Implementation of the Commercial Advertisement Loudness Mitigation (CALM) Act.
Federal Communications Commission
FCC 11-84
Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of)
)
Implementation of the Commercial Advertisement )
MB Docket No. 11-93
Loudness Mitigation (CALM) Act
)
NOTICE OF PROPOSED RULEMAKING
Adopted: May 27, 2011
Released: May 27, 2011
Comment Date:
[30 days after date of publication in the Federal Register]Reply Comment Date: [45 days after date of publication in the Federal Register]
By the Commission: Commissioner Copps issuing a statement; Commissioner Baker notparticipating.
TABLE OF CONTENTS
HeadingParagraph #
I.
INTRODUCTION .................................................................................................................................. 1
II. BACKGROUND .................................................................................................................................... 2
III. DISCUSSION......................................................................................................................................... 7
A. Section 2(a) and Scope..................................................................................................................... 8
B. Compliance and Enforcement........................................................................................................ 14
1. Section 2(c) "Safe Harbor"...................................................................................................... 16
2. Other Ways To Demonstrate Compliance............................................................................... 22
3. Station/MVPD Practical Challenges ....................................................................................... 26
4. Complaint Process ................................................................................................................... 33
5. Enforcement ............................................................................................................................ 37
C. Financial Hardship and General Waivers ...................................................................................... 38
IV. CONCLUSION .................................................................................................................................... 45
V. PROCEDURAL MATTERS................................................................................................................ 46
A. Initial Regulatory Flexibility Act Analysis .................................................................................... 46
B. Initial Paperwork Reduction Act of 1995 Analysis ....................................................................... 47
C. Ex Parte Rules................................................................................................................................ 50
D. Filing Requirements....................................................................................................................... 51
VI. ORDERING CLAUSES....................................................................................................................... 55
APPENDIX A: List of Participants in Informal Meetings
APPENDIX B: Proposed Rules
APPENDIX C: Initial Regulatory Flexibility Act Analysis
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I.
INTRODUCTION
1.In this Notice of Proposed Rulemaking ("NPRM"), we propose rules to implement the
Commercial Advertisement Loudness Mitigation ("CALM") Act.1 Among other things, the CALM Act
directs the Commission to incorporate into its rules by reference and make mandatory a technical standard
developed by an industry standard-setting body that is designed to prevent television commercial
advertisements from being transmitted at louder volumes than the program material they accompany.2 As
mandated by the statute, the proposed rules will apply to TV broadcasters, cable operators and other
multichannel video programming distributors ("MVPDs").3 The new law requires the Commission to
adopt the required regulation on or before December 15, 2011,4 and it will take effect one year after
adoption.5 We seek comment below on proposals regarding compliance, waivers, and other
implementation issues.
II.
BACKGROUND
2.The CALM Act was enacted into law on December 15, 2010 in response to consumer
complaints about loud commercials.6 The Commission has received complaints about "loud
commercials" virtually since the inception of commercial television, more than 50 years ago.7 Indeed,
loud commercials have been a leading source of complaints to the Commission since the FCC Consumer
1 The Commercial Advertisement Loudness Mitigation ("CALM") Act, Pub. L. No. 111-311, 124 Stat. 3294 (2010)
(codified at 47 U.S.C. 621). The CALM Act was enacted on December 15, 2010 (S. 2847, 111th Cong.). The
relevant legislative history includes the Senate and House Committee Reports to bills S. 2847 and H.R. 1084,
respectively, as well as the Senate and House Floor Consideration of these bills. See Senate Commerce, Science,
and Transportation Committee Report dated Sept. 29, 2010, accompanying Senate Bill, S. 2847, 111th Cong.
(2010), S. REP. 111-340 ("Senate Committee Report to S. 2847"); House Energy and Commerce Committee Report
dated Dec. 14, 2009, accompanying House Bill, H.R. 1084, 111th Cong. (2009), H.R. REP. 111-374 ("House
Committee Report to H.R. 1084"); Senate Floor Consideration of S. 2847, 156 Cong. Rec. S7763 (daily ed. Sept. 29,
2010) (bill passed) ("Senate Floor Debate"); House Floor Consideration of S. 2847, 156 Cong. Rec. H7720 (daily
ed. Nov. 30, 2010) ("House Floor Debate of S. 2847") and H7899 (daily ed. Dec. 2, 2010) (bill passed); House
Floor Consideration of H.R. 1084, 155 Cong. Rec. H14907 (daily ed. Dec. 15, 2009). Note that the Senate and
House Committee Reports were prepared before the bill was amended to add Section 2(c) of the CALM Act (the
compliance provision). See Senate Floor Debate at S7763- S7764 (approving "amendment No. 4687").
2 See ATSC A/85: "ATSC Recommended Practice: Techniques for Establishing and Maintaining Audio Loudness
for Digital Television," (May 25, 2011) ("ATSC A/85 RP"). To obtain a copy of the ATSC A/85 RP, visit the
ATSC website: http://www.atsc.org/cms/standards/a_85-2009.pdf. See also CALM Act 2(a); Senate Committee
Report to S. 2847 at 1; House Committee Report to H.R. 1084 at 1.
3 We refer herein to covered entities collectively as "stations/MVPDs" or "regulated entities."
4 See CALM Act 2(a).
5 See CALM Act 2(b)(1).
6 See supra note 1. See also House Floor Debate of S. 2847 at H 7721 (Rep. Eshoo stating that the law is in
response to "the complaints that the American people have registered with the FCC over the last 50 years").
7 See Amendment of the Commission's Rules To Eliminate Objectionable Loudness of Commercial Announcements
and Commercial Continuity Over AM, FM, and Television Broadcast Stations, BC Docket No. 79-168,
Memorandum Opinion and Order, 56 Rad. Reg. 2d (P & F) 390, 391, 2 (1984) ("1984 Order") (observing in 1984
that "the Commission has received complaints of loud commercials for at least the last 30 years"). See also 47
C.F.R. 73.4075.; Public Notice, "Statement of Policy Concerning Loud Commercials," 1 FCC 2d 10, 20(a)
(1965) ("1965 Policy Statement") (concluding that "complaints of loud commercials are numerous enough to require
corrective action by the industry and regulatory measures by the Commission").
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Call Center began reporting the top consumer complaints in 2002.8 One common complaint is that acommercial is abruptly louder than the adjacent programming.9 The problem occurs in over-the-air
broadcast television programming, as well as in cable, Direct Broadcast Satellite ("DBS") and other video
programming.
3.
The Commission has not regulated the "loudness" of commercials, primarily because of
the difficulty of crafting effective rules "due to the subjective nature" of loudness.10 The Commission has
incorporated by reference into its rules various industry standards on digital television, but these standards
do not describe a consistent method for industry to measure and control audio loudness.11 The loud
commercial problem seems to have been exacerbated by the transition to digital television. DTV's
expanded aural dynamic range allows for greater variations in loudness for cinema-like sound quality. As
a result, when content providers and/or stations/MVPDs do not properly manage DTV loudness, the
8 To view the FCC's Quarterly Inquiries and Complaints Reports, visit http://www.fcc.gov/cgb/quarter/. According
to the FCC Consumer Call Center, since January 2008, the Commission has received 819 complaints and 4,582
inquiries from consumers about "loud commercials."
9 See Senate Committee Report to S. 2847 at 1-2. See also Public Notice, "Statement of Policy Concerning Loud
Commercials," 1 FCC 2d 10, 15 (1965) ("1965 Policy Statement") (stating that a "common source of complaint is
the contrast between loudness of commercials as compared to the volume of preceding program material e.g., soft
music or dialogue immediately followed by a rapid-fire, strident commercial").
10 See 1984 Order at 14. See also Amendment to Part 73 of the Commission's Rules and Regulations to Eliminate
Objectionable Loudness of Commercial Announcements and Commercial Continuity over AM, FM and Television
Broadcast Stations, BC Docket No. 79-168, Notice of Inquiry, 72 FCC 2d 677 (1979) ("1979 NOI").
11 47 C.F.R. 73.682(d) incorporates by reference and requires compliance with most of the Advanced Television
Systems Committee ("ATSC") A/53 Digital Television Standard (2007 version) relating to digital broadcast
television and 47 C.F.R. 76.640(b)(1)(iii) incorporates by reference the American National Standards Institute/
Society of Cable Telecommunications Engineers ("ANSI/SCTE") Standard 54 (2003 version) relating to digital
cable television. The rules do not currently incorporate by reference a standard that applies to satellite TV ("DBS")
providers. Part 5 of the ATSC Standard A/53, which includes the Dolby AC-3 DTV audio standard, has recently
been updated by ATSC. In our Video Description NPRM, we propose to update our DTV transmission standard in
Section 73.682(d) of our rules to incorporate by reference the 2010 version of Part 5 of the ATSC A/53 Digital
Television Standard (relating to audio systems). See Video Description: Implementation of the Twenty-First
Century Communications and Video Accessibility Act of 2010, MB Docket No. 11-43, Notice of Proposed
Rulemaking, 26 FCC Rcd 2975, 2989, 31 (2011) ("Video Description NPRM"). See also ATSC A/53, Part 5:
2010 "ATSC Digital Television Standard, Part 5 AC-3 Audio System Characteristics" (July 6, 2010) ("2010
ATSC A/53 Standard, Part 5"). We note that this proposal is consistent with our proposed rules herein because the
ATSC A/85 RP references and requires compliance with the same testing methodology adopted in the 2010 ATSC
A/53 Standard, Part 5. See, e.g., ATSC A/85 RP 2.1 at 9 (referencing A/53) and 7.1 at 17 (stating that the ATSC
A/85 RP "identifies methods to ensure consistent digital television loudness through the proper use of dialnorm
metadata for all content, and thus comply with A/53"). See infra at 4. The previous version of the ATSC A/53
Standard, Part 5, which is incorporated by reference in Section 73.682(d), includes an outdated audio loudness
measurement method. See ATSC A/53, Part 5: 2007 "ATSC Digital Television Standard, Part 5 AC-3 Audio
System Characteristics" 5.5 at 9 (Dialogue Level) (Jan. 3, 2007) ("2007 ATSC A/53 Standard, Part 5"). The 2010
ATSC A/53 Standard, Part 5, contains the new methods to measure and control audio loudness, reflected in the
ATSC A/85 RP. See 2010 ATSC A/53 Standard, Part 5 at 2.1 at 5 (referencing A/85) and 5.5 at 9 (Dialogue
Level). We anticipate that the Video Description proceeding, MB Docket No. 11-43, will be completed before we
adopt the regulation required by the CALM Act. See Video Description NPRM, 26 FCC Rcd at 2977, 5, n.14 (the
Communications and Video Accessibility Act requires reinstatement of the video description rules one year after the
date of its enactment, which occurred on October 8, 2010).
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resulting wide variations in loudness are more noticeable to consumers.12 However, DTV technology alsooffers industry the opportunity to more easily manage loudness.
4.
The television broadcast industry has recognized the importance of measuring and
controlling volume in television programming, particularly in the context of the transition to digital
television. In November 2009, the Advanced Television Systems Committee ("ATSC")13 completed and
published its A/85 Recommended Practice ("ATSC A/85 RP"),14 which was developed to offer guidance
to the TV industry from content creators to distributors to consumers about DTV audio loudness
management.15 On May 25, 2011, the ATSC approved a successor document to the A/85 RP, which,
among other things, adds an Annex J concerning "the courses of action necessary to perform effective
loudness control of digital television commercial advertising."16 Although the ATSC A/85 RP, like most
ATSC documents, was primarily intended for over-the-air TV broadcasters, the ATSC A/85 RP also
offers guidance to cable and DBS operators, and other MVPDs to the extent that they use the AC-3 digital
audio system17 when they transmit digital programming content, including commercial advertisements, to
consumers.18 The ATSC A/85 RP adopts the International Telecommunication Union19
Radiocommunication Sector ("ITU-R")20 Recommendation BS.1770 measurement algorithm as the
12 See ATSC Letter by Mark Richer, ATSC President, and attached "Executive Summary of the ATSC DTV
Loudness Tutorial Presented on February 1, 2011" (dated Apr. 8, 2011) ("ATSC Letter and DTV Loudness Tutorial
Summary") (stating "[t]he ATSC AC-3 Digital Television Audio System has 32 times the perceived dynamic range
(ratio of soft to loud sounds) than the previous NTSC analog audio system. Although this increase in dynamic range
makes cinema-like sound a reality for DTV, greater loudness variation is now an unintentional consequence when
loudness is not managed correctly").
13 ATSC is an international, non-profit organization developing voluntary standards for digital television. The
ATSC member organizations represent the broadcast, broadcast equipment, motion picture, consumer electronics,
computer, cable, satellite, and semiconductor industries. ATSC creates and fosters implementation of voluntary
Standards and Recommended Practices to advance digital television broadcasting and to facilitate interoperability
with other media. See http://www.atsc.org/aboutatsc.html.
14 See ATSC A/85: "ATSC Recommended Practice: Techniques for Establishing and Maintaining Audio Loudness
for Digital Television," (Nov. 4, 2009).
15 See ATSC A/85 RP 1at 7. A key goal of the ATSC A/85 RP was to develop a system that would enable
industry to control the variations in loudness of digital programming, while retaining the improved sound quality
and dynamic range of such programming. Id.
16 ATSC A/85 RP Annex J.
17 AC-3 is one method of formatting and encoding digital multi-channel audio, used by TV broadcast stations and
many traditional cable operators. The AC-3 audio system is defined in the ATSC Digital Audio Compression
Standard (A/52B), which is incorporated into the ATSC Digital Television Standard (A/53). See ATSC A/52B:
"Digital Audio Compression (AC-3, E-AC-3) Standard, Revision B" (June 14, 2005). The ATSC A/85 RP provides
methods for establishing and maintaining audio loudness using Dialog Normalization (dialnorm) metadata, a
parameter unique to the AC-3 audio system. See, e.g., ATSC A/85 RP 4 at 13.
18 See, e.g., ATSC A/85 RP Annex H at 61. As discussed infra, the ATSC A/85 RP provides some guidance for
handling content without metadata, including non-AC-3 audio content; but the A/85 RP contemplates encoding all
content into AC-3 and setting dialnorm appropriately. See infra 12 and 27.
19 The International Telecommunication Union ("ITU") is a specialized agency of the United Nations whose goal is
to promote international cooperation in the efficient use of telecommunications, including the use of the radio
frequency spectrum. The ITU publishes technical recommendations concerning various aspects of
radiocommunication technology. These recommendations are subject to an international peer review and approval
process in which the Commission participates.
20 The ITU Radiocommunication Sector ("ITU-R") plays a vital role in the global management of the radio-
frequency spectrum and satellite orbits limited natural resources which are increasingly in demand from a large
(continued....)
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loudness measurement standard21 and sets forth various techniques for industry to manage and control theaudio loudness of digital programming content as it flows down the production stream.22 The ITU-R
BS.1770 measurement algorithm provides a numerical value that indicates the perceived loudness of the
content.23 That numerical value is encoded in the audio content by the content provider or station/MVPD
as a metadata parameter called "dialnorm."24 Stations/MVPDs transmit the "dialnorm" to the consumer's
reception equipment along with the programming to direct the consumer's equipment to manage and
control the loudness of the programming.25 The "golden rule" of the ATSC A/85 RP is that the dialnorm
value must correctly identify the perceived loudness of the content it accompanies in order to prevent
loudness variation during content transitions on a channel (e.g., TV program to commercial) or when
changing channels.26 If the "dialnorm" parameter is present and set correctly, the AC-3 audio decoder in
the consumer's home receiver will automatically adjust the volume to eliminate spikes in loudness at
these transitions. The ATSC A/85 RP also clarifies that the ATSC A/53 DTV Transmission Standard
requires that the dialnorm value be encoded accurately and carried with the audio content and assumes
compliance with this technical requirement.27 If all stations/MVPDs measure content with the ITU-R
BS.1770 measurement algorithm and transmit dialnorm metadata that correctly identifies the loudness of
(...continued from previous page)
and growing number of services such as fixed, mobile, broadcasting, amateur, space research, emergency
telecommunications, meteorology, global positioning systems, environmental monitoring and communication
services that ensure safety of life on land, at sea and in the skies.
21 The internationally accepted ITU-R BS.1770 measurement algorithm, presented in units of loudness K-weighted,
relative to full scale ("LKFS"), was developed to give industry professionals a contemporary and accurate tool to
measure loudness by modeling the human hearing system. ITU is currently considering improvements to its
recommendation. See ITU Press Release, titled "Sound advice from ITU to keep TV volume in check; ITU
Recommendation to control volume variations in TV programming" at
http://www.itu.int/newsroom/press_releases/2010/03.html (dated Jan. 18, 2010).
22 See ATSC A/85 RP 7.1 at 17 (the ATSC A/85 RP "identifies methods to ensure consistent digital television
loudness through the proper use of dialnorm metadata for all content").
23 See ATSC A/85 RP 3.4 at 12 (defining ITU-R BS.1770). "Loudness" is a subjective measure based on human
perception of sound waves that can be difficult to quantify and thus to measure. The ITU utilized very extensive
human testing to produce an algorithm which provides a good approximation of human loudness perception of
program audio to measure the loudness of programs. "Volume," in contrast to loudness, is an objective measure
based on the amplitude of sound waves. See ATSC A/85 RP 3.4 at 13 (defining loudness as "[a] perceptual
quantity; the magnitude of the physiological effect produced when a sound stimulates the ear").
24 Metadata or "data about the (audio) data" is instructional information that is transmitted to the home (separately,
but in the same bit stream) along with the digital audio content it describes. See ATSC A/85 RP 1.1 at 7. The
dialnorm and other metadata parameters are integral to the AC-3 audio bit stream. Id. at 8. The dialnorm value
identifies the average measured loudness of the content.
25 From the consumer's perspective, the dialnorm metadata parameter defines the volume level the sound needs to
be reproduced so that the consumer will end up with a uniform volume level across programs and commercials
without a need to adjust it again. See ATSC A/85 RP at 7. See also ATSC DTV Loudness Tutorial Summary at 1
("When content is measured with the ITU-R BS.1770 measurement algorithm and dialnorm metadata is transmitted
that correctly identifies the loudness of the content it accompanies, the ATSC AC-audio system presents DTV sound
capable of cinema's range but without loudness variations that a viewer may find annoying.").
26 See ATSC DTV Loudness Tutorial Summary at 1 ("An essential requirement (the golden rule) for management of
loudness in an ATSC audio system is to ensure that the average content loudness in units of LKFS matches the
metadata's dialnorm value in the AC-3 bit stream. If these two values do not match, the metadata cannot correctly
ensure that the consumer's DTV sound level is consistently reproduced"). See also ATSC A/85 RP 5.2 at 15.
27 See ATSC A/85 RP 7.1 at 17 ("Carriage of and correct setting of the value of dialnorm is mandatory"); ATSC
A/85 RP Annex J at J.3.
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the content it accompanies, then consumers will be able to set their volume controls to their preferredlistening (loudness) level and will not have to adjust the volume between programs and commercials.28
5.
Following Congress's adoption of the CALM Act, Commission staff held informal
meetings with industry representatives for preliminary information gathering purposes and to obtain
technical guidance on how the various industry segments currently manage audio loudness and how they
intend to comply with the required regulation.29 In these meetings, industry representatives described
certain challenges they may face with complying with the required regulation. For example, industry
representatives explained that some MVPDs do not exclusively use the AC-3 audio system on which the
ATSC RP A/85 is based. Also, industry representatives explained that some stations/MVPDs may face
challenges with respect to the content which they do not create or insert into the program stream. We
address these issues in the discussion section that follows.30
6.
The statutory text of the CALM Act provides in relevant part as follows:31
(2) (a) Rulemaking required. Within 1 year after the date of enactment
of this Act, the Federal Communications Commission shall prescribe
pursuant to the Communications Act of 1934 (47 U.S.C. 151 et seq.) a
regulation that is limited to incorporating by reference and making
mandatory (subject to any waivers the Commission may grant) the
"Recommended Practice: Techniques for Establishing and Maintaining
Audio Loudness for Digital Television" (A/85), and any successor
thereto, approved by the Advanced Television Systems Committee, only
insofar as such recommended practice concerns the transmission of
commercial advertisements by a television broadcast station, cable
operator, or other multichannel video programming distributor.32
(b) Implementation
(1) Effective Date. The Federal Communications Commission
shall prescribe that the regulation adopted pursuant to subsection
(a) shall become effective 1 year after the date of its adoption.33
(2) Waiver. For any television broadcast station, cable operator,
or other multichannel video programming distributor that
demonstrates that obtaining the equipment to comply with the
regulation adopted pursuant to subsection (a) would result in
financial hardship, the Federal Communications Commission
28 See ATSC A/85 RP 4 at 13. If the ATSC A/85 RP is applied to all channels, the loudness will also be consistent
across channels. Id. We note that the AC-3 audio system does not intend to eliminate all loudness variations, but
only prevent loudness variations during content transitions. Indeed, the AC-3 audio system increases the dynamic
range to provide consumers with cinema-like sound quality. See ATSC DTV Loudness Tutorial Summary at 1.
29 See List of Participants in Appendix A. These informal meetings occurred prior to commencement of this
proceeding and are not subject to the ex parte requirements. These meetings do not supplant official comments in
this proceeding.
30 See infra 12 and 27.
31 See 47 U.S.C. 621 (2010). See also 47 U.S.C. 609 (2010).
32 Id. 621(a).
33 Id. 621(b)(1).
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may grant a waiver of the effective date set forth in paragraph (1)for 1 year and may renew such waiver for 1 additional year.34
(3) Waiver Authority. Nothing in this section affects the
Commission's authority under section 1.3 of its rules (47 C.F.R.
1.3) to waive any rule required by this Act, or the application of
any such rule, for good cause shown to a television broadcast
station, cable operator, or other multichannel video programming
distributor, or to a class of such stations, operators, or
distributors.35
(c) Compliance. Any broadcast television operator, cable operator, or
other multichannel video programming distributor that installs, utilizes,
and maintains in a commercially reasonable manner the equipment and
associated software in compliance with the regulations issued by the
Federal Communications Commission in accordance with subsection (a)
shall be deemed to be in compliance with such regulations.36
(d) Definitions. For purposes of this section--
(1) the term "television broadcast station" has the meaning given
such term in section 325 of the Communications Act of 1934 (47
U.S.C. 325);37 and
(2) the terms "cable operator" and "multi-channel video
programming distributor" have the meanings given such terms in
section 602 of Communications Act of 1934 (47 U.S.C. 522).38
III.
DISCUSSION
7.In this discussion, we consider the scope of the CALM Act and identify the entities
responsible under the law for preventing the transmission of loud commercials. Next, we address how
stations/MVPDs can demonstrate compliance with the ATSC A/85 RP pursuant to the provisions of the
CALM Act and propose a consumer-driven complaint process to enforce regulations mandated by the
Act. We also seek information and comment on challenges for stations/MVPDs in complying with the
statute and approaches that will enable them to comply consistent with their statutory responsibilities.
Finally, we consider how to implement the waiver provisions in the statute.
34 Id. 621(b)(2).
35 Id. 621(b)(3).
36 Id. 621(c).
37 Id. 621(d)(1). Section 325 of the Communications Act defines the term "television broadcast station" as "an
over-the-air commercial or noncommercial television broadcast station licensed by the Commission under subpart E
of part 73 of title 47, Code of Federal Regulations, except that such term does not include a low-power or translator
television station." 47 U.S.C. 325(b)(7)(B).
38 Id. 621(d)(2). Section 602 of Communications Act defines the term "cable operator" as "any person or group of
persons (A) who provides cable service over a cable system and directly or through one or more affiliates owns a
significant interest in such cable system, or (B) who otherwise controls or is responsible for, through any
arrangement, the management and operation of such a cable system." 47 U.S.C. 522(5). Section 602 of
Communications Act defines the term "multichannel video programming distributor" as "a person such as, but not
limited to, a cable operator, a multichannel multipoint distribution service, a direct broadcast satellite service, or a
television receive-only satellite program distributor, who makes available for purchase, by subscribers or customers,
multiple channels of video programming." 47 U.S.C. 522(13).
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A.
Section 2(a) and Scope
8.We begin by addressing Section 2(a) and the scope of the CALM Act. As indicated
above, Section 2(a) directs the Commission to "prescribe ... a regulation that is limited to incorporating
by reference and making mandatory" the ATSC A/85 RP.39 This language not only requires us to
incorporate by reference and make mandatory the ATSC A/85 RP, but it expressly limits our authority in
that regard. Therefore, we tentatively conclude that the Commission may not modify the technical
standard or adopt other actions inconsistent with the statute's express limitations. Accordingly, we
propose to incorporate by reference the ATSC A/85 RP into our rules.40
9.
Section 2(a) further mandates that the Commission incorporate by reference and make
mandatory the ATSC A/85 RP "only insofar as [it] concerns the transmission of commercial
advertisements...."41 We seek comment on whether and how to identify the portions of the ATSC A/85
RP "concern[ing] the transmission of commercial advertisements" for purposes of the statute.42 We note
that the ATSC recently approved a successor document to the A/85 RP which, among other things, adds
an Annex J, titled "Requirements for Establishing and Maintaining Audio Loudness of Commercial
Advertising in Digital Television," addressing "the courses of action necessary to perform effective
loudness control of digital television commercial advertising."43 We invite comment on the successor
document and on the significance of Annex J.
10.
We also interpret the statutory language "the transmission of commercial advertisements"
to apply to all such transmissions by stations/MVPDs. In our informal meetings, some industry
representatives noted that in some circumstances stations/MVPDs do not create or insert all the
commercials that they ultimately transmit to consumers. They further asserted that the rules the
Commission will adopt to implement the CALM Act should limit a station/MVPD's responsibility to
commercials that the station/MVPD itself "inserts" into the programming stream and not apply to all
commercials a station/MVPD transmits to the consumer. We believe such an approach and limitation
would be inconsistent with the statutory language, the purpose of the CALM Act, the legislative history,
and ATSC A/85 RP. The statute expressly applies to commercials transmitted by a station/MVPD and
makes no exception for commercials not inserted by the station/MVPD. Nothing in the statutory
language or legislative history distinguishes between different sources of commercial content or suggests
any intent to limit a station/MVPD's responsibility only to those commercials "inserted" by it. Nor does
the ATSC A/85 RP make such a distinction.44 To the contrary, the legislative history underscores that the
39 See 47 U.S.C. 621(a).
40 See Appendix B proposed rules 47 C.F.R. 73.682(e) and 76.607. As required by the Office of the Federal
Register ("OFR"), we will obtain approval from the Director of the Federal Register to incorporate by reference the
ATSC A/85 RP into our rules. See 5 U.S.C. 552(a); 1 C.F.R. 51.3; and generally 1 C.F.R. part 51 (Incorporation
by Reference). We note that the ATSC A/85 RP will be incorporated into our rules as it exists on the date it is
approved by the OFR for incorporation by reference. We will incorporate future versions of the ATSC A/85 RP as
they become available and will publish notice of updates to this incorporation by reference in the Federal Register.
See infra 13.
41 See 47 U.S.C. 621(a).
42 We note that, under the CALM Act, each regulated entity is responsible for determining how to use the ATSC
A/85 RP to ensure that its viewers receive commercials and programming at a consistent loudness. See, e.g., ATSC
A/85 RP 8 (describing effective solutions for managing variations in loudness during program-to-interstitial
transitions); ATSC A/85 RP Annex J J.2.
43 ATSC A/85 RP Annex J J.1.
44 See ATSC A/85 RP 8 at 23. ("Methods to effectively control program-to-interstitial loudness"). See also ATSC
A/85 RP 8.4 at 24-25 ("TV Station and MVPD local ad insertion").
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purpose of the statute is to address consumers' experiences with loud commercials, and the statuteimposes responsibility for addressing the problem on the station/MVPD.45 Limiting regulations to only
certain commercials would undermine the statute's purpose. As a practical matter, consumers neither
know nor care which entity inserts commercials into the programming stream. Therefore, we tentatively
conclude that "transmission of commercial advertisements" means transmission of all commercials, and
therefore that stations/MVPDs are responsible for all commercials "transmitted" by them, including
commercials inserted by stations/ MVPDs, as well as those commercials that are in the programming that
stations/MVPDs receive from content providers and transmit (or retransmit) to viewers. We believe this
interpretation is required by the express language of the statute, but we invite commenters to address this
analysis. We also seek specific information from stations and MVPDs on the percentage of the
commercials they transmit to consumers that is inserted by the station/MVPD itself, as compared to the
percentage of commercials that is part of programming from a content provider (e.g., from a network or
cable programmer).
11.
Section 2(a) applies to "commercial advertisements," but does not define this term for
purposes of the statute.46 Nor does the legislative history address the definition of "commercial
advertisements." We seek comment on how to define this term for purposes of the CALM Act.47 For
example, does the term "commercial advertisements" include political advertising, including uses by
legally qualified candidates?48 Does the term "commercial advertisements" apply to promotions of
television or cable/MVPD programs? We anticipate that noncommercial broadcast stations will largely
not be affected by this proceeding, because Section 399B of the Communications Act, as amended,
prohibits them from broadcasting "advertisements."49 In 2001, however, the Commission concluded that
the prohibition in Section 399B does not apply to nonbroadcast services provided by noncommercial
stations, such as subscription services provided on their DTV channels.50 We seek comment on whether
the CALM Act applies to noncommercial stations to the extent they transmit advertisements on
nonbroadcast streams and, if so, whether this raises any issues unique to the noncommercial service. We
note that the definition of a "television broadcast station" used by the CALM Act includes both a
commercial and noncommercial television broadcast station.51
45 See House Floor Debate of S. 2847 at H7720 (Rep. Eshoo stating that the bill would "eliminate the earsplitting
levels of television advertisements and return control of television sound modulation to the American consumer");
Senate Committee Report to S. 2847 at 1 (stating purpose of law). See infra note 75.
46 We note that Section 399B of the Communications Act defines the term "advertisement" as "any message or other
programming material which is broadcast or otherwise transmitted in exchange for any remuneration, and which is
intended-- (1) to promote any service, facility, or product offered by any person who is engaged in such offering for
profit; (2) to express the views of any person with respect to any matter of public importance or interest; or (3) to
support or oppose any candidate for political office." See 47 U.S.C. 399b(a).
47 We note that, in the context of commercial limits during children's programming, the Commission defines
"commercial matter" as "airtime sold for purposes of selling a product or service and promotions of television
programs or video programming services other than children's or other age-appropriate programming appearing on
the same channel or promotions for children's educational and informational programming on any channel." See 47
C.F.R. 73.670 Note 1; 47 C.F.R. 76.225 Note. 1.
48 See 47 U.S.C. 315.
49 47 U.S.C. 399b.
50 See Ancillary Or Supplementary Use Of Digital Television Capacity By Noncommercial Licensees, MM Docket
No. 98-203, Report and Order, 16 FCC Rcd 19042 (2001).
51 See supra note 37 (quoting 47 U.S.C. 325(b)(7)(B)).
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12.Section 2(a) expressly applies to each "television broadcast station, cable operator, or
other multichannel video programming distributor." The CALM Act incorporates definitions of these
terms contained in the Communications Act.52 In our informal meetings, some industry representatives
explained that not all MVPDs use the AC-3 audio systems on which the ATSC A/85 RP is based for all
content.53 Therefore, they asserted that, to the extent that an MVPD does not use AC-3 audio technology,
the statute should not apply to them. The statute, however, expressly applies to all stations/MVPDs
regardless of the audio system they currently use. Nothing in the statutory language or legislative history
suggests an intent to make an exception for MVPDs that do not use AC-3 audio systems. The purpose of
the statute is to address the problem of loud commercials for all TV consumers, not just those served by
stations/MVPDs that use a particular audio system.54 Not only would limiting the statute's scope to
stations/MVPDs that use AC-3 audio systems be inconsistent with the express language of the statute, we
think such a reading would undermine the statute's purpose. Therefore, we tentatively conclude that the
CALM Act defines the scope and application of the new technical loudness standard as mandatory for all
stations/MVPDs and not only those using AC-3 audio systems. We believe this interpretation is required
by the express language of the statute, but we invite commenters to address this analysis. In addition, we
seek comment below on whether and how MVPDs that do not use AC-3 audio systems can comply with
the CALM Act.55 We note that ATSC is considering amending the ATSC A/85 RP to address how an
MVPD that does not exclusively use an AC-3 audio system can follow the ATSC A/85 RP.56
13.
Finally, Section 2(a) mandates that the required regulation be prescribed "[w]ithin 1 year
after the date of the enactment of this Act" and incorporate by reference and make mandatory "any
successor" to the ATSC A/85 RP.57 Because the statute requires the Commission to incorporate
successors to the ATSC A/85 RP, and affords the Commission no discretion in this regard, we tentatively
conclude that no notice and comment will be necessary to incorporate successor documents into our
rules.58 In accordance with this statutory directive and consistent with the requirements of the Office of
the Federal Register, we tentatively conclude that any successors to the ATSC A/85 RP will take effect
when the Commission has obtained approval from the Director of the Federal Register to incorporate by
reference such successors into our rules and publishes a technical amendment in the Federal Register to
codify the successors into the Commission's rules.59 If the ATSC adopts a successor to the ATSC A/85
RP before we issue a Report and Order in this proceeding, we tentatively conclude that we will
incorporate by reference into our rules the successor standard adopted by ATSC. We ask that the ATSC
notify us whenever it approves a successor to the ATSC A/85 RP, and submit a copy of it into the record
52 47 U.S.C. 621(d). See supra notes 37 and 38.
53 We note that broadcast TV stations are required to use AC-3 audio systems by Section 73.682 of our rules, which
incorporates by reference the ATSC A/53 Standard. See supra note 11.
54 See infra note 45.
55 See infra discussion at 26 (considering compliance by stations/MVPDs that face practical challenges, such as
the use of non-AC-3 audio systems).
56 See ATSC Letter, supra note 12 ("ATSC has also started work on the development of a new "Annex K" that
addresses loudness management for commercial advertising when using non-AC-3 audio systems.").
57 47 U.S.C. 621(a).
58 See 5 U.S.C. 552(b)(B) (providing that Administrate Procedure Act's notice and comment requirements do not
apply when the agency for good cause finds, and incorporates the finding and a brief statement of reasons therefor in
the rules issued, that notice and public procedure thereon are unnecessary).
59 See 5 U.S.C. 552(a); 1 C.F.R. 51.3; and generally 1 C.F.R. part 51.
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of this proceeding.60 We direct the Media Bureau to issue a public notice announcing the ATSC'sapproval of any successor to the ATSC A/85 RP. We seek comment on our tentative conclusions.
B.
Compliance and Enforcement
14.As established above, each station/MVPD is responsible for complying with the CALM
Act. In this section, we address how stations/MVPDs can demonstrate compliance with the statute.
Specifically, we believe that a station/MVPD can demonstrate compliance with the statute by showing
that it has satisfied the safe harbor requirements set out in Section 2(c) of the CALM Act, as described in
detail below, or by proving through other means that any commercials that are the subject of a complaint
meet the standards of the statute. We also address stations/MVPDs that seek to ensure that the
commercials they transmit to viewers comply with the ATSC A/85 RP through contracts with their
content providers. We recognize that there may be alternative means of complying and demonstrating
compliance with the regulations required by the CALM Act, and we intend to take into consideration
challenges that stations/MVPDs may face in complying with the ATSC A/85 RP, and how those
challenges may vary depending upon the technology the entity uses, as well as its size and market power.
15.
We note that the ATSC A/85 RP identifies several options for actions that
stations/MVPDs may take to control and manage loudness.61 Under the ATSC A/85 RP, stations/MVPDs
can control and manage loudness either by (1) using one or more types of equipment, such as a loudness
measurement device and/or software, a file based scaling device, or a real time loudness processing
device; or (2) ensuring that their content suppliers deliver the content to them in accordance with their
loudness specification (e.g., a fixed "target" loudness value or the correct dialnorm value).62 In the latter
case, a station/MVPD may be able to comply with the ATSC A/85 RP without having equipment capable
of managing audio loudness on its premises because the ATSC A/85 RP recognizes that the adjustments
and/or loudness calculations for setting the correct dialnorm value may be performed during production or
post-production or otherwise upstream of the station/MVPD. The statute, however, makes the
station/MVPD responsible for ensuring that such adjustments and/or calculations have been performed on
the content transmitted to its viewers/subscribers, particularly because the ATSC A/85 requires the
station/MVPD to ensure the dialnorm is set correctly.63 We seek to adopt rules that achieve the goals of
the statute, are easy to enforce and, at the same time, pose minimal administrative burdens. Therefore, as
explained below, we also propose a consumer complaint procedure that enables consumers to file
complaints with the Commission and permits stations/MVPDs to demonstrate compliance in response to
those complaints in a straightforward manner.
1.
Section 2(c) "Safe Harbor"
16.Section 2(c) expressly provides that a station/MVPD will be "deemed to be in
compliance" with our rules implementing the CALM Act64 if such entity "installs, utilizes, and maintains
in a commercially reasonable manner the equipment and associated software" necessary to comply with
the ATSC A/85 RP.65 The legislative history indicates an intent for this provision to be construed as a
60 We request that the ATSC also send a courtesy copy of the notice to the Chief Engineer of the Media Bureau.
61 See ATSC A/85 RP 8.1. See also ATSC DTV Loudness Tutorial Summary at 2-3.
62 See id.
63 See supra 12 (stating that "Section 2(a) expressly applies to each `television broadcast station, cable operator, or
other multichannel video programming distributor'"). See also ATSC A/85 RP 8.1 at 23.
64 See CALM Act 2(c) and Appendix B proposed rules 47 C.F.R. 73.682(e) and 76.607.
65 See CALM Act 2(c) (which describes when a station "shall be deemed in compliance with [our rules]").
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"safe harbor" for stations/MVPDs that obtain and use the necessary equipment.66 Consistent with Section2(c)'s language and history, we propose to interpret this provision to require the Commission to accept
showings that a regulated entity has satisfied Section 2(c)'s requirements as demonstrating compliance,
but not to restrict regulated entities to such showings as the only means of demonstrating compliance. We
tentatively conclude that the Section 2(c) safe harbor provision requires that a station/MVPD must, itself,
install, utilize, and maintain the necessary equipment, based on our reading of the statutory language and
associated definitions.67 That is, we believe that Section 2(c) contemplates action by the television
broadcast station68 and the MVPD itself, and not action by a third party, such as a network with which the
station is affiliated or a programmer providing content to the MVPD. We seek comment on this tentative
conclusion and on whether there are any circumstances in which a station/MVPD could satisfy the safe
harbor parameters by utilizing a third party that has the necessary equipment, rather than installing the
equipment itself. For example, would it be consistent with the statutory language for a station to
demonstrate Section 2(c) safe harbor compliance by showing that the network with which it is affiliated
installed, utilized, and maintained the necessary equipment in a commercially reasonable manner? Is
there any relevant distinction in this regard between a network providing content to an affiliate and a
programmer providing content to an MVPD?
17.
In our informal meetings with industry, MVPD representatives indicated that they can
use equipment to ensure compliance with A/85 for a commercial they insert into a channel, but not for a
commercial contained in a block of programming they receive from a content provider. We believe, in
this situation, the MVPD may be able to rely on the safe harbor with respect to the commercial it inserts
into the programming stream, but not with respect to the commercials for which it does not utilize the
equipment. In this situation, the MVPD would be required to use an alternative method of loudness
control,69 and could not rely on the safe harbor in response to a complaint. We seek comment on the
situations in which a station/MVPD would be able to satisfy the safe harbor provision with respect to
some, but not all, of the commercials it transmits to consumers.
18.
Below, we propose the interpretations for each of the statutory terms in Section 2(c) and
seek comment on these interpretations. We also seek comment on what "commercially reasonable"
means in this context. Does the term "commercially reasonable" mean consistent with industry practice?
Does it imply consideration of individual circumstances?
19.
Installation. We propose to interpret installation of equipment in a commercially
reasonable manner to mean that a station/MVPD has obtained and readied for use in its video distribution
system equipment that conforms with the ATSC A/85 RP to control loudness of commercials transmitted
to consumers.70 The solutions set out in ATSC A/85 RP may rely on loudness measurement devices
and/or software, file based scaling devices, or real time loudness processing devices depending on the
66 See House Floor Debate of S. 2847 at H7720 (Rep. Terry describing this provision as "a kind of `safe harbor' by
deeming an operator that installs, utilizes and maintains the appropriate equipment and software in compliance with
the [CALM Act]").
67 See supra notes 37 and 38. We also consider, infra, use of contractual arrangements through which a
station/MVPD would require that content be delivered to it by a content provider in conformance with the ATSC
A/85 RP. See infra at 23. See, e.g., ATSC A/85 RP 7.3.2 at 18 (stating that "[a] content delivery specification
should specify the Target Loudness for all content").
68 We note that Section 2(a) refers to a "television broadcast station" and Section 2(c) refers to a "broadcast
television operator." See 47 U.S.C. 621(a) and (c). We seek comment on the significance, if any, of the use of
these different terms.
69 See infra at 22-25 (discussing Other Ways to Demonstrate Compliance).
70 See ATSC A/85 RP 8 at 23.
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method chosen to control loudness.71 Loudness measurement devices and/or software must be able tomeasure loudness using the ITU-R BS.1770 measurement algorithm and support the use of dialnorm
metadata.72 We seek comment on our proposed interpretation and on how to determine whether particular
equipment conforms to ITU-R BS.1770 as required in the ATSC A/85 RP. We recognize that
stations/MVPDs may want regulatory certainty that the equipment they may purchase (or have already
purchased) will enable them to comply with the ATSC A/85 RP (and, thus, the statute).73 However, we
do not propose to require equipment authorization through an equipment performance verification
procedure or to establish an administratively burdensome or time-consuming process for determining
compliance based on satisfying the installation requirement.74 We invite comment on what measures we
should require stations/MVPDs to take to ensure that they have installed the correct equipment to enable
them to take advantage of the safe harbor provided for in Section 2(c) of the CALM Act.
20.
Utilization. We propose to interpret utilization of equipment in a commercially
reasonable manner to mean that a station/MVPD operates the equipment in conformance with the ATSC
A/85 RP to ensure that commercials are transmitted to consumers at a loudness level that is consistent
with the programming the commercials accompany.75 As discussed, the key goal of the ATSC A/85 RP
and the statute is to prevent the transmission of loud commercials to consumers.76 Consistent with that
goal, we propose to interpret the term utilization in Section 2(c) to mean that, in order to satisfy the safe
harbor provision, mechanisms must be in place to properly measure the loudness of the content for which
the safe harbor is claimed and ensure that dialnorm metadata is encoded correctly before transmitting the
content to the consumer. We seek comment on this interpretation and on the utilization that is necessary
to perform these functions. We also seek comment on how stations/MVPDs that seek to rely on the safe
harbor in response to a complaint may demonstrate utilization of the required equipment with regard to
the programming in question.
21.
Maintenance. We propose to interpret maintenance of equipment in a commercially
reasonable manner to mean that a station/MVPD performs routine maintenance on the equipment at issue
to ensure that it continues to function in a manner that prevents the transmission of loud commercials to
consumers and timely repairs equipment when it malfunctions.77 Accordingly, we believe maintenance in
71 See ATSC A/85 RP 8 at 23.
72 See ATSC A/85 RP 3.3 at 13 (defining "measured loudness") and ATSC A/85 RP 5.1 at 14.
73 Based on industry sources, Congress estimated that the cost of equipment that controls the volume of
programming ranges from a few thousand dollars to about $20,000 per device, depending on the method used to
comply with the mandate. Senate Committee Report to S. 2847 at 3.
74 We note that our existing equipment authorization procedures would be inappropriate here because they are
generally used to ensure compliance with RF safety or interference issues, neither of which is relevant to
demonstrating compliance with the CALM Act. See, e.g., 47 C.F.R. 2.902 (verification) and 2.907
(certification).
75 See, e.g., ATSC A/85 RP Annex H at 61 (stating "[g]oal is to present to the viewer consistent audio loudness
across commercials, programs, and channel changes"). See also, e.g., House Floor Debate of S. 2847 at H7720
(Rep. Eshoo stating that the bill would "make the volume of commercials and regular programming uniform so
consumers can control sound levels."); Senate Committee Report to S. 2847 at 1 (stating Congress' expectation that
the ATSC A/85 RP will "moderat[e] the loudness of commercials in comparison to accompanying video
programming"); House Committee Report to H.R. 1084 at 1 (stating goal of statute is "to preclude commercials from
being broadcast at louder volumes than the program material they accompany").
76 Id.
77 See Senate Committee Report to S. 2847 at 4 ("the Committee expects that stations and MVPDs will use
commercially reasonable efforts to maintain equipment and to repair or replace malfunctioning equipment").
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a "commercially reasonable manner" requires a station/MVPD to routinely perform quality control tests,such as spot checks to ensure that their equipment is properly detecting inappropriate loudness and to take
swift corrective action to the extent problems are detected. We seek comment on this interpretation. We
also invite comment on what, if any, other quality control measures should be required in order for
stations/MVPDs to take advantage of the CALM Act's safe harbor provision. Do stations/MVPDs, in the
ordinary course of doing business, maintain records about the routine maintenance of equipment on which
they should be able to rely to be deemed in compliance with this element of the statute? Also, how much
time is commercially reasonable for repairing malfunctioning equipment?
2.
Other Ways To Demonstrate Compliance
22.While stations/MVPDs shall be "deemed" in compliance if they show that they have
installed, utilized and maintained equipment in a commercially reasonable manner pursuant to Section
2(c), we do not believe that the CALM Act limits entities to just this one means of demonstrating
compliance. As described below, we propose that demonstrations of compliance would be required in
response to a consumer complaint alleging a loud commercial.78 Thus, for example, in response to a
consumer complaint, a station/MVPD may demonstrate that the dialnorm value of the complained of
commercial actually matches the perceived loudness of the content, following the "golden rule."79 In this
manner, the station/MVPD would thereby show that the transmission of the commercial complied with
the requirements of the ATSC A/85 RP, rather than showing it installed, utilized and maintained
equipment, pursuant to the provisions of Section 2(c). We believe that the ability to make such a showing
would be useful for stations/MVPDs that have other means of meeting the goal of the statute and do not
choose to rely on the safe harbor to demonstrate compliance. We seek comment on this and other means
of complying and demonstrating compliance.
23.
We also recognize that stations/MVPDs may take a contractual approach to compliance
with the ATSC A/85 RP. Specifically, they may contract with their content providers to ensure that the
content delivered to them complies with the ATSC A/85 RP.80 As noted above, we tentatively conclude
that the statute requires that commercials and adjacent programming be transmitted to consumers in
compliance with the ATSC A/85 RP and holds stations/MVPDs responsible for preventing the
transmission of loud commercials to consumers.81 However, the ATSC A/85 RP recognizes that it may
be more efficient for content providers to measure and encode dialnorm values at the production stage and
states that content providers may play a significant role in the process.82 The ATSC A/85 RP describes
several effective solutions for controlling relative loudness of programs and commercials, including that a
distributor "ensure" that content is labeled with the correct dialnorm value.83 Therefore, we believe it is
consistent with the ATSC A/85 RP for a station/MVPD to "ensure" that the dialnorm matches the
loudness of the content by incorporating the ATSC A/85 RP requirements into its contracts with content
78 See infra 33 (discussing complaint process).
79 See supra 4 and note 26.
80 As discussed below, we emphasize that such agreements will not alter the station's/MVPD's obligation to ensure
that it is complying with our rules, and any failure to comply may subject the station/MVPD to enforcement action.
81 See CALM Act 2(a).
82 See ATSC DTV Loudness Tutorial Summary at 2 (stating that, under both fixed and agile dialnorm systems,
controlling loudness can be achieved by ensuring that content is delivered properly to the station/MVPD operator).
See also, e.g., ATSC A/85 RP 7.3.2 at 18 and Annex I at 67.
83 See ATSC A/85 RP 8.1 at 23. See also ATSC A/85 RP 7.3.2 at 18.
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providers.8424.
Importantly, however, the station/MVPD would remain responsible for noncompliance
with the regulations required by the CALM Act where the program source fails to deliver content in
compliance with the ATSC A/85 RP, the station/MVPD transmits the nonconforming content to viewers,
and the content is the subject of consumer complaints. In this regard, stations/MVPDs may choose to
negotiate for indemnification clauses in their content contracts in the event the content provider fails to
follow the A/85 RP and the Commission takes enforcement action against the station/MVPD. We seek
comment on whether and how regulated entities that use contracts to ensure compliance with ATSC A/85
RP may demonstrate compliance with the regulations required by the CALM Act in response to consumer
complaints, and what, if any, quality control measures they should take to monitor the content delivered
to them for transmission to consumers. We also welcome comment from content providers and, in
particular, from the advertising industry to gauge industry's ability to provide stations/MVPDs with
content in compliance with the ATSC A/85 RP. Moreover, should regulated entities pursue the
contractual option for ensuring compliance, what amount of time might be necessary for negotiation of
new indemnification provisions? Should the Commission factor this contract negotiation time frame into
its approach to enforcement?
25.
We specifically invite comment on compliance methods that would be well-suited for
small stations/MVPDs. Would a contractual approach be beneficial and workable for small
stations/MVPDs? To what extent do large and small stations/MVPDs receive the same content streams,
including metadata, from programmers? What other factors that affect stations/MVPDs' compliance as a
result of their size should we consider?85
3.
Station/MVPD Practical Challenges
26.As noted above, in our informal meetings with industry, we heard that MVPDs face
specific challenges in complying with the new law. We describe two of these concerns below. We seek
comment from industry about these and other practical challenges to compliance. We also seek comment
on whether broadcast stations face similar or other challenges. We request that commenters offer
solutions as well as describing challenges, and specify how stations/MVPDs can meet their statutory
responsibilities.
84 A contractual approach to compliance with the ATSC A/85 RP seems consistent with the requirements associated
with commercial limits on children's programming. See Policies And Rules Concerning Children's Television
Programming, MM Docket No. 90-570; Revision of Programming and Commercialization Policies, Ascertainment
Requirements, and Program Log Requirements for Commercial Television Stations, MM Docket No. 83-670;
Report and Order, 6 FCC Rcd 2111, 2113, 11 (1991) ("1991 Children's TV Order") (stating an MVPD remains
liable for violations of the commercial limits on cable network children's programs they carry). In contrast, we
believe the rules pertaining to closed captioning are inapposite. See, e.g., Closed Captioning and Video Description
of Video Programming; Implementation of Section 305 of the Telecommunications Act of 1996, Video Programming
Accessibility; MM Docket No. 95-176, Report and Order, 13 FCC Rcd 3272, 3280 20, n.36 and 3287 28 (1997)
("1997 Closed Captioning Order"); and 47 C.F.R. 79.1(g)(6) (stating an MVPD may rely on the accuracy of
certifications and is not held responsible for situations where a program source falsely certifies that programming
delivered to the MVPD meets the Commission's captioning requirements if the MVPD is unaware that the
certification is false). Unlike the CALM Act and the Children's Television Act of 1990 (47 U.S.C. 303a and
303b), Section 713 of the Communications Act, 47 U.S.C. 613, refers to the closed captioning of programming by
providers and "owners" of video programming and allocates to owners some responsibility for compliance. 1997
Closed Captioning Order, 13 FCC Rcd at 3286-87, 28-29 (1997) (noting that "[t]he references to program
"owners" in Section 713 reflect Congress' recognition that it is most efficient to caption programming at the
production stage, and the assumption that owners and producers will be involved in the captioning process").
85 See also infra 38-42 (discussion of financial hardship and general waiver provisions).
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27.First, as indicated above, several MVPD representatives indicated that they use audio
systems that differ from the AC-3 audio system on which the ATSC A/85 RP is based.86 Furthermore, the
ATSC A/85 RP, which the statute directs the Commission to make mandatory, was originally intended for
TV broadcast stations and other operators of an ATSC AC-3 audio system and may not be suitable for use
by MVPDs to the extent they use other audio systems.87 Although the ITU-R BS.1770 audio loudness
measurement algorithm can be applied to all audio systems, the specific methods for establishing and
maintaining the audio loudness mentioned in the ATSC A/85 RP are not applicable to the non-AC-3
audio systems. Because the statute makes the ATSC A/85 RP mandatory for every station/MVPD, we
seek comment on whether and how MVPDs that do not use AC-3 audio system can comply.88 From our
informal discussions with MVPD representatives, we understand that some MVPDs which do not use
AC-3 in the transmission of audio content to consumers nevertheless use AC-3 within their distribution
networks and transcode content to a non-AC-3 format after commercials are inserted.89 We also
understand that if the dialnorm was set properly while the content was encoded in the AC-3 format, the
loudness adjustments will be made when the content is transcoded to another format as if such
transcoding occurred in the consumer's own equipment. We seek comment on whether the CALM Act
should be interpreted to permit non-AC-3 transmission of commercials if the loudness of commercials is
effectively controlled using the techniques described within the ATSC A/85 RP prior to such transmission
occurring. Would such an interpretation be consistent with the statutory language mandating that we
incorporate ATSC A/85 RP "only insofar as such recommended practice concerns the transmission of
commercial advertisements"? Again, we note that ATSC may revise the A/85 RP to account for users of
other audio systems.90 If it does not do so, we also seek comment, as discussed further below, on whether
exercise of our waiver authority, conditioned upon use of other effective technology, would be
appropriate to address this issue.
28.
Second, some MVPDs pointed out that they generally do not create most of the content
they transmit to consumers and often receive programs and commercials together in programming blocks
from the broadcast station or content provider and pass through these programming blocks to consumers.
In addition, they reported that they transmit (or retransmit) channels to consumers on a real time basis and
do not have the technical capability to prescreen and correct audio content before transmitting to the
consumer. We seek specific comment from MVPDs about how they receive the content from
programmers and their technical ability to prescreen and correct audio content that they do not create or
insert. To what extent does the contractual approach to compliance discussed above address any such
practical challenges faced by MVPDs?
29.
Although broadcast industry representatives did not express these same concerns, we
86 In addition to the AC-3 audio system, MVPDs may use MPEG-1 Layer 2 (MP2), advanced audio coding (AAC)
or other systems.
87 See ATSC A/85 RP 1at 7. The ATSC A/85 RP's scope includes MVPDs that use AC-3 audio systems as being
"a specific community of interest." Id. The A/85 RP also provides guidance regarding how to manage loudness of
content without metadata, including non-AC-3 audio content. Id. 6 at 16 (discussing delivery or exchange of
content without metadata). See also id. Annex H.7 at 63-64, Annex I.7 at 69.
88 The legislative history does not expressly consider the use of non-AC-3 technologies, whether other audio
technologies can be effective at addressing the loud commercials problem, whether there would be significant costs
associated with changing to exclusively AC-3 systems, or whether the waiver provision in Section 2(b)(3) is
intended to address use of other technologies. See infra 41 (discussion of general waiver).
89 Transcoding "is a procedure for modifying a stream of data carried" (in this context, the AC-3 audio stream) "so
that it may be carried via a different type of network" (in this context, the non-AC-3 audio system). See Newton's
Telecom Dictionary (definition of "transcoding") at 846 (20th ed. 2004).
90 See supra 12 and note 56 (citing to ATSC Letter, supra note 12).
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seek comment on whether broadcast stations generally have an opportunity to prescreen and correct audiocontent before transmitting to the consumer.91 For example, would stations have this ability with respect
to their local content, but not for network programming? To what extent can network/affiliate agreements
be expected to require that the networks deliver content in compliance with the ATSC A/85 RP?
30.
We also seek comment on whether special considerations apply to MVPD carriage of
broadcast stations. If a station complies with the ATSC A/85 RP, and the MVPD carries the station
without altering the audio content, will the MVPD's retransmission of the station to the consumer
likewise comply with the A/85 RP?92 If broadcast content carried by an MVPD contains loud
commercials that are the subject of a complaint, how can we determine which party to hold responsible?
We seek comment on these issues.
31.
Finally, we also invite comment on other challenges that stations/MVPDs may face and
how they can solve these challenges consistent with their responsibilities under the CALM Act. For
example, will there be challenges in conforming legacy or inventory content? Also, will MVPDs face
particular practical challenges associated with carriage of public, educational and governmental ("PEG")
or leased access programming?93 Are there any legal impediments to MVPD adjustment of audio content
to meet the RP A/85 requirements and the goals of the CALM Act? Does Section 315's prohibition on
"censorship" of political advertisements pose any legal obstacles?94 Do small market broadcast stations
or small cable/MVPD system operators face particular practical challenges related to their size?
32.
Is the contractual approach to compliance discussed above sufficient to address the
challenges that stations/MVPDs may face?95 Or, are there other means of addressing some of these
challenges. For example, can retransmission consent agreements be used to clarify responsibilities
between stations and MVPDs? Can a similar approach be used for commercial stations that elect
mandatory carriage? What, if any, are the implications under copyright licenses? Would the waiver
provision in the CALM Act, as discussed below, be an appropriate tool to address certain challenges or
special circumstances that stations/MVPDs encounter? Would such a waiver conditioned on compliance
by use of a different audio technology that will prevent the transmission of loud commercials to
consumers be consistent with the goal of the statute?96
4.
Complaint Process
33.The overall focus and intent of the CALM Act is to address the problem of loud
commercials as consumers experience them.97 Therefore, we propose to enforce compliance with the
statute by focusing on consumer complaints after the rules take effect. If stations/MVPDs take the actions
necessary to eliminate or significantly reduce valid loud commercial complaints, then we believe the
CALM Act will achieve its purpose. We believe that a consumer complaint driven procedure is the most
91 See supra note 53 (explaining that that broadcast TV stations are required to use AC-3 audio systems by Section
73.682 of our rules, which incorporates by reference the ATSC A/53 Standard. See also supra note 11.).
92 We note the Commission exempts MVPDs from liability under the closed captioning and children's television
commercial limits for broadcast content they passively carry, because the Copyright Act of 1976 bars MVPDs from
altering the content (including commercials) of retransmitted broadcast channels. See 47 C.F.R. 76.225(e) and
25.701(e)(2); see 47 C.F.R. 79.1(e)(9). See also 17 U.S.C. 111(c)(3), 119(a)(5) and 122(e).
93 See 47 U.S.C. 531(e) and 532(c)(2). See also 47 C.F.R. 76.901(a).
94 47 U.S.C. 315.
95 See supra discussion at 23.
96 See supra discussion at 12 and 27.
97 See supra note 75 (discussing goal of statute).
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practical means to monitor industry compliance with our proposed rules. In addition to investigatingindividual consumer complaints alleging transmission of a loud commercial, we intend to monitor
consumer complaints and follow trends to determine where enforcement action is warranted. We invite
comment on whether we should supplement the complaint-driven approach with occasional equipment
audits, and under what circumstances such audits would be appropriate. We seek comment on our
proposed consumer complaint-driven approach and the proposed consumer complaint procedure, as
described below.
34.
Filing a Complaint. We propose that consumers may file their complaints electronically
using the Commission's online complaint form (the Form 2000 series) found at
http://esupport.fcc.gov/complaints.htm. We propose to modify the online complaint form to specifically
accommodate complaints about loud commercials.98 Consumers may also file their complaint by fax to
1-866-418-0232 or by letter mailed to Federal Communications Commission, Consumer & Governmental
Affairs Bureau, Consumer Inquiries & Complaints Division, 445 12th Street, SW, Washington, DC
20554. Consumers that want assistance filing their complaint may contact the Commission's Consumer
Call Center by calling 1-888-CALL-FCC (1-888-225-5322) (voice) or 1-888-TELL-FCC (1-888-835-
5322) (tty).99 There is no fee for filing a consumer complaint.
35.
Complaint Details. To ensure that the Commission is able to take appropriate action on a
complaint, the consumer should complete fully the online complaint form. For consumers that choose not
to use the online complaint form, they can submit a written complaint. The complaint should clearly
indicate that it is a loud commercial complaint and include the following information: (1) the
complainant's contact information, including name, mailing address, daytime phone number, and e-mail
address if available; (2) the name and call sign of the broadcast station or the name and type of MVPD
against whom the complaint is directed; (3) the date and time the loud commercial problem occurred; (4)
the channel and/or network involved; (5) the name of the television program during which the
commercial was viewed; (6) the name of the commercial's advertiser/sponsor or product involved; and
(7) a description of the loud commercial problem.
36.
We will evaluate the individual complaints we receive to determine which complaints
indicate a possible violation of our rules. In addition, we will track these consumer complaints, as well as
stations/MVPDs' responses to them, to determine if there are trends that suggest a need for enforcement
action. We will generally forward individual complaints to the appropriate broadcast station or MVPD so
that stations/MVPDs can both be aware of a potential problem and take action to address it and to respond
to their viewers/subscribers appropriately. When appropriate, we will investigate the station/MVPD and
require it to respond to the alleged violation(s) with a detailed explanation of its actions. If the
station/MVPD asserts in its response to us that it did not violate the rules, we would expect it to provide
us with sufficient records and documentation to demonstrate compliance. We seek comment on what
records and documentation stations/MVPDs should be required retain to demonstrate compliance,
including but not limited to records and documentation to demonstrate compliance with the Section 2(c)
safe harbor provision.100 If the station/MVPD acknowledges in its response to us that it violated the rules,
we intend to require an explanation of why the violation occurred and what corrective actions it will take
to prevent future violations. We seek comment on whether to require stations/MVPDs to designate a
98 We intend to add "loud commercials" as a complaint category under the complaint type menu for "Broadcast (TV
and Radio), Cable, and Satellite Issues." We will also add specific questions which relate to the filing of a loud
commercial complaint. See infra 35 (discussing complaint details).
99 We also encourage consumers to visit the Consumer & Governmental Affairs Bureau website at
http://www.fcc.gov/cgb/ or to visit our online Consumer Help Center at http://reboot.fcc.gov/consumers/.
100 See supra 16 (discussion of demonstrating safe harbor compliance), 22 (discussion of other ways to
demonstrate compliance).
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contact person to receive loud commercial complaints, or if we can use existing contact information fromour various databases (e.g., CDBS, COALS, etc.) for this purpose.101 We note that a television broadcast
station would be required to retain in its local public inspection file a copy of a complaint filed with the
Commission about a loud commercial under the Commission's existing rules.102 We seek comment on
whether to require MVPDs to do the same in their local public inspection files or, to the extent some
MVPDs are not obligated to maintain a public inspection file, to retain such complaints for a comparable
period of time in an accessible location.103 We also seek comment on what, if any, requirements should
be imposed on stations/MVPDs to retain copies of loud commercial complaints that they receive directly
from consumers.104
5.
Enforcement
37.Under the general forfeiture provisions of the Communications Act, stations/MVPDs are
subject to forfeitures for violations of the Communications Act and Commission's rules.105 We will apply
these provisions to enforce compliance with the CALM Act and our rules implementing it. This approach
is consistent with the legislative history of the CALM Act.106 Accordingly, we will use the full range of
enforcement tools available to us.107 We seek comment on whether there are any general situations that
may warrant special consideration in enforcing the Act. We also invite comment on whether we should
establish a base forfeiture amount for violations of our rules implementing the CALM Act, and if so, on
the appropriate base forfeiture amount.108
C.
Financial Hardship and General Waivers
38.Section 2(b)(2) of the CALM Act provides that the Commission may grant a one-year
waiver of the effective date of the rules implementing the statute to any station/MVPD that shows it
would be a "financial hardship" to obtain the necessary equipment to comply with the rules, and may
renew such waiver for one additional year.109 The legislative history indicates congressional intent for us
to interpret "financial hardship" broadly and, in particular, recognizes "that television broadcast stations
in smaller markets and smaller cable systems may face greater challenges budgeting for the purchase of
101 The Commission's Consolidated Database System ("CDBS") Electronic Filing System is publicly available
online via the Media Bureau's Electronic Filing and Public Access website at: http://www.fcc.gov/mb/cdbs.html or
CDBS website at: http://fjallfoss.fcc.gov/prod/cdbs/forms/prod/cdbs_ef.htm. The Media Bureau's Cable Operations
and Licensing System (COALS) database is publicly available online at http://fjallfoss.fcc.gov/csb/coals/index.html.
102 See 47 C.F.R. 73.3526(e)(10) (requiring commercial TV stations to retain in its local public inspection file
material relating to a Commission investigation or complaint to the Commission). The rule requires a station to
retain the complaint in its public file until it is notified in writing that the complaint may be discarded. Id. See also
47 C.F.R. 73.3527(e)(11) (relating to noncommercial TV stations).
103 See, e.g., 47 C.F.R. 76.1700 et seq. and 25.701.
104 We note that, if we require stations/MVPDs to retain in their public file copies of loud commercial complaints
which they receive directly from consumers, our trends analysis may include consideration of consumer complaints
filed directly with the station/MVPD.
105 47 U.S.C. 503.
106 See, e.g., Senate Committee Report to S. 2847 at 4.
107 See 47 U.S.C. 503(b)(1)(B) and 47 C.F.R. 1.80(a)(2) (stating that any person who willfully or repeatedly fails
to comply with the provisions of the Communications Act or the Commission's rules shall be liable for a forfeiture
penalty).
108 See 47 C.F.R. 1.80.
109 See 47 U.S.C. 621(b)(2) (codifying CALM Act 2(b)(2)).
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equipment to comply with the bill than television broadcast stations in larger markets or larger cablesystems."110 In addition, Section 2(b)(3) of the CALM Act provides that the statute does not affect the
Commission's authority to waive any rule required by the CALM Act, or the application of any such rule,
for good cause shown with regard to any station/MVPD or class of stations/MVPDs.111 We intend to
delegate authority to the Media Bureau to consider waiver requests filed pursuant to Sections 2(b)(2) and
2(b)(3) of the CALM Act.
39.
Financial Hardship. We propose a financial hardship waiver standard for evaluating
requests for one-year extensions of the effective date. To request a financial hardship waiver pursuant to
Section 2(b)(2), we propose to require a station/MVPD to provide: (1) evidence of its financial condition,
such as financial statements;112 (2) a cost estimate for obtaining the necessary equipment to comply with
the required regulation; (3) a detailed statement explaining why its financial condition justifies postponing
compliance; and (4) an estimate of how long it will take to comply, along with supporting information.
Consistent with the statements in the legislative history that we should interpret "financial hardship"
broadly, we do not propose to require waiver applicants to show negative cash flow, as we have done in
other contexts.113 Instead, we propose to require only that the station/MVPD's assertion of financial
hardship be reasonable under the circumstances.114 As part of the showing set forth above, we propose to
require a station/MVPD that requests a financial hardship waiver to describe the equipment it intends to
110 See Senate Committee Report to S. 2847 at 4. The legislative history, in particular, states that the Commission
"should not require stations or MVPDs to demonstrate that they have negative cash flow or are in receivership for
bankruptcy to be eligible for a waiver based on financial hardship." This appears to be a reference to the strict
financial hardship standard established in 2008 for DTV station build-out extensions given the short time remaining
before the DTV transition deadline. See Third Periodic Review of the Commission's Rules and Policies Affecting
the Conversion to Digital Television, MB Docket No. 07-91, Report and Order, 23 FCC Rcd 2994, 3031-32, 74
(2007) ("Third DTV Periodic Report and Order") (requiring a station to either (1) submit proof that they have filed
for bankruptcy or that a receiver has been appointed, or (2) submit an audited financial statement for the previous
three years showing negative cash flow).
111 See 47 U.S.C. 621(b)(3) (codifying CALM Act 2(b)(3)).
112 Financial statements should be compiled according to generally accepted accounting practices ("GAAP").
Stations/MVPDs may request confidential treatment for this financial information pursuant to 47 C.F.R. 0.459.
113 See, e.g., Third DTV Periodic Report and Order, 23 FCC Rcd at 3031-32, 74 (generally requiring three years
showing negative cash flow for DTV station build-out extensions); 2002 Biennial Regulatory Review Review of
the Commission's Broadcast Ownership rules and Other Rules Adopted Pursuant to Section 202 of the
Telecommunications Act of 1996, MB Docket 02-277, Cross-Ownership of Broadcast Stations and Newspapers,
MM Docket 01-235, Rules and Policies Concerning Multiple Ownership of Radio Broadcast Stations in Local
Markets, MM Docket 01-317, Definition of Radio Markets, MM Docket 00-244, Definition of Radio Markets for
Areas Not Located in An Arbitron Survey Area, MB Docket 03-130, Report and Order and Notice of Proposed
Rulemaking, 18 FCC Rcd 13620, 13706 221 (2003) (generally requiring three years of negative cash flow to the
show that a station is a "failed station" for purposes of a waiver of the local TV ownership rules); Great Plains
Cable Television, Inc. et al Requests for Waiver of Section 76.1204(a)(1) of the Commission's Rules, 22 FCC Rcd
13414, 13426-7, 39-40 (2007) (granting waiver for extraordinary financial hardships upon evidence of negative
cash flow).
114 This approach is consistent with the more liberal process for DTV build-out extensions prior to 2008. See
Review of the Commission's Rules and Policies Affecting the Conversion to Digital Television, MM Docket No. 00-
39, Memorandum Opinion and Order on Reconsideration, 16 FCC Rcd 20594 (2001) (establishing four-part test for
financial hardship to obtain a DTV build-out extension: (1) an itemized estimate of the cost of meeting the build-out
requirements; (2) a detailed statement explaining why its financial condition precludes such an expenditure; (3) a
detailed accounting of the applicant's good faith efforts to meet the deadline, including its good faith efforts to
obtain the requisite financing and an explanation why those efforts were unsuccessful; and (4) an indication when
the applicant reasonably expects to complete construction).
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obtain to comply with the CALM Act and the expense associated with that equipment.115 We seekcomment on our proposals. Should we allow a station/MVPD to provide federal tax returns in lieu of
financial statements? We also seek comment on how to address the situation in which an MVPD is
carrying a broadcast station that has been granted a financial hardship waiver. We also invite comment
on whether the financial hardship waiver provisions of the statute should be interpreted to apply to any
successors to ATSC A/85 RP.
40.
Small Stations/MVPD Systems. We seek specific comment on whether to create a
streamlined financial hardship waiver approach for small market broadcast stations and operators of small
MVPD systems. One way of streamlining the hardship waivers would be to reduce the amount of
information stations/MVPDs that meet an appropriate definition of "small" would be required to submit
to justify the waiver postponing the effective date for one year. We seek comment on whether such
additional relief for small stations/systems would be appropriate; how to streamline the process for
requesting waivers; and how to define "small" for this purpose. For example, would it be appropriate to
define a "small market television broadcast station" as a station that is in television markets 101-210 and
is not affiliated with a top-four network (i.e., ABC, CBS, Fox and NBC)?116 Would it be appropriate to
define a "small MVPD system" as one with fewer than 15,000 subscribers (on the effective date of the
rules)117 and that is not affiliated with a larger operator?118
41.
General Waiver Authority. Section 2(b)(3) of the CALM Act provides that the
Commission may waive any rule required by the CALM Act, or the application of any such rule, to any
station/MVPD for good cause shown under Section 1.3 of the Commission's rules.119 In addition to any
requests for waiver necessitated by unforeseen circumstances, we believe this provision preserves our
inherent authority to grant waivers to MVPDs that cannot implement the ATSC A/85 RP because of the
technology they use. Grant of a waiver under such circumstances would be more likely to be in the public
interest if the waiver recipient can demonstrate that it, by some other means, will be able to prevent the
transmission of loud commercials, as intended by the CALM Act. We seek comment on the appropriate
exercise of our waiver authority under such circumstances, and on whether non-AC-3 audio systems can
effectively prevent loud commercials.120
115 If, for example, an MVPD does not intend to install, utilize and maintain equipment to demonstrate compliance
with the CALM Act, but rather intends to rely primarily on contractual arrangements with content providers, and
more limited monitoring equipment, then it would not qualify for a financial waiver based upon the cost of
equipment it never intends to obtain.
116 See, e.g., Third DTV Periodic Report and Order, 23 FCC Rcd at 3041, 97, n.292 (defining a small market
broadcast station in the DTV context).
117 See, e.g., 47 C.F.R. 76.901(c) (defining a "small system" as a cable system serving 15,000 or fewer subscribers
in the context of cable rate regulation).
118 See, e.g., Carriage of Digital Television Broadcast Signals: Amendment to Part 76 of the Commission's Rules,
CS Docket No. 98-120, Fourth Report and Order, 23 FCC Rcd 13618, 2 (2008) (defining a "a small cable
operator" in the context of broadcast carriage requirements and excluding cable systems affiliated with a cable
operator serving more than 10 percent of all MVPD subscribers).
119 See 47 U.S.C. 621(b)(3) (codifying CALM Act 2(b)(3)). See 47 C.F.R. 1.3 (the Commission's rules "may
be suspended, revoked, amended, or waived for good cause shown, in whole or in part, at any time by the
Commission" and that "[a]ny provision of the rules may be waived by the Commission on its own motion or on
petition if good cause therefor is shown").
120 See supra 12 and note 56 (noting that ATSC is considering amending the ATSC A/85 RP to address how an
MVPD that does not exclusively use an AC-3 audio system can follow the ATSC A/85 RP).
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42.We also invite comment on whether and how waivers should be used to address
challenges that stations/MVPDs foresee in complying with the regulations required by the CALM Act.121
For example, would it be appropriate and consistent with the provisions of the CALM Act to grant a
blanket one-year extension of the effective date of our rules to small market stations or smaller MVPD
operators because such entities are generally likely to face financial hardships and/or because of the
administrative burdens associated with requesting financial hardship waivers for such entities?122 Are
small stations/systems as a class likely to need more time to obtain the necessary equipment to comply
with the CALM Act? We also invite comment on the potential impact on consumers of a blanket one-
year extension for small stations/MVPDs, including whether it would engender confusion and frustration
if the effective date for the CALM Act were delayed for some stations/MVPDs but not others. What
impact might a blanket waiver approach have on consumers?
43.
Filing Deadline. We propose that, absent extraordinary circumstances, the deadline for
filing a waiver request pursuant to either Section 2(b)(2) or 2(b)(3) of the CALM Act will be 180 days
before the effective date of our rules. This will afford the Bureau time to consider these requests before
our rules take effect. Requests for waiver renewals must be filed at least 180 days before the waiver
expires. Requests for waiver based on unforeseen circumstances, of course, can be filed at any time. We
seek comment on these proposed filing deadlines.
44.
Filing Requirements. We propose to require a station/MVPD to file its financial hardship
or general waiver request electronically into this docket through the Commission's Electronic Comment
Filing System ("ECFS") using the Internet by accessing the ECFS: http://www.fcc.gov/cgb/ecfs/. The
filing must be clearly designated as a "financial hardship" or "general" waiver request. Such requests
must also comply with Section 1.3 of our rules.123 We believe this process will ensure that all interested
parties receive notice and an opportunity to comment on such waiver requests. We propose that we will
not impose a filing fee for waiver requests pursuant to the waiver provisions of the CALM Act. We seek
comment on our proposed filing requirements.
IV.
CONCLUSION
45.Congress' directive to us in the CALM Act is clear: incorporate by reference into our
rules and make mandatory the ATSC A/85 RP to prevent TV broadcast stations, cable and DBS
operators, and other MVPDs from transmitting "loud commercials" to consumers. To achieve this
directive, we propose a consumer complaint-driven process to evaluate and ensure compliance with our
rules, similar to what we have done in other contexts. We believe our proposed implementation of the
CALM Act appropriately focuses on benefits for consumers, while limiting costs to stations and MVPDs
to the extent possible.
V.
PROCEDURAL MATTERS
A.
Initial Regulatory Flexibility Act Analysis
46.As required by the Regulatory Flexibility Act of 1980 ("RFA"),124 the Commission has
prepared an Initial Regulatory Flexibility Analysis ("IRFA") relating to this NPRM. The IRFA is
attached to this NPRM as Appendix C. Written public comments are requested on the IRFA. Comments
121 See infra discussion at 26.
122 We also note that a blanket one-year extension for small stations/MVPDs would eliminate a significant
administrative burden on the Commission of processing hardship waiver requests.
123 See 47 C.F.R. 1.3.
124 See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601 et. seq., has been amended by the Small Business Regulatory
Enforcement Fairness Act of 1996 ("SBREFA"), Pub. L. No. 104-121, Title II, 110 Stat. 847 (1996). The SBREFA
was enacted as Title II of the Contract with America Advancement Act of 1996 ("CWAAA").
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must be identified as responses to the IRFA and must be filed by the deadlines for comments providedsupra in Section V.D. of this 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").125
B.
Initial Paperwork Reduction Act of 1995 Analysis
47.This NPRM has been analyzed with respect to the Paperwork Reduction Act of 1995
("PRA")126 and contains proposed new and modified information collection requirements.127 It will be
submitted to the Office of Management and Budget (OMB) for review under Section 3507(d) of the
PRA.128 The Commission, as part of its continuing effort to reduce paperwork burdens, invites OMB, the
general public, and other interested parties to comment on the information collection requirements
contained in this document, as required by the PRA.
48.
Written PRA comments on the proposed information collection requirements contained
herein must be submitted on or before 60 days after the date of publication in the Federal Register.
Comments should address: (a) whether the proposed collection of information is necessary for the proper
performance of the functions of the Commission, including whether the information shall have practical
utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility,
and clarity of the information collected; and (d) ways to minimize the burden of the collection of
information on the respondents, including the use of automated collection techniques or other forms of
information technology.129 In addition, we seek specific comment on how we might "further reduce the
information collection burden for small business concerns with fewer than 25 employees," pursuant to the
Small Business Paperwork Relief Act of 2002.130
49.
In addition to filing comments with the Office of the Secretary, a copy of any PRA
comments on the proposed information collection requirements contained herein should be submitted to
the Federal Communications Commission (FCC) via email to PRA@fcc.gov and to Nicholas A. Fraser,
Office of Management and Budget, via email to nfraser@omb.eop.gov or via fax at 202-395-5167. For
additional information concerning the information collection requirements contained in this NPRM, send
an email to PRA@fcc.gov or contact Cathy Williams, Cathy.Williams@fcc.gov, of the Office of
Managing Director, Performance Evaluation and Records Management, (202) 418-2918.
C.
Ex Parte Rules
50.Permit-But-Disclose. This proceeding will be treated as a "permit-but-disclose"
proceeding in accordance with the Commission's ex parte rules.131 Ex parte presentations are permissible
if disclosed in accordance with Commission rules, except during the Sunshine Agenda period when
125 See 5 U.S.C. 603(a). In addition, the NPRM and IRFA (or summaries thereof) will be published in the Federal
Register. Id.
126 The Paperwork Reduction Act of 1995 ("PRA"), Pub. L. No. 104-13, 109 Stat 163 (1995) (codified in Chapter
35 of title 44 U.S.C.).
127 We propose to modify existing information collection requirements relating to the Commission's online
complaint form (the Form 2000 series). See OMB Control No. 3060-0874. We also propose to create a new
information collection requirement to cover the filing of financial hardship and general waiver requests pursuant to
Sections 2(b)(2) and 2(b)(3) of the CALM Act.
128 See 44 U.S.C. 3507(d).
129 See 44 U.S.C. 3506(c)(2).
130 The Small Business Paperwork Relief Act of 2002 ("SBPRA"), Pub. L. No. 107-198, 116 Stat 729 (2002)
(codified in Chapter 35 of title 44 U.S.C.); see 44 U.S.C. 3506(c)(4).
131 See 47 C.F.R. 1.1206 (rule for permit-but-disclose" proceedings); see also id. 1.1200-1.1216.
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presentations, ex parte or otherwise, are generally prohibited. Persons making oral ex parte presentationsare reminded that a memorandum summarizing a presentation must contain a summary of the substance
of the presentation and not merely a listing of the subjects discussed.132 More than a one- or two-sentence
description of the views and arguments presented is generally required.133 Additional rules pertaining to
oral and written presentations in "permit-but-disclose" proceedings are set forth in section 1.1206(b) of
the rules.134
D.
Filing Requirements
51.Comments and Replies. Pursuant to Sections 1.415 and 1.419 of the Commission's
rules,135 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: (1) the Commission's Electronic Comment
Filing System ("ECFS"), (2) the Federal Government's eRulemaking Portal, or (3) by filing paper
copies.136
Electronic Filers: Comments may be filed electronically using the Internet by accessing the
ECFS: http://www.fcc.gov/cgb/ecfs/ or the Federal eRulemaking Portal:
http://www.regulations.gov.
Paper Filers: 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 appears in the caption of this
proceeding, filers must submit two additional copies for each additional docket or rulemaking
number.
Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by
first-class or overnight U.S. Postal Service mail. All filings must be addressed to the
Commission's Secretary, Office of the Secretary, Federal Communications Commission.
o All hand-delivered or messenger-delivered paper filings for the Commission's
Secretary must be delivered to Room TW-A325 at FCC Headquarters, 445 12th
Street, SW, Washington, DC 20554. All hand deliveries must be held together with
rubber bands or fasteners. Any envelopes must be disposed of before entering the
building. The filing hours are 8:00 a.m. to 7:00 p.m.
o 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.
o U.S. Postal Service first-class, Express, and Priority mail must be addressed to FCC
Headquarters, 445 12th Street, SW, Washington, DC 20554.
132 See id. 1.1206(b)(2).
133 See id.
134 See id. 1.1206(b). See also Commission Emphasizes the Public's Responsibilities in Permit-But-Disclose
Proceedings, Public Notice, 15 FCC Rcd 19945 (2000). We note that the Commission recently amended the rules
governing the content of ex parte notices. See Amendment of the Commission's Ex Parte Rules and Other
Procedural Rules, Report and Order and Further Notice of Proposed Rulemaking, GC Docket No. 10-43, FCC 11-
11, 35-36 (rel. Feb. 2, 2011).
135 See id. 1.415, 1419.
136 See Electronic Filing of Documents in Rulemaking Proceedings, GC Docket No. 97-113, Report and Order, 13
FCC Rcd 11322 (1998).
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52.Availability of Documents. Comments, reply comments, and ex parte submissions will
be publically available online via ECFS.137 These documents will also be available for public inspection
during regular business hours in the FCC Reference Information Center, which is located in Room CY-
A257 at FCC Headquarters, 445 12th Street, SW, Washington, DC 20554. The Reference Information
Center is open to the public Monday through Thursday from 8:00 a.m. to 4:30 p.m. and Friday from 8:00
a.m. to 11:30 a.m.
53.
People with Disabilities: To request materials in accessible formats for people with
disabilities (braille, large print, electronic files, audio format), send an e-mail to fcc504@fcc.gov or call
the FCC's Consumer and Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).
54.
Additional Information. For additional information on this proceeding, contact Evan
Baranoff, Evan.Baranoff@fcc.gov, of the Media Bureau, Policy Division, (202) 418-2120 or Shabnam
Javid, Shabnam.Javid@fcc.gov, of the Engineering Division, Media Bureau at (202) 418-7000.
VI.
ORDERING CLAUSES
55.Accordingly, IT IS ORDERED that pursuant to the Commercial Advertisement Loudness
Mitigation Act of 2010, Pub. L. No. 111-311, 124 Stat. 3294, and Sections 1, 2(a), 4(i), and 303(r) of the
Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i) and (j), 303(r), and 621,
NOTICE IS HEREBY GIVEN of the proposals and tentative conclusions described in this Notice of
Proposed Rulemaking.
56.
IT IS FURTHER ORDERED that the Reference Information Center, Consumer
Information Bureau, shall send a copy of this Notice of Proposed Rulemaking, including the Initial
Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business
Administration.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
137 Documents will generally be available electronically in ASCII, Microsoft Word, and/or Adobe Acrobat.
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APPENDIX A
List of Participants in Informal Meetings
1. ABC2. American Cable Association ("ACA")
3. AT&T
4. Advanced Television Systems Committee, Inc. ("ATSC")
5. CBS
6. Consumer Electronics Association ("CEA")
7. Consumers Union ("CU")
8. DIRECTV, Inc. ("DIRECTV")
9. DISH Network L.L.C. ("DISH")
10. Dolby Laboratories, Inc. ("Dolby")
11. FOX
12. Free press
13. Massillon Cable TV
14. Association for Maximum Service Television, Inc. ("MSTV")
15. National Association of Broadcasters ("NAB")
16. National Cable & Telecommunications Association ("NCTA")
17. NBC Universal
18. Public Broadcasting Service ("PBS")
19. Verizon
20. Wide Open West
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APPENDIX B
Proposed Rules
The Federal Communications Commission proposes to amend Parts 73 and 76 of Title 47 of the Code ofFederal Regulations (CFR) as set forth below:
PART 73 Radio Broadcast Services
1.
The authority citation for Part 73 continues to read as follows:
Authority: 47 U.S.C. 154, 303, 334 and 336.
2.
Amend 73.682 by adding paragraph (e) to read as follows:
73.682 TV transmission standards.
* * * * *
(e)(1) Transmission of commercial advertisements by television broadcast station. Effective [one year
after date of FCC adoption], television broadcast stations must comply with the ATSC A/85: "ATSC
Recommended Practice: Techniques for Establishing and Maintaining Audio Loudness for Digital
Television," (May 25, 2011) ("ATSC A/85 RP"), and any successor thereto, approved by the ATSC
(incorporated by reference, see 73.8000), insofar as it concerns the transmission of commercial
advertisements. ATSC A/85 RP is available from Advanced Television Systems Committee (ATSC),
1750 K Street, NW., Suite 1200, Washington, DC 20006, or at the ATSC Web site:
http://www.atsc.org/standards.html.
(2) A television broadcast station that installs, utilizes, and maintains in a commercially reasonable
manner the equipment and associated software to comply with ATSC A/85 shall be deemed in
compliance with this section.
3.
Amend 73.8000 by adding paragraph (b)(5) to read as follows:
73.8000 Incorporation by reference.
* * * * *
(5) ATSC A/85: "ATSC Recommended Practice: Techniques for Establishing and Maintaining Audio
Loudness for Digital Television," (May 25, 2011), IBR approved for 73.682.
* * * * *
PART 76 Multichannel Video and Cable Television Service.
1.
The authority citation for Part 76 continues to read as follows:
AUTHORITY: 47 U.S.C. 151, 152, 153, 154, 301, 302, 302a, 303, 303a, 307, 308, 309, 312, 315, 317, 325,
339, 340, 341, 503, 521, 522, 531, 532, 534, 535, 536, 537, 543, 544, 544a, 545, 548, 549, 552, 554, 556,
558, 560, 561, 571, 572, 573.
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2.Part 76, Subpart K, is revised by adding new Section 76.607to read as follows:
76.607 Transmission of commercial advertisements.
(a) Effective [one year after date of FCC adoption], cable operators and other multichannel video
programming distributors must comply with the ATSC A/85: "ATSC Recommended Practice:
Techniques for Establishing and Maintaining Audio Loudness for Digital Television," (May 25, 2011)
("ATSC A/85 RP"), and any successor thereto, approved by the ATSC (incorporated by reference, see
76.602), insofar as it concerns the transmission of commercial advertisements. ATSC A/85 RP is
available from Advanced Television Systems Committee (ATSC), 1750 K Street, NW., Suite 1200,
Washington, DC 20006, or at the ATSC Web site: http://www.atsc.org/standards.html.
(b) A cable operator or other multichannel video programming distributor that installs, utilizes, and
maintains in a commercially reasonable manner the equipment and associated software to comply with
ATSC A/85 shall be deemed in compliance with this section.
3.
Amend 76.602 by adding paragraph (b)(10) to read as follows:
76.602 Incorporation by reference.
* * * * *
(10) ATSC A/85: "ATSC Recommended Practice: Techniques for Establishing and Maintaining Audio
Loudness for Digital Television," (May 25, 2011), IBR approved for 76.602.
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APPENDIX C
Initial Regulatory Flexibility Act Analysis
1.As required by the Regulatory Flexibility Act of 1980, as amended ("RFA")1 the
Commission has prepared this present Initial Regulatory Flexibility Analysis ("IRFA") concerning the
possible significant economic impact on small entities by the policies and rules proposed in this Notice of
Proposed Rulemaking ("NPRM"). Written public comments are requested on this IRFA. These
comments must be filed in accordance with the same filing deadlines for comments on the NPRM2 and
they must have a separate and distinct heading designating them as responses to the IRFA. The
Commission will send a copy of the NPRM, including this IRFA, to the Chief Counsel for Advocacy of
the Small Business Administration ("SBA").3 In addition, the NPRM and IRFA (or summaries thereof)
will be published in the Federal Register.4
A.
Need for, and Objectives of, the Proposed Rule Changes
2.This document proposes rules to implement the Commercial Advertisement Loudness
Mitigation (CALM) Act.5 Among other things, the CALM Act directs the Commission to incorporate
into its rules by reference and make mandatory a technical standard developed by an industry standard-
setting body that is designed to prevent television commercial advertisements from being transmitted at
louder volumes than the program material they accompany.6 Specifically, the CALM Act requires the
Commission to incorporate by reference the ATSC A/85 Recommended Practice ("ATSC A/85 RP")7 and
make it mandatory "insofar as such recommended practice concerns the transmission of commercial
advertisements by a television broadcast station, cable operator, or other multichannel video programming
distributor."8 The NPRM considers proposals for implementing the statute and applying the required
regulation. Some of these proposals are contained in Sections D. and E. of this IRFA, and we invite
comment on these proposals. As mandated by the statute, the proposed rules will apply to TV
broadcasters, cable operators and other multichannel video programming distributors ("MVPDs").9 The
new law requires the Commission to adopt the required regulation on or before December 15, 2011,10 and
it will take effect one year after adoption.11
1 See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601 et. seq., has been amended by the Contract With America
Advancement Act of 1996, Pub. L. No. 104-121, 110 Stat. 847 (1996) (CWAAA). Title II of the CWAAA is the Small
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).
2 See Section IV.D. of the NPRM.
3 See 5 U.S.C. 603(a).
4 See id.
5 The Commercial Advertisement Loudness Mitigation ("CALM") Act, Pub. L. No. 111-311, 124 Stat. 3294 (2010)
(codified at 47 U.S.C. 621).
6 See CALM Act 2(a); Senate Committee Report to S. 2847 at 1; House Committee Report to H.R. 1084 at 1.
7 See ATSC A/85: "ATSC Recommended Practice: Techniques for Establishing and Maintaining Audio Loudness
for Digital Television," (May 25, 2011) ("ATSC A/85 RP"). To obtain a copy of the ATSC A/85 RP, visit the
ATSC website: http://www.atsc.org/cms/standards/a_85-2009.pdf.
8 See CALM Act 2(a).
9 We refer herein to covered entities collectively as "stations/MVPDs" or "regulated entities."
10 See CALM Act 2(a).
11 See CALM Act 2(b)(1).
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B.
Legal Basis
3.The proposed action is authorized pursuant to the Commercial Advertisement Loudness
Mitigation Act of 2010, Pub. L. No. 111-311, 124 Stat. 3294, and Sections 1, 2(a), 4(i) and (j), and 303 of
the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i) and (j), 303 and 621.
C.
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.12 The RFA generally
defines the term "small entity" as having the same meaning as the terms "small business," "small
organization," and "small governmental jurisdiction."13 In addition, the term "small business" has the
same meaning as the term "small business concern" under the Small Business Act.14 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.15 Below, we provide a
description of such small entities, as well as an estimate of the number of such small entities, where
feasible.
5.
Television Broadcasting. The SBA defines a television broadcasting station as a small
business if such station has no more than $14.0 million in annual receipts.16 Business concerns included
in this industry are those "primarily engaged in broadcasting images together with sound."17 The
Commission has estimated the number of licensed commercial television stations to be 1,390.18
According to Commission staff review of the BIA Kelsey Inc. Media Access Pro Television Database
(BIA) as of January 31, 2011, 1,006 (or about 78 percent) of an estimated 1,298 commercial television
stations19 in the United States have revenues of $14 million or less and, thus, qualify as small entities
12 5 U.S.C. 603(b)(3).
13 5 U.S.C. 601(6).
14 5 U.S.C. 601(3) (incorporating by reference the definition of "small business concern" in 15 U.S.C. 632).
Pursuant to 5 U.S.C. 601(3), the statutory definition of a small business applies "unless an agency, after
consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public
comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and
publishes such definition(s) in the Federal Register." 5 U.S.C. 601(3).
15 15 U.S.C. 632. Application of the statutory criteria of dominance in its field of operation and independence are
sometimes difficult to apply in the context of broadcast television. Accordingly, the Commission's statistical
account of television stations may be over-inclusive.
16 See 13 C.F.R. 121.201, NAICS Code 515120 (2007).
17 Id. This category description continues, "These establishments operate television broadcasting studios and
facilities for the programming and transmission of programs to the public. These establishments also produce or
transmit visual programming to affiliated broadcast television stations, which in turn broadcast the programs to the
public on a predetermined schedule. Programming may originate in their own studios, from an affiliated network, or
from external sources." Separate census categories pertain to businesses primarily engaged in producing
programming. See Motion Picture and Video Production, NAICS code 512110; Motion Picture and Video
Distribution, NAICS Code 512120; Teleproduction and Other Post-Production Services, NAICS Code 512191; and
Other Motion Picture and Video Industries, NAICS Code 512199.
18 See News Release, "Broadcast Station Totals as of December 31, 2010," 2011 WL 484756 (F.C.C.) (dated Feb.
11, 2011) ("Broadcast Station Totals"); also available at
http://www.fcc.gov/Daily_Releases/Daily_Business/2011/db0211/DOC-304594A1.pdf.
19 We recognize that this total differs slightly from that contained in Broadcast Station Totals, supra, note 15;
however, we are using BIA's estimate for purposes of this revenue comparison.
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under the SBA definition. The Commission has estimated the number of licensed noncommercialeducational (NCE) television stations to be 391.20 We note, however, that, in assessing whether a
business concern qualifies as small under the above definition, business (control) affiliations21 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. The Commission does not compile and otherwise 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.
6.
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.
7.
Cable and Other Program Distribution. Since 2007, these services have been defined
within the broad economic census category of Wired Telecommunications Carriers; that category is
defined as follows: "This industry comprises establishments primarily engaged in operating and/or
providing access to transmission facilities and infrastructure that they own and/or lease for the
transmission of voice, data, text, sound, and video using wired telecommunications networks.
Transmission facilities may be based on a single technology or a combination of technologies."22 The
SBA has developed a small business size standard for this category, which is: all such firms having 1,500
or fewer employees.23 According to Census Bureau data for 2007, there were a total of 955 firms in this
previous category that operated for the entire year.24 Of this total, 939 firms had employment of 999 or
fewer employees, and 16 firms had employment of 1000 employees or more.25 Thus, under this size
standard, the majority of firms can be considered small and may be affected by rules adopted pursuant to
the NPRM.
8.
Cable Companies and Systems (Rate Regulation Standard). The Commission has also
developed its own small business size standards for the purpose of cable rate regulation. Under the
Commission's rules, a "small cable company" is one serving 400,000 or fewer subscribers nationwide.26
As of 2008, out of 814 cable operators,27 all but 10 (that is, 804) qualify as small cable companies under
20 See Broadcast Station Totals, supra, note 15.
21 "[Business concerns] are affiliates of each other when one concern controls or has the power to control the other
or a third party or parties controls or has to power to control both." 13 C.F.R. 121.103(a)(1).
22 U.S. Census Bureau, 2007 NAICS Definitions, "517110 Wired Telecommunications Carriers" (partial definition),
http://www.census.gov/naics/2007/def/ND517110.HTM#N517110.
23 13 C.F.R. 121.201, NAICS code 517110 (2007).
24 U.S. Census Bureau, 2007 Economic Census, Subject Series: Information, Table 5, Employment Size of Firms for
the United States: 2007, NAICS code 5171102 (issued Nov. 2010).
25 See id.
26 47 C.F.R. 76.901(e). The Commission determined that this size standard equates approximately to a size
standard of $100 million or less in annual revenues. Implementation of Sections of the 1992 Cable Act: Rate
Regulation, Sixth Report and Order and Eleventh Order on Reconsideration, 10 FCC Rcd 7393, 7408 (1995).
27 Cable MSO Ownership, A Geographical Analysis, 2009 Edition, 14-31, SNL Kagan (June 2009).
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this standard.28 In addition, under the Commission's rules, a "small system" is a cable system serving15,000 or fewer subscribers.29 Current Commission records show 6,000 cable systems. Of these, 726
have 20,000 subscribers or more, based on the same records. We estimate that there are 5,000 small
systems based upon this standard.
9.
Cable System Operators (Telecom Act Standard). The Communications Act of 1934, as
amended, also contains a size standard for small cable system operators, which is "a cable operator that,
directly or through an affiliate, serves in the aggregate fewer than 1 percent of all subscribers in the
United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate
exceed $250,000,000."30 There are approximately 63.7 million cable subscribers in the United States
today.31 Accordingly, an operator serving fewer than 637,000 subscribers shall be deemed a small
operator, if its annual revenues, when combined with the total annual revenues of all its affiliates, do not
exceed $250 million in the aggregate.32 Based on available data, we find that the number of cable
operators serving 637,000 subscribers or less is also 804.33 We note that the Commission neither requests
nor collects information on whether cable system operators are affiliated with entities whose gross annual
revenues exceed $250 million.34 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.
10.
Direct Broadcast Satellite ("DBS") Service. DBS service is a nationally distributed
subscription service that delivers video and audio programming via satellite to a small parabolic "dish"
antenna at the subscriber's location. DBS, by exception, is now included in the SBA's broad economic
census category, "Wired Telecommunications Carriers,"35 which was developed for small wireline firms.
Under this category, the SBA deems a wireline business to be small if it has 1,500 or fewer employees.36
28 Id. at 12.
29 47 C.F.R. 76.901(c).
30 47 U.S.C. 543(m)(2); see 47 C.F.R. 76.901(f) & nn. 1-3.
31 See Cable TV Investor: Deals & Finance, No. 655, SNL Kagan, March 31, 2009, at 6.
32 47 C.F.R. 76.901(f); see Public Notice, FCC Announces New Subscriber Count for the Definition of Small
Cable Operator, DA 01-158 (Cable Services Bureau, Jan. 24, 2001).
33 Cable MSO Ownership at 12.
34 The Commission does receive such information on a case-by-case basis if a cable operator appeals a local
franchise authority's finding that the operator does not qualify as a small cable operator pursuant to 76.901(f) of
the Commission's rules. See 47 C.F.R. 76.901(f).
35 See 13 C.F.R. 121.201, NAICS code 517110 (2007). The 2007 North American Industry Classification System
("NAICS") defines the category of "Wired Telecommunications Carriers" as follows: "This industry comprises
establishments primarily engaged in operating and/or providing access to transmission facilities and infrastructure
that they own and/or lease for the transmission of voice, data, text, sound, and video using wired
telecommunications networks. Transmission facilities may be based on a single technology or a combination of
technologies. Establishments in this industry use the wired telecommunications network facilities that they operate
to provide a variety of services, such as wired telephony services, including VoIP services; wired (cable) audio and
video programming distribution; and wired broadband Internet services. By exception, establishments providing
satellite television distribution services using facilities and infrastructure that they operate are included in this
industry." (Emphasis added to text relevant to satellite services.) U.S. Census Bureau, 2007 NAICS Definitions,
"517110 Wired Telecommunications Carriers"; http://www.census.gov/naics/2007/def/ND517110.HTM.
36 13 C.F.R. 121.201, NAICS code 517110 (2007).
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However, the data we have available as a basis for estimating the number of such small entities weregathered under a superseded SBA small business size standard formerly titled "Cable and Other Program
Distribution." The definition of Cable and Other Program Distribution provided that a small entity is one
with $12.5 million or less in annual receipts.37 Currently, only two entities provide DBS service, which
requires a great investment of capital for operation: DIRECTV and EchoStar Communications
Corporation ("EchoStar") (marketed as the DISH Network).38 Each currently offer subscription services.
DIRECTV39 and EchoStar40 each report annual revenues that are in excess of the threshold for a small
business. Because DBS service requires significant capital, we believe it is unlikely that a small entity as
defined by the SBA would have the financial wherewithal to become a DBS service provider. We seek
comments that have data on the annual revenues and number of employees of DBS service providers.
11.
Satellite Master Antenna Television (SMATV) Systems, also known as Private Cable
Operators (PCOs). SMATV systems or PCOs are video distribution facilities that use closed transmission
paths without using any public right-of-way. They acquire video programming and distribute it via
terrestrial wiring in urban and suburban multiple dwelling units such as apartments and condominiums,
and commercial multiple tenant units such as hotels and office buildings. SMATV systems or PCOs are
now included in the SBA's broad economic census category, "Wired Telecommunications Carriers,"41
which was developed for small wireline firms.42 Under this category, the SBA deems a wireline business
to be small if it has 1,500 or fewer employees.43 However, the data we have available as a basis for
estimating the number of such small entities were gathered under a superseded SBA small business size
standard formerly titled "Cable and Other Program Distribution." The definition of Cable and Other
Program Distribution provided that a small entity is one with $12.5 million or less in annual receipts.44
As of June 2004, there were approximately 135 members in the Independent Multi-Family
Communications Council (IMCC), the trade association that represents PCOs.45 The IMCC indicates
that, as of June 2006, PCOs serve about 1 to 2 percent of the multichannel video programming
distributors (MVPD) marketplace.46 Individual PCOs often serve approximately 3,000-4,000 subscribers,
but the larger operations serve as many as 15,000-55,000 subscribers. In total, as of June 2006, PCOs
37 13 C.F.R. 121.201, NAICS code 517510 (2002).
38 See Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming,
Thirteenth Annual Report, 24 FCC Rcd 542, 580, 74 (2009) ("13th Annual Report"). We note that, in 2007,
EchoStar purchased the licenses of Dominion Video Satellite, Inc. ("Dominion") (marketed as Sky Angel). See
Public Notice, "Policy Branch Information; Actions Taken," Report No. SAT-00474, 22 FCC Rcd 17776 (IB 2007).
39 As of June 2006, DIRECTV is the largest DBS operator and the second largest MVPD, serving an estimated
16.20% of MVPD subscribers nationwide. See id. at 687, Table B-3.
40 As of June 2006, DISH Network is the second largest DBS operator and the third largest MVPD, serving an
estimated 13.01% of MVPD subscribers nationwide. Id. As of June 2006, Dominion served fewer than 500,000
subscribers, which may now be receiving "Sky Angel" service from DISH Network. See id. at 581, 76.
41 See 13 C.F.R. 121.201, NAICS code 517110 (2007).
42 Although SMATV systems often use DBS video programming as part of their service package to subscribers,
they are not included in Section 340's definition of "satellite carrier." See 47 U.S.C. 340(i)(1) and 338(k)(3); 17
U.S.C. 119(d)(6).
43 13 C.F.R. 121.201, NAICS code 517110 (2007).
44 13 C.F.R. 121.201, NAICS code 517510 (2002).
45 See Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming,
Eleventh Annual Report, FCC 05-13, 110 (rel. Feb. 4, 2005) ("2005 Cable Competition Report").
46 See 13th Annual Report, 24 FCC Rcd at 684, Table B-1.
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serve approximately 900,000 subscribers.47 Because these operators are not rate regulated, they are notrequired 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 10 PCOs, we believe that a substantial number of
PCOs may have been categorized as small entities under the now superseded SBA small business size
standard for Cable and Other Program Distribution.48
12.
Open Video Services. The open video system ("OVS") framework was established in
1996, and is one of four statutorily recognized options for the provision of video programming services
by local exchange carriers.49 The OVS framework provides opportunities for the distribution of video
programming other than through cable systems. Because OVS operators provide subscription services,50
OVS falls within the SBA small business size standard covering cable services, which is "Wired
Telecommunications Carriers."51 The SBA has developed a small business size standard for this
category, which is: all such firms having 1,500 or fewer employees. According to Census Bureau data
for 2007, there were a total of 3,188 firms in this previous category that operated for the entire year.52 Of
this total, 3,144 firms had employment of 999 or fewer employees, and 44 firms had employment of 1000
employees or more.53 Thus, under this size standard, most cable systems are small and may be affected
by rules adopted pursuant to the NPRM. In addition, we note that the Commission has certified some
OVS operators, with some now providing service.54 Broadband service providers ("BSPs") are currently
the only significant holders of OVS certifications or local OVS franchises.55 The Commission does not
have financial or employment information regarding the entities authorized to provide OVS, some of
which may not yet be operational. Thus, again, at least some of the OVS operators may qualify as small
entities.
D.
Description of Projected Reporting, Recordkeeping, and Other Compliance
Requirements
The NPRM contains proposals that, if adopted, would impose new reporting,
recordkeeping and/or other compliance requirements, including the following. First, the NPRM considers
what showing is required to satisfy the Section 2(c) safe harbor compliance provision.56 Second, the
NPRM considers what types of showings are required for a station/MVPD that chooses not to
47 Id.
48 13 C.F.R. 121.201, NAICS code 517510 (2002).
49 47 U.S.C. 571(a)(3)-(4). See Annual Assessment of the Status of Competition in the Market for the Delivery of
Video Programming, MB Docket No. 06-189, Thirteenth Annual Report, 24 FCC Rcd 542, 606, 135 (2009)
("Thirteenth Annual Cable Competition Report").
50 See 47 U.S.C. 573.
51
U.S. Census Bureau, 2007 NAICS Definitions, "517110 Wired Telecommunications Carriers";
http://www.census.gov/naics/2007/def/ND517110.HTM#N517110.
52 U.S. Census Bureau, 2007 Economic Census, Subject Series: Information, Table 5, Employment Size of Firms for
the United States: 2007, NAICS code 5171102 (issued Nov. 2010).
53 See id.
54 A list of OVS certifications may be found at http://www.fcc.gov/mb/ovs/csovscer.html.
55 See Thirteenth Annual Cable Competition Report, 24 FCC Rcd at 606-07, 135. BSPs are newer firms that are
building state-of-the-art, facilities-based networks to provide video, voice, and data services over a single network.
56 See NPRM 16-21. Section 2(c) requires a station/MVPD seeking "safe harbor" compliance to demonstrate that
it has installed, utilized and maintained the necessary equipment in a commercially reasonable manner.
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demonstrate Section 2(c) safe harbor compliance, but instead chooses to demonstrate compliance with therules implementing the CALM Act by some other means.57 This includes, for example, whether and how
regulated entities could use contracts to ensure compliance and what quality control measures they can
take to monitor the content delivered to them for transmission to consumers.58 Third, the NPRM
considers whether to require stations/MVPDs to designate a contact person to receive loud commercial
complaints.59 Fourth, the NPRM notes that television broadcast stations will be required to retain in their
local public inspection file material a copy of a complaint filed with the Commission about a loud
commercial, and considers whether to require MVPDs to do the same in their local public inspection
file.60 The NPRM also considers what, if any, requirements should be imposed on stations/MVPDs to
retain a copy of a loud commercial complaint that it receives directly from consumers?61 Finally, the
NPRM considers what showing is required to respond to a consumer complaint alleging a loud
commercial that is forwarded to it by the Commission.62 The NPRM proposes to require the
station/MVPD to investigate the alleged violation and provide a detailed explanation of its findings. In
addition, if the station/MVPD asserts in its response that it did not violate the rules, it must provide the
Commission with sufficient records and documentation to demonstrate compliance. The NPRM
considers what records and documentation should be required to demonstrate compliance. If the
station/MVPD acknowledges in its response that it violated the rules, it must provide the Commission
with an explanation of why the violation occurred and what corrective actions it will take to prevent
future violations.
E.
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, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small
entities.63
15.
The express language of the statute requires that the new technical loudness standard (i.e.,
the ATSC A/85 RP) be made mandatory for all stations/MVPDs, regardless of size.64 However, the
statute also provides for a one-year waiver of the effective date of the rules implementing the statute to
any station/MVPD that shows it would be a "financial hardship" to obtain the necessary equipment to
comply with the rules and allows renewal of such waiver for one additional year.65 The NPRM proposes
a broad financial hardship waiver standard for approving such waivers. In particular, this waiver
provision should benefit television broadcast stations in smaller markets and smaller MVPD systems,
57 See id. 22-23.
58 See id. 23.
59 See id. 36.
60 See id.
61 See id.
62 See id.
63 5 U.S.C. 603(c)(1)-(c)(4)
64 See 47 U.S.C. 621(a).
65 See id. 621(b)(2).
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which may face greater challenges in budgeting for the purchase of equipment to comply with the lawthan television broadcast stations in larger markets or larger MVPD systems. The NPRM also
specifically considers whether to create a streamlined financial hardship waiver process for small market
broadcast stations and operators of small MVPD systems.66 Finally, the statute also provides that the
Commission may waive any rule required by the CALM Act, or the application of any such rule, for good
cause shown to any station/MVPD.67 This provision allows us to consider legitimate requests for waiver
of specific compliance with the ATSC A/85 RP, provided the station/MVPD can prevent the transmission
of loud commercials to consumers and, thus, comply with the overarching goal of the statute and the
ATSC A/85 RP. The NPRM considers alternative approaches to implementing the waiver provisions of
the statute and specifically considers if an alternative approach would facilitate small businesses'
compliance with the ATSC A/85 RP (and thus our rules).
F.
Federal Rules that May Duplicate, Overlap, or Conflict With the Proposed Rule
16.None.
66 See NPRM 40 and 42.
67 See 47 U.S.C. 621(b)(3).
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STATEMENT OF
COMMISSIONER MICHAEL J. COPPS
Re: Implementation of the Commercial Advertisement Loudness Mitigation (CALM) Act; MBDocket No. 11-93
Thank goodness that relief is on the way for viewers who have been complaining for nearly 50
years about loud commercials. I am glad that Congress has given us a mandate in this endeavor and I
particularly thank Ranking Member Anna Eshoo for her efforts to take action on what has been the bane
of consumers' existence for far too long. Loud commercials have drawn thousands of complaints at the
FCC in just the last few years and I appreciate the work of the Media Bureau to expeditiously move this
NPRM forward to fulfill Congress' will.
While this is an issue with a number of technical challenges, first and foremost we must treat it
as a consumer issue. There will be questions to resolve in the months ahead and I look forward to acting
on a full record with input from all the stakeholders by the statute's December 15th 2011 deadline. What
should be clear is that the American public wants some CALM in their living room and our
implementation of this legislation should deliver on that long overdue entreaty.
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