**Before the**

**FEDERAL COMMUNICATIONS COMMISSION**

**Washington, D.C.**

+-------------------------------------------+--------------------------+
| In the Matter of                          | IB Docket No. 98-21      |
|                                           |                          |
| **Policies and Rules for the**            |                          |
|                                           |                          |
| **Direct Broadcast Satellite Service**    |                          |
+-------------------------------------------+--------------------------+

**NOTICE OF PROPOSED RULEMAKING**

**Adopted:** February 19, 1998 **Released:** February 26, 1998

Comment Date: April 6, 1998

Reply Comment Date: April 21, 1998

By the Commission:Commissioners Furchtgott-Roth and Powell approving in
part; dissenting in part and issuing separate statements.

**[TABLE OF CONTENTS]{.underline}**

**[Topic]{.underline} [Paragraph Number]{.underline}**

**I. INTRODUCTION** 1

**II. BACKGROUND** 4

**III. DISCUSSION** 13

A. Incorporation of DBS Service Rules into Part 25 13

B. Technical Matters 43

C. DBS Ownership 54

**IV. CONCLUSION** 66

**V. PROCEDURAL MATTERS** 67

**I. INTRODUCTION**

Consistent with our goals of regulating services subject to our
jurisdiction in a pro-competitive, common-sense manner, this rulemaking
seeks to streamline and simplify the Commission\'s rules governing the
direct broadcast satellite (DBS)[^1] service. We propose to eliminate
unnecessary and duplicative regulation of this emerging service and seek
comment on a number of issues concerning horizontal concentration within
the multi-channel video programming distribution (MVPD) market. Today,
DBS and the direct-to-home fixed-satellite service (DTH-FSS) provide
service to approximately 8.5 million households, offering an alternative
to cable television service, which is the dominant MVPD provider.[^2]
DBS and DTH-FSS providers serve more subscribers than any type of MVPD
other than cable. It has been reported that the domestic and
international demand for DBS and DTH-FSS will grow in the future,
demonstrating the potential for increased competition to the cable
industry and within the MVPD market generally.[^3] In addition, we have
recently licensed entities to provide services in the high-power
Ka-band. This next generation of broadband satellite service offers
great promise for new and innovative direct-to-home satellite
services.[^4] In light of the growth of DBS and DTH-FSS, the promise of
new broadband systems, the continuing rise in cable rates,[^5] as well
as consumer benefits from competition such as more service offerings,
better consumer service, and downward pressure on prices, we believe it
is particularly important to continue to examine our policies to ensure
that they are pro-competitive and deregulatory.

The Commission has historically regulated DBS, which is transmitted
using frequency bands that are internationally allocated to the
broadcast satellite service, and DTH-FSS, which is transmitted using
fixed-satellite service (FSS) frequency bands, separately. The
Commission rules for the DBS service are codified in Part 100,[^6] while
FSS rules, including those applicable to DTH satellite service
providers, can be found in Part 25.[^7] Since both DBS and DTH-FSS
provide video services directly to the home via satellite, we propose to
consolidate, where possible, the DBS service rules with the rules for
DTH-FSS and other satellite services under Part 25 and to eliminate in
its entirety Part 100. We also propose to move certain DBS-specific Part
100 rules into Part 25[^8] and to eliminate several Part 100 rules which
we believe are no longer needed. For instance, we propose to eliminate
the Part 100 rules (Sections 100.72-.80) which govern DBS auctions and
to conduct DBS auctions under the general auction rules contained in
Part 1, subpart Q.[^9] We further propose to amend our Part 25 rules,
where necessary, in order to render them applicable, where appropriate,
to DBS and DTH-FSS, as well as other satellite services.

In proposing to incorporate certain Part 100 rules into Part 25, we
highlight several rules of particular importance. We seek comment on our
proposal that we move our existing DBS foreign ownership rules from Part
100 to Part 25, and we ask whether the Commission should modify these
rules. We also seek comment on how we can strengthen our rules regarding
the provision of DBS service to Alaska and Hawaii and whether we should
adopt geographic service rules for Puerto Rico and other U.S.
territories and possessions. Because it is our goal to promote
competition in the MVPD market generally, we also seek comment as to
whether new rules addressing horizontal concentration in the MVPD
market, such as limitations on cable/DBS cross-ownership, are necessary
in order to prevent anti-competitive conduct in the MVPD market.[^10]

**II. BACKGROUND**

*Initiation of Direct-to-Home Service.* The DTH service has its origins
in the large direct-to-home satellite antennas which were first
introduced in the 1970\'s for the reception of video programming
transmitted via satellite.[^11] Because these first-generation
direct-to-home satellites operated in the C-band frequencies at low
power, direct-to-home satellite antennas, or dishes, as they are also
known, generally needed to be seven to ten feet in diameter in order to
receive the signals being transmitted.[^12] The Commission did not
require FSS licensees transmitting the programming to obtain special
licenses to provide this direct-to-home service. Instead, licensees were
and continue to be subject to the existing FSS rules contained in Part
25, which apply whether the satellite is providing video, voice or data
services.[^13] More recently, FSS licensees have been using the Ku and
extended Ku-bands to provide direct-to-home services enabling
subscribers to use a receiving dish approximately one meter in
diameter.[^14] In 1994, a group of several cable companies (including
TCI Satellite, Inc., Time Warner/Newhouse, Cox, MediaOne/U.S. West,
Comcast, and GE American Communications) formed Primestar Partners, L.P.
to provide DTH-FSS in the Ku-band, and Primestar now provides services
to 1.9 million subscribers.[^15]

*Regulatory Treatment of DBS.* The Commission has historically treated
DBS differently from other fixed-satellite services and established a
separate Part 100 for DBS service rules. This difference in treatment
reflects the Commission\'s original conception of DBS as a broadcast
service as well as the unique treatment of DBS under the International
Telecommunication Union\'s World Radio Conference orbital assignment
plan.[^16] When the Commission adopted the Part 100 rules in 1982, it
originally envisioned that DBS would be a broadcast service but left
open the possibility that licensees could provide service on a
subscription or common carrier basis.[^17] The Commission assigned
responsibility for regulating DBS to its Mass Media Bureau, along with
other broadcast services, while responsibility for regulating FSS,
including DTH-FSS, remained with the Common Carrier Bureau.[^18] Since
the inception of the DBS service, DBS providers have had the choice of
being regulated as broadcast, common carrier, or non-broadcast,
non-common carrier (*i.e.*, subscription). To date, all DBS licensees
have chosen to be regulated as subscription services, and the
Commission\'s regulatory classification of DBS as a subscription service
has been affirmed by the courts.[^19]

Under the ITU\'s rules, spectrum and orbital locations for the DBS
service (known internationally as the Broadcast Satellite Service or
BSS) are apportioned on a global basis among all nations through ITU
agreements reached at ITU World Radio Conferences. By contrast, orbital
locations in the fixed-satellite service are generally selected and
notified by national administrations and interference issues are
resolved through satellite coordinations. In the early 1980\'s, ITU
members reached agreement on assigning BSS orbital locations among the
ITU\'s member countries. According to the BSS and Feeder Link Plans for
North and South America (the ITU\'s Region 2),[^20] the United States
was assigned eight orbital locations for providing DBS service.[^21]
Each of these eight orbital locations is capable of providing 32 analog
channels, each with a 24 MHz bandwidth.[^22] In accordance with
Appendices S30 and S30A, DBS orbital assignments to the United States
are separated by nine degrees, as opposed to two-degree spacing used to
accommodate C and Ku-band FSS assignments. Greater orbital spacing in
the DBS service enables subscribers to use earth station antennas that
are smaller than those generally employed for C and Ku-band
services.[^23]

In 1982, the Commission established what it described as \"interim\" DBS
service rules in a new Part 100 of its rules and began accepting
applications for service.[^24] In its initial DBS licensing rounds, the
Commission did not assign all 32 channels at a particular orbital
location to a single licensee. Rather, at the request of the applicants,
it assigned from three to ten channels at individual orbital locations
and assigned separate channels to several different licensees at the
same location.[^25]

In 1995, the Commission issued its *DBS Auction Order*, in which it
instituted competitive bidding for available DBS channels.[^26] In that
order the Commission also accelerated the due diligence and system
implementation requirements by imposing a four- year satellite
construction deadline;[^27] eliminated the east/west channel pairing
method of assignment adopted by the Commission in 1989,[^28] and created
DBS geographic service requirements in order to stimulate service to
Alaska and Hawaii.[^29] The new service rules conditioned all DBS
licenses awarded after January 1996 on the provision of service to
Alaska and Hawaii, \"where such service is technically feasible.\"[^30]
In January 1996, the Commission conducted its first DBS auction for 28
channels at 110° W.L. and 24 channels at 148° W.L.[^31]

*Growth of DBS.* DBS service has experienced significant growth since it
was first introduced and now reaches over four million subscribers.[^32]
Currently, DirecTV and USSB are offering service to the public from the
101°W.L. orbital location, and EchoStar and its affiliate Directsat
offer a competing service from the 119°W.L. orbital location. Two
licensees, DBSC (also an affiliate of EchoStar) and Tempo Satellite,
Inc. (an affiliate of TCI Satellite Entertainment, Inc.), have launched
satellites to the 61.5°W.L. and 119°W.L. orbital locations,
respectively, but neither has commenced service as of this date.

A chart of the DBS orbital and channel assignments appears below. In
addition to highlighting which channels are currently being used for
service, the chart also indicates those channels for which permits have
expired and/or pending petitions for extension have been filed. A total
of 27 channels at four different locations remain unassigned. The
Commission has not yet proposed when it will auction these
channels.[^33] The area within the darkened box represents the three
full-CONUS locations (*i.e.*, 101° W.L., 110° W.L., and 119° W.L.) and
the status of their corresponding channels.[^34]

**DBS Orbital Channels By Orbital Location**

  -------------------------- ----------- ---------- ---------- ---------- ---------- ----------- ---------- ----------- -----------
  **Permittees/Licensees**   **Total**   **175°**   **166°**   **157°**   **148°**   **119°**    **110°**   **101°**    **61.5°**

  **DirecTV**                54                                27^x^                                        **27**^^   

  **USSB**                   16                                           8^x^                   3^x^       **5**^^    

  **EchoStar**               35                                           24         **11**^^                          

  **Directsat**              22          11^x^                                       **10**^^   1                      

  **DBSC**                   22          11^x^                                                                          11^↑^

  **MCI**                    28                                                                  28                     

  **Tempo**                  22                     11                               11^↑^                              

  **R/L DBS**                22                     11                                                                  11

  **Dominion**               8                                                                                          8^x^

  **Unassigned**             27          10         10         5                                                        2
  -------------------------- ----------- ---------- ---------- ---------- ---------- ----------- ---------- ----------- -----------

 operational

↑ satellite launched but not yet operational

x permits that have expired and/or for which a request for extension is
pending

In addition to strong growth in domestic services, direct-to-home
providers (including both DBS and DTH-FSS) are rapidly developing
services for international transmission. In its 1996 Report and Order
revising the policies governing U.S.-licensed satellites, the Commission
stated that DBS licensees could use their satellites to provide both
domestic and international service without additional approval from the
Commission.[^35] Further, to facilitate the opening of international DBS
markets, the United States has reached agreement with Mexico to permit
DBS and DTH-FSS satellites licensed by either country to provide service
into each other\'s territory.[^36]

The Commission\'s recent order implementing the U.S. commitments to the
World Trade Organization (WTO) for market access for satellites licensed
by foreign countries (*DISCO II*) will also promote international
service.[^37] The *DISCO II* Order notes that the United States has
undertaken no commitments with regard to DTH-FSS or DBS and has also
taken a most-favored-nation exemption for those services in the WTO
Basic Agreement on Telecommunications.[^38] The order stresses, however,
that foreign-licensed satellites providing DBS or DTH-FSS may provide
service into the United States so long as the foreign country licensing
the satellite in question offers effective competitive opportunities to
U.S. satellite providers in its territory.[^39] Currently, Galaxy Latin
America, an affiliate of DirecTV, is using a U.S.-licensed satellite to
provide DTH-FSS service to over a dozen Latin American countries. Sky
Latin America, an affiliate of NewsCorp. Inc., is providing a competing
DTH-FSS service to Latin America using a U.S.-licensed satellite.

**III. DISCUSSION**

A. [Incorporation of DBS Service Rules into Part 25]{.underline}

We propose to eliminate Part 100 of our rules and adopt permanent rules
in Part 25 to govern DBS.[^40] Consolidating the regulation of all
satellite services in one Part will eliminate inconsistencies in our
rules, reduce confusion and uncertainty for users, lessen regulatory
burdens for licensees, and simplify the development of advanced
services. In this way, DBS applicants, permittees, and licensees can use
the same forms and procedures as other satellite applicants, permittees,
and licensees.[^41] In addition, we are finding that applications are
combining DBS-band satellite functions with the functions of satellite
services in other bands at the same or adjacent orbital locations
(*e.g.*, hybrid DBS, Ku-band FSS, and Ka-band systems).[^42] By
incorporating the satellite service rules into one section of the
Commission\'s rules, we hope to encourage innovative services by
simplifying and clarifying the process for complex multi-band,
multi-service applications.

In April 1997, the International Bureau\'s Satellite and
Radiocommunication Division held a \"DBS Roundtable\" to solicit public
comment on various questions regarding revision of the Commission\'s DBS
rules.[^43] The comments received subsequent to this Roundtable will be
placed and considered in the docket for this proceeding.

Our proposal to consolidate the rules for DBS in Part 25 will help us
implement Congressional intent more effectively. While the Commission
has traditionally regulated DBS and DTH-FSS as separate services,
Congress has on several occasions sought to apply statutory provisions
to both DBS and DTH-FSS. For instance, in 1992, Congress required
satellite service licensees providing video programming in the Ku-band
under both Part 100 and Part 25 of the Commission\'s rules to comply
with certain public interest obligations.[^44] And, in 1996, Congress
amended the Communications Act of 1934[^45] to grant the Commission
exclusive jurisdiction over \"direct-to-home satellite services\"
without making any distinction between DBS and DTH-FSS.[^46]
Consolidating the rules for DBS in Part 25 will therefore reflect
Congressional intent that DBS and DTH-FSS satellite services be governed
in certain aspects by a uniform regulatory scheme and enable us to
implement more effectively legislation that applies to both DBS and
DTH-FSS.

Although we propose to regulate DBS under the same Part 25 rules that
apply to other satellite services, we recognize that some
characteristics of the DBS service distinguish it from other satellite
services.[^47] There are, therefore, certain individual Part 100 rules
which we propose to preserve and move to Part 25 but apply uniquely to
DBS. These are the DBS definition (Section 100.3), the eligibility and
foreign ownership rules (Section 100.11), the license term (Section
100.17), the due diligence requirements (Section 100.19), the technical
requirements (Section 100.21), the geographic service requirements
(Section 100.53), and the competitive bidding mechanism for mutually
exclusive applications (Section 100.71). We propose to add these
provisions, except the definition of DBS and the technical requirements,
to Part 25 by adding a new Section 25.146 titled, \"Licensing Provisions
for the Direct Broadcast Satellite Service.\" By adding Section 25.146
to the subpart that contains the licensing provisions for other
satellite services governed by Part 25, we seek to harmonize the
regulation of satellite services while maintaining relevant distinctions
among those services. We propose to add the definition of DBS and the
technical requirements to other sections of Part 25, as explained below.

We identify and explain below each of the changes that we propose and
the potential effects of those changes on the DBS service. The following
chart identifies each Part 100 DBS rule and the action we propose to
take.

**Incorporating DBS Service Rules into Part 25**

+-----------------------+-----------------------+-----------------------+
| **Part 100 Section**  | **Proposed Action**   | **Part 25 Section**   |
+-----------------------+-----------------------+-----------------------+
| 100.1 (Basis and      | eliminate             | Part 25 Authority     |
| purpose)              |                       |                       |
+-----------------------+-----------------------+-----------------------+
| 100.3 (Definitions)   | amend and move        | new 25.201            |
+-----------------------+-----------------------+-----------------------+
| 100.11 (Eligibility   | move                  | new 25.146(a)         |
| and Foreign           |                       |                       |
| Ownership)            |                       |                       |
+-----------------------+-----------------------+-----------------------+
| 100.13 (Application)  | eliminate             | covered by Part 25,   |
|                       |                       |                       |
|                       |                       | subpart B             |
+-----------------------+-----------------------+-----------------------+
| 100.15 (Licensing)    | eliminate             | covered by Part 25,   |
|                       |                       |                       |
|                       |                       | subpart B             |
+-----------------------+-----------------------+-----------------------+
| 100.17 (License term) | amend and move        | amend 25.146(b)       |
+-----------------------+-----------------------+-----------------------+
| 100.19 (Due           | move                  | new 25.146(c)         |
| diligence)            |                       |                       |
+-----------------------+-----------------------+-----------------------+
| 100.21 (Technical)    | amend and move        | new 25.146(f)         |
+-----------------------+-----------------------+-----------------------+
| 100.51 (EEO)          | move                  | amend 25.601          |
+-----------------------+-----------------------+-----------------------+
| 100.53 (Geographic    | amend and move        | new 25.146(d)         |
| service)              |                       |                       |
+-----------------------+-----------------------+-----------------------+
| 100.71 (Competitive   | amend and move        | new 25.146(e)         |
| Bids)                 |                       |                       |
+-----------------------+-----------------------+-----------------------+
| 100.72-.79            | eliminate             | covered by auction    |
| (Competitive Bidding  |                       | rules in              |
| System Design)        |                       |                       |
|                       |                       | 1.2101, *et. seq.*    |
+-----------------------+-----------------------+-----------------------+
| 100.80 (Transfers)    | eliminate             | covered by 1.1211 and |
|                       |                       | 25.119                |
+-----------------------+-----------------------+-----------------------+
| Part 25               | eliminate             | eliminate             |
| Cross-reference to    |                       | 25.109(b)(DBS         |
| Part 100 for DBS      |                       | cross-reference)      |
+-----------------------+-----------------------+-----------------------+

*Basis and purpose § 100.1*. We propose to eliminate Section 100.1,
which recites the Commission\'s statutory authority to regulate radio
transmissions and issue radio licenses for the \"interim\" DBS
service.[^48] We propose to eliminate Section 100.1 because Section
303(v) of the Communications Act makes clear that the Commission has
exclusive jurisdiction over the regulation of direct-to-home satellite
services, including DBS.[^49] We also propose removing Section 25.109(b)
which cross-references Part 25 readers to Part 100 for the DBS service
rules.[^50] We believe these changes will eliminate outmoded references
to interim DBS rules and systems and duplication of descriptions in the
Commission\'s regulatory authority.[^51] We seek comment on these
proposals.

*Definitions § 100.3*. We propose to move the definition of DBS service
from Section 100.3 to a new paragraph in Section 25.201. The definition
of DBS in Section 100.3 is identical to that which appears in the ITU
Radio Regulations.[^52] We propose amending the definition of DBS to
include a reference to the frequencies used by the DBS service in order
to distinguish application of the DBS rules from the rules for other
satellite services in Part 25, including DTH-FSS. We believe that DBS
should continue to be defined as a specific service, just as other
satellite services are defined separately in Part 25, such as the
service rules for the non-voice, non-geostationary mobile-satellite
service (Little LEOs) and the fixed-satellite service in the 20/30 GHz
bands (Ka-band).[^53] We seek comment on our proposal to move and amend
the current definition of DBS.

*Eligibility and Foreign Ownership § 100.11*. Section 100.11 of the
Commission\'s rules addresses foreign ownership limitations relating to
DBS and tracks the text of Sections 310(a) and (b) of the Communications
Act, which contain limitations on foreign ownership of U.S. radio
licenses. Specifically, Section 310(a) prohibits any foreign government
from owning any U.S. radio license, and Section 310(b) places specific
foreign ownership restrictions on broadcast and common carrier
licenses.[^54] Section 100.11(b) incorporates the language from Sections
310(a) and (b) of the Communications Act.[^55] We propose to move the
existing Section 100.11, verbatim, into a new Section 25.146(a), which
will apply only to DBS licensees. Our proposal to move Section 100.11
into Part 25 would neither change the foreign ownership rules currently
applicable to the DBS service nor create new rules for DTH-FSS. Unlike
Part 100, Part 25 does not currently have specific rules limiting
foreign ownership. Part 25 licensees, including DTH-FSS licensees,
nevertheless remain subject to the statutory limits established in
Sections 310(a) and (b). Because the foreign investment limits in
Section 310(b) apply to broadcast and common carrier licensees, Part 25
licensees that do not operate as broadcasters or common carriers, as is
generally the case, are not subject to the foreign ownership
restrictions contained in Section 310(b).

The applicability of Section 100.11 to subscription DBS was addressed in
1996 by the International Bureau in its decision relating to the grant
of a DBS license to MCI Telecommunications Corporation.[^56] In granting
MCI the right to construct, launch and operate a DBS system using 28
channels at 110°W.L., the Bureau held that, because MCI\'s DBS authority
was for subscription (*i.e.,* non-broadcast) video satellite service,
Section 310(b) of the Communications Act did not apply.[^57] The Bureau
noted that the Commission\'s intent in adopting Section 100.11 was
simply to codify the restrictions of Section 310 of the Communications
Act rather than to establish foreign ownership restrictions independent
of those contained in Section 310.[^58] The Bureau therefore held that
Section 100.11 does not apply to subscription DBS. In the event that the
Commission affirms the Bureau\'s decision in the *MCI Order*, we seek
comment on whether the Commission should modify its DBS eligibility
rules such that the foreign ownership limitations currently located in
Section 100.11 would apply to subscription DBS providers. In addition,
we seek comment on whether foreign ownership limitations similar to
those in Section 100.11 should apply to DTH-FSS provided on a
subscription basis. We note that the Executive Branch has asked the
Commission to conduct a rulemaking on whether and how foreign ownership
restrictions should be applied to subscription services offered from
U.S.-licensed satellites.[^59]

*Application requirements § 100.13*. We propose to eliminate the
DBS-specific application requirements of Section 100.13. Instead, we
propose to adopt the application, processing, and licensing requirements
of Part 25 for DBS services, including new FCC Form 312, where
applicable.[^60] We also propose not to apply the financial requirements
of Section 25.140, that now apply to FSS and other Part 25 satellite
services, to DBS applications. The competitive bidding process we use to
resolve mutually exclusive DBS applications achieves the same goal as
the financial qualifications requirements of Section 25.140, namely,
assigning spectrum to those most likely to make efficient use of it.

We propose to standardize the DBS application process by eliminating the
\"narrative\" format prescribed in Section 100.13. Instead, we intend to
apply the same application procedures to the DBS service that we apply
to other satellite services under Part 25, subpart B. Specifically, DBS
applicants will be required to provide all relevant information
requested by Form 312 for space and earth stations. We also seek comment
on whether DBS applicants should supply any additional technical
information that is not required by Section 25.114. The Commission must
notify the International Telecommunication Union and provide certain
information regarding each DBS system prior to implementation at an
assigned orbital location.[^61] We discuss these information
requirements below in Section III.B.

*Licensing procedures § 100.15*. The existing Part 100 licensing
procedures for DBS systems involve multiple steps, including the 45-day
public notice and competing application cut-off periods in Section
100.15. These procedures can delay the DBS licensing process and are
unduly burdensome. They are also inconsistent with the Commission\'s
licensing practices for fixed and mobile satellite systems. We therefore
propose to eliminate the separate DBS licensing procedures in Section
100.15 and apply existing Part 25 licensing provisions to DBS space and
earth station applications.[^62] In addition, we propose to streamline
the DBS licensing phase by adopting a one-step licensing process that
consolidates the grant of construction permit, authorization of launch,
and licensing of space station facilities into a single procedure. We
propose that once an authorization is granted we should license the
authorized entity through system operation, establishing construction,
launch, and system operation deadlines in accordance with our due
diligence rules. Based on our experience regulating the DBS service, we
believe this will eliminate uncertainty and streamline the DBS
application and licensing processes by reducing the number of separate
authorizations required from three to one. We also believe eliminating
separate authorizations will permit licensees to develop business plans
with greater certainty because they will not have to submit applications
and seek Commission approval for intermediate implementation milestones.
We seek comment on these proposals and whether they permit adequate
opportunities for the public to comment on DBS authorizations.

*License term § 100.17*. The current license terms for DBS licensees,
established under the 1995 *DBS Auction Order*, is ten years for
non-broadcast licenses and five years for broadcast.[^63] Since the
issuance of the *DBS Auction Order*, Congress has changed the maximum
term for broadcast licenses from five to eight years.[^64] Therefore, to
conform our rules to the license terms contained in the Communications
Act, we propose to adopt an eight year license for DBS broadcast
licensees, although we note that to date no DBS licensee has chosen to
be licensed as a broadcaster. We propose to add Section 25.146(b) to
include ten-year license terms for non-broadcast DBS and eight-year
license terms for broadcast DBS licensees. We seek comment on this
proposal.

*Due diligence § 100.19*. We propose to move the DBS due diligence rules
from Section 100.19 to a new Section 25.146(c). We intend to continue to
apply the existing due diligence rules to DBS permittees and licensees.
Thus, DBS licensees will continue to submit annual progress reports on
system implementation pursuant to existing Section 25.210(l). We request
commenters\' views on what, if any, further actions we should take to
monitor system implementation, including, for example, requiring interim
implementation certifications or whether we should eliminate or modify
any of the existing due diligence rules. We do not propose applying the
DBS due diligence rules to other satellite service licensees. We note
that in the past we have not ordinarily adopted general rules regarding
satellite construction milestones for other fixed-satellite services in
light of the differences in system implementation plans among the many
services covered by Part 25. The Commission has, however, used its
general licensing authority to condition Part 25 licenses on a
service-by-service basis.[^65]

*Technical requirements § 100.21.* In incorporating the DBS rules into
Part 25, we propose to apply many of the general technical requirements
for satellite services to DBS service.[^66] We address specific
questions related to the technical rules applicable to the DBS service
below in Section III.B.[^67]

*Equal employment opportunities § 100.51*. The Commission first
established equal employment opportunity (EEO) rules for the DBS service
in 1982 and codified these rules in Section 100.51(a)-(d).[^68] In 1987,
the Commission held that the DBS EEO rules \"apply only to those DBS
entities which would operate as broadcasters.\"[^69] The effect of this
holding was to limit the applicability of the Part 100 EEO rules to DBS
operators licensed as broadcasters and render them inapplicable to
subscription DBS services. As discussed *supra* in Section II, no DBS
operator to date has chosen to be licensed as a broadcaster; all have
chosen to be licensed as providers of subscription services.

In 1992, Congress instructed the Commission to revise its EEO rules for
MVPD providers by enacting Section 22 of the Cable Television Consumer
Protection and Competition Act of 1992 (1992 Cable Act).[^70] The
Commission fulfilled its mandate by amending Parts 25 and 100, among
others, to render multi-channel DTH-FSS and DBS licensees subject to the
revised EEO requirements of Part 76.[^71] The two sections added \--
Sections 25.601 and 100.51(e) \-- contain identical language.[^72] In
addition, the Commission specifically included DBS operators within the
scope of Part 76\'s EEO requirements.[^73] The effect of these
provisions is to make both subscription DBS and DTH-FSS providers
subject to the Part 76 EEO requirements.

DBS broadcasters, on the other hand, continue to be subject to the
pre-existing requirements in Section 100.51(a)-(d), which are based on
the EEO rules that were applicable to terrestrial broadcasters at the
time the section was drafted in 1982.[^74] Since 1982, the Commission
has amended the Part 73 EEO requirements applicable to radio and
television broadcasters, but it did not amend the DBS EEO provisions of
Section 100.51(a)-(d).[^75] In order to apply the same requirements to
DBS broadcasters (should a DBS operator choose to be so licensed in the
future) as other broadcasters, we propose applying the revised Part 73
EEO Rule to DBS licensees who operate as broadcasters.

We therefore propose to eliminate subsections (a)-(d) of Section 100.51
and amend Section 25.601 to require DBS licensees operating as
broadcasters to be subject to the broadcast EEO provisions of Part 73.
We also propose to eliminate Section 100.53(e) and to amend Section
25.601 to add nonbroadcast DBS to the existing language covering
DTH-FSS. We seek comment on this proposal.

*Geographic service requirements § 100.53*. In its *DBS Auction Order*,
the Commission created geographic service obligations for Alaska and
Hawaii. In that order, the Commission adopted DBS service rules
requiring DBS licensees granted authorizations after January 19, 1996 to
provide service to Alaska and Hawaii upon commencement of operations,
where technically feasible.[^76] The Commission also adopted a rule in
the *DBS Auction Order* that requires DBS licensees who were granted
their authorizations prior to January 19, 1996, to relinquish their DBS
channel assignments at the 175°W.L., 166°W.L., 157°W.L., and 148°W.L.
orbital locations (the \"western channels\") if they do not serve Alaska
and Hawaii before the expiration of their current authorizations.[^77]
Since January 1996, the Commission has granted authorizations for three
DBS service providers \-- MCI, EchoStar, and Tempo \-- to operate at
orbital locations that can serve Alaska and Hawaii and conditioned those
licenses on the requirement that the licensees provide service to those
states.[^78] All three licensees have made clear to the Commission that
they will comply with this condition and provide service to Alaska and
Hawaii.

We propose to move the DBS geographic service requirements from section
100.53 to a new section 25.146(d). We believe that the provision of
service to Alaska and Hawaii will provide important MVPD competition in
these markets. Hence, we propose to continue to apply the rule in
Section 100.53(b) that all DBS licensees granted authorizations after
January 19, 1996 must provide service to Alaska and Hawaii where
technically feasible. In addition, we seek to clarify that this rule
will apply to licensees who were granted their authorizations prior to
January 19, 1996 and who request extensions of time or renewal of their
licenses. In the *DBS Auction Order*, we noted that service to Alaska
and Hawaii is technically feasible from the 110° W.L. and 119° W.L.
orbital locations, as well as the four western orbital locations.[^79]
We have not had an occasion yet to rule whether service to Alaska and
Hawaii from the 101° W.L. or 61.5° W.L. orbital locations is technically
feasible.

We note that Section 100.53(b) applies only to Alaska and Hawaii. We
seek comment on whether we should adopt similar measures to promote the
provision of service to Puerto Rico and other U.S. territories and
possessions. Further, the State of Hawaii has asked that we consider
adopting an \"off-shore states\" policy when awarding DBS channels in
the eastern orbital positions.[^80] This policy would require licensees
of DBS channels at eastern orbital positions to demonstrate that they
have provided service to the states of Alaska and Hawaii before they
would be eligible to provide service from any eastern DBS channel
assignments beyond their existing assignments. We seek comment on this
proposal and ask if there are other steps the Commission should take to
ensure delivery of service to Alaska, Hawaii, and Puerto Rico, as well
as other U.S. territories and possessions.

While we propose to move Section 100.53(b) to new Section 25.146(d), we
propose to delete Section 100.53(a). Section 100.53(a) is unclear and
potentially runs counter to the Commission\'s purposes. We are concerned
that Section 100.53(a), which requires licensees to relinquish their
western channels if they do not provide service to Alaska or Hawaii
before the end of their current authorizations, could be misinterpreted
as permitting DBS licensees with eastern orbital locations to maintain
their authorizations at western orbital locations, even if they do not
provide service from such western channels. The intent of Section 100.53
was to ensure that DBS licensees provide service to Alaska and Hawaii,
where it is technically feasible for them to do so. We believe that
Section 100.53(b) accomplishes this goal.

By contrast, Section 100.53(a) could be interpreted to permit
warehousing of western channels by a licensee that is operating from an
eastern orbital location. The warehousing of western channels would
frustrate the Commission\'s goals of ensuring efficient use of spectrum
resources and promoting service to Alaska and Hawaii. Under one
interpretation of Section 100.53(a), an entity holding authorizations
for both eastern and western channels might argue that its western
channel authorization would remain valid during its ten-year license
term for its eastern channels even if it were not using its western
channels. Its argument might be that, pursuant to Section 100.53(a), it
would not need to relinquish its western channels unless and until its
ten-year license expired and it had not provided service to Alaska and
Hawaii. If a licensee originally received authorization for eastern and
western channels at the same time, such a licensee could, under this
interpretation of Section 100.53(a), argue that it could maintain its
authorization for its western channels for up to 16 years (6 years to
launch and operate its satellite at its eastern channels plus the
ten-year operating license term) even if during such time it never used
its western channels. This clearly was not the purpose of the original
rule. The western channels provide valuable capacity for service to
Alaska and Hawaii, and our policies should encourage use of these
channels. Even if a licensee does provide service to Alaska or Hawaii
from its eastern channels, it serves no purpose to allow such a licensee
to warehouse its channels at its western orbital location(s) simply
because its eastern channels are serving Alaska and Hawaii. If a
licensee fails to put its western channels into service by the
expiration of its authorization for these channels, we will reclaim
those channels and auction them to an entity that is prepared to put
them into use.

*Auction rules § 100.71-100.80*. The Commission\'s authority to select
DBS licensees through competitive bidding is derived from §309(j) of the
Communications Act.[^81] In its *DBS Auction Order*, consistent with the
Communications Act, the Commission determined that mutually exclusive
applications to provide DBS service would be subject to competitive
bidding.[^82] In December 1997, the Commission revised Part 1 of its
rules and established general auction rules (General Auction Rules) that
are applicable to all auctionable services, unless the Commission
determines otherwise.[^83] Previously, each service subject to
competitive bidding (such as paging, cellular, and DBS) had
service-specific auction rules. In establishing the General Auction
Rules, the Commission did not amend Part 100. We now propose to
eliminate the DBS-specific auction rules in Part 100 and rely on the
General Auction Rules in Part 1. We believe that the General Auction
Rules provide enough flexibility to allow the Wireless
Telecommunications Bureau to design future auctions for the DBS service
according to the needs of the service, and we seek comment on whether
DBS has service-specific issues that warrant the establishment of rules
different from the General Auction Rules.

We propose to move Section 100.71, which establishes the auction
authority for DBS, to Part 25 and create a new Section 25.146(e). We
propose to eliminate all other Part 100 auction rules. In so doing, we
propose to amend Section 100.71 as follows:

*§ 25.146(e) DBS Subject to Competitive Bidding.* Mutually exclusive
initial

applications to provide DBS service are subject to competitive bidding

procedures. The general competitive bidding procedures found in part 1,

subpart Q of this chapter, will apply unless otherwise provided in this

part. Once a winning bidder has made its down payment, the Commission
will

use the long-form satellite service application (*i.e.,* FCC Form 312)
pursuant

to the application, processing, and licensing provisions of part 25,
subpart B,

where applicable. When there is no mutual exclusivity for DBS channels

offered for assignment, the Commission will process applications
pursuant to

the application, processing, and licensing provisions of part 25,
subpart B,

where applicable.

At the same time, we propose to eliminate the Part 100 auction rules
(§§100.72 - .80) because we believe they are no longer necessary in
light of the Part 1 General Auction Rules and the proposed Section
25.146(e) above. As we stated in the recently released *General Auction
Rules Order*, \"\[o\]ur Part 1 rules will apply to all auctionable
services, unless we determine that with regard to particular matters the
adoption of service-specific rules is warranted.\"[^84]

In the *General Auction Rules Order*, the Commission determined that it
would evaluate each auctionable service to determine if service-specific
rules are required, including whether designated entity provisions are
appropriate for particular services.[^85] The Commission has previously
explained that the determination of whether a particular service ought
to employ designated entity provisions, and if so what type of
provisions, would \"rest in whole or in part on \[its\] assessment of
the available opportunities in, and characteristics of, a specific
spectrum-based service.\"[^86] We seek comment on whether we should
establish designated entity provisions for future DBS auctions and, if
so, what designated entity provisions would be appropriate.

We note that in the 1995 *DBS Auction Order*, the Commission declined to
adopt provisions for designated entities for the auction of the channels
at the 110° W.L. and 148° W.L. orbital locations.[^87] The Commission
stated, however, that having \"designated entity provisions for future
DBS auctions may be appropriate, particularly if we auction spectrum in
small blocks.\"[^88] Commenters who favor the adoption of designated
entity provisions for DBS should discuss whether we should establish
generic designated entity provisions applicable to all future DBS
auctions or whether we should adopt designated entity provisions on a
case-by-case basis, depending on the number of channels available at a
given auction.

The following chart provides a general comparison, for reference only,
of the Part 100 auction rules with the relevant General Auction Rules in
Part 1.

**Auction Rules Comparison Chart**

  ----------------------- ----------------------- -----------------------
                          **Part 1**              **Part 100**

  **Auction Design**      § 1.2103                § 100.72

  **Acct. Mechanism**     § 1.2104                § 100.73

  **Bidder Eligibility**  § 1.2105                § 100.75

  **Upfront Payments**    § 1.2106                § 100.76

  **Winner Licensing**    § 1.2107, 8, & 9        § 100.78

  **Anti-Collusion**      § 1.2105(c)             § 100.79

  **Default**             § 1.2109                § 100.74, 78

  **Assign or Transfer**  § 1.2111                § 100.80
  ----------------------- ----------------------- -----------------------

We seek comment on the few differences between the auction rules
contained in Parts 1 and 100 and whether these differences should be
maintained. For example, the transfer disclosure requirements for
Section 100.80 have a six-year disclosure period while the General
Auction Rules have a three-year disclosure period in Section 1.2111. We
seek comment more generally on whether DBS has service-specific issues
that warrant the establishment of rules different from the General
Auction Rules.

B. [Technical Matters]{.underline}

In this section, we seek comment on revisions to our current technical
rules for DBS in order to ensure that the rules reflect today\'s
technology and to promote maximum technical flexibility for licensees.
Our current technical requirements were adopted in 1982 and were
intended only to be interim.[^89] Certain aspects of these interim rules
are no longer valid today. For example, Section 100.21 requires DBS
systems to operate in accordance with the spectrum sharing criteria and
technical characteristics adopted in the Final Acts of the World
Administrative Radio Conference in 1977 (WARC-77).[^90] The ITU Radio
Regulations, which the Final Acts of WARC-77 modified, have been amended
by subsequent World Radio Conferences, and Section 100.21 therefore no
longer reflects the present ITU Radio Regulations. In addition, Section
100.21 was adopted prior to the ITU\'s adoption of the BSS and Feeder
Link Plans applicable to Region 2, which includes North and South
America. We propose to create a new Section 25.146(f) that will require
DBS licensees to operate in accordance with ITU Radio Regulations, which
are codified in Appendices S30 and S30A of the ITU Radio Regulations. We
seek comment on this proposal.

Appendices S30 and S30A contain the BSS and Feeder Link Plans, as well
as provisions for implementing BSS systems. These Appendices also
provide a mechanism for implementing systems whose technical parameters
differ from the planned assignments. The United States must initiate a
modification to the ITU\'s BSS and Feeder Link Plans if a US-licensed
DBS system that uses parameters different than those specified in the
BSS and Feeder Link Plans wishes to receive protection from interference
internationally or if it proposes to use an orbital location not
assigned to the United States in the ITU Plans.[^91] If a licensee
successfully completes a Plan modification, the actual parameters of the
licensee\'s system will be included in the Plans, and it will be
protected both from subsequent modifications to the Plans and from other
services sharing the bands. Until a system is included in the Plans, it
must not cause harmful interference to, and will not receive protection
from, other services or from other assignments that conform with the
Plans.

Under the ITU Radio Regulations, an administration whose proposed DBS
system exceeds the technical limits in Annex 1[^92] to Appendices S30
and S30A, for instance by altering the satellite beam coverage area,
must seek the agreement of the administrations whose Plan assignments or
other networks are affected by the proposed modification.[^93] The
Commission has received at least one application for a DBS system that
does not meet the limits specified in Annex 1.[^94] In other satellite
services, the United States regularly coordinates satellite systems, and
we believe that coordination is also appropriate for the DBS service. We
believe it will be possible to obtain approval from affected
administration(s) for DBS systems proposed by our licensees that exceed
the technical limits contained in Annex 1. Accordingly, we propose to
delete the current provisions in Section 100.21 which prohibit
applicants from exceeding the technical limits in Annex 1 and to
consider systems that exceed such limits, if there are reasonable
assurances that the agreement of the affected administration(s) can be
obtained.[^95] We seek comment on this proposal.

We also propose to adopt a new Section 25.111(c) that would explicitly
state the information that licensees will need to provide if they seek a
modification of the current ITU Plans. To initiate a modification of the
Plans, the United States must submit to the ITU Radiocommunication
Bureau the information requested in Annex 2 to Appendices S30 and S30A
of the ITU Radio Regulations.[^96] The submission of the transmit and
receive, co-polarized and cross-polarized, satellite antenna gain
contours should be made electronically, according to the format
specified by ITU Circular.[^97] To allow the Commission to determine the
impact of the proposed system on existing Plan assignments and other
services and to fulfill ITU requirements, applicants will have to submit
an analysis demonstrating whether they exceed the limits specified in
Annex 1 to Appendices S30 and S30A.[^98] For tracking, telemetry and
control operations for DBS systems, the United States must submit
Appendix 4 and Appendix S4 information to advance publish and notify the
ITU Radiocommunication Bureau of the frequencies that will be used by
the DBS system. The ITU Radiocommunication Bureau requests the
electronic submission of Appendix S4 information.[^99] We propose to
require that DBS applicants submit all the necessary ITU information
outlined above and submit the Appendix S4 information in electronic
form, and we seek comment on this proposal.

We also seek comment on whether we need to develop regulations to
supplement those specified in Appendices S30 and S30A of the ITU Radio
Regulations. For example, the DBS systems that operate in the United
States use technical parameters that differ from the parameters on which
the Region 2 Plans were developed.[^100] United States DBS systems use
digital modulation techniques instead of analog, have lower downlink
effective isotropically radiated power (EIRP), and have extended the
original intended service area delineated by the radio frequency beams
of the Plans. In addition, the operational DBS systems typically use
larger feeder link transmit earth station antennas than described in the
Plans and have implemented receive earth station antennas with smaller
diameters than assumed during the creation of the Plans.[^101] In light
of these differing system parameters, which may not have been foreseen
during the development of the international Radio Regulations, we seek
comment on whether referencing Appendices S30 and S30A in the
Commission\'s rules adequately specifies the technical requirements for
DBS systems.

*Coordination among licensees at the same orbital location*. The
Commission has assigned different DBS channels at the same orbital
position to different entities. The close proximity of satellites
located at the same orbital location can lead to uplink interference
between adjacent channels, especially if the earth station transmit
EIRPs are not similar. Appendix S30A states that a space station may be
located anywhere within 0.2 degrees of the assigned orbital
location,[^102] as long as the agreement of other administrations with
channel assignments at the same orbital location is obtained. Such
provisions do not address the domestic issue of different channels at
the same location assigned to different licensees. We often need to
coordinate among licensees, and we intend to apply our policy of
requiring licensees at the same orbital location to coordinate among
themselves to arrive at a mutually acceptable solution to any potential
or existing interference between their operations. We seek comment on
this issue. In addition, we propose extending to DBS licensees the
requirement in Section 25.272(a) that satellite licensees establish a
network control center to monitor and coordinate space station
activities.[^103] We seek comment on this proposal.

*Interference protection*. We seek comment on whether the implementation
of DBS systems with technical parameters substantially different than
those anticipated in the BSS Plans could result in harmful interference
to other systems. For example, the Region 2 BSS Plan was created
assuming receive earth stations with parabolic reflector antennas with
diameters of 1 meter with a corresponding half-power beamwidth of 1.7^o^
and the antenna reference pattern specified in Appendix S30 of the ITU
Radio Regulations.[^104] In the United States, receive earth stations
with offset feed antennas as small as 45 centimeters in diameter have
been widely implemented. Such receive earth station antennas have a
half-power beamwidth of approximately 3.7^o^. In addition, the ratio
between maximum gain and side‑lobe discrimination decreases as the
antenna dimensions decrease, thus decreasing the overall
carrier-to-interference ratio. We are concerned that U.S.-licensed DBS
systems receive sufficient interference protection and seek to ensure
that subscribers\' receive antennas will work effectively in today\'s
and the future\'s potential radio frequency interference environment. At
the 1997 World Radiocommunication Conference (WRC-97),[^105] certain
administrations supported proposals to protect DBS systems only to the
technical parameters on which the Plans were based, including a receive
earth station antenna of one meter in diameter, regardless of the
parameters actually implemented. These proposals were not adopted by
WRC-97, but the same issues may arise again in the future.

The Commission is committed to allowing systems to maximize their
technical flexibility and service quality and recognizes that earth
station receive antenna size is a very important factor to potential
consumers of DBS service. We are aware that our technical rules need to
take into account the fact that non-U.S. satellite systems using their
Plan assignments to serve the U.S. could result in smaller satellite
spacing than the current nine degree spacing between U.S. DBS orbital
slots. In addition, WRC-97 adopted an allocation for non-geostationary
(NGSO)-FSS in the BSS bands at 12 GHz, thereby raising the prospect of
sharing between DBS and NGSO-FSS systems.[^106] The Commission has
received applications for NGSO-FSS satellite systems to operate in these
bands.[^107] Use of DBS frequencies by NGSO-FSS systems should not have
a significant impact on the regulation of DBS and is, therefore, not the
focus of this rulemaking. Such issues will be fully considered in future
rulemakings. However, commenters and DBS service providers should be
aware of and take into consideration the potential for such use in the
future.

We request comment on whether the Commission should afford interference
protection to DBS systems only to the extent that they meet certain
receive antenna performance standards. Specifically, we request comment
on what type of regulation would be appropriate, such as adopting
side‑lobe suppression or minimum gain requirements or perhaps requiring
the system to have a minimum overall carrier-to-interference ratio. We
note that, in implementing its two degree spacing policy with respect to
the FSS, the Commission has adopted certain uplink and downlink power
density requirements and earth station antenna performance
requirements.[^108]

*Tracking, Telemetry and Control*. The ITU\'s Radio Regulations do not
specifically address tracking, telemetry and control (TT&C) frequencies
for DBS systems.[^109] A number of applications have requested to use C
or Ku-band FSS frequencies for on-station TT&C functions.[^110] More
recently, applicants have requested to use C or Ku-band frequencies only
for emergency or transfer orbit TT&C functions.[^111] They have
indicated that more world-wide facilities are available for transfer
orbit operations in the various FSS bands than the DBS band. Use of FSS
frequencies (*e.g.*, C and Ku-band) functions for DBS systems is
generally not consistent with the international Table of Frequency
Allocations, nor with the Commission\'s general requirements for
performing TT&C functions in the same band as the service band.[^112]
Further, the use of C and Ku-band FSS allocations for TT&C functions at
certain orbital locations is not in conformance with the C and Ku-band
tri-lateral agreement between the United States, Canada and Mexico, and
could cause harmful interference to U.S. licensees in other services in
these FSS bands.[^113] We propose requiring that licensees perform TT&C
functions in-band in the DBS service band, such as within available
guardbands. Applying Section 25.202(g) of the Commission\'s rules to DBS
systems would accomplish this goal. We seek comment on this proposal.

*Feeder Link Earth Station Coordination with Terrestrial Services in the
U.S*. A portion of the feeder link spectrum in the United States is also
shared with terrestrial services, specifically, 17.7 - 17.8 GHz.
Currently, there are no FCC rules that explicitly address sharing
between these services.[^114] In practice, the Commission\'s policy has
been to require that applicants follow the general earth station
coordination requirements contained in Part 25.[^115] Sharing between
terrestrial services and DBS feeder link earth stations has not been a
problem in the past, and the limited number of feeder link earth
stations facilitates sharing. For coordination between feeder link earth
stations and terrestrial stations, we propose to continue to apply the
coordination requirements currently in Part 25. These earth station
coordination requirements, however, generally apply to commercial
operations. U.S. Government coordination may also be required, and this
will continue to be conducted through the normal inter-agency process.

C. [DBS Ownership]{.underline}

*Introduction.* DBS and DTH-FSS combined account for the second largest
number of subscribers within the MVPD market, accounting for 9.8%[^116]
of the market as compared to cable\'s 87%.[^117] Unlike other video
service providers such as broadcast television and cable, however, DBS
satellite operators and providers have never been subject to national
limits on audience or subscriber reach, or cross-ownership restrictions
with other MVPDs such as cable systems.[^118]

When DBS service was first authorized in 1984, the Commission did not
impose ownership restrictions on DBS systems.[^119] Congress, however,
did consider whether to impose a cable/DBS cross-ownership restriction
as part of the 1992 Cable Act. Legislation introduced in the Senate
included a cable DBS cross-ownership limitation.[^120] The House and
Senate Conference decided, however, that, because \"there \[were\] no
DBS systems operating in the United States at \[the\] time, it would
\[have been\] premature to require the adoption of limitations\" at that
time.[^121] The conferees stated that they expected \"the Commission to
exercise its existing authority to adopt such limitations should it be
determined that such limitations would serve the public
interest.\"[^122]

The sole ownership limitation the Commission has applied to date has
been with respect to the auction of the 110° W.L. and the 148° W.L. DBS
orbital positions. In the *DBS Auction Order*, the Commission adopted a
\"one-time\" restriction concerning DBS ownership.[^123] The rule
required divestiture within one year by a successful bidder for the 110°
W.L. orbital position of any attributable interest in any channels at
either of the other two orbital positions capable of serving the entire
continental U.S., the two \"full-CONUS\" locations (119° W.L. or 101°
W.L. orbital locations).[^124] The rule was meant to prevent any one
entity from having attributable interests in more than one of the three
DBS full-CONUS locations.[^125] The Commission did not adopt a general
cable/DBS cross ownership limitation, but observed in the *DBS Auction
Order* that its authority to approve transfers of control of licenses
would enable it to address any competitive concerns raised by subsequent
proposals by cable affiliated entities to acquire DBS spectrum.[^126]

The *1997 Competition Report* found that incumbent franchised cable
systems continue to be the dominant distributors of multichannel video
programming.[^127] Although the share of non-cable MVPD subscribers,
especially DBS, continues to rise, cable subscribers still account for
87% of all MVPD subscribers nationally, while DBS, the second-largest
MVPD, accounts for only 9.8% of national MVPD customers.[^128] Moreover,
local markets for the delivery of multichannel video programming remain
highly concentrated. Vertical integration of national programming
services by cable operators has declined slightly, with approximately
40% of national programming services remaining vertically integrated
with cable systems.[^129] The December 1997 *Report on Cable Industry
Prices* found that cable systems that do not face \"effective
competition\" charged higher prices than cable systems that do face
effective competition.[^130] It found that the average monthly charge
for cable system programming services and equipment rose 8.5% between
July 1996 and July 1997.[^131] Thus, an important issue is whether DBS
can act as a sufficient competitive alternative to cable systems to have
a restraining effect on cable rates.

Given the status of competition in the MVPD market, we seek comment on
whether it is preferable to continue to address specific competition and
public interest concerns related to DBS ownership on a case-by-case
basis, or whether it may now be appropriate to consider adopting rules
governing DBS ownership and cross-ownership with other entities.[^132]
On the one hand, a continued case-by-case approach would maintain our
longstanding commitment to a flexible regulatory structure for DBS
service, and would not prejudice our ability to address specific cases
based on the facts in existence at any particular time. It would also
take into account any changes in the structure of the MVPD market. On
the other hand, a formal rule may provide greater predictability and
consistency and avoid the need to address specific ownership questions
on an individual basis in licensing proceedings, with attendant costs to
both the applicant and the Commission. We seek comment on these general
considerations, and any specific attributes of DBS which suggest that
one approach may be preferable to the other.

In order to consider whether it may be desirable for the Commission to
adopt any new rules concerning DBS horizontal ownership or
cross-ownership, we seek comment on the product and geographic markets
in which DBS systems compete. Information on the structure of horizontal
ownership can suggest the extent to which there is competition in the
provision of program distribution.

*Product Market.* We seek comment on the relevant product market[^133]
in which DBS systems compete for customers, and specifically whether
they should be considered to compete in a DBS market, a satellite DTH
market, or a more broadly defined MVPD market.[^134] We note that we
concluded in the *1995 DBS Auction Order* that the relevant product
market for DBS systems is the MVPD market.[^135] Moreover, the *1997
Competition Report* states that it is appropriate to use an MVPD market
definition and the report analyzes an MVPD market in which, among other
program distribution providers, cable and DBS compete.[^136]

Assuming that DBS competes in an MVPD market, what, if any, kinds of DBS
ownership patterns raise competitive concerns? Are there any
non-ownership relationships, such as leasing arrangements, that ought to
raise competitive concerns? Since cable systems currently have the
largest share of MVPD viewers,[^137] should we be primarily concerned
about ownership by cable companies of other MVPD providers such as DBS,
and therefore should we adopt specific restrictions on DBS/cable
cross-ownership?[^138] If so, what kinds of restrictions would be
appropriate? For example, should there be a flat ban on cross-ownership
of a DBS system by any cable system? If not, should we impose a rule
that limits cross-ownership for cable operators with large market
shares? Should such a limit be based on potential subscribers or actual
penetration of the commonly owned services?[^139]

If DBS is considered part of a broader MVPD market, and particularly if
the Commission were to adopt a DBS/cable cross-ownership rule, is there
a reason to be additionally concerned if any one DBS system controls
more than a certain aggregate number of channels or more than a single
DBS orbital position, especially a full-CONUS orbital position? For
example, is it important that MVPD viewers have the option of choosing
among several competing DBS systems?

Is it possible, for example, that the operation of several independently
owned DBS systems could lead to a decline in the prices charged for DBS
installation and service, and thus allow DBS to become a more
significant competitor to cable systems? If so, does this suggest that
there should be a ban on ownership of more than one DBS full-CONUS
orbital position, regardless of whether a DBS operator has any cable or
other MVPD interests? Should the three full-CONUS DBS positions
allocated to the United States be analyzed differently from DTH-FSS
positions that might be capable of reaching the entire continental U.S.?
In considering rules regarding the control of DBS full-CONUS positions,
how, if at all, should we take account of foreign-licensed satellites
that are authorized to provide DBS service into the U.S.?[^140]

*Geographic Market.* The scope of the geographic market for a service
\"is defined by the geographic area to which buyers can reasonably turn
or from which competing suppliers are likely to sell.\"[^141] The
geographic scope of the market for DBS, at least, appears to be
national, if not international, because the signals received from an
individual DBS system cover all of the continental U.S., in the case of
the 3 full-CONUS positions, and most of the U.S in the case of other
U.S. assigned orbital locations. As we concluded, however, in our *1995
Competition Report* and reiterated in our *1996* and *1997 Competition
Reports*, the relevant geographic scope of the MVPD market for the
provision of service to consumers is more appropriately a local market
defined by the overlap of the \"footprints\" of the various service
providers.[^142] A consumer views video programs at only one location at
any given time (whether at home, an office, a hotel or some other public
place). From the point of view of consumers, therefore, video programs
available in another city have no direct relevance to their viewing
choices. To a consumer located in Washington, D.C., the number of
competitive services available to that consumer is unaffected by the
number of choices available in New York City, New York, or in Des
Moines, Iowa. We request comment on this analysis and what effect the
limitations imposed by the Satellite Home Viewing Act[^143] on DBS
providers\' marketing efforts have on defining the local geographic
market.

In summary, we request comment on the appropriate product and geographic
markets in which DBS systems compete and whether it would be desirable,
as a means of promoting competition in the MVPD market generally, and
the DBS market specifically, to adopt explicit DBS ownership
restrictions.

**IV. CONCLUSION**

It is our goal to promote competition in the MVPD market generally, and
we therefore seek to make DBS and DTH-FSS more competitive services by
streamlining and clarifying the rules for all types of direct-to-home
system operators. We also seek to implement a common sense regulatory
approach by eliminating unnecessary rules and streamlining Commission
regulation of the direct-to-home satellite market. At the same time, we
seek to promote efficient and expeditious use of spectrum and orbital
resources and to create a competitive MVPD marketplace for the benefit
of the subscribing community on a national and international basis. It
is with these fundamental objectives in mind that we propose the
above-stated amendments. We request comment on these issues and
proposals, and encourage all interested parties to participate in the
resolution of this matter.

**V. PROCEDURAL MATTERS**

**A. *Ex Parte* Presentations**

This is a non-restricted (*i.e.*, permit-but-disclose)
notice-and-comment rulemaking proceeding. *Ex parte* presentations are
permitted, except during the Sunshine Agenda period, provided that they
are disclosed as provided in the Commission\'s rules. *See generally* 47
C.F.R. §§ 1.1202, 1.1203, 1.1206.

**B. Initial Regulatory Flexibility Analysis**

Pursuant to the Regulatory Flexibility Act of 1990, 5 U.S.C.
§§ 601--612, (RFA) as amended by the Contract with America Advancement
Act of 1996, Pub. L. No. 104-121, 110 Stat. 847, the Commission\'s
Initial Regulatory Flexibility Analysis with respect to this Notice of
Proposed Rulemaking is as follows:

**1.** **Reason for Action:** This Notice of Proposed Rulemaking (NPRM)
proposes to streamline and harmonize the Commission\'s direct broadcast
satellite (DBS) service rules. We propose to incorporate the DBS rules
into Part 25, the satellite communications part of the Commission\'s
rules. We do not envision that the relocation of the DBS service rules
will substantially alter the licensing provisions for the DBS service
rules under current Part 100. The DBS service was initially developed in
1982 with the promulgation of \"interim\" rules. *DBS Order*, 90 FCC2d
676 (1982). Since 1994, DBS licensees have begun to provide service into
the United States. We believe that the \"interim\" rules are outmoded
with respect to the application and licensing procedures and the
technical parameters for existing systems. Consistent with our goals of
regulating services subject to our jurisdiction in a common-sense manner
and promoting competition, this rulemaking seeks to streamline and
simplify the Commission\'s rules governing the DBS service by applying a
unified Form 312 for DBS space and earth stations. For instance, we
propose to eliminate the Part 100 rules (Sections 100.72-.80) which
govern DBS auctions and to regulate DBS auctions under the General
Auction Rules contained in Part 1, subpart Q. In proposing to
incorporate certain Part 100 rules into Part 25, we highlight two rules
of particular importance. We seek comment on our proposal that we move
our existing DBS foreign ownership rules from Part 100 to Part 25 and
whether we should modify those rules in the event the Commission affirms
the International Bureau\'s decision in the *MCI Order* and whether
similar restrictions should apply to DTH-FSS. We also seek comment on
how we can strengthen our rules regarding the provision of DBS service
to Alaska and Hawaii. Because it is our goal to promote competition in
the MVPD market generally, we also seek comment as to whether new rules
addressing horizontal concentration in the MVPD market, such as
limitations on cable/DBS cross-ownership, are necessary in order to
prevent anti-competitive conduct in the DBS or MVPD markets.

**2.** **Objectives:** The objective of this proceeding is to streamline
the DBS service rules and harmonize the regulation of the DBS service
with other satellite services, where appropriate. While incorporating
the DBS rules into Part 25, the location of the other satellite
communications service rules, we seek comment on relocation of the
foreign ownership rules of Section 100.11; further measures we could
take to promote service to Alaska and Hawaii; comments on proposals to
update the DBS technical rules; and comment on whether to adopt rules to
address issues related to concentration in the multi-channel video
programming distribution market. We believe that adoption of the
proposed rules will reduce regulatory burdens and, with minimal
disruption to existing permittees and licensees, result in the continued
development of DBS and other satellite services to the public.

**3.** **Legal Basis:** This Notice of Proposed Rulemaking is adopted
pursuant to Sections 1, 4(i), 303(r), 303(v), 307, 309(a), 309(j), 310
of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151, 154(i),
303(r), 303(v), 307, 309(a), 309(j), 310, and 5 U.S.C. Section 553 of
the Administrative Procedures Act.

**4.** **Description and Estimate of Small Entities Subject to the
Rules:** The Commission has not developed a definition of small entities
applicable to geostationary or non-geostationary orbit fixed-satellite
or direct broadcast satellite service applicants or licensees.
Therefore, the applicable definition of small entity is the definition
under the Small Business Administration (SBA) rules applicable to
Communications Services, Not Elsewhere Classified. This definition
provides that a small entity is one with \$11.0 million or less in
annual receipts.[^144] According to Census Bureau data, there are 848
firms that fall under the category of Communications Services, Not
Elsewhere Classified which could potentially fall into the DBS category.
Of those, approximately 775 reported annual receipts of \$11 million or
less and qualify as small entities.[^145] The rules proposed in this
Notice apply only to entities providing DBS service. Small businesses do
not have the financial ability to become DBS licensees because of the
high implementation costs associated with satellite services. Since this
is an established service, however, with limited spectrum and orbital
resources for assignment, we estimate that no more than 15 entities will
be Commission licensees providing these services. Therefore, because of
the high implementation costs and the limited spectrum resources, we do
not believe that small entities will be impacted by this rulemaking.

**5.** **Reporting, Recordkeeping, and Other Compliance Requirements:**
The proposed action in this Notice would affect those entities applying
for DBS construction permits and licenses and those applying to
participate in auctions of DBS spectrum in the future. In the case where
there is not any mutual exclusivity, applicants will be required to
follow the recently streamlined application procedures of Part 25 for
space and earth station licenses by submitting the information required
by Form 312, where applicable. In the case where there is mutual
exclusivity between applicants for DBS authorizations, the competitive
bidding rules of Part 1 will be used to determine the licensee.
Applicants will have to comply with the requirement to file a short-form
(FCC Form 175). Completion of short-form FCC Form 175 to participate in
an auction is not estimated to be a significant economic burden for
these entities. The action proposed will also affect auction winners in
that it will require them to submit a long Form 312 application for
authorization. This process will be required by all DBS applicants
whether selected through the competitive bidding process or not.

**6.** **Federal Rules that Overlap, Duplicate or Conflict with These
Proposed Requirements:** None. One of the main objectives of the Notice
is to eliminate any existing overlap or duplication of rules between the
DBS and other satellite services.

**7.** **Any Significant alternatives minimizing impact on small
entities and consistent with stated objectives:** In developing the
proposals contained in this Notice, we have attempted to minimize the
burdens on all entities in order to allow maximum participation in the
DBS market while achieving our other objectives. We seek comment on the
impact of our proposals on small entities and on any possible
alternatives that could minimize the impact of our rules on small
entities. In particular, we seek comment on alternatives to the
reporting, recordkeeping, and other compliance requirements discussed
above.

**8. Comments are solicited:** Written comments are requested on this
Initial Regulatory Flexibility Analysis. These comments must be filed in
accordance with the same filing deadlines set for comments on the other
issues in this Notice of Proposed Rulemaking, but they must have a
separate and distinct heading designating them as responses to the
Regulatory Flexibility Analysis. The Secretary shall send a copy of this
Notice to the Chief Counsel for Advocacy of the Small Business
Administration in accordance with Section 603(a) of the Regulatory
Flexibility Act.

**C. Initial Paperwork Reduction Act of 1995 Analysis**

This Notice of Proposed Rulemaking contains either a proposed or a
modified information collection. As part of our continuing effort to
reduce paperwork burdens, we invite the general public and the Office of
Management and Budget (OMB) to comment on the information collections
contained in this Notice, as required by the Paperwork Reduction Act of
1995, Pub. L. No. 104-13. Public and agency comments are due April 6,
1998. 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; and (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.

**D. Comment Filing Procedures**

Comments and reply comments should be captioned using the docket number
in this proceeding only. Pursuant to applicable procedures set forth in
sections 1.415 and 1.419 of the Commission\'s rules, 47 C.F.R. §§ 1.415,
1.419, interested parties may file comments on or before April 6, 1998
and reply comments on or before April 21, 1998. To file formally in this
proceeding, you must file an original and four copies of all comments,
reply comments, and supporting comments. Please note, however, that
comments and reply comments may be filed electronically, as described
below. If you want each Commissioner to receive a personal copy of your
comments, you must file an original and nine copies. Comments and reply
comments should be sent to Office of the Secretary, Federal
Communications Commission, 1919 M Street, N.W., Room 222, Washington,
D.C. 20554, with a copy to Christopher J. Murphy of the International
Bureau, 2000 M Street, N.W., Suite 500, Washington, D.C. 20554. Parties
should also file one copy of any documents filed in this docket with the
Commission\'s copy contractor, International Transcription Services,
Inc., 2100 M Street, N.W., Suite 140, Washington, D.C. 20037. Comments
and reply comments will be available for public inspection during
regular business hours in the FCC Reference Center, 1919 M Street, N.W.,
Room 239, Washington, D.C. Parties are also encouraged to file a copy of
all pleadings on a 3.5-inch diskette in WordPerfect 5.1 format.

Written comments by the public on the proposed and/or modified
information collections are due on or before April 6, 1998. In addition
to filing comments with the Secretary, a copy of any comments on the
information collections contained herein should be submitted to Judy
Boley, Federal Communications Commission, Room 234, 1919 M Street, N.W.,
Washington, DC 20554, or via the Internet to jboley@fcc.gov.

For purposes of this proceeding, we hereby waive those provisions of our
rules that require formal comments to be filed on paper, and encourage
parties to file comments electronically. Electronically filed comments
that conform to the guidelines of this section will be considered part
of the record in this proceeding and accorded the same treatment as
comments filed on paper pursuant to our rules. To file electronic
comments in this proceeding, you must use the electronic filing
interface available on the FCC\'s World Wide Web site at
\<http://dettifoss.fcc.gov:8080/cgi‑bin/ws.exe/beta/ecfs/upload.hts\>.
Further information on the process of submitting comments electronically
is available at that location and at \<http://www.fcc.gov/e‑file/\>.

**E. Ordering Clauses**

Accordingly, IT IS ORDERED that, pursuant to the authority contained in
Sections 1, 4(i), 303(r), 303(v), 307, 309(a), and 310 of the
Communications Act of 1934, as amended, 47 U.S.C. §§ 151, 154(i),
303(r), 303(v), 307, 309(a), 310, this NOTICE IS HEREBY GIVEN of our
intent to adopt the policies set forth in this Notice and that COMMENT
IS SOUGHT on all proposals in this Notice.

IT IS ORDERED that the Office of Public Affairs, Reference Operations
Division, shall send a copy of this Notice of Proposed Rulemaking,
including the Initial Regulatory Flexibility Analysis, to the Chief
Counsel for Advocacy of the Small Business Administration, in accordance
with Section 603(a) of the Regulatory Flexibility Act, 5 U.S.C. §§ 601
*et. seq.* (1981)*.*

FEDERAL COMMUNICATIONS COMMISSION

Magalie Roman Salas

Secretary

**Appendix A**

**Proposed Commission Rule Amendments**

Proposed Amendments to 47 CFR Part 25 and removal of Part 100 of the
Commission\'s Rules:

1.Remove § 25.109(b).

2.Amend § 25.111 to add paragraph (c) to read as follows:

**§ 25.111 Additional information.**

\* \* \* \* \*

\(c\) In the Direct Broadcast Satellite service, applicants, permittees
and licensees shall also provide the Commission with all information it
requires in order to modify the Appendix S30 Broadcasting-Satellite
Service (BSS) Plans and associated Appendix S30A feeder link Plans, if
the system uses technical characteristics differing from those specified
in the Appendix S30 BSS Plans, the Appendix S30A feeder link Plans,
Annex 5 to Appendix S30 or Annex 3 to Appendix S30A. For such systems,
no protection from interference caused by radio stations authorized by
other Administrations is guaranteed until the agreement of all affected
Administrations is obtained and the modified frequency assignment
becomes a part of the Plans. Authorizations for which coordination is
not completed and/or for which the necessary agreements under Appendices
S30 and S30A have not been obtained may be subject to additional terms
and conditions as required to effect coordination or obtain the
agreement of other Administrations.

3.Amend § 25.114 to add paragraph (c)(22) to read as follows:

**§ 25.114 Applications for space station authorizations.**

\* \* \* \* \*

\(22\) If the proposed DBS system\'s technical characteristics differ
from those specified in the Appendix S30 BSS Plans, the Appendix S30A
feeder link Plans, Annex 5 to Appendix S30 or Annex 3 to Appendix S30A,
each applicant shall provide:

\(i\) the information requested in Annex 2 to Appendices S30 and S30A of
the ITU\'s Radio Regulations. Further, applicants shall provide
sufficient technical showing that the proposed system could operate
satisfactorily if all assignments in the BSS and feeder link Plans were
implemented.

\(ii\) analyses of the proposed system with respect to the limits in
Annex 1 to Appendices S30 and S30A.

\* \* \* \* \*

4\. Add § 25.146 to subpart B to read as follows:

**§ 25.146 Licensing Provisions for the Direct Broadcast Satellite
Service.**

\(a\) [DBS eligibility and foreign ownership]{.underline}. An
authorization for operation of a station in the Direct Broadcast
Satellite Service shall not be granted to or held by:

\(1\) Any alien or the representative of any alien;

\(2\) Any foreign government or the representative thereof;

\(3\) Any corporation organized under the laws of any foreign
government;

\(4\) Any corporation of which more than one-fifth of the capital stock
is owned of record or voted by aliens or their representatives or by a
foreign government or representative thereof, or by any corporation
organized under the laws of a foreign country;

\(5\) Any corporation directly or indirectly controlled by any other
corporation of which more than one-fourth of the capital stock is owned
of record or voted by aliens, their representatives, or by a foreign
government or representatives thereof, or by any corporation organized
under the laws of a foreign country, if the Commission finds that the
public interest will be served by the refusal or revocation of such
license.

\(b\) [License terms]{.underline}. Licenses for non-broadcast DBS
facilities will be issued for a period of ten (10) years. Licenses for
broadcast DBS facilities will be issued for a period of eight (8) years.

\(c\) [Due diligence]{.underline}. (1) All persons granted DBS
authorizations shall proceed with due diligence in constructing DBS
systems. Permittees shall be required to complete contracting for
construction of the satellite station(s) within one year of the grant of
the authorization. The satellite stations shall also be required to be
in operation within six years of the authorization grant.

\(2\) In addition to the requirements stated in paragraph (1) of this
section, all persons who receive new or additional DBS authorizations
after January 19, 1996 shall complete construction of the first
satellite in their respective DBS systems within four year of grant of
the authorization. All satellite stations in such a DBS system shall be
in operation within six years of the grant of the authorization.

\(3\) DBS licensees shall be required to proceed consistent with all
applicable due diligence obligations, unless otherwise determined by the
Commission upon proper showing in any particular case. Transfer of
control of the authorization shall not be considered to justify
extension of these deadlines.

\(d\) [Geographic service requirements]{.underline}. Those entities
acquiring, extending, or renewing DBS authorizations after January 19,
1996 must provide DBS service to Alaska and Hawaii where such service is
technically feasible from the authorized orbital location.

\(e\) [DBS subject to competitive bidding]{.underline}. Mutually
exclusive initial applications to provide DBS service are subject to
competitive bidding procedures. The general competitive bidding
procedures found in part 1, subpart Q of this chapter, will apply unless
otherwise provided in this part. Once a winning bidder has made its down
payment, the Commission will use the long-form satellite service
application (*i.e.,* FCC Form 312) pursuant to the application,
processing, and licensing provisions of part 25, subpart B, where
applicable. When there is no mutual exclusivity for DBS channels offered
for assignment, the Commission will process applications pursuant to the
application, processing, and licensing provisions of part 25, subpart B,
where applicable.

\(f\) [Technical qualifications]{.underline}. DBS operations must be in
accordance with the sharing criteria and technical characteristics
contained in Appendices S30 and S30A of the ITU\'s Radio Regulations.
Operation of systems using differing technical characteristics may be
permitted, with adequate technical showing, if a request has been made
to the ITU to modify the appropriate Plans to include the system\'s
technical parameters. Until the system completes the Appendices S30 and
S30A, Article 4, modification procedures and becomes a part of the
Plans, the operation cannot cause harmful interference to assignments
that conform to the Plans or other services sharing the same frequency
bands, nor can it receive protection from assignments that conform with
the Plans or other services sharing the same frequency bands.

5\. Amend § 25.201 by adding the definition \"Direct broadcast satellite
service\" to read as follows:

**§25.201** **Definitions.**

\* \* \* \* \*

[Direct broadcast satellite service]{.underline}. A radio communication
service in which signals transmitted or retransmitted by space stations,
using frequencies specified in section 25.202(a)(7), are intended for
direct reception by the general public. In the Direct Broadcast
Satellite Service the term direct reception shall encompass both
individual reception and community reception.

\* \* \* \* \*

6.Amend § 25.202 to revise the table in paragraph (a)(1) and add
paragraph (a)(7) to read as follows:

**§ 25.202 Frequencies, frequency tolerance and emission limitations.**

\* \* \* \* \*

+-----------------------------------+-----------------------------------+
| Space-to-Earth                    | Earth-to-Space                    |
+-----------------------------------+-----------------------------------+
| 3700-4200 MHz^1^                  | 5925-6425 MHz^1^                  |
+-----------------------------------+-----------------------------------+
| 10.95-11.2 GHz^1^                 | 13.75-14.0 GHz^4^                 |
+-----------------------------------+-----------------------------------+
| 11.45-11.7 GHz^2^                 | 14.0-14.2 GHz^5^                  |
+-----------------------------------+-----------------------------------+
| 11.7-12.2 GHz^3^                  | 14.2-14.5 GHz                     |
|                                   |                                   |
| 17.7-19.7 GHz^1^                  | 17.3-17.8 GHz^6^                  |
+-----------------------------------+-----------------------------------+
| 19.7-20.0 GHz                     | 27.5-29.5 GHz^1^                  |
+-----------------------------------+-----------------------------------+
|                                   | 29.5-30.0 GHz                     |
+-----------------------------------+-----------------------------------+

\* \* \* \* \*

^6^Use of this band is limited to feeder links for the Direct Broadcast
Satellite service.

\* \* \* \* \*

(a)(7) The following frequencies are available for use by the Direct
Broadcast Satellite service:

12.2 - 12.7 GHz: space-to-Earth.

7\. Revise § 25.272 to read as follows:

**§ 25.272 General inter‑system coordination procedures.**

\(a\) Each space station licensee in the Fixed-Satellite Service or
Direct Broadcast Satellite Service shall establish a satellite network
control center which will have the responsibility to monitor
space-to-Earth transmissions in its system and to coordinate
transmissions in its satellite system with those of other systems to
prevent harmful interference incidents or, in the event of a harmful
interference incident, to identify the source of the interference and
correct the problem promptly.

\* \* \* \* \*

8\. Revise § 25.601 to read as follows:

**§ 25.601 Equal employment opportunity requirement.**

Notwithstanding other EEO provisions within these rules, an entity that
uses an owned or leased fixed-satellite service or direct broadcast
satellite service facility (operating under this part) to provide more
than one channel of video programming directly to the public must comply
with the equal employment opportunity requirements set forth in part 76,
subpart E, of this chapter, if such entity exercises control (as defined
in part 76, subpart E, of this chapter) over the video programming it
distributes. Notwithstanding other EEO provisions within these rules, a
licensee or permittee of a direct broadcast satellite station licensed
as a broadcaster must comply with the equal employment opportunity
requirements set forth in part 73.

9\. Remove Part 100.

SEPARATE STATEMENT OF COMMISSIONER HAROLD W. FURCHTGOTT‑ROTH

DISSENTING IN PART

*Re:Policies and Rules for the Direct Broadcast Service \-- Notice of
Proposed Rulemaking*

The rule making proceeding we initiate today has a laudable goal: \"to
streamline and simplify the Commission\'s rules governing the direct
broadcast satellite service.\" Despite its deregulatory tone, however,
the Commission herein considers adopting new cross-ownership regulations
that would be unnecessary and likely would prove burdensome to consumers
and industry. Accordingly, I dissent in part.

There is no need for a general rule that has such extremely limited and
distant applicability. We will not be presented DBS cross-ownership
issues thousands, hundreds, or even tens of times. By virtue of the
limited number of DBS orbital slots, such rules could be applied only a
handful of times. Adopting a general rule would require us to predict
the future and make hypothetical policy judgments; yet a thorough
analysis of specific situations as they arise would take little, if any,
additional time. To the extent we consider DBS cross-ownership issues,
we should do so only on a case-by-case basis.

In addition, we simply should not consider adopting rules that easily
could impose significant burdens on consumers and industry in the
context of a rulemaking proceeding that \"seeks to streamline and
simplify the Commission\'s rules.\"

**\* \* \* \* \* \* \***

**STATEMENT OF**

**COMMISSIONER MICHAEL K. POWELL**

**APPROVING IN PART, DISSENTING IN PART**

*Re: Policies and Rules for the Direct Broadcast Satellite Service, IB
Docket No. 98-21*

I fully support the decision to streamline and simplify the
Commission\'s rules governing the direct broadcast satellite (DBS)
service. I believe it should be the constant task of this agency to
examine our rules so that we can eliminate those that are not necessary.
Because I believe such consolidation will improve our regulation, I am
voting to approve that portion of the Notice.

Having said this, there is one disturbing island in this sea of words
about deregulation and efficiency. The item invites us to consider
imposing more regulation in the form of a DBS/cable cross-ownership
rule. On what basis? The answer we are given is a hypothetical string of
assumptions that suggest the need for further regulatory action: cable
rates are high, DBS is the best potential competitor to cable, cable
ownership of DBS systems might substantially reduce competition, so
maybe we need a blanket rule banning such combinations. Why so? We are
not without authority to examine such horizontal combinations when they
are proposed. We can conduct classic antitrust analysis to consider
possible anticompetitive effects and we have the public interest
standard which we can apply on a case-by-case basis. Additionally, we
are not the only agency with power and expertise to act in this area.
The Department of Justice has adequate authority and an admirable record
in evaluating and blocking anticompetitive combinations.

There might be cause for considering a rule if we were seeing numerous
cable/DBS combinations, and if we were seeing anticompetitive effects,
and if we saw that our existing powers were insufficient to address
these problems. But that is not the case. Moreover, we will have the
chance to evaluate competitive issues in the context of the Primestar
merger, where we will have the benefit of real facts and a real record
on which to think through these issues and to test the adequacy of our
existing authority. Although the series of questions proposed in the
item appear to be balanced, they have the air of a solution in search of
a problem.

It may prove true that horizontal combinations among DBS and cable
providers limit competition in the MVPD market. So may many other things
such as program access restrictions. Indeed, the issue of MVPD
competition presents broader questions that should be evaluated
comprehensively and not in tiny pieces scattered here and there among
orders that have very little to do with the subject. Rather, that
inquiry should be posed in the context of a comprehensive inquiry into
ways in which the Commission can promote more competition in that
market.

In other circumstances, I might agree with my colleagues that it would
be best to initiate a rulemaking proceeding where we can solicit broader
input. It is my view, however, because we have a case before us that
will provide better information to inform our judgment, that this is not
a propitious time to begin this inquiry. I respectfully dissent from
this portion of the item.

[^1]: ^?^DBS is the acronym used in the United States to describe the
    domestic implementation of the broadcast satellite service (BSS), as
    it is known internationally.

[^2]: ^?^Reports indicate that as of February 1998 there are
    approximately 8.5 million households receiving MVPD satellite
    delivered service. *Sky Report*, February 1998 at
    http://www.skyreport.com/dthsubs.htm (*Sky Report*). According to
    the Commission\'s 1997 Cable Competition Report, in June 1997, there
    were a total of 73.6 million MVPD households of which there were
    64.2 million basic cable subscribers; 7.2 million DBS, DTH-FSS, and
    C-band subscribers; 1.1 million MMDS subscribers; 1.2 million SMATV
    subscribers; and 3,000 OVS subscribers. *Annual Assessment of the
    Status of Competition in Markets for the Delivery of Video
    Programming* (Fourth Annual Report), CS Dkt. No. 97-141, FCC 97-423
    (rel. January 13, 1998)(*1997 Report*) at Appendix E, Table E‑1.

[^3]: ^?^*See, e.g.*, Satellite News, February 2, 1998 at 6, *citing*
    Report by the Consumer Electronics Manufacturing Association (CEMA).

[^4]: ^?^*See Assignment of Orbital Locations to Space Stations in the
    Ka-band,* DA 97-967 (rel. May 9, 1997)(licensees include Hughes
    Galaxy Communications Galaxy, Motorola, Loral Space, Ka-Star,
    PanAmSat, Morning Star, EchoStar, VisionStar, GE American
    Communications, Lockheed Martin, NetSat 28, Comm, and Orion); *see
    also Teledesic Corporation, Application for Authority to Construct,
    Launch, and Operate a Low Earth Orbit Satellite System in the
    Domestic and International Fixed Satellite Service,* 12 FCC Rcd 3154
    (1997).

[^5]: ^?^The average monthly cable rate rose by approximately 8.5%
    between July 1996 and July 1997 for cable systems that do not face
    \"effective competition.\" *Report on Cable Industry Prices*, MM
    Dkt. No. 92-266, FCC 97-409, (rel. December 15, 1997) at ¶ 28. In
    contrast, in the same period the overall consumer price index for
    all items for all urban consumers rose approximately 2.2%. Bureau of
    Labor Statistics, *Consumer Price Index-All Urban Consumers* at
    http://146.142.4.24/cgi-bin/surveymost (data extracted on January
    20, 1998). Hence cable rates rose nearly four times as fast as the
    consumer price index.

[^6]: ^?^*See Inquiry into the Development of Regulatory Policy in
    Regard to Direct Broadcast Satellites for the Period Following the
    1983 Regional Administrative Radio Conference* (Report and Order) 90
    FCC2d 676 (1982), *recon. denied,* 53 RR2d 1637 (1983)(*DBS Order*).

[^7]: ^?^The Commission previously streamlined its Part 25 rules in
    1996. *See Streamlining the Commission\'s Rules and Regulations for
    Satellite Application and Licensing Procedures* (Report and Order),
    11 FCC Rcd 21581 (1996)(*Part 25 Streamlining Order*).

[^8]: ^?^Some Part 25 Rules will [not]{.underline} apply to DBS.

[^9]: ^?^47 C.F.R. § 1.2101, *et.seq.*

[^10]: ^?^We note that the Commission has pending before it two
    applications from Primestar Partners. In one application Primestar
    seeks to acquire control of Tempo Satellite, Inc., currently a
    subsidiary of TCI Satellite Entertainment, Inc., which holds an
    authorization for 11 DBS channels at both 119° W.L. and 166° W.L.
    *Application of TCI Satellite Entertainment, Inc. and Primestar,
    Inc., for Transfer of Control of Tempo Satellite, Inc.*, File No.
    91-SAT-TC-97, file July 18, 1997. As part of the second application,
    Primestar proposes to acquire certain assets of the News Corp and
    MCI Telecommunications, Inc., joint venture which includes a DBS
    license for 28 channels at 110° W.L. *See Application of MCI
    Telecommunications Corporation and Primestar LHC, Inc., for Consent
    to Assignment of Direct Broadcast Satellite Authorizations,* File
    No. 106-SAT-AL-97, August 15, 1997*; see also MCI Telecommunications
    Corporation, Application for Authority to Construct, Launch and
    Operate a Direct Broadcast Satellite System at 110° W.L.*, DA
    96-1793 (1996). Since Primestar is owned by a group of large cable
    multi-system operators that also have ownership interests in a
    number of national cable programming services, those applications
    raise some of the same issues raised in this general notice.
    Comments in this proceeding therefore may also be considered in the
    Primestar proceeding and incorporated into the record of that
    proceeding.

[^11]: ^?^*See Implementation of Section 19 of the 1992 Cable Act
    (Annual Assessment of the Status of Competition in the Market for
    the Delivery of Video Programming*)(First Report), CS Dkt. No.
    94-48, 9 FCC Rcd 7442 (1994)(*1994 Report*) at ¶ 71.

[^12]: ^?^C-band refers to frequencies in the 3700-4200 MHz and
    5425-6426 MHz frequency bands.

[^13]: ^?^47 U.S.C. § 605(b). In order to receive programming from as
    many sources as possible, most direct-to-home satellite dishes were
    designed to track and receive video signals from a number of
    different satellites. Direct-to-home satellite dish vendors were
    generally independent distributors who were neither satellite
    operators nor program producers, and direct-to-home satellite dish
    users received both unscrambled, free-to-air programming, and
    scrambled subscription services. Direct-to-home satellite dish use
    grew rapidly in the late 1980\'s and early 1990\'s, especially in
    rural areas that lacked access to cable, and today there are
    approximately 2 million C-band subscribers. This figure does not
    include Primestar which is a Ku-band service that provides an entire
    programming package to subscribers from a single fixed-satellite.
    *Sky Report* (Feb. 1998).

[^14]: ^?^The Ku-band frequencies are 11.7 GHz - 12.2 GHz and 14.0 GHz -
    14.5 GHz.

[^15]: ^?^*Sky Report* (Feb. 1998). To provide its DTH-FSS service,
    Primestar leases transponder capacity on an FSS satellite licensed
    to GE Americom. Primestar is not itself a Commission licensee.

[^16]: ^?^The International Telecommunication Union (ITU) is an
    intergovernmental organization through which countries coordinate
    the use of radio frequencies.

[^17]: ^?^*DBS Order* at ¶ 84.

[^18]: ^?^In 1994, when it created the International Bureau, the
    Commission granted the Bureau authority over all satellite services,
    including DBS and FSS. 47 C.F.R. § 0.51. *See Amendment of Parts 0,
    1, 25, 43, 64 and 73 of the Commission\'s Rules to Reflect a
    Reorganization Establishing the International Bureau,* FCC 94-252
    (1994).

[^19]: ^?^*Subscription Video Services* (Report and Order), 2 FCC2d 1001
    (1987)(*Subscription Video*), *aff\'d*., [National Assoc. for Better
    Broadcasting v. FCC]{.underline}, 849 F.2d 665 (D.C. Cir. 1988).

[^20]: ^?^The Regional Administrative Radio Conference in 1983 (RARC‑83)
    developed and adopted the Region 2 BSS and Feeder Link Plans. It was
    not until 1985, at the World Administrative Radio Conference (WARC
    Orb‑85), that the Region 2 Plans were ratified internationally and
    became a part of the ITU\'s Radio Regulations. The Regions 1 (Europe
    and Africa) and 3 (Asia-Pacific) BSS Plan became a part of the ITU
    Radio Regulations in 1977 at the World Broadcasting-Satellite
    Administrative Radio Conference (WARC-77). The Regions 1 and 3
    Feeder Link Plan became a part of the ITU Radio Regulations in 1988
    at the World Administrative Radio Conference (WARC Orb-88).

[^21]: ^?^*See* Appendix S30 (WRC-97) of the ITU\'s Radio Regulations
    (Appendix S30) at 57. The eight U.S. orbital positions, proceeding
    from east to west (all W.L.), are 61.5°, 101°, 110°, 119°, 148°,
    157°, 166°, and 175°.

[^22]: ^?^Digital compression provides the ability for operators to
    carry simultaneously at least seven video programming services per
    analog DBS channel, and anticipated technological advances are
    expected to permit capacity for up to 20 programs per analog channel
    by the year 2000. *See Number of Television Programs From One
    Transponder in the Appendices S30 and S30A Plans,* Document
    10-11S/108-E, ITU Radiocommunications Study Group 10/11S (September
    12, 1995).

[^23]: ^?^Earth station antennas with a diameter of 60 cm (18 inches)
    are commonly employed in the DBS service, whereas earth station
    antennas employed in the Ku-band DTH-FSS are generally on the order
    of 0.84 to 1 meter (36 inches) in diameter.

[^24]: ^?^*DBS Order* at ¶ 1; *CBS, Inc.*, 92 FCC2d 64 (1982);
    *Processing Procedures Regarding the Direct Broadcast Satellite
    Service*, 95 FCC Rcd 250 (1983).

[^25]: ^?^*See CBS, Inc.,* 92 FCC2d 64 (1982).

[^26]: ^?^*Revision of Rules and Policies for the Direct Broadcast
    Satellite Service* (Report and Order), 11 FCC 9712 (1995)(*DBS
    Auction Order*) at ¶ 165.

[^27]: ^?^Previously there were only deadlines for obtaining a satellite
    construction contract and for final system implementation*. DBS
    Auction Order* at ¶ 10.

[^28]: ^?^The Commission had adopted a rule in 1989 that required
    channels at the eight orbital locations to be paired, with each
    licensee being assigned an equivalent number of channels at an
    eastern orbital location and at a western orbital location. The four
    eastern positions are: 61.5° W.L., 101° W.L., 110° W.L., and 119°
    W.L. The four western positions are: 148° W.L., 157° W.L., 166°
    W.L., and 175° W.L. For example, DBSC was assigned 11 channels at
    each of the 61.5°W.L. and 175°W.L. locations. R/L DBS was assigned
    11 channels at each of the 61.5° W.L. and 166° W.L. locations. The
    *DBS Auction Order* eliminated this policy. *DBS Auction Order* at ¶
    124.

[^29]: ^?^47 C.F.R. § 100.53.

[^30]: ^?^47 C.F.R. § 100.53(b).

[^31]: ^?^The channels at the 110°W.L. and 148°W.L. locations became
    available when the previous assignee, Advanced Communications Corp.,
    failed to meet its due diligence obligations (*i.e.*, failure to
    initiate construction of satellite within prescribed time periods)
    for use of its assigned channels at those locations. *Advanced
    Communications Corp.*, (M,O&O) 10 FCC Rcd. 13337, 13340 (Int\'l
    Bureau 1995), *aff\'d* (M,O&O), 11 FCC Rcd 3399 (1995), *aff\'d*,
    [Advanced Communications Corp. v. FCC]{.underline}, 84 F.3d 1452
    (D.C. Cir. 1996), *cert denied*, 117 S.Ct. 718 (1997). MCI
    Telecommunications, Corp., won the auction for the channels at the
    110°W.L. location by bidding \$682.5 million, and Echostar Satellite
    Corp., won the auction for the channels at 148°W.L. by bidding
    \$52.295 million.

[^32]: ^?^*Sky Report* (Feb. 1998). This figure does not include DTH-FSS
    or C-band subscribers.

[^33]: ^?^*See DBS Auction Order* at ¶ 165.

[^34]: ^?^The term \"full-CONUS\" refers to orbital locations capable of
    serving the entire continental U.S. as a result of the ability to
    transmit a signal covering the continental U.S. from a single
    orbital location.

[^35]: ^?^*Amendment to the Commission\'s Regulatory Policies Governing
    Domestic Fixed Satellites and Separate International Satellite
    Systems* (Report and Order), 11 FCC Rcd 2429 (1996)(*DISCO I*) at ¶
    70 (foreign approval required for international operations,
    consistent with international treaties). The acronym \"DISCO\"
    stands for Domestic International Satellite Consolidation Order.

[^36]: ^?^Agreement between the Government of the United States of
    America and the Government of the United Mexican States Concerning
    the Transmission and Reception from Satellites for the Provision of
    Satellite Services to Users in the United States of America and the
    United Mexican States, April 28, 1996; Protocol Concerning the
    Transmission and Reception of Signals from Satellites for the
    Provision of Direct-to-Home Satellite Services in the United States
    and the United Mexican States, *Public Notice*, DA 96-1880, Rpt. No.
    SPB-65 (November 13, 1996).

[^37]: ^?^*Amendment to the Commission\'s Regulatory Policies to Allow
    Non-U.S. Licensed Space Stations to Provide Domestic and
    International Services in the United States* (Report and Order), IB
    Dkt. No. 96-111, CC Dkt. No. 93-23, RM-7931, FCC 97-399 (rel.
    November 11, 1997)(*DISCO II*). We discuss foreign ownership rules
    applicable to DBS and DTH-FSS below in Section III.A.

[^38]: ^?^The results of the WTO basic telecommunications services
    negotiations are incorporated into the General Agreement on Trade in
    Services (GATS) by the Fourth Protocol to the GATS (April 30, 1996),
    36 I.L.M. 336 (1997).

[^39]: ^?^*DISCO II* at ¶ 98.

[^40]: ^?^47 C.F.R. §100.1, *et. seq.* and 47 C.F.R. § 25.101, *et.
    seq.*, respectively.

[^41]: ^?^These changes will permit use of FCC Form 312 for DBS and all
    other satellite services.

[^42]: ^?^*See, e.g., Application of Hughes Communications Galaxy, Inc.,
    for Authority to Construct, Launch and Operate Galaxy/Spaceway, a
    Global System of Geostationary Ka band Fixed and Ku band Broadcast
    Communications Satellites*, File Nos. 174-SAT-P/LA-95 -
    181-SAT-P/LA-95 (filed September 29, 1995).

[^43]: ^?^*Public Notice*, Rpt. No. IN 97-8, DA 97-616 (rel. Mar. 26,
    1997)(the topics identified were procedures, policy matters, and
    technical matters).

[^44]: ^?^*See Implementation of Section 25 of the Cable Television
    Consumer Protection and Competition Act of 1992, Direct Broadcast
    Satellite Service Obligations* (Notice of Proposed Rulemaking), 8
    FCC Rcd 1589 (1993). 47 U.S.C. § 335(b)(5) defines \"provider of
    direct broadcast satellite service\" as follows:

    \(i\) a licensee for Ku-band satellite system under part 100 of
    title 47 of the Code of Federal Regulations; or

    \(ii\) any distributor who controls a minimum number of channels (as
    specified by Commission regulation) using a Ku-band fixed service
    satellite system for the provision of video programming directly to
    the home and licensed under part 25 of title 47 of the Code of
    Federal Regulations.

[^45]: ^?^Communications Act of 1934, as amended, 47 U.S.C. § 151, *et.
    seq.* (Communications Act).

[^46]: ^?^47 U.S.C. § 303(v).

[^47]: ^?^For example, the orbital positions used for the DBS service
    are based on ITU orbital and frequency assignment Plans, rather than
    assignment by national administrations that are coordinated through
    the ITU process, as with certain FSS bands. In addition, since use
    of the DBS band is governed by these ITU orbital and frequency
    assignment Plans and specific technical regulations for BSS,
    licensees may not be able to enjoy as much spectrum flexibility as
    might exist in other satellite services.

[^48]: ^?^47 U.S.C. § 100.1.

[^49]: ^?^Telecommunications Act of 1996 (P.L. 104-104, Feb. 8, 1996,
    110 Stat. 56) § 205(b). *See also* Part 25 Authority.

[^50]: ^?^47 C.F.R. § 25.109(b).

[^51]: ^?^47 C.F.R. § 100.1(b).

[^52]: ^?^ITU Radio Regulations, Pt. A, Ch. 1, Article 1, Sec. II
    (3.18). The ITU Radio Regulations, however, refer to DBS as the
    Broadcast Satellite Service.

[^53]: ^?^47 C.F.R. §§ 25.142 and 25.145, respectively.

[^54]: ^?^47 U.S.C. § 310. The foreign ownership limitations in Section
    310(b) also apply to aeronautical en route and aeronautical fixed
    radio station licenses. 47 U.S.C. § 310(b).

[^55]: ^?^Section 100.11 provides:

    An authorization for operation of a station in the Direct Broadcast
    Satellite Service shall not be granted to or held by:

    \(a\) Any alien or the representative of any alien;

    \(b\) Any foreign government or the representative thereof;

    \(c\) Any corporation organized under the laws of any foreign
    government;

    \(d\) Any corporation of which more than one-fifth of the capital
    stock is

    owned of record or voted by aliens or their representatives or by a
    foreign

    government or representative thereof, or by any corporation
    organized under

    the laws of a foreign country;

    \(e\) Any corporation directly or indirectly controlled by any other
    corporation

    of which more than one-fourth of the capital stock is owned of
    record or voted

    by aliens, their representatives, or by a foreign government or
    representatives

    thereof, or by any corporation organized under the laws of a foreign
    country, if

    the Commission finds that the public interest will be served by the
    refusal or

    revocation of such license.

[^56]: ^?^*MCI Telecommunications Corporation, Application for Authority
    to Construct, Launch and Operate a Direct Broadcast Satellite System
    at 110°W.L.* (Order), DA 96-1793 (1996) (*MCI Order*). An
    Application for Review of the Bureau\'s *MCI Order*, filed by the
    National Association for Better Broadcasting, is pending before the
    Commission.

[^57]: ^?^*MCI Order* at ¶ 27.

[^58]: ^?^*Id.* at ¶ 23.

[^59]: ^?^*See* Letter to Hon. Reed E. Hundt, from Amb. Vonya McCann
    (Dept. of State), Hon. Larry Irving (Dept. of Commerce), and Amb.
    Jeffrey Lang (USTR), dated May 5, 1997.

[^60]: ^?^*See Part 25 Streamlining Order* (modifying Part 25 of the
    Commission\'s rules and regulations regarding satellite earth and
    space station licensing and adopting a new application form, FCC
    Form 312).

[^61]: ^?^*See* ITU Radio Regulations, Appendix S30, art. 5.

[^62]: ^?^*See* Part 25, Subpart B.

[^63]: ^?^The Commission extended DBS license terms in the 1995 *DBS
    Auction Order* in recognition of the fact that today\'s satellites
    enjoy longer in-orbit lifespans than their predecessors. *DBS
    Auction Order* at ¶ 130.

[^64]: ^?^47 U.S.C. § 307(c)(1).

[^65]: ^?^More recently, we have adopted specific satellite construction
    milestone requirements for the satellite digital audio radio service
    (SDARS) and the fixed-satellite service in the 20/30 GHz Bands
    (Ka-band)*. See* 47 C.F.R. §§ 25.144(b), 25.145(f), respectively.

[^66]: ^?^*See* Part 25, Subparts B, C, and D (Applications and
    Licenses, Technical Requirements, and Technical Operations).

[^67]: ^?^*See infra* Section III.B.

[^68]: ^?^*DBS Order* at ¶ 102.

[^69]: ^?^*Subscription Video*. This decision was affirmed in [National
    Assoc. for Better Broadcasting v. FCC]{.underline}, 849 F.2d 665
    (D.C. Cir. 1988).

[^70]: ^?^Pub. L. No. 102-385, 106 Stat. 1460 (1992). 47 U.S.C. § 554.

[^71]: ^?^*Implementation of Section 22 of the Cable Television Consumer
    Protection and Competition Act of 1992: Equal Employment
    Opportunities* (Report and Order)*,* 8 FCC Rcd 5389 (1993).

[^72]: ^?^Section 25.601 states that \"an entity that uses an owned or
    leased fixed satellite service facility (operating under this part)
    to provide more than one channel of video programming directly to
    the public must comply with the equal employment opportunity
    requirements set forth in part 76, subchapter E of this chapter, if
    such entity exercises control (as defined in part 76, subpart E of
    this chapter) over the video programming it distributes.\" Section
    100.51(e) replaces the words \"fixed satellite service\" with the
    word \"DBS\".

[^73]: ^?^47 C.F.R. § 76.71.

[^74]: ^?^*DBS Order* at ¶ 102.

[^75]: ^?^52 FR 26682, July 16, 1987, as amended at 58 FR 42249, Aug. 9,
    1993.

[^76]: ^?^47 C.F.R. § 100.53(b).

[^77]: ^?^47 C.F.R. § 100.53(a).

[^78]: ^?^*See MCI Communications,* DA 96-2165 (1996) at ¶ 6,
    *EchoStar,* DA 96-2164 (1996) at ¶ 5, *Tempo Satellite,* DA 97-355
    (1997) at ¶¶ 5, 35.

[^79]: ^?^*DBS Auction Order* at ¶ 128.

[^80]: ^?^Letter to Chris Murphy, Attorney-Advisor, Satellite Policy
    Branch, from David Nall, Squire, Sanders & Dempsey, counsel for the
    State of Hawaii, dated April 23, 1997.

[^81]: ^?^47 U.S.C. §309(j).

[^82]: ^?^47 C.F.R. § 100.71. The Commission based its decision in the
    *DBS Auction Order* principally on the unique characteristics of the
    DBS service, and in particular, the fact that DBS orbital locations
    are assigned to the United States by the ITU\'s international BSS
    plan. *DBS Auction Order* at ¶165. The Commission\'s authority to
    auction the DBS channels was upheld in [DirecTV, Inc. v.
    F.C.C.]{.underline} in 1997. *DBS Auction Order,* *aff\'d*,
    [DirecTV, Inc. v. F.C.C.]{.underline}, 110 F.3d 816 (D.C.Cir. 1997).

[^83]: ^?^The Commission recently modified the General Auction Rules.
    *Amendment of Part 1 of the Commission\'s Rules \-- Competitive
    Bidding Procedures* (Report and Order), WT Dkt. No. 97-82, ET Dkt.
    No. 94-32, FCC 97-413 (rel. december 31, 1997)(*General Auction
    Rules Order*).

[^84]: ^?^*General Auction Rules Order* at ¶ 5. We also stated that we
    would \"adopt service-specific auction procedures where we find that
    our general competitive bidding procedures are inappropriate\" in
    response to concerns raised in the proceeding by Hughes Electronic
    Corporation. *Id.* at ¶ 12.

[^85]: ^?^*Id.* at ¶ 5.

[^86]: ^?^*See Implementation of Section 309(j) of the Communications
    Act \-- Competitive Bidding* (Report and Order), 9 FCC Rcd 2348,
    2391 (1994).

[^87]: ^?^*DBS Auction Order* at ¶ 217.

[^88]: ^?^*Id.*

[^89]: ^?^*DBS Order* at ¶ 1*.*

[^90]: ^?^At WARC-77, the BSS Plan for Regions 1 and 3 was created and
    adopted. The Final Acts of WARC-77 set out the orbital slots and
    channel assignments for each country in Regions 1 and 3 and discuss
    the technical parameters used in establishing the BSS Plan (see
    Annex 8 of the Final Acts). In addition, the Final Acts contain
    provisions for \"modifying\" the BSS Plan, *i.e.*, implementing
    systems using technical parameters that differ from those specified
    in Annex 8 to the Final Acts. The Final Acts also include interim
    procedures for implementing BSS space stations in Region 2, prior to
    the planning of BSS for that Region. Subsequently at WARCOrb-85,
    updated when the Region 2 Plans were adopted. These updated
    procedures were not included in our rules.

[^91]: ^?^*See* ITU Radio Regulations, Appendix S30 and S30A, Article
    4.1.

[^92]: ^?^Annex 1 to Appendices S30 and S30A contains coordination
    thresholds that must be met by proposed systems or such systems must
    coordinate with affected systems.

[^93]: ^?^*See* ITU Radio Regulations, Appendix S30 and S30A, Annex 1.

[^94]: ^?^*See* *e.g., Application of Hughes Communications Galaxy,
    Inc., for Authority to Construct, Launch and Operate
    Galaxy/Spaceway, a Global System of Geostationary Ka band Fixed and
    Ku band Broadcast Communications Satellites*, File Nos.
    174-SAT-P/LA-95 - 181-SAT-P/LA-95 (filed September 29, 1995).

[^95]: ^?^*E.g.,* if it is shown in an FCC application that the effect
    on the foreign system(s) is negligible.

[^96]: ^?^*See* ITU Radio Regulations, Appendices S30 and S30A, Annex 2
    (lists the basic characteristics to be furnished in notices relating
    to space stations in the broadcasting-satellite service).

[^97]: ^?^ *See* ITU\'s Circular Letter C/58, dated October 21, 1996
    (*Circular Letter C/58*).

[^98]: ^?^When attempting to modify the Plans, an Administration must
    submit to the ITU the names of administrations who are affected by
    the proposed modification, or state that the limits in Annex 1 are
    not exceeded. *See* Section 4.3.5.1 of Appendix S30 and Section
    4.2.6.1 of Appendix S30A.

[^99]: ^?^ *See* *Circular Letter C/58*.

[^100]: ^?^ITU Radio Regulations, Appendices S30 and S30A contain
    provisions for \"modifying\" the Plans in order to include systems
    in the Plan that use different technical parameters.

[^101]: ^?^The Commission has submitted these technical modifications of
    the Plans to the ITU Radiocommunication Bureau in accordance with
    Article 4 of Appendices S30 and S30A.

[^102]: ^?^*E.g.*, for the orbital position of 110o W.L., any location
    between 109.8o W.L. and 110.2o W.L.

[^103]: ^?^*See* proposed modified rule § 25.272. This rules establishes
    general inter-system coordination procedures.

[^104]: ^?^The reference pattern used is given in Figure 8 of Annex 5 to
    Appendix S30.

[^105]: ^?^ WRC-97 began October 27, 1997 and ended November 21, 1997.

[^106]: ^?^This includes the 12.2 - 12.7 GHz band in Region 2, 11.7 -
    12.5 GHz in Region 1 and 11.7 - 12.2 GHz in Region 3. *See* Final
    Acts of WRC-97, Geneva, 1997, Footnote S5.487A. Resolution 532
    (WRC-97) established provisional power flux density limits to
    protect GSO BSS systems from NGSO-FSS systems. *See* Final Acts of
    WRC-97, Geneva, 1997, In addition, the ITU set up a joint task group
    between several of its study groups (JTG 4-9-11) to review these
    provisional limits, as well as others to protect the FSS and
    terrestrial services from NGSO-FSS, in the next two years. The U.S.
    has established a domestic group (U.S. JTG 4-9-11) to prepare for
    the international meetings of the JTG 4-9-11. *See* *Public Notice*,
    Department of State, issued by Warren Richards (rel. December 15,
    1997).

[^107]: ^?^*See* *Application of SkyBridge L.L.C. for Authority to
    Launch and Operate The SkyBridge System* (File Nos. 48-SAT-P/LA-97
    and 89-SAT-AMEND-97); SkyBridge\'s *Petition for Rulemaking* (RM No.
    9147); *Application of Denali Telecom, LLC for Authority to Launch
    and Operate the Pentriad Highly Elliptical Orbit Satellite System*
    (File No. 160‑SAT‑P/LA‑97).

[^108]: ^?^*See* 47 C.F.R §§ 25.134 and 25.209.

[^109]: ^?^*See* § 25.201 (individual definitions for space telecommand,
    space telemetering, and space tracking).

[^110]: ^?^C-band refers to frequencies in the range 3700 MHz - 4200 MHz
    and 5925 MHz - 6425 MHz. Ku-band refers to frequencies in the range
    11.7 GHz - 12.2 GHz and 14.0 GHz - 14.5 GHz. These frequencies are
    the primary bands used for FSS services.

[^111]: ^?^*See* *MCI Order*; *Application of EchoStar DBS Corporation
    for Authority to Construct, Launch and Operate a Direct Broadcast
    Satellite System at 148°W.L*., DA 96-2164 (1996) at ¶ 4.

[^112]: ^?^*See* 47 C.F.R. § 25.202(g).

[^113]: ^?^*See* \"Trilateral Agreement Regarding Use of The
    Geostationary Orbit Reached by Canada,Mexico and The United
    States,\" *Public Notice*, dated September 2, 1988.

[^114]: ^?^We note that there is an ongoing rulemaking regarding
    satellite and terrestrial use of these bands throughout the
    17.7-20.2 GHz band. *See* *Routine Licensing of Large Numbers of
    Small Antenna Earth Stations Operating in the Ka Band* (Petition for
    Rulemaking), RM No. 9005, filed Dec. 23, 1996.

[^115]: ^?^Feeder links to BSS are in an FSS allocation. It is
    consistent to regulate BSS feeder link earth stations in the same
    manner as other FSS earth stations.

[^116]: ^?^This figure includes 7.2 million subscribers to DBS, DTH-FSS,
    and C-band reported as of June 1997 data. *1997 Report* at Appendix
    E, Table E-1*.*

[^117]: ^?^*Id*.

[^118]: ^?^ In contrast, to encourage competition and a diversity of
    voices, market structure rules have been adopted for many services
    that distribute video programming to consumers. For example, current
    rules prohibit the owner of a group of TV stations from serving more
    than 35 percent of nationwide TV households, 47 C.F.R. § 73.3555;
    restrict the ownership of more than one TV station in a local area,
    47 C.F.R. § 73.3555 ; prohibit the ownership of a TV station whose
    signal overlaps with a local cable system, 47 C.F.R. § 76.501;
    prohibit the ownership of a TV station and a local daily newspaper
    in the same community, 47 C.F. R. § 73.3555; and prohibit the
    ownership of MMDS (or wireless cable systems) by cable systems in
    their franchise area, 47 C.F.R. § 21.912. A currently stayed rule
    prohibits any person from reaching, through owned or attributed
    cable systems, more than 30% of all homes passed nationwide by
    cable. 47 C.F.R. § 76.503.

    We note, however, that pursuant to the Telecommunications Act of
    1996, we recently repealed all national ownership limits on radio
    broadcast stations and relaxed local radio broadcast station
    ownership limits. *Implementation of Sections 202(a) and 202(b)(1)
    of the Telecommunications Act of 1996 (Broadcast Radio
    Ownership)*(Order), FCC 96-90 (1996). There are also pending
    rulemaking dockets in which questions have been raised concerning
    whether the local TV ownership rules should be relaxed. Congress
    repealed the statutory ban on cable/TV station cross-ownership in
    1996. There are no restrictions on DBS/television station
    cross-ownership.

[^119]: ^?^*DBS Order* at 711-713.

[^120]: ^?^The specific language stated that:

    If ten percent of the households in the United States with
    television sets subscribe to any one service provided by
    multichannel video programming distributors directly via satellite
    to home satellite antennae, the Commission shall promulgate
    appropriate regulations (A) limiting ownership of any such
    distributor by cable operators and (B) requiring access to such
    satellite service by unaffiliated video programmers.

    H.R. Conf. Rep. No. 102-862, 102d Cong., 2d Sess. (1992).

[^121]: ^?^*Id.*

[^122]: ^?^*Id.*

[^123]: ^?^*DBS Auction Order* at ¶ 28.

[^124]: ^?^*Id.* at ¶ 85-97.

[^125]: ^?^We found that a one-time auction rule would \"encourage entry
    of another full-CONUS DBS service and will essentially ensure that
    each of the three full-CONUS orbital locations will initially be
    controlled by entities that do not share interests with DBS
    operators at the other two locations.\" *Id.* at ¶ 54.

[^126]: ^?^*Id.* at ¶ 76.

[^127]: ^?^*1997 Report* at ¶ 11.

[^128]: ^?^*Id*.

[^129]: ^?^*Id*.

[^130]: ^?^*Implementation of Section 3 of the Cable Television Consumer
    Protection and Competition Act of 1992* (Report on Cable Industry
    Prices), MM Dkt. No. 92-266, FCC 97-409 (rel. December 15, 1997) at
    ¶ 4-5.

[^131]: ^?^*Id.* at ¶ 28. This percentage represents the increase in the
    average monthly rate for the noncompetitive group of cable systems.

[^132]: ^?^We note that the Commission has before it two applications
    from Primestar Partners, a group of large cable MSOs that also have
    ownership interests in a number of national cable programming
    services. As part of one application, Primestar seeks to acquire
    control of Tempo, currently a subsidiary of TCI Satellite
    Entertainment, Inc., which holds an authorization for 11 DBS
    channels at both 119° W.L. and 166° W.L. As part of the second
    application, Primestar proposes to acquire certain assets from MCI
    which includes a DBS license for 28 channels at 110° W.L.

[^133]: ^?^The concept of the relevant market is an antitrust concept
    and \"is an important first step in assessing whether a firm has
    market power, *i.e.*, \'the power to control market prices and
    exclude competition.\'\" Economic theory and antitrust case law
    \"define the relevant product market by analyzing the degree to
    which products or services are \'reasonably interchangeable by
    consumers for the same purposes.\'\" *1994 Report* at ¶¶ 38-40.

[^134]: ^?^In this notice we use the term \"DBS\" to refer to high power
    direct to home satellite systems currently regulated under Part 100
    of our rules. We note, however, that the *1997 Competition Report*
    includes medium power fixed satellite service direct-to-home
    satellite within its definition of DBS. *1997 Report* at *¶* 54*.*

[^135]: ^?^*DBS Auction Order* at ¶ 36.

[^136]: ^?^*1997 Report* at ¶ 123.

[^137]: ^?^*Id.* at ¶ 4.

[^138]: ^?^It should be noted that the term \"cross-ownership\" is
    usually used to describe ownership of firms providing two different
    but related services or products, *e.g.*, \"TV/newspaper
    cross-ownership.\" In this Notice we discuss DBS/cable
    cross-ownership even while noting that DBS and cable both compete in
    the provision of video distribution services in a broad MVPD market.

[^139]: ^?^In connection with its reconsideration of *Implementation of
    Section 11(c) of the Cable Television Consumer Protection and
    Competition Act of 1992* (Second Report and Order) in MM Docket No.
    92-264, 8 FCC Rcd 8565 (1993), the Commission will consider whether
    any limitation on the number of national subscribers any cable
    system can reach should take into account ownership of other MVPD
    systems.

[^140]: ^?^As noted above, the United States has reached an agreement
    with Mexico to allow DBS and DTH-FSS satellites licensed by either
    country to provide service into each other\'s territory. Also, as
    stated in the Commission\'s *DISCO II* order, foreign-licensed
    satellites will be able to provide DBS and DTH-FSS in the U.S. if
    the country licensing the satellite in question offers effective
    competitive opportunities to U.S.-licensed satellites in its home
    market. *DISCO II* at ¶ 98.

[^141]: ^?^*1994 Report* at ¶ 40.

[^142]: ^?^*1997 Report* at ¶ 124.

[^143]: ^?^Satellite Home Viewing Act, 17 U.S.C. § 119.

[^144]: ^?^13 C.F.R. § 121.201, Standard Industrial Classification (SIC)
    Code 4899.

[^145]: ^?^U.S. Bureau of Census, U.S. Department of Commerce, 1992
    Census of Transportation, Communications, Utilities, UC92-S-1,
    Subject Series, Establishment and Firm Size, Table 2D, Employment
    Size of Firms: 1992, SIC Code 4899 (issued May 1995).