Before the
Federal Communications Commission
Washington, D.C. 20554


In the Matter of

Service Rules for the 746-764 and 776-794 MHz 
Bands, and Revisions to Part 27 of the 
Commission's Rules

Carriage of the Transmissions of Digital 
Television Broadcast Stations

Review of the Commission's Rules and Policies 
Affecting the Conversion to Digital Television

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WT Docket No. 99-168


CS Docket No. 98-120


MM Docket No. 00-39



THIRD REPORT AND ORDER

Adopted:  January 18, 2001		Released: January 23, 2001?

By the Commission: Commissioner Tristani approving in part, dissenting in part, and issuing a separate 
statement.
TABLE OF CONTENTS
	Paragraph #
I.	INTRODUCTION	1
II.	EXECUTIVE SUMMARY	2
III.	BACKGROUND	3
IV.	DISCUSSION	5
A.	Cost-Sharing Rules	5
B.	Voluntary Band Clearing Mechanisms	10
1.	Three-Way Voluntary Transition Agreements.	10
2.	Temporary Relocation To Channels 52-58	34
C.	Secondary Auctions	37
D.	Collusion Issues	45
E.	Proposals to Make Band Clearing Mechanisms Effective	48
1.	Proposal to Cap Clearing Costs	48
2.	Digital Must-Carry	51
3.	Other Relocation Proposals	54
F.	Other Proposals to Accelerate the DTV Transition	57
G.	Band Clearing Relating to the Auction of Channels 52-59	60
V.	PROCEDURAL MATTERS	62
VI.	ORDERING CLAUSES	65
APPENDIX A:  FINAL RULES
APPENDIX B:	 COMMENTS AND REPLY COMMENTS


I. INTRODUCTION
1. By this Third Report and Order, we adopt mechanisms and make determinations intended to 
facilitate the clearing of the 740-806 MHz band to allow for the introduction of new wireless services, 
and to promote the early transition of analog television licensees to digital television service ("DTV"). 
The 746-806 MHz band at issue here has historically been used exclusively by television stations 
(Channels 60-69).  The incumbent television broadcasters are permitted by statute to continue operations 
until their markets are converted to digital television,   which is not scheduled to occur until December 
31, 2006, and that date may be extended under certain circumstances.   Congress has, however, mandated 
that the Commission commence competitive bidding for the commercial licenses well before the 
scheduled termination date of the DTV transition.   In the 700 MHz MO&O and FNPRM, we provided 
guidance on our review of applications for approval of voluntary agreements accelerating the transition 
of incumbent analog television licensees and opening these bands for new 700 MHz licensee use, and 
sought comment on several potential mechanisms to advance the spectrum clearing process.   This Third 
Report and Order announces additional policies to facilitate voluntary band clearing agreements among 
incumbent broadcasters and new wireless licensees.
II. EXECUTIVE SUMMARY
2. In this Third Report and Order, we make the following principal determinations:
? We conclude that it is not necessary or appropriate at this time to adopt cost-sharing rules to 
assist in clearing the 700 MHz band, and we leave cost-sharing arrangements to voluntary 
negotiations among new wireless licensees.

? We extend the general rebuttable presumption adopted in the 700 MHz MO&O and FNPRM for 
bilateral agreements (between incumbent Channel 59-69 broadcasters and new 700 MHz wireless 
licensees) 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).  

? We provide guidance on interference issues that may arise from a proposal to clear a station and 
relocate that broadcast operation to a channel below channel 59. 

? We confirm that DTV broadcasters may enter into negotiated interference agreements pursuant 
to Section 73.623(g), and may use existing DTV allotment swap procedures to effectuate band 
clearing. 

? We reiterate our commitment to process regulatory requests associated with relocation 
agreements expeditiously, and make certain procedural changes intended to streamline our 
consideration of such requests. 

? We clarify that voluntary agreements to relocate temporarily into Channels 52-58 will not be 
prohibited.

? We make clear that we do not intend at this time to conduct a secondary auction, and leave the 
implementation of any such auction 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.  We also provide guidance on how the Commission's anti-
collusion rules may apply in the context of band clearing agreements and secondary auctions.

? We decline to adopt relocation cost caps or cost recovery guidelines at this time. 

? We find that issues raise by the parties regarding the DTV must-carry rules adopted in the 
MO&O and FNPRM are in significant part being addressed by other orders we are adopting.

III.  BACKGROUND
3. In the 700 MHz First Report and Order, we adopted service rules for the commercial use of 
the 747-762 MHz and 777-792 MHz bands that enable the broadest possible use of this spectrum, 
consistent with sound spectrum management.   In developing these rules, we were guided by our 
conclusion in our Spectrum Reallocation Policy Statement that a flexible, market-based approach is the 
most appropriate method for establishing service rules for this band.   In the 700 MHz MO&O and 
FNPRM,  we generally affirmed the service rules we adopted in the 700 MHz First Report and Order, 
provided additional guidance on the factors we would consider when reviewing applications for approval 
of regulatory requests associated with voluntary agreements accelerating the transition of incumbent 
analog television licensees to digital television service and opening the 700 MHz bands to new licensees, 
and sought comment on several aspects of the spectrum clearing process.
4. In the 700 MHz MO&O and FNPRM, we sought comment on the following potential 
mechanisms to further the goals of transitioning the 700 MHz band to wireless services.  First, we sought 
comment on whether or not we need to adopt cost-sharing rules that would spread the cost of band 
clearing among 700 MHz licensees that benefit from the process, and tentatively concluded that we 
should not.  Second, we sought comment on additional band clearing mechanisms that would provide 
alternatives to individually negotiated agreements between 700 MHz licensees and incumbent 
broadcasters in the 700 MHz band.  We suggested that one such alternative would be "three-way" 
agreements that would provide for TV incumbents in the 700 MHz band to relocate those operations to 
lower band TV channels that would be voluntarily cleared by the lower band TV incumbent.  We 
suggested that another alternative would be to allow use of "secondary auctions" in which 700 MHz 
bidders would bid for the right to enter into band clearing arrangements with TV incumbents that wished 
to clear their channels.  We sought comment on the viability of these and other alternatives for 
facilitating the clearing of TV Channels 59-69 in connection with the upcoming auction of licenses for 
this portion of the spectrum.  In addition, we sought comment on whether any or all of these mechanisms 
could or should be used to facilitate the clearing of Channels 52-58 in connection with our future 
licensing of this lower portion of the spectrum for wireless services.
IV.  DISCUSSION
A. Cost-Sharing Rules
5. Background.  In the 700 MHz MO&O and FNPRM we tentatively concluded that it would 
not be necessary or appropriate to adopt cost-sharing rules in this proceeding and that we should rely on 
market forces to produce any desirable cost-sharing arrangements.  In doing so, we discussed a number of 
factors that should give new 700 MHz licensees incentives to reach cost-sharing agreements with each 
other and that may make it easy for them to bargain among themselves.  We nonetheless sought comment 
on how any cost-sharing rules that we might adopt should work.  
6. Discussion.  We conclude that it is not necessary or appropriate to adopt cost-sharing rules to 
assist in clearing the 700 MHz band.  We note that the majority of the commenters who addressed the 
issue support this view.  Entravision, NAB, Paxson, Nextel, USA Broadcasting, and PCIA, for instance, 
believe that the establishment of cost-sharing arrangements should be left to the private parties.   
Verizon, however, supports the adoption of cost-sharing rules in cases where the clearing of a particular 
TV incumbent benefits more than one license holder.   
7. Based on the record before us, we find that the new 700 MHz commercial wireless licensees 
should be able to enter into cost-sharing agreements without Commission rules.  As we explained in the 
700 MHz MO&O and FNRPM, the number of new wireless entrants that would benefit significantly from 
any particular clearing agreement will be small because the 700 MHz band has been allocated based on 
large spectrum blocks and regional licenses.   Because there will be relatively few new commercial 
wireless entrants, they should be able to bargain among themselves to reach cost-sharing agreements.  
We also believe that the group of new entrants will have very similar, strong incentives to reach clearing 
agreements with incumbent broadcasters and commence operations.   
8. These factors are also likely to minimize "free rider" problems in the 700 MHz band.  A free 
rider problem can arise where a new entrant seeks to benefit from a clearing agreement without assuming 
financial costs or other obligations of that agreement.  The Commission recognized that free riders could 
be a significant problem in the broadband Personal Communications Services ("PCS") context where the 
various PCS spectrum blocks were licensed sequentially and later-licensed PCS entities might have 
sought to free ride on the efforts of early entrants, which might have frustrated cost-efficient relocation.  
Because PCS licensing took place over several years, the earlier licensed PCS operators therefore had to 
initiate relocation negotiations without knowing the identity of later PCS licensees and whether they 
would be willing to share the cost of the microwave relocation.   By contrast, in the instant situation, the 
Commission intends to license all commercial 700 MHz licensees within a period of several months, and 
the new licensees are likely to be ready to deploy their services at the same time.  All 700 MHz licensees 
will therefore know with whom they need to bargain to reach cost-sharing agreements, and they will not 
find themselves in the position of needing to relocate incumbents earlier than others who would benefit 
from such relocation.  We therefore do not believe that mandatory cost-sharing rules are necessary to 
expedite clearing of the 700 MHz band for use by new licensees. 
9. In sum, we conclude that we can rely on market forces to produce any desirable cost-sharing 
relationships, and cost-sharing rules are unnecessary to assist licensees in reaching clearing agreements 
with TV incumbents.  We also find that market-driven agreements will provide parties with more 
flexibility to negotiate any cost-sharing arrangements based on individual situations.   We therefore 
leave all cost-sharing arrangements to negotiations among successful auction bidders in this band.
B. Voluntary Band Clearing Mechanisms
1. Three-Way Voluntary Transition Agreements
10. Background. In the 700 MHz First Report and Order and 700 MHz MO&O and FNPRM, we 
adopted policies and a general presumption concerning bilateral agreements between incumbent Channel 
59-69 broadcasters and new 700 MHz wireless licensees in order to expedite the full commercial and 
public safety use of the 700 MHz spectrum specified in Section 337 of the Act without an undue adverse 
effect on the public's overall receipt of broadcasting service.   In the 700 MHz MO&O and FNPRM, we 
found that we have authority to review and approve regulatory requests made in connection with 
voluntary agreements as part of our authority, under the statutory scheme as a whole, to take steps to 
manage the electromagnetic spectrum in the manner that most effectively facilitates the transition of this 
portion of the spectrum from conventional broadcast to commercial and public safety use.   In 
implementing our policy of facilitating the clearance of these bands to the extent that incumbent 
broadcasters and new 700 MHz licensees voluntarily negotiate agreements toward that end, we made two 
initial statements.  First, we said that we would not review the wisdom of private parties' business 
decisions in reaching agreements. Second, we indicated that our role would be limited to weighing the 
effect on the public interest of regulatory requests made in connection with such agreements.   We 
further stated that, in order to ensure that all public interest issues are readily identified, we would 
require broadcasters that enter into voluntary band clearance agreements to provide the public in the 
principal area served by the licensee with the notice required by Part 73 of the Commission's Rules for 
the filing of applications involving major license modifications.   
11. In the 700 MHz MO&O and FNRPM, we established a rebuttable presumption that, in certain 
circumstances, substantial public interest benefits will arise from a voluntary agreement between a 700 
MHz licensee and an incumbent broadcast licensee on channels 59-69 that clears the 700 MHz band of 
incumbent television licensee(s).  We stated that we would presume that the public interest is 
substantially furthered when an applicant demonstrates that the grant of its request will both result in 
certain specific benefits and avoid specific detriments.   We further indicated that when this 
presumption is not established, or is rebutted, we would review regulatory requests by weighing the loss 
of broadcast service and the advent of new wireless service on a case-by-case basis.   
12. Finally, in the 700 MHz MO&O and FNRPM, we sought comment on whether, and under 
what conditions, we should consider requests to approve three-way clearing agreements that 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.   Pursuant to such agreements, the 
lower band broadcasters would give up one of their two channel allotments (either analog or digital), to 
which the Channel 59-69 incumbents would then move their operations.  We noted that such three-way 
voluntary relocation agreements could facilitate clearing in the 700 MHz band by providing a 
replacement channel for incumbent broadcasters on Channels 59-69.   
13. Discussion.  We adopt a general presumption, standards of review, and policies for three-way 
agreements that are similar to those adopted in the 700 MHz MO&O and FNPRM for bilateral 
agreements between incumbent Channel 59-69 broadcasters and new 700 MHz wireless licensees.  We 
find that three-way voluntary agreements are consistent, as bilateral agreements are, with the legislative 
purposes of achieving an orderly DTV transition and expeditiously assigning the spectrum currently used 
by broadcasters on channels 60-69 to other commercial and public safety licensees. 
14. A number of commenters also agree that three-way agreements could produce significant 
benefits for all.   APCO states that television station allotments are blocking public safety access to 
some or all of the 700 MHz band in many parts of the country, including some of the nation's largest 
metropolitan areas.  Accordingly, APCO asserts that the sooner television stations vacate channels 60-69, 
the sooner public safety agencies will have the opportunity to utilize the spectrum allocated for public 
safety.   We also find that, in addition to helping public safety and commercial wireless entities by 
clearing the 700 MHz band, three-way agreements could help broadcasters on channels 59 to 69 by 
facilitating their relocation to lower channels.  Nextel asserts that parties to negotiations should have 
certainty as to whether a three-way agreement can be implemented once it is reached, arguing that 
otherwise the parties will have no incentive to invest the time and the resources necessary to negotiate an 
agreement that may never be implemented.   Finally, as a number of commenters state, a voluntary band 
clearing process will assist the Commission in "encourag[ing] the larger and more effective use of radio 
in the public interest." 
15. Based on this record, we find that adopting guidelines for three-way agreements similar to 
those we established for bilateral agreements should help negotiating parties and serve the public interest 
by providing a measure of certainty regarding the conditions under which a regulatory request to 
implement a three-way agreement may be approved.  The presumption we will apply to three-way 
agreements will be the same as the presumption we adopted for bilateral agreements.    Thus, we will 
presume that the public interest is substantially furthered when an applicant demonstrates that the grant 
of its request will both result in certain specific benefits and avoid specific detriments.  To obtain this 
presumption, an applicant must first demonstrate that grant of its request would result in one of the 
following:  (1) make new or expanded wireless service, such as `2.5G' or `3G' services, available to 
consumers, (2) clear commercial frequencies that enable provision of public safety services; or (3) result 
in the provision of wireless service to rural or other underserved communities.  To obtain the 
presumption, the applicant must also show that grant of its request would not result in any one of the 
following:  (1) the loss of any of the four stations in the designated market area ("DMA") with the largest 
audience share; (2) the loss of the sole service licensed to the local community; or (3) the loss of a 
community's sole service on a channel reserved for noncommercial educational broadcast service.  As we 
stated in the 700 MHz MO&O and FNPRM, the presumption is not conclusive or dispositive.  In specific 
cases where the presumption applies, for instance, we will consider whether special or unique factors 
involving loss of broadcast service are sufficient to rebut the presumption.   When the presumption is 
not established or is rebutted, we will review regulatory requests by weighing the loss of service and the 
advent of new wireless service on a case-by-case basis.  In conducting this analysis, we will consider all 
relevant public interest factors regarding the provision of wireless services, the acceleration of the DTV 
transition, and the loss of broadcast service.  We will consider as a relevant factor in our public interest 
determination, for instance, the extent to which a station's signal will remain available, after 
implementation of the agreement, to a significant number of its viewers in the licensee's service area.  
16. The standards we adopt here for reviewing regulatory requests made in connection with 
three-way voluntary agreements will enable us to weigh both the benefits associated with recovery of the 
spectrum for new wireless uses and any loss of service to the broadcast community.  We will apply the 
same loss of service analysis to both bilateral and three-way band clearing agreements in light of the fact 
that they will contribute to the same process of facilitating the transition to DTV and clearing the 700 
MHz band for new services.  MSTV accepts that there may be voluntary agreements that would result in 
a loss of television service and argues that the Commission should minimize that loss.   As we explained 
in the 700 MHz MO&O and FNPRM, in certain circumstances a voluntary agreement that clears the 700 
MHz band of incumbent television licensees may be in the public interest despite the fact that it may also 
result in a loss of television service.   As we also stated in the 700 MHz MO&O and FNPRM, we believe 
that loss-of-service issues here are limited and temporary.   There are a limited number of TV stations 
operating on channels 59 to 69 to begin with, and any loss of service affecting such stations should in 
most cases be temporary.   Moreover, losses of service affecting stations operating on core channels that 
might result from a three-way agreement will also be limited in that only a relatively small number of 
stations on channels 59 to 69 exist and in most cases an in-core station's signal will be replaced by a 
channel 59 to 69 station's signal.  Further, losses that result from three-way agreements may be 
counterbalanced by a gain for broadcasters of supplemental resources that strengthen the individual 
broadcast licensee's long-term viability as a DTV provider and that benefit the public by expediting the 
delivery of advanced television services.   We note also that Paxson supports the application of a 
rebuttable presumption that substantial public interest benefits will arise from voluntary band-clearing 
agreements that meet unambiguous standards.   Thus, we conclude that it is in the public interest to 
allow three-way band clearing agreements to go forward where we find that the benefits and detriments 
are appropriately balanced.
17. Although the factors involved in a loss-of-service analysis will be the same for three-way and 
bilateral agreements, their application to three-way agreements may in some circumstances require two 
loss-of-service analyses to assure that effectuation of the agreement would be consistent with the public 
interest.  In those cases, we will do such an analysis separately for:  (1) people in the service area of the 
relocation channel that is temporarily suspending service, and (2) people in the service area of the 
channel 59-69 incumbent.   Of course, if the two signals - i.e., the relocation channel's signal (channel 
2-58 range) and the relocating channel's signal (channel 59-69 range) - have been provided from the 
same location with the same coverage characteristics, the loss-of-service analysis would appear to be 
identical to that for a bilateral agreement, but with the focus on the loss of the relocation signal rather 
than the channel 59-69 signal.  Because the channel 59-69 signal would continue to be available within 
approximately the same service area, the only loss we would need to focus on would be that of the signal 
of the relocation channel.  In other words, we would need to ascertain that the presumption is met only 
for the relocation channel.  In other circumstances, however, we would need to conduct two separate 
loss-of-service analyses and each station involved should separately satisfy the requirements set forth 
above to qualify for the favorable presumption.  If one of the channels involved does not qualify for the 
presumption, then we will make a public interest determination on a case-by-case basis.  We note that a 
three-way agreement may also, in some cases, expand a service area.  Such expansion would generally 
tend to promote the public interest.  We note that such expansion would have to be considered in 
conjunction with any interference issues.   We will consider as relevant factors in our public interest 
determination the extent to which a station's signal remains available to viewers located within its 
previous service area, as well as the substitution of a relocating station's programming for the 
programming previously available to viewers of the relocation channel. 
18. Paxson urges the Commission to adopt a presumption in favor of regulatory requests that 
propose to vacate an allotment even if the grant of the request would result in the loss of a community's 
sole television station, so long as the community continues to receive Grade B service from at least three 
other television stations.   MSTV opposes Paxson's position and contends that the Commission cannot 
allow channel relocations to compromise the public's free, over-the air television service.   We decline 
at this time to adopt the presumption suggested by Paxson in light of the fact that, under the standards we 
adopt today, we may approve a regulatory request made in connection with an agreement under our case-
by-case analysis even though it does not meet the presumption. 
19. Treatment of Interference Issues.  In the 700 MHz MO&O and FNPRM, we recognized that 
interference issues may arise under a three-way agreement that do not arise under a bilateral agreement.  
Specifically, while a bilateral agreement contemplates that a broadcaster relinquish one of its two TV 
allotments, a three-way agreement involves the relocation of a channel 59-69 operation into a lower band 
allotment, which may potentially give rise to interference issues with respect to neighboring TV stations.
20. We find that no interference issues should arise if the relocating station's signal is to be 
broadcast in the same mode (i.e., the relocation involves an analog operation moving into an analog 
allotment or a digital operation relocating into a digital allotment) from the same location as the lower 
band incumbent's signal using the same or lower power and the same or lower antenna height.   In all 
other situations the proposed change must satisfy our prescribed interference protection standards for 
digital or analog operations, as applicable, and the Commission will address each such proposed 
assignment on a case-by-case basis. 
21. A modification could, for instance, involve either the relocation of an analog operation or the 
relocation of a digital operation.  If the modification involves the relocation of a digital operation either 
(1) into an analog allotment; or (2) into a digital allotment, where the relocated station does not operate at 
the same location or with the same or lower power and the same or lower antenna height as the lower 
band incumbent, we will require such modification to comply with the provisions of Section 73.623(c) of 
our rules.   That rule section spells out technical criteria for DTV modifications, including minimum 
desired-to-undesired ("D/U") signal ratios, which protect co- and adjacent channel DTV and analog 
assignments from interference.  If the modification involves the relocation of an analog operation either 
(1) into a digital allotment; or (2) into an analog allotment, where the relocated station does not operate at 
the same location or with the same or lower power and the same or lower antenna height as the lower 
band incumbent, we will require such modification to comply with the provisions of Sections 73.610 and 
73.698 of our rules in instances where an analog operation may affect the operation of another analog 
allotment,  and the provisions of Section 73.623(c) in instances where an analog operation may affect 
the operation of a digital allotment. 
22. Some broadcasters argue that the Commission should adopt a new "no interference" standard 
that would prohibit any new involuntary interference to existing licensees.  The broadcasters' position is 
that stations relocating to the lower television band during or after the transition should not be permitted 
to cause any new interference -- including de minimis interference -- to the analog or digital operations of 
other full power television stations.   We disagree.  A more stringent "no interference" standard is 
inconsistent with the objectives of this proceeding, which are to facilitate band clearing in a manner that 
is minimally disruptive to the DTV transition process and protects the public interest in continued free 
over-the-air analog broadcasting through the end of the DTV transition.   The record in this proceeding 
contains no basis for the Commission to conclude that a departure from established DTV interference 
protection criteria is warranted.  We adopted rules in the DTV proceeding that specifically permit certain 
levels of de minimis interference, increased power through antenna beam tilting, and DTV allotment 
exchanges among broadcasters.   Under our de minimis interference protection standard, non-
conforming DTV applications may be allowable where interference will affect less than 2 percent of the 
population served by another station.   Moreover, we have previously recognized that, consistent with 
the public interest, broadcasters should be afforded as much flexibility as possible to address situations 
that may be unique to their particular circumstances.   We find that this principle is particularly 
applicable in the context of modifications necessary to effectuate three-way voluntary band clearing 
agreements.
23. It may be true, as some commenters observe, that analog television stations may not easily be 
relocated to the allotment of a DTV station or vice versa, and still conform to our non interference 
requirement with respect to both co- and adjacent channel stations.   However, we believe that 
relocation proposals that can be achieved in a manner consistent with our existing interference protection 
standards should be encouraged so as to facilitate the congressional intent underlying the allocation of 
these bands for new wireless uses. 
24. We will also entertain negotiated interference agreements pursuant to Section 73.623(g), 
which is limited to possible agreements between relocating DTV stations and any existing TV stations 
that are entitled to interference protection under our rules.   Pursuant to that section, parties may reach 
negotiated agreements, notwithstanding the fact that the agreements would result in increased 
interference to a DTV or analog television station above the minimum technical criteria for DTV 
allotments, provided that the station agrees in writing to accept the interference and/or to implement an 
exchange of channel allotments in the same community, same market, or adjacent markets.   Under 
Section 73.623(g), the grant of such applications must be consistent with the public interest.  These cases 
will be reviewed on a case-by-case basis.  As with interference agreements negotiated under Section 
73.623(g) in other contexts, the Mass Media Bureau will evaluate these cases in the first instance, and it 
is our intent that the significance of any service gains and losses should be considered seriously in the 
evaluation of whether the negotiated interference agreement should be approved.  
25. We also confirm that broadcasters may file applications for exchanges of DTV allotments on 
an intra-community, intra-market, or inter-market basis, provided that the exchanges do not result in 
additional interference beyond our de minimis standard to other stations or that all affected stations agree 
to accept any additional interference that would result from the exchange, and that all other requirements 
of the DTV allotment rules are satisfied with respect to the application(s).   
26. Finally, we note that any interference-related requests in connection with a voluntary band 
clearing agreement will be considered together with the other regulatory requests to implement that 
agreement.
27. Procedural Issues.  We also address here certain procedural issues relating to these voluntary 
arrangements.  The Commission recognized in the 700 MHz MO&O and FNPRM that regulatory requests 
to effectuate band clearing agreements may involve changes to the DTV Table of Allotments, 
modification of licenses, and adjustments to allocations and terms and conditions of individual licenses.  
The 700 MHz MO&O and FNPRM made clear that interested parties would have an opportunity to 
comment on regulatory requests arising from voluntary relocation agreements consistent with existing 
requirements set forth in the Communications Act and the Commission's rules.   
28. In the DTV Sixth Report and Order, we adopted the DTV Table of Allotments, rules for 
initial DTV allotments, procedures for assigning DTV channels, and plans for spectrum recovery.   As 
part of that action, we recognized that the implementation of DTV service will be a dynamic process and 
that mechanisms are needed to provide for modifying DTV allotments and station operating facilities.   
We therefore established procedures and technical standards for adding future DTV allotments and for 
modifying the DTV Table and stations' operating facility specifications, i.e., effective radiated power, 
antenna height above average terrain (antenna HAAT), antenna pattern, and transmitter site 
coordinates.   We permitted broadcasters the flexibility to negotiate among themselves station changes 
and alternative allotment plans, provided no new interference results or affected parties agree. 
29. Discussion.  We agree with the concerns that underlie commenters' proposals to adopt some 
form of expedited processing of regulatory requests to facilitate voluntary agreements for clearing of 
channels 60-69.   We agree with Sinclair, for example, that the Commission must act expeditiously in 
disposing of such requests, and that the goals of voluntary band clearing arrangements will be frustrated 
in the event of undue processing delays.   
30. We therefore are committed to processing all such requests as expeditiously as possible. In 
light of the staff progress in processing applications for initial DTV construction permits, the 
Commission is now prepared to process expeditiously future DTV applications, including those 
regulatory requests that arise from three-way voluntary band clearing agreements.  We decline, however, 
to adopt a couple of specific approaches proposed by commenters.   Spectrum Exchange, Paxson, and 
USA Broadcasting propose that the Commission establish a 60-day processing timeline for applications 
filed by incumbent broadcasters seeking to vacate their analog channels early.   Paxson argues that the 
backlog that had resulted from the wave of applications for initial DTV construction permits suggests 
that processing of regulatory requests for approval of voluntary agreements may be similarly delayed.   
As mentioned above, we find that it is unnecessary to establish a 60-day processing timeline.  However, 
we fully expect that routine regulatory requests will be acted on within 90 days. 
31. We also doubt that decisionmaking would be expedited by Spectrum Exchange's proposal 
under which the Commission would "pre-approve" incumbent broadcasters' requests for waiver for early 
termination of analog over-the-air broadcasts.   Such an approach would be impractical because it would 
require the Commission and interested parties to make judgments in the absence of all necessary facts.  
For example, among the public interest factors that will be considered is whether the request would result 
in the loss of the sole service licensed to the local community.   However, it may be impossible to 
determine whether such loss would occur before the effective date of the proposed relocation.  Therefore, 
we believe that a more efficient use of Commission application processing staff and resources would 
involve processing the necessary filings only once a definitive, binding clearing agreement is reached.
32. Consistent with our commitment to process regulatory requests associated with relocation 
agreements expeditiously, we clarify the procedures that will apply to such requests and adopt certain 
procedural changes designed to streamline the review process.  Requests that require a change to the 
DTV Table of Allotments will generally be subject to existing procedures found in Section 73.622 of the 
Commission's rules.   Under certain circumstances, however, we will not use a rulemaking proceeding 
to make a DTV allotment change.  Moreover, the following principles will govern whether we will 
employ routine Part 73 application procedures or rulemaking proceedings, regardless of whether a DTV 
assignment is being exchanged with another DTV assignment, an analog TV assignment is being 
exchanged with another analog TV assignment, a DTV assignment is being moved to an analog TV 
allotment, or an analog TV assignment is being moved to a DTV allotment.  Proposals submitted in 
connection with three-way band clearing agreements where both broadcasters are licensed to the same 
community and the result will not be the dereservation of a noncommercial educational allotment, will be 
processed under routine application procedures (i.e., a rulemaking proceeding would not be necessary) 
and will be subject to public notice and comment procedures.   In addition, proposals to change the 
community of license will be processed under routine application procedures so long as the relocating 
broadcaster complies with all community-of-license obligations and coverage requirements for both 
communities, and the situation for the community that is losing a station is consistent with our 700 MHz 
band-clearing presumptions.  In both such cases, the Mass Media Bureau will evaluate these proposals in 
the first instance, and it is our intent that the significance of any service gains and losses should be 
considered seriously in the evaluation of whether the proposal should be approved.  We also delegate to 
the Mass Media Bureau authority to make minor, administrative changes to the analog or DTV Table to 
reflect changes authorized by the grant of applications, such as changing an analog TV allotment to a 
DTV allotment.  In addition, consistent with our existing rules, broadcasters will be permitted to 
negotiate swaps of DTV channel allotments pursuant to application procedures, provided that they 
comport with existing policies (i.e., exchanges of DTV allotments on an intra-community, intra-market, 
or adjacent-market basis will be entertained, provided that the exchanges do not result in additional 
interference beyond our de minimis standard to other stations or that all affected stations agree to accept 
any additional interference that would result from the exchange, and that all other requirements of the 
DTV allotment rules are satisfied with respect to the application(s)).   We do note, however, that a 
rulemaking proceeding will be required in situations in which a broadcaster proposes to add a new 
channel allotment, to change the community of license of an existing allotment (except in the 
circumstances mentioned above), or to dereserve an existing noncommercial educational allotment, and 
existing Commission allotment policies will be applied.  We also clarify that in such rulemaking 
proceedings to modify the DTV Table of Allotments in conjunction with band clearing agreements, the 
proposals would not be subject to counterproposals from other parties, as is usually the case in broadcast 
allotment rulemaking proceedings.
33. In managing the transition to DTV, we have, as a general matter, prohibited broadcasters 
from terminating their analog service early,  and we have determined that analog television and DTV 
facilities should be licensed under a single, paired license.   In the 700 MHz MO&O and FNPRM, we 
decided to allow early termination of analog service to accommodate voluntary agreements.   To 
effectuate that policy, we clarify that a broadcaster will not be jeopardizing its license by agreeing to 
relinquish one of the two allotments under its license, subject to prior Commission authorization, to 
effectuate a band clearing agreement.  This is a narrow departure from the general principle that the 
DTV/analog license is a single license and thus that neither channel can be transferred separately.  We 
believe that this approach will, without an undue adverse effect on the public's overall receipt of 
broadcasting service, expedite the full commercial and public safety use of the 700 MHz spectrum 
specified in Section 337 and the transition to DTV.   We also clarify that as a result of a three-way 
agreement if a broadcaster is left with only an analog television channel, it must convert to DTV by the 
applicable date set forth in Section 73.624(d) of the Commission's rules.   
2. Temporary Relocation To Channels 52-58
34. Background.  In the 700 MHz MO&O and FNPRM, we sought comment on whether we 
should permit proposals in connection with three-way agreements where the relocation channel is in the 
Channel 52-58 band, which will be subject to future licensing for wireless services.   Specifically, 
commenters were asked to discuss whether the potential benefits of allowing interim relocation to 
Channels 52-58 are sufficient to outweigh the potential costs.   The Commission noted that if such 
relocations were permitted, they would be interim in nature, because the incumbent relocating to the 
Channel 52-58 band would ultimately have to clear that channel.  We also recognized that requiring an 
incumbent to relocate twice could result in duplicative costs, additional disruption to viewers, and other 
inefficiencies.  On the other hand, we noted that this alternative could provide more options for clearing 
incumbents from Channels 59-69, and it would not add to the number of incumbent stations that would 
ultimately have to be cleared from Channels 52 to 58 (because the incumbent clearing the 52-58 channel 
as part of the three-way agreement would otherwise have to be cleared eventually).  
35. While many commenters support voluntary three-way agreements between incumbent 
broadcasters and new wireless licensees, commenters are not in agreement on the issue of whether we 
should permit a temporary relocation to Channels 52-58.  Some commenters generally support the 
temporary relocation, arguing that this is a beneficial mechanism as it provides the opportunity for a 
broadcaster operating in the 700 MHz spectrum to continue  broadcasting.   NAB, on the other hand, 
contends that approving three-way arrangements resulting in the temporary relocation of broadcasters 
from Channels 59-69 to non-core channels would likely produce significant inefficiencies rather than a 
smoother transition to digital broadcasting. 
36. Discussion. Based on our review of the record, we decide not to prohibit voluntary 
agreements to relocate temporarily into Channels 52-58. As we recognized in the 700 MHz MO&O and 
FNPRM, there are potential benefits and costs associated with temporary relocation to Channels 52-58 
resulting from voluntary agreements.  As we did in the 700 MHz MO&O and FNPRM, we note that this 
alternative could provide more options for clearing incumbents on Channels 59-69.  The potential benefit 
includes allowing the incumbent broadcasters the opportunity to continue operating, while clearing the 
spectrum for the new wireless licensees.  As Entravision notes, this arrangement serves to meet the 
requirements of all the parties involved, without placing any unacceptable burden upon them.  We also 
note that any such voluntary relocation will not increase the number of stations that will have to be 
cleared from Channels 52-58, but merely replace one station on those channels with another.  At the 
same time, we recognize, and NAB argues, that such agreements could result in duplicative costs, 
additional disruption to viewers, and other inefficiencies.   After considering all these factors, we will 
not prohibit the negotiation of such relocation agreements.  We find that the benefits may well be 
substantial, and that a broadcaster will have considered the costs in its individual situation before 
voluntarily agreeing to move into Channels 52-58 with the knowledge that it will subsequently be 
obligated to vacate that allotment.  We are not deciding to approve any specific request at this time.  
Rather, we will consider any public interest costs in our review of any requests submitted in connection 
with voluntary agreements to relocate temporarily into Channels 52-58 under the standards we have set 
out in this proceeding.
C. Secondary Auctions
37. Background.  The 700 MHz MO&O and FNPRM requested comment on a range of issues 
relating to whether some form of  "secondary auction" could be used to facilitate band clearing 
agreements.   Regardless of the form it takes, a secondary band clearing auction would be a mechanism 
to determine the price that would be paid by 700 MHz licensees to TV incumbents who agree to clear 
their channels in the 700 MHz band.  As we observed in the 700 MHz MO&O and FNPRM, participation 
in secondary auctions by both broadcast incumbents and prospective or actual 700 MHz wireless 
licensees would be entirely voluntary.   In effect, secondary auctions would differ from ad hoc voluntary 
agreements among incumbent broadcasters and wireless interests only in that a secondary auction may 
result in greater benefits to participants than more limited, separately negotiated agreements.   The 700 
MHz MO&O and FNPRM outlined some of these benefits, such as reduced financial risk to 700 MHz 
bidders, lowered transactional costs, and increased likelihood of success in developing band clearing 
arrangements.   
38. A secondary auction could take many forms. The 700 MHz MO&O and FNPRM outlined 
possible options for both private and Commission-conducted secondary auctions.   For instance, the 700 
MHz MO&O and FNPRM suggested that a Commission-conducted secondary auction could create a 
market under which participating TV incumbents could offer a legal option to enter into clearing 
agreements.   Bidders in the 700 MHz spectrum auction could bid in the secondary auction for the right 
to exercise these options and enter into band clearing agreements with participating incumbents at some 
time in the future. 
39. One possible private secondary auction mechanism outlined in the 700 MHz MO&O and 
FNPRM is the so-called "TV Exchange" mechanism, which contemplates a private auction among 
incumbent TV broadcasters using a "descending clock" auction process to identify those broadcasters 
that would be willing to relocate and the price at which the incumbents would move.   In situations 
where worthwhile clearing could feasibly occur via transition by any of a number of incumbent 
broadcasters, this type of private auction would reveal a price that should compensate the broadcasters 
fairly for moving early.  This mechanism would also promote efficient band clearing by identifying those 
incumbents with the lowest costs of relocating or terminating upper band operations. 
40. Subsequent to the release of the 700 MHz MO&O and FNPRM, Spectrum Exchange 
proposed an alternative private auction approach, which it calls a "linked auction."   Such a private 
secondary auction would not actually link the Commission's spectrum auction operations with those of a 
private auctioneer.  Rather, the secondary auction would be tied to the Commission's auction results 
only; winning bidders in the Commission's 700 MHz license auction that choose to participate in such 
plan would make payments into a clearing fund based on a percentage of their winning bids, which 
would then be divided among participating broadcasters in exchange for clearing.  Participation in any 
such private clearing scheme would be voluntary on the parts of both incumbent broadcasters and bidders 
in the Commission's spectrum auction.  
41. Discussion.  We recognized in the 700 MHz MO&O and FNPRM that a secondary auction 
mechanism may produce significant benefits, and see no reason to depart from that finding here.  A 
secondary auction may encourage band clearing in a more systematic and comprehensive fashion than 
would be the case with individual ad hoc clearing arrangements among incumbent broadcasters and 
winning bidders. A secondary auction may give potential wireless licensees greater certainty that the 
spectrum will be cleared.  The efficiency of such a secondary market mechanism is likely to ensure that 
the spectrum is employed in the most highly valued economic use. 
42. In these circumstances, the private sector is better suited to determine what mechanisms 
interested parties might demand and to implement a secondary auction in a manner that is most 
responsive to broadcasters' and potential bidders' needs. We do not therefore intend at this time to 
conduct a secondary auction, and will instead leave any such auction to private, voluntary efforts that are 
otherwise consistent with our stated policies.   A market-oriented approach is consistent with our recent 
decisions on spectrum management policies intended to promote secondary markets for spectrum usage 
rights.  Our policies in this regard are based on the principle of orienting Commission policies to create 
the conditions under which market forces can effectively operate.   That principle has also been the 
basis for the Commission's recent decisions seeking to develop more robust secondary markets that will 
help promote spectrum efficiency and full utilization of Commission-licensed spectrum and thereby make 
more spectrum available for the purposes for which it is needed.   
43. Private secondary auctions have potential to offer both broadcasters and new entrants 
additional opportunities to reduce the potential transactions costs of negotiating with each other directly 
after the auction.   At least until the end of the DTV transition period,  the transaction costs of 
bargaining among incumbent broadcasters and new 700 MHz entrants may be high.   Proponents of a 
secondary auction assert that a voluntary linked auction approach will address this problem by creating a 
clearing fund, available to incumbents, and introducing greater certainty as to costs and values.   In 
Spectrum Exchange's view, by allowing incumbent broadcasters to share in the economic value of a 
cleared 700 MHz band, a linked auction is likely to increase participation by both broadcast incumbents 
and prospective new entrants, reduce risks associated with an unlinked secondary auction approach, and 
increase certainty and efficiency by eliminating opportunities for gaming the secondary auction.   A 
voluntary secondary auction approach is supported by a number of different parties in this proceeding, 
including potential 700 MHz wireless licensees, some broadcasters, and Spectrum Exchange. 
44. We will rely on private secondary auctions and any other such voluntary, comprehensive 
band clearing arrangements among new 700 MHz licensees and incumbent broadcasters that would result 
in the voluntary early transition of this band to new services.  We cannot know whether individually 
negotiated arrangements or private auctions will be the more effective voluntary clearing mechanism and 
support giving parties a choice, so long as the approach is consistent with Commission policies and 
rules.   Based on this record, we find that a privately conducted secondary auction may be conducted in 
a manner that would not interfere with the integrity and operations of the Commission's spectrum auction 
process.  We note, importantly, that neither of the specific proposals before us requires any changes in 
our spectrum auctions procedures and processes to accommodate a secondary auction.   Finally, we 
remind parties that where a secondary auction leads to private band clearing agreements, the Commission 
must approve any regulatory requests necessary to the effectuation of such agreements.
D. Collusion Issues
45. Background.  Applicants to participate in Commission spectrum auctions and their affiliates 
are prohibited from engaging in collusive conduct.  The Commission's anti-collusion requirements may be 
found in Section 1.2105(c) and are intended to deter anticompetitive conduct during auctions of spectrum 
licenses and to ensure the competitiveness of post-auction markets.  We have also made clear that, 
where evidence exists that violations of federal antitrust laws or the Commission's anti-collusion rules 
may have occurred, the Commission may investigate and/or refer such allegations to the United States 
Department of Justice for investigation.   In particular, Section 1.2105(c)(1) provides that:
after the short-form application filing deadline, all applicants are prohibited from 
cooperating, collaborating, discussing or disclosing in any manner the substance of their 
bids or bidding strategies, or discussing or negotiating settlement agreements, with other 
applicants until after the down payment deadline, unless such applicants are members of 
a bidding consortium or other joint bidding arrangement identified on the bidder's short-
form application pursuant to  1.2105(a)(2)(viii).  

Thus, auction applicants for licenses in the same geographic areas must not communicate with each other 
during an auction about bids, bidding strategies, or settlements, unless they have disclosed that they are 
parties to a bidding arrangement pursuant to Section 1.2105(a)(2)(viii), which requires bidders to 
disclose on their short-forms all agreements or arrangements "relating to the licenses being auctioned, 
including any such agreements relating to post-auction market structure."   

46. Discussion.  We here clarify that our anti-collusion rules do not prohibit participation in a 
secondary auction or band clearing agreements, but that parties need to keep those requirements in mind. 
For instance, to the extent that negotiating a band clearing agreement or the terms of participation in a 
secondary auction conveys information about bids, bidding strategies, or settlements to other applicants 
for licenses in the same geographic license areas in the Commission's auction, such communications 
would be prohibited while the anti-collusion rule is in effect, unless the parties have identified each other 
on their short-form applications as parties to a bidding arrangement under Section 1.2105(a)(2)(viii).   
However, to the extent that such negotiations are not with other "applicants"  for licenses in the same 
geographic license areas or do not convey prohibited information, such communications would not be 
prohibited under the anti-collusion rule and negotiations could continue after the short-form deadline.  
Similarly, participation in private secondary band clearing auctions does not in itself violate the anti-
collusion rule.  Many of the parties conducting and participating in private secondary band clearing 
auctions are not likely to be "applicants" subject to our prohibition on collusion. 
47. Accordingly, we remind parties participating in linked auctions or entering into three-way 
agreements to remain mindful of their obligations under the Commission's anti-collusion rules.  In this 
regard, we note that with respect to auctions of licenses in the 700 MHz band, a band clearing agreement 
or contract to participate in a secondary auction constitutes an agreement that relates to licenses being 
auctioned, and is covered by the disclosure requirement of Section 1.2105(a)(2)(viii).   As we have 
described, disclosure of the parties to any agreements on short-form auction applications also provides a 
"safe harbor" against allegations that communications in connection with such agreements constitute 
communications prohibited under the anti-collusion rules.  Where agreements are not reached before the 
short-form filing deadline, participants in secondary auctions or parties entering into three-way 
agreements should educate all involved in such activities about these obligations, and might consider 
establishing procedures to insulate individuals from others' auction-related communications or taking 
other precautionary steps to prevent collusive conduct from occurring.  
E. Proposals to Make Band Clearing Mechanisms Effective
1. Proposal to Cap Clearing Costs
48. Background.  The 700 MHz FNPRM solicited ideas on additional proposals that might 
accelerate the DTV transition.   A number of commenters used this opportunity to request relief on a 
number of issues related to the DTV transition.   To the extent that these issues are before the 
Commission in separate proceedings, we decline to address them here.   
49. One issue that is not under consideration in other contexts is Verizon's proposal that the 
Commission establish guidelines for band clearing costs.   Verizon advocates a cap on relocation costs, 
taking into account both the "hard" costs of facilities relocation and "soft" costs, including amounts for 
lost advertising revenues in the event the station's coverage area is decreased.   Verizon asserts that a 
cap on payments would improve the ability of potential 700 MHz bidders to assess the value of the 
licenses being auctioned and would reduce disputes over relocation costs.   Verizon argues that 
"[w]ithout clear guidelines on costs, auction revenue that should represent a recovery for U.S. taxpayers 
on the public spectrum resource will instead be diverted to broadcasters."   
50. Discussion.  At this time, we will not adopt cost recovery guidelines. Broadcasters strongly 
oppose capping costs.   Paxson, for example, argues that "[b]roadcasters are being asked to assume 
significant business, construction, and operating risks in prematurely terminating reliable and familiar 
analog service."   To the extent that such risks exist, the Commission believes that private parties are 
best suited to assess, quantify, and reach agreement on the appropriate sharing of risk.  We believe that 
both voluntary clearing agreements and a private secondary auction plan would be more likely to succeed 
without the use of cost guidelines.   Further, the record of this proceeding contains little detail about 
how to structure any such guidelines.  
2. Digital Must-Carry
51. Pursuant to Sections 614 and 615 of the Communications Act,  and the implementation 
rules originally adopted by the Commission,  a commercial or non-commercial television broadcast 
station is entitled to mandatory carriage ("must-carry") on cable systems located within the station's 
market.  As required by the Act, the Commission in 1998 commenced a further proceeding to determine 
the scope and manner of mandatory cable carriage of digital broadcast signals.    In that proceeding and 
in the 700 MHz context, broadcast entities assert that imposing a digital must-carry requirement on cable 
operators is essential to encourage the DTV transition and spectrum clearance, while cable entities 
contend that any extension of the must-carry obligation before the transition to DTV is complete would 
exceed our statutory authority and raise constitutional issues.   In our recent DTV Must-Carry Order 
and FNPRM,   we determined that the purposes of the statutory must-carry requirement will best be 
realized in the digital environment by expanding the substantive scope of that obligation to keep pace 
with the expanded technical capabilities of the DTV environment.
52. Previously, in the 700 MHz MO&O and FNPRM, we clarified two limited issues related to 
cable carriage of digital signals as part of voluntary band clearing agreements.    First, we clarified that 
cable systems are ultimately obligated to accord "must-carry" rights to local broadcasters' digital signals. 
We stated that existing analog television stations that return their analog spectrum allocation and convert 
to digital are entitled to mandatory carriage for their digital signals consistent with applicable statutory 
and regulatory provisions.  Second, we concluded that to facilitate the continuing availability during the 
transition of the analog signal of a broadcaster who is party to a voluntary band-clearing agreement with 
new 700 MHz licensees, such a broadcaster could, at its own expense, provide its broadcast digital signal 
in an analog format for carriage on cable systems.  In these circumstances, we noted that nothing 
prohibits the cable system from providing such signals in analog format to subscribers, in addition to or 
in place of the broadcast digital signal, pursuant to an agreement with the broadcaster.
53. Although we did not seek comment in the 700 MHz MO&O and FNPRM on the digital must-
carry issue, a number of commenters urge the Commission to adopt DTV must-carry rules in order to 
encourage band clearing.   We find that the requests of commenters in this proceeding for adoption of 
various DTV must-carry rules have in most respects been resolved by the DTV Must-Carry Order and 
FNPRM,  as well as by the WHDT Order.   Some issues raised by commenters in the DTV Must-
Carry proceeding have, however, been deferred pending development of an improved record in response 
to the DTV Must-Carry Order and FNPRM.  These include the mandatory dual carriage of a station's 
digital and analog signals during the digital television transition.  We also seek comment in the DTV 
Must-Carry Order and FNPRM on our obligation under Section 339(b) of the Communications Act, also 
part of the Satellite Home Viewer Improvement Act of 1999, to develop and apply satellite requirements 
that are "as similar as possible" to those implementing cable television network non-duplication, 
syndicated program exclusivity, and sports blackout requirements.   We will defer consideration of 
those issues for the 700 MHz transition as well.  We believe that the submissions in this proceeding, 
seeking must-carry actions to encourage the 700 MHz band clearance process, do not raise distinctive or 
additional factual or policy considerations that justify departure from the broad determinations made in 
the DTV Must-Carry Order and FNPRM. 
3. Other Relocation Proposals
54. Background.  In the 700 MHz MO&O and FNPRM, we indicated that we would entertain 
comment on whether reliance on voluntary agreements would be adequate to clear incumbent broadcast 
operations from 700 MHz bands or, as suggested by commenters, whether we should consider steps other 
than the review of requests in connection with such agreements to facilitate the clearing more 
effectively.   Responding to this inquiry, a majority of commenters addressed the issue of whether the 
Commission should exercise its authority to require the mandatory relocation of incumbent 
broadcasters.   In particular, Verizon advocates the mandatory relocation of a "lone holdout" in a 
market.   Verizon argues that the Commission should adopt a "lone holdout rule" to reduce the 
opportunity for a single broadcaster to gain a windfall by refusing to participate in a coordinated band-
clearing process where substantial clearing has already occurred.   Furthermore, Verizon maintains that 
the Commission should also require limited mandatory relocation at a later stage of the DTV transition to 
provide new 700 MHz wireless licensees with the right to impose involuntary clearing of a broadcast 
incumbent when relocation channels are available.   Broadcasters generally oppose the proposal to 
invoke mandatory relocation arguing that the Commission lacks the authority to provide such relief.   
55. Discussion.  Certain commenters argue that, should there be a "lone holdout" of an 
incumbent broadcaster in a market where substantial clearing has occurred, it might well threaten the 
success of the transition to DTV and the ability of new 700 MHz licensees to deploy rapidly new 
wireless technologies in this spectrum.   Holdouts may be a sign of a market imperfection or failure that 
might impede the proper functioning of the market,  and may prevent efficient outcomes of secondary 
auctions and band clearing negotiations among new 700 MHz wireless licensees and incumbent channel 
59-69 broadcasters.
56. We have previously observed that "[i]n the majority of cases, efficient spectrum markets will 
lead to use of spectrum for the highest value end use."   Thus, we believe that voluntary agreements 
between broadcasters and licensees should result in the effective clearing of the 700 MHz band.   We 
note this view is broadly shared by most commenters, which advocate a voluntary, market-based 
approach to clearing incumbent broadcast operations from channels 59-69.   However, we will revisit 
this issue in the future if we find it necessary.
F. Other Proposals to Accelerate the DTV Transition
57. Background.  In the 700 MHz MO&O and FNPRM, we sought comment on two additional 
proposals to accelerate the digital television transition: sharing of the 700 MHz spectrum between 
broadcasters and new wireless licensees, and sharing between broadcasters during the transition.  We 
received no comments on the possible sharing of 700 MHz spectrum between incumbent broadcasters 
and new commercial service providers, and, accordingly, do not consider that issue further in this 
rulemaking context.
58. We received limited comment on the second proposal, whether we should allow broadcasters 
to share DTV facilities and spectrum during the transition.  For example, Paxson suggests that we 
consider allowing incumbent broadcasters who agree to clear the spectrum early, but are unable to 
commence digital operations by May 1, 2002 (or 18 months after the DTV construction permit is issued, 
if later), to temporarily share use of another licensee's digital spectrum.  
59. Discussion.  In light of the limited scope of comments on these proposals, we conclude that 
there is insufficient interest to warrant adoption of a general regulatory process at this time.  Paxson's 
general proposal regarding spectrum sharing does not incorporate a qualifying standard for licensees 
seeking to share use of another licensee's spectrum, nor a basis for compensation or a time limit for such 
arrangements.  In the absence of other interest in such arrangements, we decline to adopt a rule of general 
applicability.  While we do not adopt rules at this time, we will, of course, consider any such proposals 
on a case-by-case basis.  Paxson also asserts that public broadcasters should be permitted to multicast 
"secondary, third party, advertiser-supported commercial DTV" programming.   Paxson recognizes, 
however, that proposal is under consideration in a separate proceeding, and we will not address it here. 
G. Band Clearing Relating to the Auction of Channels 52-59
60. Background.  In the 700 MHz MO&O and FNPRM, we sought comment as to whether the 
regulations and mechanisms we have adopted in this proceeding to facilitate band clearing should also be 
employed in conjunction with the auction of spectrum currently used by Channels 52-59.
61. Discussion.  We agree with ALTV and MSTV that it is appropriate to gain additional 
experience with the innovative, voluntary band clearing mechanisms before making judgments about 
whether to extend them for use in other bands.   Thus, we intend to defer this issue to our upcoming 
proceeding on service rules for this spectrum, which will address issues arising out of the reallocation of 
channels 52-59.
V. PROCEDURAL MATTERS 
A. Regulatory Flexibility Act and Paperwork Reduction Act
62. Section 213 of the Consolidated Appropriations Act, 2000 states that the Regulatory 
Flexibility Act (as well as certain provisions of the Contract With America Advancement Act of 1996 
and the Paperwork Reduction Act) shall not apply to the rules and competitive bidding procedures 
governing the frequencies in the 746 - 806 MHz band (currently used for television broadcasts on 
channels 60-69).   Because the policies and rules adopted in this Third Report and Order relate only to 
assignments of those frequencies, no Final Regulatory Flexibility Analysis or Paperwork Reduction 
Analysis is necessary. 
B. Alternative Formats  
63. Alternative formats (computer diskette, large print, audio cassette and Braille) are available 
to persons with disabilities by contacting Martha Contee at (202) 418-0260, TTY (202) 418-2555, or at 
mcontee@fcc.gov.  This Third Report and Order can also be downloaded at 
http://www.fcc.gov/Bureaus/Wireless/Orders/2001/index.html.
C. Further Information
64. For further information concerning this Third Report and Order, contact Nese 
Guendelsberger or Bill Huber of the Auctions and Industry Analysis Division at (202) 418-0660 (voice), 
(202) 418-7233 (TTY), or Martin Liebman or Stanley Wiggins of the Policy Division at (202) 418-1310 
(voice), (202) 418-7233 (TTY), Wireless Telecommunications Bureau, Washington, DC 20554.  
VI.  ORDERING CLAUSES
65. Pursuant to Sections 1, 2, 4(i), 5(c), 7(a), 301, 302, 303, 307, 308, 309(j), 309(k), 311, 316, 
319, 324, 331, 332, 333, 336, 337, 614, and 615 of the Communications Act of 1934, as amended, 47 
U.S.C.  151, 152, 154(i), 155(c), 157(a), 301, 302, 303, 307, 308, 309(j), 309(k), 311, 316, 319, 324, 
331, 332, 333, 336, 337, 614, and 615, the Consolidated Appropriations Act, 2000, Pub. L. No. 106-113, 
113 Stat. 2502, and Section 1.425 of the Commission's Rules, 47 C.F.R.  1.425, IT IS ORDERED that 
the THIRD REPORT AND ORDER is hereby adopted.
66. IT IS FURTHER ORDERED that Part 73 of the Commission's rules IS AMENDED as set 
forth in Appendix A.  Pursuant to Section 213 of the Consolidated Appropriations Act, 2000, these rules 
shall be effective immediately upon publication in the Federal Register. 

67. IT IS FURTHER ORDERED that, pursuant to sections 1, 2, 4(i), and 303 of the 
Communications Act of 1934, as amended, 47 U.S.C.  151, 152, 154(i) and 303, and Section 1.425 of 
the Commission's Rules, 47 C.F.R.  1.425, the Petition for Rulemaking filed by Spectrum Exchange 
Group, LLC on April 24, 2000 IS GRANTED TO THE EXTENT DISCUSSED HEREIN.
FEDERAL COMMUNICATIONS COMMISSION



	Magalie Roman Salas
	Secretary



APPENDIX A:  FINAL RULES
Section 73.607 is amended by redesignating the current text as paragraph (a) and adding new paragraph 
(b) to read as follows:

73.607 - Availability of channels.

*  *  *  *  *

(b) Notwithstanding paragraph (a) of this section, an application may be filed for a channel or community 
not listed in the TV Table of Allotments if it is consistent with the rules and policies established in the 
Third Report and Order in WT Docket 99-168 (FCC 01-25), adopted January 18, 2001. Where such a 
request is approved, the Mass Media Bureau will change the Table of Allotments to reflect that approval.

Section 73.622 is amended by redesignating paragraph (c) as paragraph (c)(1) and adding new paragraph 
(c)(2) to read as follows:

73.622 - Digital television table of allotments.

*  *  *  *  *

(c)(1)  *  *  *    

(2) Notwithstanding paragraph (c)(1) of this section, an application may be filed for a channel or 
community not listed in the DTV Table of Allotments if it is consistent with the rules and policies 
established in the Third Report and Order in WT Docket 99-168 (FCC 01-25), adopted January 18, 2001. 
Where such a request is approved, the Mass Media Bureau will change the DTV Table of Allotments to 
reflect that approval. 

*  *  *  *  *

APPENDIX B:		COMMENTS AND REPLY COMMENTS
Commenters

Association of Public-Safety Communications Officials-International, Inc. (APCO)
Entravision Holdings, LLC (Entravision)
Industrial Telecommunications Association, Inc. and Access Spectrum LLC (ITA/Access)
Marantha Broadcasting Company, Inc. (MBC)
Maximum Service Television, Inc. (MSTV)
Midwest Television Inc. (Midwest)
National Association of Broadcasters (NAB)
Nextel Communications, Inc. (Nextel)
Paxson Communications Corporation (Paxson)
Personal Communications Industry Association (PCIA)
Shop at Home, Inc. (Shop at Home)
Sinclair Broadcast Group, Inc. (Sinclair)
Sonshine Family Television, Inc. (SFTI)
Spectrum Exchange Group, LLC (Spectrum Exchange)
USA Broadcasting, Inc. (USA Broadcasting)
Verizon Wireless (Verizon)

Reply Commenters

Dielectric Communications (Dielectric)
Ericsson Inc.
Maximum Service Television, Inc. (MSTV)
National Association of Broadcasters (NAB)
National Cable Television Association (NCTA)
Paxson Communications Corporation (Paxson)
Shop at Home, Inc. (Shop at Home)
Spectrum Exchange Group, LLC (Spectrum Exchange)
USA Broadcasting, Inc. (USA Broadcasting)
Verizon Wireless (Verizon)

Ex Parte Submissions

Association of Local Television Stations, Inc. (ALTV)
Cellular Telecommunications Industry Association, Inc. (CTIA)
Ericsson Inc.
National Cable Television Association (NCTA)
Paxson Communications Corporation (Paxson)
Spectrum Exchange Group, LLC (Spectrum Exchange)



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.   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.    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.   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.   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.   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.   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.
? The final version of this Third Report and Order was approved by the Commission on January 19, 2001.
  See 47 U.S.C.  337(e).  See also Advanced Television Systems and Their Impact Upon Existing 
Television Broadcast Service, Memorandum Opinion and Order on Reconsideration of Fifth Report and Order, 13 
FCC Rcd 6860, 6887 (1998)("DTV Fifth Report and Order Reconsideration").
  See 47 U.S.C.  309(j)(14).
  See Cellular Telecommunications Industry Association et al.'s Request for Delay of the Auction of 
Licenses in the 747-762 and 777-792 MHz Bands Scheduled for September 6, 2000 (Auction No. 31), 
Memorandum Opinion, FCC 00-304 (rel. Sept. 12, 2000).
  See Service Rules for 746-764 and 776-794 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, 
FCC 00-224 (rel. June 30, 2000) ("700 MHz MO&O and FNPRM").
  See Service Rules for 746-764 and 776-794 MHz Bands, and Revisions to Part 27 of the Commission's 
Rules, First Report and Order, 15 FCC Rcd 476 (2000) ("700 MHz First Report and Order").
  Principles for Reallocation of Spectrum to Encourage the Development of Telecommunications 
Technologies for the New Millennium, Policy Statement, 14 FCC Rcd 19868 (1999) ("Spectrum Reallocation 
Policy Statement").
  See 700 MHz MO&O and FNPRM  5-79.
  See id.  82-85.
  Entravision Comments at 6; NAB Comments at 8; NAB Reply at 5-6; Paxson Comments at 44; Nextel 
Comments at 4-6; USA Broadcasting Comments at 13; PCIA Comments at 2 and 4.  See also ITA/Access 
Comments at 5.
  Verizon Comments at 8. Verizon contends that costs should be shared among the winners of both 
Auction No. 31 (the 30 MHz auction) and Auction No. 33 (the Guard Band auction).  Spectrum Exchange suggests 
that if the winner of the 20 MHz license in a given region is able to enter into a comprehensive clearing 
arrangement with the incumbent broadcasters in that region, the winner of the 20 MHz license should be able to 
require the winner of the 10 MHz license in that region to contribute one-third of the clearing cost. Spectrum 
Exchange Comments at 9-10. 
  See 700 MHz MO&O and FNPRM  83.
  See 700 MHz MO&O and FNRPM  83. While new entrants will in most cases need to negotiate with 
several incumbent broadcasters to clear their license areas fully, we agree with Nextel's observation that 
comprehensive cost-sharing agreements for the clearing of multiple TV incumbents may be possible in some 
instances because some broadcast ownership groups control multiple licenses for TV stations on channels 59 to 69. 
See Nextel Comments at 4-5.
 See Amendment to the Commission's Rules Regarding A Plan for Sharing the Costs of Microwave 
Relocation, First Report and Order and Further Notice of Proposed Rule Making, 11 FCC Rcd 8825, 8831  7-8 
(1996).
  The Commission's initial auction of broadband PCS licenses, which involved the A and B blocks, 
concluded on March 13, 1995.  Auction No. 5, the first auction of C block spectrum, ended on May 6, 1996 and 
was followed by Auction No. 10, another C block auction, which concluded on July 16, 1996.  Auction No. 11, the 
first F block auction, ended on January 14, 1997.  Auction No. 22 made available additional C and F block, as well 
as E block, spectrum and concluded on April 15, 1999.
  Nextel supports the Commission's view that the licensing of non-Guard Band 700 MHz licensees all at 
the same time will facilitate the establishment of cost-sharing arrangements through voluntary negotiations without 
the need for rules.  Nextel Comments at 4.
  Nextel and NAB contend that agreements will be unique to each broadcaster's situation, and that the 
resulting complexity makes it difficult to develop fair, "one-size-fits-all" cost-sharing rules.  They argue that such 
rules might disadvantage certain 700 MHz licensees by forcing them to pay for other licensees' mistakes or poor 
bargaining. Nextel Communications Comments at 4-6; NAB Reply at 5-6.
  700 MHz First Report and Order, 15 FCC Rcd 476; 700 MHz MO&O and FNPRM  44-66.
  700 MHz MO&O and FNPRM  51.  See also 47 U.S.C.  301; 303; 309(j)(3)(A); 309(j)(14)(C).
  Id.  58.
  Id.  59. See also 47 C.F.R.  73.3580(d), 73.3572(a).
  Id.  60-61.
  Id.  61-65
  Id.  87-92.
  Id.  87.
  See 47 U.S.C.  336(b), (c), (f).  We continue to disagree with MSTV's contention that the 
Commission's role in clearing the 700 MHz spectrum should be limited to post-transition approvals. MSTV 
Comments at 8. Instead, as noted above, we have concluded that we have authority to review and approve 
regulatory requests made in connection with voluntary agreements as part of our authority, under the statutory 
scheme as a whole.  700 MHz MO&O and FNPRM  51.  See also 47 U.S.C.  309(j)(14)(C); 47 U.S.C.  
309(j)(3)(A); 47 U.S.C.  301, 303.
  Verizon Comments at 3-4; Nextel Comments at 7-8; USA Comments at 8; Spectrum Exchange 
Comments at 8-9; Entravision Comments at 3; STFI Comments at 2; Paxson Comments at 16; Sinclair Comments 
at 3-6.
  APCO Comments at 2-3.
  Nextel Comments at 7-8.
  Verizon Comments at 5 (citing 47 U.S.C.  303(g)).
  See 700 MHz MO&O and FNPRM  61-62.
  See id.  60-61.
  See id.  62.
  See id.  64.
  MSTV Comments at 3, 14. 
  See 700 MHz MO&O and FNPRM  44-57.
  See id.  56.
  Paxson Comments at 29.
  See 700 MHz MO&O and FNPRM  90-91.
  See infra  19-26.
  No comments were received on the issue of whether the loss-of-service analysis would need to be 
supplemented to account for the substitution of the incumbent's programming for that previously available on the 
relocation channel.  See 700 MHz MO&O and FNPRM  91.
  See Paxson Comments at 30-31.
  MSTV Reply at 8.
  See 700 MHz MO&O and FNPRM  63-64 for review of regulatory requests not subject to 
presumption; see also supra 15.
  See 700 MHz MO&O and FNPRM  87 n. 168.
  See 47 C.F.R.  73.623(c) (specifying co- and adjacent-channel interference protection standards and 
minimum spacing requirements); see also "Additional Application Processing Guidelines for Digital Television 
(DTV)," Public Notice (Aug. 10, 1998)(describing DTV application procedures and detailing technical 
requirements for applications that do not conform to the "checklist" variations from the DTV Table of Allotments). 
See 47 C.F.R.  73.622(d).
  See 700 MHz MO&O and FNPRM  87 n.168.  Midwest contends that interference calculations for this 
analysis should be based on the affected station's allotment parameters or on its authorized or applied-for facilities, 
whichever is greatest.  See Midwest Comments at 2, 6-9.   Current policy requires that such interference analyses 
consider the impact on both the allotment and authorized parameters.  See Advanced Television Systems and Their 
Impact upon the Existing Television Broadcast Services, Sixth Report and Order, 12 FCC Rcd. 14588 
(1997)("DTV Sixth Report and Order").   The Commission is currently considering the issue of whether parameters 
specified in pending applications should be considered, and we defer our decision on this issue to the outcome of 
that proceeding.  See Review of the Commission's Rules and Policies Affecting to Conversion to Digital 
Television, Notice of Proposed Rule Making, 15 FCC Rcd 5257 (2000).
  47 C.F.R.  73.623(c).
  47 C.F.R.  73.610 and 73.698 (specifying minimum separation distances between co- and adjacent 
channel analog stations).
  See Advanced Television Systems and Their Impact Upon the Existing Television Service, Second 
Memorandum Opinion and Order on Reconsideration of the Fifth and Sixth Report and Orders, 14 FCC Rcd 
1348, 1363  32, 33 (1998).  As appropriate, other interference protection rules may apply in specific situations.  
See, e.g, 47 C.F.R.  73.623(e) (DTV protection of land mobile stations in the 470-512 MHz band); 73.623(f) 
(Channel 6 DTV protection to FM radio broadcast stations); 73.613 (analog TV protection of Class A TV 
stations); and 73.610(f) (Channel 6 analog protection to FM radio broadcast stations).
  See MSTV Comments at 11; Paxson Reply at 21-23; Midwest Comments at 2, 6-9.
  See MSTV Comments at 11; Midwest Comments at 2, 6-9.
  See 700 MHz MO&O and FNPRM 56.
  See Advanced Television Systems and Their Impact Upon the Existing Television Service, 
Memorandum Opinion and Order on Reconsideration of the DTV Sixth Report and Order, 13 FCC Rcd 7418 
(1998)("DTV Sixth Report and Order Reconsideration"); see also "Additional Application Processing Guidelines 
for Digital Television (DTV)," Public Notice (Aug. 10, 1998).
  See 47 C.F.R.  73.623(c)(2).
  See DTV Sixth Report and Order Reconsideration, 13 FCC Rcd at 7478  147. 
  See NAB Comments at 6-7; USA Broadcasting Comments at 10; MSTV Reply at 6-7; Midwest 
Comments at 6.
  See 1997 Balanced Budget Act,  3002, as codified at  309(j) of the Communications Act of 1934, as 
amended, 47 U.S.C. 309(j).
  See 47 C.F.R.  73.623(g); see also DTV Sixth Report and Order Reconsideration, 13 FCC Rcd 7477-
78  146-147. 
  See 47 CFR  73.623(g).
  See DTV Sixth Report and Order Reconsideration, 13 FCC Rcd at 7477  146.
  See 700 MHz MO&O and FNPRM  46.
  See id.  59.
  DTV Sixth Report and Order, 12 FCC Rcd 14588.
  See DTV Sixth Report and Order, 12 FCC Rcd at 14667-78, 14671  172-173, 182.
   See 47 CFR  73.622, 73.623; see also id., 12 FCC Rcd at 14684, 14688  213, 221-222. 
    We further indicated that any negotiated changes would be subject to international coordination, as 
appropriate. 
  See Sinclair Comments at 6; Paxson Comments at 28-29; USA Broadcasting Comments at 12-13; 
Spectrum Exchange Comments at 9.
  See Sinclair Comments at 6.
  See Sinclair Comments at 6; Paxson Comments at 28-29; USA Broadcasting Comments at 12-13; 
Spectrum Exchange Comments at 9.
  See Spectrum Exchange Comments at 9; USA Broadcasting Comments at 12-13; Paxson Comments at 
28.
  See Paxson Comments at 28.
  In Spectrum Exchange's view, a preapproval process would allow broadcasters to design possible 
three-way clearing schemes and obtain Commission approval prior to the Commission's spectrum auction.  Under 
this proposal, for example, analog stations that anticipate an early transition to digital could apply for pre-approval 
for clearing by January 1, 2001, and requests for pre-approval would be acted on by March 1, 2001.  See Spectrum 
Exchange Comments at 9.
  See 700 MHz MO&O and FNPRM  61; see also supra  15.
  See 47 C.F.R.  73.622(a).
  See 47 C.F.R.  73.3500 et seq. (broadcast application procedures).
  See 47 C.F.R.  73.623(g). 
  See 47 C.F.R.  1.420, 73.607, 73.611, 73.622, 73.623.
  See Advanced Television Systems and Their Impact upon the Existing Television Broadcast Service, 
Fifth Report and Order, 12 FCC Rcd 12809, 12832-12833  55-56 (1997) ("DTV Fifth Report and Order"); DTV 
Fifth Report and Order Reconsideration, 13 FCC Rcd at 6886-6887  77-78.
  DTV Fifth Report and Order, 12 FCC Rcd 12833-35  57-60.
  700 MHz MO&O and FNPRM  44-66.
  47 U.S.C.  337.
  See 47 C.F.R. 73.624(d) (DTV construction deadlines).
  700 MHz MO&O and FNPRM  89.
  Id.
  Id.
  See, e.g., Entravision Comments at 3; Spectrum Exchange Comment at 8-9; Spectrum Exchange Reply 
at 11.
  NAB Comments at 7.
  See Entravision Comments at 3.
  See 700 MHz MO&O and FNPRM  89.  
  See 700 MHz MO&O and FNPRM  93-103.
  Id.  99.
  See id.  97.
  Id.  97-98.
  Id.  94-96.
  Id.  96.
  Id. 
  Id.   93-95.  See also Spectrum Exchange Group, L.L.C., Petition for Rule Making at 8-9 (filed Apr. 
24, 2000) ("Spectrum Exchange Petition"); Spectrum Exchange Comments at 7.
  See Spectrum Exchange Comments at 3-7; Spectrum Exchange Reply at 4-6.
  See Spectrum Exchange Petition at 8-11; Spectrum Exchange Comments at  5; Spectrum Exchange 
Reply at 10 (describing Spectrum Exchange's proposed secondary auctions mechanisms).
  See Spectrum Reallocation Policy Statement, 14 FCC Rcd at 19870  9 ("In the majority of cases, 
efficient spectrum markets will lead to use of spectrum for the highest value end use.").
  As a result of the policy choice that we make here, we see no need at this time to reach the question of 
whether the Commission has legal authority to conduct a secondary auction of clearing options.  See 700 MHz 
MO&O and FNRPM  100.
  See Principles for Promoting the Efficient Use of Spectrum By Encouraging the Development of 
Secondary Markets, Policy Statement, FCC 00-401 (rel. Dec. 1, 2000) ("Secondary Markets Policy Statement").  
See also Promoting Efficient Use of Spectrum Through Elimination of Barriers to the Development of Secondary 
Markets, WT Docket No. 00-230, Notice of Proposed Rule Making, FCC 00-402 (rel. Nov. 27, 2000); 
Implementation of Sections 309(j) and 337 of the Communications Act of 1934 as Amended; Promotion of 
Spectrum Efficient Technologies on Certain Part 90 Frequencies; Establishment of Public Service Radio Pool in 
the Private Mobile Frequencies Below 800 MHz; Petition for Rule Making of the American Mobile 
Telecommunications Association, WT Docket No. 99-87, RM-9332, RM-9405, RM-9705, Report and Order and 
Further Notice of Proposed Rule Making, FCC 00-403 (rel. Nov. 20, 2000).
  See Spectrum Reallocation Policy Statement, 14 FCC Rcd 19871-72  12.  See also Gregory L. 
Rosston & Jeffrey S. Steinberg, Using Market-Based Spectrum Policy to Promote the Public Interest, 50 Fed. 
Comm. L.J. 87, 94-95 (1997)("Market-Based Spectrum Policy").
  See Secondary Markets Policy Statement, 14 FCC Rcd 19875  18.
  See 700 MHz MO&O and FNPRM  97-98.
  See DTV Fifth Report and Order Reconsideration, 13 FCC Rcd 6860. 
  See Shop at Home Comments at 5.
  See Spectrum Exchange Comments at 4. See also Verizon Reply at 4.
  See Spectrum Exchange Comments at 4. Verizon provides qualified support for a linked auction noting 
that "certain elements" are appealing; "because the two auctions would be tied, a bidder would know the total cost 
of unencumbered spectrum at the instant it places its bid, which eliminates much of the uncertainty surrounding" 
the Commission's 700 MHz spectrum auction.  Verizon Reply at 4.  See also Spectrum Exchange Reply at 4-5 
(discussing complementarities of spectrum use rights and band clearing rights).
  See, e.g., PCIA Comments at 4 ("Past experience indicates that private parties can be trusted to 
undertake the burden of developing a voluntary, consensus plan for cost-sharing related to 700 MHz band 
relocation expenses."); Shop at Home Comments at 5 ("Shop at Home strongly encourages the Commission to 
establish a private, voluntary, secondary auction to clear the 60's spectrum."); Ericsson Reply at 2 (supporting 
three-way agreements and private secondary auctions); USA Broadcasting Comments at 8-9; Paxson Comments at 
23-24; Sonshine Comments at 4.
  Thus, we do not conceive of secondary auctions as depriving broadcasters of the ability to conduct 
individual negotiations, as is feared by some broadcasters. See, e.g., Sonshine Comments at 3-6.
  Under Spectrum Exchange's plan, assuming a high bidder in the Commission's spectrum auction is 
participating in the secondary auction, that high bid would be translated into a bid in the secondary auction by 
multiplying the license bid by a certain linkage ratio.  See Spectrum Exchange Comments at 3-7.  See also 
Spectrum Exchange Petition at 8-9; Spectrum Exchange Comments at 7  (describing descending clock secondary 
auction mechanism).
   47 C.F.R.  1.2105(c).  See also Implementation of Section 309(j) of the Communications Act - 
Competitive Bidding, Second Report and Order, 9 FCC Rcd 2348, 2387  223 (1994)("Competitive Bidding 
Second Report and Order") ("[T]he Commission is concerned that collusive conduct by bidders prior to or during 
the auction process could undermine the competitiveness of the bidding process and prevent the formation of a 
competitive post-auction market structure."). 
Section 1.2105(c)(6)(ii) provides that "[t]he term bids or bidding strategies shall include capital calls 
or requests for additional funds in support of bids or bidding strategies."  47 C.F.R.  1.2105(c)(6)(ii). 
Section 1.2105(a)(2)(ix) provides that in order to be eligible to participate in a spectrum auction, an 
applicant must file a short-form application (FCC Form 175) in which it certifies that it has not entered and 
will not enter into any explicit or implicit agreements, arrangements or understandings of any kind with any 
parties not identified in the application regarding the amount of their bids, bidding strategies or the 
particular licenses on which they will or will not bid.  47 C.F.R.  1.2105(a)(2)(ix).
  Bidders who are found to have violated the antitrust laws or the Commission's anti-collusion rules in 
connection with participation in the auction process may, among other remedies, be subject to the loss of their 
down payment or their full bid amount, cancellation of their licenses, and may be prohibited from participating in 
future auctions.  Competitive Bidding Second Report and Order, 9 FCC Rcd 2348, 2388  226.
  47 C.F.R.  1.2105(c)(1).
  47 C.F.R.  1.2105(a)(2)(viii).  See Competitive Bidding Second Report and Order, 9 FCC Rcd at 
2388  225.
  We do not here decide that such negotiation necessarily communicates information in violation of the 
anti-collusion rule.
  An applicant "include[s] all controlling interests in the entity submitting a short-form application to 
participate in an auction (FCC Form 175), as well as all holders of partnership and other ownership interests and any 
stock interest amounting to 10 percent or more of the entity, or outstanding stock, or outstanding voting stock of the 
entity submitting a short-form application, and all officers and directors of that entity."  47 C.F.R.  1.2105(c)(6)(i).
  See 47 C.F.R.  Section 1.2105(a)(2)(viii).  See also "Wireless Telecommunications Bureau Clarifies 
Spectrum Auction Anti-Collusion Rules," Public Notice, DA 95-2244, 11 FCC Rcd 9645 (1995) (An agreement in 
principle on all material terms must be disclosed whether in writing or not; if there is no agreement in principle by 
the short-form filing deadline, prohibited communications must cease).  In addition, we note that applicants in 
Commission spectrum auctions are also under an affirmative obligation to maintain their short-form applications 
substantially accurate and complete in all significant respects. See 47 C.F.R.  1.65(a).   Thus, applicants entering 
into contracts after the short form filing deadline would be obligated to amend their applications appropriately.  See 
47 C.F.R.  1.2105(b)(2)(applications may be amended to make minor changes). 
  The Commission has permitted applicants to establish internal procedures as a precaution to prevent 
prohibited communications among authorized bidding agents.  See "Wireless Telecommunications Bureau 
Responds to Questions About the Local Multipoint Distribution Service Auction,"  Public Notice, 13 FCC Rcd 341 
(1998).  Additional information about the application of the Commission's anti-collusion rule may be found on the 
Commission's Web site at:  http://www.fcc.gov/wtb/auctions/.
  700 MHz MO&O and FNPRM  104.
  See, e.g., Sinclair Comments at 4 (proposal to adopt different technical standard for DTV 
transmissions); Dielectric Reply at 3 (asserting that digital must-carry, receiver standards, and transmission issues 
exist which must be resolved); Paxson Comments at 41-44 (calling for adoption of connection and copyright 
protection standards, transmission standards, and elimination of ban on advertising by noncommercial 
broadcasters).
  See, e.g., Carriage of the Transmissions of Digital Television Broadcast Stations, Notice of Proposed 
Rule Making, 13 FCC Rcd 15092 (1998)("DTV Must-Carry Notice") (addressing DTV carriage issues); Ancillary 
and Supplementary Use of Digital Television Capacity by Noncommercial Licensees, Notice of Proposed Rule 
Making, 14 FCC Rcd 537 (1998) (considering permissible DTV operations by noncommercial broadcasters).
  See Verizon Comments at 7-8; Verizon Reply at 6.  See also ITA/Access Comments at 4.
  See Verizon Comments at 7-8.
  See id.
  Id. at 7.
  See, e.g., NAB Comments at 8; Paxson Reply at 19; USA Broadcasting Reply at 13.  See also Nextel 
Comments at 6.
  Paxson Reply at 19.
  Although commenters have raised the question of whether the Commission has legal authority to 
impose limitations on cost reimbursements and offer competing conclusions on that issue, we find it unnecessary to 
reach that question here.  Compare USA Broadcasting Reply at 12 (arguing that the Communications Act provides 
no legal authority to impose limitations on cost recovery in the absence of a mandatory relocation requirement) 
with Verizon Reply at 6 (contending that Communications Act does not limit the Commission's authority to apply 
relocation cost caps).
  47 U.S.C.  534, 535.
  Implementation of the Cable Television Consumer Protection and Competition Act of 1992, Broadcast 
Signal Carriage Issues, Report and Order, 8 FCC Rcd 2965 (1993) ("Must-Carry Order"); See also Broadcast 
Signal Carriage Issues, Memorandum Report and Order, 9 FCC Rcd 6723 (1994) ("Must-Carry 
Reconsideration").
  Carriage of the Transmissions of Digital Television Broadcast Stations, CS Docket 98-120, Notice of 
Proposed Rulemaking, 13 FCC Rcd 15092 (1998) ("DTV Must-Carry Notice").
  Broadcast and cable entities' comments in the must-carry proceeding are summarized in Carriage of 
Digital Television Broadcast Signals, CS Docket No. 98-120, First Report and Order and Further Notice of 
Proposed Rulemaking, FCC 01-22,  52-56 (rel. Jan. 23, 2001) ("DTV Must-Carry Order and FNPRM").
  Id.
  700 MHz MO&O and FNPRM  65.
  See, e.g., Entravision Comments at 6; Sinclair Comments at 5; MBC Comments at 2-5; Shop at Home 
Comments at 7-9; MSTV Comments at 18, 22-24; Paxson Comments at 9; USA Broadcasting Comments at 7-8; 
SFTI Comments at 5-6; Dielectric Communications Reply at 2.
  DTV Must-Carry Order and FNPRM  7, 12.
  WHDT-DT Channel 59, Stuart, Florida, Petition for Declaratory Ruling that Digital Broadcast Stations 
Have Mandatory Carriage Rights, CSR-5562-Z, Memorandum Opinion and Order, FCC 01-23,  12-15 (rel. Jan. 
23, 2001)("WHDT Order").
  See DTV Must-Carry Order and FNPRM  2-3, 108-112.
  DTV Must-Carry Order and FNPRM  130.  See Joint Explanatory Statement of the Committee of 
Conference on H.R. 1554, 106th Cong., 145 Cong. Rec. H11793, H11796 (daily ed. Nov. 9, 1999).  See also 47 
U.S.C. 338(b)(1)(B).
  See 700 MHz MO&O and FNPRM  92 and n. 170.
  See, e.g., Verizon Comments at 3-4; NAB Comments p. 2-4; MSTV Reply at 6; SFTI Comments at 2-
4; Entravision Comment at 2-3.
  Verizon Comments at 4.  Spectrum Exchange initially proposed this idea.  See Spectrum Exchange 
Petition at 12.
  Verizon Comments at 3-4.
  Id. at 6.
  See Paxson Comments at 23; USA Broadcasting Comments at 9; ALTV Comments at 3-4; MSTV 
Reply at 6; NAB Comments p. 3-5.
  See Verizon Comments at 4-7; Spectrum Exchange Petition at 12.
  See Ian Ayres & Eric Talley, Solomonic Bargaining: Dividing A Legal Entitlement to Facilitate 
Coasean Trade, 104 Yale L. J. 1027, 1029-30, 1035 and n. 30 (1995).
  See Spectrum Reallocation Policy Statement, 14 FCC Rcd at 19870  9 (1999). See also Market-Based 
Spectrum Policy, 50 Fed. Comm. L.J. at 94  ("Where possible, the Commission should also exhaustively license 
spectrum in bands that are now licensed on a site-by-site basis by issuing flexible, geographic-area overlay licenses 
and creating mechanisms for voluntary changes in spectrum use, including, where appropriate, procedures for new 
geographic-area licensees and incumbents to negotiate compensated relocation of incumbents.").
  In light of the policy choice we are adopting, we find it unnecessary to address the view of certain 
commenters that the Commission lacks legal authority to impose mandatory relocation or other similar solutions to 
facilitate clearing of TV incumbents in the 700 MHz band.  See, e.g., NAB Comments at 4; USA Broadcasting 
Comments at 9; MSTV Reply at 5-6; Paxson Comments at 23; Entravision Comments at 4.  See also Verizon 
Comments at 3-5 (contending that several provisions of the Communications Act authorize the limited mandatory 
relocation of holdout broadcasters).
  See, e.g., Sonshine Comments at 2; Entravision Comments at 3; USA Broadcasting Comments at 8; 
Paxson Comments at 23; Nextel Comments at 7-8; Spectrum Exchange Comments at 8-9.
  Paxson Reply at 21.
  Paxson Comments at 43-44.
  See Ancillary and Supplementary Use of Digital Television Capacity by Noncommercial Licensees, 
MM Docket No. 98-203, Notice of Proposed Rule Making, 14 FCC Rcd 3259, 3271  36-37 (1998).  
  See MSTV Comments at 24-25; ALTV Reply at 8.
  In particular, this exemption extends to the requirements imposed by Chapter 6 of Title 5, United 
States Code, Section 3 of the Small Business Act (15 U.S.C.  632), and Sections 3507 and 3512 of Title 44, 
United States Code.  Consolidated Appropriations Act, 2000, Pub. L. No. 106-113, 113 Stat. 2502, Appendix E, 
Sec. 213(a)(4)(A)-(B); see 145 Cong. Rec. H12493-94 (Nov. 17, 1999); 47 U.S.C.A.  337 note at Sec. 
213(a)(4)(A)-(B).
  Id., Sec. 213(a)(4)(A).
  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).
  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).
  See Triangle Publications, Inc., 37 FCC 307, 313 (1964), citing Hall v. FCC, 237 F.2d 567 
(D.C. Cir. 1954).
  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). 
  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)).

  See 47 U.S.C.  309(j)(14)(B).
 
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