[Federal Register Volume 90, Number 46 (Tuesday, March 11, 2025)]
[Proposed Rules]
[Pages 11689-11695]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-03800]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 73 and 76
[MB Docket No. 25-72; FCC 25-16; FR ID 283395]
Implementation of the Commercial Advertisement Loudness
Mitigation (CALM) Act
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: In this document, the Federal Communications Commission
(Commission or FCC) seeks comment on the need for updates to its rules
implementing the Commercial Advertisement Loudness Mitigation (CALM)
Act. The Notice of Proposed Rulemaking (NPRM) seeks to develop a record
to help the Commission and the public better understand consumer
complaints about loud commercials. The NPRM seeks input from consumers
and industry on the extent to which the CALM Act rules have been
effective in controlling and preventing loud commercials on programming
provided by television broadcasters and pay TV providers. The
Commission also asks about its authority to address loud commercials
and the consistency of program volume on streaming platforms. Finally,
the NPRM asks what actions the Commission, industry, or standards
developers could take in this area to further minimize consumer harm.
DATES: Comments are due on or before April 10, 2025; reply comments are
due on or before April 25, 2025. Written comments on the Paperwork
Reduction Act proposed information collection requirements must be
submitted by the public, Office of Management and Budget (OMB), and
other interested parties on or before May 12, 2025.
ADDRESSES: You may submit comments, identified by MB Docket No. 25-72,
by any of the following methods:
Electronic Filers: Federal Communications Commission's
website: https://www.fcc.gov/ecfs. Follow the instructions for
submitting comments.
Mail: Parties who choose to file by paper must file an
original and one copy of each filing.
People with Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by email: [email protected] or phone: 202-418-
0530.
For detailed instructions for submitting comments and additional
information on the rulemaking process, see the SUPPLEMENTARY
INFORMATION section of this document. Send a copy of your comment on
the proposed information collection to Cathy Williams, FCC, via email
to [email protected] and to [email protected].
FOR FURTHER INFORMATION CONTACT: For additional information on this
proceeding, contact Evan Baranoff, [email protected], of the Media
Bureau, Policy Division, (202) 418-2120. Direct press inquiries to
[email protected]. For additional information concerning the
Paperwork Reduction Act information collection requirements contained
in this document, send an email to [email protected] or contact Cathy
Williams, Office of Managing Director, at (202) 418-2918 or
[email protected].
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Proposed Rulemaking (NPRM), FCC 25-16, adopted on February 27, 2025,
and released on February 28, 2025. The full text of this document is
available electronically via the FCC's Electronic Document Management
System (EDOCS) website at https://
[[Page 11690]]
www.fcc.gov/edocs (search using FCC number) or via the FCC's Electronic
Comment Filing System (ECFS) website at https://www.fcc.gov/ecfs
(search using docket number). (Documents will be available
electronically in ASCII, Microsoft Word, and/or Adobe Acrobat.)
Initial Paperwork Reduction Act. This document contains possible
new or modified information collection requirements. The Commission, as
part of its continuing effort to reduce paperwork burdens, invites the
general public and OMB to comment on the information collection
requirements contained in this document, as required by the Paperwork
Reduction Act of 1995, Public Law 104-13. Public and agency comments
are due May 12, 2025.
Comments should address: (a) whether the proposed collection of
information is necessary for the proper performance of the functions of
the Commission, including whether the information shall have practical
utility; (b) the accuracy of the Commission's burden estimates; (c)
ways to enhance the quality, utility, and clarity of the information
collected; (d) ways to minimize the burden of the collection of
information on the respondents, including the use of automated
collection techniques or other forms of information technology; and (e)
way to further reduce the information collection burden on small
business concerns with fewer than 25 employees. In addition, pursuant
to the Small Business Paperwork Relief Act of 2002, Public Law 107-198,
see 44 U.S.C. 3506(c)(4), the Commission seeks specific comment on how
the Commission might further reduce the information collection burden
for small business concerns with fewer than 25 employees.
Providing Accountability Through Transparency Act: Consistent with
the Providing Accountability Through Transparency Act, Public Law 118-
9, a summary of this document will be available on https://www.fcc.gov/proposed-rulemakings.
Synopsis
1. The NPRM invites comment on the need for updates to the
Commission's rules implementing the Commercial Advertisement Loudness
Mitigation (CALM) Act, Public Law 111-311. It has been over 10 years
since the Commission has taken action in this area, and we seek input
from consumers and industry on the extent to which these rules have
been effective in controlling and preventing loud commercials on
programming provided by television broadcasters and pay TV providers.
2. The CALM Act was enacted on December 15, 2010, in response to
consumer complaints about loud television commercials. Among other
things, the CALM Act directs the Commission to incorporate into its
rules by reference and make mandatory a technical standard, developed
by an industry standards development body, that is designed to prevent
digital television commercial advertisements from being transmitted
more loudly than the program material the commercials accompany. In
2011, the Commission adopted implementing rules that require television
stations and multichannel video programming providers (MVPDs) to ensure
that all commercials are transmitted to consumers at the appropriate
loudness level in accordance with the industry standard mandated in the
statute.\1\ This standard requires that the average loudness of a
commercial not exceed the average loudness of the surrounding
programming. The rules took effect on December 13, 2012, and were
updated in 2014 to reflect minor changes in the technical standard.\2\
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\1\ 77 FR 40276 (July 9, 2012). As mandated by the statute, the
Commission incorporated into its rules by reference and made
mandatory the Advanced Television Systems Committee (ATSC) A/85
Recommended Practice (RP), which describes how the television
industry can monitor and control the audio of digital television
programming.
\2\ 79 FR 51107 (August 27, 2014). In 2021 ATSC issued a
successor to A/85, correcting typographical errors in the 2013
document. Because the corrections did not impact the commercial
loudness elements of A/85, the Commission made no update to its
rules at that time. Later that year, the Media Bureau issued a
public notice seeking comment on the effectiveness of the rules, but
received a limited record in response.
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3. Under the rules, any station or MVPD that is notified by the
Commission of a pattern or trend of complaints must, within 30 days,
perform a 24-hour spot check of the programming being transmitted at
that time on the channel or program stream at issue, to verify ongoing
compliance. For commercials they insert, stations and MVPDs will be
deemed in compliance if they demonstrate that they use certain
equipment in the ordinary course of business. For commercials inserted
by programmers and third parties, the rules establish ``safe harbors''
based on certifications and periodic testing.
4. The Commission's CALM Act rules have been in effect for over 12
years. In the years immediately following their adoption, consumer
complaints to the Commission dropped significantly, indicating real
efforts on the part of industry to bring their stations and systems
into compliance. Nevertheless, as noted above, in recent years the
Commission has received thousands of complaints from viewers who remain
frustrated by the loudness of television commercials.\3\ Indeed, in
2024 the Commission saw a significant uptick in complaints about loud
commercials on broadcast television, cable, and satellite.\4\ We
therefore seek to develop a record to help the Commission and the
public better understand remaining issues in this area. We seek comment
on what measures could further support the purpose of the CALM Act to
prevent the transmission of commercial advertisements more loudly than
accompanying program material on television broadcast and MVPD
channels.
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\3\ Legislation was introduced in 2023 to modernize and expand
the CALM Act, supporting the Commission's data that the loudness of
commercials remains a source of consumer frustration.
\4\ Based on Commission data, in 2024 the Commission received at
least 1,700 complaints referencing loud commercials that appear to
relate to broadcast television, cable, and satellite, after
receiving approximately 750 in 2022 and 825 in 2023.
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5. We invite consumers to tell us their experiences regarding the
loudness of commercials as they watch programming provided by
television broadcasters and MVPDs.\5\ For example, are there times of
day, channels, or advertisements that are a consistent source of
irritation for consumers? As noted above, the ATSC Recommended Practice
incorporated into our rules addresses the average loudness of
commercials, rather than their maximum loudness. Anecdotal reports
indicate that some advertisers may be attempting to ``game'' this
system by using exceptionally loud sounds at the beginning of an
advertisement and then reducing the loudness to achieve a technically
compliant commercial that is nonetheless disruptive to viewers. We seek
comment on consumer experiences with this phenomenon, and possible
actions the Commission, industry, or standard developers could take in
this area to further minimize consumer harm. For example, should the
standard consider an approach other than simple averaging? \6\ We also
seek comment on how easy it is for consumers to file
[[Page 11691]]
complaints related to loud commercials. Under current Commission rules,
complaints must include details about potential violations in order for
the Commission to spot trends or patterns of loud commercials. Are
there changes that could be made to the television complaint form used
by the Commission to receive complaints to make it clearer or easier
for consumers to use? We also note that, in addition to complaints
regarding commercial loudness on programming provided by television
broadcasters and MVPDs, complaints filed with the Commission reflect
growing concern with the loudness of commercials on streaming services
and other online platforms. To what extent does the Commission have the
authority to address these complaints, or would such action require
additional statutory authority from Congress?
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\5\ Consumers are invited to share their experiences by filing
express comments in the FCC's electronic filing system: https://www.fcc.gov/ecfs/filings/express. Please note that complaints and
stories shared using the FCC's online consumer complaint center will
not become part of the record for this proceeding, but are shared
internally for potential enforcement. More information about filing
comments with the FCC is available at: https://www.fcc.gov/consumers/guides/how-comment.
\6\ Since 2013, the Recommended Practice has required that any
completely silent passages during an advertisement be excluded when
calculating its average loudness, but the same does not apply to
very quiet passages.
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6. The problem of loudness and quality degradation may also be
endemic in streamed shows and movies. If so, degraded audio quality in
this context could disproportionately affect those with disabilities.
We seek comments from consumers about their ability to hear and
understand dialogue in streamed shows and movies and whether sound
degradation particularly affects those with disabilities. We also
welcome comments that examine the causes of this degradation. Could the
lack of industry-wide audio standards for streaming platforms
contribute to this problem? Are structural market issues in the
streaming business, perhaps related to market concentration, impeding
efforts to arrive at an industry-wide standards? Unlike streaming
platforms, broadcast providers must comply with industry-wide audio
standards. Finally, we invite comments that address the Commission's
authority to regulate in this area under the 21st Century
Communications and Video Accessibility Act.\7\ We ask these questions
to gain a greater understanding of the issue of commercial loudness on
streaming platforms. The NPRM does not propose any specific regulations
on streaming providers. The Commission will not proceed with any such
regulation against any streaming provider without first seeking public
comment in a subsequent notice of proposed rulemaking.
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\7\ We also invite comment on whether Commission authority in
this area would have been changed by the previously proposed
Communications, Video, and Technology Accessibility Act (CVTA).
Legislation to adopt the CVTA was introduced in both the House and
Senate during the 118th Congress.
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7. Finally, we seek feedback from stakeholders about whether the
Commission's CALM Act rules and practices are effectively serving their
intended purpose and on specific areas in which commenters believe
updates are needed given the passage of time and any associated
improvements in technology or new industry practices. Are there any
specific compliance challenges for industry at this time? Are there
changes to the Commission's rules that would better implement the
directives of the CALM Act? Currently a station or MVPD is only
notified by the Commission if we find a pattern or trend of complaints.
Should the Commission implement other measures to convey consumer
concerns to stations and MVPDs? We also seek information on the extent
to which stations and MVPDs are receiving complaints directly from
their viewers, including data on those complaints. We seek comment on
these and all related questions surrounding the continuing problem of
loud commercials.
Filing Requirements--Comments and Replies
Pursuant to Sec. Sec. 1.415 and 1.419 of the Commission's rules,
47 CFR 1.415, 1.419, interested parties may file comments and reply
comments on or before the dates indicated in the DATES section of this
document. Comments may be filed using the Commission's Electronic
Comment Filing System (ECFS).
Electronic Filers: Comments may be filed electronically
using the internet by accessing the ECFS: https://www.fcc.gov/ecfs/.
Paper Filers: Parties who choose to file by paper must
file an original and one copy of each filing.
Filings can be sent by hand or messenger delivery, by
commercial courier, or by the U.S. Postal Service. All filings must be
addressed to the Secretary, Federal Communications Commission.
[cir] Hand-delivered or messenger-delivered paper filings for the
Commission's Secretary are accepted between 8 a.m. and 4 p.m. by the
FCC's mailing contractor at 9050 Junction Drive, Annapolis Junction, MD
20701. All hand deliveries must be held together with rubber bands or
fasteners. Any envelopes and boxes must be disposed of before entering
the building.
[cir] Commercial courier deliveries (any deliveries not by the U.S.
Postal Service) must be sent to 9050 Junction Drive, Annapolis
Junction, MD 20701.
[cir] Filings sent by U.S. Postal Service First-Class Mail,
Priority Mail, and Priority Mail Express must be sent to 45 L Street
NE, 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 email to [email protected] or
call the Consumer & Governmental Affairs Bureau at 202-418-0530.
8. Ex Parte Rules--Permit-But-Disclose. This proceeding shall be
treated as a ``permit-but-disclose'' proceeding in accordance with the
Commission's ex parte rules.\8\ 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 Sec.
1.1206(b). In proceedings governed by rule Sec. 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.
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\8\ 47 CFR 1.1200 through 1.1216.
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Initial Regulatory Flexibility Act Analysis
9. As required by the Regulatory Flexibility Act (RFA) of 1980, as
amended, Public Law 104-121, the Commission has prepared this Initial
Regulatory Flexibility Analysis (IRFA)
[[Page 11692]]
of the possible significant economic impact on a substantial number of
small entities by the policies 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 on the NPRM provided on the first page of
the NPRM. The Commission will send a copy of the entire NPRM, including
this IRFA, to the Chief Counsel for Advocacy of the Small Business
Administration (SBA). In addition, the NPRM and the IRFA (or summaries
thereof) will be published in the Federal Register.
A. Need for, and Objectives of, the Proposed Rules
10. Section 621 of the Communications Act of 1934, as amended,
adopted as part of the CALM Act, was a response to persistent consumer
complaints about loud television commercials and required Commission
action. The Commission's rules require that broadcast television
stations and MVPDs must ensure that all commercials are transmitted to
consumers at the appropriate loudness level in accordance with the
applicable industry standards. This proceeding requests comments on
potential revisions to the Commission's rules and/or practices to
better effect the objectives of Congress and to address concerns about
the continuing problem of loud commercials. Ultimately, these policies
and rules are intended for the benefit of television viewers.
B. Legal Basis
11. The proposed action is authorized pursuant to the Commercial
Advertisement Loudness Mitigation Act of 2010, Public Law 111-311, and
sections 1, 2(a), 4(i) and (j), and 303(r) of the Communications Act of
1934, as amended, 47 U.S.C. 151, 152, 154(i) and (j), 303(r) and 621.
C. Description and Estimate of the Number of Small Entities to Which
the Proposed Rules Will Apply
12. 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 rules adopted herein. The RFA generally defines the
term ``small entity'' as having the same meaning as the terms ``small
business,'' ``small organization,'' and ``small governmental
jurisdiction.'' In addition, the term ``small business'' has the same
meaning as the term ``small business concern'' under the Small Business
Act. A small business concern is one which: (1) is independently owned
and operated; (2) is not dominant in its field of operation; and (3)
satisfies any additional criteria established by the SBA. Below, we
provide a description of such small entities, as well as an estimate of
the number of such small entities, where feasible.
13. Small Businesses, Small Organizations, Small Governmental
Jurisdictions. Our actions, over time, may affect small entities that
are not easily categorized at present. We therefore describe, at the
outset, three broad groups of small entities that could be directly
affected herein. First, while there are industry specific size
standards for small businesses that are used in the regulatory
flexibility analysis, according to data from SBA's Office of Advocacy,
in general a small business is an independent business having fewer
than 500 employees. These types of small businesses represent 99.9% of
all businesses in the United States, which translates to 33.2 million
businesses.
14. Next, the type of small entity described as a ``small
organization'' is generally ``any not-for-profit enterprise which is
independently owned and operated and is not dominant in its field.''
The Internal Revenue Service (IRS) uses a revenue benchmark of $50,000
or less to delineate its annual electronic filing requirements for
small exempt organizations. Nationwide, for tax year 2022, there were
approximately 530,109 small exempt organizations in the U.S. reporting
revenues of $50,000 or less according to the registration and tax data
for exempt organizations available from the IRS.
15. Finally, the small entity described as a ``small governmental
jurisdiction'' is defined generally as ``governments of cities,
counties, towns, townships, villages, school districts, or special
districts, with a population of less than fifty thousand.'' U.S. Census
Bureau data from the 2022 Census of Governments indicate there were
90,837 local governmental jurisdictions consisting of general purpose
governments and special purpose governments in the United States. Of
this number, there were 36,845 general purpose governments (county,
municipal, and town or township) with populations of less than 50,000
and 11,879 special purpose governments (independent school districts)
with enrollment populations of less than 50,000. Accordingly, based on
the 2022 U.S. Census of Governments data, we estimate that at least
48,724 entities fall into the category of ``small governmental
jurisdictions.''
16. Television Broadcasting. This industry is comprised of
``establishments primarily engaged in broadcasting images together with
sound.'' These establishments operate television broadcast studios and
facilities for the programming and transmission of programs to the
public. These establishments also produce or transmit visual
programming to affiliated broadcast television stations, which in turn
broadcast the programs to the public on a predetermined schedule.
Programming may originate in their own studio, from an affiliated
network, or from external sources. The SBA small business size standard
for this industry classifies businesses having $47 million or less in
annual receipts as small. 2017 U.S. Census Bureau data indicate that
744 firms in this industry operated for the entire year. Of that
number, 657 firms had revenue of less than $25 million per year. Based
on this data we estimate that the majority of television broadcasters
are small entities under the SBA small business size standard.
17. As of December 31, 2024, there were 1,385 licensed commercial
television stations. Of this total, 1,308 stations (or 94.4%) had
revenues of $47 million or less in 2023, according to Commission staff
review of the BIA Kelsey Inc. Media Access Pro Television Database
(BIA) on January 7, 2025, and therefore these licensees qualify as
small entities under the SBA definition. In addition, the Commission
estimates as of December 31, 2024, there were 382 licensed
noncommercial educational television stations, 381 Class A TV stations,
1,801 low power TV stations, and 3,091 TV translator stations. The
Commission, however, does not compile and otherwise does not have
access to financial information for these television broadcast stations
that would permit it to determine how many of these stations qualify as
small entities under the SBA small business size standard.
Nevertheless, given the SBA's large annual receipts threshold for this
industry and the nature of these television station licensees, we
presume that all of these entities qualify as small entities under the
above SBA small business size standard.
18. Wired Telecommunications Carriers. The U.S. Census Bureau
defines this industry as 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 communications networks. Transmission
facilities may be based on a single technology or a combination of
technologies. Establishments in this
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industry use the wired telecommunications network facilities that they
operate to provide a variety of services, such as wired telephony
services, including voice over internet protocol (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. Wired
Telecommunications Carriers are also referred to as wireline carriers
or fixed local service providers.
19. The SBA small business size standard for Wired
Telecommunications Carriers classifies firms having 1,500 or fewer
employees as small. U.S. Census Bureau data for 2017 show that there
were 3,054 firms that operated in this industry for the entire year. Of
this number, 2,964 firms operated with fewer than 250 employees.
Additionally, based on Commission data in the 2022 Universal Service
Monitoring Report, as of December 31, 2021, there were 4,590 providers
that reported they were engaged in the provision of fixed local
services. Of these providers, the Commission estimates that 4,146
providers have 1,500 or fewer employees. Consequently, using the SBA's
small business size standard, most of these providers can be considered
small entities.
20. Cable Companies and Systems (Rate Regulation). The Commission
has developed its own small business size standard 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. Based
on industry data, there are about 420 cable companies in the U.S. Of
these, only seven have more than 400,000 subscribers. In addition,
under the Commission's rules, a ``small system'' is a cable system
serving 15,000 or fewer subscribers. Based on industry data, there are
about 4,139 cable systems (headends) in the U.S. Of these, about 639
have more than 15,000 subscribers. Accordingly, the Commission
estimates that the majority of cable companies and cable systems are
small.
21. Cable System Operators (Telecom Act Standard). The
Communications Act of 1934, as amended, contains a size standard for a
``small cable operator,'' which is ``a cable operator that, directly or
through an affiliate, serves in the aggregate fewer than one 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.'' For purposes of the Telecom Act Standard, the
Commission determined that a cable system operator that serves fewer
than 498,000 subscribers, either directly or through affiliates, will
meet the definition of a small cable operator. Based on industry data,
only six cable system operators have more than 498,000 subscribers.
Accordingly, the Commission estimates that the majority of cable system
operators are small under this size standard. We note however, that the
Commission neither requests nor collects information on whether cable
system operators are affiliated with entities whose gross annual
revenues exceed $250 million. Therefore, 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.
22. 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 included in the Wired
Telecommunications Carriers industry which 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.
23. The SBA small business size standard for Wired
Telecommunications Carriers classifies firms having 1,500 or fewer
employees as small. U.S. Census Bureau data for 2017 show that 3,054
firms operated in this industry for the entire year. Of this number,
2,964 firms operated with fewer than 250 employees. Based on this data,
the majority of firms in this industry can be considered small under
the SBA small business size standard. According to Commission data
however, only two entities provide DBS service--DIRECTV (owned by AT&T)
and DISH Network, which require a great deal of capital for operation.
DIRECTV and DISH Network both exceed the SBA size standard for
classification as a small business. Therefore, we must conclude based
on internally developed Commission data, in general DBS service is
provided only by large firms.
24. 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 included in the Wired Telecommunications Carriers'
industry which includes wireline telecommunications businesses. The SBA
small business size standard for Wired Telecommunications Carriers
classifies firms having 1,500 or fewer employees as small. U.S. Census
Bureau data for 2017 show that there were 3,054 firms in this industry
that operated for the entire year. Of this total, 2,964 firms operated
with fewer than 250 employees. Thus, under the SBA size standard, the
majority of firms in this industry can be considered small.
25. Home Satellite Dish (HSD) Service. HSD or the large dish
segment of the satellite industry is the original satellite-to-home
service offered to consumers and involves the home reception of signals
transmitted by satellites operating generally in the C-band frequency.
Unlike DBS, which uses small dishes, HSD antennas are between four and
eight feet in diameter and can receive a wide range of unscrambled
(free) programming and scrambled programming purchased from program
packagers that are licensed to facilitate subscribers' receipt of video
programming. Because HSD provides subscription services, HSD falls
within the industry category of Wired Telecommunications Carriers. The
SBA small business size standard for Wired Telecommunications Carriers
classifies firms having 1,500 or fewer employees as small. U.S. Census
Bureau data for 2017 show that there were 3,054 firms that operated for
the entire year. Of this total, 2,964 firms operated with fewer than
250 employees. Thus, under the SBA size standard, the majority of firms
in this industry can be considered small.
26. Incumbent Local Exchange Carriers (Incumbent LECs). Neither the
Commission nor the SBA have developed a small business size
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standard specifically for incumbent local exchange carriers. Wired
Telecommunications Carriers is the closest industry with an SBA small
business size standard. The SBA small business size standard for Wired
Telecommunications Carriers classifies firms having 1,500 or fewer
employees as small. U.S. Census Bureau data for 2017 show that there
were 3,054 firms in this industry that operated for the entire year. Of
this number, 2,964 firms operated with fewer than 250 employees.
Additionally, based on Commission data in the 2022 Universal Service
Monitoring Report, as of December 31, 2021, there were 1,212 providers
that reported they were incumbent local exchange service providers. Of
these providers, the Commission estimates that 916 providers have 1,500
or fewer employees. Consequently, using the SBA's small business size
standard, the Commission estimates that the majority of incumbent local
exchange carriers can be considered small entities.
27. Competitive Local Exchange Carriers (CLECs). Neither the
Commission nor the SBA has developed a size standard for small
businesses specifically applicable to local exchange services.
Providers of these services include several types of competitive local
exchange service providers. Wired Telecommunications Carriers is the
closest industry with an SBA small business size standard. The SBA
small business size standard for Wired Telecommunications Carriers
classifies firms having 1,500 or fewer employees as small. U.S. Census
Bureau data for 2017 show that there were 3,054 firms that operated in
this industry for the entire year. Of this number, 2,964 firms operated
with fewer than 250 employees. Additionally, based on Commission data
in the 2022 Universal Service Monitoring Report, as of December 31,
2021, there were 3,378 providers that reported they were competitive
local service providers. Of these providers, the Commission estimates
that 3,230 providers have 1,500 or fewer employees. Consequently, using
the SBA's small business size standard, most of these providers can be
considered small entities.
28. Competitive Access Providers (CAPs). Neither the Commission nor
the SBA have developed a definition of small entities specifically
applicable to CAPs. The closest applicable industry with an SBA small
business size standard is Wired Telecommunications Carriers. Under the
SBA small business size standard a Wired Telecommunications Carrier is
a small entity if it employs 1,500 employees or less. U.S. Census
Bureau data for 2017 show that there were 3,054 firms in this industry
that operated for the entire year. Of that number, 2,964 firms operated
with fewer than 250 employees. Additionally, based on Commission data
in the 2022 Universal Service Monitoring Report, as of December 31,
2021, there were 659 CAPs and CLECs, and 69 cable/coax CLECs that
reported they were engaged in the provision of competitive local
exchange services. Of these providers, the Commission estimates that
633 providers have 1,500 or fewer employees. Consequently, using the
SBA's small business size standard, most of these providers can be
considered small entities.
29. Open Video Systems. The open video system (OVS) framework was
established in 1996 and is one of four statutorily recognized options
for the provision of video programming services by local exchange
carriers. The OVS framework provides opportunities for the distribution
of video programming other than through cable systems. OVS operators
provide subscription services and therefore fall within the SBA small
business size standard for the cable services industry, which is
``Wired Telecommunications Carriers.'' The SBA small business size
standard for this industry classifies firms having 1,500 or fewer
employees as small. U.S. Census Bureau data for 2017 show that there
were 3,054 firms in this industry that operated for the entire year. Of
this total, 2,964 firms operated with fewer than 250 employees. Thus,
under the SBA size standard the majority of firms in this industry can
be considered small. Additionally, we note that the Commission has
certified some OVS operators who are now providing service and
broadband service providers are currently the only significant holders
of OVS certifications or local OVS franchises. The Commission does not
have financial or employment information for the entities authorized to
provide OVS however, the Commission believes some of the OVS operators
may qualify as small entities.
30. Broadband Radio Service and Educational Broadband Service.
Broadband Radio Service systems, previously referred to as Multipoint
Distribution Service and Multichannel Multipoint Distribution Service
systems, and ``wireless cable,'' transmit video programming to
subscribers and provide two-way high speed data operations using the
microwave frequencies of the Broadband Radio Service (BRS) and
Educational Broadband Service (EBS) (previously referred to as the
Instructional Television Fixed Service). Wireless cable operators that
use spectrum in the BRS often supplemented with leased channels from
the EBS, provide a competitive alternative to wired cable and other
multichannel video programming distributors. Wireless cable programming
to subscribers resembles cable television, but instead of coaxial
cable, wireless cable uses microwave channels.
31. In light of the use of wireless frequencies by BRS and EBS
services, the closest industry with an SBA small business size standard
applicable to these services is Wireless Telecommunications Carriers
(except Satellite). The SBA small business size standard for this
industry classifies a business as small if it has 1,500 or fewer
employees. U.S. Census Bureau data for 2017 show that there were 2,893
firms that operated in this industry for the entire year. Of this
number, 2,837 firms employed fewer than 250 employees. Thus, under the
SBA size standard, the Commission estimates that a majority of
licensees in this industry can be considered small.
32. According to Commission data as of December 2021, there were
approximately 5,869 active BRS and EBS licenses. The Commission's small
business size standards with respect to BRS involves eligibility for
bidding credits and installment payments in the auction of licenses for
these services. For the auction of BRS licenses, the Commission adopted
criteria for three groups of small businesses. A very small business is
an entity that, together with its affiliates and controlling interests,
has average annual gross revenues exceed $3 million and did not exceed
$15 million for the preceding three years, a small business is an
entity that, together with its affiliates and controlling interests,
has average gross revenues exceed $15 million and did not exceed $40
million for the preceding three years, and an entrepreneur is an entity
that, together with its affiliates and controlling interests, has
average gross revenues not exceeding $3 million for the preceding three
years. Of the ten winning bidders for BRS licenses, two bidders
claiming the small business status won 4 licenses, one bidder claiming
the very small business status won three licenses and two bidders
claiming entrepreneur status won six licenses. One of the winning
bidders claiming a small business status classification in the BRS
license auction has an active licenses as of December 2021.
[[Page 11695]]
33. The Commission's small business size standards for EBS define a
small business as an entity that, together with its affiliates, its
controlling interests and the affiliates of its controlling interests,
has average gross revenues that are not more than $55 million for the
preceding five (5) years, and a very small business is an entity that,
together with its affiliates, its controlling interests and the
affiliates of its controlling interests, has average gross revenues
that are not more than $20 million for the preceding five (5) years. In
frequency bands where licenses were subject to auction, the Commission
notes that as a general matter, the number of winning bidders that
qualify as small businesses at the close of an auction does not
necessarily represent the number of small businesses currently in
service. Further, the Commission does not generally track subsequent
business size unless, in the context of assignments or transfers,
unjust enrichment issues are implicated. Additionally, since the
Commission does not collect data on the number of employees for
licensees providing these services, at this time we are not able to
estimate the number of licensees with active licenses that would
qualify as small under the SBA's small business size standard.
34. Fixed Microwave Services. Fixed microwave services include
common carrier, private-operational fixed, and broadcast auxiliary
radio services. They also include the Upper Microwave Flexible Use
Service, Millimeter Wave Service (70/80/90 GHz), Local Multipoint
Distribution Service, the Digital Electronic Message Service, 24 GHz
Service, Multiple Address Systems, and Multichannel Video Distribution
and Data Service, where in some bands licensees can choose between
common carrier and non-common carrier status. Wireless
Telecommunications Carriers (except Satellite) is the closest industry
with an SBA small business size standard applicable to these services.
The SBA small size standard for this industry classifies a business as
small if it has 1,500 or fewer employees. U.S. Census Bureau data for
2017 show that there were 2,893 firms that operated in this industry
for the entire year. Of this number, 2,837 firms employed fewer than
250 employees. Thus, under the SBA size standard, the Commission
estimates that a majority of fixed microwave service licensees can be
considered small.
35. The Commission's small business size standards with respect to
fixed microwave services involve eligibility for bidding credits and
installment payments in the auction of licenses for the various
frequency bands included in fixed microwave services. When bidding
credits are adopted for the auction of licenses in fixed microwave
services frequency bands, such credits may be available to several
types of small businesses based average gross revenues (small, very
small, and entrepreneur) pursuant to the competitive bidding rules
adopted in conjunction with the requirements for the auction and/or as
identified in part 101 of the Commission's rules for the specific fixed
microwave services frequency bands.
36. In frequency bands where licenses were subject to auction, the
Commission notes that as a general matter, the number of winning
bidders that qualify as small businesses at the close of an auction
does not necessarily represent the number of small businesses currently
in service. Further, the Commission does not generally track subsequent
business size unless, in the context of assignments or transfers,
unjust enrichment issues are implicated. Additionally, since the
Commission does not collect data on the number of employees for
licensees providing these services, at this time we are not able to
estimate the number of licensees with active licenses that would
qualify as small under the SBA's small business size standard.
D. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements
37. The NPRM seeks comment on a range of potential changes to
existing reporting, recordkeeping or other compliance requirements.
Regarding the Commission's rules implementing section 621 of the
Communications Act, the NPRM seeks comment on all aspects of the
commercial loudness rules, as well as the Commission's complaint
process. The Commission's rules currently require that small
broadcasters and MVPDs transmit all commercials at the appropriate
loudness level in accordance with the appliable industry standards.
Therefore, we do not anticipate significant changes to existing
reporting, recordkeeping, or compliance obligations for small entities
as a result of this proceeding. However, should the Commission
ultimately have the authority to adopt, and then subsequently adopt,
rules extending the CALM Act to streaming services and other online
platforms, this would necessitate new compliance obligations for small
and other providers of those services. As noted in the NPRM, it has
been over ten years since the Commission adopted rules in relation to
the CALM Act, and information on whether small entities need to hire
professionals to comply with the rules and industry standards at this
time is welcome as proposed changes are considered. We anticipate the
information we receive in comments including, where requested, cost and
benefit analyses, will help the Commission identify and evaluate
relevant compliance matters for small entities, including compliance
costs and other burdens that may result from the inquiries we make in
the NPRM.
E. Steps Taken To Minimize Significant Impact on Small Entities and
Significant Alternatives Considered
38. The RFA requires an agency to describe any significant
alternatives that it has considered in reaching its proposed approach,
which may include the following four alternatives (among others): (1)
the establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small
entities; (2) the clarification, consolidation, or simplification of
compliance or reporting requirements under the rule for such small
entities; (3) the use of performance, rather than design, standards;
and (4) and exemption from coverage of the rule, or any part thereof,
for such small entities.
39. The NPRM seeks comment on the Commission's rules implementing
section 621 of the Communications Act, as amended, specifically on
whether its rules, and the enforcement thereof, are successful in
preventing and controlling loud television commercials. Because
Congress required the Commission to apply our commercial loudness rules
to all digital broadcasters and MVPDs, some small entities will be
affected by any rule changes. The Commission therefore seeks comment on
whether any of the burdens associated with potential new filing,
recordkeeping and reporting, or other requirements can be minimized for
small entities. We expect to more fully consider the economic impact
and alternatives for small entities following the review of comments
filed in response to the NPRM.
F. Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules
40. None.
Federal Communications Commission.
Marlene Dortch,
Secretary.
[FR Doc. 2025-03800 Filed 3-10-25; 8:45 am]
BILLING CODE 6712-01-P