification, such as a passport, driver's license, or government identification. Due to the required security screening upon entry, individuals attending should arrive early to allow for the extra time needed.

Due to the REAL ID Act implemented by the Department of Homeland Security (DHS) recent changes have been made regarding ID requirements for individuals wishing to enter Federal buildings from specific states and U.S. territories. Driver's licenses from the following states or territory will not be accepted for building entry and one of the alternate forms of ID listed below will be required.

DHS has determined that regular driver's licenses (and ID cards) from the following jurisdictions are not acceptable for entry into DOE facilities: Alaska, Louisiana, New York, American Samoa, Maine, Oklahoma, Arizona, Massachusetts, Washington, and Minnesota.

Acceptable alternate forms of Photo-ID include: U.S. Passport or Passport Card; an Enhanced Driver's License or Enhanced ID-Card issued by the states of Minnesota, New York or Washington (Enhanced licenses issued by these states are clearly marked Enhanced or Enhanced Driver's License); A military ID or other Federal government issued Photo-ID card.

Docket: The docket is available for review at www.regulations.gov, including Federal Register notices, public meeting attendee lists and transcripts, comments, and other supporting documents/materials. All documents in the docket are listed in the www.regulations.gov index. However, not all documents listed in the index may be publicly available, such as information that is exempt from public disclosure.

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. This supplementary information section is arranged as follows:

This rulemaking addresses CAA section 110(a)(2)(D)(i) requirements in three infrastructure SIP submissions addressing the applicable infrastructure requirements with respect to the 2008 ozone NAAQS: a December 12, 2011, submission from the Indiana Department of Environmental Management (IDEM), clarified in a May 24, 2012, letter; a December 27, 2012, submission from the Ohio Environmental Protection Agency (Ohio EPA); and a June 20, 2013, submission from the Wisconsin Department of Natural Resources (WDNR), clarified in a January 28, 2015, letter.

The requirement for states to make a SIP submission of this type arises out of CAA section 110(a)(1). Pursuant to section 110(a)(1), states must make SIP submissions “within 3 years (or such shorter period as the Administrator may prescribe) after the promulgation of a national primary ambient air quality standard (or any revision thereof),” and these SIP submissions are to provide for the “implementation, maintenance, and enforcement” of such NAAQS. The statute directly imposes on states the duty to make these SIP submissions, and the requirement to make the submissions is not conditioned upon EPA's taking any action other than promulgating a new or revised NAAQS. Section 110(a)(2) includes a list of specific elements that “[e]ach such plan” submission must address. EPA commonly refers to such state plans as “infrastructure SIPs.”

This rulemaking proposes action on three CAA section 110(a)(2)(D)(i) requirements of these submissions. In particular, section 110(a)(2)(D)(i)(I) requires SIPs to include provisions prohibiting any source or other type of emissions activity in one state from contributing significantly to nonattainment of the NAAQS (“prong one”), or interfering with maintenance of the NAAQS (“prong two”), by any another state. Section 110(a)(2)(D)(i)(II) requires that infrastructure SIPs include provisions prohibiting any source or other type of emissions activity in one state from interfering with measures required to prevent significant deterioration (PSD) of air quality (“prong three”) and to protect visibility (“prong four”) in another state. This rulemaking addresses prongs one, two, and four of this CAA section. The majority of the other infrastructure elements were approved in rulemakings on April 29, 2015 (80 FR 23713) for Indiana; October 16, 2014 (79 FR 62019) for Ohio; and September 11, 2015 (80 FR 54725) for Wisconsin.

On September 13, 2013, EPA issued “Guidance on Infrastructure State Implementation Plan (SIP) Elements under Clean Air Act sections 110(a)(1) and 110(a)(2)” (2013 Guidance). This guidance provides, among other things, recommendations on the development of infrastructure SIPs for the 2008 ozone NAAQS.1 As noted in the 2013 Guidance, pursuant to CAA section 110(a), states must provide reasonable notice and opportunity for public hearing for all infrastructure SIP submissions. IDEM, Ohio EPA, and WDNR provided public comment opportunities on their SIP submissions. In this action of proposed rulemaking, EPA is also soliciting comment on our evaluation of each state's infrastructure SIP submission. The states summarized how various components of their SIPs met each of the applicable requirements in section 110(a)(2) for the 2008 ozone NAAQS, as applicable. The following review evaluates only the state's submissions for three CAA section 110(a)(2)(D)(i) requirements.

IDEM's submission addressing the prong one and two requirements states that it is currently “in the process of promulgating rules” to implement EPA's 2011 Cross-State Air Pollution Rule (CSAPR). IDEM noted, however, that at the time of its submission CSAPR was being implemented pursuant to a Federal Implementation Plan (FIP). IDEM did not cite any additional rules or regulations controlling emissions from the state or otherwise provide any additional analysis regarding the impacts of emissions from sources in Indiana on air quality in other states with respect to the 2008 ozone NAAQS.

Ohio EPA's submission cited various state rules related generally to interstate transport of pollutants including rules concerning stack height requirements, acid rain permits and compliance, the nitrogen oxide budget trading program, the Clean Air Interstate Rule (CAIR), and the Clean Air Mercury Rule. Ohio EPA also noted EPA's development of CAIR and regional haze programs that help address interstate transport. Finally, Ohio EPA noted that it has “responded to requests” from Indiana and West Virginia to ameliorate interstate transport by revising state rules applicable to Hamilton and Jefferson Counties. Ohio EPA did not provide any additional analysis regarding the impacts of emissions from sources in Ohio on air quality in other states with respect to the 2008 ozone NAAQS, particularly as to whether the state rules identified in its submission are sufficient to prohibit emissions that significantly contribute to nonattainment or interfere with maintenance of the standard in other states.

WDNR's submission states that the Wisconsin SIP implements the state portions of CAIR as a means of addressing the interstate transport of ozone precursors, and that current state and regional controls are sufficient to meet the state's transport obligations. WDNR also noted that it has “the authority to develop” additional control requirements once the EPA complies with the DC Circuit's opinion in EME Homer City Generation v. EPA, 696 F.3d 7 (2012), instructing EPA to quantify each state's significant contribution to air quality problems in other states before requiring states to submit SIPs addressing such pollution. Subsequent to WDNR's submission, however, the U.S. Supreme Court reversed the DC Circuit. See EPA v. EME Homer City Generation, 134 S. Ct. 1584 (2014). WDNR has not supplemented its initial submission and did not provide any additional analysis regarding the impacts of emissions from sources in Wisconsin on air quality in other states with respect to the 2008 ozone NAAQS.

Although many of the programs and rules cited by Ohio EPA, IDEM, and WDNR reduce precursor emissions that contribute to ozone formation and interstate transport, they were not developed to address interstate transport for the more stringent 2008 ozone NAAQS. None of the states have demonstrated how these programs and rules provide sufficient controls on emissions to address interstate transport for the 2008 ozone NAAQS. IDEM in particular does not cite any rules currently being implemented by the state that are part of Indiana's approved SIP or that are being submitted as part of the present SIP submission to address interstate transport for the 2008 ozone NAAQS, instead Indiana refers only to rules that it anticipates may be implemented by the state in the future.

Ohio EPA and WDNR's submissions both rely on the states' implementation of CAIR, which was designed to address the 1997 Ozone NAAQS, but not the more stringent 2008 ozone standard being evaluated in this action. Regardless, neither the states nor EPA are currently implementing the ozone-season NOX trading program promulgated in CAIR, as it has been replaced by CSAPR.

In turn, CSAPR addresses interstate transport requirements for the 1997 PM2.5 NAAQS, 1997 ozone NAAQS, and 2006 PM2.5 NAAQS. Because the three submissions addressed by this action concern states' interstate transport obligations for a different and more stringent standard (the 2008 ozone NAAQS), it is not sufficient to merely cite as evidence of compliance that these older programs have been implemented by the states or EPA.2 These submissions all lack any technical analysis evaluating or demonstrating whether emissions in each state impact air quality in other states with respect to the 2008 ozone NAAQS. As such, the submissions themselves do not provide EPA with a basis to agree with the conclusions that the states already have adequate provisions in their SIPs to address CAA section 110(a)(2)(D)(i)(I) requirements for the 2008 ozone NAAQS.

Although these submissions contain no data or analysis to support their conclusions with respect to section 110(a)(2)(D)(i)(I), EPA has recently shared technical information with states to facilitate their efforts to address interstate transport requirements for the 2008 ozone NAAQS. EPA developed this technical information following the same approach used to evaluate interstate contribution in CSAPR in order to support the recently proposed Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS, 80 FR 75706 (December 3, 2015) (“CSAPR Update Rule”).

In CSAPR, EPA used detailed air quality analyses to determine whether an eastern state's contribution to downwind air quality problems was at or above specific thresholds. If a state's contribution did not exceed the specified air quality screening threshold, the state was not considered “linked” to identified downwind nonattainment and maintenance receptors and was therefore not considered to significantly contribute or interfere with maintenance of the standard in those downwind areas. If a state exceeded that threshold, the state's emissions were further evaluated, taking into account both air quality and cost considerations, to determine what, if any, emissions reductions might be necessary. For the reasons stated below, we believe it is appropriate to use the same approach we used in CSAPR to establish an air quality screening threshold for the evaluation of interstate transport requirements for the 2008 ozone standard.

In CSAPR, EPA proposed an air quality screening threshold of one percent of the applicable NAAQS and requested comment on whether one percent was appropriate. EPA evaluated the comments received and ultimately determined that one percent was an appropriately low threshold because there were important, even if relatively small, contributions to identified nonattainment and maintenance receptors from multiple upwind states. In response to commenters who advocated a higher or lower threshold than one percent, EPA compiled the contribution modeling results for CSAPR to analyze the impact of different possible thresholds for the eastern United States. EPA's analysis showed that the one percent threshold captures a high percentage of the total pollution transport affecting downwind states, while the use of higher thresholds would exclude increasingly larger percentages of total transport. For example, at a five percent threshold, the majority of interstate pollution transport affecting downwind receptors would be excluded. In addition, EPA determined that it was important to use a relatively lower one percent threshold because there are adverse health impacts associated with ambient ozone even at low levels. EPA also determined that a lower threshold such as 0.5 percent would result in relatively modest increases in the overall percentages of fine particulate matter and ozone pollution transport captured relative to the amounts captured at the one-percent level. EPA determined that a “0.5 percent threshold could lead to emission reduction responsibilities in additional states that individually have a very small impact on those receptors—an indicator that emission controls in those states are likely to have a smaller air quality impact at the downwind receptor. We are not convinced that selecting a threshold below one percent is necessary or desirable.”

In the final CSAPR, EPA determined that one percent was a reasonable choice considering the combined downwind impact of multiple upwind states in the eastern United States, the health effects of low levels of fine particulate matter and ozone pollution, and EPA's previous use of a one percent threshold in CAIR. EPA used a single “bright line” air quality threshold equal to one percent of the 1997 8-hour ozone standard, or 0.08 parts per million (ppm). The projected contribution from each state was averaged over multiple days with projected high modeled ozone, and then compared to the one percent threshold. We concluded that this approach for setting and applying the air quality threshold for ozone was appropriate because it provided a robust metric, was consistent with the approach for fine particulate matter used in CSAPR, and because it took into account, and would be applicable to, any future ozone standards below 0.08 ppm. EPA has subsequently proposed to use the same threshold for purposes of evaluating interstate transport with respect to the 2008 ozone standard in the CSAPR Update Rule.

On August 4, 2015, EPA issued a Notice of Data Availability (NODA) containing air quality modeling data that applies the CSAPR approach to contribution projections for the year 2017 for the 2008 8-hour ozone NAAQS. The modeling data released in this NODA was also used to support the proposed CSAPR Update Rule. The moderate area attainment date for the 2008 ozone standard is July 20, 2018. In order to demonstrate attainment by this attainment deadline, states will use 2015 through 2017 ambient ozone data. Therefore, EPA proposed that 2017 is an appropriate future year to model for the purpose of examining interstate transport for the 2008 ozone NAAQS. EPA used photochemical air quality modeling to project ozone concentrations at air quality monitoring sites to 2017 and estimated state-by-state ozone contributions to those 2017 concentrations. This modeling used the Comprehensive Air Quality Model with Extensions (CAMx version 6.11) to model the 2011 base year, and the 2017 future base case emissions scenarios to identify projected nonattainment and maintenance sites with respect to the 2008 ozone NAAQS in 2017. EPA used nationwide state-level ozone source apportionment modeling (CAMx Ozone Source Apportionment Technology/Anthropogenic Precursor Culpability Analysis technique) to quantify the contribution of 2017 base case NOX and VOC emissions from all sources in each state to the 2017 projected receptors. The air quality model runs were performed for a modeling domain that covers the 48 contiguous United States and adjacent portions of Canada and Mexico. The NODA and the supporting technical support documents have been included in the docket for this SIP action. The modeling data released in the NODA on August 4, 2015, and the CSAPR Update are the most up-to-date information EPA has developed to inform our analysis of upwind state linkages to downwind air quality problems. As discussed in the CSAPR Update proposal for the 2008 ozone NAAQS, the air quality modeling: (1) Identified locations in the U.S. where EPA expects nonattainment or maintenance problems in 2017 for the 2008 ozone NAAQS (i.e., nonattainment or maintenance receptors), and (2) quantified the projected contributions of emissions from upwind states to downwind ozone concentrations at those receptors in 2017 (80 FR 75706, 75720-30, December 3, 2015). Consistent with CSAPR, EPA proposed to use a threshold of one percent of the 2008 ozone NAAQS (0.75 parts per billion) to identify linkages between upwind states and downwind nonattainment or maintenance receptors. EPA proposed that eastern states with contributions to a specific receptor that meet or exceed this screening threshold are considered “linked” to that receptor, and were analyzed further to quantify available emissions reductions necessary to address interstate transport to these receptors.

The results of EPA's air quality modeling with respect to Ohio, Indiana, and Wisconsin are summarized in Table 1 below. That modeling indicates that emissions from Ohio and Indiana are linked to both nonattainment and maintenance receptors in downwind states, and that Wisconsin is linked only to downwind maintenance receptors.

Accordingly, the most recent technical analysis available to EPA contradicts Indiana, Ohio, and Wisconsin's conclusion that each state's SIP contains adequate provisions to address interstate transport as to the 2008 ozone standard.

EPA is proposing to disapprove the Indiana and Ohio SIPs for both the prong one and prong two requirements of CAA section 110(a)(2)(D)(i)(I). As explained above, the IDEM and Ohio EPA SIP submissions do not provide an adequate technical analysis demonstrating that each state's SIP contains adequate provisions prohibiting emissions that will significantly contribute to nonattainment or interfere with the 2008 ozone NAAQS in any other state. Moreover, EPA's most recent modeling indicates that emissions from those states are projected to significantly contribute to downwind nonattainment and maintenance receptors in other states.

EPA is proposing to disapprove the Wisconsin SIP for the prong two requirement of CAA section 110(a)(2)(D)(i)(I) with respect to the 2008 ozone NAAQS. As explained above, the WDNR SIP submission does not provide an adequate technical analysis demonstrating that the state's SIP contains adequate provisions prohibiting emissions that will significantly contribute to nonattainment or interfere with the 2008 ozone NAAQS in any other state. Moreover, EPA's most recent modeling indicates that emissions from Wisconsin are projected to contribute to projected downwind maintenance receptors in another state.

However, EPA is proposing to approve the Wisconsin SIP for the prong one requirement of CAA section 110(a)(2)(D)(i)(I) with respect to the 2008 ozone NAAQS. Although WDNR did not provide information or analyses explaining why existing SIP provisions are adequate to prevent significant contribution to nonattainment in downwind states, EPA's independent modeling presented in the NODA and the CSAPR Update Rule indicates that Wisconsin emissions are not linked to any projected downwind nonattainment receptors. Accordingly, EPA proposes to find that the Wisconsin SIP has adequate provisions to prevent such significant contribution to nonattainment as to the 2008 ozone standard, and to accordingly approve the SIP for the prong one requirement of CAA section 110(a)(2)(D)(i)(I) with respect to the 2008 ozone NAAQS.

No action is being taken today on prong three relating to PSD. This prong was approved for Indiana on April 29, 2015 (80 FR 23713) and for Ohio on February 27, 2015 (80 FR 10591), and will be acted on for Wisconsin in a future rulemaking.

The 2013 Guidance states that section 110(a)(2)(D)(i)(II)'s prong four requirements can be satisfied by approved SIP provisions that EPA has found to adequately address any contribution of a state's sources to impacts on visibility programs in other states. The Guidance lays out two ways in which a state's infrastructure SIP may comply with prong four. The first way is through an air agency's confirmation in its infrastructure SIP submission that it has an EPA-approved regional haze SIP that fully meets the requirements of 40 CFR 51.308 or 51.309. These sections specifically require that a state participating in a regional planning process include all measures needed to achieve its apportionment of emission reduction obligations agreed upon through that process. A fully approved regional haze SIP will ensure that emissions from sources under an air agency's jurisdiction are not interfering with measures in other air agencies' plans to protect visibility.

Alternatively, in the absence of a fully approved regional haze SIP, a state may meet its prong four requirements through a demonstration in its infrastructure SIP that emissions within its jurisdiction do not interfere with other air agencies' plans to protect visibility. Such a submission would need to include measures to limit visibility-impairing pollutants and ensure that the reductions conform with any mutually agreed regional haze reasonable progress goals for mandatory Class I areas in other states.

For prong four, relating to protection of visibility in another state, in this rulemaking EPA is proposing to disapprove the relevant portion of the SIPs for Ohio and Indiana. On September 11, 2015 (80 FR 54725), EPA approved Wisconsin's visibility requirements for the 2008 ozone NAAQS. Therefore, in this rulemaking, no action is necessary regarding Wisconsin's prong four requirements.

IDEM's submission acknowledges that Indiana is subject to the regional haze program, which addresses visibility-impairing pollutants. EPA finalized a limited approval of Indiana's regional haze SIP submission for, among other things, BART for non-electric generating units (EGUs) and PM from EGUs on June 11, 2012 (77 FR 34218).

Ohio EPA's submission also mentions the regional haze program for addressing visibility, as well as the air agency's work with Federal Land Managers to address proposed major new sources in the state. EPA finalized a limited approval of Ohio's regional haze SIP submission for, among other things, non-EGUs on July 2, 2012 (77 FR 39177).

However, Indiana and Ohio's regional haze plans both rely on CAIR for addressing visibility for EGUs. EPA had originally found that CAIR was an acceptable solution for meeting the requirement of the regional haze program for EGUs.3 However, the D.C Circuit remanded CAIR to EPA with instructions to replace that rulemaking with a new rulemaking consistent with the Court's opinion.4 Subsequently EPA issued a rulemaking stating that CAIR's replacement, CSAPR, could be used to satisfy the EGU portion of the regional haze plans. June 7, 2012 (77 FR 33642). In that same rulemaking, EPA issued limited disapprovals of Indiana and Ohio's regional haze SIP submissions, among other states, and issued FIPs that allowed CSAPR to meet the regional haze requirements for EGUs in applicable states (77 FR 33642).

Although both Indiana and Ohio have approved regional haze plans for their non-EGUs, they do not have fully approved regional haze SIPs in place because both States' EGU-related obligations are satisfied by EPA's CSAPR-based FIPs. Furthermore, neither Indiana nor Ohio has provided a demonstration in its infrastructure SIP submission showing that emissions within its jurisdiction do not interfere with other air agencies' plans to protect visibility. Because the States have failed to meet either option for satisfying their prong four obligations laid out in the 2013 Guidance, EPA is proposing to disapprove prong four for the infrastructure element under section 110(a)(2)(D)(i)(II) for the 2008 ozone standard.

EPA is proposing to disapprove a portion of submissions from Indiana, Ohio, and Wisconsin certifying that each of their current SIPs are sufficient to meet the required infrastructure element under CAA section 110(a)(2)(D)(i) for the 2008 ozone NAAQS, specifically prongs one, two, and four for Indiana and Ohio, and prong two for Wisconsin. In addition, EPA is proposing to approve the prong one portion of Wisconsin's SIP submission with respect to CAA section 110(a)(2)(D)(i).

This action is not a significant regulatory action and was therefore not submitted to the Office of Management and Budget (OMB) for review.

This rulemaking does not impose an information collection burden under the provisions of the PRA.

The Administrator certifies that this proposed rule will not have a significant economic impact on a substantial number of small entities under the RFA. In making this determination, the impact of concern is any significant adverse economic impact on small entities. An agency may certify that a rulemaking will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, has no net burden or otherwise has a positive economic effect on the small entities subject to the rule. This action merely proposes to disapprove state law as not meeting Federal requirements and imposes no additional requirements beyond those imposed by state law.

This action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. The action imposes no enforceable duty on any state, local or tribal governments or the private sector.

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.

This action does not have tribal implications as specified in Executive Order 13175. It will not have substantial direct effects on tribal governments. Thus, Executive Order 13175 does not apply to this proposed rule.

This action is not subject to Executive Order 13045 because it is not economically significant as defined in Executive Order 12866, and because EPA does not believe the environmental health or safety risks addressed by this action present a disproportionate risk to children because it proposes to disapprove a state rule.

This action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.

This rulemaking does not involve technical standards.

EPA believes the human health or environmental risk addressed by this action will not have potential disproportionately high and adverse human health or environmental effects on minority, low-income or indigenous populations.

You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT for the division listed at the end of the pesticide petition summary of interest.

1. Submitting CBI. Do not submit this information to EPA through regulations.gov or email. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD-ROM that you mail to EPA, mark the outside of the disk or CD-ROM as CBI and then identify electronically within the disk or CD-ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2.

2. Tips for preparing your comments. When preparing and submitting your comments, see the commenting tips at http://www.epa.gov/dockets/comments.html.

3. Environmental justice. EPA seeks to achieve environmental justice, the fair treatment and meaningful involvement of any group, including minority and/or low-income populations, in the development, implementation, and enforcement of environmental laws, regulations, and policies. To help address potential environmental justice issues, the Agency seeks information on any groups or segments of the population who, as a result of their location, cultural practices, or other factors, may have atypical or disproportionately high and adverse human health impacts or environmental effects from exposure to the pesticides discussed in this document, compared to the general population.

EPA is announcing its receipt of several pesticide petitions filed under section 408 of the Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a, requesting the establishment or modification of regulations in 40 CFR part 180 for residues of pesticide chemicals in or on various food commodities. The Agency is taking public comment on the requests before responding to the petitioners. EPA is not proposing any particular action at this time. EPA has determined that the pesticide petitions described in this document contain the data or information prescribed in FFDCA section 408(d)(2), 21 U.S.C. 346a(d)(2); however, EPA has not fully evaluated the sufficiency of the submitted data at this time or whether the data support granting of the pesticide petitions. After considering the public comments, EPA intends to evaluate whether and what action may be warranted. Additional data may be needed before EPA can make a final determination on these pesticide petitions.

Pursuant to 40 CFR 180.7(f), a summary of each of the petitions that are the subject of this document, prepared by the petitioner, is included in a docket EPA has created for each rulemaking. The docket for each of the petitions is available at http://www.regulations.gov.

As specified in FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), EPA is publishing notice of the petition so that the public has an opportunity to comment on this request for the establishment or modification of regulations for residues of pesticides in or on food commodities. Further information on the petition may be obtained through the petition summary referenced in this unit.

PP 5F8351. EPA-HQ-OPP-2015-0478. Makhteshim Agan of North America, Inc. (d/b/a ADAMA), 3120 Highwoods Blvd. Suite 100, Raleigh, NC 27604, requests to establish a tolerance in 40 CFR part 180 for residues of the nematicide fluensulfone, including its metabolites and degradates, in or on berry, low growing, subgroup 13-07G at 0.30 parts per million (ppm); head and stem brassica subgroup 5A at 1.3 ppm; leafy brassica greens subgroup 5B at 13 ppm; leafy vegetables, group 4, except brassica vegetables at 2.6 ppm; leaves of root and tuber vegetables, group 2 at 20 ppm; radish, oriental at 0.50 ppm; and root vegetables, subgroup 1B, except sugar beet and oriental radish at 3.3 ppm. Compliance with the tolerance levels is to be determined by measuring only 3,4,4-trifluoro-but-3-ene-1-sulfonic acid. The liquid chromotography with tandem mass spectrometry (LC-MS/MS) residue analytical method is used to measure and evaluate the chemical fluensulfone. Contact: RD.

PP 5F8379. EPA-HQ-OPP-2015-0559. Bayer CropScience, 2 T.W. Alexander Drive, Research Triangle Park, NC 27709, requests to establish a tolerance in 40 CFR 180.664 for residues of the fungicide penflufen, in or on sugarbeet seed treatment at 0.01 parts per million (ppm). The LC/MS/MS is used to measure and evaluate the chemical penflufen. Contact: RD.

PP 5E8399. EPA-HQ-OPP-2015-0658. Interregional Research Project Number 4 (IR-4), IR-4 Project Headquarters, Rutgers, The State University of New Jersey, 500 College Road East, Suite 201 W, Princeton, NJ 08540, requests to establish tolerances in 40 CFR 180.568 for residues of the herbicide, flumioxazin 2-[7-fluoro-3,4-dihydro3-oxo-4-(2-proponyl)-2H-1,4-benzoxazin-6-yl]-4,5,6,7-tetrahydro-1Hisoindole-1,3(2H)-dione in or on the raw agricultural commodities: Berry, low growing, subgroup 13-07G at 0.07 parts per million (ppm); brassica, head and stem, subgroup 5A at 0.02 ppm; caneberry, subgroup 13-07A at 0.40; citrus oil at 0.1 ppm; clover, forage at 0.02 ppm; clover, hay at 0.15 ppm; fruit, citrus group 10-10 at 0.02 ppm; fruit, pome group 11-10 at 0.02 ppm; fruit, small vine climbing, except fuzzy kiwifruit, subgroup 13-07F at 0.02 ppm; fruit, stone, group 12-12 at 0.02 ppm; nut, tree group 14-12 at 0.02 ppm; onion, bulb subgroup 3-07A at 0.02 ppm and vegetable, fruiting group 8-10 ppm at 0.02 ppm. Adequate enforcement methodology (gas chromatography/nitrogen-phosphorus detection (GC/NPD) method, Valent Method RM30-A-3) is available to enforce the tolerance expression. Contact: RD.

PP 5F8400. EPA-HQ-OPP-2015-0695. Isagro S.P.A. (d/b/a Isagro USA, Inc.) 430 Davis Drive, Suite 240, Morrisville, NC 27560, requests to establish a tolerance in 40 CFR part 180 for residues of the fungicide tetraconazole in or on vegetable, cucurbit group 9 at 0.15 parts per million (ppm) and vegetable, fruiting group 8-10 at 0.30 ppm. The capillary gas chromatography with electron capture detector (GC/ECD)) as well as a QuEChERS multi-residue method (LC/MS-MS detection) is used to measure and evaluate the chemical tetraconazole. Contact: RD.

PP 5F8404. EPA-HQ-OPP-2013-0226. Bayer CropScience LP, 2 T.W. Alexander Drive, P.O. Box 12014, Research Triangle Park, NC 27709, requests to establish a tolerance in 40 CFR part 180 for residues of the insecticide, flupyradifurone, in or on abiu at 0.6 parts per million (ppm); akee apple at 0.6 ppm; avocado at 0.6 ppm; bacury at 0.6 ppm; banana at 0.6 ppm; binjai at 0.6 ppm; caneberry, subgroup 13-07A at 5 ppm; canistel at 0.6 ppm; cilantro, fresh leaves at 30 ppm; cupuacú at 0.6 ppm; etambe at 0.6 ppm; jatobá at 0.6 ppm; kava, fresh leaves at 40 ppm; kava, roots at 0.9 ppm; kei apple at 0.6 ppm; langstat at 0.6 ppm; lanjut at 0.6 ppm; lucuma at 0.6 ppm; mabolo at 0.6 ppm; mango at 0.6 ppm; mangosteen at 0.6 ppm; paho at 0.6 ppm; papaya at 0.6 ppm; pawpaw, common at 0.6 ppm; pelipisan at 0.6 ppm; pequi at 0.6 ppm; pequia at 0.6 ppm; persimmon, american at 0.6 ppm; plantain at 0.6 ppm; pomegranate at 0.6 ppm; poshte at 0.6 ppm; quinoa at 3 ppm; quandong at 0.6 ppm; sapote at 0.6 ppm; sataw at 0.6 ppm; screw-pine at 0.6 ppm; star apple at 0.6 ppm; stone fruit, stone group 12-12 at 1.5 ppm, tamarind-of-the-Indies at 0.6 ppm; and wild loquat at 0.6 ppm. High performance liquid chromatography-electrospray ionization/tandem mass spectrometry (HPLC/MS/MS) is used to measure and evaluate the chemical flupyradifuron. Contact: RD.

PP 5F8406. EPA-HQ-OPP-2015-0727. Arysta LifeScience North America, LLC 15401 Weston Parkway, Suite 150, Cary, North Carolina 27513, requests to establish a tolerance in 40 CFR part 180 for residues of the fungicide fluoxastrobin in or on avocado at 0.9 parts per million (ppm), barley, grain at 0.4 ppm; barley, hay at 15 ppm; barley, straw at 15 ppm, rapeseed subgroup 20A at 0.8 ppm, and dried shelled pea and bean (except soybean) subgroup 6C at 0.2 ppm. The method comprises microwave solvent extraction followed by a solid phase extraction clean up and quantification by high performance liquid chromatography with tandem mass spectrometric detection (HPLC/MS/MS) is used to measure and evaluate the chemical fluoxastrobin. Contact: RD.

PP 5F8412. EPA-HQ-OPP-2015- 0795. Gowan Company, P.O. Box 5569, Yuma, AZ, 85366-5569, requests to establish tolerances in 40 CFR part 180 for residues of the insecticide, hexythiazox, in or on bermudagrass, forage at 40.0 parts per million (ppm); and bermudagrass, hay at 70.0 ppm. High performance liquid chromatography (HPLC) method using mass spectrometric detection (LC-MS/MS) is proposed for enforcement purposes. Contact: RD.

PP 5F8413. EPA-HQ-OPP-2015- 0797. Gowan Company, P.O. Box 5569, Yuma, AZ, 85366-5569, requests to establish tolerances in 40 CFR part 180 for residues of the insecticide hexythiazox, in or on beet, sugar, dried pulp at 0.60 parts per million (ppm); beet, sugar, molasses at 0.21 ppm; beet, sugar, roots at 0.15 ppm and beet, sugar, tops at 1.5 ppm. High performance liquid chromatography (HPLC) method using mass spectrometric detection (LC-MS/MS) is proposed for enforcement purposes. Contact: RD.

PP 5F8414. EPA-HQ-OPP-2015-0791. Valent U.S.A. Corporation, 1600 Riviera Avenue, Suite 200, Walnut Creek, CA 94596 requests to establish a tolerance in 40 CFR 180.627 for residues of the fungicide, fluopicolide in or on potato chips 0.1 at parts per million (ppm) and potato flakes at 0.15 ppm. Practical analytical methods for detecting and measuring levels of fluopicolide and its metabolites have been developed, validated, and submitted for all appropriate plant and animal matrices. Contact: RD.

PP 5F8415. EPA-HQ-OPP-2015-0820. Geo Logic Corporation, P.O. Box 3091, Tequesta, FL 33409, requests to establish a tolerance in 40 CFR 180.337 for residues of the bactericide/fungicide oxytetracycline in or on fruit, citrus group 10-10 at 0.01 parts per million (ppm). The reversed-phase liquid chromatography with detection by MS/MS spectrometry (LC-MS/MS) is used to measure and evaluate the chemical oxytetracycline. Contact: RD.

PP 5F8429. EPA-HQ-OPP-2016-0029. Gowan Company, P.O. Box 5569, Yuma, AZ 85366-5569, requests to establish a tolerance in 40 CFR part 180 for residues of the miticide/insecticide fenazaquin, [3-[2-[4-(1,1,-dimethylethyl) phenyl] ethoxy] quinazoline] in or on the raw commodity for nut, tree group 14-12 at 0.02 parts per million (ppm). The LC/MS/MS with positive-ion electrospray ionization tandem mass spectrometry is used to measure and evaluate the chemical fenazaquin. Contact: RD.

PP 5E8439. EPA-HQ-OPP-2016-0066. Dow AgroSciences, LLC, 9330 Zionsville Road Indianapolis, IN 46268, requests to establish a tolerance in 40 CFR part 180 for residues of the herbicide pyroxsulam, in or on the cereal crops: teff at 0.06 parts per million (ppm); teff, forage at 0.01 ppm; teff, grain at 0.03 ppm; teff, hay at 0.01 ppm; and teff, straw at 0.01 ppm. The Dow AgroSciences Method GRM 04/17 is used to measure and evaluate the chemical residues of pyroxsulam in wheat commodities. Contact: RD.

PP 6F8442. EPA-HQ-OPP-2016-0029. Gowan Company, P.O. Box 5569, Yuma, AZ 85366-5569, requests to establish a tolerance in 40 CFR part 180 for residues of the miticide/insecticide fenazaquin, [3-[2-[4-(1,1,-dimethylethyl) phenyl] ethoxy] quinazoline] in or on the raw commodity for hops at 30 parts per million (ppm). The LC/MS/MS with positive-ion electrospray ionization tandem mass spectrometry is used to measure and evaluate the chemical fenazaquin. Contact: RD.

PP 5F8351. EPA-HQ-OPP-2015-0478. Makhteshim Agan of North America, Inc. (d/b/a ADAMA), 3120 Highwoods Blvd. Suite 100, Raleigh, NC 27604, requests to amend 40 CFR 180.680 for residues of the nematicide fluensulfone [5-chloro-2-[(3,4,4-trifluoro-3-buten-1-yl)sulfonyl]thiazole], to revise the existing tolerance expression in the introductory paragraph (a) to read “Tolerances are established for residues of the nematicide fluensulfone, including its metabolites and degradates, in or on the commodities in the table below. Compliance with the tolerance levels specified below is to be determined by measuring only 3,4,4-trifluoro-but-3-ene-1-sulfonic acid.” The LC-MS/MS residue analytical method is used to measure and evaluate the chemical fluensulfone. Contact: RD.

PP 5F8396. EPA-HQ-OPP-2015- 0796. Gowan Company, P.O. Box 5569, Yuma, AZ, 85366, requests to amend the tolerance(s) in 40 CFR 180.448 for residues of the insecticide hexythiazox in or on alfalfa, forage from 15 parts per million (ppm) to 20 ppm; and alfalfa, hay from 30 ppm to 60 ppm. High performance liquid chromatography (HPLC) using mass spectrometric detection (LC-MS/MS) analytical method is used to measure and evaluate residues of hexythiazox and its metabolites containing the PT-1-3 moiety. Contact: RD.

PP 5E8399. EPA-HQ-OPP-2015-0658. IR-4 Project Headquarters, Rutgers, The State University of New Jersey, 500 College Road East, Suite 201 W, Princeton, NJ 08540, proposes upon establishment of tolerances referenced above under “New Tolerances” to remove existing tolerances in 40 CFR 180.568 for residues of the herbicide, flumioxazin 2-[7-fluoro-3,4-dihydro3-oxo-4-(2-proponyl)-2H-1,4-benzoxazin-6-yl]-4,5,6,7-tetrahydro-1Hisoindole-1,3(2H)-dione in or on the raw agricultural commodities: Cabbage at 0.02 ppm; cabbage, Chinese, napa at 0.02 ppm; fruit, pome group 11 at 0.02 ppm; fruit, stone, group 12 at 0.02 ppm; garlic at 0.02 ppm; grape at 0.02 ppm; nut, tree group 14 at 0.02 ppm; okra at 0.02 ppm; onion, bulb at 0.02 ppm; pistachio at 0.02 ppm; shallot bulb at 0.02 ppm; strawberry at 0.07 ppm and vegetable, fruiting group 8 at 0.02 ppm. Adequate enforcement methodology (gas chromatography/nitrogen-phosphorus detection (GC/NPD) method, Valent Method RM30-A-3) is available to enforce the tolerance expression. Contact: RD.

PP IN-10848. EPA-HQ-OPP-2015-0776. Jeneil Biosurfactant Company, 400 N. Dekora Woods Blvd. Saukville, WI 53080, requests to establish an exemption from the requirement of a tolerance for residues of methyl isobutyrate (CAS Reg. No. 547-63-7) when used as an inert ingredient (solvent) in pesticide formulations applied to growing crops and raw agricultural commodities after harvest under 40 CFR 180.910. The petitioner believes no analytical method is needed because it is not required for an exemption from the requirement of a tolerance. Contact: RD.

PP IN-10850. EPA-HQ-OPP-2015-0831. Jeneil Biosurfactant Company, 400 N. Dekora Woods Blvd. Saukville, WI 53080, requests to establish an exemption from the requirement of a tolerance for residues of isobutyl isobutyrate (CAS Reg. No. 97-85-8) when used as an inert ingredient (solvent) in pesticide formulations applied to growing crops and raw agricultural commodies after harvest under 40 CFR 180.910. The petitioner believes no analytical method is needed because it is not required for an exemption from the requirement of a tolerance. Contact: RD.

PP IN-10854. EPA-HQ-OPP-2015-0655. SciReg Inc., 12733 Director's Loop, Woodbridge, VA 22192, on behalf of Taminco US Inc., a subsidiary of Eastman Chemical Company, Two Windsor Plaza, Suite 400, 7450 Windsor Drive, Allentown, PA 18195, requests to establish an exemption from the requirement of a tolerance for residues of 2-pyrrolidinone, 1-butyl- (CAS Reg. No. 3470-98-2) when used as an inert ingredient (solvent/cosolvent) in pesticide formulations applied to growing crops under 40 CFR 180.920. The petitioner believes no analytical method is needed because it is not required for an exemption from the requirement of a tolerance. Contact: RD.

PP IN-10889. EPA-HQ-OPP-2015-0858. Baker Petrolite LLC, 12645 West Airport Boulevard, Sugar Land, TX 77478, requests to establish an exemption from the requirement of a tolerance for residues of alcohols, C>14, ethoxylated (CAS Reg. No. 251553-55-6) when used as an inert ingredient in pesticide formulations under 40 CFR 180.910, 40 CFR 180.920, 40 CFR 180.930, 40 CFR 180.940(a) and 40 CFR 180.960. The petitioner believes no analytical method is needed because it is not required for an exemption from the requirement of a tolerance. Contact: RD.

PP IN-10894. EPA-HQ-OPP-2016-0038. Michelman, 9080 Shell Road, Cincinnati, OH 45236, requests to establish an exemption from the requirement of a tolerance for residues of ethylene acrylic acid copolymer with a minimum number average molecular weight (in amu) of 5,500 (CAS Reg. No. 9010-77-9) when used as an inert ingredient in pesticide formulations under 40 CFR 180.960. The petitioner believes no analytical method is needed because it is not required for an exemption from the requirement of a tolerance. Contact: RD.

Congress adopted section 629 of the Communications Act in 1996, and since then each era of technology has brought unique challenges to achieving Section 629's goals. When Congress first directed the Commission to adopt regulations to assure a commercial market for devices that can access multichannel video programming, the manner in which MVPDs offered their services made it difficult to achieve the statutory purpose. Cable operators used widely varying security technologies, and the best standard available to the Commission was the hardware-based CableCARD standard—which the cable and consumer electronics industries jointly developed—that worked only with one-way cable services. In 2010, the Commission sought comment on a new approach that would work with two-way services, but still only a hardware solution would work because software-based security was not sophisticated enough to meet content companies' content protection demands. This concept, called “AllVid,” would have allowed electronics manufacturers to offer retail devices that could access multichannel video programming, but would have required all operators to put a new device in the home between the network and the retail or leased set-top box. Now, as MVPDs move to Internet Protocol (“IP”) to deliver their services and to move content throughout the home, those difficulties are gone. Today, MVPDs provide “control channel” data that contains (1) the channels and programs they carry, (2) whether a consumer has the right to access each of those channels and programs, and (3) the usage rights that a consumer has with respect to those channels and programs. Many MVPDs already use Internet Protocol (“IP”) to provide this control channel data. Moreover, most MVPDs have coalesced around a few standards and specifications for delivery of the video content itself, and many have progressed to sending content throughout the home network via IP. This standardization and increasing reliance on IP allows for software solutions that, with ground rules to ensure a necessary degree of convergence, will make it easier to finally fulfill the purpose of Section 629.

The regulatory and technological path to this proceeding reflects a long history. It begins with the Telecommunications Act of 1996, when Congress added Section 629 to the Communications Act. Section 629 directs the Commission to adopt regulations to assure the commercial availability of devices that consumers use to access multichannel video programming and other services offered over multichannel video programming networks. Section 629 goes on to state that these devices should be available from “manufacturers, retailers, and other vendors not affiliated with any multichannel video programming distributor.” It also prohibits the Commission from adopting regulations that would “jeopardize security of multichannel video programming and other services offered over multichannel video programming systems, or impede the legal rights of a provider of such services to prevent theft of service.” In enacting the section, Congress pointed to the vigorous retail market for customer premises equipment used with the telephone network and sought to create a similarly vigorous market for devices used with services offered over MVPDs' networks.

The Commission first adopted rules to implement Section 629 in 1998, just as “the enormous technological change resulting from the movement from analog to digital communications [was] underway.” The Commission set fundamental ground rules for consumer-owned devices and access to services offered over multichannel video programming systems. The rules established (1) manufacturers' right to build, and consumers' right to attach, any non-harmful device to an MVPD network, (2) a requirement that MVPDs provide technical interface information so manufacturers, retailers, and subscribers could determine device compatibility, (3) a requirement that MVPDs make available a separate security element that would allow a set-top box built by an unaffiliated manufacturer to access encrypted multichannel video programming without jeopardizing security of programming or impeding the legal rights of MVPDs to prevent theft of service, and (4) the integration ban, which required MVPDs to commonly rely on the separated security in the devices that they lease to subscribers. The Commission did not initially impose a specific technical standard to achieve these rules, but instead adopted rules that relied “heavily on the representations of the various interests involved that they will agree on relevant specifications, interfaces, and standards in a timely fashion.”

In December 2002, the cable and consumer electronics industries adopted a Memorandum of Understanding regarding a one-way plug-and-play “CableCARD” compatibility standard for digital cable. In October 2003, the Commission adopted the CableCARD standard as part of the Commission's rules, and consumer electronics manufacturers brought unidirectional CableCARD-compatible devices to market less than a year later. At least six million (and by one report, over 15 million) CableCARD devices were built and shipped, but the nine largest incumbent cable operators have deployed only 618,000 CableCARDs for use in consumer-owned devices. These rules drove innovations that consumers value greatly today: High-definition digital video recording, competitive user interfaces that provided more program information to viewers, the ability to set recordings remotely, the incorporation of Internet content with cable content, and automatic commercial skipping on cable content. Throughout the mid-to-late 2000s, cable operators increasingly transitioned their systems to digital and introduced interactive video services such as video-on-demand and content delivery methods such as switched digital video. The Commission's CableCARD rules and the Memorandum of Understanding did not prescribe methods for retail devices to access those interactive services, and therefore retail CableCARD devices could not access cable video-on-demand services. Moreover, cable operators generally offered poor CableCARD support, which made it much more difficult for consumers to set up a retail device than a leased device.

In 2010, the Commission took steps to remedy problems with the CableCARD regime. The Commission adopted additional CableCARD-related rules to improve cable operator support for retail CableCARD devices. The Commission also sought comment on a successor technology in the form of a Commission-designed, standardized converter box that would be designed to allow “any electronics manufacturer to offer smart video devices at retail that can be used with the services of any MVPD and without the need to coordinate or negotiate with MVPDs.” The Commission sought comment on this AllVid concept in a Notice of Inquiry but ultimately decided not to propose rules to mandate it.

In late 2014, Congress passed STELAR. Section 106 of that law had two main purposes: First, it eliminated the integration ban as of December 4, 2015, and second, it directed the Chairman of the Commission to appoint an advisory committee of technical experts to recommend a system for downloadable security that could advance the goals of section 629. The Chairman appointed 19 members to the Downloadable Security Technical Advisory Committee (“DSTAC”), and the committee submitted its report to the Commission on August 28, 2015. The DSTAC Report gave an account of the increasing number of devices on which consumers are viewing video content, including laptops, tablets, phones, and other “smart,” Internet-connected devices. The DSTAC Report pointed to two main reasons for this shift: (1) Software-based applications have made it easier for content providers to tailor their services to run on different hardware, and (2) there are an increasing number of software-based content protection systems that copyright holders are comfortable relying on to protect their content. The Media Bureau released a Public Notice seeking comment on the DSTAC Report on August 30, 2015. The DSTAC Report and comments that we received in response to it underlie and inform our Notice of Proposed Rulemaking.

The DSTAC Report offered two proposals regarding the non-security elements and two proposals regarding the security elements of a system that could implement section 629. For the non-security elements, the DSTAC Report presented both an MVPD-supported proposal that is based on proprietary applications and would allow MVPDs to retain control of the consumer experience, and a consumer electronics-supported proposal that is based on standard protocols that would let a competing device or application offer a consumer experience other than the one the MVPD offers. With respect to security, the DSTAC Report presented both an MVPD-supported proposal based on digital rights management (similar to what Internet-based video services use to protect their video content), and a consumer electronics-supported proposal based on link protection (similar to how content is protected as it travels from a Blu-ray player to a television set).

In this Notice of Proposed Rulemaking, we propose rules that are intended to assure a competitive market for equipment, including software, that can access multichannel video programming. A recent news report on this topic summarized the issue succinctly: “some consumer advocates wonder why, if you do want a set-top box, you can't just buy one as easily as you'd buy a cell phone or TV for that matter.” Before MVPDs transitioned to digital service, it was easy for consumers to buy televisions that received cable service without the need for a set-top box. In 1996, Congress recognized that we were on the cusp of a digital world with diverging system architectures. To address this, Congress adopted Section 629, and the Commission implemented that section of the statute by separating the parts of cable system architectures that were not consistent among systems into a module called a CableCARD that cable operators could design to work with their system-specific technology. This module converted system-specific aspects into a standardized interface; this standardized interface allowed a manufacturer to build a single device that could work with cable systems nationwide, despite their divergent technologies. Today, the world is converging again, this time around IP to provide control channel data, in some cases also using IP for content delivery over MVPD systems, and in many cases using IP for content delivery throughout the home. Standards will allow us to develop, and MVPDs to follow, ground rules about compatibility that are technology-neutral: The rules will allow MVPDs to upgrade their networks freely and any changes that a navigation device needs to conform to those changes can be supplied via software download rather than upgrading consumers' hardware. The ground rules we propose in this Notice of Proposed Rulemaking are designed to let MVPD subscribers watch what they pay for wherever they want, however they want, and whenever they want, and pay less money to do so, making it as easy to buy an innovative means of accessing multichannel video programming (such as an app, smart TV, or set-top box) as it is to buy a cell phone or TV.

As discussed below, our proposed rules are based on three fundamental points. First, the market for navigation devices is not competitive. Second, the few successes that developed in the CableCARD regime demonstrate that competitive navigation—that is, competition in the user interface and complementary features—is essential to achieve the goals of Section 629. Third, entities that build competitive navigation devices, including applications, need to be able to build those devices without seeking permission from MVPDs, because MVPDs offer products that directly compete with navigation devices and therefore have an incentive to withhold permission or constrain innovation, which would frustrate Section 629's goal of assuring a commercial market for navigation devices.

The Need for Rules. Today, consumers have few alternatives to leasing set-top boxes from their MVPDs, and the vast majority of MVPD subscribers lease boxes from their MVPD. In July 2015, Senators Ed Markey and Richard Blumenthal reported statistics that they gathered from a survey of large MVPDs: “approximately 99 percent of customers rent[ ] their set-top box directly from their pay-TV provider, [and] the set-top box rental market may be worth more than $19.5 billion per year, with the average American household spending more than $231 per year on set-top box rental fees.” There is evidence that increasingly consumers are able to access video service through proprietary MVPD applications as well. According to NCTA, consumers have downloaded MVPD Android and iOS applications more than 56 million times, more than 460 million IP-enabled devices support one or more MVPD applications, and 66 percent of them support applications from all of the top-10 MVPDs. These statistics show, however, that almost all consumers have one source for access to the multichannel video programming to which they subscribe: The leased set-top box, or the MVPD-provided application. Therefore, we tentatively conclude that the market for navigation devices is not competitive, and that we should adopt new regulations to further Section 629. We invite comment on this tentative conclusion.

Certain MVPD commenters argue that the market for devices is competitive and that we need not adopt any new regulations to achieve Section 629's directive. They argue that the popularity of streaming devices such as Amazon Fire TV, AppleTV, Chromecast, Roku, assorted video game systems, and mobile devices that can access over-the-top services such as Netflix, Amazon Instant Streaming, and Hulu, shows that Congress's goals in section 629 have been met. We disagree. With certain limited exceptions, it appears that those devices are not “used by consumers to access multichannel video programming,” and are even more rarely used as the sole means of accessing MVPDs' programming. We seek comment on this point. Which MVPDs allow their subscribers to use these devices as their sole means of accessing multichannel video programming? We seek specific numbers from MVPDs on the number of and percentage of their subscribers who use such devices as their sole means of accessing multichannel video programming without any MVPD-owned equipment in the subscriber's home. How do these numbers compare to other commercial markets for consumer electronics?

MVPDs may have several incentives for maintaining control over the user interface through which consumers access their multichannel video programming service, but for the reasons we provide below, we believe that the Act requires competitive navigation that would allow third parties to develop innovative ways to access multichannel video programming. We seek comment on those incentives. For example, how do MVPDs profit from their control of the user interface? Do MVPDs track consumer viewing habits, and if so, do they profit in any way as a result of that tracking (for example, by using the information to sell advertising or selling the information to ratings analytics companies)? What are the profit margins for selling that data? How long does a typical consumer lease a MVPD set-top box before it is replaced? What are MVPDs' profit margins on set-top boxes? Do MVPDs leverage their user interfaces to sell other services offered over multichannel video programming systems, e.g. home security? Do MVPDs offer integrated search across their multichannel video programming and other unaffiliated video services, and if not why not?

In addition, in today's world a retail navigation device developer must negotiate with MVPDs to get permission to provide access to the MVPD's multichannel video programming, on the MVPD's terms. These business-to-business arrangements are a step in the right direction for consumers because the arrangements have increased the universe of devices they can use to receive service. The arrangements have not assured a competitive retail market for devices from unaffiliated sources as required by section 629 because they do not always provide access to all of the programming that a subscriber pays to access, and may limit features like recording. In other words, these business-to-business arrangements—typically in the form of proprietary apps—do not offer consumers viable substitutes to a full-featured, leased set-top box. Moreover, these relationships are purely at the discretion of the MVPD and, to date, have only provided access to the MVPD's user interface rather than that of the competitive device.

Some argue that these business-to-business deals are essential to ensure that the few independent, diverse programmers that currently exist can continue to survive because they ensure that those programmers can rely on the channel placement and advertising agreements that they have contracted for with the MVPD. We disagree with this assertion, and believe that competition in interfaces, menus, search functions, and improved over-the-top integration will make it easier for consumers to find and watch minority and special interest programming. In addition, our goal is to preserve the contractual arrangements between programmers and MVPDs, while creating additional opportunities for programmers, who may not have an arrangement with an MVPD, to reach consumers. We seek comment on this analysis.

We also seek specific comment on the process that an MVPD uses to decide whether to allow such a device to access its services. Have retail navigation device developers asked MVPDs to develop applications for their devices and been denied? Have MVPDs asked navigation device developers to carry their applications and been denied? Do programmers prohibit MVPDs from displaying their programming on certain devices? If so, what are the terms of those prohibitions? Should the Commission ban such terms to assure the commercial availability of devices that can access multichannel video programming, and under what authority? Are “premium features and functions” of devices such as televisions and recording devices limited due to “cable scrambling, encoding, or encryption technologies?” If so, could we adopt the rules we propose below pursuant to our authority under Section 624A of the Act?

As noted above, it appears that consumers have downloaded proprietary MVPD applications many times; we seek comment on whether consumers actually use those applications to access multichannel video programming. Section 629 directs us to adopt regulations to assure the commercial availability of “equipment used by consumers to access multichannel video programming.” MVPDs argue that their proprietary applications are used by consumers to access multichannel video programming; to better evaluate this argument, we seek further comment on usage rates of those proprietary applications. What percentage of consumers use MVPD applications to view programming one month after downloading an application? How many hours per month, on average, does a consumer use an MVPD application to view programming, compared to consumers' use of leased boxes? How many MVPDs make their full channel lineups available via applications? Do any MVPDs allow consumers to access multichannel video programming, beyond unencrypted signals, without leasing or purchasing some piece of MVPD equipment? How many consumers that lease a set-top box also use an MVPD application? How many consumers view multichannel video programming only via a proprietary MVPD application, without leasing a box? Are proprietary MVPD applications available on all platforms and devices? Or do MVPDs enter into agreements with a limited number of manufacturers or operating system vendors?

Section 629 and DBS Providers. In the First Plug and Play Report and Order, the Commission exempted DBS providers from our foundational separation of security requirement because “customer ownership of satellite earth stations receivers and signal decoding equipment has been the norm in the DBS field.” This meant that DBS was also exempt from most of the rules that the Commission adopted in the Second Plug and Play Order. Unfortunately, in the intervening years the market did not evolve as we expected; in fact, from a navigation device perspective, it appears that the market for devices that can access DBS multichannel video programming has devolved to one that relies almost exclusively on equipment leased from the DBS provider. Accordingly, to implement the requirements of section 629 fully, we tentatively conclude that any regulations we adopt should apply to DBS. We seek comment on this tentative conclusion. We also seek comment on the availability of DBS equipment at retail. Has the state of the marketplace changed since 1998, when the Commission had observed an “evolving” competitive market for DBS equipment and, if so, to what extent? In addition to our authority under section 629, we seek comment on our authority under section 335 to adopt any of the rules we propose below or any other rules related to competition in the market for devices that can access DBS multichannel video programming, which would serve the public interest. Finally, we recognize the “weirdness of satellite” that the DSTAC emphasized in this context because the DBS systems cannot assume that bidirectional communication is available in all cases, and accordingly we seek comment on differences in DBS delivery or system architecture that should inform our proposed rules set forth below.

Authority. We tentatively conclude that the Commission has legal authority to implement our proposed rules. Section 629 of the Act, entitled “Competitive Availability of Navigation Devices,” directs the Commission to “adopt regulations to assure the commercial availability . . . of converter boxes, interactive communications equipment, and other equipment used by consumers to access multichannel video programming and other services offered over multichannel video programming systems, from manufacturers, retailers, and other vendors not affiliated with any multichannel video programming distributor.” We propose to interpret the terms “manufacturers, retailers, and other vendors” broadly to include all hardware manufacturers, software developers, application designers, system integrators, and other such entities that are not affiliated with any MVPD and who are involved in the development of navigation devices or whose products enable consumers to access multichannel video programming over any such device. We believe a broad interpretation is necessary to ensure that these third parties are provided the information they need from MVPDs to facilitate the commercial development of competing navigation technologies in order to fulfill the goals of section 629.

The Act does not define the terms “navigation device” or “interactive communications equipment, and other equipment,” but we believe that Congress intended the terms to be far broader than conventional cable boxes or other hardware alone; Section 629 is plainly written to cover any equipment used by consumers to access multichannel video programming and other services, and software features have long been essential elements of such equipment. Exercising our authority to interpret ambiguous terms in the Communications Act, we tentatively conclude that these terms include both the hardware and software (such as applications) employed in such devices that allow consumers to access multichannel video programming and other services offered over multichannel video programming systems. We believe this interpretation best serves the intent of Congress as reflected in the legislative history, which directs, among other things, that we “should take cognizance of the current state of the marketplace.” In today's marketplace, “navigation devices”—i.e., interactive communications equipment and other equipment—include both hardware and software technologies. Certain functions can be performed interchangeably by either hardware, software, or a combination of both. Congress recognized this in the STELAR, which called for a study of downloadable software approaches to security issues previously performed in hardware. To fully and effectively implement Section 629 as Congress intended, we propose to interpret these terms to cover both the hardware and software aspects of navigation equipment. This is consistent with our interpretation of other sections of the Act that use the term “equipment”, which we have interpreted to include both hardware and software. The Commission derived its definition of the term “navigation devices” in our current rules from the text of section 629, and we propose to interpret that term consistent with both the language and intent of the statute, as described above.

We interpret the phrase “manufacturers, retailers, and other vendors not affiliated with any multichannel video programming distributor” in section 629 to mean broadly “entities independent of MVPDs,” such that our rules must ensure the availability of Navigation Devices from entities that have no business relationship with any MVPD for purposes of providing the three Information Flows that we discuss below. We believe that this interpretation best aligns with Congressional intent, as reflected in the legislative history of the Telecommunications Act of 1996. Namely, the House Report states that the statute was intended to encourage the availability of equipment from a “variety of sources” and “various distribution sources” to assure that consumers can buy a variety of non-proprietary devices. Moreover, we do not believe that the goals of section 629 would be met if the commercial market consisted solely of Navigation Devices built by developers with a business-to-business relationship with an MVPD, because such an approach would not lead to Navigation Device developers being able to innovate independently of MVPDs. We seek comment on this interpretation. Does it take proper account of the fact that even some Navigation Device developers that rely on the three Information Flows to provide access to MVPD service may have other business relationships with MVPDs unrelated to the provision of navigation devices? Are there other interpretations that can assure a competitive market as Congress intended?

We seek comment on this statutory analysis. Are there other sources of Commission authority to adopt the proposed rules? For example, we invite commenters to discuss the Commission's authority under Sections 624A and 335 of the Act and any other relevant statutory provisions. Alternatively, should we modify our definition of “navigation devices” to treat software on the device (such as an application) that consumers use to access multichannel video programming and other MVPD services as a “navigation device,” separate and apart from the hardware on which it is running? For example, we seek comment on whether we should add a sentence to our definition of “navigation devices” that states, “This term includes software or hardware performing the functions traditionally performed in hardware navigation devices.” Would such a modification be consistent with our statutory directive under section 629 to “adopt regulations to assure the commercial availability . . . of converter boxes, interactive communications equipment, and other equipment” used by consumers to access multichannel video programming and other services offered over MVPD systems? What implications would modification of our definition of “navigation devices” in this manner have on our current navigation devices rules? Would this definitional change impact Commission rules in other contexts? If so, commenters should identify the specific rule, how the definitional change would impact the rule, and whether further rule changes would be necessary to reflect the rule modification adopted in this proceeding. For example, would such a modification alter the accessibility obligations of device manufacturers and software developers and, if so, in what manner?

Proposals. As discussed above, we do not believe that the current marketplace provides the “commercial availability” of competitive navigation devices by manufacturers, retailers, and other vendors not affiliated with any MVPD that can access multichannel video programming within the meaning of section 629. Given our experience to date, we believe that Section 629 cannot be satisfied—that is, we cannot assure a commercial market for devices that can access multichannel video programming—unless companies unaffiliated with an MVPD are able to offer innovative user interfaces and functionality to consumers wishing to access that multichannel video programming. This interpretation is in line with our current rules, which led to the creativity and consumer benefits of the CableCARD regime. We also believe that the goals of section 629 will not be met absent Commission action, given MVPDs' incentive to limit competition. As we begin to craft rules that will meet our 629 obligations, there are seven objectives that seem paramount to our effort.

First, consumers should be able to choose how they access the multichannel video programming to which they subscribe (e.g., through the MVPD-provided user interface on an MVPD-provided set-top box or app, through a set-top box offered by an unaffiliated vendor, or through an application or search interface offered by an unaffiliated vendor on a device such as a tablet or smart TV). We propose a rule to define these “Navigable Services” as an MVPD's multichannel video programming (including both linear and on-demand programming), every format and resolution of that programming that the MVPD sends to its own devices and applications, and Emergency Alert System (EAS) messages, because we tentatively conclude that these elements are what comprise “multichannel video programming” as that term appears in section 629. We seek comment on this definition and whether there is information beyond the multichannel video programming and EAS messages that are essential parts of “multichannel video programming and other services offered over multichannel video programming systems” that a navigation system needs to access and that we should include in the definition. For example, if an MVPD offers a “cloud recording” service that allows consumers to record programs and store them remotely, should that cloud recording service be a “Navigable Service”? We seek comment on how to define “MVPD service.”

Second, we recognize that the few successful CableCARD devices all have something in common: They provide user interfaces that compete with the user interfaces MVPD-provided set-top boxes render. Therefore, MVPDs and unaffiliated vendors must be able to differentiate themselves in order to effectively compete based on the user interface and complementary features they offer users (e.g., integrated search across MVPD content and over-the-top content, suggested content, integration with home entertainment systems, caller ID, and future innovations).

Third, unaffiliated vendors must be able to build competitive navigation devices, including applications, without first obtaining approval from MVPDs or organizations they control. Senators Markey and Blumenthal found that MVPDs take in approximately $19.5 billion per year in set-top box lease fees, so MVPDs have a strong financial incentive to use an approval process to prevent development of a competitive commercial market and continue to require almost all of their subscribers to lease set-top boxes.

Fourth, unaffiliated vendors must implement content protection to ensure that the security of MVPD services is not jeopardized, and must respect licensing terms regarding copyright, entitlement, and robustness. This will ensure parity between MVPD-provided and competitive navigation devices.

Fifth, our rules should be technology neutral, permitting both software (e.g., cloud delivery) and hardware solutions, and not impede innovation. This will ensure that consumers will not be forced to use outdated, power-hungry hardware to receive multichannel video programming services.

Sixth, our rules should allow consumers to use the same device with different MVPDs throughout the country. Device portability will encourage MVPD competition because consumers will be able to change their video service providers without purchasing new equipment.

Finally, our rules should not prescribe a particular solution that may impede the MVPD industry's technological progress. We seek comment on these seven objectives, their appropriateness, and in particular their relative importance.

Based on our tentative conclusion that the market for navigation devices is not competitive, with the above objectives in mind, we propose rules that will assure a competitive market for devices that can access multichannel video programming without jeopardizing security of the programming or an MVPD's ability to prevent theft of service, as section 629 requires. Like the authors of the DSTAC Report, we split our discussion of these proposals into sections regarding the non-security and security elements of multichannel video programming services.

The rules we propose are intended to address a fundamental feature of the current market for multichannel video programming services, namely the “wide diversity in delivery networks, conditional access systems, bi-directional communication paths, and other technology choices across MVPDs (and even within MVPDs of a similar type).” In 1998, the Commission concluded that it could address this technological diversity in one of two ways, either via complex devices, or via translation of those diverse network technologies into a standardized format. This analysis stands seventeen years after it was adopted. We do not wish to impose a single, rigid, government-imposed technical standard on the parties, but we understand that it would be impossible to build widely used equipment without some standardization. Therefore, as explained further below, we propose to allow MVPDs to choose the specific standards they wish to use to make their services available via competitive navigation devices or solutions, so long as those standards are in a published, transparent format that conforms to specifications set by an open standards body. We also tentatively conclude that we should require MVPDs to comply with the rules we propose two years after adoption. We seek comment on this tentative conclusion.

Non-Security Elements: Service Discovery, Entitlement, and Content Delivery. We propose an approach to non-security elements that balances the interests expressed by the members of the DSTAC and commenters who filed in response to the DSTAC Report. Under this approach, we will require MVPDs to provide Service Discovery, Entitlement, and Content Delivery information (the “Information Flows”) in standardized formats that the MVPD chooses. Our proposal is based on the tentative conclusion that the Information Flows are necessary to ensure that developers that are not affiliated with an MVPD can develop navigation devices, including software, that can access multichannel video programming in a way that will assure a commercial market. We believe that this proposed requirement is the least burdensome way to assure commercial availability of navigation devices (the specifications necessary to provide these Information Flows appear to exist today) and is consistent with our prior rules. Moreover, this approach is technology neutral—the Commission would not dictate the MVPD's decision whether to rely on hardware or software to make the Information Flows available. Therefore, the proposed approach would provide each MVPD with flexibility to choose the standard that best aligns with its system architecture. It would also give unaffiliated entities access to the Information Flows in a published, transparent, and standardized format so that those entities would understand what information is available to them. We believe that this is the best approach because the proposal does not require the Commission to prescribe or even approve the standards so long as the Information Flows are available. A benefit of this approach is that affected industries will be able to evolve as technology improves.

Under our proposed rule, we would require each MVPD to provide Service Discovery Data, Entitlement Data, and Content Delivery Data for its “Navigable Services” in published, transparent formats that conform to specifications set by open standards bodies. Under this proposal, we would require MVPDs to provide these Information Flows in a manner that does not restrict competitive user interfaces and features. We seek comment below on this proposed rule and on our proposed definitions of the terms (1) Service Discovery Data, (2) Entitlement Data, (3) Content Delivery Data, and (4) Open Standards Body.

We base these proposed rules on three main points from the DSTAC Report related to non-security elements that we find compelling. First, we agree with the Competitive Navigation advocates that developers need the Information Flows in a standardized format to encourage development of competitive, technology-neutral solutions for competitive navigation. We also agree with the Proprietary Applications advocates, however, that providing MVPDs with flexibility, where it will not impair the competitive market, will encourage and support innovation. Significantly, consistent with a major point of agreement in the DSTAC Report, these proposed rules do not require MVPDs to “commonly rely” on the Information Flows for their own navigation devices, so they will not need to replace the devices that they currently provide their subscribers. We seek comment below on our proposed definitions of these three Information Flows. In particular, we seek comment on how detailed our definitions should be; that is, will standards-setting bodies define the details of what information should be in the Information Flows, sufficient to assure a commercial market for navigation systems and meet our regulatory goals? Should we define this with the same amount of detail proposed in the DSTAC Report? Are the definitions we propose appropriate for all MVPDs, or does the diversity in network architectures justify different definitions for traditional cable, satellite, and IP-based services?

We propose to define Service Discovery Data as information about available Navigable Services and any instructions necessary to request a Navigable Service. We tentatively conclude that the Service Discovery Data must include, at a minimum, channel information (if any), program title, rating/parental control information, program start and stop times (or program length, for on-demand programming), and an “Entertainment Identifier Register ID” so that competitive navigation devices can accurately convey to consumers the programming that is available. We seek comment on whether this is the minimum amount of information that would allow a competitive navigation device developer to build a competitive system. Should this data also include information about the resolution of the program, PSIP data, and whether the program has accessibility features such as closed captions and video description? Should this data include the program description information that the MVPD sends to its own navigation devices? For example, is it necessary for the data to include descriptive information about the advertising embedded within the program? Our tentative view is that this level is detail is not necessary. Should it include capabilities of the MVPD's Navigable Services? For instance, the DSTAC Report refers to “stream management” as important information that conveys the number of video streams that a particular system can handle based on system bandwidth, tuner resources, or fraud prevention. One approach is that the MVPD could provide unaffiliated devices with information about the maximum number of simultaneous video streams that can be watched or recorded via the Service Discovery Data flow. We seek comment on this approach.

We propose to define Entitlement Data as information about (1) which Navigable Services a subscriber has the rights to access and (2) the rights the subscriber has to use those Navigable Services. This reflects our assumption that Entitlement Data will include, at a minimum, (1) copy control information and (2) whether the content may be passed through outputs, and if so, any information pertaining to passing through outputs such as further content protection and resolution, (3) information about rights to stream the content out-of-home, (4) the resolutions that are available on various devices, and (5) recording expiration date information, if any. What additional rights information should be included in Entitlement Data? We also propose to require that this data reflect identical rights that a consumer has on Navigation Devices that the MVPD sells or leases to its subscribers. Consumers must be able to receive and use all of content that they pay for no matter the device or application they choose, so long as that device or application protects content sufficiently. We seek comment on whether our proposed definition is flexible enough to adequately address future business models. Will consumers' rights to “access” content vary from their rights to “use” the content? For example, what if a consumer subscribes to a 4K feed of a particular channel, but the device only has content protection that is approved by the content owner to protect the high-definition feed? Will our proposed definition address that situation? How should we treat Navigable Services that can be recorded and stored remotely (i.e., “cloud recording” services)? Would our requirement that Entitlement Data be identical for competitive navigation devices and MVPD-provided navigation devices ensure that a subscriber could record content on a competitive navigation device if the MVPD allows subscribers to record and store that content remotely?

We propose to define Content Delivery Data as data that contains the Navigable Service and any information necessary to make the Navigable Service accessible to persons with disabilities under our rules. We seek comment on this definition. Does content delivery include services other than multichannel video programming and accessibility information? For example, the DSTAC Report stated that some MVPDs provide applications that include news headlines, weather information, sports scores, and social networking. We tentatively conclude that such information is unnecessary to include in the definition of Content Delivery Data because that information is freely available from other sources on a variety of devices, whereas multichannel video programming is not. The provision of such applications may allow MVPDs and unaffiliated companies to distinguish themselves in a competitive market. In addition to the applications listed in the DSTAC Report, NCTA states that MVPDs offer services that allow subscribers “to switch between multiple sports games or events or camera angles, view[] video-on-demand with full interactive `extras,' shopping by remote, or see[] the last channels they tuned.” Is there anything in our proposed definition that would foreclose the possibility that a competitive navigation device could offer these services? We seek comment on this tentative conclusion.

As discussed above, we propose to require MVPDs to provide the Information Flows in published, transparent formats that conform to specifications set by “Open Standards Bodies.” We seek comment on our proposed definition of Open Standards Body: A standards body (1) whose membership is open to consumer electronics, multichannel video programming distributors, content companies, application developers, and consumer interest organizations, (2) that has a fair balance of interested members, (3) that has a published set of procedures to assure due process, (4) that has a published appeals process, and (5) that strives to set consensus standards. We seek comment on whether these are the appropriate characteristics. Are there others we should consider? We believe that there is at least one body that meets this definition but invite commenters to provide examples of such bodies. We also believe that the characteristics listed in the definition would arm the Commission with an established test to judge whether an MVPD's method of delivering the three Information Flows is sufficient (in combination with the other elements of the proposal discussed in this item) to assure a retail market. The five characteristics that define an Open Standards Body would ensure that navigation system developers have input into the standards-setting process, give them confidence that their devices will be able to access multichannel video programming, and prevent them from needing to build a glut of “capacities to function with a variety of types of different systems with disparate characteristics.” We seek comment on this proposed approach.

We seek comment on whether our proposal addresses the critiques of the Competitive Navigation approach that are set forth in the DSTAC Report, comments filed in response to that report, and recent ex partes. A consistent argument against the Competitive Navigation approach has been its emphasis on a required set of standards. The Commission has also been wary of stifling “growth, innovation, and technical developments” through regulations to implement section 629. We therefore seek comment on whether our proposed approach, which does not mandate specific standards, balances these critiques against the need for some standardization. Would this appropriately implement Congress's clear direction in section 629 to “adopt regulations to assure the commercial availability” of navigation devices “in consultation with appropriate industry standard-setting organizations”? If not, how can we achieve that Congressional directive?

NCTA claims that the Competitive Navigation approach would take years of lengthy standards development to implement. Competitive Navigation advocates, however, filed a set of specifications for Service Discovery Data, Entitlement Data, and Content Delivery Data, largely based on DLNA VidiPath, that they claim could achieve the Competitive Navigation proposal today. They also claim that “any necessary standardization, if pursued in good faith, should take no more than a single year.” We seek comment on these views. The Competitive Navigation advocates submitted evidence that DLNA has a toolkit of specifications available. Given this evidence, we propose to require MVPDs to comply with the rules two years after adoption. We seek comment on whether the standards-setting process, if pursued in good faith, could allow MVPDs to meet that proposed implementation deadline. We seek specificity on what more work needs to be done for an Open Standards Body to develop standards for Service Discovery Data, Entitlement Data, and Content Delivery Data. Given the current toolkits of specifications for Service Discovery Data, Entitlement Data, and Content Delivery Data, is it possible for us to adopt a “fallback” or “safe harbor” set of specifications? If so, should they be those proposed by the Competitive Navigation advocates, or others? We also seek comment on any other mechanisms we can adopt to ensure that MVPDs and other interested parties cooperate in prompt development of standards.

The DSTAC Report includes an “Implementation Analysis” prepared by opponents of the Competitive Navigation approach, arguing that it does not fully establish a method for replicating, in a competitive navigation device, all of the services that an MVPD might offer. Our proposal's grant of flexibility to MVPDs gives them the opportunity to seek and adopt standards in Open Standards Bodies that will allow such replication. We seek comment on this issue.

Some commenters argue that the proposal constitutes compelled speech, or interference with the manner of speech of MVPDs, and thus imperils the First Amendment rights of these speakers. The Commission does not believe that the proposed rules infringe MVPDs' First Amendment rights. The proposal to require MVPDs to provide Content Delivery Data would simply require MVPDs to provide content of their own choosing to subscribers to whom they have voluntarily agreed to provide such content. The rules would not interfere in any way with the MVPD's choice of content or require MVPDs to provide such content to anyone to whom they have not voluntarily entered into a subscription agreement. Rather, the rules would simply allow the subscriber to access the programming that the MVPD has agreed to provide to it on any compliant Navigation Device. Thus, it does not seem that this aspect of the proposed rules infringes MVPDs' First Amendment rights. The proposal to require MVPDs to provide Service Discovery Data and Entitlement Data would require MVPDs to disclose accurate factual information concerning the Navigable Service and subscribers' rights to access it. Service Discovery Data is simply information about the Navigable Service, while Entitlement Data is information about the subscriber's rights to use the Navigable Service, designed to protect the service from unauthorized access. We believe that these proposed disclosure requirements would withstand scrutiny under the First Amendment. In general, government regulation of commercial speech will be found compatible with the First Amendment if it meets the criteria laid out in Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557, 566 (1980): (1) There is a substantial government interest; (2) the regulation directly advances the substantial government interest; and (3) the proposed regulation is not more extensive than necessary to serve that interest. In Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626, 651 (1985), the Supreme Court adopted a more relaxed standard to evaluate compelled disclosure of “purely factual and uncontroversial” information. Under the standard set forth in Zauderer, compelled disclosure of “purely factual and uncontroversial” information is permissible if “reasonably related to the State's interest in preventing deception of consumers.” The District of Columbia Circuit recently held in American Meat Institute v. U.S. Department of Agriculture, 760 F.3d 18 (D.C. Cir. 2014) (en banc), that government interests other than correcting deception can be invoked to sustain a disclosure requirement under Zauderer. Here, the proposed rules would require the disclosure of purely factual and uncontroversial information concerning the MVPD's service, which we believe would be sustained under the Zauderer and Circuit Court precedents because the disclosures are reasonably related to advancing the government interest in fostering competition in the market for devices used by consumers to access video programming. We have tentatively concluded that disclosure of this information is necessary to ensure that developers who are not affiliated with an MVPD can develop navigation devices that can access multichannel video programming services, so as to foster the commercial market in such devices envisioned by Congress. This is a policy that Congress directed the Commission to advance through the adoption of rules, and we propose to fulfill that statutory obligation in a manner that does not impermissibly infringe on MVPDs' First Amendment rights. We seek comment on this analysis.

Finally, some commenters argue that the Competitive Navigation approach would require MVPDs to deploy “a New Operator-Supplied Box” to their subscribers. Other commenters disagree with this assertion, and state that the solution could be implemented in the cloud at the MVPD's discretion, thereby avoiding the need for new or additional equipment. We believe that our proposal does not require most MVPDs to develop or deploy new equipment, nor would it require subscribers to obtain additional or new equipment. In fact, our proposal may make it easier for MVPDs to offer cloud-based services because it gives each MVPD the flexibility to choose the standards that best achieve its goals. We seek comment on this belief. Would our proposal necessitate any changes to the MVPD's network, or would it give the MVPD the discretion to decide whether to modify its system architecture, as we intend?

Proprietary Applications. The DSTAC's Proprietary Applications approach proposed six different methods to deliver MVPD services that would require consumers to use the MVPD's proprietary user interface. As discussed above, we have significant doubt that such an approach could assure a commercial market for navigation devices as Section 629 requires. However, we seek comment on the DSTAC's Proprietary Applications approach and whether the Proprietary Applications approach could satisfy section 629.

We also seek comment on whether our proposed rules could achieve the benefits that the DSTAC Report's Proprietary Applications approach endeavors to achieve. One of the purported benefits of the Proprietary Applications approach is that it would provide MVPDs “diversity and flexibility.” Our proposal attempts to give MVPDs a diversity of choices and flexibility in making their Navigable Services available through competitive navigation devices, by allowing them to choose from any standard to offer the Information Flows, so long as the Information Flows are provided in a published, transparent format developed by Open Standards Bodies. Does this provide flexibility to MVPDs, while still sufficiently limiting the universe of standards such that a device could be built for a nationwide market? We seek comment on how much it would cost to build a single device that is compatible with all of the approaches listed by the Proprietary Applications advocates in the DSTAC Report. If a device were compatible with all of these Proprietary Applications approaches, would it be compatible with and able to receive all multichannel video programming services? How would this square with our statutory mandates under Sections 624A (with respect to cable operators) and 629 of the Act?

Section 629 directs us to adopt regulations to assure a market for devices “from manufacturers, retailers, and other vendors not affiliated with any multichannel video programming distributor.” If device compatibility relies on MVPDs developing “device specific apps,” how could we assure entities that are not affiliated with the MVPD that their devices will be able to access multichannel video programming services? How would device manufacturers and consumers ensure that support for the application is not withdrawn by the MVPD without consultation with the device manufacturer and consumers? Do proprietary applications impose costs or certification processes that could, if left unchecked, thwart the mandates of Section 629? As an alternative to our proposal, could and should we require MVPDs to develop applications within a specific timeframe for each device manufacturer that requests such an application, and to support that application indefinitely? Section 629 also directs the Commission to adopt regulations “in consultation with appropriate industry standard-setting organizations.” Does this suggest that the Proprietary Applications approach proposed in the DSTAC Report, which is not entirely standards-based, is not what Congress had in mind? Are applications, as they have been deployed, ancillary to leased devices, and therefore unlikely lead to retail competition with leased devices? Are the DLNA VidiPath, RVU, DISH Virtual Joey, and Sling Media Technology Client applications “two-device” solutions that would require consumers to attach MVPD-provided equipment to a separate piece of consumer-owned hardware? What standards, protocols, or specifications exist that would allow MVPDs to offer those services without any MVPD-specific equipment inside a consumer's home, or from the cloud? Could MVPDs use those standards, protocols, or specifications if we adopt our proposal? We also seek comment on any other element of the Proprietary Applications approach.

Proposal Regarding Security Elements. We propose that MVPDs be required to support a content protection system that is licensable on reasonable and nondiscriminatory terms, and has a “Trust Authority” that is not substantially controlled by an MVPD or by the MVPD industry. We believe this approach best balances the benefits of flexibility in content protection choices by MVPDs with the need of manufacturers to choose from a limited universe of independently controlled content protection systems. Below we describe the two alternative proposals set forth by DSTAC Working Group 3, and detail the concerns raised about each by commenters. We then discuss why we believe neither approach on its own would be sufficient to meet the Commission's goals in this proceeding, and propose a “via media” that could allow for a competitive market for innovative retail navigation devices while also affording MVPDs significant flexibility.

DSTAC Proposals. The DSTAC's Working Group 3, which focused on security, had significant points of agreement. Most fundamentally, the group agreed that downloaded security components need to remain in the control of the MVPD, but that consumer devices could not be built to simultaneously support every proprietary content protection system. Just as in the non-security context, however, DSTAC Working Group 3 had fundamental disagreements. As summarized in the DSTAC Report, Working Group 3 proposed two alternative approaches. The first is the “HTML5” approach, sometimes described as the “DRM” approach, which “consists of MVPD/OVDs supplying media streams over HTTPS [the secure version of the protocol used to transfer data between a browser and Web site] and CE/CPE devices accessing and decrypting those media streams by supplying devices that implement the HTML5, EME, MSE and Web Crypto APIs [software permitting secure handling of the media streams by the devices].” The most vocal advocates of the HTML5 approach are MVPDs and content providers. The second approach is the “Media Server,” in which “[n]etwork security and conditional access are performed in the cloud, and the security between the cloud and retail navigation devices is a well-defined, widely used link protection mechanism such as DTCP.” The strongest advocates of the Media Server approach are consumer electronics manufacturers and consumer-facing online service providers, as well as consumer advocates. Content protection approaches similar to both proposals are in widespread use today, in other content delivery contexts. Although there are differences in how they currently manifest, the key distinction is the way in which they allow MVPDs to control access to content—their “conditional access” systems.

The HTML5 approach allows an MVPD to rely on any digital rights management (DRM) system that it chooses to manage its content. DRM, in this context, refers to a system of content protection that is based on permissions granted from a centralized server that the content provider (in this case, the MVPD) controls. DRM prevents subscribers from using the programming they are entitled to access in unauthorized ways. If a subscriber wishes to watch a particular program, the consumer's device contacts the rights server. If the subscriber is entitled to view, record, or otherwise utilize the content, then the rights server sends a message of approval, and the device displays the content. If the subscriber is not entitled to perform that task with the content, then the rights server sends a message of disapproval, and the device does not perform the task. Traditionally, rights servers for video are not located in consumers' homes, so they do not require additional equipment in the home. Devices like smart TVs and streaming devices that are able to play programming protected by DRM must be built to conform to each DRM, however, so not every device is equipped to handle each type of DRM employed by MVPDs and other video distributors today.

Under the Media Server approach, conditional access is managed before programming enters consumer devices, and the programming is protected when moving to consumer devices by a standardized link protection system. Link protection, in this context, is an encrypted connection between a source and a receiver. The system is built on the assumption that any device that has a certificate that deems it trustworthy, granted by a trusted authority at the time of manufacture and not subsequently revoked by the Trust Authority, will treat content as instructed by copy control information embedded in data that is transmitted with content. Like DRM, link protection prevents subscribers from using the programming to which they subscribe in unauthorized ways. This technology is how a Blu-ray player sends video to a television set when physically connected—there is no additional verification step necessary, because the television has a certificate that the Blu-ray player trusts, and the television has that certificate because it was tested by the organization that controls the bestowal of certificates at manufacture to make sure that it is a secure device. The Digital Transmission Licensing Administrator (DTLA), which was founded by Intel Corporation, Hitachi, Ltd., Panasonic Corporation, Sony Corporation, and Toshiba Corporation, is an example of an organization that hands out those certificates. All of the five major Hollywood studios have approved DTLA's link-protection technology (DTCP) for protecting content as it travels from source to receiver. Traditionally, link protection has been designed to protect content within the home as it travels from one device (for example, a Blu-ray player) to another (for example, a TV set).

Criticism of the DSTAC Proposals. Since publication of the DSTAC Report, commenters have raised significant and compelling concerns about universally imposing either approach in the way described by its advocates. Criticism of the HTML5 approach has come from a spectrum of commenters outside the MVPD community, but has centered on concern that MVPDs could abuse their ability to fully control the conditional access system necessary to access their content. For example, the Consumer Video Choice Coalition argues that this approach would keep control in the hands of MVPDs that “have a history” of using their leverage over existing application deployment to prevent “consumers from viewing content they have paid for on the device of their choice.” The DRM licensor could be the MVPD itself, if it chose to offer only a proprietary DRM solution, obviously posing a challenge to any device manufacturer attempting to compete.

Critics of the Media Server approach have emphasized the security difficulties potentially posed by a standardized link protection system. For example, some commenters have stated that the current version of DTCP, the industry standard, is inadequate to protect 4K and ultra-high definition content. Commenters have also argued that the technical limitations on the current version of DTCP would require MVPD-provided equipment be in the home. DTLA has filed comments responding to both of these criticisms, stating that the soon-to-be-finalized version of DTCP will be secure enough to protect the highest value content, and flexible enough to protect content delivered from the cloud. NCTA, Adobe, and ARRIS argue that, however good the link protection system, if it were industry-wide it would be a single, static point of attack that hackers could exploit, and it would be insufficiently flexible to respond to threats as they develop. NCTA argues that “[t]oday, device manufacturers and video services can choose from a competitive marketplace of content protection technologies to stay ahead of security threats.” In contrast, they claim, the Media Server proposal (specifically, as described in filings after the issuance of the DSTAC Report) would “lock[] out the whole competitive market for DRM and content protection.”

The record reflects significant consensus about the importance of flexibility, though clear disagreements exist about what that should look like. Some of the strongest critiques are those that could apply equally to any approach imposed on all MVPDs and competitive navigation device manufacturers. The Commission has often been wary of mandating the adoption of specific technologies, rather than functional goals. Indeed, a number of commenters specifically warn against “tech mandates” in this space. Although that particular phrasing is more often heard from supporters of the HTML5 proposal, the warnings reflect a broader concern about the importance of flexibility. Public Knowledge argues that the Media Server proposal is superior because it is “versatile and flexible,” compared to the HTML5 proposal, which is “too rigid technologically.” Amazon asks us to “approach this issue from the standpoint of giving service providers technological flexibility.” Some commenters argue that the Commission should take no action given the lack of consensus on this issue. A stance of total inaction, however, would be an abdication of our responsibility under section 629. Without clear guidance from the Commission on the question of content protection, a truly competitive retail market for alternatives to MVPD set-top boxes is unlikely to develop.

We are persuaded that the HTML5 proposal is not consistent with our goals in this proceeding. By leaving total control of security decisions to MVPDs, we would perpetuate a market in which competitors are compelled to seek permission from an MVPD in order to build devices that will work on its system. So long as MVPDs are themselves providing and profiting from navigation equipment and services, retail devices will be available only when they benefit an MVPD, not when they benefit consumers, and a truly competitive market will remain out of reach. Section 629, however, requires us to ensure that our rules do not imperil the security of the content MVPDs are carrying. At the same time, we also are not persuaded that we should require the Media Server proposal. Mandating a single shared content protection standard for every piece of MVPD content, as the Media Server proponents suggest, would create too much potential for vulnerability. It would impose no requirement (and thus, provide no guarantee) that the developer of that single shared standard develop a new, more robust version in the event of a hack.

Security Proposal. Based on the record, we believe there is a middle path on the issue of content protection that can allow for a competitive market for innovative retail navigation devices, including software, that also affords MVPDs significant flexibility to protect their content, evolve their content protection, and respond to security concerns. Verimatrix asked the Commission not to “mandate either or even both [DSTAC proposals] as `the' standard solution.” They argued that both should be available as part of a “toolkit” of approaches available to MVPDs, a toolkit that could in fact include other approaches with the passage of time. We agree. We therefore propose that MVPDs retain the freedom to choose the content protection systems they support to secure their programming, so long as they enable competitive Navigation Devices. In order to do so, at least one content protection system they deploy, and to which they make available the three Information Flows in their entirety, must be “Compliant”—licensable on reasonable and non-discriminatory terms, and must not be controlled by MVPDs.

We believe this approach will give MVPDs the flexibility they need to avoid creating a “single point of attack” for hackers, and the freedom to set their own pace on eliminating system-specific content security equipment in subscribers' homes, in response to the demands of the market. At the same time, we believe it will assure competitors and those considering entering the market that they can build to what is likely to be a limited number of content protection standards licensable on reasonable, non-discriminatory terms, and expect their navigation devices to work across MVPDs. They will not need to seek approval, review, or testing from the MVPDs themselves, who may have an incentive to delay or impede retail navigation devices' market entry because their leased navigation devices will remain in direct competition with the retail market for the foreseeable future. We seek comment on these assumptions.

Accordingly, we propose that MVPDs must support at least one “compliant” conditional access system or link protection technology, although they may use others at the same time. A Compliant Security System must be licensable on reasonable, nondiscriminatory terms, and have a Trust Authority that is not substantially controlled by any MVPD or group of MVPDs. An MVPD must make available the three Information Flows in their entirety to devices using one of the Compliant Security Systems chosen by the MVPD. Such a system might include, for example, future iterations of DTCP or certain DRM systems. Commenters state that these conditional access systems could be refined to permit the full range of activity contemplated by the DSTAC, and cloud-based link protection that would minimize or eliminate the need for MVPD-provided equipment on the customer's premises. We seek comment on this proposal, including whether we need to modify our existing definition of “conditional access” in any way.

We invite comment on some specific questions surrounding our proposal. As noted above, DTLA has stated that a pending DTCP update could fully satisfy the requirements of this proposal and the needs of MVPDs. Are there other content protection systems, particularly specific DRMs currently on the market, that are likely to be able to comply with the requirements of this approach? We recognize that this approach is likely to result in the need for competitors to support more than one Compliant Security System in their navigation devices. We believe the resulting number of Compliant Security Systems would still allow Navigation Device developers to offer competitive options, but we seek comment on this understanding. Is the term “Trust Authority” and our definition—“[an] entity that issues certificates and keys used by a Navigation Device to access Navigable Services that are secured by a given Compliant Security System”—sufficiently clear? Are there more accurate or descriptive terms? Should the entity that issues certificates be the same as the one that issues keys? Should the entity that licenses the Compliant Security System also be the Trust Authority for that system? Are the proposed restrictions on the Trust Authority of a conditional access system enough to ensure its independence from MVPDs? What criteria shall we use to determine whether a Trust Authority is not “substantially controlled” by an MVPD or by the MVPD industry?

Are there any other critical elements necessary for this proposal to both protect MVPD content and ensure a market for competitors? Will the lack of uniformity that may result from this proposal create an undue burden on competitive entities? Could an MVPD support at least one Compliant Security System but use a non-compliant content protection system on their own Navigation Devices in a manner that favors their own Navigation Devices (e.g., by selecting a Compliant Security System that is computationally burdensome for competitive devices)? Should our rules take into account differences in device, viewing location (in-home and out-of-home), and picture quality, or will our proposed “parity” requirement, discussed below, resolve any issues in these areas? We also seek comment on whether we should instead adopt one of the DSTAC proposals, or another alternative, as the universal standard, and how such a standard could achieve our goals of secure openness in this proceeding. If another alternative is proposed, the proponent should provide sufficient detail to compare it to the proposals set out here. We also seek comment on any other aspect of security relevant to our goals in this proceeding that we should take under consideration.

Parity. We propose to require that, in implementing the security and non-security elements discussed above, MVPDs provide parity of access to content to all Navigation Devices. This will ensure that competitors have the same flexibility as MVPDs when developing and deploying devices, including applications, without restricting the ability of MVPDs to provide different subsets of content in different ways to devices in different situations. Parity will also ensure that consumers maintain full access to content they subscribe to consistent with the access prescribed in the licensing agreements between MVPDs and programmers. In order to achieve parity, we propose three requirements. First, if an MVPD makes its programming available without requiring its own equipment, such as to a tablet or smart TV application, it must make the three Information Flows available to competitive Navigation Devices without the need for MVPD-specific equipment. Second, at least one Compliant Security System chosen by the MVPD must enable access to all the programming, with all the same Entitlement Data that it carries on its equipment, and the Entitlement Data must not discriminate on the basis of the affiliation of the Navigation Device. Third, on any device on which an MVPD makes available an application to access its programming, it must support at least one Compliant Security System that offers access to the same Navigable Services with the same rights to use those Navigable Services as the MVPD affords to its own application. We discuss these proposals below.

The first proposed requirement is that, if an MVPD makes available an application that allows access to its programming without the technological need for additional MVPD-specific equipment, then it shall make Service Discovery Data, Entitlement Data, and Content Delivery Data available to competitive Navigation Devices without the need for MVPD-specific equipment. For example, if an MVPD makes available an iOS or Android application that allows access to its programming, it must provide the three Information Flows to all competitive Navigation Devices without requiring the use of additional MVPD-specific equipment. The ability of competitive Navigation Devices to access content without additional equipment is a concern that has been raised repeatedly in the DSTAC proceeding. We believe that our regulations would not assure a commercial market for Navigation Devices if unaffiliated manufacturers, retailers, and other vendors need to rely on MVPD-provided equipment to receive multichannel video programming and affiliated entities do not. We seek comment on that assumption. We base this proposal on the presumption that if an MVPD can securely provide the information necessary for its proprietary application to access its programming without any additional equipment, then the MVPD should be able to provide that information to non-affiliated Navigation Devices similarly without additional equipment. We seek comment on this presumption. This proposal complements the next, in that while the entirety of the Information Flows must be available to all competitive Navigation Devices in this scenario, the specifics of how each device may use the Navigable Services depend on the relevant Entitlement Data.

We recognize that DBS providers specifically will be required to have equipment of some kind in the home to deliver the three Information Flows over their one-way network, even if they also provide programming to devices connected to the Internet via other networks. How should this fact be addressed by any rule that we adopt? Are there content protection issues that are unique to DBS providers? Are there technical issues that a Navigation Device developer would need to address when developing a solution for a DBS system? We seek comment on whether we need to create a DBS exception to our proposed rule regarding proprietary applications that deliver MVPD content without the use of additional MVPD-specific equipment. We intend for this proposal to result in MVPDs serving the vast majority of non-DBS subscribers providing the Information Flows without the presence of additional MVPD-specific equipment. What technology or standards available now or in the near future will allow this “boxless” provision? What impact will this have on MVPD systems? Will this approach require any changes for current subscribers who do not choose to seek out a competitive Navigation Device? Given the importance of flexibility to the creation of a retail market, is this proposal correctly tailored? Would it be possible to ensure nondiscriminatory provision of the Information Flows, without requiring additional MVPD-specific equipment in the home, in another way? We seek comment on this proposal.

The second proposed requirement limits an MVPD's ability to discriminate in providing the Navigable Services to competitive Navigation Devices. We propose that at least one Compliant Security System chosen by the MVPD enables access to all resolutions and formats of its Navigable Services with the same Entitlement Data to use those Navigable Services as the MVPD affords Navigation Devices that it leases, sells, or otherwise provides to its subscribers. In addition, we propose that Entitlement Data does not discriminate on the basis of the affiliation of the Navigation Device. Our proposed rule requires MVPDs to make the Information Flows fully available to any Navigation Device using the Compliant Security System they have chosen to support. Even today, however, MVPDs that provide their service to subscribers via proprietary applications on certain equipment such as mobile devices often provide only a subset of their multichannel video programming, reserving the full service for set-top boxes or other in-home viewing options. We understand that these business decisions are made for a variety of reasons, including security and contracts with content providers. We do not believe that this practice poses a threat to the competitive market for Navigation Devices so long as it is applied in a nondiscriminatory fashion and does not interfere with the ability of competitive Navigation Device makers to develop competitive user interfaces and features. We seek comment on this view.

Our intent is that each MVPD make available complete access to all purchased programming, on all channels, at all resolutions, on at least one Compliant Security System that it chooses to support. Thus, Navigation Devices accessing the three Information Flows via that Compliant Security System would have the same complete access as an MVPD's leased or provided set-top box in the home. As noted above, though, we recognize that MVPDs may make distinctions regarding the content delivered based on the use case of a device. We understand that use cases are generally differentiated based on screen size and in- or out-of-home viewing, and strength of content protection used. We seek comment on whether there are any other meaningful distinctions among use cases. We further understand that Entitlement Data enforces these distinctions in programming today, and we propose to permit MVPDs to continue to rely on Entitlement Data to draw those distinctions, so long as competitive Navigation Devices are subject to only the same restrictions as MVPD Navigation Devices. We seek comment on this proposed requirement. Does a prohibition on discrimination based on whether the Navigation Device developed is affiliated with the MVPD assure equitable treatment for similarly situated Navigation Devices? That is, will our proposed rule ensure that a competitive Navigation Device is able to access the same content with the same usage rights as a Navigation Device that the MVPD provides?

The final proposed parity requirement is that, on any device on which an MVPD makes available an application to access its programming, it must support at least one Compliant Security System that offers access to the same Navigable Services with the same rights to use those Navigable Services as the MVPD affords to its own application. Our intent here is to ensure parity of access for competitive Navigation Device developers. Our proposed rules do not require MVPDs to choose Compliant Security Systems that would allow access from any device; they instead must choose one or more Compliant Security Systems to which devices can be built. It may be possible for an MVPD to abuse this flexibility, however, and choose only Compliant Security Systems that are not available on a device on which the MVPD makes available its own application to access its programming, thereby eliminating competition for access to MVPD programming via that device. The proposed rule will ensure that a competitive application can access MVPD programming on devices on which an MVPD makes available its own application, thus further ensuring a competitive market for devices including applications. We seek comment on this proposal.

We seek comment on whether the three parity requirements described above, in conjunction with the other features of our proposal, will achieve the goal of ensuring a competitive retail market for Navigation Devices as contemplated by section 629. We particularly invite commenters to weigh in on the expected efficacy of these proposals, and their necessity in meeting the mandate of section 629. We are not proposing to impose a common reliance requirement; rather, we are striving to ensure equitable provision of content to competitive Navigation Devices, to the extent necessary to achieve a competitive retail market. We seek comment on this approach.

Licensing and Certification. We believe that licensing and certification will play important roles under our proposed approach. MVPDs, MPAA, and companies that supply equipment to MVPDs argue that the Competitive Navigation approach could violate licensing agreements between MVPDs, content companies, and channel guide information providers. Based on our review of the DSTAC Report, the record, and the contract that CableLabs uses to license technology necessary to build a CableCARD device (DFAST), we have identified three major subject matters that pertain to licensing and certification. As set forth below, we seek comment on how licensing and certification can address (1) robustness and compliance, which ensure that content is protected as intended, (2) prevention of theft of service and harm to MVPD networks, which ensures that devices do not allow the theft of MVPD service or physically or electronically harm networks, and (3) important consumer protections in the Act and the Commission's rules. We then invite comment on alternative approaches we could take to address these issues.

Compliance and Robustness. We seek comment on whether licensing can ensure adherence to copy control and other rights information (“compliance”) and adequate content protection (“robustness”). Section 629(b) states that “[t]he Commission shall not prescribe regulations under subsection (a) of this section which would jeopardize security of multichannel video programming and other services offered over multichannel video programming systems, or impede the legal rights of a provider of such services to prevent theft of service.” We interpret this section of the Act to require that we ensure that our regulations do not impede robustness and compliance. To achieve this statutory mandate, our regulations must ensure that Navigation Devices (1) have content protection that protects content from theft, piracy, and hacking, (2) cannot technically disrupt, impede or impair the delivery of services to an MVPD subscriber, both of which we consider to be under the umbrella of robustness (i.e., that they will adhere to robustness rules), and (3) honors the limits on the rights (including copy control limits) the subscriber has to use Navigable Services communicated in the Entitlement Information Flow (i.e., that they adhere to compliance rules). Through robustness and compliance terms, we seek to ensure that negotiated licensing terms imposed by content providers on MVPDs are passed through to Navigation Devices. Accordingly, our proposal requires MVPDs to choose Compliant Security Systems that validate only Navigation Devices that are sufficiently robust to protect content and honor the Entitlement Data that the MVPD sends to the Navigation Device. This is consistent with our understanding based on the DSTAC Report that, in other contexts, downloadable security systems usually include robustness and compliance terms as part of design audits, self-verification, or legal agreements, and that an untrustworthy actor will not be able to receive a certificate for its Navigation Devices to verify compliance. We seek comment on this proposed approach to address compliance and robustness. We also seek comment on whether we need to define the term “robustness and compliance rules” in our proposed definition of Compliant Security System, or if that term has a common, understood meaning, as reflected in the DSTAC Report. Should these terms include, at a minimum, what is described in the DFAST license? Should these terms contemplate protection of licensing terms between user guide information providers and MVPDs, and thus require unaffiliated Navigation Device developers to purchase their own detailed program guide information? Are there alternatives to our proposed approach that would ensure robustness and compliance? Are there other terms from the DFAST license that we should cover in this regard? In addition to section 629, are there other sources of statutory authority for imposing these compliance and robustness requirements, such as sections 335(a) and 624A of the Act? What impact, if any, does the D.C. Circuit's decision in EchoStar Satellite L.L.C. v. FCC have on the Commission's ability to adopt compliance and robustness requirements?

Protection of MVPD Networks from Harm and Theft. We also believe that a device testing and certification process is important to protect MVPDs' networks from physical or electronic harm and the potential for theft of service from devices that attach directly to the networks. We seek comment on the extent to which unaffiliated devices will attach directly to MVPD networks. If devices will connect directly to the MVPD network, is our existing rule 76.1203 sufficient to assure that those devices do not cause physical or electronic harm to the network? We do not believe that each MVPD should have its own testing and certification processes. Under the CableCARD regime, devices our rules allowed testing to be performed by a qualified test facility, which is defined as “a testing laboratory representing cable television system operators serving a majority of the cable television subscribers in the United States or an appropriately qualified independent laboratory with adequate equipment and competent personnel knowledgeable with respect to the” CableCARD standards. We seek comment on whether that approach protected cable networks from physical and electronic harm and from theft of service, and whether it had any effect on the commercial availability of CableCARD devices. We also seek comment on which entities have or may develop testing and certification processes. What kind of testing should be required? We note, for example, there is a seven-step certification process to ensure that DLNA-certified devices do not have defects that would harm networks. Is this type of testing sufficient? We seek comment on this proposal and any alternative approaches, such as self-certification.

Consumer Protection. It is essential that any rules we adopt to meet the goals of section 629 do not undermine other important public policy goals underlying the Communications Act, which are achieved by means of requirements imposed on MVPDs. Specifically, certain commenters highlighted concerns that competitive Navigation Device developers (i) would not keep subscribers' viewing habits private, as MVPDs are required to do, (ii) would violate advertising limits during programming for children, and (iii) would build devices that do not display emergency alerts or closed captioning or enable parental controls as MVPDs are required to do. We are encouraged by the fact that retail navigation devices, such as TiVos, have been deployed in the market for over a decade without allegations of a loss of consumer privacy, violations of advertising limits during programming for children, or problems with emergency alerts and accessibility. Nonetheless, because these consumer protections are so important, we propose to require that MVPDs authenticate and provide the three Information Flows only to Navigation Devices that have been certified by the developer to meet certain public interest requirements. We tentatively conclude that this certification must state that the developer will adhere to privacy protections, pass through EAS messages, and adhere to children's programming advertising limits. This proposal would mean that MVPDs are not required to enable the Information Flows unless they receive this certification, and also that they are prohibited from providing the Navigable Services to a Navigation Device that does not have such a certification. MVPDs cannot withhold the three Information Flows if they have received such certification and do not have a good faith reason to doubt its validity. This will ensure that the public policy goals underlying these requirements are met regardless of which device a consumer chooses to access multichannel video programming. We seek comment on this proposal and invite alternative proposals within our jurisdiction that would ensure that these important consumer protections remain in effect while we promote a competitive navigation market. Should the proposed certification address any other issues, including compliance with the Commission's accessibility rules and parental controls, or should we leave these matters to the market? We also seek comment on whether the retail market will be competitive enough to make any such regulation unnecessary (that is, the competitive market will assure that the protections that consumers desire are adequately protected).

We seek comment on the best way to implement such a certification process. Should this be a self-certification process, or are there viable alternatives to self-certification? For example, should there be an independent entity that validates the competitor's certification? Should we develop a standardized form? Who would be responsible for maintaining a record of the certification? Could Open Standards Bodies or some other third-party entity require certification as part of their regimes and maintain those records? Alternatively, should the Commission maintain a repository of certifications? In addition, if there are lapses in compliance with any certification, what would be the appropriate enforcement mechanism?

With respect to all MVPDs, we believe that Section 629 of the Act provides authority to impose these restrictions, because consumers may be dissuaded from opting for a competitive navigation solution if they are not confident that their interests will be protected to the same extent as in an MVPD-provided solution. With respect to DBS operators, we also believe section 335(a)—which directs the Commission to “impose, on providers of direct broadcast satellite service, public interest or other requirements for providing video programming”—grants us authority to ensure that these goals are met regardless of whether the DBS multichannel video programming is accessed by means of a DBS-provided device. We also seek comment on whether the sources of statutory authority for imposing on MVPDs privacy requirements, advertising limits on children's programming, emergency alerting requirements, closed captioning requirements, video description requirements, parental control requirements, or other consumer protection requirements also authorize the Commission to require that MVPDs provide the three Information Flows only to Navigation Devices that have been certified by the developer to meet certain public interest requirements. This will ensure that the new Navigation Device rules will not undercut our rules imposing those public interest requirements. We seek comment on these views and invite commenters to suggest any other sources of authority.

We seek comment on how MVPDs could ensure that they do not provide the Information Flows to uncertified devices. Could the MVPD use device authentication to ensure that they do not send the three Information Flows to uncertified Navigation Devices? Could the Entitlement Data direct a device not to display the Content Data unless the Navigation Device was built by a developer who is certified? Are there other methods MVPDs could use to ensure that they send the Information Flows only to Navigation Devices that will honor these important consumer protection obligations? Similarly, how can MVPDs ensure, as both a technical and practical matter, that the Information Flows are no longer provided if there are any lapses in a competitor's compliance with these obligations?

We seek comment on how this requirement will affect Navigation Device developers. We do not expect it will be difficult for developers to certify to these consumer protections. For example, such content as EAS alerts will be included in the Information Flows that MVPDs make available, and we do not expect enabling receipt of this content to be burdensome. Similarly, as to ensuring the privacy of subscriber information, given the national market for consumer technology, they must already ensure that their products and services meet the privacy standards of the strictest state regulatory regime. Moreover, the global economy means that many developers must comply with the European Union privacy regulations, which are much more stringent that the requirements placed on MVPDs under sections 631 and 338 of the Communications Act.

Although we propose that competitive device manufacturers certify compliance with sections 631 and 338, we seek comment on the extent to which those manufacturers that collect personally identifiable information from consumers using their devices are currently subject to state privacy laws and the scope of any such laws. We note, for example, that California's Online Privacy Protection Act applies to an entity that owns an online service that collects and maintains personally identifiable information from consumers residing in California who use the online service if the online service is used for commercial purposes. Would this statute apply to competitive device manufacturers to the extent that they use the Internet to provide programming guide, scheduling, and recording information to consumers? Are there similar state privacy laws covering consumers residing in each of the other states? To what extent do state privacy laws require that manufacturers have privacy policies? MVPDs are obligated to provide privacy protections under sections 631 and 338 of the Act. Do state privacy laws require manufacturers to provide a comparable level of consumer protection? For example, the privacy protections established by sections 631 and 338 are enforceable by both the Commission and by private rights of action. Do any state laws provide for both administrative and private rights of action and/or damages in the event of a privacy violation? TiVo asserts that it is subject to enforcement by the FTC and state regulators for any failures to abide by its comprehensive privacy policy. We note that the FTC has taken legal action under its broad Section 5 “unfair and deceptive acts” authority against companies that violate their posted consumer privacy policies. We seek comment on whether state laws governing unfair and deceptive acts have similarly been used against companies that violate their consumer privacy policies and whether these laws are applicable to competitive device manufacturers. Furthermore, the Video Privacy Protection Act, with limited exceptions, generally prohibits companies that provide video online from disclosing the viewing history and other personally identifiable information of a consumer without the consumer's prior written consent. Does this statute impose any obligations on competitive device manufacturers to protect personally identifiable information collected from consumers? Are there any other state or federal laws that would help to ensure that competitive device manufacturers protect consumer privacy?

Licensing Alternatives. As an alternative to the licensing and certification approaches we lay out above, should we instead require industry parties to develop a standardized license and certification regime, similar to the DFAST license, which has appeared to work at balancing consumer protection issues and allowing retail Navigation Device developers to innovate? Who would be responsible for managing that licensing system? Should our Navigation Device rules instead impose these terms by regulation, either initially or if industry parties cannot reach agreement? Does the Commission have authority to impose such terms via regulation? Has competitive navigation under the CableCARD regime led to any license agreement violations, privacy violations, or other violations of consumer protection laws? If so, what were the specifics of those violations, and how were they resolved?

We do not currently have evidence that regulations are needed to address concerns raised by MVPDs and content providers that competitive navigation solutions will disrupt elements of service presentation (such as agreed-upon channel lineups and neighborhoods), replace or alter advertising, or improperly manipulate content. We have not seen evidence of any such problems in the CableCARD regime, and do not expect that the new approach we propose above will allow such behavior. Accordingly, we believe these concerns are speculative, and while we believe at this time it is unnecessary for us to propose any rules to address these issues, we seek comment on this view. We also seek comment on the extent to which copyright law may protect against these concerns, and note that nothing in our proposal will change or affect content creators' rights or remedies under copyright law. In the event that commenters submit evidence indicating that regulations are needed, we seek comment on whether we have the authority and enforcement mechanisms to address such concerns.

Small MVPDs. We seek comment on how any rules that we adopt could affect small MVPDs, and whether we should impose different rules or implementation deadlines for small MVPDs. We tentatively conclude that all analog cable systems should be exempt from the rules we propose today, just as they were exempt from the original separation of security rules. We also seek specific comment on the American Cable Association's proposal to exempt MVPDs serving one million or fewer subscribers from any rules we adopt. Is there a size-neutral way that we could ensure that our rules are not overly burdensome to MVPDs? The American Cable Association also asserts that many of its members are not prepared to transition soon to delivery of their services in Internet Protocol, but we note that our proposed rules do not require MVPDs to use Internet Protocol to deliver the three Information Flows or Compliant Security System. For example, although we do not advocate reliance on CableCARD as a long-term solution, we note that the CableCARD standard largely appears to align with our proposed rules. Could the CableCARD regime remain a viable option for achieving the goals of Section 629 for those systems that continue to use QAM technology? Are there any changes to the CableCARD rules that should be made in light of more than a decade of experience with the regime or to accommodate changes in the MVPD industry since the rules were adopted? Do MVPDs who have not transitioned to IP delivery of control channel information nonetheless provide IP-based applications to their customers or use IP to send content to devices throughout a home network? If so, should such MVPDs be required to comply with the rules requiring parity for other Navigation Device developers via the Information Flows?

Billing Transparency. We seek comment on how best to align our existing rule on separate billing and subsidies for devices with the text of the Act, the current state of the marketplace, and our goal of facilitating a competitive marketplace for navigation devices. Section 629 states that our regulations “shall not prohibit [MVPDs] from also offering [navigation devices] to consumers, if the system operator's charges to consumers for such devices and equipment are separately stated and not subsidized by charges for any such service.” We note that, although Section 629(a) of the Act states that the Commission “shall not prohibit” any MVPD from offering navigation devices to consumers if the equipment charges are separately stated and not subsidized by service charges, it does not appear to affirmatively require the Commission to require separate statement or to prohibit cross-subsidies. In the Commission's 1998 Report and Order, which implemented section 629, the Commission rejected the argument that section 629's requirements are “absolute” and that the section “expressly prevents all MVPDs from subsidizing equipment cost with service charges.” The Commission found that in a competitive market “there is minimal concern with below cost pricing because revenues do not emanate from monopoly profits. The subsidy provides a means to expand products and services, and the market provides a self- correcting resolution of the subsidy.” The Commission thus concluded that “[e]xisting equipment rate rules applicable to cable television systems not facing effective competition address Section 629(a)'s requirement that charges to consumers for such devices and equipment are separately stated and not subsidized by charges for any other service.” Accordingly, the Commission applied the separate billing and anti-subsidy requirements set forth in Section 76.1206 of our rules only to rate-regulated cable operators. In 2010, the Commission adopted “CableCARD support” rules, which included pricing transparency requirements and required uniform pricing for CableCARDs “regardless of whether the CableCARD is used in a leased set-top box or a navigation device purchased at retail.”

Developments since the 1998 Report and Order raise a question whether the applicability of the Act's rate regulation provisions should continue to determine the applicability of our separate billing and anti-subsidy rules. At the time of that order, only a small minority of cable systems had been determined to be subject to “effective competition” as defined in the rate regulation provisions of the Act and thus exempted from rate regulation. Since that time, the Commission has made many findings that the statutory test for effective competition was met and updated its effective competition rules to reflect the current MVPD marketplace. We are no longer convinced that the statutory test for the applicability of rate regulation properly addresses our objective of promoting a competitive market for navigation devices as directed by Section 629. We base this proposed change in policy on our belief that customers may likely consider the costs of lease against purchase when considering whether to purchase a competitively provided device, and must know what it costs to lease a device in order to make an informed decision. Accordingly, we seek comment on whether we should modify our billing and/or anti-subsidy requirements set forth in section 76.1206.

In particular, under the circumstances that exist today, should we revise our rules to require all MVPDs to state separately a charge for leased navigation devices and to reduce their charges by that amount to customers who provide their own devices, regardless of whether the statutory test for the applicability of rate regulation is met? Is such a requirement a necessary or appropriate complement to the rules we propose today to facilitate the offering of competitive navigation devices? We tentatively conclude that we should adopt such a requirement with respect to all navigation devices, including modems, routers, and set top boxes, and we invite comment on that tentative conclusion.

If we adopt a requirement that all MVPDs state separately a charge for leased navigation devices, we invite comment on whether we should also impose a prohibition on cross-subsidization of device charges with service fees. Section 629 discusses separate statement and prohibition of cross-subsidy in the same sentence; but we read the statute to permit us to make an individual determination whether to impose one requirement or the other, or both (or neither). Do present market circumstances warrant adoption of an anti-subsidization rule? Observers often suggest that the charges currently imposed for leased devices are typically excessive, rather than cross-subsidized. A requirement of separate statement, by itself, should help to enable competition in the marketplace to ameliorate excessive pricing of leased devices. Is it therefore unnecessary at this time for us to adopt an expanded rule against cross-subsidization? Or would such a rule provide a useful prophylactic against future attempts to cross-subsidize? Would it suffice to require that a nonzero price be identified for any leased device? We seek comment on these issues. Commenters supporting adoption of an expanded anti-cross-subsidization rule should address the Commission's previous determination that “[a]pplying the subsidy prohibition to all MVPDs would lead to distortions in the market, stifling innovation and undermining consumer choice.”

If we decide to adopt an updated anti-subsidy rule, how should we determine whether a device fee is cross-subsidized? For example, would the factors set forth in section 76.1205(b)(5) for determining the price that is “reasonably allocable” to a device lease fee be applicable for this purpose? How should we consider the possibility that an MVPD would ascribe a zero or near-zero price to a navigation device, and what implications might there be for further Commission responsibilities and actions? Are there other ways in which we can promote a competitive marketplace through requirements applicable to equipment that MVPDs lease, sell, or otherwise provide to their subscribers? For example, Anne Arundel and Montgomery Counties, Maryland in their reply comments propose that our rules (1) prohibit service charges for viewing on more than one device, (2) prohibit service charge penalties for consumer-owned devices, (3) prohibit multi-year contracts based on the use of a consumer-owned device, (4) ban “additional outlet” fees, (5) prohibit requirements that consumers lease equipment, and (6) give consumers the ability to purchase equipment outright. Commenters should include a discussion of the Commission's authority to adopt any regulations proposed.

CableCARD Support and Reporting. In this section, we seek comment on whether the CableCARD consumer support rules set forth in section 76.1205(b) of the Commission's rules continue to serve a useful purpose and should be retained following the D.C. Circuit's 2013 decision in EchoStar Satellite L.L.C. v. FCC, which vacated two 2003 Commission Orders adopting the CableCARD standard as the method that must be used by digital cable operators in implementing the separation of security requirement for navigation devices. We tentatively conclude that these rules continue to serve a useful purpose and propose to retain them in our rules. We seek comment on this tentative conclusion. Alternatively, if commenters contend that the CableCARD consumer support rules should be eliminated or modified in light of EchoStar, commenters should explain the basis for their contention. To the extent that we conclude that the CableCARD consumer support rules continue to serve a useful purpose, we seek comment on whether to eliminate the requirement that the six largest cable operators submit status reports to the Commission every 90 days on CableCARD deployment and support.

In 2005, the Commission adopted a requirement that the six largest cable operators submit status reports to the Commission every 90 days on CableCARD deployment and support. The Commission adopted this reporting requirement to ensure that cable operators meet their obligations to deploy and support CableCARDs. In an effort to “improve consumers' experience with retail navigation devices,” the Commission in 2010 imposed specific CableCARD consumer support requirements on cable operators. Specifically, these CableCARD consumer support rules: (1) Require cable operators to support the reception of switched digital video services on retail devices to ensure that subscribers are able to access the services for which they pay regardless of whether they lease or purchase their devices; (2) prohibit price discrimination against retail devices to support a competitive marketplace for retail devices; (3) require cable operators to allow self-installation of CableCARDs where device manufacturers offer device-specific installation instructions to make the installation experience for retail devices comparable to the experience for leased devices; (4) require cable operators to provide multi-stream CableCARDs by default to ensure that cable operators are providing their subscribers with current CableCARD technology; and (5) clarify that CableCARD device certification rules are limited to certain technical features to make it easier for device manufacturers to get their products to market.

In 2013, the D.C. Circuit in EchoStar vacated the two 2003 Orders adopting the CableCARD standard as the method that must be used by all MVPDs in implementing the separation of security requirement for navigation devices. The D.C. Circuit concluded that the Commission lacked the authority under section 629 to impose encoding rules, which put a ceiling on the copy protections that MVPDs can impose, on satellite carriers. The Commission argued that those rules were not severable from the rest of the rules adopted in the 2003 Orders (including the rule that imposes the CableCARD standard), and therefore the D.C. Circuit vacated both of the orders. Subsequently, questions have been raised as to what effect, if any, the EchoStar decision has on the continued validity of the CableCARD consumer support requirements in Section 76.1205(b) of the Commission's rules.

We seek comment on whether the CableCARD consumer support rules set forth in Section 76.1205(b) continue to serve a useful purpose after the D.C. Circuit's 2013 decision in EchoStar. As discussed above, the EchoStar decision vacated the two 2003 Orders that adopted rules mandating that MVPDs use the CableCARD standard to support the separation of security requirement. The EchoStar decision did not, however, vacate or even address the consumer support rules for cable operators that choose to continue to rely on the CableCARD standard in order to comply with the separated security requirement, which remains in effect. Accordingly, we believe that the consumer support rules set forth in section 76.1205(b) continue to serve a useful purpose and should be retained. We seek comment on this belief. Are the consumer support rules still necessary to support a competitive market for retail navigation devices?

Additionally, we seek comment on whether to eliminate the CableCARD reporting requirement applicable to the six largest cable operators. Specifically, we seek comment on whether the reporting requirement is still necessary in light of the CableCARD consumer support requirements, as well as the recent repeal of the integration ban. As explained above, the reporting requirement was intended to ensure that cable operators satisfy their obligations to deploy and support CableCARDs. Are the consumer support requirements sufficient to ensure that cable operators meet these obligations? If so, is there any reason to retain the reporting requirement or should it be eliminated?

Initial Regulatory Flexibility Act Analysis. As required by the Regulatory Flexibility Act of 1980, as amended (“RFA”) the Commission has prepared this present Initial Regulatory Flexibility Analysis (“IRFA”) concerning the possible significant economic impact on small entities by the policies and rules proposed in this Notice of Proposed Rulemaking (Notice). Written public comments are requested on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments indicated on the first page of the Notice. The Commission will send a copy of the Notice, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA). In addition, the Notice and IRFA (or summaries thereof) will be published in the Federal Register.

Need for and Objectives of the Proposed Rules. In the Notice, the Commission seeks comment on proposed rules relating to the Commission's obligation under Section 629 of the Communications Act to assure a commercial market for equipment that can access multichannel video programming and other services offered over multichannel video programming systems. The NPRM tentatively concludes that new rules about multichannel video programming distributor's (MVPD's) provision of content are needed to further the goals of Section 629. It proposes such new rules, relating to the information that MVPDs must provide to allow competitive user interfaces, the security flexibility necessary to protect content, and the parity requirements necessary to ensure a level playing field between MVPD-leased equipment and competitive methods that consumers might use to access MVPD service instead of leasing MVPD equipment. The Notice also asks about MVPD fees for devices and the current status of the Commission's CableCARD rules, the existing rules arising from Section 629.

Legal Basis. The authority for the action proposed in this rulemaking is contained in sections 1, 4, 303, 303A, 335, 403, 624, 624A, 629, 631, 706, and 713 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154, 303, 303a, 335, 403, 544, 544a, 549, 551, 606, and 613.

Description and Estimate of the Number of Small Entities to Which the Proposed Rules Will Apply. The RFA directs the Commission to provide a description of and, where feasible, an estimate of the number of small entities that will be affected by the proposed rules, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” small organization,” and “small government jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A small business concern is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.

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.” 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. Census data for 2007 shows that there were 3,188 firms that operated for the entire year. Of this total, 3,144 firms had fewer than 1,000 employees, and 44 firms had 1,000 or more employees. Therefore, under this size standard, we estimate that the majority of businesses can be considered small entities.

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. The SBA has developed a small business size standard for this category, which is: All such businesses having 1,500 or fewer employees. Census data for 2007 shows that there were 3,188 firms that operated for the entire year. Of this total, 3,144 firms had fewer than 1,000 employees, and 44 firms had 1,000 or more employees. Therefore, under this size standard, we estimate that the majority of businesses can be considered small entities.

Cable Companies and Systems. The Commission has developed its own small business size standards for the purpose of cable rate regulation. Under the Commission's rules, a “small cable company” is one serving 400,000 or fewer subscribers nationwide. Industry data shows that there are currently 660 cable operators. Of this total, all but ten cable operators nationwide are small under this size standard. In addition, under the Commission's rate regulation rules, a “small system” is a cable system serving 15,000 or fewer subscribers. Current Commission records show 4,629 cable systems nationwide. Of this total, 4,057 cable systems have less than 20,000 subscribers, and 572 systems have 20,000 or more subscribers, based on the same records. Thus, under this standard, we estimate that most cable systems are small entities.

Cable System Operators (Telecom Act Standard). The Communications Act of 1934, as amended, also contains a size standard for small cable system operators, which is “a cable operator that, directly or through an affiliate, serves in the aggregate fewer than 1 percent of all subscribers in the United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000.” There are approximately 54 million cable video subscribers in the United States today. Accordingly, an operator serving fewer than 540,000 subscribers shall be deemed a small operator if its annual revenues, when combined with the total annual revenues of all its affiliates, do not exceed $250 million in the aggregate. Based on available data, we find that all but ten incumbent cable operators are small entities under this size standard. We note that the Commission neither requests nor collects information on whether cable system operators are affiliated with entities whose gross annual revenues exceed $250 million. Although it seems certain that some of these cable system operators are affiliated with entities whose gross annual revenues exceed $250,000,000, we are unable at this time to estimate with greater precision the number of cable system operators that would qualify as small cable operators under the definition in the Communications Act.

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, 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. Census data for 2007 shows that there were 3,188 firms that operated for that entire year. Of this total, 2,940 firms had fewer than 100 employees, and 248 firms had 100 or more employees. Therefore, under this size standard, the majority of such businesses can be considered small entities. 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.” As of 2002, the SBA defined a small Cable and Other Program Distribution provider as one with $12.5 million or less in annual receipts. Currently, only two entities provide DBS service, which requires a great investment of capital for operation: DIRECTV and DISH Network. Each currently offers subscription services. DIRECTV and DISH Network each report 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 under the superseded SBA size standard would have the financial wherewithal to become a DBS service provider.

Description of Projected Reporting, Recordkeeping and Other Compliance Requirements. The Notice proposes the following new or revised reporting or recordkeeping requirements. It proposes that MVPDs offer three flows of information using any published, transparent format that conforms to specifications set by open standards bodies, to permit the development of competitive navigation devices with competitive user interfaces. It proposes that the flows of information not be made available to a device absent verification that the device will honor copying and recording limits, privacy, Emergency Alert System messages, the Accessibility Rules in Part 79 of the Commission's Rules, parental control information, and children's programming advertising limits.

It further proposes that each MVPD use at least one content protection system that is licensed on a reasonable and non-discriminatory basis by an organization that is not affiliated with MVPDs; that at least one such content protection system make available the entirety of the MVPD's service; and that the MVPD ensure that, on any device for which it provides an application, such a content protection system is available to competitors wishing to provide the same level of service. It also proposes a bar on Entitlement data discrimination because of the affiliation of otherwise proper devices. The Notice proposes to require each MVPD that offers its own application on unaffiliated devices without the need for MVPD-specific equipment to also offer the three information flows to unaffiliated applications without the need for MVPD-specific equipment.

Finally, the Notice proposes to require MVPDs to separately state the fees charged to lease devices on consumers' bills, and, in a possible reduction of reporting requirements, seeks comment on discontinuing a requirement that the six largest cable operators report to the Commission about their support for CableCARD.

Steps Taken To Minimize Significant Impact on Small Entities, and Significant Alternatives Considered. The RFA requires an agency to describe any significant alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities.

The Notice proposes rules intended to assure a commercial market for competitive Navigation Devices. The Commission's has a statutory obligation to do so, and has concluded that it cannot do so if competitive Navigation Devices are tied to specific MVPDs. As a result, the compliance requirements must be the same for all MVPDs, large and small. The rules have been proposed in terms to minimize economic impact on small entities. The proposed rules allow flexibility for MVPDs while still assuring device manufacturers they can build to a manageable number of standards, and assuring consumers that they only need a single device. That flexibility arises from the fact that the proposed rules establish performance standards, not design standards. Although the compliance requirements must be the same in order to comply with our statutory mandate, the requirements themselves are clear and simple. Because they would be able, under the proposed rules, to rely on open standards for information flows and RAND licensable security, small MVPDs would not have to engage in complex compliance efforts. The only reporting requirements are related to fees for device leases, which cannot be further simplified for small entities. Finally, although the rules do not contemplate exemptions for small entities, the proposed rule requiring “boxless' provision of the three information flows applies only to MVPDs with the technological sophistication to offer “boxless” programming to their own devices. Thus, smaller MVPDs that are not providing this service will not be required to implement “boxless” information flows by operation of the proposed rule.

Federal Rules Which Duplicate, Overlap, or Conflict With the Commission's Proposals. None.

Authority. This Notice of Proposed Rulemaking is issued pursuant to authority contained in Sections 4(i), 4(j), 303(r), 325, 403, 616, 628, 629, 634 and 713 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 303(r), 325, 403, 536, 548, 549, 554, and 613.

Ex Parte Rules. The proceeding initiated by this Notice of Proposed Rulemaking shall be treated as “permit-but-disclose” proceedings in accordance with the Commission's ex parte rules. Persons making ex parte presentations must file a copy of any written presentation or a memorandum summarizing any oral presentation within two business days after the presentation (unless a different deadline applicable to the Sunshine period applies). Persons making oral ex parte presentations are reminded that memoranda summarizing the presentation must: (1) List all persons attending or otherwise participating in the meeting at which the ex parte presentation was made; and (2) summarize all data presented and arguments made during the presentation. If the presentation consisted in whole or in part of the presentation of data or arguments already reflected in the presenter's written comments, memoranda, or other filings in the proceeding, the presenter may provide citations to such data or arguments in his or her prior comments, memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be found) in lieu of summarizing them in the memorandum. Documents shown or given to Commission staff during ex parte meetings are deemed to be written ex parte presentations and must be filed consistent with rule 1.1206(b). In proceedings governed by rule 1.49(f) or for which the Commission has made available a method of electronic filing, written ex parte presentations and memoranda summarizing oral ex parte presentations, and all attachments thereto, must be filed through the electronic comment filing system available for that proceeding, and must be filed in their native format (e.g., .doc, .xml, .ppt, searchable .pdf). Participants in this proceeding should familiarize themselves with the Commission's ex parte rules.

Filing Requirements. Pursuant to sections 1.415 and 1.419 of the Commission's rules,1 interested parties may file comments and reply comments on or before the dates indicated on the first page of this document. Comments may be filed using the Commission's Electronic Comment Filing System (“ECFS”).2

Electronic Filers: Comments may be filed electronically using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/.

Paper Filers: Parties who choose to file by paper must file an original and one copy of each filing. If more than one docket or rulemaking number appears in the caption of this proceeding, filers must submit two additional copies for each additional docket or rulemaking number.

Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.

All hand-delivered or messenger-delivered paper filings for the Commission's Secretary must be delivered to FCC Headquarters at 445 12th St. SW., Room TW-A325, Washington, DC 20554. The filing hours are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes and boxes must be disposed of before entering the building.

Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.

U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street SW., Washington, DC 20554.

Availability of Documents. Comments and reply comments will be available for public inspection during regular business hours in the FCC Reference Center, Federal Communications Commission, 445 12th Street SW., CY-A257, Washington, DC 20554. These documents will also be available via ECFS. Documents will be available electronically in ASCII, Microsoft Word, and/or Adobe Acrobat.

People with Disabilities. To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an email to [email protected] or call the FCC's Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

Additional Information. For additional information on this proceeding, contact Brendan Murray of the Media Bureau, Policy Division, (202) 418-1573 or Lyle Elder of the Media Bureau, Policy Division, (202) 418-2365.

Regulatory Flexibility Analysis. As required by the Regulatory Flexibility Act of 1980, see 5 U.S.C. 604, the Commission has prepared an Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on small entities of the policies and rules addressed in this document. The IRFA is set forth in Appendix B. Written public comments are requested in the IRFA. These comments must be filed in accordance with the same filing deadlines as comments filed in response to this Notice of Proposed Rulemaking as set forth on the first page of this document, and have a separate and distinct heading designating them as responses to the IRFA.

Initial Paperwork Reduction Act Analysis. This Notice of Proposed Rulemaking seeks comment on a potential new or revised information collection requirement. If the Commission adopts any new or revised information collection requirement, the Commission will publish a separate notice in the Federal Register inviting the public to comment on the requirement, as required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3501-3520). In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, 44 U.S.C. 3506(c)(4), the Commission seeks specific comment on how it might “further reduce the information collection burden for small business concerns with fewer than 25 employees.”

Ordering Clauses. Accordingly, it is ordered, pursuant to the authority contained in Sections 4(i), 4(j), 303, 303A, 335, 403, 624, 624A, 629, 631, 706, and 713 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 303, 303a, 335, 403, 544, 544a, 549, 551, 606, and 613, that this Notice of Proposed Rulemaking and Memorandum Opinion and Order is adopted.

It is further ordered that the Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this Notice of Proposed Rulemaking and Memorandum Opinion and Order including the Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR part 76 as follows:

Section 32308 of the Moving Ahead for Progress in the 21st Century Act (MAP-21) [Pub. L. 112-141, 126 Stat. 405, July 6, 2012] required FMCSA to undertake a study to assess Federal and State regulatory, economic, and administrative challenges in obtaining CDLs faced by members and former members of the Armed Forces, who operated qualifying motor vehicles during their service. As a result of this study, FMCSA provided a report to Congress titled “Program to Assist Veterans to Acquire Commercial Driver's Licenses” (November 2013) (available in the docket for this rulemaking). The report contained six recommended actions, and elements of this report comprise the main parts of this rulemaking. These actions are:

This NPRM would ease the current burdens on military personnel applying for CLPs and CDLs issued by a State Driver Licensing Agency (SDLA) in accordance with 49 CFR parts 383 and 384 in two ways. First, it would extend the time in which former military personnel are allowed to apply for a skills test waiver from the 90 days currently allowed by 49 CFR 383.77 to 1 year. On July 8, 2014, FMCSA issued a temporary exemption under 49 CFR part 381 that extended the skills test waiver to 1 year [79 FR 38659].1 The change proposed by this rulemaking would make the 1-year waiver period permanent. Second, this NPRM would allow States to accept applications and administer all necessary tests for a CLP or CDL from active duty service members stationed in that State who are operating in a Military Occupational Specialty as full-time CMV drivers. States that choose to exercise this option would be required to transmit the application and test results electronically to the service member's State of domicile. This would enable service members to complete their licensing requirements without incurring the time and expense of returning home. The State of domicile would be required to issue the CLP or CDL in accordance with otherwise applicable procedures.

If you submit a comment, please include the docket number for this NPRM (Docket No. FMCSA-2016-0051), indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so that FMCSA can contact you if there are questions regarding your submission.

To submit your comment online, go to http://www.regulations.gov, put the docket number, FMCSA-2016-0051, in the keyword box, and click “Search.” When the new screen appears, click on the “Comment Now!” button and type your comment into the text box on the following screen. Choose whether you are submitting your comment as an individual or on behalf of a third party and then submit.

If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 81/2 by 11 inches, suitable for copying and electronic filing. If you submit comments by mail and would like to know that they reached the facility, please enclose a stamped, self-addressed postcard or envelope.

We will consider all comments and material received during the comment period and may change this rule based on your comments. FMCSA may issue a final rule at any time after the close of the comment period.

To view comments, as well as any documents mentioned in this preamble as being available in the docket, go to http://www.regulations.gov. Insert the docket number, FMCSA-2016-0051, in the keyword box, and click “Search.” Next, click the “Open Docket Folder” button and choose the document to review. If you do not have access to the Internet, you may view the docket online by visiting the Docket Management Facility in Room W12-140 on the ground floor of the DOT West Building, 1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m., e.t., Monday through Friday, except Federal holidays.

All comments received will be posted without change to http://www.regulations.gov and will include any personal information you provide. Anyone may search the electronic form of comments received into any of our dockets by the name of the individual submitting the comment (or of the person signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the Federal Register (FR) notice published on January 17, 2008 (73 FR 3316) or you may visit http://edocket.access.thefederalregister.org/2008/pdf/E8-785.pdf.

This rulemaking rests on the authority of the Commercial Motor Vehicle Safety Act of 1986 (CMVSA), as amended, codified at 49 U.S.C. chapter 313 and implemented by 49 CFR parts 382, 383, and 384. It responds to section 5104(b) of the Fixing America's Surface Transportation (FAST) Act [Pub. L. 114-94, 129 Stat. 1312, December 4, 2015], which requires FMCSA to implement the recommendations included in the report submitted pursuant to section 32308 of MAP-21, discussed above. Section 5104(c) of the FAST Act also requires FMCSA to implement the Military Commercial Driver's License Act of 2012 [49 U.S.C. 31311(a)(12)(C)]. As explained later in the preamble, this proposed rule would give military personnel all of the benefits of the Military CDL Act, while avoiding certain adverse implications of that statute.

The CMVSA provides broadly that “[t]he Secretary of Transportation shall prescribe regulations on minimum standards for testing and ensuring the fitness of an individual operating a commercial motor vehicle” (49 U.S.C. 31305(a)). Those regulations shall ensure that “(1) an individual issued a commercial driver's license [CDL] [must] pass written and driving tests for the operation of a commercial motor vehicle [CMV] that comply with the minimum standards prescribed by the Secretary under section 31305(a) of this title” (49 U.S.C. 31308(1)). To avoid the withholding of certain Federal-aid funds, States must adopt a testing program “consistent with the minimum standards prescribed by the Secretary of Transportation under section 31305(a) of this title” (49 U.S.C. 31311(a)(1)).

Potential CMV drivers often obtain CDL training outside of their State of domicile. Driver training schools typically provide their students with a “representative” vehicle to use for the required skills test (see 49 U.S.C. 31305(a)(2)), as well as a valid CDL holder to accompany the applicant to the test site. Until 2012, however, the CMVSA provided that a CDL could be issued only by the driver's State of domicile (49 U.S.C. 31311(a)(12)(A)). The cost to out-of-State applicants returning to their home State, renting a “representative” vehicle, and finding a CDL holder to accompany the applicant could be substantial in terms of both personal time and financial expense. Therefore, on the basis of the authority cited in the previous paragraph, FMCSA's final rule on “Commercial Driver's License Testing and Commercial Learner's Permit Standards” (76 FR 26854, May 9, 2011) required States where a driver is domiciled to accept the result of skills tests administered by a different State (49 CFR 383.79).

For military personnel, their legal residence or “domicile” is the State they consider their permanent home, where they pay taxes, vote, and get a driver's license. Military personnel are often stationed in a different State. The Military CDL Act allows a State to issue CDLs to certain military personnel not domiciled in the State, if their temporary or permanent duty stations are located in that State (49 U.S.C. 31312(a)(12)(C)). However, this procedure creates problems for service members trying to maintain legal domicile in another State. Because drivers' licenses are often treated as proof of domicile, obtaining a CDL from the State where they are stationed could result in the loss of domicile and corresponding benefits (e.g., tax breaks) in what they consider their “home” State. FMCSA, therefore, proposes to utilize the CMVSA's broader authority to allow the State where military personnel are stationed to accept CLP or CDL applications and to administer written and skills tests for the CDL. The proposed rule would require a State that adopted this procedure to transmit the application and test results electronically to the State of domicile, which in turn would be required to issue the CLP or CDL. This would maintain the link between the issuing State and the driver's State of domicile which is mandated by the CMVSA [49 U.S.C. 31311(a)(12)] and was observed until the Military CDL Act authorized a different but problematical procedure.

FMCSA would amend § 383.5 by adding a definition of “military services” to the list of definitions in that section. A definition for “military services” is needed in order to interpret the new requirements in part 383 in this rulemaking.

This NPRM would amend § 383.77(b)(1) to allow States to accept Skills Test Waiver applications from military personnel for up to 1 year after they were regularly employed as military CMV drivers. FMCSA believes that this would give former military personnel a better opportunity to obtain a CDL in a way that will not negatively affect safety.

Currently, former military personnel who were regularly employed in the preceding 90 days in a military position requiring the operation of a CMV may apply for a skills test waiver if they meet certain conditions. To date, more than 10,000 separated military personnel have taken advantage of the Skills Test Waiver. In the November 2013 report to Congress, “Program to Assist Veterans to Acquire Commercial Driver's Licenses,” FMCSA concluded that lengthening that period would ease the transition of service members and veterans 2 to civilian life. FMCSA recommended a revision to the Military Skills Test Waiver in 49 CFR 383.77(b)(1) to extend the period of availability from 90 days to 1 year.

The Virginia Department of Motor Vehicles (DMV) subsequently requested an exemption from § 383.77(b)(1) to allow a 1-year waiver period for military personnel (available in docket FMCSA-2014-0096). On April 7, 2014, FMCSA published a Federal Register notice announcing the request (79 FR 19170). Five comments were received; all supported the application. In addition, another SDLA, The State of New York, Department of Motor Vehicles, supported “broader application of this exemption to all jurisdictions.” All commenters supported the Virginia request, saying that extending the period to apply for a waiver from 90 days to 1 year would enable more military personnel to obtain CDLs. Additionally, in a letter to FMCSA dated April 10, 2014, the America Association of Motor Vehicle Administrators, which represents the State and Provincial officials in the United States and Canada who administer and enforce motor vehicle laws, requested that FMCSA consider a blanket exemption for all U.S. jurisdictions.

In a notice published on July 8, 2014 (79 FR 38645), FMCSA determined that the exemption requested by the Virginia DMV would maintain a level of safety equivalent to, or greater than, the level that would be achieved without the exemption, as required by 49 CFR 381.305(a). The Agency, therefore, approved the exemption and made it available to all SDLAs. However, the exemption did not change the language of § 383.77(b)(1) and the exemption remains effective for only 2 years. The current exemption expires July 7, 2016.

This proposal makes existing paragraphs (a) and (b) into paragraphs (a)(1) and (2) and adds new paragraphs (b)(1) and (2). New paragraphs (a)(1) and (2) re-codify but do not add new material to those sections currently in the CFR. New paragraphs (b)(1) and (2) add new provisions that outline the provisions for active-duty personnel to obtain CLPs and CDLs.

Many active-duty military personnel would like to obtain CDLs while still in the military services, but are often stationed outside their State of domicile. This NPRM would allow a State to accept applications and administer CDL knowledge and skills tests for military personnel stationed there. That State would then be required to transmit the application and test results to the driver's State of domicile, which would be required to accept these documents and issue the CLP or CDL. For example, an airman might be stationed at Andrews Air Force Base in Maryland and live in Alexandria, Virginia. He currently holds a base driver's license in his home state of record: Kentucky. His application for a CLP would be made through the Maryland Motor Vehicle Administration (Maryland SDLA), because that is the State where he is stationed. Assuming the Maryland SDLA agreed to accept an application from a non-domiciled driver, it would forward the appropriate paperwork and test results to the Kentucky Department of Transportation (Kentucky SDLA), which would issue him a CLP or CDL.

FMCSA believes this NPRM would simplify the task of obtaining a CDL without jeopardizing (1) any benefits associated with a service member's official State of domicile, or (2) the single-domicile/single issuer concept that has been essential to the CDL program since the beginning. Additionally, it would reduce travel time and other costs associated with traveling to the State of domicile for testing. The motor carrier industry would also benefit from a larger supply of licensed CMV drivers.

A recent FMCSA rulemaking required the standardization of CLP and CDL testing and issuance: Commercial Driver's License Testing and Commercial Learner's Permit Standards (May 9, 2011, 76 FR 26854, and amended March 25, 2013, 78 FR 17875). This proposal uses existing procedures to make it easier for active duty military personnel to get both CLPs and CDLs. Military personnel would apply for a CLP in the State where they are stationed. After the driver passes the knowledge test, the local SDLA would electronically transmit the driver's test score to the State of domicile for issuance of a CLP. After the driver passes the skills test where he or she is stationed, the same SDLA would electronically transmit his/her test score to the State of domicile for issuance of a CDL. FMCSA believes this approach is an appropriate alternative to literal application of the Military CDL Act of 2012. That Act allowed a State where military personnel are stationed to issue CDLs, thus creating ambiguity about the driver's actual State of domicile: The State that issued the CDL or the State where the driver wished to maintain his/her permanent residence. The Military CDL Act was designed to reduce unnecessary bureaucratic burdens on active-duty military personnel and veterans, and this rulemaking addresses that requirement. This NPRM also permits CMV drivers in the armed forces to apply for CLPs and CDLs without running the risk of inadvertently changing their State of domicile—an unavoidable problem with the Military CDL Act.

Because CLP and CDL test requirements are uniform nationally, the State where an applicant is stationed and the State of domicile administer the same knowledge and skills tests. A State of domicile, therefore, can accept knowledge and skills test results from another State and issue the CLP and then the CDL without concern that different States may have different licensing standards.

The procedure for transmitting skills test results among States is already in place as a result of the May 2011 final rule on Commercial Driver's License Testing and Commercial Learner's Permit Standards. This new provision would not require a major technological change for the States to send and receive test result information. Some minor software modifications and updates would be required to allow transmission of the knowledge test results (as only skills test results are presently transmitted via these systems).

FMCSA analyzed this proposal and believes that it is safety-neutral. Because the CDL provisions are now standardized across all SDLAs, all drivers will be subject to the same knowledge and skills tests.

Section 5401(a) of the FAST Act added to 49 U.S.C. 31305 a new paragraph (d), which requires FMCSA to (1) exempt certain ex-military personnel from the CDL skills test if they had military experience driving CMV-like vehicles; (2) extend the skills test waiver to one year; and (3) credit the CMV training military drivers receive in the armed forces toward applicable CDL training and knowledge requirements. This rule would address the first and second of these requirements in considerable detail; the third, however, will require subsequent rulemaking.

Section 5302 of the FAST Act requires FMCSA to give priority to statutorily required rules before beginning other rulemakings, unless it determines that there is a significant need for the other rulemaking and so notifies Congress. This NPRM is required by the provisions of section 5401. Even in the absence of those mandates, however, FMCSA believes the need to improve opportunities for military personnel returning to civilian life justifies the publication of this NPRM.

FMCSA would amend 49 CFR 384.301 by adding a new paragraph (j), specifying a 3-year compliance date for States. FMCSA has always given the States 3 years after the effective date of any new CDL rule to come into substantial compliance with its requirements. This allows the States time to pass necessary legislation and modify information systems, including the Commercial Driver's License Information System (CDLIS), to comply with the new requirements.

Under E.O. 12866 (58 FR 51735, Oct. 4, 1993) as supplemented by E.O. 13563 and DOT policies and procedures, FMCSA must determine whether a regulatory action is “significant,” and therefore subject to OMB review and the requirements of the Executive order. The order defines “significant regulatory action” as one likely to result in a rule that may:

(1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal government or communities.

(2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another Agency.

(3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof.

(4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive order.

FMCSA has determined that this action is not a significant regulatory action within the meaning of E.O. 12866 or significant within the meaning of Department of Transportation regulatory policies and procedures. This rulemaking would not result in an annual effect on the economy of $100 million or more, lead to a major increase in costs or prices, or have significant adverse effects on the United States economy. This NPRM would amend existing procedures and practices governing administrative licensing actions.

FMCSA evaluated potential costs and benefits associated with this rulemaking and the Agency does not expect the proposed changes to impose any new or increased costs. However, FMCSA estimates that these changes could result in a cost savings between $462,000 and $1,062,600 per year. The following sections provide an overview of this analysis.

The rulemaking would extend the time to apply for a skills test waiver from 90 days to 1 year for former service members. This action would codify an existing exemption published on July 8, 2014 (79 FR 38645). That notice granted immediate relief from 49 CFR 383.77(b)(1) to military service members separating from active duty. The exemption did not change the CFR language and is effective for only 2 years, although it could be extended.

As the rulemaking would codify an existing practice, FMCSA does not expect this revision to have any economic impact. However, the Agency believes that permanently granting military personnel more time to apply for a CDL after separation from service would be beneficial to both service members and prospective employers by creating more employment opportunities.

This proposal would allow States to submit the results of both the skills and knowledge tests of military applicants to the driver's State of domicile for issuance of the CLP and CDL. This information would be transmitted using the same electronic system that was previously established for the skills test. The proposed rule would require all States to use either the CSTIMS—Commercial Skills Test Information Management System—or ROOSTR—Report Out-Of-State Test Results, however, both of these systems are currently managed by the American Association of Motor Vehicle Administrators (AAMVA) at no cost to the States. While some software modifications and updates may be required to allow transmission of the knowledge test results (as only skills test results are presently transmitted via these systems), FMCSA expects that the cost of any updates to allow for the transmission of this additional information would be very minor. In addition, FMCSA has determined that three States are not currently using either one of these systems. However, FMCSA does not expect those States would incur costs to adopt one of these systems, as the costs for adoption are currently covered under an FMCSA grant program. There may be future costs associated with the management and maintenance of these systems, but FMCSA does not have an estimate of these costs and specifically requests comment on potential costs that may be incurred by the operation or adoption of either of these systems.

FMCSA expects this provision to result in a cost savings for drivers. Specifically, this provision would allow States where active-duty military personnel are stationed to accept CLP or CDL applications and administer knowledge and skills tests for those personnel. The rule would require any such State to transmit electronic copies of the application and test results for military personnel to the driver's State of domicile, which in turn would be required to issue a CLP or CDL on the basis of that information. This would save military personnel the travel costs to return to their State of domicile. For example, if the driver were stationed in Virginia but his/her State of domicile was Texas, the rule would allow Texas to issue the driver a CLP and CDL based on successful testing conducted in Virginia. The driver would be saved the travel costs of returning to Texas, renting or borrowing a CMV for the test drive, and finding CDL holder to accompany the applicant to the testing site.

To estimate how many drivers might take advantage of this provision, FMCSA started with the number who have used the military skills test waiver. Between May 2011 and February 2015, more than 10,100 skills test waivers were granted for military drivers, or an average of approximately 2,460 per year.3 For purposes of this analysis, FMCSA assumed that number would remain constant in future years. To estimate the number of drivers who may be stationed in a State other than their State of domicile and who, thus, could potentially take advantage of this provision, FMCSA used an estimate of the number of drivers who attend training outside their State of domicile from the Regulatory Evaluation conducted for the 2011 “Commercial Driver's License Testing and Commercial Learner's Permit Standards” Final Rule.4 According to this evaluation, approximately 25 percent of drivers obtained training outside their State of domicile. It is likely that more than 25 percent of military personnel are stationed outside their State of domicile. However, for purposes of this analysis FMCSA used the 25 percent estimate to calculate the population of drivers who may take advantage of this provision. Based on these assumptions, this provision affects approximately 660 drivers each year.

FMCSA does not have information on the States where these drivers are domiciled or stationed. To estimate the potential costs savings, FMCSA used the scenario of a driver who is stationed in Virginia but domiciled in Texas. To present a low- and high-end estimate of the potential cost savings, FMCSA evaluated two scenarios in which the driver travels between Norfolk, Virginia, and Houston, Texas. In the first scenario, the driver takes a commercial flight. FMCSA estimates that a typical roundtrip flight between Norfolk and Houston costs approximately $700.5 In the second scenario, the driver drives a private vehicle between these locations. The current private vehicle mileage rate from the General Services Administration (GSA) is $0.575 per mile 6 and the distance between Norfolk and Houston is approximately 2800 miles, roundtrip. FMCSA estimates that it would cost the driver approximately $1,610 to drive between Virginia and Texas for CDL testing.

To estimate the potential cost savings, FMCSA multiplied the round trip flight price by the annual affected driver population to calculate the lower-bound estimate, and multiplied the mileage cost by the annual affected driver population to calculate the upper-bound estimate. Table 1 provides an overview of the expected annual cost savings, as well as the discounted total over the next 10 years. Based on the estimated participation rates, the total savings would be between $462,000 and $1,062,600 per year. In addition, the driver might incur lodging and rental costs depending on the location of the testing; however, these potential cost savings were not included in this analysis.

In addition to the cost savings described above, there may be other non-quantified benefits associated with these provisions. For example, this proposal also allows military personnel to enter the job market more quickly and ease the transition after separation from service. This rulemaking may also increase the availability of drivers qualified to work for motor carriers, since military personnel would be able to complete their testing and licensing during their separation process. Finally, reducing unemployment for former military personnel may also reduce the amount of unemployment compensation paid by the Department of Defense to former service members.

The Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612) requires Federal agencies to consider the effects of the regulatory action on small business and other small entities and to minimize any significant economic impact. The term “small entities” comprises small businesses and not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. Accordingly, DOT policy requires an analysis of the impact of all regulations on small entities, and mandates that agencies strive to lessen any adverse effects on these businesses.

Under the standards of the RFA, as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat. 857) (SBREFA), this proposed rule would not impose a significant economic impact on a substantial number of small entities because the revisions would either codify an existing practice or allow States to provide more flexibility for military personnel seeking to obtain a CDL. FMCSA does not expect the changes to impose any new or increased costs on small entities. Consequently, I certify that this action would not have a significant economic impact on a substantial number of small entities.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, taken together, or by the private sector of $155 million (which is the value of $100 million in 1995 after adjusting for inflation to 2014 dollars) in any 1 year, and if so, to take steps to minimize these unfunded mandates. This rulemaking would not result in an additional net expenditure by State, local and Tribal governments, in the aggregate or by the private sector, of $155 million or more in any 1 year, nor would it affect small governments.

This action meets applicable standards in sections 3(a) and 3(b)(2) of E.O. 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

E.O. 13045, Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, Apr. 23, 1997), requires agencies, when issuing “economically significant” rules the agency has reason to believe concern an environmental health or safety risk that may disproportionately affect children, to include an evaluation of the regulation's environmental health and safety effects on children. As discussed previously, this proposed rule is economically insignificant. Therefore, no analysis of the impacts on children is required.

This proposed rule does not affect a taking of private property or otherwise have taking implications under E.O. 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rulemaking does not preempt or modify any provision of State law, impose substantial direct unreimbursed compliance costs on any State, or diminish the power of any State to enforce its own laws. Accordingly, this rulemaking does not have Federalism implications warranting the application of E.O. 13132.

The regulations implementing E.O. 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this proposed rule.

This proposed rule does not have tribal implications under E.O. 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq.), Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct, sponsor, or require through regulations. FMCSA determined that this proposed rule would not result in changes to the current information collection requirements.

FMCSA analyzed this rulemaking for the purpose of the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and determined this action is categorically excluded from further analysis and documentation in an environmental assessment or environmental impact statement under FMCSA Order 5610.1 (69 FR 9680, March 1, 2004), Appendix 2, paragraph 6.b. The Categorical Exclusion (CE) in paragraph 6.b. covers regulations which are editorial or procedural, such as those updating addresses or establishing application procedures, and procedures for acting on petitions for waivers, exemptions and reconsiderations, including technical or other minor amendments to existing FMCSA regulations.

FMCSA also analyzed this proposed rule under the Clean Air Act, as amended (CAA), section 176(c) (42 U.S.C. 7401 et seq.), and implementing regulations promulgated by the Environmental Protection Agency. Approval of this action is exempt from the CAA's general conformity requirement since it does not affect direct or indirect emissions of criteria pollutants.

Under E.O. 12898 (Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations), each Federal agency must identify and address, as appropriate, “disproportionately high and adverse human health or environmental effects of its programs, policies, and activities on minority populations and low-income populations” in the United States, its possessions, and territories. FMCSA has determined that this proposed rule would have no environmental justice effects, nor would it have any collective environmental impact.

FMCSA determined that the proposed rule would not significantly affect energy supply, distribution, or use. Therefore, no Statement of Energy Effects is required. FMCSA analyzed this action under E.O. 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. FMCSA determined that it would not be a “significant energy action” under that E.O. because this rulemaking is economically insignificant and it is not likely to have an adverse effect on the supply, distribution, or use of energy.

The E-Government Act of 2002, Pub. L. 107-347, sec. 208, 116 Stat. 2899, 2921 (Dec. 17, 2002), requires Federal agencies to conduct a privacy impact assessment for new or substantially changed technology that collects, maintains, or disseminates information in an identifiable form. This rulemaking would not collect any personal information.

The National Technology Transfer and Advancement Act (15 U.S.C. 272 note) requires Federal agencies adopting Government technical standards to consider whether voluntary consensus standards are available. This Act also requires Agencies to “use technical standards that are developed or adopted by voluntary consensus standards bodies” to carry out policy objectives determined by the agencies, unless the standards are “inconsistent with applicable law or otherwise impractical.” If the Agency chooses to adopt its own standards in place of existing voluntary consensus standards, it must explain its decision in a separate statement to OMB. This proposed rule would not involve the adoption of any technical standards.

Section 522 of title I of division H of the Consolidated Appropriations Act, 2005, enacted December 8, 2004 (Pub. L. 108-447, 118 Stat. 2809, 3268, 5 U.S.C. 552a note), requires the Agency to conduct a privacy impact assessment (PIA) of a regulation that will affect the privacy of individuals. In accordance with this Act, a privacy impact analysis is warranted to address any privacy implications contemplated in the rulemaking. The Agency submitted a Privacy Threshold Assessment analyzing the privacy implications to the Department of Transportation, Office of the Secretary's Privacy Office to determine whether a PIA is required.

The DOT Chief Privacy Officer has evaluated the risks and effects that this rulemaking might have on collecting, storing, and sharing PII and has examined protections and alternative information handling processes in order to mitigate potential privacy risks. There are no privacy risks and effects associated with this proposed rule.

In consideration of the foregoing, FMCSA proposes to amend 49 CFR chapter 3, parts 383 and 384 to read as follows:

The not-substantial petition findings announced in this document are listed in Table 1 below, and are available on http://www.regulations.gov under the appropriate docket number, or on the Service's Web site at http://ecos.fws.gov.

This action proposes regulations to implement Amendment 17 to the Atlantic Surfclam and Ocean Quahog Fishery Management Plan (FMP). The Mid-Atlantic Fishery Management Council developed this amendment to establish a program to recover the costs of managing the surfclam and ocean quahog individual transferable quota (ITQ) fisheries, as required by the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), and to make administrative changes to improve the efficiency of the FMP.

The Magnuson-Stevens Act requires each limited access privilege program, such as the surfclam/ocean quahog ITQ program, to include measures to recover the costs of management, data collection and analysis, and enforcement activities involved with the program. This action proposes to implement a cost recovery program for the surfclam and ocean quahog ITQ fisheries modeled on the Council's existing cost recovery program for the Tilefish Individual Fishing Quota (IFQ) Program.

Under the proposed program, any surfclam or ocean quahog ITQ permit holder (also referred to in this preamble as “allocation holders”) who has quota share (i.e., receives an initial allocation of cage tags each year) would be responsible for paying a fee at the end of the year. The fee would be based on the number of the ITQ permit holder's cage tags that were ultimately used to land clams that year. In the first quarter of each year, the Greater Atlantic Regional Fisheries Office (GARFO) would announce the fee percentage and the associated per-tag fee for that year, and distribute this announcement widely. Although annual fee information would not be published in the Federal Register, distribution of the GARFO announcement would include posting it on the GARFO Web site and sending it to each ITQ permit holder with quota share. The fee percentage would be based on the total recoverable costs from the prior fiscal year, adjusted for any prior over- or under-collection, divided by the total ex-vessel value of the fishery. The resulting percentage cannot exceed the 3-percent statutory maximum. Then NMFS would calculate a per-tag fee based on the total number of cage tags used to land surfclams or ocean quahogs in the previous year. This tag fee would be separate from, and in addition to, the price allocation holders currently pay to the tag vendor to obtain the physical cage tags each year.

This process includes an inherent assumption that a similar number of cage tags will be used each year. While the fishery has been largely stable over time, many factors (e.g., weather events, market demand, etc.) may result in the use of more or fewer tags in any given year. As a result, we fully anticipate that, in some years, we will collect more or less money than is necessary to recover our costs. Refunding over-collections and issuing supplemental bills to make up for shortfalls would increase the cost of administering the fishery, which would increase the amount charged in bills the following year. To avoid these additional costs, we would apply any over- or under-collection to our calculation of recoverable costs and per-tag fees for the following year. Our communications with the ITQ permit holders each year will make clear that any prior over- or under-collection adjustments will be incorporated into the following year's cost-recovery billing.

The Council produced an analysis as part of Amendment 17 using 2013 landings and ex-vessel value and assuming a 0.2-percent fee, which represents approximately $100,000 of recoverable costs. This analysis showed that fees would have been $0.56 per surfclam cage tag and $0.27 per ocean quahog cage tag. A scenario using the statutory maximum 3 percent showed the fees could have been as high as $8.36 per surfclam tag and $4.10 per ocean quahog tag. However, reaching that 3-percent maximum would require recoverable costs to be over $1.5 million, far higher than any reasonable estimate for the management costs for these fisheries. Annual recoverable costs for the first 5 years of our other Greater Atlantic Region IFQ fisheries have averaged approximately $21,000 for the Tilefish IFQ Program, and $113,000 for the Limited Access General Category Scallop IFQ Program. Based on the management requirements of these programs, we anticipate total costs for the surfclam and ocean quahog ITQ program would be somewhere between the costs of these other programs.

If allocation holders transfer some or all of their cage tags or quota share after the start of the fishing year, they would still be liable for any cost recovery fee based on landings of their initial allocation. Here is an example of how this might work for an allocation holder: Carol has a surfclam ITQ permit with a quota share ratio of 0.02, meaning she is allocated 2 percent of the total surfclam ITQ quota each year. If in a given year the quota is 1 million bushels (53.2 million L), Carol's allocation would be 20,000 bushels (1.6 million L), or 625 cage tags (i.e., 20,000 (1.6 million L) bushels divided by 32 bushels (1,700 L) per cage). In the first quarter of the year, NMFS announces that the fee will be $0.50 per tag. Over the course of the year, Carol uses 200 cages to harvest surfclams, and leases 400 cage tags to Bob. Bob in turn uses 100 cage tags and leases the 300 remaining tags to Joe who uses 150. Because each cage tag has a unique number, we can identify which tags originated from Carol's allocation no matter how many times they were leased. Of the original 625 tag allocation a total of 450 tags were used; 200 by Carol, 100 by Bob, 150 by Joe, and 175 tags were never used. At the end of the fishing year, Carol would receive a cost recovery bill for $225.00 based on the $0.50 tag fee multiplied by the 450 tags that were used to land surfclams.

We have already begun tracking recoverable costs in these fisheries. To the extent possible, we are tracking the recoverable costs of the surfclam and ocean quahog fisheries separately, although some costs are shared (e.g., routine maintenance of our database for tracking allocations and cage tags). Under these proposed regulations, at the start of the 2017 calendar year, we would use the total recoverable costs from the 2016 fiscal year (October 1, 2015, through September 30, 2016) and the total value of the fisheries in the 2016 calendar year, to calculate fee percentages for both surfclam and ocean quahogs. We would then use the total number of tags used during the 2016 fishing year to determine a per-tag fee for the 2017 fishing year.

In early 2018 (most likely February or March) we would issue the first cost recovery bills based on how many cage tags were used in 2017 and the 2017 per-tag fee. At the same time, we would announce the fee percentage and per-tag fees for the 2018 fishing year. If the total amount to be collected is higher or lower than the total recoverable costs used to calculate the 2017 per-tag fee (i.e., the fiscal year 2016 recoverable costs), we would adjust the fiscal year 2017 recoverable costs accordingly when calculating the 2018 per-tag fee. This anticipated timeline is detailed in Table 1.

Cost recovery bills would be due within 30 days of the date of the bill, and would be paid using the Greater Atlantic Regional Fisheries Office's fishing industry Web site: Fish Online (www.greateratlantic.fisheries.noaa.gov/apps/login/login). Fish Online is a secure Web site and NMFS provides a username and password for individuals to access their accounts. Members of the fishing industry may use the site to check details about their fishing permit and landings. The Web page has been used since 2010 to collect cost recovery payments for the Tilefish IFQ and Limited Access General Category Scallop IFQ fisheries. Cost recovery bills may be paid with a credit card or with an account number and routing number from a bank account, often referred to as an Automated Clearing House or ACH payment. Once bills are issued, ITQ shareholders would be able to log onto Fish Online and access the Cost Recovery section. Payments made through Fish Online are processed using the U.S. Treasury Department's Pay.gov tool, and no bank account or credit card information is retained by NMFS. We would not be able to accept partial payments or advance payments before bills are issued. We do not anticipate that other payment methods would be accepted, as the proposed payment system has been effective for other cost recovery programs. However, other payment methods may be authorized if the Regional Administrator determines that electronic payment is not practicable.

The proposed regulations include procedures in case an ITQ permit holder should fail to pay their cost recovery bill. If a bill is not paid by the due date, NMFS would issue a demand letter, formally referred to as an initial administrative determination. This letter would describe the past-due fee, describe any applicable interest or penalties that may apply, stipulate a 30-day deadline to either pay the amount due or submit a formal appeal to the Regional Administrator, and provide instructions for submitting such an appeal. If no appeal is submitted by the deadline, the Regional Administrator would issue a final decision letter. An appeal must be submitted in writing, allege credible facts or circumstances, and include any relevant information or documentation to support the appeal. If an appeal is submitted, the Regional Administrator would appoint an appeals officer to determine if there is sufficient information to support the appeal and that all procedural requirements have been met. The appeals officer would then review the record and issue a recommendation to the Regional Administrator. The Regional Administrator, acting on behalf of the Secretary of Commerce, would then review the appeal and issue a written decision. If the Regional Administrator's final determination (whether or not there was an appeal) finds that ITQ permit holder is out of compliance, full payment would be required within 30 days. Following a final determination, we may also suspend the ITQ permit, thereby prohibiting any transfer of cage tags or quota share, use of associated cage tags to land surfclams or ocean quahogs, or renewal of the ITQ permit until full payment, including any interest or penalties, is received. If full payment is not received within this final 30-day period as required, we may then refer the matter to the appropriate authorities, including the Department of Treasury, for collection.

Each year NMFS would issue a report on the status of the ITQ cost recovery program. This report would provide details of the recoverable costs to be collected, the success of previous collection efforts, and other relevant information.

Under National Standard 1, the Magnuson-Stevens Act requires that each Council FMP define overfishing as a rate or level of fishing mortality (F) that jeopardizes a fishery's capacity to produce maximum sustainable yield (MSY) on a continuing basis, and defines an overfished stock as a stock size that is less than a minimum biomass threshold (see 50 CFR 600.310(e)(2)). The Magnuson-Stevens Act also requires that each FMP specify objective and measurable status determination criteria (i.e., biological reference points) for identifying when stocks covered by the FMP are overfished or subject to overfishing (see section 303(a)(10), 16 U.S.C. 1853). To fulfill these requirements, status determination criteria are comprised of two components: (1) A maximum fishing mortality threshold; and (2) a minimum stock size threshold.

Currently, the biological reference points in the FMP were set by Amendment 12 for ocean quahog (October 26, 1999; 64 FR 57587) and Amendment 13 for surfclam (December 16, 2003; 68 FR 69970). Although several stock assessments since these amendments have produced new biological reference points, there has not been an FMP amendment to adjust the figures in the plan. As a result, the definitions in the FMP have become inconsistent with the best scientific information available. This action would modify how these biological reference points are defined in the FMP. Rather than using specific definitions, the FMP would include broad criteria to allow for greater flexibility in incorporating changes to the definitions of the maximum fishing mortality threshold and/or minimum stock size threshold as the best scientific information consistent with National Standards 1 and 2 becomes available. The Council has already adopted this approach in several of its other FMPs, and this change would make the Surfclam and Ocean Quahog FMP consistent with these other FMPs.

The maximum fishing mortality threshold for surfclams and ocean quahogs would be defined as FMSY (or a reasonable proxy thereof), which is a function of productive capacity, and would be based upon the best scientific information consistent with National Standards 1 and 2. Specifically, FMSY is the fishing mortality rate associated with MSY. The maximum fishing mortality threshold (FMSY) or a reasonable proxy may be defined as a function of (but not limited to): Total stock biomass; spawning stock biomass; total egg production; and may include males, females, both, or combinations and ratios thereof that provide the best measure of productive capacity for each of the species managed under the FMP. Exceeding the established fishing mortality threshold would constitute overfishing as defined by the Magnuson-Stevens Act.

The minimum stock size threshold for each of the species under the FMP would be defined as 1/2 BMSY (or a reasonable proxy thereof), which is a function of productive capacity, and would be based upon the best scientific information, consistent with National Standards 1 and 2. BMSY is the stock biomass associated with MSY. The minimum stock size threshold (1/2 BMSY) or a reasonable proxy may be defined as a function of (but not limited to): Total stock biomass; spawning stock biomass; total egg production; and may include males, females, both, or combinations and ratios thereof that provide the best measure of productive capacity for each of the species managed under the FMP. The minimum stock size threshold would be the level of productive capacity associated with the relevant 1/2 MSY level. Should the measure of productive capacity for the stock fall below this minimum threshold, the stock would be considered overfished as defined by the Magnuson-Stevens Act. The target for rebuilding, when applicable, is specified as BMSY (or reasonable proxy thereof) at the level of productive capacity associated with the relevant MSY level, under the same definition of productive capacity as specified for the minimum stock size threshold.

Specific definitions or modifications to the status determinations criteria, and their associated values, would result from the most recent peer-reviewed stock assessments and their panelist recommendations. The Northeast Regional Stock Assessment Workshop/Stock Assessment Review Committee (SAW/SARC) process is the primary mechanism utilized in the Greater Atlantic Region at present to review scientific stock assessment advice, including status determination criteria, for federally-managed species. There are also periodic reviews, which occur outside the SAW/SARC process that are subject to rigorous peer-review and may also result in scientific advice to modify or change the existing stock status determination criteria. These periodic reviews outside the SARC process could include any of the following review processes listed below, as deemed appropriate by the Council and NMFS.

• Council Scientific and Statistical Committee (SSC) Review

• Council externally contracted reviews with independent experts (e.g., Center for Independent Experts—CIE)

• NMFS internally conducted review (e.g., comprised of NMFS scientific and technical experts from NMFS Science Centers or Regions)

• NMFS externally contracted review with independent experts (e.g., CIE)

The scientific advice developed on stock status determination criteria would be provided to the Council's SSC. The SSC would use this information to develop acceptable biological catch (ABC) recommendations that address scientific uncertainty based on the information provided in the peer reviewed assessment of the stock. The SSC would provide these recommendations to the Council. In addition, the Council's Industry Advisory groups are often engaged to provide management recommendations to the Council. The Council would then consider all available information and advice when developing its own recommendations to put forward through the regulatory process for setting the annual specifications for the upcoming fishing year, which is the primary mechanism for updating and adjusting management measures on a regular basis in order to meet the goals of the FMP.

Currently, the FMP specifies a surfclam optimum yield range of 1.85-3.40 million bushels (98.5 to 181.0 million L), and an ocean quahog the optimum yield range of 4.00-6.00 million bushels (213.0 to 319.4 million L). The Council must select commercial quotas within these ranges. Under the current FMP process, modification to the upper end of the ranges would require a framework adjustment. Commercial quotas may be set below the lower bounds if the SSC sets a lower ABC, resulting in an optimum yield range that is higher than ABC. The current optimum yield ranges in the FMP were based on scientific information and industry input from the 1980's, and have not been adjusted to reflect subsequent changes in our understanding of the biology of these stocks.

This action proposes to remove the optimum yield ranges from the FMP, but commercial quotas for surfclam and ocean quahog would continue to be set under the existing system of catch limits. This is consistent with the other FMPs that the Council manages; surfclam and ocean quahog are the only stocks with optimum yield ranges specified in the FMP.

As prescribed under this quota setting process, the Council may not exceed the ABC recommendations of the SSC, and would continue to specify annual catch limits, targets, and commercial quotas as otherwise described in the FMP. As part of the specifications process, the advisory panel would develop recommendations for commercial quotas, including optimum yield recommendations which would be provided to the Council.

This action also proposes a modification to the regulations pursuant to the Secretary's authority under section 305(d) of the Magnuson-Stevens Act (16 U.S.C. 1855(d)) to ensure that FMPs are implemented as intended and consistent with the requirements of the Magnuson-Stevens Act. This action proposes to modify the regulations at 50 CFR 648.11(a) so that vessels holding a Federal permit for Atlantic surfclam or ocean quahog are included on the list of vessels required to carry a NMFS-certified fisheries observer if requested by the Regional Administrator. All other Federal fisheries permits issued in the Greater Atlantic Region are already covered by either § 648.11(a) or a similar provision at § 697.12(a), which applies to vessels with an American lobster permit. The recent Standardized Bycatch Reporting Methodology (SBRM) Omnibus Amendment final rule (June 30, 2015; 80 FR 37182) modified how at-sea observers are assigned to fishing vessels. The Council's discussions of that action and analysis of alternatives clearly indicate the Council intended for the requirement (that vessels carry a NMFS-certified observer if requested by the Regional Administrator) to apply to all fisheries subject to the SBRM Omnibus Amendment final rule. The surfclam and ocean quahog fisheries have historically had very low bycatch and have been a low priority for observer coverage. Prior to the SBRM Omnibus Amendment final rule, NMFS used its discretion to prioritize observer coverage to other fishing fleets. The SBRM Omnibus Amendment final rule removed this discretion and implemented a formulaic process for assigning observer coverage across fisheries. This resulted in observer coverage being assigned to the surfclam and ocean quahog fisheries. Subsequent to the publication of the SBRM Omnibus Amendment final rule, it became apparent that § 648.11(a) does not currently apply to surfclam and ocean quahog vessel permits. Over 700 vessels have a surfclam or ocean quahog permit. However, all but 15 of those vessels are already subject to this observer requirement because they also carry another Federal permit.

Pursuant to section 303(c) of the Magnuson-Stevens Act, the Council has deemed that this proposed rule is necessary and appropriate for the purpose of implementing Amendment 17, with the exception of the measure noted above as proposed under the Secretary's authority under section 305(d) of the Magnuson-Stevens Act.

Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Act, the NMFS Assistant Administrator has determined that this proposed rule is consistent with Amendment 17, other provisions of the Magnuson-Stevens Act, and other applicable law, subject to further consideration after public comment.

This proposed rule has been determined to be not significant for purposes of Executive Order 12866.

The Council prepared a draft environmental assessment (EA) for this FMP amendment that analyzes the impacts on the environment as a result of this action. A copy of the draft EA is available from the Federal e-Rulemaking portal www.regulations.gov. Type “NOAA-NMFS-2015-0057” in the Enter Keyword or ID field and click search. A copy of the draft EA is also available upon request from the Council (see ADDRESSES).

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration (SBA) that this proposed rule, if adopted, would not have a significant economic impact on a substantial number of small entities. The Council prepared an analysis of the potential economic impacts of this action, which is included in the draft EA for this action and supplemented by information contained in the preamble of this proposed rule. The SBA defines a small business in the commercial harvesting sector, as a firm with receipts (gross revenues) of up to $5.5 million for shellfish businesses and $20.5 million for finfish businesses. Using these definitions, there are 26 small entities and 3 large entities that landed surfclam and/or ocean quahog in 2013, the most recent year of data available to the Council during development of Amendment 17.

The alternatives for the mechanism to update biological reference points and to change the optimum yield range in the FMP are administrative in nature. None of the alternatives are expected to change fishing methods or activities, nor will they alter the catch and landings limits for these species or the allocation of the resources among user groups. These administrative alternative measures are not expected to impact the economic aspects of these fisheries, as they are not expected to produce changes in landings, prices, consumer and producer surplus, harvesting costs, enforcement costs, or to have distributional effects.

Four alternatives were considered for the development of a cost recovery program. All of the alternatives would recover the costs of management, data collection and analysis, and enforcement activities related to the ITQ program, as required by the Magnuson-Stevens Act. Each alternative varies in how these costs would be distributed across the fishery. The total recovered costs could be up to the statutory maximum of 3 percent of the ex-vessel value of surfclams and ocean quahogs harvested under the ITQ program, although estimates predict that the recoverable costs would be much lower than this maximum. A conservative initial estimate placed costs at approximately $100,000 annually, or about 0.2 percent of the ex-vessel value of the fishery in 2013. For comparison, both a 3-percent fee and a 0.2-percent fee were used in the analysis of potential economic impact of the alternatives. Table 2 presents the average cost associated with a 0.2- and 3-percent cost recovery program for active surfclam and ocean quahog fishery small entities in 2013.