FOR IMMEDIATE RELEASE News Media Contact:

January 23, 2001 Mark Rubin: (202) 418-2924

E-mail: mrubin@fcc.gov

**FCC ADOPTS MEASURES TO FACILITATE VOLUNTARY CLEARING OF**

**700 MHz BAND AND ACCELERATE DTV TRANSITION**

WASHINGTON, DC -- The Federal Communications Commission ("FCC" or
"Commission") last week adopted a Third Report and Order in WT Docket
No. 99-168 to facilitate voluntary clearing of the 700 MHz band to allow
for the introduction of new wireless services and to promote the
transition of incumbent analog television licensees to digital
television ("DTV") service. This action is taken pursuant to Congress's
mandate that the 746-806 MHz band (currently used for channels 60-69) be
allocated for future use by commercial wireless and public safety
licensees. Congress has instructed the Commission to assign commercial
licenses for this spectrum by auction, even though incumbent television
broadcasters are permitted by statute to continue operations on these
frequencies until at least December 31, 2006.

In this Third Report and Order, the FCC adopts rules and policies that
allow the private sector to determine the band-clearing mechanisms that
will best suit broadcasters' and potential new 700 MHz licensees' needs.
Thus, the FCC concludes that it is not necessary or appropriate at this
time to adopt cost-sharing rules, cost caps, or cost recovery guidelines
to assist in clearing the 700 MHz band, and leaves cost-sharing
arrangements to voluntary negotiations among new wireless licensees. In
addition, the FCC leaves the implementation of any secondary auction
process to private, voluntary efforts that are otherwise consistent with
Commission policies and rules and do not interfere with the integrity
and operations of the Commission's spectrum auctions.

By this action, the FCC also builds upon the policies adopted in the
*Memorandum Opinion and Order and Further Notice of Proposed Rulemaking*
("*700 MHz MO&O and FNPRM*") adopted in this proceeding in June 2000, in
which it provided guidance regarding the Commission's review of
regulatory requests filed in connection with voluntary private
agreements that would accelerate the DTV transition and open the 700 MHz
band for new uses. Thus, the Commission extends the general rebuttable
presumption adopted in the *700 MHz MO&O and FNPRM* in favor of
bilateral agreements (between new 700 MHz wireless licensees and
incumbent Channel 59-69 broadcasters) to three-way agreements (which
would provide for TV incumbents on television Channels 59-69 to relocate
to lower band TV channels that, in turn, would be voluntarily cleared by
the lower band TV incumbents). The Commission also provides guidance on
interference issues that may arise from a proposal to relocate a
broadcast operation to a channel below channel 59. In addition, the FCC
adopts various procedural changes in order to streamline the process of
reviewing regulatory requests that are necessary to effectuate private
band-clearing agreements, and affirms its commitment to process
regulatory requests associated with relocation agreements expeditiously.

Action by the Commission by Third Report and Order (FCC 01-25). Chairman
Kennard, Commissioners Ness, Furchtgott-Roth, and Powell. Commissioner
Tristani approving in part, dissenting in part, and issuing a separate
statement.

\- FCC -

WT Docket No. 99-168; CS Docket No. 98-120; MM Docket No. 00-39

Wireless Telecommunications Bureau Contacts, TTY at (202) 418-7233:

Auctions and Industry Analysis Division:

> Nese Guendelsberger (202) 418-0660, e-mail: nguendel@fcc.gov
>
> Bill Huber (202) 418-0660, e-mail: whuber@fcc.gov

Policy Division:

> Stanley Wiggins (202) 418-1310, e-mail: swiggins@fcc.gov
>
> Martin Liebman (202) 418-1310, e-mail: mliebman@fcc.gov

Mass Media Bureau:

Gordon Godfrey, (202) 418-2193, e-mail: ggodfrey@fcc.gov

> Clay Pendarvis, (202) 418-1600, e-mail: cpendarv@fcc.gov

## *January 19, 2000*

### **SEPARATE STATEMENT OF COMMISSIONER GLORIA TRISTANI**

### **Dissenting in Part**

Re: Service Rules for the 746-764 and 776-794 MHz Bands, and Revision to
Part 27 of the Commission's Rules, Third Report and Order, WT Docket No.
99-168

I previously supported -- and continue to favor -- a case-by-case review
of band clearing proposals for channels 59-69.[^1] The public interest
in both new wireless offerings and existing television services demands
it. Earlier in this proceeding, however, I could not join my colleagues
in adopting a presumption that the public is better served by loss of
its television service than by delay in receiving new services in the
700 MHz band. [^2] Nor can I support today's decision extending that
presumption to 3-way channel swaps. Although the Commission's action
purports to facilitate the DTV transition with only a temporary loss of
service for today's viewers of over-the-air television, I fear it will
do neither. Moreover, 3-way swaps may result in loss of service not only
for viewers of channels 59-69 but in the core spectrum as well. Again, I
would have preferred a case-by-case approach.

As I have noted in the past, I am committed to preserving consumer
access to free, over-the-air television. A substantial percentage of
American households still rely on free, over-the-air broadcasting for
their local news and information. This service ensures that all members
of the community have access to a range of viewpoints and programming on
issues of public concern. At the same time, the 700 MHz spectrum offers
unlimited possibilities for advanced wireless services and is a vital
source of new spectrum to address public safety needs. Given these
competing public interest benefits, I supported applying the
Commission's long-standing precedent to determine whether new services
warrant loss of existing broadcast service.[^3] This case-by-case
review, however, prompted uncertainty among potential bidders in the
upcoming 700 MHz auction and led to adoption of the presumption in favor
of new wireless offerings. At that time, I believed Congress was
cognizant that such uncertainty could result when it mandated an early
auction while protecting existing broadcast services through 2006 and
beyond.[^4] I remain unpersuaded that Congress intended the Commission
to foster removal of all obstacles to new wireless services in this band
-- including existing television services.

The majority's contention that today's decision will facilitate the
transition to DTV while causing only a temporary loss of service cannot
withstand scrutiny. As an initial matter, nothing in today's decision
requires a broadcaster engaged in a swap to give up its analog
operations in favor of digital-only service. To the contrary, the
decision expressly permits a broadcaster to operate in analog format on
a digital channel allotment as part of a 3-way agreement. Given the
negligible penetration of DTV sets and the lack of advertising to
support digital operations, it seems likely that a broadcaster would
choose to maintain analog operations -- where the audience is -- on its
only channel and "free ride" on the efforts of other broadcasters to
complete the digital transition. To the extent that broadcasters adopt
such an approach, the transition to digital television will be hampered,
not helped. In the event a broadcaster chooses to engage in digital-only
operation, however, it will almost certainly request the local cable
operator to carry its signal in an analog format, following the approach
outlined in the WHDT Order.[^5] In this case, consumers who subscribe to
cable services will have one less reason to buy a digital set.

Thus, in the end: (1) the majority will get what they want -- the
clearing of the 700 MHz band; (2) a few broadcasters will benefit
financially (with no requirement that they expedite their conversion to
DTV); and (3) the transition to digital television, already proceeding
slowly, will not be furthered. In certain circumstances, the trade-off
for new wireless services may be in the public interest. As I have said,
I would be willing to consider band clearing proposals on a case-by-case
basis. But I again object to the majority's complacency about loss of
existing service and its vision that these deals will clearly advance
the DTV transition.

More broadly, I remain concerned that band clearing will impede a smooth
DTV transition. When Congress provided broadcasters with a second 6 MHz
channel, the intent was to allow licensees to begin offering digital
services while ensuring that existing analog viewers could continue to
access today's programming. In contrast, band clearing results in a
broadcaster holding one 6 MHz channel rather than two. This inevitably
leads to a flash-cut change from analog to digital service, occurring
today or, the majority asserts, in May 2002 for most commercial
stations. While it's clear that an instant substitution introduces DTV,
it does so at the expense of today's viewers of free, over-the-air
analog broadcasting services, who will not benefit from the orderly
transition envisioned by Congress.

With regard to 3-way swaps in particular, such agreements will
inevitably involve complex machinations as broadcasters seek to
"shoehorn" existing stations into others' channel allotments. They raise
a variety of loss-of-service concerns that involve not only voluntary
parties to the agreement but neighboring co-channel and adjacent channel
broadcasters as well. An analog provider on channel 61, for example, may
seek to move to another broadcaster's digital channel allotment on
channel 32 and operate in analog format, raising interference concerns
for stations nearby channel 32. Scenarios like this will require close
scrutiny. Despite my concerns, I am in part assuaged that the Mass Media
Bureau and the Commission will review the loss of service for
neighboring television stations on a case-by-case basis as part of the
overall regulatory review -- not subsequent to grant of the channel
swapping agreement. In doing so, we need to look seriously at
loss-of-service issues, consistent with our longstanding precedent.

Finally, I take issue with the majority's treatment of possible "lone
holdouts" in the 700 MHz band. Under this scenario, a new wireless
licensee could successfully clear its spectrum block of incumbent
licensees except for one broadcaster. While the majority expresses no
view on mandatory relocation except to assert that the Commission will
revisit the matter if necessary, I remain convinced that such action
would contravene the statute. Congress set out that incumbent
broadcasters in the 700 MHz band could retain their channels until 2006
or beyond when they relocated as part of the orderly repacking process
that accompanies the end of the transition.[^6] There simply is no
statutory authority to support consideration of a mandatory relocation
policy, and the majority should have made that clear here. Further, I am
disturbed that the majority considers this scenario as a possible
"market imperfection" and fails to acknowledge that under the
"voluntary" band clearing framework set out herein, a proposal to clear
a channel could raise issues that would prevent Commission approval
despite the strong presumption or a broadcaster may simply choose to
remain on-air in the 700 MHz band.

As I have stated previously, my ultimate concern is that the presumption
in favor of band clearing reflects a diminishing regard for the public
value of free, over-the-air television services. As we look to the
future, I hope that in balancing the ever-growing demand for spectrum
this agency will sustain our longstanding commitment to the value that
broadcasting services for all Americans.

[^1]: *See* Service Rules for 746-764 MHz Bands, and Revisions to Part
    27 of the Commission's Rules, WT Docket No. 99-168, *First Report
    and Order*, 15 FCC Rcd 476 (2000).

[^2]: *See* Separate Statement of Commissioner Gloria Tristani, Service
    Rules for 746-764 MHz Bands, and Revisions to Part 27 of the
    Commission's Rules, WT Docket No. 99-168, *Memorandum Opinion and
    Order and Further Notice of Proposed Rulemaking*, (rel. June 30,
    2000).

[^3]: *See* Triangle Publications, Inc., 37 FCC 307, 313 (1964),
    *citing* Hall v. FCC, 237 F.2d 567 (D.C. Cir. 1954).

[^4]: *See* Consolidated Appropriations Act 2000, Pub. L. No. 106-113,
    113 Stat. 2502, Appendix E, Sec. 213 (requiring the proceeds from
    the 700 MHz auction be deposited in the U.S. Treasury no later than
    Sept. 30, 2000) & 47 U.S.C. §§ 309(j)(14)(B) (allowing existing
    analog broadcasters to continue operating in the 700 MHz band beyond
    2006 upon certain showings), 337(d)(2) (requiring technical
    restrictions on new licensees to protect existing television service
    in the 700 MHz band during the transition to digital television).

[^5]: See News Release, "FCC Grants 'Must Carry' Status to Digital-only
    TV Station," rel. Jan. 19. 2001 (citing WHDT-DT, Channel 59, Stuart,
    Florida, Memorandum Opinion and Order, FCC 01-23 (adopted Jan. 19,
    2001)).

[^6]: *See* 47 U.S.C. § 309(j)(14)(B).