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A. 1. a.(1)(a) i) a) 1. 1. 1. a.(1)(a) i) a)#X\  P6G;ɒP#X01Í ÍX01Í Í#Xj\  P6G;ynXP#"i~'^:DPddDDDdp4D48dddddddddd88pppX|pDL|pp||D8D\dDXdXdXDdd88d8ddddDL8ddddX`(`lD4l\DDD4DDDDDDdDd8XXXXXX|X|X|X|XD8D8D8D8ddddddddddXdbdddpdXXXXXlX~|X|X|X|XdddldldD8DdDDDdplld|8|P|D|D|8dvddddDDDpLpLpLpl|T|8|\ddddddl|X|X|Xd|DdpL|Dd~4ddC$CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxH\dDXddddd8@d<@d<DDXXdDDxddxHxxHvppDXd<"dxtldpxxd2 KXK`K "i~'^09CSS999S]+9+/SSSSSSSSSS//]]]Ixnnxg]xx9?xgxx]xn]gxxxxg9/9MS9ISISI9SS//S/SSSS9?/SSxSSIP!PZ9+ZM999+999999S9S/xIxIxIxIxIlnIgIgIgIgI9/9/9/9/xSxSxSxSxSxSxSxSxSxSxIxSxRxSxSxS]SxIxIxInInInZnIxigIgIgIgIxSxSxSxZxSxZxS9/9S999Su]ZZxSg/gCg9g9g/xSbxSxSxSxSxn9n9n9]?]?]?]ZgFg/gMxSxSxSxSxSxSxxZgIgIgIxSg9xS]?g9xSi+SS88WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN/>/>/>/x]SSSSx]x]x]x]xSxSx]SSxSxSf]xSxSxSxIxIxWxIx{nInInInISSSWS]a?/?]?9?]]WW]n/nKn9nCn/x]xx]x]SSxxIxIxI]?]?]?]WnUn9nax]x]x]x]x]x]xxWnInInIx]n9x]]?n9xSz+SS8-8WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN8HH"&H>XHH8HB8>HH^HH>"".2",2,2,"222N2222"&22H22,006"6."""""""""2"2H,H,H,H,H,XAB,>,>,>,>,""""H2H2H2H2H2H2H2H2H2H2H,H2H1H2H2H282H,H,H,B,B,B6B,H?>,>,>,>,H2H2H2H6H2H6H2""2"""2F866H2>>(>">">H2;H2H2H2H2XHB"B"B"8&8&8&86>*>>.H2H2H2H2H2H2^HH6>,>,>,H2>"H28&>"H2?22!!WFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN$<<$.2",2222`2 LL2 LL2L"",,2d""\4  pG;\5hC:,%rXh*f9 xr G;XXW!@(#,h@\  P6G;hPH5!,),5\  P6G;,P\{,W80,%BZW*f9 xr G;X6jC:,<̃Xj9 xOG;X -  %mWPWINFIL.EXE X- X    X-w  Federal Communications Commission`u(#=FCC 9870 ă  yxdddy vK#X\  P6G;ɒP# Before the Federal Communications Commission  yO}"Washington, D.C. 20554 ă  XA-In the Matter ofj#Xj\  P6G;ynXP#) j)  X-Revisions to Part 21 of thej)ppCC Docket No. 86179  X-Commission's Rules regarding thej) Multipoint Distribution Servicej) l l  X - SECOND REPORT AND ORDER lU  X[ -X` hp x (#%'0*,.8135@8:is not subject to the broadcast obligations contained in Title III.A ? {O-ԍ See id. at 4255. A The Commission did not, however, consider the possibility that MDS might also be offered on a nonsubscription basis.  X - }3.  The National Association for Better Broadcasting and the Telecommunications   Research and Action Center (collectively, "Petitioners") jointly filed in the D.C. Circuit a petition  X-  for review of the Report and Order, seeking reversal of the portions of the Report and Order  X-  z which indicated that MDS transmissions are not broadcasting as defined in Section 3 of the   NCommunications Act, 47 U.S.C.  153, and thus not subject to the broadcast obligations  XQ-  contained in Title III of the Act.~Q|? yO~-  ԍ Section 3(6) of the Communications Act defines "broadcasting" as the "dissemination of radio communications   ,intended to be received by the public, directly or by the intermediary of relay stations." 47 U.S.C.  153(6). When   <radio dissemination fits this definition it becomes subject to the broadcast obligations under Title III, such as the   requirements of sponsorship identification and equal opportunity for political candidates. As described in footnote  {O-  three, supra, consistent with the pointtopoint nature of the service, MDS licensees have traditionally offered MDS  {Oh-  service to particular subscribers, not intending MDS transmissions to be received by the general public. See NABB  {O2-I, No. 871505. The D.C. Circuit held the petitions in abeyance pending its  X:-  ydecisions in TRAC and NABB II, which involved related issues. The D.C. Circuit subsequently   granted the Commission's unopposed request for remand of the present proceeding so that further  X-  Kconsideration could be given to the issues raised by Petitioners in light of the NABB II and TRAC  X-cases.  ? {Ol"-ԍ Order Granting Commission's Unopposed Motion for Remand, No. 871505 (D.C. Cir. issued Nov. 16, 1988).  X- {4. In NABB II, the court affirmed a Commission decision holding that subscription video  X-  services are not broadcasting services subject to Title III broadcasting obligations. T ? {O&-ԍ See NABB II, 849 F.2d at 666, affirming Subscription Video Services, 2 FCC Rcd 1001 (1987). In TRAC," ,-(-(ZZp"   however, the $!  $!  $! D.C. Circuit$!  remanded to the Commission a decision that failed to determine the   proper regulatory classification for nonsubscription service offered on Instructional Television  X-  Fixed Service ("ITFS") excess capacity.K ? {OK-ԍ See TRAC, 836 F.2d at 1356.K The court in TRAC noted that the appropriate  X-  classification for subscription video services was the subject of a separate proceeding. Z? {O-ԍ See id. at 1354 (referring to the Subscription Video decision subsequently affirmed in NABB II). The court   expressed concern, however, about possible statutory violations that could result if ITFS excess   capacity was offered on a nonsubscription basis, without the Commission's knowledge, and   without the Commission having made any prior determination as to whether broadcasting  Xa-obligations applied.@ a? {O -ԍ See id. at 1356.@   X3- 05. Given these concerns, the court in TRAC remanded the ITFS rulemaking and ordered   Lthe Commission "to make the basic classification determination or to explain why it should not  X -  have to at this time."4 ~? {O6-ԍ Id. 4 The court further stated that if the Commission continued to defer the   classification question, "it should explain what useful information it expects to learn in any   interim period and at a minimum, consider requiring licensees to inform the agency of any plans  X -  \to provide [excess capacity] ITFS on a nonsubscription basis."3 ? {O-ԍ Id.3  In response to the TRAC   decision, the Commission issued an order that continued to defer classification of nonsubscription   jservice on ITFS excess capacity, but required prior Commission notification and approval prior  X-  to the offering of nonsubscription excess capacity services on ITFS facilities.? {O-  ԍ  Amendment of Part 74 of the Commission's Rules and Regulations In Regard to the Instructional Television  {O-Fixed Service, 3 FCC Rcd 4564 (1988) ("ITFS Remand"). No petitions for review of that decision were filed.  X:-@ DISCUSSION ă  X - 6. Consistent with the D.C. Circuit's decision in NABB II to affirm the Commission's   determination that subscription video services are nonbroadcasting services, we will continue to  X-  yclassify subscription MDS as a nonbroadcast service.V ? {O"-ԍ See NABB II, 849 F.2d at 66869.V Furthermore, consistent with the D.C.  X-  Circuit's decision in  $&  $& TRAC $&  $& , we will continue to defer classification of nonsubscription MDS   yservice because we believe that it is appropriate to do so at this time. We are unaware, to date,   of any instances where MDS has been offered on other than a subscription basis. We further note   that MDS service providers, like ITFS licensees, have been authorized to provide pointto  [multipoint services, not broadcasting services, in keeping with the pointtopoint nature of the"o ,-(-(ZZO"  X-  service. ? {Oy-  ԍ See Subscription Video Services, 2 FCC Rcd at 1006 (issue of broadcasting will not arise in MDS service due to pointtopoint nature of the service). Additionally, the MDS industry is currently experiencing new growth and development.   Following a period of several years in which a freeze was placed on the filing of applications for  X-  new MDS facilities,"? {O- xԍ See Notice of Proposed Rulemaking in PR Docket No. 9280, 7 FCC Rcd 3266 (1992) (imposing freeze on filing of applications for new MDS stations). the Commission has completed its auction of the remaining available MDS  X-  channels,|? {O - xjԍ See Public Notice, Winning Bidders in the Auction of Authorizations to Provide Multipoint Distribution  {O -Service in 493 Basic Trading Areas (rel. March 29, 1996). and has processed nearly all of the station applications filed by auction winners. In   addition, MDS operators, including auction winners and existing licensees, are now engaging in  X-  numerous transactions, including transfers and assignments of MDS licenses.? {O- xԍ See, e.g., Public Notice, Action Taken on Applications for Assignment of Authorizations (rel. June 13, 1997) (granting numerous MDS assignment applications). The MDS industry   has also recently attracted new participants, including telephone companies, which have provided  X_-  additional capital needed for further expansion.Z_2 ? {OB- xԍ  See, e.g., Wireless Cable Association International, Spectrum (Feb./March 1997) at 1 (describing BellSouth's acquisition of Atlanta MDS system). Technical improvements, including digital   Kcompression, may enhance the ability of MDS to compete in the multichannel video programming  X1-marketplace.1T ? yO6-  ԍ By declaratory ruling, the Commission determined that it would routinely grant MDS and ITFS applications  {O-  proposing the use of digital modulation on a noninterference basis.  Request for Declaratory Ruling on the Use of  {O-  Digital Modulation by Multipoint Distribution Service and Instructional Television Fixed Service Stations, FCC 96  304 (released July 10, 1996). In a pending rulemaking, we are also reexamining our technical rules regarding MDS  {OZ-  ,to, inter alia, allow the provision of twoway communication services. See Notice of Proposed Rulemaking in MM Docket No. 97217, FCC 97360 (Oct. 10, 1997).  27. Given these significant developments now occurring in the MDS industry, the   <Commission believes that prematurely classifying nonsubscription MDS, a service that does not   yet exist and that may never be proposed, would be inadvisable. Instead, the Commission   Zbelieves that proper classification of nonsubscription MDS as either broadcast or nonbroadcast   should be done in the context of an actual service proposal, so the Commission will have  X-  "concrete information regarding its precise nature and method of operation."N? {O#-ԍ ITFS Remand, 3 FCC Rcd at 4564.N  As we stated in the order deferring classification of nonsubscription service offered on ITFS excess capacity: ` ` It remains apparent that any such service, which has yet to define ` ` itself, can be classified more appropriately, more capably, and more"4d,-(-(ZZf"Ԍ` ` efficiently with concrete information regarding its precise nature ` ` and method of operation. Accordingly, no attempt will be made ` ` to classify here by Rule Making services which do not exist at ` ` this time, which may never exist, and whose actual permutations  X-` ` cannot now be predicted.b? {O-ԍ ITFS Remand, 3 FCC Rcd at 4564 (footnote omitted).b  Xv-    $5   $5 Additionally, we also$5  noted that, unlike subscription services, "the classification of non  {subscription services may require casebycase examination of a multiplicity of facts and   circumstances surrounding the transmissions to determine the transmitter's intent or other relevant  X1-classification factor(s)."A1Z? {O< -ԍ Id. at 4567 n. 7.A   O8. To avoid the possibility of statutory or rule violations that could result from MDS  X -  licensees offering nonsubscription MDS service,] ? {O-ԍ  See TRAC, 836 F.2d at 1356.] we are, consistent with the D.C. Circuit's  X -  decision in  $7  $7 TRAC $7  $7  (and similar to our ITFS decision on remand), amending our rules to require   /prior notification, and Commission approval, before MDS service may be offered on a non  subscription basis. This notification and approval requirement will allow the Commission to   determine whether a proposed nonsubscription MDS service is a broadcast service before such   >service commences. An indicated above, we are not aware of any instances in which MDS   service has been offered on a nonsubscription basis. In the event that such service is currently   being offered, we require that the Commission be notified within 30 days from the effective date   <of this order. Such notification shall include full details regarding the nonsubscription operation and service offerings.  X-W PROCEDURAL MATTER ă  X- 9. Final Regulatory Flexibility Act Certification. Pursuant to the Regulatory Flexibility  X-  Act of 1980, as amended ("RFA"),pZ~? {O-  ԍ See 5 U.S.C.  605(b). The RFA, see 5 U.S.C.  601 et seq., was amended by the Contract With America   wAdvancement Act of 1996, Pub.L. No. 104121, 110 Stat. 847 (1996) ("CWAAA"). Title II of the CWAAA is the Small Business Regulatory Enforcement Fairness Act of 1996. p it is hereby certified that the notification requirement for   nonsubscription MDS service adopted herein will not have a significant economic impact on a   substantial number of small entities. As indicated above in  68, we are not aware of any   jinstances in which MDS service has been offered on a nonsubscription basis. Thus, the only   Zimpact of the notification requirement will be the submission of data concerning nonsubscription   MDS service from the limited number (if any) of MDS applicants and licensees that may one day choose to develop and provide such service. " ,-(-(ZZy"Ԍ X- 10. The Commission will send a copy of this final certification, along with this Second  X-  Report and Order, in a report to Congress pursuant to the Small Business Regulatory   Enforcement Fairness Act of 1996, 5 U.S.C.  801(a)(1)(A), and to the Chief Counsel for   jAdvocacy of the Small Business Administration, 5 U.S.C.  605(b). A copy of this certification will also be published in the Federal Register.  Xz-% ORDERING CLAUSES ă  12. Accordingly, IT IS ORDERED, That pursuant to the authority of Sections 4(i) and   303(r) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i) and 393(r), this  X -  LSecond Report and Order is adopted, and Part 21 of the Commission's Rules ARE AMENDED as set forth in the attached Appendix.  13. IT IS FURTHER ORDERED, That the rule amendment set forth in the Appendix   !WILL BECOME EFFECTIVE 70 days after publication in the Federal Register, following  X -  Lapproval by the Office of Management and Budget, unless a notice is published in the Federal  X-Register stating otherwise.   Xh-   14. IT IS FURTHER ORDERED, That the Commission's Office of Public Affairs,  XQ-  ?Reference Operations Division, SHALL SEND a copy of this  $;  $; Second Report and Order $;  $; ,   .including the Final Regulatory Flexibility Act Certification, to the Chief Counsel for Advocacy   of the Small Business Administration, in accordance with Section 605(b) of the Regulatory  X-Flexibility Act, 5 U.S.C.  601  $<  $< et seq $<  $< . 15. IT IS FURTHER ORDERED, That CC Docket No. 86179 IS TERMINATED.  X-l  X-l ă ` `  hh,VFEDERAL COMMUNICATIONS COMMISSION ` `  hh,VMagalie Roman Salasl ` `  hh,VSecretary  X- ",-(-(ZZ"  X-H APPENDIX ă I. Part 21 of Chapter 1 of Title 47 of the Code of Federal Regulations is amended as follows: PART 21 DOMESTIC PUBLIC FIXED RADIO SERVICES 1. The authority citation for Part 21 continues to read as follows:  Authority: Secs. 1, 2, 4, 201205, 208, 215, 218, 303, 307, 313, 314, 403, 404, 410, 602;   48 Stat. 1064, 1066, 10701073, 1076, 1077, 1080, 1082, 1083, 1087, 1094, 1098, 1102, as   ?amended; 47 U.S.C. 151, 154, 201205, 208, 215, 218, 303, 307, 313, 314, 403, 602; 47 U.S.C. 552, 554.   II. The following section is added as an amendment to Part 21 of Chapter 1 of Title 47 of the Code of Federal Regulations:  Xy-  21.940 Nonsubscription MDS service.  The Commission must be notified, and prior Commission approval obtained, before   -Multipoint Distribution Service or Multichannel Multipoint Distribution Service may be provided on a nonsubscription basis.