83 FR 60773 - Modernization of Media Regulation Initiative: Revisions to Cable Television Rate Regulations

FEDERAL COMMUNICATIONS COMMISSION

Federal Register Volume 83, Issue 228 (November 27, 2018)

In this document, the Federal Communications Commission (Commission) eliminate or revise expired and outdated cable rate regulation rules and close a related dormant docket.

[Federal Register Volume 83, Number 228 (Tuesday, November 27, 2018)]
[Rules and Regulations]
[Pages 60773-60776]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-25326]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[MB Docket Nos. 17-105, 02-144; MM Docket Nos. 92-266, 93-215; CS 
Docket Nos. 94-28, 96-157; FCC 18-148]


Modernization of Media Regulation Initiative: Revisions to Cable 
Television Rate Regulations

AGENCY: Federal Communications Commission

ACTION: Final rule.

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SUMMARY: In this document, the Federal Communications Commission 
(Commission) eliminate or revise expired and outdated cable rate 
regulation rules and close a related dormant docket.

DATES: Effective date: December 27, 2018.

FOR FURTHER INFORMATION CONTACT: For additional information on this 
proceeding, contact Katie Costello,

[[Page 60774]]

[email protected], of the Media Bureau, (202) 418-2233.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order, FCC 18-148, adopted and released on October 23, 2018. The 
full text of these documents is available for public inspection and 
copying during regular business hours in the FCC Reference Center, 
Federal Communications Commission, 445 12th Street SW, CY-A257, 
Washington, DC 20554. These documents will also be available via ECFS 
(http://www.fcc.gov/cgb/ecfs/). (Documents will be available 
electronically in ASCII, Word 97, and/or Adobe Acrobat.) The complete 
text may be purchased from the Commission's copy contractor, 445 12th 
Street SW, Room CY-B402, Washington, DC 20554. To request these 
documents in accessible formats (computer diskettes, large print, audio 
recording, and Braille), send an email to [email protected] or call the 
Commission's Consumer and Governmental Affairs Bureau at (202) 418-0530 
(voice), (202) 418-0432 (TTY).

Synopsis

    In the Report and Order, we eliminate and revise rules that have 
become obsolete due to the sunset of rate regulation for cable 
programming service tiers, are unnecessary given changes in industry 
practices, or have become obsolete due to changes in Commission policy. 
For the reasons stated below, we find good cause to modify Sec.  
76.923(i) without notice and comment because the modification in 
question merely codifies an existing uncodified rule. We also eliminate 
the hard copies of Forms 328 and 329 located at the end of Sec.  76.985 
of our rules. We are not changing the text of Sec.  76.985 by deleting 
these hard copies, and they are unnecessary because Form 329 is no 
longer in use and Form 328 is available electronically. Finally, we 
eliminate Sec. Sec.  76.986, 76.987, 76.922(g)(7) and 76.922(n) of the 
rules and close proceedings related to uniform regional rate 
structures, which are moot due to the sunset of cable programming 
service tier (CPST) regulation.
    A la Carte Packages and New Product Tiers. We eliminate Sec. Sec.  
76.986 and 76.987 because they are vestiges of CPST regulation. These 
rule sections address ``a la carte'' packages and ``new product 
tiers,'' both of which are types of CPSTs. Therefore, because of the 
sunset of CPST regulation we remove these two sections from our rules.
    Equipment Leasing. We modify Sec.  76.923(i) to codify our 
previously adopted uncodified rule that, where an operator offers its 
equipment for sale as well as for lease, the sales price is 
unregulated. The lease price offers the safety of a cost-based 
regulated rate to subscribers and the operator's sales price for the 
same equipment is regulated by the market.
    Single Tier Small System Headend Upgrades. We remove Sec.  
76.922(g)(7) to reflect the sunset of the opportunity for single tier 
small systems to make headend upgrade adjustments. The time period for 
taking this rate increase, January 1, 1995 to December 31, 1997, has 
expired, and we see no continued need for this rule section.
    Uniform Regional Rate Structures. The Notice of Proposed Rulemaking 
in the Cable Pricing Flexibility Order, 61 FR 45387, and our 
interpretation in the Uniform Rate Order, 62 FR 15121, of Sec.  
76.922(n) of our rules are both moot due to the deregulation of the 
CPST. In the Cable Pricing Flexibility Order, we proposed exceptions to 
the CPST rate rules to allow operators to reduce BST prices and offset 
those reductions with increased CPST rates. Section 76.922(n) permits 
similar offsets for CPST rates in order to permit cable operators to 
establish uniform rates across multiple franchise areas. Now that CPST 
rates are no longer regulated, an operator may increase CPST rates 
without Commission approval so the exceptions to the CPST rate rules 
are no longer needed. Accordingly, we terminate CS Docket No. 96-157 
and remove Sec.  76.922(n) from our rules.
    Forms 328 and 329. Two hard copy FCC forms are located at the end 
of Sec.  76.985 of our rules in the Code of Federal Regulations. Form 
329 is an obsolete CPST complaint form. Form 328 is now available 
electronically. We delete these hard copy forms, including 
instructions, from Sec.  76.985 and modify Sec.  76.910 to direct 
interested parties to the electronic Form 328 and instructions.
    Paperwork Reduction Act.--The Report and Order eliminates, and thus 
does not contain new or revised, information collection requirements 
subject to the Paperwork Reduction Act of 1995, Public Law 104-13 (44 
U.S.C. 3501-3520). In addition, therefore, it does not contain any new 
or modified ``information burden for small business concerns with fewer 
than 25 employees'' pursuant to the Small Business Paperwork Relief Act 
of 2002, Public Law 107-198, 44 U.S.C. 3506(c)(4).
    Final Regulatory Flexibility Analysis. As required by the 
Regulatory Flexibility Act of 1980, as amended (``RFA''), an Initial 
Regulatory Flexibility Analysis (``IRFA'') was incorporated in the 
Notice of Proposed Rulemaking and Order, Revisions to Cable Television 
Rate Regulations (``NPRM''). The Commission sought written public 
comment on the proposals in the NPRM, including comment on the IRFA. No 
comments on the IRFA were received. This present Final Regulatory 
Flexibility Analysis (``FRFA'') conforms to the RFA.
    Need for, and Objectives of, the Revised Rules. In the past, the 
Commission developed rules and forms for the regulation of cable 
television rates when both the basic service tier (``BST'') and the 
cable programming service tiers (``CPST'') were subject to rate 
regulation. In this Report and Order, the Commission updates some of 
these regulations. Updating is needed so that the rules and rate forms 
will reflect the March 1999 sunset of cable programming services tier 
(``CPST'') rate regulation pursuant to the Telecommunications Act of 
1996. Finally, updating is required to address issues which have arisen 
over time. This Report and Order makes changes to remove rule sections 
that are obsolete due to the sunset of upper tier regulation. For cable 
systems in general, including small cable systems, in this Report and 
Order the Commission deletes or modifies rules relating solely to CPST 
regulation and modifies a rule to codify existing policy. All of these 
changes have the effect of eliminating or reducing regulatory burdens.
    Legal Basis. The authority for this action is contained in sections 
1, 2(a), 3, 4(i), 4(j), 303(r), 601(3), 602, and 623 of the 
Communications Act of 1934, as amended, 47 U.S.C. 151, 152(a), 153, 
154(i), 154(j), 303(r), 521, 522, and 543.
    Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules Will Apply. The RFA directs agencies to provide a 
description of, and where feasible, an estimate of the number of small 
entities that may be affected by the modified rules. The RFA generally 
defines the term ``small entity'' as having the same meaning as the 
terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' In addition, the term ``small business'' 
has the same meaning as the term ``small business concern'' under the 
Small Business Act. A ``small business concern'' is one which: (1) Is 
independently owned and operated; (2) is not dominant in its field of 
operation; and (3) satisfies any additional criteria established by the 
SBA.
    The SBA has developed a small business size standard for Cable and 
Other Program Distribution, which consists of all such firms having 
$12.5 million or less in annual receipts. This category includes, among 
others, cable

[[Page 60775]]

operators, closed circuit television services, direct broadcast 
satellite services, multipoint distribution services, open video 
systems, satellite master antenna television systems, and subscription 
television services. According to Census Bureau data for 1997, in this 
category, there was a total of 1,311 firms that operated for the entire 
year, of which 1180 have less than $10 million in revenue and an 
additional 52 firms had revenue of $10 million or more but less than 
$25 million. Thus, under this size standard, the majority of firms can 
be considered small. In this category, only cable system operators are 
affected by this Report and Order and we address them below to provide 
a more precise estimate of the affected small entities.
    Cable Systems. The Commission has developed its own small business 
size standard for a small cable operator for the purposes of rate 
regulation. Under the Commission's rules, a ``small cable company'' is 
one serving fewer than 400,000 subscribers nationwide. Based on our 
most recent information, we estimate that there were 1,439 cable 
operators that qualified as small cable companies at the end of 1995. 
Since then, some of those companies may have grown to serve over 
400,000 subscribers, and others may have been involved in transactions 
that caused them to be combined with other cable operators. 
Consequently, we estimate that there are fewer than 1,439 small cable 
companies that may be affected by the proposed rules. A ``small 
system'' under the Commission's rules, is one serving ``15,000 or fewer 
subscribers. The service area of a small system shall be determined by 
the number of subscribers that are served by the system's principal 
headend, including any other headends or microwave receive sites that 
are technically integrated to the principal headend.'' The 
Communications Act of 1934, as amended, also contains a size standard 
for a ``small cable operator,'' which is ``a cable operator that, 
directly or through an affiliate, serves in the aggregate fewer than 
one 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.'' The Commission has determined that 
there are 67,700,000 cable subscribers in the United States. Therefore, 
an operator serving fewer than 677,000 subscribers shall be deemed a 
small operator, if its annual revenues, when combined with the total 
annual revenues of all of its affiliates, do not exceed $250 million in 
the aggregate. Based on this available data, we estimate that the 
number of cable operators serving 677,000 subscribers or less totals 
approximately 1,450. We do not request or collect information on 
whether cable operators are affiliated with entities whose gross annual 
revenues exceed $250,000,000, and therefore are unable to estimate 
accurately the number of cable system operators that would qualify as 
small cable operators under the definition in the Communications Act.
    Description of Projected Reporting, Recordkeeping and Other 
Compliance Requirements for Small Entities. No increase in the 
regulatory burden on small systems or small governmental entities is 
expected to result from this proceeding.
    Steps Taken to Minimize Significant Impact on Small Entities and 
Significant Alternatives Considered. The RFA requires an agency to 
describe any significant, specifically small business, alternatives 
that it has considered in reaching its approach, which may include the 
following four alternatives (among others): ``(1) The establishment of 
differing compliance or reporting requirements or timetables that take 
into account the resources available to small entities; (2) the 
clarification, consolidation, or simplification of compliance and 
reporting requirements under the rule for such 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 such small 
entities.'' In general, this item does not impose any new regulatory 
burdens on large or small entities. Rather, it serves to streamline and 
update rules, thereby relieving burdens in general. Although the 
Commission requested comment on any changes in the rate rules that 
might address continuing difficulties faced by operators of small 
systems, such as the problems associated with the simultaneous growth 
in competition and the need for additional investment to upgrade 
facilities, no comments were received. The changes do not increase the 
regulatory burden small systems face as a result of rate regulation and 
may lessen it by reducing the amount of information required to be 
reported.
    Federal Rules Which Duplicate, Overlap, or Conflict with the 
Commission's Rules. None.
    For the reasons stated above, IT IS ORDERED that, pursuant to the 
authority found in sections 1, 2(a), 3, 4(i), 4(j), 303(r), 601(3), 
602, and 623 of the Communications Act of 1934, as amended, 47 U.S.C. 
151, 152(a), 153, 154(i), 154(j), 303(r), 521, 522, 543, this Report 
and Order IS ADOPTED. IT IS FURTHER ORDERED that, pursuant to the 
authority found in sections 1, 2(a), 3, 4(i), 4(j), 303(r), 601(3), 
602, and 623 of the Communications Act of 1934, as amended, 47 U.S.C. 
151, 152(a), 153, 154(i), 154(j), 303(r), 521, 522, 543, the 
Commission's rules ARE AMENDED as set forth below. IT IS FURTHER 
ORDERED that CS Docket No. 96-157 IS TERMINATED. IT IS FURTHER ORDERED 
that the Commission's Consumer and Governmental Affairs Bureau, 
Reference Information Center, SHALL SEND a copy of this Report and 
Order, including the Final Regulatory Flexibility Analyses, to the 
Chief Counsel for Advocacy of the Small Business Administration. IT IS 
FURTHER ORDERED that the Commission SHALL SEND a copy of this Report 
and Order in a report to be sent to Congress and the Government 
Accountability Office pursuant to the Congressional Review Act, see 5 
U.S.C. 801(a)(1)(A).

List of Subjects in 47 CFR Part 76

    Cable television, Reporting and recordkeeping requirements.

    Federal Communications Commission.
Cecilia Sigmund,
Federal Register Liaison Officer, Office of the Secretary.

Final Rules

    For the reasons set forth in the preamble, the Federal 
Communications Commission amends 47 CFR part 76 as follows:

PART 76--MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE

0
1. The authority citation for part 76 continues to read as follows:

    Authority: 47 U.S.C. 151, 152, 153, 154, 301, 302, 302a, 303, 
303a, 307, 308, 309, 312, 315, 317, 325, 339, 340, 341, 503, 521, 
522, 531, 532, 534, 535, 536, 537, 543, 544, 544a, 545, 548, 549, 
552, 554, 556, 558, 560, 561, 571, 572, 573.

0
2. Amend Sec.  76.901 by removing paragraph (d), redesignating 
paragraphs (e) and (f) as paragraphs (d) and (e), and revising the 
newly designated paragraph (e) to read as follows:


Sec.  76.901   Definitions.

* * * * *
    (e) Small cable operator. A small cable operator is an 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. For purposes of this definition, an 
operator shall be deemed affiliated with another entity if that entity 
holds a 20 percent

[[Page 60776]]

or greater equity interest (not including truly passive investment) in 
the operator or exercises de jure or de facto control over the 
operator.
    (1) Using the most reliable sources publicly available, the 
Commission periodically will determine and give public notice of the 
subscriber count that will serve as the 1 percent threshold until a new 
number is calculated.
    (2) For a discussion of passive interests with respect to small 
cable operators, see Implementation of Cable Act Reform Provisions of 
the Telecommunications Act of 1996, Report and Order in CS Docket No. 
96-85, FCC 99-57 (released March 29, 1999).
    (3) If two or more entities unaffiliated with each other each hold 
an equity interest in the small cable operator, the equity interests of 
the unaffiliated entities will not be aggregated with each other for 
the purpose of determining whether an entity meets or passes the 20 
percent affiliation threshold.

0
3. Amend Sec.  76.910 by revising the first sentence and adding a 
second sentence to paragraph (c) to read as follows:


Sec.  76.910   Franchising authority certification.

* * * * *
    (c) The written certification described in paragraph (b) of this 
section shall be made by completing and filing FCC Form 328. FCC Form 
328 can be obtained from the internet at http://www.fcc.gov/Forms/Form328/328.pdf or by calling the FCC Forms Distribution Center at 1-
800-418-3676. * * *
* * * * *


Sec.  76.922   [Amended]

0
4. Amend Sec.  76.922 by removing and reserving paragraph (g)(7) and 
removing paragraph (n).

0
5. Amend Sec.  76.923 by adding a final sentence to paragraph (i) to 
read as follows:


Sec.  76.923   Rates for equipment and installation used to receive the 
basic service tier.

* * * * *
    (i) * * * Equipment sales by an operator will be unregulated where 
the operator offers subscribers the same equipment under regulated 
leased rates.
* * * * *


Sec.  76.985  [Amended]

0
6. Amend Sec.  76.985(c) by removing forms entitled ``FCC329'', 
``INSTRUCTIONS FOR FCC 328'' and ``FCC328''.


Sec. Sec.  76.986 and 76.987   [Removed]

0
7. Remove Sec. Sec.  76.986 and 76.987.

[FR Doc. 2018-25326 Filed 11-26-18; 8:45 am]
 BILLING CODE 6712-01-P