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 Federal  Communications  Commission  FCC  01-  25
 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
 Commissions  Rules
 Carriage  of  the  Transmissions  of  Digital  Television
 Broadcast  Stations
 Review  of  the  Commissions  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
 The  final  version  of  this  Third  Report  and  Order  was  approved  by  the  Commission  on  January  19,
 2001.
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 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,  1  which  is  not  scheduled  to  occur  until  December  31,  2006,  and  that  date
 may  be  extended  under  certain  circumstances.  2  Congress  has,  however,  mandated  that  the  Commission
 commence  competitive  bidding  for  the  commercial  licenses  well  before  the  scheduled  termination  date  of
 the  DTV  transition.  3  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.  4  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:
 x  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.
 x  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).
 x  We  provide  guidance  on  interference  issues  that  may  arise  from  a  proposal  to  clear  a  station  and
 1  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).
 2  See  47  U.  S.  C.    309(  j)(  14).
 3  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).
 4  See  Service  Rules  for  746-  764  and  776-  794  MHz  Bands,  and  Revisions  to  Part  27  of  the  Commissions
 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).
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 relocate  that  broadcast  operation  to  a  channel  below  channel  59.
 x  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.
 x  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.
 x  We  clarify  that  voluntary  agreements  to  relocate  temporarily  into  Channels  52-  58  will  not  be
 prohibited.
 x  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
 Commissions  spectrum  auctions.  We  also  provide  guidance  on  how  the  Commissions  anti-collusion
 rules  may  apply  in  the  context  of  band  clearing  agreements  and  secondary  auctions.
 x  We  decline  to  adopt  relocation  cost  caps  or  cost  recovery  guidelines  at  this  time.
 x  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.  5  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.  6  In  the  700  MHz  MO&  O  and  FNPRM,  7  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.
 5  See  Service  Rules  for  746-  764  and  776-  794  MHz  Bands,  and  Revisions  to  Part  27  of  the  Commissions
 Rules,  First  Report  and  Order,  15  FCC  Rcd  476  (2000)  (  700  MHz  First  Report  and  Order).
 6  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).
 7  See  700  MHz  MO&  O  and  FNPRM    5-  79.
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 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.  8
 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.  9  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.  10
 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.  11  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
 8  See  id.    82-  85.
 9  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.
 10  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.
 11  See  700  MHz  MO&  O  and  FNPRM    83.
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 believe  that  the  group  of  new  entrants  will  have  very  similar,  strong  incentives  to  reach  clearing  agreements
 with  incumbent  broadcasters  and  commence  operations.  12
 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.  13  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.  14  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.  15
 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.  16  We  therefore  leave  all  cost-sharing
 arrangements  to  negotiations  among  successful  auction  bidders  in  this  band.
 12  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  Nextels  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.
 13  See  Amendment  to  the  Commissions  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).
 14  The  Commissions  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.
 15  Nextel  supports  the  Commissions  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.
 16  Nextel  and  NAB  contend  that  agreements  will  be  unique  to  each  broadcasters  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.
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 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  publics  overall  receipt  of  broadcasting  service.  17  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.  18  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.  19  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  Commissions  Rules  for  the  filing  of  applications  involving  major  license
 modifications.  20
 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.  21  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.  22
 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.  23  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
 17  700  MHz  First  Report  and  Order,  15  FCC  Rcd  476;  700  MHz  MO&  O  and  FNPRM    44-  66.
 18  700  MHz  MO&  O  and  FNPRM    51.  See  also  47  U.  S.  C.    301;  303;  309(  j)(  3)(  A);  309(  j)(  14)(  C).
 19  Id.    58.
 20  Id.    59.  See  also  47  C.  F.  R.    73.3580(  d),  73.3572(  a).
 21  Id.    60-  61.
 22  Id.    61-  65
 23  Id.    87-  92.
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 relocation  agreements  could  facilitate  clearing  in  the  700  MHz  band  by  providing  a  replacement  channel  for
 incumbent  broadcasters  on  Channels  59-  69.  24
 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.  25
 14.  A  number  of  commenters  also  agree  that  three-  way  agreements  could  produce  significant
 benefits  for  all.  26  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  nations  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.  27  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.  28  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.  29
 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.  30  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.  31  To  obtain  this  presumption,  an  applicant
 24  Id.    87.
 25  See  47  U.  S.  C.    336(  b),  (c),  (f).  We  continue  to  disagree  with  MSTVs  contention  that  the
 Commissions  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.
 26  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.
 27  APCO  Comments  at  2-  3.
 28  Nextel  Comments  at  7-  8.
 29  Verizon  Comments  at  5  (citing  47  U.  S.  C.    303(  g)).
 30  See  700  MHz  MO&  O  and  FNPRM    61-  62.
 31  See  id.    60-  61.
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 Federal  Communications  Commission  FCC  01-  25
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 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  communitys  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.  32  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
 stations  signal  will  remain  available,  after  implementation  of  the  agreement,  to  a  significant  number  of  its
 viewers  in  the  licensees  service  area.  33
 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.  34  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.  35  As  we  also  stated  in  the  700  MHz  MO&  O  and  FNPRM,  we  believe  that
 loss-  of-  service  issues  here  are  limited  and  temporary.  36  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  stations  signal  will  be  replaced  by  a  channel  59  to  69
 stations  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  licensees  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.  37  Thus,  we  conclude  that  it  is  in  the  public  interest  to  allow  three-  way  band  clearing  agreements
 32  See  id.    62.
 33  See  id.    64.
 34  MSTV  Comments  at  3,  14.
 35  See  700  MHz  MO&  O  and  FNPRM    44-  57.
 36  See  id.    56.
 37  Paxson  Comments  at  29.
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 Federal  Communications  Commission  FCC  01-  25
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 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.  38  Of  course,  if  the  two  signals    i.  e.,  the  relocation  channels  signal  (channel  2-  58
 range)  and  the  relocating  channels  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.  39  We  will  consider  as  relevant  factors  in  our  public  interest  determination  the  extent  to  which  a
 stations  signal  remains  available  to  viewers  located  within  its  previous  service  area,  as  well  as  the
 substitution  of  a  relocating  stations  programming  for  the  programming  previously  available  to  viewers  of
 the  relocation  channel.  40
 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  communitys
 sole  television  station,  so  long  as  the  community  continues  to  receive  Grade  B  service  from  at  least  three
 other  television  stations.  41  MSTV  opposes  Paxsons  position  and  contends  that  the  Commission  cannot
 allow  channel  relocations  to  compromise  the  publics  free,  over-  the  air  television  service.  42  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.  43
 19.  Treatment  of  Interference  Issues.  In  the  700  MHz  MO&  O  and  FNPRM,  we  recognized  that
 38  See  700  MHz  MO&  O  and  FNPRM    90-  91.
 39  See  infra    19-  26.
 40  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  incumbents  programming  for  that  previously  available  on  the
 relocation  channel.  See  700  MHz  MO&  O  and  FNPRM    91.
 41  See  Paxson  Comments  at  30-  31.
 42  MSTV  Reply  at  8.
 43  See  700  MHz  MO&  O  and  FNPRM    63-  64  for  review  of  regulatory  requests  not  subject  to
 presumption;  see  also  supra  15.
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 Federal  Communications  Commission  FCC  01-  25
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 interference  issues  may  arise  under  a  three-  way  agreement  that  do  not  arise  under  a  bilateral  agreement.  44
 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  stations  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
 incumbents  signal  using  the  same  or  lower  power  and  the  same  or  lower  antenna  height.  45  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.  46
 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.  47  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,  48  and  the
 provisions  of  Section  73.623(  c)  in  instances  where  an  analog  operation  may  affect  the  operation  of  a  digital
 44  See  700  MHz  MO&  O  and  FNPRM    87  n.  168.
 45  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).
 46  See  700  MHz  MO&  O  and  FNPRM    87  n.  168.  Midwest  contends  that  interference  calculations  for
 this  analysis  should  be  based  on  the  affected  stations  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  Commissions  Rules  and  Policies  Affecting  to
 Conversion  to  Digital  Television,  Notice  of  Proposed  Rule  Making,  15  FCC  Rcd  5257  (2000).
 47  47  C.  F.  R.    73.623(  c).
 48  47  C.  F.  R.    73.610  and  73.698  (specifying  minimum  separation  distances  between  co-  and  adjacent
 channel  analog  stations).
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 Federal  Communications  Commission  FCC  01-  25
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 allotment.  49
 22.  Some  broadcasters  argue  that  the  Commission  should  adopt  a  new  no  interference  standard
 that  would  prohibit  any  new  involuntary  interference  to  existing  licensees.  50  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.  51  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.  52  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.  53  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.  54  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.  55  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.  56  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
 49  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).
 50  See  MSTV  Comments  at  11;  Paxson  Reply  at  21-  23;  Midwest  Comments  at  2,  6-  9.
 51  See  MSTV  Comments  at  11;  Midwest  Comments  at  2,  6-  9.
 52  See  700  MHz  MO&  O  and  FNPRM  56.
 53  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).
 54  See  47  C.  F.  R.    73.623(  c)(  2).
 55  See  DTV  Sixth  Report  and  Order  Reconsideration,  13  FCC  Rcd  at  7478    147.
 56  See  NAB  Comments  at  6-  7;  USA  Broadcasting  Comments  at  10;  MSTV  Reply  at  6-  7;  Midwest
 Comments  at  6.
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 Federal  Communications  Commission  FCC  01-  25
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 new  wireless  uses.  57
 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.  58  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.  59  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).  60
 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.  61  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  Commissions  rules.  62
 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.  63  As  part  of
 that  action,  we  recognized  that  the  implementation  of  DTV  service  will  be  a  dynamic  process  and  that
 57  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).
 58  See  47  C.  F.  R.    73.623(  g);  see  also  DTV  Sixth  Report  and  Order  Reconsideration,  13  FCC  Rcd  7477-
 78    146-  147.
 59  See  47  CFR    73.623(  g).
 60  See  DTV  Sixth  Report  and  Order  Reconsideration,  13  FCC  Rcd  at  7477    146.
 61  See  700  MHz  MO&  O  and  FNPRM    46.
 62  See  id.    59.
 63  DTV  Sixth  Report  and  Order,  12  FCC  Rcd  14588.
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 Federal  Communications  Commission  FCC  01-  25
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 mechanisms  are  needed  to  provide  for  modifying  DTV  allotments  and  station  operating  facilities.  64  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.  65
 We  permitted  broadcasters  the  flexibility  to  negotiate  among  themselves  station  changes  and  alternative
 allotment  plans,  provided  no  new  interference  results  or  affected  parties  agree.  66
 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.  67  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.  68
 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.  69  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.  70  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.  71  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  Exchanges  proposal
 under  which  the  Commission  would  pre-  approve  incumbent  broadcasters  requests  for  waiver  for  early
 termination  of  analog  over-  the-  air  broadcasts.  72  Such  an  approach  would  be  impractical  because  it  would
 64  See  DTV  Sixth  Report  and  Order,  12  FCC  Rcd  at  14667-  78,  14671    172-  173,  182.
 65  See  47  CFR    73.622,  73.623;  see  also  id.,  12  FCC  Rcd  at  14684,  14688    213,  221-  222.
 66  We  further  indicated  that  any  negotiated  changes  would  be  subject  to  international  coordination,  as
 appropriate.
 67  See  Sinclair  Comments  at  6;  Paxson  Comments  at  28-  29;  USA  Broadcasting  Comments  at  12-  13;
 Spectrum  Exchange  Comments  at  9.
 68  See  Sinclair  Comments  at  6.
 69  See  Sinclair  Comments  at  6;  Paxson  Comments  at  28-  29;  USA  Broadcasting  Comments  at  12-  13;
 Spectrum  Exchange  Comments  at  9.
 70  See  Spectrum  Exchange  Comments  at  9;  USA  Broadcasting  Comments  at  12-  13;  Paxson  Comments
 at  28.
 71  See  Paxson  Comments  at  28.
 72  In  Spectrum  Exchanges  view,  a  preapproval  process  would  allow  broadcasters  to  design  possible
 three-  way  clearing  schemes  and  obtain  Commission  approval  prior  to  the  Commissions  spectrum  auction.
 Under  this  proposal,  for  example,  analog  stations  that  anticipate  an  early  transition  to  digital  could  apply  for  pre-(
 continued.)
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 Federal  Communications  Commission  FCC  01-  25
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 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.  73  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
 Commissions  rules.  74  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.  75  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)).  76  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.  77  We  also  clarify  that  in  such  rulemaking  proceedings  to  modify  the  DTV  Table  of  (Continued  from  previous  page)
 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.
 73  See  700  MHz  MO&  O  and  FNPRM    61;  see  also  supra    15.
 74  See  47  C.  F.  R.    73.622(  a).
 75  See  47  C.  F.  R.    73.3500  et  seq.  (broadcast  application  procedures).
 76  See  47  C.  F.  R.    73.623(  g).
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 Federal  Communications  Commission  FCC  01-  25
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 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,  78  and  we  have  determined  that  analog  television  and  DTV  facilities
 should  be  licensed  under  a  single,  paired  license.  79  In  the  700  MHz  MO&  O  and  FNPRM,  we  decided  to
 allow  early  termination  of  analog  service  to  accommodate  voluntary  agreements.  80  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  publics  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.  81  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  Commissions  rules.  82
 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.  83  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.  84  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).  85
 (Continued  from  previous  page)  77
 See  47  C.  F.  R.    1.420,  73.607,  73.611,  73.622,  73.623.
 78  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.
 79  DTV  Fifth  Report  and  Order,  12  FCC  Rcd  12833-  35    57-  60.
 80  700  MHz  MO&  O  and  FNPRM    44-  66.
 81  47  U.  S.  C.    337.
 82  See  47  C.  F.  R.  73.624(  d)  (DTV  construction  deadlines).
 83  700  MHz  MO&  O  and  FNPRM    89.
 84  Id.
 85  Id.
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 Federal  Communications  Commission  FCC  01-  25
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 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.  86  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.  87
 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.  88  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.  89  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.  90  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.  91  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
 86  See,  e.  g.,  Entravision  Comments  at  3;  Spectrum  Exchange  Comment  at  8-  9;  Spectrum  Exchange
 Reply  at  11.
 87  NAB  Comments  at  7.
 88  See  Entravision  Comments  at  3.
 89  See  700  MHz  MO&  O  and  FNPRM    89.
 90  See  700  MHz  MO&  O  and  FNPRM    93-  103.
 91  Id.    99.
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 Federal  Communications  Commission  FCC  01-  25
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 benefits  to  participants  than  more  limited,  separately  negotiated  agreements.  92  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.  93
 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.  94  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.  95  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.  96
 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.  97  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.  98  Such  a  private  secondary
 auction  would  not  actually  link  the  Commissions  spectrum  auction  operations  with  those  of  a  private
 auctioneer.  Rather,  the  secondary  auction  would  be  tied  to  the  Commissions  auction  results  only;  winning
 bidders  in  the  Commissions  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  Commissions
 spectrum  auction.  99
 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
 92  See  id.    97.
 93  Id.    97-  98.
 94  Id.    94-  96.
 95  Id.    96.
 96  Id.
 97  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.
 98  See  Spectrum  Exchange  Comments  at  3-  7;  Spectrum  Exchange  Reply  at  4-  6.
 99  See  Spectrum  Exchange  Petition  at  8-  11;  Spectrum  Exchange  Comments  at  5;  Spectrum  Exchange
 Reply  at  10  (describing  Spectrum  Exchanges  proposed  secondary  auctions  mechanisms).
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 Federal  Communications  Commission  FCC  01-  25
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 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.  100
 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.  101  A  market-  oriented  approach  is  consistent  with  our  recent  decisions  on
 spectrum  management  policies  intended  to  promote  secondary  markets  for  spectrum  usage  rights.  102  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.  103  That  principle  has  also  been  the  basis  for  the
 Commissions  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.  104
 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.  105  At  least  until  the  end  of  the  DTV  transition  period,  106  the  transaction  costs  of
 bargaining  among  incumbent  broadcasters  and  new  700  MHz  entrants  may  be  high.  107  Proponents  of  a
 secondary  auction  assert  that  a  voluntary  linked  auction  approach  will  address  this  problem  by  creating  a
 100  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.).
 101  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.
 102  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).
 103  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).
 104  See  Secondary  Markets  Policy  Statement,  14  FCC  Rcd  19875    18.
 105  See  700  MHz  MO&  O  and  FNPRM    97-  98.
 106  See  DTV  Fifth  Report  and  Order  Reconsideration,  13  FCC  Rcd  6860.
 107  See  Shop  at  Home  Comments  at  5.
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 Federal  Communications  Commission  FCC  01-  25
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 clearing  fund,  available  to  incumbents,  and  introducing  greater  certainty  as  to  costs  and  values.  108  In
 Spectrum  Exchanges  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.  109  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.  110
 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.  111  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  Commissions  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.  112  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  Commissions  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.  113  We  have  also  made  clear  that,  where
 108  See  Spectrum  Exchange  Comments  at  4.  See  also  Verizon  Reply  at  4.
 109  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  Commissions  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).
 110  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  60s  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.
 111  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.
 112  Under  Spectrum  Exchanges  plan,  assuming  a  high  bidder  in  the  Commissions  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).
 113  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
 (continued.)
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 evidence  exists  that  violations  of  federal  antitrust  laws  or  the  Commissions  anti-  collusion  rules  may  have
 occurred,  the  Commission  may  investigate  and/  or  refer  such  allegations  to  the  United  States  Department  of
 Justice  for  investigation.  114  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).  115
 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.  116
 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  Commissions  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).  117  However,
 (Continued  from  previous  page)
 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).
 114  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.
 115  47  C.  F.  R.    1.2105(  c)(  1).
 116  47  C.  F.  R.    1.2105(  a)(  2)(  viii).  See  Competitive  Bidding  Second  Report  and  Order,  9  FCC  Rcd  at
 2388    225.
 117  We  do  not  here  decide  that  such  negotiation  necessarily  communicates  information  in  violation  of  the
 anti-  collusion  rule.
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 to  the  extent  that  such  negotiations  are  not  with  other  applicants  118  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  Commissions  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).  119  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.  120
 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.  121  A  number  of  commenters  used  this  opportunity  to  request  relief  on  a
 number  of  issues  related  to  the  DTV  transition.  122  To  the  extent  that  these  issues  are  before  the
 118  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).
 119  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).
 120  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  Commissions  anti-  collusion  rule  may  be  found
 on  the  Commissions  Web  site  at:  http://  www.  fcc.  gov/  wtb/  auctions/.
 121  700  MHz  MO&  O  and  FNPRM    104.
 122  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
 (continued.)
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 Federal  Communications  Commission  FCC  01-  25
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 Commission  in  separate  proceedings,  we  decline  to  address  them  here.  123
 49.  One  issue  that  is  not  under  consideration  in  other  contexts  is  Verizons  proposal  that  the
 Commission  establish  guidelines  for  band  clearing  costs.  124  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  stations  coverage  area  is  decreased.  125  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.  126  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.  127
 50.  Discussion.  At  this  time,  we  will  not  adopt  cost  recovery  guidelines.  Broadcasters  strongly
 oppose  capping  costs.  128  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.  129  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.  130  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,  131  and  the  implementation  rules  (Continued  from  previous  page)
 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).
 123  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).
 124  See  Verizon  Comments  at  7-  8;  Verizon  Reply  at  6.  See  also  ITA/  Access  Comments  at  4.
 125  See  Verizon  Comments  at  7-  8.
 126  See  id.
 127  Id.  at  7.
 128  See,  e.  g.,  NAB  Comments  at  8;  Paxson  Reply  at  19;  USA  Broadcasting  Reply  at  13.  See  also  Nextel
 Comments  at  6.
 129  Paxson  Reply  at  19.
 130  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  Commissions
 authority  to  apply  relocation  cost  caps).
 131  47  U.  S.  C.    534,  535.
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 Federal  Communications  Commission  FCC  01-  25
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 originally  adopted  by  the  Commission,  132  a  commercial  or  non-  commercial  television  broadcast  station  is
 entitled  to  mandatory  carriage  (  must-  carry)  on  cable  systems  located  within  the  stations  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.  133  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.  134  In  our  recent  DTV  Must-  Carry  Order  and  FNPRM,  135  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.  136  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.  137  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,  138  as  well  as  by  the  WHDT  Order.  139  Some  issues  raised  by  commenters  in  the  DTV  Must-  Carry
 132  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).
 133  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).
 134  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).
 135  Id.
 136  700  MHz  MO&  O  and  FNPRM    65.
 137  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.
 138  DTV  Must-  Carry  Order  and  FNPRM    7,  12.
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 Federal  Communications  Commission  FCC  01-  25
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 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  stations  digital  and
 analog  signals  during  the  digital  television  transition.  140  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.  141  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.  142
 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.  143  In
 particular,  Verizon  advocates  the  mandatory  relocation  of  a  lone  holdout  in  a  market.  144  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.  145  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.  146  Broadcasters  generally  oppose  the  proposal  to  invoke  mandatory  relocation  arguing  that
 (Continued  from  previous  page)  139
 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).
 140  See  DTV  Must-  Carry  Order  and  FNPRM    2-  3,  108-  112.
 141  DTV  Must-  Carry  Order  and  FNPRM    130.  See  Joint  Explanatory  Statement  of  the  Committee  of
 Conference  on  H.  R.  1554,  106  th  Cong.,  145  Cong.  Rec.  H11793,  H11796  (daily  ed.  Nov.  9,  1999).  See  also  47
 U.  S.  C.  338(  b)(  1)(  B).
 142  See  700  MHz  MO&  O  and  FNPRM    92  and  n.  170.
 143  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.
 144  Verizon  Comments  at  4.  Spectrum  Exchange  initially  proposed  this  idea.  See  Spectrum  Exchange
 Petition  at  12.
 145  Verizon  Comments  at  3-  4.
 146  Id.  at  6.
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 Federal  Communications  Commission  FCC  01-  25
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 the  Commission  lacks  the  authority  to  provide  such  relief.  147
 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.  148  Holdouts  may  be  a  sign  of  a  market  imperfection  or  failure  that  might  impede  the  proper
 functioning  of  the  market,  149  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.  150  Thus,  we  believe  that  voluntary  agreements
 between  broadcasters  and  licensees  should  result  in  the  effective  clearing  of  the  700  MHz  band.  151  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.  152  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
 147  See  Paxson  Comments  at  23;  USA  Broadcasting  Comments  at  9;  ALTV  Comments  at  3-  4;  MSTV
 Reply  at  6;  NAB  Comments  p.  3-  5.
 148  See  Verizon  Comments  at  4-  7;  Spectrum  Exchange  Petition  at  12.
 149  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).
 150  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.).
 151  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).
 152  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.
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 Federal  Communications  Commission  FCC  01-  25
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 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  licensees  digital  spectrum.  153
 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.  Paxsons
 general  proposal  regarding  spectrum  sharing  does  not  incorporate  a  qualifying  standard  for  licensees
 seeking  to  share  use  of  another  licensees  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.  154  Paxson  recognizes,
 however,  that  proposal  is  under  consideration  in  a  separate  proceeding,  and  we  will  not  address  it  here.  155
 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.  156  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.
 153  Paxson  Reply  at  21.
 154  Paxson  Comments  at  43-  44.
 155  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).
 156  See  MSTV  Comments  at  24-  25;  ALTV  Reply  at  8.
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 Federal  Communications  Commission  FCC  01-  25
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 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).  157
 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  Commissions  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  Commissions  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.  158
 157  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).
 158  Id.,  Sec.  213(  a)(  4)(  A).
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 Federal  Communications  Commission  FCC  01-  25
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 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  Commissions  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
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 Federal  Communications  Commission  FCC  01-  25
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 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.
 *  *  *  *  *
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 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)
30
 Federal  Communications  Commission  FCC  01-  25
 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
 Commissions  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.  159  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.  160  Nor  can  I  support  todays  decision
 extending  that  presumption  to  3-  way  channel  swaps.  Although  the  Commissions  action  purports
 to  facilitate  the  DTV  transition  with  only  a  temporary  loss  of  service  for  todays  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  Commissions  long-  standing  precedent  to  determine
 whether  new  services  warrant  loss  of  existing  broadcast  service.  161  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.  162  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.
 159  See  Service  Rules  for  746-  764  MHz  Bands,  and  Revisions  to  Part  27  of  the  Commissions
 Rules,  WT  Docket  No.  99-  168,  First  Report  and  Order,  15  FCC  Rcd  476  (2000).
 160  See  Separate  Statement  of  Commissioner  Gloria  Tristani,  Service  Rules  for  746-  764  MHz
 Bands,  and  Revisions  to  Part  27  of  the  Commissions  Rules,  WT  Docket  No.  99-  168,  Memorandum
 Opinion  and  Order  and  Further  Notice  of  Proposed  Rulemaking,  (rel.  June  30,  2000).
 161  See  Triangle  Publications,  Inc.,  37  FCC  307,  313  (1964),  citing  Hall  v.  FCC,  237  F.  2d  567
 (D.  C.  Cir.  1954).
 162  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).
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 Federal  Communications  Commission  FCC  01-  25
 The  majoritys  contention  that  todays  decision  will  facilitate  the  transition  to  DTV  while
 causing  only  a  temporary  loss  of  service  cannot  withstand  scrutiny.  As  an  initial  matter,  nothing  in
 todays  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.  163  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  majoritys  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  todays  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  its  clear  that  an  instant  substitution  introduces  DTV,  it  does  so  at  the
 expense  of  todays  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  broadcasters  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
 163  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)).
32
 Federal  Communications  Commission  FCC  01-  25
 at  loss-  of-  service  issues,  consistent  with  our  longstanding  precedent.
 Finally,  I  take  issue  with  the  majoritys  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.  164
 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.
 164  See  47  U.  S.  C.    309(  j)(  14)(  B).
33