Federal Communications Commission	FCC 20-10


Before the
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON, D.C. 20554


In the Matter of

Implementation of Section 1003 of the Television Viewer Protection Act of 2019
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MB Docket No. 20-31

NOTICE OF PROPOSED RULEMAKING

Adopted:  January 31, 2020	Released:  January 31, 2020

Comment Date:  (15 days after date of publication in the Federal Register)
Reply Comment Date:  (25 days after date of publication in the Federal Register)

By the Commission:

I. INTRODUCTION
1. In this Notice of Proposed Rulemaking (NPRM), we propose revisions to section 76.65 of our rules, which governs good faith negotiation of retransmission consent, to implement provisions in section 1003 of the Television Viewer Protection Act of 2019 (TVPA). The Television Viewer Protection Act of 2019, Pub. L. No. 116-94, 133 Stat. 2534, 3198 (2019) (amendments to be codified at 47 U.S.C. § 325).  The TVPA was enacted in December 2019 as Title X of the “Further Consolidated Appropriations Act, 2020” (H.R. 1865, 116th Cong.).  Through this NPRM, we satisfy Congress’s directive in section 325(b)(3)(C) of the Communications Act of 1934, as amended by section 1003(a)(3) of the TVPA, to commence a rulemaking proceeding to revise the Commission’s rules to specify that “certain small MVPDs can meet the obligation to negotiate [retransmission consent] in good faith . . . by negotiating with a large station group through a qualified MVPD buying group.”  H.R. Rep. No. 116-329, 116th Cong., 1st Sess. 2019 at 8.  Section 325(b)(3)(C), as amended, requires that the Commission specify such rules “not later than 90 days after the date of enactment of the TVPA,” or March 19, 2020.  Because no final Congressional report was issued to accompany the bill as enacted, we rely on the House Commerce Committee Report accompanying the House bill, H.R. 5035, for the relevant legislative history for section 1003 of the TVPA.   
  Section 1003 principally directs the Commission to adopt rules that provide for negotiation of retransmission consent between “qualified multichannel video programming distributor [MVPD] buying group[s]” and “large [broadcast] station group[s]” as those terms are defined in the TVPA. See, e.g., 47 U.S.C. § 325(b)(3)(C)(vi) (as added by Section 1003(a)(3) of the TVPA).  
  As discussed below, we propose to adopt rules defining:  (i) the term “large station group” as used in section 1003 of the TVPA to mean, in relevant part, an entity whose individual television station members collectively have a national audience reach of more than 20 percent; and (ii) the term “qualified MVPD buying group” as used in section 1003 to mean, in relevant part, an entity that negotiates on behalf of MVPDs that collectively serve no more than 25 percent of all households receiving service from any MVPD in a given local market.  In addition, we propose to codify in section 76.65 the provisions governing negotiation of retransmission consent between qualified MVPD buying groups and large station groups, See 47 U.S.C. § 325(b)(3)(C)(vi)(I)-(III) (as added by section 1003(a)(3) of the TVPA).
 as well as the definitions of “local market” and “multichannel video programming distributor” set forth in section 1003(b)(3). See id. § 325(b)(7)(E), (F) (as added by section 1003(b)(3) of the TVPA).
  Finally, we propose to make minor conforming changes to section 76.65. See Appendix A.
  We seek comment on these proposals. This NPRM proposes rule revisions that implement only section 1003 of the TVPA (“Satisfaction of Good Faith Negotiation Requirement by [MVPDs]”); TVPA provisions not covered herein will be implemented in separate proceedings.  In view of the 90-day deadline established in section 325(b)(3)(C) of the Act, as amended by section 1003(a)(3) of the TVPA, we find that establishing the abbreviated pleading cycle set forth above is necessary to meet our statutory responsibility and serves the public interest.
   
II. BACKGROUND
2. The TVPA, enacted on December 20, 2019, is the latest in a series of statutes that have amended the Communications Act to establish parameters for the carriage of television broadcast stations by MVPDs. The TVPA was enacted together with the Satellite Television Community Protection and Promotion Act of 2019 (STCPPA), Pub. L. No. 116-94, 133 Stat. 2534, 3201 (2019), which was enacted as Title XI of the “Further Consolidated Appropriations Act, 2020” (H.R. 1865, 116th Cong.).  The STCPPA amended the Copyright Act of 1976 to narrow the scope of the satellite distant signal statutory copyright license in 17 U.S.C. § 119, including by requiring satellite carriers to provide local-into-local service to all 210 DMAs as a pre-condition to use that license, but made the satellite distant signal statutory copyright license permanent.  
  As relevant to this NPRM, section 1003 of the TVPA revised section 325(b) of the Act principally by allowing smaller MVPDs to negotiate collectively as a buying group for retransmission consent with large broadcast station groups. See 47 U.S.C. § 325(b)(3)(C)(vi) (as added by section 1003(a)(3) of the TVPA).  Although the TVPA amended section 325(b) in other respects, as noted, we address herein only those revisions that are contemplated by section 1003 of the TVPA.
  In particular, section 1003(a)(3) of the TVPA amends section 325(b)(3)(C) of the Act by adding new subsection 325(b)(3)(C)(vi), which, read as part of section 325(b)(3)(C) as a whole, requires the Commission to commence a rulemaking proceeding to revise its retransmission consent rules to specify that:
(I) a [MVPD] may satisfy its obligation to negotiate [retransmission consent] in good faith under [section 325(b)(3)(C)(iii)] . . . with a large [broadcast] station group by designating a qualified MVPD buying group to negotiate on its behalf, so long as the qualified MVPD buying group itself negotiates in good faith in accordance with such clause; 
(II) it is a violation of the obligation to negotiate in good faith under [section 325(b)(3)(C)(iii)] for the qualified MVPD buying group to disclose the prices, terms, or conditions of an ongoing negotiation or the final terms of a negotiation to a member of [such] . . . group that is not intending, or is unlikely, to enter into the final terms negotiated by the . . . group; and 
(III) a large [broadcast] station group has an obligation to negotiate [retransmission consent] in good faith under [section 325(b)(3)(C)(ii)] with respect to a negotiation . . . with a qualified MVPD buying group. Id.  
 
3. Moreover, section 1003(b) of the TVPA amended section 325(b)(7) of the Act principally by adding new subsections 325(b)(7)(C) and (D), which define the terms “qualified MVPD buying group” and “large station group,” respectively, for the purpose of applying the new good faith negotiation provisions of section 325(b)(3)(C)(vi). Id. § 325(b)(7)(C), (D) (as added by section 1003(b) of the TVPA).  As noted infra, section 1003(b) also amended section 325(b)(7) of the Act by adding subsections (b)(7)(E) and (F), which define the terms “local market” and “multichannel video programming distributor,” respectively.  
  In particular, section 325(b)(7)(C) of the Act, as added by the TVPA, defines “qualified MVPD buying group,” in relevant part, as an entity that: 
(i) negotiates [retransmission consent] on behalf of two or more multichannel video programming distributors—
(I) none of which is a [MVPD] that serves more than 500,000 subscribers nationally; and 
(II) that do not collectively serve more than 25 percent of all households served by a [MVPD] in any single local market in which the applicable large station group operates. See 47 U.S.C. § 325(b)(7)(C) (as added by section 1003(b) of the TVPA).
 
4. In addition, section 325(b)(7)(D) of the Act, as added by the TVPA, defines “large station group” as a group of television broadcast stations that: 
(i) are directly or indirectly under common de jure control permitted by the regulations of the Commission;
(ii) generally negotiate agreements for retransmission consent . . . as a single entity; and 
(iii) include only television broadcast stations that have a national audience reach of more than 20 percent. Id. § 325(b)(7)(D) (as added by section 1003(b) of the TVPA).

5.  There are ambiguities in the statutory definitions of “large station group” and “qualified MVPD buying group.”  With respect to “large station group,” this term could mean a group of television broadcast stations whose members collectively have over 20 percent national audience reach, or it could mean that each station in the group individually has such coverage.  Similarly, the term “qualified MVPD buying group” could mean an entity that negotiates on behalf of MVPDs that collectively serve no more than 25 percent of all households receiving service from any MVPD in any single local market in which the large station group operates.  Or it could be referring to an entity that negotiates on behalf of MVPDs that collectively serve no more than 25 percent of all households receiving service from a single MVPD in any single local market in which the large station group operates.  We initiate this proceeding to clarify these terms in order to permit applicable parties to utilize the new TVPA protections promptly, as reflected in the expedited deadline specified in the new statute.
III. DISCUSSION
6. We propose to implement section 1003 of the TVPA by revising section 76.65 of our rules:  (i) to define the term “large station group” as, among other things, an entity whose individual television station members collectively have a national audience reach of more than 20 percent In addition to satisfying the audience reach requirement, a “large station group” must otherwise meet the definition set forth in section 325(b)(7)(D) of the Act, as added by section 1003(b)(3) of the TVPA.
; and (ii) to define the term “qualified MVPD buying group” as, among other things, an entity that negotiates on behalf of MVPDs that do not collectively serve more than 25 percent of all households served by MVPDs in any single local market in which the applicable large station group or television broadcast station operates.  
7. We tentatively conclude that this interpretation of the term “large station group” finds support in the text and structure of the TVPA, and would best effectuate Congressional intent. Our proposed interpretation also is harmonious with the Commission’s ownership restrictions.  See, e.g., 47 CFR § 73.3555(e)(1) (providing that “[n]o license for a commercial television broadcast station shall be granted, transferred or assigned to any party . . . if the grant, transfer or assignment of such license would result in such party . . . having a cognizable interest in television stations which have an aggregate national audience reach exceeding [39 percent]”) (emphasis added).  See also Pub. L. 10-199, § 629(1) (directing the Commission to revise its multiple ownership rules set forth in section 73.3555 of its rules by increasing the national audience reach limitation for television stations to 39 percent).
  First, we note that the text of the first two clauses in the definition  of “large station group” require, respectively, that stations comprising a “large station group” be under “common de jure control” and negotiate agreements as a “single entity.” 47 U.S.C. § 325(b)(7)(D)(i)-(ii) (as added by section 1003(b) of the TVPA).
  We tentatively find that these two requirements properly characterize only stations that collectively comprise a group, rather than individual stations, and that the third clause of the definition thus should be interpreted as imposing a requirement that must be true of the stations collectively. See United States v. Finn, 502 F.2d 938, 942 (7th Cir. 1974) (stating that under normal canons of statutory construction, “parallel and sequentially numbered clauses” should be interpreted so that they “all bear the same relationship to the rest of the sentence”).
  Second, we note that the TVPA contemplates that “qualified MVPD buying groups” and “large station groups” would be counterparties in a retransmission consent negotiation. 47 U.S.C. § 325(b)(3)(C)(vi) (as added by section 1003(a)(3) of the TVPA).
  Because the former term imposes a market share cap of 25 percent on the MVPDs “collectively,” Id. § 325(b)(7)(C)(i)(II) (as added by section 1003(b) of the TVPA).  
 we tentatively conclude that the 20 percent market share threshold for “large station groups” similarly should be construed to apply to the stations collectively. We note that the term “collective” is absent from the statutory definition of “large station group,” whereas it is included in the definition of “qualified MVPD buying group.”  We seek comment on whether this has any relevance to the interpretation of this term.
  Third, given that a key purpose of the new good faith negotiation provisions is to level the playing field by “allow[ing] smaller MVPDs to collectively negotiate as a buying group [with large station groups] for retransmission consent,” See H.R. Rep. No. 116-329, at 4.
 we tentatively find that Congress could not have intended to create a collective negotiation mechanism to address the growing bargaining power of large station groups but then defined those groups in a way that would render the mechanism unavailable as a practical matter.  Significantly, a contrary interpretation, whereby each station in the group individually must have at least a 20 percent national audience reach, would be illogical given that there are currently no stations that meet this threshold. Indeed, no individual broadcast station even meets the 20 percent national audience threshold.  We note that the largest Designated Market Area (DMA) is New York, which covers roughly six percent of U.S. television households.  See Nielsen Media Research, Local Television Market Universe Estimates (Sept. 28, 2019), https://www.nielsen.com/wpcontent/uploads/sites/3/2019/09/2019-20-dma-ranker.pdf. 
 
   
8. We also propose to construe the phrase “all households served by a [MVPD]” in the statutory definition of “qualified MVPD buying group”  47 U.S.C. § 325(b)(7)(C)(i)(II) (as added by section 1003(b) of the TVPA).
 to mean all households that receive service from any MVPD, rather than all households served by a specific MVPD in a given local market.  Because the percentage of households that subscribe to a particular MVPD (or class of MVPDs) relative to the total number of households that subscribe to any MVPD in a given market is a competition metric that the Commission historically has utilized, See, e.g., Communications Marketplace Report, FCC 18-181 at 42, fig. B-2 (rel. Dec. 26, 2018); Rules and Policies Concerning Multiple Ownership of Radio Broadcast Stations in Local Markets, 16 FCC Rcd 19861, 19876 (2001).
 we tentatively conclude that this is the most reasonable reading of the relevant phrase.  We also believe that adopting the alternative interpretation would create practical problems given that the statute provides no guidance as to which MVPD in a given market should serve as the benchmark for the relevant threshold.  We seek comment on these proposals and tentative conclusions.
9. We also propose to implement section 1003 by:  (i) codifying in section 76.65 of our rules the provisions governing negotiation of retransmission consent between qualified MVPD buying groups and large station groups required by section 1003(a)(3) of the TVPA See 47 U.S.C. § 325(b)(3)(C)(vi)(I)-(III) (as added by section 1003(a)(3) of the TVPA).  Our proposed rule makes minor, non-substantive changes to this statutory provision, such as revising the statutory phrase “may satisfy its obligation to negotiate in good faith under clause (iii) with respect to a negotiation for retransmission consent under this section with a large station group” to read “may satisfy its obligation to negotiate in good faith for retransmission consent with a large station group.”
 and the definitions of “local market” and “multichannel video programming distributor” set forth in section 1003(b)(3); See id. § 325(b)(7)(E), (F) (as added by section 1003(b)(3) of the TVPA).  See Appendix A.   
 and (ii) deleting the phrase “as defined in 17 U.S.C. 122(j)” in section 76.65(viii) and (ix). Id.  Section 1003(c)(2) of the TVPA directs the Commission to strike this phrase from section 325(b)(3)(C) of the Act.  See Pub. L. No. 116-94, § 1003(c)(2).
  We seek comment on these proposed rule revisions and on whether other revisions are needed to implement section 1003 of the TVPA.
IV. PROCEDURAL MATTERS
10. Initial Regulatory Flexibility Analysis.  As required by the Regulatory Flexibility Act of 1980, as amended (RFA), 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. 857 (1996).  The SBREFA was enacted as Title II of the Contract with America Advancement Act of 1996 (CWAAA). 
 the Commission has prepared an Initial Regulatory Flexibility Analysis (IRFA) relating to this NPRM.  The IRFA is set forth in Appendix B.
11. Initial Paperwork Reduction Act Analysis.  This document does not contain proposed new or revised information collection requirements subject to the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. §§ 3501-3520).  In addition, therefore, it does not contain any new or modified “information burden for small business concerns with fewer than 25 employees” pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. § 3506(c)(4).
12. Ex Parte Rules – Permit-But-Disclose.  The proceeding this NPRM initiates shall be treated as a “permit-but-disclose” proceeding in accordance with the Commission’s ex parte rules. 47 CFR §§ 1.1200 et seq.

  Persons making ex parte presentations must file a copy of any written presentation or a memorandum summarizing any oral presentation within two business days after the presentation (unless a different deadline applicable to the Sunshine period applies).  Persons making oral ex parte presentations are reminded that memoranda summarizing the presentation must (1) list all persons attending or otherwise participating in the meeting at which the ex parte presentation was made, and (2) summarize all data presented and arguments made during the presentation.  If the presentation consisted in whole or in part of the presentation of data or arguments already reflected in the presenter’s written comments, memoranda or other filings in the proceeding, the presenter may provide citations to such data or arguments in his or her prior comments, memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be found) in lieu of summarizing them in the memorandum.  Documents shown or given to Commission staff during ex parte meetings are deemed to be written ex parte presentations and must be filed consistent with rule 1.1206(b).  In proceedings governed by rule 1.49(f) or for which the Commission has made available a method of electronic filing, written ex parte presentations and memoranda summarizing oral ex parte presentations, and all attachments thereto, must be filed through the electronic comment filing system available for that proceeding, and must be filed in their native format (e.g., .doc, .xml, .ppt, searchable .pdf).  Participants in this proceeding should familiarize themselves with the Commission’s ex parte rules.
13. Filing Comments and Replies.  Pursuant to sections 1.415 and 1.419 of the Commission’s rules, 47 CFR §§ 1.415, 1.419, interested parties may file comments and reply comments on or before the dates indicated on the first page of this document.  Comments may be filed using the Commission’s Electronic Comment Filing System (ECFS).  See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998).
· Electronic Filers:  Comments may be filed electronically using the Internet by accessing the ECFS:  http://apps.fcc.gov/ecfs/.
· Paper Filers:  Parties who choose to file by paper must file an original and one copy of each filing.  If more than one docket or rulemaking number appears in the caption of this proceeding, filers must submit two additional copies for each additional docket or rulemaking number.
Filings can be sent by 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.
§ All hand-delivered or messenger-delivered paper filings for the Commission’s Secretary must be delivered to FCC Headquarters at 445 12th St., SW, Room TW-A325, Washington, DC 20554.  The filing hours are 8:00 a.m. to 7:00 p.m.  All hand deliveries must be held together with rubber bands or fasteners.  Any envelopes and boxes must be disposed of before entering the building.  
§ Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9050 Junction Drive, Annapolis Junction, MD 20701.
§ U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street, SW, Washington, DC 20554.
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 Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).
14. Availability of Documents.  Comments, reply comments, and ex parte submissions will be available for public inspection during regular business hours in the FCC Reference Center, Federal Communications Commission, 445 12th Street, SW, CY-A257, Washington, DC 20554.  These documents will also be available via ECFS.  Documents will be available electronically in ASCII, Microsoft Word, and/or Adobe Acrobat.
15. Additional Information.  For additional information on this proceeding, contact Raelynn Remy of the Media Bureau, Policy Division, at Raelynn.Remy@fcc.gov or (202) 418-2936.
V. ORDERING CLAUSES
16. Accordingly, IT IS ORDERED that, pursuant to the authority found in sections 4(i), 4(j), 303(r), and 325 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 154(j), 303(r), and 325, and section 1003 of the Television Viewer Protection Act of 2019, Pub. L. No. 116-94, § 1003, 133 Stat. 2534, 3198 (2019).
 this Notice of Proposed Rulemaking IS ADOPTED.  
17. IT IS FURTHER ORDERED that the Commission’s Consumer and Governmental Affairs Bureau, Reference Information Center, SHALL SEND a copy of this Notice of Proposed Rulemaking, including the Initial Regulatory Flexibility Act Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.
						FEDERAL COMMUNICATIONS COMMISSION




						Marlene H. Dortch
						Secretary
9
APPENDIX A
Proposed Rules  
The Federal Communications Commission proposes to revise 47 CFR Part 76 as follows:

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, 338, 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.

2.	Amend § 76.65 to read as follows: 

§ 76.65  Good faith and exclusive retransmission consent complaints.

* * * * * 

(b) * * *

(1) * * *

(viii) Coordination of negotiations or negotiation on a joint basis by two or more television broadcast stations in the same local market (as defined in 17 U.S.C. 122(j)) to grant retransmission consent to a multichannel video programming distributor, unless such stations are directly or indirectly under common de jure control permitted under the regulations of the Commission.
(ix) The imposition by a television broadcast station of limitations on the ability of a multichannel video programming distributor to carry into the local market (as defined in 17 U.S.C. 122(j)) of such station a television signal that has been deemed significantly viewed, within the meaning of § 76.54 of this part, or any successor regulation, or any other television broadcast signal such distributor is authorized to carry under 47 U.S.C. 338, 339, 340 or 534, unless such stations are directly or indirectly under common de jure control permitted by the Commission.

(2)  Negotiation of retransmission consent between qualified multichannel video programming distributor buying groups and large station groups.
(i)  A multichannel video programming distributor may satisfy its obligation to negotiate in good faith for retransmission consent with a large station group by designating a qualified MVPD buying group to negotiate on its behalf, so long as the qualified MVPD buying group itself negotiates in good faith in accordance with this section. 
(ii)  It is a violation of the obligation to negotiate in good faith for a qualified MVPD buying group to disclose the prices, terms, or conditions of an ongoing negotiation or the final terms of a negotiation to a member of the qualified MVPD buying group that is not intending, or is unlikely, to enter into the final terms negotiated by the qualified MVPD buying group. 
(iii)  A large station group has an obligation to negotiate in good faith for retransmission consent with a qualified MVPD buying group.
(A) “Qualified MVPD buying group” means an entity that, with respect to a negotiation with a large station group for retransmission consent—
(1) negotiates on behalf of two or more multichannel video programming distributors—
(i) none of which is a multichannel video programming distributor that serves more than 500,000 subscribers nationally; and 
(ii) that do not collectively serve more than 25 percent of all households served by multichannel video programming distributors in any single local market in which the applicable large station group operates; and 
(2) negotiates agreements for such retransmission consent—
(i) that contain standardized contract provisions, including billing structures and technical quality standards, for each multichannel video programming distributor on behalf of which the entity negotiates; and 
(ii) under which the entity assumes liability to remit to the applicable large station group all fees received from the multichannel video programming distributors on behalf of which the entity negotiates.

(B) “Large station group” means a group of television broadcast stations that –
(1) are directly or indirectly under common de jure control permitted by the regulations of the Commission;
(2) generally negotiate agreements for retransmission consent under this section as a single entity; and 
(3) include only television broadcast stations that collectively have a national audience reach of more than 20 percent;
	
(3)  For purposes of this section and section 76.64 of this subpart, the following definitions apply:
(i)  “Local market” has the meaning given such term in 17 U.S.C. 122(j); and
(ii)  “Multichannel video programming distributor” has the meaning given such term in 47 U.S.C. 522.
(4)  Totality of the circumstances. * * * * 
	Federal Communications Commission	FCC 20-10


APPENDIX B
Initial Regulatory Flexibility Analysis
1. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), See 5 U.S.C. § 603.  The RFA, see 5 U.S.C. §§ 601-612, has been amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), Pub. L. No. 104-121, Title II, 110 Stat. 857 (1996).  The SBREFA was enacted as Title II of the Contract With America Advancement Act of 1996 (CWAAA).
 the Commission has prepared this Initial Regulatory Flexibility Analysis (IRFA) concerning the possible significant economic impact on small entities by the rules proposed in the Notice of Proposed Rulemaking (NPRM).  Written public comments are requested on this IRFA.  Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments provided on the first page of the NPRM.  The Commission will send a copy of the NPRM, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA). See 5 U.S.C. § 603(a).
  In addition, the NPRM and IRFA (or summaries thereof) will be published in the Federal Register. See id.

A. Need for, and Objectives of, the Proposed Rules
2. In this Notice of Proposed Rulemaking (NPRM), pursuant to section 325(b)(3)(C) of the Act, as amended by section 1003 of the Television Viewer Protection Act of 2019 (TVPA), Pub. L. No. 116-94, § 1003, 133 Stat. 2534, 3198 (2019).
 we commence a rulemaking proceeding to revise our retransmission consent rules to specify, among other things, that certain small multichannel video programming distributors (MVPDs) may satisfy their obligation to negotiate retransmission consent in good faith by negotiating with a large broadcast station group through a qualified MVPD buying group.  In particular, we propose to revise section 76.65 of our rules to define:  (i) the term “large station group” as used in section 1003 of the TVPA to mean, in relevant part, an entity whose individual television station members collectively have a national audience reach of more than 20 percent; and (ii) the term “qualified MVPD buying group” as used in section 1003 to mean, in relevant part, an entity that negotiates on behalf of MVPDs that collectively serve no more than 25 percent of all households receiving service from any MVPD in a given local market.  In addition, we propose to codify in section 76.65 the provisions governing negotiation of retransmission consent between qualified MVPD buying groups and large station groups, as well as the definitions of “local market” and “multichannel video programming distributor” set forth in section 1003(b)(3).  We also propose to make minor conforming changes to section 76.65. For example, consistent with the statute, the proposed rules delete the phrase “as defined in 17 U.S.C. 122(j)” in section 76.65(viii) and (ix).  Section 1003(c)(2) of the TVPA directs the Commission to strike this phrase from section 325(b)(3)(C) of the Act.  See Pub. L. No. 116-94, § 1003(c)(2).
  The NPRM seeks comment on these proposals and on whether other rule revisions are needed to implement section 1003 of the TVPA.    
B. Legal Basis
3. The proposed action is authorized pursuant to sections 4(i), 4(j), 303(r), and 325 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 154(j), 303(r), and 325, and section 1003 of the Television Viewer Protection Act of 2019. Pub. L. No. 116-94, § 1003, 133 Stat. 2534, 3198 (2019).

C. Description and Estimate of the Number of Small Entities To Which the Proposed Rules Will Apply
4. 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. 5 U.S.C. § 603(b)(3).
  The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” Id. § 601(6).
  In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. Id. § 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).
  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 U.S.C. § 632.
  Below, we provide a description of such small entities, as well as an estimate of the number of such small entities, where feasible.
5. 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.  47 CFR § 76.901(d).  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 Cable Television Consumer Protection and Competition Act of 1992:  Rate Regulation, MM Docket No. 92-266 et al., Sixth Report and Order and Eleventh Order on Reconsideration, 10 FCC Rcd 7393, 7408, para. 28 (1995).
  In addition, under the Commission’s rules, a “small system” is a cable system serving 15,000 or fewer subscribers.  47 CFR § 76.901(c).  
  Industry data indicate that there are currently 4,392 active cable systems in the United States. S&P Market Intelligence-MediaCensus data. 
  Of this total, 3,691 cable systems have fewer than 15,000 subscribers, and 701 systems have 15,000 or more.  Id.
  Thus, we estimate that most cable systems are small entities.
6. Cable System Operators (Telecommunications Act Standard).  The Act also contains a size standard for a small cable system operator, which is “a cable operator that, directly or through an affiliate, serves in the aggregate fewer than 1 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.” 47 U.S.C. § 543(m)(2); see also 47 CFR § 76.901(e).
  There are approximately 49,011,210 cable video subscribers in the United States today. See SNL Kagan, Multichannel Industry Benchmarks, https://platform.mi.spglobal.com/web/client?auth=inherit#industry/multichannelIndustryBenchmarks (last visited Jan. 14, 2020).
  Accordingly, an operator serving fewer than 490,112 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. See 47 CFR § 76.901(e).
  Based on available data, we find that all but five incumbent cable operators are small entities under this size standard. See SNL Kagan, Top Cable MSOs, https://platform.mi.spglobal.com/web/client?auth=inherit#industry/topCableMSOs (last visited Jan. 14, 2020).
  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.  Although it seems certain that some of these cable system operators are affiliated with entities whose gross annual revenues exceed $250 million, 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.
7. Most recent available data also indicate that there are 188 cable antenna relay service (CARS) licensees. August 24, 2017, report from Media Bureau staff based on data contained in COALS, www.fcc.gov/coals.
  The Commission, however, neither requests nor collects information on whether CARS licensees are affiliated with entities whose gross annual revenues exceed $250 million.  Although some CARS licensees may be affiliated with entities whose gross annual revenues exceed $250 million, we are unable at this time to estimate with greater precision the number of CARS licensees that would qualify as small cable operators under the definition in the Communications Act.
8. Open Video Services.  Open Video Service (OVS) systems provide subscription services. See 47 U.S.C. § 573.
  The open video system framework was established in 1996, and is one of four statutorily recognized options for the provision of video programming services by local exchange carriers. 47 U.S.C. § 571(a)(3)-(4).  See 13th Annual Report, 24 FCC Rcd at 606, para. 135.
  The OVS framework provides opportunities for the distribution of video programming other than through cable systems.  Because OVS operators provide subscription services, See 47 U.S.C. § 573.
 OVS falls within the SBA small business size standard covering cable services, which is “Wired Telecommunications Carriers.” U.S. Census Bureau, 2012 NAICS Definitions, 517110 Wired Telecommunications Carriers, http://www.census.gov/naics/2012/def/ND517110.HTM#N517110.
  The SBA has developed a small business size standard for this category, which is:  all such firms having 1,500 or fewer employees. 13 CFR § 201.121, NAICS code 517110 (2012).
  To gauge small business prevalence for the OVS service, the Commission relies on data currently available from the U.S. Census for the year 2012.  According to that source, there were 3,117 firms that in 2012 were Wired Telecommunications Carriers.  Of these, 3,059 operated with fewer than 1,000 employees.  Based on this data, the majority of these firms can be considered small. See U.S. Census Bureau, Table EC1251SSSZ5, https://factfinder.census.gov/faces/nav/jsf/pages/searchresults.xhtml?refresh=t#none.
  In addition, we note that the Commission has certified some OVS operators, with some now providing service. A list of OVS certifications may be found at http://www.fcc.gov/mb/ovs/csovscer.html.
  Broadband service providers (“BSPs”) are currently the only significant holders of OVS certifications or local OVS franchises. See 13th Annual Report, 24 FCC Rcd at 606-07 para. 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. 
  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, at least some of the OVS operators may qualify as small entities. The Commission further notes that it has certified approximately 45 OVS operators to serve 116 areas, and some of these are currently providing service. See http://www.fcc.gov/encyclopedia/current-filings-certification-open-video-systems (current as of July 2012).
  Affiliates of Residential Communications Network, Inc. (RCN) received approval to operate OVS systems in New York City, Boston, Washington, D.C., and other areas.  RCN has sufficient revenues to assure that they do not qualify as a small business entity.  Little financial information is available for the other entities that are authorized to provide OVS and are not yet operational.  Given that some entities authorized to provide OVS service have not yet begun to generate revenues, the Commission concludes that up to 44 OVS operators (those remaining) might qualify as small businesses that may be affected by the rules and policies adopted herein.
9. 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,” See 13 CFR § 121.201, NAICS code 517110 (2012).
 which was developed for small wireline firms. 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).
  Under this category, the SBA deems a wireline business to be small if it has 1,500 or fewer employees. 13 CFR § 121.201, NAICS code 517110 (2012).
  Census data for 2012 indicate that in that year there were 3,117 firms operating businesses as wired telecommunications carriers.  Of that 3,117, 3,059 operated with 999 or fewer employees.  Based on this data, we estimate that a majority of operators of SMATV/PCO companies were small under the applicable SBA size standard. U.S. Census Bureau, Table EC1251SSSZ5, https://factfinder.census.gov/faces/nav/jsf/pages/searchresults.xhtml?refresh=t#none. 

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 is now included in SBA’s economic census category “Wired Telecommunications Carriers.”  The Wired Telecommunications Carriers 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 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. See U.S. Census Bureau, 2017 North American Industry Classifications System (NAICS) Definitions, http://www.census.gov/cgi-bin/sssd/naics/naicsrch (2012 NAICS Definitions) (NAICS Code 517110). 
  The SBA determines that a wireline business is small if it has fewer than 1,500 employees. 13 CFR § 121.201 (2012) (NAICS Code 517110).
  Economic census data for 2012 indicate that 3,117 wireline companies were operational during that year.  Of that number, 3,083 operated with fewer than 1,000 employees.  See U.S. Census Bureau, Table No. EC1251SSSZ5, Information: Subject Series - Estab & Firm Size: Employment Size of Firms for the U.S.: 2012; 2012 Economic Census of the United States (Jan. 8, 2016), https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ5&prodType=table. 
  Based on that data, we conclude that the majority of wireline firms are small under the applicable standard.  Currently, however, only two entities provide DBS service, which requires a great deal of capital for operation:  DIRECTV (owned by AT&T) and DISH Network. See Communications Marketplace Report et al., GN Docket No. 18-231 et al., Report, FCC 18-131, 2018 WL 6839365, at *20, paras. 50-51 (Dec. 26, 2018).  
   DIRECTV and DISH Network each report annual revenues that are in excess of the threshold for a small business.  Accordingly, we conclude that, in general, DBS service is provided only by large firms.
11. Television Broadcasting.  This Economic Census category “comprises establishments primarily engaged in broadcasting images together with sound.” 2012 NAICS Definitions (NAICS Code 515120).
  These establishments operate television broadcast studios and facilities for the programming and transmission of programs to the public. Id.
  These establishments also produce or transmit visual programming to affiliated broadcast television stations, which in turn broadcast the programs to the public on a predetermined schedule.  Programming may originate in their own studio, from an affiliated network, or from external sources.  The SBA has created the following small business size standard for such businesses:  those having $41.5 million or less in annual receipts. 13 CFR § 121.201 (2012) (NAICS Code 515120). 
  The 2012 Economic Census reports that 751 firms in this category operated in that year.  Of this number, 656 had annual receipts of less than $25 million, 25 had annual receipts ranging from $25 million to $49,999,999, and 70 had annual receipts of $50 million or more. U.S. Census Bureau, Table No. EC1251SSSZ4, Information: Subject Series - Establishment and Firm Size: Receipts Size of Firms for the United States: 2012 (Jan. 8, 2016), https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_51SSSZ4&prodType=table.
  Based on this data, we estimate that the majority of commercial television broadcasters are small entities under the applicable SBA size standard.
12. Additionally, the Commission has estimated the number of licensed commercial television stations to be 1374. Press Release, FCC, Broadcast Station Totals as of December 31, 2019 (rel. Jan. 3, 2020), https://www.fcc.gov/document/broadcast-station-totalsdecember-31-2019.   
  Of this total, 1,282 stations (or 94.2%) had revenues of $38.5 million or less in 2018, according to Commission staff review of the BIA Kelsey Inc. Media Access Pro Television Database (BIA) on April 15, 2019, and therefore these licensees qualify as small entities under the SBA definition.  In addition, the Commission estimates the number of licensed noncommercial educational (NCE) television stations to be 388. Id.
  The Commission does not compile and does not have access to information on the revenue of NCE stations that would permit it to determine how many such stations would qualify as small entities.
13. We note, however, that in assessing whether a business concern qualifies as “small” under the above definition, business (control) affiliations “[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 the power to control both.”  13 CFR § 21.103(a)(1).
 must be included.  Our estimate, therefore, likely overstates the number of small entities that might be affected by our action, because the revenue figure on which it is based does not include or aggregate revenues from affiliated companies.  In addition, another element of the definition of “small business” requires that an entity not be dominant in its field of operation.  We are unable at this time to define or quantify the criteria that would establish whether a specific television broadcast station is dominant in its field of operation.  Accordingly, the estimate of small businesses to which rules may apply does not exclude any television station from the definition of a small business on this basis and is therefore possibly over-inclusive.
14. There are also 387 Class A stations. See supra note 40.
  Given the nature of these services, the Commission presumes that all of these stations qualify as small entities under the applicable SBA size standard.  In addition, there are 1,892 LPTV stations and 3,621 TV translator stations. See supra note 40.
  Given the nature of these services as secondary and in some cases purely a “fill-in” service, we will presume that all of these entities qualify as small entities under the above SBA small business size standard.
D. Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements
15. The NPRM does not propose to adopt any reporting or recordkeeping requirements.  The NPRM proposes to revise the Commission’s rules to permit certain small MVPDs to meet their statutory obligation to negotiate retransmission consent in good faith by designating a qualified MVPD buying group to negotiate on their behalf with a large broadcast station group.  In particular, the NPRM proposes to revise such rules by, among other things, clarifying the meaning of the statutory terms “large station group” and “qualified MVPD buying group” so as to facilitate smaller MVPDs’ use of the new collective bargaining provisions consistent with Congressional intent.  The proposed rule revisions would impose no new regulatory compliance burdens on small television broadcast stations.
E. Steps Taken to Minimize Significant Economic Impact on Small Entities and Significant Alternatives Considered
16. 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 and reporting requirements under the rule for such small entities; (3) the use of performance, rather than design standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities.” 5 U.S.C. § 603(c)(1)-(c)(4).

17. Through this NPRM, the Commission seeks to implement section 1003 of the TVPA in a way that reduces burdens on smaller MVPDs that negotiate retransmission consent against large broadcast station groups with greater bargaining leverage by allowing them to negotiate collectively as a buying group for retransmission consent with such groups.  As noted, the proposals in the NPRM, if adopted, likely would not have an adverse economic impact on any small entities, and would have a positive economic impact on smaller MVPDs that choose to avail themselves of the TVPA’s new collective bargaining provisions to negotiate against large broadcast station groups that have significant market power.  We invite comment on the economic impact of our proposals on small entities, and on how the Commission could minimize any potential burdens on such entities.
F. Federal Rules that May Duplicate, Overlap, or Conflict With the Proposed Rule
18. None.
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