[Federal Register: December 3, 2003 (Volume 68, Number 232)]
[Proposed Rules]
[Page 67624-67629]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03de03-17]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 73 and 76
[MB Docket No. 02-230; FCC 03-273]
Digital Broadcast Content Protection
AGENCY: Federal Communications Commission.
ACTION: Notice of proposed rulemaking.
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SUMMARY: In this document, the Commission seeks comment on the
mechanisms and standards by which new content protection and recording
technologies can be approved for use with Covered Demodulator Products
as part of an ATSC flag-based redistribution control system for digital
broadcast content. The Further Notice of Proposed Rulemaking also seeks
comment on: whether cable operators should be allowed to encrypt the
digital basic tier so that they can give effect to the ATSC flag
through their conditional access systems; and the interplay between an
ATSC flag-based redistribution control system for digital broadcast
content and the development of open source software applications,
including software demodulators, for digital broadcast television.
Potential Commission action in these areas is intended to protect
digital broadcast television content from indiscriminate
redistribution, thereby ensuring the continued flow of high value
content to broadcast outlets and preserving the nation's broadcasting
system.
DATES: Comments due January 14, 2004; reply comments are due February
13, 2004.
ADDRESSES: Federal Communications Commission, 445 12th Street, SW.,
Washington, DC 20554. For further filing information, see SUPPLEMENTARY
INFORMATION.
FOR FURTHER INFORMATION CONTACT: Susan Mort, (202) 418-1043 or Susan.Mort@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Further Notice of
Proposed Rulemaking portion of the Commission's Report and Order and
Further Notice of Proposed Rulemaking (``Further NPRM''), FCC 03-273,
adopted and released November 4, 2003. The full text of the
Commission's Further NPRM is available for inspection and copying
during normal business hours in the FCC Reference Center (Room CY-A257)
at its headquarters, 445 12th Street, SW., Washington, DC 20554, or may
be purchased from the Commission's copy contractor, Qualex
International, (202) 863-2893, Portals II, Room CY-B402, 445 12th St.,
SW., Washington, DC 20554, or may be reviewed via Internet at http://www.fcc.gov/mb
.
Synopsis of the Further Notice of Proposed Rulemaking
1. Although we believe that our adoption of a flag-based
redistribution control system for digital broadcast television will
further the digital transition and ensure the continued flow of high
value content to broadcast outlets, further comment is needed on
several issues. As an initial matter, we seek comment on whether cable
operators that retransmit DTV broadcasts may encrypt the digital basic
tier in order to convey the presence of the ATSC flag through their
conditional access system. Section 76.630 of the Commission's rules
generally prohibits cable operators from ``scrambl[ing] or encrypt[ing]
signals carried on the basic service tier'' without distinguishing
between analog and digital service. NCTA has suggested that allowing
cable operators to encrypt the digital basic tier and ``virtually''
convey the presence of the flag will facilitate the offering of future
home networking services. We seek comment on whether cable operators
should be allowed to encrypt in this manner.
2. In response to our Notice of Proposed Rulemaking, EFF questioned
the impact of a flag-based regime on innovations in software
demodulators and other DTV open source software applications. The
Commission has actively promoted the development of
[[Page 67625]]
software defined radio and other software demodulators as important
innovations in the digital age. We seek further comment on the
interplay between a flag redistribution control system and the
development of open source software applications, including software
demodulators, for digital broadcast television.
3. This Further Notice of Proposed Rulemaking also seeks comment on
whether standards and procedures should be adopted for the approval of
new content protection and recording technologies to be used with
device outputs on Demodulator Products. If so, we seek comment on the
various types of content protection technologies that should be
considered as a part of this process, including but not limited to
digital rights management, wireless and encryption-based technologies.
We recognize that similar issues have been raised with respect to
digital cable ready DTV receivers in the Second Further Notice of
Proposed Rulemaking in the Commission's ongoing ``Plug and Play''
proceeding. We seek comment on whether a unified regime should be
employed in both instances.
4. With respect to the particular standards and procedures to be
employed, we seek comment on whether objective criteria should be used
to evaluate new content protection and recording technologies and, if
so, what specific criteria should be used. For example, in our recent
Second Report and Order and Second Further Notice of Proposed
Rulemaking relating to digital cable compatibility, Microsoft
Corporation and Hewlett Packard Corporation submitted a detailed
proposal suggesting functional requirements that could be used to
evaluate digital rights management technologies for use with digital
cable ready products. We seek comment on this proposal in the ATSC flag
context, as well as on other proposals submitted in this proceeding
relying on objective criteria, and any new proposals that commenters
may submit to the Commission.
5. We also seek comment on the appropriate scope of redistribution
that should be prevented. In general, we believe that a flag based
system should prevent indiscriminate redistribution of digital
broadcast content, however, we do not wish to foreclose use of the
Internet to send digital broadcast content where robust security can
adequately protect the content and the redistribution is tailored in
nature. We see comment on the usefulness of defining a personal digital
network environment (``PDNE'') within which consumers could freely
redistribute digital broadcast television content. If so, we seek
comment on the various permutations of a PDNE that were proposed in the
BPDG Final Report and whether any modifications are needed to maintain
consumer's home viewing expectations. We also seek comment on possible
new formulations of a PDNE.
6. We also seek comment on whether content owners are the
appropriate entities to make initial approval determinations, or
whether another entity should have decision-making authority. In
particular, we seek comment on whether the Commission, a qualified
third party, or an independent entity representing various industry and
consumer interests should make approval and revocation determinations.
7. As to the issue of how approved content protection and recording
technologies may be revoked should their security be compromised, we
seek comment on the appropriate standard for revocation. Specifically,
we seek comment on whether revocation is appropriate where a content
protection or recording technology is perceived to be insecure, or
whether the appropriate standard is where security has been compromised
in a significant, widespread manner. Once a content protection or
recording technology has been revoked, we seek comment on the
appropriate mechanism by which revocation should be effectuated. For
example, should revoked content protection or recording technologies be
eliminated on a going-forward basis, while preserving their
functionality for existing devices? We also seek comment on whether
there are technological or other means of revoking content protection
or recording technologies while preserving the functionality of
consumer electronics devices.
8. Authority. This Further NPRM is issued pursuant to authority
contained in sections 1, 2, 4(i) and (j), 303, 307, 309(j), 336, 337,
396(k), 403, 601, 614(b) and 624a of the Communications Act of 1934, as
amended.
9. Ex Parte Rules--Non-Restricted Proceeding. This is a non-
restricted notice and comment rulemaking proceeding. Ex parte
presentations are permitted, except during the Sunshine Agenda period,
provided that they are disclosed as provided in the Commission's rules.
See generally 47 CFR 1.1202, 1.1203, and 1.1206(a).
10. Accessibility Information. Accessible formats of this Further
NPRM (computer diskettes, large print, audio recording and Braille) are
available to persons with disabilities by contacting Brian Millin, of
the Consumer & Governmental Affairs Bureau, at (202) 418-7426, TTY (202) 418-7365, or at Brian.Millin@fcc.gov.
11. Comment Information. Pursuant to sections 1.415 and 1.419 of
the Commission's rules, 47 CFR 1.415, 1.419, interested parties may
file comments on or before January 14, 2004, and reply comments on or
before February 13, 2004. Comments may be filed using the Commission's
Electronic Comment Filing System (ECFS) or by filing paper copies. See
Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121
(1998).
12. Comments filed through the ECFS can be sent as an electronic
file via the Internet to http://www.fcc.gov/e-file/ecfs.html.
Generally, only one copy of an electronic submission must be filed. If
multiple docket or rulemaking numbers appear in the caption of this
proceeding, however, commenters must transmit one electronic copy of
the comments to each docket or rulemaking number referenced in the
caption. In completing the transmittal screen, commenters should
include their full name, U.S. Postal Service mailing address, and the
applicable docket or rulemaking number. Parties may also submit an
electronic comment by Internet e-mail. To get filing instructions for e-mail comments, commenters should send an e-mail to ecfs@fcc.gov, and
should include the following words in the body of the message, ``get
form .'' A sample form and directions
will be sent in reply. Parties who choose to file by paper must file an
original and four copies of each filing. If more than one docket or
rulemaking number appear in the caption of this proceeding, commenters
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 (although we continue to experience delays in
receiving U.S. Postal Service mail). The Commission's contractor,
Natek, Inc., will receive hand-delivered or messenger-delivered paper
filings for the Commission's Secretary at 236 Massachusetts Avenue,
NE., Suite 110, Washington, DC 20002. The filing hours at this location
are 8 a.m. to 7 p.m. All hand deliveries must be held together with
rubber bands or fasteners. Any envelopes 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 mail, Express Mail, and Priority Mail should be addressed
to 445 12th Street, SW.,
[[Page 67626]]
Washington, DC 20554. All filings must be addressed to the Commission's
Secretary, Office of the Secretary, Federal Communications Commission.
13. Regulatory Flexibility Act. As required by the Regulatory
Flexibility Act, the Commission has prepared an Initial Regulatory
Flexibility Analysis (``IRFA'') of the possible significant economic
impact on a substantial number of small entities of the proposals
addressed in this Further NPRM. The IRFA is set forth below. Written
public comments are requested on the IRFA. These comments must be filed
in accordance with the same filing deadlines for comments on the
Further NPRM, and they should have a separate and distinct heading
designating them as responses to the IRFA.
14. The Commission's Consumer and Governmental Affairs Bureau,
Reference Information Center, shall send a copy of this Further NPRM,
including the Initial Regulatory Flexibility Analysis, to the Chief
Counsel for Advocacy of the Small Business Administration.
Initial Regulatory Flexibility Analysis
15. As required by the Regulatory Flexibility Act of 1980, as
amended (``RFA'') the Commission has prepared this present Initial
Regulatory Flexibility Analysis (``IRFA'') of the possible significant
economic impact on a substantial number of small entities by the
policies and rules proposed in the Further Notice of Proposed
Rulemaking portion of this item. 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 on the Further Notice of
Proposed Rulemaking portion of this item provided in paragraph 69 of
the item. The Commission will send a copy of this entire Report and
Order and Further Notice of Proposed Rulemaking (``Report and Order and
Further NPRM''), including this IRFA, to the Chief Counsel for Advocacy
of the Small Business Administration (``SBA''). In addition, the
Further Notice of Proposed Rulemaking portion of this item and the IRFA
(or summaries thereof) will be published in the Federal Register.
16. Need for, and Objectives of, the Proposed Rules. Content
providers have suggested that they should have the ability to make
determinations about which new content protection and recording
technologies may be used in connection with demodulator products under
an ATSC flag-based redistribution control system. Commenters have
indicated that content providers should not be the sole arbiters of
such decisions. However, the record currently before the Commission is
insufficient on this matter. In order to ensure the connectivity and
interoperability of Demodulator Products and peripheral devices, we are
initiating the Further NPRM to seek comment on the process and criteria
by which new content protection and recording technologies can be
evaluated and approved for use in this context. The Further NPRM also
seeks comment on whether cable operators should be allowed to encrypt
the digital basic tier in order to be able to give effect to the ATSC
flag through cable operators' conditional access system. The Further
NPRM also seeks comment on the interplay between an ATSC flag system
and open source software for DTV applications, such as software defined
radio.
17. Legal Basis. The authority for this proposed rulemaking is
contained in sections 1, 2, 4(i) and (j), 303, 307, 309(j), 336, 337,
396(k), 403, 601, 614(b) and 624a of the Communications Act of 1934, 47
U.S.C 151, 152, 154(i) and (j), 303, 307, 309(j), 336, 337, 396(k),
403, 521, 534(b) and 544a.
18. 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. The RFA
generally defines the term ``small entity'' as encompassing the terms
``small business,'' ``small organization,'' and ``small governmental
entity.'' 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 Small Business
Administration (``SBA'').
19. Television Broadcasting. The Small Business Administration
defines a television broadcasting station that has no more than $12
million in annual receipts as a small business. Business concerns
included in this industry are those ``primarily engaged in broadcasting
images together with sound.'' According to Commission staff review of
the BIA Publications, Inc. Master Access Television Analyzer Database
as of May 16, 2003, about 814 of the 1,220 commercial television
stations in the United States have revenues of $12 million or less. 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 aggregate revenues
from affiliated companies. There are also 2,127 low power television
stations (LPTV). Given the nature of this service, we will presume that
all LPTV licensees qualify as small entities under the SBA definition.
20. In addition, an element of the definition of ``small business''
is that the entity not be dominant in its field of operation. We are
unable at this time to define or quantify the criteria that would
establish whether a specific television station is dominant in its
field of operation. Accordingly, the estimate of small businesses to
which rules may apply do not exclude any television station from the
definition of a small business on this basis and are therefore over-
inclusive to that extent. Also as noted, an additional element of the
definition of ``small business'' is that the entity must be
independently owned and operated. We note that it is difficult at times
to assess these criteria in the context of media entities and our
estimates of small businesses to which they apply may be over-inclusive
to this extent.
21. Cable and Other Program Distribution. The SBA has developed a
small business size standard for cable and other program distribution
services, which includes all such companies generating $12.5 million or
less in revenue annually. This category includes, among others, cable
operators, direct broadcast satellite (``DBS'') services, home
satellite dish (``HSD'') services, multipoint distribution services
(``MDS''), multichannel multipoint distribution service (``MMDS''),
Instructional Television Fixed Service (``ITFS''), local multipoint
distribution service (``LMDS''), satellite master antenna television
(``SMATV'') systems, and open video systems (``OVS''). According to the
Census Bureau data, there are 1,311 total cable and other pay
television service firms that operate throughout the year of which
1,180 have less than $10 million in revenue. We address below each
service individually to provide a more precise estimate of small
entities.
22. Cable Operators. The Commission has developed, with SBA's
approval, our own definition of a small cable system 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. We last estimated that there were 1,439 cable operators
that qualified as small cable companies. Since then,
[[Page 67627]]
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 entity cable system
operators that may be affected by the decisions and rules proposed in
this Further NPRM.
23. The Communications Act, as amended, also contains a size
standard for a small cable system operator, which is ``a cable operator
that, directly or through an affiliate, serves in the aggregate fewer
than 1% 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 68,500,000 subscribers in the United States. Therefore, an
operator serving fewer than 685,000 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 available data, we find that the number of cable
operators serving 685,000 subscribers or less totals approximately
1,450. 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.
24. Direct Broadcast Satellite (``DBS'') Service. Because DBS
provides subscription services, DBS falls within the SBA-recognized
definition of Cable and Other Program Distribution Services. This
definition provides that a small entity is one with $12.5 million or
less in annual receipts. There are four licensees of DBS services under
part 100 of the Commission's rules. Three of those licensees are
currently operational. Two of the licensees that are operational have
annual revenues that may be in excess of the threshold for a small
business. The Commission, however, does not collect annual revenue data
for DBS and, therefore, is unable to ascertain the number of small DBS
licensees that could be impacted by these proposed rules. DBS service
requires a great investment of capital for operation, and we
acknowledge, despite the absence of specific data on this point, that
there are entrants in this field that may not yet have generated $12.5
million in annual receipts, and therefore may be categorized as a small
business, if independently owned and operated.
25. Home Satellite Dish (``HSD'') Service. Because HSD provides
subscription services, HSD falls within the SBA-recognized definition
of Cable and Other Program Distribution Services. This definition
provides that a small entity is one with $12.5 million or less in
annual receipts. The market for HSD service is difficult to quantify.
Indeed, the service itself bears little resemblance to other MVPDs. HSD
owners have access to more than 265 channels of programming placed on
C-band satellites by programmers for receipt and distribution by MVPDs,
of which 115 channels are scrambled and approximately 150 are
unscrambled. HSD owners can watch unscrambled channels without paying a
subscription fee. To receive scrambled channels, however, an HSD owner
must purchase an integrated receiver-decoder from an equipment dealer
and pay a subscription fee to an HSD programming package. Thus, HSD
users include: (1) Viewers who subscribe to a packaged programming
service, which affords them access to most of the same programming
provided to subscribers of other MVPDs; (2) viewers who receive only
non-subscription programming; and (3) viewers who receive satellite
programming services illegally without subscribing. Because scrambled
packages of programming are most specifically intended for retail
consumers, these are the services most relevant to this discussion.
26. Multipoint Distribution Service (``MDS''), Multichannel
Multipoint Distribution Service (``MMDS'') Instructional Television
Fixed Service (``ITFS'') and Local Multipoint Distribution Service
(``LMDS''). MMDS systems, often referred to as ``wireless cable,''
transmit video programming to subscribers using the microwave
frequencies of the MDS and ITFS. LMDS is a fixed broadband point-to-
multipoint microwave service that provides for two-way video
telecommunications.
27. In connection with the 1996 MDS auction, the Commission defined
small businesses as entities that had annual average gross revenues of
less than $40 million in the previous three calendar years. This
definition of a small entity in the context of MDS auctions has been
approved by the SBA. The MDS auctions resulted in 67 successful bidders
obtaining licensing opportunities for 493 Basic Trading Areas
(``BTAs''). Of the 67 auction winners, 61 met the definition of a small
business. MDS also includes licensees of stations authorized prior to
the auction. As noted, the SBA has developed a definition of small
entities for pay television services, which includes all such companies
generating $12.5 million or less in annual receipts. This definition
includes multipoint distribution services, and thus applies to MDS
licensees and wireless cable operators that did not participate in the
MDS auction. Information available to us indicates that there are
approximately 850 of these licensees and operators that do not generate
revenue in excess of $12.5 million annually. Therefore, for purposes of
the IRFA, we find there are approximately 850 small MDS providers as
defined by the SBA and the Commission's auction rules.
28. The SBA definition of small entities for Cable and Other
Program Distribution Services, which includes such companies generating
$12.5 million in annual receipts, seems reasonably applicable to ITFS.
There are presently 2,032 ITFS licensees. All but 100 of these licenses
are held by educational institutions. Educational institutions are
included in the definition of a small business. However, we do not
collect annual revenue data for ITFS licensees, and are not able to
ascertain how many of the 100 non-educational licensees would be
categorized as small under the SBA definition. Thus, we tentatively
conclude that at least 1,932 licensees are small businesses.
29. Additionally, the auction of the 1,030 LMDS licenses began on
February 18, 1998, and closed on March 25, 1998. The Commission defined
``small entity'' for LMDS licenses as an entity that has average gross
revenues of less than $40 million in the three previous calendar years.
An additional classification for ``very small business'' was added and
is defined as an entity that, together with its affiliates, has average
gross revenues of not more than $15 million for the preceding calendar
years. These regulations defining ``small entity'' in the context of
LMDS auctions have been approved by the SBA. There were 93 winning
bidders that qualified as small entities in the LMDS auctions. A total
of 93 small and very small business bidders won approximately 277 A
Block licenses and 387 B Block licenses. On March 27, 1999, the
Commission re-auctioned 161 licenses; there were 40 winning bidders.
Based on this information, we conclude that the number of small LMDS
licenses will include the 93 winning bidders in the first auction and
the 40 winning bidders in the re-auction, for a total of 133 small
entity LMDS providers as defined by the SBA and the Commission's
auction rules.
30. In sum, there are approximately a total of 2,000 MDS/MMDS/LMDS
[[Page 67628]]
stations currently licensed. Of the approximate total of 2,000
stations, we estimate that there are 1,595 MDS/MMDS/LMDS providers that
are small businesses as deemed by the SBA and the Commission's auction
rules.
31. Satellite Master Antenna Television (``SMATV'') Systems. The
SBA definition of small entities for Cable and Other Program
Distribution Services includes SMATV services and, thus, small entities
are defined as all such companies generating $12.5 million or less in
annual receipts. Industry sources estimate that approximately 5,200
SMATV operators were providing service as of December 1995. Other
estimates indicate that SMATV operators serve approximately 1.5 million
residential subscribers as of July 2001. The best available estimates
indicate that the largest SMATV operators serve between 15,000 and
55,000 subscribers each. Most SMATV operators serve approximately
3,000-4,000 customers. Because these operators are not rate regulated,
they are not required to file financial data with the Commission.
Furthermore, we are not aware of any privately published financial
information regarding these operators. Based on the estimated number of
operators and the estimated number of units served by the largest ten
SMATVs, we believe that a substantial number of SMATV operators qualify
as small entities.
32. Open Video Systems (``OVS''). Because OVS operators provide
subscription services, OVS falls within the SBA-recognized definition
of Cable and Other Program Distribution Services. This definition
provides that a small entity is one with $12.5 million or less in
annual receipts. The Commission has certified 25 OVS operators with
some now providing service. Affiliates of Residential Communications
Network, Inc. (``RCN'') received approval to operate OVS systems in New
York City, Boston, Washington, D.C. and other areas. RCN has sufficient
revenues to assure us that they do not qualify as small business
entities. Little financial information is available for the other
entities authorized to provide OVS that are not yet operational. Given
that other entities have been authorized to provide OVS service but
have not yet begun to generate revenues, we conclude that at least some
of the OVS operators qualify as small entities.
33. Electronics Equipment Manufacturers. Rules adopted in this
proceeding could apply to manufacturers of DTV receiving equipment and
other types of consumer electronics equipment. The SBA has developed
definitions of small entity for manufacturers of audio and video
equipment as well as radio and television broadcasting and wireless
communications equipment. These categories both include all such
companies employing 750 or fewer employees. The Commission has not
developed a definition of small entities applicable to manufacturers of
electronic equipment used by consumers, as compared to industrial use
by television licensees and related businesses. Therefore, we will
utilize the SBA definitions applicable to manufacturers of audio and
visual equipment and radio and television broadcasting and wireless
communications equipment, since these are the two closest NAICS Codes
applicable to the consumer electronics equipment manufacturing
industry. However, these NAICS categories are broad and specific
figures are not available as to how many of these establishments
manufacture consumer equipment. According to the SBA's regulations, an
audio and visual equipment manufacturer must have 750 or fewer
employees in order to qualify as a small business concern. Census
Bureau data indicates that there are 554 U.S. establishments that
manufacture audio and visual equipment, and that 542 of these
establishments have fewer than 500 employees and would be classified as
small entities. The remaining 12 establishments have 500 or more
employees; however, we are unable to determine how many of those have
fewer than 750 employees and therefore, also qualify as small entities
under the SBA definition. Under the SBA's regulations, a radio and
television broadcasting and wireless communications equipment
manufacturer must also have 750 or fewer employees in order to qualify
as a small business concern. Census Bureau data indicates that there
are 1,215 U.S. establishments that manufacture radio and television
broadcasting and wireless communications equipment, and that 1,150 of
these establishments have fewer than 500 employees and would be
classified as small entities. The remaining 65 establishments have 500
or more employees; however, we are unable to determine how many of
those have fewer than 750 employees and therefore, also qualify as
small entities under the SBA definition. We therefore conclude that
there are no more than 542 small manufacturers of audio and visual
electronics equipment and no more than 1,150 small manufacturers of
radio and television broadcasting and wireless communications equipment
for consumer/household use.
34. Computer Manufacturers. The Commission has not developed a
definition of small entities applicable to computer manufacturers.
Therefore, we will utilize the SBA definition of electronic computers
manufacturing. According to SBA regulations, a computer manufacturer
must have 1,000 or fewer employees in order to qualify as a small
entity. Census Bureau data indicates that there are 563 firms that
manufacture electronic computers and of those, 544 have fewer than
1,000 employees and qualify as small entities. The remaining 19 firms
have 1,000 or more employees. We conclude that there are approximately
544 small computer manufacturers.
35. Description of Projected Reporting, Recordkeeping and other
Compliance Requirements. At this time, we do not expect that the
proposed rules would impose any additional reporting or recordkeeping
requirements. However, compliance with the rules, if they are adopted,
may require consumer electronics manufacturers to seek approval for
content protection technologies and recording methods to be used in
conjunction with demodulator products. These requirements will have an
impact on consumer electronics manufacturers, including small entities.
We seek comment on the possible burden these requirements would place
on small entities. Also, we seek comment on whether a special approach
toward any possible compliance burdens on small entities might be
appropriate. The proposed rules would also allow cable operators to
encrypt the digital basic tier, however, we do not believe that this
voluntary provision would have an impact on small entities.
36. 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.
37. As indicated above, the Further NPRM seeks comment on whether
the
[[Page 67629]]
Commission should adopt rules establishing an approval mechanism for
new content protection and recording technologies to be used with
demodulator products. Consumer electronics manufacturers may be
required to seek such approval prior to implementing content protection
and recording technologies in demodulator products. We welcome comment
on modifications of this proposal to lessen any potential impact on
small entities, while still remaining consistent with our policy goals.
The Further NPRM also seeks comment on whether cable operators should
be allowed to encrypt the digital basic tier in order to be able to
give effect to the ATSC flag through cable operators' conditional
access system. While we do not believe that this rule change would have
a potential impact on small entities because it would be voluntary in
nature, we seek comment on whether a special approach toward any
possible compliance burdens on small entities might be appropriate.
38. Federal Rules Which Duplicate, Overlap, or Conflict with the
Commission's Proposals. None.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 03-30008 Filed 12-2-03; 8:45 am]
BILLING CODE 6712-01-P