## January 20, 2000

**STATEMENT OF COMMISSIONER MICHAEL K. POWELL,**

**DISSENTING IN PART**

*Re: Report and Order - In the Matter of Creation of Low Power Radio
Service*

*(MM Docket 99-25)*

This item's goal is to create a class of radio stations "designed to
serve very localized communities or underrepresented groups within
communities." *Notice of Proposed Rulemaking,* MM Docket No. 99-25, 14
FCC Rcd 2471, 2473 (1999). Attempting to give greater voice to narrower
interests is generally laudable and I support the objective. But, the
question that gives me pause is what the cost is to existing stations
that provide equally valuable service to their communities. Because this
*Order* fails to give credence to this concern, I respectfully dissent
in part.

I do not quibble with the Commission's objectives. Certainly, the
extensive consolidation of radio stations into large commercial groups
and the financial challenges of operating full power commercial stations
have limited the broadcasting opportunities for highly localized
interests. The introduction of a low power FM service may partially
address this concern. However, to borrow from the teaching of the
medical profession, when trying to treat a problem, we should "first do
no harm."[^1] There presently exist many small and independent stations
across the country that are especially notable for their local focus.
This admirable group includes a fair number of stations owned by
minorities and women, as well as stations with smaller audiences and
limited advertising. These stations have struggled to survive as
independent voices against the rising tide of consolidation brought on
by the economic stress of small scale production. It would be a perverse
result, indeed, if these stations were to fail or the quality of locally
originated programming suffer, because new LPFM stations diluted their
already tenuous base of support.

There are two interrelated, yet distinct, threats to these small
stations that stem from the new LPFM service: 1) signal interference and
2) erosion of economic viability. The first has garnered all the
attention. The Commission has endeavored to minimize the dangers of
interference in this item. It wrongly has ignored the second
concern.[^2] I have met with a number of small market broadcasters that
tell me that when they raise concerns about the threat of LPFM to their
economic viability they are bluntly rebuked---told that such
considerations are of no import, that we are only concerned with
spectrum efficiency and that we do not pick winners and losers. I, too,
heard this line during our internal deliberations. I find the
proposition absurd. We regularly consider the economic impacts of our
actions on licensees. Just one example is the degree to which we have
attempted to balance the need for consolidation to achieve economic
efficiency against our goal to foster myriad diverse voices. Indeed, the
Commission itself has recognized that the industry\'s ability to
function in the public interest, convenience and necessity is
fundamentally *premised on the industry\'s economic viability*.[^3]

The introduction of the LPFM service is not simply a way to get greater
use out of the spectrum, regardless of who gets the benefits. It is a
policy choice to create stations that allow very small communal and
parochial interests to find a voice. We are not agnostic as to whether
they proliferate and prosper. Indeed, we have made special
accommodations to suit our conception of this service, like eliminating
the third adjacency protections normally imposed on FM broadcasters.
Indeed, for years small broadcasters have tried to expand their services
to the community by seeking more lenient interference restrictions, but
to no avail. Similarly, we are minting a unique and distinct definition
of "community" in order to facilitate the LPFM service. My view is to
make such accommodations for this service, while putting our heads in
the sand as to the economic impacts on existing stations is in fact,
contrary to the assumption of some, picking winners and losers.

The threat to small independent broadcasters by the introduction of LPFM
service is not trivial.[^4] While the non-commercial educational LPFM
stations will not be direct competitors for advertising dollars to
existing commercial stations, they can threaten the economic health of
these stations in meaningful ways. LPFM stations might very well siphon
financial support away from small market stations. Local support that is
presently coming to existing stations in the form of advertising might
migrate to one or more LPFM stations in the form of underwriting.[^5]
Moreover, the presence of one or more LPFM stations will certainly
dilute audience share, on which securing advertising dollars is based. I
note, for example, that many of the *Order's* protections exist only
within the "protected contour" of the existing FM station. We know,
however, that many FM stations reach significant audience share outside
that contour and garner significant financial support from these
areas.[^6] Finally, market dilution may make it difficult to secure
financial support from lenders or investors.

The proponents of LPFM retort that the number of new stations will be
few in a given market, and limited in their reach. Perhaps, in some
markets this is true. But, the 41 new station possibilities in Elko,
Nevada and Springerville, Arizona, or the 25 new station possibilities
in Billings, Montana certainly are not trivial to the established
stations in those small, rural markets. In all, the Bureau tells us that
there is a possibility of 700 to 1000 new LP100 stations (more if LP10
stations come into the market).

It is important to emphasize that an adverse impact on existing stations
directly compromises the public interest. Locally originated programming
that we favor is expensive to produce compared to the scale efficiencies
of syndicated programming. The erosion of economic return, even slight
in small markets, may adversely impact the quantity and quality of local
programming, which is unlikely to be replaced by micro stations
operating under even greater economic constraints. The link between
local programming and economic efficiency is well-established. Former
Commissioner Ervin S. Duggan stated it succinctly:

Broadcast stations that can't stay above water economically can't serve
their communities. Broadcasters have always borne a fundamental
obligation to provide service in the public interest. Most have borne
that obligation quite well, despite occasional adversity. But the FCC
and the nation cannot expect broadcasters to fulfill that obligation if
the structure and economics of the industry don't permit it.[^7]

The threat of compromising this maxim of the public interest should have
compelled the Commission to fully consider the economic impact of its
decision.

Are these threats minimal or serious? We are left to wonder, wait and
see for the Commission has refused to seriously consider what might be
the economic consequences. I fear that many small and independent
stations will find this to be the straw that broke the camels back, or
that last "wafer thin mint"[^8] forcing them to sell out or cut back it
local programming. The result would be a further decrease in independent
and perhaps in minority and female ownership of full power stations that
we so often bemoan. The lost community value, furthermore, would not
simply be transferred to the new LPFM stations. Those stations may serve
a very small piece of the overall community, but could not possibly make
up for the greater service coverage of the lost full power station, nor
the lost opportunity for a minority or women to share in the fruits of
the broadcasting business.

# Signal Interference

I must confess that I have no clear idea as to whether or not existing
broadcasters will suffer intolerable interference. The engineering
studies on the record reach very different conclusions. When carefully
examined, however, one finds that the basic methodologies and analysis
are consistent with each other. Where these studies differ, is what the
various proponents believe is "acceptable" interference or degradation
of service. This I find to be a relatively subjective judgment rather
than an engineering one, colored by the self-interest of the various
proponents. It is my practice in such a situation to defer to the
conclusions of the Offices and Bureaus when not clearly persuaded
otherwise. Thus, customarily, I would accept the staff's conclusion that
third adjacency protection is unnecessary. I do have some hesitancy,
however, because I note that by doing so, we diverge from protections we
have insisted on---some say with unbending resolve---with respect to
other FM services. Nonetheless, to resolve this lingering doubt I would
have introduced the LPFM system another way than that we adopt here.

# A Better Way

On balance, I would have taken a different approach to introducing LPFM
service. I believe in light of lingering concerns about signal
interference and my pronounced concern about the economic impact of the
new service we should have introduced this service gradually. It might
begin with some experimental licensing in certain communities to assess
the real world impact of signal interference. Subsequently, we could
have fully introduced the service with third channel adjacency
protections. This would have two benefits. First, it would minimize the
risk of interference in a manner consistent with existing services and
second, it would introduce substantially fewer stations into the market,
thereby allowing us to evaluate the economic impacts of these new
stations in these markets. Finally, if all went well, we could then move
to full service with less adjacency protection, as warranted by our
experience. Such an approach strikes me as prudent and preferable to the
shotgun introduction which we let loose today.

# Conclusion

For the foregoing reasons, I dissent in part.

[^1]: Paraphrasing *Of the Epidemics*. Hippocrates. Translated by
    Francis Adams (found at
    http://classics.mit.edu/Hippocrates/epidemics.1.i.html).

[^2]: *See* Comments of John Haring and Harry M. Shooshan III "LPFM: The
    Threat to Consumer Welfare," *In re* Creation of a Low Power Radio
    Service, *Notice of Proposed Rulemaking*, MM Dkt No. 99-25 at 24.
    (Harring & Shooshan) *contained in* Comments of the National
    Association of Broadcasters, vol. I ("A station's economic scale of
    operations is affected both by technical parameters of the broadcast
    'machine' it operates and the competitive economic environment in
    which it operates. The premise of the Commission's LPFM proposal is
    that the operative constraint on very 'narrowcast' broadcast
    operations is primarily technical. . . .That is a false premise: In
    today's operating environment, the constraint on narrowcast
    programming is primarily economic rather than technical.").

[^3]: *See* *In re* Revision of Radio Rules and Policies, *Memorandum
    Opinion and Order and Further Notice of Proposed Rulemaking*, 7 FCC
    Rcd. 6387, 6389, para. at 11 (1992) (emphasis added).

[^4]: *See generally*, Haring & Shooshan (an economic analysis
    documenting the economic risks and possible loss to consumer welfare
    of the LPFM service).

[^5]: 47 U.S.C. § 399b, 47 U.S.C. § 541(e).

[^6]: It is true, that they do not enjoy protection from new full power
    stations outside their protected contours either, but new such
    stations would be hindered by the third adjacency spacing criteria
    and other limitations.

[^7]: "Localism Tied to the Tracks?," remarks of Commissioner Ervin S.
    Duggan, FCC before the Mississippi Association of Broadcasters (June
    27, 1992).

[^8]: To those unfamiliar with Monty Python, this line comes from the
    film *The Meaning of Life*. I will not describe the scene other than
    to say the phrase is spoken by a waiter urging a patron who has
    over-indulged to have just one last morsel, the infamous "wafer thin
    mint."