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=@i@)h"5@^!)22SN!!28!2222222222888-\HCCH=7HH!'H=YHH7HC7=HH^HH=!!/2!-2-2-!222N2222!'22H22-006!!!!()!22H-H-H-H-H-YCC-=-=-=-=-!!!!H2H2H2H2H2H2H2H2H2H2H-H2H2H2H2H272H2H-H-C-C-C-=-=-=-H2H2HH2H2H2H2(2!2!!!2'H2==)H2H2H2YHC!C)7'7'N#-2!-22222KK2LL2K!!--2d!!22bd!-d!t!77778c7%7777777777>>>1eOIIOC=OO%+OCbOO=OI=COOhOOC%%47%17171%777V7777%+77O77155<%%%%,-%77O1O1O1O1O1bII1C1C1C1C1%%%%O7O7O7O7O7O7O7O7O7O7O1O7O7O7O7O7=7O7O1O1I1I1I1C1C1C1O7O7OO7O7O7O7,7%7%%%7+O7CC-O7O7O7bOI%I-=+=+N&27%177777"SS7!TT7S!%%117n%%77ln%1n%!t%<<<<>mBBs,?>[N6Wms[77UUUH_%7777777777>>>1eOIIOC=OO%+OCbOO=OI=COOhOOC%%47%17171%777V7777%+77O77155%T7,OOOOOO=7111111I111117777777<77777772\C7Gby.C8*,gC\  P6QPc7PC2,W XP\  P6QXPd2J=.,/&J\  P6Q&P.e2N=.,&N4  pQ&f0J=.,3V^&J*f9 xQ&XgP,%,J,\  P6QJPhI(!,,(\  P6Q,P{,C8*,3C*f9 xQXYYdBBddBYB Paragraph X(#P  S(-X` hp x (#%'0*,.8135@8:to increase gradually the amount of captioned new programming offered over time. The rules require  S( - x/minimum captioning benchmarks to be met at two year intervals, starting on January 1, 2000.Q( h pm {O0-ԍId., Appendix B at 79.1(b)(1).Q New  S - xprogramming is defined as programs first published or exhibited after January 1, 1998.Q pm {O-ԍId., Appendix B at 79.1(a)(5).Q The rules allow  S - x.video program providers to exercise discretion with respect to what types of programs to caption first,= pm {O-ԍId. at 47.=  xand permit video program providers to caption news programming using the electronic newsroom ("ENR")  S - xmethod.Q pm {OF-ԍId., Appendix B at 79.1(e)(3).Q ENR captions are created from the text in the station's news script computers. With ENR, only  xjtext transmitted from the scripting computers onto teleprompters is captioned; unscripted material, such  xas live reports from the field, reports of breaking news, and weather and sports reporting, is not  S-captioned. (pm {O`!- x.ԍSee Notice of Proposed Rulemaking In the Matter of Closed Captioning and Video Description of Video  {O*"- xjProgramming, Implementation of Section 305 of the Telecommunications Act of 1996, Video Programming  {O"- xjAccessibility, MM Docket No. 95176, 12 FCC Rcd 1044, 1058 at 21 (released January 17, 1997) ("Closed  {O#-Captioning Notice").  S- ` _x3.` ` The emergency information which we address in this Further Notice falls under the Closed  S- xkCaptioning Order's definition of new programming. By "emergency information," we generally mean  xstate, local and regional emergency announcements or reports, including interruptions of regularly"t ,`(`(88"ԫ xscheduled programming and latebreaking reports during live news programs. Pursuant to the rules  S- xkadopted in the Closed Captioning Order, emergency information would be subject to the same closed  xcaptioning requirements as other new programming. Such programming would not be required to be  xoffered with closed captioning before 2000 at the earliest, and each video program provider would have  xthe discretion to determine whether to give emergency information priority for captioning relative to other  x>new programming. In addition, under the rules, a video program provider could caption its live news  x programming using the ENR method, which could leave much emergency information inaccessible to persons with hearing disabilities since it is likely to be latebreaking news and unscripted.  S- ` B x4.` ` We did not adopt specific closed captioning rules for emergency information programs  Sr- xin our Closed Captioning Order. Due to limited comments on the issue of captioning of emergency  SL - xinformation, the Commission determined that further comment was necessary to address captioning rules  S$ - xfor such programming.e $ pm {O -ԍClosed Captioning Order, 12 FCC Rcd ___ at 253.e However, we stated our expectation that video program providers will use other  xmethods, such as open visual scrawls, open captioning, slides, or other methods to ensure that all of the  S -details of emergency information programs are fully accessible to viewers with hearing disabilities.1 Zpm {O-ԍId.1  S - ` x5.` ` A few commenters in the closed captioning proceeding addressed issues related to the  xprovision of closed captioning for emergency information. For example, one commenter who has a  xhearing disability noted that, without captions, viewers with hearing disabilities often must guess at the  S - xsignificance of storm alerts and instructions from emergency management personnel.h pm {O-ԍSee Closed Captioning Notice, 12 FCC Rcd at 1074, 68.h Another  x commenter observed that a visually displayed message might direct the viewer to watch a later news  xlreport for details, but if the news is captioned using the ENR method and the portion of the news  xdescribing the later news report is unscripted, viewers with hearing disabilities will not have access to this  Sl- xinformation.\l~pm {O- xԍClosed Captioning Order, 12 FCC Rcd at ___ 252 citing Comments of Joan Andrews at 34 in response to  {OT- xthe Notice of Inquiry in this docket. See Closed Captioning and Video Description of Video Programming, Notice of Inquiry, MM Docket No. 95176, FCC 95484,11 FCC Rcd 4912 (1996).  Other commenters cited the importance of weather and emergency programming for safety  SD- xand wellbeing,(Dpm {O- xxԍSee, e.g., Consumer Action Network Comments in response to the Closed Captioning Notice at 9; CalTVA  {OP- xhComments in response to the Closed Captioning Notice at 4; Kaleidoscope Television Comments in response to the  {O - xClosed Captioning Notice at 3; League for the Hard of Hearing ("LHH") Comments in response to the Closed  {O -Captioning Notice at 9. while captioning companies urged the Commission to require realtime captioning for  xlatebreaking emergency news reports and emergency announcements. They contend that ENR captioning  xleaves substantial portions of the news uncaptioned and thus inaccessible, and that the absence of realtime  xcaptions leaves viewers with hearing disabilities with only the most basic, brief warnings in emergency  S-situations.g pm {O%-ԍSee Closed Captioning Notice, 12 FCC Rcd at 1075 69.g "|$,`(`(88"Ԍ S- ` x6.` ` Similarly, a letter from the NorCal Center on Deafness ("NorCal") raises concerns about  xthe inequities in accessibility of emergency information depending upon where viewers with hearing  xdisabilities live. NorCal cites the failure of local television broadcasters in the Sacramento and Stockton  S- x=areas to offer closed captioning of live field reports concerning recent local emergencies.rpm {O-ԍSee December 4, 1997 Letter of NorCal Center on Deafness, Inc. at 1.r NorCal claims  xthat although the studio portions of local news reports are captioned using ENR, most live portions of  xlocal television reports on the 199697 flooding in Northern California, a tornado alarm in the San Joaquin  xzValley, and a bomb scare in the Roseville area were preceded by a statement that "This portion of the  S- x.news will not be closed captioned. Closed captioning will resume later."T\Zpm {O - xԍId. NorCal also contends that the California State Office of Emergency Services failed to caption critical safety  xinformation during a recent tornado warning, and was inaccessible by TTY when NorCal attempted to call and  {Ot -complain. Id.T NorCal notes that viewers in  xthe San Francisco Bay Area and Los Angeles County have had realtime closed captioning of news  xzprograms for several years now, and that one station in San Francisco has even provided deaf viewers  xwith captioned transcripts of live speeches made on the Capitol steps in Sacramento, while local  SH -Sacramento stations have not done so.7H ~pm {Of-ԍId. at 2.7  S - ` `x7.` ` Given the significant health and safety issues inherent in emergency information, in the  S - xClosed Captioning Order we concluded that closed captioning requirements for emergency information  S - xLshould be considered further. In this Further Notice, we seek comment on how our rules can best ensure  xthat such programs are accessible to viewers with hearing disabilities. We request comment on whether  xzseparate transitional closed captioning requirements are needed for emergency information or whether  S4-there are other methods of providing accessibility for this type of programming.4pm {O- xԍWe note that the types of emergency information contemplated in the Further Notice are not those which must  {O- xbe transmitted by the Emergency Alert System ("EAS") under our existing rules. See 47 C.F.R. 11.1 et seq.  xKUse of the EAS is required only in the event of a national emergency, though state and local authorities may use  {O@- xthe EAS to provide early warnings to communities about regional, state and local emergencies. See Report and  xOrder and Further Notice of Proposed Rulemaking In the Matter of Amendment of Part 73, Subpart G, of the  {O- xCommission's Rules Regarding the Emergency Broadcast System, FO Docket Nos. 91301 and 91171, 10 FCC Rcd.  x1786, at 1790 and 1809 9 and 66. The Commission has recently amended the EAS rules so as to improve the  {Od- xaccessibility of EAS messages for viewers with hearing disabilities. See Second Report and Order In the Matter  {O.- xof Amendment of Part 73, Subpart G, of the Commission's Rules Regarding the Emergency Broadcast System, FO  xDocket Nos. 91301 and 91171, FCC 97338, 12 FCC Rcd 15503 (released September 29, 1997). The rules and  {O-policies proposed in this Further Notice are not intended to conflict with or supersede the EAS rules in any way.  S- ` ax8.` ` As we stated in the Closed Captioning Order,b~pm {O#-ԍClosed Captioning Order, 12 FCC Rcd __ at 252. b providing all viewers with accurate  x[information regarding emergencies is of great importance, and we are concerned that viewers with hearing  xdisabilities may not always have access to the same information that is available to other viewers. As a  x=threshold matter, we seek comment on the types of information and programs that should be considered  x["emergency information" for the purposes of our rules. We note that the Commission currently requires  x>broadcast licensees to make the emergency information programming that they transmit accessible to",`(`(88D"  S- xpersons who are deaf or hard of hearing.Lpm {Oh-ԍSee 47 C.F.R. 73.1250(h).L The broadcast rule enumerates the following examples of  xemergency situations as being subject to the rule: tornadoes, hurricanes, floods, tidal waves, earthquakes,  x>icing conditions, heavy snows, widespread fires, discharge of toxic gases, widespread power failures,  xindustrial explosions, civil disorders, and school closings and changes in school bus schedules resulting  S`- x0from such conditions.u`Zpm yOZ-ԍ47 C.F.R. 73.1250(a). The rule notes that this list is not exhaustive.u We tentatively conclude that for this purpose, we should broadly define  x.emergency information to ensure that sufficient information regarding situations that affect the safety of  xNviewers is available to persons with hearing disabilities with the same immediacy as it is for other  xviewers. To the types of situations cited in the existing broadcast rule, we believe that it would be  xappropriate to add warnings and watches of impending changes in weather affecting the safety of viewers,  x!and seek comment on how to define such situations. We also seek comment on whether defining  x=emergency information more broadly here than in the broadcast rule would cause any practical problems  SH -or other complications for entities subject to emergency closed captioning requirements.`H pm {O-ԍSee 47 C.F.R. 73.1250 and n. 34, infra.`  S - ` x9.` ` We seek comment on whether it is feasible to require video program providers to supply  xclosed captions for emergency information programs. By its nature, emergency information is not  xtypically programming that can be prerecorded and captioned in advance of airing. A requirement that  xsuch programs be captioned would therefore oblige providers to obtain realtime captioning services for  SX- xsuch programs. As we described in the Closed Captioning Order, realtime captioning resources are  S2- x somewhat limited at this time.a2|pm {ON-ԍClosed Captioning Order, 12 FCC Rcd at ___ 84.a We declined to require that all live news programming be captioned  xusing realtime captioners in part due to concerns about the limited realtime resources in existence and  xthe need to allow captioning companies sufficient time to recruit and train more captioners to meet the  S-increased demands for their services that the rules will create.2pm {Oh-ԍId. 2  Sj- ` x 10.` ` We seek comment on the estimated costs, in both financial and human resource terms,  xthat a captioning requirement for emergency information will impose on video providers. In particular,  x we seek updated information on the number of realtime captioners currently available as well as the  xMnumber projected to be available in the near future. In the event a realtime captioning requirement is  x!instituted for emergency information, we seek comment on the effect such a rule will have on the  x.availability of live captioning resources for other types of live programming. Captioning companies and  xcommenters who regularly use realtime captioning services should submit detailed information on the  xhourly costs charged for such services, and whether and under what conditions those costs vary. Is it  xzfeasible for video program providers to have realtime captioners "on call" for closed captioning when  xemergencies arise, or would providers have to hire fulltime staff to produce live closed captions? What would it cost to hire an "on call" realtime captioner?  S- ` ax 11.` ` We request information on the availability and feasibility of providing live captions  x]remotely in emergency situations. Where an emergency affects a large geographic region, all video"b,`(`(88"  xproviders in that region will need to access realtime captioning resources at the same time. Given the  x limited number of realtime captioning resources available at present, it may not be possible for each  xyprovider to obtain the necessary captioning assistance within its geographic region. For example, a major  xsnowstorm such as that which occurred on the East Coast in early 1996 could place a significant strain  x[on realtime resources throughout the northeast and midAtlantic states. Could video program providers  xuse realtime captioners located in other areas (e.g., California) unaffected by the emergency to offer  xremote captioning under such circumstances? Would remote realtime captioning incur greater costs or be less costly than local live captioning under such circumstances?  S- ` x 12.` ` We specifically seek comment on whether emergency programming should be given a  xkhigher priority for captioning than other types of new programs. Specifically, should we require that  xemergency information be provided with captions prior to the commencement of the captioning  xrequirement for other new programs? If so, when should video program providers be required to begin  xcaptioning these programs? With respect to the minimum benchmarks for captioning of new programs,  xzwe ask whether video program providers should be required to supply closed captions for emergency  x[information programs during the transition period, regardless of whether the provider has already met its  x?captioning benchmark for new programs. Would such a requirement be feasible, or would it pose  xsignificant logistical problems or economic burdens on video program providers? We tentatively conclude  xthat any textual presentation of emergency information programs should be required to incorporate  S- xsubstantially the entire text of the audio portion of the program.pm {Op- xԍSee, e.g., Ex Parte Submission of the National Association of the Deaf in the Closed Captioning Proceeding, July 11, 1997, at 8. We seek comment on this tentative conclusion.  S- ` `x 13.` ` The closed captioning rules also include exemptions based on video program providers'  xgross revenues. Under the revenue exemption, video program providers with annual gross revenues of  xzless than $3 million per channel are exempt from all captioning requirements, except for the obligation  S- xLto pass through captions where programs are received from the program supplier with captions.y"pm {O-ԍClosed Captioning Order, 12 FCC Rcd at ___, Appendix B at 79.1(d)(12).y Also,  xour rules provide that once a video program provider has spent an amount equal to 2% of its gross annual  S- xrevenues on captioning, that provider need not spend any more money on captioning.Rpm {O-ԍId., Appendix B at 79.1(d)(11).R We seek comment  xas to whether these exemptions should be suspended for the limited purpose of emergency information  xprogramming closed captioning. Should all video program providers be required to supply closed captions  xzfor emergency information, even where the provider is otherwise eligible for one of our revenuebased  xexemptions? How would such a rule affect small entities such as small or low power television stations  xand small cable operators? Commenters should submit proposals for reducing the burdens on small entities that such a mandatory closed captioning rule might impose.  S- ` x 14.` ` Alternatively, we ask whether other methods of visually presenting emergency information  x0would be acceptable in lieu of a closed captioning requirement. As noted above, the Commission  xcurrently requires broadcast licensees to make such programming accessible to persons who are deaf or"8F,`(`(88 "  S- xhard of hearing.Epm {Oh-ԍSee 8 supra.E To the extent broadcast licensees transmit emergency information programming, they  S- xMare required by our rules to transmit such programs both aurally and visually or only visually.o Zpm {O- xhԍSee 47 C.F.R. 73.1250(h): "Any emergency information transmitted by a TV station in accordance with this  xsection shall be transmitted both aurally and visually or only visually. . . . However, when an emergency operation  x\is being conducted under a national, State or Local Area Emergency Alert System (EAS) plan, emergency  xinformation shall be transmitted both aurally and visually . . . " The obligation to provide visual displays arises  xwhenever emergency information is broadcast, and is not limited to instances in which the EAS is formally activated,  xya request is received from a government official, or the information is specifically identified as an emergency  {O - x.announcement. See Public Notice, Commission Reminds Licensees About Obligations Contained in Section  {ON - xJ73.1250(h) of the Commission's Rules Regarding the Broadcasting of Emergency Information, FCC 90302, 5 FCC Rcd 6260 (1990).o The  x>broadcast rules allow television stations to "use any method of visual presentation which results in a  xlegible message conveying the essential emergency information," including, but not limited to, slides,  S`- xelectronic captioning, manual methods (e.g., hand printing), or mechanical printing processes.B!`0 pm yO0-ԍ47 C.F.R. 73.1250(h).B However,  xzno equivalent obligation exists for emergency information transmitted by cable television operators or  xother multichannel video program distributors ("MVPDs"). We seek comment as to whether an extension  xof the existing broadcast rules to cover emergency information disseminated by MVPDs, in conjunction  xwith our existing captioning rules, would be appropriate or sufficient to address the concerns raised in this  S-Further Notice.  SJ - ` x15.` ` In addition, an emergency information program may consist of an audio report that is not  xydisplayed visually, or the audio portion of the report may be longer and offer more complete information  S - xthan that displayed visually, leaving viewers with hearing disabilities without full details on the situation."\ pm {OZ- xYԍSee, e.g., Closed Captioning Order, 12 FCC Rcd at ___ 252; Californians for Television Access ("CalTVA")  {O$- xComments in response to Closed Captioning Notice at 3 (an EAS alert caption reported that an entire county was to be evacuated due to flooding, where the audio portion of the message announced evacuation of one city).  xWe seek information on methods or requirements that could be adopted to ensure that all pertinent details  xare accessible. We also seek comment on a proposal submitted by CalTVA for cases where local stations  xare unable to provide an instant visual transcription of audio emergency messages. CalTVA recommends  xzuse of a second text channel that a viewer may switch to within ten minutes of airing of an emergency  xmessage, to read a typed report of the audio message and any actions the viewer is being instructed to  S - xktake.p# pm {O -ԍCalTVA Comments in response to the Closed Captioning Notice at 4.p We seek comment regarding the feasibility of this proposal, and request information regarding other possible methods of ensuring the accessibility of this information to persons with hearing disabilities. x  S- ` bx16.` ` Finally, we seek comment on any other proposals to promote and to ensure the  xaccessibility of emergency programming and other special reports that have not already been raised in this  SB- xFurther Notice or in the closed captioning proceeding. In particular, we ask commenters to address the legal, policy, and practical implications of any such proposals. "v#,`(`(88%"Ԍ S- `III.xADMINISTRATIVE MATTERS  S-xA.` ` Initial Regulatory Flexibility Analysis for the Notice of Proposed Rulemaking (#` `  S`- ` A x17.` ` Pursuant to Section 603 of the Regulatory Flexibility Act ("RFA"),$Z`pm yO- xYԍ5 U.S.C.  603. The Regulatory Flexibility Act has been amended by the Contract With America Advancement  xAct of 1996, Pub. L. No. 104121, 110 Stat. 847 (1996) ("CWAAA"). Subtitle II of the CWAAA is the "Small  {OX-Business Regulatory Enforcement Fairness Act of 1996" ("SBREFA"), codified at 5 U.S.C.  601 et seq.  the Commission has  x\prepared the following initial regulatory flexibility analysis ("IRFA") of the expected impact of these  xproposed policies and rules on small entities. Written public comments are requested on the IRFA. These  xcomments must be filed in accordance with the same filing deadlines as comments on the rest of the  S- x=FNPRM, but they must have a separate and distinct heading designating them as responses to the IRFA.  S- xkThe Secretary shall cause a copy of this FNPRM to be sent to the Chief Counsel for Advocacy of the  St-Small Business Administration ("SBA") in accordance with Section 603(a) of the RFA.=%tpm yO -ԍ5 U.S.C.  603(a).=  S$ - ` x18.` ` Reason for Action and Objectives of the Proposed Rule: Section 713 of the 1996 Act  xrequired the Commission to adopt rules and timetables for the captioning of video programming by  xAugust 8, 1997. In the course of the closed captioning proceeding, a few commenters addressed the  xjparticular need for captioning of emergency programming and similar special reports, but the information  xsubmitted to the Commission regarding this issue was insufficient to support the adoption of specific  S^- xcaptioning rules for emergency programming. Instead, the Closed Captioning Order directed that a  S8- x=separate proceeding be initiated to address this issue. In this FNPRM, we seek comment on appropriate  xzrequirements for promoting and ensuring the accessibility of emergency programming to viewers with hearing disabilities.  S- ` 4x19.` ` Legal Basis: This FNPRM is adopted pursuant to Sections 4(i), 4(j) and 713 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 613.  S$- ` x20.` ` Description and Number of Small Entities Affected: The RFA defines the term "small  xentity" as having the same meaning as the terms "small business," "small organization," and "small  S- xbusiness concern" under Section 3 of the Small Business Act.`&zpm yO-ԍRegulatory Flexibility Act, 5 U.S.C. 601(3) (1980).` A small business concern is one which:  x(1) is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies  S-any additional criteria established by the SBA.;' pm yO0!-ԍ15 U.S.C.  632.;  S6- `  x21.` ` Small MVPDs: The SBA has developed a definition of small entities for cable and other  x]pay television services, which includes all such companies generating $11 million or less in annual  S- xreceipts.J(pm yO"&-ԍ13 C.F.R. 121.201 (SIC 4841).J This definition includes cable system operators, closed circuit television services, direct  x]broadcast satellite services, multipoint distribution systems, satellite master antenna systems and"* (,`(`(88-"  xysubscription television services. According to the Bureau of the Census, there were 1,758 total cable and  S- xother pay television services and 1,423 had less than $11 million in revenue.)pm yO@- x,ԍU.S. Department of Commerce, Bureau of the Census, Industry and Enterprise Receipts Size Report, Table 2D, SIC 4841 (Bureau of the Census data under contract to the Office of Advocacy of the SBA). We address below each  x{service individually to provide a more precise estimate of small entities. We seek comment on the tentative conclusions below.  S8- ` _x22.` ` Cable Systems: The Commission has developed, with SBA's approval, our own definition  xzof a small cable system operator for the purposes of rate regulation. Under the Commission's rules, a  S- x"small cable company" is one serving fewer than 400,000 subscribers nationwide.*$ pm yO - xԍ47 C.F.R.  76.901(e). The Commission developed this definition based on its determinations that a small  {Or - xcable system operator is one with annual revenues of $100 million or less. Implementation of Sections of the 1992  {O< - x<Cable Act: Rate Regulation, Sixth Report and Order and Eleventh Order on Reconsideration, 10 FCC Rcd 7393 (1995).  Based on our most  xNrecent information, we estimate that there were 1,439 cable operators that qualified as small cable  S- x/companies at the end of 1995.+ pm {OF-ԍPaul Kagan Associates, Inc., Cable TV Investor, Feb. 29, 1996 (based on figures for Dec. 30, 1995). Since then, some of those companies may have grown to serve over  xy400,000 subscribers, and others may have been involved in transactions that caused them to be combined  xjwith other cable operators. Consequently, we estimate that there are fewer than 1,439 small entity cable  S" -system operators that may be affected by the decisions and rules proposed in this FNPRM.  S - ` x23.` ` The Communications Act also contains a definition of a small cable system operator,  xwhich is "a cable operator that, directly or through an affiliate, serves in the aggregate fewer than 1% of  xzall subscribers in the United States and is not affiliated with any entity or entities whose gross annual  S\- xNrevenues in the aggregate exceed $250,000,000."A,\pm yO-ԍ47 U.S.C. 543(m)(2).A The Commission has determined that there are  x61,700,000 subscribers in the United States. Therefore, we found that an operator serving fewer than  xk617,000 subscribers shall be deemed a small operator, if its annual revenues, when combined with the  S- xtotal annual revenues of all of its affiliates, do not exceed $250 million in the aggregate.M-. pm yO-ԍ47 C.F.R.  76.1403(b) (SIC 4833).M Based on  xavailable data, we find that the number of cable operators serving 617,000 subscribers or less totals  S- x1,450.. pm {O-ԍPaul Kagan Associates, Inc., Cable TV Investor, Feb. 29, 1996 (based on figures for Dec. 30, 1995). Although it seems certain that some of these cable system operators are affiliated with entities  xkwhose gross annual revenues exceed $250,000,000, we are unable at this time to estimate with greater  xkprecision the number of cable system operators that would qualify as small cable operators under the definition in the Communications Act.  S- ` `x24.` ` Multipoint Multichannel Distribution Systems ("MMDS"): The Commission refined the  xMdefinition of "small entity" for the auction of MMDS as an entity that together with its affiliates has  S~- x[average gross annual revenues that are not more than $40 million for the preceding three calendar years.D/~x pm yO&-ԍ47 C.F.R.  21.961(b)(1).D "~ /,`(`(88"  S-This definition of a small entity in the context of MMDS auctions has been approved by the SBA.0$pm {Oh- x.ԍSee Amendment of Parts 21 and 74 of the Commission's Rules With Regard to Filing Procedures in the  x-Multipoint Distribution Service and in the Instructional Television Fixed Service and Implementation of Section  {O- x309(j) of the Communications Act Competitive Bidding, MM Docket No. 9431 and PP Docket No. 93253, Report and Order, 10 FCC Rcd 9589 (1995).  S- ` x25.` ` The Commission completed its MMDS auction in March 1996 for authorizations in 493  x!basic trading areas ("BTAs"). Of 67 winning bidders, 61 qualified as small entities. Five bidders  xindicated that they were minorityowned and four winners indicated that they were womenowned  xbusinesses. MMDS is an especially competitive service, with approximately 1,573 previously authorized  xand proposed MMDS facilities. Information available to us indicates that no MMDS facility generates  xrevenue in excess of $11 million annually. We tentatively conclude that, for purposes of this IRFA, there  xare approximately 1,634 small MMDS providers as defined by the SBA and the Commission's auction rules.  SH - ` Qx26.` ` ITFS: There are presently 2,032 ITFS licensees. All but 100 of these licenses are held  S" - xby educational institutions. Educational institutions are included in the definition of a small business.1" pm yOv- xԍSBREFA also applies to nonprofit organizations and governmental organizations such as cities, counties, towns, townships, villages, school districts, or special districts, with populations of less than 50,000. 5 U.S.C. 601(5).   x>However, we do not collect annual revenue data for ITFS licensees, and are not able to ascertain how  xmany of the 100 noneducational licensees would be categorized as small under the SBA definition. Thus, we tentatively conclude that at least 1,932 licensees are small businesses.  SZ- ` x27.` ` Direct Broadcast Satellite ("DBS"): Because DBS provides subscription services, DBS  xfalls within the SBA definition of cable and other pay television services (SIC 4841). As of December  x1996, there were eight DBS licensees. The Commission does not collect annual revenue data for DBS,  xand is unable to determine with certainty the number of small DBS licensees that could be affected by  x.these proposed rules. However, estimates of 1996 revenues for various DBS operators are significantly  S- xngreater than $11,000,000, and range from a low of $31,132,000 for Alphastar[2X pm yO@- xԍAlphastar Press Release (via Canada Newswire), March 20, 1997. Revenues were originally stated in Canadian  xDollars ($42,915,000 Canadian). Revenues were recalculated using an exchange rate of $1.3785 (Can) = $1.00 (US). Revenues stated include revenues for Cband service.[ to a high of  Sl- x=B$1,100,000,000 for Primestar.N3l, pm {O8-ԍThe SkyTrends Report: 19961997.N Accordingly, we tentatively conclude that no DBS operator qualifies as a small entity.B  S- ` Rx28.` ` Home Satellite Dish ("HSD"): The market for HSD service is difficult to quantify.  xIndeed, the service itself bears little resemblance to other MVPDs. HSD owners have access to more than  xy265 channels of programming placed on Cband satellites by programmers for receipt and distribution by  S~- xMVPDs, of which 115 channels are scrambled and approximately 150 are unscrambled.b4~ pm {O%-ԍ1996 Competition Report, 12 FCC Rcd at 4385 49.b HSD owners  xcan watch unscrambled channels without paying a subscription fee. To receive scrambled channels,  xyhowever, an HSD owner must purchase an integrated receiverdecoder from an equipment dealer and pay". P 4,`(`(88"  xNa subscription fee to an HSD programming packager. Thus, HSD users include: (1) viewers who  xsubscribe to a packaged programming service, which affords them access to most of the same  xprogramming provided to subscribers of other MVPDs; (2) viewers who receive only nonsubscription  S- x=programming; and (3) viewers who receive satellite programming services illegally without subscribing.=5pm {O-ԍId. at 50.=  S8- ` 2x29.` ` According to the most recently available information, there are approximately 30 program  S- xjpackagers nationwide offering packages of scrambled programming to retail consumers.16Zpm {O -ԍId.1 These program  S- xpackagers provide subscriptions to approximately 2,314,900 subscribers nationwide.17pm {Ot -ԍId.1 This is an average  xlof about 77,163 subscribers per program packager. This is substantially smaller than the 400,000  xsubscribers used in the Commission's definition of a small multiple system operator ("MSO").  xFurthermore, because this an average, it is likely that some program packagers may be substantially smaller. We seek comment on these tentative conclusions.  S - ` 3x30.` ` Open Video Systems ("OVS"): The Commission has certified nine OVS operators. Of  x.these nine, only two are providing service. On October 17, 1996, Bell Atlantic received approval for its  S - xcertification to convert its Dover, New Jersey Video Dialtone ("VDT") system to OVS.8 ~pm {O- xԍBell AtlanticNew Jersey, Inc. (Certification to Operate an Open Video System), 11 FCC Rcd 13249 (CSB  {O-1996) ("Bell Atlantic OVS Certification"). Bell Atlantic  xsubsequently purchased the division of Futurevision which had been the only operating program package  SZ- xprovider on the Dover system, and has begun offering programming on this system using these resources.9Zpm {O- xKԍBell Atlantic, Bell Atlantic Now Offering Video Services in Dover Township New Jersey (news release), Nov. 1, 1996.  xMetropolitan Fiber Systems was granted certifications on December 9, 1996, for the operation of OVS  S - xysystems in Boston and New York, both of which are being used to provide programming.: 4 pm {O- xԍSee Metropolitan Fiber Systems/New York, Inc. (Certification to Operate an Open Video System), Consolidated Order, 11 FCC Rcd 20896, DA 962075 (CSB Dec. 9, 1996). Bell Atlantic  xand Metropolitan Fiber Systems have sufficient revenues to assure us that they do not qualify as small  x=business entities. On October 10, 1996, Digital Broadcasting Open Video Systems received approval to  S- xNoffer OVS service in southern California.; pm {O - x-ԍSee Public Notice, DA 961703 (Oct. 10, 1996). Digital Broadcasting Video Systems proposes to use local exchange company facilities for the transmission of video services. Digital Broadcasting Open Video Systems is a general  xpartnership just beginning operations. Little financial information is available for the other entities  xauthorized to provide OVS that are not yet operational. Given that other entities have been authorized  xto provide OVS service but have not yet begun to generate revenues, we tentatively conclude that at least some of the OVS operators qualify as small entities. " ;,`(`(88$"Ԍ S- `  x31.` ` Satellite Master Antenna Television ("SMATVs"): Industry sources estimate that  S- xyapproximately 5,200 SMATV operators were providing service as of December 1995.g<pm {OB-ԍ1996 Competition Report, 12 FCC Rcd at 44034404 81.g Other estimates   xindicate that SMATV operators served approximately 1.05 million residential subscribers as of September  S- xZ1996.1=Zpm {O-ԍId.1 The ten largest SMATV operators together pass 815,740 units.1>pm {O-ԍId.1 If we assume that these SMATV  xLoperators serve 50% of the units passed, the ten largest SMATV operators serve approximately 40% of  xthe total number of SMATV subscribers. Because these operators are not rate regulated, they are not  xrequired to file financial data with the Commission. Furthermore, we are not aware of any privately  xpublished financial information regarding these operators. Based on the estimated number of operators  x\and the estimated number of units served by the largest ten SMATVs, we tentatively conclude that a substantial number of SMATV operators qualify as small entities.  SJ - ` x32.` ` Local Multipoint Distribution System ("LMDS"): Unlike the above pay television services,  xLMDS technology and spectrum allocation will allow licensees to provide wireless telephony, data, and/or  xvideo services. A LMDS provider is not limited in the number of potential applications that will be  xavailable for this service. Therefore, the definition of a small LMDS entity may be applicable to both  xLcable and other pay television (SIC 4841) and/or radiotelephone communications companies (SIC 4812).  S - xThe SBA definition for cable and other pay services is defined in paragraph 16 supra. A small  S^- x[radiotelephone entity is one with 1500 employees or less.??^~pm yO|-ԍ13 C.F.R.  121.201.? However, for the purposes of this FNPRM, we include only an estimate of LMDS video service providers.  S- ` x 33.` ` LMDS is a service that is expected to be auctioned by the FCC in 1997. The vast  xmajority of LMDS entities providing video distribution could be small businesses under the SBA's  S- x>definition of cable and pay television (SIC 4841).@pm {OF-ԍSee 21 supra for an estimate of the number of entities under SIC 4841. However, in the Third NPRM,A$pm {O- xZԍIn the Matter of Rulemaking to Amend Parts 1, 2, 21, and 25 of the Commission's Rules to Redesignate the  x;27.529.5 GHz Frequency Band, to Reallocate the 29.530.0 GHz Frequency Band, to Establish Rules and Policies  xfor Local Multipoint Distribution Service and for Fixed Satellite Services and Suite 12 Group Petition for Pioneer's  {O2-Preference, ("Third NPRM") CC Docket No. 92297, 11 FCC Rcd 53 (1995),  188. we proposed to  xdefine a small LMDS provider as an entity that, together with affiliates and attributable investors, has  xaverage gross revenues for the three preceding calendar years of less than $40 million. We have not yet received approval by the SBA for this definition.  S- ` x!34.` ` There is only one company, CellularVision, that is currently providing LMDS video  xservices. Although the Commission does not collect data on annual receipts, we assume that  xMCellularVision is a small business under both the SBA definition and our proposed auction rules. No  SZ- xcommenters addressed the tentative conclusions we reached in the Notice. We tentatively conclude that a majority of the potential LMDS licensees will be small entities, as that term is defined by the SBA. "4 A,`(`(88{"Ԍ S- ` ԙx"35.` ` Small Broadcast Stations: The SBA defines small television broadcasting stations as  S-television broadcasting stations with $10.5 million or less in annual receipts.?Bpm yOB-ԍ13 C.F.R.  121.201.?  S- ` x#36.` ` Estimates Based on Census and BIA Data: According to the Bureau of the Census, in  x1992, 1,155 out of 1,478 operating television stations reported revenues of less than $10 million for 1992.  S<- xzThis represents 78% of all television stations, including noncommercial stations.C<Xpm {O4- xԍSee 1992 Census of Transportation, Communications, and Utilities, Establishment and Firm Size, May 1995, at 125. The Bureau of the  x/Census does not separate the revenue data by commercial and noncommercial stations in this report.  xNeither does it allow us to determine the number of stations with a maximum of $10.5 million in annual  xreceipts. Census data also indicate that 81% of operating firms (that owned at least one television station)  S-had revenues of less than $10 million.Dpm yO - xԍAlternative data supplied by the SBA Office of Advocacy indicate that 65% of television station owners (627  xof 967) have less than $10 million in annual revenue and that 39% of television stations (627 of 1591) have less  xthan $10 million in annual revenue. These data were prepared by the U.S. Bureau of the Census under contract to  x;the SBA. These data show a lower percentage of small businesses than the data supplied directly to the Commission  x[by the Bureau of the Census. Therefore, for purposes of our worst case analysis, we will use the data supplied directly to us by the Bureau of the Census.   SL - ` x$37.` ` We also have performed a separate study based on the data contained in the BIA  xPublications, Inc. Master Access Television Analyzer Database, which lists a total of 1,141 full power  S - xcommercial television stations.E * pm yO- xԍThis figure excludes LPTV stations and translator stations from the calculations. As of May 31, 1996, there  {O- xwere 1880 LPTV stations and 4885 television translators in the United States. FCC News Release, Broadcast  {OX- xStation Totals as of May 31, 1996, Mimeo No. 63298, released June 6, 1996. Given the nature of LPTV stations,  xZwe will presume that all LPTVs qualify as small businesses. Because television translators pass through the signal  xof the parent station, we do not believe that any closed captioning requirements we may adopt will result in regulatory burden on those stations. It should be noted that, using the SBA definition of small business  x?concern, the percentage figures derived from the BIA database may be underinclusive because the  xdatabase does not list revenue estimates for noncommercial educational stations, and these therefore are  S - xexcluded from our calculations based on the database.{FX pm yO- xԍThe Association of America's Public Television Stations ("APTS") reports that there are 30 public televisions  xstations (out of 197 public television licensees) with annual operating budgets of less than $1.5 million. Interview with Lonna M. Thompson, Director of Legal Affairs for APTS (December 3, 1996). { The BIA data indicate that, based on 1995  xrevenue estimates, 440 full power commercial television stations had an estimated revenue of $10.5  xymillion or less. That represents 54% of full power commercial television stations with revenue estimates  xlisted in the BIA program. The database does not list estimated revenues for 331 stations. Using a worst  x case scenario, if those 331 stations for which no revenue is listed are counted as small stations, there  xwould be a total of 771 stations with an estimated revenue of $10.5 million or less, representing approximately 68% of the 1,141 full power commercial television stations listed in the BIA data base. "l F,`(`(88"Ԍ S- ` x%38.` ` Alternatively, if we look at owners of commercial television stations as listed in the BIA  xdatabase, there are a total of 488 owners. The database lists estimated revenues for 60% of these owners,  x[or 295. Of these 295 owners, 156 or 53% had annual revenues of less than $10.5 million. Using a worst  xcase scenario, if the 193 owners for which revenue is not listed are assumed to be small, then small entities would constitute 72% of the total number of owners.  S- ` x&39.` ` In summary, based on the foregoing worst case analysis using Bureau of the Census data,  xwe estimate that our proposed rules will apply to as many as 1,150 commercial and noncommercial  xtelevision stations (78% of all stations) that could be classified as small entities. Using a worst case  xanalysis based on the data in the BIA data base, we estimate that as many as 771 commercial television  x\stations (about 68% of all commercial television stations) could be classified as small entities. As we  xnoted above, these estimates are based on a definition that we tentatively believe greatly overstates the  xnumber of television broadcasters that are small businesses. Further, it should be noted that, under the  x/SBA's definitions, revenues of affiliates that are not television stations should be aggregated with the  xtelevision station revenues in determining whether a concern is small. The estimates overstate the number  xof small entities since the revenue figures on which they are based do not include or aggregate such revenues from nontelevision affiliated companies.  S0- ` x'40.` ` Reporting, Recordkeeping and Compliance Requirements: The FNPRM seeks comment  x.on whether we should require video programming providers (including broadcast licensees and MVPDs)  xto closed caption or otherwise visually display emergency programming and similar special reports to  x ensure the accessibility of these types of video programs to viewers with hearing disabilities. If this  xproposal is adopted, video programming providers may choose to maintain records of the closed captioned  xemergency programming carried in order to resolve any disputes which may arise regarding compliance.  S- ` x(41.` ` Federal Rules Which Overlap, Duplicate or Conflict With the Commission's Proposal: None.  S- ` x)42.` ` Any Significant Alternatives Minimizing the Impact On Small Entities and Consistent With  S~- xlthe Stated Objectives: The Closed Captioning Order directs us to initiate proceedings to establish  xcaptioning requirements for emergency programming. We seek comment on proposals to promote and  S0- x>ensure the accessibility of emergency programming and other special reports to persons with hearing  x.disabilities. We also seek comment on methods of visually displaying emergency information to viewers other than closed captioning which may be less costly or burdensome than captioning.  S-x B. ` ` Procedural Provisions  S@- ` 3x*43.` ` Ex Parte Rules PermitButDisclose Proceeding. This is a permitbutdisclose notice  S - xand comment rulemaking proceeding. Ex parte presentations are permitted, except during the Sunshine  S -Agenda period, provided that they are disclosed as provided in the Commission's rules.mG pm {O\#-ԍSee generally 47 C.F.R. 1.1202, 1.1203, and 1.1206(a).m  S"- ` x+44.` ` Pursuant to applicable procedures set forth in Sections 1.415 and 1.419 of the  x/Commission's rules, interested parties may file comments on or before February 25, 1998, and reply  xkcomments on or before March 27, 1998. To file formally in this proceeding, you must file an original  x/plus six copies of all comments, reply comments, and supporting comments. If you would like each",%ZG,`(`(88&"  xCommissioner to receive a personal copy of your comments and reply comments, you must file an original  x[plus 11 copies. We also encourage commenters to include a computer disk copy of their comments with  xMtheir official filings whenever possible, as this will allow the comments to be easily transferred to the  x?Commission's Internet site. You should send comments and reply comments to the Office of the  xNSecretary, Federal Communications Commission, 1919 M Street, N.W. Washington, D.C. 20554.  xComments and reply comments will be available for public inspection during regular business hours in  xthe FCC Reference Center, Room 239, Federal Communications Commission, 1919 M Street N.W., Washington D.C. 20554.  S- D. Ordering Clauses  SH - ` x,45.` ` Accordingly, IT IS ORDERED that pursuant to the authority contained in Sections 4(i),  x303(r), and 713 of the Communications Act of 1934, as amended, 47 U.S.C.  154(i), 303(r), and 613,  S -the Further Notice of Proposed Rulemaking IS ADOPTED.  S - ` x-46.` ` IT IS FURTHER ORDERED that the Secretary shall send a copy of this Further Notice  S - xof Proposed Rulemaking, including the Initial Regulatory Flexibility Analysis, to the Chief Counsel for  x.Advocacy of the Small Business Administration, in accordance with paragraph 603(a) of the Regulatory  S6-Flexibility Act, Pub. L. No. 96354, 94 Stat. 1164, 5 U.S.C.  601 et seq. (1981).  S- ` x.47.` ` For further information, contact Alexis Johns, Policy and Rules Division, Cable Services Bureau, at (202) 4187200, TTY (202) 4187172. x` `  hh@FEDERAL COMMUNICATIONS COMMISSION x` `  hh@Magalie Roman Salas  S-x` `  hh@Secretary