[Federal Register Volume 85, Number 137 (Thursday, July 16, 2020)]
[Proposed Rules]
[Pages 43195-43203]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-13203]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 73
[MB Docket Nos. 20-145; FCC 20-73; FRS 16851]
Promoting Broadcast Internet Innovation Through ATSC 3.0
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: In this document, the Commission seeks comment on the extent
to which we should clarify or modify our existing rules in order to
further promote the deployment by television broadcasters of new,
innovative ancillary and supplementary services, which we refer to as
``Broadcast Internet,'' as part of the transition to ATSC 3.0. We first
seek comment generally on potential uses of the new technological
capability from ATSC 3.0 and any existing regulatory barriers to
deployment. We then consider specifically whether any changes or
clarifications are needed to the ancillary and supplementary service
fee rules and the rules defining derogation of service and analogous
services. A Declaratory Ruling relating to the broadcast ancillary and
supplementary service rules is published elsewhere in this issue of the
Federal Register.
DATES: Comments due on or before August 17, 2020; reply comments due on
or before August 31, 2020.
ADDRESSES: You may send comments, by any of the following methods:
Electronic Filers: Comments may be filed electronically
using the internet by accessing the ECFS: http://apps.fcc.gov/ecfs/.
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 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. Commercial overnight mail
(other than U.S. Postal Service Express Mail and Priority Mail) must be
sent to 9050 Junction Drive, Annapolis Junction, MD 20701.U.S. Postal
Service first-class, Express, and Priority mail must be addressed to
445 12th Street, SW, Washington DC 20554. Effective March 19, 2020, and
until further notice, the Commission no longer accepts any hand or
messenger delivered filings. This is a temporary measure taken to help
protect the health and safety of individuals, and to mitigate the
transmission of COVID-19.
FOR FURTHER INFORMATION CONTACT: For additional information on this
proceeding, contact John Cobb, [email protected] of the Policy
Division, Media Bureau, (202) 418-2120.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Proposed Rulemaking (NPRM), MB Docket Nos. 20-145; FCC 20-73,
adopted and released on June 9, 2020. A summary of the Declaratory
Ruling adopted concurrently relating to the broadcast ancillary and
supplementary service rules is published elsewhere in this issue of the
Federal Register. The full text of this document 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. The full text of this document will
also be available via ECFS (http://www.fcc.gov/cgb/ecfs/). (Documents
will be available electronically in ASCII, Word, 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
The United States is transitioning to a new era of connectivity.
From innovative 5G offerings to high-capacity fixed services and an
entirely new generation of low-earth orbit satellites, providers from
previously distinct sectors are competing like never before to offer
high-speed internet services through a mix of different technologies.
The Commission has been executing on a plan to identify and remove the
overhang of unnecessary government regulations that might otherwise
hold back the introduction and growth of new competitive offerings. We
want the marketplace--not outdated rules--to determine whether new
services and technologies will succeed. Broadcasters, as well as a
range of other entities, now have the potential to use broadcast
spectrum to enter the converged market for connectivity in ways not
possible only a few short years ago.
With this item, we take important steps to further unlock the
potential of broadcast spectrum, empower innovation, and create
significant value for broadcasters and the American public alike by
removing the uncertainty cast by legacy regulations. More than twenty
years ago, during the transition from analog to digital broadcast
television, the Commission adopted rules allowing digital television
(DTV) licensees to provide ancillary or supplementary services on their
excess spectrum capacity and authorized licensees to enter into leases
with other entities that would provide such services. Flash forward to
today, and the conversion of digital television from the first-
generation technologies associated with the ATSC 1.0 standard to the
next-generation of ancillary services that will be enabled by ATSC 3.0
is now underway. This new technology promises to expand the universe of
potential uses of broadcast spectrum capacity for new and innovative
services beyond traditional over-the-air video in ways that will
complement the nation's burgeoning 5G network and usher in a new wave
of innovation and opportunity. These new offerings over broadcast
spectrum can be referred to collectively as ``Broadcast Internet''
services to distinguish them from traditional over-the-air video
services. Broadcasters will not only be able to better serve the
information and entertainment needs of their communities, but they will
have the
[[Page 43196]]
opportunity to play a part in addressing the digital divide and
supporting the proliferation of new, IP-based consumer applications or
voluntarily entering into arrangements to allow others to invest in
achieving those goals. We undertake this proceeding to ensure that our
rules help to foster the introduction of new services and the efficient
use of spectrum.
In the NPRM, we seek comment on the extent to which we should
clarify or modify our existing rules in order to further promote the
deployment of Broadcast Internet services as part of the transition to
ATSC 3.0. As when the ancillary services rules were first adopted, the
Commission seeks to promote and preserve free, universally available,
local broadcast television by providing a clear regulatory landscape
that permits licensees the flexibility to succeed in a competitive
market and incentivizes the most efficient use of prime spectrum. And
given that the existing rules were adopted over twenty years ago, we
believe it is appropriate at this time to reassess them in the context
of the newest advanced broadcast television technology. To that end, in
the NPRM we first seek comment generally on potential uses of the new
technological capability from ATSC 3.0 and any existing regulatory
barriers to deployment. We then consider specifically whether any
changes or clarifications are needed to the ancillary and supplementary
service fee rules and the rules defining derogation of service and
analogous services. In so doing, we seek to encourage the robust usage
of broadcast television spectrum capacity for the provision of
Broadcast Internet services consistent with statutory directives.
Background. Commission Regulations Applicable to Ancillary and
Supplementary Services. Pursuant to section 336 of the
Telecommunications Act of 1996 (the 1996 Act), Congress established the
framework for licensing DTV spectrum to television broadcasters and
permitted them to offer ancillary and supplementary services consistent
with the public interest. Congress recognized that the transition from
analog to digital broadcast technology would enable DTV licensees to
provide new and innovative services, including various forms of data
services, over their additional spectrum capacity and wanted to provide
licensees with the flexibility necessary to utilize fully that new
potential. Accordingly, section 336 directed the Commission to adopt
regulations that would allow DTV licensees to make use of excess
spectrum capacity, so long as the ancillary or supplementary services
carried on DTV capacity do not derogate any advanced television
services (i.e., free over-the-air broadcast service) that the
Commission may require. Such ancillary or supplemental services are
also subject to any Commission regulations that are applicable to
analogous services. The statute also directed the Commission to impose
a fee on ancillary or supplementary services for which the DTV licensee
charges a subscription fee or receives compensation from a third party
other than commercial advertisements used to support non-subscription
broadcasting.
The Commission adopted the initial rules governing the provision of
ancillary or supplementary broadcast services in 1997 as part of the
DTV Fifth Report and Order. Consistent with the Act, the rules obligate
DTV licensees to ``transmit at least one over-the-air video program
signal at no direct charge to viewers on the DTV channel.'' This means
that regardless of whatever other services a broadcaster may provide
over its spectrum, it must continue to provide one free stream of
programming to viewers. As long as DTV licensees satisfy that
obligation, the rules permit them to ``offer services of any nature,
consistent with the public interest, convenience, and necessity, on an
ancillary or supplementary basis'' provided the services do not
derogate the licensee's obligation to provide one free stream of
programming to viewers and are subject to any regulations on services
analogous to the ancillary or supplementary service. These rules
reflect the Commission's intent to promote the public interest by
maximizing ``broadcasters' flexibility to provide a digital service to
meet the audience's needs and desires.''
The Commission initiated a separate proceeding to determine how
best to assess and collect the statutorily required fee for ancillary
or supplementary services. The statute directed the Commission to adopt
a fee structure that would ``recover for the public a portion of the
value of the public spectrum resource made available for such
commercial use, and . . . avoid unjust enrichment through the method
employed to permit such uses of that resources.'' It also specifically
instructed the Commission to set the fee at a value that, ``to the
extent feasible, equals but does not exceed (over the term of the
license) the amount that would have been recovered had such services
been licensed pursuant to the provisions of section 309(j) of [the Act]
and the Commission's regulations thereunder.'' Ultimately, the
Commission determined that a fee based on a percentage of the gross
revenues generated by feeable ancillary or supplementary services was
the best option to satisfy the statutory directive and achieve the goal
of incentivizing innovation to maximize spectrum efficiency. The
Commission set the fee at five percent of gross revenues received from
any feeable ancillary or supplementary services.
Subsequently, the Commission clarified the ancillary or
supplementary service rules as applied to noncommercial educational
(NCE) television licensees. The Commission concluded that Sec. 73.621
of the rules, which requires public NCE stations to provide a nonprofit
and noncommercial broadcast service, would apply to the provision of
ancillary or supplementary services by NCE licensees. However, the
Commission also decided to allow NCE licensees to offer subscription
services on their excess capacity and to advertise on ancillary or
supplementary services that do not constitute broadcasting. Finally,
the Commission concluded that section 336(e) of the Act does not exempt
NCE licensees ``from the requirement to pay fees on revenues generated
by the remunerative use of their excess digital capacity, even when
those revenues are used to support their mission-related activities.''
Pursuant to section 336(e)(4) of the Act, the Commission originally
adopted rules requiring all DTV licensees and permittees annually to
file a form (currently Form 2100, Schedule G), reporting information
about their use of the DTV bitstream to provide feeable ancillary and
supplementary services. In 2017, as a part of the Modernization of
Media Regulation Initiative, the Commission revised these filing
requirements. The Commission concluded that requiring every DTV
licensee to file the form was an unnecessary regulatory burden, as very
few licensees offered any feeable service, and instead changed the
rules to require only those licensees who had provided feeable
ancillary or supplementary services during the applicable reporting
period to file the form. As the Commission observed, at that time only
a fraction of all television broadcast stations provided feeable
ancillary or supplementary services despite expectations in the wake of
the digital transition.
Next Generation Broadcast Standard (ATSC 3.0). ATSC 3.0 is the
``Next Generation'' broadcast television (Next Gen TV) transmission
standard developed by the Advanced Television Systems Committee as the
world's first IP-based broadcast transmission platform, which ``merges
the capabilities of over-the-air broadcasting
[[Page 43197]]
with the broadband viewing and information delivery methods of the
internet, using the same 6 MHz channels presently allocated for DTV
service.'' As stated in the Next Gen TV Report and Order, the ATSC 3.0
standard will allow broadcasters to ``offer exciting and innovative
services,'' including superior reception, mobile viewing capabilities,
enhanced public safety capabilities (such as advanced emergency
alerting capable of waking up sleeping devices to warn consumers of
imminent emergencies), enhanced accessibility features, localized and/
or personalized content, interactive educational children's content,
and other enhanced features. In 2017, the Commission authorized
broadcasters to begin the transition to ATSC 3.0 voluntarily and
established standards to minimize the impact on, and costs to,
consumers and other industry stakeholders. The Media Bureau began
accepting applications for Next Gen TV licenses on May 28, 2019.
Earlier this year, the Commission adopted a Notice of Proposed
Rulemaking seeking comment on proposed changes to the rules governing
the use of distributed transmission systems (DTS) by broadcast
television stations. Proponents of the changes assert that they will
facilitate the use of new and innovative technologies that will improve
traditional broadcast service and mobile reception of broadcast
signals, as well as allow the more efficient use of broadcast spectrum,
which they claim would enable broadcasters to exploit more fully the
new capabilities resulting from ATSC 3.0.
ATSC 3.0 provides greater spectral capacity than the current
digital broadcast television standard, allowing broadcasters to
innovate, improve service, and use their spectrum more efficiently.
Although today many broadcasters are focused solely on deploying
traditional broadcast television services using the ATSC 3.0 standard,
some broadcasters and third-party groups are looking to the future and
examining ways broadcasters can become part of the 5G ecosystem and
provide myriad other services using the enhanced capabilities of ATSC
3.0 technologies. Specifically, these groups hope to utilize television
spectrum to provide non-traditional broadcast video services such as
video-on-demand or subscription video services and new, innovative non-
broadcast services in such areas as the automotive industry,
agriculture, distance learning, telehealth, public safety, utility
automation, and the ``Internet of Things'' (IoT). Providing a
regulatory environment to enable a thriving secondary market is key to
unlocking the potential for such Broadcast Internet services via ATSC
3.0.
Discussion. With this NPRM, we seek comment on any rule changes
that would create even more certainty and promote greater investment in
innovative Broadcast Internet services. We therefore seek comment on
three topics related to the provision of ancillary or supplementary
services by broadcast television licensees, either on their own or in
conjunction with a third party, to aid the Commission in determining
whether and how to modify or clarify its rules to promote the
deployment of Broadcast Internet services that can complement the 5G
network as a part of the transition to ATSC 3.0. First, we seek comment
on a number of general matters concerning the potential uses and
applications of excess broadcast spectrum capacity resulting from the
transition to ATSC 3.0. Second, we seek comment on whether the amount
and method of calculating the ancillary services fee should be
reconsidered given the new potential uses of excess spectrum capacity.
Finally, we ask whether the Commission should clarify the rules
prohibiting derogation of broadcast service and defining an analogous
service.
General Matters. As an initial matter, we invite comment on the
types of Broadcast Internet services that are likely to be provided in
the future using the ATSC 3.0 standard. Recently, television
broadcasters have indicated that they will use their spectrum to
provide innovative services in such areas as automotive transportation,
agriculture, distance learning, telehealth, public safety, utility
automation, and IoT devices. Given the wide and likely expanding range
of services that could rely on Broadcast Internet spectrum, are there
rule changes we should consider to help promote such services? In
addition, we invite comment on when television broadcasters anticipate
such services might be introduced into the marketplace. Further, to
what extent will Broadcast Internet services be utilized as a
complement to our nation's 5G network? Are Broadcast Internet services
likely to be offered in urban areas of the country as well as in rural
and underserved areas?
We seek comment generally on the steps the Commission should take
to promote innovation, experimentation, and greater use of broadcast
television spectrum to provide ancillary and supplementary services. In
addition to today's declaratory ruling, are there additional steps we
should take, in light of changes to the marketplace, that could
encourage or facilitate the ability of broadcast licensees to enter
into partnerships or leasing arrangements for the provision of
ancillary and supplementary services that would allow them or others to
utilize broadcast spectrum more efficiently and to its fullest extent?
For example, are there steps the Commission could take to help
facilitate dynamic spectrum management agreements or to provide
regulatory certainty for prospective lessees, specifically? Should we
consider revisions to our broadcast licensing rules to allow for
partnerships or leasing arrangements beyond those that are the subject
of clarification in today's declaratory ruling (e.g., leases more
closely resembling those used by wireless licensees)? To this end, are
there any rules applicable to mobile or fixed wireless services that
could be considered useful models for the purposes of encouraging
Broadcast Internet services? In addition, what regulatory, technical,
or other barriers exist that might impede the introduction of Broadcast
Internet services? For example, do the existing technical rules
regarding ancillary and supplemental services restrict the types of
services that could be offered, either by a station directly or in
partnership with a third party? To the extent such barriers exist, what
steps, if any, should the Commission take to eliminate them?
We seek comment more specifically on whether there are any
potential regulatory limitations on the ability of public television
stations to provide Broadcast Internet services. For example, section
399B of the Communications Act permits public stations to provide
facilities and services in exchange for remuneration provided those
uses do not interfere with the stations' provision of public
telecommunications services. Section 399B, however, does not permit
public broadcast stations to make their facilities ``available to any
person for the broadcasting of any advertisement.'' In 2001, however,
the Commission concluded that the section 399B ban on advertising
applies to all broadcast programming streams provided by NCE licensees
but does not apply to ancillary or supplementary services on their DTV
channels, such as subscription services or data transmission services,
to the extent that such services do not constitute ``broadcasting.'' We
tentatively conclude that the Commission's 2001 determination regarding
section 399B permits NCE
[[Page 43198]]
broadcasters to offer Broadcast Internet services. We seek comment on
the kinds of Broadcast Internet services NCE licensees are likely to
provide. How are these stations planning to take advantage of the
opportunities afforded by the transition from ATSC 1.0 to ATSC 3.0? Are
there any regulatory or other impediments to the provision of ancillary
and supplementary services by NCE stations?
We also seek comment on the provision of Broadcast Internet
services by low power (LPTV) television stations. Are LPTV broadcasters
likely to offer Broadcast Internet services? If so, what kinds of
services are these broadcasters likely to provide? Do LPTV stations
face unique challenges in the provision of Broadcast Internet services
and, if so, what are they? If such challenges exist, what steps, if
any, should the Commission take to facilitate the provision of such
services by LPTV stations?
Ancillary and Supplementary Service Fee. As noted above, the 1996
Act requires broadcasters to pay a fee to the U.S. Treasury to the
extent they use their DTV spectrum to provide ancillary or
supplementary services ``(A) for which the payment of a subscription
fee is required in order to receive such services, or (B) for which the
licensee directly or indirectly receives compensation from a third
party in return from transmitting material furnished by such a third
party (other than commercial advertisements used to support
broadcasting for which a subscription fee is not required).'' Below we
seek comment on whether we should clarify or modify the rules
applicable to the provision of feeable ancillary and supplementary
services, such as the amount and method of calculating the fee or the
reporting requirements, given the new potential uses of spectrum
capacity to provide ancillary and supplementary offerings through ATSC
3.0 technologies, including innovative services that were not
contemplated when the Commission first implemented the rules over two
decades ago.
At the outset, we note that, as discussed above, the Commission is
subject to certain statutory mandates for determining the fee for
ancillary and supplementary services carried on the public spectrum.
Specifically, the ancillary and supplementary services fee must be
designed to: (1) Recover for the public a portion of the value of the
public spectrum resource made available for ancillary or supplemental
use by broadcasters; (2) avoid unjust enrichment of broadcasters
through the method used to permit digital use of the spectrum; and (3)
recover for the public an amount that, to the extent feasible, equals
but does not exceed (over the term of the license) the amount that
would have been recovered had such services been licensed at auction.
Also, the Commission is required by statute to adjust the ancillary and
supplementary services fee ``from time to time'' in order to ensure
that these requirements continue to be met.
When the Commission last undertook an assessment of ancillary and
supplementary service fees in 1998, it determined that it would assess
fees on all revenue--both subscription and advertising revenue--from
all ancillary and supplementary services for which viewers must pay
subscription fees. In addition, as required by the 1996 Act, the
Commission determined that fees must be assessed on ancillary and
supplementary services for which the licensee directly or indirectly
receives compensation from a third party in exchange for the
transmission of material provided by the third party (other than for
commercial advertisements used to support broadcasting for which a
subscription fee is not required). The Commission noted that, pursuant
to our rules, over-the-air video programming provided at no charge to
viewers is not an ancillary or supplementary service. It reasoned,
therefore, that this provision ``applies to ancillary or supplementary
services, consisting of material that does not originate with the
licensee and that the viewer can receive without payment of a fee.''
These services may include data, audio, ``or any other ancillary or
supplementary services that may be established in the future.'' The
Commission noted that it received very little comment on the types of
non-subscription ancillary or supplementary services parties
contemplated providing. Accordingly, it concluded that, in determining
whether a non-subscription ancillary or supplementary service is
feeable, ``until we gain more experience, we will simply be guided by
the statutory criteria as questions arise.''
Given the passage of time since the implementation of the ancillary
and supplementary fee program over two decades ago and the
technological developments since then that will enable the provision of
new and innovative ancillary or supplementary services on the public
spectrum, we seek comment on whether we should clarify or modify our
rules for assessing fees on such services. In the ATSC 3.0 proceeding,
some commenters suggested that a higher fee might be warranted to
ensure compliance with the statutory directives in section 336(e)(2)(A)
through (B), while others asserted that the fee should be reduced to
ensure that it does not impede innovation by Next Gen TV broadcasters.
In the Next Gen TV Report and Order, the Commission concluded that it
would be premature to adjust the fee associated with ancillary services
in part because it was not clear from the record in that proceeding
which ATSC 3.0-based services and features would be ``ancillary
services'' or which such services will be feeable.
With the possibility of providing new, innovative ancillary and
supplementary services that were not necessarily envisioned at the time
the fee rules were established, is it appropriate at this time to
adjust the fee associated with ancillary and supplementary services?
Should we consider adjustments to either the basis of the fee or the
percentage of the fee? Are there any circumstances under which it would
be appropriate to set the fee at zero? What changes, if any, would
ensure that the fee promotes the provision of innovative ancillary and
supplementary services offered by ATSC 3.0 transmission while complying
with statutory requirements (e.g., recovering some portion of the value
of the spectrum for the public, preventing unjust enrichment,
recovering for the public an amount that equals the amount that would
have been recovered at auction)? And how, if at all, should we account
for changes in the communications and media landscape? What would be
the costs and benefits of adjusting the ancillary services fee?
Commenters advocating in favor of modifying the fee should describe
with specificity the kinds of ancillary services broadcasters are
likely to offer in ATSC 3.0 and the benefits that would accrue from any
proposed change in fee structure. Alternatively, is it still premature
to change the fee rules now? Should we allow the ATSC 3.0 marketplace
to develop further before considering changes?
Are there any other issues we should consider with respect to the
application of fees to the provision of ancillary or supplementary
services during the transition to ATSC 3.0? For example, in order to
promote the provision of new services, should we apply the fee only to
gross revenues above a certain threshold? If so, should such a
threshold apply only to certain classes of stations, such as NCE
stations? Similarly, should the fees be capped during license term and,
if so, at what level? Should we revisit the Commission's prior decision
to adopt a fixed percentage rate as opposed to a variable percentage
rate based upon the type of service provided? Should we consider
granting exemptions for certain classes of service
[[Page 43199]]
from fees, such as telehealth, distance learning, public safety, or
homeland security-related services, or services that promote access in
rural areas? Would it be consistent with the statute to do so? Would
such rule changes or exemptions be consistent with the Commission's
statutory obligation to assess a fee that will recover some portion of
the value of the spectrum for the public, prevent unjust enrichment,
and approximate the revenue that would have been received through
auction? We note that when the Commission initially implemented the
program for assessing ancillary and supplementary fees, it observed
that ``[a]n overly complex fee program could be difficult for licensees
to calculate and for the Commission to enforce and could create
uncertainty that might undermine a DTV licensee's efficient planning of
what services it will provide.'' Does this concern regarding complexity
weigh against any changes to the ancillary and supplementary fee that
differentiate among types of services? We invite comment generally on
these issues.
We invite comment on how the ancillary and supplementary services
fee should be calculated in instances where a broadcaster receives
compensation from an unaffiliated third party, such as a spectrum
lessee, in return for the airing of material provided by the third
party. For example, the broadcaster could lease spectrum to a third
party for a set fee or could agree to share in the proceeds generated
by the service offered by the third party. We tentatively conclude
that, in each instance, the fees should be calculated based on the
gross revenue received by the broadcaster, without regard to the gross
revenue of the spectrum lessee. Indeed, to hold otherwise could subject
the broadcaster to a fee payment in excess of the actual gross revenue
it received. We seek comment on this tentative conclusion. To the
extent the licensee and the lessee are affiliated (e.g., commonly owned
or controlled), we believe that the gross revenues of the lessee should
be attributed to the licensee for purposes of calculating the ancillary
and supplementary services fee. Otherwise, the licensee (or its parent
company) could create a subsidiary for the sole purpose of evading the
fee while retaining all of the financial benefit of the arrangement. We
seek comment on these issues. We also invite comment on whether the
calculation of fees should include the value of any ``in-kind''
improvements made by an unaffiliated spectrum lessee to the licensee's
facilities to facilitate the provision of services. While such facility
improvements could reasonably be considered a form of indirect
compensation that may otherwise be subject to the ancillary and
supplementary services fee, we tentatively conclude that the value of
such improvements should be excluded from the gross revenue
calculation. The transition to ATSC 3.0 is voluntary and many stations
may lack the funds and/or expertise to upgrade their transmission
facilities. Excluding the value of in-kind improvements from the fee
calculation may help promote faster adoption of ATSC 3.0 and greater
use of spectrum for Broadcast Internet applications. Over time, this
could result in greater fee collection as broadcasters derive greater
gross revenues as a result of the facilities upgrade. We invite comment
on these issues.
Finally, we seek comment on whether we should consider any changes
to the annual reporting requirement applicable to the provision of
feeable ancillary or supplementary services. Currently, the
Commission's rules require all commercial and noncommercial DTV
licensees and permittees that provided feeable ancillary or
supplementary services during the applicable 12-month period to report
each December 1: (1) A brief description of the feeable ancillary or
supplementary services provided; (2) gross revenues received from all
feeable ancillary and supplementary services provided during the
applicable period; and (3) the amount of bitstream used to provide
feeable ancillary or supplementary services during the applicable
period. Should the Commission make any changes to the information
collected on the form or any other information collections related to
the provision of ancillary and supplemental services?
Derogation of Service and Analogous Services. The 1996 Act and
specifically section 336 thereof allow broadcasters flexibility to
provide ancillary and supplementary services. But in authorizing
broadcast television stations to provide ancillary or supplementary
services on their DTV channels, Congress required that the provision of
such services: (1) Must avoid derogating any advanced television
services that the Commission may require; and (2) must be subject to
Commission regulations applicable to analogous services. In furtherance
of this statutory requirement, the Commission adopted Sec. 73.624(c)
of the rules, which permits broadcasters to offer ancillary and
supplementary services so long as they ``do not derogate the DTV
broadcast stations' obligations under paragraph (b) of this section.''
Section 73.624(b) of the rules, in turn, requires that each DTV
broadcast licensee transmit at least one standard definition (SD) over-
the-air video program signal on its digital channel at no charge to
viewers that is at least comparable in resolution to analog television
programming. Accordingly, a station's service is not derogated so long
as it continues to offer at least one free over-the-air SD video
programming stream at least comparable in resolution to analog
television programming pursuant to Sec. 73.624(b). Furthermore,
broadcasters are permitted to provide ancillary or supplementary
services on their broadcast spectrum that are analogous to other
regulated services, but should they choose to do so, they are required
to adhere to any rules specific to such type of service.
While the Commission adopted broad rules in furtherance of these
statutory requirements in 1997, it has not revisited these rules since
affirming them on reconsideration in 1998. In particular, the
Commission has not conducted a recent examination of how these
restrictions should be applied in the context of changes in the media
and communications landscape, or in light of the capabilities offered
by the ATSC 3.0 transmission standard as compared to the ATSC 1.0
standard. Accordingly, we seek comment below on whether the existing
interpretation of what constitutes a derogation of service remains
valid or whether any changes are warranted. Further, we seek comment on
whether and, if so, how the Commission should provide greater clarity
to broadcasters to determine when an offered service is ``analogous''
to a regulated service and thus would require compliance with parts of
the Act and Commission rules beyond those governing broadcast services.
Derogation of Service. As discussed above, section 336(b) of the
Act requires that the Commission ``limit the broadcasting of ancillary
or supplementary services . . . so as to avoid derogation of any
advanced television services.'' We tentatively conclude that the
determination of whether a broadcast station's signal has been
derogated should continue to be evaluated by whether it provides at
least one standard definition over-the-air video program signal at no
direct charge to viewers that is at least comparable in resolution to
analog television programming, as required by Sec. 73.624(b). We seek
comment on this tentative conclusion. We also tentatively conclude that
we should amend the wording of Sec. 73.624(b) to specifically define
the precise resolution that is considered to be ``at least comparable
in
[[Page 43200]]
resolution to analog television programming'' as 480i. We seek comment
on this proposal. What resolution does the broadcast industry currently
use for purposes of compliance with the Commission's existing ``at
least comparable in resolution to analog television programming''
standard? We recognize that since adoption of these rules, broadcasters
have begun providing a myriad of broadcast television programming
offerings both in high definition (HD) and SD, often offering multiple
streams (i.e., subchannels) of free, over-the-air, video programming.
We seek comment on whether a broadcaster's replacement of an HD
offering with an SD offering in order to deploy ancillary and
supplementary services should be deemed a derogation of advanced
television services under our rules. Are there any other modifications
of the Commission's current derogation of service rule that we should
consider in order to ensure that, as mandated by section 336 of the
Act, broadcasters' ancillary and supplementary offerings are not being
provided to the derogation of ``advanced television services'' (i.e.,
free over-the-air broadcast service)? How might any proposed rule
modification, on balance, affect broadcasters' ability to deploy
ancillary and supplementary services?
Standard for Evaluating Analogous Services. As stated above,
section 336(b) of the Act outlines the Commission's authority to permit
the provision of ancillary or supplementary services by DTV licensees
in order to ensure parity among regulated entities and prevent unjust
enrichment. While the Commission's rules provide examples of the types
of services that might be offered, there is no specific guidance on how
licensees or the Commission should determine whether a non-broadcast
service being offered by a DTV licensee is ``analogous'' to another
regulated service and therefore subject to regulation under those
rules. To date, the Commission has provided little guidance beyond that
offered in the rule when it was initially adopted. At that time, the
Commission referenced, and largely just extended, the prior approach
applicable to the provision of ancillary and supplementary services by
television station licensees broadcasting in analog.
We seek comment on whether the Commission should provide additional
guidance regarding the factors or other approaches it will use to
determine whether an ancillary or supplementary service is sufficiently
``analogous'' to another service. What are some examples of services
that broadcasters may be looking to offer to consumers that could be
deemed ``analogous'' to services currently regulated by the Commission?
As a general matter, what information should the Commission consider
when determining whether an ancillary or supplementary service being
offered is analogous to another regulated service? Should we adopt a
presumptive standard by which any service that has certain specific
characteristics is deemed to be analogous to another Commission
service? What characteristics would be indicative of a service that
should be considered to meet such a presumptive standard?
Alternatively, are there certain circumstances in which a broadcaster
should be presumptively deemed not to be offering an analogous service?
For example, what if the broadcaster or a third-party spectrum lessee
is not offering the entire, end-to-end, service to the consumer or
customer? What if the broadcast spectrum is only being used for
wireless off-load for existing broadband providers (e.g., airing large
bit-rate video programming), one-way data distribution services (e.g.,
consumer device software updates), or as part of spectrum that must be
aggregated across more than one broadcaster in order to provide a
viable service? Can an input to another service be regulated as an
``analogous service''? Should any affirmative finding by the Commission
be required? If so, what should be the process for obtaining such
approval and what information should be provided by broadcasters to
demonstrate that the presumptive standard has been met?
Further, in the event that an ancillary or supplementary service is
analogous to a service permitted elsewhere in the Commission's rules,
but is only provided by a third party lessee or the television station
for a very short period of time--on a discrete basis (e.g., only an
hour per day) and/or on an aggregated basis (e.g., no more than 48
hours collectively in a month or a year)--should the Commission's
analogous services rule apply nonetheless? Stated differently, should
an analogous service always be subject to the applicable analogous
service's rules regardless of the circumstances, or should the
Commission permit some flexibility or ``de minimis'' operation if the
broadcaster or its third-party spectrum lessee only offers the service
on a discrete or aggregated basis? Should we adopt a ``de minimis''
service threshold that exempts DTV licensees that provide analogous
services from needing to apply for a license or authorization that may
otherwise be required under the analogous services rules? Would this be
consistent with the statute that seeks to ensure parity among service
providers? If so, what would an appropriate ``de minimis'' service
threshold be for such an exemption? Specifically, what would be the
appropriate discrete and/or aggerated time limits? Would such
flexibility benefit and promote broadcasters' efforts to offer
Broadcast Internet services, and, if so, how? In order to promote the
offering of ancillary and supplementary services, should the Commission
consider waiving, on a case-by-case or other basis, certain regulations
that would apply to analogous services? Are there certain rules that
are applicable to other regulated service providers that may not be
feasible for broadcasters to comply with?
Are there other actions the Commission can take to provide
broadcasters with greater guidance and clarity as to whether a service
they are seeking to offer would be deemed an analogous service? Are
there any other issues we should consider with regard to the analogous
services provision in light of advancements in broadcasting and the
capabilities of the ATSC 3.0 standard?
Paperwork Reduction Act. This document may result in new or revised
information collection requirements subject to the Paperwork Reduction
Act of 1995, Public Law 104-13 (44 U.S.C. 3501 through 3520). If the
Commission adopts any new or revised information collection
requirement, the Commission will publish a 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, see 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.''
Ex Parte Rules--Permit-But-Disclose. This proceeding shall be
treated as a ``permit-but-disclose'' proceeding in accordance with the
Commission's ex parte rules. Ex parte presentations are permissible if
disclosed in accordance with Commission rules, except during the
Sunshine Agenda period when presentations, ex parte or otherwise, are
generally prohibited. Persons making ex parte presentations must file a
copy of any written presentation or a memorandum summarizing any oral
presentation within two business days
[[Page 43201]]
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. Memoranda must
contain a summary of the substance of the ex parte presentation and not
merely a listing of the subjects discussed. More than a one or two
sentence description of the views and arguments presented is generally
required. 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
section 1.1206(b) of the rules. In proceedings governed by section
1.49(f) of the rules 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--Comments and Replies. Pursuant to Sec. Sec.
1.415 and 1.419 of the Commission's rules, 47 CFR 1.415, 1.419,
interested parties may file comments and reply comments on or before
the dates indicated on the first page of this document. Comments may be
filed using the Commission's Electronic Comment Filing System (ECFS).
See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR
24121 (1998).
Electronic Filers: Comments may be filed electronically using the
internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/.
Paper Filers: Parties who choose to file by paper must file an
original and one copy of each filing. Filings can be sent 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. Commercial
overnight mail (other than U.S. Postal Service Express Mail and
Priority Mail) must be sent to 9050 Junction Drive, Annapolis Junction,
MD 20701.U.S. Postal Service first-class, Express, and Priority mail
must be addressed to 445 12th Street, SW, Washington, DC 20554.
Effective March 19, 2020, and until further notice, the Commission no
longer accepts any hand or messenger delivered filings. This is a
temporary measure taken to help protect the health and safety of
individuals, and to mitigate the transmission of COVID-19. See FCC
Announces Closure of FCC Headquarters Open Window and Change in Hand-
Delivery Policy, Public Notice, DA 20-304 (March 19, 2020). https://www.fcc.gov/document/fcc-closes-headquarters-open-window-and-changes-hand-delivery-policy. During the time the Commission's building is
closed to the general public and until further notice, if more than one
docket or rulemaking number appears in the caption of a proceeding,
paper filers need not submit two additional copies for each additional
docket or rulemaking number; an original and one copy are sufficient.
Initial Regulatory Flexibility 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 the Notice of Proposed
Rulemaking (NPRM). Written public comments are requested on this IRFA.
Comments must be identified as responses to the IRFA and must be filed
by the deadlines for comments provided on the first page of the NPRM.
The Commission will send a copy of the NPRM, including this IRFA, to
the Chief Counsel for Advocacy of the Small Business Administration
(SBA). In addition, the NPRM and IRFA (or summaries thereof) will be
published in the Federal Register.
Need for, and Objectives of, the Proposed Rules. With this item, we
take important steps to help further unlock the potential of broadcast
spectrum, empower innovation, and create significant value for
broadcasters and the American public alike by removing the uncertainty
cast by legacy regulations. More than twenty years ago, during the
transition from analog to digital broadcast television, the Commission
adopted rules allowing digital television (DTV) licensees to provide
ancillary or supplementary services on their excess spectrum capacity
and authorized licensees to enter into leases with other entities that
would provide such services. Flash forward to today, and the conversion
of digital television from the first-generation technologies associated
with the ATSC 1.0 standard to the next-generation of ancillary services
that will be enabled by ATSC 3.0 is now underway. This new technology
promises to expand the universe of potential uses of broadcast spectrum
capacity for new and innovative services beyond traditional over-the-
air video in ways that will complement the nation's burgeoning 5G
network and usher in a new wave of innovation and opportunity. These
new offerings over broadcast spectrum can be referred to collectively
as ``Broadcast Internet'' services to distinguish them from traditional
over-the-air video services. Broadcasters will not only be able to
better serve the information and entertainment needs of their
communities, but they will have the opportunity to play a part in
addressing the digital divide and supporting the proliferation of new,
IP-based consumer applications or voluntarily entering into
arrangements to allow others to invest in achieving those goals. We
undertake this proceeding to ensure that our rules help to foster the
introduction of new services and the efficient use of spectrum.
By this NPRM, we seek comment on the extent to which we should
clarify or modify our existing rules in order to further promote the
deployment of Broadcast Internet services as part of the transition to
ATSC 3.0. As when the ancillary services rules were first adopted, the
Commission seeks to promote and preserve free, universally available,
local broadcast television by providing a clear regulatory landscape
that permits licensees the flexibility to succeed in a competitive
market and incentivizes the most efficient use of prime spectrum. And
given that the existing rules were adopted over twenty years ago, we
believe it is appropriate at this time to reassess them in the context
of the newest advanced broadcast television technology.
To that end, in this NPRM we first seek comment on potential uses
of the new technological capability from ATSC 3.0 in such areas as the
automotive industry, agriculture, distance learning, telehealth, public
safety, utility automation, and the ``Internet of Things'' (IoT). We
intend to identify and minimize any existing regulatory, technical, or
other barriers that might
[[Page 43202]]
impede the introduction of these Broadcast Internet services. We then
consider whether any changes or clarifications are needed to the
ancillary and supplementary service fee rules and the rules defining
derogation of service and analogous services. Specifically, we ask
whether we should clarify or modify the rules applicable to the
provision of feeable ancillary and supplementary services, such as the
amount and method of calculating the fee or the reporting requirements,
given the new potential uses of spectrum capacity to provide ancillary
and supplementary offerings through ATSC 3.0 technologies, including
innovative services that were not contemplated when the Commission
first implemented the rules over two decades ago. With regard to the
rules defining derogation of service we tentatively conclude that the
determination of whether a broadcast station's signal has been
derogated should continue to be evaluated by whether it provides at
least one standard definition over-the-air video program signal at no
direct charge to viewers, as required by the rules. Further, with
regard to the rules defining analogous services, we seek comment on
whether the Commission should provide additional guidance regarding the
factors or other approaches it will use to determine whether an
ancillary or supplementary service is sufficiently ``analogous to
another service.'' We seek comment on any other rule changes we should
consider to provide greater regulatory clarity to television
broadcasters. In so doing, we seek to encourage the robust usage of
broadcast television spectrum capacity for the provision of Broadcast
Internet services consistent with statutory directives.
Legal Basis. The proposed action is authorized pursuant to sections
1, 4(i), 4(j), 303(r), and 336 of the Communications Act of 1934, as
amended, 47 U.S.C. 151, 154(i), 154(j), 303(r), and 336.
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 proposed rules, if adopted. The
RFA generally defines the term ``small entity'' as having the same
meaning as the terms ``small business,'' ``small organization,'' and
``small governmental jurisdiction.'' In addition, the term ``small
business'' has the same meaning as the term ``small business concern''
under the Small Business Act. A small business concern is one which:
(1) Is independently owned and operated; (2) is not dominant in its
field of operation; and (3) satisfies any additional criteria
established by the SBA. Below, we provide a description of such small
entities, as well as an estimate of the number of such small entities,
where feasible.
Television Broadcasting. This Economic Census category ``comprises
establishments primarily engaged in broadcasting images together with
sound.'' These establishments operate television broadcast studios and
facilities for the programming and transmission of programs to the
public. These establishments also produce or transmit visual
programming to affiliated broadcast television stations, which in turn
broadcast the programs to the public on a predetermined schedule.
Programming may originate in their own studio, from an affiliated
network, or from external sources. The SBA has created the following
small business size standard for such businesses: Those having $41.5
million or less in annual receipts. The 2012 Economic Census reports
that 751 firms in this category operated in that year. Of this number,
656 had annual receipts of less than $25 million, 25 had annual
receipts ranging from $25 million to $49,999,999, and 70 had annual
receipts of $50 million or more. Based on this data we therefore
estimate that the majority of commercial television broadcasters are
small entities under the applicable SBA size standard.
Additionally, the Commission has estimated the number of licensed
commercial television stations to be 1,374. Of this total, 1,282
stations (or 94.2%) had revenues of $41.5 million or less in 2018,
according to Commission staff review of the BIA Kelsey Inc. Media
Access Pro Television Database (BIA) on April 15, 2019, and therefore
these licensees qualify as small entities under the SBA definition. In
addition, the Commission estimates the number of licensed noncommercial
educational (NCE) television stations to be 388. The Commission does
not compile and does not have access to information on the revenue of
NCE stations that would permit it to determine how many such stations
would qualify as small entities.
We note, however, that in assessing whether a business concern
qualifies as ``small'' under the above definition, business (control)
affiliations must be included. Our estimate, therefore, likely
overstates the number of small entities that might be affected by our
action, because the revenue figure on which it is based does not
include or aggregate revenues from affiliated companies. In addition,
another element of the definition of ``small business'' requires that
an entity not be dominant in its field of operation. We are unable at
this time to define or quantify the criteria that would establish
whether a specific television broadcast station is dominant in its
field of operation. Accordingly, the estimate of small businesses to
which rules may apply does not exclude any television station from the
definition of a small business on this basis and is therefore possibly
over-inclusive.
There are also 387 Class A stations. Given the nature of these
services, the Commission presumes that all of these stations qualify as
small entities under the applicable SBA size standard. In addition,
there are 1,892 LPTV stations and 3,621 TV translator stations. Given
the nature of these services as secondary and in some cases purely a
``fill-in'' service, we will presume that all of these entities qualify
as small entities under the above SBA small business size standard.
Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements. It is our intent to promote and preserve free,
universally available, local broadcast television by permitting
licensees the freedom to succeed in a competitive market, as well as to
incentivize the most efficient use of prime spectrum. We do not
anticipate this NPRM leading to any new reporting, recordkeeping, or
other compliance requirements. Rather, it should decrease already
existing regulatory burdens on broadcast television licensees as the
goal of this proceeding is to reduce regulatory uncertainty and
eliminate outdated rules that could hinder the development of the new,
innovative uses of broadcast spectrum that the ATSC 3.0 standard
enables.
However, we do seek comment on whether we should consider any
changes to the annual reporting requirement applicable to the provision
of feeable ancillary or supplementary services. Currently, the
Commission's rules require all commercial and noncommercial DTV
licensees and permittees that provided feeable ancillary or
supplementary services during the applicable 12-month period to report
each December 1: (1) A brief description of the feeable ancillary or
supplementary services provided; (2) gross revenues received from all
feeable ancillary and supplementary services provided during the
applicable period; and (3) the amount of bitstream used to provide
feeable ancillary or supplementary services during the applicable
period. If after the record develops we determine that there is a need
for any additional reporting requirements associated with the
[[Page 43203]]
provision of feeable ancillary or supplementary services, we will take
all appropriate steps to minimize the burden on broadcast licensees.
Steps Taken to Minimize Significant Economic 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, standard; and (4) an exemption from
coverage of the rule, or any part thereof, for small entities.
Through this NPRM, the Commission seeks to minimize the regulatory
burden associated with the provision of ancillary or supplementary
services by broadcast television licensees, the majority of which are
classified as small entities. The existing rules governing the
provision of ancillary or supplementary broadcast services, found in
Sec. 73.624, apply consistently to all broadcast licensees to ensure
that the provision of new and innovative services does not result in a
derogation of the free, universally available, local broadcast
television service for which the license is granted. These minimum
service standards must apply to all licensees, including small
entities. The Declaratory Ruling we issue today removes regulatory
uncertainty that could hinder the development of the new, innovative
uses of broadcast spectrum that the ATSC 3.0 standard enables.
Consistent with this action, any final rule the Commission adopts in
response to this NPRM will reduce regulatory barriers in our existing
regulations restricting broadcasters from using the full potential of
ATSC 3.0 technologies and therefore should not result in any increased
regulatory burden or negative economic impact for any broadcast
licensees.
Federal Rules that May Duplicate, Overlap or Conflict With the
Proposed Rule. None.
It is ordered that, pursuant to the authority found in sections 1,
4(i), 4(j), 303(r), and 336 of the Communications Act of 1934, as
amended, 47 U.S.C. 151, 154(i), 154(j), 303(r), and 336, this Notice of
Proposed Rulemaking in MB Docket No. 20-145 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 in MB Docket No. 20-145, including the Initial
Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of
the Small Business Administration.
Federal Communications Commission.
Cecilia Sigmund,
Federal Register Liaison Officer, Office of the Secretary.
[FR Doc. 2020-13203 Filed 7-15-20; 8:45 am]
BILLING CODE 6712-01-P