Federal Register, Volume 75, Number 98, May 21, 2010, Pages 28463-28750

Federal Register/Vol. 75, No. 98/Friday, May 21, 2010/Proposed Rules

these licensees qualify as small entities
under the SBA definition.
100. Cable Television Systems. The
proposed rules and policies could affect
cable television systems. Cable
television systems fall within the SBA
standard for Wired Telecommunication
Carriers, and in this category a business
is small if it has 1500 or fewer
employees.137 This category includes,
among others, cable operators, direct
broadcast satellite services, fixed-
satellite services, home satellite dish
services, multipoint distribution
services, multichannel multipoint
distribution service, Instructional
Television Fixed Service, local
multipoint distribution service, satellite
master antenna television systems, and
open video systems.138 Since currently
available data was gathered when "Cable
and Other Program Distribution" was
the relevant category, earlier Census
Bureau data collected under the
category of "Cable and Other Program
Distribution" will be used here.
According to Census Bureau data, there
are 1,311 total cable and other pay
television service firms that operate
throughout the year of which 1,180 have
less than $10 million in revenue.139
Consequently, the Commission
estimates that the majority of providers
in this service category are small
businesses that may be affected by the
rules and policies adopted herein. The
Commission addresses below each
service individually to provide a more
precise estimate of small entities.
101. Cable System Operators (Rate
Regulation Standard). The Commission
has 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
137 13 CFR 121.201 (NAICS Code 517110). This
NAICS Code applies to all services listed in this
paragraph.
138 Those MVPDs relying primarily or exclusively
on satellite transmission could also be considered
to fall under the "Satellite Telecommunications"
category. 13 CFR 121.201 (NAICS Code 517410).
139 Economics and Statistics Administration,
Bureau of Census, U.S. Department of Commerce,
1997 Economic Census, Subject Series-
Establishment and Firm Size, Information Sector
51, Table 4 at 50 (2000). The amount of $10 million
was used to estimate the number of small business
firms because the relevant Census categories
stopped at $9,999,999 and began at $10,000,000. No
category for $1412.5 million existed. Thus, the

number is as accurate as it is possible to calculate
with the available information.

nationwide.140 As of 2008, out of 814 141
cable operators all but 10, that is 804,
qualify as small cable companies under
this standard.142 In addition, under the
Commission's rules, a "small system" is
a cable system serving 15,000 or fewer
subscribers.143 Current Commission
records show 6000 cable systems. Of
these 726 have 20,000 subscribers or
more, based on the same records. The
Commission estimates that there are
5,000 small systems based upon this
standard.
102. Cable System Operators
(Telecom Act Standard). The
Communications Act of 1934, as
amended, also contains a size standard
for small cable system operators, which
is "a cable operator that, directly or
through an affiliate, serves in the
aggregate fewer than 1 percent of all
subscribers in the United States and is
not affiliated with any entity or entities
whose gross annual revenues in the
aggregate exceed $250,000,000." 144
There are approximately 63.7 million
cable subscribers in the United States
today.145 Accordingly, an operator
serving fewer than 637,000 subscribers
shall be deemed a small operator if its
annual revenues, when combined with
the total annual revenues of all its
affiliates, do not exceed $250 million in
the aggregate.146 Based on available
data, the Commission finds that the
number of cable operators serving
637,000 subscribers or less is also
804.147 The Commission notes that the
Commission neither requests nor
collects information on whether cable
system operators are affiliated with
entities whose gross annual revenues
exceed $250 million.148 Although it
14047 CFR 76.901(e). The Commission
determined that this size standard equates
approximately to a size standard of $100 million or
less in annual revenues. The Commission
developed this definition based on its
determination that a small cable system operator is
one with annual revenues of $100 million or less.
See Implementation of Sections of the 1992 Cable
Act: Rate Regulation, Sixth Report and Order and
Eleventh Order on Reconsideration, 10 FCC Rcd
7393, 7408 (1995).
141 Cable MSO Ownership, A Geographical
Analysis, 2009 Edition, 14-31, SNL Kagan (June
2009).
142 Id. at 12.
143 47 CFR 76.901(c).
14447 U.S.C. 543(m)(2); see 47 CFR 76.901(f) &
nn. 1-3.).
145 See Cable TV Investor: Deals & Finance, No.
655, SNL Kagan, March 31, 2009, at 6.
146 47 CFR 76.901(f); see Public Notice, FCC
Announces New Subscriber Count for the
Definition of Small Cable Operator, DA 01-158
(Cable Services Bureau, Jan. 24, 2001).
147 Cable MSO Ownership at 12.
148 The Commission does receive such
information on a case-by-case basis if a cable

operator appeals a local franchise authority's
finding that the operator does not qualify as a small

seems certain that some of these cable
system operators are affiliated with
entities whose gross annual revenues
exceed $250,000,000, the Commission is
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.
103. Satellite Telecommunications.
The category of Satellite
Telecommunications "comprises
establishments primarily engaged in
providing telecommunications services
to other establishments in the
telecommunications and broadcasting
industries by forwarding and receiving
communications signals via a system of
satellites or reselling satellite
telecommunications." 149 The category
has a small business size standard of
$15 million or less in average annual
receipts, under SBA rules.150 For this
category, Census Bureau data for 2002
show that there were a total of 371 firms
that operated for the entire year.151 Of
this total, 307 firms had annual receipts
of under $10 million, and 26 firms had
receipts of $10 million to
$24,999,999.152 Consequently, the
Commission estimates that the majority
of Satellite Telecommunications firms
are small entities that might be affected
by its action.
104. All Other Telecommunications.
Satellite-related businesses within this
category include "establishments
primarily engaged in providing
specialized telecommunications
services, such as satellite tracking,
communications telemetry, and radar
station operation. This industry also
includes establishments primarily
engaged in providing satellite terminal
stations and associated facilities
connected with one or more terrestrial
systems and capable of transmitting
telecommunications to, and receiving
telecommunications from, satellite
systems." 153 For this category, Census
Bureau data for 2002 show that there
were a total of 332 firms that operated
for the entire year.154 Of this total, 303
cable operator pursuant to Section 76.901(f) of the
Commission's rules. See 47 CFR 76.901(f).
149 U.S. Census Bureau, 2007 NAICS Definitions,
"517410 Satellite Telecommunications"; http://
www.census.gov/naics/2007/def /ND51741 0.HTM.
15o 13 CFR 121.201, NAICS code 517410.
as2 U.S. Census Bureau, 2002 Economic Census,
Subject Series: Information, "Establishment and
Firm Size (Including Legal Form of Organization),"
Table 4, NAICS code 517410 (issued Nov. 2005).
152 Id. An additional 38 firms had annual receipts
of $25 million or more.
153 U.S. Census Bureau, 2007 NAICS Definitions,
"517919 All Other Telecommunications"; http://
www.census.gov/naics/2007/def/
ND517919.HTM#N517919.

154 U.S. Census Bureau, 2002 Economic Census,
Subject Series: Information, "Establishment and

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United States. Office of the Federal Register. Federal Register, Volume 75, Number 98, May 21, 2010, Pages 28463-28750. Washington D.C.. UNT Digital Library. http://digital.library.unt.edu/ark:/67531/metadc52679/. Accessed September 20, 2014.